Saving More Money

It seems like only yesterday that savers were docks. They kept piggy banks. They drove last year’s cars. They fished in their change purses for nickels while the superstars flashed credit cards.

Today, values have changed. The new object of veneration is not money on the hoof, but money in the bank; and the dorks have it. The more you save the freer you get because time is on the saver’s side. Compound interest floats all boats.

Like most people who make their own money, I started out living paycheck to paycheck. I could cover my bills (most of the time). But I “knew” that I could not afford to save so I did not bother. Even had I bothered, my small $20 or so a week would not have seemed worth the effort.

Some years (and many lost $20s) later, I learned I was wrong. Anyone can put money aside, at any level of income. You just have to do it. Of all of the New Era’s new virtues daily jogging, eating bran, quitting smoking; saving money is the simplest and the least demanding of your time and attention. Savers can lie in a hammock all day eating Mars Bars and still feel good about themselves. As for the value of a tiny $20 a week.

A financial plan is grounded in savings. That is how you get enough money to pay off your debts and accumulate and investment fund. How much should you save? The answer comes from ancient times. You tithe. It was learned generations ago and is still true that most people can save up to 10 percent of their incomes and hardly notice. I can’t tell you why it works, only that it does. Maybe tithing just collects the money that otherwise goes up in smoke (it’s 9 am; do you know where yesterday’s $10 is?). On a $30,000 paycheck, you can save $250 a month, $3,000 a year. On $60,000, shoot for $500a month, $6,000 a year. On $100,000, save $833 a month, $10,000 a year.

I hear you, I hear you. You say you can’t do it. Your rent is too high, your bills are too large, your needs are too great, your credit lines are too long. None of those things is actually an impediment, but it will take you awhile to see it. So start by saving only 5 percent of your income.


Kicking The Credit Card Habit

Credit Card habit

Credit Card habit

Why do you need a fistful of credit cards? They are heavy. They make your wallet bulge. They cost money.  You can’t remember how much you have charged on them. Now that even the hoi polloi carry gold cards, prestige lies in flashing a plain vanilla card. For an even bigger thrill, pay cash.

As a status symbol, the credit card is finished. It is now just a transactions workhorse and having too many of them says you are dumb. Assuming, as I do, that you want to get out of debt and build some saving, plastic ought to serve a single purpose: convenience. You put it down instead of writing a check or paying cash. At the end of the month, you pay the bill.

Not that you are perfect. You will still stretch the occasional bill over two or three months; maybe at Christmas or after a vacation. But your goal is never to charge any more than you can easily repay. For the twenty-first century, debt is out.

How to get rid of consumer debt;

It is so simple that I am almost embarrassed to mention it. Don’t borrow anymore. That is all there is to it. Say to yourself, “Today, I am not going to put down a charge card for anything.” When you buy something, pay cash or write a check.

Tomorrow, say the same thing: “I am not going to put down a charge card for anything. I am not even going to borrow $10 from a friend.” Take it slowly, one day at a time. It is like stopping smoking. You will be nervous at first; you won’t see how it is possible to live; you will suffer relapses and sneak a new debt or two. But when you get up every morning, renew your pledge. To make it easier, quit carrying credit cards.

I hear you saying, “I can’t get along without a credit card.” Of course, you can. You can pay by check or debit card. On trips, you can use traveler’s check. You may have to show a credit card to rent a car. But when you bring the car back, pay the bill by personal check or travelers check.  (If the rental agent won’t take your personal check, pay by card and immediately make out a check to the credit card issuer; pay this bill the moment it arrives.)

Naming an Executor

The executor or, in many states, personal representative sees that your will is carried out. It is tiresome, detailed, time-consuming, thankless job. You are doing no favors for the person you name. All the property has to be tracked down and assembled (no easy job if you did not keep good records). Creditors notified. Heirs dealt with tactfully. Arguments settled. Bills and taxes paid. Property appraised and distributed or sold. Life insurance claimed if it is payable to the estate. Investments managed until they can be distributed to their new owners. Final accounting to be made, to the heirs and, perhaps, to the courts.

The executor usually works with a lawyer, so you do not need an expert in estate law or high finance. You need virtues that are much harder to find. An executor has to be willing, reliable, well organized, honest, responsible about money, fair-minded, and sensitive to the worries of the heirs. The usual practice is to ask able heirs (or friend) to do the job. If you name a professional executor a bank or a lawyer include a family member as co-executor, just to keep things moving along. Get permission before putting down someone’s name. If money is misspent or errors made, the executor can be held personally responsible.

A friend or family member usually doesn’t ask for compensation. But you should specify this in the will; otherwise, they may claim the commission allowed by law, even though you expected them to serve for nothing. (In large estates, it may be cheaper for a family member to take a commission than to take the same amount of money as an inheritance. The income tax on the commission may be lower than the death tax on the net estate.)

When banks or attorneys are executors, however, they may charge, and charge, and charge sometimes by the hour, sometimes a fixed fee, sometimes a percentage of the assets in the estate that goes to probate. Your estate will pay less if you keep the executorship at home and let your family hire a lawyer by the hour or by the job. (Executors should shop lawyers, asking more than one what they will charge; like any other business people, lawyers cut fees for jobs they want and that they know are up for bid. Your family may not even need an attorney.

More Living Trust Facts

Trust facts

Trust facts

The states have different title loans rules and taxes affecting trusts, so see a lawyer if you move. Your trust document should specifically allow for a change of state so the laws that govern the trust can change, too. Otherwise, the laws (and taxes) of your former state apply unless you get a court order allowing a change.

There’s a lot of legwork involved in transferring property into a trust. Your lawyer will prepare the new deed for your real property, as well as transfer letters for assets held by your bank, broker, and other financial connections. But you will have to follow up.

Don’t make the trust the beneficiary of your 401(k) or Individual Retirement Account. If you died, that whole sum of money would go into the trust and be taxed right away. By contrast, a spouse or other individual beneficiary can roll the 401(k) into an IRA and take payments over many years. That spreads the taxes out.

You can name the trust beneficiary of your life insurance policy. The proceeds would then go into the trust to be distributed as you directed. Before doing this, however, married people should ensure that a surviving spouse will have plenty of ready cash in case there is a delay in getting the trust paid out.

Your trust should define what it means to be disabled, requiring a successor trustee to handle your affairs. For example, “I shall be deemed to be disabled when two physicians licensed to practice medicine in my state sign a paper stating that I am disabled and unable to handle my financial affairs.” The same language can be used to determine when your disability has passed.

To change the terms of a living trust, you prepare a written amendment. Don’t scratch in the changes on the trust document; they won’t be accepted. In some states, the amendment has to be signed and, maybe, witnessed just like a will. But in most states, a notarized signature will do.

A married couple should ask an experienced estate-planning lawyer (not a lawyer or insurance agent who is hard-selling trusts) whether they need one trust or two. In community property states, it is common to have a single trust document for all the property; each spouse’s separate property interests are segregated within the trust; at the death of the first spouse, the trust divides into multiple trusts include the title loans.

Granting the Power, Durably

Everyone needs a backup, a person to act for you if you are away, if you are sick, if you get hit by a car and can’t function for a while, or if you grow senile. That means giving someone, a spouse, mate, parent adult child, or trusted friend your power of attorney. A lawyer can get an Atlanta title loan in a jiffy. . It is probably in his word processor and just needs printing out. Young people need a power of attorney as well as the old.

Limited powers of attorney grant narrow right, such as: “Christopher can write checks on my bank account to pay my bills while I am out of the country for six months.” Ordinary powers of attorney give broader powers over your finances. But both limited and ordinary powers expire if you become mentally disabled, however, which is exactly when you need the help the most.

So protect yourself against doomsday by asking a lawyer to draw up a durable power of attorney. It lets someone act for you if you are judged senile or mentally disabled, if you fall into a coma, or if illness or accident damages your brain. A durable power lasts while other powers don’t. As long as you are mentally capable, you can revoke a durable power whenever you like.

The person who holds your power of attorney could, theoretically, exercise it at any time, even if you are healthy. He or she could sell your investments and clean out your bank account. But that is not as easy as it sounds. Banks and brokers normally check on what has happened to you before accepting a power of attorney. Besides, you would not give the power to someone you did not trust.

Be sure to execute copies of the durable power maybe even 10 or more. Some institutions want an original for their files (photocopies won’t do) before they’ll cooperate with the attorney in fact. In many states, you have to execute new durable powers every 4 or 5 years to show that your intention holds. Insurance companies and financial institutions probably won’t honor an old power. A few won’t honor any durable power of attorney at all, or any power more than 6 months old, or any power not written on their own form. In my view, that is harassment, but they sometimes do it and you might be stuck with Atlanta title loan.

Estate Foreclosure

Estate Foreclosure

Estate Foreclosure

The majority of the states limit the mortgagee’s right to a deficiency judgment. Some limitations are procedural. For example, many states impose strict notice requirements and the time limits on the mortgagee. Failure by the mortgagee to comply with these limitations can destroy the right to obtain a deficiency judgment.

Likewise, failure to comply with “one action” rules also can destroy the mortgagee’s right to the deficiency judgment. Under such rules, the mortgagee’s only remedy on default is foreclosure, and he must obtain any deficiency judgment incident to the foreclosure proceeding. Two justifications are often cited for this rule: One is to protect the mortgagor against the multiplicity of actions when the separate actions though theoretically distinct, are so closely connected that normally they can and should be decided in one suit.

The other is to compel a creditor who has taken a mortgage on the land to exhaust his security before attempting to reach any unmortgaged property to satisfy his claim.

Similar restrictions sometimes apply to the power of sale foreclosures. In such situations, the exercise of the power of sale is a condition precedent to a subsequent action at law for a deficiency. Some commentators refer to this restriction as the “security first” principle.

There are also important substantive limitations on deficiency judgments. As a result of the depression of the 1930’s many state enacted “fair value” legislation and most of this legislation is still in force. Fair value statutes usually define the deficiency as the difference between the mortgage debt and the fair value of the foreclosed land, rather than as the difference between the mortgage debt and the foreclosure sale price of the land. Depending on the statute, a court or a jury may determine the fair value. Most of these statutes were designed to deal with depression conditions when foreclosure sales typically yielded nominal amounts. This legislation, however, also assumes that even in a stable economic climate, a forced sale of real estate will yield a price significantly lower than otherwise would be obtained by private sales.

Closely related to the fair value approach are the appraisal statutes used in a few states. This legislation requires the court or the person conducting the foreclosure sale to appoint an appraiser, who determines the value of the property. For example, in south California, a statute reduces the deficiency by the difference between the foreclosure sale price and the appraisal amount.

Anti-Deficiency Legislation

Under the traditional approach followed in many jurisdictions, once the mortgage goes into default and the obligation is accelerated, the mortgagee has two options. The mortgagee may either obtain a judgment on the personal obligation and the enforce it by levying upon any of the mortgagor’s property and, if a deficiency remains, foreclose on the mortgaged real estate for the balance or foreclosure on the real estate first and if the proceeds are insufficient to satisfy the mortgage obligation, obtain a deficiency judgment thereafter. Some jurisdictions following the above approach require the mortgagee to elect one of the two options. The Restatement agrees; see Restatement (Third) of Property (Mortgages 1997). Other states, however, reject this “election of remedies” requirement; the mortgagee is permitted to follow both options simultaneously with the only limitation being that the mortgage obligation may only be satisfied once.

Under the traditional approach, a deficiency judgment is calculated by subtracting the foreclosure sale price from the mortgage obligation. If the foreclosure is judicial, the deficiency judgment is obtained in the same proceeding after the foreclosure sale. Where the foreclosure is by a power of sale, the mortgagee obtains a deficiency judgment by filing a separate judicial action against the mortgagor.

Forced sale even under stable economic conditions, normally will not bring a price that will reflect the reasonable market value of the property if it were marketed outside the foreclosure context. Moreover, in times of several economic downturn, mortgaged property often sells for substantially depressed prices. To make matters worse, mortgagees occasionally purchase at the foreclosure sale for a deflated price, obtain a deficiency judgment and resell the real estate at a profit.

The great depression of the 1930’s, as might be expected, produced a substantial amount of varied state legislation to provide relief for mortgagors. Perhaps best-known were the various moratoria statutes.  Such legislation different from state to state. Some statutes gave courts authority to grant foreclosure postponements on petition of mortgagors in the individual case. Other statutes extended the period of statutory redemption beyond the usual period or stretched out the periods of time in a foreclosure action. Most of this legislation was upheld against federal and state constitutional attack. Constitutional law students are a family with Home Building & Loan Ass’n v. Blaisdell, 290 U.S. 398, 54 S.Ct. 231, 78 L.Ed. 413 (1934), which upheld the Minnesota legislation, finding it not to be an unconstitutional impairment of the obligation of contracts.

Bank Fees Are Too High

Join the crowd. Everyone is screaming. But you may be able to cut your costs. When you opened your checking account, you might have looked only at how much interest you could earn. Now you know that the best account is the one that carries the lowest fees.

To find that account, start by analyzing your recent bank statements. Circle every fee to see how much you are spending each month (it could be as much as $300 a year) and list what all the fees were for.

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How low does your monthly balance go? How many incidental services do you use? How large are your savings deposits there? How much interest have you earned on your interest paying checking and does it exceed the fees you pay?

Armed with this information, sit down with a bank employee and say that you’d like to find ways of lowering your fees.

Maybe you have an interest paying checking account but your balance keeps falling below the required minimum. That might cost you $7 or more each time. You will save money over by choosing no interest checking with a lower minimum balance.

Maybe you write so few checks that you can manage on a no-frills account.

Maybe your fees will drop if you keep more deposits in the bank. If you have a CD somewhere else, move it to this bank when it matures.

Maybe your bank charges fees for using its ATMs. If so, you will save money by taking $90 once a week rather than $30 three times a week. Some types of accounts may offer free access to ATMs.

Maybe you are tapping your account through another bank’s ATM. That always costs more than using your own bank’s machines. You may even pay twice for the same transaction. One fee goes to the banks and the ATM network, the other fee goes to the owner of the ATM (which may be the bank or an outside company).

Maybe it costs less to pay by debit card or automatic electronic transfer than to pay be check. Automatic transfers work for any fixed monthly payments: mortgage, rent, auto loan or lease, condo maintenance, life insurance premiums, budgeted utility bills, and regular monthly investments.

Learn more…

Fixing Bank Mistakes

Cash; how many times have you cashed a check in a hurry, then walked away without counting the money? Maybe you think the teller is always right. Maybe you are intimidated by the line of grumpy people behind you. But if you count the money at the bank door and find that you are $20 short, you might be stuck. Tellers are not allowed to hand over extra money on a customer’s say so. After all, you could have slipped the missing $20 into your pocket before you went back to the teller’s window.

Always count your money before leaving the window. If you discover an error later, give your name, address, and account number to the manager. If the teller winds up the day with the right amount extra cash, you will be reimbursed.

Deposits; Teller sometimes err when crediting deposits, for example, entering $100 when you actually put in $1,000 into your Atlanta title loan account.

Double check every transaction for accuracy before leaving the window. What if the teller credits $1,000 to your account when you gave him or her only $100? Don’t spend the money. The mistake will be found and in banking, there’s no finders keeper.

Automated Teller machines

ATMs goof, just as people do. They short change the occasional customer, giving you $70 when you asked for $100. Sometimes they accept cash and checks without crediting them to your account.

Never deposit cash in an ATM. It is impossible to prove how much you put into the envelope, so losses are sometimes hard to recover. Checks are easier to find or replace.

Report mistakes right away. Some banks install telephones next to their ATMs for that purpose, although they may be answered by bank personnel only during banking hours. When you call, leave your name, address, account number, the amount of the loss, and the location of the ATM; then put the same information into a letter. You will have to wait until the accounts are balanced, but if the machine is over by the sum you reported, you will get your money. At the bank’s own ATM machines, the error might be fixed at the end of the day. But it will take an extra day or two (and sometimes weeks) if you used an ATM at another bank.

Deposit Slips; It always astonishes me to see the trash baskets near ATMs overflowing with deposits slips with Atlanta title loan.

Federal Deposit Insurance

Do not waste your time searching through sub-clauses, thinking to find a loophole in the coverage. The government will meet every obligation of the deposit insurance fund and title loans in Atlanta. The S&L bailout of the 1980s is proof of that.

Federally insured money is entirely safe up to $100,000 and more, depending on how the accounts are held. Safe, in a failing bank.  Safe, in a bank that pays cockeyed interest rates. Safe, even with a crock or incompetent at the institution’s helm. So do not worry, be happy, and collect the highest interest rates that you can find. You get $100,000 worth of deposit insurance for each of the following accounts, or groups of accounts, held in the same financial institution:

All the accounts in your name alone, added together, including any accounts in the name of a business you own as a sole proprietor.

Your share of all retirement plan whose investments you control including Individual Retirement Accounts, Simplified Employee Pensions, and Keoghs. If you have multiple plans in the bank, the shares are lumped together as if they were a single account.

Your share of the retirement fund that you company managers say, a traditional pension plan or a company run 401(k). Each person’s interest in the fund is normally insured for up to $100,000, assuming that the banks meet certain capital requirements for safety and soundness. If it does not, the FDIC insures the fund as a whole for $100,000. That gives each participant much less protection, but so far, this harsh provision of the law has not been applied.

Each “in trust for” account or “payable on death” account held for a member of your immediate family child, spouse, and grandchild. There can be multiple owners and multiple beneficiaries, each with his or her own FDIC coverage. For example, if you and your spouse open an account in trust for your three children, you are insured for up to $600,000: $100,000 for each beneficiary of each account owner.

Living trusts and family trusts usually aren’t insured separately. Neither is in trust for or payable on death accounts if the beneficiary is someone other than your child, spouse or grandchild. Instead, such accounts are added to those held in your sole name.

Each account owned by a partnership, corporation, or unincorporated association, such as a union, homeowners association, fraternal organization or title loans in Atlanta.