Personal E-Newsletter - July 2013

Home Buying 101

With a generally improved employment picture and continuing low mortgage interest rates, more people are considering buying a home this year. Whether you have your eye on a starter home or a new construction, planning ahead can help ensure you're happy with your new abode after move-in day.

Maybe you've been planning for a while and are clear about what you want. In any case, be sure to consider whether you want to live close to your job or particular schools, the size of the ideal yard, your desire for a garage, the number of rooms, and the composition of the neighborhood-young families, retired couples, or a mixed group?

You can also benefit from identifying your lender, such as a community bank. Consider whether it's important to have a good relationship with a local banker if questions arise down the road. Ask friends and relatives for their recommendations.

A lender will pre-qualify you for a loan of a certain amount, which can help narrow your house search. Based on your credit report, income, and assets, a lender can also provide pre-approval, guaranteeing a loan up to a certain amount and shortening the mortgage application process.

You can then contact a real estate agent who is a buyer's broker and will help identify potential properties that fit your needs. You can also look at properties yourself and then contact the seller's realtor on your own, but beware that this agent is working in the interests of the seller.

When you're ready to make an offer, your buyer's broker can help you draft the offer to purchase. You may want to include various contingencies, such as specific repairs or a home inspection to prevent any maintenance issues or other unwelcome surprises later.

After you reach a deal with the seller, your lender can help you decide which type of mortgage is best for you-for example, a fixed rate mortgage where the monthly interest and principle payment remains the same for the life of the loan or an adjustable rate mortgage (ARM) where the lender may increase the interest rate over time. Your lender can also help you apply for government loans, such as FHA, VA, or WHEDA (Wisconsin Housing and Economic Development Authority) loans.

The last stage of home buying is the closing, when you sign the mortgage note and related paperwork. Ask about any item you do not clearly understand. If you are unhappy with any part of the transaction, several regulations including the Real Estate Settlement Procedures Act are designed to help resolve problems. Begin by contacting your lender. Other resources are the Wisconsin Department of Financial Institutions and the U.S. Department of Housing and Urban Development (HUD); phone: 1-800-669-9777.


8 Tips for Landscaping on the Cheap

Take a look at your yard. Couldn't your grass be a little greener? If you're like many homeowners, you pay more attention to the interior of your house than to your garden. But consider this: more people see (and judge) your landscaping.

Fortunately, sprucing up your yard or porch is cheaper than redoing the kitchen or bathroom. Here are eight cheap landscaping ideas with a big payoff.

Contain your plants

Add pizazz to your front porch with container plants. This simple trick instantly makes your home more welcoming. Containers and plants should vary by type and size and be placed on multiple levels. Stick with the cheap landscaping theme by repurposing metal tubs, buckets and pails as planters.

Stock up
Gardening isn't much different from shopping at Costco. The more plants you buy, the lower the per-item cost. For example, at an online nursery, a bag of 100 tulip bulbs goes for about $60, or 60 cents apiece, compared with $20 for 25 bulbs, or 80 cents each.

Grow spring and summer flowers from seeds
Seasonal plants liven up a landscape. Alyssum, celosia, cosmos, hyacinth bean, impatiens, marigold, morning glory, nasturtium, sunflower and zinnia germinate and mature quickly, and they grow equally well indoors or out. If you don't want to start from scratch, flats of annuals are good for landscaping on the cheap. Many perennials, such as black-eyed Susans, blanket flower (gaillardia), columbine and coneflower (echinacea) are nearly effortless to grow and are relatively inexpensive.

Practice native gardening
Which plants are native to your region? It pays to find out, because a garden filled with native plants offers financial benefits. Native plants don't need much attention, so you can save on fertilizer, pesticides and water. Native gardening is an easy and effective way to landscape on the cheap.

Tend to trees and shrubs
Clean-up branches, leaves, petals and fruit that may have fallen onto the lawn. Pruning deciduous trees and shrubs is an essential component of garden maintenance. Failure to tidy up your yard may be seen as a sign of neglect and a little cleanup is the ultimate cheap landscaping idea.

Apply mulch
Apply a fresh layer of mulch to all garden beds for an instant transformation. The dark mulch adds a nice contrast to the surrounding plant life and helps the ground retain moisture, while keeping weeds at bay. And mulch is relatively cheap, especially if you buy it in bulk.

Beautify your lawn
Is your lawn an unflattering brown or filled with weeds? It might be worth installing new sod. Doing so requires removing the old lawn, laying new sod and keeping it well hydrated for several weeks.

Fill in your side lawns
The strips of land on each side of a home are hard to make aesthetically appealing. One low-maintenance and cheap landscaping idea calls for filling these areas with pea gravel or sand and topping them off with a decorative arrangement of stones or bricks.


Make the Most of Semi-Retirement

Some people call it "phased retirement." Others refer to it as "semi-retirement." Essentially, it means working part-time in a job that’s different from your previous career. And it’s not uncommon. A recent CareerBuilder survey found that 60% of workers older than 60 plan to look for new jobs after retiring.

Sit down with Nancy Collamer, the author of Second Act Careers: 50+ Ways to Profit from Your Passions During Semi-Retirement, to find out more about how people can make the most of this new trend.

Q: What inspired you to write about semi-retirement careers?

A: Despite the fact that we’d always done what the experts had advised, living below our means, maximizing our 401k contributions, etc., my husband and I learned that, under certain circumstances (like the 2008 financial crisis), we could conceivably run out of money in our later years.

I’d also been a career coach for over 15 years, and my specialty was flexible work, generating income by using your skills and talents on a part-time basis. When I looked at what was being generally recommended for Boomers, I was seeing one of two lines of thinking: Either the “buy a vineyard, and live off the land” type of dream, not realistic for most folks, or the “be an usher at a movie theater/greeter at Wal-Mart” advice. There are so many other things that people could be doing to generate additional income during retirement, so the book was born.

Q: Do certain traits make you more likely to succeed at semi-retirement?

A: As a therapist once explained to me, fear is often just an acronym for “false evidence appearing real.” What I discovered in the more successful “second act-ers” was that they didn’t let fear stop them from moving forward. Instead, they overcame it by taking small steps, such as gaining added skills and knowledge, which gave them the confidence to overcome their fears. One of the challenges with a second-act career is that you sometimes have to take a step backwards, so another trait would be a willingness to ask for help, while recognizing that risk, and failure, is part of the process.

Q: When is the best time to start thinking about semi-retirement?

A: Ideally, I’d say three to five years before you’re getting ready to retire is a great time to begin the process. This may seem like an overly long timeframe, but the reality is that the more time you allow, the more flexibility you’ll have to explore, research, test, and refine your plan.

It’s also important to keep in mind that it may be a while until you can generate income via a new career. So the more time that you allow yourself to save money, the more flexibility you’ll have to retool and retrain when you’re ready to transition. Also, if you start thinking about what you want to do while you’re still employed, you may be able to take advantage of employee-sponsored training programs, workshops and conferences, helping you get that new career off the ground.

Q: Are there specific industries that are more receptive to semi-retired workers?

A: Any sector where age, and with it experience, maturity and a strong work ethic, can play in your favor will be more receptive. The health care industry would qualify. Education, to some degree, is another one: A teacher who brings 25 years of life experience to the table can be helpful. I’ve devoted a full chapter to identifying these industries, but the main thing is to remember that there are many different types of jobs and businesses where your maturity, contacts, accomplishments and range of experiences will be attractive to a lot of clients.

Q: What are your top three tips for people looking to do this?

A: Invest in your success. You need to recognize that the process is going to take time and money, but also keep in mind that the second act could easily last for 20 years. Think about what you spent on your last vacation, and put a tiny portion of that into your own personal investment fund to provide a cushion for this transition.

Surround yourself with support. Reaching out to family, friends and professional contacts is an effective way to learn about ideas and opportunities. There’s no bigger dream-killer than isolation.

Focus less on finding a job and more on filling a need. Many of the opportunities aren’t necessarily things that you’ll find in a job listing; they’re things you’ll create on your own and project work you’ll do for others. The latest statistics show that about a third of Americans are working in something other than a full-time job, they’re working part-time, freelance, consulting and running their own businesses. It’s very clear that, over time, those numbers are going to increase.

Q: Any other parting words of advice or encouragement?

A: Think big, but act small. Start by creating a big picture of what you want your life to look like in semi-retirement, and then take small actions on a regular basis to build that dream by signing up for a workshop, taking a class, or brainstorming with friends. Regular small actions over time add up to big change.


5 Tips for Parents on Being Good Financial Role Models

Everyone views smart financial practices differently, and what's an effective strategy for one parent doesn't necessarily work for another. While there's no official rulebook, consider these five ways parents can become better financial role models:

1. Be open about your financial situation. Although children like sweets, you don't have to sugarcoat the truth about your family's financial standing. "Teach your kids about money from objective reality,” says Steve Siebold, author of How Rich People Think. "It's a nice thought to say everyone, regardless of financial status, has access to all the good things in life. It’s also naïve and untrue.”

Instead of trying to shield your kids from your household budget, include them in the decision-making process on when to save and when to spend money.

2. Take a hands-on approach. The earlier you can teach children about money, the better. Andrew Wang and his wife introduced the subject to their kids as soon as they started asking for things. "We have encouraged our preschool-aged children to touch money, identify different denominations of money, play with and count money,” says Wang, an investment adviser and father of three in Mendham, N.J. “By opening up the conversation early and keeping it going as kids grow, we hope to raise financially-savvy kids."

From counting pennies in a piggy bank to teaching your teen how to balance a checking account, letting your children take control of their finances in some capacity – no matter how small – can heighten their confidence about using money appropriately.

3. Emphasize the importance of earning money. Many parents strive to teach their children they have to put in effort to earn money. Some default to the common arrangement of doing household chores for an allowance, but doing so runs the risk of teaching kids they only should clean their room in exchange for money.

Eric Erickson, a resident in New Mexico and father of four boys, circumnavigates this issue. "The boys do not get allowances, but they will do small jobs for people in the neighborhood or have minimum wage jobs," Erickson says. "Since the two oldest drive, they have vehicles and are responsible for putting gas in the car and paying for routine maintenance. This makes them realize they have to budget, and if they drive too much, they have to refill the car with gas."

4. Have a healthy relationship with money. Children, especially young ones, pick up on behavioral cues and attitudes faster than you may think. If you grimace every time you receive your monthly credit card bill or moan when taking out your wallet to pay for something, they may start associating money as painful and problematic.

Chris Miles, founder of financial advisory company, says money should be a positive conversation. "When parents talk about money like there's never enough or a 'necessary evil,' my experience has shown that those children grow up hating money and struggle with it throughout their lives," he says.

Miles adds, "The first thing I do on a daily basis is to avoid phrases like, 'We can't afford it' or 'We don't have enough,' and instead use more truthful phrases, such as 'It's not a priority right now,' 'I don't think it's worth the price' or ask questions like, 'What can we do to find or earn the money to get that?'"

5. Don't do it on your own. Teaching kids good financial habits can be challenging, as it often requires a lot of time and effort. In addition to being a good financial role model yourself, connecting your kids to other people who have a positive relationship with money can strengthen how your children will handle money in adulthood.


Budget-Friendly Fun for the Summer

The lazy days of summer are here, and if your budget is tight this season, you may be wondering how to spend those long days without getting bored. Fortunately, you can make the most of summer with live entertainment, sports and outdoor adventures, all at little to no cost.

Here are six cheap ways to enjoy summer:

Take a staycation. Avoid the high costs of airfare and gasoline, and enjoy a staycation. Attend free festivals and community gatherings, or simply play tourist in your town or city. Consider planning a themed trip. A tour of local restaurants and wine bars, or exploring the city's art galleries, for example, can be a fun, low-cost way to enjoy time off work.

Attend free concerts. Many cities play host to concerts during the summer months, and local music events can be a great way to meet people. Find out which concert venues offer free or low-cost admission, and pack snacks for the show so you don't have to spend extra money on food.

Sign your kids up for a local sports team. Encourage your children to stay active by joining an organized sports team in the area. Many community centers and public libraries run free or low-cost athletic programs during the summer. You can save money by purchasing used gear or renting the equipment.

Go camping. Whether you choose to camp in your backyard or head to a state park, the summer months are a great time to enjoy the outdoors. Pack plenty of food for the trip so you don't have to stop anywhere along the way or pay extra for convenience foods. Shop at a warehouse club for basic items such as bottled water, bread, and juice.

Get creative in the kitchen. Cooking and preparing food can be a fun activity in itself, and you can experiment with a variety of in-season ingredients and flavors. Use some of your downtime on Sundays to come up with tasty recipes for the week. Consider creating themed menus or trying healthier versions of your favorite foods. You can save on the cost of eating out by putting together a meal plan and sticking to a weekly food budget. Don't forget to shop at your local farmers' market for seasonal produce and other items priced lower than what you'll find on sale at grocery stores.

Teach yourself a new skill. Have you always been interested in learning how to draw or paint? How about building a scale model car, or trying your hand at organic gardening? Make a list of interests and hobbies you want to explore this summer and the skills you want to learn throughout the process. Use the Internet to find free tutorials, do-it-yourself guides and other public resources.