Thursday, September 29, 2011

Boo BOA!

Startled by the news that Bank of America will begin charging $5 a month to customers who use debit cards.  BOA is trying to recoup some of the $2 billion in swipe fees that Congress outlawed beginning next month. 

I expected, and previously posted, that banks, including my own Wells Fargo, were doing away with debit card reward programs, but I'm flabergasted that banks are actually going to start charging for debit card use.
And as a regular debit card user, I'm not sure what we'll do if Wells Fargo rolls out such a program that applies to our accounts.

I wonder if the merchants who promised to reduce prices if swipe fees were reduced will live up to their end of the bargain.  Somehow, I think prices will stay the same and the consumer will end up paying both the merchant and the bank.

Rental Refi

Happy to report that we were able to refinance the loan on one of our rental properties. 

We went from an interest rate of 6.25% to 4.625%, balance of loan increased by about $4000 since we rolled closing costs into the loan balance rather than pay upfront.  Monthly mortgage cost is reduced by @$150.  The refinance costs will be paid for in just over two years.  And as long as we keep the home rented during this time period, the tenants will be paying the costs.

Refinancing this property has been a goal of ours since 2009, when we refinanced our home, but its been difficult because lenders are more stringent on non-primary home loans.  Additionally, we were uncertain as to whether the home would appraise for what we needed. 

Glad to have this behind us and I'm glad that Mr. Sam took the lead on this one (since I normally handle the finances of the rentals and he handles the rest).

Wednesday, September 21, 2011


I'm heading out of town for a long weekend trip with one of my girlfriends.  I have to post to say how much fun it is to plan a quick trip and to have travel and fun money in our ING accounts just sitting there waiting for me to spend it.

Travel is so much more fun when the trip is already paid for and I have "fun" money available for shopping, spa and eating out.

Tuesday, September 20, 2011

Section 8

We are in the middle of renting one of our properties.  The property has been cleaned and turned and is ready for move in.  The property is listed and this past weekend we had three applicants.  One of the three applicants is an individual with a Section 8 housing subsidy voucher.

We have a friend who has several properties and he regularly rents to folks who use Section 8.  He spoke very positively about the program, in fact he prefers to rent to folks with Section 8 vouchers.  Our friend has explained that the Section 8 funds are paid directly by the government to the landlord and the tenant/landlord lease relationship is not altered by the Section 8 housing voucher.  If the tenant fails to pay his or her share of rent due, the eviction process would be the same regardless of whether the tenant has a housing voucher.  We understand that we would have to have the property inspected by the local HUD office, but otherwise there are really no additional hoops to jump through.

Our concern, and one that we apply to all applicants, is ability to pay.  We generally want to rent to a family or roommate group where the amount paid for housing costs (rent plus utilities) is 1/3 or less of take home pay (or other sources of income, Social Security, child support, etc.).  In this instance, even adding in the Section 8 voucher ($1000 a month), this candidate does not meet our 1/3 rule.  But looking at the Section 8 guidelines is seems unlikely that a Section 8 candidate would ever meet our 1/3 rule because then they would not qualify for Section 8.

We've never rented to someone with a Section 8 voucher so I'm wondering if anyone has any experience with this program? If so, I'd really appreciate hearing from you regarding your experiences, positive and negative.

Friday, September 16, 2011

Do You Use Coupons?

I am not much of a coupon user, although I will look for a coupon once I have selected a particular item for purchase.  So when I buy something on-line, which I do with some regularity, I look for a coupon for that site, or I'll hold my purchase until they have a coupon or a sale.  Same for in store purchases, I appreciate receiving coupons from retail establishments that I frequent, i.e. Ann Taylor, Pottery Barn and the like. 

But, when it comes to coupons for the grocery store, I don't normally bother.  First, most coupons are for products that I'm not interested in, like prepared foods, cold cereal, sports drinks, etc.  Second, I'm a very loyal consumer, there are certain products I like, not necessarily brand products (I am a huge fan of almost oall of the Publix store brand food items), and a coupon will not nudge me to try something else.  Third, I don't really have the time or inclination to clip coupons.

However, I have watched, somewhat in awe and somewhat in fear, the Extreme Couponing show on TLC in which regular folks often end up buying carts and carts of grocery products for $10 or less due to their coupon use.  I'm in awe that folks can be that organized, diligent and successful in obtaining hundreds of dollars in products for little to nothing.  I'm in fear, because many of these extreme couponers have garage, basements, rooms filled with products that, in my opinion, they will never use or need.  I saw one show in which a consumer cleared a grocery store shelf of mustard, it was clear to me that this household would never use all this mustard so I just didn't understand the point and some of these folks seem more like hoarders (I like that show on TLC as well, highly motivating to watch while cleaning the house).

Now I see that grocery stores and manufacturers are pushing back on the extreme couponing, limiting number of coupons per visit, limiting use of competitor coupons, and eliminating the doubling of coupons.

What say you, do you use coupons and if so what are your habits and patterns?

Debit vs. Credit

I'm a debit card kind of gal, so I read this article, Five Places Never to Use Your Debit Card and the comments, with interest.

First, we use debit for 99% of our day to day transactions because we find spending present dollars (vs. future dollars) to be a key part of our personal finance plan to avoid and reduce debt and to live within our means.  We also like debit rather than cash because we find that it is much easier to track our spending.  I recognize that there are lots of folks who use credit wisely, never pay any interest, and collect rewards left and right.  I, myself, used credit cards for years and paid them off without incurring interest, but when I switched from credit to debit I found that I reduced my discretionary spending by 50%.

  • Rental or security deposits. If you have to put money down to rent a car or heavy duty home improvement equipment, try not to use a debit card. Why? Because the business will actually take the money out of your account in the form of a security deposit. You’ll get the cash back when you return the car or equipment. But with a credit card, the money is just “frozen” but not actually charged and you won’t ever notice it’s gone.
I have run into the hold problem both with renting cars and at hotels.  And my husband has run into this problem renting tools and equipment.  So, I have to agree with this one.  We actually, now, use a credit card when traveling to avoid this problem. 

  • Restaurants and bars. There are way too many prying eyes around a dining establishment to trust using your debit card. Apart from the risk of having your card stolen, restaurants are one of those rare places where someone actually walks away with your card and you don’t see them for a few minutes. Much better to use cash when dining out.
Never had this problem and we eat out and drink out with great frequency.  I actually prefer to use debit in this situation, because I want to know how much I'm spending in this category.
  • Regular payments. Businesses love to get their sticky little fingers on your debit card number so they can extract dues straight from your bank account on a regular basis. Whether it’s a gym or your insurance company, you’re better off using a credit card. That’s because if there’s a dispute, the business won’t take the cash right out of your checking account if they don’t have your debit card number.

I agree with this one, it is much better to push payments rather than to allow businesses to pull payments from your checking account via debit or auto payment. 

  • Wi-Fi hot spots. Never use your debit card for an online purchase while at a coffee shop or other business that offers free Wi-Fi access. Many of those businesses have unsecured wireless connections, so it’s much easier for hackers and scammers to log on and steal your data.
This makes sense to me. 
  • Any retail outlet where you choose the “credit” option. Debit cards allow you to choose between a debit (having cash taken straight out of your account) and a credit transaction (where the money will be taken out but it could be a few days later). For one, credit purchases cost the retailer more cash in swipe fees, so you could be hurting a small business owner. But the real problem is the delay when choosing credit – you may forget the purchase and not account for the money. That can lead to an overdraft situation and the onerous fees that go with them.
This information is outdated, swipe fees have recently been capped by Congress so the cost to retailers has been much reduced.  I patronize quite a few small businesses but I always opt for credit when using my debit card for security purposes. 

As for the overdraft issue, I recognize that some people struggle with this issue, they use their debit card and they don't think twice about it.  I, myself, use a check registrar and log each debit transaction just like I would for each check and I do so about every other day.  With on-line and mobile access, I almost always know how much is in my checking account and I generally keep at least $500 extra as a cushion.  For me, using my debit card and then reviewing those transactions online, writing them down in my registrar, thinking about them, is a big part of my system for living within my means.  Yes I have to pay attention to my debit card use, but that is exactly why I use debit and not credit.

Thursday, September 15, 2011

2011 Goals - Mid Month Update

(1) Max out 401k(s) - $21,840 (66%)(goal is $33,000)
(2) Max out IRA(s) - $10,000 (100%)(goal is $10,000, this goal is completed)
(3) Add to e/r fund - $7,600 (76%)(goal is $10,000)
(4) Pay down mortgage - $3,320 (66%)(goal is $5,000)
(5) House projects - $1,906 (38%) (goal is $5,000)

Total - $44,666 (69%)

We are about $200 behind where we should be.

Wednesday, September 14, 2011

Missoni Madness

So, I'll admit it, I got sucked into the Missoni for Target craze which crashed Target's servers yesterday. I wanted a certain Missoni throw (the brown with blue) which is already, of course on Ebay for much more than it cost at Target.

Anyways, I spent many minutes, at work, yesterday trying to get through to Target and when I did, I found that the item I wanted was sold out, but since I had gotten sucked into the hype I opted for a Duvet set, that I didn't even really like, thinking I needed to have some of this Target Missoni.

Luckily, reason set in and I reconsidered my purchase and recognized that I was just buying to buy and I opted to exit Target without purchasing anything.

Storage Wars

I am a big fan of Storage Wars which airs on A&E. If you've never seen the show, a cast a characters bids on storage units that have been abandoned and then it is a bit of a treasure hunt crossed with Antique Roadshow, with some bidders coming out way ahead and some losing quite a bit of money.

Anyways, I read recently that storage units are big business and a real growth industry especially here in Florida where we have no basements.

So I read this article from with interest. The author, after moving to a home with a basement, is finally reunited with her storage unit stuff and finds out that most of it was junk.

Over the past few months I've been in a decluttering mode, I spent one whole weekend cleaning out my closet.  I found items in my closet from both high school and college (I am many years away from both) and items with the tags still affixed (meaning I bought it, but never wore it).  I ended up reducing the clothes, purses and shoes by 50% (and my closet is still pretty full).  Then I tackled our office, which I'm still working on, but I've shredded and recycled paperwork that included things like college and professional school acceptance letters, credit card statements going back more than 10 years, etc. 

I am overly sentimental and I hate to see anything with a family connection be given away or sold to non-family, which means, for example, that I've got boxes of china in my attic (thank goodness I've got an attic) that I don't really care for and may never use.  So, I'm getting better at parting with some things but not others (what I would call family treasures) although I've never rented a storage unit so I'm doing better than some.

How about you, do you struggle with clutter, do you pay to store your stuff, how do you keep family treasures close but not let them overwhelm your home?

Tuesday, September 13, 2011

Questions on Turning a Rental

I had a couple of questions on how we handle turning a rental property, how we manage security deposit charges, etc.
Frugal Coconut said...

Does Mr. Sam do the painting and cleanup himself or do you outsource those jobs?

I just had to do those as well as I'm also in the process of re-renting ... and it just seems as though it would eat into any potential profits, especially if the tenant hasn't been there that long.

I don't know what the fine line is for paint being a wear-and-tear item for which you can/cannot charge the tenant. My previous tenant put holes in the walls despite the rental agreement prohibiting it. Luckily I had to repaint anyway because it was time ... but what if it wasn't? And what is a typical lifeline of paint so that I would know whether the tenant got it dirty/blemished prematurely or if I just have to suck it up and fork over the cash to have it repainted at turnover?

How do you handle things like that? What is worth the hassle of deducting from the security deposit, and the risk that it will be disputed in court?

Anonymous said...

I have a property management firm take care of mine, I have no direct contact with the tenants. They seem to get higher rent than I think I could (so that offsets some of the cost). We agree on the rent and they have discretion for up to $100 for repairs then need my approval. Over 9 years they have done a great job screening tenants and my current tenant has been there 5 years. They also seem to get volume discounts for us (like painting) since they manage a few hundred homes. 10% of the top of the rent for all the above.

First, when it comes to turning our rental properties, Mr. Sam does almost all the work himself (although he often has a guy who works with him or who works at the property when Mr. Sam is at work).  At this point in the game, Mr. Sam has all the supplies, equipment, know-how, etc. to do just about all the rental maintenance that is necessary.  We also, minimize costs by using the same paint colors for the exterior of our rental homes (and our primary home), same paint color for the interior of our rental homes, and we utilize the same carpeting from rental home to rental home.  

Second, when it comes to paint, we don't count that as a charge against the security deposit, because we almost always paint each time a rental turns (most of our rentals are more than a year), we count it more as cleaning.  Security deposit goes to actual damage.  We also try to take a non-refundable pet deposit as part of our security deposit.   And since its non refundable there is no discussion as to what we are charging for. 

Third, we've never used a property management service so I can't really speak to same.  For us the costs, which seem much higher than what Anonymous reports, are just not worth it.  All of our properties are within 10 miles of our home, we have lawn service for one, but otherwise we (meaning Mr. Sam) can manage them with one Saturday of work per month when they are rented.

Sunday, September 11, 2011

Wells Fargo Rewards - No more

As I wrote about back in March, my bank Wachovia (now Wells Fargo) has done away with its debit card reward program.  This past week, I received the official notification that the Wells Fargo Rewards program is no more.

Since I already cashed in all my accumulated rewards back in March, my current rewards balance is pretty low but I'll cash out the points anyways.

Friday, September 9, 2011

2011 Goals - September Update

(1) Max out 401k(s) - $21,240 (64%)(goal is $33,000)
(2) Max out IRA(s) - $10,000 (100%)(goal is $10,000, this goal is completed)
(3) Add to e/r fund - $7,200 (72%)(goal is $10,000)
(4) Pay down mortgage - $2,905 (58%)(goal is $5,000)
(5) House projects - $1,856 (37%) (goal is $5,000)

Total - $43,201 (69%)
We are about $400 behind on our 2011 savings goals, so starting to slip up a bit.  Mr. Sam is in the midst of turning one of our rentals so no rent coming in and money going out for new carpet, paint and general clean up.