October 26, 2022

Lightbulbs that really save money

With inflation and energy costs taking a bigger bite out of your spending plan, it's time to revisit the basics like replacing incandescent bulbs. Switching from incandescent to LED (light-emitting diode) bulbs could save around $225 in electricity cost per year. Also, LED bulbs last about 25 times longer than incandescents.  

Speaking of lighting... 

Kelvin is a unit to measure the color temperature of lighting, ranging from 2500K (extra warm white) to 6500K (daylight). 

Lumens is a measure of the maximum brightness of a bulb.

450 Lumens = 40 watts ranging to 1,600 Lumens equals 100 Watts. 

Info from the September 2022 Consumer Reports p. 12.

Light Bulb, Light, Glow, Shining, Bulb

Hybrid vs. Conventional Vehicle

 According to Consumer Reports the break even point is 3 years if you pay more for a hybrid vehicle compared to a similar conventional model based on fuel savings. This calculation is based on gas at $4.50/gallon and 12,000 miles per year. 

Car, Body, Auto, Sports Car, Vehicle

After the Death of Your Spouse: Next Financial Steps for Surviving Spouses

 As a surviving spouse, you might find yourself overwhelmed by all the administrative and financial to-do items that you have to handle soon after the death of your spouse. There's a lot to do, much of which you've never done before. And you're supposed to get it all done while grieving.

This book, by Mike Piper, CPA, walks you through it, in plain language.

Many surviving spouses find themselves overwhelmed by all the administrative and financial to-do items that have to be handled in the months after their spouse’s death. There’s a lot to do, and they’re supposed to get it all done while grieving. And in many cases, the situation is made more difficult by the fact that the surviving spouse is not the one who regularly handled the household finances.

I wrote this book to walk people through it, in plain language. It’s the book I want my spouse to have, in case something happens to me.

Fortunately, some of these to-do items for surviving spouses are important but not urgent. And in fact, for some of these items, it’s best to wait. Many people report experiencing “brain fog” in the weeks or months following their spouse’s death. They find that they have difficulty concentrating and difficulty performing tasks that would normally be easy. Major, irrevocable decisions are best put off until this period is over, in cases in which it’s practical to do so.

That’s why the book is broken down into two parts: immediate next steps and intermediate next steps.

The book’s table of contents is as follows:

Part One: Immediate Next Steps

1. Learn the Terms (The Estate Administration Process) 2. Getting Organized 3. Notifying Necessary Parties 4. Initial Responsibilities as Personal Representative 5. Updating Your Own Estate Plan

Part Two: Intermediate Next Steps

6. Social Security Planning 7. Further Responsibilities as Personal Representative 8. Handling Inherited Retirement Accounts 9. Additional Options as a Beneficiary and Surviving Spouse 10. Tax Returns 11. Reassessing Your Own Finances 12. Reassess Your Portfolio 13. Finding Professional Assistance

Conclusion: What’s Next?

Appendix A: Does an Inheritance Create Taxable Income?

Appendix B: Social Security Widow(er) Benefit Math Details

Appendix C: Dealing with Trusts

 

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Database of State Incentives for Renewables & Efficiency®

Check out this website https://www.dsireusa.org/ for information on nation-wide, sate, or local energy efficiency incentives for personal and business uses. 

Considering buying or leasing an EV or hybrid vehicle, adding insulation, upgrading HVAC, going solar, buying new appliances for home or business?  Check out this website for links to a money saving tax credits.

"DSIRE is the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University and receives support from EnergySage."

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Save on Printer Ink

Computer printers are cheap to buy but ink is expensive. Typically you will pay more for ink over the life of the printer than the initial cost. As Consumer Reports states, "Ounce for ounce, it (ink) routinely exceeds gasoline and even Dom Perignon Champagne in price."

To save ink, use the DRAFT mode when you just need a printout but don't need picture perfect quality. Also, Times New Roman font goes 27% further than using Arial font. 

Free photos of Office

September 22, 2022

Comparing auto loans

The Consumer Financial Protection Bureau (CFPB Has a helpful worksheet for persons shopping for a vehicle loan. See: https://files.consumerfinance.gov/f/documents/201606_cfpb_auto-loan-worksheet.pdf

Learn what questions to ask about vehicle financing:  https://www.consumerfinance.gov/consumer-tools/auto-loans/

If you are having trouble paying your bills during this period of high inflation, watch the video Prioritizing Bills: https://www.consumerfinance.gov/about-us/blog/tools-to-help-pay-bills/

The CFPB is a government agency with an abundance of practical financial information and advice. Check out: https://www.consumerfinance.gov/

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SEQUENCE-OF-RETURN risk

 "SEQUENCE-OF-RETURN risk has long been a major concern among retirees—and it’s a real danger right now for those who just quit the workforce or soon will. Also known simply as sequence risk, it refers to the chance that the market declines sharply, forcing retirees to sell investments at depressed prices to generate income." 

Sound like today's situation with investment losses and high inflation? Keep reading...

"Wade Pfau, a leading retirement researcher, published a paper highlighting the danger involved. As he makes clear, a few years of market losses coupled with portfolio withdrawals can decimate savings, increasing the risk that a retiree will run out of money."

Richard Conner explains how to counteract sequence-of-return risk in his Humble Dollar https://humbledollar.com/ blog post "Beginning Badly." Learn five ways to structure retirement income to lessen sequence risk’s impact:  

1. Annuitize. (Search for the links to annuities in this blog)

2. Cash bucket.

3. Reduce spending.

4. Work.

5. Social Security. (But I caution against taking SS before age 70 unless you expect to die young.)

Get the details at: https://humbledollar.com/2022/09/beginning-badly/?utm_source=mailpoet&utm_medium=email&utm_campaign=another-ses-test_7  

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Tiresome Debates about the 4% "rule", Claiming Social Security, and investing vs. paying down debt

 Jonathan Clements, author of the Humble Dollar Blog https://humbledollar.com/ and former Wall Street Journal financial columnist, is one of the most sensible financial experts I've encountered in a 40+ year career of teaching personal finance. Check out his blog.

Rather than me summarizing his main points, read the financial journalists column "Tiresome Debates" about:

1. Should you use the 4% withdrawal rate?

2. Should you take Social Security early and invest the money?

3. Should you use your spare cash to invest or pay down debt? 

Check it out: https://humbledollar.com/2022/09/tiresome-debates/?utm_source=mailpoet&utm_medium=email&utm_campaign=another-ses-test_7 

Explore the Humble Dollar blog for a full financial education:  https://humbledollar.com/

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September 21, 2022

Parent Plus Loans for College Can Be Toxic

 The Subprime Loans for College Hiding in Plain Sight

Writing for The New York Times, Ron Lieber explains how poor a choice Parent Plus loans can be for many families. 

"If you want your kids to go to college but you can’t afford the bills, the federal government has a deal for you that will blow your mind."

"You can borrow the entire cost — minus any other aid your child receives — through something called a Parent PLUS loan. Moreover, your income — and thus your ability to repay the debt — doesn’t matter. As long as you don’t have one of a handful of black marks in your recent credit history, you can borrow six figures even if your take-home pay puts you below the federal poverty level."

"This is totally bananas. But don’t take my word for it."

Think tanks and policy institutes on all sides of the political spectrum agree that the loose lending policies letting just about anyone sign away their financial future are a terrible loan program. 

These loans have been particularly toxic for low income families, many who are Black who are saddled with debt they can never replay.   

You need a subscription to the NYT to be able to read the full article but if you are considering one of these loans, do your research and consult a financial advisor before signing up. There are other ways to afford higher education! 

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September 14, 2022

Popular Personal Financial Advice versus the Professors

 "JAMES J. CHOI is a finance professor at Yale University. But in a recent paper titled “Popular Personal Financial Advice versus the Professors,” Choi played the role of (somewhat) neutral arbiter. The question he sought to answer: Do popular—that is, non-academic—personal finance books offer advice consistent with the academic literature? And if not, is that a problem?"

Adam M. Grossman

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