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Money $ense Newsletter - Volume 10, Issue 2: Summer 2013

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Money Sense

Save More and Spend Less

A newsletter for individuals and families
Volume 10 Issue 2 (PDF)

In this issue:

Hotel stays: tips to save and avoid fees

So you and your family have made vacation plans. Here are some ways to not over-spend or be surprised with all those extra costs at your hotel.

Parking — When you are making your hotel reservation, ask about parking fees. You might think you’re going to pull in the lot, park your car, and start your hotel stay. But actually, you can be charged to park your car in the lot or a nearby garage.

Internet use — While some hotels offer free wireless Internet access, others charge for use. There are hotels that actually charge per minute for using the Internet. Before you use it, ask. If you’re charged, chances are you can find a wireless network at a local coffee shop or library.

Spa or resort fees — These types of fees can include anything, and pretty much let hotels charge you for whatever they’d like. It can include use of hotel property like a fitness center, spa, pool, hot tub, tennis courts or shuttle service. Even if you aren’t using these things, you can be charged for it.

Missing items — If something is missing from the room by accident, you can be charged. For example, if you grabbed a few towels to take them to the hotel pool and left them there, you can be charged for those missing towels.

Service fee — This fee simply means an extra cost for services like housekeeping, concierge, maintenance staff, bellhop, shuttle service or doorman. Remember, tipping is expected for some of these services.

Using the safe — You may be playing it safe by storing your jewelry, money or any other valuables inside your room’s safe, but you can also be paying for the use. The best thing is to leave those valuables at home.

In-room food and drink — After a hot day of exploring, hiking or shopping, you might be exhausted. And if you grab that large bottle of water sitting pretty on the desk, it could cost you dearly. Any food or drink in the room can be extra even though it is sitting in arms reach. Anything in the fridge or mini bar and even the coffee in the coffee maker could be extra. When in doubt, call the front desk and ask.

Late check out — If you realize you are running behind schedule, call down to the front desk and ask if you can get a free late check out.

Room service — Most places don’t hide it, but room service generally comes along with a big fee. Instead of ordering food to your room, walk down and order.

Breakfast — So many hotels include free breakfast, you might forget that it is not included everywhere. If you didn’t include breakfast in your vacation budget, this could negatively impact your funds. Ask the front desk for recommendations and ask if they have any coupons.

Cancellation — Anytime you make a reservation at a hotel, ask what the cancellation policy covers. Things can happen, and you may have to cancel your trip and stay at home. It can be nonrefundable from the time you book, two weeks in advance, or 24-hour notice. If you’re planning a big trip, consider purchasing travel insurance that may cover you if you end up needing to cancel.

How to avoid these fees

  • Read the fine print. Even if you’re booking on another site, like, spend a good amount of time on the actual hotel’s website to see what is included and not included.
  • Call customer service and ask if there are any unclear fees. Besides informing you of any other costs, this will give you a good argument if you end up with something extra on your bill.
  • Look at your receipt before you check out. Don’t just assume that all is fine. Be sure to fully understand the receipt and cost. This way if there is any dispute, you can handle it immediately.
  • Keep your receipt. This will help if you notice when you get home that your charge is different than the receipt.
  • Pay with a credit card instead of cash. This will make it easier to dispute any charges if you feel you were wrongly charged. In addition, you’ll also earn rewards if you use a hotel rewards credit card.
  • Read hotel reviews. TripAdvisor,, and Yelp are filled with hundreds of reviews for the hotel you’re staying at. Getting smacked with ridiculous fees is definitely motivation for a person to write a negative review about it.

Budgeting guidelines to manage your income and expenses

budget list and calculatorSetting a smart household budget is a balance of wants and needs. It’s a personal or family exercise that offers you the chance to decide what’s most important to you and your family. To get started, think about what you must have and then what you can live without.

The following are guidelines — not rules — for determining how much to budget as a percentage of your take-home income. Remember, take-home income is called net income. Gross income is the total amount you earn before taxes.

Housing: 25–35%. These costs include rent or mortgage payments, plus insurance and any repairs or maintenance.

Utilities: 5–10%. Take seasonal changes into account. Power, gas, water, sewage, trash and the lights are all utilities.

Transportation: 10–15%. Include in this expense insurance and gas — not just a car payment. And while a car payment is technically a debt, it’s debt with a specific purpose.

Food: 5–15%. Food is a necessity, but how much you spend depends on your desired lifestyle and habits. If you spend more here, be sure to spend less in some other categories. Think about better meal planning, effective use of coupons, taking advantage of rewards programs in many grocery stores, or eating out less frequently.

Entertainment: 5–10%. Including entertainment as a category is an important way to balance having fun now vs. later. Entertainment should include things like cable or satellite TV, Internet service, and phone service, including cell phone plans.

Debt: 5–15%. Technically, a mortgage or car payment is debt (if you have them), but we don’t include them here because they are a part of your living expenses. Student loans and credit cards should be included as debt.

Savings: 5–10%. Include saving for short-term goals like a vacation or a new pair of shoes, as well as your emergency fund for whatever may come. Don’t dip into your emergency fund for something that isn’t an emergency — keep the funds separate. The target is to have 6–8 months (of your take home pay) as an emergency fund.

Retirement: 10–20%. Ideally, your savings rate should be 20 percent, which would reflect investments plus matching funds. For you as an individual, strive for 14 percent. At least make sure you are taking advantage of any employer matching funds.

Kitchen cleaning on a shoestring

scrubbing countertopsKeeping your kitchen clean year-round is important for your health and your pocket book. Cleaning products can be expensive. Try the following suggestions can save money.

  • Vinegar will clean the coffee pot. Fill coffee pot with half white vinegar and half water and run through coffee maker. Empty the pot and run through another cycle with plain water.
  • Save money by using inexpensive dish detergent. Add a few drops of vinegar. It will cut grease and leave dishes sparkling clean.
  • To remove tarnish from copper or brass, mix equal amounts of salt, vinegar and flour. Apply the paste with a damp sponge until the metal is shiny. Rinse and gently dry.
  • Sponge pet spills with a half cup of white vinegar in 1 quart of warm water. Let stand a few minutes and wipe clean. Be sure and test an area first to see if it will change the color of the carpet.
  • Sprinkle baking soda on pots with burned-on foods. Add a few drops of water and make a paste. Allow to stand for about 1/2 hour. Add 1 cup water and simmer for 15 minutes. Add more water if needed so pot doesn’t boil dry. Turn off and let stand for a few hours. This will usually lift the burned food out of the pan.
  • Remember, never mix chlorine bleach and ammonia. The fumes are toxic.

Financial tips for new college grads

graduate in cap and gownCongratulations on getting your degree. Here are some tips to consider as your new career starts.

Get health care coverage immediately. If it hasn’t already, your parent’s health care coverage will probably end with your graduation or the age of 26. Get a quote for an individual health insurance plan or sign up with your new employer’s plan. Going without coverage could have a devastating effect on your finances if you have a severe illness or accident. Make this the first thing you do and don’t put it off.

Get your own home and auto insurance. Now that you are a graduate, you’ll need to get your own auto and renter’s insurance policies. Start by calling your current insurer, you might be eligible for a discount based on the length of time you’ve been with the company, don’t forget to shop around to save on insurance premiums. This can save you money.

Save money for your future self. Join the retirement plan at work. If you are young and your company offers it, you may want to explore the Roth 401k at work. In addition to your plan at work, begin saving money on your own for both retirement and other goals.

Start an emergency fund. Earmark some of your first dollars from your new job to build up a savings account to serve as an emergency fund. You never know when an emergency will hit, but it is inevitable. Some suggest having an 8-month fund.

Learn about taxes. Educate yourself about taxes, and you’ll be able to take advantage of incentives and deductions to cut your tax bill. Pay particular attention to the student loan interest deduction and the saver’s credit for retirement savings contributions.

Begin payments on student loans. Begin paying off your student loans right away. Your future self will thank you. This loan will be part of your credit history.

Handle credit cards wisely. Use credit cards carefully to earn cash rewards. Always pay your balance in full every month. If you ran up some credit card debt while in school, begin paying it off aggressively.

Create savings goals. Before you commit your paycheck away, create savings goals. As a new grad, you may want to focus on retirement or a down payment for a house.

Spend money slowly. It can be very tempting with a new job to buy a new car and rent a fancy apartment. Not so fast. Wait a few months to see how your finances work out. Set up your household budget.

Wedding bells: starting your financial life together

Once the wedding is over, the practicality of day-to-day life together begins. In addition to dividing household responsibilities, couples will also need to determine who will pay the bills, track investments, review bank statements and more. Although it’s not necessary to assign each task to one partner, it is critical that you have a system in place to ensure these tasks get done. Here are a few financial and estate-related items that recently married couples should consider.

Decide on whether or not to combine finances — You are free to make your own choices for what will work best for you and your partner in your marriage. Some couples have chosen to combine finances, while others have not done so. Another option is to do a hybrid approach where they each have their own account and then have an account together from which bills are paid. The point is to make sure that it works for both of you.

Review your beneficiaries — Go through each of your accounts — including retirement plans and insurance — and ensure that the beneficiaries listed are still accurate. If you would like your spouse to receive the funds from your accounts in the event of your death, make him or her the beneficiary.

Revisit your insurance — Upon getting married, it’s important to sit down and review both of your health, life and car insurance plans. Review whether your coverage overlaps in certain areas, if one plan is better or cheaper, or whether you could be saving money by combining coverage.

Changing your name — If you change your name upon marrying — to your spouse’s last name or to a hyphenated name — it’s important that you notify certain organizations of the change. You should notify the Social Security Administration immediately to ensure that your retirement account is properly credited, and also to request a new Social Security card. Change your name on all important documents and accounts. And remember to change your name on your driver’s license, which serves as the primary form of identification for most Americans.

Develop a budget — Whether you already have individual budgets and want to combine them or you are new to budgeting, marriage marks an important time to sit down and create a plan for spending and savings. Your new budget should reflect your shared living situation and both of your incomes and expenses.

Prenuptial agreements — A prenuptial agreement outlines how assets will be divided in the event that the marriage ends. While some people consider prenuptial agreements to be unromantic or to represent a lack of faith, others feel they can ensure some security for both partners and help them know what to expect in the event the marriage ends.

Postnuptial agreements — If you’re already married and have come into wealth or you’ve just decided you want a financial agreement with your spouse, consider a postnuptial agreement. In some cases, such as when one spouse enters into a business partnership with another individual, a postnuptial agreement may be an important contract to consider.

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