I came across this article by Consumer Reports and thought I’d share it with you. The article is titled Cut Costs by Making Things Last and it’s about ways to prevent replacing things more often than you should. Some of the information was a little too obvious so I only included what I felt to be most beneficial. I’ve added some comments of my own as well; they are annotated below with a sub-bullet…

• Carpeting: Unless your carpet comes with a cushion attached, be sure to install one, ideally no more than 7/16-inch thick. Vacuum often, especially in high-traffic areas, to prevent soil from becoming embedded in the fibers.
  • The soil in your carpet acts like sand paper to the fibers and causes premature wear and tear.

• Hardwood Floors: Wipe up wet spills immediately. Dust mop or vacuum (ideally with a brush attachment or one designed for bare floors) at least weekly to keep dirt and grit from scratching the finish.

• Mattresses: Buy a washable, protective cover. Pull back the sheets and blankets, and let the bed air out for 20 minutes or so each morning. Avoid sitting on the edge of the mattress or allowing kids (or overly exuberant adults) to use it as a trampoline.
  • Another way to extend the life of your mattress is to flip it over every time you change your sheets.

• Clothing: Wash clothes in cold water whenever possible. Line-dry if you can. Consider a front-loader for your next washer. They cost more, but are more efficient to operate. The higher your utility rates, the sooner the payback. Also, front-loaders are less punishing to clothes than top-loaders, although they tend to cause more wrinkles.
  • This will also prevent you from shrinking or fading your clothes.

• Clothes Dryers: Empty the lint filter after each use, and clean the entire air duct yearly. The first step will allow the dryer’s air to flow freely; the second will do the same and also help prevent a house fire.
  • Clothes dryers were involved in an estimated 14,800 U.S. home structure fires, 16 civilian deaths, 309 civilian injuries and $75.8 million in direct property damage, annually, during 1994-1998 (learn more about appliance related fires here).

• Cell Phones: To prevent the battery from overheating and possibly ruining the phone, don’t stow your phone in your car’s glove compartment, especially during the hot summer months.
  • Leaving your cell phone plugged in all the time can cause permanent degradation to the battery making it hard to maintain a charge (the same applies to anything with a rechargeable battery).

• Digital Cameras: Suppress the urge to reach for a regular tissue or your shirttail when the lens is smudged or dirty. Use a lens-cleaning cloth or special lens tissue (with or without lens-cleaning fluid).

• Laptop Computers: Do your computing on a hard, flat surface rather than a soft, cushy one such as a bed or carpet. The latter can block airflow to your laptop and lead to overheating.

• LCD TVs: Clean the screen gently with a soft cloth. If you need to use a liquid solution, make sure it’s one designed for the purpose. Avoid regular glass cleaners and ammonia-based ones.

• Refrigerators and Freezers: Vacuum the dust off the coils, usually under or behind the unit, every few months.

• Tires: Keep them properly inflated. Consult your owner’s manual or the sticker on the driver’s side door jamb for guidance. Don’t go by the number on the sidewall of the tire; that refers to the tire’s maximum pressure. Both under and over inflation can cause premature wear, as well as handling problems.
  • Rotating your tires every other oil change and keeping them properly inflated can also save you gas mileage.

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Interested in mutual funds but feel you lack the knowledge necessary to get started? Don’t worry! You’re not alone! Researching which mutual funds to invest in can prove to be overwhelming if you don’t truly understand mutual funds and how they work. Let me share some of the basics with you.

The Security and Exchange Commission (SEC) defines a mutual fund as, “A company that brings together money from many people and invests it in stocks, bonds, and other assets.” In other words, people like you and me pool their money together in a fund and professionals invest this lump sum in the market for us. Now since we all own shares of this fund, when the net asset value (NAV) increases, so does the value of our shares. Conversely, when the NAV drops, the value of your shares goes down. This is why it’s important to do your homework (more on that later).

There are two types of mutual funds. Open-end funds (the most common) and closed-end funds…

• Open-end Fund: An unlimited number of shares. The fund will just create a new one for anyone who wants to purchase a share.

• Closed-end Fund: A limited number of shares. Once they’re gone, they’re gone!

You’ll also need to choose between front-end load, back-end load, and no-load funds…

• Front-end Load: This is a service fee that is required upfront when purchasing shares. You will usually see this with funds that are historically good performers.

• Back-end Load: This is a commission that is paid to the agent that purchased your shares for you. No different than a salesperson receives after selling you that shiny new car!

• No-load: These funds charge nothing upfront to purchase shares.

You have a few options when it comes to purchasing mutual funds. You can purchase them directly through the fund itself, through an individual retirement account (IRA), or through your company’s 401(K) plan. I suggest doing your homework first though. There are many free resources on the Internet to research funds and how they’re performing (I like to use Yahoo! Finance). Another often-overlooked resource is to view the fund’s prospectus. This is where the company breaks down the fund’s objectives, performance, and any fees associated with the fund. Here are some of the fees you might see…

• Management Fees: Management Fees are charged as a normal part of doing business.

• 12(b)-1 Fees: The 12(b)-1 fees cover the cost of advertising and distribution.

• Redemption Fees: Redemption fees are a penalty for selling your shares before the contracted date. It’s used to prevent a high turnover rate in the fund.

So whether you’re looking to diversify your investment portfolio, or just wanting to invest in something that doesn’t take much time or effort, a mutual fund is a great choice!

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If you’re somewhere between the ages of 40 - 50 years old, retirement is probably in the forefront of your thoughts (or at least it should be). The kids are out of the house, you’re career is in its prime, it’s the perfect time to refine that retirement plan. It’s also the perfect time to make some costly mistakes! Prepare yourself by applying some (or all) of the following steps…

• Payoff Debt: If you haven’t done this already, you need to! Credit cards, vehicle loans, and other nondeductible debt should be the first to go. Once this is done, you should start sending all that extra money towards your mortgage.

• Re-visit Your Investments: At this point in your life, you might want to consider shifting your funds into more secure investments like certificates of deposit (CDs) or money market accounts. The interest rates may be lower, but hopefully you’ve made enough through prior investments that you’ll still receive a decent return on your money.

• Re-evaluate Your Life Insurance Plan: Over the years your life insurance needs change. Review your life insurance policy and make sure it fits your current situation. You don’t want to be paying more than you need!

• Learn About Long-term Care Insurance: The jury’s still out about whether it is smart to purchase long-term care insurance in your 40’s - 50’s (some feel this is a mistake because the company could disappear by the time you need to use it), but do yourself a favor and at least do some reading on the subject.

• Nudge Your Kids from the Nest: If your kids are still asking Dad and Mom for money, now is the time to say “No!” This might be hard for some, but you will be doing both you and them a favor by teaching them this life lesson.

• Join the American Association of Retired Persons (AARP).

• Enjoy the Best Years of Your Life!

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Many people struggle with whether to invest in a money market account or a certificate of deposit (CD). If you are one of these people, the first question you should ask yourself is, “What is the purpose of the money I’m investing?” Your answer will most likely fall into one of the following categories…

• “I want to be able to access my money in an emergency.” If this is your answer, you’re probably better off looking at a money market account. While your interest rate might be a little lower, money market accounts are set-up so that you can readily access your funds (you can search for the best interest rates at Bankrate). Most even come with a check writing capability. Be careful though, most money market accounts only allow 3 - 6 transactions a month. Any more than that and you’ll be hit with a service fee. Other considerations are that money market accounts typically mature within 1 year or less and most require a minimum balance of $2,500 or more (dropping below the minimum required balance will result in a penalty, usually $10 a month as long as it stays below the required minimum balance).

• “I don’t need quick access; I just want a good return on my money.” If this is your answer, you might want to look into a CD. CDs generally range from 3 months - 5 years. Once the account matures, you can cash out or roll it over into another CD (I like to use ING DIRECT for their Orange CDs). The longer the term is, the higher the interest rate will be. This is because the longer the bank can hold your money, the more profit they can make by lending it to other customers. Be cautious though, chasing the higher interest rates of long term CDs can backfire if you end up cashing out before the maturity date. Accessing these funds early comes with a penalty in the form of losing interest already acrued in the account.

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If you don’t realize you have a problem with debt, there’s a good chance you’ll miss the signs that are right there in front of you! I aim to prevent this by sharing with you the most common signs that you’re in over your head financially. Here are some things to look out for…

• Denial: This is probably the most common sign and it comes with the highest consequence. Add up all your debt on a piece of paper and write this number in large, bold numbers! This is the enemy! Make paying this figure down your #1 priority!

• Carrying Over Credit Card Balances: If you’re continually carrying over a balance on your credit cards, there’s a good chance you’re spending more than you make. This is a downward spiral folks, and you need to make a change now! Take your credit cards out of your wallet or purse and put them away for good. If you don’t trust your self-discipline, put them in a tupperware container, add water, and place it in the freezer (this works great for impulse shoppers).

• Making Minimum Payments: If you continuously make minimum payments on bills, you might want to re-evaluate your spending plan and look for ways to save extra money to send to your debt (for ideas on how to do this read my article Not So Mandatory Expenses).

• No Discretionary Income: Not having any discretionary income is often the result of poorly managed, or non-existent spending plans. Get some great tips about spending plans and even some blank forms to get you started on Dave Ramsey’s website: daveramsey.com.

• No Emergency Fund: Without an emergency fund, you will be forced to rely on a credit card when an unexpected expense comes up. Instead, try making minimum payments on all of your bills until you can save $1,000 - $1,500 in a savings account for emergency situations. I recommend a high yield online account like the Orange Savings Account ING DIRECT at (learn more about this in my article Saving Money Online).

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