5 "Outside the Box" Holiday Gift Ideas

Submitted by: winnie 12/02/2009 9:56 PM

Every year I am reminded that gifts that some of the best gifts are ones you can't get in stores. Those tend to be the most useful and heartfelt. And gifts don't always have to come in a box - it is always fun to get a little creative around the holidays! Here are some of my favorites: 1)The Gift of Food - You'll always need food and you can make this gift more personal by 'making' it yourself. From homemade jams to cookies to signature treats, food that lasts is a treat you can enjoy anytime. One year, my cousin made all of us cookie mixes. She collected mason jars and filled them with all the dry ingredients for oatmeal raisin cookies. She took a square of scrap holiday fabric and some rafia to cover the tip and then printed out the recipes and tied that to the top. Such a great gift! And we thought of her when we made her cookies that winter. Another year, one of my friends went out and bought a package of tv dinner trays and cooked up some home made tv dinners for her son who had just graduated college. She cooked up chicken, ham, steak, green beans, broccoli and a cherry pudding cake and brownies and divided them all up. Included reheating instructions and sent her son home with 20 tv dinners for his freezer. This is a great idea for elderly friends or family, a home cooked meal at their fingertips. Cooking too much? When my dear friend graduated high school, her mother made her a bound book of all the family recipes from growing up so she could take a bit of 'home' with her. She still uses that cook book to this day! 2)The Gift of Nature - we are fortunate to live in the country so our holiday wreaths are easy to make, and we thought we'd make some of our 'city' friends a country wreath. Easy to do with some pine boughs, wild berries, pine cones and whatever other interesting plants we could find. all you need is some wire and a wreath frame from michaels. Most wreaths in stores are $25 or more, so this makes a great gift. You can also make garland or centerpieces or if you have a friend who is a beach lover, take some old box tying string and make a garland of starfish, seashells and sea lavender for a beach inspired holiday decoration. 3)The Gift of Craft - One year when money was really tight, we decided to make holiday ornaments/decorations for friends and family. My husband cut down scrap pieces of wood into square blocks that we sanded down and stenciled letters on to spell out HAPPY HOLIDAYS on one side, MERRY CHRISTMAS, on another and HAPPY NEW YEAR. I also took scrap fabric and trim made stockings with the year and the recipient's name on the stocking. If you can stitch, making a wall hanging is fun to do. Take a piece of muslin or white fabric and then stitch a personalized message. My mom collects snowmen, so I made her a scene of snowmen and the words "let it snow, let it snow, let it snow." Made it look country by keeping everything simple. Then I took the fabric and did a light tea stain treatment to give it a more antiquey look. Finally, I found a cheap frame at a thrift store and distressed it and frame the piece. She loved it and now it hangs with her collection. If you are struggling for ideas, walk around a craft fair for inspiration. 4)The Gift of Experience - I am the point in my life where there is nothing that I really need, but there are plenty of things that I'd like to do. Gifts that involve activities are great fun, especially when that activity involves the gift giver. My neighbor and I exchange gifts every year, but a few year we decided to do something different, instead of spending time buying gifts, we bought each other a ticket to the Nutcracker so we could enjoy the show together. Last year, we took a cooking class together and this year, we bought each other half price mani/pedi treatments from Groupon, so we will get to spend the afternoon together and be pampered at the same time! 5)The Gift of Time - This kind of runs along the same lines as the last one, but sometime it is just time spent together that matters, no money spent, no dollars exchanged, just time spent together.

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Talking to Aging Parents about their Finances

Brought to you by Balance, Alternatives Credit Counseling partner. Do you know if your parents have a will? If anyone is trying to sell them an annuity? If they are paying all of their bills? If you answered no to these questions, it may be time to have a conversation with them. You may be groaning right now – who enjoys talking about money? – but doing this can help ensure your parents’ well-being. Bill-paying Many of us struggle to meet our monthly obligations, especially seniors, who often face diminished retirement savings and high medical costs. Ask your parents if they have been unable to pay any bills or purchase essential expenses, like medicine or food. If so, help them explore ways they can revise their budget. Are there any expenses that can be cut or reduced, like cable or dining out? Is there any way to increase their income, such as through a part-time job or reverse mortgage? Encourage your parents to contact the creditors/service providers for any bill they are struggling to pay. (If preferred, you may be able to talk to them yourself with your parents’ permission.) Many creditors offer hardship programs – short-term arrangements that allow you to make smaller payments. Utility companies frequently have payment assistance programs for limited-income customers. For aging parents suffering from memory problems, bills may go unpaid simply because they forget. Handling the bill-paying yourself is one possibility, but if you do not have the time, you may find it helpful to use the services of a daily money manager. Daily money managers assist with financial tasks, such as opening and paying bills, balancing checkbooks, and organizing and filling out paperwork. Professional daily money managers charge a fee for their services, but low-income seniors may be eligible for free assistance through a volunteer program. (You can contact your local Area Agency on Aging for more information.) Of course, since there is the potential for abuse, you should choose a daily money manager carefully and periodically check up on his or her work. Long-term care costs Sometime in the future, your parents will likely reach the point where they are no longer able to live on their own without help. Unless you or a relative plans to care for them, they will have to pay for nursing-home, assisted-living, or in-home care. It is not unusual for long-term care costs to exceed $50,000 a year, and Medicare and Medicaid only cover them in limited circumstances. If your parents do not already have a plan for financing their long-term care, help them create one. Putting aside a set sum each month can help your parents amass a good chunk of change, but if they do not already have a significant amount of savings, it may be difficult to save enough now to completely cover their costs. Besides saving, another option is to purchase long-term care insurance. Many policies cover both nursing-home and in-home care costs. The best time to purchase this insurance is when you are in your 50s or 60s. Since there are many different provisions to consider, you and your parents may want to talk with a qualified insurance advisor about what would best meet their needs. Long-term care insurance is expensive, so it can be tempting to go with whoever offers the cheapest policy, but avoid purchasing one from a company with questionable financial health. Salespeople/scammers Unfortunately, there are many people out there looking to take advantage of others, and seniors are a popular target. If someone is trying to sell your parents an annuity, timeshare, or other investment opportunity, review it in detail to see if it would make sense financially. (It probably won’t.) Explain to your parents why you think it is not a good investment. If they are getting calls from telemarketers, sign them up on the National Do Not Call Registry (www.donotcall.gov or 888-382-1222). Discuss common scams, such as the promise of lottery winnings if you send a check for taxes, and encourage them to talk to you before sending money to someone. Estate planning The majority of Americans don’t have a will. No one wants to think about death, but having a will ensures your property goes who you want it to go to and reduces the likelihood of conflict breaking out between surviving relatives. If you are not sure if your parents have one, ask. Those with more complicated financial situations may want to have their will drafted by a lawyer, but others may be able to create one with the aid of a book or computer software. Even if you know your parents have a will, you can talk to them about whether they feel it is up-to-date or if they want to make any changes. For example, if they left part of their estate to a sibling and he died, they may prefer now to leave their whole estate to their children. Also discuss if they have other estate planning documents, such as durable power of attorney for healthcare and finances.
The Everything Wills and Estate Planning Book (2nd edition) By Deborah Layton (Adams Media 2009) This book provides comprehensive information on the estate planning process for a fraction of the cost of a lawyer. You will learn about the sections and clauses of a will, how to sign it properly and amend it later if needed, and how the probate process works. Layton also reviews estate planning tools you can use to avoid the probate process, such as trusts, joint ownership, and life insurance. Other topics discussed include minimizing estate taxes and assigning durable power of attorney. The Everything Wills and Estate Planning Book is the perfect gift for parents who need to plan their estate. And if you have delayed planning too, you may want to buy a second copy for yourself. Keep these in mind when talking to your parents. 1. If you disagree with something they are doing, try to calmly explain why. Avoid saying such things as, “How could you do something so stupid?” 2. If you have siblings, talk with your parents together. This will reduce the chances of family conflict occurring later on, and they could bring ideas to the table that you did not think of. 3. Respect your parents’ opinion. Let them know that you want to help them but are not trying to take away their independence. 4. Don’t be afraid to seek professional help. Most people aren’t experts on things like investments, wills, and insurance. Talking to a financial planner, lawyer, accountant, or other professional can ensure that you and your parents create a solid financial plan. 5. If your parents need to create a will or do anything else, set a specific deadline. This will discourage procrastination. 6. Looking for a way to initiate the conversation? Start by talking about your own finances. For example: “We met with a lawyer last week and created a will. Do you have one?” 7. Avoid trying to talk to your parents about their finances during a stressful or hectic time, like while you are in the middle of cooking Thanksgiving dinner. 8. Let your parents know that you want talk with them about their finances because you love them and want to ensure they are taken care of. 9. Emphasize the benefits of financial planning – being able to pay your bills now and in the future, ensuring that assets are passed on to the next generation and not drained, etc. 10. Don’t force your parents to talk about their finances if they are extremely resistant. They may be more open to discussing it at another time or with a professional.

50 Clever DIY Ideas for Big Savings

Submitted by: Tip Hero 11/03/2009 3:59 PM

What we don't have in money we can make up with in time. When times are good and you've got money to spare, you might be fortunate enough to be able to afford to pay someone else to do work around the house, freeing up time for other work, projects, hobbies, and fun. But when the going gets tough, time can often be your most valuable asset. And putting that time to good use, such as going the DIY route, can help save you money while also providing for some very rewarding work. After all, when you do it yourself, you're much more likely to enjoy what you've done than if you had paid someone else to do it. At least we think so! We came across a great article from This Old House that lists 50 DIY things you can do to save big. There are a lot of really great ideas on the list. What we also like about the list is that they break up the projects into four major per-year savings categories: (1) Savings of up to $50, savings of up to $150, savings of up to $250, and savings of up to $500. Plus, under each idea, they provide cost and savings amounts, so you can get a sense of what to expect to save for each. We've pulled out a few of our favorites from each category, but we strongly suggest clicking through to read about all 50 ideas. And if you've got any DIY, money-saving tips of your own, please share them with the rest of the Tip Hero community in the Comments section below. Thanks! Up to $50 in Savings: 1. Shorten your dryer-vent hose. - "Then trim the hose length so that it's just long enough for you to pull the dryer a few feet out from the wall. A short and unobstructed line makes your dryer run more efficiently." Estimated savings: $25/year. 2. Borrow specialized tools. - "Go to Zilok for far better deals than rental retailers offer." Estimated savings: "$50 or more for the same tool at a rental center." Web searches (sponosred): Tool Rentals | Tool Rental Centers 4. Choose one neutral trim paint. - "For the entire house rather than buying a gallon of a particular color for each room and using only a fraction of each can." Estimated savings: "$50 on paint for three rooms." Web searches (sponosred): Discount Paint | Paint Tools Up to $150 in Savings: 17. Set your computer to sleep. — "Not just the monitor, but the hard drive, too—so that it automatically dims after 10 minutes of nonuse." Estimated savings: $75/year off electric bills. 18. Wait to replace your grill, lawn mower, or patio furniture until the fall. - "Stores mark down their inventory to make room for holiday decorations and snowblowers." Estimated savings: "$150 or more per item." Compare Prices: Grills | Lawn Mowers | Patio Furniture 21. Buy a deluxe battery recharging station. - "Stop using disposables. A combo unit keeps a supply of AA, AAA, C, and D batteries at the ready." Estimated savings: "As much as $100 per year on disposables for dozens of tools and gadgets." Compare Prices: Battery Recharging Stations Up to $250 in Savings: 29. Plug in a SmartStrip. - "Three-quarters of the energy that electronics burn is consumed when the equipment is turned off. Rather than unplug items after every use, hook them up to a SmartStrip surge protector, which automatically kills power to electronics when you turn them off and returns it when you switch them back on." Estimated savings: "As much as $240 per year in energy costs." Compare Prices: SmartStrips 33. Do your own energy audit. - "Pick up Black & Decker's new Thermal Leak Detector to find weak spots in your home's "insulation envelope." Fixes are often as simple as installing foam gaskets under switch plates and outlet covers ($3 for 10 gaskets at Home Energy Solutions) and adding new weatherstripping around your entry door ($3 for 17 feet of self-adhesive foam strip at Lowes)." Estimated savings: $160/year. Compare Prices: Thermal Leak Detectors 35. Get the contractor discount on home improvement products. - "Many local dealers offer a 5, 10, or even 15 percent discount to tradespeople. So, for example, drop the name of your plumber when buying new bath fixtures. Don't have a pro? Explain that you're contracting the job, and ask if they'll extend the discount." Estimated savings: "Easily $250 for a new tub, sink, and toilet suite." Up to $500 in Savings: 38. Install an under-sink water filter. - Stop buying expensive bottled water. Estimated savings: "$360 per year on purified water." Web searches (sponosred): Under-Sink Water Filters 39. Install a wireless light switch. - "Simply attach a battery-operated device to the wall and screw its receptor into the lamp socket, which then receives the bulb." Estimated savings: "$250 to $300 to have an electrician install a switch and snake in wiring." Compare Prices: Wireless Light Switch 42. Free mulch and compost. - Get it at your town's yard-waste recycling center. Estimated savings: "$300 for all the amendments you'll need to fortify and cover your raised beds and foundation plantings, per 1/4 acre." 50 Nifty Tricks for Big DIY Savings (This Old House)

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Want prosperity? Index ranks Finland as place to be

emailed from Brendan:

SINGAPORE (Reuters Life!) – For those who value their freedom of expression as much as health, wealth, and prosperity, then Finland is the place to be, with an index ranking the Nordic nation the best in the world.

The 2009 Legatum Prosperity Index, published on Tuesday and compiled by the Legatum Institute, an independent policy, advocacy and advisory organization, ranked 104 countries which are home to 90 percent of the world's population.

The index is based on a definition of prosperity that combines economic growth with the level of personal freedoms and democracy in a country as well as measures of happiness and quality of life.

With the exception of Switzerland, which came in at number 2, Nordic countries dominated the top 5 slots, with Sweden in third place followed by Denmark and Norway.

The top 10 were all also Western nations, with Australia (6th place) and Canada (7th place) both beating the United States, ranked 9th. Britain came in at number 12.

In Asia, Japan was the region's highest ranked country at number 16, followed by Hong Kong (18th place) and Singapore (23rd place) and Taiwan (24th place).

Dr. William Inboden, senior vice president of the Legatum Institute, said the lower rankings for Asian nations were largely due to their weak scores for democracy and personal freedoms.

"Many Asian nations have good economic fundamentals, but the Index tells us that true prosperity requires more than just money," Inboden said in a statement.

"Democratic institutions and personal freedom measures are letting some Asian nations down. Furthermore, countries which have low levels of economic stability, such as Cambodia, finish even further down in the overall rankings."

Cambodia came in the 93rd slot while China, with its tight political controls, came in 75th despite booming economic growth.

And the world's least prosperous country? According to the Legatum Index, it is Zimbabwe, with Sudan and Yemen close runners-up.

The index combines objective data and subjective responses to surveys. More details can be found on http://www.prosperity.com.

(Writing by Miral Fahmy, editing by Ron Popeski)

Negotiating credit card debt down yourself

From Clarkhoward.com:

Debt-settlement firms promise they can negotiate your credit card debt down to just pennies on the dollar. But are they true to their word?

Too often that promise is an illusion. You usually pay an upfront fee to the debt-settlement firm, plus a monthly retainer. Their strategy is to get you to stop paying on your bills. They typically have you take the money you would have paid on monthly minimums and stash it in a savings account.

The basic idea is to make the credit card companies so desperate that they'll settle with you. The reality, however, is that you just wind up damaging your credit.

Did you know that you can negotiate down your debt by yourself? Begin by figuring out what you owe and what you can afford to pay. Then call up your various creditors and say, "My total debt is X number of dollars and I can afford to pay you X amount every month."

Set a condition that all of your creditors must agree to your terms in writing or no one gets anything at all. And don't give them access to your checking account! You'll want to pay them directly to safeguard your funds.

It's important to know that this approach will foul up your credit and you'll get a tax bill from the IRS for each settlement. If you owe $10,000 to one creditor and they take $2,000, then the $8,000 that's written off is considered taxable income for you.

The power you have lies in the fact that credit card companies are scared you'll go bankrupt and then they get zero. More than a million people are expected to file bankruptcy in 2009. That means creditors that wouldn't deal with you before now probably will.

Finally, there is another option. You can use NFCC.org to pay off your debt over time in a negotiated settlement. Those who are particularly burdened may qualify for a hardship debt-management plan (DMP) through the above link.

7 New Rules for the First-Time Home Buyer

Submitted by: Ray @ Tip Hero 09/17/2009 12:33 PM

One of my favorite personal finance columnists is Ron Lieber of The New York Times, and in this week's column he covers 7 New Rules for First-Time Homebuyers. I was particularly interested in the article because I have been looking to buy my first home. The article goes against what most people believed over the last couple of years during the great real estate bubble. Although the article calls them new rules, most of them are tried and true advice for home buying, like limiting your mortgage, taxes, and insurance to 35% of your pretax income, and to make a down payment of 20%. Reading this article, I thought of a couple of additional rules I would consider, such as not thinking of your home as an investment. I always heard from family and friends that their home was their best investment. Well, when I ask them for the numbers, it doesn't pan out when they factor in all the costs, from taxes to insurance, from repairs to remodeling and landscaping and you name it. I'm not saying that real estate can't be a great investment, but for the typical home buyer, a home is a forced savings account with bank type returns. Another rule that came to mind when reading this article is to not buy a home for tax reasons. People always bring up the tax savings/benefits of home ownership. Buying a home for the tax benefits, in my mind, is letting the tail wag the dog. What few people realize is that the real tax benefit is only the incremental amount of itemized deductions over the standard deduction, which you get regardless of whether you own a home or not. For some people, in certain tax situations, it does provide a decent tax benefit, but for many others, it provides only a small or sometimes negligible benefit. Finally, a last piece of advice would be to try and strip out as much emotion from the purchase process as possible. There's a very good reason why advertisers spend millions of dollars on TV trying to associate emotions with products (car advertising being the best example). They want you to focus on the emotions the product elicits -- not the dollars and cents. Home buying is probably at the top of the list when it comes to emotional purchases. Before going out to look at homes, put pad to paper to figure out what you can afford and what you're comfortable paying. When you're deciding on whether to make an offer, make sure you have a handle on all the numbers, both now and in the future, and that you're comfortable with them. The article closes with probably the best rule of them all: The "8-Hour Rule", which is not to buy a home that keeps you awake at night and keeps you from getting a solid eight hours of sleep. There was a famous investor back in the twenties, Bernard Baruch, who had a similar rule: "Sell to your sleeping point." If a stock kept him up at night, he would sell enough shares until he could get a good night's sleep again. For homes, Mr. Baruch would tell you to "buy to your sleeping point." A home is ultimately for providing you with shelter, security, and comfort, not to keep you from getting a good night's sleep.

Profit vs. Loss

A co-worker just passed this on.

Ariely and Shin conducted an experiment on MIT students. They devised a computer game which offered players three doors: Red, Blue, and Green. You started with 100 clicks. You clicked to enter a room. Once in a room, each click netted you between 1-10 cents. You could also switch rooms (at the cost of a click). The rooms were programmed to provide different levels of rewards (there was variation within each room's payoffs, but it was pretty easy to tell which one provided the best payout).

Players tended to try all three rooms, figure out which one had the highest payout, and then spend all their time there. (These are MIT students we're talking about). Then, however, Ariely introduced a new wrinkle: Any door left unvisited for 12 clicks would disappear forever. With each click, the unclicked doors shrank by 1/12th.

Now, players jumped from door to door, trying to keep their options open.They made 15% less money; in fact, by choosing any of the doors and sticking with it, they could have made more money.

Ariely increased the cost of opening a door to 3 cents; no change--players still seemed compelled to keeping their options open. Ariely told participants the exact monetary payoff of each door; no change. Ariely allowed participants as many practice runs as they wanted before the actual experiment; no change. Ariely changed the rules so that any door could be "reincarnated" with a single click; no change.

Players just couldn't tolerate the idea of the loss, and so they did whatever was necessary to prevent their doors from closing, even though disappearance had no real consequences and could be easily reversed. We feel compelled to preserve options, even at great expense, even when it doesn't make sense.

More on irrational behavior here.