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April 2010 - Posts

  • Pet Owners' Spending Doubles Over The Past Decade

    Annual spending on pets by U.S. owners is expected to hit $52 billion per year in the next two years

    According to recent studies by a British insurance company and the RSPCA (Royal Society for the Prevention of Cruelty to Animals), the average U.K. dog owner typically spends as much as $35,000 over the lifetime of their pet -  a typical British cat owner spends about a third of that amount. All told, pet owners in the United Kingdom spend approximately $68 million on their pets annually – which pales in comparison to the estimated $41 Billion spent on pets by American owners!

    Although some pet owners spend lavishly on their furry friends – just go to any pet store or search on line and your will find items such as $430 indoor dog-potties, $30-an-ounce perfume, and $225 trench coats aimed solely at four-footed feline and canine consumers. My personal favorite are “neuticles,” a patented prosthetic implant that is designed, says inventor Gregg Miller, to "let people restore their pets to anatomical preciseness" after neutering, “allowing them to retain their natural look and self-esteem.” They are a bargain at $919 a pair (not counting the cost of the surgery to attach them to your pet).

    For those pet owners looking for ways to economize on the impact their pets have on their budget, here are some ways to save money.

    • Adopting a rescue animal can be a win-win deal. Not only will you be taking in an animal that needs a home and may face euthanasia, you will usually pay less for your new pet than if you go to a pet shop or a breeder. The rescue agency may have already spayed or neutered the animal, and some will even arrange subsidized vaccinations and neutering before you pick up your new best friend.
    • Pet insurance can be important to your pet's health. Shop around for the right policy and deductible. Insurance policies, premiums, deductibles and coverages are as varied as those for humans. Premiums are based on the type of pet you have, its age, where you live and other factors that will determine how likely it is to get lost or fall ill. As with other types of insurance, you can lower your premiums by taking on a higher deductible.
    • Choosing a mutt – instead of a purebred animal can cost you much less cash. Research suggests that purebred dogs for example, can cost as much as 34 more to care for over their lifetimes than do animals of mixed breed.
    • Visit your veterinarian when necessary. You probably don't take your child to the vet at the first sign of a cold, so why would you do so for your dog or cat? Don't skip on preventative shots – they can help your pet avoid costly illnesses.
    • Spend less on medication. Check out web sites like www.petmeds.com for cheaper alternatives for medications sold by the vet and at traditional pet stores.
    • Check out neutering programs run by your county animal control agency, the ASPCA or other animal-friendly organizations. Depending on your income level, you may be able to get financial assistance or even take advantage of free programs.
    • Buy your pet food in bulk. Generally speaking, the bigger the package of food you can buy the cheaper it will be.
    Posted Apr 29 2010, 02:17 AM by moneycoach with no comments
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  • Financial Infidelity

    Financial infidelity - lying or refusing to be honest with your spouse or partner about money.

    As more and more marriages are made up of two-income couples, financial planners and marriage counselors are encountering a problem known as “financial infidelity.” Simply put, financial infidelity is lying to your partner about money. Although recent studies reveal that 96% of American couples believe complete honesty about financial issues is important, 29% admit to lying to their partners about money.

    The ways that we lie about money can vary from something as simple as not telling your partner about buying a new pair of shoes to something as complicated as hiding a large investment – or the losses from one. Lying about money also varies by gender – according to psychologists, men tend to lie about income, while women more often are dishonest about spending.

    Sometimes the impulse to keep financial secrets stems from a desire to avoid confrontation or arguments. This is an easy mistake to make, but a dangerous one. Psychologists and divorce specialists agree that strong relationships are about financial compatibility, as well as emotional, physical and emotional compatibility. Being financially faithful involves having complete honesty, similar monetary goals and a workable – agreed upon – family budget.

    When it comes to money matters at home – honesty is important – and financial infidelity in a marriage can destroy your relationship with your partner as quickly as can emotional or sexual infidelity.
    Posted Apr 29 2010, 02:17 AM by moneycoach with no comments
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  • Understanding Health Insurance Reform

    More than half of Americans say they still don't understand how they'll be affected by the new health insurance law – what is the positive impact of reform?

    Last month, Barack Obama signed into law the most sweeping social program since Lyndon Johnson's Great Society. But most Americans – even those who understand on some level the historical significance of the achievement -  are still unsure of what changes to expect … and when.

    After months of debate that has played out over the internet, in newspapers, television and radio, most
    Americans still don't understand how the nearly $1 trillion behemoth of insurance regulations, tax credits, and new programs, will affect them, according to a recent CBS News poll.

    Health insurance reform, now that it has finally been passed, avoids sweeping changes. The law doesn't create a government-run insurance plan as some had feared, nor does it (at first) require that everyone have health insurance, whether they can afford it or not. Instead, much like the social safety net first established by the social security system, the new health plan is designed to assist those who can't get insurance at work and can't afford to buy their own, who lose their jobs, who have pre-existing conditions, or who own or want to start businesses and insure themselves and their employees.

    In fact, most Americans are not likely to see any changes at all in the short run.

    The Congressional Budget Office (CBO) estimates that until about 2019, 160 million Americans will still be getting their insurance from their employers, paying about the same rates as they would have without health reform. Millions more will continue to buy private insurance.

    The centerpiece of the bill – the major change to the way insurance is sold and marketed starts in 2014.  The law sets up state-based insurance "exchanges" that will offer consumers and small businesses a choice of standardized and heavily regulated health plans, designed to serve people who aren't offered insurance by a large employer. The exchanges are designed with three main goals in mind:

    • Insurers will be required to offer you coverage. After 2014, health insurers will not be able to turn anyone down because of pre-existing conditions; even pregnancy and heart disease will be covered. Rates won't be tied to your health any more, although smokers may have to pay more. The oldest people in a plan will pay no more than three times the rate paid by the youngest. Policies you purchase through an exchange will look a lot more like the group plans you can get through an employer.
    • Subsidies will be available to those unable to afford health insurance. The insurance on the exchanges won't be free, but it is estimated that more than half of those using the exchanges will receive large tax credits to help them buy. For families earning up to four times the poverty line -- $88,200 today for a couple with two kids -- the tax credits will be set so that they pay no more than 9.5% of their income for a fairly basic health plan in 2014.
    • Health plans will be simpler to shop for. To get the insurance, you'll tap into an exchange set up by your state or a group of states. All the plans must provide at least a standard menu of essential benefits, so you'll have to spend less time scouring contracts for surprising loopholes. Plans will be available in four basic types: bronze, silver, gold, and platinum. Plans can compete by mixing different premiums, deductibles, and co-pays.

    In short – health insurance reform appears to be well on its way to doing what its proponents have asked for – making affordable insurance available to every American.  

    Next post: the down side to insurance reform.
    Posted Apr 29 2010, 02:13 AM by moneycoach with no comments
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  • “Green” Reality T.V.

    Ed Begley, Jr. and his wife Rachelle share their experiment in “green” living – with sometimes hilarious results!

    In the reality T.V. Series, “Living with Ed,” actor Ed Begley, Jr. shares his family's experiences as they attempt to live with the smallest possible carbon footprint. The series records the conflicts between him and his much less enthusiastic wife (Rachelle) who many times suffers due to her husband's uncompromising environmental beliefs. As Ed constantly strives to make his home more environmentally friendly, he sometimes engages in friendly competition with his best friend and next door neighbor Bill Nye (from the PBS science series, “ Bill Nye the Science Guy”). Other celebrities have appeared on the show including Jay Leno, Jackson Browne and Jack McGee.

    Originally aired on HGTV starting in 2007, the show switched to the new Planet Green channel for the 2009 television season.

    This is a reality T.V. show that is not only fun and entertaining but also informative as well. The madcap relationship between Ed and Rachelle with Rachelle and their daughter playing a funny counterpoint to the environmentalist husband who drives them crazy saving the world, one drop of water and one compact fluorescent light bulb at a time!

    As a committed environmentalist for more than 30 years, Ed Begley, Jr., has always tried to "live simply so others may simply live." As we look for ways to reduce our impact on the planet and live a better, greener life, Ed shares his experiences on what works, what doesn't-and what can save you money! The show features tips for environmentally friendly living that anyone can use to try to make a positive change for the environment.

    From recycling more materials than you ever thought possible to composting without raising a stink to buying an electric car, Living Like Ed is packed with great ideas that can help the average consumer live a more green lifestyle.

    Live responsibly.
    Live well.
    Live like Ed.

    Posted Apr 27 2010, 10:29 AM by moneycoach with no comments
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  • Mortgage Aid Program Doesn't Go Far Enough, Panel Says

    A group overseeing the financial bailouts says the mortgage aid program advocated by the Obama administration doesn't help enough families

    President Obama unveiled his plan to help homeowners affected by the financial crisis in February. The plan aims to keep more than 9 million people from losing their homes by making refinancing easier for people who owe more on their mortgages than their homes are currently worth and by providing incentives for mortgage lenders to help homeowners on the brink of foreclosure. Speaking in Phoenix, Obama said that the $75 billion plan was designed to address "a crisis unlike any we've ever known" and would forestall "the worst consequences of this crisis from wreaking even greater havoc on the economy."

    In a report released this week, the Congressional Oversight Panel criticized the plan, saying that the administration projects only one million families will end up with lower monthly payments as a result of the program. The report warned that borrowers who have their monthly payments lowered as a result of the program still could lose their homes because the payments remain too high.

    Treasury spokeswoman Meg Reilly replied that the program was not designed to prevent every foreclosure, and "we cannot help those who simply bought a home they could not afford." By some analyst's estimates, reducing home loan balances so that no homeowners would owe more than the value of their homes would cost up to $900 billion, with $150 billion of that borne by the government.

    Through March 2010, more than 230,000 homeowners have completed mortgage loan modifications. That amounts to only about 21 percent of the 1.1 million borrowers who began the program over the past year.

    Some Congressional republicans have criticized the administration's efforts and say that the Obama administration should abandon the effort and focus on creating jobs instead.
    Posted Apr 14 2010, 05:28 AM by moneycoach with 2 comment(s)
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  • Do You Know What You Own?

    Create a home inventory – it can be a valuable tool after a disaster strikes!

    After recent disasters such as Hurricanes Katrina and Rita, most financial and insurance experts recommend a "home property inventory" as an invaluable tool for homeowners seeking to obtain insurance compensation after a catastrophic event or natural disaster. Although few people will dispute the value of a having a complete and up-to-date inventory of their possessions and property, most people admit that it’s on their “to do” list, right below getting that root canal or paying taxes. And yet, as recent tragic weather events have shown us, having a detailed home inventory can be the single most important action you can take to protect yourself in a time of crisis.

    Creating a list of the things we own that are important to us needs to be a task we take seriously.

    "The complete inventory, including photos, may be one of the most valuable investments for peace of mind we will ever make for ourselves and our families," said Gail Haubrich, FEMA (The Federal Emergency Management Agency) individual assistance housing supervisor. "If a catastrophic event disrupts our homes and surroundings, a home inventory will eliminate the need to piece that information together in the aftermath of the event."

    FEMA has created a web page with resources available to those wishing more information on creating a home inventory or for those facing the aftermath of a storm or disaster (http://www.fema.gov/news/newsrelease.fema?id=33513).
    Posted Apr 14 2010, 05:25 AM by moneycoach with no comments
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  • Life Insurance Is More Important Than You Think

    Life insurance is something that many people just don't want to think about. For some, its about admitting mortality – and that can be depressing! Avoiding talking about life insurance or admitting we need it will not make anyone live longer!

    So why is life Insurance so important?

    What would happen to your family if you died today? Think about it:
    • Do you have enough in savings to take care of your funeral expenses, pay the mortgage, utilities, car payments and allow your family time to grieve and adjust to life without you?
    • Is the income from your spouse's job going to be enough to cover everything?
    • Will your children still be able to go to college, if you are not around to pay for it?

    Your life has a financial value - the value of all of your future earnings.

    Simply put, life insurance exists to provide against the loss of those future earnings and to protect the plans that you and your family have for that future. There are the practical costs of funeral, mortgage and utility bills, the missed time at work for your spouse or executor.

    One overlooked cost caused by the unexpected passing of a loved one is the cost of time - the time it takes to grieve. Life insurance can act as a fiscal cushion that allows your family time to adjust to the loss - without having to go back to work and "life as usual" right away.

    OK - so you admit you need life insurance. What kind of life insurance do you need?

    Term life insurance provides a cash payment upon your passing. It is the cheapest and simplest form of life insurance.  A term life policy is worth nothing if you stop paying the premiums

    Whole life policies provide a cash payment as well, but act as an investment by building value over time – in exchange for a more expensive premium payment. You may be able to borrow against the value of your policy, since it represents a financial asset.

    Universal life insurance policies allow you to vary the amount of your premium by using part of your accumulated cash value to cover part of the premium cost. You can also vary the amount of the death benefit. For this flexibility, you'll pay much higher premiums and incur administrative fees.

    The easiest life insurance to obtain is your employer's group life insurance plan, assuming one is offered. These policies are typically term policies, which means you're covered as long as you work for that employer. Some policies can be converted to individual policies upon termination of employment.

    In order to determine how much life insurance that you need, you must consider factors such as your salary and any other sources of income, how many dependents you have, your savings and debts, and your lifestyle. A good general guideline is between five and ten times your annual salary. It is a good idea to consult an insurance agent or financial planner to get a more accurate idea of what you and your family's needs are. Also, don't forget to purchase policies for your spouse and children - as unthinkable as it seems, you need to protect yourself and other family members from this loss as well.

    A "life insurance needs" calculator can be found at http://moneycentral.msn.com/investor/calcs/n_life/main.asp or at http://www.lifehappens.org/life-insurance/life-calculator
    Posted Apr 09 2010, 05:50 AM by moneycoach with no comments
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  • 2000-2009: A Lost Decade?

    The first decade of the new millennium has been labeled the “worst in modern times” by economists

    For the majority of the past 70 years, the U.S. economy has grown at a steady pace, generating perpetually higher incomes and wealth for American households. The economic story since the start of the year 2000 has been very different. Economists have labeled the past decade the worst for the U.S. economy in modern times. The end of a long period of prosperity starting at the end of the great depression is causing economists and policymakers to fundamentally rethink the structure of the economy and our understanding of the engines that fuel economic growth and prosperity.

    2000 – 2009 was, according to a wide range of data, a “lost decade” for American workers.There has been zero net job creation since December 1999. No previous decade going back to the 1940s had job growth of less than 20 percent. Economic output rose at its slowest rate of any decade since the 1930s as well.
    • Middle-income households earned less income in 2008, when adjusted for inflation, than they did in 1999 - and the number is certain sure to have declined further during 2009. This marks the first decade of falling median incomes since figures were first compiled in the 1960s.
    • The net worth of American households -- the value of their houses, retirement funds and other assets minus debts -- has also declined when adjusted for inflation, compared with sharp gains in every previous decade since data were initially collected in the 1950s.
    • The 1990s ended near the top of a stock market and investment bubble. The decade finished near the bottom of a severe recession.
    • Total household debt rose 117 percent from 1999 to its peak in early 2008, according to Federal Reserve data, as Americans borrowed to buy ever more expensive homes and to support consumption more generally.
    The first decade of the new century was an experiment in what happens when an economy comes to rely heavily on borrowed money.

    "A big part of what happened this decade was that people engaged in excessively risky behavior without realizing the risks associated," said Karen Dynan, co-director of economic studies at the Brookings Institution. "It's true not just among consumers but among regulators, financial institutions, lenders, everyone."

    The Great Depression of the 1930s led to new insights about the impact a collapse of the financial system can have. The Great Inflation of the 1970s brought a rethinking of what drives inflation, such that economists now put a premium on maintaining the credibility of central banks and keeping inflation expectations in check. The lessons of the “Lost Decade” are still being formed.

    The financial crisis seems to be, for all practical purposes, over, and economists are now generally expecting the job and housing markets to rebound in 2010. The task ahead for the next generation of economists is to figure out how, in a decade that began with such economic promise, things went so terribly wrong.
    Posted Apr 08 2010, 06:30 AM by moneycoach with no comments
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