My sister recently graduated from college and my family all made the trek to watch her receive her diploma. She graduated from Gannon University in Erie, PA, which was out of state for all of us. My parents and younger brother live in  Texas, I live in the greater Chicago area, and my older brother lives in Southern California. The Texas side of the family decided to fly out, but Erie was in driving distance for me so my plan was to drive. When my older brother was researching airline ticket prices, he found out it was cheaper for him to fly into Chicago than into Erie (which is common for regional airports), so we decided to make a trip out of it and do the 8+ hour drive together. It was fun to catch up with my brother since he lives in California and we don’t get to see each other frequently.

We had a solid day’s drive ahead of us for each leg of the trip, so I decided to take my car in before we hit the road. Here are some tips before you hit the open road for your next road trip:

What you need to know before hitting the open road

Get Your Vehicle Serviced

Before I took off on the road trip, I took my car in to get an oil change, tire balance and rotation, and an alignment – all of which are good for improving mileage per gallon, reducing wear and tear, and extending the life of your tires and vehicle. I do most of my service at national chains (in this case, FirseStone) because that is where I bought my tires – which is good for free balancing and rotation for the life of the tires. I also bought a lifetime alignment there, which was a great deal and something I rec0mmend looking into. A few years ago my car slid on some ice and bumped into a curb. I was only traveling around 5 mph as I was accelerating from a stop sign, so there was no damage to my car. However, it did knock my alignment out of balance. The cost for a lifetime alignment was roughly double the cost of a one time alignment, so it was a no-brainer to buy the lifetime alignment (I’ve used it about once per year since I bought it).

I also use FireStone because they perform an inspection each time I get my oil changed, top up fluids, make sure the tire pressure is good, etc. All of these things are good to do before hitting the road on a long trip.

MPG Claims Aren’t Always as Advertised

Sometimes they are better!  There has been a lot of talk about how many cars don’t get the miles per gallon average that manufacturers claim on the window sticker (part of this has to do with car manufacturer’s engineering their vehicles for the testing standards set forth by the EPA). So depending on your driving habits, you may experience a better or worse MPG than what is stated on your window sticker.

I bought my Mazda 3 new over 6 years ago and the stated mileage was 26 town, and 31 highway. Thats not bad mileage for the year the vehicle was manufactured (the Mazda 3 now gets around 40 mpg on the highway). During the trip we had several stretches where we exceeded the highway MPG, with tanks of gas averaging 34 and 35 mpg. I was impressed to beat the stated highway MPG by 10%, especially for a 6 year old car.

We didn’t do anything special on the trip either – other than use cruise control at 75 mph for most of the stretches where we got the excellent mpg (the stated speed limit was 70; I often drive five over and set the cruise control when driving on the highways if the weather is clear, which it was). Limiting your speed to only five over the limit is usually enough to avoid a speeding ticket.

Related: How to improve your gas mileage.

Book Lodging Early

My brother and I went to a college graduation, which meant there were hundreds of more people in town that weekend. We planned early and booked our hotel room well in advance, and we got good rates for the area and the hotel class we stayed in. While we were checking in I overheard the hotel receptionist tell someone on the phone that almost all hotels in the area sell out during the spring through fall months. I never would have guessed that for a city the size of Erie, but then again, you don’t always think about those things when you plan a trip. Plan early, and make sure you get a hotel that fits your dates, is conveniently located, and fits your budget.

Related: How to get a good deal at Priceline.

Paying for Everything

It’s always a good idea to notify your credit card company if you are planning a trip – this will help prevent your card from being frozen by accident. Some companies are good about notifying you if they suspect something, which is cool, while others may just shut off your card without warning. It’s also good to discuss splitting the tab if you are sharing the road trip with someone. My brother and I switched off on buying gas and snacks on the road, which worked out well. I have no idea if either one of us paid more or less than the other person, but it felt right, so in the end, that’s all that matters.

Here are a few recent articles from around the web: Carnival of Financial Camaraderie, Totally Money Blog Carnival, Insurance Claims And Issues: The Risk of Risk, Self Directed Investing For Retirement Carnival – Bear Market Rally is Over.

Photo credit: Adam Foster | Codefor

Related Articles:

1. 7 Mobile Apps for Use on Your Next Road Trip
2. Is It Ethical to Use Your Business Computer for Personal Use?
3. Save Time, Money, and Your Marriage for Under $300

~$~

Whether you are building, remodeling, or just doing a few home improvements, it can help to hire a general contractor. There are those who point out that you can be your own general contractor, and this is true. However, if you don’t have the time, skills, or the inclination to be your own general contractor, it is always possible to hire someone.

A general contractor can simplify the process. You hire the contractor, and he or she hires everyone else that works on your project. However, you do need to be careful. Here are 5 things to keep in mind as you hire a general contractor:

1. Check for Licenses and Insurance

Don't have the skills? Hire out!

You want to make sure that the general contractor you choose is properly licensed and insured in your state, as well as bonded, where necessary. Ensure that the general contractor only works with others who are properly licensed as well. You want to make sure that any contractor you hire is likely to be following state regulations. It’s also a god idea to do some background research on them by reviewing their profile on the Better Business Bureau, or other review boards.

2. Look for Specialists

It can help to find a general contractor that specializes in your project. Check around for those with experience. You want someone who knows your project. Even if the general contractor doesn’t specialize, it’s still possible to work with a general contractor who knows how to work with specialists. Find out who the contractor plans to hire, and find out whether these sub-contractors are specialists.

3. Get Estimates in Writing

As you shop around for estimates, make sure that you get them in writing. While no estimate is going to be the final, it can still help to have estimates in writing in order to better compare services of different contractors. You can also ask for a detailed estimate that allows you to get a better idea of what to expect, and that offers a more accurate expectation of costs. Be wary of contractors that seem to offer a much lower rate than others. They might be lowballing, or you could end up with inferior work.

4. Create a Detailed Contract

Once you have chosen a general contractor, you need a detailed contract. This contract should include the work that will be done, as well as information on the rates and costs involved. In some cases, it might be possible to stipulate a cost cap on the project. Your contract should also include your responsibilities. You need to know what you are responsible for, as well as what the contractor will accomplish.

5. Use Your Gut

If you want to know about someone, one of the best ways is to look him or her in the eye. This is especially true if you are doing business. While you can’t always avoid being swindled this way, meeting with potential contractors can help you get a gut feeling about them. If you have doubts about someone, don’t hire him or her. Instead, hire a general contractor that you feel you can trust. Meeting the contractors, and watching how they conduct themselves as they look at your project area, can give you a good feel for what to expect.

Photo credit: USACEpublicaffairs

Related Articles:

1. How To Find and Hire Reliable Contractors
2. Consider Contracting and Freelancing
3. Looking for Freelance Work – Check out oDesk

~$~

Over the past couple of years, it has been possible to find good real estate deals by focusing on foreclosures. Indeed, in some markets it’s more expensive to rent than it is to buy a home. However, the foreclosure situation may be about to get worse. So, if you have been thinking that you have largely missed the foreclosure boat, you might have some opportunities coming up.

Foreclosures in Limbo about to be Released

Will you see this sign more frequently in your neighborhood?

According to CNN Money, there are thousands of foreclosures in limbo right now. These foreclosures are mostly in states that require some sort of judicial review before the process is completed. Because of the robo-signing scandal, many lenders feared that their processes wouldn’t hold up under scrutiny. In order to avoid legal issues, many halted foreclosures in order to sort out the problems in the system.

Now, though, many lenders feel more confident about their processes, and foreclosures are about to ramp up again. “Foreclosure squatters,” who have been living in their homes for up to almost three years without paying their mortgages, could soon be evicted. According to the CNN Money article, that means that we could see quite a few more foreclosures in the housing market.

As more foreclosures hit the market, this could be a chance for you to buy a home relatively inexpensively — if you’re ready to buy.

Tips for Buying a Foreclosure

If you are interested in buying a foreclosure it’s important that you understand the process, and that you understand what you are getting. As always, it helps to be informed. Research the foreclosure market in the area you plan to buy. You can also check for a real estate agent who has experience with transactions involving foreclosures. The right person on your side can be a real asset. Other things to keep in mind as you buy a foreclosure include:

• Get your financing lined up first: You have to move fast on many foreclosures. For best results, visit a lender for pre-approval. Get, in writing, how much you are pre-approved for so that  it is clear you are serious and able to buy. You can also have the cash together.
• Expect the home to be “as is”: Most foreclosed homes are sold “as is.” This means that you aren’t going to get many concessions from the bank that owns the home. You could be missing something as trivial as fixtures, or you may find the wiring has been pulled out. Some previous homeowners trash properties on their way out. You need to be prepared to make necessary repairs.
• Make sure you are comfortable with the location: Determine your requirements for location. Do you like the neighborhood? Is it close to the amenities you want? Visit the foreclosed home and size it up for yourself, and make sure that the most important points are covered.

Buying a foreclosure can represent an opportunity if you have the ability to fix problems with the home, and if it is what you want. And, if the analysts are right, there should be plenty more foreclosed properties on the market soon.

Photo credit: JefferyTurner

Related Articles:

1. Should You Walk Away from Your Mortgage?
2. How to Prevent Foreclosures – Give More Loans
3. Reality TV Programs Tune Into to Foreclosed Homes

~$~

Earlier this year, my sister and I found ourselves unexpectedly becoming members of the “Sandwich Generation”—that is, adults who are caring for both children living at home and aging or elderly parents at the same time. Our sandwich moment arrived when our mother came down with acute pneumonia just days after Mom and I threw a baby shower for my 8 months pregnant sister, making my sister the poster child for the generation.

Thankfully, our mother will make a full, if slow, recovery. But my sister and I certainly have some different responsibilities to take on now that we are both raising children and helping to take care of our parents—although we’re lucky in that our parents don’t need the kind of daily care that some sandwichers have to provide. But both my sister and I have had to take on additional roles while Mom is in the hospital.

When caught between two generations of family who need your support, care, and potentially your income, it’s important to remember that you need to take good care of yourself, particularly when it comes to your finances. Here are some ways to stay on top of your finances while taking care of two generations:

1. Pay yourself first. We all know that we should save for retirement ahead of our children’s college funds. However, saving for retirement ahead of Mom and Dad’s long-term care is a harder emotional decision to make—although it is an absolutely necessary one. Your parents’ own assets should be what you use for their care for as long as you can. Otherwise, you may end up passing along a legacy of sandwich generation money problems to your kids. Just as it is not selfish for a caregiver to take time for him/herself, it’s not selfish for you to continue to fund your retirement.

2. Invest in insurance. Both for yourself and your parents, making sure that you have adequate insurance can mean the difference between financial security and a money disaster. Long-term care insurance for your parents can help to offset the elevated costs of end-of-life care, especially if your elderly family needs round-the-clock care. The best time to purchase this insurance is early—before Mom and Dad hit their 70s or get seriously ill.

For yourself, make sure you invest in disability insurance. According to the website disabilitycanhappen.org, 1 in 4 American workers will become disabled at some point during their working years. This could be devastating for a family with two generations counting on the disabled worker’s income.

3. Have the tough discussions. It’s important to know what your parents are facing financially before they need to count on you for care. Sit down with Mom and Dad and ask what they have saved and where it is. Find out whether they still have life insurance, what plans they have made for their twilight years, and who they trust as their financial advisor. It’s important to know all of these things in advance, so that you will be better able to make decisions should something happen. It’s also a good idea to keep an eye on Mom and Dad’s financial decisions, considering how often the elderly are targeted for scams.

In addition, the family—including your siblings—should make the decisions about who will have power of attorney and who will be the “point person” for regular caregiving. Discussing all of this ahead of time will help prevent stressful miscommunication and potential resentment during an emotional time.

4. Become an expert on Medicare and Social Security. Don’t forget that there are financial programs available to help out elderly Americans. Take the time to determine what your parents are eligible to receive. The websites www.benefits.gov and www.medicare.gov both offer questionnaires that will help you figure out what your parents may be entitled to and will direct you to those programs in order to get Mom and Dad signed up.

5. Consult an expert. A financial advisor can help you to determine the best course of action for preserving your assets, ensuring your parents’ dignity as they grow older, and planning for your children’s future. Being in charge of day-to-day decisions for multiple generations is exhausting enough without adding the stress of financial decisions. Consult with an expert so that you do not feel as though the entire world is on your shoulders.

The Bottom Line

The Sandwich Generation has an unenviable task. But with open communication and planning, taking care of your parents and your children does not have to be an overwhelming prospect.

Photo credit: Martin LaBar

Related Articles:

1. 4 Ways to Not Get Stuck in the Sandwich Generation
2. Kiplinger’s Sponsors Free Long Term Care Advice
3. How New Health Care Benefits Affect You

~$~

Once upon a time, it was generally assumed that homes were cheaper to rent than to buy. It varied by market, of course, but it was assumed that buying a home meant a large down payment, costly insurance, and a hefty monthly mortgage payment. But then debt got cheap and lenders were willing to finance homes for 100% of the purchase price and with creative terms, allowing virtually anyone to buy a home without putting much, if anything down. As real estate prices trended upward, the “buying is more expensive than renting” trend continued.

Renting a home is more expensive. Should you buy?

Then we experienced the real estate bubble and 2008 financial crisis. After the bubble burst, many people were stuck with homes they couldn’t afford. In some cases, people chose to cut their losses and walk away from their mortgages. The result was a glut of unsold homes on the market, a rash of foreclosures, and a precipitous fall for housing prices. Somewhere along the way, lenders were forced to change their lending practices which further slowed the housing market.

And as banks tightened their purse strings and people lost their homes, fewer people were able to buy homes and more people were forced to rent, leading to higher rent prices. According to CNN, it is now cheaper to buy a home than to rent in 98 out of the top 100 markets in the US (Honolulu and San Francisco are the two exceptions).

Do Higher Rental Prices Mean I Should Buy a Home?

So now the question looms – with rentals being more expensive in many parts of the nation, are you throwing away your money if you spend more on rent than you would if you bought a home? Since it costs more to rent, you should just go ahead and buy a house, right?

Stop right there! Buying a home is one of the biggest financial decisions you will ever make, and not something you should rush into. Even though rents are rising in many locations, that doesn’t mean buying a home is right for you. Each financial decision, especially as major as buying a home, needs to be made based on more than one factor.

You still need to keep the following things in mind when deciding to buy a home:

• Do you have a large enough down payment? Or are you willing to pay PMI?
• Is your credit score good enough? You need a top notch credit score to get your mortgage approved.
• What are your short and long term goals (personal and professional)? Does buying a house fit within these goals?
• Will the house you want to buy now (or can afford now) be the right house for you in 5 years? 10 years?
• Can you afford homeowner’s insurance, property taxes, and home improvements?
• Do you have a large enough emergency fund to pay for large repairs which may pop up?

Buying a house is more expensive than most homeowners realize, and this was a contributing factor to the mortgage bubble. Many people stretched their limits to buy a house the bank told them they could afford, only to find out that they really couldn’t afford the mortgage payments when they factored in the insurance, property taxes and other expense.

Buying is Not for Everyone

There are some advantages to renting. You aren’t on the hook for most large home repairs, you aren’t locked into one location long term – which gives you more personal and professional freedom, you don’t have to worry about selling your home in a down market, and you don’t have a host of other problems that arise from home ownership.

Do What is Best for Your Situation

It doesn’t matter if buying is more or less expensive than renting. What matters is what is right for your personal situation. If now is not the right time to buy a home, then don’t buy into the mantra that you are throwing money away if you rent. You aren’t. You are avoiding a costly mistake of buying a home when you aren’t ready and losing money when you go to sell.

Photo credit: nikcname

Related Articles:

1. 6 Advantages of Renting Instead of Buying Your Home
2. Home Buying Mistakes
3. When Buying In Bulk Is More Expensive

~$~

When my wife and I moved into our new home a year ago, it marked the first time I had to take care of my own lawn. Before this, I had always lived in apartments, or in a town home, both of which included lawn care and other landscaping. When we bought our house I was actually looking forward to mowing the lawn and taking care of it. Call me strange, but I find mowing the lawn a nice break and a chance to have some alone time where I can get lost in thought. Some people like running, I like mowing.

Even though I enjoy the general lawn care, I realized there were a few things I couldn’t do as well on my own. For example, when we moved into  our house, the lawn was in desperate need of weed control, fertilizer, and other lawn care goodies.

Do you do your own lawn care, or hire out?

So being the frugal homeowner, I drove to our neighborhood Lowe’s and bought 3 bottles of weed & feed (for approximately $45), and proceeded to follow the directions. I attached the weed spray to my hose and sprayed it evenly on my lawn. Then I  waited a few days. Nothing. We were still running a dandelion farm.

So off to Lowe’s I went again, and bought some more weed control and repeated the process. The results this time were slightly better, but still not great. And this was after spending a small fortune on weed control and allocating the better part of two Saturday mornings to drive to the store, buy the spray, apply it, and clean up.

About two weeks after the second application, I saw a landscaping truck at our neighbor’s house across the street. I flagged down the guy in charge (Bill) and asked him for a quote and some advice for my lawn. He was extremely knowledgeable about the types of grass, problems with my lawn, how to control the weeds, and other things my lawn needed that I didn’t know about (like aeration and crabgrass pre-emergent). He also gave me information about dethatching, but told me that to hold off a year or so and see if the aeration, fertilizer and weed control would be enough to help resuscitate my lawn. (I loved that he had a chance to sell me anything, but instead chose to educate me about how to better take care of my lawn, what to do, and what not to do).

It was early spring when we bought our home, and only a few weeks after we moved in when I met Bill. I signed a summer care contract with his landscaping company, and they took care to apply the right weed control, fertilizer, and other applications at the right times of the year, based on weather, experience, and other factors. They also had access to fertilizers and weed control you can’t buy without a license.

These are things I wouldn’t have known about myself. They were also much more effective than I could do on my own. As for the cost, it was comparable to what I would have paid on my own, if not cheaper in some cases (especially for things such as aeration or dethatching, which require specialized equipment). Most applications for fertilizer and weed control are around $45, which is what I paid on my own for something that wasn’t effective, and took over two hours of my time, including the shopping and cleanup.

When I factored in the cost of equipment and materials, the time it takes to apply it, and my own lack of knowledge when it comes to lawn care, it was a no-brainer to sign up for the service.

I still mow my own lawn, and I enjoy it. But the fertilizer, weed control, and other aspects are best left to the pros.

What are your thoughts? Do you use a lawn care service, or DIY?

Photo credit: Theophilus Photography

Related Articles:

1. $5 Live Nation Concert Lawn Tickets for Citi Cardholders
2. 4 People You Should Never Hire
3. National Health Service in the UK – How Does it Compare to the US Health Care System?

~$~

The house across the street has sat empty for the better part of a year. According the neighborhood gossip, the owners—a young couple with no kids—walked away from the underwater mortgage. Apparently, the husband, who worked as a manager for a national restaurant chain, was transferred to another part of the country, and the couple figured it would be easier for them to simply mail the keys to the bank rather than deal with the financial headache.

Are you underwater on your home?

There has certainly been a great deal of tut-tutting in the neighborhood over this (alleged) decision. But it got me wondering what this couple will deal with (other than our neighbors’ scorn) because they decided to default on their loan. If you are in a similar situation—where you can’t afford to continue paying your underwater mortgage—please know that walking away can seriously affect your financial future. Not to mention your standing in a neighborhood:

How a Foreclosure Affects Your Finances

1. Your credit will take a hit. This is the most obvious consequence of defaulting on a mortgage, and one that many desperate homeowners are willing to face. It’s important to note that after a default, your credit score will not only go down, but you may also find that your credit cards are canceled or have their limits lowered. You can also put your plans for buying a car or furniture on hold unless you can pay in cash, as it will become very difficult to obtain financing on big ticket items. Finally, it will be anywhere from three to seven years before you can qualify for another mortgage.

However, remember that non-default options can also negatively affect your credit. If you agree to a short sale—where you keep possession of the house and maintain it while trying to sell it on the bank’s behalf, generally within a two to three month time frame—you also will see repercussions in your credit score. The difference is that you will be able to apply for a home loan again sooner.

2. You may have to pay the difference between what the bank was able to get for your home and what you owe. This is called the deficiency, and in most states in the union, it’s perfectly legal for your lender to sue you for that difference. Again, this is a possibility even if you go through a short sale, so know that being underwater does not leave you many good options.

Even if you live in one of the few states with anti-deficiency laws, you may still be liable for the difference depending on if you have taken out a second mortgage, if you have refinanced to take cash out of your home’s equity, and if you are still paying your original mortgage. No matter what your situation, if you are considering defaulting or short selling, you will want to consult with a real estate attorney to determine how best to protect yourself.

3. You can’t escape the Tax Man. When the mortgage crisis first hit in 2007, the Mortgage Forgiveness Debt Relief Act was created to offer protection to troubled homeowners—including forgiving federal taxes that would otherwise be due on a foreclosed home. Unfortunately, state taxes do not have to follow this law, and so walking away from your home may burden you with a state and/or local tax bill. The tax liability when defaulting on a second home or an investment property can be even higher.

The Bottom Line

If you’re in trouble, it’s time to call in some experts. Consulting with a real estate lawyer and an accountant may seem like more money than you can afford when you’re possibly facing a major financial crisis—but the cost of a mistake could be even greater than their fees. You want to know exactly what the consequences of your actions will be before you make a decision that could still cost you for years to come. They may also be able to direct you to some programs which may help.

Photo credit: Adam Melancon

Related Articles:

1. Home Affordable Refinance Program (HARP) Updated
2. Understanding the Home Mortgage Interest Deduction, Part Two
3. Understanding the Home Mortgage Interest Deduction, Part One

~$~

Most of us want our kids to grow up to be successful — especially when it comes to money. While you may not care if your child becomes a millionaire, chances are that you at least want your child to be smart about money, and live a comfortable life that he or she can afford. In order to get to that point, though, you need to help your child learn about money. As you consider what to teach your child, here are five important money lessons your kids should learn:

1. You Don’t Always Get What You Want

Giving your child everything he or she wants may seem like the loving thing to do, but it’s not realistic. We don’t always get what we want. As adults, we know that sometimes it’s impossible to to get what we want immediately. Sometimes we have to wait for what we want, and sometimes we just don’t get what we want, period.

So why do we let our children have whatever they want? Say no to your kids sometimes. Let them know that sometimes they just aren’t going to get that new whatever-it-is. This can be a good way to help them be content with what they already have.

2. Save Up for What You Want

Even if you can’t have something you want now, it’s often possible to get it later — if you save up. One thing you can do is teach your child the value of saving money. Encourage your child to save up for what he or she wants, and make it a pleasant experience. This can be a great way to help your child develop a habit of saving money throughout his or her life. Being able to save up, and pay with money already in hand, can be a source of pride, and you need to encourage that.

3. Credit Cards are Loans

Too often, we think of credit cards as representing “our” money. It’s easy for kids to think this way, too. However, a credit limit of $3,000 doesn’t mean that you “have” $3,000. It means that you can borrow up to $3,000. This is a lesson vital to the financial well being of your children. Credit cards are loans. If you carry a balance, you are paying interest. Make sure that your kids understand how credit cards work, and that they realize that the money isn’t “theirs.”

4. Hard Work and/or Innovation Can Mean More Money

Don’t forget to teach your children the value of hard work and/or innovation. Whether your child is working harder or smarter (or both), he or she needs to understand the value of earning money. It’s important that they be given chances to earn money while young, and learn to like the feeling of working for what they receive.

5. You Don’t Have to Get Paid for Everything

Finally, I think it’s important that children learn that money isn’t the be all and end all — and that it isn’t the only measure of what something or someone is “worth.” There are some things we do in life because they are the right things to do, and not because we’re being paid. Service and charity should be encouraged. One of the reasons that we don’t pay our son for doing basic chores like keeping his room clean, setting the table, gathering the trash, and dusting is that we want him to learn that sometimes we do things as part of a family. We don’t need to be paid for everything we do, and for every service we render. This is a great money lesson as well.

What are the money lessons you want your kids to learn?

Photo credit: Alan Cleaver

Related Articles:

1. Money Lessons Your Child Can Relate To
2. How to Teach Your Kids the Value of Money
3. Are Kids REALLY Unaffordable?

~$~