FHA and VA Loans Might Put Ownership in Reach

Buying a home might be a pretty conventional act, but financing one doesn’t have to be. Loans backed by federal agencies can be a big help if you’re low on cash or your credit score isn’t where you or a conventional lender would like it to be. There’s even a loan that can help you buy a genuine fixer-upper that many lenders won’t touch. So who qualifies, and what are the benefits of these special programs? One thing to note is that the following mortgages are only for the purchase of owner-occupied homes, not investment or rental properties. Beyond that, the requirements vary depending upon the program. Here are some answers to non-conventional mortgage questions.

FHA loans

Despite the name, an FHA loan isn’t issued by the Federal Housing Authority, but it is backed by the federal government. Because your lender knows that the government is guaranteeing the loan, the credit requirements aren’t quite as strict as with a conventional loan. Rates are as good or better than with conventional loans, and you can get an FHA loan with as little as 3.5 percent down. Not every lender offers FHA loans, but you can find several on Zillow by simply getting a rate quote for a mortgage with less than 20 percent down. How much can you borrow with an FHA loan? That varies by state and county, but it’s easy to check the limit for your location.

So why doesn’t everyone get an FHA loan? Because there are some costs. You won’t have to pay for private mortgage insurance as you would with a conventional loan when you put less than 20 percent down, but you will be paying in other ways. FHA loans require an upfront mortgage insurance premium (MIP) of 1.75 percent of the loan. Despite the name, you can roll that into your monthly payments. In addition, your annual MIP is paid each month, and the rate for that varies.

If you pay less than 10 percent down, and your loan was originated on or after June 3, 2013, that monthly MIP never goes away. To stop paying it, you’ll have to refinance to a conventional loan. If you put more than 10 percent down, your are required to pay the MIP for 11 years. You can check out the schedule here.

VA loans

One way to get a zero-down mortgage is through a VA loan. So what is a VA loan? Like the FHA, the U.S. Department of Veterans Affairs doesn’t actually make loans, but it does guarantee them. To get a VA-backed loan, you need qualify for the benefit and to go to an approved lender. You can find a VA lender easily here.

Although eligibility is determined by the VA, you may qualify if you are an honorably discharged veteran or an active member of any branch of the U.S. armed service, or if you are the spouse of either a veteran killed in the line of duty or an active duty member who is listed as MIA or POW.

The service thresholds vary, particularly for those who served in the National Guard or Reserves. You can find them on the Zillow VA loan FAQ page. You will also need a Certificate of Eligibility. You can either ask your lender to obtain your COE or you can get it for yourself from the VA’s ebenefits portal online.

How much house can you buy with a VA loan? In most areas, the VA puts a limit of $417,000 on its loans. But in certain high-cost parts of the country the limit is higher. You can find the limit in your county here.

In addition to the zero-down option, VA loans do not require you to pay any kind of mortgage insurance, even when borrowing 100 percent of your home’s value. As with many things, there is a catch — but it’s relatively small. In addition to the closing costs associated with every home loan, there is a VA funding fee. However, that can be financed or rolled into your monthly payment, and some veterans may even be exempt.

FHA 203k (fixer-upper loans)

Buying a fixer-upper that’s seen better days and turning it into your dream home can become a nightmare if you don’t have a good chunk of cash for repairs stashed away. That’s where the FHA 203k loan can help. You have to meet the usual FHA requirements, but with this loan you can get extra cash upfront to finance everything from new floors to a new roof.

You can get a loan for either the as-is value of the property plus repair costs or 110 percent of the estimated value of the home once repairs are complete, whichever is less. If your fixer-upper needs more modest repairs, you can get a streamlined 203k. This loan will get you the purchase price plus up to $35,000 for things like new appliances or carpets. But don’t get too fancy. You can’t use it to add luxuries like a swimming pool.

The catch? Not all properties will qualify and the application process isn’t as easy as slapping on a fresh coat of paint. You can find more details on the HUD site.

USDA loans

The other zero-down option is a loan backed by the U.S. Department of Agriculture. These loans are for low- to moderate-income buyers looking to purchase a home in rural area. The applicant may not exceed income limits and the dwelling must be “modest, decent, safe and sanitary.”

Also, as always, you must demonstrate an adequate ability to repay the loan. The USDA website will help you determine if you or the area you want to purchase will qualify.

Source: zillow.com

When rules bring freedom

While I’ve identified as a writer since I was eight years old, what I’ve written has changed significantly over time.

When I was very young, I was only interested in writing stories. These stories were child-like, to be sure, but they grew in sophistication as I did. By junior high, I was drafting large chunks of fantasy novels (mimicking the books I tended to read at the time). Then, in high school, I discovered a love for poetry.

In high school and college, I mostly wrote poetry. Some of it was actually good, too. (Seriously!) I won contests and scholarships with my poetry, and some of it even saw print in small magazines.

But somewhere along the way, I stopped writing poems. I’ve written a few songs with friends over the years, but that’s it really. The part of me that’s a poet — a part that once was integral — seems to no longer exist.

Anyhow, it occurred to me today that the spending moratorium I’ve set for myself in 2021 is, in a way, like writing poetry. Let me explain.

Rules for Poetry

You see, part of the fun of writing poetry — for me, anyhow — is figuring out how to express yourself while adhering to the rules. And the “rules of poetry” aren’t set in stone. Each poet sets her own standards. What’s more, those rules might change from poem to poem.

Take Shakespeare, for instance. Shakespeare’s sonnets follow a specific format.

  • Each sonnet contains fourteen lines.
  • Those fourteen lines are divided into four groups: three four-line quatrains and a final two-line couplet.
  • Each line contains ten syllables of iambic pentameter.

These rules are part of what makes Shakespeare’s poems so appealing. He was able to express himself, to convey a great deal of emotion, while playing by these rules. If you re-write a Shakespeare sonnet without the rules, it loses its beauty. (Fun fact: One of my favorite Shakespearean sonnets uses money metaphors!)

On the other hand, e.e. cummings played by a different set of rules. “anyone lived in a pretty how town” is still one of my favorite poems, but it’s vastly different than a Shakespearean sonnet.

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For many young poets, rules are frustrating. They feel like limits on creativity rather than sources of inspiration. As a result, we often latch on to free verse, which seems less restrictive.

When I was writing poetry, I found that giving myself rules fostered creativity instead of stifling it. That’s kind of counter-intuitive, I think, but it’s true. It’s a fun challenge to see what you can create when your options have been restricted.

To this day, I find that (generally speaking) I admire poets who work with meter and rhyme more than those who simply produce free verse. (This isn’t always true. There are plenty of great poems written in free verse. But all things being equal, I tend to prefer a poem with structure over one without.)

Rules for Spending

Why do I bring this up? What does it have to do with personal finance? How is this related to my spending moratorium?

For the past week, I’ve been on a deeply reflective kick. I’m not suffering from my chronic anxeity and depression (yay!) but I am asking myself deep questions about what I should do with my future, and I’m trying to figure out how to keep the depression and anxiety from returning. As part of that, I’ve been reading about mindfulness and meditation.

As I talk with friends about this, they’ve been recommending books. Researching these books leads me to discover other books. Reading articles online about mindfulness makes me want to read still more books. And if I weren’t on a spending moratorium at the moment, I would be allowing myself to buy some of these books.

Fortunately, this isn’t a new interest for me. In the past, I’ve wanted to learn more about mindfulness and meditation, so I’ve picked up maybe a dozen books on the subject(s) over the years. They’ve been gathering dust in my library.

Now, in 2021, a few of these books are titles I’ve decided I want to read. Yes, there are a couple of books I don’t own that sound really interesting to me and I want to buy them. But I can’t. Or, more precisely, I won’t. Because I’m on a spending moratorium for 2021.

In the past, I might have found this frustrating. Right now, though, it’s kind of liberating.

My spending moratorium is doing exactly what it’s intended to do. It’s forcing me to look inward, to search my existing library, instead of turning outward and ordering more books. Ordering the new books wouldn’t solve anything anyhow. They’d just end up like the books I already own: unread on my bookshelves.

But because of the artificial structure I’ve imposed on myself, I’m forced to become creative, to be resourceful, to work with what I have. I’ve begun reading the books on my bookshelf. Yay!

This is very much like writing poetry given a set of specific rules. And you know what? Turns out the results are the same too.

When Rules Bring Freedom

Yesterday, I started reading Waking Up by Sam Harris. Holy cats, you guys. This is exactly the book I needed for this moment in my life. And it’s one that I already I own. Amazon says I bought the book in 2015 but I only started reading it yesterday morning. Crazy stuff.

I bought this book five years ago and never read it!

But I’m only reading Waking Up now because of the rules of my spending moratorium. I browsed my (digital) bookshelf and that book stood out. If I weren’t playing by these rules right now, I wouldn’t be reading anything yet. I’d be waiting for new books to arrive from Amazon.

The same thing has been true with my recreational reading. I ran out of John le Carré novels on hand, so I had to look for something else. I couldn’t just order Tinker Tailor Solider Spy. Instead, I’ve decided to work through my science fiction paperbacks one by one. (I’ll look for Tinker at the public library.)

Plus, the spending moratorium is leading me to get creative in other areas of my life.

On a larger level, it’s interesting to think of the implications here. I’m saying that I appreciate poetry more when it’s bound by rules, when the poet isn’t free to do whatever she pleases. I’m also saying that I kind of like the fact that my book choices are currently limited to what I have on hand.

My frustration at not being able to buy a new book lasts for maybe thirty seconds, then I turn my attention to the available options. These options are fewer, but I don’t feel any less happy. (So far, anyhow.)

Perhaps this shouldn’t be surprising. This is, after all, the thesis of The Paradox of Choice by Barry Schwartz. He argues that we think we want more options, but we really don’t. When we have more options, it becomes more difficult to choose because we’re afraid of not making the “right” decision. (Even if there isn’t a “right” decision.)

In a very real way, rules bring freedom — with poetry and with spending.

Footnote: This reminds me of the rules I set for myself when I’m trying to get fit. A decade ago, I created a short document of “acceptable” foods. These are, in essence, my rules for healthy eating. When I’m doing well with my fitness, it’s usually because I’m sticking to these guidelines. I allow myself to eat anything I want as long as it’s healthy, as long as it follows my food rules. Donuts for breakfast? No, that breaks the rules. Filet mignon for breakfast? That doesn’t break the rules. Let’s do it! Sounds silly but it works.

Source: getrichslowly.org

VA loan refinance scams and how to avoid them

Beware of unsolicited offers

Unfortunately, some shady mortgage companies try to make a profit by
urging homeowners to refinance — even when it’s not in their best interest.

Veteran homeowners tend to be targeted by refinance scams more often, because the VA’s lenient loan guidelines make it easier for lenders to ‘churn’ these loans and make money quickly.

The best thing you can do to avoid scammers is to be very wary of unsolicited refinance offers. Mortgage offers that come out of the blue and seem too good to be true, usually are.

If you do want to refinance your home, research loan programs
and interest rates on your own and choose a reputable, transparent lender.

Check your VA loan refiance options with top lenders (Jan 30th, 2021)

In this article (Skip to…)

Signs of a VA loan refinance scam

There are a few red flags that can reveal a scammy or misleading VA
refinance offer.

If you’ve been contacted by a mortgage company about refinancing,
the Consumer Financial Protection Bureau (CFPB) says to look out for:

Low interest rates without specific terms

An ultra-low interest rate offer that’s not clearly accompanied by
the terms of the loan is likely misleading.

A homeowner might refinance for this new interest rate, only to be
surprised by higher-than-expected loan costs or unaffordable monthly payments.

There are a few ways advertised interest rates could be deceptive.

  • Surprise mortgage points. Buying mortgage points or ‘discount points’ can lower your interest rate significantly. However, each point costs 1% of the loan amount (or $1,000 for every $100,000 borrowed). Some lenders advertise below-market rates without indicating the borrower will have to pay a hefty fee at closing to actually obtain that rate
  • Adjustable-rate mortgage vs. fixed-rate mortgage. Adjustable-rate mortgages (ARMs) typically have lower advertised rates than fixed-rate mortgages (FRMs). This can make an ARM look more attractive upfront. However, that low rate is subject to change after the initial fixed-rate period of 5, 7, or 10 years. This could leave the homeowner with a much higher mortgage rate and payment later on. If you’re expecting a fixed interest rate and payment, make sure the lender is not advertising an ARM rate
  • 15-year vs. 30-year mortgage. Similarly, 15-year FRMs typically have lower rates than 30-year FRMs. However, monthly mortgage payments are much higher because the loan must be paid off in half the time. Despite lower interest rates, 15-year mortgages are unaffordable for many borrowers

Any mortgage offer should include the terms of the new home loan as
well as
the interest rate. Look for:

  • Annual percentage rate (APR)
  • Loan term (repayment period, often 15 or 30 years)
  • Type of mortgage (ARM or FRM)
  • Mortgage points included on the advertised rate

Also remember that interest rates vary from one borrower to the

An advertised rate isn’t likely to be the exact rate you’re offered;
that will depend on factors like your credit score and home equity.

So even if a refinance offer looks perfectly legit, you’ll need to
apply with the company and get a custom rate quote to know how good of a deal
it can truly offer you.

Get a VA refinance rate estimate (Jan 30th, 2021)

Offers to skip mortgage payments

The Department of Veterans Affairs explicitly prohibits lenders from
advertising that borrowers can skip one or two mortgage payments when
refinancing. A lender might list this as a benefit because there are not real
benefits to your refinance; or because it wants the offer to look better than
it is.

An offer that says you can skip mortgage payments when refinancing
should be avoided.

Offers to receive cash from an
escrow fund

Most homeowners pay their property taxes and homeowners insurance into an escrow account. Their mortgage lender stores the payments in escrow before distributing them to the insurance company and tax authority when they’re due.  

After refinancing, a homeowner might receive an escrow refund if they had cash leftover in the account at the time the new loan closes.

This is not a unique benefit of a VA mortgage, nor is it a reason to

Plus, you’ll likely need the money to fund a new escrow
account on your new home loan.

Aggressive sales tactics

Borrowers should be extremely wary of lenders with aggressive sales tactics.

If a lender emails, mails, or calls you multiple times, there’s
likely a reason it’s so eager to get you to refinance — because it will benefit
them. It’s not necessarily good for you, though.

If you’re on a federal or state do-not-call list, remind lenders
that it’s illegal to call or text you without prior consent. Do-not-call laws
lead to hefty fines for any lender that violates them.

Be sure to do your due diligence before refinancing. It’s relatively
quick and easy to get mortgage quotes online or over the phone from a lender of
your choice.

Shop around to learn more about the terms and rates you’d really
qualify for on a VA refinance loan. Odds are, the company desperate for your business
is not going to be your best choice.

No-cost refinance offers

Lenders might also tempt homeowners to refinance by advertising a ‘no-closing cost’ or ‘no out-of-pocket cost’ refinance. These programs may not be what they seem.

Unlike some other loan types, VA loans do not allow refinancing homeowners to roll closing costs into their loan balance. Only the VA funding fee can be included in the loan amount; the rest of your refinance closing costs are due upfront.

It is possible to have the lender cover part or all of your
closing costs. This is known as a “lender credit.”

But it’s not a free ride — in exchange for lender credits, you’ll
usually pay a higher interest rate on your new loan. This could raise your
mortgage costs significantly in the long run.

So, when a lender advertises no closing costs on a VA refinance, it
really means you’ll increase the cost of your loan by paying higher interest
for the rest of your mortgage term.

Two major VA refinance scams to look out for

There are two main VA loan refinance scams that both involve loan “churning.” That’s when lenders encourage those with VA loans to refinance when it provides little or no benefit.

This is also known as “equity
stripping” or “equity skimming,” because the scammers may suck the equity out
of your home, unnoticed by you because you pay nothing out-of-pocket for your

Churning is intended to line lenders’ pockets at the expense of borrowers.

Scam 1: The cash-out refinance

you’re short of cash, you may want to dip into some of the equity you’ve built
up in your home. That process is called cash-out refinancing.

For the right homeowner, a VA cash-out refinance can be a great idea. It lets you tap up to 100% of your home equity at a low interest rate.

cash-out refinancing isn’t for everyone. Your home equity isn’t free money —
and it’s important to understand the implications of a cash-out refi before
jumping in. 

means you’re resetting the clock on your mortgage. If your 30-year mortgage has
25 years left to run, for example, you’re starting over with another 30 years of

a refinance comes with closing costs. These often total 2-5% of the loan
amount, which can easily add up to thousands of dollars out-of-pocket.
Remember, the VA funding fee is the only closing cost that can be financed.

try to get borrowers to refinance in this way repeatedly. But that keeps
resetting the clock. And it keeps putting fees from closing costs into lenders’
pockets. So the lender profits at the borrower’s expense.

cash-out refinancing can be a good strategy. But you need to make the decision
on your own or with a financial advisor; not based on a lender tempting you
with promises of untapped home equity.

Scam 2: The bad refinance

Generally speaking, it’s a
good idea to refinance to a lower interest rate. Your monthly payments are
lower. And your overall cost of borrowing falls. What’s not to like?

Well, it depends on what you
have to do to get that lower rate.

Suppose you have a $300,000 mortgage at a 4.25% interest rate that you’ve been paying for five years. Your current balance is $266,170, and your principal and interest payment are $1,476.

You could lower your payment to $1,309 by refinancing without even changing the interest rate.

That’s because you’re stretching out the repayment of the remaining balance to a new term, and extending your repayment by five years.

An unscrupulous lender will
refer to the $167 a month difference as “savings.” But clearly you are saving
nothing — in fact, you’ll pay more in interest in the long run.

Most lenders don’t just offer
to refinance your old loan at the same rate, however. They offer a lower rate — and they might
even offer to do the loan at no out-of-pocket cost to you.

For instance, you might
get a 3.75% mortgage rate, at a cost of three points (3 percent of
your loan amount), plus other fees — perhaps a total upfront
cost of $10,000.

Your new payment drops from
$1,476 to $1,279, “saving” you nearly $200 a month. But the
total amount of interest remaining actually increases from $158,800 to
$185,300. So the “cheaper” refinance loan will cost you an extra $26,500 if you
keep it the full loan term.

And if you don’t stay the full loan term? You might save month-to-month, but don’t forget: closing costs were $10,000. You’d need to keep the loan 50 months (over 4 years) just to make back the money you spent on refinancing.

Is the VA Streamline Refinance legit?

The VA Streamline Refinance (also known as the Interest Rate Reduction Refinance Loan, or IRRRL) is a legitimate refinance program backed by the U.S. Department of Veterans Affairs.

The IRRRL program is meant to
make refinancing simpler and more affordable for veterans and service members.
It has lenient documentation requirements and no new home appraisal.

But although it’s a safe program
on its own, the Streamline Refinance is sometimes the vehicle for VA mortgage
scams. And you can see why.

The VA wanted to make
refinancing from one VA loan to a new VA loan cheap, easy, and
straightforward. It eased up on many bureaucratic procedures, which
is helpful for borrowers but may have left IRRRLs more vulnerable to abuse.

Since these loans are easier to
approve and often close faster than traditional refinances, VA Streamline refis
are more attractive to scam lenders intent on “churning” loans to turn a

However, that doesn’t mean a VA Streamline Refinance can’t give you a fantastic deal. They typically do. It just means you need to choose your lender with care.

As with any refinance loan, make sure you compare IRRRL offers from multiple lenders to see which can offer the best deal. And use care when comparing rates — just because you can drop your rate, doesn’t mean you’ll save money in the long run.

Compare loan fees and total interest costs on your IRRRL offers to make sure the loan really benefits you.

Check your VA Streamline Refinance options (Jan 30th, 2021)

When is a VA loan refinance a good idea?

We just described a number of ways refinancing can have a negative
impact on homeowners. But these warnings are not intended to scare you away
from refinancing.

Rather, these examples should illustrate how important it is to
fully understand a refinance offer before signing it. You should be aware of both
the short- and long-term costs, and feel confident the new loan benefits you.

When done right, refinancing isn’t just worthwhile — it can save you
huge amount of money. Refinancing can also help you access home equity to cover
important expenses, like home renovations, consolidating debt, or paying
college tuition.

The trick is to refinance only when the outcome meets your financial

Often, that means refinancing for a low enough interest rate that
you’ll save money on monthly mortgage payments and total interest costs.  

But that’s not always the case.

If your income has been reduced and you need to save money each
month, it might make sense to refinance for a lower monthly payment even if
your long-term cost is a bit higher.

On the flip side, it might make sense to accept higher monthly
payments if your goal is to shorten your loan term and pay off the home early.

Or maybe you want cash out. In that case, your new interest rate might not be ultra-low. But that shouldn’t matter as much.

There are many different scenarios where it makes sense to refinance. But in every case, it needs to be a personal decision based on your current mortgage and your long-term goals.

If you’re not sure whether a refinance is a good decision, talk to a
trusted financial advisor or contact a reputable mortgage lender that can walk
you through your options and help you decide what the right move is.

Verify your VA loan refinance eligibility (Jan 30th, 2021)

How to find a safe VA loan refinance

VA homeowners have two main refinance options: the VA Streamline
Refinance (IRRRL) and the VA cash-out refinance.

The right refinance loan for you depends on your goals.

  • If you simply want to lower your interest rate and
    monthly payment, the IRRRL is generally the best option. There’s no reason to take
    cash out from your home equity if you don’t need it for a specific purpose —
    and no lender should urge you to cash-out if you don’t need to
  • If you do need to tap your home equity, you’ll
    apply for the VA cash-out refinance. The Streamline program does not allow
    homeowners to receive cash at closing

The VA cash-out program can also help veterans and service members
with non-VA loans refinance into a VA home loan.

For example, a homeowner with an FHA loan who has VA loan
eligibility could use the cash-out program to switch loan types without
actually taking cash out.

To find the best deal on your refinance loan, you should apply with
at least three lenders and compare their offers.

You can do this on your own by applying to lenders individually. Or, you can work with a mortgage broker who will help you understand your loan options and find the best lender for your needs.

The vast majority of mortgage lenders are decent companies —
scammers are in the minority. But you still need to look at multiple companies
to be sure you’re getting the best deal.

Start with well-known lenders that get positive customer reviews. If you have friends or family members who have refinanced a VA loan in the past and had a good experience, it’s also worth asking them for recommendations.

How to compare VA refinance offers

After you apply with a few lenders, you need to make sure the “Loan Estimates” they send you compare with their initial offers.

Loan Estimates are standard
documents detailing your loan offers; including your approved interest rate, loan amount,
loan type, and loan terms.

Lenders are required to send you
an Estimate after you apply, and they shouldn’t change anything
without a good reason, which must be explained to you.

Later, at least three days
before you close, you’ll get a “Closing Disclosure” that sets out all the terms
of your new mortgage in an easy-to-understand format. That’s your last chance
to make sure you’re getting the deal you want — and the one you were promised —
without derailing your refinance.

A mortgage loan is not binding until you’ve signed your final closing papers. If anything looks amiss before that point, you have the right to bring it up with your lender or simply walk away.

As the borrower and homeowner,
the power in the transaction is in your hands.

What are today’s VA refinance rates?

Mortgage rates are very low right
now, and VA loan rates are generally the lowest of any loan type.

If you think a refinance is the right move for you, check today’s rates to see how much you could potentially save.

Remember, mortgage rates vary by lender and by borrower, so you need to shop around to find your best offer.

Verify your new rate (Jan 30th, 2021)

Source: themortgagereports.com

The power of habit tracking

For decades, I’ve been a proponent of habit tracking. Habit tracking sounds and feels nerdy to a lot of folks, so many people avoid it. That’s too bad. Habit tracking is a powerful tool that can help you make better decisions about your life.

Let me share an example.

Over at Reaktor, Olof Hoverfält recently published a long piece about why he’s tracked every single piece of clothing he’s worn for three years.

That’s right: For 1000+ days, Hoverfält documented every garment he wore. (And, in fact, he’s continuing to document his wardrobe publicly.) Using the info he collected, he’s now able to make better decisions about which clothes to keep and which clothes to buy. I love it!

Hoverfält says people worry about how much time it’d take to do something like this but they shouldn’t. Most of the time investment is in the initial setup, in that first batch of data entry. Actually using and maintaining the system requires about one minute each day. And the rewards are far greater than the cost in time.

Hoverfält’s project is a perfect example of the power of habit tracking.

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The Power of Habit Tracking

For a long time, I’ve preached the importance of tracking your spending. But I think it’s smart to log anything you’re curious about or want to change: your fitness habits, your time habits, your work habits. Documentation is the first step to lasting change.

I recently met my goal to lose thirty pounds in six months, for instance. To succeed, I logged my fitness stats every morning. (And I’ll continue to do so for the foreseeable future.) Kim is starting a weight-loss journey of her own, so she’s logging every calorie she burns or consumes.

And what about tracking your time? All this month, I’ve been using an app called ATracker to log what I’m doing at any given moment. Using the app requires very little effort. The results are interesting. They provide insight into how I actually use my time versus how I think I use it.

Using ATracker for habit tracking

That’s the real value to projects like this. Habit tracking allows us to differentiate perception from reality. (In his article, Hoverfält covers this in the section on “actual versus imagined use”.)

I’ve learned that what people think they do (or what they say they do) is often quite different from their actual behavior. “I don’t spend much on clothes,” somebody will say, but when they actually crunch the numbers, they see that their clothes spending is much higher than average. “I don’t overeat,” another person will say, but when they log their calories, the see that their ginger ale addiction adds an extra 500 calories per day to their diet.

Faithful, honest tracking of habits is the only way to truly learn what it is you do with your time and your life.

Here’s another (silly) example of how tracking can help you differentiate perception from reality. A couple of years ago, Kim and I had a disagreement over who cleaned the litterbox most often. She felt like she always did it. I felt like I always did it. We started tracking behavior. We put a sticky note next to the litterbox, and when one of us changed the litter, we made a note. Turns out we were both cleaning the litterbox equally. Disagreement over! The solution to our litterbox problem is to have fewer cats haha.

Don’t Combine Tracking with Judgment

It’s important to keep decisions separate from tracking. When you’re tracking a habit — your spending, your alcohol consumption, your wardrobe use — you want to track actual behavior. Your job in that moment is recorder, not judge.

This is something I’m trying to stress to Kim as she begins logging her food intake. “Don’t beat yourself up over any of this right now,” I told her. “If you eat a cookie, that’s fine. Just write it down.”

If you combine judging with data collection, it’s a recipe for failure. You end up feeling guilty every time you make a poor choice. This makes it so you don’t want to document your behavior. You want to give up. You want to hide.

Habit tracking is only habit tracking. Data collection is only data collection. You’re like an impartial third-party observer who is noting what you actually do and who has not vested interest in whether those actions support your goals or not. In data collection mode, you’re after information — and only information.

Tracking my weight loss this year

Once you’ve collected enough info, then you can act.

After Kim has documented her diet for a few weeks, she can sit down and look for patterns. Based on these patterns, she can experiment with adopting different habits.

You can see this in my own annual financial updates. I track my spending throughout the year, but I do so only for information. Normally, I don’t try to make course corrections in June or July. But in early January, after I’ve had a chance to crunch the numbers, then I compare how my current habits have veered from my goals. I use this info to make choices like “I want to spend less in restaurants this year” or “I want to experiment with a spending moratorium”.

I’ve found that by keeping documentation and judgment separate, I’m more likely to make changes. Plus, I don’t beat myself up as much. When it comes time to analyze the data, I’m able to do so more rationally because I’m not in the heat of the moment, and I’m looking at a large collection of data instead of individual choices.

The Bottom Line

Okay, you get the point. Habit tracking is a great way to learn what you do with your time, money, and energy. But you need to be sure to keep tracking separate from judgment. Got it. But what about Hoverfält’s wardrobe project? What lessons did he learn?

Cost per wear

If you don’t want to read the entire article (although I think you should), here are some quick takeaways:

  • “In some cases, buying cheap is provenly more expensive.” This is the boots theory of socioeconomic unfairness. More expensive items are often (not always) better quality. As a result, they actually cost less to own in the long run than repeatedly buying cheap. This is only true when the extra cost buys extra quality, though. If the extra cost is due to buying a brand or a style, that doesn’t necessarily translate into savings.
  • “Frequency of use is the underlying driver of performance.” This is obvious but easily overlooked. The more you wear something, the less its long-term cost. The $100 shoes you wear twice a week for a year are actually more cost-effective than the $50 shoes you wear once a month.
  • “A wardrobe with nothing but favorite clothes sounds nice. It may also be the best in terms of cost performance.” Because the value of your garments is driven by “cost per wear”, the more you wear a given item, the more value you receive from it. This naturally means your favorite pieces are most cost-effective. The bottom line? Not only do you enjoy wearing your favorite pieces more than your other clothes, these favorites save you money.

Based on three years of data, Hoverfält has some advice for others.

Find what you need and love, then buy only that. Focus on cost per use, not on price. Buy only favorites. (Or, using Marie Kondo’s terminology, buy only those items that “spark joy”.) Try to buy only clothes that can be worn in a wide range of situations. Buy for the long-term. Take good care of your clothes. Know when to get rid of an item.

I think one reason I love this article (and project) so much is that it reinforces some conclusions I’ve already come to.

Now that I’ve lost thirty pounds, I can fit in my old clothes again. And now my closet is filled to the gills because it contains both skinny clothes and fat clothes. It’s a mess. I’ve been thinking about how to evaluate what to keep and what to discard, and Hoverfält’s article helped to provide some clarity.

This weekend, I’ll make a pass through my closet and drawers to get rid of (and/or store) the things I know I won’t wear. And who knows? When I’m finished, maybe I’ll make time to create a wardrobe spreadsheet of my own. It sounds like fun!

Source: getrichslowly.org

What Does a Builder’s Warranty Cover?

Builders’ warranties vary greatly, so it’s important that homeowners take the time to learn what’s covered.

Even with new homes, things can go wrong. That is why many buyers of newly built homes are interested in warranties, which promise to repair or replace certain elements of the home.

Many home warranties are backed by the builder, while others are purchased by builders from independent companies that assume responsibility for specific claims. In other cases, homeowners purchase coverage from a third-party warranty company to supplement coverage provided by their builder. In fact, the Federal Housing Authority (FHA) and the Department of Veterans’ Affairs (VA) require builders to purchase a third-party warranty as a way to protect buyers of newly built homes with FHA or VA loans.

The key to any of these warranties is to understand what’s covered, what’s not covered, how to make a claim and the process for resolving disputes that might arise between you and the builder or warranty provider.

Most warranties for newly constructed homes offer limited coverage on workmanship and materials as they relate to components of the home, such as windows, siding, doors, roofs or plumbing, electrical and HVAC systems. Warranties typically provide coverage for one to two years, although the specific time period may vary by from component to component; coverage may last up to a decade on major structural elements. Warranties also routinely define how repairs will be made and by whom.

Warranties generally do not cover household appliances, tile or drywall cracks, irrigation systems or components covered under a manufacturer’s warranty. Most warranties also exclude expenses incurred as a result of a warranty repair construction, such as the need to store household belongings while a repair is being made.

Before you close on your new home purchase, you should ask your builder – or your third-party warranty provider – these questions:

  • What does this warranty cover?
  • What is not covered by this warranty?
  • What’s the process or timeliness if I have a claim?
  • Is it possible for me to dispute your decision to deny a claim?
  • What is the extent of your liability?
  • Can you refer me to other new home owners with whom you’ve worked so I can speak to them about warranty coverages?
  • Where are some of you previous projects so I can speak with owners there?

The information you gain may not be enough to send you running from your new home deal, but it should help you understand where you’ll stand if you ever need to file a claim. You should also check with your state’s Attorney General Office or contractor licensing board to make certain your builder is offering all warranties he’s required to provide.

To learn more about builders’ warranties, contact your state or local builders’ board. If you’re making your home purchase with an FHA or VA loan, those organizations can also provide you with additional information.

Originally published June 11, 2014


Source: zillow.com

How to Protect Your Credit While in the Military

August 25, 2020 &• 7 min read by Credit.com Comments 0 Comments

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Around a third of active military service members in 2019 said they didn’t pay all their bills on time, and close to that number of military spouses said the same. Military service can require some serious financial planning. But many service members might not realize how joining the military impacts their credit—and how their credit can impact their military career.

Find out more about the
relationship between a military career and credit below. Plus, get some
information about resources that can help military members protect their

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  • It’s settled; I’m getting ExtraCredit tonight. Totally unrelated, but any suggestions for my new fear of sharks? I watched that documentary too.
  • …we live in Oklahoma.

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How Your Credit Can Impact Your Ability to Join the

No matter which branch of the
military you want to join, you have to meet certain eligibility requirements.
Specific requirements vary by service branch as well as the level of security
needed for the job.

The military does conduct background checks to determine factors such as whether you have a criminal background. A credit check is often included by some branches because the state of your financial situation can help provide a picture about your overall reliability. And if you’re dealing with a great deal of debt or have negative items on your credit report, it could make you vulnerable. Someone in financial distress could be at greater risk of illegal or questionable activity to generate money.

You can be denied military enlistment if you’re in financial trouble, such as if you have a number of collections in your credit history. But it’s actually more likely that poor credit will impact your ability to move up within a military career. That’s because Guideline F of the National Security Adjudicative Guidelines outlines financial considerations that may disqualify you from various levels of security clearance.

Failing to meet those requirements could result in revocation of security clearance. And that could mean losing your job with the military. Any time enlistment depends on a security clearance, the same could be true for simply joining up.

How Joining the Military Affects Your Credit

Joining the military doesn’t
have a direct impact on your credit. You won’t get points on your score because
you’re a service member, for example. However, you might want to pay attention
to your credit because you could be subject to greater financial monitoring
depending on your position and security clearance.

Being in the military can also create some challenges that relate to credit. The National Foundation for Credit Counseling notes some common financial trends and challenges experienced by military members and their families, including:

  • Struggling to pay bills on time. According to NFCC, service member households are more
    likely to pay bills late than other US households. In some cases, this might
    simply be due to challenges associated with managing daily activities, such as
    bills, when you’re deployed or moving from place to place regularly.
  • Putting major decisions on hold. More than 70% of service members or their spouses say they
    put major decisions, including buying a new home, on hold during military
  • Sticking to a budget.
    More than 50% of active military members and/or their spouses say they don’t
    manage a regular budget.

Protecting Your Credit While You Serve

That doesn’t mean it’s
impossible to maintain a strong credit score while you serve in the military.
In fact, a number of resources are available to help you do just that. Here are
just a few tips for protecting your credit while you’re in the military,
particularly when you’re deployed.

1. Place an Active Duty Alert on Your Credit Reports

An active duty alert is like a fraud alert. It’s a notice on your credit reports that encourages lenders to take extra precautions when approving credit in your name. In some cases, creditors may be required to contact you directly or otherwise verify your identity when approving credit. This makes it harder for someone to pretend to be you and apply for a loan or credit card.

Active duty alerts also remove you from insurance and credit card offers for up to two years. That means that providers can’t do a soft pull on your credit report and send you a preapproved offer in the mail. This reduces the potential for someone to take that preapproved offer and open credit in your name without you knowing about it.

Active duty alerts are free.
You can request one from any of the three major credit bureaus and ask that it
let the other two know to do the same. Active duty alerts last for one year, so
you’ll need to request them annually if desired.

2. Understand Your Rights Under the Servicemembers Civil
Relief Act

The SCRA offers some protection for military members when it comes to civil legal action, including those related to financial matters. Some of the protections under this act include:

  • Rate cap. In some cases, if military members have high-interest debt from before they joined, they may be able to get the interest rates reduced to no more than 6%.
  • Default judgment protection. In civil cases, a default judgment occurs when one person doesn’t show up to a scheduled hearing. If default judgments are allowed, the judge decides in favor of the party that showed up. Due to the nature of their occupation, military members may be protected from default judgments if they aren’t able to make a hearing due to their military service.
  • Repossession and foreclosure. In certain cases, creditors must get court orders to repossess or foreclose on property of an active service member. This typically requires that the military service person took out the loan on the property before enlisting or otherwise going into active duty status.

3. Understand Your Rights Under the Military Lending

The Military Lending Act provides a number of protections for active military members who are seeking credit during their service. Some provisions of the act include:

  • Capping interest, including
    finance charges and fees, on loans to 36% regardless of credit score and other
  • Limiting what creditors can ask you to agree to, such as mandatory arbitration clauses and mandatory
    payments from your paycheck.
  • Protection against prepay penalties if you pay the loan back early.

For any
questions about your individual circumstance regarding FCRA or the MLA contact
your military branch’s legal office for guidance.

Credit-Related Perks for Military Members

As a current or former
military service member, you may also have access to perks that help you build
and manage your credit and personal finances. Here are just a few.

NOTE: The CARES Act specifically provides some protections to military personnel and veterans during the COVID-19 coronavirus pandemic. This includes protections for VA-guaranteed loans for those experiencing financial hardships.

Check Your Credit After Deployment

Understanding your rights and
what resources you have available—as well as taking proactive approaches—can
help protect your credit while you’re in the military. But no plan is
foolproof, and mistakes can happen. So, it’s important to check your credit
reports whenever you return from deployment and regularly even when you’re not

If you find anything on your credit that isn’t correct, you have a right to challenge it. DIY credit disputing is possible, but it takes more time than active duty military members might have. Consider working with a credit repair firm such as Lexington Law, which has tools to focus verification and challenges for military personnel. Working to challenge inaccurate negative items can help you protect your credit so you can protect your security clearance and your financial future as well.

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Disclosure: Credit.com is owned by Progrexion Holdings Inc. John C Heath, Attorney at Law, PC, d/b/a Lexington Law Firm is an independent law firm that uses Progrexion as a provider of business and administrative services.

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How to build credit the quick and easy way

Most Americans know that it’s important to build credit but many don’t know how. If you’re one of those confused about how to build credit, you’re not alone.

In 2019, CNBC reported that around 40% of Americans don’t know how credit scores work. This is a disappointing but not altogether surprising statistic since credit-building is still absent from curriculum at most schools. Good for you for seeking out this valuable information!

Today, let’s cover some credit-building basics. In this article, I’ll share some tips on how to build credit quickly and easily.

What is Credit?

Credit is simply the ability to use borrowed money.

When you think of credit, you probably picture credit cards and loans (student loans, auto loans, mortgages, etc). But you’re also using credit when you use services like utilities, rent, and your cell phone plan.

Companies provide these services with the expectation that you’ll pay for your usage each month. That’s why you need to have some established credit to qualify for an apartment or a cell phone. And if you’ve ever been asked to put down a deposit for your utilities, it’s because you didn’t have enough positive credit history to assure your utility provider than you would make your payments on time and in full.

To build credit, you have to prove you can be trusted to meet your financial obligations. The only way to do this is to start using credit. Not sure how to get started? No problem, we’ll get into that in just a moment. But before you start your credit-building journey, you deserve to know why good credit matters.

Good credit opens financial doors. When you have a positive credit history, you’re more likely to qualify for an apartment rental, credit card, auto loan, or mortgage when you have good credit. But, just as importantly, you qualify for better interest rates on your loans.

Interest is the cost of borrowing money. The better your credit, the lower your interest rate. And the lower your interest rate, the less you pay to borrow money.

Take a mortgage, for example. If your credit score is just okay, you might be able to get an interest rate at 4.997%, but with excellent credit, you could get a rate as low as 3.408% (using late 2019 rates). Doesn’t sound like a big difference, does it? But on a 30-year mortgage for a $200,000 home, that interest rate difference can save you $185/month in interest. Over the life of your loan, you save $66,754 in interest!

The bottom line? Good credit pays. Bad credit is costly.

How to Build Credit

Okay, so how do you start building good credit?

Using a credit card to build credit is a quick and effective option. But be certain you use your credit cards wisely. Never spend more than you can afford to repay. And if you can pay your balance in full every month, you’ll never have to pay a cent in credit card interest!

Here are four ways to use a credit card to build credit:

  • Become an authorized user. Ask a parent or guardian if you can be an authorized user on their credit card. Because the parent or guardian will be responsible for your credit card spending, the credit card company isn’t taking much of a risk by allowing you to be an authorized user. So you’re extremely likely to be approved as a user so you can begin building credit.
  • Secured cards. With secured credit cards, you have to put down a deposit before you can use your card. If you were to fail to pay your bill, the credit card company would keep your deposit.
  • Student cards. Student credit cards come with low credit limits to help students learn to use credit responsibly without getting into too much debt.
  • Store cards. Store cards are typically easier to qualify for than general credit cards because they generally have fairly low limits and can only be used for certain stores.

If you’re afraid you’d get into too much debt with a credit card (and good for you for being self-aware and honest!), there are ways to build good credit without getting a credit card.

Here are three options:

  • Student loans. For many of us, student loans are the only way we can afford college. While student loans aren’t ideal, at least they help you build your credit.
  • Auto loans. As with student loans, auto loans are a necessity for many of us. And while we hate the higher interest rates, at least they provide a way to purchase a car and build credit.
  • Ask for service credit to be reported. Service credit is less about borrowing money and more about owing money for services. Utility bills, rent payments, and cell phone plans all fall into this category. In most cases, your on-time payments aren’t reported to the credit bureaus. But if they were reported, they would help you build good credit. So contact your providers and ask if they can report your on-time payments.

It typically takes about six months to establish credit. That may sound like a long time, but remember, lenders need to see a history of responsible usage before they will trust you enough to lend you money. In terms of your overall financial life, six months is a drop in the bucket.

Start small. Maybe get a secured or student credit card. Put just a few necessities on your card each month and pay the bill in full before the due date. Then, in six months to a year, apply for more credit, like a second credit card with a higher limit. Use this card in the same way as the first to demonstrate that you can be trusted to remain responsible even with more credit.

Continue making payments on time every month, and before you know it, you’ll have excellent credit!

How are Credit Scores Calculated?

A key part of your credit history is your credit score. Your credit score is the numerical rating you’re assigned based on your history of credit use. You’ve probably heard the term “FICO Score”. This is one specific type of credit score.

Your credit score is composed of five key factors:

  • Payment history: do you pay on time? Aim for zero late payments.
  • Utilization: how much of your available credit do you use? Try to use less than 30% of your available credit limit.
  • Length of credit history: how long have your accounts been open? The longer, the better. That’s why you don’t want to close your accounts.
  • Recent activity: have you applied for more credit recently? Applying for too much credit in a six-month period looks suspicious.
  • Credit mix: what kind of loans do you have? You generally don’t want to have only short-term, high-risk loans. Lenders are more comfortable if you have a mix of credit cards and installment loans (like a student loan, auto loan, or mortgage).

These five factors aren’t weighted equally. Some matter more than others. Here’s the breakdown for calculating your FICO Score:

  1. Payment history: 35%
  2. Utilization: 30%
  3. Length of credit history: 15%
  4. Recent activity: 10%
  5. Credit mix: 10%

For more on this subject, check out our handy guide to your credit score (and why it matters).

FICO Score Components

How to Increase Your Credit Score

Once you open your first credit card or get your first loan, you’ll increase your credit score over time simply by making on-time payments each month. If you’re worried that you’ll forget to make payments, set up auto-pay so you never have to think about it.

And there are a few other things you can do to quickly and easily increase your credit score.

  • Correct any errors on your credit report. Errors on credit reports are surprisingly common and can drag your score down. Get a free credit report online at least once a year to check for errors.
  • Don’t apply for too many cards at once. Space out your applications by six months to a year.
  • Don’t carry a large balance. Keep your balance under 30% of your available credit to show that you’re not overextending yourself.
  • Don’t close your accounts. Even when a credit card is paid off, keep the account open and use it for necessities once in a while. This will increase your credit history length and your overall credit score.

Having good credit is critical to your long-term financial health. To build good credit, you have to use credit tools wisely. Consistently making your payments on time is the best way to increase your credit score over time.

Building good credit doesn’t happen overnight. But it also doesn’t take much time or effort. Just use your credit responsibly and make those payments on time every month. Within six months to a year, you’ll have an established credit record.

But remember: Just because you have a credit card doesn’t mean you need to incur interest charges or credit card debt. Pay your bill in full every month to avoid credit card trouble.

Source: getrichslowly.org

How to prepare for a natural disaster

My world is on fire.

As you may have heard, much of Oregon is burning right now. Thanks to a “once in a lifetime” combination of weather and climate variables — a long, dry summer leading to high temps and low humidity, then a freak windstorm from the east — much of the state turned to tinder earlier this week. And then the tinder ignited.

At this very moment, our neighborhood is cloaked in smoke.

I am sitting in my writing shed looking out at a beige veil clinging to the trees and nearby homes. The scent of the smoke is intense. My eyes are burning. After everything else that’s happened this year, this feels like yet one more step toward apocalypse. So crazy!

Fortunately, Kim and I (and the pets) are relatively safe. We’re worried, sure, but not too worried. Our lizard brains make us want to flee. (“Fight or flight” and all that.) But our rational brains know that unless a new fire starts somewhere nearby, we should be safe.

Here’s a current map of the fire situation in our county. (Click the image to open a larger version in a new window.)

Map of the wildfires in our county

The areas in red are under mandatory evacuation orders. (And the red dots are areas that have burned, I think. They added the dots to the map this morning.) Residents of areas shaded in yellow need to be prepped to leave at a moment’s notice. And the areas in green are simply on alert.

See that town called Molalla? That’s where my mother and one of my brothers live. My mother’s assisted-living facility was evacuated to a city twenty miles away. My brother and his family voluntarily moved from their home to our family’s box factory. But even that doesn’t feel 100% safe. (The box factory is located just to the left of that cluster of red dots at the top tip of the yellow area around Molalla.)

Kim and I live near the “e” in Wilsonville. We’re more than twenty miles from the nearest active fire. We should be safe. But, as a I say, we’re worried. So, I spent much of yesterday prepping for possible evacuation.

Update! As of Sunday afternoon (September 13th), things have calmed for us. The evacuation notice has been lifted for our area. The weather is changing. Rain is only a day or two away. So, we’re standing down. Now, having said that, there are still many people in our country who remain evacuated, and there are others who have lost their homes. (My brother’s town and home will probably emerge unscathed. Probably. For now, though, they’re still evacuated and living in an RV at the box factory.)

Natural Disasters

We Oregonians don’t have a protocol for emergency evacuations. It’s not something that really crosses our minds.

While the Pacific Northwest does have volcanoes, eruptions are rare enough that we never think about them. And yes, earthquakes happen. Eventually we’ll have “the Big One” that devastates the region, but again there’s no way to predict that and it’s not something we build our lives around. (Well, many people have been adding earthquake reinforcement to their homes, but that’s about it.)

In the past fifty or sixty years, the Portland area has experienced four other natural disasters.

Now, in 2020, we’re experiencing the worst wildfires the state has ever seen. That’s roughly one disaster every ten or fifteen years, and it’s the first one during my 51 years on Earth that’s made me think about the need for evacuation preparedness.

Kim and I have been asking ourselves lots of questions.

If we were to evacuate, where would we go? What route would we take? What would we carry with us? How would we prep our home to increase the odds that it would survive potential fire?

Let me share what we’ve decided and what we’ve learned. (And please, share what you know about emergency preparedness, won’t you?)

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Evacuation Preparedness

The first thing we did was brainstorm a list of things that were important to us. Without reference to experts, what is it that we would want to do and/or take with us, if we were to evacuate.

  • Our animals (and animal supplies).
  • Phones, computers, and charging cords.
  • Important documents from our fire safe.
  • A bag for each of us containing clothes and toiletries.
  • Sleeping bags and pillows.
  • Sentimental items. (We have no “valuable”.)
  • Create a video tour of the house for insurance purposes (be sure to highlight valuable items).
  • Move combustible items away from the house.

After creating our own list, we consulted the experts.

In this case, we looked at websites for communities in California. California copes with wildfires constantly. (And, in fact, Kim’s brother and his family recently had to help evacuate their town due to wildfires!) For no particular reason, I chose to follow the guidelines put out by Marin County, California. I figured they know what they’re talking about!

The FIRESafe MARIN website has a bunch of great resources dedicated to wildfire planning and preparedness. I particularly like their evacuation checklist. While this form is wildfire specific, it could be easily adapted for other uses, such as hurricane preparedness or earthquake preparedness.

The ready.gov website is an excellent resource for disaster preparedness. It contains lots of info about prepping for problems of all sorts. You should check it out.

Creating a Go Kit

FIRESafe MARIN and other groups recommend putting together an emergency supply kit well in advance of possible problems. Each person should have her own Go Kit, and each should be stored in a backpack. (In our case, I have several cheap backpacks that I’ve purchased while traveling abroad. These are perfect for Go Kits.)

What should you keep in a Go Kit? It depends where you live, of course, and what sorts of disasters your area is susceptible to. But generally speaking, you might want your kits to contain:

  • A bandana and/or an N95 mask or respirator.
  • A change of clothing.
  • A flashlight or headlamp with spare batteries.
  • Extra car keys and some cash.
  • A map marked with evacuation routes and a designated meeting point.
  • Prescription medications.
  • A basic first aid kit.
  • Photocopies of important documents.
  • Digital backup of important files.
  • Pet supplies.
  • Water bottle and snacks.
  • Spare chargers for your electronic equipment.

That seems like a lot of stuff, but it’s not. These things should fit easily into a small pack. Each Go Kit should be stores somewhere easy to access. Kim and I don’t have Go Kits yet, but we’ll create them soon. We intend to store them in the front coat closet.

Writing this article reminds me of one of the first posts I shared after re-purchasing Get Rich Slowly. Almost three years ago, I wrote about how to get what you deserve when filing an insurance claim. This info from a former insurance employee is very helpful (and interesting).

Final Thoughts

I spent much of yesterday prepping for possible evacuation. This isn’t so much out of panic as it is out of trying to take sensible precautions. I gathered things and put them in the living room so that we can be ready to leave, if needed. If authorities were to upgrade us from level one to level two status, I’d move this stuff to my car.

Also as a precaution, I moved stuff away from the house and thoroughly watered the entire yard. (Not sure that’d make much difference, but hey, it can’t hurt.) I created a video tour of the house that highlights anything we have of value. And so on. This took most of the afternoon.

This morning, I can see that the neighbors are doing something similar. We’re all trying to exercise caution, I think.

Kim and I will almost surely be fine. Although the smoke is thick here at the moment — it’s like a brownish fog, and it’s even clouding my view of the neighbor’s house! — there aren’t any fires super close to us. And barring mistakes or stupidity, there won’t be any threat to our home.

Still, it’s good for us to take precautionary measures, both now and for the future. And it’s probably smart for you to take some small steps today in case disaster strikes tomorrow.

Here’s a terrific Reddit post about what one person wishes they’d known when evacuating for wildfire.

Source: getrichslowly.org

How much does it cost to drive? Driving cost calculators and tools

My girlfriend recently bought a new car. After 23 years, she sold her 1997 Honda Accord to a guy who’s more mechanically inclined than we are. Kim upgraded to a 2016 Toyota RAV4, and she loves it.

One of her primary considerations when searching for a new car was the cost to drive it. In her ideal world, she would have purchased a fully-electric vehicle but it just wasn’t in her budget. The RAV4 hybrid was a compromise. According to fueleconomy.gov, it gets an estimated 32 miles per gallon. (And actual users report 34.7 miles per gallon.)

Cost to drive a RAV4 hybrid

Kim’s quest for a fuel-efficient car prompted me to revisit apps and online tools that help users track their driving and fuel habits. I’ve written about these in the past — and, in fact, this is an updated article from 2008! — but haven’t looked into them recently.

Here’s a quick look at some of my favorite driving cost calculators, tools, and apps.

Cost to Drive

Cost to Drive (stylized Cost2Drive) is an easy-to-use web app that estimates how much you’ll spend to drive from point A to point B. Enter your starting point (address, city, state, or zip code) and your destination, enter your vehicle information, then click a button.

Cost to Drive input

That’s it. Cost to Drive calculates travel distance, approximate driving time, and an estimate of your fuel costs. Here, for instance, is how much it would cost to drive from Portland to visit Kim’s brother in Groveland, California.

Cost to Drive output

This tool is handy for road trips, of course, but it’s also useful for extended journeys. Before Kim and I set out on our R.V. trip across the U.S., I used Cost to Drive to estimate how much we’d spend on fuel. (I was way off, but that’s not the fault of the tool. I overestimated the fuel economy of our motorhome!)

This isn’t the sort of tool that you’ll use every day, but it’s certainly useful enough to bookmark for later use.

Folks in Europe — and possibly the rest of the world — might want to play with the Via Michelin app, which offers route planning and driving cost calculations.


While we only used the Cost to Drive once for our R.V. trip, we used the Fuelly app every single day. And I still use it today.

Fuelly is primarily a smartphone app with which you can track your vehicle’s fuel economy. Whenever you stop to pump gas, you enter mileage and pricing info into the app, and it computes how much it costs to drive.

Here, for instance, are two screencaps from Fuelly showing how it tracked info for our motorhome.

Fuelly cost to drive screenshot  Fuelly cost to drive info

To get more accurate estimates of the cost to drive your vehicle, you can also log maintenance info in Fuelly. And, as you can see, the free version of the app is ad supported. Ad-free premium versions are available, and they include added features.

While the Fuelly website doesn’t offer a lot, there’s one feature that I think GRS readers will find interesting. If you select the browse vehicles option from the main menu, you, you can get a profile of driving info for all Fuelly users. Here, for instance, is what the app has tracked for other folks who own a 2004 Mini Cooper, like me.

Fuelly individual model info

Fuelly cost to drive info


A decade ago, GasBuddy was a gas price aggregation tool. It collected fuel price info from across the United States, and served it up so that visitors could find the best prices in their area.

Today, GasBuddy is still that website, but it’s a whole lot more. For instance, you can look up a chart of gas price trends over the past couple of years.

Gas price trends

Or you can find local maps and national maps of current gas prices.

Local gas prices

National gas prices

And because it’s 2020 now, GasBuddy offers a smartphone app featuring all sorts of tools to help you calculate (and reduce) your fuel costs.


FuelEconomy.gov is the official U.S. government source for fuel economy info. Like all U.S. government sites, it’s a treasure trove of data and resources.

The site includes a car finder (and comparison) tool (also available for iOS and Android devices), a vehicle power search, a fuel savings calculator, and more. There’s even a page exploring extreme MPG!

The site also provides some widgets for site owners (like me!) to share with their audience. Here’s

Find a Car Tool

This tool lets you look up official EPA fuel economy ratings for vehicles back to the 1984 model year.


Gas Mileage Tips

This tool displays a fuel-saving tips and provides links to additional tips on fueleconomy.gov.

Each year, the U.S. Department of Energy and the U.S. Environmental Protection Agency produce a Fuel Economy Guide to help buyers choose fuel-efficient vehicles. You can find guides from recent years in the Get Rich Slowly file vault, if you’re interested: 2020, 2019, 2018, 2017, 2016, 2015.

If you’re into alternative fuels and advanced technology vehicles, the U.S. Department of Energy has a bunch of different widgets to play with at their Alternative Fuels Data Center.

Sidenote: Many folks want a new Tesla or Prius in order to minimize their impact on the environment. This isn’t as straight-forward as it might seem. The calculations are complicated but the bottom line is this: In many cases, it makes more sense to keep (or buy) an older fuel-efficient vehicle than to buy a new one. That’s because the manufacturing process itself is the source of roughly 25% of a car’s environmental impact.

The Bottom Line

It’s important to note that even the best driving cost calculator has limitations. Most of these tools track only fuel costs, which are a small portion of the overall cost to drive your car.

Your true cost of car ownership includes the purchase price,insurance, maintenance, and more. According to the American Automobile Association, the average new vehicle costs 62 cents per mile to drive. AAA figures the average driver spends $9,282 per year on her automobile.

To truly determine how much you’re spending to get around, you need to take matters into your own hands. Find a cheap notebook or pad of paper. Grab a pen or pencil. Whenever you make a trip – even if it’s just down the street – log the time and the distance. Write down how much you spend on fuel and maintenance. Tally your car and insurance payments.

Do this long enough and you’ll begin to get a picture of your personal driving costs. At any point, you can simply divide the amount you’ve spent on your vehicle by the number of miles you’ve driven to learn how much it costs to drive.

What you do with this info is up to you!

Note: This is an updated article from the GRS archives. The original version from 03 December 2008 was woefully out of date. Some older comments have been retained.

Source: getrichslowly.org

Wishing for a walkable neighborhood

“You sure slept in late,” I said to Kim this morning.

“I know,” she said. “I was up for two hours in the middle of the night. I was thinking about you. I was thinking about everything we talked about at our family meeting.”

“For two hours?” I asked.

“Yeah,” Kim said. “My wheels were spinning. I was trying to figure out why you’ve been so unhappy since we moved to this house. The more I think about it, the more I’m convinced it’s because we don’t live in a walkable neighborhood. That’s so important for you. I think it makes a real difference to your mental health.”

“I hadn’t thought of that,” I said.

Walk Score: Seven

Actually, when we moved to this place two-and-a-half years ago, the lack of walkability was a very real consideration. I thought about it. I talked about it. I wrote about it. In the end, though, I decided that the pros of the move would outweigh the cons.

Our current home has a Walk Score of 7

Since we moved, I haven’t thought much about the lack of walkability here. I’m aware of it, sure, and I sometimes bemoan the fact that I can’t just walk for errands. But Kim could be right. This could be a critical factor in my (lack of) recent happiness.

  • The condo had a Walk Score of 68, a Bike Score of 81, and a Transit Score of 37. Our current country cottage has a Walk Score of 7, a Bike Score of 24, and a Transit Score of 0. (The only reason our Walk Score isn’t a zero? There are nearby schools and parks.)
  • At our old place, the 0.5-mile walk to the nearest grocery store took ten minutes. Now, the two nearest grocery stores are both 1.5 miles away — or half an hour by foot. (Plus there’s 625 feet of elevation change on one route, an average grade of about 7.5%.)
  • At the condo, walking to restaurants took a little longer than walking to the grocery store — by two minutes. And there were a dozen good eateries to choose from! Here, it’s the same 1.5-mile walk to reach lesser-quality restaurants (and, again, half of them are at the bottom of a huge hill).

When we lived in Portland, it was easy to walk for nearly every errand. If the place I needed wasn’t in the half-mile radius of our immediate neighborhood, it was almost certainly within the one-mile radius of our extended neighborhood. And some summer afternoons, I’d make the 2.7-mile walk to the next neighborhood over in order to access even more stores and services.

Here, outside of the two shopping centers that are 1.5 miles away, there are two additional commercial pockets that are each 2.9 miles away (at the bottom of the hill). Those walks are doable — but not often.

Gone are the days when at three in the afternoon, I’d decide what to make for dinner, then walk to the grocery store to pick up ingredients. Gone are the days of spontaneously deciding to walk to Thai food for lunch. Gone are the days of walking the four miles into downtown Portland from the condo to meet readers and colleagues.

A Cascade Effect

Before we moved, I averaged about 12,000 steps per day. Last month, I averaged 6287 steps per day. Most of those steps are from walking the dog. A few times per year, I’ll walk for errands. Mostly, though, I drive.

Other indicators are worrisome too. In the thirty months since we’ve lived here, I’ve gained thirty pounds. (I’m pleased to report that I seem to have arrested this weight gain, however, and am now losing weight.) My net worth has dropped $300,000 (!!!). I now get a few social interactions per week instead of a few per day.

I can’t say there’s a causal relationship between the move and these changes (although it sure seems likely). And I’m not saying that I want to leave this house. Because I don’t. I told Kim as much this morning.

“I’ll do whatever it takes to improve your mental health,” Kim said this morning. “Even if it means moving.”

I waved her off. “I think you’re probably right about this. I think the lack of walkability probably has had a huge impact on me. But I don’t want to move. That feels foolish. I love this place. I love my life here with you and our animals. I don’t want to leave.”

Instead, I think I need to force myself to get out and walk more. I need to accept where I live and walk regardless.

A decade ago, when Kris and I were still married and living on the other side of the river, I was in a similar situation. The nearest grocery store was exactly one mile away. There were a few restaurants within 1.5 miles of the house. If I was feeling ambitious, I could walk the 2.7 miles to the nearest downtown area to access even more stuff.

For most of the time I lived in that house, I did not walk for errands. But during my last couple of years with Kris, I learned to walk. It became something I looked forward to. By the time we split up, I was often walking the five-mile roundtrip to the nearest town for lunch. I think that’s something I could (and should) do here.

The nearest restaurant to our house

Time to Walk

“You know what?” Kim said as we prepared to walk the dog this morning. “I think you might want to consider renting an office somewhere nearby. Even if it’s just a small place. It’d be a way for you to get out of the house. And if the office was somewhere walkable, you could scratch that itch too.”

Maybe Kim’s right. I don’t know.

This morning, I sifted through Craigslist to see if there’s any local office space for rent. There is, but not much. Five miles from our house, in the center of the next city over, there are two spots available.

  • The first space is 129 square feet for $325 per month.
  • The second space is 161 square feet for $425 per month.

Both of these spaces are in the same building, and the building is in the heart of a walkable downtown where we already do many of our errands. Plus, there’s a Regus shared office space at the bottom our our hill, about 2.5 miles from the house. That’s certainly walkable in summer and bike-able most of the year. (There’s no much else in that particular neighborhood though.)

I’ve already sent email regarding the office space. Tomorrow, I’ll drop by the Regus building to check out my options there. I think Kim may be on to something here.

In the meantime, I’m absolutely going to make myself walk more often — despite the fact that meterological winter starts today. When the cats need food, I’ll walk to the pet store. For small shopping trips, I’ll walk to the grocery store. And once or twice each week, I’ll walk to a local restaurant for lunch (and to work).

Instead of being passive, instead of allowing myself to be unhappy due to my circumstances (circumstances that I chose), it’s time for me to be proactive, time for me to do the things that I know bring me increased well-being. And that means walking.

Source: getrichslowly.org