My wife and I have a couple of couches.  Structurally, they’re both in great shape.  However, one of them has some damaged fabric on its arms, and the other has been faded by the sunshine.  We’d love to keep the couches – they’re both very comfortable – so there’s no real (non-cosmetic) reason to get rid of them.  At this point, we’re thinking about buying some slipcovers for the couches.  (We don’t sew, so we’ll have to purchase the slipcovers.)

Now, the questions.

1.  Have you ever used a slipcover to improve the look of an old couch or loveseat?

2.  If so, how did it look?  In other words, did you find a slipcover that didn’t “look” like a slipcover?

3.  What type of slipcover did you buy and approximately how much did it cost?

Feel free to leave your comments section.  If you have a site where you ordered your slipcover, feel free to leave the link.  If, for some reason, the spam filter blocks your comment, please contact me and let me know.  Alternatively, you can head over to Twitter and @NCN with your input.  Thanks so much, in advance!

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Reader Feedback Request – Alternative To New Couches

First, I need to go through my filing cabinet and gather up all income tax-related documents.  W-2’s will arrive soon – and I want to file my taxes as soon as possible this year.  I also want to go through my old tax returns, label them, and store them in a more orderly fashion.

Second, I’ll sift through the rest of my files, discarding any unnecessary documents, bill stubs, or letters.  Over the past four years, I’ve changed banks, cellular providers, satellite television providers, etc.  I just need to see if I have any “stuff” hanging around that I can send through the old shredder.  I’m pretty conservative when it comes to trashing documents, so if I even think I might need to keep one, I’ll keep it.  That being said, I’m pretty sure I can get rid of the manual and sales receipt for an old push-mower – one I bought ten years ago and no longer own!

After that, I’ll update my list of financial accounts.  Three or four times a year, I like to go through my financial accounts, update and change passwords, make sure that contact information is correct, and make note of any new accounts I might have opened.  I like to have an inventory of those accounts – one copy that I keep with my regular files and one copy locked away in our emergency safe.

Next, I think it’s time to print out a new copy and update my grocery store price-book.  I use the price-book to track the price of groceries (and other items found at the local grocery store).  When an item hits its rock-bottom price, I stock up.  My current price-book is several years old and a little tattered.  Now that I’m back to healthy eating, I’m tracking different items.

Finally, I need to go through and organize all of the various finance-related files that are on my computers.  I have two laptops – my old Lenovo and my current Mac – and I also have an old desktop.  I have various files on all three, and I really need to consolidate those files and password-protect them.  I’ve been meaning to do this for some time, and this freezing cold weather outside is as good a reason as any to take an hour or so and just get it done.

What about you?  Do you have any financial spring cleaning that needs to be done?  If so, don’t wait until spring – Do it now!

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A Little Financial “Spring” Cleaning

Before you make any financial decision, understand exactly what you are doing and why you are doing it.

• If you sign up for a credit card, understand the card’s terms and conditions.
• If you take out a mortgage, understand the mortgage’s terms and conditions.
• If you make an investment, understand the potential risks involved.
• If you buy and insurance policy, understand how the policy works and what it covers.

You get the point.  Imagine that you have two jobs.  First, there is the job that you do for someone else – the job you do for your boss and for your customers.  That’s the job that pays you your salary.  Second, there is the job that you do for yourself.  You are both boss and customer.  Don’t let the you of today sabotage the you of tomorrow.  Take the time to educate yourself and you’ll be better off, in the long run, for it.

Do not be afraid to ask questions.

Do not be afraid to say no.

Do not be embarrassed if you do not understand something.

This is your future.  You have a right to feel comfortable about the decisions you are making and the steps you are taking.

Bonus Tip -

Be sure to keep a copy of the terms and conditions associated with any financial product or service that you might use.

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Understand It Before You Do It – Today’s Quick Tip

Today, I received the actual explanation of benefits from my insurance company.  I am happy to report that my portion of the cost of the procedure is several hundred dollars less than the amount I paid to the hospital.  When estimating my portion, the hospital included my full deductible, unaware that, due to several doctors’ visits prior to the procedure, I had already met most of my deductible.

I called the hospital and spoke to the billing department.  A refund for the overpayment has been issued.  I should receive it in a week or so.

It’s always a good idea to check – and then recheck – your medical bills.  Many insurance companies now allow you to view your account information online.  This makes it very easy to view recent activity and to check account balances.

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Keeping A Close Eye On Those Medical Bills

At the end of each pay cycle, right before I receive a paycheck, I’ll do a savings sweep.  I take a peak at my monthly budget, notice any categories where I might have “left over” money, and sweep that money from my checking account into my savings account.

Benefits of Today’s Tip -

• Savings account pays higher interest rate than does checking account.
• Money in savings account is harder to spend than money in checking account.
• This gives me one more chance to analyze and tweak my budget.
• I am motivated to live under-budget, so that my sweep amount can be maximized!

Bonus Tip -

If you are in debt, consider a payment sweep.  Instead of sweeping “left over” money into savings, consider making an additional payment to one of your creditors.

I always keep a small amount in my checking account.  This would be especially important for those living without free checking.

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The Savings Sweep – Today’s Quick Tip

Personally, I’m very busy.  So, when I’m offered a trial period, especially one that requires a phone call in order to cancel a service, I’m vary wary.  In most cases, I simply decline the service.  This is by far the easiest way to deal with most of these types of offers.

Once in a while, however, I’ll actually get an offer to try a service that I’m actually wanting to check out.  For instance, I recently switched satellite television providers, and enjoyed three months of free premium movie channels.  Just last night, I called my provider, just as the free trial period ran out, and canceled the channels.  It was fun to have the channels, but I really do not need them.

If, like me, you struggle to stay organized, but you still want to take advantage of these trial periods, consider setting up a reminder system.  Personally, I use the iCal program on my computer, and make a simple note, reminding myself of when to call and cancel a particular service.  I also know folks who use websites like FutureMe, a website that will allow you to schedule a reminder email, and send it to yourself at a specific time in the future.  Pretty rad.

Remember, before signing up for any free trial period, be sure that you know exactly how to cancel the service.  This is especially true for services offered by credit card companies and credit reporting services.  Taking the time once a month to take care of these pesky little phone calls can, in the long-term, save you a lot of money.

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Dealing With Trial Periods

The purpose for our Kids’ Fun Fund was pretty specific.  Our kids love to go to an arcade – a very specific arcade – located about fifteen minutes from where we go on vacation.  This arcade is really more than just an arcade, it’s more like a small-scale amusement park, complete with miniature golf course and go-carts.  My kids, for some reason, just really like to this particular arcade.

Last January, when we started to plan for our vacation, I asked my kids what they thought about creating a Fun Fund, so that they could save up a big pile of coins to use at the arcade.  They really took to the idea an the Kids’ Fun Fund was born.  You can click this link to read more details about the Kids’ Fun Fund.

The Kids’ Fun Fund really worked.  Our kids worked hard – and worked hard together – to earn money for the Fun Fund.  They were both so proud, when we were preparing for vacation, to pack their big jar of coins.  When we arrived at the arcade, we all stuffed our pockets with quarters, and headed inside.  The kids had a blast and it was great to see them enjoy the reward for their labors.

It’s cool to note that the kids could have spent every penny in their Fun Fund, but they chose not to do so.  In fact, they used just a small portion of the money that they had saved.  Now, they are in the process of deciding exactly what to do with the rest of the Fun Fund.  I’ll guide them as they make the decision, but I’ll leave the final choice up to them.  Whatever they do, I’m super-proud of my kids.  They set a goal, worked hard to achieve it, and then had a blast at the arcade.  Success!

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The Success Of The Kids’ Fun Fund

You are the quarterback, the game manager, of your own personal finances.  Your goal is to minimize rookie mistakes so as to maximize your progress.  Over the next few days, I’ll discuss rookie mistakes, and how to avoid them.

The Dreaded Overdraft

What is an overdraft?

An overdraft occurs when withdrawals from your checking account exceed the balance available in your account, resulting in a negative account balance.  This can be referred to as being overdrawn or bouncing a check.

How can you avoid being overdrawn?

1.  Maintain a balanced checkbook.

2.  If you share a checkbook with your spouse, regularly reconcile receipts, checks written, ATM withdrawals, etc.

3.  Record non-check transactions – ATM withdrawals, debit card purchases, online bill payments, auto-drafted payments – in your checkbook register.

4.  Regularly access your checking account – online or via the telephone – so as to be aware of any fraudulent or irregular withdrawals from your account.

5.  Avoid floating – writing a check before sufficient funds to cover it are in your account.

6.  Stop depending on overdraft protection plans.  Consider leaving a small buffer amount, say $50, in your checking account at all times, should other steps to avoid being overdrawn fail.

What is the cost of an overdraft?

Most banks charge between $25 and $50 for each withdrawal processed on an overdrawn account.  Also, most banks process withdrawals based on amount, starting with the highest amount first.  Consider the following scenario -

Jack has $300 in his checking account.  On Friday, he writes two checks, one for $350, the other for $75.  His wife, Sara, uses her debit card three times, for purchases of $50, $25, $60.  Jack gets paid on Fridays, and he is planning to “beat the check” to the bank on Monday, and deposit his paycheck before 2 pm.  On Monday, however, Jack gets busy, forgets to make the deposit, and only remembers late that evening.  The next morning, Jack looks at his online banking information, and this is what he sees -

Not only is their checking account in the red, they are now $175 poorer than they were just one day before, all because of poor planning.

Don’t be like Jack and Sara.  Never use your debit card unless you are sure that you have enough money in your checking account to cover a withdrawal.  Stop playing games with your checks and trying to beat them to the bank.  For those trying to get out of debt, just one or two overdraft fees can reduce the progress you have been making with your debt reduction plan.

In our above scenario, Jack and Sara paid $175 for a one day loan of $260! – Banks are charging exorbitant fees, and customers are paying them, for very short term, very expensive, “loans”.

What are some questions to ask yourself / your bank?

How does your bank process overdrafts?

How does your bank handle deposits?

When can deposited money be accessed?

Would using money management software help to keep me informed about my balances?

If I am constantly dealing with overdraft fees, isn’t that a sign of poor financial management?

What can I do if I am a rookie and I have recently made this mistake?  How can I get some (or all) of my money back?

Here’s what I would do, to try to recoup some of the money lost to overdraft fees -

I would call my local branch, and ask to speak to the manager.  I would honestly explain my situation, and ask that a portion (or all) of the fees be refunded.  I would remind the manager of my loyalty as a customer.  I would acknowledge that I made a mistake, and I would inform that manager that I am now living on a budget and that I plan to be a better manager of my own finances.

If I felt uncomfortable speaking to a local manager, I might call the service number for the company which owns my bank, and speak to a customer service representative.  Again, I would be honest and courteous, and I would ask that a portion (or all) of the fees be returned.  I would remind the representative of my loyalty, and acknowledge my mistake.

The bank is under no obligation to refund any of your money, but many banks are willing to work with their customers.  Be patient.  Be persistent.  Call until you reach someone to whom you can talk about your situation.

Final note -

If you have ever had to deal with the embarrassment of an overdraft fee, join the club.  At some point in time, almost everyone you know, including yours truly, has goofed things up and found themselves in the red.  Our goal is not to wallow in the mistakes of the pass, but to move forward, and to plan for success in the future.

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Avoid These Rookie Mistakes – Overdraft Fees

A few months ago, in an effort to teach our kids a bit about money and responsibility, I created The Kids’ Fun Fund.  Throughout the year, the kids are earning extra money, and they are planning to spend that money when we go on vacation.  Here’s how The Kids’ Fund Fund works -

Instead of giving our kids an allowance, we reward our kids for doing chores around the house.  Our daughter is 9, so she can help with folding clothes, taking care of the baby, cleaning her room, and straightening up the den.  Our son, now 5, can make his bed, put away folded clothes, straighten up the bathroom, and pick up his toys.

Taking into consideration their differing ages, I created a list of 10 age appropriate chores for each of our kids.  I then posted the list of those chores, along with how much Mommy and Daddy will pay upon completion of  each of those chores, on a bulletin board near our refrigerator.  (By the way, the bulletin board is a life-saver.  It keeps papers off of the front of the refrigerator, and with a few pushpins, makes organization a snap.)

Each morning our kids go through their list of chores, and as they do them, they receive their “salaries” – usually a dime or a quarter per chore, depending on the chore’s complexity.  My wife and I also have the flexibility to add bonus chores, something we do pretty often, especially if the house needs a quick clean up.

One cool thing about The Kids’ Fun Fund – all of the money goes into a single jar.  It’s actually a square plastic container with a label that says “The Kids’ Fun Fun”.  I made it from a jar of fancy peanuts.  The kids have been earning money for several months, and neither one of them have commented on the “fairness” of putting all of the money into a single jar.  In fact, from time to time, they’ll take all of the money out of the jar, count it, and determine what their “half” of the money is.

We have tried other systems for teaching them about money, but this one really seems to work.  Clearly, our oldest is doing more work and could make much more money, but she seems very content to share whatever we give her with our son.  And he loves nothing more than to dump the money onto the floor and organize the coins by type.

I’m not sure if this system will always work, but for right now, it’s a good way to teach them about work, how to share, the power of working together, and the joy of achieving a common goal.  It’s going to be very interesting this summer at the beach.  I really can’t wait to see if they spend all of their money at the “fun park”, or if they choose to save a bit for other adventures.  Whatever they do, I’m sure there will be plenty of teachable moments along the way.

A couple of final thoughts – Our kids give a portion of what they earn to our local church.  We believe it is important to teach them to be givers.  Also, they save a portion, because we also believe it is important to save.  Also, there are some chores that our kids are expected to do, for which they will not receive any financial reward.  And, there are times when we just give them money, for no other reason than that we want to.  We want them to learn that family members do for family members, not for gain, but out of love.  Finally, I have found that the amount we give the kids is almost irrelevant to them.  For now, they just really dig watching those shiny coins pile up.

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The Kids’ Fun Fund – Our Alternative To Allowance

Updating Inventory of Financial Accounts -

I’ve spent a few minutes updating my inventory of financial accounts.  This single-page document serves two purposes.  First, I use it to keep track of all of my account names, account numbers, and account passwords.  Second, if something were to happen to me, my wife would have easy access to all of our financial information.  Read more about the Inventory of Financial Accounts and print your own copy.

Opening Education Savings Accounts -

As soon as I publish this article, I’m going to open two new education savings accounts, one for my son and one for my youngest daughter.  I opened an ESA or my oldest daughter a couple of years ago, and I actually printed out an application for my son’s ESA a few months ago.  I’m actually thankful that I didn’t open the account at that time, because I’ve decided to go with Vanguard instead of my original choice, TD Ameritrade.

Consolidating Budget Categories -

I have been using the You Need A Budget financial management software for quite some time, and I am very pleased with it.  This year, I’m trying something a little different.  I am going to consolidate several smaller budget categories into just a few larger categories.  At this point in my financial journey, I have broken the habit of overspending, and I want my budget to be a tool, not a burden.  By consolidating, creating my budget will take a little less time.

Scheduling Automatic Contributions -

As soon as I open the education savings accounts, I plan to schedule automatic contributions to all of my after-tax retirement and education savings accounts.  In the past, I liked to manually enter my contributions, as a way to keep my head-in-the-game.  Now, after almost four years, I’ve moved past the need to micro-manage every detail of every transaction.  In the words of the info-mercial, I’m going to set it, and forget it!

Organizing Financial Documents -

I recently purchased a fire-proff safe and my wife and I are using it to store our marriage certificate, our kids’ birth certificates, our social security cards, and our wills.  Tomorrow, I’m going to go through several of our financial documents, and organize them for tax time.  I need to sort though last year’s documents and receipts, just to see if their are any pertinent tax-related documents.  I also have a retirement-specific form that I need to update for my employer.

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Working Hard To Get Ready For The New Year