Beating Broke

Mr Credit Card from www.askmrcreditcard.com is going to talk about how to make use of 0% deals that are routinely offered by credit card issuers. You might also want to check out his list of 0% balance transfer credit cards

The 0% introductory offer on balance transfers and purchases is a very common tactic used by credit card issuers to lure new cardholders. Credit card issuers hope that by offering a 0% interest rate, the new cardholders will stick to using the card after the introductory period expires. But rather than looking at this as a marketing ploy, there are ways to make this work to your advantage. We will explore these ways to make use of 0% deals to your advantage.

Transfer High Interest Balances: The most obvious way to take advantage of a 0% interest rate is of course to transfer balances from higher interest rate credit cards. This can save quite a bit in interest payments. This technique will work well for those in credit card debt and are looking for a way to pay it off faster. By combining Dave Ramsey’s snowball method together with temporarily paying 0% interest rates, you can get of out your credit card debt much faster.

0% Interest on Purchases: I am generally against making use of 0% deals for purchases. That is because I always advocate paying your credit card bills in full every month. But sometimes, carry a balance may make sense. For example, if you are starting a new business, you could taking advantage of such deals on a business credit card and get a new computer. You may want to carry a balance simply to build a business credit history (and we assume you have the money to pay it off in full if you choose to).

Earn Rebates and Rewards: As silly as it may seem, some cards reward you for actually doing a balance transfer even though they do not offer any 0% interest rate. For example, if you transfer a balance to the US Airways MasterCard, you will get 10,000 bonus miles! So even if you normally pay your bills in full, transferring a balance to get the bonus miles may actually make sense to folks who play the frequent flier game.

Rules and Guidelines

However, to play this game, you need to follow a few rules and be aware of a few things.

Figure Out What the Rate Will Be: If possible, calculate what your interest rate will be after the introductory period so you can plan accordingly. Either make sure your balance is paid in full by then or decide if it will be cheaper to not take advantage of the 0% interest rate and stay with the current card.

Pay More than the Minimum: This is something that would be beneficial to all credit card users, but especially so if you are using a credit card with a no interest offer. In the end if you still have a balance, at least it will be smaller and not accrue as much interest as if you just paid the minimum payment during the intro offer. The typical minimal payment is between 2% and 4%.

Be Aware of the Rules: Make sure you understand where the 0% interest applies, if it is just on balance transfers or only on certain purchases. Also make sure you are aware of the time period and the exact date the intro offer will be over. If you need to, put the date on a calendar so you won’t be surprised when you have to start paying interest on your credit card.

Pay on Time: Always pay your bills on time (especially when you are on one of these 0% deals. Pay late and you could see your rates go from 0% to perhaps even default rate levels! Sign up for autopay and make sure you have sufficient funds in your bank account.

0% APR Donts

These are things that will sabotage your efforts in taking advantage of a 0% interest rate:

Waiting to Pay Balances: Don’t let the 0% interest rate run out on balance transfers. You could end up paying a higher interest rate after the introductory rate than you were on the card you transferred from. Try to pay off the balance transfer before intro period ends.

Getting into Debt: Don’t use a 0% offer as an opportunity to put yourself further into debt. Make your purchases while the rate is 0% and pay off balances when the introductory period ends.

Summary: – 0% deals offered by credit card issuers can be a great tool in the right hands. You could use it to pay off your credit card debt faster, or manage your cash flows when you get 0% for purchases. Savvy frequent fliers can even earn bonus miles for just temporarily transferring a balance. But the most important thing is to use it wisely and not fall into the trap of getting into debt.

Popularity: 1% [?]

Several things have happened recently that have made me decide that it’s time to upgrade the way I track my finances.  First, the software I currently use (Microsoft Money 2006) is no longer supported.  At some point it’s not going to work anymore.  Not for a while, but that combined with other factors says it needs to be replaced.  Second, currently we track our check register in Money and then transfer the info into a spreadsheet for our budget.  It’s somewhat archaic. Finally, it’s cumbersome and time consuming.  I’d like something that is all-in-one and that I can enter my register stuff in while categorizing it on the fly and that I can then click over and see the effect on budget and so on.

The software that I’m currently looking at and will likely demo is YNAB (You Need a Budget), MoneyDance, and Quicken.  I’ve looked briefly at GNUCash and I’ve used Quickbooks before, but both are pretty heavy duty accounting software and the object here is to simplify, not have to learn proper double entry accounting procedures.  So far, the front-runner is YNAB.  But, I haven’t tested any of them yet so I only have the online sites to go off of.  Which brings me to the online options.  I think they are out.  Some are very robust, but none of them will automatically bring in my information, and I have no need for access to it from anywhere, so it just seems like an added privacy risk that I don’t need to take.

Now, here’s where all you readers come in.  I want to know what you use.  What do you recommend?  And what options/features have you found to be “can’t live without” in your software.

Popularity: 2% [?]

Welcome to the Carnival of Personal Finance #267!  It’s been a long time since I’ve hosted a CoPF.  So long, in fact, that I’ve never hosted one in the 2 years that I’ve had Beating Broke.  I hosted one once upon a time with another site, but that was easily 4 or so years ago.  It’s grown immensely since then.

If you are curious, you can go and check out last weeks carnival, and next weeks carnival will be hosted at the Ultimate Money Blog.

This is a long carnival, so let’s get right to it.

First, a few that I’ve chosen as Editors picks.

• Doug Warshauer from Doug Warshauer presents How Much Should You Spend on Your Car?.
• Myke from In Search of Salt presents Nearly Everything I learned about Investing I Learned from My Father.
• Kevin from Financially Poor presents The Path To Financial Freedom: Start Counting.
• John from The Best Money Blog presents Saving Money For Opportunities.
• Jeremy from Generation X Finance presents Everyday Philanthropy: Simple Ways You Can Start Helping Others Today.

And the rest, in the order that they were submitted:

• Jaime from Eventual Millionaire presents How I Handle an Irregular Income.
• Craig from Free From Broke presents The Different Types of Mortgage Loans.
• Dividend Growth Investor from Dividend Growth Investor presents 14 Dividend Stocks with Dividend Growth Potential .
• moses kimani from life dividend presents greed is good!- or is it?.
• Nicole from Grumpy Rumblings of the Untenured presents Adventures in Retirement Savings Part 2: What not to do.
• Adam from Rabbit Funds presents REVIEW: Mint.com and the new Goals feature.
• Len from Len Penzo dot Com presents 15 Organic Fruits and Veggies That Aren’t Worth Paying More For.
• Neal Frankle from Wealth Pilgrim presents How To Convince Your Spouse You Need A Budget.
• Money Beagle from Money Beagle presents Do Any Of Us Have A Chance In The Stock Market?.
• Mich from Beating The Index presents How To Prepare For Higher Mortgage Rates.
• Craig Ford from Money Help For Christians presents Student Loan Debt Forgiveness For Ministers and Non-Profit Workers.
• Austin from Foreigner’s Finances presents Online Banks vs. Brick & Mortar Banks.
• D4L from Dividends Value presents Where To Find Great Dividend Stocks.
• Kim at MMI from Blogging for Change presents 10 ideas for young entrepreneurs.
• Briana Ford from Go Banking Rates presents Divorce Happens: Be Prepared.
• Bret from Hope to Prosper presents The Benefits of Financial Reform.
• FMF from Free Money Finance presents How to Make Your First Million.
• Arjun R. from Investing Thesis presents An Introduction To Financial Planning For Same Sex Couples.
• Kathy Sweedler from Plan Well, Retire Well: Saving and investing your money presents Refinancing: If it was just a simple yes/no question!.
• Rob from Daily Financial Solutions presents How Much Is Your Driving Costing You?.
• Jeff Rose from Consumer Boomer presents How to Calculate Your Credit Card APR.
• Tim from The Econ Man presents How to Kick a Bad Habit.
• Dan from ETF Base presents Why Bear Market Investments are Bad in Any Market.
• Pop from Pop Economics presents How to prepare for a double-dip recession.
• Reasonable from Richly Reasonable presents Use it Up, Wear it Out, Make it Do, or Do Without!.
• FruGal from FruGal presents Central Europe travels: Transport on a budget.
• Jason from Live Real, Now presents A Budget Isn’t Enough.
• RJ Weiss from Gen Y Wealth presents Money can be a Great Excuse.
• Kim Snider from Kimmunications from Kim Snider presents Five Healthcare Questions You Must Answer Before You Retire.
• Craig from Free From Broke presents Dollar Cost Averaging Helps Eliminate Emotion And Market Risk.
• Suba from Wealth Informatics presents How to make tent camping comfortable?.
• J. Money from Budgets Are Sexy presents These Commercials Are Making Me Batty!.
• Kristina from DINKS Finance presents A 50/50 Relationship.
• Paul Williams from Provident Planning presents Understanding the New Credit Card Statements.
• Rick from Expat Investing presents Is Offshore Banking right for you?.
• Bob from Christian Finance presents 10 Tips To Create Wealth.
• Cara Henis from Taking Charge presents ‘Real Housewives of New Jersey’ credit card tales of trouble.
• 2 Cents from Balance Junkie presents 5 Financial Bubbles: Are We Facing a Bubble of Bubbles?.
• MD from Studenomics presents Student’s First Car Buyer Guide– What You Need To Know .
• Silicon Valley Blogger from The Digerati Life presents How To Invest In Shares of Common Stock.
• The Smarter Wallet from The Smarter Wallet presents Visa Black Credit Card Review.
• Adam from Magical Penny presents How to Avoid Burn Off.
• Betty from www.ControlYourCash.com presents Stick a Pin In It, It’s Done.
• Jacob from My Personal Finance Journey presents Does Being Green Make Economic Sense? – Part 1 – Green and Hybrid Automobiles.
• Donna Freedman from Surviving and Thriving presents Hey, you, take off those shoes!.
• Michael from The DoughRoller presents 8 Must Have Small Business Tax Deductions.
• Mike from Green Panda Treehouse presents 8 Ways to Put Cash in Your Pocket Now.
• Pierre from Intelligent Speculator presents Build your own macro hedge fund with single country ETFs.
• Mike from The Financial Blogger presents Everything you need to know about income trusts.
• PT from PT Money presents Best Small Business Credit Cards.
• eemusings from Musings of an Abstract Aucklander presents Children are expensive, but so are cars.
• Mr. Credit Card from Ask Mr. Credit Card presents The Parent Trap.
• Miss Bankrupt from Miss Bankrupt presents Life After Bankruptcy Isn’t All Bad.
• mbhunter from Mighty Bargain Hunter presents How not to buy gift cards on eBay.
• Madison from My Dollar Plan presents Amazon Prime Free for Students and Others.
• Helen from Science and Money presents The True Purpose of Whole Life Insurance.
• ElizabethG (Modern Gal) from Modern Gal presents Preparing for Today’s Employment Realities.
• Tim Chen from NerdWallet Credit Card Watch presents Discover Acceptance Hits 90%. Does Discover Escape Finally Deserve Consideration?.
• Cecil Dellison from Clear Choice Credit Cards presents New Amendment on Credit Card and Debit Swipe Fees.
• a.b. from Modern Tightwad presents My Folks’ Home Modification = Epic Fail.
• Curt from PennyJobs.com presents 5 Reasons Why the Sooner the Market Crashes the Better.
• Daniel from Sweating The Big Stuff presents Motivational Story: From Dog Walking To Ivy League.

Whew!  That’s a lot of posts.  That’s the last of them though, so take your pick and read as many as you can.  There’s a veritable gold mine of information there and you could learn a lot!

Popularity: 11% [?]

Gold! Through the eons, it’s been a much sought after commodity. After all, it’s shiny and stuff. Even in the investment world, it’s the wonder investment. It’s touted as being the “can’t fail” investment for these uncertain times. Unlike stocks, gold is a physical thing. You can buy gold by the bar or by the ounce. And did I mention that it is a rock solid investment? Or is it?

The price of gold appears to hold a somewhat inverse relationship to the economy.  When times are good and the economy is rolling, the price of Gold goes down.  When times are bad and the economy is tanking, the price of Gold goes up.  Take the last few years for instance.  As the world’s economy has tanked, the price of gold has inversely risen significantly.  Why?  Because, whenever the economy tanks, the value of the dollar goes with it.  Now, stop to think what would happen if the dollar became worthless.  You couldn’t buy anything with that paper.  You’d be better off lighting a fire with it.  But Gold?  Gold is and always will be an in demand commodity.  No matter the value of the dollar, you can always trade gold!  So, as the economy tanks, more and more people begin buying gold.  They think of it as a sure-fire solid way to hold the value of their money as everybody else loses theirs.  If the economy tanks completely and the dollar becomes a fire starter, they’ll have something to buy stuff with.

So, worst case scenario, you’ve set yourself up and have something to trade.  But, much like the coins many of the gold hoarders buy, there’s a reverse side to this.  What if the economy recovers?  Those of you who are buying gold at $1100 and $1200 an ounce?  What happens when the economy comes back and the price of gold drops back down to something like $800 or $900?  Not so solid of an investment anymore, is it?

Now, let’s think on a grander scale.  There are an incredible number of people who are buying gold right now.  Celebrities everywhere are endorsing gold.  Regular joes like you and I are buying it up hoping to avoid the collapse of our economy.  And many of them will dump a large percentage of their investment portfolio into gold.  Maybe even their life savings.  If they lose 30% of their savings/portfolio, what do you think will happen?  The gold bubble will burst.  The price of gold will drop even further as people rush to sell off their holdings.  They’ll lose even more.

Is that the way it will go down?  Is Gold just another big bubble like the dot-coms and real estate?  I happen to think it might be.  I don’t think it will have nearly the effect that either of the previous bubble bursts had, but it could be a pretty rough few years while we recover.  What do you think?

Popularity: 3% [?]

There’s been a bit of publicity lately about The Giving Pledge, an organization started/inspired by Warren Buffett and Bill Gates that is aimed at the Forbes wealthiest 400 people.  They and the organization encourage the worlds wealthy to give it all away.  Or at least a majority of their wealth.

Reading about all of this brings up the questions.  Could you give it all away?  Would you?  Should you?

At the real bottom of this is a more important question.  Why do we build wealth?  What purpose do we give our lives that we strive to attain wealth.  In Warren Buffetts case, I think you could argue that he has always seen it as a challenge.  Bill Gates saw a technological breakthrough and found a way to improve upon it.  Again, a challenge.  The challenge is not usually about the money though.  Buffett saw the building of the businesses as the challenge.  He wanted to be a better investor than anyone else.  Mission accomplished, I’d say.  Gates’ passion was in geekery.  He wanted to build a better computer.  Also, mission accomplished.

Gates and Buffetts passions made them very rich.  And, since you can’t take it with you, it’s gotta go somewhere.  Both have chosen to give a majority of their wealth away.  Kudos to them.  But, would you?  Could you?

For me, I would like to think that I could and would give most of it away.  Since I don’t have any to speak of, it’s easy to say that.  Ask me again when I’m 50 ish.   Many Christians would say that it’s the right thing to do.  Non-Christians will have a different reason.  Some would say that we have a moral obligation to make someone elses life better and to share the wealth.  Whatever the reason, I think it really comes down to doing good.  Most people are good by nature.  And doing good for others is in our nature.  That doesn’t mean that we all want to be paupers who volunteer all their time, but most of us are happy to share some of our spoils with those less fortunate.

What about you?  Would you give it away?  Why?

Popularity: 2% [?]

As we head into the new year, there is a wide range of expiring tax cuts that the former Congress and President approved back in 2001 and 2003. The tax cuts intended to help spur and strengthen the economy. To put it another way, there are a wide range of taxes that will be increased that will impact both the middle and upper classes unless Congress acts this year. During his campaign for presidency, President Obama was clear about his intention to let the Bush tax cuts expire at the end of 2010 to keep our growing federal deficit under control. Many argue that these tax increases will affect everyone in some way–you be the judge. Here is a list of the expiring tax cuts, and changes to credits and deductions in 2011 you may want to know about in order to mitigate any increased tax liabilities you may be facing. Many of these projections are based of off the proposed budget and are subject to change.

Income Tax Rates

Currently, the proposed budget intends to make some changes to the income tax rates or income tax brackets. President Obama’s 2011 budget will keep the previous tax breaks for single taxpayers making less than $200,000 and married couples making less than $250,000. In fact, the 28% tax bracket is expected to be expanded. However, the 33% tax bracket is expected to rise to 36% and the top 35% tax bracket should end up being 39.6%.

Capital Gains and Dividends

There will no longer be a 15% long term capital gains rate for those in the upper brackets. Their rates will go back to 20%. For individuals in the lower 15% income tax bracket, they might see their long term capital gains rate go to 10%. Under Bush, the lower 15% tax bracket had a 0% capital gains rate. In 2011, dividends (excluding mutual fund capital gain distributions) that were once taxed at a 15% tax rate are set to be taxed as ordinary income for the highest tax bracket. Obama’s proposed budget though only wants to increase the dividends tax rate for the top bracket from 15% to 20%. It remains to be seen what will happen but in any event the top bracket will be paying more taxes on dividends.

Estate Taxes

The estate tax (also known as the death tax) exemption will return to a $1 million exemption and is set to increase to 55% for estates over $1,000,000 dollars. This year (2010) happens to be the best year to die (that sounds horrible but true) because the estate tax was completely phased out this year (unless Congress acts to retroactively change this).

Mortgage Premiums

After December 31, 2010, Americans will no longer be able to deduct mortgage insurance premiums from their taxes if Congress fails to act. This was a special deduction for taxpayers/homeowners who were paying these insurance premiums for mortgage insurance contracts issued after December 31st, 2006. Although this deduction had an eligibility income cap at $100,000 for families (fully phased out at $110,000).

Child Tax Credit

Currently the child tax credit is $1,000 per child, but in the new year it will drop down to $500 and may not be refundable to all taxpayers. The tax credit for married couples (filing jointly) started to phase out at $110,000 (AGI) and for all other taxpayers (except married independent filers) it started to become phased out at $75,000. In the beginning of this year, Obama has proposed increasing this credit for middle-class families but nothing has been approved as of yet.

529 and Coverdell ESA Plan Changes

529 Plans allowed parents to invest after-tax dollars in an account which could grow with withdrawals being tax free if used for qualified education plans. In 2011, 529 plan (college savings plans or higher education plans) withdrawals will not be allowed tax free to pay for internet access or computers. Also, Coverdell ESA Plans will have changes. Coverdell ESA are similar in some ways to 529 Plans, except they are geared for elementary/secondary education expenses and have maximum contribution limits. After 2010, the max contribution limit will fall from $2000 a year to $500 unless Congress acts.

Business Taxes

There will be a few business taxes that will change including the section 179 expense deduction. The maximum expense deduction for 2011, with regards to the 179 expense deduction that applies to small firms and companies, will drop from $250,000 to $125,000 in 2011. There are limitations with this tax deduction as well.

Other Tax Credits

There will be limitations on the tuition credits and the earned income tax credit.

It is a tricky situation for the current Commander-in-Chief. If the cuts are allowed to expire, policymakers will be given gruff for raising taxes. If the cuts are extended for a longer term, the future of the deficit begins getting worse real fast. The situation leaves not much room for compromise between the government and the taxpayers, especially during a time of recession.

This guest post was provided by TaxDebtHelp.com, a company that provides IRS tax debt help through a collection of self-help articles that serve as a guide for taxpayers facing IRS tax problems. Moreover, articles are complimented and backed by a diverse team of tax professionals offering tax relief services for those taxpayers facing serious issues.

Popularity: 10% [?]

Way back in March, I mentioned that I was beginning to look into making some adjustments and doing some price checking.  Somewhere in between there and here, life got in the way and I wasn’t able to get it done as quickly as I would have liked.  I’ve finally caught up to it though and I’m glad that I did.

This story should be proof for the rest of you who don’t regularly compare prices on things.  Never assume that you’re getting the best rate.

Our car insurance had been with State Farm.  I have been a customer of theirs for close to a decade.  As of August (when the home owners insurance renews) I will no longer be a customer.  Why?  Because, what I found in my checking is that they were tied for most expensive auto insurance.  And the home owners wasn’t much better.  Of course, your results may vary and the insurance company for us isn’t necessarily going to be the company for you.  I know that when I originally signed up with State Farm, it was because the price comparison tool at Progressives website pointed to them as being the cheapest.

I find it ironic that the insurance company that we’re moving to is Progressive.  We’ll be moving our Home Owners policy to someone else.  Progressive was almost exactly 50% cheaper than State Farm.  50%!!!  In fact, the total for 6 months for all three vehicles that we insure was just barely more than it was for just one of them at State Farm.  That’s pretty incredible.  A bit of trivium; our new ins. agent mentioned that he’s moved 11 clients from State Farm to Progressive in the last month or so, and that about 6 Progressive clients have moved to State Farm.  I mention that to concrete the idea that the right insurance company for one person isn’t necessarily the right insurance company for another.  With all the variables that they take into account, it’s hard to say which will be better unless you do some shopping.

Another interesting note from the adventure.  Previously, I went to a State Farm agent and got my insurance.  This time, I went to an insurance agency.  They’re independent for the most part and have access to several insurance companies to quote from.  That makes it much easier to shop around, as they will do most of the footwork for you.  All you’ve got to do is check any companies that you’d like quotes from that the agency doesn’t have a relationship with. In our case, Allstate was probably the biggest one that the agency didn’t have to quote from.  I used Allstate’s online quote tool and found it to be on par with State Farm.

So, lesson learned.  Shopping around is good.  It can help you find the best deal when you’re buying just about anything.  But, if you’re buying a service, remember to shop around periodically and compare the service that used to be the best deal to make sure it still is.  You just might do like we did and save 50%.

Popularity: 4% [?]

Ok, folks.  I want your opinions and advice.

The situation is this.  My wife and I have been living in our current home for almost 6 years.  While the interest rate on our mortgage isn’t astronomical (6.75%), it is still a few points higher than what we could get now if we refinanced it.  Also, we have a second mortgage that is at 9%, but is pretty small in comparison to the first mortgage.  With rates as low as they are, I though that it might bear looking into refinancing the loans.  I had an appointment with our loan officer and based on the data I came home with and some other fiddling I’ve done, here’s what I’ve come up with.

If we refinance, we should be able to get in at around 4.375%.  That’s a pretty good drop from the current rates.  Because of closing costs, I estimate that it will take about 2.6 years for the refinance to be a positive thing.  If we were to sell at any time before that, we’d be losing money if we refinance.  Of course, the catch is that we are planning (hoping really) on moving to something a little bit bigger in the next 2 years.  Which, if that happens, would mean that the refi would be a bad idea.

If you’re following closely, you’ll notice that there really isn’t a need for advice there.  Well, here’s the rub.  If we refinance, our overall payment would be reduced by over $100.  If I were to take that $100 and use it to pay down a credit card or any other bill, it would be a great help.  Also, if I use it to pay a credit card that has 12% interest, I’ll be saving that 12% on that $100 which makes the refi pay off quite a bit faster.  *I should note that I am not all that good with math so I don’t know how to figure in the savings on CC interest into the equation.  If you do, feel free to say so in the comments.

So, here’s your call for advice.  What would you do?  Would you not refi and just bear with it since you’re planning on moving in 2 years?  Or would you do the refi so that you could reduce the payment and use the extra to help pay stuff off?  Leave your advice in the comments below!

Popularity: 6% [?]

Why are we so clueless about the stock market

By: Mariusz Skonieczny

Mariusz could have just as aptly named this book something like “The Beginners guide to the stock market” because that is what the book is; essentially.  He takes a very low level approach to the stock market in an attempt (I believe) to bring the chaos that is the everyday market to a much slower and easier to understand pace.

Even having read the book, and seen some of the examples he used, my mind is still having a hard time with it.  I’ve been so conditioned to see the stock market as this super-duper complex machine that only the smartest and best educated can even begin to understand.  And some of the elements of the stock market are that.  But, at it’s very core, the stock market is nothing more than an exchange for shares of companies.  The beginning of the book makes that abundantly clear.  It goes on from there, to explain some very simple concepts about earnings, e/p ratios, dividends, and stock price.

The book has a couple of failings, in my opinion.  One, it’s terribly short.  At 164 pages, it’s reminiscent of a “how-to” manual or very in depth brochure.  I also think that he took the concepts down to a too simple level.  I would like to believe that a company like Microsoft is similar to a lemonade stand, but I just can’t accept it.  Also, with as much explanation as he gives about the structure of business and the simpler indicators of a business’ health, it would have been nice to see him give a more in depth look at a few of the methods he uses for researching a company.  He very briefly mentions a few, like annual reports, but it would be nice to maybe have examples of where in an annual report to find the information we need and also what form it might take.

The book gives a beginner the tools to understanding the basics of the stock market and to begin investing on the markets simplest level.  And I think that was the goal of the book.  Mission accomplished.  I would have liked to see it have a bit more information on the back end of the stock research and selection process.

Disclaimer: I was given a copy of this book by the author for review purposes.  If you’d like a copy for yourself, you can pick it up at Amazon.  Or, there may be a giveaway here in the coming months, so you could wait for that as well.

Popularity: 4% [?]

So, are you surprised by that news?  That new home sales dropped like a rock in May?  I can’t say that I am.  I try hard to keep my politics out of this site, but what the heck were they thinking?  If you look at the chart that CNNMoney has posted, you can clearly see that, not only did they drop, but they dropped below where they were before.

And obviously, there is a very nice spike for a while.  Incentives do make a bit of a difference.  And, in all honesty, if we had been in a situation where we felt we could afford a new home, we would have jumped at the opportunity to take advantage of those incentives.  But the spike was just that.  A small percentage of people taking advantage of an incentive that made it very attractive to buy a new house.  What it didn’t do was return home sales to anything like previous numbers.  In fact, it didn’t even get the numbers back to 50% of what they were in 2000!  And now, after the incentives have expired, they dropped 33% to an all-time new low. The last time the numbers were this low was in 1981!

I think everybody has the right to purchase a home.  You shouldn’t be dis-allowed from purchasing a home.  But, you still have to pay for it!  Owning a home is not a right.  The ability to purchase one if you can afford it is.  Years and years of politicians buying votes by pushing lenders to finance houses to people who couldn’t afford them is what caused the housing market (and our economy as a whole) to be in the condition it is in.  And that crashs’ ripples are still being felt throughout the country and the world.  Creating incentives to buying a home just extends that streak.  People see that $8000 and think that they can afford a home that they really can’t because they will get a nice $8000 check to help pay it down.  But, when that money comes around, what are they going to do with it?  Spend it.

And in five years, when those mortgages adjust, we’ll have a nice little mess to figure out again.  Sure, it won’t be anywhere near as bad as the current one, but it’ll be there.  If only we could teach people to be responsible consumers.  To not buy what they cannot afford, and to only spend what they earn or less.  If we could do that, then they wouldn’t need those incentives to buy a home.  They might actually be able to afford it without them.

Popularity: 4% [?]