As I said last year when Heath Ledger died, my first thoughts always go to the children of the deceased. I worry that stars with young children haven’t prepared for the possibility. In Heath’s case, he hadn’t updated his will to include his daughter. Now we have the even more challenging situation of Michael Jackson’s death. According to court filings, Michael Jackson died without a will. No matter how famous or unfamous you are, take this as a lesson that you need a will, especially if you have children. Even better, get a trust.

Why You Need a Will
In the average Joe’s case, a will states the people you would like to inherit your estate. In most cases, surviving children or spouses will automatically inherit without a will, but it’s ultimately up to the state to decide. Do you trust the government to divide your estate for you?

What Happens if You Die Without a Will
In Michael Jackson’s case, his intestate death will result in years of legal wrangling and thousands of dollars in legal fees. Like Elvis, he is probably worth more dead than alive. (It sounds callous, but it’s true. His estate will continue to earn royalties for decades after his passing.) If he had a will or trust, he could have named someone to oversee his business following his death. Now the court will determine who has that right. Most likely, his children will inherit everything, but they are minors and will therefore need someone to manage his affairs until they are adults.

In addition, a will would have allowed him to name his children’s legal guardian. Some reports said he wanted them raised by his nanny. Other reports indicated that the birth mother of two of the children may make a claim. The courts have so far granted custody of all three children to Jackson’s mother, but that could change. If multiply custody claims are filed, this issue could drag on for quite some time.

A Trust is Better than a Will
Given the size of his estate, Jackson would have been better served with a trust. A will must still pass through probate court, which can be expensive and slow. A trust typically avoids the courts while also ensuring that the children’s rights are protected and their financial support arranged from day one.

But I’m Not Famous, You Argue
Some people argue that they don’t have assets, therefore they don’t need a will. If you’re childless and living in your car, that’s probably true. However, if you have children, you need a will or a trust, regardless of net worth. It’s the only way to ensure that your wishes are carried out, rather than the wishes of the state. If you have any assets, even a falling down shack, consider a trust to reduce the tax impact and transfer time of the assets. When minors inherit a trust, the trust maintains ownership and the designated trustee is responsible for managing and distributing the assets. That won’t happen in Jackson’s case.

Many people worry about the expense of creating a will or a trust. If your estate is complicated, you should see a lawyer. If it’s fairly uncomplicated, you can use a legal service site like to prepare your documents quickly and affordably. Worst case, handwrite your will on a piece of paper, sign it, and put it in a safe place. These aren’t legal in some states, but it’s something at least. A formal will or trust is always best.

You’re probably familiar with the warranties your electronics came with – those convoluted promises it’s impossible to make a claim under. A home warranty is not exactly the same, and it can be issued on a house of any age. If you’re a new owner, you should get one. Current owners should consider it.

What a Home Warranty Is
A home warranty is a service contract on the appliances and systems in your house. If your dishwasher breaks down, you can file a claim under the home warranty to have it repaired or replaced. You’ll have to pay a service fee for the initial visit to diagnose the problem.

What It Includes
The warranty is not for items like the foundation or roof, although you may have a separate warranty for these if you’re buying a home directly from a builder or the home was built very recently. If you have an older home, those items would be included in the homeowners insurance policy. This warranty typically covers the systems, which are often excluded by your insurance policy:

  • HVAC
  • Appliances
  • Water Heater
  • Plumbing
  • Electrical

Before buying a policy, review it carefully to make sure the systems in your home are included. For example, well pumps aren’t usually automatically included. If your systems aren’t included, ask if there’s a policy or add-on that does include them.

How Much You’ll Save
It depends on the problem. If it’s a minor problem, your service fee may cover the cost of the repair. However, if it needs replacing, you could save thousands of dollars on a new heating system or major plumping repairs.

How to Get a Home Warranty
If you’re shopping for a home, include the home warranty in your offer as one of the items paid for by the seller. The seller may not agree to this cost, but most will. If the seller won’t, you can buy it yourself. Some real estate agents will buy it as a gift for you at closing.

If you already have a home, you can add a home warranty at any time. You can renew it annually.

Warranty Costs
The cost of a home warranty varies by region. It can be as low as $250 and as high as $500. Service fees also vary by region and service, but can range from $25 to $100. If you have a new appliance with an existing warranty, that should be your first call. However, if you have an older appliance, the home warranty may extend the coverage without the added expense of an appliance-specific extended warranty. As someone who spent a year fighting a major appliance dealer to have the extended warranty honored, I can tell you the high cost of the extended warranty isn’t worth it. Just get the home warranty.

Why New Owners Need It
If you’ve been living in your home a while, you know the issues that generally occur and about what it costs to fix them. You know how old your systems are and when you can expect to replace them. As a new owner, you don’t always have this information, and haven’t had time to save up the money for the needed repairs or replacement. You don’t want to be five months into your new home and discover the heating unit has broken at the start of winter, and then have to come up with $2,000 to fix it.

Even though it seems like one more expense to add to an already expensive process, a home warranty is key for new h

That sounds like a brilliant honeymoon activity right now! They could arrange whole package tours where couples go from bank to bank punching their blow-up logos. I’m sensing a growth industry. Even in good times, people still hate banks.

But I digress…

Carnival of Personal Finance #210 hosted by Suburban Dollar included my post about finding the right house . I also recommend Searchlight Crusades post about finding the right loan – if you can’t find an affordable loan for the long-term, it’s not the right house.

Festival of Frugality hosted by Financial Highway included my post about  keeping your head in a real estate bidding war. I also recommend Bible Money Matters post about using the first time buyers credit as a down payment or to cover closing costs if you’re doing an FHA loan.

Money Hacks Carnival hosted by Blogging Banks included my post about  saving money on travel. I also recommend Studenomics post about being a great host for travelers.

With the economy possibly recovering, possibly worsening, and possibly experiencing a dead-cat-bounce (false recovery), many people are scrambling to figure out what they should do financially, so here are my top 5 recommendations.

Shore Up Your Emergency Fund
If you don’t have an emergency fund, make sure you start saving at least 10% of your income every month. I know this is hard, but you should do it. After a year, you’ll have saved just over one month’s salary, which should get you through a small rough patch. If you can’t swing 10%, shoot for 5%. If you can’t swing that, shoot for anything you can manage. The key is to give yourself some sort of cushion. Do this even if you have to stop paying down debt. Ideally you need 3-6 month’s salary on hand.

Pay Down Debt
This is step 2, to be undertaken only after you’ve built an emergency fund. Once you’ve got a cushion of at least six months’ living expenses, you can start paying down debt again, but don’t stop saving.

Check Your Credit Reports
You get three free credit reports annually at I space them out so I can monitor my credit every four months. I don’t usually buy the credit scores, but you could if you’re curious. Checking your own credit score will not ding your credit. If you find any errors, have them removed. Not only do creditors check your reports, but so do insurers and prospective employers. Keep them as clean as possible!

Avoid Major Purchases on Credit
Now is not the time to make major purchases on credit unless you have the money to pay them off at the end of the month. If it’s an emergency, see if you can get one of those “no payments for 12 months” deals and then pay it off within that time to avoid interest. I say this knowing that we’re about to buy a new washer/dryer. We also planned to buy a new fridge, but decided to wait a few months to decide what we need and what fits in the space. We plan to buy new furniture, but not all at once. We want to live in a house for a few months to get a feel for it.

Build Your Contact Network
This isn’t strictly a financial move, but it could be if it ensures that you keep your job or helps you find a new one. Join LinkedIn, attend Meetups and industry events, anything to get your name out there and expand your network. You should also check in with former colleagues regularly so you’re on their mind if something comes up.

I know, I know you’ve been hearing all this advice for months. Guess why? It hasn’t changed. Not only are these good moves for right now, they’re good moves for always.

With home prices falling, people who were considering selling are now staying put and learning to live with what they have. But you don’t have to put up with stale design elements. If your home’s size and layout still works for you, here are some simple, mostly affordable fixes that can update your home and make it feel newer.

Painting the outside of your house can cost a few thousand dollars, but it will drastically improve your curb appeal if you haven’t painted in a long time. If the outside is fine, you can paint a room on the inside for as little as $50. Spending a weekend applying a new color can transform the look and feel of the room. Just make sure the color complements your furniture, unless you can afford to buy a new sofa or slipcovers.

Make Slipcovers
If you’re handy with a sewing machine and have a fairly simple couch design, you can make slipcovers with a few weekends of work. I don’t necessarily recommend doing it with a complicated couch like mine, but it can be done, and it can be very affordable.

Change the Decorations
Has that vase been on the mantel so long it’s left an imprint? Rather than changing the paint or the slipcovers, just swap out your dusty candles and vases for something else you find in the closet. Or visit a home décor store to pick a few attractive new items on sale. It will feel just like a model home, at least for those few minutes before everyone else comes home.

Update the Yard
It never hurts to update your landscaping. Prune back the overgrown roses and other bushes. Dig up dead flowers and plant new ones. Paint some pots for your flowers. Buy new cushions for the patio table. Restain the deck. All of these are affordable things you can do to make your home more enjoyable.

Update Your Appliances
This costs a bit more, but it’s much more affordable than a complete kitchen remodel. Newer appliances may also be more energy-efficient and simpler to use. Take the measurements, then visit a home store to find out what current appliances cost. You should also check your local water, power, and gas utilities to see if they offer rebates for purchasing certain appliances, or for having them pick up your old appliances. DWP in Los Angeles gives owners $35 for turning an old refrigerator. You can get up to $75 for buying a new energy-efficient washing machine.

Add Chair Rail or Wainscoting to a Room
Chair rail or wainscoting in a living room, dining room, or bathroom can really make it feel more luxurious, for a lot less than new furniture or a bathroom remodel. In most cases, installing chair rail is a simple weekend project. Wainscoting requires a little extra effort, but not much. Warning: do not attempt crown molding unless you’re an experienced woodworker. It requires special cutting tools and knowledge that most people don’t have.

Update Fixtures
If your chandelier or bathroom fixtures came with the house, consider updating them with newer, more modern-looking options. Again, these are relatively cheap, but really change the look of a room. If you’re replacing a ceiling light fixture in the bedroom or a main living space, consider adding a fan to keep the room cooler without running the AC.

Clean the Walls
This one’s nearly free! Paint is washable, so you can update a room simply by washing off all those smudges and marks. Start with a magic eraser (about $5 in the grocery store cleaner aisle) to remove major marks. Then a bucket of soap and water and a sponge will do the rest. You may be surprised how much you like the color once the walls are clean. Bonus points: it’s a good arm workout.

Buy New Dishes
I don’t mean new fine china. But you can buy a set of new everyday dishes fairly affordably. Using them in place of your old chipped set will make you feel a lot better without a lot of expense or effort. If you still like your old set, consider the modern twist of mixing and matching various dishes.

Clear Clutter
If your home feels too small, see if clearing the clutter will make it feel large again. With all the stuff gone, you may be able to rearrange the furniture, which will also change your perspective on your home.

You can easily update your home for anywhere from $10 to $3000, both of which are far more affordable than buying a new home, and easier, too. Do you have tricks for updating the look of your home? Share them in the comments.

Many people have noticed an interesting phenomenon in the housing market: tons of would-be buyers are flocking to low-priced homes. Some speculate that the first-time buyer credit is the cause. But is this really true? Is the new car tax deduction having the same result?

Does the First-Time Buyer Tax Credit Motivate You to Buy?
I think the answer here is: it depends. My husband and I are happy to accept the tax credit if the government is going to give it to us, but it didn’t change our target price range or goad us into buying this year. We’d always planned to buy this year. We have, however, seen more people out looking. At the same time, prices in Los Angeles have fallen precipitously, to the point where first-timers can now afford to buy, so I’m not sure if the credit is fueling sales as much as the low prices.

You also have to consider that the tax credit isn’t anywhere close to 10% of the purchase price in Los Angeles. Here it’s no more than 5%, and it’s probably closer to 1-2% of the price for first homes in the popular areas.

However, if we were buying a place like Kansas or Michigan, that extra $8,000 could be a very important consideration. There it could potentially be 8-10% of the purchase price. Since the FHA is also now allowing buyers to use the money as part of the down payment, it’s suddenly become possible for people in lower-priced regions to put down a substantial down payment. It’s also made it easier for people shopping in the low-end of higher-priced regions to make it to the required 3.5% down.

Apparently Congress believes the credit has been effective enough to warrant boosting it to $15,000, but that may be more of a gambit to boost home prices for current owners who want to sell. There’s been speculation that prices have risen as a result of the credits.

Does the New Car Tax Deduction Motivate You to Buy?
It certainly doesn’t seem like people are rushing to buy cars the way they’re rushing to buy homes. That could partly be because most people don’t need new cars – most cars on the road are less than three years old, which is hardly dire. It could also be that the deduction is worth a few hundred bucks at most – hardly the thousands that could actually alter your finances.

The deduction is unrelated to my reason for buying a new car. In my case, my car will be twelve by the time I replace it. It’s time. The deduction is just a nice bonus for something I already planned to do, like the new home tax credit.

Does the Cash for Clunkers Program Motivate You to Buy?
Since my clunker doesn’t qualify for the voucher, I certainly wouldn’t consider this a motivation to buy a new car. For some people, it might, but the majority of people who qualify under this program have cars that will fetch more than $3500 or $4500 as a resale or trade-in. It might get some of those 1970s-1980s boats off the road, but many of those have already died.

What do you think? Will you trade in your SUV for a more efficient car because of the Clunkers program? Will the new car deduction motivate your purchase? Has the first-time buyer tax credit caused you to rethink your home purchase plans?

From my point of view, they shouldn’t. If you want to buy a home and can afford to buy a home, then buy a home. If you want a new car and can afford a new car, then buy a new car. However, stretching your limits to take advantage of tax credits may lead you down a dangerous road.

We finally got an offer on our first house accepted, but before we accepted the acceptance (weird, but that’s how it works in California), we decided to get a second opinion. My parents came down for the weekend and we went to the house for an hour and a half to check it out. It was the best thing we could have done to make sure it was the right house for us.

They Helped Us See Potential Issues with the House
My dad is analytical, so he pointed out potential flaws and checked things we hadn’t previously checked, like air-conditioning, water heater, etc. Since it’s a foreclosure property, it’s unoccupied and there’s no telling what surprises the house may hold. We didn’t see anything major, but having my parents there to check for flaws and give the benefit of their experience helped. For example, they pointed out that the refrigerator space is too small for a standard-sized refrigerator, but we were able to find an affordable solution to that problem while we were in the house.

They Helped Us See the Potential Advantages
There were a couple things we were concerned about. My mom has a designer’s eye, so she automatically saw affordable changes we could make and pointed out design issues and advantages that we hadn’t seen before.

They Were Unbiased
This is very important. Their primary concern is making sure we get a house we like and that won’t turn into a money pit. If it was a terrible house, they’d be more than willing to tell us because they’re not invested in the property.

We Had More Time to Consider
Most people spend about 15 minutes in a house before making an offer. We had about 30 minutes – long enough to know we liked it. But this is a major commitment. Now that we’ve spent more time at the house, I’m more confident in our decision. Some rooms were smaller than I remembered, but other rooms were bigger than I remembered.

If you’re thinking of buying a house, I highly recommend that you take someone to see the property before going into escrow. Preferably, this person should be an experienced homeowner who won’t be rooting for you one way or the other. You don’t want a cheerleader, you want someone who will scrutinize the property.

Summer is here again! Time to break out the flip flops, shorts, and suntan lotion. Oh, and the fruit. All the fruit you can eat! Ripe cherries, sweet strawberries, juicy peaches. My mouth is watering over here. In keeping with my quarterly tradition, here are 13 more frugal ways to celebrate summer, one for each week.

Bake a Cherry Clafoutis
Basically, clafoutis is a sort of custardy pie with cherries baked right into it. It’s easy to make – all you need is a pie dish, an oven, and a blender. Chefs recommend leaving the pits in for better flavor (and to be traditional). If you don’t like cherries, you can also make this with any other berry, nectarines, or any other fruit you have on hand.

Drink Ginger-Berry Lemonade
It’s a sweet, spicy taste of summer that’s perfect for baby showers, bridal showers, and summer barbecues you want to jazz up a bit.

Twirl Your Toes in the Grass
Especially in the morning when the grass is still cool, but the peak of the day is nice, too. I love how the blades tickle my feet and the cool earth refreshes my whole body.

Buy New Flip Flops
Podiatrists don’t recommend wearing flip flops all the time – they don’t have much support. However, you can’t very well take your heavy shoes to the beach and flip flops are easy to put on for a quick run into the yard. Old Navy usually has flip flops for about $5. There’s no excuse not to pick up a new pair at that price.

Pick Fruit Fresh from the Tree
If you don’t have a fruit tree in your yard, then go to a U-Pick farm to pick your own fruit. There really is a difference in taste, I promise. My family had a peach tree that would drop softball-sized peaches every other year. We left them on the branch until they were just about to fall off and then ate them right away. It was heaven.

Try One New Fruit
You’re probably familiar with the standard fruits of summer, but new breeds show up at the farmer’s market all the time. Next time you’re near a market, check out the options and pick one fruit you’re not familiar with. One time I tried white nectarines, and they weren’t for me. Another time I tried mango nectarines and I love them. I can’t wait for them to return to the market.

Play Volleyball
Set up a volleyball net, or go to a local park with a net, and hit the ball over it with some friends. If you’re particularly coordinated, you can try badminton, but I’ve never been that coordinated. My shuttle always wound up in the tree.

Play Obstacle Croquet
My family is fairly competitive, and our lawn wasn’t even, so we invented a new version of croquet. Rather than just hitting the balls through the wickets, you also have to knock it over a bridge made from two planks of wood, through a tunnel, or around a root. My most epic course required us to hit the ball up the concrete patio seam, up the grate, across the deck, down the gravel path, past the rose bushes, across the gravel patio, onto the lawn, over the bridge, through the tunnel, and then there were the wickets. We also played dressed as Alice in Wonderland characters and hopped on English tea, but that’s just me.

Host a Potluck BBQ
If you’ve got a grill and a yard, spring for a pack of hot dogs and then host a potluck barbecue. Good food, good music, good friends. That’s what summer is all about.

Change Your Décor
If you’ve been bottled up in your house for a few months, you’re probably getting tired of the décor. Give it a summer update by swapping out the candles and maybe the pillows. You don’t have to buy new pillows – just tack a pretty fabric over the old ones for a few months.

Plant Some Herbs
Fresh herbs are good year-round, but they’re at their peak during the summer. If you don’t already have herbs growing, buy potted herbs and set them out in the backyard. If you have space and mild winters, you can plant them in the ground, otherwise leave them in the pots so you can bring them inside during winter.

Enjoy a Meatless Meal
Even though grilling and summer go together, this is also a great time to eat light and enjoy meatless meals. Fill your dishes with chunky tomatoes, cheeses, and nuts. I do enjoy eggs in my meatless meals, but it is still an animal product.

Play Frisbee
A Frisbee costs a few bucks, but it’s good for hours of fun in the park or on the beach. Bring a picnic to the park with you and toss the old flyer around a few times for a relaxing summer day.

Got more great ways to celebrate summer? Post them in the comments!

Another week, another set of three carnivals.

First up, Living Almost Large presents the 209th Carnival of Personal Finance.  She named my rant about the Cash for Clunkers program as an editor’s pick. In addition, I recommend Punch Debt In the Face’s debate about whether using credit cards will send you to hell. My answer: no. It’s just a tool people, not a sin.

Next, the Festival of Frugality #102 hosted by Stupid Cents. In addition to my post about homemade microwave popcorn, I also recommend Thrifty Jinxy’s tips for reducing your baking costs – including a great one for making your own self-rising flour. I would totally do that if it weren’t for my food intolerance.

Last, the Money Hacks Carnival #69 at Own the Dollar. In addition to my post about buying gold, I also recommend MoneyNing’s tips for including CDs in your portfolio.

I don’t usually do anything for Father’s Day except send a card because my dad lives 400 miles away. When I was young, we were usually on vacation for Father’s Day, but we did affordable family activities if we were home. If you’re not sure what to do to honor the occasion, here are 5 cheap ways to celebrate Father’s Day.

Go Hiking
This one’s really affordable. Pack some sandwiches and trail mix, gather the kids, and then drive to a local trail you’ve been eager to try. Since it’s June, the weather shouldn’t be too hot, too cold, or too wet, which makes it perfect for hiking. Even better, you can spend time with the family without spending a dime or even stepping foot in a shopping establishment.

Bust Out the Grill
I don’t know what it is about dads and grills, but they seem to be synonymous. Since this Father’s Day also coincides with the first day of summer, it’s the official kick-off of grill season. Spend the morning scouring the grill (or make the kids do it as part of your gift), then toss on a well-seasoned steak or ribs. No chicken or fish – this is Father’s Day. Live it up.

Relax in the Yard
You work hard, you deserve a rest. The best gift of all might be sitting alone in the backyard with a cold beverage and comfortable chair.

Share Your Passion with Your Kids
Fishing, baseball, music, movies, whatever your passion is, choose this day to share it with your kids. If you’re an avid guitar player, teach them how to strum a few notes. If you like to fish, it’s time to take them to the fishing hole. If you’re a movie fan, introduce them to your favorite age-appropriate DVDs. They might complain about it at first, but deep down they love it.

Make the Kids Wait on You
This works for moms, so why not you? Make them clean out your garage, bring you cool beverages, or let you choose the TV channel for a change. If you’re feeling brave, supervise them grilling your favorite meal for you (or maybe just preparing the side dishes.)

To my way of thinking, Father’s Day gifts are nice, but a man only needs so many bottles of cheap cologne, funny ties, and golf balls. Instead of gifts, ask your kids to do any of the above with you and it will probably be a lot more enjoyable for everyone.

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