I’m getting better at this titling thing! So this week we have three blog carnivals to share.

First, Carnival of Personal Finance #207 hosted by Funny About Money.  In addition to my post about key budget items, I also recommend Tough Money Love’s post suggesting  a simple way to feel wealthy – contro l your bill payment schedule.

Second, the Festival of Frugality #180 hosted by Frugal for Life. In addition to my post about our 50% savings success this month, I also recommend A Modern Gal’s comparison between learning to save and adopting a new fitness regimen.

Finally, the Money Hacks Carnival #76 hosted by Man vs. Debt.  In addition to my post about cheap summer entertainment, I also recommend Be a Survivor’s 15 simple ways to save money.

If your tastes or hobbies previously ran to the expensive, such as gourmet cooking classes, wine clubs, or shopping in general, you may be wondering what to do with yourself now that consumption is out. Or, if your personal budget no longer allows this consumption? You don’t have to sit at home twiddling your thumbs. Instead, you can find new hobbies and interests, or transform those interests into something more affordable.

Gourmet Cook = Cooking Club
If you enjoy gourmet cooking and regularly shelled out $80 for a couple cooking classes, you don’t have to give that up. You just have to give up the pricey teacher and classroom setting. Instead, look for a cooking club. Cooking clubs usually meet in someone’s home or a rented community space. You either bring your own ingredients or contribute a smaller fee. Everyone learns together, which makes it all the more fun. You may even get to help choose the dishes the group will be preparing.

Wine Enthusiast = Wine Club
This is another easy one to switch. Instead of visiting an expensive wine bar, join a local wine club. Some are held at wineries or wine stores, and can be pricey. Others are held in the homes of local members. Members take turn hosting and everyone brings a new bottle to share. You’ll discover new wines and make new friends for a fraction of the cost.

Hardcore Shopper = Swapping
If you liked to hit the malls with a group of friends, now you can hold a swap instead. I wrote about setting up swaps last month. You can also look for meetups.

Culture Snob = Movie or Book Club
Can’t afford all those museum memberhips? Like reading or movies? Join a book club or movie club. Most book stores hold monthly book clubs, but you’ll also find them at libraries or in people’s living rooms. Movie clubs will attend local screenings as a group, possibly with special rates.

Gym Rat = Get Outdoors
If you used to spend a lot of time at the gym, join the Sierra Club, an orienteering group, or a local hiking meetup to find new trails and meet new people for free. If you already have a mountain bike, a kayak, or any other outdoors equipment, find a local group that suits your interests. If you can’t find, start one on Meetup or Craigslist.

Heavy Charity Donor = Support a Cause
Have you always wanted to volunteer in a campaign? Help the needy? Work for an environmental cause? There are groups that do that, too. Use your newfound free-time to do something worthwhile without taking out the checkbook.

Passionate Consumer = Pursue a Passion
The consumerist society we live in makes it difficult to pursue your passions when you’re struggling to keep up with the Jones. Now that you don’t have to do that, you can pursue your true passions. Maybe you’ve always wanted to write a book, learn to play an instrument, or garden. This is your opportunity.

See my earlier post on inexpensive hobbies for more ideas. Have you had to change your ways and find new hobbies? What did you discover to fill your time?

I’ve seen several blogs encouraging people to haggle over prices and push for discounts, but there comes a point when you’ve gone too far. It’s one thing to ask for a discount. It’s another to try to cheat the person you’re dealing with. The “it’s a big company” argument doesn’t work – they still have employees and vendors to pay, and can’t do that if everyone demands a big discount.

Damage the Item, then Request a Discount
This happened to me all the time when I worked in a bookstore. Customers would do one of three things: hunt for a damaged book when there was a perfectly good one next to it, stand around reading the book long enough that the spine bent, or bend the pages themselves. They would then ask me for a 10% discount. Sometimes I would agree to the discount, sometimes I wouldn’t.

Ask for a Discount Because You Didn’t Like the Something
You should certainly review the bill to make sure you haven’t been overcharged, especially if a meal was prepared incorrectly and you had to send it back. However, you can’t have an item removed from the bill just because you didn’t like or didn’t eat all of it.

The same goes for a movie. If it’s so bad that you leave ten minutes in, I can see asking for a refund. But you can’t watch the whole thing and then ask for your money back.

Use the Product and then Return It
This is called Wardrobing, but people don’t just do it with clothes. They also do it with books, and anything else that doesn’t come shrink-wrapped. This only raises the cost for everyone else. And no, the store can’t just return it to the manufacturer. If it’s damaged, the store has to eat the loss.

Haggle Over a Fixed Price Item
Some businesses are designed for haggling – auto dealers, mattress showrooms, swap meets. Most retail establishments are not set up for haggling. The person behind the counter doesn’t have the power to accept half the price because you’re in the mood to bargain. If you want it cheaper, wait for it to go on sale.

Expect to Get Multiple Extras for Free
In certain industries, negotiating is a part of the process. This is especially true in the wedding industry, but even here you can go too far. For example, I asked my wedding photographer to include an engagement shoot in the package for free. Several other photographers in her price range included this and had lower-priced, more-generous packages, but we preferred her photographs. The engagement shoot brought her price in line with the other photographers. I wouldn’t, however, have asked to add three more hours, bring along an extra assistant, and give us a framed print, too. There’s a fine line between negotiating and being greedy.

Be Rude
This one’s obvious, but it’s amazing how many people are rude to cashiers or other service people. Being frugal is one thing. Being a jerk about it is quite another.

Abuse the All-You-Can-Eat Menu
Apparently it’s a common practice for families to go to the All You Can Eat buffet and order just one plate, and then share it between them. The price is all you can eat, you being singular, not all you and your entire family can eat. No, you can’t get a doggy bag either.

Whenever you’re tempted to push too hard for a discount, turn it around on yourself. Ask yourself how you would feel if someone asked the same of you. If someone asked you to provide that same service for free, would you do it? If your boss offered you half your salary for the same work, would you do it?

I’m all for being frugal and for bargaining where appropriate, but there’s a right away to do it and a wrong way. If you do it wrong, you’re just a bad customer.

Several counties have begun sending out updated property tax assessments to request declining home values. You probably received notices of increases while property values were rising. Many people don’t know that they have the right to appeal the assessed amount if they feel it’s not right. If you’re successful, you could save thousands of dollars, but there are risks, too.

How Property Tax Reassessment Works
It partially depends on your state, but basically, your county assessor annually reviews property values and either increases or decreases property taxes based on estimated current value. However, this is done by a formula, not by a personal review unless you’ve requested a reassessment, bought a new home, refinanced a mortgage, or made permitted home improvements that prompted a reassessment (for increased square footage.)

When you receive your notice, it will indicate the current assessed value, the tax, and a due date. The notice should also indicate a deadline to appeal your assessment.

Reasons for Appeal
You can appeal your assessment if you feel it overvalues your home, but not simply because you can’t afford to pay the tax. Some reasons why your home may be overvalued:

  1. Local sale prices have significantly decreased in your neighborhood
  2. Your home is not upgraded
  3. The listed square footage is wrong
  4. Changes to the neighborhood have depressed the value.

How to Appeal
Find the forms. The notice should provide instructions for appeal. If not, visit your county assessor’s website to download the proper forms. If you miss the deadline for appeal, your property tax won’t be adjusted in time to reduce your payments this year, but you may receive a refund later.

Build Your Case.
When requesting the appeal, state your case clearly. For example, if the square footage is wrong, indicate that. It’s possible that the assessor saw your enclosed porch and assumed it was fully finished. They may be working off a set of plans for your neighborhood that your home deviates from. It’s very common for older homes to be recorded with an incorrect number of bedrooms, bathrooms, or square footage.

You will also need to find comps for your home. Check the MLS for recently sold homes with the same square footage, number of bedrooms, and number of bathrooms. If you live in a recently built subdivision, it should be easy to find homes like yours. It’s more difficult in older neighborhoods, but it can be done. Look for the comps with lower values than yours to prove your case. If all the comps are higher, then you run the risk of having your taxable value increased instead.

Finally, consider any changes to your neighborhood that could negatively impact your resale value. For example, new train tracks, a freeway expansion, or a new high-traffic development could be cause to reduce your value, even if they don’t actually bother you.

Schedule the hearing. Some counties require you to visit the assessor’s office for a formal hearing. Others will send an assessor to you. Some will even handle the whole thing by mail. If your county’s process is very complicated, or notorious for refusing appeals, consider hiring a real estate appraiser or lawyer to make your case for you.

Watch Out for Scams
Property tax reassessment scams have been around for decades, but they’re becoming more prevalent as property values decline. If you receive a notice about your property value, review it carefully. Watch out for the following red flags:

It’s not an official document from the county assessor’s office. Scammers will send official-looking documents that reference “tax adjusters” or “tax review.” Check the address on the document. It should match that of your county assessor’s office, not a PO Box or business address.

The reassessment requires a fee. There is no cost to have your property reassessed by the county, so you shouldn’t pay a dime unless you hire a private appraiser or property tax lawyer to plead your case.

Most of these aren’t true scams in the sense that they’re trying to steal your tax payment. In most cases, they just want to be paid for doing something you could do for free.

Risks of Reassessment
There is always a risk to being reassessed. Your tax bill could go up, especially if you’ve done extensive remodeling without being reassessed or your home has been incorrectly recorded and is larger than stated.

Property tax values rise and fall every year. If your tax is reduced this year, and property values start to rise again next year, your bill will go up, but at least you’ll have save some money this year.

If you own a Chrysler or GM car, you may be wondering how the GM bankruptcy and Chrysler collapse affect you. Rest easy – your car is still covered by the warranty. If you’re in the market for a car, you’re probably seeing great deals on the American brands. The question is how comfortable you feel buying one. Here’s what you need to know.

Warranties during Chrysler and GM Bankruptcies
The GM bankruptcy is actually fairly straightforward from a consumer perspective. The company isn’t going to cease to exist, although some brands and dealerships are being shuttered. The government has a funded program in place for both GM and Chrysler to guarantee your coverage for the term of your warranty. Federal law requires that your parts continue to be manufactured, so you won’t be unable to get the parts you need. You also don’t need to contact the government to file a claim. The dealership will take care of it.

Loan Payments during the Bankruptcy
If your bank went bankrupt or sold your home loan, you still have to pay the mortgage. The same holds true of any payments you owe on your car. Continue sending payments on time to the same address until you receive a notice indicating a new address for your payments.

Buying a Car from a Bankrupt Manufacturer
This is a little more tricky. If you’re in the market for a car, you may be able to find some great deals on Chryslers and GMs. The question comes down to whether or not you’re comfortable buying a car from a company in bankruptcy or have faith in its current models.

GM is expected to continue to exist after they emerge from bankruptcy. So, the question is not whether you’ll still be able to get parts and warrant coverage. It’s a question of whether or not you believe in GM quality.

I imagine GM to be in the same situation as United or Delta airlines when they were in bankruptcy. People didn’t stop flying those airlines while they were in Chapter 11. You shouldn’t avoid GM just because it’s in bankruptcy. Consult expert reviews, quality ratings, fuel ratings, maintenance ratings, etc. just as you would for any other car purchase if you have a GM car on your list. You may want to consider that GMs may have a lower resale value after they emerge from bankruptcy, but the resale wasn’t all that great to begin with and is not a huge factor if you own a car for ten years, as I recommend. http://www.soundmoneymatters.com/lease-vs-buy-a-car/

Chrysler is the sticky wicket. Although it will soon re-emerge as a partnership between Fiat and the Chrysler arm of the UAW, only time will tell how Fiat will manage its new brand. Chrysler’s current line of cars is not well-reviewed or considered to be very reliable. Fiat hasn’t been in the US market for some time, but European cars do tend to be smaller and more nimble. If I had a choice, I would wait to see the new designs they come up with for Chrysler before opting for one of these cars.

Ford Is Fine
For anyone concerned about Ford, they are not bankrupt. They have not received bail-out funds. They’re suffering from the downturn, but they’re not currently at risk.

Would I Buy a GM?
Because of my GM bail-out stabby post, some people think I hate GM. I honestly don’t. I don’t hate Chrysler or Ford, either. I think they’re all lumbering companies with outdated business models that need to seriously change if they want to succeed in the future. I also think they have serious reputation issues due to decades of poor manufacturing.

I have actually owned a GM. My first car was an early-90s Pontiac that I later learned was made by Daewoo, which was new to car manufacturing at the time. I’m lucky to be alive after owning that car. Due to the design, it regularly overheated in traffic. When it overheated, the brakes failed to work properly. So picture me sitting in Thanksgiving traffic on a hilly freeway with a car rapidly rising in temperature and my brakes getting softer by the minute. I was lucky to be able to get off the freeway and coast to a stop to wait for my car to cool off so I could get home. The car was replaced one month later by my Toyota. I will never buy another GM. I won’t buy a Daewoo, either.

A car is a personal purchase. Some people feel the need to buy American, and that’s fine. I only ask that you do all your research before you decide which car to buy and don’t let the GM bankruptcy play into your decision if you believe they make good cars. If you have more questions, see the New York Times piece on the bankruptcy.

If you’re in the housing market right now, you have to make a major decision about whether you’re willing to buy fixer-uppers. Due to the foreclosure crisis, there are a lot of homes on the market with half-finished projects, or no upgrades. The previous owners either bought more than they could afford or got started and then ran out of money.

How to Get a Feel for Fixers
When you first start going to open houses, include some fixer uppers on your tour list. That way you’ll get an idea of what sorts of fixes are typical and what you’re really prepared to handle. It will also give you a feel for your budget. If fixers are all you can afford, you might need to scale down your other needs or wait to save more or prices to fall. If you can afford a spruced-up house, but are willing to do some work, a cheap price on a fixer could be a good opportunity.

On your tours, note things like run-down kitchens and bathrooms. What’s the dealbreaker for you there? Is it the ancient oven? The cramped shower? We’ve seen some that just needed cosmetic upgrades, but we’ve seen others that weren’t habitable. Where do you draw the line?

If the house is in a serious shambles and this is your first purchase, I would keep looking. Save that one for the investors with the money, resources, and experience to do the job right.

What Are You Willing to Do?
We’ve made two offers so far. One had been fully upgraded and needed no work. We were outbid (the buyers overpaid, we feel.) The other was most of the way there, but would eventually need new appliances and cabinets. The bank foreclosed before considering our offer there, so we’re watching for it.

We also considered making an offer on a fixer, but the location stopped us. The rest I saw as a canvas. The kitchen, bathrooms, and floors needed upgrading, but it was livable in its current condition and had a lot of potential.

Ideally, I’d like to get a low enough price that I could do the kitchen and floors before I moved in. I can wait a few years to upgrade bathrooms. Landscaping is a great summer project.

For the kitchen, are you willing to do a teardown or simply upgrade the current arrangement with new cabinets, counters, and appliances? If you don’t want to do a major renovation, then make sure the current layout will work for you.

What’s Your Budget for the Purchase and Repairs?
During the boom, buyers would use all of their money for the purchase and assume they’d get a home equity loan for upgrades right away. Unfortunately, many couldn’t do that because they’d already bought the house with a 100% loan.

If you’re considering buying a fixer-upper, you need to be able to put 20% down and then have cash left over to do immediate upgrades before move-in. That means you’ll also need sufficient cash to cover a mortgage and rent for a couple of months while the work is done.

In our case, I would look for a price-point that allowed us to put 20% down and left us with $40,000 in cash for an immediate kitchen remodel and flooring upgrade. (If necessary). Those are two of the most common failings we see. Sometimes the floors just need buffing, but others need to be replaced. Then I would see what I think it would cost to upgrade the bathrooms in two years and make sure we could save the cash for that, too. In our area, that means looking for a home that’s about $160,000 less than our upper price limit.

How Much Work Does the House Need?
Some upgrades are common and affordable. Others should probably stop unless you’re a professional. That includes relocating walls, major foundation repairs, and new systems. Many homes need a copper re-pipe, which is common. But a copper re-pipe, new roof, new kitchen, new bathrooms, new floors, new wiring, and foundation repairs is too much for the average homebuyer to do on one house.

Is An Upgraded Home Better?
If you don’t have a cash-cushion, then paying a little more for an already upgraded home is probably the better option. In this case, your purchase price and mortgage will be higher, but you won’t have other costs to deal with. If you don’t have 20% at the highest-price point you’re considering, then this is really your only option.

What’s the Advantage of a Fixer?
There are four advantages of fixer-uppers, at least in my mind.

  1. They’re cheaper. You can save tens of thousands on the purchase price by buying a fixer. This will reduce your mortgage, monthly payments, and property tax.
  2. You can put your own stamp on it. An already upgraded home was done to someone else’s taste. If you do the upgrades, you can make it into your dream.
  3. Immediate equity. If you buy a fixer-upper and then put in $40,000-$50,000 of improvements, you could easily increase the value of the home by $75-100,000.
  4. If your local market is still declining, a cheaper home offers more protection against losing money when you sell.

Fixer-uppers aren’t for everyone. You need to have a good eye for potential, a willingness to find and work with contractors, and a strong stomach for setbacks. If you’re not that type of person, stick to an upgraded home and try a fixer later in life.

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