Working With a Design-Build Team to Create Your Dream Home

What do the experts say you need to do and know for a smooth build out?

Building your dream home from scratch is a daunting task, especially if you’ve never worked with an architect, builder, and design team before.

To make the project a little easier to wrap your head around, here’s some advice from construction professionals.

Do your research

The building process isn’t short, so make sure you are happy with your team — you’re stuck with them for a long time.

This requires doing a little homework.

To start the building process right, you’ll want to do the following:

  • Conduct extensive online research to make sure you’re using a reputable builder
  • Get referrals from friends and family
  • Look at examples of the builder’s current work

Nikki James, studio manager at Ashton Woods, a builder and design studio constructing homes in the South and Southwest, recommends visiting a builder’s model homes and those under construction.

It’s fine to even be a little sneaky, says Jesse Fowler, president of Southern California-based Tellus Design + Build. Pop in at a construction site unannounced to see what the job site looks like. Workers not wearing hard hats or lots of garbage on the ground are red flags.

Ask questions (and more questions)

You need to understand the parameters of what the builder is doing for you, advises Roger Kane of Kane Built Homes in Massachusetts. And you get that information by asking questions. Make sure the builder can execute what you want, because not all builders can accommodate custom designs.

One of the first things you should do before meeting with your team for the first time is to identify what you don’t know, and then eliminate that doubt.

If this is your first time building, there are probably going to be a lot of things you don’t know, and that’s fine, Fowler says. There are no dumb questions.

Here are a few starter questions:

  • What exactly are you paying for?
  • Do you need full architecture/design/build services, or do you just want a blueprint?
  • How much time should you allow?

Know what you want

“Design inspiration can come from anywhere,” says James. She asks her clients to bring in plenty of pictures, scraps of fabric, or anything that speaks to their aesthetic.

The first thing to do, Fowler says, is to figure out the look and feel that a customer likes, and weed out what they don’t like.

It’s also important to know your limitations, though. James warns that you must make the structural selections for your floor plan before picking design elements so you know what you can and can’t have. For example, if you want a freestanding tub, you will first need to know if you have the right plumbing for it.

An architect wants to know how you’re going to use your home, advises Kim Nigro, the architect at Chicago-based Studio Nigro Architecture. Tell your architect what you don’t like about your current home, and what your day-to-day needs are.

This can be as simple as letting them know you shop at Costco a lot, so you want a big pantry, James says.

The details matter

You probably never thought about what kind of grout you want between your tiles. But these are the kinds of decisions you will be making.

Ashton Woods gives its customers a checklist for details like this, and there are a lot of specific items on it, from what kind of edge you want on your counters to how many outlets and phone jacks you’ll need.

This sounds overwhelming, but Kane’s advice is to just take it room by room. Start out with the basics. Determine how many bedrooms and bathrooms you need, then go inside each room and think about what should be in it.

“Make a list,” he says. “’We want hardwood flooring; we need his-and-her closets.’ Make your own little notebook and just address every room. That’s a great way to start.“

Know your budget

The harsh reality is that you can’t buy something you can’t afford. So, do your math and be upfront about your budget.

“Not communicating a clear budget to a designer is a mistake,” Fowler advises. “Designers need something tangible. If you let them go wild, 99 times out of 100 they are going to do something you can’t afford.”

There are good reasons not to pinch too many pennies, though.

As the saying goes, “If it seems too good to be true, it probably is.” You probably shouldn’t go with the cheapest guy out there, Fowler suggests. A lot of builders, he says, cut corners by doing things illegally.

Don’t get roped into a mess like that. Saving a few bucks now might end up costing you more later.

James recommends doing things exactly the way you want them from the beginning, because remodeling later will cost you more money and more stress.

“We see a lot of buyers getting nervous about spending too much. As people get closer [to finishing], they wish they had spent that extra money,” she reports.

Spending more for quality products is another big consideration. Kane uses sustainable products for the exterior of his houses that last “pretty much a family’s life in a home — 30 to 40 years.”

That’s good for the environment and your wallet, because regular maintenance like repainting the outside of a house can cost $15,000.

Be decisive

The biggest mistake Kane, a veteran homebuilder, has seen homeowners make is being wishy-washy with their decisions.

Once a home is under construction, it’s important to have made all your major design selections.

“Paint color’s not a big deal,” Kane says. “But you should have things like all your tile and granite picked out.”

Why? Because at this point in the process, your selections could be backordered, and waiting on them is costly to the builder and to you.

If you do tend to change your mind a lot, make sure you pick a builder with a good warranty program.

Communication is key

One core piece of advice from construction professionals: Keep the lines of communication open. The biggest mistake you can make, says Fowler, is leaving gray areas in your building and design plan.

“I’ve heard horror stories, and most are because one party’s expectations were different from the other’s,” Nigro states. “The more developed drawings can be, the fewer assumptions the contractor will have to make.”

And it’s not only important for you to communicate to your design team. The members of your team need to be on the same page with each other as well.

“They need to really create a collaborative team,” Nigro says. “There are a lot of decisions to be made.”

Fowler recommends getting the whole team together to meet each other and start working collaboratively from the start. Most times, he says, architects, designers, and builders who work in a community have met and done projects with each other before.

Consider the trends

More homes across the country are being built “healthy” or “green.” These are homes built with non-toxic, natural products and materials.

Nigro says she used to recommend healthy building to her clients, and now people are coming to her asking for it.

Another trend sweeping the nation is “mother-in-law suites” or homes that accommodate multi-generational families.

Over the past five years, a lot of Nigro’s clients have started looking down the road to when older relatives might move in with them, or maybe their adult children will move back home after college.

This could mean a separate apartment over a garage, or maybe a guest bedroom on the main floor.

Why are trends an important factor to consider? It could help you sell your home in the future.

Have fun

“It’s important for us to personalize your home and make it yours and something that you’re proud of,” James remarks.

If this means having a full basketball court right on the main floor next to the dining room, like one of Nigro’s customers wanted, then that’s what you should have!

Custom features can range from practical to fantastical: Fowler has had clients ask for water pipes over their nightstand so they wouldn’t have to get up for water in the middle of the night; “living walls” (walls with plants or grass growing right on them); hidden cameras; and even an unexplained hole in the closet floor.

Hey, it’s your dream house, after all.

Wondering if new construction is right for you? Search new construction listings, and get more home-buying tips and resources to help you decide.

Related:

Originally published October 21, 2016.

Source: zillow.com

Preparing Your Information for Disaster

When COVID first hit, like a lot of people, I began to think about my own mortality in a new light. Here was this unknown illness that was striking people down. What if it were to happen to me?

What I felt wasn’t so much a fear of my own mortality, but worries about what would happen to my family if I were no longer here. I have a good term life insurance policy, but that was just one piece of the equation.

What about our accounts? Does my wife Sarah know where everything is? What if we were to both pass on? Would our children’s guardians know where everything is? Could they access all of those accounts?

Worries stick in your mind until you take action to fix them.

In this article

The basics of life documentation

Life documentation is simply the recording of all of your key financial and personal account information in one very secure place to make things easier for your loved ones in the event of your untimely passing. Often, putting together such documentation shows you lots of little maintenance things that should be done, such as adding a new family member to an account.

What about security?

The first question to ask about something like this is security. How can a document like this be secure?
The best approach is to divide the information you want to pass on into “secure” and “non-secure” piles. Which pieces of information do you want to keep secure? Passwords are definitely in the “secure” pile, especially for financial information. Other pieces of information likely need less security. For example, knowing that you have an account at say, Fidelity, is something that someone observing your mail could figure out.

For information that you want to keep safe, you’ll want to devise a very secure method for storing that information and protecting your accounts. One method is to use secure password management software such as 1Password, paired with a very long master passcode. Within that software, you can store and organize passwords for all of the relevant accounts, along with relevant notes on each account. Then, focus on storing the master password for your password manager securely by giving that code to a lawyer or storing it in a known secure place.

The less secure information can be stored in a more easily accessible document, such as a printed document or an easy-to-access digital document.

Physical or digital storage — or both?

Physical and digital storage each have advantages and disadvantages.

Physical documents are the easiest to access and use later. On the other hand, they’re much harder to keep updated, meaning that you often have to reprint or rewrite sections of the document. For security, the best strategy with physical documents is to keep the most sensitive information in a small document in a highly secure place, with the less-sensitive information in an easier-to-access place.

Digital documents are much easier to update as you go along, but may be difficult to access and use later. You might choose to digitally store a document on a memory stick, for example, and update it regularly by just plugging in the stick and copying over a fresh document. With security, a good strategy is to have the most secure elements under some form of passcode protection as described above with a password management tool.

Who should know about it?

For less secure information (like a reminder to close a Netflix account, for example), a document stored with other core belongings that several people in your life know about is fine.

For more secure information (like the passwords for your key accounts), you should consider storing that information in a secure place. A good approach is to discuss this with a family lawyer or to use a safe deposit box. If you’re using a password manager for much of your documentation, the key thing to be stored is simply the passcode for that password manager.

Who should know about this information? A family lawyer is a good choice, as is your partner. Your executor and other core family members should know to contact your lawyer in the event of your passing to access those documents. For physical items (like documents or a memory stick), you can store them in a home safe or a safe deposit box at a bank, as long as your partner and your lawyer know the location.

How to get started

The first step in creating a life document is to simply list all of your accounts from which financial transactions occur, as well as all significant assets you own. For some, this may be a long list. You can do it on a computer or with pen and paper, as you prefer.

If you need help figuring out what to include on this list, Charles Schwab offers a great template for making a list of your assets. For your financial accounts, start by listing your bank accounts, investment accounts, and credit card accounts, then use those statements to generate a list of other accounts as your statements will show you where money is coming from and going to.

It’s important to recognize that this is a living list. Over time, you’ll open new accounts and close old ones. Those changes should be reflected in this list, so you’ll want to establish a habit of updating this document regularly.

What should you store?

There’s a simple rule to follow when making a list like this: If you’re not sure whether to include it, include it. Put everything in this list, so that your survivors don’t have to look for anything when cleaning up the accounts and assets you left behind.

Here’s a checklist to help you get started. For each of these, be sure to include account numbers and online login information.

  • All of your bank accounts
  • All of your credit card accounts
  • All of your investment accounts
  • All of your other debts, such as mortgages and car loans
  • All of your insurance policies (life insurance in particular, but other insurance that’s in your name)
  • All monthly services that you pay for, such as your cable bill, your Netflix account, your utilities, and so on.
  • All assets you own that have more than nominal value (real estate, vehicles, collectibles, art, and so on) and where to find them
  • All debts owed to you and points of contact
  • All outstanding business interests and points of contact

As you are doing this, consider whether each of these accounts and assets are currently up to date with proper beneficiaries and other details. Do you still need this account? Is there a good password on the account? Are there any changes that need to be made? Ask this for each account and asset you add to the list. You may also decide during this process that having a better overall plan is a good idea, in which case contacting a certified financial planner might be a good move.

Scheduling an annual appointment on your calendar to update this list is a good idea.

My own life documentation

My life documentation is stored in a few ways. My less private documents are stored in a folder in a safe in our home. It does not include sensitive information, such as passwords. With that documentation, I also have estate documents as well as a letter to my executor.

For account information, I have logins, passwords and some other relevant information for each account stored in a password manager. The master code to get into that password manager is very complex and is written down in two secure locations. The instructions for how to use it are in with the less secure documentation, but the password itself is stored very securely.

I also keep a slip of paper in my wallet that identifies people to contact in the event of serious injury or death. The people on that paper know enough to get the ball rolling on these matters.

We welcome your feedback on this article. Contact us at inquiries@thesimpledollar.com with comments or questions.

Source: thesimpledollar.com

Bodnar of MMG: What Does Continued Volatility Mean for Clients?

Bill Bodnar of The Mortgage Market Guide (MMG) discussed how volatility continues in the bond market.

Friday morning’s “gap down” open is a negative sign. Key resistance levels in the 10-year Note yield are still holding at the moment.

Inflation will be sharply higher over the next three months due to the year-over-year baseline effect. However, Bodnar says he doesn’t see inflation being a big problem longer-term.

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Source: themortgageleader.com

Dear Penny: We Want to Travel Post-COVID, but He’s Too Poor

Dear Penny,

I’m 70 and a widow of six years. I was married for almost 43 years. Two years ago, I met a man from New England on a dating site who’s just a bit older than me. We’re both healthy and physically active. We love to dance, hike and visit new places.

He’s been married twice and has four children. He is very close to his kids, grandkids and siblings. I have met them and they are good, decent people. He has lots of friends and is very outgoing.

He’s self-employed with a business next to his home. He works when he feels like it. He would like to live and work in New England for four months and spend the rest of the time in Florida, where I live.

He doesn’t have much money. His Social Security is minimal. He saves it and lives off of the money he makes from his business and the settlement his ex-wife sends him, which will end in two years. His house is paid off, his expenses are low, and he is careful with his money.

My husband left me financially secure. We were always careful with money and never lived an extravagant lifestyle. I’ve got two adult children who are financially independent.

The man I’m seeing doesn’t have much disposable income and isn’t concerned about it. I’m not sure about a long-term future with him feeling this way. When this pandemic is over, we’d both like to travel and do more, but I don’t want to travel on the cheap. I’m not talking about fine dining and five-star hotels. Just something in-between. I have no problem paying my share, but not for both of us.  

He knows that I will never marry again and whatever money I have left will go to my children. When he is down here, he stays with me (he’s been with me six months, now). He buys half the groceries and many times pays for restaurants, so his monthly expenses may add up to $400. He does help around the house.  

Now that we have our vaccines, I went to visit my family, who live in another country. He decided not to join me, but he didn’t want to return home, either. 

I pointed out that this is his busy time for business and he should take advantage. But he says he has worked hard and it’s his time now to enjoy life.

Is this relationship doomed because of our differences in attitude on finances? Should we just enjoy what we have?

-Am I Too Old to Have It All?

Dear Am I Too Old,

You found a guy who isn’t rich, but does he make your life richer? Your letter screams “yes” to me.

You share the same hobbies. You like his family and friends. It seems like he’s an equal partner with you, even though he can’t pay 50% of the bills.

Your boyfriend sounds like someone who manages what little money he does have wisely.

He can afford his lifestyle — he just can’t afford your lifestyle. My alarm bells would go off if you were telling me that your 30-something boyfriend only works when he feels like it and says now is his time to enjoy life. But from a 70-something? Not so much.

What I want you to do is think about the next trip you want to take post-COVID. Would you have more fun if you took it alone, with the comfort of knowing you didn’t foot the bill for him? Or would you enjoy it more traveling together, even if that means you’ll pay for most of it?

I feel like you’re assigning a level of urgency here that doesn’t really exist. He’s already been staying with you for six months in Florida. He’s not talking about selling his home in New England. No one’s begging for the other person’s hand in marriage. You can plan a vacation, knowing you’ll pay for most of it, without committing your entire retirement to traveling together.

I don’t think your relationship is doomed — and age is a very big factor here. My answer would be very different here if you were in your 20s or 30s. If you were building a home, a nest egg and a family together, your differences on money could be too difficult to reconcile, no matter how in love you were. But in your 70s, it’s a lot more realistic that you can keep your finances separate.

Whatever you do, don’t pursue a future with this man if you think you’re going to change him. It sounds like money just isn’t that important to him. That’s not a character flaw.

You don’t always fall in love with someone in the same tax bracket. That means one person often shoulders a greater share of the expenses. But if this relationship truly makes you happy, that’s a small price to pay.

Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected].

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Source: thepennyhoarder.com

Why Is the Last Friday in May so Important When Buying a House?

When You Put in an Offer on a Home Can Have a Big Impact on How Much You Can Save

If you have plans on buying a home this year and you want to get the best deal possible, many signs point to the fact that you should be acting now. This is because after the month of May ends, you could be paying a lot more for the home you’re interested in.

In the real estate world, the month in which you buy isn’t the only important factor you need to consider; the day of the week you put in your offer can also affect your price. Here’s why the last Friday in May is so important to be mindful of, when you want to get the best deal possible on the home you’re looking to buy.

home buying in mayhome buying in may

Why Is It Best to Submit an Offer on Friday

You have five days in any given week when you can submit an offer on a home. In most cases, a buyer will find the home they want on a Saturday, compare the pros and cons of the home on Sunday, and then submit their offer on Monday. This is what most people do because it simply fits easier in their schedule best.

But many experienced buyers will tell you that Friday is actually the best time to submit an offer. Buyers who submit their offers on a home on Monday will often find themselves stuck in a bidding war for the rest of the week. But you can often avoid this unpleasant (and expensive) situation by submitting your offer on a Friday, before Monday’s rush of offers.

If the home is priced properly, then you will want to include in your offer a short acceptance period. The goal is to have the home under contract with the proper terms by the end of the weekend. With your offer accepted before Monday, you will avoid the bidding war process and wind up getting the home at the best price possible.

home buying in mayhome buying in may

Buying in May Versus June

When spring transitions into summer, the housing market typically explodes, which can make for a bad time to buy if you’re interested in saving money. After May ends, home prices start climbing because sellers anticipate the increase in buyer traffic.

June also sees home closings happening at a faster rate than most other months. This means there’s less time for a buyer to negotiate the price. Homes sold in June also tend to sell for much more than the asking price due to the increase in buyer traffic and the bidding wars that this can cause.

home buying in mayhome buying in may

Find the Home You Want Before Summer’s Market Shift

If you want to get into a home before the start of the summer onslaught of buyers and escalating home prices, then now is the time you want to start looking for a home. At Homes.com, we can provide you with up-to-the-minute listings in your desired buying area. You even can use our filters to narrow down your options to only those homes that best fit your wants and needs, saving you time in the process.

Find the home you want and make sure you submit your offer by the last Friday in May to get the home you want at the best price possible.


Carson is a real estate agent based out of Phoenix, Arizona. Carson loves data and market research, and how readily available it is in today’s world. He is passionate about interpreting these insights to help his clients find and buy their perfect home. Carson got into the real estate industry because he loves the feeling of handing over the keys to a new home to happy clients. In his free time, he works on his backyard bonsai garden and spends time with his wife, Julia.

Source: homes.com

Should You Use a Car-Buying Service?

The last two new cars I’ve bought, I never spoke to a salesman.

I bought my current vehicle in 2004 after emailing every dealer within a 50-mile radius of my house. I haggled via email with a half-dozen of them — probably spending about the same amount of time it would have taken to visit a couple of showrooms.

My car before that, a brand-new 1996 Oldsmobile, was an easier experience. I simply hired a car broker I learned about from a co-worker. The broker called me, asked what I was looking for, discussed prices and options, and went on his merry way. A week later, he found the perfect car at a near-perfect price. He even had it delivered to the parking lot at my office building.

Best I can tell, I saved a couple thousand buying a car online, and slightly less buying a car through a broker. Whether either option is right for you depends on several things.

If you want to try a new way to buy a car, here are six things you need to know first.

1. Not all services are the same

The broker I hired didn’t cost me a dime. He made his money by charging the dealer. (Some brokers charge the customer a fee instead.) Brokers often have close relationships with a handful of dealers in the area who are willing to give them a discounted price because of the volume of sales.

I could’ve gone to a car concierge, who does the same thing. However, concierges generally charge customers a flat fee or a percentage of the savings they generate for the buyer. So what’s the advantage? Generally, a concierge scores deals by casting a wider net. As the name implies, concierges excel at buying luxury or harder-to-find vehicles.

Finally, there are club car-buying services available through membership organizations, such as the AAA Auto Buying Service and the Costco Auto Program. Many credit unions also offer this service, like this one from PenFed. It’s a free perk of membership, but these services are limited to the dealers that sign up with the organization.

Which service you select should depend on the answers to two questions:

  • How is the service paid? If the service is getting paid by the dealership, what gives it the incentive to find you the best possible price?
  • What services are included? Will the contract be ready for your signature? Will the car be delivered to you? Is the service simply introducing you to potential sellers? What else is involved?

2. Try selling your old car on your own

In my case, the car broker offered to include my old car in the deal for a new one. But I quickly figured out I could sell my ancient, no-frills Nissan hatchback on my own for a few hundred more. Then I had a change of heart and let the broker handle the trade-in. Why? Because I was willing to lose some value if I could gain some free time.

Do this math for yourself. If you’re willing to put in the hours, sell your trade-in and pocket the cash. If it’s too much hassle – and if you live in a small town where your customer base may be limited – consider doing what I did.

3. Do your own research

A broker, concierge or buying service can save you legwork, but you still need to do your homework. Spend some time online studying what vehicle you want, with the particular options you both crave and could do without. You want to give the service as much detail as possible.

In my case, the broker said I would save both time and money if I didn’t care what color my Oldsmobile was. So I ended up with a red car, which was fine with me.

4. Line up your financing in advance

In the video above, Stacy was adamant about financing: “Shop it and have it lined up.” He’s right. There’s no point in shopping for a car, or anything else, until you know you have the money to buy it. Shopping for a car before securing the loan is like stepping on the gas before you’re in gear: You may make a lot of noise, but you’re not going anywhere.

5. Ask what happens afterward

What happens if you get a lemon? What if you just don’t like the car when you show up on the lot or it’s delivered to your door?

Also, if you want to keep it maintained by a dealership, where’s the nearest one that services your make?

Besides the potential savings, a major advantage to embracing one of these services is sparing you time and hassle. If you don’t ask these questions up front, you could be facing complications and demands on your time after the sale.

6. Decide what your time is worth

If I had to do it all over again, would I use another broker or buy on my own? At the time I called the broker, I was starting a new job, so it was invaluable to me to have someone else handle the purchase — even worth forgoing a few hundred dollars on the sale of my old car — so I could focus on proving my value at work. And I ended up getting a great deal on the car.

Also, there wasn’t the Internet we have today, so hunting down the best deals on a new car and selling my old car would have been a time-sucking task. By 2004, that situation had changed. If you’re willing to put in the time online, you can save more – especially if you’re buying a popular, mid-priced model that many dealers have stacked on their lots.

As for me, after talking to Stacy Johnson, who’s wealthy and has never bought a new car in his life, I think I’m going to buy “pre-owned” next time.

This post originally appeared on Money Talks News.

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Image: iStockphoto

Source: credit.com

Social Security Recipients to Get Delayed Third Stimulus Checks After SSA Sends Data to IRS

Nearly 30 million people who receive Social Security or Supplemental Security Income (SSI) benefits have been waiting to get a third stimulus check because the Social Security Administration failed to send critical information to the IRS. Fortunately, that wait should come to an end soon, now that the SSA has finally forwarded the necessary data to the tax agency.

It took a letter from four Congressmen to get the SSA to send the requested information, which they did the day after the letter was sent. However, according to the Congressmen, the necessary payment files arrived a month after the IRS requested them. That delay held up payments to millions of Americans.

The IRS has already sent approximately 127 million third-round stimulus payments worth about $325 billion over the past two weeks. More payments will be sent on a weekly basis going forward. So, hopefully, payments to the Social Security and SSI recipients who have been waiting can be sent in one of the next few batches.

[Stay on top of all the new stimulus bill developments – Sign up for the Kiplinger Today E-Newsletter. It’s FREE!]

Amount of Your Third Stimulus Check

Every eligible American will receive a $1,400 third stimulus check “base amount.” The base amount jumps to $2,800 for married couples filing a joint tax return. You also get an extra $1,400 for each dependent in your family (regardless of the dependent’s age).

Not everyone will receive the full amount, though. As with the first two stimulus payments, third-round stimulus checks will be reduced – potentially to zero – for people reporting an adjusted gross income (AGI) above a certain amount on their latest tax return. If you filed your most recent tax return as a single filer, your third stimulus check will be phased-out if your AGI is $75,000 or more. That threshold jumps to $112,500 for head-of-household filers, and to $150,000 for married couples filing a joint return. Third-round stimulus checks will be completely phased out for single filers with an AGI above $80,000, head-of-household filers with an AGI over $120,000, and joint filers with an AGI exceeding $160,000.

You can use our handy Third Stimulus Check Calculator to get a customized estimated payment amount. All you have to do is answer three easy questions.

Why Does the IRS Need Data From the SSA

Third-round stimulus checks are generally based on information taken from 2019 or 2020 tax returns. However, since many Social Security and SSI recipients don’t have to file a tax return every year, the IRS tries get the information it needs for these non-filers from another source – like the SSA. But if the SSA doesn’t provide the information, the IRS can’t send out payments to these people.

Even though the SSA finally sent the requested files, Social Security or SSI recipients who have dependents might not get all the money their entitled to in their stimulus payment. That’s because the IRS won’t necessarily know anything about the dependents, which means they can’t send the additional $1,400-per-dependent payment authorized by the new stimulus law.

However, if you don’t get the extra $1,400 for a dependent now, you won’t lose out on the money — you’ll just have to wait until next year to claim it. Third-round stimulus checks that will be sent now are really just advance payments of the 2021 Recovery Rebate tax credit. So, if the IRS doesn’t send you a third stimulus check – or doesn’t send you the full amount – you can claim the credit and get a refund or reduction of the tax you owe when you file a 2021 tax return next year (you can file a return just to claim the payment).

How to Track the Status of Your Third Stimulus Check

The IRS’s online “Get My Payment” tool will let you know when your third stimulus payment is expected to arrive. Actually, it does more than just that. It also lets you:

  • Check the status of your stimulus payment;
  • Confirm your payment type (paper check or direct deposit); and
  • Get a projected direct deposit or paper check delivery date (or find out if a payment hasn’t been scheduled).

For more information about the tool, see Where’s My Stimulus Check? Use the IRS’s “Get My Payment” Tool to Get an Answer.

Seniors Living with Adult Children

Will seniors who live with an adult child get a stimulus check? The answer depends on whether the senior parent is claimed as a dependent on the adult child’s tax return. If the parent is claimed as a dependent, then he or she won’t get a stimulus check. That’s because anyone who can be claimed as a dependent on someone else’s tax return doesn’t qualify for a third stimulus check.

However, an adult child supporting an elderly parent will get the extra $1,400 added on to his or her third stimulus check if the parent is a dependent. As mentioned earlier, the age of the dependent doesn’t matter for third-round stimulus checks, which is different than for first- and second-round stimulus payments.

For more information about third-round stimulus checks, see Your Third Stimulus Check: How Much? When? And Other FAQs.

Source: kiplinger.com

Insurance for New Cars Versus Used Cars

  • Car Insurance

Is a new car really more expensive to insure than a used car? According to countless car owners, you’ll always pay more if you have a new vehicle, but how true is this, do auto insurance companies really place that much emphasis on the age of your car and, if so, what can you do about it?

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Is an Auto Insurance Policy Cheaper for New or Used Cars?

Generally speaking, a used car will be cheaper to insure than a new car, but the difference isn’t as big as you might think. In fact, we ran a few insurance quotes and found the difference to be less than 10% on average for most providers and up to 20% for providers like State Farm, Allstate, GEICO, and Progressive.

In truth, however, there are too many variants at play to say with any certainty that auto insurance rates are cheaper for used cars than they are for new cars.

​What do Car Insurance Companies Consider?

Insurers focus on risk. The only thing they care about is whether or not you are likely to make a claim. If the odds of you making a claim increase and the costs of that claim are likely to be high, your insurance costs will increase.

A new car is more likely to have advanced safety features, anti-theft devices, and other technology designed to reduce the chances of everything from minor dings and parking mishaps to full-on accidents. However, if major repairs are needed, the state-of-the-art features could be expensive to fix and replace, driving those insurance costs up.

For obvious reasons, new cars will also cost much more to replace than used cars. 

Car Loans and Full Coverage

Another reason new model cars may cost more to insure is that they are more likely to have financing. If you have financing on your car, you will be required to have comprehensive coverage and may also need gap insurance. That way, if anything happens, the lender doesn’t lose out.

Of course, this means that in addition to your monthly car payments you’ll be paying through the teeth for a full coverage car insurance policy.

How to Reduce New and Old Car Insurance

Just because new cars can cost more than older ones, doesn’t mean they always will. Many variables are at play here. If, for instance, you’re comparing a sports car that is over a decade old to a brand-new SUV with a high safety rating, the latter should always cost less (if all coverage is equal). And even if you have the former or have just purchased a new sports car or luxury car, there are still ways to save:

Compare Multiple Car Insurance Quotes

In our comparisons of used vehicle car insurance quotes vs new vehicle car insurance quotes, we found some notable differences and we only tested one state, one type of car, and one type of driver.

The differences between car insurance quotes can be staggering once you consider all minor details, including driving history, vehicle history, and more.

Don’t just assume that a specific insurer will have the cheapest rates and don’t base your decision on the insurer your friends/family use or the one whose commercial appealed to you the most. Compare all national and local providers and don’t forget about insurers like the USAA, which offers low-cost policies to current/former members of the military and their families.

Look for Car Insurance Discounts

Car insurance discounts are offered by most providers and relate to everything from your driving history to the type of car you drive. Some discounts are required under state law, but many are not and whether they are available or not will depend on your state of residence. Here are a few of the most common discounts:

  • Good Driver Discounts: Drivers with a history of clean, safe driving can benefit from reduced insurance premiums. They have proven themselves as responsible drivers and, as a result, are able to reap the rewards.
  • Good Student Discounts: Young drivers pay more for their car insurance than any other demographic, but there is some reprieve, and this comes in the form of a good student discount, which is offered to all students that maintain a B average.
  • Safety Features: Front-and-side airbags and anti-lock brakes can save you up to 40% on full coverage with some insurers. These features are standard on most cars so you may not have noticed this discount. However, once you try quoting for a car that doesn’t have these features you’ll understand just how important they are.
  • Anti-Theft Features: If the risk of theft is high in your area or for your car, your premiums will increase. However, you can save money if your car has an alarm, a tracking device or another anti-theft feature.
  • Membership Discounts: The biggest savings are offered to members of the military and their families, as they can save as much as 90% if they are on active duty and use specific providers. Discounts are also available through the AAA and the AARP for seniors going through providers like The Hartford.
  • Payment Discounts: These discounts are a little smaller but are also easy to acquire. Many providers will give you a discount if you choose Auto-Pay and a further discount if you go Paperless or pay in full.
  • Driver Courses: Prove your ability behind the wheel by completing defensive driving courses and other driver education courses. Most insurers will offer you a discount in exchange for finishing such courses.

Boost Your Credit Score

Credit reports will be checked during every insurance application. It may seem unfair, and even a little odd. After all, you’re applying for car insurance, not a credit card. But research suggests that bad credit drivers are more likely to claim than those with good credit, and quite significantly so.

To improve your chances of getting good rates, boost your credit score. You can’t reach an Excellent score overnight, but there are a few ways you can boost your score quickly and this short-term improvement should be enough to improve your chances of paying lower rates:

  • Repay Debt: The more of your debt you repay, the better your credit utilization ratio will be. This counts for 30% of your total FICO score.
  • Increase Credit Limits: Call your credit card providers and increase your credit limits. This will also increase your credit utilization ratio, and it won’t cost you a dime.
  • Stop Applications: Every time you apply for a new credit card, you’re hit with a hard inquiry, which can reduce your FICO score by 2 to 5 points. If you activate that card, it will take a further hit. Once the new credit limit is taken into consideration and your credit utilization ratio has been boosted, the pros should outweigh the cons, but that takes time, and in the short-term, your score will drop.
  • Become an Authorized User: By adding yourself as an authorized user to a parent’s credit card you can benefit from their great credit and high limits without being responsible for the debt.
  • Dispute Errors: Check your credit report, make sure all information is correct and if you notice any mistakes, correct them. You can contact the credit reporting agency directly, provide them with proof of their mistake, and wait for them to fix it.
  • Use a Credit Building Loan or Card: If your credit score is rock bottom then the above tips may not be enough to help. In such cases, you need to start from the bottom and work your way up, and that’s where credit builder loans and secured credit cards come in. These work just like traditional forms of credit, only all of the benefits are stripped away and the only thing remaining is the ability to build your credit.

Combine Cars and Policies

If you have multiple drivers in your household then consider adding all of them to the same policy. Obviously, that policy will increase, but you’ll pay much less than if you were to buy two separate policies. All car insurance companies will allow you to do this and many of them will even contact you when your child is ready to drive, offering you this service.

The bigger insurers also offer something known as a “multi-policy” discount. Typically referred to as “bundling“, this discount is provided to consumers who purchase multiple policies from the same provider, such as adding homeowners insurance to car insurance.

Consider your Coverage and Deductible

Your first step is to make sure you have the minimum coverage required by your state. This cover will span bodily injury liability, property damage liability and, in some states, it will also include uninsured/underinsured motorist cover, personal injury protection (PIP), and medical payments.

Get what you need and then consider how useful all other options are. Collision coverage will cover you if you’re involved in a collision that doesn’t involve another vehicle; comprehensive coverage will ensure you get a payout if your car is vandalized or involved in a non-collision accident. If you have an expensive car and want the best cover, go for it; if you have a cheap car and won’t stand to lose much in an accident, think about skipping it.

You can discuss your options with an insurance agent. They have experience in this field and can advise on the best course of action.

Look into Mileage-Based Insurance

Drivers who only use their cars for short commutes or occasional weekend driving should look into mileage-based car insurance. Many of the big providers offer specific programs that use devices and apps to track how much you drive and how well you drive, before setting your rates accordingly. 

Keep Your Car in Good Condition

Commit to regular oil changes, car washes, and other basic maintenance, and fix minor issues before they have a chance to grow into something more serious. Not only will this offer some much-needed peace of mind, but it will also keep your car running for longer and prevent breakdowns resulting from poor maintenance. 

Keep a Clean Driving Record

The more accidents you’re involved in and the more moving violations you receive, the higher your insurance costs will be in the future. A single speeding ticket could see your rates climb by as much as 30% and a DUI or DWI will trigger an even sharper rise.

By being responsible, there’s less chance you’ll be involved in a serious accident and more chance you’ll get cheaper car insurance rates the next time you renew.

Renew After Major Life Events

In addition to the type of car that you drive, your age, and your driving record, insurance companies will also consider some less-obvious factors when underwriting your policy.

For instance, rates are cheaper for homeowners than they are for renters, and married drivers will pay less than single drivers. As a result, it’s important to inform your insurer every time there is a significant life event. Not only could this result in a cheaper policy but it will also keep all of your information accurate and up to date.

Plan Your Next Car Purchase Carefully

Now that you know how important your choice of car is for your insurance premiums, you can make better choices in the future. You shouldn’t focus only on the cars that give you the cheapest insurance rates. In doing so, you could save a few hundred dollars, but only at the expense of driving a car you don’t really like.

But while prospective insurance rates aren’t everything, they are a small piece of the bigger picture and could help to sway you one way or the other. To help you with this decision, here are a few of the cheapest cars to insure:

  • Honda Accord, Civic, and CR-V
  • Jeep Wrangler and Cherokee
  • Toyota Tacoma, RAV4 and Highlander
  • Ford Fusion, Escape, and Explorer
  • Nissan Sentra and Altima
  • Chevrolet Silverado and Equinox

Buying New vs Used

Insurance rates should always be considered when choosing between a new car and a used car. However, let’s be honest here, there are more important things to consider. Sure, the insurance premiums can make a big difference, but saving a few hundred bucks on used car insurance or new car insurance may not be enough to cover the additional maintenance costs or sticker price.  

It’s important, therefore, that you consider all the pros and cons of buying a new vehicle vs a used vehicle:

Benefits of Buying Used vs New

The idea that new cars are much more reliable than used cars is somewhat dated. Sure, new cars are that little bit more reliable as they have driven very few miles. But most cars are built to last these days and it’s not uncommon for them to hit 50,000 and even 100,000 miles before they need any serious repairs.

The idea that new cars are much more reliable, therefore, is a complete fallacy, as is the notion that new cars offer many more benefits than used cars. Just take a look at the following ways that used cars are better than new ones.

Price

The biggest issue with new cars is the price. You’ll pay much more for a new vehicle than one that is a couple of years old. In fact, the average price for a new car in the United States recently climbed above $36,000, which is a staggering sum of money.

To put that into perspective, it’s more than the average cost of a wedding and it’s more than three times the cost of the average funeral. It’s also close to twice the average down payment for a house. Of course, very few Americans are paying all that money upfront and most take out an auto loan, but whether you’re paying for it upfront or over several years, it’s still a huge sum of money.

The average cost of a used car, on the other hand, is just over $20,000. This is still a lot of money, but this average cost has increased significantly in recent years as more consumers understand the benefits that used cars bring.

Depreciation

New cars depreciate at a rapid pace. In fact, you could lose a few grand as soon as you drive it out of the lot and after 12 months the average new car will lose up to 20% of its value. This means that a $35,000 car could be worth just $28,000 after a year, and it only gets worse from there.

Estimates suggest that new vehicles will continue to lose at least 10% of their value every year for the next 4 years. After 5 years, your shiny new $35,000 investment could be worth half what you paid for it. This is a substantial financial loss and it’s made worse by the fact you’re paying interest on it.

Used cars will also depreciate. But the rate of depreciation will be much slower. By purchasing a car that is just one or two years old, you’ll be getting many of the benefits that come with driving a new vehicle (well maintained, high-tech features) but without paying the cost of that rapid depreciation.  

Buy a Better Car

$25,000 to $35,000 can get you a brand-new Nissan, Honda or another cheap car. You’ll get all the features and a relatively well-built car, but as reliable as these vehicles are, they can’t quite compare to a BMW, Mercedes or Lexus.

One of the great things about buying used is that you can move to the next level, going from affordable to luxury. A brand-new low-end vehicle costs the same as a used luxury car, and because you’re buying from a reputable manufacturer known for producing quality, you know it will last.

Dings and Scratches

If a new car gets damaged, it’s heart-breaking. You just dropped tens of thousands of dollars on that vehicle and even the slightest ding or scratch can hurt you to your core.

With an old car, it’s less of an issue. Of course, damage is damage, and no one wants to experience it, but there’s no doubt that it cuts deeper when the car is new.

Benefits of Buying New vs Used

Everyone enjoys that new car smell and the idea they are the first person to drive the vehicle. This isn’t a real benefit, however, as no one can justify spending up to 50% more on a car just because of a smell or slightly cleaner fabrics, not when you can stick a car-freshener in there and pay for a deep clean. But new cars still have a wealth of benefits compared to used vehicles.

Finding the Right Car is Easier

Shopping for new cars is much easier than shopping for older cars.

The used car buying process is taxing and frustrating. You struggle to find the right car in the right budget and in the end,  you settle for something that is a little more expensive, not in the right color, and/or lacking in key features. Used car shopping is all about compromise, but the same can’t be said for new car shopping.

When you buy a new car, you have the freedom of choice. You can get the features you want in the color you choose, adding or removing options to tweak the price.

In both cases, you can also negotiate, but with car dealerships, you may have more options, as you can discuss free additional features and services as well as a reduced price.

Betting Financing Options

Car dealerships will do all they can to get you to sign on the dotted line and with new cars, they tend to have more maneuverability. You can get a brand new car with a low down payment and an affordable monthly payment.

The Latest Technology

New cars are fitted with the latest technology, including the most advanced safety features and anti-theft devices. These can help to reduce your car insurance rates as they make you less of a liability behind the wheel. More importantly, they can keep you safe and give you all the joy and convenience that comes from playing with new gadgets.

Technology is moving at a rapid pace, so even a difference of just a few years can be massive in terms of available technology.

Bottom Line: A Big Decision

Whether you choose a new car or an old car can have a big impact on your finances over the next few years and is, therefore, something you need to consider very carefully. But that shouldn’t stop you from getting a car that you want; a car that you’ll be comfortable driving, and a car that will keep you safe and get the job done.

Consider all these things, compare and contrast, and take your time. Spending a little extra time on this process and expending a little more effort could save you thousands in the long run.

Source: pocketyourdollars.com