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Joseph David, CMPS®

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Seven Steps to Inhibit Spending

05-28-08
Joseph David, CMPS®

  1. Freeze credit cards and ATM cards in a glass of water in your refrigerator freezer. Get spending on a cash basis and make notes/keep receipts on all purchases to help raise your awareness of where your money is going, day in and day out.

  2. Take some financial pictures of yourself. The big picture is your net worth, listing the things you own versus the things you owe. But don't stop there, Take a close-up picture of your net worth, that is your cash-flow, which is money moving in and out of your life on a monthly basis. It is a list of all income received in a month and also a list of all expenses during the same month. The difference in the two amounts equals your cash flow, be it positive (more income than expenses), or be it negative (more expenses than income), or be it zero (monthly income and expenses are equal). The close-up picture will help in prioritizing monthly spending. The cash-flow will also help identify spending that may be hurtful to getting out of debt. Try to get as much extra cash going to debt pay-down as possible.

  3. Create a written spending-plan and implement it with the next paycheck or the first of the month, whichever comes first. The cash-flow exercise is the basis for the spending-plan; all the leg-work is done. The monthly spending-plans then become your financial roadmap. The key is to follow it closely, because within that spending plan will be the Christmas debt reduction and, eventually overall debt elimination.

  4. Look for ways to get a better value for your dollar. It may mean doing things for yourself that you may have paid others to do for you, such as lawn care, car washes, laundry, and so forth. Comparison shopping is another way to save money and get more value. Coupons and rebates add value to your dollar, especially at the grocery store where the average American family spends 30 cents of every take-home dollar.

  5. Make it a family affair. Everyone can contribute to energy savings, avoiding food waste, clipping coupons and watching out for sales on things regularly purchased. Everyone can become a comparison shopper and look for better values. An over-spender is not just someone who spends more than they earn, an over-spender is also someone who pays too much for things and the latter group is the majority.

  6. Add to your income at the same time you are spending smarter. This can be done by taking part-time employment, selling things on the internet with eBay, for instance, perhaps generating additional income from a hobby, craft, music or language instruction, and tutoring, to mention a few.

  7. Get some visual reminders around your home and office about improving spending. If ATM and some credit cards must be unfrozen, place a note on your refrigerator.

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Twelve tips for Grocery and Household Shopping

05-28-08
Joseph David, CMPS®

1. Create a list to take shopping. Put anything you want on the list, but don't add to the list once you get to the store. Using a list will help plan for your needs in advance, so take advantage of sale prices and avoid impulse purchases. "Go alone after a meal". If you go shopping hungry or with another, you're shopping for more than one appetite and the result is always increased spending.

2. Watch for coupons in your mail box and flyers distributed at the stores, watch for store ads in the newspapers and coupons on Sundays. Check for sale prices on the items you regularly purchase. Compare prices with other stores, especially those you don't normally visit. Pay special attention to the days of the week the sale prices are in effect. For example some stores have no sale prices in effect on Mondays, traditionally a busy shopping day. Carefully plan purchases, noting on the list which items are sale priced and items where a coupon can be used.

3. Spend cash. Take time to get cash before going to the store. Nothing impacts our mind like taking cash from our wallet or purse. Many people who use credit cards rarely know how much was actually spent - until the statement comes. Many people who write checks simply do not take the time to calculate the balance and have no idea what is left over. Paying cash causes us to think ahead.

4. Take advantage of coupons and rebates, they do add up. Shop at stores that double coupons and take the time to watch the papers for grocery coupons. Look for items on the shelf which also have coupons included inside the packages, called a double play by couponers.

5. Always shop by the unit price at the stores. In most states it's the law that retailers post the unit cost on the shelves. It used to be the larger the pack the better the price, but not always so these days. For example a 50 cent coupon, doubled on any size of soap detergent could make the smallest size the most economical in terms of least cash spent.

6. Avoid buying plastic bags for food storage or garbage disposal. The stores give plastic bags away free and there are plastic bags available in the produce and meat sections. Separately bag each item and save them for reuse. When asked if you want either a paper or plastic bags, ask for paper inside of a plastic bag and you will then have an ample supply of ready-made garbage bags.

7. Cleaning aids, cleansers etc. are very costly and prices vary greatly with the brands. Some companies market a cleanser (and now specialty wipes - what a waste) for virtually every type of household project. The best cleanser in the kitchen, aside from powder is ammonia. No need to buy a brand name, ammonia is ammonia, if you want it soapy, then add some detergent. Another valueless item is dish soap promoted to be more gentle to hands or cuts grease better. If your hands are that sensitive, use the longer lasting rubber gloves and save money on detergent by using generic brands. Hot water and any detergent will cut grease.

8. Plan meals in advance. Keep in mind wise use of leftovers or freezing for later use when purchasing meats, etc. and making pasta dishes for example. Consider buying meat items you use regularly in bigger quantity, freezing for later use the portions not needed the week you buy them. This can save you up to 20 percent.

9. Avoid prepackaged items. Cereals, breads, desserts, juices, beverages etc., mixed and prepared at home are always a better value than prepackaged items. The same is true for pet foods and many experts agree dry pet food mixed with water is better than canned food.

10. Be cautious about adding non-food items to the grocery list. These include health and beauty items, paper and plastics, utensils, brooms, brushes, film, etc. These items have the highest profit margin for most grocers, which is exactly why they are prominently displayed in the stores. Usually a better value can be obtained at discount drug stores.

11. When shopping stick to the list and plan in advance all purchases to take full advantage of sale items and 2 for 1 deals (if the price isn't inflated to compensate). When possible shop the outside walls and stay out of the aisles. Most food stores situate the four basics (produce, meats, dairy and breads) on the walls. They most often place all the cookies, cereals, beverages, canned goods and the nice-to-haves on the aisles.

12. Finally, check the checker. Note the prices as you select items and then make sure the same price is posted at the check-out. Check the register tape again after leaving the store, often unintentional mistakes are uncovered, especially with large purchases. Many times a sale price is listed in the store, but not reflected at the check-out. Also, the shorter the time spent in the store, the less money spent.

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Housing – Deal or No Deal?

01-28-08
Joseph David, CMPS®

The new home sales for December 2007 were reported below expectations. The supply of new unsold homes rose to 9.6 months from November's reading of 9.3 months.

What 2008 will be like if you're looking for a real estate deal?

Last year home prices dropped between 5 - 10%, but there was no "bubble". This new year will be another down year for housing with similar declines in prices - but will also mark a bottoming out. The thing of it is...you can't see a bottom until you are already past it, much like how we always see refinance activity pick up when rates start rising from their lowest levels!

What makes 2008 such an attractive year to get a good deal?

Rising incomes and lower home prices will make real estate more affordable, as some of the excesses of housing inventory are washed out.

As far as Mortgage Rates is concern the only word to describe this year is "volatile." We expect to see sharp moves and intra-day repricing becoming commonplace. If you're looking for financing in this rocky market you need smart strategies. Experience the difference with mortgage planning!

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Another Fed Rate Cut Is On Its Way: Find Out Why

01-15-08
Joseph David, CMPS®

Dear reader,

Mortgage Bonds were in rally mode this morning after Retail Sales, showed its weakest growth in five years with an overall annual growth rate of 4.2%.The NY State Manufacturing Index , and the Producer Price Index(PPI) were reported lower than expectations. When excluding volatile energy and food prices, the Core PPI matched the consensus forecast.

With this economic data, I don't see why the Fed should not have reasons to cut rates by .50%, and in fact it seems like traders are now hoping the Federal Reserve may slash rates before its next two-day session ending on Jan. 30.

Why do you need a Certified Mortgage Planning Specialist™?

Simply because we are...

COMMITTED:
to raising mortgage industry standards of practice, ethics and professionalism through individual membership, training and certification.

QUALIFIED:
to help clients achieve financial freedom, build wealth and experience their life dreams by implementing intelligent mortgage, cash flow and home equity strategies.

EQUIPPED:
to be a strategic resource to homeowners, first-time home buyers, move-up home buyers, senior citizens, real estate investors, Realtors, builders, attorneys, CPAs and financial advisors.


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