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Disaster proofing our homes is an integral part of personal finance planning. The images of the small Jewish boy who was orphansed when his parents were killed in the terror attacks in Mumbai in November last year, is still fresh in my mind. It was like watching a rerun of the 9/11 attacks sans the airplane.
Being a mother myself of a fifteen-month-old, I could well imagine my child in the same situation and cannot but be scared. These are uncertain times and if not a terror attack, an earthquake or a hurricane or even a road accident is sufficient to throw our peaceful lives out of gear and life may never be the same again.
What occured to me then was that I have to make few arrangements to ensure that, even if something happens to me, my child is not left helpless to fend all for himself. So the whole of last week my husband and I took some time off our work to disaster proof our home.
We first made a list of all our bank accounts, stock market investments and term deposits. We made 3 copies of the list, kept one at our house, one in our bank locker and one at my mother’s place, just in case. We then checked the personal details that had provided in our financial/bank accounts and we realised that some of the details like address and contact details that we had provided were old and the nominee detail was missing in few accounts. We completed those details as well, so that in case there is a need for that information in case of an emergency, the updated information is available.
Only few weeks back my hubby was cribbing about the annual insurance premium payment which he thinks is useless and was eating up most of his money. But this time I did not have to persuade him to pay the premium so that the policy does not lapse. He did it by himself.
Thankfully we have the habit of keeping a sum of 3-6 times our monthly income as an emergency fund, untouched. We decided to continue with that habit of ours. We had already shot pictures of our valuables like jewellery, appliances and cars for our home owners insurance policy. We have now made few copies of those CD’s and stored them in bank lockers and at my parent’s place.  We already have a fire alarm in our place. We still thought it wise to buy a fire extinguisher and keep in a place that is easily accessible.
My mother thought we were being very pessimistic. My friends called it a knee-jerk reaction. But we never realise the importance of certain things unless they happen to us. And it is better to be safe than to be sorry.
 
One of my many New Year resolutions has been to write down my daily expenses. The effort which I grudgingly took up has been a sort of enlightenment for me in that, I have realized that fuel expenses have started becoming one of the largest expenses for me every month, apart from food. In fact it has constituted almost one-third of my total expenses till date this month. This has made me more determined than before to reduce my gas bills. I read up a bit on the ways and tips to keep a check on and reduce fuel bills. I have been sharing those tips with my friends now. Here are some of them.
1. Driving the car at moderate speed to save fuel. Steering the car at over 70mph will only lead to an aerodynamic drag resulting in increased fuel consumption. Contrary to popular myth, keeping the air conditioner on while driving does not actually increase fuel consumption. In fact keeping the windows open while driving at high speeds only increases fuel consumption. Driving at lower speeds also consumes a lot of fuel. So moderation is the way to be.
2. Switch off the ignition if you know for sure that you are going to wait for more than a minute. It consumes less fuel to restart the engine than to keep the engine running idle for a long time during traffic jams, or while doing some quick shopping.
3. Service the car regularly to check the battery, spark plugs and tyre pressure. A well maintained car with clean air filters and the right tyre pressure always gives better mileage than the ones that rarely visit the garage.
4. What car you own, plays a big role in how much you spend on fuel. If you are yet to buy a car you can check out some of the latest hatchbacks in town. Small cars are known to be much more fuel efficient than large gas guzzling sedans. Beginners will find it much easy to park and handle hatchbacks as compared to sedans. Browse through car review sites to find the more fuel efficient models.
5. Do not hesitate to form car pools with those traveling to your college or office. Using messengers or community sites you can find out the list of those people who travel through the same route at the same time and form car pools. It is not shameful to form car pools and save fuel, certainly not when you have a look at your fuel bills at the end of the month.
6. Websites like www.fueleconomy.gov provide the list of locations where gas prices are lower compared to other places. You can check such sites by location, before filling the fuel tank.
7. Trying to fit into those slim fit jeans for a long time now? Drop those car keys at home and take a walk. You not only save fuel but will also end up shedding the extra flab which you have wanted to lose for a long time.
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 I have been following the bail out plea of the Big Three automakers of Detroit for quite a while now. Ford, General Motors and Chrysler, iconic brands of the American car industry are now in the brims of bankruptcy with government bailout being their only option for survival. As some one who has driven and owned some of their cars and as a fellow American it pains me to see the CEO’s of these companies mumbling lame answers for questions raised by the Congress. But much of this is their own making.
Even as their ideas of making gas guzzling cars in these days of fluctuating oil prices became a subject of debate, the CEO’s of the companies also came in for much criticism for flying in private jets to Washington to seek bailout for their companies from the Congress. That brings us to the question of austerity and cost cutting measures adopted by the CEO’s in their personal front, when they axe hundreds and thousands of jobs in the name of cost cutting.
There seem to be very few CEO’s who lead by example when it comes to implementing real cost cutting measures and austerity. The CEO of Japan Airlines for instance was in the news recently for taking a salary cut, making his pay much lower than what his pilots take home. The CEO slashed his pay to $90,000, something that most American middle level managers take home. And what a joke it was when the CEO’s of the Big three said that they will henceforth take home only $1 as their pay.
Having said that I should also add that it this seems to be the case only with the large corporations. I am sure new entrepreneurs and small corporations are feeling the heat of the recession even more due to their size and possibly inexperience in tackling such crises head on. And when it comes to survival, there does not seem to be much difference between the GM’s and Ford’s of the world and these small ventures. Like this entrepreneur’s experiences that he states in the ‘First time CEO’s recession survival guide’, you won’t own all the proceeds if the company succeeds, but you’ll certainly own a failure in its entirety.
The large corporations atleast have a well established board, wise bankers and investors advising them on handling recession. And most of these corporations have been there, done that and fairly know how to sail through the crises. But for entrepreneurs and first time CEO’s this is an acid test and a time when Darwin’s theory of ‘Struggle for existence and survival of the fittest’ really comes into play.
Call it sadistic pleasure, but it sort of makes me happy to know that whether the CEO of a Ford, GM, a new corporation like Redfin or an ordinary person like me, the recession hits us all and is a great equalizer that way.
Last evening I was talking with a friend, her plans to buy a new car. While we were discussing models, features, prices, I asked her what her credit score looked like? She stopped and thought about it and realized she didn’t know! I didn’t need to say anything else. She knew right away that she’d be going into the car dealership at a big disadvantage if she didn’t know what her credit score looked like.
That conversation got me thinking about the importance of maintaining good credit scores and being informed about what is on your credit report. Here’s a short FAQ about credit scores.
What is a credit score? – A credit score represents a person’s creditworthiness. It is a score calculated by taking into account a person’s credit history, promptness of payment, repayment of debts and loan defaults.
Why is it important? – A credit score becomes immensely important when trying to secure a loan; home mortgage, car loan, credit card or an insurance policy. Credit score not only determines your eligibility for credit, but also the interest rate that you have to pay. The higher your credit rating the less interest you’ll pay.
Who calculates my credit score? – There are three major credit bureaus in the US, Experian, TransUnion and Equifax. All three secure consumer credit reporting information from the nation’s banks and financial institutions and apply a score based on the FICO score developed by Fair Isaac Corporation and their own VantageScore. FICO scores range between 300 and 850, while VantageScore ranges from 501-990. As an example, a FICO score of 720 and above is usually considered excellent and will qualify for the best interest rates available.
Can I know my credit score? – Yes you can, but at a price. You are entitled to a free credit report from each of the three rating agencies once in a year. Beyond that, you’ll have to pay in the neighborhood of $15 or more for your scores. Many large loan providers calculate the average of the three credit scores before sanctioning a loan. So it is advised that you get your credit scores from all the three agencies before applying for a large loan.
How do I improve my credit score? – While there are many ways to increase your credit score, it all boils down to these four basic rules of thumb.
