I personally had never heard of this before but there are historic homes that sell for $1 and it’s not an American pipedream either. Bankrate wrote up an article explaining the “‘demolition delay bylaw” (at least what it’s called in Norfolk, Mass.) where the existing homeowner wants to demolish a home that has historic value but the town wants to save it, somehow. Basically you buy the house and move it somewhere else! The sellers want it because then they don’t have to pay for the demolition.

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When I started this blog on the last day in January this year, I never imagined blogging, which already had exploded with the likes of Xanga, would continue to grow as much as it has. I also didn’t think that personal finance blogs and the idea of revealing your finances to the world would be as popular as it has, as evidenced by NetWorthIQ’s popularity and the sheer number of blogs that have been started.

I’m thankful that all of you continue to read this blog for without you many of the exciting things of this part year would not have been possible. Who would’ve thought a company would want to send me some furniture to review? Or that a reporter from the New York Times would want to talk with me and even take my picture!

I look forward to what 2006 brings as there are some things in the works that are already rolling along that may prove to be the tipping point for personal finance blogs. (shhhh!)

Back near the end of July of ‘05, I blogged about an article about the best home value renovations which revealed that the only even money proposition was the addition of a second bathroom. A recent report by the National Association of Realtors and Remodeling magazine revealed that some home renovations actually earned you a profit.

A “mid-range bath remodeling” would cost the average homeowner $10,499 but boosts the value of your home by $10,727, or 2.2%. “Upscale residing” would cost you $10,393 but add $10,771 in value, or 3.6%. This is a slight improvement over the numbers revealed in my previous post about the best home renovations (by value).

Some other notable improvements were the conversion of an attic into another bedroom suite (bed and bath), which increased value by 93.5% of the cost, a deck increased value by 90.3%, a home office a mere 72.8%. However, all the percentages are much higher than previously reported home renovation values by a significant percentage. An attic bedroom was listed at 90%, a deck listed at 80%, and a home office was originally listed at 60%. It only fuels the debate as to the actual return value of a particular renovation but the relative return values are still the same (attic bedroom is better than a deck which is better than a home office, the same as before).

The report also revealed what we all probably understood – renovations are valued differently in different parts of the country. A window replacement was valued at 103% out west but only 83.7% in the south. A bath replacement garners an incredible 111.9% in the west, 104.4% in the east, but only a stingy 89.5% in the Midwest. It’s not entirely obvious (at least to me) why this is the case but it’s good to know.

(Photo: Jo Illingworth)

Bankrate, one of the great free resources out there today, had one of its real estate related articles featured on the front page of Yahoo! Finance and it contains ten mistakes that you must know if you’re looking to buy a house. As you may or may not know, I went through the home buying process a little over half a year ago and struggled through the process learning as I went along. While I was lucky to avoid some of these mistakes, I didn’t avoid them all and this is a must-read for those of you looking for a home this spring.

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Ahhh the clahhsic Best of 2005 post that you may or may not have been waiting for. Considering this blog was started on January 31st of this year, this really could be titled the Best Ever post and still be accurately titled. However, that is a bit presumptuous to say that what I consider the best is what you should consider the best but we’ll give it a shot anyway. Of the 433 posts written this year, here are the ones, categorized for your convenience, that I believe are worthy of re-reading:

Incredibly Detailed House Hunting Search

Financial Products:

Laddered CD/MMC Safe Invesment Plan

The Beauty of Mutual Funds

Vanguard Target Retirement Funds Explained

ETFs and Mutual Funds – Empowering Average Joe Trader

Emigrant Direct Account Opening Guide (and Review)

Introduction to I-Bonds and Treasury Direct

Taxes

Tax Relief 101 – Education Credits (Lifetime & Hope)

Tax Relief 101 – Deducting State Sales Tax (vs. State Income Tax)

Tax Relief 101 – Understanding Alternative Minimum Tax

Tax Relief 101 – Understanding Capital Gains and Losses

Tax Relief 101 – Retirement Savings Credit

Tax Breaks for Tree-Hugging Autos

Your Tax Return as a Subtle Financial Planner

Tax Advantaged Investing Strategies

Schnepper-Malagoli Charitable Tax Grab

Deducting Donations – IRS Tax Rules

Tax Credit for Energy Saving Home Improvements

Think About Your Tax Deductions

Retirement

401k Front Loaded versus Incremental Contributions

IRAs Protected From Bankruptcy Creditors

401(k) “Additional Company Match Contribution”

Retirement Planning: Rely Only On Yourself

New Retirement Option – Roth 401k Explained

Five Tips for your Retirement Account

Reviewing and Rebalancing Your Portfolio

Frugality:

Is a Hobby or Habit Hurting Your Savings?

Always Ask to have a Fee Refunded/Waived

How To Conserve Gas While Driving

Just Ask: 200 Cell Phone Minutes Free

Post Office Tips and Tricks

How To Buy Stamps Under Face Value

Understanding “Trimmables,” or, Purposeful Saving

Buying Auto Parts Yourself Saves On Repairs

Plan Meals And Save On Groceries

Jim Cramer-related:

Jim Cramer’s Mad Money

Jim Cramer’s 25 Rules of Investing (First Five Rules)

Jim Cramer’s Mad Money – Lightning Round Legit?

Jim Cramer’s 25 Rules of Investing (Rules 6 – 10)

Jim Cramer’s 25 Rules of Investing (Rules 11 – 15)

Jim Cramer’s 25 Rules of Investing (Rules 16 – 20)

Jim Cramer’s 25 Rules of Investing (Rules 21 – 25)

Free Jim Cramer’s Mad Money Recaps

Auto:

Purchasing a Used Car from a Dealership

Why Buy Your Tires at Costco

Guide to Buying a Car on Ebay

Car Insurance – Milestone at Age 25

Auto Insurance & The 25 Milestone

CarMax’s Friendly Buying Experience

SmartMoney Auto Insurance Tips

Nitrogen-Filled Tires & Better Gas Mileage?

Auto Insurance 25 Year Milestone Analysis Revised

Carnivals:

Carnival of Personal Finance #2

Carnival of Personal Finance #21

Carnival of Debt Reduction #7

Carnival of Debt Reduction #13

Festival of Frugality

Festival of Frugality #1

Personal Finance Blogger Spotlight Series:

Boston Gal’s Open Wallet

My Money Musings

Young and Broke

Sitting Pretty Financially

The Millionaire Blog

Health & Medical:

How Does A Flexible Spending Account Work?

Understanding COBRA Health Insurance

Finding Temporary Health/Medical Insurance

Ebay’s Health Insurance Plan

Others:

Reduce, Reuse, Recycle – It Saves Money

How Federal Funds Rate Affects You

Online Photo Developers Comparison

Is AAA Worth It?

Making Sense of Mail-Order DVD Services

PF Blogger’s Allowance Policies

Understanding Total Cost of Ownership

Costco’s Incredible Return Policy

Buying Counterfeit Merchandise

Don’t Save, Pay Off Debt!

Gift Card Consumer Protection Laws

My Past Jobs In College

Thanks for everything everyone!

A recent survey highlighted by CNN Money showed that only 59% of those aged 45-64 used direct deposits, compared to 72% of seniors (65+). The three reasons they listed, as to why they don’t use direct deposit, were they liked going to the bank to cash their check (21%), they don’t trust it (19%), and they preferred receiving a paper check (18%). There are a lot of reasons why everyone should be using direct deposit, especially now that all the kinks have been worked out.

It saves you money to have the money directly deposited. Everyone saves money when you use direct deposit. Your company doesn’t have to mail you a check (though sometimes they mail you a paystub anyway), you don’t have to drive to the bank or take time out of your day to cash the check, and your bank doesn’t need to process a paper check (though this was made cheaper by Check 21).

It can help automate your savings. Many employers offer the ability to direct deposit to multiple banks. Send a steady percentage each month to your emergency/vacation/slush fund and the rest to your primary bank account. You’ll soon find yourself flush with cash you didn’t even really think you were saving.

Direct deposits don’t get lost. The USPS is pretty reliable but for anyone depending on their next paycheck, you don’t want to be that one out of a few hundred thousand that gets unlucky and has their paycheck lost or mangled beyond cashability. Also, let’s say you get the check but can’t get to the bank… what if you lose it? Getting a payroll check cancelled and reissued can cost you a lot of time and potentially some money (for the stop payment).

You earn interest faster via direct deposit. This is less of a financial reason than a psychological one because the difference in interest is negligible but if you direct deposit, you earn interest the moment the money hits your account. There is no waiting for the postal carrier, the drive to the bank, the waiting period for the check to cash, etc.

Happy three week anniversary Festival of Frugality! This week’s edition is hosted by none other than Free Money Finance and features a dozen posts, a very strong showing considering the holiday week and how busy everyone is.

Happy holidays everyone!

For details on the purpose of this festival, I invite you to read the introductory post about the Festival of Frugality and if you’re interested in hosting, please don’t hesitate to contact me. If you’d like to contribute to the third Festival, to be hosted by the inimitable Dawn of Frugal for Life, please use this spiffy submission form from the Conservative Cat or this convenient submission form from BlogCarnival.

festival of frugality

Stores have ramped up today, the first shopping day after Christmas, by offering ridiculously marked down deals. It’s not uncommon to see things 75% off at prices even the most frugal would jump at but remember this helpful tip: It’s not a deal if you didn’t need it. Once you identify the difference between need and want (you don’t need a leather coat, you want it, you can make do with the non-leather jacket you have now) then you’ll realize you didn’t need that new widget that’s now 50% off.

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I’m from New York and we don’t say we’re on holiday like the Brits but I thought it sounded funny and gave me an air of classic nobility. Anyway, my grandfather is flying from Taiwan to Los Angeles so we’re going out to California to meet up with him and practically ever other state-side relative I have on that side of the family. I’ll be away with potentially zero access to the internet from the 25th until the 31st. I’ve posted a few articles in advance (some timely end of year tax things), though I’ve tried to keep away from the personal finance stuff a little because it is the holidays after all and wish you all happy holidays and a prosperous start to the new year.

One of the cornerstones of a solid personal financial plan is setting up an adequate emergency fund and the general advice out there is to contribute as little as 3 months and as much as a year’s worth of monthly expenses. My own personal opinion is that 3 months is probably an adequate amount for an emergency fund for me but then again, I’m willing to accept financial risk (I don’t carry collision or comprehensive coverage as part of my automobile coverage) as long as the savings are high enough.

When you’re deciding on how much to contribute you should look at your personal situation. What’s the purpose of the emergency fund? Is it to help weather a period of unemployment or do you want a fund you can tap into in case you wreck your car or have a medical emergency? Understanding whether it’s a long term disaster you want to prepare for or something more short term will lengthen or shorten the window of emergency coverage you need. If you’re in an industry with a high rate of employee turnover and you’re concerned your job won’t be there in six months, you want to prepare for that by saving as much as a year’s worth of expenses in an emergency fund. If you’re only keeping the fund around in the event of a emergency where your income won’t be affected, six months may be adequate.

The next step is to figure out where you’ll store your money. Ideally you want something liquid like your local savings or checking account, something you can reach as soon as physically possible. Secondly, you might want to consider using an Emigrant Direct or ING Direct account too. The principal is protected and you earn around 4% in interest while the money’s in there. You may also opt to go with laddering CDs if you predict you won’t need the money for a few months. For example, if you have 12 months worth of expenses saved up then you can probably ladder it in a way that half the money (the second six months) is earning interest while you’re spending the first six months.

Personally, my emergency fund right now is barely half a month’s expenses because I just raided it to pay off my second mortgage. With credit cards, I have at least a one month grace period in the event there is an emergency (such as the $800 bill to repair mother nature’s wrath) and because I feel that I’m in a low turnover industry so my job is pretty safe. The intent of my fund is to cover major house problems (appliances breaking down?) or unforeseen medical emergencies.

(Image by meddic99er)