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Wednesday October 20th 2021

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Ebenezer Land

Ebenezer Land

By DWIGHT HOBBES “Affordable housing...is a misnomer of sorts: affordability implies the ability to pay for something given your budget”, think tank Cato Institute noted in a 2016 blog. Anyone of modest means looking for someplace to live who has run into what’s being marketed as “affordable” can tell you just what a misnomer that is. It begs the cynical retort, affordable to whom? On top of which, rents and income have gone in opposite directions for some time and the contagion certainly didn’t help, putting people out of work left and right. Ebenezer Park Apartments (photo courtesy of Ebenezer) Enter Ebenezer Park Apts., which doesn’t solve that problem for everyone, but does give the elderly and disabled, including deaf tenants, a sorely needed break. Starting with the wallet, but, importantly, not ending there. Paramount, it goes without saying, is the difference between dispiritedly perusing ads for places priced out of your range and being asked one-third of your income – whatever that happens to be. Plus, there’s no application fee. It defies reason as how companies and organizations, whose selling card is affordability, charge at least $35, non-refundable, with a straight face just to fill out an application. Claiming it’s to cover the background check is just so much bilge water. Ebenezer can find out whether you got booked for loitering and doesn’t pocket a dime in the process. We’re not talking public housing, which generally, how little you pay, is no bargain. Shelterforce.org documents, "Public housing , to a cycle of government neglect and under-funding which, in turn, led to poor construction design, inadequate maintenance, racial segregation, stigmatization, and further concentration of the very poor." In parts of Minneapolis, it also fosters veritable drug and prostitution franchises. Conversely, Ebenezer is a comparative oasis. Maintenance, something no [...]

Are You Letting Expenses Rise to Meet Income?

By MARY ELLEN KALUZA I once heard the phrase: Expenses rise to meet income. "Not me!" I thought. But, to be honest, even a pathologically frugal person like me lets expenses rise with income. Case in point: For most of my life (we’re talking quite a few decades) I watched broadcast television and library videos on hand-me-down TVs. Cable was not in the budget as a single parent. After my nest emptied and I had only myself to support, I envied friends and the great stuff they were watching on internet streaming sites. So, I started to pay for streaming. But, because my TV was so old and dated, I had to move off the couch in the living room to a hard chair in front of the computer screen to watch streaming video. I was okay with that, but my cat was not. We had a lot of disagreements about what was comfortable and what wasn’t. So I finally paid money for a new TV for the first time in my life. (Don’t worry - I didn’t completely go off the rails; it is a modest TV). We were back on the couch for TV time, and harmony was restored to the household. But, of course, that meant I needed to buy other devices, like a digital antenna and some box to get the internet to my TV. More expenses. I could argue all this spending was justified to keep the cat happy, which makes my life easier. But the truth is, I didn’t need to pay for entertainment in the first place. There is still plenty to watch on broadcast TV, and my library is only two blocks away. Why wouldn’t you want to let expenses rise to meet income? Retirement. I have a cousin who always put her pay raises into her retirement account instead of spending it. Because of her diligence, she retired early with her husband and they are enjoying life very much.Unforeseen events. Nearly 70% of Americans have less than $1000 in savings. Almost a quarter don’t even have a savings account. It doesn’t take much of an emergency to put a family into a [...]

Are You Letting Expenses Rise to Meet Income?

By MARY ELLEN KALUZA I once heard the phrase: Expenses rise to meet income. Not me!, I thought. But, to be honest, even a pathologically frugal person like me lets expenses rise with income. Case in point: For most of my life (we’re talking quite a few decades) I watched broadcast television and library videos on hand-me-down TVs. Cable was not in the budget as a single parent. After my nest emptied and I had only myself to support, I envied friends and the great stuff they were watching on internet streaming sites. So, I started to pay for streaming. But, because my TV was so old and dated, I had to move off the couch in the living room to a hard chair in front of the computer screen to watch streaming video. I was okay with that, but my cat was not. We had a lot of disagreements about what was comfortable and what wasn’t. So I finally paid money for a new TV for the first time in my life. (Don’t worry - I didn’t completely go off the rails; it is a modest TV). We were back on the couch for TV time, and harmony was restored to the household. But, of course, that meant I needed to buy other devices, like a digital antenna and some box to get the internet to my TV. More expenses. I could argue all this spending was justified to keep the cat happy, which makes my life easier. But the truth is, I didn’t need to pay for entertainment in the first place. There is still plenty to watch on broadcast TV, and my library is only two blocks away. Why wouldn’t you want to let expenses rise to meet income? Retirement. I have a cousin who always put her pay raises into her retirement account instead of spending it. Because of her diligence, she retired early with her husband and they are enjoying life very much.Unforeseen events. Nearly 70% of Americans have less than $1000 in savings. Almost a quarter don’t even have a savings account. It doesn’t take much of an emergency to put a family into a [...]

YOUR FIRST APARTMENT!

By MARY ELLEN KALUZA It's that time of year – moving vans are everywhere. Eighty percent of moves happen between April and September. A significant number of those moves are young people leaving the nest for the first time. Many life lessons await them! Some lessons will be painful. Avoid the pain with a little bit of knowledge. CHOOSE YOUR ROOMMATES WELL Everyone will be equally liable for the whole rent, not just their portion. Are the roommates dependable?Do you share a similar lifestyle?What about smoking or drinking?    Frequent guests?How will you resolve conflicts?     IS IT AFFORDABLE? The rule of thumb is to keep housing expenses at 30 percent of your income. But, this is just a guideline and not necessarily the best measure of affordability. If you have a decent income, the remaining 70 percent of your income can be substantial. If you are earning minimum wage, the remaining 70 percent isn’t much. Spend some time on your budget. Know your monthly net income and recurring expenses (phone, transportation, insurance, etc.). Track spending on food and entertainment. Can you cut some expenses to afford rent? Consider a different neighborhood? More roommates? CHECK YOUR CREDIT REPORT Most landlords use a screening service for prospective tenants, which includes your credit, your rental history, and your criminal background. They may have credit score thresholds to be considered for a rental. Be proactive by getting your free credit reports from www.annualcreditreport.com, to check for errors and other issues that drag your score down, before you pay the application fee to the landlord. If your rental application is denied based on what is in your screening report, you have a right to a free copy of the report. FIND THE RIGHT PLACE Is the apartment convenient for work, school, public transportation?What is the parking situation?What are the utility costs?Is the building secure? Can you safely [...]

But I Don’t Wanna Budget!

But I Don’t Wanna Budget!

By MARY ELLEN KALUZA I understand. Having a “budget” sounds restrictive, like a punishment. What if we call it something else, like a “spending plan”? Does that seem more palatable?  Planning the money you have coming in and going out is really all about being in control. YOU are choosing where your hard-earned dollars are going, not the estimated 6000 to 10,000 advertisements we see each day! (That's double what it was in 2007, by the way.) With that much pressure on us, it takes some effort to keep that control.  Where to start? Know how much money is coming in. This is the net income – after taxes and other deductions. You'd be surprised how many people don't know that number. (Frequently, they also carry expensive credit card debt.) Subtract your Must Pay expenses – housing, utilities, loan payments, insurance – think of those things that will result in something bad happening if you didn't pay them. Subtract your Must Save For periodic expenses – car repair/maintenance, home repair/maintenance, taxes not subtracted from income, medical bills, emergencies, etc. What is left? This is where the hard decisions come in - what do you need and what do you want. We need food and clothing. But how much food and clothing? And what kind of food and clothing? You may need a car, but what kind of car? Do you need a bigger screen TV? You get the idea. How to manage it? Divide it up into piles. Set up automatic deposits or transfers to the piles (aka accounts).Your Must Pays go into a separate checking or savings account, or on a special debit card. This card stays at home, by the way. Your Must Saves go into a separate savings account. (Calculate annual amounts and divide by 12 – this is your monthly deposit to that savings account.) Some of the remaining amount can be made into sub-piles, if desired. Want a vacation, for example? Save for it in its own [...]

What’s Your Score?

By MARY ELLEN KALUZA https://www.lssmn.org/financialcounseling/blog/credit-credit-report/build-and-improve-your-credit-score Americans are obsessed with their credit score - checking it daily, paying for apps, even sending screenshots to potential mothers-in-law. The score is a source of pride and boasting. It can also be a source of shame and low self-esteem. It feels like that 3-digit number defines who we are. Have a good score? You're golden. Have a distressed score? You're tarnished.  Your credit score is based on information in your credit reports. Essentially it is your grade on what has been reported. That grade will determine if you can rent or buy a home, get a phone plan, get a job or promotion, have a decent interest rate on your car loan, how much you pay for insurance, and who will marry you. I tell my daughter she doesn't marry anyone until I see their credit report. Mostly I mean it as a joke, but one partner's poor credit score can hold the couple back from pursuing goals. It is not a joke that life is hard and expensive with a low credit score.  The whole idea of buying and selling information about potential borrowers' creditworthiness goes back to the late 1800's. The score we all know and love or hate – FICO – came into widespread use quite recently in the early 1990's when the practice of risk-based lending, charging higher interest if the borrower was deemed a higher risk, took firm hold in the lending world. Theoretically, lending decisions based on the score are made without interference of personal biases.  The scoring system eliminated some, certainly not all, of the unfairness and prejudice that goes into a decision to extend credit or not. The score does not tell the backstory – was there a job loss? An illness? Death in the family? Divorce? Youthful ignorance? And, it does not address the persistent inequities of colonization and slavery that give great advantages to some and rob others [...]