How to Beat Travel Fees Big and Small

Travelers have been complaining about airline fees for booking, itinerary changes, and checked baggage for years. But now airlines seem to have a fee for almost everything – Wi-Fi, extra leg room, and more. “Anything that some might consider a perk, there’s now a fee for that,” says Rick Seaney, co-founder of FareCompare.com, a travel-planning website.

Even low-fee carrier Southwest Airlines added a $40 fee in January for passengers who want to be among the first 15 people to board their plane. It has also raised its “EarlyBird” check-in for slightly less exclusive priority boarding from $10 to $12.50.

Extra fees from airlines and hotels often aren’t disclosed when you book a trip. But more transparency may be on the way. In November, the Federal Trade Commission sent a warning letter to 22 hotel operators telling them to disclose “resort fees” in their total price. And this month the Department of Transportation expects to release a proposed rule that would require airlines to provide fee information to travel agents so that consumers can compare fees amount carriers and pay for optional services when they book flights.

Until then, here’s what to do to avoid certain fees.

1. Airline extras.

The fees most likely to aggravate you are those for changing your ticket and for checking your bags. Change fees typically run $75 to $150 for domestic flights and $200 for international trips. Your first checked bag typically costs $20 to $25 on domestic flights and is free if you fly internationally. But if your checked bags weigh too much, you’ll get slapped with overweight fees of $25 to $200. You might also pay fees of $10 to $35 to book by phone, up to $99 for advance seat selection, and $10 to $199 for extra leg room. If those aren’t bad enough, Spirit Airlines charges up to $50 for a carry-on, and Virgin America has a $10 fee for pillows and blankets.

What you can do. Travel light. Or fly a low-fee airline, such as JetBlue or Southwest. JetBlue allows you one free checked bag; Southwest gives you two. If you need to check a bag or pay for a carry-on, see whether there’s a discount for prepaying on the airline’s website.

Check your airline’s luggage fees and weight limits. For example, United charges $100 to $200 (depending on your destination) for a checked bag weighing from 51 to 70 pounds; Hawaiian Airlines charges $50 for travel outside Hawaii. Complicating things, overweight fees kick in at just 41 pounds on Spirit and Allegiant Air.

You might avoid some fees if you charge your travel to an airline credit card. The cards often carry annual fees of $40 to $100, but many waive them in the first year. The perks they typically offer – priority boarding, free checked luggage, car-rental insurance, travel insurance, and access to airport lounges – can more than make up for the annual fee.

2. Hotel Add-ons

Once you arrive at your destination, you might get hit with “resort fees” tacked onto your hotel bill at checkout to the tune of $12 to $40 per day. Those fees can cover services such as access to a pool, gym, or business center; daily newspapers; or making “free” local calls – whether you use the services or not.

What you can do. Try negotiating with the hotel clerk to remove or reduce the extra fees. Or stay at a hotel that doesn’t charge them in the first place. Mid-tier chains such as Courtyard by Marriott, Hilton Garden Inn, and Hyatt House typically offer free Wi-Fi, parking, gyms, pools, and business centers.

Joining a hotel loyalty program or getting a hotel credit card can score you free amenities. For instance, Omni Hotel group’s complimentary loyalty program gets you free Wi-Fi, morning beverage service, newspapers, clothes pressing, and bottled water on your arrival.

This article was originally published in the May 2013 issue of Consumer Reports.

The Best and Worst Things to Buy in June

June is the month with the longest daylight hours of the year, which for the deal-hunter means that you have even more time to shop! But before you let the increasingly warm weather convince you to buy less-than-stellar deals, check out our latest buying guide. We searched through our extensive archives of sales, promotions, coupons, and daily deals to sort the fact from fiction when it comes to getting the best deals in June.

Beef Prices Are on the Rise

Unfortunately for anyone getting ready for a season of grilling, beef prices have risen to historically high prices. According to The Wall Street Journal, “Retail beef prices are widely expected to set new records in coming weeks after wholesale prices hit an all-time peak this past week.” The increases are due to years of drought that have thinned cattle herds, a problem that can’t be easily reversed. Maybe take this opportunity to throw leaner foods like chicken and (gasp!) veggie burgers on that gas or charcoal grill.

Grill Deals Will Spark in July

Of course, we can’t mention grilling without pointing out that deals on grills themselves will be less than thrilling in June. You’ll get a better discount if you wait for July 4th promotions. According to our deals from last year, you could save as much as $200 or more on a mid- to high-end grill if you wait until July.

The Month is Front-Loaded with Tool Deals

Naturally, there will be tool sales in June to entice shoppers to buy turbo charged something or other for dear old dad on Father’s Day. In fact, about two-thirds of last year’s Editors’ Choice offers on tools in June came before the holiday. But if you’re looking to buy something substantial, and there’s no Father’s Day deadline, consider waiting until late October or November when the discounts are consistently deeper.

Hold Off on Apple Purchases

Apple will be holding its annual developers conference in June, and while CEO Tim Cook has hinted that new hardware won’t come until the fall, one thing is certain: you’ll be kicking yourself if you buy a new iPhone or MacBook if these items get refreshed this month. If that happens, then we’ll see price cuts on previous generation models, both new units (at resellers like MacMall) and refurbished devices (from Apple directly). If Apple only unveils iOS 7 at the conference, then go ahead and buy the Cupertino device of your dreams — unless you want to wait another few months.

This article was written by Lindsay Sakraida and originally published at dealnews.com on May 28, 2013. To read the entire list of buys, click here.

3 Skills to Teach Your Teen About Money

As they regularly remind us, teens know everything. Money is no exception.

In a recent Capital One 360 poll, 87% of 12- to 17-year-olds reported knowing at least an average amount about managing finances. Or not. That study also found that 24% of them think a debit card is used to borrow cash.

And a Charles Schwab poll found that fewer than a third of teens understand how credit card interest works and 4 in 10 can’t budget.

Parents’ money talks with high schoolers tend to start and end with “How much do you need?”

“The more you teach your kids before they go off on their own, the better prepared they are,” says Daniel Hebert of Jump$tart, a coalition promoting financial literacy.

The most critical skills to impart:

1. Managing on a limited budget

The key word is limited. “Teens need to know that money is finite,” says Anton Simunovic, founder of ThreeJars.com, a money-management site for kids.

How to build the skill. Figure out what you’re spending for junior’s clothing, entertainment, and gifts for friends. “Then give that amount to your kid and let him pay for those things,” says Jayne Pearl, author of a series of books on kids and money.

Set teens up with a checking account and debit card, and when they mess up, resist the urge to bail them out.

“It is important to make them responsible for their financial actions while the consequences are not serious,” says Jeffrey Arnett, a psychology professor at Clark University and co-author of When Will My Grown-Up Kid Grow Up?

2.  Paying yourself first

“You want to get your child in the habit of putting something aside,” says Stephanie Bell, spokesperson for Junior Achievement USA.

A good goal is to stash 10% of every allowance, paycheck, and birthday check. And nothing provides better motivation than an understanding of how money makes money — a.k.a. compound interest.

How to build the skill. Use an online calculator to show your teen how compounding works, says Beth Kobliner, author of Get a Financial Life. (Try the Simple Savings Calculator at Bankrate.com.) You might also sweeten the pot by offering to match her with, say, $25 for every $100 she banks.

3.  Steering clear of credit debt

Just 9% of college kids pay their credit cards off every month, a study in the International Journal of Business and Social Science found. Help your child understand the value of being in that minority.

How to build the skill. The next time you pay with plastic in your child’s presence, point out that it’s borrowed money and that compounding works against you when you carry a balance. Later, show her your bill, specifically the box illustrating how long it will take to pay off and how much it will cost if you fork over only the minimum.

Make sure she understands, too, that you’re “graded” on your use of credit; regularly paying late, for example, could result in a higher rate on a car loan. When she’s ready for her own card — around age 21 — “ask for a $500 limit,” says Hebert. Well prepared as your child may be, it never hurts to use training wheels the first time out.

This article was written by Karen Cheney and originally posted at money.cnn.com on May 15, 2013.

 

Choosing the Right Mortgage Loan: 15 or 30 Years?

When my husband and I decided to refinance our home earlier this year, we were faced with the major decision all home loan borrowers face — 15-year mortgage or 30-year mortgage?

Whether you are buying a home for the first time or whether you’re an old pro at the refinancing game, you need to determine whether it makes more sense for you to get a 15-year mortgage or a 30-year mortgage.

While you will also need to decide whether you want a fixed rate loan or an adjustable rate loan, the first big decision you make has to do with the length of your mortgage term.

In the end, the decision is usually made based on monthly cash flow.

15-Year Mortgage

The biggest advantage of the 15-year mortgage is that you can save money over the life of your home loan. Not only do you have the loan for a shorter period of time, but you also usually have a lower interest rate.

Consider a $200,000 loan. A 15-year mortgage has a rate of 2.6% fixed, and a 30-year mortgage has rate of 3.4% fixed. This calculation doesn’t include PMI, taxes, insurance, and other costs that might come with a mortgage.

With a 15-year mortgage, your total on that loan would be $241,742.46. The total on a 30-year mortgage would be $319,306.49. You can see that you save a great deal by choosing a 15-year mortgage. Plus, you pay off the mortgage much faster. It can be a great choice for someone who is interested in saving money and paying off the house as soon as possible.

The main downside with a 15-year mortgage is that you have a higher mortgage payment.

In our scenario above, the 15-year monthly payment is $1,343.01. That, of course, doesn’t include your other costs, from property taxes and insurance to utilities and maintenance. Compare that to the $886.96 monthly payment that comes with a 30-year mortgage.

30-Year Mortgage

30-year mortgages are popular mainly because they are more affordable on a monthly basis. When you get a 30-year mortgage, you can usually shave off between $300 and $500 a month, depending on the interest rate and the size of the mortgage.

For someone just starting out, a 30-year mortgage is desirable because it makes the home more affordable. Many couples buying a first home have a hard time affording the monthly payment associated with a 15-year mortgage.

Payment Flexibility

Another advantage of a 30-year mortgage is that you have a certain degree of flexibility — even if you can afford the payments associated with a 15-year mortgage. When my husband and I refinanced our home, we decided to go with the 30-year mortgage, in spite of the fact that we could afford a 15-year loan. We realized that we have a certain amount of payment flexibility with a 30-year loan. This is comforting, since our income is variable.

We can make 15-year loan payments with our 30-year mortgage. So, even though we have a lower monthly payment, we can pay more each month, applying the extra toward the principal. If you are interested in paying off your loan as quickly as possible, there is nothing preventing you from making payments as though you have a 30-year loan. If you run into financial trouble, you can stop making your extra payment, and return to the payment that you agreed to.

With a 15-year mortgage, you are stuck with that higher payment — no matter what. If you miss payments because of financial difficulty, you run the risk of foreclosure. If all you need is $300 or $400 of breathing room for the month, and you are used to making 15-year payments on your 30-year mortgage, you have that option to cut back without jeopardizing your credit rating or your home.

How to Decide Which Mortgage to Get

Whether you choose a 15-year mortgage or a 30-year mortgage, it’s important to make sure that you can handle your payments right now. Even the lower payments associated with a 30-year mortgage can be a problem if the mortgage is just barely affordable for you.

In some cases, it’s a straightforward look at the numbers. Can you afford the monthly payment with a 15-year mortgage? If not, you have little choice but to go with the 30-year mortgage. You can refinance to a 15-year mortgage, with a lower rate and a higher payment, after your income situation improves.

However, if you have income flexibility, weigh the pros and cons. Decide what is most important to you. If paying off your mortgage as quickly as possible is the most important consideration to you, a 15-year mortgage will force you into disciplining yourself to make those payments. At the same time, though, a 30-year mortgage can allow you the same ability (just make extra payments) while providing you with a level of flexibility in your payments.

Another consideration is whether or not you really need to pay off your mortgage so quickly. While it sounds nice in theory to pay off your mortgage in 15 years, while building up equity, for many that isn’t a particular concern. This is especially true in a low interest rate environment like we are experiencing right now. If you can lock in a low interest rate for 30 years, and then invest the money you are saving each month over the 15-year payment, you can actually come out ahead, depending on market conditions.

Bottom Line

For those who want to maintain cash flow flexibility, the best option is a 30-year mortgage. A certain amount of peace of mind comes with a 30-year mortgage, too, since you know that you might be able to handle a payment if an emergency strikes. However, if you want to lock in a lower interest rate, paying less and getting out of your mortgage sooner, a 15-year mortgage might be the better choice.

This article was written by Miranda Marquit and originally published at wisebread.com on May 22, 2013

6 Things You Think Add Value To Your Home – But Really Don’t

Every homeowner must pay for routine home maintenance, such as replacing worn-out plumbing components or staining the deck, but some choose to make improvements with the intention of increasing the home’s value. Certain projects, such as adding a well thought-out family room – or other functional space – can be a wise investment, as they do add to the value of the home. Other projects, however, allow little opportunity to recover the costs when it’s time to sell.

Even though the current homeowner may greatly appreciate the improvement, a buyer could be unimpressed and unwilling to factor the upgrade into the purchase price. Homeowners, therefore, need to be careful with how they choose to spend their money if they are expecting the investment to pay off. Here are six things you think add value to your home, but really don’t.

1. Swimming Pools

Swimming pools are one of those things that may be nice to enjoy at your friend’s or neighbor’s house, but that can be a hassle to have at your own home. Many potential homebuyers view swimming pools as dangerous, expensive to maintain and a lawsuit waiting to happen. Families with young children in particular may turn down an otherwise perfect house because of the pool (and the fear of a child going in the pool unsupervised). In fact, a would-be buyer’s offer may be contingent on the home seller dismantling an above-ground pool or filling in an in-ground pool.

An in-ground pool costs anywhere from $10,000 to more than $100,000, and additional yearly maintenance expenses need to be considered. That’s a significant amount of money that might never be recouped if and when the house is sold.

2. Extensive Landscaping

Homebuyers may appreciate well-maintained or mature landscaping, but don’t expect the home’s value to increase because of it. A beautiful yard may encourage potential buyers to take a closer look at the property, but will probably not add to the selling price. If a buyer is unable or unwilling to put in the effort to maintain a garden, it will quickly become an eyesore, or the new homeowner might need to pay a qualified gardener to take charge. Either way, many buyers view elaborate landscaping as a burden (even though it might be attractive) and, as a result, are not likely to consider it when placing value on the home.

3. High-End Upgrades

Putting stainless steel appliances in your kitchen or imported tiles in your entryway may do little to increase the value of your home if the bathrooms are still vinyl-floored and the shag carpeting in the bedrooms is leftover from the ’60s. Upgrades should be consistent to maintain a similar style and quality throughout the home. A home that has a beautifully remodeled and modern kitchen can be viewed as a work in project if the bathrooms remain functionally obsolete. The remodel, therefore, might not fetch as high a return as if the rest of the home were brought up to the same level. High-quality upgrades generally increase the value of high-end homes, but not necessarily mid-range houses where the upgrade may be inconsistent with the rest of the home.

In addition, specific high-end features such as media rooms with specialized audio, visual or gaming equipment may be appealing to a few prospective buyers, but many potential homebuyers would not consider paying more for the home simply because of this additional feature. Chances are that the room would be re-tasked to a more generic living space.

The Bottom Line

It is difficult to imagine spending thousands of dollars on a home-improvement project that will not be reflected in the home’s value when it comes time to sell. There is no simple equation for determining which projects will garner the highest return, or the most bang for your buck. Some of this depends on the local market and even the age and style of the house. Homeowners frequently must choose between an improvement that they would really love to have (the in-ground swimming pool) and one that would prove to be a better investment. A bit of research, or the advice of a qualified real estate professional, can help homeowners avoid costly projects that don’t really add value to a home.

This article was originally posted at forbes.com on May 19, 2013. To read the entire list, click here.