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Though I’ve lived in the D.C. area for the past 5 years, I still haven’t bought a home here. It just hasn’t made sense yet, especially since I’m not sure how many more years I’ll choose to stay in this area. The properties I do own are located back in Texas and stay consistently rented out. The two of them combined cost less than one comparable home here in northern Virginia, and that’s only talking about the actual property value, so I’m quite content with the arrangement for now.

I’m not yet sure if I’ll ever move back to the land of affordable homes. Either way, one thing is for sure: it’s hard to discuss the cost of setting down roots in D.C. without talking about property taxes. The biggest surprise, though? While it’s exponentially more expensive to buy a home here versus Texas, the property taxes are actually quite a bit lower!

This is pretty fresh in my mind right now, too, as I received a tax assessment notice in the mail just yesterday. For the third year in a row, one of my properties’ values is climbing up again. Last year, for instance, it jumped $5,000; this year, it’s climbing another $8,000. While this might be good news if I were looking to sell sometime soon, it’s not good news for a long-term rental property. A higher assessment, of course, means higher property taxes. And higher property taxes mean less money in my pocket.

Don’t Blindly Pay, Especially With an Increase

With high or climbing property tax rates, it’s worth the effort to try to reduce those rates, if at all possible. After all, when filing personal income tax returns, taxpayers look for every deduction and credit, often saving hundreds or thousands of dollars. However, most homeowners simply accept their property tax bill without questions, even though it could easily be a bigger bill than their income taxes.

Related: 30 Things to Budget for When Buying a Home

With the stress of income taxes done and behind us, now is the perfect time to take a look at your property value and the accompanying tax bill. The amount of property tax you owe is based on an assessed value of your house, and local governments typically assess properties every 18 to 36 months. This means that, depending on where you live, your assessment could have been performed when the market was at a peak. Add to it that the average assessments lag behind current values by about three years, and there is plenty of room for real-time error.

What If You Don’t Agree With the Assessment?

Homeowners could save thousands of dollars with a successful appeal if they only set aside a little bit of time to dispute the bill.

Of course, we’d like to think that our home values continue to increase because we want to feel that the decision to buy a home will result in a good investment over time. When it comes to assessments for tax purposes, though, it’s better to have the lowest value possible. Review your recent assessment, and consider these factors for appeal:

  • Comparable home prices. Look at actual sales of houses in your area. Knowing the current market is a key to determining a fair assessment for your house.
  • Age of the assessment. If the assessment is from over a year ago, comparable homes in your area might have sold for less money more recently.
  • Room count and layout. Most assessments are accomplished without definite knowledge of your house’s layout. There could be mistakes in your assessment that result in a higher value on paper, like too many bedrooms. If your basement is unfinished, you could also argue for a lower assessment
  • Amenities. When assessments are based on comparable home prices, you could be unfairly taxed if your home doesn’t have the same amenities as your neighbors’ houses. Don’t have a pool like the houses surrounding yours? Then, you shouldn’t have the same property tax bill.

After you receive notice of your newest assessment, review it quickly and appeal right away. You’ll be filing what’s called a Notice of Protest with your county’s ARB, or appraisal review board. Even if you would prefer to resolve your concerns informally — many appraisal districts will work with you directly to review and resolve your objections — filing this notice in time is still important, as it retains your right to escalate your dispute to the ARB at a later date. You typically have 30 days from the date the appraisal district mailed your new assessment notice to file your dispute.

You’ll want to review the property record card and look for inaccurate details. You can also take photographs of relevant features of your house and look at documentation for comparable home sales in your neighborhood. Make notes of any improvements you have made, as well as anything that may have depreciated your home’s value (a foundation shift resulting in structural damage, for instance, or mold remediation).

The ARB will typically give you about 15 days’ advance notice of your hearing, though you can occasionally postpone this to a later date, if needed.

When you have your hearing, bring all this documentation to support your case, along with copies to pass along to the board members and district representative. When presenting your case, try to keep emotional pleas out of your argument, and just stick to the facts. Firmly but respectfully present your reasoning, and hope for the best.

If you are unhappy with the decision of the district or the appraisal board, you can take your case even higher. In many states, you have the option of appealing to the state district court in the county where your property is located. Be sure to check your individual appraisal district’s options, by looking online or calling the local tax assessor-collector’s office.

It Doesn’t Hurt to Try

Authorities are aware that most assessments are inaccurate, but they won’t do anything about it unless homeowners speak up. Some homeowners are unsuccessful with the first appeal and simply give up — however, I would suggest that pressing on is worth the fight, especially if you’re paying high (or markedly increasing) taxes.

The county certainly isn’t going to do you any favors; if you want to lower your tax bill, it’s going to take some effort. The savings from a successful appeal could be substantial, though, so don’t give up until your home’s value is accurately assessed.

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National averages for credit card and other consumer debt can be a good barometer of consumers’ financial capacity and goals. For instance, when debt decreases, Americans, as a whole, may be spending less and saving more. Of course, that’s a good thing.

So, when SmartAsset released its average credit card debt study recently, we took notice. The survey looked at median individual income and credit card data from 2006 to 2016. It even broke down the data by state!

trend

What did the survey find? Here are some of the topline results and what they might mean for consumers like you:

Americans were dropping credit card debt… but now they’re reversing that trend.

The data show that from 2006 to 2015, the average total credit card debt went from about $3,175 per person to $2,800 per person. Total credit card debt dropped — in every region except Virginia, Maryland, and Washington, D.C. — during this time period.

What does that 11.6% decrease mean? It’s hard to say exactly. But it could have been a result of the financial crisis, and people understanding how dangerous credit card debt can be during a time of personal financial upheaval.

During this time, though, there was a peak in the average credit card debt. In 2008, the average debt was $3,670, and the average American had debt equal to about 14% of their annual income! From that high point, we started cutting back on credit card debt quickly and efficiently. This is definitely a good thing.

So for several years, Americans were dropping debt at a significant rate. But then, a new trend happened.

The average credit card debt bottomed out at $2,730 in 2014, bouncing back up to $2,800 in 2015. Over this same time period, the total national credit card debt rose from $733 billion to $799 billion. So, is this the new normal?

It’s hard to say. But the report speculates that the Great Recession incentivized Americans to lower their credit card debt. But once the recession turned around, Americans seem to have forgotten the struggle and gone back to their old ways… taking on significant amounts of credit card debt.

What does it meant for consumers?

Boiling complex statistics, in a survey like this one, down to a few talking points is risky. The challenge is to avoid reading too much into the results. With that said, I think there are a few lessons that financially savvy consumers could take away from this study.

 

It’s all too easy to go back to bad habits.

What we see here in these trends is that, when given a big enough push, Americans are capable of buckling down and paying off debt. In some states, credit card debt levels shrunk by 30% or more, during and right after the Great Recession!

Necessity tends to breed discipline, in finances as in everything else. But when that necessity is no longer spurring you on, what happens? It’s way too easy to go back to former bad habits.

Time will tell whether the recent uptick in debt levels is a trend that will continue. But it does show that once the worst of the crisis is over, people may be willing to slide back to where they were before.

If you really want to change your habits, whether in the realm of personal finance, your health, or elsewhere, you have to keep going. And that means even after the crisis that spurred your change has passed!

 

We should all be prepared for the worst, at any time.

If consumers had known beforehand that the Great Recession was coming, do you think they would have had thousands of dollars in credit card debt lying around? For many, probably not!

It’s easy to live large when things are good, and not to worry too much about things like credit card debt. After all, you can afford the payments, so what’s the big deal? The problem is that you never know what’s just around the bend.

Illness, stock market crashes, job loss, and other disasters can strike at any time. While you don’t want to live in a doom-and-gloom mindset, it’s best to be prepared. And, financially, this means being as debt-free as possible and having emergency savings available.

 

Focusing on staying out of credit card debt is still important.

Personal finance blogs like this one have been around for decades now, but many people still need to go back to the basics. One of those basics is the importance of paying off credit card debt.

Sure, sometimes taking on credit card debt can be justified. But it’s important to pay it off as quickly and efficiently as possible. Otherwise, you run the risk of trying to pay down such debt while you’re already in the middle of a crisis.

So, what’s your story from the Great Recession? Did your credit card debt go down? Are you letting it slide back up again? Tell us in the comments.

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We’ve always been fans of Quicken here at Consumerism Commentary, and we’ve got a lot of reviews floating around to prove it. But you don’t really need reviews of Quicken from five years ago. You just need to know what to expect from the latest version: Quicken 2017.

Here, we’ll give you the highlights, and we’ll also talk you through the basics of using this interface.

quicken guide

The Highlights

Quicken still provides everything you’ve come to expect, including the ability to track all of your money in one place. If you’re big on tracking your net worth, it’ll help you do that. It tracks both assets and debts, and it will also track investments. (Though if you’re a serious investor, you may want to upgrade to Quicken Premier.)

What’s new with the 2017 version? Not a whole lot has changed, but there are a couple of upgrades you should know about, including:

  • Mobile: Now you can download the Quicken app to track your investments and budget on the go. The mobile app has a nice interface with everything you’ll find in the desktop version. Plus, you can add budget line items as you spend.
  • Advanced Search: You can find mobile transactions more easily with the mobile advanced search feature.
  • Refresh: Quicken got a refresh this year. The screen looks nicer, and the interface is a little more user-friendly. It’s not a major overhaul, but it’s easy on the eyes.
  • Zillow: You can connect with Zillow to automatically import your home’s estimated value. While Zillow may not be the most accurate option if you’re actually getting ready to buy or sell a home, this is a simple way to get a ballpark idea of your home’s value when calculating your net worth.
  • Alerts: You can get alerts sent to your phone or email inbox when bills are due or when you’re about to go over your budget.
  • Receipt Storage: Need to track expense receipts, but tired of paper clutter everywhere? You can snap photos of your receipts and store them with the mobile app.

Related: How to Track and Manage Receipts with Google Docs

Once you get set up, keeping track of everything in Quicken is relatively simple. Here’s what it all looks like:

First, import your accounts

As with other popular budgeting and financial tracking software, Quicken will automatically sync with your bank and credit card accounts, as well as your investment accounts. This makes it easy for you to track transactions without having to enter them manually.

In fact, the very first thing Quicken asks you to do after you enter your credentials is to sync a new account. To make it happen, you’ll just need your account’s login information. You can import all sorts of accounts, even to the basic version of Quicken, though investment tracking is more robust with the higher-level versions.

Next, check your recent transactions

When your accounts are imported, it can seem a little overwhelming at first. Quicken automatically categorizes your transactions, but you’ll likely have to go through a recategorize many of them. Quicken will give you the last thirty days’ worth of spending information to work with.

I do like how the system breaks everything down graphically. Once you set all of your transactions into categories, you can see what percentage of your budget goes to each category, and check out a corresponding chart breaking down your spending. It looks like this:

Quicken 1

You can see that Quicken will alert you when there are uncategorized transactions. You can click into that directly to see those transactions. Then, you can sort your transactions by account, date, and type of spending (with or without taxes).

You can also click into spending categories to figure out which transactions Quicken has placed into which categories. Chances are you’ll want to change some of those if you’re a budgeting stickler!

Quicken 2

Related: A 10-Minute Budget That Actually Works

Try the bill reminder system

Once you’ve been in the spending category interface, you can use the bill system to remind you when your bills are due. It’ll look at your last two months’ worth of transactions and find recurring bills and their due dates. The system will also track any paychecks you have automatically deposited to your bank account.

Quicken 3

You can then set up the reminders, which will alert you when bills are due and project your checking account balances over the next 12 days, based on your upcoming income and expenses.

Quicken 4

Since it’s not accounting for one-off spending like groceries and gas, this balance isn’t very accurate. At least not for me! But it can be a helpful way to stay on top of your bills so you don’t miss any due dates.

Learn More: Track Your Cash Flow with Google Docs

You can also sign up to have Quicken actually pay your bills for you. This requires a validation of your bank account and a monthly payment of $9.95. Since many banks offer free bill pay services, this one may not be worth the additional spend.

Create a budget

As with other pieces of this interface, Quicken will automatically create a budget for you based on past spending. However, this spending is according to Quicken’s categorizations. If you think Quicken has gotten a few things wrong, it’s best to re-categorize your existing transactions before delving into the budget tab.

Once you do, though, you can get access to a quick budget that you can change from there. The budget interface now looks very similar to Intuit’s Mint.com, which features slider bars to show how close you are to the budget limit in each category.

Quicken 5

You can, of course, change the budget for each category depending on your preferences and needs. You can also look at the budget in terms of only certain bank accounts, toggling between transactions in each account on the left sidebar.

One of the interesting things about this budget interface is that you can run various reports. These come out as very nice, color-coded documents that you could print off or store electronically, for an over-time view of your personal finances.

You can run reports for a variety of scenarios, including spending by category, spending versus available budget, income versus expenses, or spending for the month versus average spending by category. These over-time reports will become more useful the longer you use Quicken, which gives it more data to pull from. But some of the reports look like this:

Quicken 6

These reports could be really helpful if you’re trying to meet specific financial goals, like reducing spending in a few categories or tracking your budget over time.

What about upgrades?

My review has been based on the Quicken Starter option, but there are other options currently available, too. Here’s a quick breakdown of what they offer:

Quicken Deluxe

Quicken Premier

Quicken Home & Business

Quicken Rental Property Manager

Is Quicken right for you?

Quicken offers a load of great features, and its new interface is definitely more user-friendly than the last version I reviewed in 2014. If you want a one-stop-shop for tracking all of your personal finance details — from budgeting to investments to debt — then Quicken may be a worthwhile investment.

With that said, I don’t think I’d pay for the basic version of Quicken when free tools like Mint.com can do basically the same thing. My personal preference for budgeting is YNAB, though it does come with a $5/month fee.

However, if you want to add investment tracking and detailed financial planning into the mix, Quicken Deluxe might be a good option for you. And, of course, if you run rental properties or a small business, you can’t go wrong with the robust business-oriented versions of Quicken.

So, tell us: do you think Quicken is the right option for your personal finance tracking needs?

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Overbooking ImageAs the entire world has likely seen by now, United Airlines removed Dr. David Dao from his Sunday evening flight, by selecting him at random and then dragging him off the airline.

While the United apology tour took a good 48 hours to get started, they finally came around and said they were very sorry for overbooking the flight, and they promised to do better next time. Chris Christie, governor of New Jersey released a statement that said Airlines should abolish the practice of overbooking to avoid situations like this in the future and has asked President Trump to consider the idea.

It’s time to separate the fact from the fiction.

United Flight 3177 Was Not Overbooked

Let’s get this out of the way first. The irony of this whole situation is that the United flight from Chicago to Louisville was not actually overbooked. The flight was full; however, the number of ticketed passengers equaled the number of seats on the plane, so the outrage about overbooking isn’t quite right.

United needed four seats opened on their plane to get crew members to Kentucky for work the following day, so they’ve chosen to hide under the “overbooking” policy. What happened here was that everyone who had a ticket was boarded; there were no additional passengers to board, and United decided to forcibly remove four passengers from the plane in order to board non-paying, non-ticketed employees.

The Process of Overbooking

When handled properly, the idea of overbooking makes sense for everyone. Allowing airlines to book 220 passengers for 200 seats may seem like a bad idea, but when you consider the economic principles behind it, the consumer and the airline both come out on top.  For example…

Assume Southwest has a 200-seat passenger plane and a flight on July 1st going from New York (JFK) to Florida (FLL). The flight is available for purchase six months in advance, and Southwest decides to make 200 seats available for purchase. By April 14th, the flight is sold out and taken off the board. All 220 passengers have confirmed tickets to board the aircraft in a few months, but the airline knows that 20 of those purchase agreements will not be honored.

A funny thing then starts to happen beginning May 1st. Every once in a while, a passenger calls up Southwest to ask to cancel or change their flight because their plans have changed. So one by one, couple by couple, family by family, the 220 tickets held for the flight on July 1st begin to dwindle. You have 218 down to 215, down to 210 and so forth. Then by June 30th, the day before the flight takes off, Southwest now has only 205 confirmed passengers for this flight.

On the day of the flight, Southwest is now tracking the number of ticketed passengers who check in, assuming 100% of the passengers that check in make their flights. Attendants show up at the gate. Boarding is about 15 minutes away from getting started, and the full count is in: 202 passengers have checked in for the flight. Three more people either didn’t make it to the airport on time or decided not to take today’s flight, leaving Southwest with a bit of a problem. They’ve overbooked this imminent flight by two passengers, and they need two people to step aside and take a different flight to Ft. Lauderdale. Let the auction begin!

The normal process from this point is to have the attendant at the gate alert the crowd waiting to board that the flight is oversold. They need two volunteers to come to the table and schedule a different flight (sometimes on the same day; other times on the following day). Opening offers generally start in the $300 travel voucher range, and the attendant will continue to raise the price until two passengers come forward to volunteer their seats.

In the instance where there is no reasonable amount of money to entice the crowd to volunteer their seats, Southwest will pick passengers at random. They will offer them the maximum amount of compensation allowed, $1,350, and call it a day. You can see from the chart below how often passengers volunteer their seats, versus the ones that are forced to schedule later flights. In the 4th quarter of last year, 106,000 passengers across all US airlines volunteered their seats to others, while 9,000 had no choice.

Q4 Booking Standards for Flights

So, this begs the question… why is having 9,000 passengers forced to take flights they don’t want a good thing for the market?

Cheaper Flights

Imagine the scenario above where Southwest sells only 200 tickets initially instead of 220. As passengers begin to fall off the rolls, Southwest reopens the flights online. The later and later this happens, though, the less likely they are to find passengers to take these now open flights. They will be able to re-book some of the seats, but not all.

For argument’s sake, let’s say on the day of the flight, the airline gets the number of ticketed passengers back up to 190. Then on the day of the flight, the three people who missed their plane in the first scenario do so again, meaning Southwest has taken in ticket revenues for 187 passengers. That’s 15 less than scenario #1, which means lower revenues for the airlines.

Yes, the airline will have to compensate the overbooked passengers, but it rarely, if ever, comes out to more than they’ve already taken in. Even when they have to give the full $1,350 to passengers who do not volunteer, they’re still likely in the green (assuming a modest $250 ticket price in our scenario above, 15 additional ticket sales means $3,000 in revenue vs. $2,700 in compensation to involuntary bumps). And the chart above shows that for every 11 passengers who accept modest compensation, only one does not… so the added revenue per overbooked flight can be quite substantial.

Flexible Options

Another reason why overbooking is essential in the marketplace is the freedom to cancel and change flights. Some airlines offer no cancellation or change fees, while others charge a small to moderate fee. If overbooking was not allowed and airlines were forced to book only the number of seats they had available, it’s very likely the ability to change flights would be restricted, or at least much more expensive, than it is today. Airlines are now a bit more forgiving when it comes to schedule changes because they know they have “reserves” available to take your place if needed. In their eyes, it’s no biggie.

Many airlines also offer their own branded airline miles credit card, which offers perks to allow customers to change their flight plans at no cost. As is standard operating procedure with airlines, if they’re forced to spend more money or end up taking in less revenue, the first thing to disappear is usually the quality of their rewards program.

Added Revenue for the Consumer

Some travelers are flexible when it comes to getting to their destination. Perhaps they’re heading home from a vacation and wouldn’t mind spending an extra day around town. Perhaps they’re headed out for a business meeting that can easily be pushed to Tuesday instead of Monday. Why not take the opportunity to cash in a few free flights down the road for a few hours’ inconvenience? There are well-established online travel bloggers who show in detail how they do this. They’ve earned thousands of dollars in compensation, simply for the willingness to take the next flight available. Some even show how you can tackle this more than once a day and almost consider it a profession!

Of course, there’s no such thing as a free lunch, and there is one obvious negative attached to the concept of overbooking. If you are one of the nearly 9,000 passengers last quarter who did not want to leave your flight because of a commitment you could not miss, $1,350 may not be good enough.

This is the very reason why many advocates of the policy are looking to have the maximum compensation amount revised or altogether removed to allow for a true bidding process. If the airline is forced to keep adding to their offer in order to ensure 100% of passengers voluntarily give up their seats, the right flight could yield quite a large number. Even so, in the rare instance that happens, the airlines and the marketplace will still be thankful that they’ve overbooked the flight.

There is no denying that the way United staff handled the United Flight 3177 issue was the exact wrong way to do it. Add on the non-apology from their CEO Oscar Munoz, and for years, people that book their flights will remember this incident. Many of them will even look elsewhere for their travel needs.

But nothing about this PR disaster has anything to do with the concept of overbooking. When executed properly, it’s an essential practice to keep costs low for all consumers. If the day should come where maximum compensation amounts are lifted, overbooking will become an even greater asset to the airline community.

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Should High Schools Require Money Management Classes?

by Luke Landes
fin literacy

It’s common knowledge that kids today aren’t learning the same things that we learned when we were younger. Take cursive, for instance. Forty-six states have implemented Common Core Standards on at least some level, which eliminates mandatory teaching of cursive in the elementary school curriculum. While children are instead learning how to type and use […]

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A Free Online Checking Account Earning High Interest: The FNBO Direct Checking With BillPay

by Stephanie Colestock
FNBO Direct checking

Have you been looking for a new online checking account? Preferably one with a higher-than-average interest rate? Then the FNBO Direct checking account may be the answer. I’m a bit particular when it comes to my checking accounts. I don’t like paying any monthly fees, regardless of how much money I keep in the account. […]

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Are Credit Card Annual Fees Worthwhile?

by Luke Landes

The best credit card deals are often spoiled by an annual fee. Annual fees can range from about $50 to $2,500, with the high end reserved for the super-select American Express Centurion Card (the “black card”). In return for this fee, credit card issuers provide a range of benefits beyond what typical no-fee cards offer. […]

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How to Pay a Tax Bill You Can’t Afford

by Luke Landes
TAX BILL

It’s a good thing I’ve been saving a good portion of my income for the past year. Even with making estimated tax payments — the last of which was due on January 16 — I still have a significant tax bill this year, thanks to increased income. Many taxpayers dread filing their taxes, even if […]

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Money Systems That Lead to Success: Automatic Savings

by Luke Landes
Make Savings Automatic

A while back, I wrote about the opinions of Scott Adams on his eventual success as the creator of the comic strip Dilbert. I focused on the failure aspect of the article he wrote for the Wall Street Journal and I wanted to revisit the topic, as only touched lightly on the success factors. Specifically, […]

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The Impact of the Philadelphia Soda Tax

by Michael Pruser
philly soda 2

Earlier this year, I wrote an article discussing the new Philadelphia Soda Tax that had just been put into effect. At the time, the discussion focused on the possibilities the law would present: from having more people drink water and getting more funding for the school system, to Americans losing money to the tax and companies […]

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