All about the challenges of Midlife Finance

A Potpourri of Updates

Every so often, we take another look at subjects we’ve covered on MLF, and see if anything new is happening. It’s also a good time to alert you to bargain trends — after all, we want you to save money!  Here’s what’s popped up recently:

Now is the perfect time to buy goodies! Holiday-themed candy, including chocolates and specialty goods, have been dropping in price for weeks now. Lebkuchen, a Christmas favorite cookie of Germans for generations, has been marked down regularly on Amazon. As of this writing, you can purchase a ‘Lebkuchen Pure’ package of nearly 4 pounds, imported from the Schmidt company in Nuremberg, Germany, for $26 and shipping. (It started in the $60-plus range a month or so ago.) Or get a smaller amount of cookies, plus one of the decorative metal chests Schmidt is famous for each season — same price.  The cookies stay fresh for months, incidentally.

     Add markdowns to the chocolates and other edibles which didn’t sell on Feb. 14…and you’ve got a sweet-tooth paradise right now.

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Worried about student loans? You may be catching a break. In his 2016 budget, President Obama proposed a “Pay As You Earn” program for borrowers that would set their repayment amounts based on 10% of income. (Current rules say payments cannot be higher than they would for a standard 10-year repayment plan.) Not only that, but after 20 years of payments, the loan would be forgiven completely. The president is also urging that interest rates be pulled back, if the monthly payment is less than interest due.

     Borrowers with grad school loans of more than $57,500 would be able to have those forgiven after 25 years of payments. Being able to pay those loans with service, instead (like schoolteachers, firefighters and other public servants have been able to do for years), will see the amount capped at $57,500. (Why that is the magic number, I have no idea. Nor, probably, does Congress.)

     Married borrowers can no longer exclude their spouse’s income from the repayment calculation, even if partners file separately. Also, these breaks only apply to current borrowers; anyone who borrowed their first student loan before July 1, 2016 must use the current repayment plans, instead. (Darn.)

     What this all translates out to: a $21 billion shortfall (or $22 billion, depending on who you’re talking to) in the federal student loan program. Does that mean that current debtors will stop paying so much, because they don’t have to? (At least one blogger has taken this approach.) Or will people take out more loans, reasoning that they won’t have to pay as much back? As someone who scrimped and saved to pay off Husband’s student loans early, I have a particular interest in (and irritation about) this subject. Stay tuned.

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Tired of being cold all the time? Radiant heat, using hot water, may be the answer.Although it was a hassle to install, Mr. Money Mustache put in radiant heat in his new house. The results, after nearly a full winter of use, showed a substantial money savings, plus a surprising benefit: “how nice it is to have warm floors,” he says. “On top of that, anything you leave on the floor gets extra toasty: a pair of wet winter boots, a forgotten coat, even the socks you threw off before hopping into bed — perfectly warm and dry when you pick them up the next morning.”

     There are some drawbacks. Heat output is not as strong as he’d hoped. (He recommends using tile floors, instead of wood, for better heat penetration.) Also, the hot water in the system, although it was constantly circulating, couldn’t be used for cooking or drinking because it smelled like “new pipes.” (Other pros and cons are here.) The system benefits from backup heat, like a woodstove or solar power. (More efficient windows, as well as insulation and weatherproofing, should help: more ideas here. Or try an electric or gas fireplace: it may not be as efficient, but it’s also thought to help ease up those nasty winter blues.)

     According to Mr. MM, radiant heating will also help cool his floors in summertime, by stripping away the heat from the floors and transferring it to the water. (“Double energy savings and free air conditioning,” he comments.) At any rate, this system, while saving money every month, cost approx. $8000 less, he estimates, than a more traditional forced-air furnace. That in itself is worth considering.

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Chilly forecast for coming months:   If the Farmer’s Almanac is right (and they’ve been surprisingly on the mark this winter), we’ve got a lot more below-average cold temperatures and white stuff to look forward to in the U.S. before spring this year. (The Canadians don’t have it much better.) “Only near the West and East Coasts will temperatures average close to normal,” they say. (Tell that to Boston and New York City.)

     Better not put your shovel away yet, either. The eastern third of the country will continue to have storms “delivering copious amounts of snow and rain” through mid-March, especially “the nation’s midsection to the East Coast.” On the other hand, Southern states, as well as the upper Great Lakes region (famous for heavy snowfall, incidentally) is supposed to have fewer flakes than normal. We’ll see what happens.

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 Finally, there’s still uncertain news in the jobs forecast. Employers added fewer jobs than projected in January this year, keeping unemployment rates worse than December’s. (And they were bad enough.) Although new order rates are said to “remain healthy,” it’s still a sobering reminder that things may not be all sweetness and light in the financial sector. It might not be a bad idea to reassess your own work situation. At the very least, polish up that resume; you may need it soon. 

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