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Welcome To The Insighter!

Explore the latest happenings at Kirtland FCU and learn about important topics from around the financial world. Here’s your insight!
To learn about retirements, investments and financial planning, check out Invested now.


Security Taxes Fraud

‘Tis the season! For taxes, that is. And, unfortunately, the tax scammers who come with them.

IRS scams are not new, and they’re also not isolated to the early spring. But there’s no doubt that these types of scams pick up the pace around this time of year. And after a year filled with record high unemployment claims, stimulus checks and more, 2020 is shaping up to be a complicated one for taxes.

“This is an extraordinary year for fraud,” says Eva Velasquez, president and CEO of the Identity Theft Resource Center.
(as reported by the AARP)

If you’re getting ready to file your 2020 taxes or waiting for a stimulus check from the IRA make sure you don’t fall prey to these common scams. Here are a few opening lines you may hear if you encounter an IRS scammer.

“We need a small payment to release your stimulus check!” Whether you get this message during a phone call, in a text, or in an e-mail, it’s never true. Stimulus checks will either automatically drop in your account (if the IRS has your information) or will be sent in the mail. Check on the status of the latest stimulus check here.

“We have issued a warrant for your arrest due to back taxes—unless you pay!” The IRS will never call you with a message like this. If you receive a letter from the IRS about your taxes, contact the agency yourself to verify. Don’t pay money or give personal information over the phone, via text, or online! If it’s an e-mail, just delete it.

“Click here to update your bank information.” The IRS does not e-mail, call, or text you to ask for banking information. You can hang up, delete the e- mail, or ignore the text. If there is an issue with your tax return, your tax preparer will alert you or you’ll be prompted to fix your return on your own.

“You must give us a gift card to fix fraud on your account.” Demanding payments, especially with a very specific method like purchasing a gift card, is a big red flag. In fact, requesting gift cards as payment is a key indicator of a scam, no matter what the subject of the scam is. The reason is because gift cards are not traceable or refundable. Once you’ve purchased it and sent the information to the scammer, there is no way to retrieve your money.

“There’s no need for us to sign your tax return.” If you’re paying a person or a service to complete your tax return form for you, that preparer is absolutely required to sign it and provide their preparer tax identification number (PTIN). A refusal to do so is indicative of a less-than-trustworthy tax preparer. Never sign your form if it’s blank. Considering the level of personal information that is turned over to tax preparers, you should be very careful about whom you choose to help you complete tax returns. If you do have problems with a tax preparer, you can file a complaint with the IRS by submitting Form 14157, a Return Preparer Complaint.

Have you ever encountered a tax scammer? Some fraud schemes are easy to spot, but others can take you by surprise. Rely only on reputable tax preparation services, never share personal information when prompted (and especially when threatened) to do so. And remember: the IRS will never e- mail, call, or text you asking for payments with gift cards.

Lifestyle

Originally published August 24, 2020

If the coronavirus has you going stir-crazy, there’s a good chance you’ve thought about renting or buying an RV and taking a road trip. After all, an RV allows you to travel without exposing yourself to germy airports and hotels.
 
You wouldn’t be the only person to come up with that idea. In May, peer-to-peer rental service RVshare saw a 650% spike in bookings since the beginning of April. But if you’re a first-time RV driver, there can be a steep learning curve to overcome.
 
Before you hit the open road, make sure you don’t make one of these major first-timer mistakes.
 
1. Believing bigger is better
Considering that you’ll be spending a good amount of time in your RV, you want to be comfortable. Choosing something too small will make traveling feel claustrophobic. But that doesn’t mean you should buy the biggest RV you can.
 
“The mistake I made was thinking I needed more space than we actually needed,” said Angela M. DiLoreto, who travels nearly full time in her travel trailer and blogs with her husband at Fitting in Adventure. “People compare the space to their houses; we spend a lot of time in the four walls of our home but little time inside the walls of an RV.” However, she said, the RV experience is about what happens outside those walls.
 
A smaller vehicle will be easier to drive and park, as well as faster to set up and tear down. Plus, many national parks have length restrictions for camping, so keep this in mind when choosing the size of your RV.
 
2. Buying brand spanking new
If you’re buying your RV, it might be tempting to lean toward the security of buying brand new. After all, new cars are in great shape and ready to roll, so you might presume RVs are, too.
 
“This isn’t true in RVing, unfortunately,” said Georgianne Austin, communications director for Escapees RV Club. Common advice shared in RVing circles, she said, is that it’s best to buy an RV that’s at least two years old. “The idea behind this is to let someone else deal with the fresh-off-the-lot issues, such as interior construction problems, chassis problems, etc., which surface during the first real ride with the RV.” This is often referred to as the “shakedown” trip.
 
By purchasing a used RV, someone else has already dealt with those issues that arise with the first few trips and has hopefully had them fixed by the time you take over.
 
3. Failing to check the carrying capacity
Because RVs are big, you might think that they can easily haul whatever you can fit inside. And you might believe that the bigger the RV, the more it can tow. Those are misconceptions that can cost you, said Kimberly Button, co-editor of Couch Potato Camping. “All RVs are different, based on their designs, but they are only designed to safely carry a certain amount of weight, which is known as gross cargo carrying capacity.”
 
Cargo carrying capacities can range from just a few hundred pounds to several thousand pounds. Either way, that limit includes personal items (shoes, clothing, sports gear, etc.), food, water (including fresh, gray and black tanks), updates or additions to the RV (solar panels, TVs, etc.) and passengers.
 
Button warned that carrying more than that capacity could damage your RV or trailer, tow vehicle or both. “It is extremely important for RV buyers to consider how they are going to camp and how many people they will be bringing.”
 
4. Not considering what your tow vehicle can handle
Another mistake, specifically for those looking at travel trailers, is purchasing a camper too heavy for the towing capacity of their vehicle, according to Rosanna T. Mitchell, founder of outdoor family adventure site A Pragmatic Lens. “Horror stories abound of RV dealers and sales associates assuring customers that their vehicle is able to tow a camper weighing thousands of pounds only to realize later they need a new towing vehicle, or worse, get in an accident,” she said.
 
If you plan to buy a trailer, be sure that your existing vehicle is equipped to tow the weight. If not, you may need to budget for a new towing vehicle or consider a different type of RV.
 
5. Traveling with too many aftermarket modifications
Especially with the explosion of the “van life” movement, many RV owners are making aftermarket modifications to their vehicles to make them more livable and aesthetically pleasing.
 
However, you should be wary of purchasing an RV with modifications such as high roofs or different passenger and driver seats, said Tina Willis, a personal injury attorney in Orlando, Florida, who’s owned an RV for about five years.
 
“The reason is that these aftermarket changes very often aren’t nearly as safe as those tested and engineered by the original vehicle manufacturer,” she said. For example, removing the original roof from a van and adding a new high top eliminates the metal support beams that surround the occupants. Plus, many extended vans already have a higher rollover risk, and making them taller adds to that risk.
 
It can be tempting to buy something that looks like it drove right off an influencer’s Instagram feed, but safety should be the priority when choosing a vehicle.
 
6. Picking a poor floor plan
Rae Miller, blogger at the Getaway Couple, said it’s important for first-time renters or buyers to really think about the floor plan they want. For instance, are you a family that needs separate areas for the kids? Are you bringing any large toys along? Do you like the open concept or do you want distinct living areas?
 
Some newer RV models also have retractable slides that will affect how accessible the interior is while driving. “The number one question we tell first-time buyers to ask themselves is: Can you access the bedroom, bathroom and fridge with the slides in? You’d be surprised how many times you’ll want to access these areas with the slides retracted when traveling, so make sure they aren’t blocked,” Miller said.
 
7. Assuming you’ll get it perfect the first time
Becca Borawski Jenkins, a senior editor at FinanceBuzz who’s been a full-time RVer for over three years, said she knows few people who are still driving the first RV they purchased. “Most are on their second or third, and some have gone through even more than that.”
 
Why? It takes time and experience to truly understand what you want and need in an RV. And that’s OK. Jenkins said realizing you won’t buy the perfect RV the first time is a good thing, as it relieves some of the pressure when choosing a vehicle to invest in. “You’ll probably buy one that turns out to be too big or too small or doesn’t feature an amenity you later realize is essential to your camping happiness,” she said.
 
The most important thing is to not break the bank on your first choice. “If you don’t spend a fortune your first time out, then you can trade your first RV in and get the RV of your dreams the second time around.”
 
Also important to consider: an RV purchase will very often not include many accessories and parts you will need on your journey. Items such as wheel chocks, hoses, and other critical tools will be needed, so be sure to budget extra to purchase these supplies before you hit the road.
 
There are many avenues to pursue RV ownership: through a dealership or through a private seller. If you don’t have a chunk of change laying around, financing is available (and often cheaper than you might think) from your bank or credit union.
 
At Kirtland FCU, you could finance your home on wheels with a rate as low as 5.99% APR* for 180 months.

See how an RV payment would fit into your budget

 
Article originally published at Huffpost.com. Membership eligibility required. *APR=annual percentage rate. Rates are subject to change at any time without notice, and are effective the 1st of the month. Actual rate and loan are dependent on age of vehicle, type of loan, credit worthiness, and other factors.

Banking News

The Kirtland FCU footprint keeps growing in Albuquerque! After all, our members are from all over the metro—and we’re dedicated to being where they live, work and play. Following the successful opening of our Coors Pavilion branch last year, this latest addition to the Kirtland FCU family will bring Kirtland FCU’s unique local flavor in finances to the northeast quadrant of Albuquerque near San Pedro and Paseo in the Holly Plaza!

The Holly Plaza branch will pack a mighty punch into a compact, conveniently located space. Members can take care of all their needs in one visit with one Member Experience Specialist. Open an account, apply for a home equity loan or line- of-credit, withdraw cash, meet with a mortgage loan officer, meet with an investment advisor, and more.
 

Where is this new branch exactly?

The Holly Plaza branch is located in the Holly Plaza shopping center at 6550 Holly Avenue NE, Suite D-6.

Coming from northbound I-25, exit at Paseo eastbound, turn left at San Pedro and right at Holly. Then look for the Kirtland FCU logo on the direction sign to turn right into the correct shopping center.
 

When will the branch open?

Construction started in March to bring the Kirtland FCU brand and technology to the new branch. We anticipate opening sometime in early May but check in with our social media accounts for the latest on our Grand Opening events!
 

What else do I need to know?

The new Holly Plaza location will be coinless! This really saves space in small branches. If you’re cashing a check, you will not be able to receive coin. Instead, you can round your cash back down to the nearest dollar and deposit the remaining coin into your accounts. Alternatively, you can round up to the nearest dollar by withdrawing the cents needed from one of your accounts.

Because Holly Plaza is located in a shopping center, there are no drive-thru services.

So, next time you’re traversing the busy Paseo corridor just east of I-25, keep an eye out for that familiar blue Kirtland FCU logo as our renovations begin. We can’t wait to see you at Holly Plaza!

COVID-19

The U.S. Congress passed the third wave of federal relief—a.k.a., stimulus bill— on March 10, promising financial relief to individuals, businesses, states and local governments. And yes, most Americans will be getting another check from this particular package.
 

How big of a check?

Well, that depends on how much money you made last year (if you’ve already filed your 2020 return) or the year before (if you haven’t yet filed). The thresholds for direct payments from the ARP have lower cutoffs than with previous bills, so some families who received a check in the last round will see either no check or a reduced amount.

Individuals earning up to $75,000 and couples earning up to $150,000 would receive the full direct payments of $1,400 per person. Individuals will also receive an additional $1,400 payment for each dependent claimed on their tax returns. For individuals making between $75,000 and $80,000 (and couples making between $150,000 and $160,000), a partial payment will go out. Individuals earning above $80,000 (or couples earning above $160,000) will not receive a direct payment at all.

That $1,400 includes any dependents as well. For example, a family of four whose parents make $80,000 and file jointly, can expect to receive $5,600 in direct payment from the ARP.

Due to an expanded Child Tax Credit included in the plan, that same family with children ages 8 and 5 will receive $2,600 more in tax credits than they did previously. The new Child Tax Credit is $3,000 for children ages 6–17 and $3,600 for children under 6. Right now, the plan is to issue a portion of the credit over the course of a year in the form of direct payments up to $300 per child per month. Congress has not yet decided how to execute this portion of the bill, however, and more information will be available soon. The payments would not start until mid-summer. The credit is, again, dependent on income. Couples with an income less than $150,000 a year (or $75,000 per year for an individual with a child) are eligible for the full credit amount.
 

When will the money arrive?

Again, that depends. If you’ve previously authorized direct deposit with the government during tax filing in order to receive your refund, you can expect those direct payments to begin dropping automatically into those accounts as early as March 17.
 

“For tax returns with direct deposit or bank account information, the IRS will be able to send money electronically. For those households for which Treasury cannot determine a bank account, paper checks or debit cards will be sent.”

 

How will I know the money has arrived?

The easiest way to keep track is to check the account listed with the IRS via Online or Mobile Banking. The IRS, as of March 11, 2021, says they are currently reviewing implementation plans, though with the president's signature on Thursday, March 11, the IRS should have more information posted very soon. Kirtland Federal Credit Union will deposit Economic Impact Payments into your account upon receipt of the funds from the Federal Reserve.

Check your payment status here.

If you are expecting a paper check, keep an eye on your mailbox for the next few weeks. Once you receive your direct payment (or are receiving your Child Tax Credit payments), you can deposit those checks quickly and easily with your phone or tablet with our Mobile Banking app. No need to come into a branch (unless you want to. We’d love to see you!)

Stay up to date with the latest COVID-19 updates by bookmarking the COVID-19 Updates page.

Security Fraud

We often write about the various methods that fraudsters and criminals use to steal info and money from victims. Sometimes, the attempt is relatively obvious. Other methods, like a well-done spoof, are more difficult to detect.

In late February, a local New Mexico school district warned parents about a spoofed website, built to look virtually identical to the real school district website. The website was well done, the fake good enough to not be obvious at first glance. But it held many of the hallmarks of a spoofed website—if you knew where to look.


What’s a spoofed website?

A spoofed website is a site built to mimic a legitimate website for malicious purposes. A spoofed bank site, for example, could fool customers and members into entering their banking login information, exposing it to the criminals. Another high-profile example of spoofing occurred in November 2020. The FBI issued a warning that several spoofed websites mimicking the federal agency’s official site. According to the FBI:


“Adversaries can use spoofed domains and email accounts to disseminate false information; gather valid usernames, passwords, and email addresses; collect personally identifiable information; and spread malware, leading to further compromises and potential financial losses.”


Some of the spoofed domains are highly suspicious; but others could easily be mistaking for an official FBI page.

A domain that is similar to a legitimate domain but not identical is a hallmark of a spoofed website. For example, our website domain is https://www.kirtlandfcu.org/. A hypothetical spoofed domain could be close to the original (kirtlandfederalcu.org) or add a subdomain (kirtlandfcu.moneyspoof.com) to fool you into thinking it’s the real Kirtland FCU site.

In the school district incident, the spoofed domain had a single extra letter: rrps.net vs. rrpss.net.

With a spoofed domain, a fraudster can also create email addresses with that domain in order to extend the deceit to inboxes. So be sure to check any domain of an email address before you decide to open it or interact with it.


How to spot a spoof

A good spoof can look identical to the legitimate site it’s purporting to be. But there are signs that you aren’t looking at the real website. Here is what the FBI says you can do to spot a spoof and keep yourself safe:
 
  • Verify the spelling of web addresses, websites, and email addresses that look trustworthy but may be imitations of legitimate election websites.
  • Ensure operating systems and applications are updated to the most current versions.
  • Update anti-malware and anti-virus software and conduct regular network scans.
  • Do not enable macros on documents downloaded from an email unless absolutely necessary, and after ensuring the file is not malicious.
  • Do not open emails or attachments from unknown individuals. Do not communicate with unsolicited email senders.
  • Never provide personal information of any sort via email. Be aware that many emails requesting your personal information may appear to be legitimate.
  • Use strong two-factor authentication if possible, using biometrics, hardware tokens, or authentication apps when available.
  • Use domain whitelisting to allow outgoing network traffic to websites that are deemed safe.
  • Disable or remove unneeded software applications.
  • Verify that the website you visit has a Secure Sockets Layer (SSL) certificate. In other words, check to make sure the address has https, not just http at the beginning of the URL.
Think you spotted a spoofed website? Report it to the FBI.

Lifestyle

You may or may not have heard of QR codes, but in the midst of COVID-19 and the focus on contactless communication, these little black-and-white boxes are in their heyday.


What is a QR code?

A QR (quick response) code, pictured here, is simply a box with black-and- white patterns that lead to a particular action in a device (usually activating a URL or an app download). The pattern is a new-age barcode—but instead of transmitting information about a product, including price, this code holds information that can take you anywhere on the web. No fancy scanners—all you have to do is take a picture of it in most of today’s devices.
QR codes aren’t new. Launched in 1994, QR really failed to catch on with any regularity in the quarter-century that followed their inception. But with 2020 came a resurgence of contactless options in business, fast-tracking this previously no-hit wonder to modern-day mainstream.


Why QR?

On a device, a hyperlink is obviously, instantly clickable, and a fast way to reach a particular website or app. But what happens in real-life when you need to do the same thing? You could type in the web address manually, but that takes time and some URLs are really long. This is the bread-and-butter of QR codes! And in the midst of the COVID-19 pandemic, any option that reduces contact is in high demand. QR codes are shining, and odd are you’ll encounter one:
  • In a restaurant: QR codes printed on stickers or table signage provide a contactless way for patrons to view the menu online.
  • On a vehicle: Moving objects and long URLs don’t mix. But taking a quick photo? Easy peasy.
  • On products: Adding a QR code is a space saving way for companies to direct customers to more detailed information about their product.
  • In advertising: In the year of food delivery, putting a QR code on a receipt, flyer, banner, poster, or other visual advertising is a compact way to let the reader easily access more information if they decide to.
  • As a payment method: It’s not AS common, but behemoths like PayPal have started adding QR codes into their platforms to use as a payment option. Many merchants aren’t quite there, but in the lightspeed advancement of contactless payments that’s happening right now, that’s changing.


How to use a QR code

In the beginning, a special QR reader app was required to make sense of this special, nonsensical box, and the demand for the technology didn’t justify many device makers rushing to build the tech into their products. Slowly, but surely, as QR codes have gained popularity and widespread recognition, device makers have finally caught up. We’ve said, “Just snap a photo!” and it’s literally that easy on most devices. In fact, it’s easier. Have an iOS (Apple) device? Scanning a QR code is as simple as opening your camera app and pointing it at the QR code with the rear camera. Don’t press the shutter button—the phone will recognize the code automatically.

Most Android devices also have built-in functionality through their camera app. If not, the Google Lens app can easily be added.


QR Safety

So, here’s the thing about links: there is always the potential for it to be malicious. When you scan a QR code and head off to that page, you run the same risks as you would clicking on a link in a virtual environment. Here are a few things to consider before scanning:

Where did I find this code?
Is the code in a restaurant you’re sitting in? It’s probably safe if it’s on the official restaurant signage. Likewise, QR codes that come in bills are probably safe. But scanning QR codes you find laying around may not be the best idea. It’s incredibly easy to generate a QR code—for good or for ill. Receive an email with a QR code? Err on the side of caution and just visit the site yourself (not with a link) and look for the information you want.

Where does this lead?
Your device may allow you to preview the link itself before actual launching. Make sure you check this link before heading to the site! If it doesn’t match a site you thought you’d be headed to, cancel out and do not follow it. It’s safer to type in a URL, just in case.

Have you ever scanned a QR code? Next time you see one on official advertising or in a business you’re patronizing, give it a scan!

See more of the contactless ways you can get life done

 

News

The COVID-19 pandemic hasn’t slowed the need for kids in our community. With the opening of our branches, KRQE Cares and Kirtland Federal Credit Union are once again gearing up to collect shoes for the Shoes For Kids campaign.

A new, well-fitting pair of shoes opens a world of exploration for students, allowing them to fully engage in all areas of their education. Unfortunately, some families are not able to provide a new pair of shoes for their growing kids—it’s Shoes For Kids’ mission to change that reality for families in need at Title I schools in Albuquerque.

 

March 1–31, 2021, all Kirtland FCU branches will accept donations of new shoes for the Shoes For Kids program!

 

What To Donate:

New athletic shoes of ANY size for ANY gender.
 
  • Why athletic shoes? Students need athletic shoes to be active and athletic shoes can be worn for most student related occasions.
  • Why any size? Students come in all sizes and many times the older kids are overlooked because they wear adult size shoes.
  • What else will we accept? We definitely won’t say no to new socks or new underwear if a member brings it in. The items will go to the APS Title I clothing bank. Those items are ALWAYS needed.
  • What don’t we want? Used shoes. Shoes wear out pretty quickly. AND the exciting thing for our student recipients is receiving a brand- new pair of shoes. Many of them have never owned a brand-new pair of shoes!
These shoes change lives,” says Carolyn Rush with KRQE Cares. “I put a new pair of shoes on a child who had been known to have behavior issues. He didn’t say a word to me. But when we were done...he hugged me and told me ‘Thank you for caring about me’. We just don’t know what these kids are going through and something as simple as a new pair of shoes from a stranger can give these children light and hope for the future.

For more information about the KRQE Cares campaigns, visit https://www.krqe.com/krqe-cares/.

COVID-19


Since the new public health order featuring the “Red To Green” system went into effect, Bernalillo country, where all Kirtland FCU branches reside, has been Red Level. Effective February 11, Bernalillo is now in Yellow Level. This means we can now enter the next phase of opening our branches for normal operations
 

Effective February 16, 2021, all Kirtland FCU branch lobbies will reopen—no appointment necessary.

The Base Exchange branch on Kirtland AFB has been operating normally and will continue to serve the men and women of Kirtland Air Force Base.
 
Credit unions are an essential business. We are now open to serve you in-person, with drive-thru service, or through our full suite of digital options including Online and Mobile Banking—transfer money, deposit a check, and so much more, right from home!
 

We’re NM Safe Certified!

 
Rest assured that the safety of our employees and our members is first and foremost in our minds. Kirtland FCU recently completed training for important safety certification from the state through the NM Safe Certified Program, and you’ll see a variety of measures in place at each branch to help us serve you safely. The program, according to the state of New Mexico, is to increase confidence in the safety practices of the business they do need to visit.
 
“We want businesses to know they are not alone in adjusting to the new environment and we want customers to know they can feel confident about visiting businesses in a COVID-positive world,” NMSAE Executive Director Jason Espinoza said. “The program trains New Mexico businesses in the state’s COVID-Safe Practices to help ensure all of us – customers, employees, and families – remain safe as New Mexico reopens for business and recreation.”
 
Sarah Horten, Chief Lending Officer, says the new certification is part of Kirtland FCU’s commitment to service and safety.
 

“We’re focused on keeping our employees and members healthy while staying present and available to serve you—no matter what.”



 

Before You Go

We can’t wait to see you! Please remember:
 
Wear Your Mask Keep Your Distance Follow Door and Floor Signs
 
Please postpone your visit if you’ve been experiencing any flu-like symptoms including coughing, difficulty breathing, fever, or have experienced a loss of taste or smell.

Personal Finance

You probably won’t be deciding where in your community the schools or shopping centers will be built. Similarly, you likely can’t exert power over whether or not your neighbors maintain their home or beautify their lot. In short, you can’t always control the external factors that determine your home’s value. But you can control the general attractiveness of your own home.

Home improvement projects can be a tremendous tool for increasing the value of your home. However, given the size and relative complexity of these projects, it is very easy for the cost to quickly spiral out of control. That’s why it’s so important to establish a budget for the project before it begins and to do everything you can to adhere to that plan.

Here are some constructive tips for building the best possible home improvement budget.
 

Know your own budget first

No home improvement project should ever be embarked upon without first gaining an understanding of how it will impact your month-to-month finances. Ideally, you would identify a particular home improvement job as a goal several months in advance and create a saving account – separate from emergency, college or retirement savings – to earmark money for the project. If you are planning on financing the work either through a credit card, personal loan or home equity line of credit (HELOC), be aware what your monthly payments will be and how that impacts your monthly bottom line.
 

Mind your p’s: practical and pragmatic

It’s important when picking your home improvement projects to focus on what will be most attractive to the general population of home buyers. You may love the idea of a nook to store your 180-gallon fish tanks, but to a potential future buyer that addition may make the house look lopsided and unwieldy. Many times the improvements that will help your home sell quickly and for top dollar later are pretty unglamorous today. A new water heater or fixed roof may seem pretty mundane now, but it can make a huge difference in how secure a future buyer feels about the property in the future. Even if you are just fixing the place up for yourself, try to always prioritize safety and efficiency over aesthetics when choosing which projects you will fund. Many websites offer national cost-vs.-value averages for different projects, so take advantage of this information in deciding which jobs to prioritize.
 

Know exactly what you want

Trying to figure out what a “kitchen remodel” will cost you is only going to provide you with a very wide and ultimately counterproductive idea of what you can expect to pay. For bigger jobs like this, break them down into each item that will be replaced or refurbished. Using the kitchen example again, research what kind of countertops, flooring, cabinets, etc. you want so you can either communicate effectively with a contractor or know what you can expect to pay for materials you source on your own.
 

Let the competition begin!

To figure out if what you have saved or are planning to finance for your project matches what it will actually cost, your best option is to get bids from contractors who specialize in remodeling or in the particular project you are interested in. Even if you are planning on doing the project yourself, it can be extremely educational to see what a professional estimates for materials, labor, permits, cleanup, etc. Demand that the estimate be as detailed as possible. And don’t stop at just one. Not only are potential contractors competing against the possibility of you doing the project yourself, they are also competing against other professionals out there. Use this to your advantage to come up with a number that fits within your budgeted amount.
 

Understand overage

Know that whether you do the job yourself or hire a contractor to do the work, you are almost always going to run into some aspect of the project that pushes the cost beyond initial estimates. Count on your costs ending up anywhere from 10-25% above initial estimates. If this goes beyond what your budget has shown you can afford, it’s wise to wait until you can bulk up your earmarked amount a bit or scale back the scope of your current project.
 

Unearth savings

If you hire a professional to do your home improvement, that doesn’t necessarily mean you have to leave the sourcing of materials up to them. Consider hiring a contractor who will let you shop for supplies on your own. This will allow you to comparison shop more vigorously than a contractor might have time to. It can also open up the possibility of getting high quality supplies at a deep discount from a nonprofit like a Habitat for Humanity ReStore outlet. If you are going with a big box home improvement store, be sure to ask about upcoming sales. Lastly, if you are using a contractor and can wait a bit, try to do your home improvement project in winter when builders are more desperate for work and will in many cases drop their bids.

As mentioned above, home improvements are one of the few things you can control about the value of your home. So be sure to do just that and TAKE CONTROL of the process rather than letting it become series of money pits. As long as you create a plan ahead of time and do your best to stick with it, you can have a rewarding process and a more desirable property.
 

Smart Tips

Nine ways to avoid home improvement budget killers
  1. Don’t add “while we’re at it” jobs that weren’t a part of the original budget/plan.
  2. Stay away from cheap materials or corner-cutting measures that will just mean paying more later.
  3. If you are doing the work yourself, learn the entire process before you start instead of using a “learn as you go approach.”Let your contractor know you aren’t interested in the top-end, luxury versions of goods and materials.
  4. Check service ratings websites before hiring your contractor.
  5. If you are doing some pre-home sale upgrades, give yourself plenty of time so you don’t have to pay for rush work or overtime.
  6. Consider refurbishing certain items instead of tearing them out and replacing them.
  7. Exercise your creative abilities and look for ways to use materials found at architectural salvage stores.
  8. To avoid paying to store in a locker any work-blocking household items, have a plan ahead of time for housing in-the-way furniture during the project.
  9. Ask your contractor – you don’t want to miss out on potential savings because you failed to communicate.


Recommended Reading

Home Remodeling – What You Don’t Know and How It Really Works, Familia Publishing, 2012
Working with a contractor on a home improvement job can feel like talking to a doctor about your options for a medical condition. There’s some terminology you’re not 100% sure about, your options can seem unclear and there’s always concern about what it’s going to cost you. In fact, unless you’ve worked in construction in the past, it may be pretty difficult for you to understand the perspective or motives of your contractor at various points in the process.

What makes this e-book so valuable is that it helps you to understand the work process from the contractor’s point of view. Often times, homeowners shoot themselves in the foot with remodeling projects because they can’t differentiate between legitimate requests from the contractor and unnecessary ones. To avoid costly mistakes, you need to arm yourself with information.

In well-organized, easy to understand language, this book will help you manage otherwise gnarly tasks, like:
  • Grasping what the entirety of the project will require
  • Researching ahead of time what permits will be needed
  • Setting up a remodeling plan
  • Hiring the right contractor for your job
  • Arranging payments to the contractor
  • Understanding insurance requirements
  • Protecting yourself legally
  • Writing the contract
  • Making better in-project decisions
  • Not get railroaded
  • Maybe even enjoying the process!
You won’t find too many other books that give you such a thorough breakdown of navigating a financial process in such clear and concise language. With this book you can truly feel like you are on equal footing when talking a contractor.

Read more from Balance Pro Financial, just for Kirtland FCU members!

 

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