Proverbs 19:2 says, “It is not good to have zeal before knowledge.”  We live in a society that has zeal and limited knowledge so we miss out on the hidden manna that is available to everyone.

             We have seen many examples where people have sought help at the wrong place or with the wrong people.  Others have found the right people but didn’t know the correct questions to ask.  We know numerous veterans who may be eligible for help but aren’t receiving it because they do not know the rules.  It is often not enough to simply ask a question about taxes and expect to get the right answer from the IRS knowing there are over 71,000 pages of the code. 

             People assume that if they take their taxes to the accountant that the accountant will show them how to pay less in taxes next year.  If you only see your accountant between January and April 15, don’t expect this bleary-eyed person to come forth with all the ways you could have structured your income to pay less in taxes. 

             Equally complex is the college tuition eligibility and financial aid process for reducing college costs.  We have a process for no debt college.  To optimize the result, planning should begin in the eighth grade.  For some we have helped reduce the cost after graduation.

             Most people do not understand the whole process of borrowing and establishing your credit score.  The credit score determines the amount of interest you will pay on a loan.  Our job is to improve the credit score to reduce your interest rate and thus improve your cash flow.

             Food costs can be dramatically reduced by simply understanding how stores merchandize their products and by setting up rules for yourself before entering the store.  Making up lists, using coupons, and checking receipts will add additional money to your pocket.  Even the process of choosing the right store is important to know.

             Utility costs can be dramatically reduced with proper insulation, routine maintenance of your furnace and air conditioner, and attention to energy usage ratings of your appliances.  Additional savings can be found by using water restrictors, fluorescent bulbs, and water efficient toilets.  If the cap and trade agreement happens, you can expect increases of $150 to $250 per month in utility expenses.  Begin making your house energy efficient now. 

             There is so much information available to us today that it becomes overwhelming very quickly.   Be determined and discerning in your search for the best possible solutions.

             Robert Ostrander, CFP®

            SWS Advisors, Inc.

             Under the proposed measures to reduce carbon dioxide emissions by our current Congress, called cap and trade agreements, everyone should expect utilities and gasoline expenses to increase.  This increase will primarily impact the low to middle income families as we expect substantial increases in utility bills.  In addition, this will impact heavy users of electricity, primarily in manufacturing, resulting in either the costs to comply with the regulations being passed on to consumers or the transfer of these operations to countries where the cap and trade rules do not apply.  This of course will cause more job losses in this country. 

It is obvious the goal is not to reduce emissions.  The United States has had more reduction of emissions without these agreements than have European countries, which already put these agreements in place.  So what is the point?  The real goal is to introduce a socialist agenda and to create another profit center for energy producing companies.  Ken Lay, former CEO of the now defunct Enron, was a strong proponent of this plan because of the business opportunities and the profits it creates at the consumer’s expense. 

As consumers, we should begin rethinking of ways to reduce utility bills.  Those with low incomes may find there can be help through the Home Energy Assistance Program (HEAP).  Additionally, newer appliances tend to be more efficient than older appliances.   An eighteen year old air conditioner can use as much as twice the energy as a newer model. 

For those in older homes, window replacement may have long-term savings, but measure how long you plan to stay in the home first.  Another great value is to identify energy loss in remote places in the home including crawl spaces, under sinks, and though openings in the basement.  Insulating in and around these areas and caulking around doors and windows offer great benefits in reducing heat and cooling loss.

Attic insulation will yield a high value because it reduces heat loss in the winter and cooling loss in the summer.  It is also important to know that insulation settles over time reducing the R-factor, or energy loss resistance, and should be replaced.  Insulating hot water pipes, changing filters on furnaces, adding hot water heater blankets, and using florescent bulbs rather than incandescent bulbs will also help.  My books Saving Without Sacrifice and Saving Without Sacrifice In Action cover over forty more ways to reduce utility bills.

            Energy cost should double in the next five years because of inflation and the new cap and trade agreements.  As mentioned earlier, fraud is expected to be rampant based on Europe’s experience with these regulations.  The environmental effect is considered so remote that it will not be measurable.  The economic impact could be devastating.  Preparation for what is coming is always the best cure.

            Robert Ostrander, CFP®

            SWS Advisors, Inc.

A new Energy Star-rated model runs on about $40 worth of electricity.  A new $600 refridgerator will last for decades and could pay for itself in less than seven years.

To see how much you can save by replacing your old refridgerator, click here.