This is a question we all ask when planning educational events. Though its common knowledge there is a huge need for financial education usually the people who need the information are not going to seek it out. One of the struggles many of our partners who serve adults face is getting people to attend their events. Financial Beginnings is fortunate we don’t need to recruit our audience because our classes are in the in schools or community groups where are audience is already gathered. They are stuck hearing form us if they want to or not.

Last week was Money Smart Week in Oregon. Financial Beginnings and Operation HOPE decided that we wanted to expend our efforts beyond our youth in school programs during Money Smart Week. I have always wanted to have an open forum for adults to be able to ask their questions regarding personal finance. With laws and industry norms changing so frequently in addition to money always being viewed as a taboo subject I thought people have a forum to where they can ask questions would be wonderful. Money Smart Week gave me the push I needed to finally organize one of these forums and we named it Unraveling the Mysteries of Your Money. You’d be surprised how long it took us to come up with the name.

At Portland State University we brought together experts within the financial industry including; Jim Hunt from OnPoint Community Credit Union, Michael Parker from the Oregon College Saving Plan, Nelson Rutherford from Alten, Sakai & Co, and Diane Childs and Fernando Velez from the Oregon Division of Finance and Corporate Securities. The moderator of the panel was Brent Hunsberger, It’s Only Money columnist for the Oregonian Newspaper. Brent’s diverse knowledge in personal finance combined with his reputation in the community really helped to bring exposure and credibility to this event. You would think that with this great group this would have been the hard part of my task, but this was easy.

The hard part was the promotion and getting people to come to the event. I hear it time and time again from event organizers that it is so hard to get people to come. Having the event be free may even make it more difficult in some respects because of the perceived value. If people pay for attendance to an event they may tie a higher value to it and may be more likely to attend.

As of the three days before the event we had less than 10 people registered to attend. My anxiety level was high and I was so worried I was going to waste the panel’s time because nobody would show up. So we marketed it hard. All of the panel members helped to promote the event. Brent wrote about it in the paper and Nick Allard from KGW brought us on the bricks to promote it. We ramped up our social media and contacted all of the business professors at Portland State.

The registrations started flooding in, we maxed out the registration. We even added more seats because our experience has shown that usually only 2/3 of those that register end up attending free events. Our predictions were correct and we ended up with about 2/3 of those who registered attending.

I was so pleasantly surprised by the diversity of the crowd and their eagerness to hear from the panel. We had several planned questions in case the audience did not have questions right away, but Brent was only able to get one of the planned questions out and the audience took over from there. I saw several individuals in the crowd filling out multiple pages of notes. When time ran out several audience members flocked the panel for additional questions. It was like they were rock stars.

Aspects I see attributing to the success of the event:
• Having Brent Hunsberger of the Oregonian as the moderator added a lot of credibility to the event and his writing about it gave the event more exposure.
• Holding the event at Portland State University also added credibility to the and highlighted the educational component of the event.
• The panel was made up of high level and respected individuals.
• The varied marketing proved to be successful based on a pole of those attending reporting how they heard about the event.

We will definitely hold the event again next year during Money Smart Week. We have created a great foundation for the event and will be able to build upon this more next year.

Turns out my poor tax planning hurt me more than I had expected.  On Friday we went to pick up our returns in the best of moods because we assumed we would be getting a couple of thousand returned to us.  We were already starting to plan the vacation we would take with the money we got back.  Well….turns out we owe a couple of thousand.  Both of us were dumbfounded when the tax preparer told us.

How could this be?

• Getting married hurt us- In 2009 I was able to file head of household and deduct more.
• Not owning a home- In 2010 we rented our home so we did not have home mortgage interest that we could deduct which both of us had in previous years.
• 401k rollover- I rolled over a 401k from a previous job into my Roth IRA.  It was only about $6000, but that’s $6000 that I now needed to pay taxes on.
• Charitable contributions- We did a poor job keeping track of our charitable contributions.  We both volunteer a lot outside of our nonprofit jobs and we could have deducted mileage and other expenses that we incur when volunteering.  We also donated several loads of items to Goodwill, but never collected the receipts.  You’d be surprised by how much you can deduct when you itemize these donations.
• Rental expenses- Though we do a good job of keeping track of the direct costs we put into repairs on the homes we rent out, we did not track the mileage for driving to and from the homes and smaller costs like paint brushes or cleaning supplies.

Though I know we were new clients and we came to the firm towards the end of the season I also felt that our return was rushed.  If it had been brought to our attention that we were going to owe we could have worked to gather more of the documentations some of the charitable contributions or rental expenses.  Also, we hosted an exchange student and were surprised when I asked what our deduction for that was and she said nothing.  I came home and researched it and found that in there in fact was a deduction of at least $50 a month we could have taken.

So do I gather more information and pay them to restate it?

Last Friday I had my annual tax preparation appointment which meant we had to have all of our tax information gathered before the 2pm Friday appointment.  I have never had such a hard time gathering my taxes before!

I imagine that based on my work in the financial education sector you would expect me to be fully prepared for my taxes.  You might even think I’d do my own.  Well, this year that was far from the truth.  I stopped doing my own taxes several years ago when I decided the hours I spent and the unease of knowing if I was actually doing them correctly was not worth it and sought out a tax professional.  I did what most of us do, asked around and got a referral.  I blindly took the referral and brought him all of my financial information.  I didn’t interview him or even question if he was right for me because I really didn’t know how to figure that out.

I wasn’t highly impressed by my CPA’s abilities since there were a couple of occasions where he made mistakes on my rental homes, but he always fixed the mistakes and it never financial affected me so I kept using him.  I used him until the year of my divorce.  You know how you get the packet from you tax preparer for you to fill out before they complete you taxes?  Well, due to the stress of going through a divorce I decided for the first time in my life to file for an extension.  A few months later when things calmed down I finally got around to opening the tax packet only to find a very sad letter informing me that my CPA had passed away.  Boy did I feel stupid for not opening the packet sooner.  I continued to use someone else at the firm until this year after I got remarried.

My husband utilized a firm down in California to do his taxes and I didn’t really have a connection or was really impressed by the firm doing my taxes so we decided to find a new CPA.  Once again we asked around for a referral and took the recommendation of our financial advisor.  And once again I had no idea what to ask or what would indicate if this person was right for us.  I just handed over the financials, expect that I’ll get my returns and bill in a couple of weeks and then do the same thing again year after year.

It wasn’t until yesterday when I was talking with a supporter of Financial Beginnings, Nelson Rutherford from Alten, Sakai & Co, that I realized I really have been going about this all wrong. He is joining us as our tax and financial planning expert at our panel discussion, Unraveling the Mysteries of Your Money, this week and we were discussing some talking points.  He told me how so many consumers wait until the last minute, throw everything together and take it to any CPA that will take them, but they forget one key aspect.  PLANNING!

Now I did not admit to Nelson that I was one of those people and quite honestly always have been.  You might be wondering why I didn’t go to Nelson since I know him and think highly enough to consider him an “expert” for my panel.  I felt like it was mixing business and personal too much.  Though I don’t imagine him seeing my nonprofit salary would scare him away from continuing to be a donor.  I did however refer my grandmother to Nelson.  She too had gone to the same tax preparer for 30 years and every year complained how she made mistakes, but never did anything about it until the tax preparer retired this year.

So I’m taking a new approach for the future!  I’m going to try out this whole planning thing that Nelson was talking about.  More to come on how I’ll go about it.

While I was moving into my new home I found a box with some of old notebooks from about 10 years ago which I used to keep track of my finances in. It was an eye opener for me how differently I managed my money then. I used to spend hours planning out money for the coming months, writing down each paycheck and the bills that would be paid out of it, logging my loans and deducting the principle each time I made a payment, and hand writing out my budget.

In addition to the notebook I would also enter every transaction into Microsoft Money, categorize it appropriately and carefully watch how I was tracking to my budget during the month. This made it incredibly easy for me to do my taxes at the end of the year or identify areas that I could cut back on to create more funds in my budget. It was Microsoft Money that informed me that I was spending $80 a month at the coffee cart by my house and that I should kick my coffee habit.

It made me think how my money management has changed over the years. I no longer keep a notebook or use Microsoft Money. Being recently married we still are working to find the groove in how to handle our money and we’ve been able to create some processes and find some tools that have really helped us. Still, I am realizing that possibly due to having time and a larger comfort level in what I’m doing I am not spending the time and keeping the same level of details I did 10 years ago. Since I’m one of those that really enjoys working out my budget and scrutinizing over where each penny I spend goes I wonder if I should maybe revert back to my old ways a bit?

Now settling into my new home I am beginning to get back into my normal Sunday routine of drinking my coffee and reading the paper. There are only a few sections that I read; the front page, the business section and the travel section.

Brent Hunsberger has two great articles today. The article on the front page, Hundreds of Foreclosure Sales Halted http://blog.oregonlive.com/cgi-bin/mte/mt-comments.cgi caught by eye because the home that I recently rented and recently moved out of was in foreclosure.

The article talks about how lenders have withdrawn hundreds of foreclosure sales since February after there have been several questions on the legality of the process.

After months of my calling the trustee several times to continually hear that the home I was renting was still in foreclosure and then finding the day that I closed on the purchase of a new home that the case was closed. I was so surprised since by my estimation the home had a negative equity of approximately $200,000. I couldn’t image how the landlords who now lived out of state would be able to maintain this as a viable rental. Still, after hearing that the foreclosure case was withdrawn I assumed they must have worked something out with the bank. Now I’m questioning that. Do you think it was one of the homes that Bank of America withdrew?

Oh this feels so good! I’m happy to have this be my last in the Tenants in Foreclosure series which I’ve been living and writing about since last April. We officially moved into our new home last weekend. We are moving out the remaining items we have in our rental and will do our final cleaning.

On the 5th of February I called the trustee to find that the auction of the home was postponed by only two weeks until the 18th. I decided that I wouldn’t run the risk and only paid for rent through the 18th of the month. Upon follow up of the auction the trustee informed me that the home was no longer up for auction at all. It appears the landlords may have been able to work out some sort of modification.

So all’s well that ends well right?

I called the Trustee on Friday to see if my home got auctioned and come to find that it again was postponed. The different aspect this time though was they only postponed it by two weeks where all of the previous dates have been 30 or more days out. So I was posed with a questions….Do I pay for a full month’s rent or do I just pay for the 18 days that I know they will own the home?

We decided that it would be best to prorate the rent and pay for the 18 days that we know they will own the home and then on the 18th of the month we’ll call again to see if it was auctioned. I’m think this has to be coming to a close soon since it has been in foreclosure since April of last year and this time they only postponed the sale by 2 weeks. I did let the landlords know why I did not pay the full rent and did not receive a response from them.

More to come later in the month.

Its official, we are in escrow! We found a house to purchase and will get to soon leave our foreclosure nightmare behind. On Sunday I notified the landlords that we would be moving out and it felt so good. I also let them know that again I would be calling to make sure the home was not sold at auction on Feb 4th before paying the February rent.

That asked that we be sure to leave the house nice and have the carpets clean. Really? Of course we will leave the house in good repair, but it just irks me hearing them dictate what I need to do after all of the grief they have put us through these last 10 months.

It’s been a hard search finding the right how. Yes, there are a lot of homes on the market, but many are vacant and need repairs. When you are already putting 20% down on the home it’s hard to be able to find additional funds to repair the home.

The home we found is perfect for us and will make us happy for many years to come. There are some areas of concern that we have had to address during this process though. The first being that the home behind our new home is a foreclosure sale and is for sale for $180,000 less than the home we are purchasing. The home is slightly larger with a smaller less usable lot and needs some repairs, but still this is a large concern that our home’s value will decrease right after we move in due to the sale of this home. There really is nothing we can do about this, but with the market we are in it’s very unsettling.

The second issue that we have had to deal with is that the home we are purchasing was recently remodeled and there may be some permit issues. Most of the repairs were done by the homeowner and it appears that the permits may have been forced by the county because the work was being done by the homeowner without permits. The permits were closed out just days before the home was put on the market after being open for nearly 3 years.

Of course I did not think to look into this until our inspection came back with several electrical issues. I spoke with several inspectors at the county to find our more information. I encourage you do this if you ever have questions. They are very easy to reach and very helpful. I was able to find out about all of the permits and complaints filed on the home by going to www.portlandmaps.com. It lists all of the inspectors that were assigned to the permit and gives their phone number. I asked the electrical inspector how the home could pass inspection with so many items not being up to code. I was told by one inspector that there was over two years from when he saw the electrical work and gave the okay to drywall over. He said that there was a great potential that more was done in that time that he would not have seen at the final inspection time because everything was closed over.

I asked if the homeowner doing these repairs on his own left us open for any liability and he said that when you purchase a home you purchase any permit issues that may arise even if we did not initiate or do the work.

Did you know that when you purchase a home you are also purchasing any permitting issues the home may have?

My friend was a contractor and had a customer who had recently purchased the home and was doing some plumbing which required a county inspector. When the inspector came out he noticed that the home had a finished basement, but this was not on file with the county. All of the work had been done without permits. The customer had to hire my friend to rip out the entire basement and start all over bringing the whole thing up to code. It cost him about $30,000. He did not realize that when the box on the disclosures said that some repairs had been done without permits that it would mean he’d be open to such a huge liability. Yikes!

Tenants in Foreclosure- January Update

Well, I feel like I should just copy and paste any of my posts from the last several months because it’s all the same. The auction date for the sale of the home I live in and rent has once again been postponed a month.

The day after Christmas my husband, daughter and I were all in the family room playing rockband and having a great time enjoying what Santa brought when I look out the window to find a strange car pulling up to the home and snapping photos. Really? You can’t take the Christmas weekend off?

The next day the landlord sent an email informing us that they are approaching the end of their modification period and the bank is doing its final review so not to be surprised if somebody comes by. I guess he didn’t realize that we’ve been living with theses monthly drive byes.

The landlord again was kind enough to again send a “friendly reminder” that the rent was due by the 5th. I had to fight by the urge to give a snide remark letting her know that the reason the rent is not being paid on the 1st as it was for a year before we fell into the situation they caused is because we have to wait and see if the home is sold. We have to spend our time calling the trustee to see if the landlord is in fact entitled to the rent.

So, I hope to have a better update soon since they are supposed to be near the end of the modification process. I really can’t fathom how this is going to work out for them since by my estimation they are about $200,000 underwater.

With this going on for eight months now, I bet you are all losing interest right? My home, which I rent, has been in foreclosure since April is never going to sell right? By now, I have no idea.

The last sale date that was given by the trustee was December 3rd. On the 5th my landlord gave me a “friendly reminder” that my rent was due. I called the trustee to find that the sale date has been postponed once again with a new sale date of January 3rd.

Quite honestly I wish the bank would just auction off the house already. If it did sell at auction then I would no longer have a rental agreement with my landlords and could quit paying them money each month. I have no idea where the money I’m sending it going and that really bothers me.

Based on the research I’ve done if the home did sell at auction the rental agreement would become void. It would be up to the bank or new owners to work out a new agreement with us. They might even offer the “cash for keys” which I’ve heard so much about and since we plan to move anyway, why shouldn’t we benefit a bit from the whole ordeal? If it did sell then how long would it take for the bank or the new owners to contact us? From what I’m hearing it’s taking quite a while for anything to be done on these foreclosed homes. So until that happened I’d have nobody that I owed rent to. Doesn’t sound like a bad deal to me!

If only it had sold at the beginning of December. That would have made for some extra funds for my Christmas shopping