Sound Advice

Money Management

Money Management is a weekly column on personal finance prepared and distributed by CPAs.

FOR IMMEDIATE RELEASE: November 30, 2009

WHAT’S ON SALE NOW?

Even in a tough economy, there are some bright spots. For example, many expensive purchases have gotten a lot less costly because of industry problems, a steep decline in consumer spending or both. The New York State Society of CPAs describes three big-ticket items that may cost less than they did a year ago.

TIME TO BUY A HOUSE?

By the middle of the year, home prices nationwide had fallen a great deal from their recent peaks, and the decline is much larger in some former boom neighborhoods. That’s why many people who might have been priced out of the market during the buying frenzy of the last few years are now wondering whether it’s a good time to purchase. As you shop, though, keep in mind that just because a house is cheap doesn’t necessarily mean it is a good value. Be sure to take all the usual precautions before committing to a purchase, including getting a home inspection from a qualified, independent inspector who checks to make sure the house is sound and not in need of major repairs. And while the home may feature a big price cut from the original asking price, ask your realtor to show you examples of recent comparable sales of similar houses in the same area. It may be that the house is still overpriced for the neighborhood, despite any price reduction. Finally, make a realistic assessment of your own budget for housing costs and determine whether the purchase price and monthly costs are truly affordable for you.

CAR PRICES MORE ATTRACTIVE?

Many auto manufacturers have lowered their prices in recent months due to a drop in sales in the midst of the recession and because of troubles in the auto industry. As a result, this may be a good time to shop around for great deals on new or used cars. When you do your shopping, ask about any incentives, either in the form of cheaper prices or lower interest rates, because many dealers are offering them. And get information before you go to a dealership on the best value for the car you want and what the competition is asking. Web sites such as www.kelleybluebook.com and www.edmunds.com provide information on basic prices on different models. When you’re an informed shopper, you have a better chance of getting the best deal.

TRAVEL IN THE PICTURE?

Both air fares and hotel rates have been attractive in recent months. There are two reasons. First, prices have dropped because of the problems in the economy and travel cutbacks by both businesses and individuals. In addition, airlines no longer have to pay for the high gas prices we were all facing last year.

Once again, though, shop wisely, being aware, for example, of hidden costs for any flight you book, such as extra charges for luggage, onboard meals or cancellation fees if you change your plans. They could wipe out the value of your bargain.

GOOD NEWS AT THE HOLIDAYS?

Keep in mind that it’s not only the most expensive items—such as houses, cars and air fares—that are now on sale. Many retailers have cut prices on a wide range of items to attract buyers and they are continuing to do so as the holidays draw near. Watch out for sales and you will likely be able to keep more money in your pocket this holiday season.

CONSULT YOUR LOCAL CPA

It’s important to remember that even a bargain is not a good deal if you can’t afford it, so don’t be tempted by low prices if you don’t have the money to pay for them. There are many ways to stretch your dollar in tough times, and your local CPA can help you make the most of them. Turn to him or her with all your financial questions.

###

Produced in cooperation with the AICPA
© 2009 The American Institute of Certified Public Accountants
PUBLIC SERVICE ANNOUNCEMENT
THE UPSIDE OF A RECESSION: BARGAINS
Approx. time: 30 seconds

Even in a tough economy, there are some bright spots. For example, many purchases have gotten a lot less costly because of a steep decline in consumer spending, among other reasons. The New York State Society of CPAs advises that numerous retailers have cut prices on a wide range of items to attract buyers and they are continuing to do so as the holidays draw near. Watch out for sales and you will likely be able to keep more money in your pocket this holiday season. It’s important to remember that even a bargain is not a good deal if you can’t afford it, however, so don’t be tempted by low prices if you don’t have the money to pay for them. Keep in mind that there are many ways to stretch your dollar in tough times, and your local CPA can help you make the most of them. Turn to him or her with all your financial questions.