Effective tax rates in the United States

I messed up! Despite trying to make this article as fact-based as possible, I botched it. I’ve made corrections but if you read the comments, early responses may be confusing in light of my changes.

For the most part, the world of personal finance is calm and collected. There’s not a lot of bickering. Writers (and readers) agree on most concepts and most solutions. And when we do disagree, it’s generally because we’re coming from different places.

Take getting out of debt, for instance. This is one of those topics where people do disagree — but they disagree politely.

Hardcore numbers nerds insist that if you’re in debt, you ought to repay high-interest obligations first. The math says this is the smartest path. Other folks, including me, argue that other approaches are valid. You might pay off debts with emotional baggage first. And many people would benefit from repaying debt from smallest balance to highest balance — the Dave Ramsey approach — rather than focusing on interest rates.

That said, some money topics can be very, very contentious.

Any time I write about money and relationships (especially divorce), I know the debate will get lively. Should you rent a home or should you buy? That question gets people fired up too. What’s the definition of retirement? Should you give up your car and find another way to get around?

But out of all the topics I’ve ever covered at Get Rich Slowly, perhaps the most incendiary has been taxes. People have a lot of deeply-held beliefs about taxes, and they don’t appreciate when they read info that contradicts these beliefs. Chaos ensues.

Tax Facts

When I do write about taxes — which isn’t often — I try to stick to facts and steer clear of opinions. Examples:

  • The U.S. tax burden is relatively low when compared to other countries.
  • The U.S. tax burden is relatively low when compared to U.S. tax burdens in the past.
  • Overall, the U.S. has a progressive tax system. People who earn more pay more. That said, certain taxes are regressive (meaning that, as a percentage of income, low earners pay more).
  • A large number of Americans (roughly one-third) pay no federal income tax at all.
  • Despite fiery rhetoric, no one political party is better with taxing and spending than the other. The only period during the past fifty years in which the U.S. government had a budget surplus was 1998-2001 under President Bill Clinton and a Republican-controlled Congress.

Even when I state these facts, there are people who disagree with me. They don’t agree that these are facts. Or they don’t agree these facts are relevant.

Also, I sometimes read complaints that the wealthy are taxed too much. To make their argument, writers make statements like, “The top 50% of taxpayers pay 97% of all federal income taxes.” While this statement is true, I don’t feel like it’s a true measure of where tax burdens fall.

I believe there’s a better, more accurate way to analyze tax burdens.

Effective Tax Burden

To me, what matters more than nominal tax dollars paid is each individual’s effective tax burden.

Your effective tax burden is usually defined as your total tax paid as a percentage of your income. If you take every tax dollar you pay — federal income tax, state income tax, property tax, sales tax, and so on — then divide this total by how much you’ve earned, what is that percentage?

This morning, while curating links for Apex Money — my second personal-finance site, which is devoted to sharing top money stories from around the web — I found an interesting infographic from Visual Capitalist. (VC is a great site, by the way. Love it.) They’ve created a graphic that visualizes effective tax rates by state.

Here’s a summary graph (not the main visualization):

State effective tax rates

As you can see, on average the top 1% of income earners in the U.S. have a state effective tax rate of 7.4%. The middle 60% of U.S. workers have a state effective tax rate of around 10%. And the bottom 20% of income earners (which Visual Capitalist incorrectly labels “poorest Americans” — wealth and income are not the same thing) have a state effective tax rate of 11.4%.

Tangent: This conflation of wealth with income continues to grate on my nerves. I’ll grant that there’s probably a correlation between the two, but they are not the same thing. For the past few years, I’ve had a low income. I’m in the bottom 20% of income earners. But I am not poor. I have a net worth of $1.5 million. And I know plenty of people — hey, brother! — with high incomes and low net worths.

It’s important to note — and this caused me confusion, which meant I had to revise this article — that the Visual Capital numbers are for state and local taxes only. They don’t include federal income taxes. (Coincidentally, I made a similar mistake a decade ago when writing about marginal tax rates. I had to make corrections to that article too. Sigh.)

GRS readers quickly helped me remedy my mistake, pointing to the nonprofit Tax Foundation’s summary of federal income tax data. With a bit of detective work, I uncovered this graph of federal effective tax rates by income from the Peter G. Peterson Foundation. (Come on. What parent names their kid Peter Peterson? That’s mean.)

Federal effective tax rates

Let’s put this all together! According to the Institute on Taxation on Economic Policy, this graph represents total effective tax rates for folks of various income levels. Note that this graph is explicitly comparing projected numbers in 2018 for a) the existing tax laws (in blue) and b) the previous tax laws (in grey).

TOTAL effective tax rates in the U.S

Total Tax Burden vs. Total Income

Here’s one final graph, also from the Institute on Taxation and Economic Policy. This is the graph that I personally find the most interesting. It compares the share of total taxes paid by each income group to their share of the country’s total income.

Tax burden vs. total income

Collectively, the bottom 20% of income earners in the United States earned 3.5% of total income. They paid 1.9% of the total tax bill. The top 1% of income earners in the U.S. earned one-fifth of the nation’s total personal income. They paid 22.9% of total taxes.

Is the U.S. tax system fair? Should people with high incomes pay more? Do they pay more than their fair share? Should low-income workers pay more? Are we talking about numbers that are so close together that it doesn’t matter? I don’t know and, truthfully, I don’t care. I’m concerned with personal finance not politics. But I do care about facts. And civility.

The problem with discussions about taxation is that people talk about different things. When some folks argue, they’re talking about marginal tax rates. Others are talking about effective tax rates. Still others are talking about actual, nominal numbers. When some people talk about wealth, they mean income. Others — correctly — mean net worth. It’s all very confusing, even to smart people who mean well.

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Final Note

Under the Digital Accountability and Transparency Act of 2014, the U.S. Department of the Treasury was required to establish a website — USASpending.gov — to provide the American public with info on how the federal government spends its money. While the usability of the site could use some work, it does provide a lot of information, and I’m sure it’ll become one of my go-to tools when writing about taxes. (I intend to update a couple of my older articles this year.)

U.S. federal budget

The USA Spending site has a Data Lab that’s currently in public beta-testing. This subsite provides even more ways to explore how the government spends your money. (I also found another simple budget-visualization tool from Brad Flyon at Learn Forever Learn.)

Okay, that’s all I have for today. Let the bickering begin!

Source: getrichslowly.org

Inside Supernatural Star Jensen Ackles’ ‘Very Hip’ Lake House in Austin

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If you’re a die-hard Supernatural fan like us, you’re probably still reeling from the show’s finale and coping with the fact that there won’t be any new Winchester adventures for us to follow. But we’re not here to talk about that, but rather snoop into the private life of one of the series’ leading men. More specifically, Jensen Ackles’ house — which we actually think Dean Winchester would approve of.

The actor starring in CW’s longest running show and his wife Danneel opened up their 7,500-square-foot home in Austin, Texas to Architectural Digest, giving us a rare glimpse into the heartthrob’s home and personal life.

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As the story goes, the couple was relocating from Los Angeles and initially considered buying a house down the road when they noticed this property (that wasn’t even for sale). But since they fell in love with it, the couple went ahead and asked the previous owners if they’d be willing to sell. And since it’s not easy resisting Jensen Ackles’ charms, they managed to convince the owners so the Ackles’ moved on to the next step –- redecorating the house.

To help out, they hired architect Paul Lamb and interior designer Fern Santini and together they came up with some brilliant ideas on how to best revamp their already-stunning new house.

“It was imperative that the house express the Ackleses — young, bold, and irreverent,” Lamb told AD.

Jensen Ackles’ house, which boasts five bedrooms, revolves around Danneel’s decorating outlook of “more is more is more!” There is a lot of color, texture, a lot of wood work going on to make it look like a lake house and endless decorations with some of the coolest background stories.

Let there be music

In Supernatural, Jensen loves music. Remember his spontaneous Eye of a Tiger outtake? Still fun to watch! There’s definitely more of where that came from in real life, since Jensen did his best to create an amazing acoustic sound in his house.

The living room is scattered with guitars and all across the shag rug lie comfy and colored floor pillows. All this because the couple loves having friends over, sitting on the floor, singing and playing the guitar.

Jensen was excited to talk about one of his favorite features of the house: “The hand-scraped wood floors undulate quite heavily, and we’ve got these giant beams and wood all around that feel like you’re in the hull of a giant ship.” “What that does is it creates an amazing acoustic sound,” he continues. “We’ve always had music in our lives, and we wanted to pass on that tradition.”

Jensen Ackles home in Austin, Texas. Image credit: Jeff Wilson for AD

Jensen’s kick-ass bar

They’ve taken care of the music, and to complete the ambiance they got rid of the formal dining room (that nobody used anyway) and replaced it with a kick-ass bar.

Placed on one end of the large living room, the bar is made out of black walnut with black and white veined marble. The cabinets were specially made to light the expensive bourbons it holds inside.

Jensen Ackles home in Austin, Texas. Image credit: Jeff Wilson for AD

The master suite

There’s a master bedroom swaddled in Trove wallpaper bearing vintage photography of 1920s opera boxes. The wallpaper is covered in sections by Japanese-inspired barn door panels “because sometimes you need an audience and sometimes you don’t”.

Jensen Ackles home in Austin, Texas. Image credit: Douglas Friedman for AD

The master bathroom has a beautiful
bathtub sitting in front of a large window that provides a stunning view to the
lake.

The Mr. and Mrs. own two separate counters, because, you know, it just makes things easier in the mornings; and the inspiration for their master bathroom shower came from an Architectural Digest story featuring a steel and glass shower in the home of Neil Patrick Harris.

Jensen Ackles home in Austin, Texas. Image credit: Douglas Friedman for AD

Jensen Ackles’ bright, wood-framed home

Thanks to exposed beams, larger expanses of windows, and rich wooden ceilings, the architect managed to simplify and open the spaces. They simply tore down walls to let more natural light into the home.

Jensen’s favorite space is the breezy two-story screened porch that transformed the entire profile of the house; and his favorite piece – a custom long table made using a 2,000-year-old cypress log.

Parents of three

Jensen and Danneel have three beautiful children, so they had to choose the decor and furniture according to their needs as well. It appears that the couple’s eldest daughter would make a great interior designer once she grows up. The six-year-old girl, JJ, helped pick out all her own bedroom decor.

Jensen Ackles home in Austin, Texas. Image credit: Douglas Friedman for AD

Unsurprisingly, the kids’ favorite toy is a rolling acrylic table from the ‘50s, placed in the kitchen. Everybody loves a happy kitchen!

Jensen Ackles home in Austin, Texas. Image credit: Douglas Friedman for AD

Jensen Ackles’ home is full of hidden gems

The actor’s house is a personalized, eccentric, yet highly livable place. It was designed to resemble the Laurel Canyon bungalow the couple had once lived in and it’s a testament to the old school, Austin-style lake house.

The space is filled with all kinds of eccentric and eclectic objects—some useful, some decorative, some both. The decorations could be found in abundance in Austin during its bohemian period (the Ackles’ are active supporters of local art), as well as in late-60s California.

More beautiful celebrity homes

Rob Lowe’s Gorgeous House in Montecito is Back on the Market for $42.5 Million
Luxurious Malibu Estate Previously Owned by Kelsey Grammer On the Market for $20M
‘Hunger Games’ Actor Josh Hutcherson is Selling His Celebrity-Magnet “Tree House” in Hollywood Hills
Jessica Alba’s Los Angeles House is a Pinterest-Perfect Dream Home

Source: fancypantshomes.com

This Dream Getaway Home is Part of a $220 Million Aspen Ranch

If you’re a fan of the mountain farmhouse aesthetic, you’re in for a treat. Nestled into a hillside just minutes away from Aspen core sits the Mount Daly House, one of the eight modern ranch retreats at the 800-acre Aspen Valley Ranch.

The massive Colorado ranch — owned by oil and gas executive Charif Souki — was initially listed back in May 2020 for $220 million, which propelled it to the top of the list of most expensive residential properties for sale in the U.S.

Since then, marketing efforts for the property, led by Souki’s son, Chris Souki, along with Carrie Wells (both with Coldwell Banker) have shifted, with the massive ranch being divided into more manageable assets. One of which is the biggest home on the ranch, Mount Daly, which has been listed alongside a future homesite (so far simply titled Lot 9), which has a 13,000-square-foot proposed floorplan that would outshine all the other existing homesteads on the property.

Inside Mount Daly, a luxury ranch home in Aspen, Colorado. Image credit: Coldwell Banker Mason Morse Real Estate

The asking price for the two properties — Mount Daly and Lot 9, the future homesite of a 6-bed, 9-bath dream ranch home with a generous 13,000-square-foot floorplan — is a whopping $30 million, but that’s not above the mark for properties in the area, especially considering that the lots total 82 acres (in what’s undoubtedly a phenomenal location).

Mount Daly house has 5,373 square feet and comes with 4 bedrooms, 4.5 baths, and a barn. Designed by Michael Fuller, the residence beams with mountain farmhouse aesthetic, with its interiors paying homage to western culture and history, boasting reclaimed beams, barn wood, stone features, and other traditional ranch-style elements.

Inside Mount Daly, a luxury ranch home in Aspen, Colorado. Image credit: Coldwell Banker Mason Morse Real Estate
Inside Mount Daly, a luxury ranch home in Aspen, Colorado. Image credit: Coldwell Banker Mason Morse Real Estate
Inside Mount Daly, a luxury ranch home in Aspen, Colorado. Image credit: Coldwell Banker Mason Morse Real Estate

Best of all, the home rests on the valley floor at the confluence of two mountains, offering some of the best Elk Mountain range views. The massive windows carefully placed throughout the home make the most of these views, and invite calm and relaxation.

Inside Mount Daly, a luxury ranch home in Aspen, Colorado. Image credit: Coldwell Banker Mason Morse Real Estate
Outdoor entertaining area at Mount Daly, a luxury ranch home in Aspen, Colorado. Image credit: Coldwell Banker Mason Morse Real Estate

More luxury properties for sale

Charming Estate With Ties to The Beatles On the Market in Connecticut
This Stunning Modern House Was Built With Fire Safety in Mind
New Jersey’s Gloria Crest Estate, Once Home to Hollywood Silent Film Starlet, Is on the Market
Morgan Brown Re-Lists Stunning West Hollywood Home Amid Split from Actor Gerard Butler

Source: fancypantshomes.com

Charming Estate With Ties to The Beatles On the Market in Connecticut

A gorgeous, sprawling Connecticut estate with ties to The Beatles, Prudence Farrow, and the Gershwin brothers is up for sale in Westport for $9 million. 

The seven-bedroom, eight-bathroom, 9,360-square-foot property at 157 Easton Road, also known as River Run Estate, is being marketed by Compass’ Susan Vanech. It was originally built in 1955, and completely renovated in 2020, pairing old-school charm with modern-day amenities. 

The marketing for the resort-style estate is inspired by John Lennon’s ‘Imagine,’ as a reflection of the home being restored and getting a new lease on life. But there is also another, far more fascinating connection to The Beatles. 

Westport, CT home with ties to The Beatles. Image credit: Compass

Their song ‘Dear Prudence’ was based on Mia Farrow’s sister Prudence Farrow, who fell into a deep depression during her teenage years after her father’s sudden passing. John Lennon and George Harrison, who were in the same social circles as Prudence, wrote the song to help lift her spirits — and it ended up becoming a massive hit. 

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At the time, Prudence Farrow was living at the River Run Estate, and in her memoir, she describes hiking in the woods near the property, canoeing, skating on the pond, and playing with the neighborhood kids.

Back when Prudence resided at 157 Easton Road, the property was owned by violinist and photographer Leopold Godowsky Jr., and his wife Frankie Gershwin, younger sister to George and Ira Gershwin (the songwriting team whose songs were synonymous with the sounds and style of the Jazz Age). The frequent parties and gatherings at River Run Estate are said to have maybe inspired some of the Gershwins’ most popular compositions. 

The estate is the epitome of relaxed, outdoorsy Connecticut living, featuring personal tennis courts, a home gym, and access to the river waterfront with waterfalls to canoe, paddle, or swim.

Westport, CT home with ties to The Beatles. Image credit: Compass
Westport, CT home with ties to The Beatles. Image credit: Compass
Westport, CT home with ties to The Beatles. Image credit: Compass

There are also plenty of walking and hiking trails, as well as a pool and spa with a steam room. The outdoor area also includes a river house and a greenhouse, so the property would be an ideal fit for someone who loves the outdoors and enjoys being in nature year-round. 

Inside the property, there is an exquisite owner’s suite, as well as separate guest quarters for when friends or family come to visit. The home incorporates quiet offices, perfect for a work-from-home setup, a spacious dining room, multiple fireplaces, and fantastic views. 

Westport, CT home with ties to The Beatles. Image credit: Compass
Westport, CT home with ties to The Beatles. Image credit: Compass
Westport, CT home with ties to The Beatles. Image credit: Compass
Westport, CT home with ties to The Beatles. Image credit: Compass
Westport, CT home with ties to The Beatles. Image credit: Compass
Westport, CT home with ties to The Beatles. Image credit: Compass
Westport, CT home with ties to The Beatles. Image credit: Compass

Keep reading

A Charming Home Featured on HGTV’s ‘Property Brothers’ is Looking for New Owners
Shigeru Ban-Designed Home in Sagaponack, NY is the Prized Architect’s Only Project in the Area
New Jersey’s Gloria Crest Estate, Once Home to Hollywood Silent Film Starlet, Is on the Market
These 5 Unique Listings Will Remind You of Everything that Makes NYC Real Estate Special

Source: fancypantshomes.com

Here’s Why a Womb Chair is the Perfect Addition to Your Interiors

Regardless of the direction you plan on taking with your overall home design, the color scheme, furniture and accents will all play a major role in creating that spotless look you’re going for.

One element that can help you bring everything together is a carefully picked accent chair — which is one of the quickest ways to create a focal point. A beautiful piece of furniture will draw your eye as soon as you walk into the room or complement the space in a way that highlights the rest of its features.

And when it comes to nice chairs, both modern and traditional styles offer plenty of options. Over the years, we’ve seen trends go from club chairs to Chesterfields, then back to tufted armchairs, and on to minimalist chairs. So choosing one style — that’s also likely to stick around and not fade in popularity — isn’t the easiest choice.

But one style that doesn’t seem to lose appeal and can easily complement many types of interiors is mid-century modern. One particular piece that traces its roots to this timeless design — and has been growing in popularity within the past years, for all the right reasons — is the womb chair.

The womb chair is an iconic mid century modern masterpiece designed by architect Eero Saarinen. Its designer status can hamper many homeowners from buying it due to their limited budgets. Here are the top 10 reasons why you should furnish your homes with the womb chair:

A stylish addition to any home

One of the top reasons to go for a Saarinen womb chair is that it’s the epitome of stylish. It’s understated, brimming with elegance, and yet still highly fun and quirky thanks to its unique shape. It’ll definitely ramp up the ambiance of your home.

Works as a standalone piece

One of the best things about the womb chair is that it can be used as a standalone furniture piece. You can use it in a freestanding capacity in any place in your home – be it next to a planter, next to a bookcase, next to a beautiful gallery wall or even a zen corner of your home.

Also works as an accent piece

The womb chair along with all of its replicas is designed to be an exemplary accent piece. It’s classy, sophisticated, and yet unique enough that it’d be a great accent to many interior design styles.

With plain upholstery, it can bring tasteful contrast in modern, minimal, and contemporary spaces. With patterned upholstery, it can make a statement in eclectic, vintage, and retro interior designs.

SEE ALSO: ‘Queer Eye’ Design Expert Bobby Berk Shares His Top 6 Choices for Wall Décor

Very comfortable

The body and anthropometry of the womb chair have been designed in a way that makes it the pinnacle of comfort.

It’s stylish and trendy by default, but once you sit on it, you’ll realize that it’s also highly comfortable to boot. Therefore, you can set it up in spaces designed for you to relax – e.g. next to a fireplace, in your personal book nook, or even in front of a picture window.

Matches the rest of the furniture nicely

The design of the womb chair is as understated as they come. It’s simple in its complexity.

Its molded plywood design is simply upholstered in padding and fabric, and looks really beautiful with all sorts of furniture pieces. You can use yours to complement your living room sofa, your bedroom furniture, and even your desks in the office. 

Iconic mid-century design

The idea of the womb chair is totally inspired and is one of Eero Saarinen’s best works. To this day, it remains truly iconic. The Eero Saarinen womb chair has been designed to bring that iconic vibe in your spaces at an affordable price.

It’s a great piece for making a statement in your home – though admittedly, it works just as well in commercial spaces such as hotels, offices, air-port resting lounges, and more, which just stands to show how versatile it is.

A great chair for relaxing

A womb chair is perfect for spending a relaxing day on. You can place one in your study rooms – preferably next to you bookshelf or cabinet – so you can simply lean back and enjoy some great books from your to-read pile.

You can even add a small back-pillow to make the leaning experience all the more relaxing while you’re at it. Also, placing a floor lamp right next to it would look pretty good.

A statement piece

The womb chair is a true icon, so it’s a statement-worthy furniture piece. If you’re going for an instant visual impact, a womb chair replica is a great choice.

You can place it as a free-standing object in front of a plain or continuous backdrop as in this image. It would contrast with the background and make your ambiance feel all the more eye-catching.

Customize your fabric

The great thing about going for a womb chair is that you can always customize its upholstery. If you want to emulate pattern contrast in your home interiors, you can choose one that has a very unique pattern. If you want to emulate simple high-contrast in your spaces, then you’ll have a lot of options with simple or textured fabrics as well.

 Creates contrast

A good womb chair will imitate the classic high-contrast aura of its predecessors. This means that just these chairs will have a great high-contrast aesthetic that will make your homes pop with color, vibrancy, and uniqueness. You can place them at a focal point in your rooms so that they immediately catch the eye of anyone who enters the room.

There are a lot of reasons why you should furnish your home with a womb chair. You won’t just be investing in a typical furniture object – you’ll be investing in long-lasting comfort and timeless style.

Keep reading

10 of the Most Stylish Minimalist Wall Clocks You Can Buy on Amazon
6 Smart Home Devices to Keep Your Pets Safe, Well Fed and Entertained While You’re Away
The 15 Best Luxury Candles to Brighten your Home & Complement your Decor
Here are 10 of the Coolest Housewarming Gifts You Can Buy for Your Bookworm Friends

Source: fancypantshomes.com

7 Top Decorating Ideas for Your Bedroom this Fall: Making Your Room More Cozy & Stylish

Fall is one of the most exciting seasons of the year. The trees, the smells, the comfy sweaters and pumpkin spice lattes; it’s a cozy, wonderful time and who wouldn’t want to enjoy that warm vibe all year long?

And since this is the season that prompts us all to spend a little more time inside, homeowners and renters alike tend to step up their interior decor game and invite the fall into their homes, adding notes of warmth and pops of color that are typical for the fall season.

If you’re one of the many people that love fall and you’re looking for ideas on how to decorate your bedroom with seasonal elements, here are some great ideas for you to try.

1. Scented candles

When it comes to decor, we often think about how the room looks. Other senses are often ignored. With fall, it’s hard to ignore the power of scent as there are plenty of smells associated with this season.

Some good scents to bring into your bedroom during the fall season include: fresh fig, warm wood, cinnamon, oak moss, sandalwood, frankincense, patchouli, pumpkin, bergamot, apple, raspberry, clary sage, and so much more. Get several candles in these scents or better yet, get them in various blends. Essential oils could also do the trick on the odor side, but they lack the visual element that a well-picked, nice looking candle would bring.

To step things up a little, you can pair the candles with some nice, seasonal elements to create an arrangement where the candles are the centerpiece. Just remember that candles are flammable, so if you’re adding any seasonal flowers or items that might be lit up, keep them at a safe distance from the flame of the candle.

2. Ambient lighting

The right lighting can create a relaxing mood in your bedroom. This fall, you’ll want ambient lighting that’ll make you want to snuggle up in your sheets and never leave.

Instead of the usual white light bulb, opt for ones that emit a warm glow like orange or yellow. This will really go well with your scented candles, plus it has the added benefit of making you fall asleep faster.

3. Warm palettes

Another easy way to decorate your bedroom this fall season is by changing up the color palettes. I’m not saying to go crazy by painting your walls — especially if you’re a renter and don’t have the go-ahead from your landlord to repaint the walls. But there are many other ways to play with colors that don’t involve paint, fumes, or a full day’s worth of work.

Simply replace your current bed linens with some warm colors like orange, burgundy, brown, terracotta, red, and purple. You can also apply this in other areas of the bedroom such as your rugs and curtains, and make use of some nice wall art to supplement the fall color effects.

4. Cozy bedding

Since this season is all about getting cozy, you want to make sure that your bed is conducive to rest. Weighted blankets are the new fad so you may want to consider getting one. But in addition to that, you also have to think about the fabric.

You’ll want to keep warm this fall so consider replacing your current bed sheet and pillows with thicker ones made in velvet, fur, wool, or flannel. They’re wonderful fabrics that do more than just make you warm, they also add texture to your room decor. 

5. Fall accents

Replace last season’s accessories with fall accents. Some good ideas you can do are a vase of autumn flowers, a tray of pinecones, or even just a fall scented candle. 

6. Add in the rugs

One rug is nice but two rugs is even better. This ups the cozy factor allowing more opportunities for you to get warm. If there’s already one beside your bed, place the second rug in an area where you are likely to spend a lot of time like by the window or the foot of the bed. Opt for a rug in a contrasting color so that it doesn’t look too matchy-matchy.

7. Embrace the dark

We know natural light is great but fall is one of the rare times where you’re allowed to embrace the dark. This doesn’t mean you have to completely remove natural light from your room altogether, but you’ll want to have the option to darken the room if needed. For this, you’ll want to put up curtains in a dark color. This allows you to easily pull them together if you want to get extra comfy in the evenings, or even during daytime. 

There are plenty more ways to make the bedroom more appropriate for fall but these are the easiest, most effective ways to do it. We hope you enjoyed these tips.

Now onto you. What decor changes do you make in your home during the fall season? Share your thoughts in the comments below.

More tips for your lovely home

Here’s Everything You Need to Set Up a Meditation Corner in Your House
How to Properly Furnish a Small Bedroom to Fit a Large Bed
How to Add a Touch of Luxury to Your Home without a Costly Renovation
5 Ways to Add a Note of Sophistication to Your Kitchen Décor

Source: fancypantshomes.com

Loans Archives – Money Crashers

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Source: moneycrashers.com

When to Cancel a Credit Card? 10 Dos and Don’ts to Follow

If you’ve been thinking about canceling a credit card, it’s critical to understand how it will affect your entire financial life. Laura covers 10 dos and don’ts for when to cancel a credit card that will help you minimize credit damage and improve your finances.

By

Laura Adams, MBA
June 17, 2020

12 Credit Myths and Truths You Should Know

The Connection Between Credit Cards and Your Credit

The only way to build credit is to have active credit accounts in your name and to use them responsibly over time. That’s where credit cards come into play.

One of the biggest factors in how credit scores are calculated is called your credit utilization ratio. It only applies to revolving accounts, such as credit cards and lines of credit, which don’t have a fixed term. Credit utilization isn’t measured for installment loans, such as mortgages and car loans, because they do have a set ending or maturity date.Credit utilization is a simple formula that equals your total account balance divided by your total credit limit. For example, if you have a credit card with a balance of $1,000 and a credit limit of $2,000, your utilization ratio is 50% ($1,000 / $2,000 = 0.50).

Keeping a low utilization, such as below 20%, is optimal for good credit.

Keeping a low utilization, such as below 20%, is optimal for good credit. So, by paying down your balance on the card to $400, you could reduce your utilization ratio to 20% ($400 / $2,000 = 0.20) and boost your credit scores.

A low utilization ratio says that you’re using credit responsibly. A high ratio indicates that you may be maxed out and even getting close to missing a payment.

Many people mistakenly believe that getting rid of their credit cards will automatically improve their credit. The surprising truth is that canceling credit cards usually hurts it because your available credit on the card plunges to zero, which instantly increases your utilization and causes your credit scores to drop right away.

However, whether closing a card is right for you really depends on your current and future financial situation. Use the following do and don’ts to know when ditching a card is best and how to do it with minimal damage to your credit.

RELATED: 5 Ways to Get a Loan With Bad Credit

10 dos and don’ts for when to cancel a credit card

1. Do cancel credit cards that are a net loss

If you’re like Maria and have great credit with an unused card that’s costing you money, you may want to consider canceling it. Many rewards cards come with an annual fee, especially when they offer cashback, airline miles, or points for merchandise. In some cases, using the rewards easily offsets the annual fee.

If you won’t use the card or can’t afford the annual fee, common sense should be the deciding factor, not your credit score.

However, if you won’t use the card or can’t afford the annual fee, common sense should be the deciding factor, not your credit score. However, one option is to replace a card that charges an annual fee with another card that doesn’t, ideally before you cancel the first one. That allows you to swap out one credit limit for another one and avoid any damage to your credit.  

2. Do cancel credit cards that tempt you to overspend

I also don’t recommend keeping a credit card if it tempts you to overspend. Taking a temporary hit to your credit might be worth it to prevent bigger problems in your financial life.

3. Do cancel credit cards to simplify your financial life

If you’ve missed payments or can’t keep up with transactions because you have too many cards, it might be worth it to strategically cancel one or more credit cards. Keep reading for tips to minimize the potential damage to your credit.

4. Do cancel credit cards with low credit limits first

If you cancel a credit card, choosing one with a higher credit limit poses more of a threat than getting rid of one with a smaller limit. The lower your credit limit on a card, the less closing it could negatively affect your credit.

As I previously mentioned, for optimal credit, it’s best to never carry a balance that exceeds 20% of your available credit limit. If you’re not sure what your credit limits are, you can review them by getting a free copy of your credit report at annualcreditreport.com.

5. Do cancel credit cards you recently opened by mistake

A common credit dilemma is what to do after opening a new credit card that you felt pressured into at a retail store. Sales clerks make getting a huge discount with a new card signup sound too good to pass up. In some cases, you may not even realize that what you’re signing up for is a credit card.

If you’re loyal to a store and make frequent purchases there, having its branded credit card can give you nice savings and promotional benefits that make it worthwhile. While you can’t erase the card from your credit history, if you decide that you’d rather not have the account, closing it sooner rather than later is better for your credit.

Free Resource: Credit Score Survival Kit – a video tutorial, e-book, and audiobook to help build credit fast!

6. Don’t cancel your only credit card

In addition to maintaining low credit utilization, the health of your credit depends on having a mix of credit accounts. That shows you can handle different types of credit, such as installment loans and revolving accounts. But if you cancel your only credit card, that would leave you deficient in the revolving credit category.

It’s better to spread out your balances on multiple cards and maintain low utilization on each of them, rather than have one card that you charge to the limit.

Therefore, I don’t recommend canceling a credit card if it’s your only one. Having at least one card in the mix rounds out your credit file. Ideally, you would have a total of two or three cards that come from different issuers, such as Visa, Mastercard, American Express, or Discover.

If you have more than one line of credit or credit card, most credit scoring models calculate your utilization ratio for each account and collectively on all your accounts. So, it’s better to spread out your balances on multiple cards and maintain low utilization on each of them, rather than have one card that you charge to the limit.  

Depending on the types of charges you make, you may need a low-rate card for times when you must carry a balance and a higher-rate rewards card for charges that you always pay off each month. No annual fee cards are best, but as I previously mentioned, rewards cards that come with a fee may be worth it.

 

7. Don’t cancel credit cards you’ve had for a long time

As if credit utilization and having a mix of credit accounts weren’t enough, a canceled credit card hurts your credit in other ways. Another factor that’s used in calculating credit scores is how long you’ve had credit accounts.

Having a long, rich credit history boosts your scores and makes you appear less risky to potential lenders and merchants. Canceling a long-standing credit card causes your average age of credit history to decrease, which hurts your credit. So, value credit cards that you’ve had for a long time more than those you’ve recently opened.

8. Don’t cancel multiple cards at the same time

If you have more than one credit card that you want to cancel, don’t shut them all down at the exact same time. It’s better to space out cancellations over time, such as one every six months, to minimize the damage to your credit health.

9. Don’t cancel credit cards if you’re planning to make a big purchase

If you’re planning to finance a big purchase, such as a home or vehicle, in the next three to six months, it’s not wise to cancel any credit cards. If your utilization rate increases and your credit scores suddenly take a dive during the application process, you may ruin your chances of getting a low-interest loan.

If you’re planning to finance a big purchase, such as a home or vehicle, in the next three to six months, it’s not wise to cancel any credit cards.

Maria didn’t mention if she’s looking to use her great credit to borrow money any time soon. But it’s an important issue that I recommend she consider.

10. Don’t cancel credit cards because you’ve made late payments

Never cancel a credit card with negative information, such as late payments or being in collections, thinking that it will disappear from your credit file. All credit accounts stay on your credit report for seven years from the date you became delinquent, even after you or a card issuer closes it. Accounts with only positive information remain in your credit file longer, for up to 10 years

What should you do with unused credit cards?

If you or Maria go through these dos and don’ts and decide that it’s better not to cancel a credit card, use it occasionally to make small purchases that you pay off in full. That keeps it active and allows you to continue adding positive information to your credit history.

However, I don’t recommend keeping a credit card that you’re not using responsibly or that tempts you to overspend. Taking a temporary hit to your credit might be worth it to prevent bigger problems in your financial life.