The Tlingit and Haida Regional Housing Authority held a two-hour training session at the Nolan Center last Wednesday evening, April 24. The THRHA works across Southeast Alaska to create affordable housing, offers opportunities for home repairs, and even helps people learn about money management. Representatives from the organization came to Wrangell last week to offer training on financial planning and preventative home maintenance.
The budgeting portion of the training session was handled by Administrator Shaun Guthrie and Energy Assistance Coordinator Megan Gregory. Having a better understanding of finances is important for a number of reasons, Guthrie said. One of the most important reasons is to be self-sufficient and financially independent, which he said was increasingly important in today’s climate.
“With the new federal and state administration these safety nets are being taken away slowly,” Guthrie said.
One of the first things people should do when creating a budget, Gregory said, was to consider their “wants” versus their “needs.” It is also important to determine what their priorities are. If someone puts a high value on their health, they should budget more money for medical expenses. If they value their community, they should budget for donating to charity. By prioritizing one’s values, putting together an accurate budget becomes easier, she said.
Understanding expenses is another important part of budgeting, they said. In general, a household’s expenses can be divided into three categories: Fixed, flexible, and luxury. Fixed expenses are things like rent and loan payments. Flexible expenses are expenses that are fairly regular, but change in size over time, like groceries or credit card bills. Luxury expenses are, as the name suggests, for luxury items like vacations or eating out at restaurants. Guthrie said that in an ideal scenario, 50 percent of a person’s income should be set aside to cover fixed expenses, while another 30 percent is used to cover flexible expenses. The final 20 percent should be set aside for savings. This is not always realistic, he said, but that should be the general aim.
Lastly, there are four steps to follow when creating a spending plan. The first step is to track one’s income and expenses month by month. Secondly, assess the previous month to see if more money came in or if more money was spent. The third step is to take action and alter the spending plan in ways that cuts back on expenses and better matches one’s financial priorities. The last step, simply, is to save money wherever possible.
“It’s important to track how much you’re spending, how much you’re saving,” Gregory said.
Budgeting was not the only finance-related topic covered in the training session. Amber Hommel with First Bank spoke about how to avoid fraud. Fraud is a common occurrence across the country, even in Wrangell. Hommel said that she has heard from many customers complaining about phone calls from people claiming to be with the IRS, or from some organization stating the customer has won a contest and needs their personal information. Hommel said that there are several easy ways to protect oneself from fraud. First off, if the offer being made by the person on the other end of the phone is too good to be true, it probably is. Another tip is to not trust caller ID. Even if it is a Wrangell number that the scammer is calling from, phone numbers are easy to fake. Go to Google and search the person/organization that is calling to ask for personal information, if one has doubts. Finally, when in doubt, talk to family, friends, or people at the bank before giving away any account numbers or making any withdrawals.
Larry Gamez, development and construction operations manager for the THRHA, spoke about home maintenance. Taking care of one’s home is a good way to save money, Gamez said. With a little preventative maintenance and up-front expenses, homeowners can avoid major costs in the long run. It is better to handle minor repairs now than major repairs later, he said.
“Preventatively watch and repair your caulking around the base of your toilet, easy fix,” he gave as an example. “$10 for a tube of caulking and $10 caulking gun, easy fix, $20. Emergency repair months later: Damaged vinyl and vinyl repair, caulking, and labor. Might have to have someone come in there and do that, $320. If times goes on and you wait for this leaky toilet to leak for a couple years, now you got a situation … There’s $1,000.”
Of course, not every homeowner will have the skills necessary to make a repair themselves. When a contractor is needed, Gamez had some suggestions on how to avoid getting cheated. The first step is to simply ask friends and family for recommendations on who to hire. Another good step is to get at least three written estimates from different contractors, to see who would be the most affordable. Get a written agreement before any work begins, and do not be afraid to ask to see the contractor’s licensing. Lastly, he said, never make a full payment until the work is complete. It is not uncommon to make a down payment, but the full expense should be paid only after the job is done.
Gamez went on to say that homeowners should routinely check their homes for any areas in need of maintenance. Everything from crawl spaces under the house to chimneys and rooftops should be examined for any damage, weathering, or other problems. Electric outlets, sinks, floors, and basically every other inch of the house should be checked. The sooner problems can be caught, the more likely it will be for a cheap fix. Dry rot is something homeowners should be on the lookout for, he added, especially in this region.
“Dry rot in Southeast Alaska is major. It’s always going to be a repair,” he said.
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