It sounds great in theory: Pre-plan and prepay your funeral expenses so your children and heirs won’t have to make expensive and difficult decisions while grieving. But not all pre-paid funeral contracts deliver on their promises as funeral homes go out of business, change hands, or raid the money consumers thought was safely invested in trust funds.

Comparison shop. The average cost of a funeral is $6,500, according to the National Funeral Directors Association—and that doesn’t include cemetery costs and extras like flowers, obituary notices, and limousines that can quickly boost the price to well over $10,000. But a full 79 percent of seniors report they have not done any comparison shopping for burial or funerals, an AARP study found.   Consumers received some protection from unscrupulous funeral providers with the creation of the Funeral Rule in 1984. This rule, administered by the Federal Trade Commission (FTC), requires funeral providers to give consumers accurate, itemized price information and other specific disclosures about funeral goods and services. The Funeral Rule requires funeral directors to provide price information over the phone to any caller who asks for it.

Unfortunately, the Funeral Rule does not apply to many of the features of pre-need contracts, which are governed solely by state law, and protections vary widely from state to state.

Following are some questions that the FTC recommends asking before signing up for a pre-need funeral arrangement. The questions are from the FTC’s booklet “Shopping for Funeral Services.”  See also the FTC’s Shopping for Funeral Services page.

• What happens to the money you’ve prepaid? States have different requirements for handling funds paid for prearranged funeral services.
• What happens to the interest income on money that is prepaid and put into a trust account?
• Are you protected if the firm you dealt with goes out of business?
• Can you cancel the contract and get a full refund if you change your mind?
• What happens if you move to a different area or die while away from home? Some prepaid funeral plans can be transferred, but often at an added cost.

These pitfalls can be avoided, of course, by making decisions about your arrangements in advance, but not paying for them in advance. Be sure to tell your family about the plans you’ve made; let them know where the documents are filed. If your family isn’t aware that you’ve made plans, your wishes may not be carried out. It may also be best for you to consult an attorney on the best way to ensure that your wishes are followed.

Pastor Clinton House

America is the land of the free and the home of the brave.  It is the land of opportunity and despite our issues (political, racial, and economical) it is still, in my opinion, the best place in the world to live.  And apparently, I am not the only one that believes this, because thousands and thousands of people try to come to America from all over the world to get a piece of the American dream.  And for many, that dream includes the ownership of their own home (spouse, white picket fence, and 2.2 kids sold separately).

Home ownership is a possibility that most Americans are familiar with and many are in the process of obtaining.  It is a huge accomplishment, and according to the Census Bureau, 64% of Americans own or are purchasing a home.  It is something to be excited about, and for most people, their home will be their biggest financial asset when they retire.  But home ownership can be a curse if you are not prepared properly.  So here are some tips on proper planning when it comes to purchasing a home.

1. Eliminate as much debt as you can.  Lose the car notes, credit cards, department store cards.  Get rid of things you make payments for.  These payments are wasting your money, stealing your income, robbing your ability to save, and lowering your ability to make a house payment.  The more money you have, the more house you can afford.

2. Save as much money as possible for a down payment.  The more money you have the better.  If you save up to put 20% down on a home you wish to buy, you can completely avoid Private Mortgage Insurance (PMI) altogether.  PMI is a fee you pay the bank monthly and they use it to foreclose on you if you stop paying the mortgage.  Essentially, it is you funding your own eviction (how crazy is that!!!). And the higher the PMI, the less house you can afford.  I know there are a lot of “creative” programs out there and several of these programs allow low down payments (some as low 3%) but I would warn you about those.  Just remember all the homes lost in 2008 due to “creative financing”.  Let’s not repeat the same mistakes and just do the hard (but simple) thing and save the money.  You can do it, but it will take effort.  Cash is still king.  It is better to have the cash to avoid PMI.

3. Do not let your eyes be bigger than your wallet.  Your cash flow will determine how much house you can afford.  Although paying cash is better, because buying a home is such a large investment, most people will get a mortgage.  For the sake of security, a good rule of thumb is a mortgage payment with all the fees (taxes and interest) should not exceed more than 25% of your take home pay (not your gross).  Here’s the tricky thing, mortgage companies will lend you more money, but the more money you borrow, the less money you have to build wealth.

4. A 15-year mortgage is the way to go.  I know you can afford a bigger house with a 30-year mortgage, but you are guaranteed to be in debt for an extra 15 years.  And you pay hundreds of thousands of dollars more in interest of the life of the loan.  That is tens of thousands of your dollars going to make the banks rich that could be better spent making you wealthy.

If there is one investment every wealth person has, it is real estate.  Why?  The answer is simple.  God is not making any more land.  He already made all the land He is going to make, and He did a good job (if He may say so Himself).  So real estate is a finite resource and it usually gains value over time (that is what makes it a great investment).  It is another example of God providing the opportunity for us to gain wealth and we do ourselves a disservice if we neglect His provisions.  Get your finances in order and start taking these steps to owning your own home.  Go get what God has for you.