Here was a parting thought intern Lucy left with us. Happy reading!
Most of us do not realize how the color of our bedroom or living room can affect our everyday lives. The color of a room can influence our mood and our thoughts. I found these interesting mood- enhancing colors:
Calming colors: beige, pale apricot, and greyed-down violet.
Cozy colors: deep blue-green, pale sage, espresso brown, and deep rosy red.
Uplifting colors: lavender, yellowy green, and robin’s egg blue.
Sexy colors: deep red, hot pink, chocolate brown, and gunmetal grey.
Have you ever gone into a furniture store’s showroom and fallen in love with the pieces you see? Now how many times have you gotten those pieces home and they just don’t look as good as you remembered?
The truth is there is nothing wrong with the furniture. No, it’s not your house either. What you saw in the showroom is just not what you bought. Look at the illustrations below.
The first picture shows a fully decorated room with window treatments, area rugs, beautiful pieces of art on the walls, greenery and accessories on the mantle (much like the furniture store’s showroom). What you fell in love with in the showroom was the decorated look. What you brought home is new furniture- like the room in the second picture.
The difference is in the details. Furniture pieces are a huge component in a space, but without adding the extra touches, all you have is furniture sitting in a room. Nobody wants to come into their new home and see furniture lined up against blank walls or naked windows that make your house a fishbowl at night while allowing the sun to fade your furniture during the day.
Everyone wants to come home and feel comfortable in their space- all of our homes are lived in, but who says “lived in” can’t be beautiful? Never underestimate the value of floor and table lamps, art pieces, greenery and accessories in a room. These are the components we spend the least time thinking about but they all work together in layers to give our space the decorated look while still being functional. A little tip- allocate 30% of your budget for these items.
Liz: “Any last tidbits of advice, ladies?” Melody: “Prioritize goals! Be patient when planning a project. Make sure the improvement s they want to do fit into their overall financial planning goals and their ability to resell their property. From what I’ve seen, converting an attic to a bedroom, finishing a basement or focusing on rooms with water like kitchens and baths yield the best return on investment for homeowners. Liz: “That is so true! Susie, last words of advice?” Susie: “On the commercial side, for a business owner who wants to buy their own building, I always recommend that they talk with an attorney and a CPA before buying. Small business owners especially don’t know the tax advantages or liabilities of buying a building. We, as bankers can’t advise them on how to structure things, so they need the guidance of these professionals.
“The SBA (Small Business Association) offers some financing programs for borrowers to work with a bank and put a small amount of money down to secure financing. I recommend these programs for small businesses to use if they don’t have a lot of money.” Liz: “How do they go about finding information on these programs?” Susie: “They need to talk to their banker. The SBA doesn’t lend the money- the bank lends the money and the SBA provides the guarantee. So talking to their banker can help them get started.”
Melody Townsend, CFP owns Townsend Financial Planning with offices in Mt Sterling and Lexington. Those initials behind her name stand for “Certified Financial Planner” which a special distinction that I will let her tell you all about! Melody’s office is fee only, so she doesn’t charge hefty investment commissions. You can get more info on her website www.townsendfinancialplanning.com or call her at 859.498.2020.
Susie McEuen has nearly 30 years in the banking industry and has the distinguished title of VP at Community Trust Bank in Lexington. She works with business owners throughout the state to secure financing for their needs. Susie also has a team of bankers ready to help with personal financing. She can be reached at 317.442.8944 (treasure this, as it is her direct line) or mceuensu@ctbi.com.
I encourage you to seek these ladies out if you have financial questions and needs!
Liz: “Do you have a ceiling amount for the loans you can provide?” Susie: “Sky’s the limit as long as the cash flow, equity and values of the borrower make sense. There is no minimum and no maximum. The loan just needs to makes sense.”
Liz: “Do your clients approach you with the plans to do re-design and re-modeling projects a lot?” Melody: “Not a lot, but I do have clients that when asked about goals for their future, they list an addition to their home or redecorating their home. So, we keep a separate pot of money to be the start for their remodeling plans. Some clients want to pay cash and others want to take out a loan as long as it doesn’t jeopardize their financial situation. “ Liz: “So which do you see more often- people wanting to pay cash or people wanting to apply for a loan? Melody: “Well, they’re in my office so I never know if they are just saying that they want to pay cash because they are talking to me or not. The big thing to remember is that if you are over 85% in loans on your house and the real estate market drops you probably won’t be able to get out of your house. I try to keep client from inching up to the full value of their home even though some banks will loan them that much.”
Hope you are liking what you read. The final installment will be posted tomorrow!
Liz: “Melody, is there a certain place you advise your clients to place money they are saving for a project to possibly gain interest?” Melody: “Typically, if you have a time frame that is less than 5 to 7 years you would not want to subject the money to market risk. So I would not say ‘Let’s go find this great stock or mutual fund to dump the money into.’ The market could just as easily go down as it could go up. I would recommend a money market account or a savings account, or possibly some short term CDs. They would need to make sure the maturity dates would come before the start date of the project. I suggest that savings be as automated as possible to help them get closer to their goal on time.
Liz: “Susie, Is there a certain type of loan that you typically direct business owners to?” Susie: “If it’s a pretty large project, I set up a construction line of credit for them to draw on and during the project time period they pay interest only then afterwards it flips to a fully amortized loan. The loan would likely be tied to the building as an asset. The bank won’t lock into a rate longer than 5 years because there is too much risk involved in it. As a bank, we need to really know what’s going on with that business so we continue to monitor the changes in the business and their cash flow. We stay involved through the length of the loan.”
Money is a topic of conversation between me and all of my clients on a regular basis. They need to know how much they can comfortably spend on a project and I need to know what that amount is so I can determine how to best allocate it for them. I pulled in two fabulous financial contacts- Melody Townsend, financial planner extraordinaire; and the banker who is giving money away, Susie McEuen- to share some insight on how to prepare for a redecorating project (at home or in your business). I've broken up the interview into 4 installments and will be posting them daily between now and Wednesday. I hope you get a nugget or two that can help you in determining your financial picture!
Liz Toombs, C.I.D.: “How far in advance do you recommend people start saving money or applying for a loan that they would need for a large re-design project?”
Melody Townsend, CFP: “For a remodeling project, I would think a homeowner would take out a second mortgage or a home equity line of credit with someone like Susie. If someone wants to start a redecorating project, the savings time period would depend on the project, in terms of how big it’s going to be. If, for example, they want to start this project in 2 years they would need to have a budget in mind and divide the budget over 24 months to know how much to save each month. The other option is to start saving tax returns or company bonuses. My suggestion would be to break it down into smaller chunks because people have an easier time looking at it as a monthly or per paycheck savings versus one large lump sum.”
Susie McEuen: “Whether the client needs money for a project on their home or in their business, they would need to do a budget [personal side] or projections [business side] to determine if they have the cash flow to cover the additional debt they would be taking on. They really need to work with their banker to determine if they can cover this extra debt. I like it when people come to me and say “I’ve got an idea- this is what I want to do. This is how much I think I’m going to spend.” I like to see a budget of what they want to spend. We verify income and look at what we can use as collateral. It depends on the size of the loan and whether it is personal or business loan, but we typically ask for 3 years of financials. My side can go pretty quickly depending on how prepared they are with the information I listed. For lease-hold improvements we want as much information as possible: who is doing the project, how they are going to get paid, etc. The loan amount really dictates how much information we require [on the business side]. On the personal side it is a little easier to get funds, but we do look at if the improvements are going to drastically change the value of the house. If they are going to spend $50,000 to add on a sunroom we make sure they will be getting dollar for dollar back out of the project.”
Liz: “If someone is planning a major project what is the best method for them to prepare financially? Do you recommend them pulling from their savings account, cashing in a CD, or applying for a home equity loan?”
Melody: “If they are going to do a major remodeling project, I would love to know their plans several years in advance so I can get them in a position that it wouldn’t impact them as much financially. I look at their goals and help them prioritize how important the project is in comparison to their other goals such as putting their kids through school or their retirement picture, and then I help them determine what they can safely spend. First, I want to make sure that they have a fully funded emergency fund AND have a will in place. If they are on safe ground with these things, then I advise them on where to get their funding. I never advise them to put the project expenses on a credit card or to pull from their retirement or emergency fund!
Susie: “I would sit down with them to determine the reason behind the project. On the business side, I want to know what their 3-5 year plan is. I also consider whether they lease or own the building, because if they lease we may need to consider getting the landlord involved. If they own a building and need to expand because of company growth, we look at historical business numbers to determine whether it makes sense to give them the money. The bank will ask them to put cash into the project, because we won’t give 100% financing. This helps us ensure that they are committed to the project. But it all goes back to projections: What is their gain by adding on additional square footage? We don’t want to see them do a remodel that doesn’t add value.”
As a decorator I have some special privileges, like seeing all the HOT Christmas colors and ideas 5 months in advance. And let me tell you, I’m excited! The main color schemes are pretty similar to last year- rich earth tones (bronze, copper, silver), deep jewel tones (turquoise, sapphire), classic colors (black, white, red) and bold colors that I refer to as the 80s revisited (bright pink, purple, electric blue). If you are a glitz lover, then hold onto your hat because this year is all about glitter , sparkle and shine, giving you an all access pass to go overboard in your holiday decorating.
If these trends aren’t your cup of tea, no worries, take your personal Christmas style and own it. You can never go wrong with a vintage themed Christmas decorations (think Victorian lace) or rustic and all natural decor complete with fresh pine, family heirloom ornaments and popcorn garland.
Don’t forget that Polka Dots & Rosebuds offers holiday decorating for homes and businesses alike. Let us help you refresh or replace your tired decor. Make your appointments early because December will be here before you know it!
Oh, and before I forget….Here’s your personal SAVE THE DATE:
Polka Dots & Rosebuds Holiday Preview Party (for those shoppers who want to get a jumpstart and save a little cash)
Tuesday, November 2nd
BIG Savings on all custom painted gift orders (ornaments, glassware, canvases, etc)
Mark your calendar and tell all your friends, neighbors and coworkers because they won’t want to miss this! More details and individual invites to follow.
