Archive for Building Wealth

Buying a Used Car? Beware of Flood Damaged Vehicles

BMWs on Display - Know the Signs of a Flood Damaged Vehicle

If you are in the market for a used car, stay alert for prices that seem attractively low. The US has experienced two major hurricanes and numerous floods this year. Hundreds of thousands of vehicles suffered water damage – Fortune Magazine estimates the number of hurricane damaged vehicles to be over 1,000,000 in 2017.

Many of these flood damaged vehicles have been or will be offered for sale. Some of these vehicles will have been completely repaired and restored. The rest of these water damaged vehicles will have been partially repaired or perhaps not repaired at all beyond draining and drying.

What are the potential problems from buying a vehicle that has been immersed in water?

1. Mold and mildew. The upholstery, door panels, seats, carpets, dashboard, trunk … if not replaced or 100% dried, mold can quickly become a problem. It may not be noticed until much later when the area begins to smell or when you happen to expose the mold when doing an unrelated repair.

2. Rust. Anywhere water lingers on iron metals, rust can develop. The includes any exposed metal on the outside body of the vehicle – anywhere there is a scratch, chip, or dent. It includes door panels, the car floor, the underbody of the vehicle, the fuel pipes, muffler, and more. Importantly, it also includes the engine and any iron-containing bolt, nut, or other part that might be actually holding critical parts of your car in place. It could be many months, even years before you realize the extent of rust damage

3. Electrical system problems – the wires and electrical components are subject to rust and corrosion from water contact. This is one of the classic problems that can arise when you buy a vehicle that looks good but has been in a flood. Controls for the brakes, windows, heating/cooling, headlights, and so much more! Worse, according to Jerime Monroe at Denver Auto Body, flood-damaged cars can have a “huge risk for potential fires” (Source Denver CBS4). It can be many months before electrical system water damage begins to destroy a car.

4. Salt. Salt is highly corrosive to multiple parts of your vehicle and will eventually cause rust and all the problems that come with it. A vehicle that has been immersed in sea water will likely have a film of salt left after the water has evaporated away, as well as salt damage through out the engine, electrical system, and body. Potential damage from salt is so serious that many car repair experts will consider a salt water flooded vehicle to be unrepairable. (Source NAPA and Dashboard Light)

5. Water. Yeah, this one sounds obvious. Most water problems will show up immediately. Water in the fuel tank. Water in the air and fuel filters. Water that somehow found it’s way into the oil system, brake fluid, power-steering fluid, transmission fluid, windshield wiper fluid, or radiator. Water in the catalytic converter can ruin it. Excessive water in the crankcase or cylinders will usually make itself known by destroying the engine almost immediately after it is started. But small, even tiny, amounts of water that linger in any of these areas can slowly wreck havoc with your vehicle.

6. Dirt and debris. While this sounds cosmetic, it can actually be a cause of many serious issues. Perhaps the most dangerous is debris that finds its way in the brake system and interferes with your ability to slow or stop your vehicle. Any part in your vehicle that depends on movement, electric contact, or periodic contact with other parts can be affected by debris and dirt that result from a flood. This includes steering, doors and windows, spark plugs, joints, hinges, axles, and so much more.

So. Unless you are an ace with car repairs, you may find it wise to avoid flood damaged cars and vehicles altogether.

What can the potential buyer do to try to avoid unknowingly purchasing a flood damaged vehicle?

1. Start with the title. One of the easiest actions a buyer can take is to check the history of the car and its title. CarFax offers a free flood check using the car’s VIN number to see if flood damage was reported on the vehicle and if a salvage title was issued for the car. You will also find helpful information about flood damaged vehicles from CarFax on this page.

The National Insurance Crime Bureau – NICB – also offers a free VIN search to check for vehicles with a salvage title.

If the title check indicates a salvage title or a flood damaged vehicle title, and you are still tempted beyond all reason to purchase the car, then you should have the vehicle thoroughly inspected by a mechanic who has experience in assessing water damage in a vehicle. You should also be very aware that a salvage title or flood damaged title will likely make it very difficult for you to sell the vehicle.

Vehicles that pass the title check are not automatically in the clear. Through dishonesty or mistakes, a vehicle that was issued a salvage title may later get a clean title issued. This is more likely if the car has been titled and retitled in different states. If this history is not fully reported, then CarFax or NICB may not detect the prior salvage title.

A vehicle with a clear title may also have been badly flooded, but an insurance claim (and therefore reporting of the damage) was never made. You will need to take other steps to try to detect water damage in these vehicles. Even if there was an insurance claim for a flooded vehicle, if the insurance company did not total the car then a salvage title would not be issued.

As noted above, dishonest car sellers may re-title a vehicle in different states to have the “salvage” flag removed from the title.  This can be by titling the vehicle in a state that does not issue salvage flags on a title or it may be by maneuvers that cause the salvage flag to be unintentionally dropped.  If you are considering buying a vehicle that appears to have been titled in multiple states, you would be wise to trace the title to it’s origin before you purchase it.  You may uncover a prior salvage title from flooding or from other extensive damage to the vehicle.

2.  Look for water lines and water stains on the inside of the interior, glove box, trunk, and inside of the engine compartment.

3.  Look for condensation in the headlights and tail lights.

4.  Be alert for multiple electric problems – a vehicle with multiple non-working or problematic electrical systems, even ones considered non-essential, may be an indicator of more serious flood-related problems to come.

Check every electrical system you possibly can – cruise control, lights, dashboard lights, radio, DVD, traction control, seat controls, heat/air conditioning, 4WD, turn signals, etc.  Michael Jones of Autopom! even recommends that you check the wires under the dashboard by gently bending them.  He indicates that wet wires become brittle as they dry and will no longer be soft and bendable.

5.  Signs of mold or mildew – often the smell is the first sign.  If the car smells of mold, this could be an indicator of serious rust and other impending problems, regardless of whether it has been in a flood. Inspect the upholstery, the trunk, the seats, and as much of the dashboard as you can see.

6. Check for damp areas in the car.  Trapped moisture can linger for months in a vehicle.  Look for foggy mirrors, fogged instrument panels, condensation in the dome light, damp areas under the seats, under the gas and brake pedals, in the overhangs of the wheel wells, in corners,  and in areas not often accessed or exposed.

7. Look for rust and corrosion.  Extensive rust may be a reason to avoid a vehicle regardless of the cause.  But rust or corrosion in unusual places, such as hood springs, on normally protected screws and hinges, seat springs, in the dome light or overhead area, under carpets, under the spare tire, or even on parts of the engine, may be a flood indicator.

8.  Look for a salt or brine film.  This can be an indicator of a salt-water flood.

9.  Look for sand, silt, or unusual debris.  Sand and silt in the glove box, in the corners of the trunk, under the car mats, in the wheel wells etc. can be left behind when flood waters recede.  Same for clumps of debris in the engine compartment, wheel wells, trunk, or underbody.

10.  New carpeting, upholstery, seat covers, seats can be an indicator of a replacement due to flood damage.  Look for mismatched carpeting and upholstery too.

11.  Listen to the radio – static or distortion can be a sign of water damage.

12.  Check the oil and fluids – this one may be harder for the non-mechanic, but off colored or odd textured oil or fluids may be signs that water or water damage is present.


Of course this inspection list is not all-inclusive.  Further, you may not even recognize signs of water damage when you see them.  If you have any suspicion that a vehicle is flood-damaged or if you are purchasing a vehicle from an area that has experienced recent flooding, then have a pre-purchase  inspection by a mechanic who is experienced in finding signs of flood damage.

Staying sharp, watching for signs of flood and water damage, and avoiding the unknowing purchase of a flood damaged vehicle can save you thousands of dollars and prevent many hours of frustrations.  Now, that’s The Fat Dollar way!


How about you?  Have you ever owned a vehicle that has gone through a flood? Share in the comments!

Article by Patti Tokar Canton

Sources for this article and for further information:




Furniture and Clothing – NonCash Donations as a Tax Deduction

Wondering if it would help your Federal tax return to take a deduction for the clothing your donated?

The Fat Dollar article – Clothing and Furniture Donations on Your Tax Return was just updated and has links to Goodwill and Salvation Army valuation pages as well as useful information and IRS links. Click the link to see the article.

What better way to get a tax deduction than by cleaning out your own closets!

Junk That’s Really Treasures – Your Stuff May be Worth Money


Treasure ChestOk, maybe your old stuff isn’t worth a fortune, but it could be worth more than you expect. While I was clearing out some of my own clutter, I happened across a 2012 Woman’s Day magazine. (Yes, I did say I was clearing clutter.)

An article in the magazine intrigued me. It listed several items that “could fetch big bucks on places like eBay”. Hmmm.

Here are the things that were listed as possibly valuable items hiding in your home:

1. Small kitchen appliances – like bread machines, food dehydrators, espresso machines

2. Video Games – check

3. Tacky Sweaters – sweaters decorated with things like pictures, holiday themes, cats – the ones that Aunt Gertrude gave you that you would never, ever wear

4. 1950s Furniture

5. Vintage Electronics – pre-1980s stereo and hi-fi equipment – LP turntables, reel-to-reel tape decks, vacuum tube amplifiers, etc.

6. Lunchpails – vintage lunchboxes with TV show or celebrity images

7. Gold – old chains, earrings, broken bracelets

I’m on the lookout for tacky sweaters now. Did you know that you can search “tacky sweater” on e-Bay and a whole list of them will come up? It looks like you could sell one for at least $9.99. Not bad for something that you would love to get rid of!

Video games, I’m not so sure about. It must depend on the game. We’ve tried to sell some of our own games and sometimes the best offer was $1.00 per game. Sometimes it was $10.00.


Here are some other resources for finding potentially valuable items in your attic:


The Penny Hoarder – 7 Places to Find Hidden Cash .

Huffington Post – 15 Items in Your Home that May be Worth Money

Reader’s Digest – 9 Vintage Items That May be Worth Money

Mashable – 9 Valuable Things You Didn’t Know are Lying Around Your House

Cracked – 8 Insanely Valuable Items You Probably Owned and Threw Out

The Children’s Toys That Have Soared in Value

Bottom Line Personal – Don’t Throw Out These Old Electronics

BuzzFeed – 33 of your Childhood Toys that are Worth a Fortune Now


How to Sell Your Old Stuff

Once you find any collectible or valuable items in your home, selling them is the next step.  You can reach a broad market by selling on the internet. While selling your item on eBay is  a good way to consider, you should always first Google your item or do an internet search for your item to see if there are any collectors or specialized sites that might be easier and more profitable for selling your particular item.

One relatively new way to sell things on the internet is Facebook. Try searching “garage sale” and your city name on Facebook and you will likely be amazed at how many buy-sell-trade pages are operating in your area.

In my area the general procedure to sell something on Facebook is to first join the Facebook group for the online garage sale.  Then, following the rules of the group, post the item for sale with a photo and description.  The first person to comment that they are interested or want to buy must be given the opportunity to purchase.  Once the sale is agreed, then a public place is set for meeting and completing the sale.  If you break any of the rules of the group, then you are likely to be banned from the group

This is a good way to sell larger value items, but not necessarily items that will not sell for very much, especially since you will have to take the time and spend the gas money to drive somewhere and meet a prospective buyer.

Certainly you can also use the traditional ways to sell:  letting others in your circles know you have a unique item for sale, advertising in local papers and newsletters, and placing an ad on

A last resort would be a local pawn shop.  While you can quickly sell most moderately valuable items to a pawn shop, expect to sell for  much less than you would receive if you sold it yourself.

Finding treasures in your home and selling them has so many benefits:  it clears out items from your living space, it puts an item into the hands of someone who really values it, and it gives you some money for investing or paying bills.  Now that’s the Fat Dollar way!

Be sure and share with us any of your own found treasure stories!


Photo credit: & Stoonn

Review Your Regular Bills for Hidden Savings

Paying BillsNow is a good time to review your regular bills. Make a list of the bills that are paid regularly, such as electric and gas bills, internet and TV, cell phone, trash service, home and auto insurance, etc.

Start with the monthly bills and select one. Review every line item on the bill. Do you understand everything that you are being charged for? Are there items on the bill that you don’t need or use anymore? Are you being charged to rent a piece of equipment that you don’t have anymore?

For internet, TV service, and other similar bills, if you have had the same service package for a year or more, call the customer service center and ask if there are any discounts or different packages that may be available.

I recently called my internet and cable TV service and found that we were eligible for a free upgrade to a much faster internet service. The customer service rep did the upgrade while I was still on the phone. While that call didn’t save any monthly money, I felt it was a very worthwhile call. I am thrilled with the faster internet speed. As well, she gave me another number to call because it appeared that we were also eligible for a lower-cost package. I’ll be calling that number soon!

Go through each of your regular bills one by one, slowly and in detail. If you find a charge that should not be there, make the call or send the email and get the process started to get it eliminated. While it may only be a few dollars of savings, keep in mind that a few dollars each month adds up. Saving $5.00 a month is a savings of $60.00 a year. What would you do if someone handed you $60.00 at the end of each year?

Credit card bills should be reviewed each and every month as they arrive. Did you sign up for a monthly “club” that you haven’t used in 3 months, but are still getting a $19.99/month charge? Did a company accidentally double bill you for something? Are there charges you don’t recognize? Even a $.25 charge that you didn’t authorize should be investigated. It may be a test charge by a card thief to see if the card is good as well as to see if they are able to make undetected charges on your account.

A periodic review of your regular bills helps to prevent money being completely wasted on services or items that you no longer use or need.

Even better, as soon as you discover and remove an unnecessary charge, set up an automatic monthly transfer of that amount to your savings account. You won’t miss the money and your savings account will start growing effortlessly.

Take a look at The Fat Dollar’s post on Automatic Investing for more ideas on increasing your regular savings.

Photo courtesy of and patpitchaya.

Simple Secrets for Money Management

Learning to manage your money can be the difference between a life a struggle and a life of ease.  Learning money management is not complicated.

Here are some secrets for a life of financial strength from Northwestern Mutual Chairman and CEO John Schlifske that he shared with a group of students from St. Louis University:

1.  Don’t try to beat the stock market.  Just make sound investments.

2.  Do not borrow money to fund a lifestyle you can’t afford.

3.  Learn to live below your means – in other words, live on less than you earn.

4.  Always put aside an amount in savings.

5.  Although it’s not as “sexy” to drive a car that might not be as nice as your neighbor’s, in the long run you will have a much better life if you can learn to live within your means.

John also says that being in a position of having to worry about being able to pay your debts makes you lose options in life, limits your freedom to easily change jobs, and even limits your ability to have the funds to take advantage of investment opportunities.

Thumbs up from The Fat Dollar!  We’re here to help you learn to live well on the dollars you earn.

Specialized Job Listing Sites for Your Job Search

Man Circling Help Wanted AdsIf you’ve been searching for a good job, you have probably tried,, or  These are listed as the top 3 most popular job websites according to in their article The Top 15 Most Popular Job Websites | July 2013.

But what if you’ve tried all of the general job listing websites and still haven’t found the right job?  Try searching the specialized job boards.

There are websites that list job openings just for the medical field, engineering, accounting and finance, blue collar, creative fields, earth-friendly jobs, and more.  Try searching for sites that cater to your specific field of interest.

Try some of the listings in this article: Employment Websites to Help You Find a Great Job – List of Targeted Job Listings Sites for a list of nearly two dozen sites for your niche search.

Often the perfect job is the one that is not widely advertised so contacting friends and acquaintances in your desired field to ask them if they know of any job openings can be effective, too.

What is your favorite job search site?

Clothing and Furniture Donations on Your Tax Return

[Editor’s note – this article was updated on 02-14-16 to reflect current tax years and links]

One common and easy way to help a charity is to donate your good used clothing, furniture, and household goods.

Family Donating StuffBesides a clean house with more usable space, you may also receive a tax deduction for the fair market value of your donations.   A tax deduction on your income tax return can mean more money for you to pay bills, enjoy, invest, or to donate to charity.

To claim a deduction on your 2015 Federal tax return for a donation, you will use the Schedule A (Itemized Deductions).  Yes, this means that you must be able to itemize deductions in order to claim a Federal deduction for a donation in 2015.

One common question with donated clothing, furniture and household goods is how to figure the IRS donation values.

The short answer is that you will be able to deduct the lower of the fair market value or your cost basis of the donated property.

Figuring your cost basis is simple.  Your cost basis is how much you paid for the item.  You may also add in any additional costs to improve or prolong the life of the item.  For example, you may have paid $55.00 for a pair of shoes.  $55.00 would be your cost basis.

As another example of cost basis with extra costs, you may have paid  $50.00 for a dresser at a garage sale, and then another $25.00 to buy new handles, glue, and paint to improve it.  Your cost basis in the dresser would be $75.00.

Note, though, that the amount you can deduct is the lower of the cost basis or the fair market value. For most taxpayers, fair market value is what they will use on their tax return to value their donations.

So how do you figure the fair market value of donations?  Good question and the simple answer is:  fair market value is the amount that you could sell the item for.   Usually this will be the thrift shop or garage sale price.

Here are some resources to help you value your donated goods:

Goodwill Industries – Donation Value Guide  This Goodwill page has a link to a downloadable booklet which gives guideline values for clothing, household goods, and furniture. The link is toward the bottom, under the section Taxes and Your Donations. For example, according to the Goodwill guide, a woman’s shirt in good condition would have a fair market value of $2.00 – $12.00.

The Salvation Army also has a guide – Valuation Guide for Salvation Army Donations  In their guide, the Salvation Army values a woman’s blouse between $2.50 and $12.00, similar to the Goodwill values.

If you frequently shop at garage sales or thrift shops, then you likely already know what prices are reasonable for valuing your clothing and other items.

Other things to keep in mind for tax return purposes when donating clothing, or household goods:

The condition of the items must be at least “good” condition before the IRS will allow a deduction.

The donation must be made to a qualified charity.  Giving furniture to a deserving family is a worthy action, but it will not be tax deductible because the family is not a qualified charity.  Use IRS Search for Charities – (previously Publication 78) to see if your charity is qualified.

Keep a detailed list of your donated items, or snap multiple photos for your records.  Also keep notes on the date of the donation, the address and name of the charity that you donated to.

If your donation value will be $250.00 or more, be sure to get a signed, dated receipt from the charity.

If all of your noncash donations for the year total $500.00 or more, you will need to report the details on Form 8283.   The Instructions for Form 8283 are also a good resource of information on donations of noncash items.

IRS Publication 561 has good information – Determining the Value of Donated Property

Simple Life Corp has a more detailed article on taxes and giving items to charity – Is Your Donation A Tax Deductible Donation?

How much will a donation of household items affect your Federal taxes?

Let’s use the women’s blouses as an example.  Say you do a major clean-out of your closet and end up donating a variety of 20 women’s blouses in good to excellent condition to Goodwill Industries.  Using Goodwill’s valuation chart, you value these at $8.00 each.  This gives you a deduction of $160.00.  If you can itemize and you are in a 15% tax bracket, you will reduce your taxes by $24.00.  Not bad for an hour or two of cleaning out your closet.

Even better, you’ve helped out a charity, you now have a simpler, less crowded closet, and you got a few extra dollars to donate, spend, or invest. Now that’s The Fat Dollar way!




[11-30-13 … the link to the Salvation Army valuation guide was updated.  Also note that Publication 78 is no longer published by the IRS, but the link allows you to search for qualified charities.]

This article is for guidelines only and not to be considered specific tax advice. Consult your tax professional for specific advice on deducting donated items on your tax return.