Finance Blog number 1

Lean times call for budgetary triage. But while you should clearly opt for orthodontics before Disneyland, the choice is tougher when it comes to home maintenance.

Should you get a paint job or a new furnace? "There’s no homeowner’s manual that tells you when to do what," says Naperville, Ill., home inspector and structural engineer Mark Waldman.

Emergencies aside, the project that could cause the most damage and expense if left unfixed is the priority. Below, the order in which to tackle your biggest repair needs.

1. Electrical system

Wiring problems claim the No. 1 spot for good reason: They can lead to fires and electrocution. "That trumps everything," says Waldman.

Danger signs: Circuit breakers that trip frequently, lights that dim when you turn on the vacuum or outlets that are loose, hot, or accept only two-prong plugs.

How to check: Spend $300 to $500 for a licensed electrician to open up your main panel to look for trouble and to tighten any loose connections. He’ll also spot-check switches, outlets and light fixtures to ensure that the wiring is in safe working order.

Replacement cost: $4,000 to $10,000 to rewire the house.

Prolong its life: Flip every circuit breaker off and on again once a year to prevent corrosion. Add new circuits ($100 to $500 each) to take the heaviest electrical loads, like window air conditioners, off the old wires.

2. Basement

Structural problems downstairs mean shifting and cracking upstairs — at the very least — so there’s little point in doing other repairs until you’ve fixed the building’s foundation.

Danger signs: Bowed or split beams, rotted posts, piles of sawdust (evidence of wood-boring insects), tiny mud trails (indications of termites), or large cracks in the masonry foundation — especially if the cracks are horizontal, which tends to indicate a bigger problem.

How to check: A contractor will usually take a look free of charge. If he recommends significant repairs, hire a home inspection engineer (find one at nabie.org) to investigate ($350 to $500).

Replacement cost: Major foundation work can cost $3,500 to $8,000; new posts or beams could run $1,200 to $2,500.

Prolong its life: Water is the cause of cracked concrete, rotten timbers and wood-eating pests. So keep your basement dry by making sure the landscape slopes away from the house and maintaining the next two items on the list: the roof and gutters.

3. Roof

Water leaking into your home from above can lead to a host of pricey problems: rot, insects, electrical shorts and mold.

Danger signs: Dampness or stains on ceilings; curling, missing, or broken shingles; smooth spots where the granules have worn away; green algae growth.

How to check: Have a roofer inspect your home. This is typically free, but the pro, of course, is looking for business. So check the company’s reputation at angieslist.com ($5 a month).

Replacement cost: $5,000 to $15,000

Prolong its life: Prune tree limbs so they’re at least 10 feet from the roof to keep squirrels away and to let moisture evaporate quickly after storms. If shingles blow off, replace them immediately, and repair small leaks promptly.

4. Gutters

Your gutters are just as important as the roof. The only reason they’re lower on this list is that if you replace gutters first, they’re likely to get damaged when you reroof later. So if you need a roof too, it’s better to wait — or do both projects at the same time.

Danger signs: Dented or disconnected gutters, pooled water around your home’s foundation, or basement flooding near the downspouts.

How to check: Head outside during a rainstorm and watch the gutters in action, says Caitlin Corkins, stewardship manager for Historic New England, which maintains dozens of historic properties. "The best time to see clogs and overflows is when the system is working," she says.

Replacement cost: $1,500 to $3,000

Prolong its life: Hire a gutter company to clean, check, and repair your gutters ($100 to $200) at least once a year — two or three times if you’re in a wooded area. And have someone clear the eaves of deep snow to prevent icing, which can split open gutters or rip them right off the house.

5. Exterior walls

"People think paint is just a decorative element, so they let it go," says Robert Niemeyer, a Winston-Salem, N.C., handyman, contractor, and electrician. But without a weather-tight seal, water can infiltrate the siding, causing rot and attracting wood-damaging insects. Still, leaks from a vertical surface generally aren’t as quick or lethal as ones from a roof and gutter.

Danger signs: Paint that’s peeling, cracking or blistering

Replacement cost: $4,000 to $10,000; make sure the painters replace loose putty around the window glass and caulking gaps around molding.

Prolong its life: Hire a pro to do touchups every year. Trim foliage so it’s at least a foot from the house, and kill any mildew growth with a bleach-and-water solution.

6. Aging equipment

An old heating or cooling system is costly to operate — and the risk of a breakdown increases with age. But as long as your old furnace, boiler, or AC is operating safely, there’s no rush to upgrade.

Danger signs: The system cycles on and off frequently to hold your thermostat setting; you spot corrosion on the vent pipe; the natural-gas flames are yellow or orange instead of pure blue.

How to check: Get a repair estimate: if it’s more than a third of the replacement cost, spring for a new machine, says Indianapolis plumber Larry Howald.

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Replacement cost: Typically $2,000 to $4,000 for a furnace (forced air); $4,000 to $8,000 for a boiler (hot water); $1,000 to $3,000 for a water heater; $6,000 to $10,000 for an air conditioner.

Prolong its life: Have your systems cleaned and tuned annually, including flushing the water heater to remove sludge, replacing all filters and lubricating any pumps.

MONEY magazine is researching an article on ways to reduce the financial pain of college. We’re looking for families that can talk about new and creative ways that they’re raising cash for college and cutting costs while they’re there. Sound like you? Tell us your story and you might even get your picture in the magazine! E-mail Beth_Braverman@moneymail.com. 

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President Barack Obama, offering an election-year prescription to spur the economy, said the wealthiest Americans should pay more taxes in the name of fairness, to bring down the deficit and ensure those trying to make ends meet don

Strikes and demonstrations against Greek austerity measures hit the capital Athens on Tuesday, as international debt inspectors returned to decide whether the country’s reforms are strong enough for it to secure a vital bailout.

The officials from the European Union, European Central Bank and International Monetary Fund, which are lending money to Greece to keep it from bankruptcy, are expected to press the government for faster cost-cutting reforms.

Greece’s continued access to bailout loans depends not only on delivery on its austerity promises but also on negotiations with private creditors on a bond swap deal aiming to cut its debt by euro100 billion ($127 billion). It needs to get an agreement soon if it is to secure more rescue loans, with a bond repayment of euro14.5 billion due in late March.

Some 10,000 protesters took part in rallies in central Athens over potential pay cuts in the recession-battered private sector. Anti-austerity strikes in the capital disrupted public transport and other services. Journalist unions also launched a 48-hour strike.

Police said a plain-clothed officer from the anti-terrorism division was beaten and seriously injured by a group of some 30 protesters who took his handgun. The rally was otherwise peaceful.

Under government pressure, unions and employers are due to launch talks Wednesday to explore ways of slashing labor costs. Lower-level members of the debt of the debt inspection team started the talks in Athens on Tuesday, with the mission chiefs due Friday.

Meanwhile, Greece saw its borrowing rates ease marginally in a bill auction on Tuesday. Unable to issue long-term debt due to untenably high borrowing interest rates of 33 percent, the country maintains a market presence through regular treasury bill auctions.

The public debt agency said it raised euro1.625 billion ($2.06 billion) in a sale of 13-week treasury bills, an interest rate of 4.64 percent, compared with 4.68 percent in the last such auction in December.

Demand for the bills was 2.90 times the amount on offer, roughly the same as last month.

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America’s retailers enjoyed a record 2011 and their first $400 billion sales months ever. But the final month of the year was a dud.

Sales eked out a 0.1 percent increase in December, lifting sales to a seasonally adjusted $400.6 billion.

It was the second straight month that sales have topped $400 billion. The government revised November sales to show a 0.4 percent gain, twice the original estimate.

For all of 2011, sales totaled a record $4.7 trillion. That was a gain of nearly 8 percent over 2010 _ the largest percentage increase since 1999.

Steady sales gains have fueled a 20 percent surge from the low during the Great Recession. Monthly sales are even 6 percent above their pre-recession high. The figures confirm evidence that the economy was strengthening as 2011 ended.

Still, December’s increase was the weakest in seven months. Excluding volatile auto purchases, overall sales actually fell 0.2 percent. It was the first such drop since May 2010.

Part of the reason was lower gasoline prices. Those prices reduced sales at gasoline stations by 1.6 percent. Excluding gas stations, overall retail sales would have risen 0.3 percent in December.

Another factor was heavy discounting during the holiday shopping season. Many retailers said they had to offer cut prices in December to attract shoppers.

Separately, more people applied for unemployment benefits last week, the government said. Applications rose 24,000 to a seasonally adjusted 399,000. But the gain was largely due to companies letting go of workers after the holiday season.

Economists downplayed the increase. It followed three months of declines that had reduced the number of unemployment applications to their lowest level in more than three years.

And businesses increased their stockpiles in November to meet rising consumer demand. That gain likely boosted economic growth in the final months of 2011. Companies are rebuilding stockpiles after cutting them last summer amid fears of another recession. It means many anticipate higher consumer spending.

The government’s report on retail sales showed that holiday discounts weakened department store sales. They fell 0.2 percent in December. A broader category that includes department stores like Macy’s and big chains such as Wal-Mart showed an even larger drop last month: 0.8 percent.

Compared with the same time last year, retail sales have risen 6.4 percent.

An earlier survey of 25 major retail chains by the International Council of Shopping Centers found that revenue in December at stores open at least a year rose 3.5 percent over the same month a year ago.

That survey’s figures aren’t adjusted for seasonal changes; the government’s sales figures are. The government report is also a broader gauge. It covers purchases at all retailers, not just at major national chains. It also includes auto dealerships, restaurants and bars, grocery stores and gasoline stations.

Though December’s retail sales were disappointing, analysts said they still expect consumers to help the economy strengthen further, especially because businesses have stepped up hiring payday loan no faxing. More jobs mean more people with money to spend.

“Although consumer spending is not particularly robust, households do continue to spend and provide moderate support for the overall economy,” said Steven Wood, chief economist at Insight Economics.

The strength last month was led by a 1.5 percent jump in auto sales. Furniture store sales rose 1 percent. Hardware stores reported a 1.6 percent increase. But sales at electronics and appliance stores sank nearly 4 percent.

Restaurants and bars fared slightly better over the holidays. Their sales rose 0.7 percent.

The government’s retail sales report is its first look each month at consumer spending, which accounts for roughly 70 percent of economic activity. A healthy report typically signals a stronger economy.

Compared with the same time last year, retail sales have risen 6.4 percent.

This week, the Federal Reserve issued a report saying the final six weeks of 2011 were among the economy’s best last year. The report pointed to higher holiday and auto sales, along with increased travel.

The job market has brightened, too. Employers added 200,000 jobs in December. And the unemployment rate fell to 8.5 percent, the lowest in nearly three years.

Many analysts predict that economic growth rose to an annual rate of roughly 3 percent in the final three months of 2011. That would be an improvement from the summer, when the annual rate was just 1.8 percent. And it’s much better than the 0.9 percent growth rate in the first six months of 2011.

For the holiday season, many retailers drew customers by staying open on Thanksgiving Day or offering sharp discounts. Discounting helped generate record sales at the start of the shopping season and in the days before Christmas.

U.S. automakers have said that November and December were their two best sales months in 2011. Their U.S. sales rose 10 percent to 12.8 million in 2011, a 23 percent jump from the recession year of 2009.

Chrysler Group reported sales surged 26 percent for all of 2011. General Motors Co. saw sales rise 13 percent for the year. Ford Motor Co. reported an 11 percent gain for 2011.

Because the government’s retail sales report is seasonally adjusted, the current month can be compared with the previous month. But the figures aren’t adjusted for inflation.

A separate government report each month measures consumer spending. It’s an even more inclusive gauge. It covers all spending at retailers _ for both durable goods like cars that are expected to last for years and nondurable goods such as food.

This report also covers spending on services. Services include items such as doctor’s visits, airline tickets, apartment rentals and utility bills. The service category makes up two-thirds of consumer spending and isn’t covered in the retail surveys.

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Republican Senators Orrin Hatch of Utah and Bob Corker of Tennessee criticized the Federal Reserve for overstepping its role by making policy recommendations on how the U.S. government should try new ways to spur the housing market.

Hatch, the top-ranking Republican on the Senate Finance Committee, said the housing study sent by Chairman Ben S. Bernanke to Congress last week, along with recent Fed speeches,

Banks will be allowed go below minimum liquidity levels set by global regulators during financial crises to avoid cash-flow difficulties.

LONDON

North Korea said solving food and power shortages are urgent goals in 2012, and called on its people to defend Kim Jong Un, who inherited control of a country struggling to feed itself after 60 years of totalitarian rule.

The president of scandal-battered Olympus on Thursday called business partnerships an option for shoring up the gaping hole that the huge investment losses it hid for years have left in its balance sheet.

Olympus Corp. met its deadline to avoid being removed from the Tokyo Stock Exchange by filing correct earnings for the April-September first half and for the past five fiscal years on Wednesday.

The deception at Olympus, dating back to the 1990s, to hide 117.7 billion yen ($1.5 billion) in investment losses came to light when former President and Chief Executive Michael Woodford blew the whistle, questioning expensive acquisitions and exorbitant fees for financial advice.

Woodford, a 51-year-old Briton and a rare foreigner to lead a major Japanese company, was fired in October after confronting Olympus directors. Woodford, in town this week to meet with investors and other stakeholders to attempt a comeback, is demanding that the entire board, including President Shuichi Takayama, resign.

The battle over who will lead the camera and medical equipment maker _ embroiled in one of Japan’s worst corporate scandals _ could come to a head at the next shareholders’ meeting. Takayama said that might be held in March or April.

“Capital adequacy ratio is a big problem, and we are considering how we can overcome it,” he told reporters at a Tokyo hotel. “We are considering various options, including a capital tie-up and operational or sales tie-ups.”

Olympus appointed three outsiders to a new reform committee to beef up governance and present a plan to shareholders. The committee is in addition to an earlier panel announced by Takayama, which is investigating the scandal.

The company’s loss of 32.3 billion yen ($414 million) for the first half of the fiscal year, through September, a reversal from a 3.8 billion yen profit the same period a year earlier, was mainly from the economic downturn and losses from Thai flooding, Takayama said.

Woodford said he was opposed to tie-ups and had better ways to get capital for Olympus to shore up its hobbled balance sheet. He promised not to break it up or seek a partner, which may reduce its independence.

“I am very fearful of the current management working with parties to look for strategic alliances, which would mean in the end the loss of our independence,” he told The Associated Press on Thursday.

“Because of the strong cash flows and profitability of the medical business, we could raise funding from additional sources without losing our sovereignty,” he said at a Tokyo hotel.

Olympus should focus on core businesses _ medicine, microscopes, industrial products and cameras and other consumer products _ and stop acquiring unrelated companies, as it had in recent years, he said.

Woodford said he was talking with investors and many “influential people in the Japanese establishment” to line up support for his return at the top. He declined to give specifics, saying the discussions were “delicate.”

It is still unclear if Woodford will manage a comeback. Some people, such as former board member Koji Miyata, see him as a hero and have begun an online campaign to bring back Woodford.

The scandal has prompted soul-searching in Japan Inc. on living up to global standards in governance.

Some experts say laws need to be updated, corporate boards need more outside members and transparency needs to be strengthened. Ruling and opposition legislators met with Woodford earlier this week to hear his ideas about better corporate practices.

No one has been charged in the scandal. But Olympus management has said several top company men were involved in the scheme and has promised to investigate 70 officials, including former and current executives and auditors, to pursue possible criminal charges.

A third-party panel set up by Olympus, including a former Japanese Supreme Court judge, released the findings of an investigation earlier this month, which said top executives who were “rotten to the core” had orchestrated the accounting cover-up spanning three decades.

The fees for financial advice and overvalued acquisitions were part of an elaborate deception utilizing overseas banks and several funds to keep the massive losses off the company’s books, according to Olympus.

Japanese magazine Facta was first to report the dubious money.

Tsuyoshi Kikukawa, who was behind Woodford’s appointment as chief executive and later his firing, has since resigned as chairman. He is among several executives suspected of knowing about the scheme.

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House Republicans intend to propose a gradual increase in Medicare premiums for wealthy seniors to help cover the cost of renewing Social Security payroll tax cuts and benefits for the long-term unemployed, officials said Wednesday.

The precise details remain to be worked out as the leadership consults with rank-and-file Republicans about the legislation, which has grown significantly in recent days and is expected on the House floor next week.

GOP officials described the plan on condition of anonymity because no final decision has been made.

In addition to the extension of payroll tax cuts and jobless benefits that are at the heart of President Barack Obama’s jobs program, House Republicans plan to include a provision to avert a 27 percent cut in payments to doctors who treat Medicare patients. All three face a Dec. 31 deadline for action.

In addition, GOP leaders eager to attract votes for the measure are likely to include conservative-backed provisions to speed the construction of a controversial oil pipeline from Canada to Texas and block a proposed Environmental Protection Agency rule restricting toxic emissions from industrial boilers.

Across the Capitol, Democrats set the stage for a second politically charged vote in the Senate later in the week on their proposed surtax on million-dollar earners to help pay for the renewal of the tax cuts and unemployment benefits.

Senate Republicans blocked an earlier bill along the same lines, and the Democrats’ decision to call for a second showdown comes as they seek to brand GOP lawmakers as protectors of the rich at the expense of the middle class.

The move is “nothing more than another bill that’s been designed to fail, so Democrats can have another week of fun and games on the Senate floor while tens of millions of working Americans go another week wondering whether they’re going to see a smaller paycheck at the end of the year,” said Senate Republican leader Mitch McConnell of Kentucky.

Republicans oppose higher taxes, and GOP aides in the House pointed out that the proposed higher Medicare premiums for the wealthy would fall on some of the same individuals whom Democrats want to tax.

Senate Republicans included higher premiums in their own alternative measure last week. It would have required seniors earning more than $750,000 to pay more for Medicare Part B, which covers doctor visits and other costs apart from the expense of hospitalization.

According to Medicare’s website, monthly Part B premiums will be $99.90 in 2012 for beneficiaries with individual income of $85,000 or less. The cost rises gradually, reaching $319.70 for anyone whose income exceeds $214,000.

The dispute over taxes is one of several that must be settled before legislation can reach Obama’s desk, and Democrats sought to put the onus on Republicans.

Republicans have said in recent days that to cover the cost of doctor fees under Medicare, they intend to cut funds from the year-old health care bill that is the president’s signature domestic achievement.

Sen. Max Baucus, D-Mont., who is chairman of the Senate Finance Committee, dismissed that approach during the day as “not a good idea. That’s going to cause more problems than it solves,” he said, and urged Republicans to concentrate on drafting legislation that can clear both houses.

Speaker John Boehner, R-Ohio, and other GOP leaders must contend not only with Senate Democrats, but also with disgruntled lawmakers inside their own party who are reluctant to extend a payroll tax cut that they claim has failed to produce any jobs. The proposal to take a piece out of the president’s health care bill is likely to be an attractive addition to these Republicans, as is the renewal of current reimbursement rates for doctors who treat Medicare patients.

Officials said the emerging House bill is also likely to extend several features of Medicare that would otherwise revert to lower payments for some hospitals as well as for ambulances in rural areas, some mental health services and therapy services from non-hospital providers.

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