Financial setbacks happen. Even the most cautious of consumers have been caught unaware by an unexpected bill, the loss of a job, or other emergencies that turn their careful financial planning on its ears. The setback itself isn’t as significant as how you respond to it when trying to make a comeback. These are the things you need to keep in mind when trying to dig your way out of a financial setback. Assess Your Situation Before you can begin to recover, financially speaking, you must first thoroughly understand the ramifications of your setback. Most of the time, the source of your financial reversal is something that was entirely beyond your control. Even when you do not have control over the cause, you do have control over how you address the matter. Start by determining just how far-reaching the consequences of this setback are.  You have to know what the big financial picture looks like before you can begin making plans to change your future and make a comeback. Obtaining a copy of your credit report is an excellent place to start. You can also see if there are any mistakes listed and clear those up as you work to improve your overall financial situation. Find the Right Resources The first thing to realize is that no matter how overwhelming your situation may seem, there are resources available that can help you in your efforts to recover. Your mission, at this point, is to find the right resources to help you figure out where you want to go next and then, how to get there. One of the best resources to consider is a money mentor. These mentors can help educate you on the reality of your financial situation and the steps you can take to dig your way out of debt and make your economic comeback.  You do not necessarily need to spend money to find a qualified financial mentor. There are many excellent blogs and financial educators online who can help you find the resources you need to start your journey back to where you started and even into a better financial situation overall. That will give you a roadmap to follow that will cost you nothing to get started. You only need to establish a plan to help get you back on track. Establish a Plan That is one of the most important things you can do to begin the journey toward the financial future you had envisioned or even have had in the past. It would be best if you created a plan that you can put into motion to regain control over your financial situation. A few key things to remember when creating a plan include the following: Once you have your plan in place, it is time to create personal financial goals that go beyond merely recovering. Set Goals Part of making a comeback from your setback is to begin creating financial goals for the future. In your case, it can be something as simple as achieving a specific credit score by a particular time. Once you begin accomplishing some of the steps in your plan, like paying off some of your credit cards, your score will improve on its own. Once you have accomplished part of your plan, you can turn your attention to bigger goals and changes. The idea is always to create new financial goals to improve your financial circumstances. Takeaway A financial setback is just that — a step backward. Failing to recover and start moving forward, however, can prevent you from enjoying the comeback you so richly deserve. These steps can help.

Making a Comeback from a Financial Setback

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Operating under the idea of “less is more” in life and money, the minimalist model of living is something more people are beginning to ascribe to. The thought is the fewer possessions one has, the less crowded your life becomes. From interior design to closet space and all spaces in between, minimalism is gaining traction among consumers of all ages and all economic brackets. Here’s what you need to know about minimalism and the minimalist model. The Benefits of Minimalism The benefits of minimalism are different for every person, and people have different reasons for embracing the minimalist model. Some of the common reasons for embracing minimalism include: As you can see, the benefits are far-reaching for those who dedicate themselves to living minimalistic lifestyles. The benefits can be even broader than you expect, though. By reducing the “noise” around you (from things like the Internet, the clutter in your home, financial concerns, etc.), you may even discover a more peaceful existence. With less stress, you might find you realize physical and mental health improvements. These benefits are priceless. A Minimalist Home A minimalist home is one that offers many positive contributions. Not only is it uncluttered, but it is also easier to clean, maintain, and keep organized. Minimalist homes are not overcrowded with furniture. They offer clean lines and transparent surfaces. If you do have accent decorations in the minimalist home, they are few and, usually, meaningful. When you embrace a minimalist home, you focus on the quality of items in your home, rather than their quantity. This is how you begin. Tackle one room in your home at a time, and begin with the most essential items in the room – the furniture. This does not mean you cannot have any decorations in your life, only that you should have fewer distractions from the decorations you choose. A Minimalist Life A minimalist life is one that is better for your finances, your health, your mind, and the planet. When you live a minimalist life, you develop deeper relationships with the people in your life and focus more on things that truly matter to you. You also do not get caught up in the “noise” and “clutter” of the world around you. Your home becomes simpler to clean. You have time for the things that are most important to you, and you have the money and the energy to pursue activities that matter most. Takeaway The minimalist model is one most people would be happier pursuing in life. When you have fewer things, you discover you need fewer things. When you are unconcerned over accumulating more possessions, you enjoy the belongings you have even more. It is a gift you give yourself.

The Minimalist Model

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If you are behind on your bills or are drowning in credit card debt, chances are you might have been tempted to take out a payday loan. A payday loan is typically a loan between $100 to $500 that you have to pay back from your next paycheck. But, payday loans can be more damaging than they are helpful since many have interest rates that exceed 400%. What Is a Payday Loan? Payday loans are a short-term borrowing solution where you obtain a high-interest loan based on your credit profile and income. They may also be referred to as check or cash advance loans. The loan amount is usually a portion of your next paycheck. As mentioned, these loans can carry crazy interest rates for short-term borrowing. Finding Better Alternatives Some individuals can not afford to pay payday loans off within a couple of weeks. So, they either roll the loan over or take another payday loan out to pay off the first one. There are alternatives you can try rather than taking out a payday loan.. They include:
  1. Ask Family or Friends
    Ask a family member or friend if they would be willing to make a short-term loan to help you out of a tough situation. If they agree, you should always put the loan agreement in writing, provide them a time period where you will be able to repay the loan and offer to pay them a reasonable, but friendly, interest rate. This ensures reliability and trust. If they can not help you out financially, perhaps they could help with things like:
    • Sharing meals

    • Free child care

    • Other assistance

  2. Sell Valuable Belongings
    You can sell valuable items through a yard sale or at a pawn shop. You can put your belongings up for auction on sites like Craigslist or eBay. Selling belongings for fast cash is definitely a better solution than taking out a payday loan, especially if they are items you do not need.

  3. Try a Payday Alternative Loan (PAL)
    The National Credit Union Administration regulates PALs. It created the program in the year 2010. However, the loans must be:
    • Given in amounts between $200 and $1,000.

    • Issued only to people who have been members of the credit union for a minimum of a month.

    • Affordable, with a 28% maximum annual percentage rate and no more than a $20 application fee, which will reflect the actual processing cost.

    • Provided to individuals one at a time; people can not receive more than three PALs within a six month period.

    • Provide no rollovers; they must be repaid completely after one to six installment months.

  4. Get a Second Source of Income
    A temporary or additional part-time job might be needed for covering extra expenses. Today, there are a lot of side gig opportunities, including dog sitting, rideshare driving, and even grocery shopping. If you have substantial debt, you might require more funding than what a short-term payday loan can provide. Ask your family or friends if they can help watch your children so you can get a second job.

  5. Seek the Help of a Bank
    Many banks, when you consult with them, will often help consumers with pending overdrafts. They might help you work a short-term solution out with reduced fees. But, you’ll never know until you ask them.
Remember, payday loans, while a standard solution for paying off debt, come at a high cost, and they can be more damaging than they are helpful. So, it is always better to seek alternatives to payday loans whenever possible.

Alternatives to Pay Day Lenders

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The decision to become a one-car family can be one of the most financially liberating choices for any family to make. With the average cost of a new mid-size SUV hovering around the $25,000 mark, the expense of owning and operating multiple vehicles can be astronomical. Of course, the decision to downsize to one car is one that requires careful consideration before you make your move. What is the Dynamic? The first question you need to consider is this: what will it take to make your family work with only a single car? Many small and medium-sized cities offer plenty of transportation alternatives to automotive travel. So, the good news is that having multiple vehicles is not a lifestyle necessity. But you must really take stock of the practicalities of using alternate forms of transportation, too. One of the most important aspects of making the transition is effective communication by all family members. Last-minute changes of plan can throw the entire day off-course. That means you need to keep an active calendar of events, so the whole family always knows what is going on with transportation. At the end of the day, you need to have everyone on board to make the one-car plan work for your family. If family members are resistant or holding out, it could set your efforts back before you even know it by making everyone miserable with the new arrangement. Benefits of Being a One-Car Family There are many benefits to being a one-car family that goes well beyond the financial benefits. In addition to eliminating monthly payments, parking, insurance, maintenance, registration, and more, keep in mind to include things like: The big question most families have when weighing this decision is how to make it work. That requires careful planning and taking the time to measure how “on board” your family is for the idea. Make sure they understand the potential costs and benefits. Other Means for Transportation Becoming a single-vehicle family does not mean that other members of the family are left out in the cold when it comes to transportation. It just means you have to plan for specific events a little more carefully than if you were to have two vehicles. Fortunately, there are many alternative forms of transportation available in communities of all sizes, such as: There is also the potential to telecommute. If one or both parents in the family can work from home, making a move to a single-vehicle would be more comfortable. The goal is to simplify your finances and your lifestyle by downsizing your debt and your car situation. Make sure you have it planned to the point that it does not cause additional, unnecessary stress to accomplish. Takeaway Making the switch to become a one-car family does not have to be a painful decision, nor does it need to feel like a monumental sacrifice. As a matter of fact, it can be quite freeing by doing the following: With benefits like these, the sacrifice actually seems quite small.

Becoming a One-Car Family

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For those at the low-to-moderate-income level, the most substantial barrier to homeownership are the closing costs and a down payment associated with obtaining a mortgage loan. Because of this, most house finance agencies (HFAs) provide some closing cost and down payment assistance (DPA) to qualified homebuyers in their states with low-to-moderate-income.

What Is a Down Payment Assistance Program?

DPA programs offer homebuyers low-interest loans and grants that decrease how much they must save for a down payment. Nationwide, there are over 2,000 of these programs. Country, state, or city governments operate a lot of them. DPA programs will vary by the location, but many homebuyers could qualify for thousands of dollars worth of assistance for down payments. Most of the DPA programs through an HFA must be used along with a first-lien mortgage product the HFA offers. Several states provide stand-alone closing cost and down payment assistance that people can use in combination with any eligible non-HFA mortgage product. Certain DPA programs are focused toward certain populations, like: Others provide assistance for homebuyers who meet the purchase price and income limitations of their programs. Programs like these are structured in various ways including: A lot of HFAs also hand out federal funds to nonprofits or municipalities within their states for regional or local DPA or closing cost use. Frequently, these funds don’t need to be used simultaneously with HFA first-lien mortgage products.

How Do Down Payment Assistance Programs Work?

State housing finance agencies provide this help to combine with county and city government programs to meet affordable housing needs. Frequently, the plans are provided along with mortgages targeted towards first-time homebuyers. The types of closing costs and DPA vary by program. However, common types of assistance are:

Do I Qualify for a Down Payment Assistance Program?

DPA programs are usually meant for first-time homebuyers. A repeat homebuyer could be counted (and often is) as a first-time buyer if, in the past three years, they have not owned a home. Other requirements may include buying a home in a particular “qualified” area or income caps. Each DPA program is a bit different. The exact requirements for qualifying will depend on your location and the programs available. However, many have guidelines that are similar, including: Each program will vary by zip code. However, you are likely to more readily qualify if you are purchasing in a “target area.” so to speak.

How to Apply

Here’s how you can get started:
  1. First, you will want to browse the different DPA programs your state’s housing finance agency offers. Check out first-time home buyer state programs to find out about programs in your location.

  2. Next, check with your county and city to see if they provide any local first-time homebuyer grant programs.

  3. Then, visit the local government agency website or organization administering the program to see about DPA requirements and obtain a list of approved mortgage lenders.

  4. Lastly, apply for a mortgage through a lender approved for working with the grant program. You might want to check with local agencies about recommended loan officers with experience helping individuals apply for grants administered by them.

Takeaway

DPA can make a substantial impact on your home buying potential. It helps you buy a home more quickly. Many buyers are stuck on the sidelines, putting money aside and watching interest rates rise and fall. DPA programs might offer grants or forgivable loans for your closing costs and down payment. Resources like these can instantly build your buying power and help you buy a home much quicker.

Down Payment Assistance Programs

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Sudden financial windfalls come in many forms. Some people have no idea they are in the works or how to deal with them. Putting the money aside until you assess your situation can help you manage your good fortunes better and place you in a considerably healthier overall financial position. These are a few things you should do when you come into the money before you spend a dime.

Assess Your Debt

The first thing you want to do is look at your overall debt situation. Is your windfall enough to pay off some or all of your debt? The key is to assess and identify the debt that has the highest interest rate. You want to pay that debt entirely off, if possible, first. The best way to go is to make a list of your debts in order of interest rate from high to low. Then to start at the top and work your way down. If you cannot pay all of your high-interest debt off with your windfall, pay as much as possible and focus your attention on other high-interest debt. Some people focus on paying the most significant debt off first, but that is not always the best plan. Without careful consideration, high-interest debt can quickly spiral out of control, becoming massive unsecured revolving debt. In other words, it can become your own financial albatross. That is why you want to pay that debt off first. If you can pay off your highest interest debt, then move on to the next most high-interest debt. Continue on until you are at least within the realm of lower interest rate debts that will be easier for you to manage in the long-term.

Laying Out a Plan

Before you do anything, make sure you take care of your good old Uncle Sam. Otherwise, he could come back to hit you with a painful bite in the form of penalties and fees. Work with your accountant to determine how much of your windfall is subject to taxation and how it will affect your income tax rates. Make sure to set aside enough to cover the required taxes. Second, make sure you set aside some money to enjoy. Life is too short, and there are no guarantees. While it is always wise to think of the future, it can be foolish to do so entirely at the expense of today. Have a little fun with your windfall. You have earned it! Next, work on your debt situation. It is always good to have a plan going into negotiations and talks with creditors. Having cash on hand places you in a position of power dealing with them. Many of them will be more than happy to negotiate on things like interest rates if you promise to pay the principal in full.

Future Opportunities

Do not forget to look for ways to invest your money. Paying off debt is one thing. It is a good thing. You do want to remove some of the weight debt places on your shoulder. But you should also plan for the future with your windfall. That means setting aside some money for an emergency fund and investing the rest. If you do not currently own a home, you might be interested in using some of your windfalls to make a downpayment on a home. It is the ultimate investment in the future for your family. If you have a mortgage, consider paying it off if you have already paid off higher interest debts. Alternatively, you might invest in an investment property or a vacation property that you can use part of the year and rent out to others for the remainder of the year. Your financial windfall has created economic opportunities that, when used wisely, can help you improve your financial situation for life.

Takeaway

Do not forget to take a moment to enjoy your windfall with a little splurge for yourself and your family. Then get to work using your financial bounty wisely.

What to do with a Financial Windfall

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You may have wondered what happens if your aging parent ends up losing their ability to make financial or health decisions. How will you or other family members help them in these circumstances; how will you know what to do? A power of attorney, or POA, provides the legal ability to decide on another person’s behalf, like a loved one or an aging parent.

What Is a Power of Attorney?

A POA is a legal document that provides a person, referred to as the attorney-in-fact or agent, the authority to make decisions and take action on behalf of another person, known as the principal. Depending on the POA’s terms, the agent will have either limited or extensive authority to make a legal decision about the principal’s:

Steps to Create a Power of Attorney

There are certain steps you need to take to create a power of attorney. These include:
  1. Determining Your Needs to Help You Choose the Accurate Document
    You will first need to know the various types of POA documents available to you. So, what are your needs? Will you have to take over another person’s personal affairs or monthly expenses? Will someone have to take over yours? Do you need or want someone to make business decisions for you? Sell your property?

  2. Determining the Agent
    Depending on the state, the agent might be called an attorney-in-fact. Either way, they will receive the legal authority outlined within the POA to decide on behalf of the other person (the principal). This should be an individual who is:
    • Responsible and trustworthy

    • Won’t abuse this power

    • Make decisions in the best interest of the principal

  3. Filling Out the Document
    Once the “needs” have been determined and an agent selected, it is time to fill the document out. This is a simple process, but the document must comply with your state’s rules.

  4. Signing the Document
    Sign the document properly to make it legally binding. Again, depending on the state, you might have to sign it in front of a notary and two witnesses. Make copies of the document and keep the original. Many institutions won’t accept a photocopy of the document.

Different Types of Power of Attorneys

There are various types of POAs, including:
  1. Non-Durable Power of Attorney
    This type of POA is used for a certain period and typically for a specific transaction where you grant them the authority to act on your behalf. After the completion of the transaction, the non-durable POA ceases.

  2. Durable Power of Attorney
    The durable POA is a bit more binding than the non-durable POA. It might be used for allowing the agent to manage the principal’s affairs if they were to become unable to do so themselves. It doesn’t have a set period, and it becomes effective right away once the principal becomes incapacitated. It does expire in the event of the principal’s death, however.

  3. Medical Power of Attorney
    The medical POA grants the agent authority to take absolute control over the principal’s medical decisions if they cannot do so themselves or if they become incapacitated. This typically becomes effective upon the presiding doctor’s consent and allows the agent the authority to make all medical decisions for the principal.

  4. Limited or Special Power of Attorney
    This type of POA is used temporarily for one-time banking or financial transactions or selling a certain property. It is most frequently used when the principal cannot complete the transaction because of illness or prior commitments and wants to appoint the agent to act on their behalf.

  5. Springing Power of Attorney
    The springing POA becomes effective when a certain event occurs, such as your incapacitation. The springing POA must be extremely carefully crafted for avoiding any issues in identifying exactly when the triggering event occurred.

Takeaway

Suppose you are incapacitated or take care of a person who has no power of attorney chosen to handle things. In that case, your family will potentially be forced into time-consuming and costly delays. A power of attorney can be reassuring as a way to protect your real estate and financial interests, medical needs, health, and maybe even the manner of your death.

Creating a Power of Attorney

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If you own a home, the mortgage payments you make each month could help you build a substantial asset – home equity. The home equity you build represents how much of your home you own, which can grow with time.

What Is Home Equity?

Equity is how much of your house you actually own after you account for debt. To calculate this value, you will need to subtract your loan’s balance from your home’s market value. If you come up with a negative number, your house is worth less than what you owe, and you end up with negative equity. Having equity is valuable. It enables you to:

How to Build Equity in Your Home

There are ways to build up your home’s equity, including:
  1. Make a Large Down Payment
    Making a bigger down payment when you purchase a home allows you to gain equity right from the start. It is instant equity. For a bonus, when you put 20% or more of your property’s value down, you avoid costly private mortgage insurance.

  2. Pay More Money on Your Mortgage
    If you choose to add to your monthly mortgage payment each month, ensure the money you are adding will apply to the mortgage principal. Ask the lender of your mortgage how you can do that and keep an eye on your monthly mortgage statements to ensure the money is being credited accurately. There are several ways of paying more regularly:
    • Add more money to your monthly payment. Ensure it is a high enough amount that will make a difference but doesn’t harm your budget.

    • Change to making mortgage payments biweekly. Instead of paying monthly on your mortgage, pay biweekly. This will add on an extra monthly payment annually to your mortgage.

    • Schedule additional automatic payments with your bank or credit union to apply to the mortgage at regular intervals.

  3. Enhance the Property
    Some home improvements, remodeling, and curb appeal projects can boost the equity of your home. Smaller projects, such as replacing a front entry door or garage door or adding attic insulation, do better at increasing your home’s equity, particularly if you pay with cash rather than through a loan.
    Other things you can do to improve your property’s value involve enhancing your home’s energy efficiency. For instance, you can install double-paned windows, switch to LED lighting, upgrade to energy-efficient appliances, and add solar panels. Even smaller upgrades, like adding a smart thermostat, can appeal to energy-conscious buyers. Of course, modern bathrooms and kitchens are sought after, as are finished basements and decks.

How Does Building Home Equity Help Me?

Building equity in your home could be a long-term wealth-building strategy. Making your monthly payments decrease the amount you owe, therefore making payments on your home is often referred to as “a forced savings account.” This is different than almost all other assets bought with a loan, like vehicles, which lose their value as you’re paying them off.

Takeaway

It can take some time to build equity, but it is worth it. After you have built up enough equity, you can turn around and draw from it through a home equity credit line or home equity loan. Boosting your property’s value, making a larger down payment, and paying more on your mortgage each month are only some ways of growing your equity.

Building Equity in Your Home

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With all the available credit card reward programs, the problem is not whether you should get a rewards card, but what type would be the best?

What Are Credit Card Points and How do They Work?

Credit card points are one of the three primary credit card rewards types. The other two are miles and cash back. You can earn credit card points in various ways, which include: When it comes to a points credit card, you will most likely earn a minimum of one point per $1.00 you spend on all your purchases. However, other cards may offer more or less. Individual card programs may provide the same point amount across all purchases. Others will reward specific spending categories (i.e., restaurants, gas, groceries) with extra points. You can typically redeem your credit card points for things like: Sometimes, you could also redeem donations to charity or exclusive events. Each issuer provides a distinct range of choices and configures your redemption price settings. For instance, your points might be worth a penny when you put them towards travel. Then for cashback, they might be worth half a cent. While individual issuers have their own redemption instructions, you can typically redeem your points by going to your online account and the issuer’s reward center. This is where you will see your reward choices and their cost in points.

Getting the Most From Credit Card Points

When you contemplate signing up for a rewards card, the most essential thing is to do some serious thinking. An application you get in the mail might seem perfect, but it might not be a good fit in practicality. For instance, you might get an airline miles card, but you hardly ever fly. This would not be an ideal match. So, here are some tips to help you get the most out of your credit card points:
  1. Align Your Interests and Your Rewards
    Different reward card programs will come in various forms. Typically they allow you to collect points toward:
    • Gift cards

    • Merchandise

    • Cash back

    • Points

    • Travel miles
    Therefore, it would make sense to align your rewards with your goals or with what interests you. Suppose you are focused on budgeting your income better, for instance. In that case, you may select a card that provides cash back on basic things like filling your gas tank or shopping at the grocery store. Obviously, you would probably want to go with an airline miles reward card that provides you with miles if you travel. Try to avoid reward programs that try and entice you to spend more money, like those where you are required to meet a specific spending requirement within a short period. You might wind up spending more money than you normally would have.

  2. Do Some Comparison Shopping
    A big mistake a lot of consumers make is impulsively adding a credit card to their wallet. Rather than making an impulse decision at the moment, take several minutes to compare similar credit card offers online.

  3. Run Spending Through a Single Card
    Narrow the number of cards you use and do most of your spending on that card. That way, you will maximize the value of that card’s rewards program. Having a good rewards card will not do much good if you do not use it. While you do not want to spend needlessly to earn rewards, use the rewards card to pay for your usual expenses. This way, you will get more out of your spending in the form of rewards.
    To keep your credit card balance under control, you might wish to make weekly payments to avoid an unexpected bill at the end of the billing cycle.

Cash Back or Travel?

Selecting a rewards credit card will often mean choosing between travel benefits or cashback. There are advantages to both. Cashback is easy to redeem and flexible. Miles or points offer you the chance of free vacations. These days, individual cards allow you to redeem rewards for travel or cash at the same value. However, if you are making a decision between the two, your lifestyle is really what you should consider. Cash Back Rewards come in dollar form with a cash back card, not miles or points. You can redeem your rewards for: Cashback cards do not typically charge an annual fee. Not to mention, redeeming the rewards is really simple. Travel With travel credit cards, you receive miles, points, and in some cases, cash. There are two primary types: For individuals looking to earmark vacation rewards, these types of cards could help and may provide extra benefits.

Takeaway

There are a few essential things you need to consider when it comes to rewards cards or credit card points. You must decide whether you want a card with increased rewards in specific areas or a card with straight points across all of your purchases. Then base your decision on how you typically spend. Once you choose, regularly use your card – but not too much, so you can earn rewards and redeem them. Be sure you completely understand all your redemption options, particularly the value of your points for each.

Evaluating Credit Card Reward Programs

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Financial aid offers make college possible for many students across the country. But not all are created equal. It is essential to make an apple to apple comparison when it comes to financial aid packages to make the best decisions about your higher education options.

What Types of Financial Aid are Available?

Financial aid comes in many different styles and can include support from your college or university, the federal government, or private sources. These are some of the types of financial assistance that may be included in your financial aid offer. While other financial aid types are available, these are the most common financial aid types available today.

What Is a Good Financial Aid Offer?

The best financial aid offers are those that allow you to proceed with and complete your college education with the least amount of debt. If you must take on debt, it is best to prioritize subsidized debt over unsubsidized debt. The sad truth is that most people cannot fund their complete college education with grants and scholarships alone. Rising tuition and on-campus housing costs have created a scenario in which most grant programs are insufficient to meet students’ needs over four years. Consider that many students require five years to complete all course requirements, and those expenses are even more significant. That means you must compare financial aid offers that consider a wide range of information in addition to the cost of tuition, such as: Loans exist to fill in the gaps that grants, scholarships, and work-study programs leave open in your educational funding needs. They should be approached cautiously and used only when necessary. The best financial aid packages offer you the option to use few if any, student loans for your education.

Which Offer Is Better?

Because some grants, scholarships, and work-study offers are college-specific, you will have to compare packages individually to determine which best meets your needs. You will need to do a little homework to compare the cost of attending the various colleges and universities, including living expenses in and around the college.

Takeaway

The financial aid landscape can be tricky to maneuver, especially for students just beginning to explore their financial aid options. These tips can help you make better-informed decisions about which college you attend, the financial aid you accept, and even where you live while attending college.

Comparing Your Financial Aid Offers

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Spoofing is where an unknown person disguises communications as a trusted and known source. It is a form of cyberattack that criminals employ to meet specific malicious ends.

What Is Spoofing?

When it comes to cybersecurity, spoofing is where something or someone pretends to be something else in order to: A spoofing attack comes in various forms, mainly: So, how do cybercriminals fool you? They often simply invoke the name of large, trusted companies to get people to take some type of action or give up information. For instance, a spoofed email from Amazon or PayPal may inquire about a purchase you never made. Then, after raising concerns about your account, you may click on the link they include in the email. After you click on the malicious link, you are sent to a fake login page with a spoofed URL and a familiar logo, where you are prompted to provide your username and password. They may also use a malware download in an attempt to harvest your information.

Different Types of Spoofing Attacks

There are numerous types of spoofing attacks, including:
  1. ARP Spoofing. ARP spoofing is a common type of man-in-the-middle attack. It allows the attacker to intercept communications between network devices. Cybercriminals execute it by overloading a local area network with false ARP (Address Resolution Protocol) packets to allow them to tamper with the regular traffic routing process. Traffic is then redirected and read at the attacker’s computer before reaching its intended location. The attacker might also distort the data prior to forwarding it the actual recipient or they may stop all network communication.

  2. Spoofing. To perform an IP spoofing attack, the cybercriminal sends falsified source address Internet Protocol packets in order to obscure the packet sender’s actual online identity and thereby impersonates a different computer. IP spoofing is frequently used for setting denial of service (DDoS) attacks in motion.

  3. Website Spoofing. Con artists might try to dupe a target company’s staff into clicking into a “carbon copy” of a website they regularly visit and use for their work. Sadly, black hats (i.e. hackers looking to compromise systems, steal data, or take down networks) are rapidly becoming proficient at mimicking the legitimate website:
    • Branding

    • Layout

    • Sign-in forms

  4. GPS Spoofing. With people relying increasingly on geolocation services for avoiding traffic jams or reaching their destination, cybercriminals might attempt to manipulate the GPS receiver of a target device into signaling incorrect whereabouts.

How Can I Protect Myself Against Spoofing Attacks

Some ways of protecting yourself against a spoofing attack are:
  1. Be Observant. One way to prevent spoofing is to be observant. When you are alert, you can more easily spot any substantial spoofing attempts. Keep an eye out for various types of email message errors. Also, look for unusual sentence structures or inconsistent grammar. Typically, professional business entities don’t make trivial correspondence mistakes.

  2. Don’t Download Unsolicited Attachments or Click on Unfamiliar Links. If you doubt the sender, you could send a separate email to the sender’s actual email address, looking for confirmation.

  3. Check Out the Address of the Sender. One form of spoofing involves the sender’s address being tampered with by making slight changes to the letters’ positions in the address. By looking carefully, you can see if you’re dealing with a false address.

  4. Look Out for Phone Spoofing. Spoofing can occur on the phone as well. Install software on your phone that traces out the right caller ID. Or, you could check search engines to see if the number is linked with spam. You could also hang the phone up and call back the correct number.

Takeaway

In many ways, spoofing is worse than phishing since spoofing could be an attempt to steal data. Spoofing tricks the person into believing they are doing something right, but it is actually the opposite. The person will part with the data unwittingly, thereby causing harm to the company and its safety.

What is a Spoofing Attack?

View Resource What is a Spoofing Attack?
In the military, you can use available resources to help prepare for your future. As far as saving money, you have various tools to help you build and secure your financial future. And, the more you save, the more prepared you will be for unexpected events or opportunities that might come along. You might wish to purchase a new vehicle, help your kids pay for college, or contribute to a retirement fund. You can master these skills with tools and resources for saving and budgeting.

What Are the Basics?

There are some financial basics you need to know about:
  1. Saving and Budgeting
    You might be shocked at how small everyday costs add up. Go over your monthly cash flow to see how much you have coming in and how much goes out. What does the payment look like for your home? How much are you spending on your vehicle loan, entertainment costs, or household bills?
    There are various free downloadable apps to help you keep track of your expenses. You will also find software programs that can help, as well.

  2. Borrowing
    Being able to manage your debt is a critical part of your financial health. Having too much debt can negatively impact your financial position and credit score. A higher score could make it harder for you to obtain future loans.
    There are smart strategies available to help you recognize things like:
    • Bad debt vs good debt

    • Decreasing your credit card dependency

    • Paying down your bills

    • Taking control of your personal finances

  3. Blended Retirement Essentials
    Around 85% of all reserve and active-duty service members, under the Blended Retirement System by the military, will receive a retirement benefit, regardless if they are not eligible for full retirement. This is a huge difference from the number of service members who are saving for retirement today. You will be helping your future self out if you start saving today.

  4. Protecting Your Finances
    Many individuals fall victim to financial scams or identity theft every year which costs them time, money and aggravation. You do not want to join them. Learn different ways of protecting your military, personal and financial data and reducing your risk of becoming swindled while you are trying to build your financial security, which can slow you down.

What Options Are Available?

A primary resource for active-duty, National Guard, and Reserve service members and their families is Military OneSource. It is a U.S. Department of Defense program that provides free support and resources 24 hours a day, 7 days a week. Some available options include:
  1. Installation Financial Readiness Management Program
    The U.S. Department of Defense offers a network of support for the military community, including MilitaryINSTALLATIONS, one of many free resources from Military OneSource. These include:
    • One-on-one counseling

    • Seminars

    • Classes

    • Moving assistance
    They also provide additional information to educate service members about consumer rights and help them become financially stable.

  2. Family Life and Military Counseling Program
    This program provides counseling to help families manage finances, reach long-term goals like buying a home, get an education, plan for retirement, and resolve financial problems.

  3. Financial Counseling
    The Department of Defense provides numerous financial counseling options you and your family can use to plan and control your financial future.
    This resource helps service members learn personal finance basics, such as managing a checking account, paying down debt, creating a family budget, and selecting good investments. You can also read about military pay and compensation benefits, consumer rights, and military savings programs.

Benefits of Financial Counseling for Service Members

As a service member, you can gain access to financial counseling through MilitaryINSTALLATIONS programs for free. Counselors recognize and understand the financial challenges you have to deal with as a service member. The available resources could help you plan and manage your fiscal future. Obtaining financial counseling could help you by:

Additional Tools That Can Help

Service members have access to several resources for managing expenses and saving money. Learn about ways of saving and protecting your family’s financial health through these programs:
  1. Benefits.gov
    Visit Benefits.gov to find information on a large range of benefits you have available to you if you are an active-duty military or veteran. It is a resource available to all service members and their families. It provides information on:
    • Interest benefits

    • Interest rate reductions

    • Medical benefits

    • Educational benefits

    • And more

  2. Servicemembers Civil Relief Act (SCRA)
    The SCRA offers service members with a large range of benefits and rights, from eviction protection to interest rate reductions.

  3. Tax Preparation and Consultations
    Speak to a Military OneSource tax consultant by calling 800-342-9647 or visit their website for free tax consultations and tax preparation resources.

Takeaway

Having financial security may be simpler than you might think, particularly with the resources and tools available to you as a service member. Using them can help you create a successful financial plan for each phase of your life.

Financial Basics for Service Members

View Resource Financial Basics for Service Members
Google, Apple, T-Mobile, and the U.S. government are each working hard to end robocalls as well as other types of phone-based spam. While we all wait for these calls to end, it helps to know what you can do to end these aggravating and sometimes dangerous phone calls.

What Is a Robocall?

Robocalls compromise public safety and privacy, subject vulnerable consumers to intrusive and harassing debt collection and telemarketing tactics, and undermine the federal Lifeline telecommunications program. They use up low-income individuals’ precious limited minutes too. If you get a phone call and a recorded message is on the other end instead of a live person, you are dealing with a robocall. If you are receiving robocalls attempting to sell you something, chances are the calls are not legal – and are most likely scams. Unless you give a company your written permission to place a robocall to you to sell you something, it is likely illegal. The company must be clear about their request to call you with robocalls and gain your permission. It cannot make you agree to receive these calls to get a service or product. Even if you do give the company permission, you can always change your mind down the road.

Is There a Difference Between Telemarketers and Robocalls?

Telemarketers make unsolicited phone calls to help them sell their products and services. Robocalls, however, automate calls using autodialers and recorded messages.

Methods on Stopping Robocalls

The FCC is dedicated to doing what they can to protect you from these types of automated calls and unwelcome messages. They are taking various steps to crack down on illegal calls, such as:
  1. Budgeting millions of dollars to take enforcement actions against robocallers.

  2. Making it mandatory that phone companies use caller ID to help decrease illegal spoofing.

  3. Empowering phone companies to block unwanted or illegal calls by default before the calls even reach individuals.

  4. Making consumer complaint information available to allow for better labeling and call blocking solutions.

  5. Enabling consumer options or tools for blocking calls from numbers that don’t appear on their contact list or another “white list.”
What you can do: The FCC has provided some simple steps you can take to help decrease robocalls:
  1. Do not answer calls from unknown or blocked numbers.

  2. Do not assume any incoming call that appears to be from a local number is, even if it looks like it is.

  3. Hang up on any calls where you hear a recording like, “Hello, can you hear me?”

  4. If you receive a call from someone that says they are from a certain company, hang up and place a call to that company yourself. You can find the company’s official number on their website.

  5. Do not answer questions that a simple “yes” can answer.

  6. Hang up on any call that requires you to press a number to connect with a representative. By pressing a number or interacting with voice prompts, you let spammers know your number is genuine. They then can turn around and target your number more often or sell it to another company.

Takeaway

Keep an eye out for common phone scams, such as those scam calls that impersonate the government. If you receive a call from someone asking you to pay with a gift card, wire money, or hand over personal information, it is a scam. Look into call-blocking services to get fewer illegal robocalls. The call-blocking solution you decide on depends on where you are receiving the robocalls, whether on your traditional landline, mobile phone, or home phone, using the internet (VoIP).

Stop the Robocalls!

View Resource Stop the Robocalls!
There is no doubt about it. COVID-19 is one of the worst economic disasters this country has faced. Fortunately, we are a resilient nation. We can bounce back from storms such as this. Many people will be helped along the way by the various entities offering housing relief options for struggling homeowners who may be failing to make ends meet due to COVID-19. Whether you are unemployed or underemployed due to COVID-19 or are one of the millions of small business owners that simply could not remain solvent, there are various housing relief options available. They just may prevent you from losing your home as a result of the pandemic raging on our shores.

What Are My Options?

You may not feel like you have a lot of options when it comes to saving your home in light of your current financial situation. Relief might seem a foreign concept. However, the federal government and various lenders are stepping in to provide assistance to families in this time of great need. While some are providing humanitarian assistance, others are more practical in nature. The housing crisis of 2007-2009 looms large in recent memories for large and small lenders alike. No one wants to go through unprecedented foreclosures. As a result, new options are available to help you stay in your home. Whether you are a homeowner or a renter, there are protection options available for you. Each of these options offers some pros and cons, but all offer options for homeowners to find relief from overdue payments.

Protections for Rental Housing Relief

For renters who have fallen upon hard times due to COVID-19, there are protections to prevent landlords from evicting you. This protection went into effect beginning March 27, 2020, through January 31, 2021. There is a possibility this gets extended in later legislation. Some states offer additional security beyond what the federal government provides. What you need to know about this protection is the following: Your rent payments are still due. The protections only exist to buy you time. If you are experiencing hardships, it is always wise to seek state and local assistance and make arrangements with your landlord. You do not want to get too far behind. The ultimate goal is to avoid eviction once the restrictions are lifted.

How Do I Qualify?

For most of these programs, you only need to have the right kind of loan and take action to get started. The best place to start is with a call to your mortgage lender or landlord (according to your circumstances). Understanding options available can help you make informed decisions about the future of your mortgage.

Takeaway

Even with protections in place to provide housing relief options for COVID-19 and the financial devastation in its wake, you are still ultimately responsible for paying your rent and mortgage. These protections offer only temporary relief. It is up to you to repay your mortgage as promptly as possible and/or make arrangements with your lender for long-term relief.

Housing Relief Options and COVID-19

View Resource Housing Relief Options and COVID-19
Cryptocurrency is one of those words that is slowly trickling into our everyday vocabulary. Thanks to massive media coverage, many people have heard of it, but few people understand what a cryptocurrency is and what it could mean for them. The Cryptocurrency Evolution Perhaps the most widely known cryptocurrency on the market today is Bitcoin, which boasts nearly 14 million bitcoins in circulation. You have probably heard of this particular cryptocurrency. What you may not know, is that the intention of Bitcoin founder, Satoshi Nakamoto, was not necessarily to create a new currency, but to create a decentralized digital cash system. Many attempts to do just that have failed over the last several decades, mostly because they all attempted to utilize a Trusted Third Party (TTP) approach. Ultimately, all of these previous attempts failed, primarily because of security holes in the TTP approach. It was not until Satoshi tried to create a peer-to-peer system for electronic cash that a digital method succeeded. What makes this system different than so many others that failed? One reason is it is currently decentralized. That means no central servers are involved, and there is no controlling authority. What is a Cryptocurrency? The transactions are recorded both publicly and chronologically on a digital ledger referred to as blockchain. Blockchain technology has many uses other than cryptocurrency, but it works exceptionally well for this purpose because all currency transfers are verified simultaneously at both ends of the transaction. Today, cryptocurrencies have moved beyond Bitcoin. While Bitcoin remains the most recognizable name in the industry, other names are making waves and Investopedia recommends keeping an eye on these cryptocurrencies: Bitcoin may be leading the pack, but it is not the only one in the race. Of course, there is always the one we have not heard of yet that is waiting in the wings. One thing seems clear; cryptocurrencies appear to be here to stay. Where Can I Buy and Sell Cryptocurrency? There are a few exchange applications that can be used to buy and sell cryptocurrency: Exchange applications will help you keep track of your exchanges for cryptocurrencies and will list the current market as well. What Sets Cryptocurrency Apart from Regular Money? Several things that set cryptocurrencies apart from traditional money. Understanding these critical differences between conventional currency and cryptocurrency may help you understand the demand for cryptocurrency and how they might benefit you. Government bodies do not create or issue cryptocurrencies. Computer programs use highly sophisticated algorithms to identify new ‘coins’ and release them for public use. The combined user base of each currency, using vast amounts of computing power, record transactions between users in a peer-to-peer blockchain. The methodology used to create cryptocurrency keeps supplies limited and removes political or centralized decision-making from supply considerations. Because there is a restricted supply of any individual cryptocurrency, the value of the currency will theoretically grow over time. Fewer coins will be required to pay for goods in the future because the growing supply of products or services will outpace the limited, or static amount of coins. That is a deflationary model rather than the inflationary model traditional currency creates. Because an increasing supply of money decreases its purchasing power over time, prices typically rise with conventional currencies. That is not the case with cryptocurrencies making them attractive investments to some people. How Can It be Used? Some of the benefits related to cryptocurrencies are the very things that set them apart from traditional money. One of the most significant benefits is the anticipated increase in the value of these currencies over time. However, this is still more theory than fact as these currencies have not been around long enough to establish this maxim as absolutely correct. There are some benefits cryptocurrency users can enjoy right away, however. They include things like: For now, cryptocurrency is used primarily as a type of investment, but there is no limit in sight for its use if it becomes more widely available, distributed, and accepted. What Does the Future Hold for Cryptocurrencies? The one thing that remains up in the air about cryptocurrencies and their future is government regulations. Throughout the world, governments currently seem divided about how to address the issue of cryptocurrencies and their legalities. When the use of cryptocurrencies become more commonplace, new laws and regulations are likely to appear. We do not know how these things will impact cryptocurrencies and their usefulness. The evolution of technology has created more than a few new industries, regulations, and now even the invention of a new currency. Cryptocurrency may very well become the currency of the future – and perhaps a new economy — one that is driven by technology and access to that technology rather than numbers in a bank account or on a credit report.

What is a Cryptocurrency?

View Resource What is a Cryptocurrency?
Online bill paying has moved to the mainstream. According to a October 2019 report by the Credit Union Times, 57% of all bills are now being paid online with 21% being paid via mobile applications. Not surprisingly, Millennials and Gen Xers are leading the way, paying 61% and 60% of their bills online, respectively, according to the same the study. That is not surprising: Online bill paying is convenient and environmentally friendly. It can also save consumers money. Here, then, are the basics of how online bill paying works, and why you should embrace it. Convenience Think about how much work it is to mail your mortgage payment each month. Think about your car payment or student loan bill too. You have to write a check, record the amount in your checkbook’s ledger, address an envelope, find a stamp and go to your local post office or the nearest mailbox to mail the payment. When you are paying many bills each month — as the average U.S. household is — this can add up to a lot of wasted time. When you pay your bills online, though, you just log onto your bank’s Web site, enter your username and password and pull up your account. You can then either manually send your payments to your credit card company, auto lender or mortgage company. Alternatively, you can set up automatic payments, where your bank sends your payments to your credits on the same day each month, with you doing nothing. To set up online bill paying, call your bank. Most financial institutions today offer this service. Moreover, the vast majority of them provide the service at no charge. Cost savings That leads to the next benefit of online bill paying: It can save you money over the long run. If your bank or credit union offers free online banking, it makes financial sense to sign up for the service. Consider these numbers from ClearPoint Credit Counseling: The company estimates that the average U.S. household pays 15 bills every month. If you factor in the cost of a stamp for all of those bills, it comes out to more than $70 a year. If you sign up for online bill paying, you will not have to pay for as many stamps. Also, those calculations do not factor in the costs of an envelope or the gasoline you spend driving to and from the post office. Now, $70 a year might not seem like much money, but it can add up. Why spend it if you do not have to? Environmental factors Do you care about the environment? Do you consider yourself a “green” person? Then online banking is for you, too. Think of how much paper you waste when paying bills the old-fashioned way. Your creditor sends you a paper bill. You use an envelope to send it back. You tear off a check from your checkbook to write in your payment. That is a lot of paperwork that merely disappears when it comes to online banking. Security Some consumers are hesitant to sign up for online bill paying because of security concerns. They do not want hackers to gain access to their accounts. That is a reasonable fear, and massive banking hacks have happened in the past. However, you can take simple steps to protect your accounts. First, choose a password for your accounts that will be difficult for others to crack. Make sure to include numbers, symbols, and letters in your password. Secondly, don’t fall for phishing scams. Your bank will never ask in an e-mail message for your password, ATM number or Social Security Number. Never give out personal information online or over the phone to someone claiming to be from your financial institution. If you receive such requests, the odds are good someone is trying to steal your personal information.

Introduction to Online Billpay

View Resource Introduction to Online Billpay
Solar energy is one of the cleanest types of renewable energy, but the solar panels and equipment necessary for an implementation of a home solar system are very expensive. Systems installed in prime locations will eventually pay for themselves, but most homeowners do not have the cash upfront to get the system installed. There are several options you can turn to for financing a home solar project and getting your system up and running. Methods for Financing Solar Panels and Equipment Leasing solar equipment: Just as you can go out and lease a car, now there are many companies that allow you to lease equipment for a home solar project. The lease is either for a fixed monthly cost regardless of how much energy the panels produce or for a fixed cost per unit of electricity produced, known as a power purchase agreement. Either way, there is no money down, which is ideal for homeowners who are on a tight budget. The downside to leasing is that you never own the equipment, and the lease is typically for 20 years, which could complicate selling the house at a later date. Home equity borrowing or cash-out refinancing: You can take out a home equity loan for any purpose, provided you have good credit, steady income, and your mortgage balance and home equity borrowing don’t exceed 80% of your home value. Another option, which is especially attractive if your current mortgage has a higher rate than today’s market rates, is to use a cash-out refinance to get a new mortgage. The new mortgage needs to be of a sufficient amount to pay off your old mortgage and put cash in your hands to buy a solar system. The risk of both of these types of loans are that they use your home as collateral, and if you cannot pay, the lender could foreclose. The benefits often outweigh the risks, though, because it is a way to own a solar system at a low-interest rate while being able to deduct mortgage or home equity interest on your taxes. Solar power loans: Some companies that sell or lease solar panels are also starting to offer loans specifically to purchase the equipment. These companies have arrangements in place with banks or other lenders, who may have been reluctant to lend directly to individuals when solar technology was first available and was more expensive. Keeping the loan separate from your home equity can be a good safety net, so you do not put your home at risk. Interest rates on these loans can still be relatively low because the equipment can be collateral on the loan. Property Assessed Clean Energy (PACE): In some areas, you can borrow money from your state or local government to purchase a solar power system, and repay it through increased property tax bills for the next 10 to 20 years. The debt is secured by your property, but not your mortgage. If you sell your home, those increased taxes automatically transfer with the property to the new owner. Government Subsidies for Home Solar Projects In addition to the monthly costs, it is important to consider one-time perks that could help offset the cost of buying a home solar energy system. If you have several of these perks available to you and can take advantage of them, then buying may be a better option for you than leasing. Deciding if Solar is Right for You If you live in a location with high potential for solar power, installing solar panels through any of these methods will often save you money every month from the beginning of the installation. Plus, you will have the satisfaction of making solar power a larger part of the renewable energy picture in the United States.

Financing a Home Solar Project

View Resource Financing a Home Solar Project
Now more than ever, it is imperative that you be proactive about keeping your home energy efficient. If you do not keep an eye on this area, then you might be spending more money than you need be, as well as negatively impacting the environment with unnecessary energy use. Fortunately, most consumer research shows that even in the face of declining energy prices, most households have committed themselves to reducing their energy usage and footprint. Much of this focus is driven by an increased awareness of climate change and its impact on our environment. A Focus on the Future According to the Deloitte Resources 2020 Study, few, if any households plan to take advantage of declining energy prices by using more energy. Most are being driven by their environmental awareness to reduce energy consumption. The Deloitte study shows that 68% of residential consumers have a strong concern about climate change and that they want to reduce their own carbon footprint. The belief that human actions and carbon emissions are the driving factors behind climate change has stayed relatively steady at 73%. Many energy conscious consumers see the use of the renewable power as part of the solution. In fact, 44% of consumers view the use of solar power as one of the three most important ways to reduce greenhouse gas emissions. The US has planned that 76% of its capacity will be towards using both wind and solar power, which shows a positive trend towards clean energy. Of course, one way to reduce carbon emissions is by using renewable energy. The other is to reduce energy usage. About eight in 10 households, according to the Deloitte 2019 study, have taken steps to reduce consumption over the last year. There are a few ways to reduce carbon emissions in your household. One way is by using renewable energy, such as wind and solar power. Another way is to reduce energy usage overall. Then there is the case for green energy which utilizes natural energy sources, but tends to come with a higher price tag. If you are not one of those, you might consider taking inventory of your home and looking for ways to lower your energy footprint even further. Energy Audit Step-by-Step If you are looking to save money on your home energy bills, it is important to perform a home energy audit. Step 1: Find air leaks. One of the biggest causes of energy wastage in your home is air leaks, and they are relatively easy to spot:
  1. Close all windows, fireplace flues, and exterior doors, leaving interior doors open.

  2. Turn on all exhaust fans that blow air outside, such as stove vents, bathroom fans, and clothes dryers.

  3. Light an incense stick, and hold it near common leak sites such as vents, attic hatches, window and door frames, and electrical outlets.
If the smoke from the incense stick wavers, you have a draft and need to seal it. Step 2: Check your ceiling insulation. The first thing you need to know regarding your ceiling insulation is the current recommendation for the amount of insulation for homes in your area, as well as how much insulation you already have. If you do not have enough insulation, you are likely to be losing energy and need to get on top of that. To check your wall insulation, you can rent an infrared thermometer from a tool rental company. Step 3: Check your windows. If your home has many windows, it could be losing heat. If your windows have stickers that say NFRC (National Fenestration Rating Council), you will be easily able to check their energy efficiency, as it will be printed on the sticker. On the other hand, if you have no stickers on your windows, look at whether the window panes are single or double. Double panes are best as they trap heat more efficiently than single panes, so you might want to consider either fitting double paned windows or installing extra insulation to help retain heat during the winter months. Step 4: Find where you are hemorrhaging energy. If you have lots of electronic appliances in your home and keep them on standby, or even plugged in, they may be using excess power. For this reason, it is best practice to switch off and unplug all appliances when you are finished using them. Keeping Track Once you have completed the steps above, you should have a good idea of how energy efficient your home is, and be able to pinpoint areas that need improvement. Once you have made your improvements, keep a close eye on your energy bills to see where savings have been made. Through performing a home energy audit, you can save money, as well as help to save the planet.

Performing a Home Energy Audit

View Resource Performing a Home Energy Audit
Food delivery services have spiked as consumers look to time savings and convenience in meal planning. In more recent times, they have provided an alternative when their favorite restaurants announce dine-in closures. With the spread of COVID-19, you are likely spending way more time at home than you are used to. Fortunately, being home more does not necessarily mean you cannot indulge in your favorite restaurant food. The rise of food delivery service providers means that there is a wide array of food options that remain available straight to your front door. It also means if you have recently become a stay-at-home chef, you have easy access to all your favorite ingredients. What Food Delivery Services Are Available? As U.S. restaurants put their dine-in services on hold, ordering takeout and cooking at home has gained a lot of popularity. Some great food delivery services you should look into are:
  1. DoorDash
    This delivery service is still operating in most areas in the United States. It has a huge selection of food for you to have delivered. If you are looking for fast food straight to your door, DoorDash might be the way to go. Because of the coronavirus, DoorDash is offering the option of “no-contact deliveries” where you pay for your order online, and delivery drivers drop your delivery off on your doorstep.

  2. Grubhub
    Another popular delivery service choice you might want to take advantage of is Grubhub. It has made the announcement that it will delay business referral fees in the wake of the outbreak of the coronavirus, which will impact restaurants around the U.S. It costs $9.99 per month to use Grubhub, but the 10% cashback and unlimited free delivery is worth it.

  3. Uber Eats
    UberEats has a huge food selection as well, plus the company has stepped up through this recent pandemic as well. Notably, they are offering free meals to first responders and healthcare workers who are helping fight the virus, and they are waiving their delivery fees in some markets for some small businesses.

  4. Postmates
    There is also Postmates, which currently operates around the country in thousands of cities. Postmates goes one step further and delivers groceries and alcohol if you require it. It is safe to say if you have a Postmates working in your area, they could be your one-stop-shop choice for all food and beverage delivery. Because of the outbreak of the coronavirus, Postmates is providing no-contact delivery. They are also offering new customers a $10 credit.

  5. InstaCart
    InstaCart focuses on grocery stores for both pick up and delivery services. The application allows the customer to submit a grocery list order for the selected store which is then picked up by a personal shopper. The personal shopper communicates with you via the app in case an item is unavailable and needs to be swapped for. Due to the coronavirus, InstaCart has added convenient curbside pick up locations at the store in which you can have your groceries delivered directly into your vehicle.
What To Expect With Food Delivery Services You will want to take all benefits and drawbacks into consideration before you have food or groceries delivered to your door. You will also want to consider if time-saving resources and apps are worth the cost. Some pros and cons of delivery service use are: Food delivery apps like GrubHub, UberEats, and DoorDash usually charge up to 30% on your bill. Some include booking or processing fees that could run you anywhere from 5% to 9%. You should also tip your driver. Benefits For Having Food Delivered Here are some benefits of having your food delivered:
  1. Wide Variety
    You have a wide variety of menu options to choose from in various restaurants. The images of dishes and cuisine will show you what you can order. Also, since restaurants typically display calorie counts on their menu, you can manage your diet when you use food delivery services.
    Online food delivery services deliver you a broad range of cuisines, such as:

    • Chinese

    • Italian

    • Thai

    • Pizza

    • Burgers

    • And more
    These options assist you in trying new types of food and selecting from a variety of cuisine types.
  2. Simplicity
    Online food delivery services are transparent and straightforward. You decide:

    • Where you would like to order from

    • What you would like to order

    • How you plan on paying

    • When you would like the food delivered
    There is no need to rush out your door for last-minute shopping at the grocery store. There is no need to wait for your favorite dish — just order it, and it should be at your door within the hour. And, since delivery is often 24/7, there is no need to go to bed on an empty stomach. If you are hungry at 1 AM, you can find a delivery service open at that time and order something to eat. This includes holidays.
  3. You Will Save Time
    Another huge advantage of delivery service, particularly groceries, is you can carve out extra time for yourself because you do not need to run out to the store. Just place your order and wait for your doorbell to ring.
Online food delivery, especially lately, is reaching its peak. Individuals are engaging more and more with delivery service apps. And, more delivery companies like Instacart and Postmates are providing you with the choice of limited contact door service to adhere to the new safety and health guidelines.

Are Food Delivery Services Right for Me?

View Resource Are Food Delivery Services Right for Me?
College is an exciting and rewarding time. However, along with the great experience comes a wave of new fees and expenses. One of those expenses is the costs of textbooks each semester – which can add up fast. Wouldn’t it be nice if you could save big money on your books? Fortunately, there are things you can do that will help you curb the costs of these educational necessities. Overview on the Costs of Textbooks Aside from tuition, room, and board, textbooks and supplies can be one of the larger expenses you will pay to attend college. According to the most recent survey data from College Board, the average full-time undergraduate will spend $1,240 on average for the 2020-2021 school year. Textbook pricing is also on the rise due to the coronavirus pandemic and the demand for digital books and books purchased online. Some savvy students will take advantage of substantial money-saving alternatives to buying new textbooks like those listed below. Tips for Saving Money Saving money is an important life skill and college is a great place to begin developing and refining this important ability. These are a few things you can do to cut your textbook costs in a meaningful way. Consider Renting Textbooks Many colleges and universities understand the overwhelming burden buying textbooks each semester can be and allow students the option to rent their textbooks instead of purchasing them new. That can save you a substantial amount of money when it comes to the costs of your books, but it also means you are responsible for taking good care of them. There are also some online services that offer this option too. Keep in mind, though, that renting is not always the cheapest option, so compare costs before signing on. Skip the College Bookstore University bookstores are in the business of making money. While it is true they will have every book you need – along with t-shirts, posters, banners, and university logo’d everything you might not need – they charge a premium for the convenience of the service they provide to students who often feel like a captive audience. Instead, skip the campus bookstore and look for off-campus solutions (or on-campus classified ads) instead. Buy Used Textbooks Used textbooks are often in great shape (some were probably never been opened by their previous owners) and can be substantially cheaper than pristine copies that are brand new. There are many places you can go to find used versions of popular college textbooks including websites, like Amazon, eBay, and AbeBooks. When comparing costs from one site to the next, pay attention to things like shipping costs and estimated shipping times. Books coming from China, for instance, might not arrive until the semester ends, while those that are eligible for Amazon Prime are guaranteed to arrive in two days and ship for free. Consider Using Older Editions Using older edition books is a bit of a risk, so it is wise to consult professors before making the decision. While most will applaud your decision to be frugal, some will have insights on which previous versions will better match the course requirements and will be able to advise you if core material is missing in older versions. Otherwise, you can save a significant amount of money by using older editions of textbooks. Visit the Library Some professors only require you to have a textbook to cover a specific aspect of the course, not the whole thing. Your college library might have several copies of the textbook on hand that you can use while at the library, or check out for an extended period. Since copies are probably limited, it would pay to be the ‘early bird’ at the library door once the required textbook list is made available for each class. Opt for Electronic Versions of the Books ETextbooks offer both a budget-friendly and environmentally-friendly solution for many students. You can carry all of the textbooks you need for the day on a single tablet device or your laptop computer. You can highlight and underline key passages, copy, and paste, and take notes on your electronic devices too. The price? As an example, Amazon offers the Eleventh Edition of Campbell Biology for $273 new. The cost to rent the eTextbook is $54.98 and the cost to buy it is $74.99 – both considerably less than buying the book new. The added benefit of eTextbooks is that you can download them instantly – no need to wait, or pay, for shipping. Consult Your Network Take your textbook needs to your social media network of friends and acquaintances. Ask for the specific versions of the books you need and ask if anyone has the books who is willing to part with them. Once you’ve gotten the lower rate on all your textbook needs and make it through the semester, put the books you’re never going to use again to work for you. Once again skip the kiosks on campus offering to buy them back and opt to sell them yourself on eBay, Amazon, or countless other venues where you can get a better return on your textbook investment.

Saving Money on College Textbooks

View Resource Saving Money on College Textbooks
Dealing with personal finances is a challenge in itself, never mind adding in the complication of roommates. Regardless of how great your relationship is with your roommate, conversations that involve money can become emotionally charged and uncomfortable. Unexpected things will happen… like an unexpected bill, damaged furniture, or broken appliance. So, it is essential to establish how finances with your roommate will be managed beforehand to preserve your relationship. Here you will find some roommate finance management advice.

How to Split Bills

Having to split bills with your roommate can be amicable and straightforward, or it can be somewhat uncomfortable. It depends on if you have reached an understanding and set up rules to deal with the expected and unexpected. To keep good terms between both of you, here are some tips on how to split bills.
  1. Have an Open and Transparent Conversation About the Expectations
    Before you move in together have a conversation about expenses. After all, you will be sharing more expenses than simply the rent and utilities. It is good to have a plan in place. You can start by asking some questions like:
    • Are you paid sporadically or on a regular schedule?

    • How often are you likely to be home?

    • Are you responsible with money?

    • What should be considered household expenses?

    • Should we set up an emergency fund?

  2. Create a System to Manage Household Finances
    There are various ways of going about dividing bills with your roommate. You could:
    • Put one person in charge of collecting the money from everybody else and paying the bills

    • Have each person be responsible for paying their portion of each bill

    • Contribute a predetermined amount and place it into a Shared Account, then use this money to pay the bills
  3. Decide On a Monthly Budget for Shared Expenses
    Sit down with your roommate and make up a list of all your shared expenses, including:
    • Mortgage or rent

    • Property taxes

    • HOA fees

    • Maintenance fees

    • Cable/Internet bill

    • Electricity bill

    • Water bill

    • Cleaning supplies

    • Streaming services like Hulu, Netflix, etc.

    • Shared groceries

    • Hygiene products

    • Other household expenses (i.e. lightbulbs, batteries, etc.)

Dealing with Groceries and Furniture

There will also be individual purchases you will want to consider — like pieces of furniture, the vacuum cleaner, small kitchen appliances, and more. Be sure you come up with an agreement with your roommate on splitting the costs for things like these. You could split the expense or have one roommate buy the item with the deal they get to keep it when you both move out. You might wish to talk about how you plan on splitting the grocery bill. Do you each contribute to pantry and fridge staples (i.e., eggs, bread, milk, canned goods, etc.) Or will you each be buying groceries and preparing your food separately?

Apps That Help

You can use a roommate bill-splitting app to help avoid financial conflicts. These types of apps make it simple to keep track of and divide expenses fairly. Some great apps include:

Takeaway

While managing finances is really about household bookkeeping, a lot of emotion can be tied around spending habits. To maintain peace and a healthy relationship with your roommate, you need to navigate the inevitable conflicts with care. Communicating with each other is necessary and vital for bringing an issue to light. Chances are either you or your roommate will at one time or another be totally oblivious to the fact the other is not happy about something. This is where good communication comes in and planning ahead.

Roommate Finance Management

View Resource Roommate Finance Management
A timeshare offers regular access and partial ownership to a condo, resort, or vacation property. Resort rooms and timeshare units are usually situated at popular travel destinations, like mountains, beaches, or theme parks. If you are in the market for a vacation property, you can use this guide to help you make an informed decision on the best timeshare option for you.

What Is a Timeshare?

Timeshares are vacation properties that allow you to share the costs with other people while still having your time at the property guaranteed. There are a few factors to consider when deciding to purchase a timeshare. These are the type of ownership (who will own the property and the way it will work to visit the timeshare), the type of contract, and its advantages and disadvantages.

Types of Timeshares

There are different types of timeshares. Some timeshares provide you with more flexibility; others are more cost-effective. And, then there are other less desirable options based on the contracts and the way they function. The different types include:

Advantages and Disadvantages of Timeshares

A timeshare purchase is often an impulsive and emotional decision. There are both advantages and disadvantages to timeshares you need to consider before you buy.

Advantages of Timeshares

Some advantages of timeshares are:

Disadvantages of Timeshares

Some disadvantages of timeshares are: Timeshares are often located close to a beach or a natural disaster-susceptible area, so you might be facing special assessment fees more frequently. For example, you might be expected to pay the repair bill for damage to your timeshare property from an unexpected hurricane. As with any type of major purchase, the decision to invest in a timeshare requires careful thought and consideration. It will involve large up-front fees and considerable recurring costs. So, you will want to be sure all your questions are answered and take your time with your decision.

What’s the Deal with Timeshares?

View Resource What’s the Deal with Timeshares?
Coupons have come a long way. Today, in addition to the coupons that come in the mail and newspaper circulars, you have a wide range of digital options at your fingertips for online coupons through apps, extensions, and websites. Therefore, it is simpler today to score deals and save money each time you shop your favorite stores online and offline. This could be the reason why so many people are still nuts about coupons.

Apps, Extensions, and Websites

You do not see a whole lot of people clipping, organizing, and hauling handfuls of paper coupons with them when they go shopping today. Now, it can all be done online using your smartphone and computer. With all the online coupon options available, clipping paper coupons is really just a matter of choice, rather than a necessity, when trying to save money Here are some popular coupon apps, extensions, and websites:

How to Use

For websites, to use online coupons, you would find a code you want to use. Typically you would just copy and paste it (or type it) into a coupon code box in your online shopping cart. Then you click a button to apply it, and your savings will be taken off your total. For apps, you simply download the app on either iOS or Android and access it through the app on your smartphone. Apps that are implemented as browser extensions can be implemented through your browser. You can often find these via listings of extensions available for your browser. Alternatively, the coupon service provider will typically have a link to click on their website to install it.

Are There Any Risks?

While it can be convenient to shop online, it is not always the best choice to use coupons. In some cases, it would make more sense to go to a brick-and-mortar store to shop. For example, certain offers you will find are restricted to “in-store” only. Typically, these are set up to get customers into their physical stores because they will usually spend more that way. If you do not like the thought of having to pay for shipping, you are probably also better off shopping in-store. Many online stores will offer you free shipping but at a high purchase threshold. So, if this threshold is more than your budget or if you cannot find any online codes, you might wish to go to the physical store instead.

Finding Online Coupons

View Resource Finding Online Coupons
Your personal information may be at risk as fraudsters increase their criminal activities to gain access to your personal information, your debit card and your bank accounts. Fraudsters use information from data breaches, malware and stolen debit or credit card information to gain sufficient information to create fake customer profiles. The criminals then pose as your bank to get you to provide any missing information and gain access to your accounts. These criminals may pose as First Federal Lakewood call center agents or send text messages that appear to come from us. These calls or messages will falsely warn you of suspicious transaction activities to get you to provide additional information such as your PIN number or security code. Or fraudsters use the illegally obtained personal information to pretend to be you, call into First Federal Lakewood’s call center and request changes to your card information. We want to help you recognize the signs that someone is trying to get access to your debit card and account information before fraudulent activity can occur. Text Alerts Legitimate text alerts from First Federal Lakewood warning of suspicious account activity will never include a link. Our texts will request simple ‘yes’, ‘no’, ‘help’ or ‘stop’ responses. Text alerts from First Federal Lakewood will come from a five-digit number. We will never send texts from a ten-digit number that resembles a phone number. Phone Calls Phone calls, automated or person to person, will only ask for your zip code. No other personal information will be requested unless a transaction is confirmed as fraudulent. If a transaction is confirmed as fraudulent, you will be transferred to a call center agent who will ask for more information and review transactions with you. When confirming transactions, we will never ask for the three-digit security code on the back of your card. Please note a fraudster may say your card has been stolen and has been blocked and that the three-digit code is needed to get a new card to you. Keep Your Account Safe First Federal Lakewood has tools to help you know if your account experiences unusual activity. We will notify you of unusual or suspect account activity when you set up account alerts through mobile banking. Click here to get started. You can also enroll in FFL CardShield here to monitor your debit card usage and transactions. Being diligent about your account activity, guarding your passwords and using online alerts and FFL CardShield can save you time and protect your personal information and your account. If you receive suspicious text messages, take a screenshot of the message and email it to reportfraud@ffl.net. If you have any doubts about the validity of a caller, simply hang up and call your local First Federal Lakewood branch or the First Federal Lakewood Customer Relationship Center (216) 529-2700. Your banker will be able to help you determine if the call was fraudulent. The banker will also take steps to report the attempted fraud so that the bank can track these illegal activities.

Debit Card Fraud Reaches New Levels

View Resource Debit Card Fraud Reaches New Levels
You are ready to buy a new car. However, before you hit the dealership, you need to learn the basics of how to pay for your car. You have three options: You can pay for your car with cash. You can take out a loan, also known as financing your vehicle. Alternatively, you can lease it, an arrangement in which you basically rent the car with an option after a set number of months to buy. What option is best for you? That depends on your financial situation. If you can afford it, the best option is usually to pay for your car in cash. This way, you will not have to pay interest on the price tag of your new vehicle. Of course, not everyone can pay cash for a new car. After all, new cars can cost $15,000, $20,000 or more. Not too many people have that kind of money sitting around. If you do not have the money, you’ll have to either take out a loan to finance a vehicle or lease your new car for a set number of years. Before choosing either of these options, you’ll need to determine how much you can afford to pay for the car on a monthly basis. The best way to do this is to look at your debt-to-income ratio. In general, you do not want your total monthly debts, including an estimated new car payment, to equal any more than 36 percent of your gross monthly income. If a monthly car payment would push your debt-to-income ratio higher than this level, you cannot afford that new car. Once you know you can afford a car, it is time to consider leasing or financing. When you finance a car, you take out a loan for the purchase price. You then pay back your loan in monthly installments, with interest added to your monthly payments. You can either take out a loan with the dealer who is selling the car or with an outside lender. Often, you can nab a better deal — with lower interest rates — from an outside lender such as your bank or credit union. Your interest rate, though, will depend largely on your three-digit credit score. This number tells lenders whether you pay your bills on time each month. If you do, and if your debt levels are not too high, your credit score will be high. Lenders today consider a credit score of 740 or greater on the FICO scale to be an excellent score. If your credit score is too low, you might have to pay a higher interest rate to provide financial protection to lenders that are taking on the risk by lending to you. If your score is exceptionally low, you might struggle to qualify for an auto loan at all. Leasing a car is a bit more complicated. Under this arrangement, you lease a car for a set number of months, such as thirty-six. You and the dealer will decide how much you want to pay upfront to lease a car. Auto experts recommend that you negotiate as low an upfront cost as possible, perhaps paying what are known as “drive-off fees” only. Once you have your lease, you will pay, as if you were financing the vehicle, a monthly fee to continue leasing the car. You will be allowed to drive the car a set number of miles each year — such as 12,000 to 15,000 miles — without paying any extra fees. If you go over those miles, you will have to pay penalties. At the end of your lease period, you will have the option to buy your car. When you first take out your lease, you’ll negotiate a residual price. Once you’ve completed all of your lease payments, you can purchase the car for this residual price. If you do not want to pay this, you can instead return the car to the dealer. You might face charges for excessive damage or wear-and-tear at this point. Monthly lease payments are often lower than the monthly payment you might pay if you take out a loan to purchase a vehicle. That is because you only pay for the value of the car used during the lease term. Put another way, it is the purchase price minus the residual value of the car at the end of the lease term. Deciding whether to lease or finance a new car — or pay for your new vehicle in cash — is no easy decision. There are plenty of factors to consider. If you like the idea of upgrading to a new car every three years, leasing might be a better choice. If you’d prefer to pay off your car over time and drive a vehicle without having to make monthly payments, financing your car with a low-interest-rate auto loan might make more sense. Shopping for a new car might be the fun part. However, by researching your payment options, you’ll increase your odds of landing a better financial deal once you do hit the dealership.

Vehicle Financing Options

View Resource Vehicle Financing Options
Getting into shape or maintaining your fitness level is a common goal for people to have, but it requires some work to make it happen. Joining a gym is one of the best ways to have access to the tools you need to succeed in your fitness goals. However, you can end up spending a lot of money on your gym membership unless you do your homework and search out the best deal. Find potential gyms to join Start your search by making a list of all the gyms around you that you could join. You will save money if you choose a gym that is close to your home or work so you do not have to travel out of your way getting there. If the gym is in your usual path of travel, you are also more likely to go more frequently so that you are not wasting your money on an unused membership. List your desired features The last thing you want to do is to waste your money on a gym that has plenty of features you do not need, but is lacking in what you are looking for the most. Consider how you plan to use the gym, and make a list of your must-have features. They may include a pool for lap swimming or water aerobics, TV screens on cardio equipment, yoga classes, sports leagues, personal training, or a sauna. If you can find a gym that includes some or all of these features in the basic fee, you will be able to avoid paying for extras. At the same time, you do not want to overpay for a membership that includes many extras you will not use if an a-la-carte approach is available at another gym that would lower your monthly cost. Use free trials Before you buy a membership, try out the gym for as long as they will let you. Some gyms offer just a day pass, whereas others will let you try it out for three days, a week, or even longer. If you go through free trials at all the gyms in your area, they will often add up to a free month of workouts that ultimately helps you decide where you want to get your membership. Get yourself the lowest price Once you have identified the gym you want to join, your last task is to get the price as low as you possibly can. Start off by looking for coupons online. You can also check with your employer to see if they subsidize the cost of gym memberships. Also, ask the gym if they give a discount for joining with a friend. If possible, join a gym at the end of the month. That is the time when staff will be trying to meet their membership quota for the month, so they are more willing to negotiate on price. You can also save some money by joining during the slower time of the year, which is in the summer when people are busy with vacations and outdoor activities. Lastly, use your negotiation skills. Go to the gym and talk to a sales person about the price you are willing to pay. You can mention the competitor’s prices and see if the gym you want will match that price. You can also mention some of the features that are included in the membership that you will not use and see if they will cut you a deal. Gyms often won’t turn people away who want to buy a membership!

Saving Money When You Join a Gym

View Resource Saving Money When You Join a Gym
The internet is not only an incredibly vast source of information and entertainment, it’s also a convenient, time-saving tool for important tasks like banking. With online banking on the rise for both consumers and businesses, it’s more important than ever to follow a few basic steps to safeguard both your computer and your company’s sensitive information from malware, identity theft and other online threats. Here are some things you can do: 1. Keep Your Browser up to Date Most of today’s internet browsers, like Internet Explorer, Firefox, Google Chrome and Safari, provide built-in safeguards to help block malware. It’s a good idea to always use the latest version of whatever browser you choose, and be sure to configure it to automatically install security updates as they’re made available. 2. Block Pop-Ups, Consider Ad-Blocking Software Many browsers give you the choice to automatically block pop-up ads, which you should do whenever possible. “Malvertising,” or malware-embedded advertising, is a serious and growing threat – but you can avoid it by blocking ads or never clicking on them. For added protection, you can run dedicated ad-blocking software designed to keep other forms of advertising (beyond pop-ups) off of your browser. 3. Two Browsers: One for Business, One for Fun It’s a good idea to do all your business-related surfing (such as online banking, shopping and bill paying) on a separate browser from the one you use for all of your other internet activity. Make sure to keep the browser you use for secure work current with the latest security updates, and never use it for non-secure browsing. 4. Steer Clear of Questionable Websites Malware is often spread via websites with questionable content, so it’s best to avoid such sites. Also avoid clicking on those sensationalist ads promising shocking or “incredible” information that you find on some news and entertainment sites. You know the type, with headlines like, “One Weird Trick For Weight Loss” or “15 Shocking Celebrity Selfies.” The websites you visit don’t control these links or their content, so clicking on them is always a risk. 5. Only Trust Known Sites When Shopping or Downloading If you’re not familiar with a site or if it doesn’t have a good reputation for protecting personal information, don’t buy or download anything from it, and don’t share any personal account information. When purchasing from a trusted site, using a service like PayPal may be the safest way to pay. Pre-paid gift cards and credit cards are good options too, but a debit card doesn’t provide the same level of protection and should be avoided for online purchases. 6. Use an Up-to-Date Anti-Virus/Anti-Malware Program A good anti-virus and/or anti-malware program will go a long way in protecting your system from any viruses that could accidentally be downloaded while you’re browsing. These programs will also help your browser identify potential attacks that may be directed against it. 7. Keep Your Computer’s Operating System Up to Date Operating system vulnerabilities are regularly being discovered and fixed, so using the latest version is a good way to help stay protected. You will also want to install any patches and security updates as they become available from the company who makes your operating system. Updates often contain fixes for security vulnerabilities that could be exploited in previous versions of the operating system. Staying up to date helps you stay safe. By following these steps, handling your business’ banking online can be an efficient, easy, and – most importantly – safe way to keep all your important financial needs in order.

7 Tips for Safer Online Business Banking

View Resource 7 Tips for Safer Online Business Banking
Companies of all sizes are being targeted by criminals through business email compromise scams. In these scams, cybercriminals gain access to an employee’s legitimate business email through social engineering or computer intrusion. The criminal then impersonates the employee — often a senior executive or someone who can authorize payments — and instructs others to transfer funds on their behalf. First Federal Lakewood recommends the following tips to help businesses and employees avoid business email compromise attacks: • Educate your employees. You and your employees are the first line of defense against business email compromise. A strong security program paired with employee education about the warning signs, safe practices, and responses to a suspected takeover are essential to protecting your company and customers. • Protect your online environment. It is important to protect your cyber environment just as you would your cash and physical location. Do not use unprotected internet connections. Encrypt sensitive data and keep updated virus protections on your computer. Use complex passwords and change them periodically. • Use alternative communication channels to verify significant requests. Have multiple methods outside of email – such as phone numbers, alternate email addresses – established in advance through which you can contact the person making the request to ensure it is valid. • Be wary of sudden changes in business practices or contacts. If an employee, customer or vendor suddenly asks to be contacted via their personal e-mail address, verify the request through known, official and previously used correspondence as the request could be fraudulent. • Be wary of requests marked “urgent” or “confidential. Fraudsters will often instill a sense of urgency, fear or secrecy to compel the employee to facilitate the request without consulting others. Use an alternative communication channel outside of email to confirm the request. • Partner with your bank to prevent unauthorized transactions. Talk to your banker about programs that safeguard you from unauthorized transactions such as call backs, device authentication and multi-person approval processes. For more tips, see the FBI’s Internet Crime Complaint Center’s public service announcement If you fall victim to a business email compromise scam: • Contact your financial institution immediately to notify them about the fraudulent transfer and request that they contact the institution where the fraudulent transfer was sent. • Contact your local Federal Bureau of Investigation office as they might be able to freeze or return the funds, if notified quickly. • File a complaint, regardless of dollar loss, at www.IC3.gov.

6 Ways to Avoid Business Email Fraud

View Resource 6 Ways to Avoid Business Email Fraud
Average mortgage interest rates on 30-year and 15-year fixed-rate mortgages have risen a bit in comparison to the last several years. Depending on when you purchased your home and the rate you have on your current mortgage, the time might still be right to refinance into a new mortgage. You might not hit the historic low-interest rates of the last several years, but rates are still attractively low. This leads to the big question of whether the time is right to refinance your mortgage? The answer, not surprisingly, depends on several factors, most notably your financial health, your current mortgage interest rate and how long you plan to stay in your home. Your Finances Before deciding to refinance, take a honest look at your current financial health. Have you been paying your bills on time every month or have been late or missed several payments? Do you have tiny credit card balances or have you run up mountains of credit card debt? Your ability to qualify for low mortgage interest rates that you see advertised online or in your local newspaper depends heavily on your three-digit credit score. That score will not be strong if you have a recent history dotted with missed car loan payments and soaring credit card balances. To qualify for today’s lowest rates, you’ll need a credit score of 740 or higher on the commonly used FICO credit-scoring system. If your credit score is much lower than that, you might not qualify for an interest rate low enough to make refinancing worth your while. Your Current Interest Rate Interest rates, of course, play a key role in whether you can justify refinancing your mortgage. If you can significantly reduce the interest rate on your mortgage, you can realize dramatic savings by refinancing. For instance, if you originally obtained a $200,000 mortgage at a 6 percent rate and made your $1,199.10 payment each month for 60 months, you would have an outstanding balance of $186,108.71. If you refinance that outstanding balance at an interest rate of 4 percent, your monthly mortgage payment will fall to $888.51 a month. That is a saving of $310.59 a month or $3,727.08 a year. That is significant. However, if your original $200,000 mortgage had an interest rate of 5 percent and 60 months later you lowered it only to 4.5 percent by refinancing, you’ll only save about $143.07 a month. That might not be worth the time and money of refinancing. Remember, refinancing your mortgage costs a significant amount of money. According to estimates from the Federal Reserve Board, you can expect to pay from 3 to 6 percent of your outstanding loan balance in closing and settlement costs when you refinance. For a $200,000 mortgage balance, that comes out to $6,000 to $12,000. You want to make sure that you’ll be saving enough money to pay back those fees over a reasonable period. Length of Stay Finally, consider how long you plan on staying in your home before you decide to refinance. The goal of refinancing is to save money. You will not be able to do that if you plan on selling your home before you can realize the financial savings of a refinance. For instance, if you saved $1,500 a year by refinancing with $5,000 in closing costs, you’ll need to stay in your home for at least four years before your savings pay back those costs.

Tips for Refinancing Your Home

View Resource Tips for Refinancing Your Home

The process of buying a home can be daunting if you’re a first-time buyer, especially when it comes to acquiring a home loan. Proper preparation can be the key to a smooth home-buying experience. Here are five recommendations on how to prepare yourself and your finances ahead of the mortgage application process so you can focus more on finding the home of your dreams and less on the paperwork to get you there.

  1. Consider holding off on large purchases prior to applying for a loan
    Lenders typically don’t want to see any sort of pattern relating to large, spontaneous purchases. Even if you are able to afford a new HDTV or bedroom furniture set, hold off on making the purchase until your loan has closed. That TV will look so nice in your new living room!
  2. Avoid moving your money around between accounts
    Even though moving money around between your accounts isn’t a deal breaker, it can delay the approval process. Lenders are very thorough with their research and due diligence, and will review bank statements, money market accounts, checking account and all other assets. If you do need to move money between accounts, plan to document your movements and the reasons for them. It’s smart to make it as easy as possible for the lenders. Also, ensure you are fully disclosing any monthly expenses including student loans, alimony or child support payments or revolving credit accounts.
  3. Try to wait before looking to change jobs
    A steady, reliable income is an essential piece in getting a loan for a home. Lenders always look for job consistency, and changing jobs during the loan approval process could influence the outcome. If there is no way to avoid the situation, be sure to discuss it with your lender, as earlier in the process as you are able.
  4. Familiarize yourself with your credit report
    It’s important to fully understand your credit report and score prior to applying for residential lending. This way, if there are any discrepancies on your report, you can take care of the situation before the lender reviews it. Bad marks on your credit report can result in your loan being declined or a higher mortgage rate and sometimes a few phone calls can eliminate issues you may otherwise have been unaware of. There are a number of free services available to help you gain access to your credit reports from all 3 credit bureaus- Experian, Equifax®, and TransUnion®.
  5. Don’t apply for additional credit accounts while applying for a mortgage
    Banks and other lenders appreciate seeing responsible applicants without a lot of debt or too many credit accounts. Applying for credit also can temporarily decrease your credit score, which can negatively affect your application.

Although the mortgage application process can be a bit of an undertaking, avoiding common pitfalls and mistakes can go a long way towards making the process less stressful. If you have questions about purchasing a home or acquiring a loan, visit the mortgage section of our website for more information and to help you find the right mortgage for you. We look forward to hearing from you.

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5 Tips for Applying for a Mortgage

View Resource 5 Tips for Applying for a Mortgage
Corporate account takeover is a type of fraud where thieves gain access to a business’ finances to make unauthorized transactions, including transferring funds from the company, creating and adding new fake employees to payroll, and stealing sensitive customer information that may not be recoverable. First Federal Lakewood recommends following these tips to keep your small business safe. 1. Educate your employees. You and your employees are the first line of defense against corporate account takeover. A strong security program paired with employee education about the warning signs, safe practices, and responses to a suspected takeover are essential to protecting your company and customers. 2. Protect your online environment. It is important to protect your cyber environment just as you would your cash and physical location. Do not use unprotected internet connections. Encrypt sensitive data and keep updated virus protections on your computer. Use complex passwords and change them periodically. 3. Partner with your bank to prevent unauthorized transactions. Talk to your banker about programs that safeguard you from unauthorized transactions. Positive Pay and other services offer call backs, device authentication, multi-person approval processes and batch limits help protect you from fraud. 4. Pay attention to suspicious activity and react quickly. Look out for unexplained account or network activity, pop ups, and suspicious emails. If detected, immediately contact your financial institution, stop all online activity and remove any systems that may have been compromised. Keep records of what happened. 5. Understand your responsibilities and liabilities. The account agreement with your bank will detail what commercially reasonable security measures are required in your business. It is critical that you understand and implement the security safeguards in the agreement. If you don’t, you could be liable for losses resulting from a takeover. Talk to your banker if you have any questions about your responsibilities.

5 Ways to Protect Against Fraud

View Resource 5 Ways to Protect Against Fraud
According to the Internal Revenue Service, more than 70 percent of the nation’s taxpayers received a tax refund averaging nearly $3,000 in 2017 and will get a similar amount this year. As Americans receive their refunds along with additional benefits coming from the Tax Cuts and Jobs Act passed in December, we have highlighted seven tips to help you make the most out of your money: • Save for emergencies. More than 60 percent of Americans are not prepared for unexpected expenses. You can prepare by opening or adding to a savings account that serves as an “emergency fund.” Ideally, it should hold about three-to-six months of living expenses in case of sudden financial hardships like losing your job or having to replace your car. • Pay off debt. Pay down existing balances either by chipping away at loans with the highest interest rates or eliminating smaller debt first. • Save for retirement, your child’s education or future health expenses. Open or increase contributions to a tax-deferred savings plan like a 401(k) or an IRA. Your bank can help set up an IRA, while a 401(k) is employer-sponsored. Look into opening a tax-advantaged 529 education savings plan to ensure school expenses will be covered when your child reaches college age. Or save for future health expenses with tax-free dollars by investing in a Health Savings Account. • Pay down your mortgage or student loans. Make an extra payment on your mortgage or student loans each year to save money on interest while reducing the term of your loans. Be sure to inform your lender that your extra payments should be applied to principal, not interest. • Invest safely with U.S. savings bonds or municipal bonds. The U.S. Treasury allows for savings bond to be purchased using your tax refund for as little as $50. Savings bonds earn interest for a maximum of 30 years. • Invest in your current home. Use your refund to invest in home improvements that will pay you back in the long run by increasing the value of your home. This can include small, cost-effective upgrades like energy-efficient appliances that will pay off in both the short and long term – and with tax credits (as long as Congress continues to renew the program). • Donate to charity. The benefit is two-fold: Giving to charity will make a difference in your community, and you can also claim the tax deduction, if you itemize. Regardless of your income status it is important for everyone to file a tax return especially for lower income workers —even if their income is too low to trigger any federal tax liability—in order to potentially claim the Earned Income Tax Credit (EITC). Depending on a recipient’s income, marital status and number of children, the EITC can result in a refund of up to $6,318 to help them achieve financial goals.

7 Ways to Use Your Tax Refund

View Resource 7 Ways to Use Your Tax Refund
You already know how important health insurance is. Without it, a serious illness or injury could devastate you or your family financially. However, what about vision plans or dental insurance? Do you need a prescription drug plan? The good news is that many employers offer vision plans, dental insurance and prescription drug plans to their employees, along with basic health insurance. The bad news? It’ s not always easy to determine if these company-offered health plans are good buys. Health Insurance There’s little debate that if your company offers health insurance, you should sign up for it. Taking out private health insurance will cost you far more. The odds are that your company offers more than one form of health insurance plan. Determining which is right for you takes some research. An HMO plan is usually the least expensive of the health insurance options offered by employers. These plans will provide coverage for a broad range of routine and severe health matters. The drawback, though, is that you’ll be limited to a network of doctors. If your favorite doctor is not in the network, you will not be able to see this professional unless you are willing to pay for the costs of the visit and any treatment out of your pocket. Most employers also offer a PPO plan. PPOs allow you to see any doctor. However, you will pay more if you see physicians located out of your network. For instance, if you see a doctor inside your PPO’s network, your insurance might cover 80 percent of the costs of your visit or treatment. If you see a doctor outside the network, you may have to pay as much as 50 percent of the costs of your visit. Fewer employers offer an indemnity plan. With this type of plan, you can see any doctor you’d like. The provider will then bill your insurance company. Your insurance company usually will pay 80 percent of the costs of the visit and treatment. Analyzing costs When determining which employer-sponsored health plan to consider, it is important to look at the costs associated with them. First, look at the monthly fee. A portion of every paycheck will go toward paying for your health insurance coverage. This deduction will vary depending upon which of your employee’s health plans you choose. Next, look at the deductible. This is an important figure: It is how much you have to pay before your insurance coverage kicks in. For instance, you might have a deductible of $500. You’ll need to pay that much whenever you receive medical care before your insurance benefits kick in. There’s also coinsurance to consider. Once your insurance coverage does kick in, your coinsurance is how much you’ll have to pay for your insurance coverage. Your plan, for instance, might require you to pay for 20 percent of the costs of care after your benefits kick in. Voluntary coverage Your employer might offer voluntary health programs; policies that offer vision benefits, dental care or prescription drug benefits. Before signing up for any of these programs, you’ll need again to analyze their costs and benefits. Dental plans can cost from $15 to $100 a month. They usually provide complete coverage for routine dental care. However, when it comes to more complicated procedures, that coverage level usually drops to about 50 percent. So if you should need crowns that cost a total $1,000, you’d be responsible for paying $500 of that total. Vision plans are often limited, too. Most plans only cover the costs of routine eye exams and screenings while providing discounts for glasses and contact lenses. This does not mean that these plans are not worthwhile investments. It is important to monitor your health, and these supplemental medical benefits can help you do that. Just make sure that the benefits that come with these extra plans are worth the monthly cost. For instance, if you are investigating dental plans, make sure that your plan provides coverage for exams, x-rays, cleanings and basic care. You might also, if you have children who might need braces, want a plan that provides access to orthodontic services. When deciding whether a vision plan is a good buy, consider how often you can receive free eye exams and how big of a discount you’ll receive when ordering glasses or contact lenses. For a prescription drug plan, consider how large of a discount you’ll be receiving on medication. Researching health insurance and supplemental plans is no one’s idea of a good time. However, this research can dramatically boost your odds of choosing the right insurance plan for you and your family.

Types of Health Insurance Plans

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The hallmark moments in our lives — the ones that truly change our trajectory – are celebrated down every greeting card aisle in America. Beyond “Happy Birthday,” “Bon Voyage,” “It’s a Girl,” and “Congratulations on your Marriage” sentiments, there is always a card with a quaint water-colored cottage that says, “Good Luck in your New Home.” From the time we are young we are filled with hope that we’ll live a life full of card-worthy moments—including buying our own home. Getting to “Good Luck…” requires far more than crossing our fingers. After all, how to buy a house isn’t a course offered in school or something readily taught by parents or peers who have bought before us. We somehow still assume that we’ll have plenty of time to figure it out, but when opportunity knocks we can get swept up without being properly prepared. You can begin preparing now with these five steps to successful first-time home-buying. Step #1 Start by determining your budget. While seemingly obvious, this step goes beyond checking your current bank account balance. While saving for a down payment is a great start, you need to develop a well-thought-out budget. By calculating your take home pay, spending and future savings goals you will have a strong snapshot of your finances. Creating a monthly budget and actively monitoring it on a regular basis will not only help you get organized, but this new-found control can also help reduce stress. To help you decide the true amount you can afford to spend on a home, start looking at home prices that are two to three times your annual income. Remember to factor in closing costs, home improvements and moving expenses. Step #2 Know and embrace your credit. Credit is the key in so much of the home-buying process. Your credit score helps to determine your eligibility for borrowing money and for securing better interest rates. Remember, even if your credit score isn’t exactly where you want it to be the first time you check, you can absolutely work to improve it. Step #3 Choose a lender and get pre-qualified. Before you start digging through real estate listings and scheduling visits to open houses, you need to first work with a reputable lender to get pre-qualified for a loan. Doing so sends a signal to sellers that you are a serious shopper. To choose the best lender and mortgage for you, remember that it is a long-term relationship. Consider all of your options and select the one that is the best fit for you based on your relationship with the bank as well as: Step #4 Shop around and find a real estate agent. Especially for first time home buyers, a real estate agent will help guide the process and provide access to more home options than you’ll likely find yourself. Interview several buyers’ agents – these will exclusively represent you and not the seller – until you find someone who makes you feel comfortable and understands your needs, wants and deal breakers. Ask friends and family for agent recommendations too. Step #5 Make an educated offer. You’re almost there, but before you make an offer, crunch your numbers again. This time, factor in costs you may not have thought about such as the home inspection and appraisal fees, insurance, property taxes and any homeowners’ association fees you may have. Ask yourself if you can realistically afford this home including the cost for utilities, living expenses, and long-term maintenance of the property. If you are confident that this is the house and you can indeed comfortably afford it, move ahead with an offer. To avoid low-balling or paying more than necessary, be sure have your realtor look at other homes in the area (comparables or “comps”) to determine if the asking price is reasonable. If any immediate repairs need to be made, drop your offer so you can cover those costs. In the end, don’t make the rookie mistake that many first-time home buyers do by taking on more of a financial obligation than you can handle. You will know when you are ready to take the leap into buying a home, so take your time, save up and research as much as possible. This is your moment, so—Good Luck!

Tips for a First Time Home Buyer

View Resource Tips for a First Time Home Buyer

Repayment of a home equity line of credit requires that the borrower make a monthly payment to the lender. For some home equity lines of credit, borrowers can make interest-only payments for a defined period of time, after which a repayment period begins. Interest-only payments are based on the outstanding loan balance and interest rate. During the repayment period the payment includes both repayment of the loan principal, plus monthly interest on the outstanding balance. Loan payments for the repayment period are amortized so that the monthly payment remains the same throughout the repayment period, but during that period, the percentage of the payment that goes towards principal will increase as the outstanding mortgage balance decreases.

Home Equity Line of Credit Payment

View Resource Home Equity Line of Credit Payment
Moving Yourself or Professional Movers? Do you think hiring professionals will cost you more than moving yourself? Think again. Although it might seem like you have gotten a great deal on a rental truck, all the effort and sweat you put into the move and the gas money to keep the U-Haul’s tank full may just make hiring the pros worthwhile. However, if you are still undecided, here are some things to consider. Do it Yourself Handling the move yourself comes with both pros and cons. On the pro side, you are in control of your move. You can choose to go in a single day or spread it over several days. You also handle all the boxes, so you can take special care of items that are fragile. If you are doing the moving, you can decrease stress and the cost of fuel by avoiding rush-hour traffic. A move can also turn into an opportunity to spend time with family or friends who might lend a hand to help you with the move (although it might cost you if you buy them pizza and beverages!). There also some cons with a DIY move. The biggest by far is the amount of heavy lifting that you (and your family and friends) will have to do. Also, since you are transporting your fragile items, if they break during the move, there is no chance for you to get reimbursed for mishandled items. Professionals You might find that you have less flexibility with moving dates and times if you choose to hire professional movers. There are also some unreputable movers out there, so you will need to do your due diligence and read reviews or get references. Chances are the cost will be more to hire a professional mover too, but you are also getting peace of mind. Other benefits of hiring a professional include: Shopping for Professional Movers If you are considering hiring professional movers, be sure to get at least a few quotes from different moving companies. Although you may think you cannot negotiate with movers, it is possible especially during their off-season when they will lower their rates. Before hiring a professional moving company, do a background check on them. Ask for references, look up reviews online or check the U.S. Department of Transportation’s Safety and Fitness Electronic Records. DIY Packing Tips There are ways to cut down on your packing costs too. Have a garage sale. Moving is the perfect time to go through your stuff and get rid of things you hardly ever use. Have a garage sale to sell items you no longer need and use the extra money to help cover your moving costs. Don’t pay for boxes. Of course, you need boxes to pack your things in, but you do not have to pay for them. Moving companies charge absurd amounts of money for boxes. Instead of buying them, there are ways you can get boxes for free such as: Start early on collecting boxes before your move to save you time. You will likely know months in advance that a new place to live is on the horizon. That is an excellent opportunity to get a jump on collecting the boxes you will need. Use what you already have. Use plastic bins or suitcases to pack some of your things. Linens and sheets are great for wrapping items. DIY Truck Rental and Storage If you do decide on a DIY move, you are going to need a rental truck. Your rental should be big enough to accommodate all your belongings. Although you probably won’t feel comfortable driving a large truck, renting a truck that’s too small will cause you to take multiple trips and will cost a bundle in gas money. It will also be more time-consuming. You may need to store some things as well. You can often find good deals on off-site storage services, such as getting your first month free. In some cases, there are storage unit companies who offer combo deals where you can also rent a van or truck along with your storage unit. Whether you choose to hire a professional mover or do it yourself, the costs of moving are unavoidable. You can keep your moving costs down, but you just have to plan ahead, compare prices and think outside the box when packing.

Manage Moving Expenses

View Resource Manage Moving Expenses
Loan protection insurance can be an ideal solution to protect yourself, and your finances, against economic emergencies. While no one wants to contemplate a future in which they are unable to take care of their monthly bills, loan protection insurance promises to help with specific loan repayments if you are unable to work due to disability or periods of unemployment. However, it is essential to understand the details of what loan protection insurance provides before deciding as to whether it is right for you. What Is Loan Protection Insurance? Most people make major purchases with the full expectation that they will be able to continue working and producing at their current or better income level for many years to come. Then the unexpected happens, and they are unable to work and earn income. It could be an illness that requires a lengthy recovery and rehabilitation period. It could be a financial windstorm that leaves you, along with thousands, if not hundreds of thousands, of people out of work with no job prospects in sight. Loan protection insurance is designed to help you by providing financial support to help you repay your loans in these instanced. This type of protection is usually an optional coverage you can purchase when obtaining personal, auto or home loans. How Does It Work? In the case of mortgage protection, the insurance works by making your monthly mortgage payment on your behalf if you should become disabled through an illness or injury that renders you unable to work or if you are laid off from your job. Most plans have strict limits about how long you must have the policy in place before it will begin making payments for you as well as limits on how long the mortgage payments will continue. The standard for most policies is that the plan needs to be in effect for 60 days before the protection goes into effect, with a limit of 24 total months of protection for the duration of the coverage. Most people can get back on their feet from a temporary setback or make other arrangements to pay their mortgages within a 24-month frame of time. However, one consideration, in deciding whether a loan protection plan is right for you, is whether the 24-month window would provide the necessary payment coverage in the event of a deep and extended recession or lengthy illness. How You Can Benefit: The Pros The main benefit of loan protection insurance is the peace of mind it provides. The time-window for protection allows you to focus on treatment and recovery (or a job search if you are unemployed) rather than how you are going to keep a roof over your head in the coming months. That is the point of insurance, after all, to provide peace of mind to the insured and allow them the breathing room they need to focus on recovering from disasters without the added worry of potential financial devastation. Not only can it help you keep making your mortgage, auto or personal loan payment while experiencing a significant illness, loan protection insurance also protects your credit score while you go through these devastating experiences as well. That can help you with negotiating power when you attempt to obtain favorable loan terms for other loans or credit cards. Had you not been able to continue making loan payments, you might receive less than optimal rates on new loans or suffer penalizing higher interest rates on outstanding credit card balances. Finally, acceptance rates for this type of insurance protection are incredibly high, so most people don’t have to worry about being turned down because of your age, occupation, marital status, or other financial issues. What to Look Out For: The Cons It is not all sunshine and roses though. Not only do you need to stick with reputable insurers for this type of insurance protection, but you also need to make sure you read and understand the fine print of your policy. Common causes for refusals to pay out, for instance, include: Some people find employer-sponsored long-term disability plans are better solutions to help them cover their costs and expenses during periods of unemployment due to illness or injury, though those aren’t effective for unemployment concerns. You will need to compare policies, investigate companies offering coverage (and their records for denying claims), and choose your loan protection insurance policy wisely if this is the route you decide to go. There are no absolutes. Even companies with the best reputations may have policy shifts that err on the side of the company rather than the insured. The Takeaway: Loan protection insurance fills a unique role with potentially substantial benefits, but there are downsides too. The key is to investigate thoroughly, understand your risks, and make informed decisions about the value of the coverage, should you have a prolonged health problem or period of unemployment.

The Pros and Cons of Loan Protection Insurance

View Resource The Pros and Cons of Loan Protection Insurance
You did not begin saving for retirement early enough. Now you are in your 40s or 50s, and you’ve barely saved anything for your post-work years. Fortunately, you can take steps to resolve this. Just because you procrastinated doesn’t mean that you are doomed to a retirement filled with money woes. First, don’t worry about the past. You cannot go back in time and boost your retirement savings. The only thing you can do now is to start saving in earnest. It will not be easy, but if you cut down on your expenses and boost your rate of savings, you can still build enough cash to enjoy a comfortable retirement. The key is to start saving immediately. The more time you waste, the fewer chances you’ll have of building a large enough nest egg to reach your goals for your retirement years. Working longer isn’t enough It is tempting to think that you can compensate for your late start by working longer. After all, every extra year you log at your job will boost the amount of money you receive each year from Social Security. Problem is, even if you work until you are 70, the extra income you earn and the increase in your Social Security benefits will not provide enough money to live a comfortable retirement. The reason? Social Security payments simply don’t provide enough income for most retirees. The vast majority of retirees will need to rely on other forms of income such as savings and their company-sponsored 401(k) to pay bills and reach their goals during their retirement years. If you are relying on working longer, then, you’ll need to explore other avenues to boost your retirement preparedness. Boost savings, reduce expenses There is no magic formula that late starters can use to build a retirement nest egg. Saving enough money for retirement requires hard choices: You’ll need to increase your income and dramatically reduce your expenses. The first step? Employees in their 40s and 50s need to eliminate as much debt as possible, especially debt from credit cards. Your retirement years will be far more stressful if you have large amounts of consumer debt. Make the smart financial decisions today to forego those pricey electronics or extravagant meals out if you cannot afford to pay for them with cash. You’ll be grateful you did once retirement comes. Another possible move? Downsize to a more affordable home. If you are making a large mortgage payment each month, you can dramatically reduce your monthly expenses by selling your existing home and downsizing to a condominium or smaller home that comes with an equally smaller monthly payment. This might even make sense for your and your spouse. Your living space needs will grow smaller as you age and your children move away. Why not downsize to a home that not only saves you money but also comes with fewer maintenance needs? You might also make lifestyle changes to reduce the amount of money you are spending each month. You do not need the most expensive luxury car on the market. A mid-priced vehicle can get you to and from your office just as well and for a much smaller monthly payment. Instead of shopping at the highest-end department stores, consider shopping at more reasonably priced retailers. You do not have to cut out all your pleasures, but the more frugal you are now, the better off financially you’ll be once you retire. At the same time you are reducing expenses, you’ll need to boost the amount of money you are saving for retirement. This starts with your company’s 401(k) plan. Make sure you are contributing the maximum amount possible to your plan. Since your company will automatically deduct these dollars from your paycheck, you’ll barely miss them. However, the extra savings will add up once retirement age hits. Open IRA accounts, too. Moreover, if you already contribute to IRAs, boost your yearly contributions. Remember, once you hit the age of 50, you can make “catch-up” payments to your IRA and workplace retirement plans. For traditional and Roth IRAs, this means that you can invest an extra $1,000 above the standard contribution limits for these accounts. For 401(k) plans, you can contribute $6,500 more above the annual contribution limits. These additional catch-up payments can dramatically boost the size of your retirement savings. If you receive unplanned for money from raises and promotions, make sure to save it for retirement. Too often, when workers receive raises, they simply increase their monthly expenses. Don’t fall into this trap. If you are still worried about your future retirement savings, consider adding a second income to your household. This could mean that a spouse who has not worked in the past takes on a second job. It could also mean starting a home-based business or renting out an unused mother-in-law suite in your home. Producing a new income stream for several years before you hit retirement age can significant ally improve your financial standing once you leave the workforce. Adjusting retirement plans Even if you take all these steps, you still might not save enough to meet your original retirement goals. If this is the case, you may have to adjust your expectations for your retirement. For example, maybe you and your spouse planned to travel the world. If you started saving for retirement too late, this might not be possible. Instead, you may have to adjust your expectations. You might have to be happy with a retirement in which you pay your bills, cover your medical costs and spend quality time with your adult children and grandchildren. The key is to be comfortable during your retirement. You might not lead a life of luxury, but you also won’t be worrying about paying the grocery bill each week.

Catching Up Tips for Retirement

View Resource Catching Up Tips for Retirement
Prioritizing how you repay your debt is essential since it can impact how efficiently and quickly you become debt-free. It could also affect the ease in which you maintain your financial motivation. Having a well-organized priority list can not only help you to save money and time but also ensure you stay motivated to repay your debt. Make a List of Your Debt First, you’ll want to list all your debt, such as: Not only list them, but write down the amount you owe, the monthly payment, the interest rate, and if the loan is current, in default, or late. Strategies for Debt Repayment Here are four strategies for prioritizing how you repay your debt:
  1. Pay High-Interest Rate Debt First
    Prioritizing your debt by annual percentage rate (APR) is essentially the best strategy. If you pay off your debts with the highest APR first, you will save money overall. High APR debts accrue higher monthly interest fees. Therefore, the more you allow the debt to linger, the more it will cost you.

  2. Pay Small Balances First
    If your high APR debt is your highest balance, it can take some time for you to pay it all off, and this could cause you to lose motivation and decide to just stay in debt.
    That is not good, so you may want a different strategy. Instead, you might want to start with your smallest balances first. Tackling your small balances are quick wins and can help keep you motivated to tackle your larger debts.

  3. Pay Your Largest Balances First
    There may be some situations where you will want to pay your largest balances off first, such as:

    • Your largest balances are on a 0% promotional period, and you will want to pay it off before the promotion ends.

    • Part of your balance has a high APR since you used a special type of transaction like a cash advance.

    • You are paying a joint account off from a divorce decree to allow you to close the account.

    • The larger balance is harming your credit score since you are using over the 30% available credit limit.

  4. Pay All Your Balances Off At Once with Debt Consolidation
    If you cannot pay off your debt within five years or have high rate loans that are making it difficult, you might consider debt consolidation. In some cases, individuals consolidate debt because it is difficult keeping track of a handful of payments and their due dates.
    Debt consolidation is where you take all your debt and roll it over into a single loan. When individuals talk about debt consolidation, it’s usually because they can get a lower monthly payment or lower overall interest rate.
    One common way of consolidating debt is rolling your current credit card balances over onto a single credit card with a low-interest rate (often 0% APR for a specific period). You can save hundreds or thousands of dollars on interest if you pay the balance off before the 0% APR expires.
Takeaway Ultimately, success in repaying your debt will come down to knowing your options, setting priorities, and deciding on the right strategy. With a little bit of diligence, organization, and persistence, you will soon become debt-free.

Prioritizing How You Repay Debt

View Resource Prioritizing How You Repay Debt
Creating a budget and learning to live within certain limitations does not have to feel like walking across hot coals barefoot. It’s true! There are things you can remove from your budget that you will barely notice once you make a move, like these 25 (almost) pain-free budget cuts.
  1. Ditch the drive-through. Whether you engage in rigorous meal planning or begin an amazing love affair with the crockpot, it is easier than you think (and healthier, too), to give up your drive through habit and dine in your own home instead.

  2. Curtail your coffee habit. Designer coffee is a great pick me up in the middle of the afternoon and even first thing in the morning, but it is one that comes with a hefty price tag. Buy a coffee maker, a thermos, and invest in a few key syrups and creams for a more budget-friendly coffee-shop experience.

  3. Switch to generics or store brand products. While there are some products we all love and cannot live without, there are many others we buy out of habit rather than a necessity, or even desire. Consider switching to generics for those products and see what a difference it makes for your budget.

  4. Check out local consignment shops instead of buying new. From clothing to sporting equipment and furniture, there is a consignment shop for that with “gently used” products well below retail. If there are none available locally, you might find plenty of online options.

  5. Carpool. Share driving duties and reduce expenses (e.g., fuel, maintenance, wear, and tear) at the same time.

  6. Switch mobile phone plans and carriers. Skip the contracts and go month to month for massive savings.

  7. Stop buying the newest mobile phone to hit the market. Savvy sales staff understand that they can keep you as indentured servants by offering outstanding deals and “financing” on the latest mobile phone. Don’t fall for it.

  8. Cut and color your hair. For women who visit salons monthly, the savings in one year can be substantial.

  9. Bring your lunch (and snacks) to work. It’s a simple shift that will leave you well into the green. It can also signify a healthier way of eating for you as well since your ditching convenience foods from vending machines and takeout from your daily routine.

  10. Bottle your water. This one is excellent for your budget and even better for the planet. How much can you save? According to Earthday.org, you can save up to $266 per year by bottling your own water.

  11. Reacquaint yourself with your local library. Libraries are not only sources of amazing books, free for the borrowing; they also offer videos, music, audiobooks, magazines, eBooks, and more.

  12. Cancel subscription boxes. While it’s fun to treat yourself to these monthly luxuries, many of them include items that go unused and unwanted. Eliminate the expense and buy items you want instead.

  13. Compare prices on everything. The Internet is a wonderful tool that allows you to see prices others are offering for the items you desire.

  14. Shop around for better deals on insurance annually. You can realize savings year after year by doing so.

  15. Bring your snacks on road-trips. Stopping to eat on the road can be an unnecessary expense when all you need is a quick pick-me-up snack.

  16. Wash your hands well and often. That can help you suffer through fewer colds and illnesses throughout the year, and less cash outlays for medicine or doctor visits.

  17. Use cost-effective natural cleaning supplies. Baking soda, vinegar, and hydrogen peroxide can handle many of the toughest cleaning tasks in your home at a fraction of the costs of designer cleaning products.

  18. Recycle aluminum cans and bottles. Some states offer substantial rewards for recycling your cans and bottles. Others require hefty deposits only returning them if you bring them back to designated recycling centers.

  19. Cut the cable cord. In many situations, you will not even miss it. Invest in a Roku or Amazon Fire Stick instead. If you cannot find enough entertainment there for free, there are subscription services like Prime, Hulu, and Netflix that cost considerably less than cable.

  20. Eliminate magazine subscriptions. They create clutter and often go unread.

  21. Use promo codes for items and services you buy online. Many companies now offer discount or promo codes for their purchases.

  22. Stop using credit cards. At an average of around 20 percent interest rates, the interest is killing your budget.

  23. Stop paying for things you do not use. From gym memberships to old gaming accounts, and so much more; almost everyone is paying for subscriptions and services they have forgotten they have.

  24. Identify your spending weaknesses. Moreover, find ways to eliminate them.

  25. Never, ever, shop for food when you are hungry. It does not end well.
These 25 simple and practically painless budget cuts can help you accomplish so much more with your money each month. Try them for yourself and see what a difference they make for your financial situation.

25 Budget Cuts You Can Make

View Resource 25 Budget Cuts You Can Make
When it comes to settling a bill for services rendered, paying a babysitter, splitting a lunch bill with someone or sending money to the other side of the U.S., you have many person-to-person or peer-to-peer (P2P) payment services to help you make that digital transaction. What are Peer-to-Peer Payments? P2P payments are simple-to-use, secure phone apps that allow you to send payments to other people through a linked debit card using your mobile device. They enable you to send money to your friend in a restaurant across the table, anywhere in the country or even in another country. Most apps are free and quicker than trying to write a check or find the right combination of bills. You also have a record of each transaction you make, regardless if it is for gas, rent or the dinner tab. Many of these apps are not always the safest payment method for retail purchases and are more intended for peer-to-peer exchanges from one friend to another. Popular and Safe P2P Payment Apps Some different P2P payment apps include: When using P2P payments, there are some things to take into consideration. For instance, you may experience delays. Even though transaction notifications are sent and received immediately, it could take up to three business days for transaction approval, and the funds appear in your account. However, this depends on the P2P service you are using. You may have to pay fees. Some services charge a small amount to process a payment for a debit or credit card — usually only a few cents for each transaction. Again, it depends on the P2P service. Be sure you read the fee policy carefully. Making Secure Payments Paypal popularized payments between friends and family using a computer or phone. Now, Venmo, Google, and many others offer the same functionality. Credit unions and banks offer this service now and even social media networks like Snapchat and Facebook. So, when you are at a restaurant having dinner and you want to split the check with a friend, you just: That is all there is to it. Your friend receives a notification through their app that they have received money. Once they get the money, they can either transfer it to his bank or keep it in his P2P account to use at another time. The P2P app works kind of like a go-between. You link your card, and it enables these types of transactions. However, there are different requirements and different steps with various services. Things to Consider in Selecting a Tool Whether you are still deciding if a P2P service is right for you or you are already using one, there are specific features you want to look for before handing out your financial information. Security You want to make sure that the service protects personal information like your credit card or bank account information. Therefore, search for P2P apps that require more than a single authentication method to verify your transactions or identity while logging in. Transaction Limits Some P2P apps impose limits on transactions that might prohibit you from using the app to transfer large sums of money. Smaller amounts like paying a dinner tab probably won’t be impacted, but if you are looking to move more substantial funds, you will want to check and see how much you can transfer. Fees Many P2P services charge a small percentage of your transaction if you make money transfers using your credit card. If you are using your bank account or debit card to make the transfer, many services do not impose a fee, but with credit cards they do. You also may want to see if there are additional costs for sending money internationally. Speed and Accessibility Some P2P providers may take up to six days to clear the transaction. Others may do it inside of a day or less. Then there are bank or credit union providers that provide real-time transfers if you are a customer of that bank. It can be quite convenient being able to transfer money using your phone. However, like anything else involving technology, you need to research to find a secure and reliable service. A little research on the different features each service has to offer and reading each company’s terms and conditions can help you make a better decision when choosing the right P2P payment service for your needs.

Peer-to-Peer Payment Tools

View Resource Peer-to-Peer Payment Tools
When your credit score runs a little too low to get you the things you want and need in life at an attractive interest rate, it’s time to consider making changes. One of the changes many consider is credit repair services. But, is the investment in these types of services worth the cost?

What Is a Credit Repair Service?

Credit repair services help to remove inaccurate or incorrect information from your credit report. That is something that can bring your credit score down. Companies that offer these services provide advice on how you can improve your credit score. They will also file disputes with credit reporting agencies on your behalf. What they cannot do, though, is remove accurately reported information, even if it harms your credit score. The types of inaccuracies credit repair services can address include the following: Many of these services charge monthly fees and may take several months, or even years, to completely clean up your credit report. You should note that you can clear up many of these on your own. However, it is a time-consuming process. Mostly, you are paying for the convenience of having someone else act on your behalf.

What Is a Credit Report Dispute?

When you find inaccurate information on your credit report, you must dispute it to have it removed. The process does take time, energy, and some degree of persistence. That is one reason why it can take so long for credit reports to improve — even when using credit repair services. When you file a dispute with one or all the major credit reporting agencies: They will notify the reporting creditor of the dispute and allow them 45 days to prove their claims. Once the 45 days pass, it will be up to the credit reporting agency to remove the negative report or leave it in place. If they deny your dispute, there is a process by which you can escalate your claims. You will generally need to offer proof of your own for this to occur, such as a canceled check reporting that you have paid your bill. The great thing about a credit repair service is that they can do these things and save you the time and the hassle involved. On the other hand, these are all things you can do for yourself.

Are They Worth It?

In some cases, they are well worth the money. That is especially true if you have inaccurate, false, or outdated information on your credit report keeping your credit score artificially low. Some people view time as precious of a commodity as money. If you are among that group, you will likely feel that credit repair services are well worth every penny you have saved because it saves you time. However, credit repair services cannot help everyone. After all, they can only help with the removal of false information from your credit report. In most cases, waiting seven years will allow all the negative information on your credit report to disappear.

Credit Repair Service Company Caveats

We should also note that some credit report repair scams are lurking out there. Look out for and steer clear of companies that hold lofty promises and demand upfront payments. It is also a big red flag if a credit repair service company says they can remove all negative information from your credit report. That is not true, as no one can remove accurate information from your credit report.

Takeaway

Are Credit Repair Services Worth It?

View Resource Are Credit Repair Services Worth It?
No one wants to think about ending a marriage before it even begins. However, the American Psychological Association reports that about 40 to 50 percent of married couples in the United States will eventually divorce. Unfortunately, that means that it might be a good idea to expect the best and plan for the worst. Getting a prenuptial agreement is like getting marriage insurance – of a sort.

What Is a Prenup and Do I Need One?

A prenuptial agreement is a written, legal contract you sign before you are married, determining how to divide assets and liabilities in the event of a divorce. It lists all the accounts, property, and debts owned by each person before the marriage takes place and what each person’s rights will be to these if the union gets terminated. Additionally, prenups can shield one party from the other party’s debts. That means if one party has enormous student loan debts, those debts would be exempt from any divorce settlement, and the other party would not have to pay them. Do you need one? If you have assets going into a marriage you wish to protect or shield your partner from your debt, then yes, a prenup is recommended. Prenups do not, however, protect assets or debts acquired during the marriage from divorce proceedings.

How Does a Prenup Work?

Laws vary from state to state about what can and cannot be in each state’s prenuptial agreement. For this reason, it is best to work with an attorney familiar with your state’s legal framework for prenuptial agreements. Some prenups can even restrain couples from speaking ill of one another after a divorce. Essentially, couples can agree to any of the following in their prenup: Remember that every prenup is unique, and you and your partner may have differing interests in the prenuptial agreement. Putting together a deal can be an important test for your relationship. There will be challenges as you determine who gets what if your marriage should end in a divorce. Also, remember that just like in a divorce, you each need to have individual representation to protect your interests. A prenup is not about hamstringing either party. It’s about creating an equitable dissolution of the marriage based on the assets and liabilities you brought into the marriage with you.

Advantages and Disadvantages

Before you decide a prenup is right for you, make sure you consider the potential advantages and disadvantages that go along with it. Advantages: Disadvantages: Takeaway

Should You Get a Prenup?

View Resource Should You Get a Prenup?
Electric cars sound like an excellent investment — especially if you have been at the gas pump lately. Not only do they cost less to operate, but they also produce fewer emissions, which is terrific for the planet (and all the creatures that call it home). In the past, electric vehicles have had a few problems to overcome, including the availability of different vehicle types. Today, more electric cars are available than ever before. There are even several highly stylish options to consider. Now is the perfect time to give electric vehicles a second look if you have been sitting on the fence.

What to Consider

Before you dive in, there are a few important considerations you will need to keep in mind. Electric vehicles are not the right choice for everyone. As you explore your options and try to decide whether electric cars are the best choice for you, take into account the following: As you can see, there are quite a few considerations to mull over when deciding if an electric vehicle is an appropriate choice for your driving needs.

Costs

With the broader proliferation of electric vehicles in the marketplace, many ownership costs have decreased. While many states are imposing higher taxes on electric car drivers, the fact remains that the broader competition is keeping prices in check. Plus, there are ways you can bring down the costs even further, including the following:

Buying Used vs New

One of the significant drawbacks of purchasing used vehicles for many is the lack of warranty protection, especially for batteries. The average EV covers the battery replacement for up to 100,000 miles, making it a non-issue. Buying used can save money, but some people simply like that “new car smell.”

Takeaway

Buying Your First Electric Car

View Resource Buying Your First Electric Car
The real estate market offers many different housing options. Depending on your life stage, financial resources, and where you are on your financial journey, one type might work better than others. When choosing between houses, townhomes, or condos, how do you know the right choice for you? The better you understand each type of home, the wiser choices you can make when buying your first, second, or even final home. Here’s what you need to know.

Where to Start

One of the most crucial details to understand when choosing between a condo, townhome, and a house is that upfront costs are not the only costs involved. For instance, condos often have the lowest initial costs. However, they also tend to have much higher HOA fees to cover maintenance costs of exterior spaces and common areas. Townhomes often cost less than houses, but you still have many homeownership expenses, such as maintenance, repairs, upkeep, and property taxes, plus HOA fees. These fees can easily exceed those of homes that do not require HOA fees. Houses tend to require higher upfront costs than most townhomes and condos, and owners are fully responsible for maintenance, repairs, and upkeep. On the flip side, a traditional house offers more privacy than any other options on this list.

Comparing Types of Homes

Condos Condos are excellent choices for first-time owners as well as those who are mature or elderly and looking to downsize their space and maintenance commitments. They offer lower price points for entry, and maintenance and upkeep of the buildings, lawn, and public areas occur on your behalf. That no-maintenance lifestyle, though, has a price of its own. Don’t overlook the costs of the condo association and other fees that go along with your condo lifestyle. Condos can also have complex amenities, such as a pool and tennis court. Townhomes Townhomes are typically multi-level structures. They can be a good option for small families and couples who want a little more privacy than condos provide. They also require a deeper personal commitment to things like maintenance, repairs, taxes, and other fees than condos may. Many townhomes have small front and backyards to be maintained during the summer. They may require snow removal or other services in the winter. Like condos, townhome communities may offer amenities like a clubhouse, pool, fitness center, and tennis courts. Houses Houses are a proper choice for people who are most concerned about the room to spread out and the privacy from the prying eyes and ears of neighbors. You do not have to worry about neighbors below your floor, above your ceiling, or on the other side of your walls. Instead, you do need to worry about maintenance and upkeep for your home and lawn, driveway, and sidewalks for all weather conditions that come your way. If you are looking to the future, though, a house of all these options maintains its value best. Keep that in mind and choose the option that works best with your short and long-term financial goals.

Making a Decision

It may feel like the weight of the world is on your shoulders when you make your home buying decision. It is, after all, usually a long-term commitment with a 15-year or 30-year mortgage attached. However, it is not the end of the world. You have the option of upgrading (or downsizing) into a different home as your needs change and the situation warrants. Weigh the dollars and cents against your needs and select the option that offers the most opportunities for growth, future sales, and low-maintenance living (if that is what you’re looking for).

Takeaway

House, Townhome, or Condo?

View Resource House, Townhome, or Condo?
Disposable income is a consumer finance term used to describe your income after the deduction of taxes. It is a significant indicator of personal wealth and one of the tools we use to measure the state of the economy for consumers. There is a lot more to it than that, however. The better you understand the ins and outs of your disposable income, the better handle you will have on your financial situation.

What Is Disposable Income?

Once you take your income and subtract your taxes (federal, state, and local), your required paycheck deductions (Social Security, Medicare, unemployment insurance, back taxes, and court-ordered child support), and any other mandatory government payments (licenses, fees, and permits), what remains is your disposable income. Voluntary automatic contributions from your paycheck for retirement savings or 401(K) plans are not part of disposable income. They are not mandatory payroll deductions. Disposable income is money available for you to do the following with: It includes the amount you can do all the above without having to draw or liquidate assets. The basic formula to calculate disposable income is simple: Gross income — taxes, required payroll deductions, and mandatory government fees = disposable income However, disposable income includes all income received by an individual but not necessarily earned. Examples include unemployment compensations, social security benefits, food stamps, veteran benefits, and welfare payments. Disposable income includes all of these. Disposable income does not include realized or unrealized capital gains or losses from investments.

How Does it Work?

Disposable personal income is a crucial indicator of wealth for the national economy. So much so that the U.S. Bureau of Economic Analysis (BEA) releases information on the changes in disposable personal income from month to month. Ultimately, your disposable income is the money you are supposed to live on from month to month. It is the amount of money upon which you base your budget for each month and annual spending. You can use your disposable income to determine how much you can afford to spend on necessities. That includes rent or mortgage payments, rainy day savings, what you can invest, and what you have leftover for discretionary spending each month. The U.S. Government uses disposable income numbers and other economic statistics to determine the health of the U.S. economy, especially as it relates to personal savings rates. For instance, during recessionary times, the personal savings rate dips into negative territory, indicating that Americans have to dip into their savings to cover essential living expenses.

Disposable vs. Discretionary

It’s important to understand that disposable income and discretionary income are not the same, although people often confuse them. Disposable income is the total amount of money you have to work with for the month. Discretionary income includes money you use to pay for the essentials, which include things like: Discretionary income also includes income you have available for expenses that aren’t necessary for living, such as: As you can see, discretionary funds, while derived from disposable income, are not the same. When working out payment plans and calculating available funds for these instances, some organizations use discretionary income. Others use disposable income to determine how much you can afford to pay each month.

Takeaway

There are critical differences between discretionary income and disposable income. Understanding what disposable income is and how it is different from discretionary income can help you budget more effectively. Calculating disposable income can help you determine how much money you can reasonably apply to certain expenses in your life before you commit to them.

Calculating Your Disposable Income

View Resource Calculating Your Disposable Income
Understanding the cost of living in an area can help you determine the amount of money necessary to cover basic living expenses. It can also describe the amount of money you will require to maintain a specific lifestyle in a given location. Because the cost of goods and services differs from city to city, calculating the cost of living can identify the affordability to live in a specific town. Your cost of living will likely change should you move from one part of the country to another. Using a cost of living index can help you decide if changes in pay are sufficient to warrant your change of address. In other words, the cost of living index enables you to compare the prices of living in one city versus another.

What Is Cost of Living?

Cost of living refers to the costs of meeting basic expenses in one location. It determines how far your money will go in a particular locale. It can be done by cities, states, or even some neighborhoods to help people determine the benefits of relocating. Factors that affect the total cost of living in an area include things like: It is also a great indicator of how your shiny new salary stacks up against your new living expenses.

How Is Cost of Living Determined?

Most people consult the consumer price index (CPI) for information or calculations related to living costs. It is beneficial for comparing the costs of living between two or more areas. However, it certainly isn’t the only option available. There are many websites online that offer cost-of-living calculators. As you can imagine, large cities worldwide and throughout the U.S. have higher costs of living. That includes cities like Tokyo, Hong Kong, New York, Beijing, and Singapore. You cannot forget or overlook the importance of taxes when determining the cost of living. It is not just federal income taxes that should be of concern. There are also state and sometimes local income taxes to contend with: property taxes, vehicle taxes, and countless others, which are higher in some locations than others. Just remember that the basics are not everything. You have to be able to live a little as well. That means you need to consider costs above and beyond living essentials. You should make sure your salary will help you make ends meet while also setting aside funds for savings, investments, and more.

Applying Cost of Living

When you apply the cost of living changes to your new proposed salary, do not forget to factor the numbers with your disposable income for the area in mind. One thing you can do is use online cost-of-living calculators. These can help you determine how much you would need to earn in a new location to maintain your current standard of living. You may be surprised to learn that your new home has a lower cost of living, so even a slight pay raise will give you more discretionary income. Do not let everything hang on estimates, however. Take the time to look around at rental prices, fuel prices, and even supermarket ads online to see how the numbers stack up in real-world comparisons. The bottom line is that cost of living measurements can be valuable tools to determine if a job relocation is the right financial move.

Key Takeaways

Measuring the Cost of Living

View Resource Measuring the Cost of Living
Some people have one password strategy: a bad one. It is not a good idea to use the same default password for all your accounts. If you have not put much thought into your password strategy, now is an excellent time to give it a try. Creating strong passwords can help prevent casual hacking of your accounts and prevent identity theft and other significant problems. How bad is the problem of stolen account information, including passwords? According to We Live Security, more than 15 billion account credentials for sale on cybercrime forums. You need to make sure these criminals do not have a direct entrance into all your accounts.

Creating Strong Passwords

Creating strong passwords is part art, part science, and part strategy. Despite widespread education about the dangers of using “password” as your password, it remains one of the most commonly used (or some variation thereof, such as “Password123” or “Password1!”) passwords today, according to Consumer Reports. These strategies will help you create more effective, stronger passwords. Think about all the accounts you have: social media, email, banking, utilities, streaming, and likely many more. It is conceivable that you have 50 or more accounts that all need strong passwords. Password managers can help you manage across all your devices without risking repeats or making it easy for hackers to compromise.

Are Your Passwords Compromised?

Suppose you have received a letter in the mail informing you of a data breach that includes your information. In that case, the odds are good that your password is compromised. What does that mean? It means every account associated with your email address that uses the same password is also compromised. What if you have not received a notification? There are programs out there that look out for you, like Firefox Monitor from Mozilla and Password Checkup from Google. You can use these tools to see if your email address has been part of a data breach. These services will notify you via email if a known data breach has compromised your accounts. Of course, there is more you can do to keep your information safe and secure. One of those options is to use multi-factor or two-factor authentication to add a layer of security to your important accounts.

Multi-Factor Authentications

Multi-factor authentication, or MFA, requires multiple forms of authentication to make your account information available to you. Some may send a code via email or text or even require a token in addition to your password. Some recommend against using text messaging for multi-factor authentication because spammers can intercept those codes and access your information regardless. Alternatively, you can use a service like Google Authenticator or Microsoft Authenticator to verify your identity on your behalf once you have registered a specific device with the service. The bottom line is that it is always in your best interest to strengthen your passwords as much as possible. Doing so reduces the risks of others accessing your accounts.

Takeaway

What’s Your Password Strategy?

View Resource What’s Your Password Strategy?
Data breaches occur all the time these days. They hardly make the news headlines anymore. One of the outcomes of these widespread breaches is that some credit card companies have started to provide digital or virtual credit card numbers to their customers. But, is it the best solution for you? Let’s explore what these cards do, the benefits they offer, how to get them, and what you need to know. What Are Digital Credit Cards? A virtual credit card allows you to mask your main credit card number and use a unique card number for each transaction. You can create as many of these virtual card numbers for your actual credit card without jeopardizing your credit score or your standing with the credit card company. Depending on your credit card issuer, you will receive unique numbers for each transaction or a single virtual card to use with all merchants. Many allow you to request a new number for the card as often as you like. While these cards can make online transactions safer for you, they do not make you impervious to fraud. It would be best if you continued to manage your account and monitor transactions for suspicious activities.

Getting a Digital Credit Card

Most credit card providers offer this service free of charge to their customers. You must first have a credit card. Then, you must log into your account with the credit card company and take the following or similar steps:
  1. Go to account settings and look for the “virtual card numbers” or “digital credit card” option and select it. If your credit card company does not offer one of these options in the account settings, they may not yet provide this service.

  2. Download the app that allows you to access the digital card if required. That will make the process of using your credit card easier.

  3. Accept the assigned digital credit card number.

  4. Choose how long you would like that card to be valid. You may have the option of one-time use or the ability to establish specific expiration dates. Suppose you have the type of digital credit card that is different for each merchant. In that case, your expiration date may be pre-selected.

  5. Get the security code for your digital credit card. That allows you to use the digital card just as you would a physical card, except for online purchases.
There may be variations from one credit card provider to the next. However, most will offer something very similar to this. The goal is to make it easier to protect yourself, not more difficult.

What to Be Aware Of?

Digital credit cards are different from payment apps, like Google Pay or Apple Pay. Those services are for use at brick-and-mortar locations. On the other hand, digital credit cards are designed specifically for use with online transactions. Other things to be aware of concerning digital credit cards include the following: The primary benefit is that if a data breach exposes a virtual credit card number, you don’t have to cancel your credit card. You only have to cancel that specific digital credit card number and seek a new one of those. You can continue to use your physical credit card for essential shopping.

Takeaway

Digital (or Virtual) Credit Cards

View Resource Digital (or Virtual) Credit Cards
There’s a $400 charge on your credit card for a hotel at which you’ve never stayed. Alternatively, maybe there’s a smaller mistake, the $18 charge for an online newspaper subscription that you canceled a month earlier. You do not have to accept these charges. You can dispute them with your credit card company. Moreover, the best news is the issuer of your card is far more likely to side with you than with the merchants whose charges you are disputing. The odds are high that you will one day have to dispute a questionable charge on your credit card statement. Many of us rarely carry cash today. We pay for drinks and meals on airplanes with our credit cards. We check into hotels online, using our credit card number to complete the transaction. We use our credit cards to pay for restaurant meals, groceries and a night out at the movies. Also, how many of us buy clothing, video games, books and shoes directly from online retailers, paying for each transaction by punching in our credit card numbers. The potential for your credit card information to fall into the wrong hands, then, is higher than it has ever been. The good news is that the Fair Credit Billing Act, which went into effect in 1975, gives you the right to dispute suspicious charges on your credit card. When you dispute charges, your credit card provider will force merchants to prove that the disputed charge was not a mistake. This means that the burden of proof is on merchants, not you. This is a benefit for you, but a problem for many merchants. After all, there are plenty of unscrupulous consumers willing to dispute legitimate charges as a way to “purchase” items for free. Avoid this temptation. Only challenge legitimate mistakes. If you call your credit card company each month with complaints, the odds are that your card issuer will get suspicious. Instead of siding with you, it might flag you for suspicious behavior. To win a credit card dispute, you need to follow just a few simple rules. First, if you notice a strange charge from a merchant, don’t call the merchant. The Fair Credit Billing Act says that you can resolve disputes directly with your credit card provider. This is often the simplest way to a resolution. Credit card companies are required by law to conduct a reasonable investigation of your claims within two months. They are also required to send you a letter notifying you of their decision once their investigation ends. Most card issuers will, as they conduct this inquiry, take the disputed charge off your bill. If they resolve the dispute in your favor, then, you’ll never have to shell out any money because of the disputed charge. Don’t forget, though, that there are exceptions to the Fair Credit Billing Act. The act only applies to purchases that are more than $50. Also, the purchase must take place in the same state as the one on your billing address or take place within 100 miles of your address. Don’t let this stop you from disputing a $20 charge, however. Most credit card companies will take on disputes even if the complaints do not meet the stricter requirements of the law. Credit card companies, after all, want to keep their customers happy. Addressing their billing disputes is one way to do this. The third key to a successful dispute? You need to be aware of the charges made on your card. This means that you must study your credit card bill carefully each month. We are all busy people. However, taking a few minutes to study your monthly credit card bill could uncover some suspicious charges. Don’t ignore them. Dispute them.

Disputing a Credit Card Transaction

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If you lost your job tomorrow, would you have enough money to pay your bills without running up credit card debt? What if your car broke down and you needed $3,000 to get back on the road? Could you come up with the cash? If you answered “no,” then you need to create a rainy day fund, dollars that you can tap in case of a financial emergency. The benefit of such a resource is obvious: If you have one, you will not need to go into debt to handle the economic crises that so frequently pop up. U.S. Consumers Not Ready For Emergencies If you do not have a rainy day fund, you are far from unusual. According to a Bankrate.com August 2020 survey, 4 in 10 adults have the ability to cover an emergency expense that would cost $1,000. Those that are saving have probably not saved enough. The Bankrate.com survey reports that 27 percent of respondents have less than three months’ expenses saved, and 1 in 5 respondents with three to five months. Surprisingly, 21 percent of Americans have no emergency savings at all. No doubt the economic impact of a global pandemic that left millions out of work plays a substantial role in those numbers and when the economy starts to recover they’ll rebound significantly. How will consumers without a rainy day fund cover emergency expenses? Many would borrow from family members or friends while others say they would neglect a different financial obligation. Others would, of course, put the debt on their credit cards. None of these are reliable options. The best bet is to have an emergency fund available. The good news? Starting an emergency fund is not overly complicated. How Much Do You Need? First, you have to determine how much money you need in your rainy day fund. Most experts recommend that you have at least enough money in your emergency fund to cover three to six months of expenses. However, depending on the state of the economy or stability of employing within your profession, you might need more or less. Of course, the more money you have, the better. That is especially true in today’s economy when it is still easy to lose your job and often challenging to find a replacement that pays the same. To determine how much money you need, take a long look at your monthly expenses, including everything from your recurring bills — such as your mortgage payment, car bill, and student loan payment. Then include those costs that vary from month to month — everything from your grocery bills to your utilities and minimum monthly credit card payments. Add these and then multiply them by the number of months you want to cover. If your monthly living expenses come out to $4,000, then you would need $12,000 for three months of emergency funds or $24,000 for six. That is just the start of your rainy day fund. You will also need to budget savings for emergency situations. What if your kitchen sink suddenly springs a leak and destroys the cabinet underneath it? What if your car needs a new transmission? What if you need medical care and your insurance only covers part of the procedure? These are all financial situations that could throw you deep into debt without an emergency fund. It is hard to estimate how much you will need for these emergencies. According to American Family Insurance, you should look to save 1% of your home’s total price for maintenance. So if your home cost $200,000, then you should be looking to save $2,000 to cover costs. It could cost about $900 a year on average to maintain and repair a car that is five years or older. To be on the safe side, then, you might need to boost that $24,000 emergency fund to at least $27,000. That amount might seem like an overwhelming sum of money to save. However, it is not. No one expects you to save your money immediately. You will have to build your emergency fund over time. Start putting away whatever you can each month. That might mean cutting down on unnecessary expenses such as eating out, going to the movies or buying that high-cost coffee on your morning commute. It also helps to set up a direct deposit from your regular paycheck into the account that is holding your rainy day funds. Saving money is easier when you do not think about the money you are stowing away. With direct deposit, you never miss the money you are saving. Where To Save It Experts recommend that you save your emergency fund dollars in an interest-bearing bank savings account. There is a reason for that: You want to have easy access to the dollars in case of an emergency. With a savings account, you will be able to tap your savings quickly. Moreover, if you have your dollars in an interest-bearing account, you will at least earn a bit of money. You will not get rich by having those dollars in a traditional savings account. However, you might make a bit of extra cash. Many financial experts recommend that you start you rainy day fund before you take on other significant financial tasks such as paying off high-interest rate debt. That is because a fiscal emergency if you do not have the cushion of an emergency fund, could throw your financials into chaos. If that occurs, a crisis could send your high-interest-rate debt soaring to new heights. If you want to get financially healthy, the message is clear: It is time for you to commit to a rainy day fund of your own.

Building a Rainy Day Savings Fund

View Resource Building a Rainy Day Savings Fund
Leveraging social media marketing can increase your customer base significantly. According to the Pew Research Center’s 2018 Social Media Fact Sheet, social media usage among American adults has grown from 5 percent in 2005 to 69 percent in 2018. Moreover, for the most popular sites, most users are visiting those sites at least once a day. That makes social media a place you will need to be if you want your business to get noticed. However, it can be a challenge to start a social media campaign without any insight or experience. Almost all entrepreneurs currently participate in social media in some fashion; however, many are still not sure how to benefit from it. Using social media marketing optimally includes understanding its power, setting goals, planning social media marketing campaigns, and strategically and consistently utilizing these platforms. What Is Social Media Marketing? Marketing on social media platforms consists of creating a presence on numerous social networks to achieve branding and marketing communications goals. It is a form of online marketing that primarily includes activities like sharing videos, content, and images for marketing purposes. Planning and Goal Setting Before you create your first social media marketing campaign, set business goals and devise a plan to achieve them. If you do not already have set goals for your business, it is essential for you to create them. Consider what you are trying to achieve when marketing on social media sites, who your target audience is, where they spend their time, and how they are using social media. Additionally, determine what message you want to get across to your target audience. You can use social media marketing to achieve key business goals, including: You can only measure your social media ROI once you have established your goals. Other Helpful Tips Some other tips that will be helpful in building a foundation that will serve your brand, customers, and bottom line include:
  1. Provide Quality. Your social media efforts can pay off better by having 100 followers who read, talk, about and share your content, rather than 1000 who disappear after your initial contact.

  2. Have Patience. Success in social media marketing takes consistency and time. Although it is possible to make some quick sales or get some business partnerships on your first attempt, it is far better to commit to the long haul.

  3. Hang With Influencers. Find out who the online influencers are in your industry and hang out with them virtually. Respond to their tweets and Facebook posts, and eventually, they might do the same for you. These will be the people with quality audiences who might just be interested in what you are offering. Make a connection with these people and begin building relationships with them.

  4. Provide Value. If you are using social media exclusively for promoting your products or business opportunity, people will begin to ignore you. You have to add value to the mix. Keep your focus more on creating valuable content and less on conversions.
Available Platforms Facebook Create a business Facebook page. By adding a business page, you can further your conversations with your audience by posting images, articles, and videos that are industry related. You should also pay careful attention to the layout when using Facebook since the visual component is an integral part of the overall Facebook experience. Twitter The Twitter platform lets you broadcast updates (tweets) in 140 characters or less. You can begin by following other tweeters that are in your related industry, which will hopefully garner you followers in return. When making tweets, it is best to mix them up a bit between official-related tweets (discounts, specials, etc.), news tweets and, value tweets. Throw in a little bit of fun and humorous tweets as well. If a customer says something nice about you, be sure to retweet it and always answer any questions that people ask you. Instagram Instagram is one of the most potent social media platforms for visual content. Almost all of it is content consists of photos and video posts. Now with more than 700 million active users, it has become a destination site for those that like to post about food, fashion, travel, the arts and other visually-focused subjects. The other exciting aspect of Instagram is that its post all must originate from a mobile device. Snapchat Snapchat is another mobile-only platform that currently has 150 million-plus app users. Snapchat content is temporary, disappearing from a user’s feed after 24 hours. Snapchat is useful for visual story-driven material and has a strong reach to millennial audiences. YouTube If your business lends itself to product demonstrations or service explanations, take advantage of the popularity of video. YouTube is a fabulous platform for many types of companies to embrace and prosper with as a promotional vehicle. Pinterest Would your business benefit from posting and sharing images? Many small and large businesses alike would, including hair salons, web designers, jewelry stores, restaurants, event planners, and much more can find that Pinterest helps them draw in and engage with existing and prospective customers. LinkedIn While many businesses can benefit from LinkedIn, it is especially beneficial for B2B marketing. It is an excellent platform for small businesses to reach out to other organizations who may be seeking their services. It is also an excellent tool for recruiting employees. Social media marketing will do much more than increase your website traffic and sales. It will also allow you to get a better understanding and learn from your target audience. However, when done right, social marketing can lead to increased traffic, better conversions, and more customers.

Social Media Marketing

View Resource Social Media Marketing
While many lenders and businesses will tell you that you are more than your credit score, the truth is that your credit score matters more than you probably realize. The better you understand your credit score and what affects your score, the better control you can have over your financial future.

Types of Credit Scores

There are two types of credit scores that most people are aware of (however, there are many more!) The most prominent, two, are: The “FICO” score was developed originally by Fair, Isaac and Company, now better known as FICO. Businesses use these scores when making credit decisions. The FICO score can be adapted to meet unique or specific needs based on industry or even types of loans. VantageScore was created as an alternative to FICO by the big three in the business, Experian, TransUnion, and Equifax.It was launched in 2006 and has since remained a force in the industry. Additionally, alternative credit score models and individualized models are used in-house by large corporations. They often factor traditional credit scores into their risk assessments.

Understanding Credit Scores

Suppose you are preparing for a major credit purchase, such as a car or a home. In that case, it is a good idea to get a copy of your credit report to make sure the information is accurate and up-to-date. It’s also a good idea to know where you stand, credit-wise, before applying for any loans. Fortunately, you can obtain a copy of your credit report from any of the three major vendors one time each year. You can also get your credit report free from annualcreditreport.com, which Federal law authorizes. You can receive more than one if you are willing to pay for subsequent copies. One good way to keep a running check of your credit report throughout the year is to get one copy from one of the three major organizations per quarter. That way, you never have to pay, and you have a good idea of your credit picture. So, what does your credit score say about your credit situation? For the average person, it does not say much. However, to lending organizations, it can reveal a lot. The information that is of particular interest to these groups include: The information in your credit report, combined with your credit score, helps lenders determine whether to extend credit to you.

What Affects Your Credit Score?

Credit scores can be affected by a wide range of everyday events, including some things that may surprise you. For instance, applying for credit can harm your credit score. It’s true! This is especially the case if you go and suddenly apply for many types of credit (credit cards, auto loans, mortgages, etc.) at the same time. Lenders would rather see fewer credit applications and long-term relationships with the creditors you do have. The things that affect your credit score most include: Solve these problems on your credit history to enjoy faster approvals, more approvals, and lower interest rates.

Key Takeaways

The Ins and Outs of Credit Scores

View Resource The Ins and Outs of Credit Scores
Saving money and spending less may sound like the same thing, but they involve different financial habits to lead to financial security. Creating healthy spending habits and saving money can be difficult. With product placements, sales, subscriptions, and online shopping, buying is as easy as 1-2-3. But those steps can change, and you can begin making changes to bring yourself more financial security with the tips listed below to help you spend less and save more.

Creating Healthy Spending Habits

  1. Record your expenses. For a month, record all your expenses. At the end of the month, go back and see your spending habits. What surprises you? What is necessary, and what is unnecessary? Evaluate those spending decisions and decide if everything is warranted.
  2. Evaluate your income. Is your income enough to keep up with your spending habits? Take a look at what you bring in and determine if you need to spend less.
  3. Reviewing recurring expenses. Take a look at items such as insurance policies, mobile phone plans, cable service, etc. Can you make changes there to save some money?
  4. Determine your shopping stops ahead of time. Make a plan to shop only at specific stores. Limiting the number of stores you go to will limit the number of unnecessary purchases–saving you time and money!
  5. Shop with a shopping list. Create a shopping list–and stick with it! Get what is on your list to avoid purchasing the other items that catch your eye.

  6. Find patterns in your behavior. Look for trends. For instance:

    • Do you shop because of stress or boredom? If you are bored and shop, you may be making unnecessary purchases.
    • Are you rushing in the morning? If you don’t have time to slow down and eat, you may get the temptation to stop and grab food and coffee–which adds up daily!
    • Do you opt for free trials and forget to cancel? We all do this! You are excited to try a new service, and you forget to cancel it. Make sure that you make a note to cancel when you decide you no longer want the service. Try doing it at that moment to prevent charges if you forget later.
    • Do you routinely incur late fees? Late fees can add up. Create a calendar for when things are due to avoid paying late fees. Also, pay bills early if you can.
    • Are there services you do not use? There are so many cool things out there: subscription boxes, streaming, rental clothes–you name it! But are you using them all? Take a look at what you can do without, and you will begin making better “sign-up” choices.

  7. Create new habits. Everything we do is habitual. If spending is a problem, rework it for a solution. Here are some things that may help create new habits:

    • Drive a different way to work to avoid making specific purchases.
    • Carry only cash. You can’t spend what you don’t have.
    • Find free or low-cost events to attend. Once there, they usually guide you to others.

When and Where to Spend Less

There are many key areas you can focus on to spend less, including: Food Clothes Overall

How to Save

The best way to save money is to have it added for you! Check the interest rates at your financial institution and find the highest one. The more you put in there, the more you make off of it.

Takeaway

Changing your spending habits is not easy. It is a lifestyle change. Start with one thing you can change and work from there. Start with your audits and evaluate what changes you will make. From there, take baby steps. Over time, you will feel free and richer!

The Difference Between Spending Less and Saving Money

View Resource The Difference Between Spending Less and Saving Money
Tracking your expenses and spending is a great way to ensure you are not living beyond your means. No one wants to have their power cut off because they have to have that expensive handbag or coffee every morning. Below we will go over effective ways to categorize and track your expenses.

Needs, Wants, and Obligations

There is a significant difference between the things you need, your obligations, and things you want. You need things such as: You are obligated to: You may want: Before setting a budget or preparing to track expenses, you must first determine your specific needs, wants, and obligations, as these vary from person to person. Some of the things you need may include: You are obligated to pay things such as: Expenses that accumulate based on things you want may include:

Tracking Expenses

Tracking the amount of money you are bringing in versus the amount of money you are taking out each month can help you save a tremendous amount of money if that is your goal. Account statements: To start, look over all of your account statements, including all checking accounts, savings accounts, and any credit cards you may own. Determining where your money is going each month is the first, and perhaps most important, step to tracking your expenses. Create a budget: Budgeting is not for the faint of heart, and it entails hard work and dedication to succeed. Once you have successfully determined where you are spending your money each month, you can begin grouping things you need versus those you want. Determining necessities versus vanities will look a little different for each person; therefore, no two budgets will be the same. Begin your budget by allotting for things you need to survive and those financial obligations you have incurred. These may include items such as rent, mortgage, an auto loan note, both health and auto insurance, your electric and water bills, and groceries. It is essential to allot additional money within your necessities for those unexpected expenses, such as an emergency room visit. Once you have laid out your necessities within your budget, you can begin allotting for your vanities. Vanities may include things such as a meal out, a coffee from your local coffeehouse, hitting a night club, or a new handbag. Allow yourself a monthly personal spending limit within your budget, so you do not feel too restricted. Log your purchases: Whether it be a paper report that you fill out by hand or an online application, utilizing an expense report to log your purchases will help ensure you do not exceed your budgeted monthly amount. You can download many different apps straight to your phone for ease of tracking, or you can utilize things like spreadsheets or a simple notebook if you would rather the simplicity of monitoring. Identify necessary changes: After a month has passed of budgeting and expense tracking, you will begin to see your spending habits and be able to tell if your habits are healthy or not. Once you have determined areas where change may be necessary, you can easily make those adjustments in your spending to ensure a better financial future for yourself and your family.

Takeaway

Overall, categorizing and tracking your monthly expenses and spending will not only benefit you in the short term but the long term as well. Tracking expenses can seem quite daunting when you are first starting, but if you can stick with it, you will learn so much more about the things you need than those you may think you need. There are many ways to categorize your monthly necessities and even more ways to track your spending. Whether you choose to go old school and track things by hand, keep your receipts to enter expenses into a spreadsheet, or utilize an online application for convenient expense tracking, you are sure to save and cut down on your monthly payments by doing so.

Categorizing and Tracking Your Expenses

View Resource Categorizing and Tracking Your Expenses
Marriage is an exciting milestone in every couple’s life. But with every marriage comes the important conversation of finances. After tying the knot, did you discover that your significant other has a history of bad credit? What do you do now? Below you will learn more about what credit is and how to deal with your spouse’s credit issues.

Why Good Credit Is Important

A credit score is an overall assessment of how financially reliable or unreliable you are based on your credit report. When you are applying for a new loan or line of credit, whether it be a personal loan, auto loan, or even a credit card, it is reported to one of three national credit bureaus and added to your credit report. These credit bureaus also track your ability to repay debts both on time and in full. Having good credit comes into play with many aspects of life. If you wish to purchase a new home or vehicle, a lender will assess your credit report to determine if you are a reliable borrower or not. Also, when doing things such as apartment hunting, the prospective landlord may run a credit check to determine if you can pay your bills on time. A future employer may even run a credit check to determine if you are dependable.

Will My Credit Be Affected?

Simply enough, no. When two people are married, their previous credit history remains their own. Your spouse’s credit score does not directly affect your credit score and vice versa. It does, however, affect your future finances and debts and credit purchases you take on jointly. So, any debts you take on jointly will appear on both you and your spouse’s credit reports. If you and your spouse are applying for a loan together, especially when purchasing a home, and one of you has a low credit score while the other has a much higher score, it may be beneficial to apply with only one of you instead of both. When applying with a spouse with bad credit, you may not be approved for the amount desired or might end up paying a much higher interest rate.

Identify the Issues

It is not uncommon for couples to avoid the discussion of finances, especially before they are married. If you tie the knot and have yet to have a discussion on finances, now is the time to do so. If you or your spouse have credit issues, it is imperative to keep an open mind and try not to judge their past choices. It is essential to understand why your spouse has credit problems to help them identify and attack the source. To figure out where you stand, obtain a copy of both of your credit reports. Take a thorough look over each credit report to determine what led to either yours or your spouse’s credit issues. Was it overspending, the loss of a job, or an emergency? Getting to the root of the cause will help you immensely along the way.

Plan of Attack

To repair damages, you must first learn the ins and outs of what caused them. When reviewing credit reports, make a list of all collections accounts available and the payoff amount for each. Work to pay off each of these debts, either in small amounts of each consecutively or one at a time if it is easier that way. Reduce credit card balances to 30% or less of the total credit limit. Keeping credit card balances to 30% or less of the card’s total limit shows lenders that you can maintain a healthy balance between borrowing and paying off debts. In repairing the damages done to your credit report, one of the options you may want to pursue is to seek out help from a professional credit repair company. These experts spend every day helping others just like you and your spouse, maybe even those who are worse off. A credit repair specialist can make recommendations and help you establish a plan to get you in good standing with credit bureaus. Below are a few tips to aiding in the repair of your spouse’s bad credit: Do not let a significant other’s credit history scare you off. Unless the two of you apply for a joint line of credit, your credit will not be affected in any way. Help your spouse build their credit so the two of you can enjoy all that life has to offer.

Working Through Credit Issues with a Spouse

View Resource Working Through Credit Issues with a Spouse

Digital and mobile wallets have become quite popular among smartphone users in recent years. Digital and mobile wallet payments are becoming the way of the future as the number of users continue to climb day by day. Below we will go over the basics of digital and mobile wallets to help with your decision-making.

What is a Digital and Mobile Wallet?

A digital or mobile wallet, also known as an e-wallet, is precisely that. It is a wallet located digitally within a device, such as a smartphone or a smartwatch. Most require network connectivity for digital or mobile payment capabilities.

There are many popular mobile wallets such as:

These digital and mobile wallets store your credit or debit card information within their database to allow for a more secure, convenient checkout option. Many retailers now have the opportunity to “scan and pay,” meaning you scan your digital or mobile wallet, eliminating the need to carry your physical wallet with you.

Are They Secure?

A digital and mobile wallet is often more secure than carrying your physical wallet containing your debit card, credit cards, or even cash you may have on you. These mobile payments are encrypted, meaning the application does not actively store your actual credit/debit card number or account number.

If your phone is lost or stolen, a digital wallet is much safer than if it were your physical credit or debit cards. The payment information you enter is only accessible to authorized users such as yourself and a company representative.

Using a Digital and Mobile Wallet

Determining which digital or mobile wallet to use often is determined by which brand of smartphone or device you are using, whether it be an iPhone, Android, or other manufacturer. With an iPhone, many users opt for Apple Pay, while those with an Android or other smartphone tend to use Google Pay or Samsung Pay. You can also utilize multiple mobile wallets at one time, including:

Once you have chosen your desired digital wallet, you will begin entering your personal information, such as your name, date of birth, and address. Once you have completed this step, you will enter the credit or debit card information you wish to use within the application. Your card or account information, whichever you choose to use, will immediately be encrypted within the application’s database for your use only.

Using the digital wallet, you can send money directly to a family member, friend, or retailer. The application uses a technology known as near-field communication, meaning it uses radio frequencies to communicate between the two allowing for a successful payment to a retailer.

Not all smartphones utilize near-field communication systems. If your phone does not allow near-field communication, you can often still use a digital wallet. For example, PayPal allows users to make payments using their mobile phone number during checkout for safe, secure payments from your digital wallet.

Not all retailers support mobile payment capabilities; however, you can quickly determine if the retailer of choice can submit your mobile payment by checking the point-of-sale system for the mobile payment indicator. You also may ask a store associate if they accept mobile payments.

What Else Can They Do?

A digital and mobile wallet offers more than just convenient payment options. You can also store boarding passes, hotel reservations, concert tickets, coupons, and other card information.

Takeaway

A digital wallet, or e-wallet, is a secure payment option that holds your encrypted credit, debit, or banking account number securely within the application’s database for a safe, convenient checkout. With more smartphone users utilizing this option each day, more and more retailers will allow this payment method to be an option at checkout.

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Digital and Mobile Wallet Basics

View Resource Digital and Mobile Wallet Basics
Perhaps you have heard the now-famous phrase, “The only two certainties in life are death and taxes,” originally attributed to founding father Ben Franklin (by the author Mark Twain). Estates and estate planning incorporate death and taxes, with a good dose of law thrown to make it interesting (and complicated).

What is Estate Planning?

As defined by common law, your estate is your net worth at a given point in time (meaning, all of your current assets minus any liabilities). Estate planning is an umbrella term encompassing all the major financial and life planning decisions one must make to determine the fate of his or her assets upon death or incapacity. An estate plan also determines the estate’s impact on any dependent children you might have designated in your will and establishes your wishes for medical care. An estate plan can also help simplify the probate process and maximize the amount you can pass on to your heirs. What kinds of assets are in an estate? Common assets on the “plus side” could include real estate (both your primary residence, any second or vacation homes, and any rental properties), automobiles, cash, savings, retirement accounts, health savings accounts, stocks, bonds, exchange-traded funds (ETFs), life insurance policies, valuable artwork, and pensions. Of course, your assets may be different. Ownership in a business is also an asset. The “minus side” would include any debt, such as credit card debt, mortgages, auto loans, liens on any property, current income taxes owed, etc.

Understanding Estate Planning

You do not need to have a deep understanding of estate law or be an attorney to grasp the critical parts of a well-designed estate plan. You should, however, consider consulting with an attorney when you are ready to set up your estate plan, especially if you have a large or complicated estate or special childcare concerns. Hiring an attorney is generally worth it. They address and resolve all kinds of different situations you might not be aware of to ensure that your estate plan is correct. An attorney will also strive to maximize the benefits for your beneficiaries while minimizing the taxes owed on the estate (remember, it’s about death and taxes). Estate taxes, gift taxes, income taxes, and other related taxes may all come in to play when your estate is settled. A basic estate plan involves most or all of the following components:
  1. A personalized will
  2. Trust account(s)
  3. The name of the Executor of the estate
  4. The legal guardians for any dependents
  5. The Durable (or Limited) Financial Power of Attorney
  6. Advance Health Care Directive: Medical Care Directive (also called a Living Will) and name of the Medical Power of Attorney (also called a Health Care Proxy)
  7. Funeral, memorial, and cremation arrangements
  8. Charitable gifts and instructions, if applicable

Where to Start

Now that you have a basic understanding of what estate planning covers, the perfect place to start is to write your will if you do not have one. Everyone needs to have a will (called a Last Will and Testament), even if you have few assets or decide you do not need any further estate planning. Why is having a will so important? A will is a legal document that directs your assets in the right amounts to the correct people (or institutions). If you have dependents, it also names the legal guardian for your minor children and the kind of care you want for them to have. Even if you have a will already, you will want to review it every time you experience a significant life change, such as buying or selling a house, having a child, or getting married or divorced. What if I can’t afford a lawyer? The good news is you may not have to hire a lawyer in some cases. There are several good online resources for writing your own will if your estate is small or not very complicated. TIPBe sure to check the beneficiary status on all your accounts, including retirement accounts and checking and savings accounts. The person you name as the beneficiary is the person you want to inherit the account. Remember, the beneficiary cannot see the balance of your account unless they are a cosigner on that account. What about my medical care needs? A complete estate plan establishes not only your wishes for your assets after death but also sets up any medical care you might need while alive, if you become incapacitated to the point that you are unable to make decisions on your own. An Advance Care Directive (or Living Will) outlines these medical care wishes and includes naming a trusted family member or friend to carry out those wishes. TIPIt is a great idea to set up an Advance Health Care Directive and name a Medical Power of Attorney (Health Care Proxy) while you are alive and well and can think through what you would want if you cannot take care of yourself or make healthcare decisions.

Takeaway

What is Estate Planning

View Resource What is Estate Planning
At some point, many of us get into a bind where we need cash fast. It could be a bill that’s due, a medical expense, or a car repair. No matter what the reason, you have to get cash — and get it fast. While quick cash is not a long-term solution, there are quick cash options. Check out some ways that you can acquire cash and make your payment.

Using Your Emergency Fund

If you do not have an emergency fund, now is the time to start one. When the COVID-19 pandemic hit in 2020, it reminded many Americans how important having an emergency fund is, especially when you lose your job. If you are short on cash, this is where having an emergency fund is crucial. If you are stuck, dip into the emergency fund, as that’s why it’s there.

Creating a Budget

If you are consistently low on cash, or you are constantly turning to your emergency fund, you may need to reevaluate your finances and spending. Create a budget to curb the borrowing and cash issues.

Making Fast Cash

However, while the budget is a long-term solution, it is not a quick fix. If you need fast cash, you could try to:

Takeaway

While there are certainly ways to get cash reasonably quickly, it does not solve the underlying issue of not having the extra money in the first place. If you need cash in an emergency, perhaps you need to consider starting an emergency fund or adding more to one. You will be grateful when you do need it. In the meantime, there are plenty of options to get cash quickly, but none of them will likely provide a significant amount of money immediately.

What to Do When You’re Short On Money

View Resource What to Do When You’re Short On Money
When purchasing a standard mortgage from a private lender, you may be required to purchase private mortgage insurance (PMI). However, PMI can be costly, usually charging you around 0.5% to 1.0% yearly interest on your loan amount. The interest rate may seem like a small, even negligible amount of money, but if you are purchasing a mortgage for a home, it can be a substantial sum of money. For example, if you purchase a $500,000 home, you could be charged $2,500 and $5,000 a year in mortgage insurance, or approximately $210 to $420 every month. Even for one year of payments, this can be a significant chunk of your money and added together with all of your other bills and expenses; it can add up. So, it is no wonder why people want to get rid of PMI as quickly as possible. Luckily, you can take specific steps to eliminate PMI as promptly as possible. In this article, we will go over what PMI is, its cost, and how to get rid of it.

Defining PMI

Private mortgage insurance is an additional payment to your mortgage that usually ranges between 0.5% to 1.0% of your mortgage balance every year. In addition, PMI is in place to protect your private lender if the home buyer defaults on their mortgage.

PMI Costs

In most cases, homebuyers who use a standard mortgage with a down payment of less than 20% must purchase PMI. In addition, PMI costs depend on the amount of risk a lender has to take on: low risk means lower costs, while high risk usually equates to higher PMI costs. Factors that can affect your PMI costs include your down payment amount, credit history, and type of loan.

Getting Rid of PMI

It is no surprise that anyone that can get rid of PMI generally wants to. Paying for a mortgage alone can be a heavy burden without the weight of additional costs that PMI brings about. There are four standard ways to get rid of your PMI:

Takeaway

PMI can be an extra cost that everyone wants to avoid if they can. Before purchasing a home, consider factors like your credit score, your planned down payment, and the type of loan you are considering purchasing to see if you can do it beforehand to avoid or reduce PMI costs. If you have PMI, try getting over the 20% mark as quickly as possible, or consider refinancing or reappraisals if the housing market is doing well.

Getting Rid of Private Mortgage Insurance

View Resource Getting Rid of Private Mortgage Insurance
Pre-qualified and pre-approved are some of the most common terms you may encounter when applying for a mortgage. Unfortunately, most people often use these two phrases interchangeably, not knowing they are not the same. For this reason, this article discusses everything you need to know about pre-qualification and pre-approval, covering their definitions, requirements, differences, and more.

What Does Pre-Qualified Mean?

During the earliest stages of the lending process, you may want to get some guidance on how much you will be able to borrow when looking to purchase a home. To do that, lenders and banks need to have a rough idea of where you stand financially and your base qualifications for a loan. Therefore, they may request you provide your financial information, including assets, income, debts, etc. This process is known as ‘being pre-qualified’. It can be conducted online, in person, or over the phone and is usually free.

What Does Pre-Approved Mean?

On the other hand, being pre-approved is usually the next step after pre-qualification. Here, you will be required to complete an application for pre-approval for the loan. You will then provide the lender with additional information and documentation along with your application. The lender will then conduct a thorough financial background check based on the provided information. If your application meets all the requirements for that particular loan, the lender will offer a specific loan amount based on your financial background. You will also find out more about the interest rate for the loan you have been pre-approved for at this stage. In addition, pre-approval allows you to begin searching for homes within the price range provided by the bank or lender. Finally, pre-approved means you can start negotiations with the seller because you have a higher chance of being approved for the mortgage.

Differences Between Pre-Qualified and Pre-Approval

As mentioned earlier, these two terms are often thought to mean the same thing but are entirely different. Below is why, but keep in mind there might be slight variations in requirements per lender.

Mortgage Application

In a pre-qualification, you don’t need to fill out a mortgage application. Instead, the lender or bank wants to know where you stand financially. In a pre-approval, you need to fill out a mortgage application.

Application Fees

You do not typically need to pay any application fee during pre-qualification. However, some pre-approval applications involve an application fee.

Financial Background Check

A pre-qualification does not include a financial background check, but pre-approval does. The latter may analyze your bills, debts, credit history, and anything in between to find out whether you are eligible for a mortgage and the exact amount to offer.

End-Goal

The end goal of pre-qualification is to find out about you as the borrower, but a pre-approval focuses on finding out more about your finances. It involves analyzing documentation to prove the information you provided during pre-qualification.

Down Payments

You don’t need to estimate your down payment during pre-qualification, but you do need it for pre-approval.

Loan Estimate

During pre-qualification, the lender will provide an estimate of a loan amount for you. However, the same does not apply for pre-approval; you won’t find out how much the lender can offer until they’ve reviewed your finances.

Loan Amount

The loan amount offered during pre-qualification is just an estimate, which could change during pre-approval. On the other hand, the amount shown during pre-approval is usually the specific amount the lender will give.

Interest Rate

During pre-qualification, the lender won’t tell you anything about the interest rate. But, pre-approval involves disclosing the interest rate after the lender establishes a certain amount they are willing to part with based on your financial background.

Key Takeaways

Pre-qualification and pre-approval have two different meanings, even though they may sound almost the same. During pre-qualification, you’ll provide basic information, such as your income, down payment amount, desired mortgage amount, and so on. But, on the other hand, the pre-approval process requires copies of your pay stubs as proof of income, financial background check, bank statements, down payment amount, desired mortgage amount, tax information, and so on. Another essential thing to note is that pre-qualification comes before pre-approval. Therefore, the lender may provide an estimate of what they can offer based on the information you provided during pre-qualification. The amount may change during pre-approval after reviewing your financial records. Lastly, pre-qualification provides a rough idea of how much mortgage you may be eligible for, while pre-approval gives you the confidence to engage sellers, knowing the lender has a certain pre-approved amount to offer.

Being Pre-Qualified vs. Being Pre-Approved

View Resource Being Pre-Qualified vs. Being Pre-Approved
Buying a home can be complex. Since it’s probably one of the most significant purchases you will make in your lifetime, it’s a good idea to assemble a team to guide you through the process. Having a solid support team in place will take some of the burden off you as a buyer, as you can rely on experts to make sure everything is just right before and after you make your purchase. Below, we will discuss the benefits of building a team, who will be on it, and their specific roles.

Benefits of Building a Team

Going through the home buying process can be likened to an obstacle course. You could find it challenging to navigate on your own, especially if this is your first home purchase. However, having the expertise of a team of professionals can protect your interests as they guide you through finding a home, making an offer, getting financing, and finalizing the sale. Let’s look at a few advantages of the team approach to home buying.

Core Members: Who Does What?

Each of the core members of your house buying team brings expertise and benefits to the home purchase process. These core members and functions include the below:

The Bottom Line

Buying a home can be complex, stressful, and exciting simultaneously, but if you have the right team, it can be relatively easy, and you can rest assured you’re getting a good deal for the property you are buying. If you don’t know where to start, you can always begin with an agent, and they can help you find the rest of the team members.

Building a Home Buying Team

View Resource Building a Home Buying Team
You have finally received the phone call or email you have been waiting on regarding your recent job interview. But, the excitement begins to fade when you realize that the offer isn’t exactly what you were looking forward to when you initially applied for the job. When that happens, you can either take up the offer anyway or negotiate better terms — the latter is always the best thing to do, even though it may seem a little bit uncomfortable at first. For this reason, this article discusses the art of negotiating a job offer, hoping you will find the much-needed courage to ask for what you believe you deserve before taking on a new job.

What to Negotiate

The answer is simple — you can negotiate anything that does not meet your requirements as far as the job offer is concerned, as long as it is reasonable and negotiable. Here are some examples:

Why Negotiate Your Salary?

According to studies, most managers expect new and potential employees to negotiate their salary and benefits, despite not mentioning that the job offer is negotiable. So even if the job offer does not state that it is open to negotiation, this should not stop you from negotiating. If you are reasonable, there is often nowhere to go but up! It is therefore advisable to negotiate your salary if:

Tips For Negotiating Your Salary

Now that you have decided to negotiate your salary, your next move will determine whether the potential employer will accept your proposal. Here’s what to do:

The Aftermath

One of the most important things to know before negotiating a job offer is that you do not need to challenge every offer element. You do not want to seem like a dissatisfied employee even before working at your new job. Instead, choose two to three issues that you want to discuss with your potential employer and then build your case around them. Also, for the best results, remember to keep a positive attitude throughout the negotiations.

Negotiating a Job Offer

View Resource Negotiating a Job Offer
A cash-free world might be on its way sooner than you think. According to the Federal Reserve Bank of San Francisco’s May 2021 “Diary of Consumer Payment Choice” study, cash use accounted for only 28% of all non-bill payments. That was down seven percentage points from 2019. There’s little doubt that the COVID-19 had a meaningful impact on the number of cash-less transactions, as retailers, merchants and restaurants increasingly encouraged the use of ‘touchless’ credit and debit cards. Whether that behavior will continue as the pandemic eases is unknown. But the direction is pretty clear. The increasing popularity of cashless payments has led to alternative digital payment methods, such as PayPal, Zelle, Venmo, and many others. For this reason, a cashless society is now a question of ‘when’ not ‘if.’

What Does ‘Cashless’ Mean?

Cashless is a term used to describe a system where people rely entirely on electronic payments rather than paper money. Processing such transactions usually occur through channels, such as:

The Benefits of Going Cashless

Ditching cash payments for electronic payments comes with lots of benefits for both individuals and businesses. They include:

Reduction of Illegal Transactions

Electronic payments always leave behind a trail, unlike cash payments. For this reason, it’s easy for law enforcement agencies to identify individuals behind illegal transactions by simply following the trail. Most black market trades, such as selling recreational drugs and unlicensed weapons, complete transactions using cash. Therefore, getting rid of cash payments could significantly reduce such deals. Additionally, white-collar crimes, such as money laundering, will be challenging to pull off because electronic payments always leave behind a digital paper trail.

Easier International Payments and Transfers

Exchanging foreign currency at a forex bureau can be pretty challenging, especially if you aren’t familiar with the exchange rates. But if all countries adopt electronic money and digitized payments, there will be no need to visit a forex bureau to exchange money received from or sent to another country.

No Cash Management Costs

Physical paper is costly to print, store, protect, and transfer in large amounts. In addition, hard printing cash requires many resources and minerals, such as paper, copper, zinc, cotton, linen, etc. But such expenses won’t be necessary when the world goes cashless.

Reduced Operating Expenses

Employees who deal with physical money in banks, grocery stores, and other industries must be trained to handle cash registers and account for the money at the end of every shift. But on the other hand, electronic transactions are easier to account for, significantly reducing such operational expenses.

More Secure Than Hard Cash

According to FBI data, banks lost approximately $482 million due to robberies in 2019 alone. However, it would be possible to reduce this significantly if businesses, individuals included, did not keep any cash on hand.

Better Customer Experience

Businesses that only accept cash payments from customers often experience long queues during peak times. Typically, cash exchanges take longer to process, thanks to the calculations involved. Going cashless would tremendously increase a business’s efficiency and improve customer experience. Cashless transactions don’t require complex human calculations that often lead to impatient clients’ frustration and workers’ exhaustion.

Electronic Payments Improves Budgeting

Unlike cash payments, electronic payments leave a trail, making it easy for individuals to track their spending habits and budget their money accordingly. For example, some banks have mobile applications displaying data about their customers’ spending habits by day, week, month, year, among other parameters.

Significantly Reduces ‘Lost Cash’

Lost cash or small change loss is solid cash lost due to individual errors, such as unknowingly dumping it in a trash can at home, at the gas station, or anywhere else. If you’ve experienced a ‘lost cash’ moment in your life, you probably know how frustrating it can be. But, unfortunately, the worst thing about this kind of loss is it happens even to the most careful person. But with cashless transactions, you may misplace your wallet and not your money, just as long as no one else has your PIN. But if they do, you can log into your online account and block future transactions.

Where to Begin: How to Go Cashless as an Individual or Business

You can take concrete steps to move to a mobile wallet and digital transactions only as an individual. Here are tips to get you started. As a businessYou can play a significant role in transitioning from paper to cashless payment. Here are some great tips on how to begin:

The Bottom Line

There’s no doubt that the world will soon go completely cashless, thanks to the popularity and benefits of electronic payments. However, the transition to electronic payment requires collective effort both at the individual and corporate levels. And, whether you’re transacting and cash, cards, mobile payments, or a digital platform, there are risks. So, as with money, it’s essential to protect and manage your finances wisely.

Going Cashless

View Resource Going Cashless
Child identity theft is nothing short of heartbreaking. Unfortunately, many victims of this crime only find out about it when they are older and need essential services, such as student loans. As a result, their applications suffer rejection due to damaged credit history. According to a study by Carnegie Mellon University’s CyLab, children are 51 times more likely to be victims of identity theft than adults. Also, the Federal Trade Commission reports that over one million children are vulnerable to identity theft crimes every year. These shocking statistics explain why it is becoming increasingly important for parents to learn more about the possible signs of identity theft involving their children. As a parent or guardian, here is all you need to know about this notorious crime.

What Is Child Identity Theft?

A child identity theft crime occurs when an individual accesses a child’s personal information and uses it to commit fraud. It mostly begins when the criminal steals a child’s Social Security number and uses it to illegally apply for a job, loan, or government benefits. When this happens, the criminal usually leaves the innocent child with debt worth thousands of dollars. Children are prone to identity theft because they have clean credit records. Criminals then use their victim’s details to apply for loans, given that they stand a higher chance of being approved thanks to the clean credit history. Additionally, children may never need to apply for such services until they are older, providing plenty of time for the fraudsters to go unnoticed. As a result, child identity theft can ruin the future of these innocent kids if not dealt with soon enough. Criminals can access a child’s information through data breaches, phishing, or even physical theft. Also, since parents are usually the custodians of their child’s private information, criminals may use any means possible to steal such information from the parents.

Protecting Your Child’s Information

Parents need to do all they can to keep their children’s information safe from identity theft. If you’re a parent or guardian, here are some valuable tips to protect your child.

Warning Signs of Child Identity Theft

So, how do you know that your child is suffering from identity theft? Here are some warning signs to watch out for: It’s also important to note that if the criminal changes the physical address of the child’s residence, the identity theft incident may go unnoticed for several years. Criminals do this to divert mail and calls to a new address.

Dealing with Compromised Information

Have you recently discovered that your child’s identity has been stolen, or are you suspecting something along the lines? Here’s what to do:

The Bottom Line

Child identity theft is a serious crime that can ruin a child’s future, given that it often stays unnoticed for years. Additionally, children are the most sought-after victims of identity theft because their clean records are attractive and hard to detect. Therefore, parents should be vigilant in protecting their children’s information from third parties, online and offline.

Protecting Your Family Against Child Identity Theft

View Resource Protecting Your Family Against Child Identity Theft
When someone hears the words “identity theft,” they immediately think of a stolen name or even social security number, but no one thinks about medical identity theft. The usual culprits for medical identity theft typically are individuals, health providers, or even remote hackers. According to the American Association of Retired Persons, or AARP, more than 45 thousand people in 2020 fell victim to medical identity theft. This specific form of identity theft can wreak havoc for years to come as it adds questions to an individual’s past medical history. Therefore, it is essential to understand what medical identity theft is and protect yourself and your personal information.

What is Medical Identity Theft?

Medical identity fraud is a type of fraudulent activity that occurs when someone uses the personal information of someone other than themselves. This information may include: Stealing this information happens for several reasons, including seeing a doctor under a presumed identity, receiving medical treatments, medications, surgeries, or purchasing medical devices. In addition to these, dishonest employees will either sell your protected information to an outside source or use your personally identifiable information to submit one or more fraudulent claims to your insurance company.

Protecting Your Information

Protecting your personal information is one of the most important things you can do for yourself. Through constant monitoring of several aspects, you can ensure that you do not fall victim to medical identity theft. Review and read thoroughly through all notices you receive from a health provider’s office, whether by mail or during an in-person visit. Even your primary care physician’s offices, laboratories, and pharmacy could be susceptible to unusual activity. Your health insurance information holds personally identifiable data within it; therefore, you must not share this information with just anyone. Also, be wary of companies claiming to offer any free services or products as these are likely a scam. In addition, if you have lost your health insurance card, or feel it was stolen, request a new insurance card and identification number immediately. Protect yourself by shredding the following documents that contain personally identifiable information: By monitoring your credit report and keeping a personal copy of your medical records, you can stay on top of your personal information and detect any errors quickly.

Dealing With Stolen Information

Medical identity theft is a form of fraud that is punishable with the potential of a felony offense with several years of jail time. While it may not be easy to determine who has stolen your medical identity, several entities are put into place to help. It is essential to know that medical identity theft can occur in several ways. For example, your medical provider’s office employees may sell your information because individuals will pay big money for your identity. In addition, individuals can steal your medical information when you incorrectly dispose of paper documents. Theft also occurs when hackers penetrate medical records databases. If you find yourself a victim of medical identity theft, file an official report as soon as possible. Utilize outside resources to monitor your credit report, health insurance claims, and take the necessary measures to protect your personally identifiable information.

Protecting Yourself Against Medical Identity Theft

View Resource Protecting Yourself Against Medical Identity Theft
Tax season can be a headache, but it doesn’t have to be. One effective way to make filing your taxes easier is by better understanding one of the necessary tax forms: Form W-2. You should receive your W-2 by mid-February at the latest. Employers must send out W-2s to their workers by January 31st each year (or a few days later if the end of the month falls on a weekend). If you haven’t received it by then, contact your employer. You cannot file your taxes until you’ve received your W-2, which is essential to the process. Form W-2 helps the IRS determine how much income employees should be claiming and confirms what they have already paid in taxes and need to pay in taxes (if any). Form W-2 is a necessary component for tax returns and tax filing.

What is Form W-2?

Form W-2, or the Wage and Tax Statement, is the annual statement provided by your employer that reports your taxable income to you and the IRS. The form shows you and your employer’s payments for Medicare and Social Security and taxes withheld from your pay. All of the taxes withheld from your pay are on Form W-2. Information on Form W-2 goes to state and federal taxing authorities. It helps determine how much you should be paying in taxes for the given year.

Reading Form W-2

Reading a W-2 can be daunting if you do not understand the listed information. Form W-2 has multiple boxes explaining different aspects of your earnings and withholdings. Even if you’re not trying to file your taxes, you should still be able to read your W-2. Below is a short explanation of every box on Copy B of the W-2, which is the one you will file with your tax return: Boxes A – F: Lists the following: Box 12: All of the codes your employer needs to report to the IRS: Box 13: These options are not subject to federal income tax withholding. The checkboxes include: Box 14: A miscellaneous field. This field could include: Boxes 15 to 20: These boxes contain local and state income tax information from your employer. The boxes include: You will also need to attach Copy 1 to any other tax returns you’re required to submit (including state, city, or local).

Filing Form W-2

Once you receive Form W-2, you will be able to file for your tax return using Form 1040, your W-2, and any other financial and tax documents.

Understanding Your W-2 Form

View Resource Understanding Your W-2 Form
As a self-employed or small business owner, you can secure your retirement and your employees with a Simplified Employee Pension (SEP) Plan.

What Is a SEP Plan?

A simplified employee pension plan is an Individual Retirement Account (IRA) that provides a streamlined approach to retirement planning for self-employed and small business owners. The primary advantage of this pension plan is that it is easier to set up and has a lower operating cost than that of a traditional IRA. SEP Plan Benefits SEP Plan Drawbacks Eligibility Requirements An employee or a self-employed person who is eligible for a SEP plan: Employers can relax some eligibility criteria but cannot impose stricter requirements. Employee exclusions from the SEP plan are:

How Does a SEP Work?

You can open a SEP if you are self-employed or a small business owner and want to secure a retirement option for yourself and your employees. You can set up a SEP plan by filling out Form 5305-SEP or a prototype of the same. You can choose a financial institution or a broker with whom you want to set up the account. Though not necessary, all employee’s SEP funds typically use the same financial institution. SEP Plan Contribution Limits: Employers can contribute to each employee’s SEP plan up to: When you are self-employed, you also contribute to your plan as you treat yourself as both employer and employee. To determine the amount you can contribute and deduct, you will need to do the following:
  1. Determine your net profit.
  2. Multiply your Self-Employed tax deduction by 0.50
  3. Subtract your reduced Self-Employed tax from your net profit.
  4. Multiply new net profit by your reduced plan contribution rate.
  5. The final total will be the amount you can contribute and deduct.
Withdrawing From a SEP Plan: Maintaining Your SEP Plan You can maintain a SEP plan for yourself or your employees by opening an account with any broker or financial institution. The contribution so made would be invested in a wide range of stocks and shares, ETFs, mutual funds, and CDs to get the best returns on the investments in the long run. Making Contributions To maintain a SEP plan, you need to contribute to the fund anytime before the due date of filing your income tax return for the year. After making the contributions, employees can make their own investment decisions. Your contribution to your employee’s SEP accounts is automatically vested in them. To ensure your SEP operates as per the rules, you need to conduct an annual check-up.

Takeaway

Simplified employee pension plans are a simple way for self-employed people and owners of small businesses to have a tax-deferred benefit and a pension fund to secure their future after retirement.

Simplified Employee Pension (SEP) Plans

View Resource Simplified Employee Pension (SEP) Plans
Regardless of how you earn income, you will still need proper tax forms. The two primary documents you focus on as a traditional employee are forms W-2 and W-4. Your W-4 determines your tax withholdings, while your W-2 shows how much income you received and how much you owe in taxes. However, not everyone works directly for an employer. Self-employed individuals, freelancers, independent contractors, or others that receive income outside of a traditional employee relationship need to rely on IRS Form 1099. We will discuss what Form 1099 is, its use, and how to file it.

What is Form 1099?

There are multiple types of Form 1099; however, they are all used for the same reason. Form 1099’s primary purpose is for taxpayers who receive income outside the traditional employer-employee relationship. Like Form W-2, Form 1099 provides information to both the IRS and the taxpayer regarding their income for the fiscal year. Once the IRS receives this information, they can determine how much the individual owes in taxes. Typically, the company or firm paying you sends you a Form 1099 following the end of the tax year. For example, a firm providing a freelance platform to connect customers with workers will send 1099 forms to those freelancers and the IRS to report income earned through that relationship. “Gig workers” typically fit this category, providing ride-sharing and food delivery services and design, programming, and other temporary project help.

Using Form 1099

Form 1099 provides income and tax information to the IRS regarding an individual’s income outside of a traditional W-2 employer. This type of income is from non-employment-related sources. In other words, it’s for those that receive payment other than a standard salary from an employer. Form 1099 also allows you to report dividends from investments and interest from banks. Also, tax refunds from the state or local authority can go on Form 1099 for income. Essentially, Form 1099 handles all forms of income that are not part of a traditional salary. If you want to avoid receiving an audit from the IRS, taxpayers need to report all sources and amounts of income.

Exemptions

If you earn less than $600 from non-employment-related sources, you are exempt from filing Form 1099. However, if you exceed that amount, you must report that income with Form 1099.

Form 1099 Types

Although every type of Form 1099 serves the same income reporting purpose, there are different versions of the 1099 form for reporting different types of income. The two most common types are the following: Other types include: There are several more types of Form 1099, with each one representing a specific type of income. The main takeaway with Form 1099 is that if you receive any form of payment that is not traditional, you should report it.

Filing Your 1099 Form

Generally, taxpayers do not need to complete Form 1099 to report their income. Instead, taxpayers receive Form 1099 from their sources of income, which could be anything from a business to a financial institution. Similar to Form W-2, Form 1099 has a deadline of January 31st, which means that the taxpayer should get their copy by mid-February at the latest.

If You’re a 1099 Employee

View Resource If You’re a 1099 Employee
Many people fill out Form W-4 multiple times throughout their careers without really understanding how it affects their tax bill. However, every employee must fill out Form W-4. The form lets your employer know how much federal tax to withhold from your paychecks. In 2020, the IRS made significant changes to Form W-4 to improve transparency and increase payroll withholding system accuracy. We will discuss Form W-4’s purpose and how to fill one out correctly.

Explaining Form W-4

Form W-4 is known as the “Employee’s Withholding Certificate.” It is an IRS form that employees fill out to communicate to employers how much federal tax to withhold from each paycheck. Employers use Form W-4 to calculate payroll taxes which sends the taxes to the IRS and the state for the employee. If you already have a W-4 form on file with your employer, you do not need to complete one every year. However, you need to complete and submit a W-4 form to your employer whenever you start a new job. Also, if you ever want to change your withholdings at your job, you may need to complete a new W-4. Whatever the reason for filling out a W-4 form, it can be a great way to evaluate your withholdings.

Using Form W-4

Form W-4 allows you to pay federal taxes like the federal income tax. Federal income taxes fund a wide range of national programs, including:

Updated Form W-4

The new and updated version of Form W-4 eliminated the option to claim personal allowances. Personal allowances enable you to claim allowances so that your employer would withhold less tax from your paycheck. The new form also allows you to note whether or not your circumstances warrant more or less withholding. For example, it asks whether or not you have income from a second job or expect to have deductions that you will itemize when you receive your tax return.

Completing Form W-4

Form W-4 comes in a four-page packet, but the document itself is only one page and has just five steps: Step 1) Personal Information Provide the following: Step 2) Account for Multiple Jobs This section is for individuals with more than one job or filing jointly with their spouse who also works. Fill out steps 2 to 4(b) for whichever W-4 you’re using for the highest paying job. You can leave those steps blank on the other W-4(s). Step 3) Claiming Dependents This step allows you to claim dependents, like if you have any kids. For anyone making an income under $200,000 (or $400,000 for joint filers), you can enter your total number of dependents and multiply that by the credit amount. Step 4) Further Adjust Withholdings This step is an optional section where you may choose to get more or less (if you are eligible) tax withheld from your paycheck. If you want more taxes withheld, or you’d like to claim deductions other than standard ones, this is where you can do that. People often increase the amount taken out, so they get a more considerable sum back during tax returns at the end of the tax year. Step 5) Signature This step is the last part of the W-4 form, where you need to sign and date the document.

Reasons to Revise Your W-4

The latest iteration of Form W-4 has the most significant updates since enacting the Tax Cuts and Jobs Act in 2017, which made considerable changes to withholding. Due to the new version, it may be best to reevaluate your form if you have been with the same employer for years. Another reason to revise your W-4 is by determining if you received a tax refund or had to pay taxes. Owing a lot in taxes shows that you underpaid taxes for that year. However, if you have a large refund, you overpaid in taxes. In some cases, adjusting your withholdings can change what you owe in taxes or what you get back as a refund. Furthermore, suppose you recently got married or divorced, had a child, or started a new freelance job (in addition to your current job). In that case, it is a good idea to revise your W-4 as there will likely be changes to it.

Filling Out a W-4 Form

View Resource Filling Out a W-4 Form
If meeting your retirement goals while getting tax benefits sounds like a great idea, you should consider investing in a 401(k) plan.

What Is a 401(k)?

An employer provides a 401(k) plan as an employee benefit. It offers tax advantages to help employees save for their future retirement. In a 401(k) plan, employees can contribute a part of their salary to a specific account. Employees receive tax advantages from the amount contributed while also growing their retirement nest egg. Some things to consider about a 401(k) plan are: Employee Benefits. A 401(k) plan is a tool you can use as an employee for tax-deferred savings and investments towards your retirement. Your employer usually matches your contribution and applies it to the designated account. You can choose the amount you decide to invest, and your employer can contribute accordingly. In addition, you can set up your 401(k) plan to automatically deduct a specific percentage of your income so that you continue to build your savings. The amount transferred, also called deferred wages, is not taxed and is not shown in your income tax return. Employer Benefits. Employers also receive tax benefits for matching the contributions of their employees’ 401(k) accounts. Employers can take deductions on their corporate income tax returns for those contributions. Investing as an Employee. Although your decision depends on your financial situation, lifestyle, and retirement goals, a typical 401(k) investment rate is about 10% of your salary. When your employer contributes a matching percentage to your 401(k) fund, you should put in the minimum amount required to maximize your earnings. If you start investing early, every paychecks’ contribution to a 401(k) plan will help you build retirement savings over the long term.

Choosing a 401(k) Plan

There are two primary types of 401(k) plans: Traditional 401(k). You can contribute a percentage of your salary every month to this plan, which your employer then matches. Sometimes, employers can contribute for the benefit of all participating employees even when they do not contribute to the fund. Usually, employers provide a matching contribution towards their plan. In addition, employee contributions are eligible for tax deductions. A traditional 401(k) plan requires an employer to conduct annual tests to verify that they do not discriminate in favor of better-paid employees. Other plans similar to the traditional 401(k) are: Roth 401(k). A significant difference between a traditional and a Roth plan is that in the Roth 401(k) plan, employees pay taxes on their income before contributing to their plan. That way, they can avoid paying taxes at the time of withdrawal.

Maintaining Your 401(k)

As described, a 401(k) plan is a contribution fund where employees put aside a specific percentage of their monthly income to secure their retirement goals. Employers usually make a matching contribution to the fund. While you, as an employee, can determine the percentage of income you want to contribute, the maximum amount that both employer and employee can contribute to the fund adjusts for inflation. For 2022, no more than $305,000 of an employee’s compensation can be considered when determining contributions. The employer must report the employee contributions in Form W2 or wage and tax statement even though it is tax-deductible under income tax laws.

Withdrawing From Your 401(k)

You can withdraw funds in both traditional and Roth 401(k) plans only by reaching the age of 59 1/2 years or after meeting specific criteria set by the IRS. In addition, you’ll need to consider your vesting percentage because your plan may require the completion of a particular number of years of service for vesting in matching contributions. If you make an early withdrawal while not following IRS rules, you could receive a 10% penalty on top of the required tax. In a traditional 401(k) plan, an employee must pay taxes on the amount withdrawn. In contrast, for a Roth 401(k), the employee pays taxes on their income before contributing.

Takeaway

The main benefit of having access to a 401(k) plan is that employees can invest funds for their retirement goals while at the same time getting tax benefits out of it. The employer also pitches in and makes a matching contribution towards the fund to secure the employees’ financial future even after retirement.

An Overview of 401(k) Plans

View Resource An Overview of 401(k) Plans
A company can provide multiple benefits for its employees. Examples include vision and dental plans, retirement benefit plans, long-term care insurance plans, and more. In addition, employee stock ownership plans, or ESOPs, are an exceptional benefit that companies may choose to provide. ESOPs can motivate employees to grow and improve the business due to their direct connection with profitability. If the company is doing well and its stock is up, the employees gain value in their investments. In addition, ESOPs also offer retirement benefits for the employees by giving them partial ownership within the company.

What is an ESOP?

Essentially, an ESOP is a retirement plan provided by a company for its employees, set up as a trust fund. ESOPs are different from employee stock option plans. The stock option plans allow employees to purchase their company’s stock at a set price after a given amount of time. ESOPs provide employees with partial ownership of the company by increasing their stock holdings over time. Afterward, company stock can be sold for cash when the employee retires. ESOPs benefit both employees, who gain partial ownership within the company, and its shareholders, which helps the company overall. In addition, they are commonly used to provide a market for any exiting owners.

Understanding ESOPs

Essentially, ESOPs are trust funds. A company can contribute shares or cash directly to the trust fund, or it can borrow money to purchase additional shares. All contributions are tax-deductible. Employees do not pay any taxes on these contributions until they exit the company, giving them the option to either sell on the market or back to the company.

Benefits of Setting Up an ESOP

ESOPs are qualified plans providing tax benefits for both the company and its participants. The main reasons a company uses an ESOP plan are the following:

Using Your ESOP

ESOP participants get an annual statement showing them the number of shares allocated to them that year and their net account balance. The number of shares typically takes the employee’s overall compensation into account. Vesting provisions are also a vital element of an ESOP. There are two types: Benefit distribution methods can vary, and there are other options; however, the employee will receive equal installments of their stocks over five years. Participants will not receive the vested portion of their ESOP until either they retire, quit their job, or die. Then the individual can sell the shares back to the company or sell them on the market.

How Do Employee Stock Ownership Plans (ESOPs) Work?

View Resource How Do Employee Stock Ownership Plans (ESOPs) Work?
While choosing from the various kinds of retirement plans available, an employer or a company can choose a profit-sharing plan to provide retirement benefits for its employees.

What is a Profit-Sharing Plan?

Profit-sharing is a retirement plan that considers the employer’s discretionary income. Unlike other retirement plans that require employees to contribute to the retirement plan, a profit-sharing plan puts the entire responsibility of funding on the employer. The company can exercise its discretion while allocating its profits towards its employees’ retirement goals. It can choose the amount to contribute each year out of the profits available. As a result, they may avoid making contributions in a lousy year. A profit-sharing plan can be a powerful tool to boost employees’ retirement goals, improving morale and productivity. In addition, it is a sure way of appreciating an employee’s contribution to an organization. Benefits: Drawbacks:

How Profit-Sharing Plans Work

An employer shares its profit with its employees through the profit-sharing plan. When contributed to a specific employee fund, the funds become tax-deferred and are taxable only on withdrawal. An employer creates a fund with a financial institution to contribute a percentage of their profits to secure their employees’ retirement. A profit-sharing plan is at the employers’ discretion, usually in addition to a traditional retirement plan like 401(k). The company can distribute profits through either a tax-deferred stock option or a cash bonus. However, it does become taxable at the time of withdrawal. Eligibility Criteria: All employees are usually eligible to participate in the plan, although the company might exclude some employees when Allocation of Contribution An employer determines the extent of contribution by following the comp-to-comp method. The steps are:
  1. Determine the total compensation paid to all the employees.
  2. Divide the actual compensation of each employee by the total employee compensation to get a fraction.
  3. Multiply each employee’s fraction by the total contribution allocated by the employer.
The employer can allocate profits using any of the three methods:
  1. Equal Contribution Plan: Profit is distributed equally to all the participating employees.
  2. Age-Based Plan: Employers contribute to the plan based on the age and the years of service of each participating employee.
  3. Variable-Rate Plan: Employers can contribute varied rates to each group of employees based on the factors they decide.
Employers can use the profit-sharing plan by contributing tax-deferred income in funds of the participating employees or in the form of a cash bonus depending on the company’s profit in a particular year.

Maintaining Your Profit-Sharing Plan

A profit-sharing plan is made purely at the employer’s discretion, depending on how much of the profit they desire to allocate towards the individual employee’s retirement plans. Although the employer is free to allocate any amount they choose, the company must pay proportionately to all the participating employees of the company. The IRS has also fixed a limit on a company’s total amount towards an individual employee account. Limits of Contribution In 2022, a company can share its profits with employees to the extent of 100% of employee’s compensation or $61,000, whichever is less. Further, the company must fill out Form 5500 to disclose the plan’s details and its participating employees. Also, the company must report that it is not discriminating in favor of its highly paid employees in the process. Withdrawing Funds Funds deposited by the company towards profit sharing are tax-deferred at the time of contribution but will be taxable at withdrawal. Withdrawal of funds is allowed on attaining the age of 50 1/2 years. It would attract an additional tax of 10% if withdrawn earlier.

Takeaway

A profit-sharing plan is an effective tool in the hands of the employers to provide retirement benefits to the employees and get a tax advantage in the process.

What is a Profit-Sharing Plan?

View Resource What is a Profit-Sharing Plan?
Suppose you are looking for a retirement plan that does not require contributions but allows a fixed income post-retirement based on your earnings or employment tenure. In that case, a defined benefit plan might work for you.

What is a Defined Benefit Plan?

A defined benefit plan is an employer-determined guaranteed retirement plan. This plan provides a fixed benefit, often based on an employee’s earnings or career, to employees at the time of retirement. According to this plan, employers can set up a pension fund for their employees which puts a fixed amount towards their retirement savings every year. The amount contributed is tax-deferred and is then taxable at distribution. An employer can pay the retirement benefits in the form of:
  1. A pension. An employer pays a monthly income calculated per a fixed rate on an employee’s retirement.
  2. A cash balance. An employer pays the entire amount as a lump sum.
Your employer needs to inform you about the plan’s details to make an informed decision. The total amount received by the employee is fixed and decided through a formula based on the employee’s earnings or career.

Benefits and Drawbacks

The benefits of a defined benefit plan are:
  1. You, as an employee, do not contribute to the fund. The employer contributes and manages the pension fund for you.
  2. Your employer is responsible for the risks associated with the investment and planning of the fund.
  3. You receive a guaranteed income at retirement based on a formula that is fixed and easy to understand.
Some of the drawbacks of a defined benefit plan are:
  1. Employers generally avoid the plan as it involves substantial costs and a complex administrative procedure.
  2. You have less control over the contribution amount or your withdrawal period as the fund is entirely sponsored and managed by the employer.
  3. You might need to work for the employer for a long time to satisfy the pension plan benefits rules.

Choosing a Defined Benefit Plan

You can choose how to receive the retirement benefits in the following ways:
  1. A single lumpsum amount. You will be paid a single lumpsum amount at retirement.
  2. Monthly payments for life. You will get monthly payments calculated based on the length of your career or your income.
  3. An annuity covering yourself and your surviving spouse. You will receive a monthly payment for your lifetime, and after that, your spouse will receive at least 50 percent of the monthly payment for the rest of their life.

Calculating Defined Benefit Plan Payments

In a defined benefit plan, an employer decides on the amount for employees based on an agreed formula. To determine the earnings for your benefits, you will need to average out the past couple of years’ salary before retirement. In addition, you could also take the average of an employee’s salary during their career. You can receive these earnings in either a lump sum or monthly payments. An employer can calculate monthly payments in two ways:
  1. Pay a specific amount per month for retirement. For example, an employer deposits $150 per month for every year of the employee’s service. If the employee has worked for 20 years on retirement, they will receive $3,000 ($150x 20) per month as a retirement benefit.
  2. Base retirement payments on the average income of an employee. Suppose an employee earns an average income of $5,000 per month. In that case, the employer can provide monthly retirement benefits like 20% of the average income, i.e., $1,000 (20% of $5,000) per month.

Maintaining Your Defined Benefit Plan

Although your employer controls and maintains the terms of your defined benefit plan, they still must follow specific rules:
  1. A contribution made to the fund is tax-deferred but becomes taxable at the time of distribution.
  2. No distribution of benefits before the age of 59 1/2 years.
  3. Requires reporting of the plan in Form 5500.
  4. An employer must have an enrolled actuary to determine the level of funding.

Takeaway

Employers can use a defined benefit plan to provide tax-deferred retirement benefits to their employees. It can be a secure way to meet your retirement goals. You can receive the benefits as a monthly plan or lump sum payment on retirement.

What is a Defined Benefit Plan?

View Resource What is a Defined Benefit Plan?
Payroll taxes are taxes that both employees and employers pay based on employees’ wages, tips, commissions, and salaries. The employees’ portion is deducted from each paycheck, and the employer pays their portion directly to the IRS.

Types of Payroll Taxes

Payroll taxes fund Federal social insurance programs such as Social Security, Medicare, and unemployment. While you will also see payroll deductions on your pay stub for Federal, state, and local income taxes and deductions to pay for things like health insurance or 401(k) contributions. They are not considered payroll taxes and have no corresponding employer payments. The following are payroll taxes: Your employer is responsible for making all payroll tax payments to the IRS.

If You are Self-Employed

Self-employment tax is a Medicare and Social Security tax for self-employed individuals. In addition, self-employed individuals must pay both the employer and employee portion of Medicare and Social Security taxes. The self-employment tax rate is 15.3% of net earnings, consisting of a 12.4% Social Security tax and a 2.9% Medicare tax on net profits. The same 2022 wage base limit of $147,000 applies to self-employed individuals to pay Social Security taxes.

Takeaway

Unfortunately, payroll taxes reduces your total gross income. So, your listed salary won’t necessarily reflect the amount you take home. Additional income tax payments and automatic deductions for retirement and healthcare will further reduce your take-home pay. Unlike some other taxes, payroll taxes fund your future Social Security and Medicare benefits when you retire.

Understanding Payroll Taxes

View Resource Understanding Payroll Taxes
Receiving matching contributions to your retirement plan from an employer is one of an employee’s best benefits for making the most out of their 401(k) plan. In addition, maximizing matched contributions will help grow your retirement plan faster.

What is a Matching Contribution?

Essentially, a matching contribution is the amount given by an employer whenever you contribute to your retirement plan. For example, suppose you use a 401(k) plan as a retirement savings vehicle. Your employer would make a matching contribution for every contribution you make to the plan in such a case. Every employee contributing a specific percentage of their income to their chosen retirement plan will receive a match from the employer for the same amount. An employer’s matching contribution is essentially free money for the employee since they do not earn it themselves.

How Matching Contributions Work

A typical example of a matching contribution occurs through a 401(k) retirement plan. Under this plan, an employee contributes a certain percentage of their income to a designated fund to get future retirement benefits and tax advantages on the contributed amount. For example, an employer’s matching contribution can be 50% of an employee’s contribution, limiting to 6% of their salary. Suppose your annual salary is $40,000, and you contribute $2,000 towards your 401(k) plan every year. Then, your employer’s matching contribution would be 50% of your contribution, i.e., $1,000 (50% of $2,000), subject to a cap of 6% of your annual pay, i.e., $2,400 (6% of $40,000). Matching contributions are not legally required, and not all employers provide this benefit. Still, it is usually the norm for employers to provide some matching contribution to boost an employee’s retirement benefits.

What Plans Are Available?

You can find matching contributions usually in 401(k) plans, although other retirement benefit programs, like simple IRAs, make use of them. 401(k) plans are primarily two types:
  1. Traditional 401(k) Plan. Traditional 401(k) plans require contributing a certain percentage of your income to a designated fund. Your employer then makes a matching contribution towards the account to fulfill the plan’s purpose. Matching contributions can be:
    • A partial match. The maximum contribution by employers caps at a specified percentage of an employee’s annual income. Often, a matching contribution made is 50% of employees’ contribution, subject to a limit of 6% of their yearly pay. However, the exact employee matching terms can vary by plan.
    • A dollar-for-dollar match. In this case, employers’ contribution is 100% of an employee’s contribution, limited to a percentage of their annual pay. For example, your employer can contribute 100% of your contribution with a cap of 4% of your yearly pay.
    • A non-match. These contributions, though rare, are made by employers on a profit-sharing basis, based on achieving particular business objectives. They are also limited to a specified percentage of an employee’s annual pay.
  2. Roth 401(k) Plan. In a Roth 401(k) plan, you contribute a specific percentage of your income after deducting taxes.
    In this plan, tax deductions occur before contributing to the fund. To provide matching contributions for a Roth 401(k) plan, employers need to create a separate traditional 401(k) account.
    According to this plan, employees make contributions post taxes, while employer contributions are charged taxes at the time of withdrawal.

Maximizing Your Matches

When you choose to contribute to a 401(k) plan, a matching contribution by your employer can allow you to multiply your savings to meet your retirement goals. You can take the following steps to make the most of the contributing matches:
  1. Start contributing early. Most companies will give you the full benefit of the plan when you start contributing early. However, some companies allow matching contributions by employers after a specific tenure of service.
  2. Get the full match from your employer’s contribution. Matching contributions from employers are primarily extra money for contributing to a 401(k) plan. Make contributions to ensure that you get the full match from your employer’s contribution.
  3. Set your contribution on automatic mode. Set your contribution on automatic mode to pay yourself first before incurring other expenses. This simple step will allow you to save consistently for your retirement in the future.
  4. Avoid dipping into your retirement savings. Saving for retirement is a long-term habit. You might dip into your fund to spend on some other immediate expenses, but that can eat away your future security in the long run.

Takeaway

Your employer’s matching contribution to your 401(k) plan provides you with free money that can help secure your retirement in the long run. So make sure to contribute to get the maximum advantage out of it.

Understanding Matching Contributions

View Resource Understanding Matching Contributions
Credit cards are everywhere; not only do most people have one, but many have several. Unfortunately, some individuals are looking to steal your credit card information and use it for their benefit.

What Is a Credit Card Dump?

A credit card dump is when someone makes an illegal and unauthorized digital copy of a credit card. Credit card dumps have existed for many years. However, they’re becoming increasingly popular and more widely used due to the increase in identity theft, credit card theft, credit card forgeries, and other cybercrimes. Credit card dumps happen when thieves physically copy your credit card information or hack into company payment databases that contain that information. Skimming is the most common method used to accomplish this. Skimming uses an illegal card reader to save a customer’s credit card information. Someone could place it on a real ATM or a card reader, like the ones you see at a gas station. Credit card dump attacks have been happening on a larger scale, sometimes affecting millions. Criminals will target a company’s computer database containing credit card data and copy all the information. Once they finish the process, the thieves will often sell that information to buyers on the black market or use it for personal gain.

Protecting Yourself From Credit Card Dumps

Nobody wants to be a victim of a credit card dump, but how can you protect yourself? Credit cards typically offer security features like a PIN or security chips to make theft more difficult. Here are some more easy ways to lower your risk of getting targeted for a credit card dump:

What If I’m Compromised?

If you believe someone has stolen your credit card information, immediately contact your credit card company. You’ll be able to cancel your card and review any unauthorized charges. Most credit card companies will not charge you for unauthorized purchases as they have a “zero liability” policy. Once your card is canceled and the statement reviewed, the next step is to go to IdentityTheft.gov. This website, run by the Federal Trade Commission (FTC), will help you report and recover from your credit card fraud.

Takeaway

Unfortunately, credit card dumps are becoming a common occurrence. However, with knowledge tucked into your back pocket, there are ways to help secure your purchases so you won’t become a victim.

How Credit Card Dumps Work

View Resource How Credit Card Dumps Work
Skimming is a form of identity theft that extracts credit card information when you use the card in a modified public card reader. Skimmers are typically installed on ATMs or any point-of-sale technology and then read your credit card data to defraud you.

How Skimming Works

Skimming can happen when a fraudster modifies a device on an ATM, gas pump, or point of sale terminal to read your card data when you swipe your credit card. Fraudsters then use the data to create fake credit cards to steal from the victim’s accounts. With the advent of more sophisticated technology, skimmers can be as thin as a credit card, making it impossible for authorities to identify them. Criminals will typically install skimming devices on ATMs with cameras. The skimming device can also be in the form of keypad overlays, which can go on top of the factory-installed keypad. The keypad overlay is capable of capturing your PIN. Gas stations usually have their card readers outside near the gas pumps away from the checkout counters, making them an easy target to install skimmers.

Types of Skimming

Skimming has become more sophisticated and can happen in the following ways:

ATMs and Point-of-Sale (POS) Terminals

ATMs are the prime location that fraudsters use for skimming devices because the devices are easy to hide so victims won’t notice. Some scammers place hidden pinhole cameras to record the person’s keystrokes as they put in their PIN. Others use keypad overlays attached to the original keypads to record the keystrokes when users enter their PIN. Skimming devices will store the data and transfer it wirelessly for later use.

Gas Stations Terminals

In gas stations, scammers install skimmers in the internal wiring of the POS machines, making them invisible to card users. The skimmers then record the card details and transmit them electronically to be used to defraud the victims.

Avoid Getting Skimmed

Skimmers can be attached to any ATM and POS terminals to read and later misuse your card details to defraud you. Taking certain precautions when using your credit cards in public places can be the only way you can prevent such crimes.

Tips for ATM and POS Use

Tips for Gas Station Use

Some other precautions you can take to protect your card information from skimmers are:

Takeaway

To protect yourself from skimmers, be alert and observant when using a card reader in public areas and report anything suspicious to the authorities.

What Is Skimming?

View Resource What Is Skimming?
Due to the COVID-19 pandemic, more and more parents transitioned to homeschooling their children compared to previous years. Though homeschooling seems easy to an outsider, there may be legal requirements, hidden costs, and other unknown factors. Therefore, conducting outside research or getting information and helpful tips from other homeschooling families in your community is best.

Homeschooling Expenses: What to Expect

The decision to remove your children from a public school setting can be difficult for many parents. Most private schools require costly tuition fees, making homeschooling more enticing to families. However, you might not be aware of all the expenses and costs of homeschooling. Homeschooling expenses consist of:

Curriculum

There are some free options for homeschooling; however, most options are not free. You might also need to purchase student workbooks, teaching materials, and other learning materials required to complete the classwork. Typically, curriculum requirements vary state by state, so it’s essential to research your state’s requirements before committing to one source.

School Supplies

Homeschooling requires school supplies, like pens, pencils, notebooks, and other supplies pertinent to learning, reading, writing, and more.

Extracurricular Activities

Homeschooling necessarily does not mean you’re learning from home at all times. For example, you might need to plan for field trip expenses, sports, arts and crafts, and other activities outside the house.

Additional Fees

In addition, you might face other fees throughout the school year, such as state-mandated testing fees or tutoring, for example.

Homeschool Planning and Budgeting

You might notice how quickly homeschooling expenses and fees add up, especially with multiple children at home. Before you remove your children from school, ensure that you’re well-researched regarding the options and curriculums available. Then, once you’ve estimated the price range of your expenses, make sure to read through your state’s rules and regulations so you’ll find a curriculum that fits your child’s needs.

Homeschool Budgeting Tips

Hidden Costs for Homeschooling

Most fees associated with homeschooling are upfront and easy to decipher. However, hidden fees still exist. These fees can include anything from supplies for the classroom to an increase in your grocery bill. While you might expect to purchase items like pencils, markers, binders, and notebooks, you’ll also need items for other activities. Examples include science lab experiments, art class, or physical education to maintain a healthy homeschooling lifestyle. In addition, you can expect an increase in your grocery bill since your child will consume more snacks and meals at home. Even though there are plenty of free homeschooling curriculums, people tend not to discuss that other options can cost families over $1,000 or more per school year. However, if you are a family with multiple school-aged children, consider reusing curriculums as your children grow.

Takeaway

According to Investopedia, the average price per year for homeschooling one child can be upwards of $1,800. If you decide on homeschooling your children, ensure you spend an ample amount of time researching and understanding the laws of your state. Also, keep in mind the average of a curriculum and ensure you’re budgeting for any unexpected expenses for the school year.

The Cost of Homeschooling

View Resource The Cost of Homeschooling
Pension plans can be a significant source of retirement income for many retirees. Employers often use pension plan benefits to attract and retain employees. Typically, they set aside money for each employee in a fund, which the money grows over the tenure of the employee’s time there. When employees reach retirement age or retire, they’ll receive their pension.

What Is a Pension Plan?

A pension plan is a retirement benefit plan where an employer pays their employee a set amount once they retire or after the termination of their service. The amount will also vary depending on the length of their service. At retirement, the employee can choose to receive a lump sum or get regular payments for life in the form of an annuity. To get a pension, an employee needs to put in the minimum time of service, which depends on each employer. They’ll forfeit their right to the pension fund if you leave before that. Vesting of pension money can be in two forms:

Public vs. Private Pensions

Although employers can offer a pension, it is typically more common in the public sector. The public sector is usually from government bodies, whether state, local, or federal. Private companies that offer pensions are less common. However, when provided by a private employer, the pension does have legal protections. Private companies are legally required to ensure that they fund their pensions adequately. In addition, the Pension Benefit Guarantee Corporation will insure those pension funds. Public pension funds are not subject to such legal requirements, which can lead to severe underfunding, drastically reducing such benefits.

Calculating a Pension Fund

A pension can be calculated by:

Pension Plan vs. 401(k)

Nowadays, a 401(k) plan has largely replaced the traditional pension plan, especially in the private sector. A 401(k) is a defined contribution retirement plan where the employee contributes a certain percentage of their salary to the fund that the employer creates. Typically, the employer can either match their contributions partially or fully. Employees can choose the type of investment plan that they want to fund. Then, they’ll be able to make withdrawals once they hit retirement. In contrast, a traditional pension fund will have funds set aside by the employer once the employee hits retirement. In addition, employees have the option to not contribute to the fund and will receive funds based on the number of years of service. Although the employer creates the pension fund for the benefit of the employees, the amount is vested in the employees after fulfilling certain conditions. The main differences between 401(k) and pension funds are:

Pension Funds

401(k) Plan

Risks of a Pension Plan

A pension plan, being a retirement benefit, can have the following risks:

Takeaway

A pension fund can be a great retirement benefit if employees plan to stay with their company for the long haul. If they’re looking for a fixed income after retirement, a well-invested pension plan from their employer will help ensure a stable financial future.

Understanding Pension Plans

View Resource Understanding Pension Plans
If you’ve been on social media and scrolled through your various feeds, you have most likely seen social commerce at work. Social commerce is when brands advertise and promote their products through social media platforms. For example, if you follow any celebrities or influencers, you’ve probably seen them promote a brand’s product, typically one they use. Social commerce is the newest branch of traditional eCommerce. Rather than relying exclusively on advertising, search engines, or their website, social commerce brings the brand’s product directly to the social media user’s feed. Below, we’ll dive more into social commerce and what you need to know about it.

Understanding Social Commerce

Social commerce is buying and selling products or services on social media or networking platforms. Typically, it’s common on platforms like Facebook, TikTok, Instagram, LinkedIn, and Twitter. Here are some statistics provided by the consulting firm Accenture to help you understand just how quickly social commerce is growing:

Social Commerce vs. eCommerce

It’s easy to mix up social commerce and eCommerce; however, social commerce is simply a part of eCommerce. eCommerce encompasses all online shopping. Before social commerce, companies would promote and sell their products online. Now, companies are bringing their products to social media spaces, often encouraging customers to interact with their platforms. In addition, companies can hire influencers and celebrities to help promote their product to that person’s audience. As consumers shift their shopping habits from online to social media, we’ll eventually see a more significant portion of eCommerce sales being social commerce. There are multiple reasons to help explain this rise:

Audience and Reach

Social commerce allows companies to cater to specific audiences and expand their reach. Traditionally, online advertising utilizes the user’s data to show products you might have seen on your phone or on different websites. Likewise, television ads typically cater to the shows or channels’ demographics. However, with social commerce, companies can target specific audiences. For example, suppose a user follows a beauty influencer. In that case, beauty companies can pay influencers to promote their product on their platform and companies often allow influencers to have a promo code to generate sales further.

Genuine Promotion

Social commerce blurs the line between buyers and sellers. It has enabled companies to connect with their customer directly, while traditional advertising lacks this connection. For example, brands can easily hire influencers, celebrities, or anyone with a large following to promote their product. Typically, this results in posts or videos that seem genuine.

Change in Ad Space

Social commerce has changed the game for ad space. Usually, a user will hit a wall of ads on YouTube or any streaming platform that they’ll try to skip or ignore as they look at their phone. Essentially, people don’t enjoy watching ads. Social commerce has made it so that ads aren’t as intrusive because they’re something the user doesn’t mind seeing. For example, on TikTok, you can find comedy accounts that act out funny skits. Many of these accounts partner with brands and incorporate branded products into their funny videos. So, instead of scrolling past the video, a user might watch it and possibly get a laugh or two out of it.

Ads Are Everywhere

With the rise of social commerce, ads are inescapable while browsing any social media platform. Users can scroll for a few moments and be hit by an ad or two and users may not even be aware that what they saw was an ad. Typically, this increases exposure while changing and commodifying the social media space.

Where to Shop

You can find a place to shop on a few social media platforms, like Facebook and Instagram. You’ll most likely find links and promotions on your favorite’s social media feed that make shopping easy.

Takeaway

Social media has changed our lives in countless ways. As companies note the limitless benefits of promoting and selling on social media platforms, the rise in social commerce will come as no surprise.

What Is Social Commerce?

View Resource What Is Social Commerce?
Having roadside assistance insurance can give you peace of mind if you worry about how a flat tire or a dead battery can leave you stranded on the road. Roadside assistance coverage can help you resolve any breakdown issues in no time while reimbursing you some of the costs.

What Is Roadside Assistance Insurance?

Roadside assistance insurance can help you get assistance and payment when your vehicle breaks down or becomes disabled. Typically, you’ll pay an annual fee for this service. The primary benefits of getting roadside assistance coverage are: A roadside assistance policy, like auto insurance, requires the policyholder to pay a premium for their desired coverage. However, if your car breaks down, the policy will pay for the emergency services up to the coverage limit.

Roadside Assistance Coverage

Your roadside assistance policy will typically cover: In addition to the regular services, the roadside assistance policy can also cover additional services depending on the terms of your policy.

Benefits of Roadside Assistance Insurance

A roadside assistance policy can help you safely get back home if your car breaks down on the road. It can also cover the payment of emergency services for towing and repairing stranded vehicles. While everyone can benefit from having roadside insurance coverage, it is most advantageous to have the policy in the following situations:

Obtaining Roadside Assistance Insurance

You can get roadside assistance insurance from several places like:
  • Auto insurance companies. The best way to get roadside assistance coverage is through your auto insurance company. Typically, you can add it to your auto insurance premium. Some auto insurance policies also have roadside assistance as a part of their package.
  • Auto clubs. Auto membership organizations like AAA and Good Sam specialize in roadside assistance. They have many members and often provide DMV and travel-related services.
  • Credit card companies. Premium credit card companies like Visa provide roadside assistance services to their members subject to a pre-negotiated fee.
  • Car manufacturers. If you buy a new car or a certified pre-owned vehicle, it may come with complimentary roadside assistance service during the warranty period.

    • Rules and Exclusions:

    Although getting roadside assistance coverage may benefit you greatly, there are specific rules and exclusions you should consider:

    Takeaway

    Driving your car on the road can lead to minor hazards that can leave you stranded. Having roadside assistance insurance can help you get assistance to get back on the road again.

    Understanding Roadside Assistance Insurance

    View Resource Understanding Roadside Assistance Insurance
    If you plan on selling your car, there are various ways you should consider so that you can get the best price for your vehicle. The main methods focus on trading in your car, selling it yourself, or getting an instant cash offer. Here, we’ll go over essential details about selling your vehicle, including where to start, prepare, and close the sale.

    Different Ways to Sell Your Car

    When you’re looking to sell your car, there are three main ways to go about it. You can trade the vehicle at a dealership, sell it yourself, or get an instant cash offer from companies like Kelley Blue Book.

    Trading In Your Car

    The first method you can consider is trading in your car. You can sell your used vehicle to a dealership to get a lower price on a new car. Essentially, the dealership will subtract the assigned value from the cost of your new vehicle. The best part about trading in your car is not having to worry about selling it. Trading in your vehicle can be a more convenient process with no additional costs. It can also potentially reduce the sales tax on your new vehicle. But, ultimately, you might not get the best price for your car.

    Sell It Yourself

    The best part of selling your vehicle is the possibility of getting the best price possible and saving money since you won’t suffer from a dealer’s overhead costs. However, selling the vehicle yourself does require more work on your part. You’ll be responsible for advertising, negotiating prices, and meeting with potential buyers. So, while it is usually more profitable, it does require more work.

    Instant Cash Offers

    Companies like Kelley Blue Book or CarMax can grant car sellers instant cash offers. So, rather than trading your car to a dealership, you’ll sell it to the company and immediately receive cash. However, like a dealership, you won’t receive the best price, especially since it’s a cash offer. But, again, you won’t have to go through the hassle of selling the car yourself.

    Preparing to Sell

    1. Organizing documents. The first step when selling your vehicle is gathering all the essential documents. Typically, this includes your car title, service records, original sales paperwork, and a vehicle history report in case your car was in any accidents.
    2. Make necessary repairs. If you want the best price on your car, make sure you complete any necessary repairs, like new brakes or changing out worn tires. Even the most minor things, like a cracked windshield, can reduce your sales price. So, ensure you’re maintaining and repairing your car when needed.
    3. Cleaning your vehicle. No one wants to purchase a dirty car. It’s best to either thoroughly clean your car yourself or take it in for a detail and wash.

    4. Pricing your vehicle. Before you put your car on the market, you’ll need to determine its value. Unfortunately, people tend to overestimate the worth of their vehicle, so it’s best to try the following ways to determine the price:

      • Hire a mechanic to assess the value of your vehicle. They’ll evaluate all features, which includes anything from the engine to the tail lights.
      • Check out online valuation tools, like Kelley Blue Book, that will provide you with ways to receive an estimate on your vehicle.
      • Check out the local listings. You might already have similar vehicles on the market, so this method will help determine your listing price.

    Closing the Sale

    You should take several steps to ensure a safe and legitimate transaction. Try meeting the individual in a public place while using legitimate forms of payment. Many police departments have safe, designated spots where sellers can meet their buyers. Typically, you’ll need to provide documentation that shows your sale to the buyer. The documentation will usually involve a title transfer, bill of sale, and release of liability, along with removing and turning your plates in.

    Takeaway

    If you’re trying to sell your car, look at your situation and assess every option. For example, if you’re moving to a city that doesn’t require a vehicle, an instant cash offer or selling it yourself might be best for you. On the other hand, if you’re looking to upgrade your car to a newer model, then trading it in might be best. However, whichever way you go, ensure you’re diligent and that the option works for you. Remember not to be too disappointed if you can’t reach your best sales price.

    Selling Your Car

    View Resource Selling Your Car
    Inflation has made its impact in the past couple of months. If you’ve noticed an increased cost of goods and services, that’s due to inflation. While inflation is natural and normal, it has increased drastically in the past months. Inflation increases the cost of goods and services within a given period. For example, between 1922 and 2020, the U.S. dollar had an average inflation rate of 2.83% per year. While that doesn’t seem like much, it has created a cumulative price increase of roughly 1,440%. That means the dollar is now worth 15 times less than in 1922. It’s best to remember that inflation is natural despite the staggering statistics. Despite the decrease in the power of the dollar, there has been an increase in wages. Americans are currently dealing with much higher inflation rates. The main issue is that while the price of goods and services has increased, there has not been an equal wage increase to counter it.

    Understanding Inflation

    The Bureau of Labor Statistics (BLS) is a government agency that collects data to create the Consumer Price Index (CPI). CPI follows the prices of consumer goods and services, like gas, transportation, food and beverages, apparel, and more. Tracking pricing allows the CPI to show any increases in prices over time. For example, according to BLS, from January 2021 to January 2022, the Consumer Price Index rose 7.5 percent. Food prices rose by 7 percent, while energy prices rose by 27 percent. Therefore, a gallon of milk or a car in 2021 would be 7% more expensive than the previous year. Many factors contribute to inflation— one being supply and demand. When the supply for goods and services is low, or demand for them is high, prices for those items are likely to rise. The U.S. has been dealing with supply chain issues throughout the pandemic, which has put a crimp on available supply, increasing prices for related goods and services. In addition to the supply chain, energy prices (especially oil), regionalization, and the Federal Reserve interest rates affect inflation.

    What Does Inflation Impact?

    Inflation impacts almost everything. No goods or services are left untouched from increasing prices when the dollar inflates. Inflation affects the following costs:

    Dealing With Inflation

    Inflation will undoubtedly strain your finances— your budget will likely increase while your income remains stagnant. Here are some steps you can take to fight inflation:

    Takeaway

    Inflation has affected many Americans who haven’t seen an increase in their income. So now, Americans struggle to save money, pay off debts, get loans, save for retirement, or meet their financial goals. Thankfully, high inflation does not last forever. There are some simple steps that anyone can do to save extra money during this time.

    How Inflation Impacts Your Finances

    View Resource How Inflation Impacts Your Finances
    Hearing the name “sinking fund” may give you the wrong idea, mainly if you’ve never heard of one before. A sinking fund differs from a savings account because money is typically for a specific purchase, usually big-ticket items like a car or downpayment on a home. Increasing your savings account or an emergency fund is always essential, but these typically have a general-purpose. Instead, it may be best to create a sinking fund if you want to save for a specific expense. This article will discuss sinking funds and how to start one.

    What’s a Sinking Fund?

    A sinking fund is a savings account designed to pay for a specific, upcoming expense. They are secure, safe, and liquid, so you can save and access your money effortlessly and risk-free. You can use a sinking fund for almost anything, but you must plan a budget to reach your goal. Knowing the dollars and timeline for saving is best. Since you can use a sinking fund for just about anything, here are some typical expenses people choose:

    How Does a Sinking Fund Work?

    We all wish we could write a check when a considerable expense arrives and not overthink its impact on our finances. But unfortunately, most of us have to be strategic with our money, especially regarding items with higher price tags. Try using a sinking fund if you want to designate money for an upcoming expense. Each month you can save a portion of your income for the account. Then, if you plan accordingly, you’ll have the funds you need when the expense arrives. Example: You are looking to go on vacation next summer and determined your total cost will amount to $6,000. The expenses include flights, hotel, dining, traveling, and activities; the target date is ten months away. You’ll need to save $600 monthly for ten months to hit your goal.

    Sinking Fund Benefits

    Sinking funds offer a multitude of benefits, including:

    Starting a Sinking Fund

    When starting a sinking fund, reviewing your finances and past purchases is best. Check for any significant expenses and determine any large expenditures for the future. Then, list your savings goals while prioritizing your most important expenses first. Next, make a timeline. List out the due dates for each expense and determine how much you need to save every month to cover each one. For example, if you want to save $2,000 for a vacation in five months, you’ll need to save $400 per month to reach your goal. Once you’ve hit your goal, use the money to cover the expense. Then, if you think you’ve managed your finances better, try using a sinking fund again for any other upcoming payment.

    Takeaway

    A sinking fund is a great way to manage your money for upcoming expenditures. They allow you to identify an expense, budget your money, and save to reach your goal. Ultimately, a sinking fund will keep your finances organized while leaving your other savings and investment accounts untouched. Consider using a sinking fund for your next expense to ease the overall process and make it more intentional.

    Using a Sinking Fund to Save

    View Resource Using a Sinking Fund to Save
    Minimum payments seem like a great option for paying off your credit card debt— you can pay a low amount, avoid late fees, and keep your account in good standing. However, avoid paying the minimum amount unless you can’t afford to do otherwise. You might wonder why making only minimum payments could put you in a difficult situation when paying off your credit card debt. Over time, your balance increases because it’s accruing interest, making it take much longer to pay off. Plus, by the time you pay off your balance, you’ll have spent way more money on interest alone when compared to your original balance. This article will discuss minimum payments, their impact on your debt, and how to pay more.

    What Is a Minimum Payment?

    A minimum payment is the lowest amount you can pay on a credit card each month while avoiding late fees and keeping your account in good standing. Paying the minimum balance every month allows you to avoid penalty APRs, late fees, and any bad marks on your credit report. Making the minimum payment on your card will allow you to grow your credit while avoiding additional fees. However, if you can pay more, you should.

    Impact of Paying the Minimum

    Even if paying the minimum amount keeps you out of credit trouble, doing so will eventually come back to bite you. Each time you pay the minimum amount, the other money you owe is still outstanding and accumulating interest charges. Ultimately, you’ll have to pay that amount off. The longer you wait, the more significant that balance becomes, making it more challenging to pay off. If you’re not paying off your entire balance by the due date, your debt will accrue interest, and you’ll owe more money. Meaning, that each time you only pay the minimum amount, your balance will naturally increase due to your card’s interest rate. Paying off the entire balance is the only way to avoid accumulating interest. Let’s take an outstanding balance of $5,000, as an example, on a card that charges a 15% interest rate. Paying only 2.5% of the unpaid balance each month will take you over 18 years to repay the debt. Over those 18 years, you’ll pay almost the same amount you owe in interest charges. Check the “Minimum Payment Warning” on your credit card bill. It’ll show exactly how much credit card debt you’ve accumulated in the account. If you’ve only paid the minimum amount, it’ll indicate how many years it’ll take for you to pay it off. You might be surprised how long it’ll take.

    Should I Pay More?

    It is always best to pay more than the minimum amount. Credit card companies establish a low minimum balance. Typically, it’s either a fixed amount or a percentage of your balance. For example, it could be $25, or one or two percent of your debt, plus fees and accrued interest. While you can avoid late fees by paying the minimum each month, you’ll eventually pay more than when you started. If you pay more than the minimum amount, you’ll have less debt, making it easier to pay off in time. Try revisiting your “Minimum Payment Warning.” You’ll determine how long it’ll take to pay off the balance with your new payment amount. For example, if you start paying triple the minimum amount every month, you’ll pay off your debt by one-third of the time listed on the bill. If you can afford to pay more than the minimum, you should. If you can’t, you should consider cutting down on other expenses so you can make larger payments each month. Paying a little more each month can make a difference in the long run.

    Takeaway

    Minimum payments seem like a great idea; however, knowing what they are and how they can impact your finances is essential. Paying the minimum each month may offer more flexibility with your finances. Still, you’ll spend more money over time, getting you into more debt. It’s best to pay more if possible, and the better you and your finances will be. Paying down the entire balance each month is best to avoid accruing any interest and increasing your debt.

    Making Only Minimum Payments

    View Resource Making Only Minimum Payments
    If you’re looking to borrow money or rent an apartment, typically, you’ll need a credit reference. Credit references demonstrate an applicant’s ability to make timely payments.

    What Is a Credit Reference?

    Credit references are documents that indicate your creditworthiness to potential lenders or landlords. Although the most common type of credit reference is your credit history records, there are other options to prove your creditworthiness to potential lenders. Credit references provide insight into your borrowing ability and whether you can repay future loans. In addition, it also includes information about your current debt situation. For example, suppose your credit score is good, and you have a record of timely payments. In that case, the lender will probably accept your loan application. In contrast, having a history of falling behind on debt payments and a poor credit score would likely reject your application.

    Types of Credit References

    There are different types of credit references, each with varying degrees of effectiveness. Here are some credit references to know about:

    Credit Report

    Credit reports are the most popular of all credit references. Generally, employers, lenders, and landlords use credit reports to check your creditworthiness and financial standing. While evaluating your credit history, potential lenders consider your account’s age, the number of credit inquiries, and current debt level. You’ll probably face rejection if you have a poor credit score, many credit inquiries, or a large debt. Credit reports can be helpful since they contain your debt and payment history information. Remember, you can get a free copy of your credit report each year from the three major credit reporting bureaus by visiting AnnualCreditReport.com.

    Asset Documentation

    Asset documentation is another type of credit reference issued by financial institutions. Typically, the documents list your assets, such as savings accounts, stocks, bonds, or retirement funds. Having assets can increase your creditworthiness as it shows you can pay off your debts in the future.

    Character Reference

    A character reference is a credit reference obtained from a previous lender, landlord, or employer. It is a document through which your past lender, landlord, or employer can vouch for your character, integrity, and ability to pay off future debts. A character reference letter is beneficial if you are new to the U.S. or have zero credit history. For example, suppose you’ve paid off your past loans on time. In that case, you can have your previous lender vouch for you, thus improving your creditworthiness. Although character references are not an actual reflection of your financial condition or a foolproof credit reference, they can be an effective way to showcase your finances. They can improve your chances of getting a loan or renting an apartment.

    Who Needs a Credit Reference?

    You might need credit reference in the following situations:

    Takeaway

    Good credit references can help you get a loan or rent an apartment. In addition, you can get better rates and terms based on your credit score. Also, a good credit score enables you to get utility services without paying a hefty security deposit. An excellent credit reference can also give you more choices regarding where to get a loan or rent a place. It can also get you insurance at lower rates since most states allow insurance companies to use credit scores to determine their rates.

    What Is a Credit Reference?

    View Resource What Is a Credit Reference?
    Furnishing a new home or a new apartment can be stressful, especially if you don’t have a plan. There are multiple factors to consider, like So even if you start the project with optimism, it can become a challenging experience if you lack a plan. Luckily, furnishing your new space doesn’t need to be a headache. Instead, shopping for furniture can be fun and much easier if you plan and organize your ideas.

    Creating a Budget

    Creating a realistic budget is especially important once you sign a lease and pay your security deposit. You’ll need to consider any monthly payments or other expenses you have when creating your furnishing budget. If you have a low budget, keep in mind that you can always purchase less expensive furniture and replace it once you’ve settled in and saved more money. In addition, ask yourself questions about your current situation, like: If you have pets or are planning to move across the country in a few years, keeping your budget relatively low may be best. However, spending more on your furnishings may be best if you plan to settle in your new space for a while, especially since you’ll get more use out of them.

    Spend or Save

    Even though it’s always nice to save money, sometimes spending more on furniture is tempting. If that’s the case, then consider the following factors:

    Shopping for Furniture

    Shopping for furniture can be exciting if you know what you want and where to look. However, before you visit your local furniture shop or check online, measure the dimensions of your space. Get the floor and wall space dimensions and write it all down. Ultimately, this will save you much stress while you’re at the store and uncertain if something will fit in your living space. Next, it’ll be time to decide if you want to shop online or in person. For example, you can buy pretty much any furniture online; however, you may still prefer to shop in-store to see the items in person. Choosing a store that fits your budget and style needs is best. If you are working with a lower budget, try looking at your local secondhand stores and consignment shops. You can also check online marketplaces for people selling in your area. Also, depending on where you live and the time of year, you might be able to snag quality pieces of furniture that people are selling. Be on the lookout for estate, moving, or garage sales. If you have a large budget, you will have more options. Try researching online and then visit the store to review your options.

    Should I Rent?

    Renting furniture is a viable option too. It’s perfect for people who don’t plan on living in their space for long or want to wait to buy furnishings. However, renting does offer some flexibility. For example, some companies allow you to rent while making low monthly payments. Then, if you end up liking the piece of furniture, you’ll be able to purchase it by paying the difference. Renting furniture does give you access to high-quality, clean furniture until you’re ready to buy your own. Also, it is fast and easy because you typically don’t move the furniture yourself. When your rental term ends, the company will arrange pickup for the item. Plus, if you’re living in a place temporarily, you’ll save money.

    Takeaway

    Furnishing your new place is a big step, but it doesn’t have to be stressful. Typically, it is best to write out a plan for your furnishings, including your budget, what you need, and the dimensions of your space. Planning will help make the process easier.

    Furnishing Your New Space

    View Resource Furnishing Your New Space
    Everyone should consider getting liability insurance, regardless of their circumstances. You might think you’ll never be responsible for injury or property damage; however, the truth is that mistakes happen. Unfortunately, when accidents occur, no one is immune to liability. If you want to cover yourself in case of a liability lawsuit, consider getting liability insurance. So, if something happens, you’ll have insurance coverage to protect you and pay for your suit if you lose, meaning you’ll have minimal out-of-pocket expenses. However, there are instances where the amount owed is more significant than your policy’s coverage limit. If that’s the case, you’ll have to pay the difference. With that in mind, it is best to have coverage, so umbrella insurance is essential. This article will discuss the necessary information regarding umbrella insurance.

    What is Umbrella Insurance?

    Umbrella or personal liability insurance will help protect you if you are party to a lawsuit and have damages larger than your coverage limit. An umbrella policy will help pay the difference, so you aren’t paying the total entirely out of pocket. Even if you already have homeowner’s, auto, or boat insurance, it is still best to get umbrella insurance. Umbrella insurance works with your other plans; however, it can protect you in areas your other policies don’t cover. In addition, umbrella insurance coverage provides additional liability coverage that car rental insurance does not cover. Also, umbrella insurance covers slander, libel, and false imprisonment claims, which other insurance policies do not cover. One of the benefits of umbrella insurance is that it provides much broader coverage than other policies. For example, most policies cover specifically named incidents. In contrast, umbrella insurance covers everything except for specific exemptions listed in the policy.

    Umbrella Insurance vs. Excess Liability Insurance

    Although the two policies are similar, excess liability insurance is not the same as umbrella insurance. Both insurance policies extend your coverage limit; however, umbrella insurance provides additional protection that your other policies do not cover. In other words, umbrella insurance offers a broader range of coverage than excess liability insurance.

    How Does Umbrella Insurance Work?

    To better understand umbrella insurance and how it works, let’s look at some examples where your base policies may not cover you while umbrella insurance would: Here is a detailed example: You run a stop sign and hit another vehicle. The car is damaged, and several people are injured. The vehicle requires $20,000 for repairs, while the cost of injuries totals $250,000. In addition, the driver you hit was a surgeon. Unfortunately, they broke their arm, which prevented them from working until they fully recovered. They sue you for $150,000. The total costs, including a lost lawsuit, would be $420,000. In this example, your primary insurance policy would likely not cover all the costs of the damages, including the other car, medical bills, and lawsuits. For instance, if your insurance policy only covered $200,000 for the incident, you would need to pay the remaining balance of $220,000. However, if you have umbrella insurance, the policy would cover the remaining balance, including legal fees for the lawsuit.

    Do I Need Umbrella Insurance?

    Unfortunately, getting sued is not uncommon; anybody can be buried in lawsuits and legal fees, ruining them financially. Even if you think you’ll never get sued, you can never be too sure. Deciding whether you need umbrella insurance can be case-dependent. But, you should be aware that anyone can be sued, and many are not prepared to pay legal fees and the overall lawsuit cost. With that in mind, even wealthy people can benefit from umbrella insurance since it protects their savings and assets from being taken from a lost case. The truth is that anyone can benefit from umbrella insurance. At the very least, it’ll give you peace of mind and, at most, could save you millions.

    Takeaway

    Deciding whether umbrella insurance is right for you can take some consideration. It’s important to note that it can mean the difference between being in massive debt versus paying nothing if there is an incident. Consider how much risk you’re at for liability and the value of your assets to help your decision. In addition, it may help to speak with an insurance agent to assess your risk and adequately inform you about the policy.

    What Is Umbrella Insurance?

    View Resource What Is Umbrella Insurance?
    Bringing sustainable living into your life doesn’t mean drastically changing your lifestyle or increasing your budget to make more sustainable purchases. Instead, making changes to your lifestyle can be as simple as taking the time to ensure that your grocery purchases are sustainable. In addition, eating sustainable foods can lower your carbon footprint, support ethical food systems, and protect ecosystems. Moreover, making sustainable food choices doesn’t necessarily entail spending more money on food. Instead, there are ways to shop for groceries sustainably while keeping a tight budget. In this article, we will guide you through making sustainable food choices.

    Before You Begin

    While you may want to jump in and head to your local grocery or health food store, you should take a few small steps at home first.

    Sustainable Shopping

    Making sustainable shopping choices is one of the first and most essential steps to creating sustainable food choices. Here’s what to do:

    Reducing Food Waste

    Even if you make all these changes to your shopping, you could be doing much better if you’re still throwing out a lot of your food. Did you know that the average U.S. household wastes nearly a third of its food? So even if you’re sure your household isn’t wasting this much, you’re still probably wasting more than you think. You could probably do a better job of reducing that number, whatever it is. Try using the following methods:

    Takeaway

    Making sustainable food choices doesn’t have to strain your budget. Instead, try planning out your meals and make minor changes to how you think about food. By doing so, you’ll significantly improve your sustainable food choices.

    Making Sustainable Food Choices

    View Resource Making Sustainable Food Choices
    Gas prices have been surging in 2021/2022 due to inflation and supply-chain issues related to the pandemic. Then, more recently, the war in Ukraine has caused the price of oil, and therefore gas, to jump even higher. In the United States, we’ve hit all-time highs for gas, the closest prices being the cost of gas after the 2008 financial crisis. So if you’re wondering how to deal with these gas prices, you are not alone. Although there are no ways to avoid the high gasoline prices altogether, there are some ways to help you save on gas and keep your wallet from emptying as quickly.

    Save on Gas

    Research Gas Prices

    Researching gas prices is an effective way to avoid the expensive stations while sticking to the more affordable ones.

    Change Your Driving Habits

    Altering your driving habits can be beneficial when looking to cut back and save on gas. While it may not be the most favorable option, it will save you the most money.

    Takeaway

    Unfortunately, gas is a necessary expense for most of us. However, there are ways to lessen that expense. Learning your local gas prices and altering your driving habits will save you the most money. In addition, you can utilize public transportation to get you to your destination. Finally, if you learn how to save money when gas prices are high, you can continue these methods when the prices are lower to keep the savings coming.

    Dealing With High Gas Prices

    View Resource Dealing With High Gas Prices
    If you’re shopping for a savings account for a minor child or young adult with minimal or no balance requirement and a short maturity period, try a Small Saver Certificate (SSC).

    What Is a Small Saver Certificate?

    Small saver certificates, or SSCs, are deposit savings accounts with minimal to no balance requirements and a maturity period ranging from 3 to 24 months. Typically, this type of account targets young adults or minors who are beginning to save money for the first time and will make smaller deposits. SSCs were first set up in the 1980s to provide banks with short-term deposits with a maturity period of 18 months. This type of account was for helping banks compete with money market accounts with the same maturity window. Later on, young adults and children were primarily using SSCs to start saving money. Some of the essential characteristics of an SSC are:

    Advantages and Disadvantages

    An SSC can help young people develop a savings mentality early on. In addition, due to the nature of an SSC, young adults can make smaller deposits within a fixed term. Once they get an idea of investing in a deposit savings account, they’ll be able to move on to more complex investments, like stock exchanges or investment accounts. An SSC can also help banks develop their younger investors as prospective customers. For example, most banks and credit unions encourage young investors to set up bi-weekly or monthly recurring deposits. Most SSCs do not carry monthly fees and are FDIC- or NCUA-insured, allowing young adults to invest in a safe and controlled environment. Some SSCs also come with checking account-like features like online and mobile banking and paperless check options. An SSC’s main disadvantage is having a much lower interest rate than the industry standard. In addition, SSCs renew automatically at a lower rate. After maturity, investors can transfer the funds from the SSC to a different savings instrument like a CD or money market account for better returns. However, some SSCs still have more competitive terms that match CD’s interest rate and maturity period to lure in young investors.

    Using a Small Saver Certificate

    A young adult or minor should start investing with an SSC. Saving in an SSC is easy due to its minimum or zero balance requirements. In addition, the shorter maturity period with a decent interest rate also helps. The primary purpose of an SSC is to teach someone how to save for a fixed term. Typically, this applies to young adults and minors looking to be more responsible. Here are some facts you need to know before investing in an SSC:

    Withdrawing From an SSC

    Small saving certificates are deposit savings accounts that function similarly to a CD. Like a CD, the funds should stay in your SSC until its maturity date, and then you can withdraw the funds without penalty.

    SSC vs. Savings Account

    While both types of accounts are FDIC- or NCUA-insured, savings accounts are more flexible since they allow withdrawal over a period without penalty. However, SSCs are similar to CDs since they need to hit their maturity date before the withdrawal.

    Adding Money to an SSC

    SSCs are available in small denominations, like $100 and $200. While some institutions allow you to add money to the account after opening, typically, you’ll increase your deposits by opening new ones.

    Takeaway

    SSCs are simple deposit instruments that can teach young adults and minors how to save. However, while they can be a great way to build better savings habits, they do not earn like other savings tools.

    Understanding a Small Saver Certificate (SSC)

    View Resource Understanding a Small Saver Certificate (SSC)
    Credit cards have changed the way we all shop. With a credit card in hand, you can walk into any store and walk out with a purchase. And rather than pay for that purchase out of your current monthly budget or the cash you have on hand, you can pay for it over time, plus interest. But how well do we understand what ‘plus interest’ means? Depending on how you handle making credit card payments, you might go from being a savvy shopper to someone who overpays for things they buy.

    What Is Credit Card Interest?

    Interest is the price you pay for borrowing money. Credit card issuers typically state their interest rate as an Annual Percentage Rate or APR. You pay interest at the APR rate when you fail to pay the entire balance before the due date. Whenever you fail to pay your entire balance before the due date, the credit card company imposes interest on the unpaid amount, which adds more to your debt. If you fail to pay your balance the following month, you’ll pay interest on top of your interest. Your credit card balance can quickly grow if you consistently leave an unpaid balance at the end of each billing cycle.

    Monthly Interest Calculations

    Credit card interest is charged monthly, based on your outstanding balance. Each time you carry forward a credit card balance, the interest gets added to the balance based on your APR. Your credit card statement will list what that APR is.

    Types of Credit Card Interest

    Credit card companies tend to charge a variable interest rate based on fluctuating market conditions. As a result, fixed interest rates are relatively uncommon except for personal loans and mortgage situations. Credit card issuers may also have different types of rates, depending on how you use the card and whether you’re an existing customer or not. Interest can be the following types: For almost all cases, the APR will depend on your credit score. A good credit score (720 or more) can help you qualify for a lower interest rate since your lender will consider you a lower risk. On the other hand, having a poor credit score will increase your interest rate.

    Factors Impacting Your Interest

    The following factors can influence your credit card’s interest rate:

    Prime Rate:

    Typically, the Federal Reserve sets a ‘prime rate’ that credit card companies use to establish the rate of interest to be charged for their credit cards. Also, your credit score, credit history, and other factors may be used to determine your credit card’s interest rate.

    Hard Credit Inquiry:

    The issuing credit card company will perform a hard credit inquiry based on your credit report whenever you apply for a card. The credit inquiry will look at your history of payments, credit score, and the number of credit accounts you own. Due to these criteria, it is best to improve your credit score before applying for a new credit card.

    Ways to Lower Your Interest

    Credit card interest can easily drain your finances while pulling you into more debt. Here are some tips for lowering your credit card interest while managing your cards better:

    Takeaway

    Credit cards are great for adding flexibility to your finances while earning rewards. Paying off your entire monthly balance will help you avoid unnecessary credit card interest expenses.

    Understanding Credit Card Interest

    View Resource Understanding Credit Card Interest
    Paying your bills on time is not the only way to maintain a good credit score. Controlling your credit utilization and ensuring it stays low is another excellent way to improve your credit score. In a FICO score or VantageScore, you’ll need to keep your credit utilization under 30% to maintain a good credit score.

    What Is Credit Utilization?

    Essentially, your credit utilization rate compares how much you owe on your credit cards to your total credit limit. This rate shows up as a percentage and significantly impacts your credit score. To calculate your credit utilization rate, you’ll need to do the following: For example, let’s say you own two credit cards with a total credit limit of $10,000. One card carries a balance of $5,000, making your credit utilization rate 50%. The rate represents you using half of your available credit. On the other hand, a lower credit utilization rate means you use less of your available credit. In addition, it shows that you’re managing your credit accounts well by not overextending your finances. Lowering your credit utilization rate can boost your credit score by 30%. It is also essential to keep individual credit card utilization rates low. For example, if you have two credit cards, it is better to have one card carry $3,000 and the other carries $2,000 than one having $5,000. Your overall credit utilization rate still will be 50%; however, one card will have a 60% rate while the other has a 40% rate.

    Credit Utilization’s Impact on Credit Score

    Your credit card utilization rate plays a significant role in your credit score. The lower your rate is, the higher your score will be. On the other hand, the higher your utilization, the lower your score. To maintain a healthy credit score, you’ll need to keep your expenses in check and avoid having high balances. In addition, the total number of opened credit accounts and your credit history will also matter. For example, using only one of many cards to make purchases can adversely affect your credit score, especially if you have a short credit history. Alternatively, spreading your expenses across multiple cards with excellent credit history can improve your credit score.

    Improving Credit Card Utilization

    If you want to reduce your credit utilization rate to boost your credit score, try the following steps:

    Takeaway

    Maintaining a low credit utilization rate while paying off your monthly balances is best. Accomplishing these tasks will drastically improve your credit score while allowing you to enjoy your credit card’s reward program.

    How Credit Card Utilization Impacts Your Credit Score

    View Resource How Credit Card Utilization Impacts Your Credit Score
    Credit card interest rates can be manageable for some people but a real challenge for others. Depending on your card type, credit score, and other factors, card rates can vary anywhere from 19.49 to 29.99 percent. At the higher end of the spectrum, getting yourself out of debt may be more of a challenge. It does not necessarily have to be that way, though. You have some power to reduce your interest rates in many cases. These steps can help you reduce your credit card interest rates so you can pay back your debts before it becomes out of control. Negotiating with Your Credit Card Issuer One of the first things you can do is contact your card’s issuer to try to negotiate a lower interest rate. It is that simple, though you will want to do a little homework first. For instance, find out what rates other competing credit card companies offer and have a list of top offers to bring to the table with your negotiations. The Simple Dollar recommends a few critical considerations for your negotiations, including these: If that does not work, there are still other options available to you, though it might be worth your while to keep trying every few months until you get a more favorable answer. Remember that a history of late payments or high amounts of debt will make your plight less desirable for the credit card company. Attempt to pay down some balance and be more consistent with monthly payments while seeking an interest rate reduction. Consider Balance Transfer Offers Many credit card companies allow you to transfer your balances from another card to their cards with very low, if not zero, introductory rates. That provides an excellent opportunity to reduce your overall debt by thousands of dollars if you manage to meet all the “fine print” requirements. Before you decide this is the route for you, do your homework on the cards you are considering and the relevant details about the balance transfer process. Some details you will want to have in mind include: Knowledge is power when considering a balance transfer. The more you know about the offer and its potential benefits, the better-informed decisions you can make. Keeping Your Rate Low for the Long Haul Asking for a lower rate is sometimes all it takes. Keep these things in mind, and you should be able to find a way to reduce your credit card debt substantially by lowering your credit card rates.

    Lower Your Credit Card Rate

    View Resource Lower Your Credit Card Rate
    Figuring out how many credit cards belong in your purse or wallet can give you a headache. But, as new offers keep popping up, it can be tempting to take advantage of them all. Not to mention, there are cards for many different things. For example, there’s a card to target your favorite hotel chain, one to maximize airline miles, and one that offers you cashback on your grocery purchases. With this variety of credit cards, filling your wallet with plastic can become too easy. So, how many credit cards should you have? Advantages of More Cards Advantages of Fewer Cards Weighing It Out So, how many cards should you own? That will depend on your specific situation. It may be best to start with one credit card with a lower credit line and work your way up to a few cards once you build up credit. Some people believe you can never have too many credit cards. Depending on the individual, this can be true somewhat. Each credit card you have in good standing will increase your credit score and positively impact your credit history. However, some people can have too many cards. For example, if you tend to overspend with multiple cards, struggle to manage your accounts, or incur much debt, numerous cards are too many.

    How Many Credit Cards Should You Have?

    View Resource How Many Credit Cards Should You Have?
    The interest rates offered on savings accounts and money market accounts today are hardly impressive. The FDIC’s weekly national rate and rate caps as of end of December 2023 found the average national rate for a non-Jumbo deposit was just 0.46%, with a cap of 6.08%. Fortunately, consumers have other options if they want to save their money in safe, risk-free investment vehicles. Certificates of deposit, better known as CDs, for instance, offer better interest rates. Credit unions might refer to them as Certificate Accounts. There’s a catch with CDs, however. You must invest the money for a set period, known as a term. If you withdraw that money before it matures at the end of the term — you’ll face a penalty. CD terms do not have to be long. Banks and credit unions offer CDs in a variety of terms. So you can select a CD that will mature in three, six or nine months if that meets your need. Alternatively, you can opt for a longer term, as long as 60 months or five years in some cases. In most cases, the longer the CD term, the higher the offered interest rate on that CD. However, what if you want the higher interest rates associated with CDs, but you also want easier access to your cash? You can achieve this with an investment strategy known as laddering. How Laddering Works With laddering, you take out several CDs, all with different terms. Ideally, you want your CDs to reach maturity at regular intervals. That gives you the choice at each maturation date to either withdraw funds, renew them for a new term or withdraw some and re-invest the rest. Here’s an example: You might invest some of your dollars in a CD with a longer term, maybe as long 60 months. That CD comes with the highest interest rate possible. Next, you can invest more dollars in a CD with a slightly shorter term, say 48 months. Also open CDs with terms of 36 months, 24 months and 12 months. You can see that you’ve laddered your CDs. A new CD will reach maturity every year. Moreover, here’s what you do when that happens. When your first CD matures after 12 months — the CD that will pay the lower interest because of its short lifespan — you can take out what money you need for expenses, purchases or other investments. Leave the rest of your dollars in it and then renew that amount into a 60 month CD. What just happened? You gained access to the cash you needed and transformed the CD into a longer-term CD earning more interest. One year later, your second CD — the one with an original term of 24 months — matures. Again, you can decide to withdraw all your money, renew all of it or keep some and save the rest. If you are laddering, you should only withdraw some of your money and then save the rest for 60 months. Again, you’ve gained access to your money and transformed a low-yield CD into one that pays off far higher interest rates. As you can see, this scenario will play out every year. Each year, one of your CDs will mature, allowing you easy, and penalty-free, access to your cash. At the same time, the money you do not need will be generating higher amounts of interest. You can ladder at shorter intervals and with fewer CDs, too. There’s no reason you could not ladder CDs by investing in CDs with terms of 6, 9 and 12 months, and then renew these CDs as they mature. Risks If done right, laddering comes with few risks. However, you could break the chain if you are not patient. It might be tempting three years into your laddering arrangement to empty one of your CDs. You will not face a financial penalty for doing so. However, you will leave a year-long gap in your cycle of maturing CDs. It is important to note that despite interest rates that are higher than those associated with savings accounts or money market accounts, CDs are still not one of the higher-yield investments out there. If you want to make more money at a faster clip, you’ll need to invest in more aggressive, but riskier, investment vehicles. Still, for those who prefer a safe and steady investment, CD laddering might be a smart move. It is a clever way to maximize both the accessibility and interest-generating powers of your CDs.

    Laddering Strategies for CDs

    View Resource Laddering Strategies for CDs
    Does your employer offer flexible spending accounts? Do you take advantage of this benefit? If you answered “yes” to the first question but “no” to the second, you might be losing hundreds of dollars, depending on your income-tax bracket, every year. What Are Flexible Spending Accounts? Many employees do not understand the benefits of flexible spending accounts, better known by the acronym FSA. Such accounts allow employees to set aside money from their regular paychecks on a pre-tax basis to pay for out-of-pocket medical or dependent care expenses. That might sound confusing, but here’s how it works: Every pay period, your employer deducts a set amount of money from your paycheck. You then use that money to pay for medical or dependent-care expenses that your regular health insurance will not cover. The benefit of this is obvious: You will be saving up money for health expenses regularly. You then won’t face a significant financial shock if you need to pay potentially pricey out-of-pocket healthcare expenses. However, there’s an even more significant financial benefit: The dollars you stow away in your flexible spending account are considered pre-tax dollars. That means that they reduce the amount of income you will have to report to the IRS every year, thus reducing the amount of income taxes you must pay each year. For example, if you earn $40,000 a year and put $2,000 into a flexible spending account, the gross income you must report to the IRS falls to $38,000. Depending on the size of your tax rate, that could result in significant tax savings. The Internal Revenue Service limits the amount you can deposit into an FSA each year and contribution limits expect to be raised annually based on the inflation rate. However, even with restrictions, the savings are still meaningful to most employees. Types Companies that offer FSAs tend to provide two different kinds: those set aside for healthcare expenses and those created for dependent care. It is important to note that dependent-care accounts are not just for your children. Dependent-care accounts can be used for any of your dependents, including your elderly parents, if you are taking care of them. You can use your FSA money for a variety of things: Use it or Lose it Flexible spending accounts are not perfect, however. For example, they come with a provision that requires you to spend all of the money deposited in your FSA account before the end of the year or risk losing any unspent funds. The “use-it-or-lose-it” rule has always been one of the most significant downsides to saving in these plans. Some plans provide a grace period to let you use the money by March 15th of the following year, but the “lose it” rule kicks in after that date. In response to many consumers’ issues in losing such unspent funds, the U.S. Treasury Department amended FSA rules in 2013. The changes permitted employers to offer plans that would allow employees to roll over up to $500 from their current plan year account for the next plan year. However, such changes come at the employer’s discretion, and many haven’t implemented the new option. Many companies have decided to maintain the March 15th grace period instead of the rollover provision as IRS rules force them to choose one option or the other. Check with your plan administrator to see what your company offers. FSAs, then, are as flexible as their name suggests. Unfortunately, however, their availability from employers is not as widespread as many would like. According to the U.S. Bureau of Labor Statistics, only 43% of private industry workers have access to FSAs, while 71% of state and local government workers have access.

    Flexible Spending Accounts for Medical and Dependent Care

    View Resource Flexible Spending Accounts for Medical and Dependent Care
    Researchers have found that many households in the United States live their lives from paycheck to paycheck. They have little or no savings and rely heavily on the influx of cash on paydays to make ends meet. The latest Paycheck-to-Paycheck report from PYMNTS.com shows that three in five Americans live that way, with inflation being the leading factor. For most of these families, a few changes and attention to detail could help them break the cycle of living paycheck to paycheck.

    Problems With Living Paycheck to Paycheck

    A wide range of financial and emotional consequences depend on every paycheck for essentials. These include:

    Identify That You Live Paycheck to Paycheck

    Four simple questions can help you determine whether you live paycheck to paycheck. If your answers are yes to at least three of these questions, then you are probably living paycheck to paycheck, and you will reap many benefits from breaking that cycle.

    Look For Expenses to Trim Away

    The critical thing you need to do to avoid your dependence on your next paycheck is to trim away unnecessary expenses. Most people have at least a few things they spend money on that they do not strictly need. In many cases, you can cut back on these areas of extra spending for just a few months until you build up some savings, then start adding them back in as you can afford. One ordinary expense to get rid of is eating out at restaurants and fast food places. You can also reduce the amount of money you spend on drinks, including alcohol, sodas, and specialty coffee. If shopping is your problem, withdraw a limited spending allowance in cash after each paycheck and use that for all your spending until your next paycheck.

    Begin Paying Bills Right Away

    One of the benefits of getting off the cycle of living paycheck to paycheck is that you can pay your bills immediately, rather than waiting for the paycheck shortly before they are due. That reduces stress in your life by reducing the chance of missing a payment and getting hit with late fees. Once you have a buffer in your checking account, try getting in the habit of paying your bills as soon as you receive them. Another option is to have a particular day of the month when you pay all your bills, so you do not have to think about them at any other time.

    Develop Your Own Strategies for Breaking the Cycle

    What works for other people might not suit you, so it is your responsibility to know your weaknesses. Take the time to write down everything you spend money on for a month to understand where your money is going and where you can make changes. Another way to break the cycle is to get a part-time job, just until you build up enough of a buffer in your checking account to feel free from counting down the days until your next paycheck. It is essential to keep your eyes on the prize through all of this. Once you have some money in savings and have a buffer in your bank account, you won’t stress as much regarding the state of your finances. Plus, you will be able to control your money better and work toward your bigger financial goals, like getting out of debt or saving up a down payment to buy a house.

    Stop Living Paycheck to Paycheck

    View Resource Stop Living Paycheck to Paycheck
    The days when companies would provide pensions for their employees are rapidly dwindling. Today, workers are primarily responsible for saving enough money for their retirements. The good news? Workers can choose from many retirement plans, from 401(k) plans to IRAs to Simplified Employee Pensions. However, no matter what plan your company offers — or whatever you invest in if you are a self-employed worker — your job is to maximize your retirement savings during your working years. Maximizing Your Retirement Savings Richard Lichtig, a partner with accounting firm Eisner Amper, recommends that employees take advantage of two investing strategies: dollar-cost averaging and maximizing an employer’s matching contribution. In dollar-cost averaging, workers buy a fixed dollar amount of a particular investment on a set schedule, no matter what that investment’s share price happens to be. That gives employees the chance to buy more shares when the price per share of an asset is low and a smaller amount of shares when the price per share is higher. That reduces the chance that employees will make a substantial purchase when that investment is at its highest point. Another sound investment technique for employees to consider is matching their employer’s contribution to the 401(k) plan. As Lichtig writes, employers allow their workers to invest 15% of their salary in 401(k) plans. The employers will then match half of the first 5% of what their employees contribute. Employees could cost themselves money by selecting a contribution method that fully funds their 401(k) plans as early as possible. Lichtig provides a compelling example. He cites an employee with a salary of $330,000 a year who wants to contribute $16,500 to the employer’s 401(k) plan. If the employee contributes is at a 15% rate, the employee will have maxed out the $16,500 contribution in April. They would have invested $4,125 (or 15% of their monthly salary) from each paycheck from January through April. The employer will have made $2,750 in matching contributions. However, if the employee contributes 5% of their monthly salary (or $1,375) to the plan, they would have contributed the same $16,500. However, in this case, the employer would have added matching contributions totaling a much higher $8,250. Of course, this strategy works best for employees with higher salaries. Contribution Limits In 2025, workers can contribute $23,500 throughout the year in their 401(k) and 403(b) plans. The catch-up contribution limit for those 50 or older is $7,500. It is essential, too, for workers who directly deposit funds into their 401(k) plans from their paychecks to change their direct deposits to adjust to annual changes in the contribution limit. But, again, the key is for workers to ask their employer’s payroll department to remove the maximum contribution from each paycheck. Obviously, not every worker will be able to contribute the maximum each year, so you are far from being alone if you are unable to do so. However, what is essential is for workers to contribute enough to capture any 401(k) match offered by their companies.

    Reviewing Your Retirement Plan

    View Resource Reviewing Your Retirement Plan