Category: Blog

Did you ever wish they had taught courses in personal money management in school?  Oh, they probably touched on it in high school.  Maybe a little bit in college—that is, if it was a course as part of your major!

So, what we did was depend upon family, friends, and bankers and tax preparers to help direct our financial future.

While I am not a financial planner, I found these six common questions and answers that people ask when it comes to managing their money…

1. Should I hire a financial planner OR come up with my own financial plan?

Financial planners can help you organize your finances and come up with a long-term plan (like retirement, home improvement, college funds).  If you are money savvy, there are plenty of financial planning tools that you can use online—and most of them are free.

2. Should I hire an accountant OR should I do my own taxes?

If your taxes are pretty straightforward, you receive a W-2 form, regular deductions, it’s easier and cheaper to do them yourself.  However, if you are self-employed, receive commission or 1099 income, have rental properties or write off business expenses, then hire a professional.  Tax laws change from year to year, so if your taxes are a little more complicated, it’s better not to chance it – or worse, miss valuable deductions that you are entitled to just because you did not know about the changes in the tax code.

3. Should I use a credit card or a debit card?

Use a credit card to get “rewards” like travel miles or money toward goods and services.  However, be sure to try to pay a majority of the credit card off every month.  Use a debit card if you have trouble managing your finances or controlling your spending.

4. Should I write my own checks or schedule automatic bill paying?

If you have trouble paying bills on time, by all means schedule automatic bill paying through your checking or savings account.  Even if your bank charges you to do so, it will still save you a ton or money in late fees—not to mention the damage late payment does to your credit score.  Write checks for one-time expenses, like an emergency plumbing repair or school tuition.

5. Should I get a credit card with a low rate and no perks—or a higher rate with lots of perks and rewards?

You are better off getting a credit card with a low rate.  However, if you pay off the credit card every month and never miss a payment (oh, and want to go on trips), then go with the higher rate because by paying it off every month, the higher rate does not matter at all.

6. Should I contribute to my 401K or pay off my bills first?

If your company matches your 401K contribution, only put in as much money as the company will match (a company match is like free money).  If your company does not have a 401k matching program, pay off your credit cards, starting with the highest interest rate first, before contributing to your retirement fund.

Have you ever walked into a home (either a brand new one or one that’s been around for 25 years or more) and said to yourself, “I wonder what the builder was thinking when they built this house?”
Maybe you are thinking of finally building your dream home. Or considering downsizing the one you currently own. Or need to remodel the one you currently live in.
Here are 8 things to keep in mind:
Have a vision of what you want your home to look like. The floor plan is just the first step in the process. There a hundreds of thousands of decisions you will need to make. Take just the bathroom – what color tile? What pattern? Will the cabinets match? Faucets? Countertops? The floor? And that’s just one bathroom!
Find the right people – By people, I mean an architect, a builder, sub-contractors, suppliers. Are they licensed and bonded? More importantly, can you get along with them? Do they offer suggestions? Are they difficult to deal with?
Visit the construction site often – Be sure that the home/remodeling is being built to your expectations. Ask questions. Make suggestions. Visiting your home every other day is recommended.
Building too big of a home – Don’t think about what size you need right now—but what you will need 7 to 10 years from now. A well-designed 3,000 sq. ft. home may work just as well as an ill-designed 5,000 sq. ft. home.
Work that you can do to reduce costs – Ask the builder what sweat equity he/she will allow you to do to help reduce costs. Painting the walls or staining the trim. Maybe you have a friend who is a licensed electrician who would charge you less.
Think about the upgrades – When a builder provides you with a price to build your home/remodeling, it’s usually based on “medium grade” materials. Take kitchen cabinets for example. What type, color and grade are included? Or should you pay $8,000 extra for solid maple cabinets instead? It depends on your budget and if you can find something that you like in the medium grade so you can use the money for something else. Other than you loving maple wood, there is very little resale value in upgraded cabinets when it comes time to sell. Consider only adding your MUST HAVE upgrades.
Think about selling your home in the future – Even if you never plan to sell your home, your descendants may have to do so. Build your home so it’s not a nightmare to sell.
Think about monthly mortgage payments – When you have been pre-approved for your mortgage amount there are a few things to consider.
What will the interest rate be when the home is completed?
How much will extra upgrades add to the monthly payment?
How much money will you need after the closing (window coverings, furniture, landscaping)?

It seems like “there’s always something” that needs fixing.  Child expenses. Doctor bills. And it seems like it’s harder and harder to save money.

For emergencies.  For vacation. For retirement.

However, I just read a science-based study with tricks on how to kick your savings goals up a notch, so I wanted to share some of the ideas that others have used to get your brain into the “savings mindset”.

Nickname your savings account.  Naming your account helps you establish an emotional connection to your savings goal.  Your emergency savings could be called “Crap Happens”, or your vacation fund, “Let’s Have Some Fun”.

Switch Spending Habits. Let’s say that you spend money on pizza delivery every week (which costs extra with the tip).  Consider instead picking up the pizza, and as a reward, deposit the $5 tip into savings.

Visualize Your Goal. Create a vision board or tape a picture of what you are saving for to the back of your credit card to remind yourself of your goal.  Another way to visualize is to create a thermometer (like United Way) and color it in as your savings increase.

Phone a Friend.  Partner with somebody who has a similar savings goal as yours and share ideas on how each of you have saved money.

Put Your Savings on Auto-Pilot. Most employers use direct-deposit to pay your salary or wages.  Ask that part of the money be put into savings instead of it all going into a checking account.  If you are self-employed, designate a dollar amount to go into savings each month BEFORE you pay yourself. This is the best option of all.

Saving for Retirement. Take advantage of your company’s retirement program.  Even if you change jobs, the money can be transferred to another retirement fund.

What have you done when you wanted to save money for a special event

In September of 2017, Equifax announced a data breach that exposed the personal information of 147 million people. The company has agreed to a global settlement with the Federal Trade Commission, the Consumer Financial Protection Bureau, and 50 U.S. states and territories. The settlement includes up to $425 million to help people affected by the data breach.
Here’s what you need to do to determine whether your credit data has been compromised and the options that you have if your social security number appears as one of the 147 million credit records.
Use this link to the FTC and enter in the last 6 digits of your social security number. (WARNING: there are other websites out there that are asking for your information. Don’t use them—use this one – https://www.ftc.gov/enforcement/cases-proceedings/refunds/equifax-data-breach-settlement )
The website will tell you whether you are eligible to file a claim.
There are 4 claim options:
Cash or Pre-paid credit card of $125
Or, Free credit monitoring for 4 years and $1 million dollars of identity theft insurance
Or, free credit monitoring for 6 years (no insurance)
Or, You incurred loss of money and time due to identity theft. If you claim less than 10 hours, you must describe the actions that you took to fix the issues. If you claim 10 hours or more, you must provide documentation. Maximum claim is $20,000.
Your claim must be filed by January 22, 2020.
Claims will be reviewed starting January 23, 2020 but no date has been set when the money will be sent or the credit monitoring option will begin.
One more thing…It used to be that you could ask for one free credit report per year. Now as part of the settlement, consumers can get up to 6 credit reports per year from Equifax for up to 7 years.