Month: December 2016

11 Money Tips for Older Adults

 

Getting older isn’t all bad. If you’ve accumulated wealth over your working years, it can be the time to enjoy all of that hard work. But financial stresses often arise, including budgeting concerns, income limitations and even fraud. These tips will help older adults ensure their cash lasts as long as they do.

 

Getting older isn’t all bad. If you’ve accumulated wealth over your working years, it can be the time to enjoy all of that hard work. But financial stresses often arise, including budgeting concerns, income limitations and even fraud. These 11 money tips for older adults tips will help ensure their cash lasts as long as they do.

Budget carefully.

During retirement, income tends to be lower than it was in the prime earning years, and that means older adults need to look for ways to limit expenses to make their nest eggs last. One key is to track living expenses to make sure you don’t burn through savings too fast.

Don’t be too generous.

When grown children are struggling with their own financial lives, it can be tempting to open up your bank account to them. The problem with this approach is that it can stress your finances and lead to family tension. It’s important make protecting your money a priority, even while trying to help your children.

Plan with your partner.

Even if you’ve been married to your spouse for years, it’s possible that you have different visions of how to spend your retirement years.  Once you know about your spouses hopes and dream, you both can start planning for it.

Make sure your bank is on your side.

Some banks cater to older clients more than others, with perks such as using larger print in communication, meeting outside of the bank and speaking clearly without being condescending. Asking about your bank’s age-friendly policies before you need them can help ensure you don’t get frustrated with its policies later.

Put fraud safeguards in place.

Older adults are at a greater risk for financial fraud, but there are ways to reduce that risk. Family members can be alerted to large withdrawals from accounts. Debit cards can be programmed to only work in certain locations and names and numbers can be placed on “do not call” lists.

Prepare for cognitive decline.

When it comes to managing money, signs of cognitive decline tend to show up in one’s 60’s and 70’s. It can become harder to manage bills, calculate tips and make change. Sometimes adult children or others can help prevent bigger problems, like falling behind on bills, by noticing those red flags and stepping in to help.

Keep learning.

While cognitive decline is real, other research suggests that older adults with higher levels of financial literacy are more likely to have higher wealth levels. Understanding concepts of investment risk and the stock market is associated with the ability to build and preserve wealth.

If you’re active on social media or have an extensive digital library or music or books, you’ll want to consider how to pass on those digital assets when you die. You can include your wishes in your will, pick someone to share account information with and restrict your privacy settings now so you’re not oversharing personal details with strangers.

Get money help from your adult children.

Adult children can often play a useful role in helping their parents manage money as they age. It’s important to enlist the support of children before experiencing a crisis or cognitive decline, so they know the basics of where to find account information if they need to. Talking through plans and wishes, and even writing out an overview of how you want to manage money as you age, can also help.

Consider launching a business.

Starting a business in midlife or later can add to your income in retirement as well as bring a measure of professional and creative satisfaction even after you leave your day job.

Teach your grandchildren about money.

Grandparents can play a significant role in teaching grandchildren about the value of a dollar. A 2014 survey from TIAA-CREF found that many young people say they are open to talking about finances with their grandparents, but only a small percentage actually have those conversations. Still, most grandchildren say their grandparents do influence their financial habits.

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3 Habits Debt-Free Consumers Practice: Practicing good financial habits makes reducing debt simple

Do you often wonder how people become debt free? No need to wonder anymore. There are 3 Habits Debt-Free Consumers Practice Practicing good financial habits makes reducing debt simple

 

Many consumers attempt to become debt-free, but while setting such a goal is easy, attaining it is often difficult or impossible. Financial experts are often asked for tips on how to pay off debt. The answer many give is that it is not something achieved overnight. There are several different habits that consumers need to develop if they want to reduce or end their debt. By practicing these habits regularly, they will start to see a change in their amount of debt.

1. The main reason consumers are in debt is because they spend more than they earn. By creating a monthly budget and tracking their expenses, consumers can see where their money goes each month. Then they can cut back on unnecessary purchases until they are earning more than they spend.

2. Consumers need to review their credit card and bank statements every month, to identify things such as memberships or subscriptions that they no longer need.

3. Another tip is for consumers to approach saving as a long-term solution process. While debt can be built up in a day, it can also be built up with small, regular purchases. Those who eat out several times a week may not think they’re spending a lot of money, but when it is all added up, the result is often much more than they realized.

Practicing these good financial habits regularly can make reducing your debt simple.

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6 December Moves To Save On 2016 Taxes

Tax time is drawing nigh. Learn the 6 moves you can make in December to save on 2016 taxes

It’s Not Too Late to Take Money-Saving Steps

The holiday season is full of plans and activities that make December incredibly hectic. If you are the average American, tax considerations and financial adjustments are pretty low on your holiday to-do list. However, you are not the average American — you enjoy saving money, are diligent in seeking ways to save, and excellent at following through with your plans. Here are 6 potential money-saving moves to take before the calendar rolls over into 2017.

  • Make Maximum Retirement Contributions – If you can afford to do so, max out your contributions to tax-deferred savings plans. For the 2016 tax year, maximum annual Individual Retirement Account (IRA) contributions are $5,500 with an additional $1,000 allowed as a “catch-up” contribution for taxpayers who are at least fifty years old. 401(k) plan annual contribution limits are $18,000 with an extra $6,000 catch-up allowed if you are over fifty years old.
  • Don’t Forget Charitable Contributions – Make any charitable contributions before the end of the year to claim them on your 2016 tax bill — but make sure you retain your records and get appropriate receipts or notifications from the charity. Gifts of $250 or more require an acknowledgement from the receiving group.
  •  Adjust Withholding – If your chosen withholding level is not taking the right amount of your salary out of your paycheck to equal your taxes, adjust it as soon as possible. You cannot overcome eleven months of over- or under-withholding, but correct what you can.While it is enjoyable to get a big refund, it is not economically smart. Your annual withholding should equal or be slightly below your tax bill. Are you have extra money withheld in order to get a refund? If so, you are just giving the government the interest on your money when you could be collecting it instead. However, make sure you are withholding enough to avoid an underpayment penalty.
  • Accelerate/Delay Deductions and Income – Is your income likely to change next year? Assuming you itemize, you may want to adjust income or expenses as possible to make the greater level of deductions match the greater level of income. For example, if your income will drop next year, you can pay expenses such as your January mortgage and property taxes in December — any deductible expense that will increase your deductions for the year — and claim those deductions for 2016. If your income will increase, consider delaying charitable expenses or accelerating income (such as bonuses) ahead whenever possible.
  • Spend Down “Use or Lose” Accounts – Do you have an employer-sponsored Flexible Spending Account (FSA) to cover medical expenses, or some other account that has a “use it or lose it” approach? If so, make sure that you use those expenses wisely. Wait too long and you may not be able to get an appointment before the end of the year, forfeiting your benefits. Remember, others are probably trying to fit appointments in to use up their FSAs as well.
  • Review Your Portfolio – You may have some losing stocks in your portfolio and capital gains to claim. You can sell the losing stocks and use the net losses to neutralize some of the capital gains taxes. Just be aware that the “wash rule” keeps you from buying those stocks back or purchasing “substantially identical” ones within a 30-day period. Make sure the losing stocks are not ones that you will be interested in over the short term.

Most of these tips involve doing a quick trial run of your taxes to evaluate the proper path to take. Who wants to do a tax form in December? You do!  It will save you money on 2016 taxes and time in April 2017 when you file your actual return. If you like, think of it as an investment that will finance an extra present or two next year.

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What’s Your Plan?

 

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Benjamin Franklin is quoted as saying,

“If you fail to plan, you are planning to fail!”

While those words may seem harsh, in many ways there is a good bit of truth to this logic.  Personal financial planning — whether you engage a professional or manage your own money — is a tool that leads to more informed financial decision making and hopefully better financial outcomes.  Goals force us to determine our desired destination.  A plan provides us with a road map that will show us how to reach that destination.  With personal financial planning, those goals are primarily related to accumulating and distributing our wealth and our financial plan provides the details on the steps we will take to be financially successful. SMART goals have become the standard for goal setting in all areas and personal finance is no exception.

If the end result of good financial planning is the achievement of our financial goals, then perhaps the best place to start in our journey is to identify those goals.  In 1981, George T. Doran published a paper in Management Review titled “There’s a SMART Way to Write Management Goals and Objectives“.  In it, he introduced the SMART acronym that suggested that well written goals should be:

Specific;

Measurable;

Attainable;

Realistic; and

Timely

Smart goals

The best goals incorporate all of these elements to help us formulate a plan for achieving those goals. Think about the idea of a goal as a destination.  The more specific we can be about where we want to go, the more efficient a travel plan we can create.  The more we can measure or quantify our hopes and dreams, the easier it will be to know if we’ve attained them — or how much farther we have to go. Setting goals just for the sake of setting goals is truly a waste of time.  Why set Pluto as our destination if in our gut we know that reaching Pluto is not likely in our lifetime?  Similarly, just because technically we could reach Pluto in our lifetime, are we willing to put in the work that it would take to get there?  Lastly, don’t just think ‘pie-in-the-sky’ here.  Set target dates for these destinations as opposed to saying “someday I want to visit Pluto.”  Categorize your goals.  What do we want to achieve in the short term — within the next year?  What do we want to achieve in the medium term — after this year but within five years?  How about  in the long term more than five years from now?

This is the way we should be thinking about goals.  Let’s follow Dr. Doran’s advice and be SMART about writing our financial goals so that we can reach our financial destinations. For more information about SMART goals and a FREE printable worksheet click here

 

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Are You Making These Mistakes With Your Debt?

debt mistakes

Do you know why paying the minimum payments is a long term trap set up by credit card companies? If you’re in debt, do you know why you should follow the strategy of big banks to get out of debt? These are innocent mistakes made by consumers who are trying to get out of debt. But these mistakes are small potatoes to the most common mistake of all – Not knowing how credit card companies use YOU to create profits.

 Here’s the problem:

Competition for profits in the credit card industry is at an all-time high with new payment technologies coming out that are squeezing company’s profits. These companies must find new ways to push profits, even at the expense of the consumer. So few people even know about these strategies, it gives you an almost unfair edge.

Here’s what you should do:

1. Follow Big Business

If you’d like to get out of debt, the best way to learn is to see how big corporations handle debt. They learn how to make debt work for them and use it to profit. They clearly understand the loopholes that banks and credit card companies don’t want you to know.

2.  Avoid The Monthly Payment Trap

First realize that your monthly payment is calculated by the banks to MAXIMIZE their profits. Companies don’t have interest in you paying off your credit card debt because that hurts their profits. Realizing credit card issuers are companies looking to maximize profit at your expense is helpful to getting out of debt.

3.  If you get in too deep, get help

If you get to the spot where you’ve gone 6 months or more and the amount you owe on your credit cards is not decreasing, then seek the right kind of help. You still have a number of options to get out of debt using the money you already earn and without hurting your credit.

Remember, debt doesn’t have to rule your life, your marriage and your family. You can be debt free if you take action on the right information.

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Debt Keeping You Up At Night? My 3 Most Effective Steps To Pay Down Debt

Pay Down Debt
Pay Down Debt

 

I remember a time when I could hardly sleep at night,I was plagued with debt. I would lay awake thinking about all the debt I had looming over me, wishing that it was some magic debt elimination pill that I could take to erase all my debt. With five children, I kept sinking deeper and deeper into debt and there just didn’t seem any way out.

With a new year approaching, many of you may want to pay off debt. If my story sounds familiar, read on. Because I’m about to share 3 tips to help you pay down your debt and get a good night’s sleep.

The truth is, you have all the tools you need to change your financial picture today. I’m here to tell you that you CAN end the madness and put yourself on the road to safe and easy recovery with just a few simple steps. Just like any tough situation that seems impossible to change, it takes a bit of time. But, once you get on the right track, the road to a debt-free life is painless and incredibly freeing and rewarding. Let me show you an example, below you will find an actual MasterCard debt of mine from about 22 years ago:

Debt Balance MonthlyPayment Interest Rate Months toPay Off
MasterCard $972 $24 22.9 6 yr, 6 mo
  1. Pay off high-interest rate debts first

This is more than a rule of thumb in the debt relief business, but most people don’t understand it until they see it in print. Once you pay off your highest interest credit card debt, you will start seeing a complete change in your financial picture.

One way to do this is obvious – pay more than the minimum payment, right? For example, if you paid just another $24 per month on the MasterCard account, you can pay it off in just over 2 years – not 6 years! Plus, all the extra interest you would have paid to the bank goes into your pocket – not theirs! You might think, “easier said than done”.

  1. Review daily expenses

It actually is easier than you think. Have you ever taken the time to review all of your extraneous expenditures? For example, how much do you spend on expensive coffees, beauty treatments and shipping from online purchases? I’m guessing that it is a lot more than you think.

Reducing and eliminating your unnecessary expenses will, most definitely, add up and you will be able to fold the extra cash into higher monthly credit card payments. Just another $24 could be all you need! But you need to start with a reality check of your actual spending beforehand, especially incidentals. Are you ready?

  1. Negotiate interest rates

This is a tip that is rarely considered by those who are in debt. Did you know that some credit card companies are willing to reduce the interest rate for a set period of time if you speak with one of their customer service representatives? Believe it or not, you may have more power than you think, particularly if you mention a strong interest in transferring your balance to another financial institution.

Get started today!

Start with my top three steps and you will immediately see a difference in your financial outlook for the future.

  1. Pay off high-interest rate debts first
  2. Review daily expenses
  3. Negotiate interest rates

I have many more pertinent and effective steps you can take, but do yourself a favor and get started today. Then you can breathe a sigh of relief and know your life’s pendulum is going to swing toward positive change.

Have the debt free life you desire!

Tracie B.Threadford,

Your money make up artist

Contouring your pockets, lifting your bottom line and highlighting your future

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Protecting Your Identity during the Holiday Season

10 way;s to protect yourself from identity theft
Protect Your Identity

The holiday season is in full swing! This can be one of the busiest times of year as we juggle office and school holiday parties, gift purchasing, and family celebrations. This is also the biggest shopping season of the year, making holiday shopping hot-spots, including brick and mortar stores and online retailers, primary targets for identity thieves. Don’t take protecting your identity for granted now or anytime.

The Grinch is real and here are six simple steps that you can take to help protect yourself from him this holiday season (and year-round):

6 Steps you can take to protect your identity

  • Be aware of your surroundings while shopping.
    Is someone standing too close behind you in line? Are they taking pictures with their cell phone? These could be signs of “shoulder-surfers” who try to take a picture or write down your credit card information from behind. To limit the opportunity of shoulder-surfers only have your credit card out while your transaction is taking place and use your hand to cover important information such as your credit card number, pin number, and name.
  • Limit what you bring and/or carry with you.
    When you are shopping, it is important to have your hands free. Limit what you bring with you shopping so that you are not constantly sitting down with a purse or other items that could be forgotten or left behind. It is important to carry your driver’s license, but do not bring extra credit or identity cards with you. Your Social Security ID card should definitely be left at home in a safe place.
  • Protect your smart phone.
    Smart phones are designed to put information at our fingertips.  Many people use their smartphone for banking, online shopping, and to track personal information.  Be certain to have safeguards in place on your smartphone in case it is lost or stolen to prevent someone from instantly gaining access to all of your personal information. If your smart phone has an auto-lock, consider setting up a unique passcode. Automatic log-in on apps and the “remember-me” feature on websites can be very handy; however, they also allow a thief instant access to your personal information.
  • grinch-2images-1Shop with cash or credit.
    Shopping with cash is a great way to limit your holiday spending and stay within your budget. However, some individuals may find it more practical to shop with their credit or debit card. Use your credit card instead of your debit card. Your credit card will offer additional protections if it is lost or stolen as compared to your debit card.
  • Be mindful of your accounts.
    It is easy to overspend during the holiday season. Being mindful of your accounts and transactions will help you stay both within your budget and aware of any fraudulent activity. Double-check your transactions to make certain that they match your purchases. Often credit card thieves will only make small dollar amount purchases to make it less likely for you to notice the transactions on your bill.
  • Safety first, when online shopping.
    When shopping online, you are often entering a tremendous amount of personal information, including your name, phone number, address, etc., not to mention your credit card information. Always make certain that you are using a personal/home computer for online shopping. Public computers, like those at work or the public library, may store your information that someone could access later. Be certain the website you are using is secure. Once you enter into the shopping cart phase of a website, the web address should have an “s” after the http. The “s” indicates that your data will be transmitted securely. Also, be certain that you are on a legitimate retailer’s site. Knock-off websites do exist and at times it may be difficult to tell the difference from the real thing.

Safeguarding your identity is important year-round. The strategies to protect your identity are easy and quick to introduce into your shopping routine.

Tracie B. Threadford

The Money Make Up Artist

Contouring your pockets, lifting your bottom line and highlighting your future!

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Ten Terrific Tips to Take Charge of Holiday Spending

 

save money
Savings

Does this time of year stress you out financially? I know the holiday season can be a financially challenging time. In addition to the cost of gifts for friends and family, many people have extra expenses for travel, entertainment, food, decorations, tipping, charitable gifting, and utilities. The holidays don’t need to cause financial stress and they don’t have to. This year, while there is still time, take these 10 steps to reduce your stress and holiday spending:

Create a Holiday Spending Plan – Include gifts, of course, but also hidden costs of gifts such as wrapping and shipping. Also factor in other expenses noted above. A great online Holiday Spending Worksheet is available at http://www.bankrate.com/calculators/savings/holiday-spending-calculator.aspx.

Match Expenses to Income – Determine how many paydays you have left from early November through mid-January. Match holiday spending to your income, including any year-end bonuses, so expenses are paid with current income. For example, if you have $900 of holiday expenses and six paychecks, you’ll need to set aside $150 per paycheck

Play the Float – Always try to time charges on credit cards so bills can be paid in full when they arrive. For example, if your statement ending date is the 3rd of the month and you buy things on the 5th, you may have six or seven weeks before payment is due.

Use Credit Cards Wisely – Don’t charge more than you can repay.  Remember, a bargain isn’t a bargain when interest is added to a purchase! Check your account statements to make sure all charges are correct and avoid unnecessary expenses such as late, over-the-limit, and cash advance fees and penalty APRs.

Make a Gift List – List the names of people/families receiving gifts and determine a monetary value for each gift so the cost of all gifts stays within your overall holiday. Then stick to the list.  For a helpful worksheet, see http://www.vertex42.com/ExcelTemplates/christmas-gift-budget.html.

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Look for Bargains – Specific strategies include deeply discounted online deals with free shipping, online and print coupons, “door buster” sales at certain hours, and high-end thrift shops.

Set Realistic Expectations – If your budget is tight, have a conversation with family and friends about ways to cut back. For example, consider replacing individual gift-giving with drawing names and buy one nice gift rather than many gifts.

Make a Gift – Homemade gifts show thought, effort, and love.  Consider baked goods, fancy pillowcases, photos, artwork, and embroidered, personalized items.  Try gift certificates for car washes, pet-sitting, house-cleaning, or baking.

PowerPay Your Debt – If you run up an outstanding balance, use the free online Powerpay program to pay it off quickly. Powerpay (http://www.powerpay.org) generates a debt repayment calendar. As soon as you pay off a debt,  apply its monthly payment to another starting with the highest-interest rate first.

Save Now for 2017 – Open a “Holiday Club” or similar savings plan with a bank or credit union.  Make regular deposits throughout the year. Come Fall 2017, you’ll have the money you need without the stress of having to cut spending or use credit for purchases.

Take charge of your finances to get the most out of the upcoming holiday season without financial stress.

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5 Steps to a New Financial You in 2017

new_year

A new financial you is an achievable goal for 2017. Holiday shoppers have been careful each season to make their lists and check them twice. Budgets have become more discerning and savers have become better planners for their spending; prioritizing savings along the way. According to a September 2016 report, two out of five millennial shoppers got a head start this year and started buying gifts for the season before summer had even come to a close.

These successful financial habits don’t have to stop there. With the New Year comes an opportunity to make some improvements to your financial health. Don’t make just another resolution that disappears by Valentine’s Day. Take your financial wellness to a whole new level: a New Year, a new financial you.

These five steps will help you to establish your best financial path for 2017, and you can have all the heavy lifting done before the clock strikes twelve:

5 Steps

  1. Take stock of your finances. Analyze all of your income, expenses, and existing savings/investment accounts. And no matter how nice you were, don’t forget to include any naughty debts you may have incurred in the spirit of the season.
  2. Sketch out a budget “template” for the year to come. Think big picture. Plan your spending for 2017 and find the method for budgeting that you’re going to use in the new year, rough out what you’d like it to look like from month to month. Be pragmatic about your needs and be honest about where your money is going. Plan to make adjustments and really dig into your spending habits when you check back in on a regular basis.
  3. Check your credit report. It is your legal right to get a free copy of your credit report every 12 months from each of the three major credit reporting bureaus. Add a visit to AnnualCreditReport.com to the calendar as an annual “holiday” or divvy up the bureaus to get a free report from a different bureau every four months.
  4. Set up bank and credit alerts, and financial reminders. Whether you’re at your computer or on your mobile device, you are in an ideal position to receive notifications about upcoming payments, suspicious activities on an account, transactions over a certain dollar amount, low balances, and more. Find out what online services your financial institution(s) offer, and supplement what they don’t with an app or calendar reminder. It’s all right there at your fingertips.
  5. Make a Commitment to Yourself to Save. Those who make a commitment to themselves and their family to save usually save more than those who don’t. Think of this as your New Year’s FINANCIAL Resolution.

Join those savers who have successfully opted to reduce holiday spending. Make saving a priority throughout the season and make 2017 your best financial year yet.

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