Mothers are credited with teaching many of life's most important lessons, but what about the lessons that we can teach our moms? Sixty-five percent of people say their mother is intimidated by money, considers money-management a necessary evil or has never managed money, according to an online poll by the nonprofit National Foundation for Credit Counseling. Here are a few steps to help your mom along the path to financial empowerment.
- Get organized. The easiest way to begin is to have her organize the family financial papers. It may sound simple, but can be daunting to tackle in one afternoon. Instead, spread this first step out over several weeks. The most important part of the exercise is to read the papers before filing them and ask questions of the family's financial team (spouse, CPA, lawyer, etc.).
- Meet with each member of the financial team, in person, and ask for a "review." Have your mom sit down with her CPA and review her tax return, re-read the will and trusts with her lawyer to make sure she understands the documents she signed, and set aside time to understand the investment portfolio and how it is managed with her goals in mind.
- Buy a scanner and keep an electronic version of every important document. A simple scanner can help your mom get and stay organized. All electronic versions should be kept on a password-protected computer.
- Educate her. Encourage your mom to take a class on investing or start reading more about financial topics that are relevant to her—consider doing this with her as added encouragement, and to help your own financial understanding, too! Check out your local state CPA society for free classes and events. At a minimum, she should read what comes in the mail and ask any questions if she doesn't understand what she's reading.
Aaaah...summer, beach days and barbecues, rest and relaxation, right? Many American adults also equate summer with financial anxiety, according to a 2014 survey conducted for the AICPA by Harris Poll. According to the survey:
- 59% of U.S. adults said their financial tension during the summer matches or exceeds the stress they feel during the year-end holiday season;
- 55% said they didn't have a vacation on the calendar;
- And for those Americans with summer vacation plans, 41% expect to pay an average of $3,000 for transportation, lodging, meals, activities, entertainment and pet care.
The costs of summer are stressful for everyone, but the following tips can help you get started saving for or reducing your upcoming expenses.
- Create your summer budget now. Get out your calendar and make a list of planned activities and related costs, registration fees, amusement park entry fees, pool memberships, etc. Knowing how much you need now will give you a goal and keep up motivation to keep saving.
- Be a Weekday Warrior! Avoid the weekend rush when you can. Plan midweek adventures, since everything from amusement parks to golf outings are usually less crowded and cheaper mid-week. Very often hotels and rental cars are discounted during weekdays.
- Hunt for Discount Coupons. Never pay full price for water and theme parks or other entertainment. Look for deals in the form of discount coupons at supermarkets, convenience stores and even hotel brochure racks. The savings can be 25% or more.
- Look for Freebies. When choosing accommodations for your vacation, consider the following to reduce costs: Does the hotel offer complimentary transportation to the airport, restaurants or local attractions? Does the rate include breakfast? Having a meal included can save you a bundle, especially on longer trips or family vacations.
- Cleanout and Sell. Sell unwanted items on eBay or Craigslist or have a garage sale. This helps fund the vacation and gets rid of clutter at the same time. A double bonus!
National Safety Month, June, begins this Sunday and the National Safety Council is encouraging everyone to help bring attention to key safety issues. Safety isn't just good for your health; it's also good for your wallet. As we head into the summer months, here are a few safety tips to keep in mind.
- Slather on the SPF. The NSC recommends wearing a sunscreen with an SPF of at least 15 on all skin that is exposed to the sun. Even on cold or cloudy days the sun's rays can still cause significant damage to your skin. Did you know that a 30-day cancer drug prescription can cost more than $10,000, according to the Food and Drug Administration? That doesn't even include doctor visits or other treatment. For less than $10 per bottle, sunscreen can help keep your skin safe all summer long.
- H2O to go. Being out in the sun not only takes a toll on your skin, but on your body's hydration too. Bring a reusable water bottle with you when you're headed out for some fun in the sun, and try to take water breaks at least three times per hour. Heat-related illnesses can cost you big bucks at the doctor, and keep you out of the sun, and fun, for weeks.
- Share space. Carpooling is a great way to save money during the summer, especially if you have kids involved in summer camps or activities. Added passengers make it all the more important to exercise safe driving. Motor vehicle crashes, especially those involving motorcycles, increase greatly during the summer months. Make sure to leave a greater following distance behind a motorcycle, and always give motorcycles the full width of the lane; never try to share a lane. An accident can cost you more than just hospital bills and increased insurance costs, serious crashes can be fatal.
Most couples will likely agree that money is a major factor in a relationship, especially when it comes to the wedding. Instead of focusing on spending money, why not have an honest conversation with your loved one about money. Here are a few tips to help get you and your partner on the right financial track today.
- Bare all. When it comes down to it, marriage really is a merger. Two businesses wouldn't merge without taking a close look at the books, and neither should couples. Both people should offer full financial disclosure as part of a joint financial planning process. And the disclosure shouldn't end there. Each partner should agree to routinely review credit card accounts, bank statements and credit reports to ensure all information stays out in the open.
- Analyze your 'Money DNA.' Your Money DNA is your individual outlook on money and finances. Some people are super savers. Others are chronic consumers. And when opposing Money DNA collides, things can get messy. The trick is understanding and acknowledging you and your partner's individual Money DNAs, setting goals and mapping a strategy that can satisfy both points of view. Mackey McNeill, CPA and former National Financial Literacy Commission member, offers advice in a short video.
- Set a date. At least once a month, set aside an hour to meet about your family finances. This ensures an ongoing, open dialogue about money at a time when both people can free themselves from outside distractions. If an hour of finances sounds like as much fun as a trip to the dentist, pair it with a monthly date night, that way you can reward yourself for being financially responsible with a relaxing evening alone with your loved one.
- Divide and conquer. It's typical in a relationship for one person to take on the role of chief financial officer, managing accounts and paying bills. But this arrangement can lead to unnecessary stress, tension and, at times, confusion. Split the duties. One person can act as bill payer, the other as money tracker. This removes the burden from one person and provides a check-and-balance system.
Check out more resources on managing your finances as a couple.
When it comes to life firsts, dads are often there with a tip or two to get you started, especially when it comes to good money lessons, like how to stick to a budget, save for a rainy day or select investments for our retirement portfolio. Dads also tend to know some of the best budget-friendly pastimes. This summer, take a lesson from Dad and try one of the following outdoor activities.
- Take a hike. You don't have to travel to the Rocky Mountains to enjoy a scenic and energizing walk in the woods—even big cities have nature preserves within an hour's drive of the urban core that are free for the public's use. Remember Dad's advice about safety (take a map and water, watch for poison ivy, etc.) and enjoy Mother Nature up close and personal.
- Sow a row. Our dads might not all be farming the land like older generations, but many of them still like to garden and enjoy the tasty fruits of their labor. Try planting your own garden and enjoy the added flavor that fresh-from-the-garden food brings to your plate, while saving money on produce at the same time.
- Pitch a tent. Camping can be an inexpensive lodging option on summer vacation, or it can be the entire purpose of the trip. These days, you can go as rustic or as modern as you want, with many state park campgrounds offering showers and even Internet wi-fi. Just make sure you don't go crazy purchasing unnecessary camping equipment, which can negate any savings.
- Cast a line. Even if your dad only taught you how to bait your hook but never got around to showing you how to net the big fish or fillet your catch, fishing can be a relaxing activity that calms the mind, allows you to enjoy the Great Outdoors and costs close to nothing. Just be sure you have any required licenses so you don't find yourself socked with a fine.
At this point in the summer, you've probably already made your plans for the things that are most important to you, like taking a vacation, joining a sports league or attending a big music festival, which means you've already bought the tickets and have them on your calendar. Where you can get into trouble with over-spending is on those last-minute activities that pop up and seem too good to pass up. Before you say yes and book your ticket to the next special event, ask yourself the following questions:
- Is the cost of the event worth the price of admission? We often don't think twice about shelling out money for an event ticket that includes food and drink, figuring that the added element of a theme or entertainment is worth it. But are you signing up for the event just for the food? Can you have a similar experience at half the price by simply going to a restaurant? Or are you going to just spend time with friends? Can you set up a social gathering that doesn't include a cost of admission? Make sure you're getting value for your money before paying event admission fees.
- Is this a one-time opportunity? It's hard to pass up the chance to participate in a fun summer event, even when your summer budget is feeling tapped out. But before you stretch it further, consider whether you may have the chance to attend the same event next year, or even a similar one at a later date when it might be less of a strain. Most bands tour every couple years, so don't feel like this is your only chance to see your favorite artist live. If you can't afford it now, wait until the next tour!
- How does the rest of your week or month look? We often get so caught up in the excitement of planning ahead that we fail to realize that we're scheduling night after night of fun with no time to rest or catch up on laundry. Before agreeing to yet another street festival with your friends, consider whether you'll even be in the mood to go out if you already have other fun events on the horizon. It's ok to say no and spend an evening at home catching up on life if your calendar is already looking full.
Don't let a summer of fun leave you with a mountain of debt to deal with long after the leaves have turned. Enjoy each minute of it without ruining your budget by evaluating each activity's impact on your spending as well as its value in your day-to-day life. It's not worth the stress of credit card debt or stalled savings goals if it's not something you really want to do.
The sun is still shining and the beach is still calling, but it's hard to ignore the calendar telling us that it's time to start thinking about back-to-school. At least in terms of what it's going to cost you. A recent National Retail Federation survey revealed that families with kids in school expect to spend an average of $635 on back-to-school supplies, clothing and electronics. And even though 8 out of 10 shoppers say they'll adjust their spending due to the economy, that all adds up to a national total of almost $27 billion! Try these tips to keep back-to-school from becoming back-to-broke.
- Plan ahead. 24% of shoppers surveyed said they will start shopping at least two months before school. This allows you to spread the cost over more time, and gives you time to shop the sales. If the first shopping trip doesn't yield the perfect sneakers, you have a few weeks to keep looking, and might even find things going on sale as the school year starts. And if you find what you need but the price is too high for your budget, you'll have time to do some online research to see if you can find the item for less somewhere else.
- Prioritize. Your kids will no doubt have ideas of what they want for their back-to-school items, from the coolest denim to the latest tablet or smart phone that everyone "has to have." Before you give in to the extra cost that the popular items and labels add, ask your children to prioritize what they absolutely MUST HAVE and what they would be willing to have in an off-brand or skip altogether. By engaging them in this decision, you'll be teaching them a valuable money lesson about trade-offs while saving yourself money in the process.
- Set limits. Before you head into the clothing section and start selecting items for your kids, set a spending limit and share it with your kids. Once you're in the store and see how darling your kids look in the new duds, it will be harder to say no to items that exceed your budget. Having a clear idea of what you can afford to spend before you decide what you'll spend it on will help you avoid buyer's remorse.
- Get thrifty. Don't overlook the merchandise that can be found—or the opportunity to recover some of your money spent on outgrown items—at consignment shops and thrift stores. You can often find great wardrobe basics, and can sell your own gently-used items to help defray some of the costs. Most consignment shops will give you fifty percent of the sales price of your goods. There are also new smart phone apps that allow you to quickly and easily list your items for sale online.
There's no way to avoid some of the back-to-school costs, but with a little planning and budgeting you can keep both your kids and your budget happy.
The phrase "dog days of summer" doesn't only conjure up thoughts of warm, sultry summer weather, it can also trigger the desire to bring home a furry companion. But before you start thinking of cute names for a new four-legged friend, take a minute to consider the financial impact of adding a new member to the family. The cost of a pet—particularly a dog or cat—extend well beyond the initial purchase or adoption fees. Here are a few things to consider:
- Immediate costs. Leash, food bowls, litter box, crate, bed, food … these items add up quickly. And don't forget the first round of shots and vaccinations, plus the cost of spaying or neutering. You may also have to invest in puppy school to properly train Fido. Make sure you have enough money on hand to cover these costs from the start.
- Ongoing costs. Food, litter, waste disposal bags, daily dog walker, and grooming are just a few recurring expenses for which you should be prepared to cover as well. You'll also need to make annual visits to the veterinarian for health checks and shots. Don't forget, if you go on vacation, you may have to pay someone to care for your pet while you're away. Factor these costs into your monthly budget to make sure you can afford to properly maintain your pet.
- Unexpected costs. You can never anticipate what might happen to your pet, but you should be prepared financially to deal with an emergency. Find out what the average cost of surgery, special exams and medication and make sure you set aside enough to cover at least one unplanned vet visit per year.
- Insurance. It is possible to purchase insurance for your pet's health, which may be advisable for certain breeds. If you go this route, make sure you purchase a policy that covers all the unexpected health issues that could arise. Otherwise, instead of buying the insurance, you could set that money aside into an emergency pet fund and, if you don't need it, you'll have some extra savings!
Before you make a trip to the local shelter, make sure you do the math. Research the costs of everyday care as well as the one-time and annual costs of keeping your pet healthy and happy.
Labor Day was officially established as a national holiday 120 years ago as a tribute to the contribution American workers make toward the strength, prosperity and well-being of our country. As you celebrate the holiday, take some time to make sure you're taking full advantage of workplace savings options so you can afford to retire when you're ready. Here are a few of the more common options offered by employers.
- FSA/HSA: A FSA ( flexible spending account) or HSA ( health savings account) is an account tied to your health benefits that allows you to withhold money from your paycheck pre-tax in order to pay for healthcare costs. This includes things like doctor visit co-pays and prescriptions, in addition to items that aren't covered by your insurance, like contact solution, eyeglasses and other health-related costs. There are some key differences between the two types of accounts, including when the funds must be used by, so make sure you understand the details of the accounts offered by your employer before you make your selection. Both are great options to help you get, and stay, in the habit of building up an emergency fund.
- TSA: Similar to FSA's and HAS's, TSA's (transportation savings accounts) do the same thing for transportation expenses, like train fare or parking. Like FSA and HSA accounts, TSA's also act as "filters" that essentially "strip" the taxes from the money you spend on these items. For example, if your effective income tax rate is 25%, then you're saving twenty-five cents for every dollar you spend on these costs.
- 401k/403b/SIMPLE: 401k, 403b and SIMPLE accounts are different types of employer-sponsored retirement savings accounts that allow you to save a percentage of your salary for retirement and let it grow tax-free until you either begin withdrawing upon retirement or at age 70 ½. Many employers will also match a portion of the money that employees contribute to the account, which is additional compensation that you can't afford NOT to take advantage of. Even if your employer doesn't match your funds, you should be taking advantage of the ability to save pre-tax dollars—employer-sponsored retirement plans have higher contribution limits than individual retirement accounts and they make it easy by withdrawing the money from your paycheck before you even see it.
- ESOPs: If you work for a public company that is traded on a national stock exchange, your employer may offer an Employee Stock Ownership Plan (ESOP). These plans typically allow employees to buy a fixed dollar amount of company stock at a discount and free of brokerage fees through automatic paycheck withdrawals. Even contributing just ten dollars per paycheck can add up to a nice stock portfolio. You usually can't sell the stock you purchase while you're still participating in the plan, but if you discontinue participation or you leave the company, the stock will be yours, free and clear. Each company's plan is different, but if your employer offers one, you should consider participating.
Talk to your employer's HR team or a financial professional, like a CPA, if you have any questions or uncertainties about your current savings options. Have a safe and happy Labor Day!
May 18th, is National Visit Your Relatives Day! Even if you can't get together with family, you likely have some type of reunion or get together on the calendar during the upcoming summer months. Weddings, graduations, summer BBQs, etc. are all great opportunities to gather with family and friends, but it can be easy to forget the cost of these fun events when budgeting for the summer. Take some time today, or this week, to estimate your costs. Here are a few items to keep in mind:
- Be creative with your travel. Driving often seems like it might be the cheapest, but if you have to stay in a hotel and eat restaurant meals along the way, it may actually be less expensive to fly or take a train. Reconsider if you'll need a rental car for your entire visit and explore other means of transportation at your destination – public transit, bike sharing and even local shuttles can help you get from place to place in many cities.
- Be a Weekday Warrior. If your travel dates are flexible, avoid the weekend rush when you can. Plan midweek adventures, since everything from amusement parks to golf outings are usually less crowded and less expensive mid-week. Very often hotels and rental cars are also discounted during weekdays.
- Be FREE. When choosing accommodations for your vacation, consider the following to reduce costs: Does the hotel offer complimentary transportation to the airport, restaurants or local attractions? Does the rate include breakfast? Having a meal included can save you a bundle, especially on longer trips.
No matter what your summer plans, estimating the costs today can help you avoid unnecessary credit card debt down the road. And if a trip to visit family just isn't in the cards, remember that sometimes a phone call can mean just as much.
The cost for attending a wedding can be expensive, especially if you're a part of the wedding party. And as more couples are opting for destination weddings, the cost of travel can turn a positive RSVP into the price of a luxury vacation. Planning ahead and budgeting is essential when you learn you'll be traveling for upcoming nuptials. While you can't do much to change the price of airfare—besides using comparison tools and watching the trends—here are a few tips to possibly reduce the cost of lodging:
- Think outside the block. Most couples will set up a block of rooms for guests at a hotel at a special rate, but don't assume that the rate is the best available. Do your own research with the hotel (the wedding rate isn't always the lowest available rate) and also take a look at other nearby hotels.
- Bunk up. Sharing a hotel room with other wedding guests is a great way to cut your cost in half. It's likely only for a night or two and you won't be in the room much anyway.
- Stay with Aunt Sally. Consider asking if there are any in-town guests who may be willing to host you at their home. Just don't forget a small thank you gift.
- Visit (somebody else's) home sweet home. Sharing services are everywhere, from cars to clothes to homes. So, don't forget about sites like Airbnb and HomeAway when considering accommodation options.
Extra tip: When it comes to gifts for destination weddings, it's quite acceptable to make your presence the present. Just don't forget a nice card to congratulate the happy couple.
While you may not be able to secondhand shop for all the items on your or your kids shopping list—like those "must-have" trends—it is possible to save money on some necessary items. Plus, secondhand shopping is healthy for your wallet, and the environment. Here are three things you can probably thrift without sacrificing your "cool factor:"
- Outerwear: Most kids end up shoving their coats into lockers for the duration of their school day, which makes them a good item to purchase gently used. Fall and winter coats can be especially pricey at department stores, so this is one big expense you can minimize by thrifting.
- Underthings: Look for unopened packages of socks and underwear and buy them for a fraction of the price you would have paid at a full-price retailer.
- Sporting gear: The cost of equipment can limit families' ability for their kids to play sports. Don't just check the local secondhand sporting goods shop for the stuff you need, also shop the back aisles of more general thrift shops as well as garage sales and online marketplaces.
Bonus: Many classroom supplies can be found at thrift stores or dollar stores as well. With a little patience, you can save a bundle on back-to-school and be financially prepared for other family goals, such as planning a winter vacation or saving for college.
As we round the corner in the final weeks of the year, there are a few financial planning moves you may need to make before the clock strikes midnight on New Year's Eve. Check this list twice before time runs out:
- Max out your 401(k): This year you can put away up to $18,000 ($24,000 for age 50 or older). A year-end bonus can be a great place to find the extra money to boost your retirement account. IRAs allow deposits up until your tax return is due, but 401(k) contributions must be made by year-end to count.
- Use your FSA money: If you put money into a Flexible Spending Account, you have until the end of the year to spend it or you may lose it. Most accounts let you apply for reimbursement into the new year, but the money needs to be spent this year.
- Drop off your donations: Make sure you itemize any items you donate to thrift stores, then obtain a receipt for the maximum tax deduction.
- Pre-pay deductible expenses: If you pay state estimated taxes and/or tuition for school, which is typically not due until January, you may want to make those payments before year-end so you can deduct them a whole year earlier. As long as the payment is postmarked or made online by December 31, it counts as this year.
- Decide how you'll prepare your taxes: If you're planning to hire a professional, consider interviewing and selecting the best person before year-end. This will give you enough time to get your information together for a timely filing and will also ensure you are able to hire the CPA or tax preparer you want, before they get too busy with tax season.
Most of these steps only take a few minutes to complete, but can make a big difference to your financial picture. Check that list today!
With Americans adding, on average, more than $1,000 to their credit card debt over the holidays, chances are you may be suffering a bit of a debt hangover too. Before you start accruing interest, make a plan to pay off the debt ASAP.
Here are some tips and tricks to help with that:
- Make sure you're paying the most on your highest interest rate card.
- If the minimum payment is all you can afford right now, try rounding it up by $5 then make that amount your fixed payment even as the required minimum drops.
- Use the Accelerated Debt Payoff calculator to see how much interest you can save.
- Put your cards away until they are paid off to avoid a cycle of debt.
- File your taxes as soon as you can later this month and use any refund to make a dent in your debt.
Are there other financial goals on your list for the New Year? Make a plan today!
The high temperatures seem to indicate otherwise, but summer hasn't officially started yet! Wednesday is the Summer Solstice, and this time of year we recommend that you DO sweat the small stuff (or else your summer bills might leave you shivering!).
When it comes to saving, a little goes a long way. According to the U.S. Department of Energy, you can save as much as 10% a year on cooling by turning your thermostat back 7 to 10 degrees from its normal setting for 8 hours per day! If that sounds uncomfortable, don't sweat it - check out these DIY hacks to help keep you cool this summer.
Independence Day is all about celebrating our freedom to choose - our career, speech, religion, life partner and even how to spend or save money. Are you making the best choices for your own financial independence? Here are some steps to take toward declaring your financial freedom this Independence Day:
- Declare your independence from monthly interest by making a plan to pay off your high-interest rate debt.
- Free yourself from financial stress by establishing your emergency fund.
- Prepare for your ultimate financial freedom day - retirement - by saving in an IRA or 401(k).
If you're an online shopper, chances are your email inbox is being flooded with semi-annual sale reminders - your favorite brands are practically giving stuff away! One way to save money is to simply unsubscribe. But let's be real, sometimes you could use those deals. Here's how to make the most of them:
- Get a jump-start on holiday shopping: Sounds crazy, but Christmas is exactly five months away, so why not feed your urge to splurge by checking a few gifts off your holiday list? Just remember to make a note of your purchases to avoid accidentally buying multiples, and write down where you stow the gifts so you're not searching for hidden treasures in December...
- Be mindful of the season: Most merchants will be clearing out summer items to make room for Fall. While there's plenty of summer still left, try to be realistic about what you need to get through the rest of the season. Would you have purchased those sale items in your cybercart at the beginning of the summer for full price? If not, double check you're not just buying for the bargain instead of buying something you really need. Another good "gut check" is to ask yourself if it's something you know you'll need, and will last until, next summer.
- Set aside funds: One of the ways that credit card debt can creep in is when we go on an online shopping spree, then forget to set the funds aside to pay off our credit cards the next month. While it's a good idea to use credit instead of debit when shopping online to protect from hackers, make a note or move any money that you do charge into your savings so you won't be surprised when your bills are due.