Word of the Month: Debit Card

Teacher and student

Brandon was super-excited. His mom was taking him to Chuck E. Cheese’s today!

“Am I going to get a lot of tokens?” he asked his mom as they drove together. “I need a whole bunch so I can get a ton of tickets and win the best prize!”

Mom just smiled. “You’ll have enough,” she said.

They pulled up in front of Chuck E. Cheese’s and made their way inside. While Brandon’s mom got busy in front of the token machine, Brandon checked out a few of the games and tried to find the best ones to start with.

“Brandon,” mom called. She had finished paying and was holding out a card.

Brandon took it from her, puzzled. “What’s this?” he asked. “Don’t I need tokens to play?”

“Nope—you use this card,” mom explained. “You just scan it in front of the game you want, and it lets you play.”

Mom showed Brandon how to use the card, and he was soon off trying to win the most tickets he possibly could.

Brandon had a great time playing arcade games—until his card stopped working.

“Hey, mom!” he called, running towards where she sat, working on her laptop. “My card’s broken! I need a new one!”

Brandon’s mom quickly snapped her laptop closed. “There’s nothing wrong with your card, Brandon,” she said.

“So why isn’t it working?” he asked.

“Because you used up all the money I put on it!”

“What do you mean?” Brandon was confused.

Mom stood up and motioned for Brandon to follow her. She walked toward the machine she’d used earlier and started punching in numbers.

“I need to put money into the card in order for it to work,” she said. “It’s like a debit card.”

“A what?”

Mom reached into her purse and pulled out a plastic card. “This is a debit card,” she said. “I have a checking account at the credit union. I put money into that account, and when I use this card, money comes out of my account. Do you understand?”

Brandon nodded slowly.

“And that’s sort of how this machine works, too,” mom continued. “In order for you to use the card, I need to put money onto it.”

“And when I finish that money,” Brandon said, “I can’t use the card anymore, right?”

Mom smiled. “Exactly. Then we need to put more money into the ‘account.’”

Mom stuck her debit card into the card machine and punched a few numbers again. Then she took Brandon’s playing card and put it into the machine, too. A minute later, the machine beeped and both cards came sliding out.

“Here you go, Brandon,” mom said. “Your debit card is ready to use!”

Talking Points:

  • How is the card at Chuck E. Cheese’s like a regular debit card? How is it different?
  • Why do people use cards instead of cash (or tokens)?
  • Do you think people spend more or less money when they use a debit card instead of cash? Explain your answer.

Steps 1 thru 12 to Living a Debt Free Life

working on her accounts

Step One: Take Stock of Your Debt

You’re determined that this will be the year you finally pay down (or pay off) that debt. Get ready, because every month, our Do It Today plan will have you taking another step on your journey toward living a debt-free life. 

First, sit down and take stock of all your debts. Don’t let the numbers scare you; you need to do this to move forward. Get out every single credit card bill, personal loan, student loan, and any other debt you’re carrying (except your car and mortgage payments). Tally up the numbers to give yourself an idea of what you’re dealing with. 

Next, organize your debt into different categories, such as credit card debt, student debt, personal loans etc. Use a spreadsheet to list your debt, the remaining term of each loan (if applicable), the minimum payment and the interest rate.   

Finally, designate one hour each week for working on your finances. 

Step Two: Don’t dig yourself deeper

When you’ve dug yourself deep into a pit, the only way to get out is to stop digging. This month, focus on not racking up more debt. Stop using your credit cards. Skip your weekly trips that usually have you buying too many non-essentials.

Instead, start brown-bagging your work lunch and brewing your own coffee. Get into the habit of spending only on essentials so you can make real progress toward paying down that debt.

Don’t forget to make the minimum payments on every line of credit and loan you have open. Neglecting your debt will only pull you deeper into the pit.

Step Three: Negotiate a lower APR

If the majority of your outstanding debit is credit card debt, you may be spending hundreds of dollars just on interest alone. Aside from wasting money, this keeps you from moving forward and paying down your debt.

Most people don’t know you can call up a credit card company and negotiate for a lower APR. Take the time this month to do that. Explain that you are working on paying down your debt and that the interest payments are impeding your progress. You can even research competing cards and cite their interest rates in a bid for a lower APR from your current credit card company.

Lowering your interest rates will allow you to make another real step toward getting rid of debt.

Step Four: Create an emergency fund

You may be feeling impatient to start more aggressively paying down debt, but it’s important important to first create an emergency fund. If you don’t have money socked away for unexpected expenses, you’ll be tempted to use the money that’s already earmarked for your debt payments to fund this expense.

Experts recommend keeping three months’ worth of living expenses in an emergency fund, but you can start with a modest $1,000. Set up an automatic monthly or weekly transfer from your [credit union] Checking Account to your Savings Account until you have a fully padded emergency fund. This may take several months, but no worries, you can continue following the next few steps towards a debt-free life as your emergency fund grows.

Step Five: Create a budget

This month, you’re going to organize your finances. Hold onto every receipt, bill, paystub and invoice you produce throughout the month. Sometime during the last week of May, sit down with all of your paperwork and start crunching the numbers.

When you’re through, you should have all of these questions answered:

  • How much is my net monthly income?
  • How much are my monthly fixed expenses?
  • How much are my monthly non-fixed expenses?

Now that you have the numbers in front of you, work on creating a budget. Designate the necessary funds for your fixed expenses. Then, with the remaining money, determine how much you will spend in each non-fixed expense category; like groceries, clothing, entertainment, etc.

Put your minimum debt payments in the fixed-expenses category, with another category for extra debt payments in your column of non-fixed expenses.

Step Six to be continued in June ……………………………

 

 

5 Ways To Spring Clean Your Finances

5-Ways-to-Spring-Clean-Your-Finances-studying your PC

Q: Spring is here! I’ve cleaned out my house and now I’m ready to take on my finances. I’d love to give them a thorough cleaning, too. Where do I start? 

A: It’s wonderful that you’ve decided to clean up your finances. Springtime is months after the holiday squeeze and still a while away from the pricey summer season, making it a prime time for whipping your finances into shape. 

So, let’s get cleaning! 

1. Dust Off Your New Year’s Resolutions 

We get it: New Year’s resolutions get stale as soon as the calendar hits February. But this was the year you were really fired up and ready to conquer the world. Why sell yourself short when your goals are actually within reach? 

Use the fresh energy and renewal of spring to revisit the list of resolutions you penned back at the end of 2018. What were your budgeting goals? What were your savings dreams? Have you achieved any of those goals? If not, what’s holding you back? 

Take stock of where you are financially and get back on track, moving forward and toward those goals. It’s not too late to make it happen this year! 

Do it today: Dig out that paper with your New Year’s resolutions and go through your financial goals one at a time. Did you overreach? Were you irresponsible? Tweak and adjust as necessary, create a new tracking system if the existing one isn’t working, and then get out there and own those goals! 

2. Sweep Out Your Monthly Budget 

Now that you’ve taken stock of your resolutions, take a good look at your monthly budget. 

Review your spending habits of the last few months. What are your weak spots? Where can you cut back? Have you been allotting too much money for one category and not enough for another? It’s time to take stock! 

Do it today: Review your monthly budget and choose one area to trim. Create concrete and realistic steps to make that happen. For instance, try the money envelope system to keep you on track, or stick to cash-only so you don’t slip up. Your budget will thank you! 

3. Freshen Up Your W-4 

You might be celebrating a generous tax return this year, but that only means the government has been handling some of your money all year long instead of it earning more for you. It’s almost like giving the government an interest-free loan! You could have used those funds to start investing, add to an existing emergency fund, launch a business or to save for your dream summer getaway. 

Take a closer look at your W-4 so you don’t overpay in taxes again this year. 

Do it today: Spend some time researching your best withholding options or ask your accountant to help you work out the numbers. Adjust your W-4 accordingly and submit it to the payroll specialists at your workplace. 

4. Pile Up Your Savings 

Once you’re cutting down on your spending habits and taking home a larger check each payday, why not use the extra money to bump up your savings? You can add to an existing fund, build a new one, open a Savings Certificate or start investing. You have many great options! 

Speak to a Mutual Credit Union representative today to find out about our fantastic savings options. 

Do it today: After choosing a savings option, stop by any Mutual Credit Union branch to set up a direct deposit. Each month, your money will be automatically transferred from your checking account to your new account. It’s the ultimate in set-it-and-forget-it! 

5. Toss Your Debt 

This spring, while you try on old, scratchy sweaters and make piles of junk to toss in the trash or sell for cash, why not get rid of your debt, too? 

Debt is ugly on you. It holds you back from moving forward, keeps you in a spending trap that only gets stronger with time and clings to you like caked-on mud. Wash it all off this spring with an actionable plan to get rid of that debt for good! 

Do it today: We know that paying down debt is easier said than done. But, you can do it! All you need is a plan. Review your debts and pick one to pay off first. It can be the debt with the smallest amount of total owed or the one with the steepest interest rate. Find a way to double down on your payments toward that debt. You can do it by taking on a side hustle, seeking a promotion at work or trimming existing expenses. After you’ve paid down this debt, move onto the next one. Accelerate its payoff by applying the total payment amount from your first debt to the new one – in addition to the regular payment you were making on it. Keep going until they’re all gone. It might take until next spring, but eventually, you’ll kick all of your debt to the curb! 

Spring is here—it’s time to freshen up your finances so they’ll be in tip-top shape for summer! 

Your Turn: How do you clean out your finances in the spring? Share your best tips with us in the comments.

 

SOURCES:

https://www.thebalance.com/spring-clean-your-finances-2385567

https://www.moneytalksnews.com/13-tips-for-spring-cleaning-your-finances/

https://www.google.com/amp/s/amp.kiplinger.com/article/retirement/T065-C032-S014-3-ways-to-spring-clean-your-finances.html

 

 

 

 

7 Signs You’re Living Beyond Your Means and How To Fix Them

Couple computer finances money

 

In the age of plastic spending and mobile payments, it’s easier than ever to buy stuff you can’t pay for right away while supporting a lifestyle you can’t really afford. 

Let’s take a look at seven red flags that might mean you’re living beyond your means and the steps you can take to get back on track. 

1. You’re carrying a credit card balance from month to month 

Credit cards are a great way to earn rewards, pay for emergency purchases when things are extra-tight and build a strong credit history. Unfortunately, though, they also make it far too easy to fall into the spending trap. It’s a lot harder to feel like you’re spending money when all that stands between you and a purchase is a plastic card. 

If you have an outstanding balance on one or more credit cards and you’re only paying the minimum payment each month, you can end up carrying this balance for years while paying hundreds of dollars (or more!) in interest. You might also be tempted to make more purchases on this card since you already have an open balance. 

The fix: Try to double down on your monthly payments and/or make one extra payment each month instead of paying just the minimum amount. Stop using your card until the debt is paid off.  

2. You stress about paying your bills 

No one likes paying bills, but if you’re losing sleep over your bills, you need to take a step back to review your monthly budget and spending habits. Bills should be fixed into your budget and you should be able to pay them easily without any stress or nail-biting involved. 

The fix: Take a long look at your monthly budget to find ways at cutting back. Cancel a subscription you never use, trim impulse purchases, start brown-bagging it at work more often or tighten the belt in any other way possible. 

3. You can’t save 5% of your monthly income 

Financial experts recommend putting 20% of your monthly income into savings, or even more if you can swing it. At the very least, you’ll want to sock away 5% of your monthly take-home pay to fund your retirement and any other expensive purchases or events you might need to pay for in the future. If you can’t possibly do that now, and you’re left with little or no money at the end of the month, you’re living beyond your means. Savings aren’t an extra; they are a necessity that should be a fixed part of every budget. 

The fix: Again, you’ll need to trim your expenses and restructure your budget to include a minimum of 5% for savings. 

4. You don’t have emergency and rainy-day funds 

Unexpected expenses, like a household repair or extra tutoring for your child, can disrupt your monthly budget and really set you back—unless you have some way to pay for them. Ideally, you’ll want to have an emergency fund to cover major unexpected expenses, like a job loss or a medical emergency, and a rainy-day fund for small expenses you can anticipate, like replacing an aging appliance and sending your child to summer camp. 

The fix: Start building your funds now by putting away as much as you possibly can each month. 

5. Your mortgage payment eats up more than 30% of your monthly income 

Most financial experts agree that your monthly mortgage payments should not exceed 30% of your take-home pay (that’s after taxes). Take a few minutes to do the math. If your mortgage is more than 30% of your income, you’re in over your head. 

The fix: You have two choices here:

  1. Find ways to boost your income. You can seek a raise or promotion at your current job, freelance for hire or find another side hustle to bring home extra cash.
  2. Scale back your mortgage payments by considering a refinance. Speak to a home loan counselor at Mutual Credit Union to see if this is the right choice for you. If your mortgage is really crippling your budget, you might want to consider downsizing to a smaller and cheaper place.

6. You lease a car you can’t afford to buy or finance 

Leasing lets you live the life of a high-roller without the huge bills. The problem is that many people can’t really afford their leases either. You might be covering your monthly payments, but if you can’t do that while also putting money into savings and meeting your other expenses, your car is too expensive. 

Can you afford to pay for or finance your car? If the answer is no, you’re in financial trouble. 

The fix: Downgrade your vehicle to one you can actually afford. 

7. Your financial decisions are influenced by your friends’ spending habits 

Thanks to social media and the hyper-sharing culture it introduced, the pressure to keep up with the Joneses is stronger than ever. If you find yourself making financial decisions—from what kind of footwear to buy to where you vacation—based on your friends’ choices, you’re likely spending more money than you can afford. 

The fix: Stop looking over your shoulder and keep your eyes on your own life and your own wallet. If your friends have expensive tastes, try to be the budget-conscious influence in the group. You may just start a new, financially responsible trend! 

If you’re in over your head, Mutual Credit Union can help! Stop by today. We will be happy to help.  

Your Turn: What’s your personal red flag that your spending has gotten out of control? Share it with us in the comments.

SOURCES:

https://www.google.com/amp/s/www.hermoney.com/invest/financial-planning/warning-signs-of-living-beyond-your-means/amp/

https://www.investopedia.com/articles/pf/08/in-over-your-head.asp

https://rockstarfinance.com/7-signs-that-you-might-be-living-well-beyond-your-means/

Financial Importance of Protecting Yourself Online

Online financial purchase

Why you should keep financial information private

There’s no denying that financial information is some of the most sensitive data we deal with every day. Because of the sensitive nature of financial information, it should be a priority for all individuals and businesses to do everything in their power to protect it. In order to protect all financial information, encourage your friends, families, coworkers, and employees to protect their Personally Identifiable Information (PII). This type of information includes names, personal ID numbers such as social security, driver’s license, taxpayer and credit account numbers, addresses, biometrics, vehicle IDs, phone numbers and technology asset information such as IP addresses. If these identifiers are kept private, hackers will have a more difficult time breaking into your larger systems and accessing financial information once inside.

 

Prevent identity theft

Identity theft occurs when an unauthorized individual gains access to personal information online and impersonate a said person with malicious intent. Those who gain access to personal accounts can retrieve all login information, personal data and commit cyber crimes such as tax fraud and theft. Identity theft can have repercussions that last for years following the attack and can negatively affect your finance, digital reputation, and privacy. In order to avoid identity theft, precautions can be taken that increase your security online and lock down confidential information on various levels.

 

How to protect financial information

The first step in ensuring your information is safe online is implementing a few new practices into daily digital activity. A few of these practices include:

  1. Using strong passwords – One of the most important things you can do to keep your systems safe is to lock down systems with strong passwords. The use of weak passwords makes all internal accounts easier for cybercriminals to hack and is something that can be easily avoided with a quick update. When you go to update passwords from weak to strong, be sure to include both lower and upper case letters, at least one special character, and avoid using personal information such as qualifiers, which include names, home addresses, and birthdates.
  2. Enabling 2-factor authentication – To further keep financial information secure, utilize a two-factor authentication security process for all internal systems. The addition of this second step provides an extra layer of security to limit who can access your information. With this form of authentication, simply knowing the password is not enough to gain access to private accounts. Rather, anyone trying to break in will go through multiple forms of security checkpoints, such as a fingerprint scan or facial recognition, before successfully logging in. Many of these second checkpoints require the use of multiple devices as well, making it even more challenging for hackers to penetrate the system.
  3. Never save payment information online – According to a study conducted by CreditCards.com, approximately 100 million American individuals currently store their credit card or debit card information within apps or on websites to make future shopping experiences more convenient. While it may seem helpful at the time, storing your financial data on these kinds of sites actually makes it easier for hackers to access your information. Not only could this site be hacked, but your personal device might be stolen. In either scenario your personal information would be at risk.
  4. Making purchases from only trustworthy sites – A pro tip to ensuring you are browsing on and entering financial information on a safe site is to look for the “S” after “HTTP” in a website’s address. This “S” signifies that the site you’re visiting is protected by Secure Sockets Layer (SSL) encryption. You can also double check for a trust icon (which looks like a padlock symbol) on the site with the words “Secure” or “Verified”. Click this icon to see if you are taken to a verification page and if you aren’t, you’ll know that it’s a fake, unsecure site. This can help you avoid filling purchase orders or fulfilling other financial activities on sites that could easily open your system up to hackers.

 

Protect your company’s reputation

Research shows that a single data breach can cost American businesses an average of $7 million, considering the firm’s direct monetary loss along with business disruption, fines, and credit monitoring and identity theft repair efforts. On top of these costs, failing to protect your customers’ and employees’ sensitive personal data can destroy their trust in your brand. To avoid these repercussions, consider implementing these practices for your whole enterprise:

  1. Using secure applications and tools – Some of the most important things to lock down within your systems are the tools your employee base use every day. From messaging systems and call center software to the email platform you send all important data through, ensuring these tools have adequate security measures is critical. One simple way to keep these tools in sync is to streamline them all through a cloud-based unified communications platform with built-in security measures. Not only does implementing the cloud ensure the safety of all tools your employees are using, but it also makes it simple to track that security by being hosted in one, unified system.
  2. Encrypting data – These days, most correspondence between professionals happens via email, which increases the need to protect data by utilizing email encryption. Not sure what encryption is? Email encryption is the process of using an authentication mechanism to prevent unauthorized personnel from accessing private email messages and information. Most well-known email platforms come with a form of built-in encryption, but that often isn’t enough for sensitive financial data. Instead, consider upgrading to a more secure form of encryption and require all individuals within your network to do the same.

 

Even if you think you are invincible online or have nothing to hide, it’s important to protect privacy from both a personal and professional standpoint. You never know when something completely innocent-seeming could lead to a threat or breach. In order to prepare for these unknown attacks on your data, the best thing you can do is make that information less accessible, starting with these tips laid out before. To also stay up-to-date on the best security practices available, continue to research and update security measures as necessary.

 

Source: https://blog.kasasa.com/2019/02/protecting-yourself-online/

 

How I Learned About Saving For Retirement (And You Can Too)

coins and time clock retirement

Confession time: Finances have never been my specialty. As a creative professional, sometimes what I dream up and what happens in the real world need to come together for a little tête-à-tête. Now that we’ve gotten that on the table, you may ask, “So why are you writing about saving for retirement?” Fair question. Here’s why: in my quest to crack the “retirement savings code,” I resolved many previous unknowns (to me) and ultimately rethought my personal approach to saving for retirement.

 

I will also conjecture that there are a lot of people who are similarly lost when it comes to saving for retirement. In fact, the numbers support this hypothesis: according to an Economic Policy Institute (EPI) study“nearly half of families have no retirement savings at all.” With that in mind, here are some of the major questions that I had while digging into how I should be saving for retirement.

 

How much do I really need to have set aside to coast through retirement?

AKA, what is the magic number? A seemingly innocuous question, right? Not exactly. Turns out it depends on who you ask. This is where I learned there are many schools of thought on how to best approach your number. Below summarizes the three different methods I found, but you can learn more about each at 3 Ways to Calculate Your Retirement Number by money.usnews.com.

 

Income Method

This involves multiplying your income by a factor to determine how much you need to retire. There’s a little more to it than just that, and exactly how much you should multiply it by is debatable, but the article does a nice job of breaking down the different variables and assumptions you should account for.

 

Expense Method

This method asks you to analyze your monthly budget to arrive at your retirement number. You’ll need to think through what expenses you anticipate having then, what gets added, and what falls off, which brings up the subject of a mortgage… I’ll get into that a little later. There are, of course, a few other considerations which you can see in more detail here, but that’s the main idea.

 

Savings Method

This method involves setting aside a percentage of your annual salary in retirement accounts. This might be the most prevalent approach I encountered in my research; however, the “right percentage” to set aside can vary from source to source. My takeaway: 15% is a good goal on the conservative end and 20% on the aggressive end. Anything beyond that gets you gold-star status.

 

That’s a lot to digest. I get it. Luckily, I stumbled upon this article by CNBC with features a more digestible timeline of savings goals from Fidelity that follows the Income Method. And visuals are always helpful.

 

How much do I need to save for retirement?

10X

Fidelity Investments suggests you should aim to have 10 times your salary in savings.

Here is how much to set aside by age in order to stay on track for retirement at 67.

how-much-save-retirement-380x839

Keep in mind this is a ballpark diagram. Consult a financial advisor for exact numbers.

Epperson, Sharon. “What’s the Magic Number for Your Retirement Savings?” CNBC. 11 Feb. 2016. Accessed 8 Feb. 2018.

Where all will this money come from?

Here are the key players. Getting a general sense of each will help you understand how they all work together. This video from CNBC Money also does a nice job of explaining the differences.

 

401(k) – A 401(k) is an employer-sponsored type of retirement plan. It allows an employee to dedicate a percentage of their salary to a retirement account. Contributions are tax-free and taxes are paid upon withdrawal. Putting money into your 401(k) can be a great place to start, as many companies offer a match program up to a certain percentage. Ideally, you should strive to at least contribute up to the full match since that is free money for you!  Learn more about 401(k)s here.

 

IRA – An IRA is an Individual Retirement Account that can be opened up by anyone, whether they’re associated with an employer or not. There are two types of IRAs — a traditional and a Roth — which have a few differences, but the main one being the time at which you’re taxed. (Roth contributions are taxed the year you deposit them, traditional IRAs are taxed upon withdrawal.)

 

HSA – An HSA or Health Savings Account offers a way to set aside money for your healthcare expenses while receiving some tax advantages. Another nice thing is if you don’t use it all in a year, you can hang on to it and, in some cases, invest it!

 

Investments (other) – Whether it be in real estate, stocks, bonds, mutual funds, or any combination of these and more, this is anywhere you’re setting aside money in the eventual hope of reaping a return on top of your initial deposit.

 

Pension –  Employer-provided retirement income (from companies with pension plans) that requires an employee to work for them a certain number of years. The benefit usually increases with the length of time employed at the company. This often applies to government jobs, like military, police, and fire departments. According to The Balance, “Large corporate employers may also offer pension benefits, but it is not as common as it was thirty years ago.”

 

Social Security – It is hotly debated how much longer we should rely upon this as a source of retirement income. Regardless of its endurance, according to CNN Money, “your Social Security benefits will only replace about 40% of your previous income, which won’t cut it even under the most frugal circumstances.” So the best bet is to think beyond Social Security.

 

Do I count my home equity as income?

You’re right to realize that some of the expenses you have today won’t necessarily be around by retirement age. The amount you’re currently setting aside for retirement is one, ideally your student loans are another, and of course, that brings you to a major investment — your home (assuming it’s paid off).

 

But according to TheBalance, “you’ll also have retirement costs that you don’t carry today, like certain out-of-pocket health and end-of-life care costs. And ideally, you’ll also travel more, enjoy more hobbies, and indulge a bit. As a result, you may want to budget for retirement by assuming you’ll spend roughly the same amount you spend now.” The Huffington Post further supports this outlook in Is Your Home Equity Part of Your Retirement Savings?, saying that “If you don’t plan to sell, then your home equity, while still an important part of your overall net worth, shouldn’t be included in your retirement savings calculation.”

 

Should I focus on paying off debt or saving for retirement?

According to Dave Ramsey, it’s important to start with a firm foundation, and that includes addressing your debt first. In his post on The Truth About Retirement, Mr. Ramsey recommends that:

“You begin investing for retirement after you’ve done two things: you’re debt-free, and you have saved an emergency fund of three to six months of expenses. Three-fourths of the people on Forbes list of the 400 wealthiest people in America say getting and staying debt-free is the most important thing you can do when it comes to handling your money. The full emergency fund ensures you have a cushion in case of an illness or job loss and that your retirement funds stay where they are and keep growing.”

 

When is the best time to start saving for retirement?

The short answer: Now. Or as soon as possible. That’s because there’s also another factor in play that could really work to your advantage — compounding interest — or the interest you can earn on interest. According to Tony Robbins, “by not saving, and by not investing, you are losing out on more money by waiting than you stand to lose by taking a small risk and starting your retirement account.” For a more in-depth breakdown of how compounding interest over time can make a big difference, see Tony Robbins’s article: Create a Money Machine.

 

My final thoughts:

Although I’m no financial guru, I have wised up to a few things over time. First of all: processing your current age never feels any less like an alien/host-type situation; at 7 years old, the coveted teen years felt oh sooo far away, your 20s felt unimaginably grown up (hilarious), and every decade that passes thereafter… more of the same. Second: Seeking the “right time” is futile, because it doesn’t exist.

 

So when you factor in those “constants,” waiting to perfect a master retirement savings plan feels less critical (and daunting) than just getting the ball rolling in the right direction. That’s not to say you should become lax in your research and planning. By all means, get out there and speak to a certified financial advisor (they get paid to do this stuff for a reason). Just try to avoid getting stuck an endless loop of analysis and become your own enemy to progress. That’s not how you’ll make it to that little beach bungalow or another perfect retirement of your dreams.

Source: 

How I Learned About Saving for Retirement (And you can too)

Jaclyn Eickenhorst
Jaclyn Eickenhorst

 

By craft Jaclyn is a copywriter, but she really fashions herself more of an “idea explorateur.” When it comes to working through tasks to arrive at the best solution, she considers herself a purist, aka a compulsive brainstormer. Intervals of staring into space, broken up by a frenetic syncopation of keystrokes — that’s just part of “the process.” No need to call for someone…unless they have cookies. Definitely call then.

3 Questions for Jaclyn:

  1. Favorite hobbies?

    Paying guitar, boxing, finding new ridiculous things to worry about, daydreaming about the next great American novel, and talking to my cat like she’s a human baby (because she is).

  2. What was your very first job?

    A confectionary & culinary artist/customer service liaison within the food and hospitality industry — a.k.a. “counter girl” at Dairy Queen.

  3. Worst financial decision?

    Probably buying a timeshare at the ripe old age of 21. Not only was I gullible enough to attend the spiel, yes, I actually bought into it. Luckily, I read the fine print, found a loophole, and got out within 24 hours! Critical reading skills for the win!

Tax Code Changes 2019

TAXES 2019

The annual tax code changes can be confusing. No worries, though; we’ll walk you through everything you need to know for 2019.  

Though most changes won’t take effect until April 2019, some of them can impact the financial choices you’ll make this year. For that reason, here’s the details on the most important tax changes. 

1.)   Changes to the amounts taxed for each income bracket 

The 7 tax income brackets remain unchanged, but the amounts each bracket is taxed have gotten an overhaul. Here are the new rates for taxpayers filing as individuals. 

Taxable Income Bracket                Tax Due 

10%        $0-$9,700                         10% of taxable income

12%        $9,701 -$39,475               $970 +12% of income $9,700+

22%         $39,476 – $84,200          $4,543+22% of income $39,475+

24%         $84,201 – $160,725        $14,382.50+24% of income $84,200+             

32%         $160,726- $204,100        $32,748.50+32% of income $160,725+

35%         $204,101 – $510,300       $46,628.50+35% of income $204,100+

37%          $510,301+                       $153,798.50+37% of income $510,300+              

You can check out the taxable income rates for couples filing jointly and for individuals filing as heads of households here. 

2.)   Changes in standard deduction amounts

The standard deduction in 2019 will be $12,200 for individuals, $18,350 for heads of household, or $24,400 for married couples filing jointly and surviving spouses. 

3.)   Elimination of personal exemptions 

The personal exemption amount is being eliminated for the 2019 tax year.  

4.)   Changes to itemized deductions 

Some of the itemized deduction changes for 2019 include: 

  • Medical and dental expenses.  For 2019, you can only deduct those expenses exceeding 10% of your adjusted gross income (AGI).
  • State and local taxes (SALT). The new maximum for SALT deductions is a combined total of $10,000 for taxpayers filing jointly.
  • Home mortgage interest. In 2019, home interest payments will be maxed at $750,000 for married couples filing jointly.
  • Job expenses and miscellaneous. In 2019, you can only claim work-related deductions that are less than 2%of your AGI.

5.)   Changes to tax credits 

There have been several adjustments to various tax credits for 2019, including the following: 

  • Child Tax Credit. The child tax credit has increased to $2,000 per child.
  • Earned Income Tax Credit (EITC). The maximum EITC amount for 2019 is $6,557 for married taxpayers filing jointly who have three or more children.
  • Adoption Credit. The maximum adoption credit in 2019 for a child with special needs is $14,080. The ceiling for other adoptions is $13,810.
  • Lifetime Learning Credit. For 2019, the AGI used by joint filers to determine the reduction in the Lifetime Learning Credit is increasing to $116,000.

6.)   Retirement account contributions 

For 2019, you can contribute a total of $6,000 to one or more traditional or Roth IRA(s) if you’re under age 50, and $7,000 if you’re age 50+. For 401(k)s, you can contribute $19,000, and $25,000 if you’re age 50+. 

Your Turn: Which tax credit or deduction helps your finances most? Tell us all about it in the comments.

FREE Tax Prep Resources

SOURCES:

https://www.google.com/amp/s/www.forbes.com/sites/kellyphillipserb/2018/11/15/irs-announces-2019-tax-rates-standard-deduction-amounts-and-more/amp/

https://www.google.com/amp/s/www.marketwatch.com/amp/story/guid/18A0A5AE-E9DD-11E8-8F27-5C6847258365

https://www.google.com/amp/s/www.fool.com/amp/retirement/2018/12/23/the-6-best-tax-deductions-for-2019.aspx

https://www.google.com/amp/s/amp.usatoday.com/amp/2207406002

BEWARE! Tax Scams 2019

TAXES 2019

Each year, the IRS publishes the “Dirty Dozen,” a list of 12 scams that are rampant during that year’s tax season. 

This year, the IRS is cautioning taxpayers to be extra vigilant because of a 60% increase in email phishing scams over the past year. This is particularly disheartening, since it comes on the heels of a steady decline in phishing scams over the previous three years. 

Typically, an email phishing scam will appear to be from the IRS. Once the victim has opened the email, the scammer will use one of several methods to get at the victim’s personal information, including their financial data, tax details, usernames and passwords. They will then use this information to steal the victim’s identity, empty their accounts or file taxes in the victim’s name and then make off with their refund. 

Scammers have several means for fooling victims into handing over their sensitive information. The most popular tax-related phishing scams include the following: 

1.    Tax transcript scams. In these scams, victims are conned into opening emails appearing to be from the IRS with important information about their taxes. Unfortunately, these emails are bogus and contain malware. 

2.    Threatening emails. Also appearing to be from the IRS, these phony emails will have subject lines like “IRS Important Notice” and will demand immediate payment for unpaid back taxes. When the victim clicks on the embedded link, their device will be infected with malware. 

3.    Refund rebound. In this scam, a crook posing as an IRS agent will email a taxpayer and claim the taxpayer was erroneously awarded too large a tax refund. The scammer will demand the immediate return of some of the money via prepaid debit card or wire transfer. Of course, there was no mistake with the victim’s tax refund and any money the victim forwards will be used to line the scammer’s pockets. 

4.    Phony phone call. In this highly prevalent scam, a caller spoofs the IRS’s toll-free number and calls a victim, claiming they owe thousands of dollars in back taxes. Those taxes, they are told, must be paid immediately under threat of arrest, deportation or driver’s-license suspension. Obviously, this too is a fraud and the victim is completely innocent. 

If you’re targeted 

When targeted by any scam, it’s crucial to not engage with the scammer. If your Caller ID announces that the IRS is on the phone, don’t pick up! Even answering the call to tell the scammer to get lost can be enough to mark you as an easy target for future scams. If you accidentally picked up the phone, hang up as quickly as possible. 

Similarly, suspicious-looking emails about tax information should not be opened. Mark any bogus tax-related emails that land in your inbox as spam to keep the scammers from trying again. 

If you’re targeted by a tax scam, report the incident to help the authorities crack down on these crooks. Forward suspicious tax-related emails to phishing@irs.gov. You can also alert the Federal Trade Commission at FTC.gov. 

Protect yourself from tax scams 

Stay one step ahead of scammers this tax season by being proactive. Protect yourself with these steps: 

  • File early in the season so scammers have less time to steal your identity, file on your behalf and collect your refund.
  • Use the strongest security settings for your computer and update them whenever possible.
  • Use unique and strong passwords for your accounts and credit or debit cards.
  • Choose two-step authentication when conducting financial transactions online.

Remember, the IRS will never: 

  • Call about taxes owed without having first sent you a bill via snail mail.
  • Call to demand immediate payment over the phone.
  • Threaten to have you arrested or deported for failing to pay your taxes.
  • Require you to use a specific payment method for your taxes.
  • Ask you to share sensitive information, like a debit card number or checking account number, over the phone.

Be alert and be careful this tax season and those scammers won’t stand a chance! 

Your Turn: Have you ever been targeted by a tax scam? Share your experience with us in the comments.

 

SOURCES:

https://clark.com/personal-finance-credit/taxes/beware-of-these-common-irs-scams/

https://www.google.com/amp/s/www.forbes.com/sites/kellyphillipserb/2018/12/04/irs-warns-on-surge-of-new-email-phishing-scams/amp/

https://www.businessinsider.com/irs-phone-scam-what-to-do-if-you-get-scam-call-2018-2

5 SCAMS TO WATCH FOR AFTER THE HOLIDAYS

The mad holiday rush may be over, but scammers aren’t slowing down. The post-holiday weeks bring an increase in scams that, unfortunately, are quite believable during this time of year. HOLIDAY SCAM ALERT

Don’t be the victim of a post-holiday scam! Read on to learn about five common ways fraudsters seek to dupe consumers after the holidays: 

1.) Gift-picking 

With the holidays behind us, many people are enjoying new, and often expensive, gifts. These can be top-of-the-line electronic devices, luxury entertainment systems or phones with four-digit price tags. If you’re the lucky recipient of such an expensive gift, you may be targeted by old-fashioned thieves who are looking for a good picking. 

Protect yourself by keeping your gift under wraps. Dismantle all packaging that contained your gift. Discard them in a covered trash or recycling bin instead of leaving them at the curb where potential thieves can spot them and peg you as an easy target. For extra precaution, consider hauling your boxes off to a communal dumpster or the local recycling station. 

2.) Charity scams 

The last two days of December see more charity donations nationwide than the rest of the year. While this may speak well of our goodwill, it also offers scammers another opportunity to help themselves to other people’s money. 

Be wary when giving charity this time of year. Don’t donate to any organization without first checking it out on a charity vetting website, like CharityNavigator.com. If you have a favorite cause you like to give to, contact them yourself instead of clicking on an ad or calling a number that appears to represent them. 

3.) Underpriced gifts for sale 

You may think you just found a real steal of a deal on Craigslist from a seller who is eager to get rid of a gift because “My wife didn’t like it.” But, be suspicious of any prices that seem too good to be true; they are likely to be scams. 

If an item for sale appears authentic, proceed, but with caution. Don’t rely on email communication. Instead, get the seller’s phone number and street address. If possible, ask for references and pictures of the item. If everything appears to check out, arrange to meet the seller in a well-lit, populated area, preferably one with ample security-camera coverage. Finally, never wire money online to any seller—let the cash and item change hands at the same time. 

4.) Belated holiday e-cards 

Don’t assume every e-card that lands in your inbox with a heading like “Oops! I’m late!” is legitimate. Too often, e-cards are ridden with malware and will infect your device as soon as you click on an embedded link. The e-cards may even bear the name of your friend, but don’t be fooled; scammers can easily pick these names off the internet. Authentic e-cards will include a confirmation code for you to copy and paste at the issuing website, so only open e-cards that are accompanied by a code. 

5.) Post-holiday ‘sales’ 

The holiday shopping frenzy is over and retailers are eager to drum up more business. This makes the post-holiday sale scam seem especially believable. Your social media platforms may be exploding with ads that are offering exclusive deals and deeply discounted prices at your favorite stores. While some of these ads may be legit, lots of them are scams. 

Here’s how to spot the fake ads and differentiate them from the real ones: 

  • The URL is off by one letter. Carefully check each landing page as you make a purchase.
  • The site is not secure. Always look for the “s” after the “http.”
  • The words “deals” or “discounts” are part of the URL. Authentic retailers sell from their home site and will rarely create a new website just to sell sale items.
  • The store’s logo is missing from the website. Look for a genuine store logo on every landing page.

Post-holiday scams are everywhere, but by knowing how to spot a scam, you’re already one step ahead of the criminals. Stay alert and stay safe! 

Your Turn: Have you been targeted by a post-holiday scam? Share your experience with us in the comments.

 

SOURCES:

https://blog.aarp.org/2017/12/30/protect-yourself-from-post-holiday-scams/

https://www.google.com/amp/amp.fox5atlanta.com/news/i-team/beware-post-holiday-loan-scams

https://dayair.atomicdevbox.com/blog/post-holiday-scams-to-know-about/

5 SCAMS TO AVOID THIS BLACK FRIDAY

Black Friday Scam Alert

Black Friday and Cyber Monday can be great fun – but they can also put you at great risk. Scams abound on the weekend that heralds the holiday shopping season, and you don’t want a phishing scheme or a bogus bargain to turn you into a Grinch. 

Here are 5 scams to look out for as you brave the frenzied crowds while trying to snag the best deals after Thanksgiving.  

1. Crazy deals that are actually bogus 

The noisy crowds and flashy ads on Black Friday can lead you to make rash decisions and spend more than you planned. But be careful not to leave your senses at home. 

An iPhone X retailing at just $12? A pair of genuine Ugg boots for just $9? These deals sound insane because that’s exactly what they are. And yet, thousands of people happily send their money to online stores that are advertising these laughable prices on Black Friday. And of course, once the scammers have your credit card information, they won’t hesitate to use it for their own shopping spree – all on your dime. 

Be smarter: Don’t believe any advertised price that is ridiculously low. It’s only bait used by scammers to lure you into their trap. Black Friday deals tend to fall within the 20-30% off range or an offer of free shipping. 

2. Black Friday gift cards for cheap 

In the weeks leading up to Black Friday, you might see an explosion of cheap gift cards being sold at online marketplaces. The gift cards are linked to big-name retailers and are offered for a fraction of their real value. 

These cards are usually stolen from their real owners. The victim of the theft will likely report the loss and the card will be disabled. And you’ll have forked over your hard-earned money for a card that’s not worth the plastic it’s made from. 

Be smarter: Don’t buy any gift cards that are retailing at a heavily marked-down price. 

3. Bait and switch 

Want to be the lucky winner of a brand new iPhone X? Just fill out a form with your personal details and take this survey. You may just be the proud new owner of the super-expensive phone! 

If you know anything about online scams, you’ll already recognize this one. Your personal details and a site whose authenticity you can’t verify are two things that should never meet. The sweepstakes is just the scammer’s bait to get at your information. And, with holiday expenses growing each year, it’s the perfect time to lure an innocent victim into thinking they’ve just saved a ton of money. 

Don’t make the mistake of thinking you’re safe from this scam just because you’re doing all your Black Friday shopping at the mall. “Bait and switch” scams can happen offline, too. 

The brick-and-mortar version of this scam is somewhat less nefarious. Retailers will advertise deals so amazing you’ll find yourself travelling across town and battling impossible traffic to grab these bargains. Once you finally reach the store, though, you’ll be told that those items are all sold out, but you can check out the items they do have in stock. You’ll be shown similar, but inferior, products and cheap knockoffs, or nothing you’re interested in at all. These scams are just a waste of your time and often your money, too. 

Be smarter: Don’t enter any sweepstakes or believe advertisements for heavily marked-down prices on sites and stores you’re unfamiliar with. 

4. Delivery problems 

With so much of your shopping happening online, you probably wouldn’t be surprised to receive an email claiming there’s been a problem with the delivery of one of your purchases. But if you get an email like this asking you to click on a link or download an attachment to arrange an alternative delivery date, you’re looking at a scam. You may also receive a message asking you to pay an extra fee for delivery after you’ve completed an order. Again, this email is bogus and you’re being scammed. Ignore these emails. And, if you have a problem with the delivery of your purchase, contact the seller or company directly. 

Be smarter: Never download anything or click on a link from an unverifiable source. 

5. Online purchases that can only be paid for with a wire transfer 

If you’re planning on going on an all-out spending spree this Black Friday, use your credit card. It offers you the most protection against purchases that don’t turn out to be what you expected. 

A debit card can be a good choice, too, if you’re only shopping at stores and retailers you trust and frequent often. 

Never agree to an online purchase demanding payment via money order or wire transfer. These are favorites among scammers since they are similar to paying with cash – once the money has changed hands, there’s almost no way you can get it back. 

Be smarter: When frequenting unfamiliar stores and sites, use your credit card. 

Be an educated shopper this Black Friday and outsmart scammers! 

Your Turn: Have you ever been targeted by a Black Friday scam? Share your experience with us in the comments below.

 

SOURCES:

https://www.finder.com/black-friday-scams

https://www.scam-detector.com/article/black-friday-scam

https://www.makeuseof.com/tag/6-scams-watch-black-friday-cyber-monday/