If you celebrate Christmas, this is your public service announcement that it’s less than 100 days away…93 to be exact. Many of us always swear that we’re “going to start shopping early this year”, but that doesn’t always happen. So if you plan to buy gifts for your family and friends and haven’t started, start now. Here are some simple tips that will help ease the burden on your bank account.
1. If you have saved throughout the year for presents, great! Then use what you have saved to go shopping. If you’re like the average person and haven’t saved anything, then determine how much you can afford to spend. Look at your income and your monthly expenses and what’s left over is what you have to use toward gifts, but don’t forget about other random expenses that might come up, i.e. shoes, clothes, kids’ field trips, etc.
Try not to spend every last penny you have left over on gifts because something is sure to come up as soon as you spend all your money.
2. Only charge what you can afford to pay off right away. I love buying gifts for people, but I HATE paying for those gifts with interest &/or payments for months and months after the holidays.
3. If you don’t have much leftover money in your budget, be creative. There are tons of DIY ideas on the internet. Google DIY gifts or check out Pinterest if that’s your preferred method. And if you have a large family, think about playing the white elephant gift game, draw names, or only buy for the kids.
4. There’s still time to purge your clutter and sell items online or in a garage sale. Then use your earnings for your future purchases.
Holidays are about spending time with friends and family. So try to take some of the stress away by starting early, not spending as much, and more importantly avoiding future credit card payments for yourself.
Already have credit card debt? A Debt Management Plan can help. Call us at 888.577.2227 for an appointment or visit ConquerYourDebt.org to get started with your online counseling session. Take action today to conquer your debt!
Author Elaina Johannessen is a Program Director with LSS Financial Counseling.
WHAT TO GIVE YOUR GRADUATE: The Gift of the Future
- Twenty-two year olds have a hard time (impossible is more accurate) imagining being old. Let alone how fast it will happen. Saving for retirement is simply not a priority for them. So, it is our job to get them started, even if against their will. Consider opening a Roth IRA as your graduation gift to your child. The miracle of compound interest is dependent on time—the sooner you get started, the more miraculous it is.
- Start looking at mutual fund companies for initial deposit requirements—can be as low as $50, but more commonly around $1000. Can’t save $1000 by next May? Talk to family and friends who might be planning on a graduation gift and pool your resources.
- Picking a fund can be paralyzing. Gratefully, many companies are offering target date funds. Easy peasy. Just calculate the young person’s retirement year and it’s done! (Don’t worry, it isn’t set in stone. Your graduate can make changes as they wish.)
- If opening a Roth IRA for your graduate isn’t affordable, consider helping them sign up for their employer-based retirement fund. It is far too easy to not sign up. Don’t let up on them until it’s done! This may not feel like a gift to your graduate, but 40 years from now they will be thanking you! Bake a celebratory cake when it is all set up.
- The employer doesn’t offer retirement savings? Still no excuse! Welcome to myRA! This new federal program is designed to help those without employer-based retirement savings to open up a Roth IRA with Direct Deposit through their payroll. Savings are risk-free, backed by United States Treasury. Visit myra.gov to learn more.
Next is living arrangements…
WHERE TO LIVE: It Isn’t Free Anywhere!
- The other post-graduation concern is living arrangements. Most graduates end up back home by default. Set up the expectation that post-college they will be paying rent. Don’t spring it on them when they are at the door, start talking about it now. This also helps set up the expectation of immediate job search.
- It may feel wrong to take money from your child, especially if you don’t need the money yourself to pay bills. But, remember, preparing our children for the real world of bills and financial responsibility is our responsibility.
- Some parents will set aside rental income to gift to their child at a later time like a deposit on a future apartment or a contribution their Roth IRA, etc. Consider using the rental income to catch up on your own retirement savings, which has likely taken a back seat while raising children.
- Along with rent, expect (and the hard part—enforce) that your graduate do their share of household work. Knowing how to operate appliances and lawn/garden equipment, or how to use tools, is a HUGE benefit.
We know how fast time flies by. We were fighting back the tears as they got on that school bus for the first time in kindergarten just a few years ago, weren’t we? You will be fighting back those tears again in no time as they walk up to accept their college diploma. Be ready to prepare them for their entry into real-deal adulthood.
Author Mary Ellen Kaluza is a Certified Financial Counselor at LSS Financial Counseling. Counselors like Mary Ellen are able to meet with you either in-person or by phone and discuss your options with debt. We also have counselor specialized to talk about student loan issues and housing. We are here for you. Appointments are free and completely confidential. Give us a call today at 888.577.2227.
I hate grocery shopping. But, I love doing laundry. I don’t know why. I think it feeds some compulsive behavior in me. I like separating colors, fabrics, tackling stains, getting whites white … There are worse compulsive behaviors.
WASH FULL LOADS
I don’t mind my daughter bringing home laundry because I can have a full load and feel good about saving natural resources. Otherwise, I let my dirty laundry pile up to a critical mass. I will plan my weekly outfits around laundry—wear similar colors so I have a full load to wash.
DON’T WASH MOSTLY CLEAN CLOTHES
Were you working in the hot sun on a construction site or in a climate-controlled office all day? Does that top really need to be washed, or can you wear it again? There is a lot of friction happening in the washer and dryer – it wears clothes out. Prolong the life of your clothes and reduce your utility costs by washing only dirty clothes.
USE COLD WATER
Most laundry detergents today are formulated to work well in cold water. Heating water costs money. And, hot water is harder on fabrics. Use hot water only when needed for sanitation reasons.
TREAT STAINS IMMEDIATELY
You really don’t need fancy stain removers. Dish soap works great on most stains. Other common household products also useful: hydrogen peroxide, salt, baking soda, ammonia, vinegar. Use cold water on protein stains – blood, meat, eggs, etc. The sooner you get the stain, the better chance you have to save the garment. Soaking is good for most fabrics to keep the stain from setting until it is washed.
USE LESS LAUNDRY DETERGENT
Laundry detergent manufacturers are in the business to sell their product. You can almost always get away with using 1/2 of the recommended amount on the container. (Especially soiled clothes may need more.)
To reduce your carbon footprint with your detergent, buy powdered instead of liquid. The increased weight of liquid detergent requires more fossil fuel to ship. Plus, the plastic container isn’t renewable like paper.
AND, MY FAVORITE…LINE DRY!
Heating air is expensive. Electric dryers are particularly costly. The first thing I did when I bought my house was to install clothes lines outside. I love hanging out my laundry (is that some sort of Freudian thing?) Falling asleep on fresh sheets hung out in the sunshine is heavenly! Mmmmmm. I do keep an eye on the pollen count and hang clothes indoors if pollen is high. In winter I hang clothes in front of my forced-air furnace in the basement. The colder the weather, the faster the clothes dry!
As previously mentioned, dryers are rough on clothes. All the lint in the lint trap? That’s your clothes being worn away. The heat of dryers also sets stains. With line drying, you get a second chance to tackle a stain.
You may not share the same compulsive behavior I have, but we all share a need to conserve our personal resources and the earth’s.
Author Mary Ellen Kaluza is a Certified Financial Counselor at LSS Financial Counseling and an important member of our blogging team.
LSS is a nonprofit, consumer credit counseling agency in Minnesota. We focus on helping people get out of debt. Give us a call today at 888.577.2227 or visit us online at www.ConquerYourDebt.org. Meeting with a financial counselor is free, confidential and will help you gain control of your financial situation.
We polled our Sense and Centsibility readers and asked if they’ve ever given their adult children money. Out of the 1,507 responses, a whopping 1,400 people said ‘yes’. This isn’t surprising because, in general, parents want to help their children in any way they can. Also, ‘giving money’ could be interpreted in different ways. Some may give to their children just because they can, for a gift, or it could be something more substantial like money to pay for bills on a regular basis or even providing a small loan.
Since I don’t have children, I’m going to put a different spin on the subject and talk about giving any family member or friend money. Because, let’s face it, adult children likely aren’t the only ones asking for help. It may be your adult sibling, cousin, best friend, etc. There is nothing wrong with helping out someone financially. However, you need to consider the risks involved before making the decision to lend a financial hand.
Here are 3 questions to ask yourself before giving/loaning anyone cash:
1.) Am I putting myself and my immediate family at risk?
If the answer is yes, then you really shouldn’t give money to anyone else. Instead, focus on priorities: keeping a roof over your/your family’s head, food on the table, transportation for school/work, utilities, and other payment obligations such as student loans or credit cards.
2.) Is this a one-time thing?
Determine this right away by talking to the person. Ask them, “If I give this to you, will it help you stabilize your situation?” If it’s going to be an on-going gift or loan, you’ll need to decide if that’s truly affordable. And not to mention if it’s a recurring donation, is it really helpful in the long run to keep giving to your friend/family member?
3.) Even if you can afford to give money, should I?
Ask yourself first if you want the person to pay you back and what happens if s/he doesn’t. One consequence of giving money to a friend or family member may be a strained relationship. Will your brother avoid you because he owes you money? And are you charging interest or just giving money and not expecting anything in return? Be really clear about the details of the gift or loan to hopefully avoid any awkwardness at Thanksgiving dinner.
Alternatives to Giving Money
If your friend or family member is struggling financially, here are some suggestions to help in ways other than giving them money.
- Refer them to your local County Offices or call United Way 211 for resources in your area. You never know what someone might qualify for until it’s checked out. For instance, they might be able to access Food Support, food shelves, childcare assistance, medical, and more.
- Encourage them to come up with ways to make money. Can they babysit or do something for you (or someone else) that would normally be paid for anyway? That way, both of you benefit.
- Another idea is to suggest that they have a garage sale &/or sell their unwanted/unused goods online (make sure it’s a secure/legitimate site).
- Do they have unsecured credit card debt? Refer them to LSS Financial Counseling to set up a budget and see if a Debt Management Plan (DMP) is right for them. DMPs help people pay off credit card debt in 5 years or less, likely reduce interest rates, and sometimes even monthly payment(s).
Giving can feel really good – that’s part of the reason we do it. In the end, it’s your decision how to spend your hard-earned money. It might be difficult to say ‘no’, but in the end you have to do what’s best for YOU and your partner, spouse, and/or kids.
Author Elaina Johannessen is the Director of Client Services at LSS Financial Counseling.
Debt can also get in the way of civilian employment opportunities for military spouses, making it difficult to provide the additional income necessary to manage the home front.
If you’re among those who feel what they’ve already achieved may be in danger due to their financial issues, there is a place you can turn to for help.
94% of clients that were counseled by us reported an increase in confidence regarding their finances after receiving our services. Call us at 888.577.2227 to learn more about the services we offer to veterans. We can help.
At LSS we recognize that the ever-changing nature of military life can create and foster difficult and dangerous financial cycles.
HOW WE CAN HELP
- Provide straightforward debt-relief plans.
- Consolidate bills into one smaller payment.
- Understand special circumstances.
- Lower interest rates regardless of credit score.
- Eliminate late fees and over-limit charges.
- Ensure you know where you stand at all times.
You owe it to yourself. Let us help you secure your military career and restore hope for you financial future in your civilian life.Visit our website at www.ConquerYourDebt.org or call us at 888.577.2227 to learn more. Make sure to mention to you are a veteran.
Identity theft can happen when someone gets access to your personal information, like your name or social security number. If you are like me you just want to know what you can do to protect yourself. Simple as that. The key is to be conscious of HOW identity theft happens. Common ways include:
- Stolen wallet or credit cards-Your cards don’t have to ACTUALLY be stolen to do this. Think more borrowed. I just watched a movie where servers at restaurants were swiping card information while running your card to pay for the bill. The card was never actually stolen. Just borrowed.
- Documents or receipts in the trash– Yes, people will dig through your trash. It just takes one credit card bill or pay stub.
- Phone or email scams-People will call and pose as your bank or credit card company and ask for your SSN to identify yourself. Be careful. I worked for a major bank for years and we never made phone calls like that. Ask if you can call back to verify their identity.
- Hacking unsecured computers and wireless networks
The number of identity fraud victims jumped from 13.1 million in 2013 according to a new report from Javelin Strategy & Research. Scary, isn’t it? How does a person even begin to protect themselves. Identity theft victims can suffer years with denied credit, erroneous collection activity, and even tax implications – not to mention the emotional damage from stress. Avoid being a victim…protect yourself with these 7 tips.
1. MIND YOUR PURSE AND WALLET
When out and about don’t carry every credit card, debit card and bank account number with you. Limit the number of personal information items you have on you at all times. Never have your social security card in a purse or a wallet. Keep a list of all account numbers and a contact number for the creditor locked in location that is readily available should you need it.
2. BEWARE OF WHAT YOU SHARE
Social media is where we share our lives…but, just think. You are going on a family vacation and share it all on Facebook. Your house is obviously empty. Thieves watch for this sort of thing. Don’t accept friend requests from people you don’t know and be smart about what you share.
3. PROTECT YOUR PERSONAL INFORMATION
The most basic personal information is often the only information that is actually needed to commit fraud. Your social security number and birthdate are often enough. Never use those numbers as part of a username or something that is commonly seen by others. This includes apps on your mobile device. Make sure you are downloading only reputable apps and be smart about what you share.
4. BEWARE OF “PHISHING”
E-mails that are sent from a legitimate site will never ask you for your personal information, so if you ever see one that is coming from a bank or a creditor, be very wary. Contact the institution who “sent the e-mail” right away for further instructions. If you’ve entered in your information, it’s possible that thieves already have it.
5. REVIEW CREDIT CARD AND BANKING STATEMENTS
Review all of your statements to verify that the charges were made were made by you and you alone. If you don’t recognize call the bank or financial institution right away to dispute the charge as there are time limits on disputes.
6. SHRED DOCUMENTS WITH SENSITIVE INFORMATION
Never toss in the garbage any paperwork with sensitive information on it. Thrown away statements and information make obtaining account numbers easy. Shredding unneeded documents is probably one of the easiest ways to protect your identity.
7. REGULARLY REVIEW YOUR CREDIT REPORT AND SCORES
Each year you are entitled to a free credit report from all three of the major credit bureaus. These reports would be a good place to look for any sort of unusual activity, including new lines of credit and address listings. Be diligent with your finances…protect yourself and your family to get some peace of mind.
If you’ve already become a victim of identity theft, read “Identity Theft Help” by Ashley Hagelin.
Want a second set of eyes to decipher your credit report? Contact LSS at 888-577-2227 to schedule a Credit Report Review. Or if you want to set up a budget to conquer your debt, call us or visit www.ConquerYourDebt.org to get started online. It’s never too late to improve your finances – take action today!
When counseling my clients, I admit to them all the time that I come to this line of work from a checkered financial past. I’m not ashamed of it. Managing finances isn’t an ability, it’s a skillset. Skillsets need to be taught. If you weren’t taught (which I wasn’t), then you probably don’t know how to do it.
There were a lot of initial hesitations and resistances to learning that skillset for me. One was self-doubt. I wasn’t sure I could learn it (hint: I did. You can, too.) Another was just the uncertainty of doing something new. Change can sometimes be scary (hint: Sometimes change can be for the best. This is one of those times.) Perhaps the biggest hurdle for me to get past, though, was how tedious and detailed I assumed it was going to be (hint: “Assumed” is a key word, there. Budgeting can be as simple as you want or need it to be—and it’s way better to have a simple budget than no budget, at all.)
That last barrier is something I’ve been thinking about, lately. First of all, let me say that I think if you start out with a more detailed budget, it gives you a much better grasp of your situation. Your awareness of your cash flow is higher. I think it’s a good idea to at least sit down and do a pretty detailed budget once, just to engage you in the process and really get you thinking about how you spend and what you spend it on; and I mean EVERYTHING. Soak in that process. If you find numbers that make you uncomfortable, ask yourself 3 important questions:
- Why am I uncomfortable about it?
- Do I feel like I need to change it?
- What would I feel comfortable changing it to?
So now let’s say you’ve done all that. You sat down, you spent some time working on a detailed budget, and now you’re looking forward to moving on and sticking to the plan without the plan’s details bogging you down. Here are a few thoughts on how to do that.
First of all, consider that there are a number of things in your budget that likely won’t change month to month. Your mortgage or rent might change once a year. Your car payment is what it is. So is your insurance. In fact, when you think about it, I bet there are almost more categories that don’t change than there are that do.
The categories that almost certainly will have changes in how much you actually spend are things like gas, groceries, entertainment, and eating out. Those categories that are a little more fluctuating are also probably the categories that you need to be a little more on top of. (Doing a full, detailed budget can help you figure out where your “problem” areas exist.) So how do you do that?
Well, to be honest, there are lots of ways—but they’re all based on the exact same principles. Those principles are: 1) Setting a limit; and 2) Doing something to help stay within that limit.
One example of that might be groceries. Let’s say that my grocery limit is $150 for the month. That’s the limit that has been set according to how it fits into the rest of my budget. So then I have a few different options I can use to try and help facilitate staying within that limit.
Maybe I have a sub-savings account at my credit union or bank and I have $75 out of each check automatically transferred in there. And then when I go grocery shopping, I make sure to take the cash out of that account. When that account is empty, I’m done grocery shopping for the month.
Maybe another option is to buy a gift card for $150 from the grocery store when I first go at the beginning of the month. Then, I never buy groceries with cash but, instead, I always pay for them with my gift card. When I run out of money on the card, I’m done grocery shopping for the month.
Maybe a third option is to put $150 in an envelope on the kitchen counter at the beginning of each month (or put $75 into it from each paycheck.) When I go to the store, I take the cash out of that envelope. When I run out of money, I’m done grocery shopping for the month.
A fourth option could be to collect receipts and keep a running total each time I shop using a ledger. When I hit my $150 of expenses, I’m done. A fifth option might be to use a smartphone app that allows me to punch in transactions as I do them, and when the app tells me I’ve hit my limit of $150, I’m done.
I’m sure there are more options than that, too. Again, the best system is whatever system works best for you, so don’t be afraid to experiment. All of those examples are basically based on those same two concepts from before. (As an aside, you know that if you keep hitting your limit halfway through the month, it means that you probably need to revisit the budget and rework your plan. Same thing if you find you’re actually only spending $100 a month, too. Revisit, rework.)
You just need to find some system for yourself that also works within those two concepts for whatever those “problem” spending areas are: 1) Set a limit; and 2) Take action to stay within the limit. It doesn’t have to be tedious. It doesn’t have to bog you down. And I suspect that you’ll find that making the (I promise you not-too-overwhelming) effort to stick to those concepts will have big gains for you in your ability to control (and enjoy) your money.
Dan Szymczak is a HUD certified housing counselor at LSS Financial Counseling. If you want help from a certified credit counselor or have questions about how to find a budgeting method that works best for you, call us at 888-577-2227 or visit www.ConquerYourDebt.org to get started now.
Here we are, well into January now. Have you already fallen off the wagon with your resolve to stop eating so much or get more exercise? Don’t give up for the year! Even if those resolutions didn’t stick, there’s no law that says you have to wait until January 1, 2016 to try another one. A
s our regular readers know, our bloggers are financial counselors by day. We are in the trenches with debt and budget issues day after day. And, we have some valuable advice to offer. This piece of advice will make a good Anytime of the Year resolution:
Schedule a regular date to visit your finances at least monthly, but preferably bi-monthly or weekly.
A common theme we observe in our offices is hectic, busy lives leading to disorganization, overspending, and expensive debt. (That expensive debt can mean hundreds of dollars spent each month on credit card interest charges, on overdraft fees, on revolving payday loans, or on any other devious ways that suck us dry.) And the reality is, there is no substitute for devoting space in your life to your finances to gain control.
Pick a time when you can have peace and quiet, even if only for 20 minutes. Some time is better than no time. Put it on your calendar as a recurring date. For your date, have a nice cup of tea or cool drink, depending on the season. Make sure the kids are distracted or locked away. Now that you are settled in, what do you do on this date with your finances? Oh! There are so many ideas!
- Check your balance in your bank account.
- Review your debit card transactions.
- Look at your credit card statements—the full statement—and force yourself to look at your interest rates and monthly interest charges along with all the transactions.
- List your fixed monthly bills (rent, phone, electricity, student loan payment, etc.) with due dates.
- Calculate your net income.
- Set a savings goal, and then set up an automatic transfer or direct deposit to savings.
- Plan out your paychecks—when will you pay which expense?
- Do the math—after fixed expenses and savings, what is left for everything else?
- Schedule an appointment with a financial counselor to develop a debt repayment plan.
The list can go on, and get into deeper areas. Are you and your partner on the same page? What are your long-term goals? What steps do you need to take to get there? Don’t try to cover everything on each date. The routine maintenance checks listed above will become easier and faster, leaving time for the other financial issues. The point is to just start. It is a small commitment. Not like having to exercise an hour a day. Who wouldn’t fall off that one in the middle of January?! The payoff for the small commitment is huge—control, peace of mind, success!
Need some professional guidance to get you started? Visit our website at www.ConquerYourDebt.org. Here’s to a Prosperous New Year everybody!
Author Mary Ellen Kaluza is a Certified Financial Counselor at LSS Financial Counseling. Give us a call at 888.577.2227 to learn how to start Conquering Your Debt!
I’ve had several identity theft victims in my office in recently. They all said they didn’t know where to start to deal with it. So, here it is:
Where to Start
Identity theft is the most frequent complaint filed with the Federal Trade Commission (the agency created in 1914 to protect the public against unfair commerce practices, later charged with much greater consumer protection duties.) I always encourage clients to file an identity theft complaint with the FTC. They publish an annual report of complaints, cited by everyone else as the barometer of consumer issues. The more data the FTC has, the better the statistics and allocation of resources.
FYI: One statistic I found very valuable is that young people (20 -29) are the most frequent victims of identity theft. You can be sure I will be quoting that to my 23 year old daughter!
Let me start by saying that the Federal Trade Commission (FTC) is my go-to source on identity theft. Bookmark this website: http://www.consumer.ftc.gov/features/feature-0014-identity-theft.
Preventing identity theft is, of course, preferred over being victimized. See our blog 7 Tips to Protect Yourself from Identity Theft . Unfortunately, we see people after they have been victimized.
Know the Signs
- Withdrawals from your bank account you don’t recognize.
- Bills or other mail don’t arrive.
- Your checks are refused.
- Debt collection calls about debts that aren’t yours.
- Unknown accounts, inquiries or addresses on your credit report.
- Medical bills for services you didn’t have.
- IRS notice that a tax return has already been filed in your name.
- Notice that your information was compromised by a data breach.
First Steps (The sooner you take action, the less damage to repair)
- Get a notebook and folder to record and save all action such as phone calls, letters, etc.
- Place a fraud alert on your credit reports. The fraud alert is good for 90 days.
- Contact one of the 3 major credit bureaus as they are required to pass on the information to the others:
- Experian 1-888-397-3742
- TransUnion 1-800-680-7289
- Equifax 1-800-525-6285
- Mark your calendar to renew the fraud alert at the end of the 90 days.
- Consider putting a credit freeze on your credit reports. This prevents new creditors from accessing your reports instead of requiring them to verify your identity as with the fraud alert. Credit freezes may cost money, depending on your state laws. (They take time to unfreeze so you must plan ahead if you are intending to apply for credit.)
- Order your credit reports from each credit bureau at the numbers above. Explain you have placed a fraud alert on your reports. This entitles you to a free report. Review the reports carefully for any suspicious information. Meet with a financial counselor if the reports make your head spin. (link to counseling here?)
- Create an Identity Theft Report (aka Affidavit) through the FTC. This helps you gather the information you need to file a police report, provides important statistical information to the FTC, and is useful when dealing with companies who want you to pay for fraudulent activity.
- File a police report with your local police department and get a copy or report number. Here in Minneapolis, it can be done through our one-stop city service resource called 311 Minneapolis. Maybe your city offers a similar service.
- Call your credit card companies to alert them to the identity theft.
The Next Step: Clean Up
Write the credit bureaus. Specifically request the fraudulent activity be removed. Send certified mail.
- List of fraudulent information from your credit reports.
- Copies of credit reports showing the fraudulent activity.
- Copies of the affidavit and police report.
- Copy of your identification.
- Call the companies of your existing accounts if you have fraudulent charges.
Let them know you are a victim of identity theft and ask what they need from you. Make sure to send the needed information certified mail and log your phone calls with notes from the conversation, dates letters were mailed; and keep copies of everything sent. The FTC has very detailed instructions and sample letters: http://www.consumer.ftc.gov/articles/pdf-0009-taking-charge_0.pdf
It is a lot of work dealing with identity theft. It can take months, even years to fully recover, depending on the extent of the damage. So, take the old Ben Franklin quote to heart: “An ounce of prevention is worth a pound of cure.”
Author Mary Ellen Kaluza is a Financial Counselor at LSS Financial Counseling. Give us a call at 888-577-2227 or visit our website at www.ConquerYourDebt.org to learn more about LSS.