How One Little Habit Can Save You $45,000…Really!

August 27, 2015

Chances are, it’s not one major financial decision you make in your lifetime that will seal your future. It’s about the small choices you make everyday.

Those everyday choices become habits. Habits become a lifestyle…a lifestyle to which you become accustom easily.

I’d like to share a true story about a friend of mine who just retired. Early in his career, he made a choice of going to the nearby gym over his lunch hour, and ate his brown bag lunch after exercising. This was his routine five days a week, 50 weeks a year. Oh sure, he would occasionally go out for lunch with colleagues, but generally, he packed his lunch so he could fit in his exercise regime. He really didn’t think much about the savings he would reap from his  brown-bag lunches, since he didn’t skimp on eating what he wanted.

But the results were remarkable…He conservatively figures he saved about $45,000 on lunch costs over his career. Wow!

Do you have a habit that packs a wallop like that? Let me know!

Spending Shift: More Buying at Moment of Need

August 20, 2015

Consumers are showing signs of shopping for items as they need them instead of buying a month or two ahead, as evidenced by a recent survey on back-to-school apparel shopping.

Contrary to shopping the traditional peak month of July, the shoppers surveyed said they are waiting until August or September, according to a survey conducted by The NPD Group market research firm. Roughly 55 percent of those surveyed said they will finish back-to-school shopping in August and 19 percent said September, making September the second largest buying month for back-to-school.

Marshal Cohen, chief industry analyst for The NPD Group, added, “When so many consumers are planning to do their back-to-school shopping in the months not traditionally considered part of the season by retailers, it’s time to break with tradition and change the way we market and measure this shopping season.”


Can You Cut Your TV Expenses?

August 4, 2015

Seems like you keep paying more for less TV service? It’s not just you.

Your pay-TV rates are rising an average of 6 percent a year. For 2015, pay-TV subscription for basic service and premium-TV channels will cost the average U.S. household $123 every month, according to The NPD Group, a market research firm. Data showed only 16 percent of U.S. households do not currently subscribe to pay-TV services.

So what about someone who cuts the cord and cancels? Many are accessing programs from free-to-air broadcasts, free Internet TV, and more on-demand services like Netflix.

Said Keith Nissen, research director for The NPD Group, “As pay-TV costs rise and consumers’ spending power stays flat, the traditional affiliate-fee business model for pay-TV companies appears to be unsustainable in the long term. Much needed structural changes to the pay-TV industry will not happen quickly or easily; however, the emerging competition between S-VOD and premium-TV suppliers might be the spark that ignites the necessary business-model transformation of the pay-TV industry.”

Should You Freeze Your Credit?

July 27, 2015

Worried about identity theft or already experienced several breaches? You might want to freeze your credit or use a fraud alert.

A fraud alert allows someone to get a copy of your credit report if they can verify your identity, and it’s free. A freeze restricts access to your credit report entirely, and you typically pay a $5-10 fee per agency.

A freeze or fraud alert does not affect your credit score, stop pre-screened offers for credit, or prevent you from getting your free annual credit report from

To order a credit freeze, you must contact each credit reporting agency:

Equifax – 800.525.6285 

Experian – 888.397.3742 

TransUnion – 800.680.7289 

You will supply your full name, address, birth date, Social Security number and other personal information. Each agency sends a confirmation letter and a PIN (Personal Identification Number) that you use to lift the freeze. The freeze remains in place until you request it be lifted, and there may also be a fee to do so.

You can place a fraud alert to protect your credit from unverified access for 90 days to 7 years. To do this, contact one of the credit reporting agencies listed here and give proof of your identity. This agency must tell the other two agencies.

Why FICO Score Can Vary

June 27, 2015

About 90% of the top lenders use FICO® scores to make lending decisions. According to FICO, the information on your three credit reports could vary because:

➜➜Lenders are not required to notify all three credit reporting agencies—or any of them.

➜➜Each agency processes data differently.

➜➜Even if one FICO score is high, you could be dinged by one of your lower scores.

➜➜Each lender uses different criteria to evaluate credit scores.

➜➜Lenders usually report account performance once a month, but not necessarily at the time you pay your credit card bill.

College Grads Can Get Their Loan History

May 2, 2015

Students with federal loans can use the government’s student aid database at to access the status of each loan, outstanding balances, disbursements, and total loan debt. Check it out here.

How to Shop for an Annuity

April 22, 2015

This post is reprinted from Financial Awakenings, a blog by Rick Kahler. Kahler is a financial advisor. You can find his weekly column here

If you’re shopping for an annuity, then, what should you look for and look out for?

First of all, do your own research. Carefully read everything a salesperson gives you, but get some independent information as well. A good start is an internet search for “annuities pros and cons” to get some pros-and-cons.jpgbasic facts.

Some of the benefits of annuities are:

• Tax-deferred growth

• No income restrictions or limits on contribution amounts

• Guaranteed lifetime income

Some of the drawbacks are:

• High fees and sales commissions

• Payments are taxed as ordinary income rather than capital gains

• High penalties, taxes, and surrender charges if you take money out early

• Paying for life insurance you may not need

• The guaranteed income may be significantly less than what a diversified portfolio may yield

• Unlike most retirement plans, contributions are not tax deductable

Second, ask specific questions about fees and commissions. Insist on having the numbers set out clearly so you know exactly what the annuity will cost you each year in addition to the initial premium. Be sure you know the financial penalty for getting out of the annuity. If the salesperson brushes you off with vague or confusing answers, take your business elsewhere.

Third, comparison shop. Check out annuities from several companies, including brokerage firms like Vanguard, Ameritas, or T. Rowe Price, to compare rates, costs, and benefits. But don’t stop there. Compare the annuities to other investments, such as 401(k)’s, IRA’s, and mutual funds, to decide whether the annuity is the best place to put your money. Many investment advisors recommend that you not even consider annuities until you have maxed out other tax-deferred options like IRA’s and 401(k) plans and you are in the top income bracket (currently 35%).

Fourth, get independent advice. Before you sign any annuity contract, have it reviewed by someone you trust who is familiar with investments and has no interest in the transaction except your well-being. From my perspective, of course, ideally this would be a fee-only financial planner. If you don’t have a financial planner, you might get advice from an accountant, an attorney, or a trusted and knowledgeable family member or friend.

Always remember two basic precepts: the more you educate yourself, the less you can be taken advantage of, and beware of anything that sounds too good to be true.


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