Put a Jingle in Your Christmas

December 20, 2014

So you think saving is hard enough during the year, and you can’t imagine trying to save money during the Christmas season – aka “tis the season to be spending”? Plus, you just expect to sing the blues with the January bills?

Saving during the holidays isn’t impossible, providing you clean up some of those sloppy financial habits and get creative. Here are 4 steps to take.

1. Consider your holiday spending personality with this checklist:

What are your holiday patterns – Do you like to shop for gifts, wrap them, entertain, decorate, bake/cook, and/or party hearty? Do you prepare or procrastinate?

Do you:

• Stick to a spending limit or leave it open-ended?

• Buy gifts for everyone who’s anyone?

• Spend time to find just the “right” gift for each recipient?

• Shop early, search for sales or wait until the last-minute?

• Want to spend an equal amount on everyone?

• Want to be “best” gifter, “best” baker, “best” host AND life of the party?

• Strive to “keep-up-with-the-Joneses” and have a mental checklist?

• Find things for yourself as you’re looking for others?

• Make numerous donations for various causes?

2. After you have an idea how you might spend, make a budget.

Who needs a budget? Anyone who’s spending! In addition to buying gifts, also earmark money for those often unseen expenses:

  1. Extra groceries for entertaining and baking
  2. Hostess gifts
  3. Transportation
  4. Decorating
  5. Appearance (new accessories, manicure, dry cleaning)
  6. Eating out, including alcohol
  7. Unexpected incidentals

So…you’ve made that budget. What more is there?

3. Planning ahead is everything!

Here are some ways to do that:

  1. Plan to make your money go farther – Check for sales
  2. Plan to shop with a list – to stick to your budget
  3. Plan to use coupons and frequent shopper rewards
  4. Plan ATM visits – to avoid fees
  5. Plan to not overdraw accounts – avoid overdraft fees

Not planning your time costs you:

  1. Snacks to eat – high-priced stops to curb hunger can bust a budget
  2. Wrapping gifts – many retailers wrap for free if you have time to wait
  3. Shipping costs – avoid last-minute rush pricing, and ship direct if ordering on-line
  4. Group your shopping trips – Plan to use less gas and time
  5. Use cash – and avoid credit card fees in January
  6. Plan enough time so you aren’t rushing – Accidents cost too!
  7. Stress is a cost of not planning. So avoid the last-minute panic, disappointment, fights, depression, stomachache, overeating binge, and the “January bills” blues.

 4. Creativity Counts…and might save some money as well.

• Make some gifts – presents or presence??

• Learn a skill, give a skill.

• Magical touches – wrapping, cards, photos, surprises

• Co-op with others-baking, writing cards, making crafts.

• Make some memories – Party together, photo books, open houses, nativity scenes

• Make some TIME – texting doesn’t count (call Mom), do lunch with someone

• Make a tradition (bake cookies with your friend)

Let Christmas spending and giving bring out your best financial behavior, not your worst.


How to Avoid 2015’s Higher Bank Fees

December 1, 2014

ATM fees hit a new high this year and so did overdraft fees and some other account fees, according to the 17th annual Bankrate Checking Survey. On average, consumers using out-of-network ATMs now pay $4.35/transaction, up 5% in 2014.*

Fees in 2015 promise to be higher, too. Sometimes those pesky fees can’t be avoided, but getting dinged with several ATM charges every month signals sloppy financial habits you can fix.

Plan ahead, even a little!
1. Withdraw more money in one transaction rather than make two smaller withdrawals the same week.
2. Choose an ATM in your network. To find one, use a free app called “ATM Locator.”
3. Use your debit card at the store and get cash back there instead (restrictions may apply).
4. Switch to an account at a bank with ATM locations convenient for you.

Another fee on the rise? Overdraft fees, or getting dinged for not having enough in your account to make the purchase.

How to avoid overdrafts:
• Opt-out! Choose to have a debit card purchase declined rather than pay a fee (means you “opt out” of overdraft protection, thanks to a recent Federal Reserve rule for banks).
• Keep more money in your account.
• Watch your account balance and check your activity.

Most checking account customers can avoid fees by following the rules and paying attention to transactions. For starters, that probably means you must use direct deposit and keep a minimum balance. Fees are typically higher on checking accounts earning interest but require a minimum balance. Ask yourself if that meager interest rate is worth it.

* Bankrate’s survey covers the nation’s 10 largest banks in the 25 largest markets and was conducted late summer, 2014.


Iowa Financial Know-How Challenge offers cash prizes, scholarships to Iowa high schools

November 24, 2014

Originally posted on Iowa Bankers Association:

Iowa Student Loan, the Iowa Department of Education, the Iowa Jump$tart Coalition, Junior Achievement of Central Iowa and the Iowa College Access Network have partnered to create the Iowa Financial Know-How Challenge. The program focuses on rewarding Iowa high schools that promote financial literacy to its students.

Between now and Jan. 31, 2015, Iowa high schools have the opportunity to win one of 30 $1,000 cash prizes to improve the school’s financial literacy programs and its scholarship fund. To be eligible for the drawing, the high school must register for the Iowa Financial Know-How Challenge and have students participate in the Student Loan Game Plan and ROCI Reality Check.

College-bound seniors who complete the challenge and score among the top 20 on a related assessment will be awarded a $1,500 scholarship to go toward their college education.

“These tools are a two-pronged approach to borrowing for college in a responsible…

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Want a College Savings Plan? Choose a Good One

November 15, 2014

You might want to start saving for a child’s college education with your state’s 529 plan. This type of plan may also offer you a tax deduction in the year you make a contribution.

But before you just assume you should do the plan offered by your state, consider the fees and the return on your investment. Click on the link below to see how states compare for fees and returns.

 

State 529 Plans, Fees and Performance | Create Infographics

State plans offering the lowest fees are more near the left axis. Those offering the highest returns migrate toward the top of this chart. Just mouse over a yellow dot to see the state info.


More Millennial Entrepreneurs?

October 21, 2014

Recent news reports show a solid number–about 54%–of millennials express desires to start their own businesses. But only 8% have tried.

By Kauffman Foundation measures, the percentage of new entrepreneurs between ages 20-34 is actually less – 22.7% in 2013, compared to 34.8% in 1996. Look at more trends here. In the next 15 years, the number of Americans reaching their 30s and 40s – the peak years for entrepreneurs– will be larger than ever.

Do you have thoughts on what’s holding back young entrepreneurs? Do they know how to begin?


Student Debt: Is Today Really Different?

October 4, 2014

Many are horrified at the amount of student debt burdening college grads today– it’s not unusual for a student at a public university in Iowa to borrow $28,000 or more. And how will they ever repay that loan if the economy won’t cooperate and provide good jobs?

Before we bail out today’s borrowers, let’s compare their plight to those student borrowers before them and how they handled their educational goals and loans. For example, let’s consider an in-state student graduating with a B.S. from a four-year public university in Iowa.

About 40 years ago…

In 1975, the cost to attend college in Iowa averaged about $1560/year (and fees skyrocketed the next year to a whopping $2600). Some students had $2-3000 in loans, or roughly 1/4th their cost to earn a bachelors degree in four years.

At that time, the starting job for a typical college grad paid under $10,000/year, and the high end of the job scale would offer 20-25% more, typically for engineers. By comparison, summer jobs for most teens meant roughly $2/hour. The minimum wage was $2.30, except for farm workers, who got $1.60 minimum.

Though several major Iowa corporations had hiring freezes, graduates could find employment somewhere, albeit not the jobs of their dreams nor  for top-dollar salaries. Most took the job anyway.

About 30 years ago…

In 1985, the cost to attend a pubic university and earn the same B.S. degree was about $10,841/year. I know students who borrowed $10-12,000, or roughly 1/4th the cost to attend college for four years.

Comparatively, the starting job for a 1986 grad with a B.S. was just over $15,000, and new engineers would earn about $20,000/year. By comparison, teens would have earned about $3/hour at summer jobs. The minimum wage was $3.35.

Though Iowa was suffering through a severe farm crisis and recession was pending, graduates found jobs somehow, although many settled for less than the job (and salary) of their dreams. But..they took the job anyway.

As for recent grads…

In 2012, the cost to attend a public university and earn the same bachelors degree was about $16,500/year.

Statistics show that undergraduates attending Iowa’s public universities borrow more than average, taking on about $27,000 in student loans. It appears this is roughly 1/4th the cost for a student to earn a degree (which typically takes five years not four, and includes opportunities for leadership experiences on campus, studying abroad, taking unpaid internships, building well-rounded resumes, etc.)

Comparatively, starting jobs for 2012 graduates could be found for $45-50,000/year, and new engineers could earn $65,000/year. Likewise, summer jobs for teens meant about $7-8/hour, and the minimum wage was $7.25.

Though many complain that no jobs exist for them, there are companies that want to hire but can’t fill positions. Some grads are taking those jobs anyway, realizing that maybe they haven’t reached the pinnacle of their career yet and that their dream job (and salary) may come a few years down the road.

In conclusion…

–yes, college costs have risen.

–yes, the amount students borrow is more.

–yes, students take longer to finish college.

–yes, many students give up paying summer jobs for unpaid college experiences.

YET, grads borrow and have about the same percentage of college costs to pay back as ever- about 1/4th the cost of a bachelor’s degree.

AND, while some grads will snag their dream job right away, others realize that, like their predecessors, they should get out there and get working.

Begin with the end in mind.

 

 


Money Habits: Can Parents Teach Them?

August 20, 2014

When it comes to managing money, parents want to set a good example for their children. It seems that knowing how to do that is the dilemma.

According to a recent survey by T. Rowe Price, about 3 out of 4 parents are hesitant to talk with their kids about finances, even though two-thirds of parents were concerned about setting a good financial example for them.

Roughly 1 of 4 parents surveyed feel they are not good with money themselves and shouldn’t be the ones to teach their children. Almost 9 in 10 parents said it’s appropriate for kids to learn about financial matters in school. 

And speaking of financial behaviors the survey revealed….almost half the parents admitted to bribing their kids with money to encourage good behaviors, and about one third admitted to borrowing money from their kids’ piggy banks.


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