Covering the Basics – Saving for Your Christmas/Holiday Fund 2015

January 22nd, 2015

125183558We’re nearing the end of January and you have probably opened all the credit card bills that you racked up over the holiday season.  If you had your choice next year, would you be doing the same thing?  In January 2016 do you want to be dealing with credit card debt, or would you like a new idea to tackle holiday costs?

It will start the New Year out a whole new way. Hopefully you are all ears – as there are several ways to create the fund for your 2015 holiday gift fund.

First, think back to your total holiday spending for 2014.  Include gift wrapping, food, gifts, entertainment and holiday events.  Here’s one idea that I have shared with many people – it’s easiest to explain with an example:

Suppose your total spending was $500.00. Divide that amount by 10 (months).  Result? if you save $50 each month, then by November you will have $500.00 for next year’s holiday shopping.  It can be your own “Christmas Club!”

Another idea involves starting your shopping list now, and shopping all year long. I had a friend that always had her shopping done by August and could enjoy celebrating the holidays with no financial stress.  One bonus of this strategy is that you can take advantage of sale prices whenever they come up during the year.

Another benefit of starting holiday shopping early is that you have plenty of time.  With time comes the opportunity to price gifts online or compare by phone.  Remember to read about taxes, shipping policies and the fine print.

Our giving hearts come out during the year, so don’t forget to include giving to your local charities.  Check to see if your employer offers a match your contribution.

~Susan

Saving, Smart shopping

January is Radon Month

January 20th, 2015

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In the winter months, we spend lots of time in our homes.  Is your home safe?  Yes, you have smoke, carbon dioxide detectors, and fire extinguisher in your home.  But has your home been checked for RADON?  Iowa has a high incidence of radon in homes. As the glaciers came over Iowa, they deposited finely ground rocks that contain radium. Because the rocks that make up our soils are so finely ground, they have a large surface area to emit radon gas.

Radon is a natural radioactive gas that can cause cancer. You can’t see, smell or taste it, but radon may be in your home. The Surgeon General’s National Health Advisory on Radon states that “Indoor radon is the second-leading cause of lung cancer in the United States and breathing it over prolonged periods can present a significant health risk to families all over the country.”

High levels of radon can be found in any type of home, so it is important for everyone to test their home. It can happen in older homes as well as newly constructed homes. Radon gas can enter  through even small cracks in the foundation or openings in the foundation of homes like sump pumps or spaces around pipes. For some individuals with wells, radon in the well water can enter the home and become airborne during showering or dishwashing. The amount of radon from groundwater is generally small compared to the amount of radon that comes from the soil.

When I bought my house about three years ago, this is one test I had done.  Guess what? The house I was going to buy had 3 times the recommended level of Radon.  It has since been mitigated.

January is Radon Month!

~ Susan

Consumer Knowledge, Insurance ,

Do you need a health insurance exemption?

January 15th, 2015

Please PayIf you didn’t have health insurance coverage for any portion of 2014, you may encounter a surprise on your income tax return.  Americans are now required to carry health coverage, unless they qualify for an exemption.  Those who did not will face a fee, called the “Individual Shared Responsibility Payment.”

There are two kinds of exemptions; some can be handled directly on your tax return, while others require application and approval.  That approval process can involve a 2-3 week waiting period, so now is a good time to get going on it if you haven’t already done so.

Exemptions which can be handled directly on your tax return include:

  1. Income-based exemptions (i.e. if your income is low enough that the law agrees that you can’t afford health insurance).
  2. Only a short gap in coverage (less than 3 months)
  3. Not lawfully present in the United States
  4. Member of a health-care sharing ministry
  5. Member of a Federally-recognized Indian tribe
  6. Incarceration
  7. If you had coverage beginning on or before May 1, 2014, you have an automatic exemption for the months before that. NOTE: this exemption is unique to 2014, because the open enrollment period was extended until March 31.  The same exemption will not be available in future years
  8. Employer coverage with a non-calendar plan year, so you were not able to join your employer plan until, for example, July 1.  This exemption is available only in 2014.

Exemptions requiring application and approval.  You need to apply for these exemptions through the health insurance marketplace (www.healthcare.gov), and if you are approved, you will be issued an Exemption Certificate Number which must be added to the tax return.

  1. Hardship exemptions.   Even if your income appeared to be high enough that you could afford insurance, the marketplace may grant you an exemption if you faced certain hardships, such as homelessness or eviction, domestic violence, large medical expenses, disaster, and others.
  2. Religious objections.  If you are a member of a recognized religious sect whose members object to insurance, you may apply for an exemption.
  3. AmeriCorps coverage available to those serving in AmeriCorps, VISTA, or NCCC.

The list above is not 100% comprehensive, nor does it give all the details.  If you (or someone you know) were uninsured for part of 2014, I recommend you go to www.healthcare.gov/exemptions to find out if you qualify for an exemption.

At that link, you will also find information about the fee for being uninsured.  Although the fee for 2014 will be fairly small, it will go up in 2015, and again in 2016, so now is the time to consider enrolling in health insurance.  Go to www.healthcare.gov for details.

~Barb

Consumer Knowledge, Insurance , , , ,

Tax Refund? Invest! (one way or another)

January 13th, 2015

182106567If you’re expecting to get a tax refund this year, you may already have plans for what you want to do with it.  I’m not here to change your mind.  But I do have an idea for your consideration: use your refund as an investment.

Am I telling you to put it away for retirement?  Well, that’s certainly one possibility.  When you invest in financial assets that will produce income or grow in value, that pays off in the long run.  If you are 30 years old, and invest $1,000 of your refund in a retirement account that earns an average of 8% annually, you will have nearly $15,000 at age 65, just from that one deposit.  That’s a nice payoff. But financial assets are only one way to get a payoff from your money.

Let’s think of an investment as anything that over time produces value greater than the original cost – that is, anything that can be compared to planting a seed and seeing it grow.

As I see it, some purchases can be investments.  Buying a new or different car?  Maybe.  If you’re buying a car because you don’t like the color of the old one or you want a better sound system, I would not see that as an investment.  It doesn’t provide any long-term payoff.  But if  you’re buying a  car that is necessary so you can commute to a new job, that’s an investment.  It will pay off because it enables you to earn money at the job.

Likewise, a new computer could be an investment if it is going to be used to further your education, but if you’ll mainly use it to surf the web and pay games, then it may just be an expense… no long-term payoff.

If you’re buying experiences, you can also evaluate the payoff.  Some experiences will provide a greater payoff than others.  Some people plan a family outing each year with part of their tax refund.  Most family outings will have some short-term payoff, providing family bonding time and enjoyment.  But some outings provide greater long-term payoff.  If your children have never seen a live play on stage, then taking them to a community theater production might have greater long-term payoff (expanding their cultural awareness) than going to a movie that’s a lot like the other movies they’ve seen.

Paying debts is a common use of tax refund money.  It provides an immediate payoff, and some larger payoff too if it saves money in interest or means you won’t get evicted.  I suggest, though, that you take debt payoff a step farther and invest in financial security by setting up an emergency savings account that will prevent you from being in debt when tax time rolls around next year.

How will you invest part of your tax refund this year?  ~Barb

Goals, Saving ,

Where do your tax dollars go?

January 8th, 2015

When you look at your 2014 W-2 form (which should arrive around the end of the month), you may wonder at the amount of tax that was withheld from your pay. If you started working in the 1960’s or 70’s, the total amount withheld this year may be greater than your entire yearly salary in your early career. So where did this amount, “equivalent to a small paycheck,” go?

Visit http://www.whitehouse.gov/2013-taxreceipt and use a tool that illustrates how your federal tax withholding amount is divided among the programs that provide for the common good.  It generates a receipt for your social security tax, Medicare premiums and federal tax withholding. Allocations include national defense, healthcare, education, agriculture, natural resources, international affairs and other federal spending categories. If you click on each one you’ll see a description of what is included in each area. Jobs and family security for instance includes unemployment benefits, food assistance, tax credits and other programs designed for income security.

If you take a few minutes to examine the results, you’ll begin to see why individuals are speaking up about the national debt. For myself I wonder about the balance between funding which supports asset building and funding that only offers a short term solution. See what you think.

Joyce

Consumer Knowledge

Finance Education Online

January 6th, 2015

My Extension resolution for the new year is to expand learning opportunities online. Our audiences have plenty of activities on their calendars and this approach should provide another option to participate. Two programs are set to roll during the first few months of the year.

On January 19th, from 6-8 pm, Family Finance staff are offering the second presentation of our health insurance program, Smart Choice: Health Insurance. The class will take 2 hours of your time and includes vocabulary, definitions for different forms of policy coverage, a review of what personal factors should be used to select coverage, and information about changes brought about by the Affordable Care Act. Even if you have employer insurance the content will help you make a “smart choice”. Open enrollment continues until February 15th for everyone purchasing private coverage. As many participants have shared in our face to face presentations, “You usually don’t understand your coverage until you need to use it, and then it can be too late.”  To register for the class go to:  http://tinyurl.com/pvmceb7.

YMYFlogoOn the first Monday evening of each month beginning at 5:30 pm you can take a short 2 hour class which contains content from our Your Money Your Future program. During the online class time we’ll go over methods to track spending, discuss setting up a spending plan, and talk about working toward achieving financial goals.  Stop by your Extension office to pick up a registration brochure, the fee is $15. Or call the Cerro Gordo Extension office to find out how to register. 641-423-9844  Date choices include Feb 2, March 2, April 6, May 4, or June 1.

 Joyce

Uncategorized

Cars For Young Drivers

January 1st, 2015

minivanAt our house, we tend to buy cars new and drive them till the last gallon of gas in the tank will carry them to the junk yard. We do our research and prioritize our criteria before buying, and at the top of that list is the safety crash ratings. So, when my kids were teens and learning to drive, they always drove a large old vehicle, which at that time was a soccer-mom-van. We felt the vehicle would keep them safe should they have an accident.  BONUS: the fact that there was nothing cool about their mode of transportation reduced the chance of friends wanting to hitch a ride (They wouldn’t want to be seen in such an uncool vehicle). This also reduced the risk of the driver being distracted by a car load of their sometimes-silly friends.

According to the December 19, 2014 Consumer Report article (http://www.consumerreports.org/cro/news/2014/12/why-teens-shouldn-t-drive-old-cars/index.htm), teens should not drive old cars. The government’s Fatal Accident Reporting System found that fatally injured teens were more likely to be driving older cars that lacked the safety equipment now available as standard equipment on new cars. The Electronic Stability Control (ESC) feature has proven to save more lives than any other innovation since seat belts. This safety control is especially helpful in tall SUVs and pickups with a higher center of gravity which are more likely to roll over when they go sideways off of hard pavement. In 2003, when this feature first came on the scene, it was only available in luxury cars. It is not likely that I would have been buying that car for my teenage drivers.

The good news is…the first cars with ESC are now older and cheap enough to be in the price range that young drives could afford. How does this information effect the car purchasing decisions you are making for your teens? ~Brenda

Consumer Knowledge, Smart shopping

Returns and Exchanges

December 30th, 2014

photoI worked at a small-town general store while in high school. The manager trained me to accept everything as a return – even if I was sure  the item did not come from our store (a brand we did not carry) or had clearly already been worn. He believed it was important to keep the customer happy, and that by accepting the return, we made them OUR customer for all future sales. Things have definitely changed in the world of Returns and Exchanges.

Return policy laws vary by state. For the most part, stores can set their own policies…”30 days”, “merchandise credit only”, “all sales final.” Some states require a posted sign. In others, the policy needs only to appear on the sales receipt. Some stores record IDs in a tracking database while others only require the sales slip or gift receipt to establish where and when the item was purchased and at what price.

According to the return policy survey put forth annually by ConsumerWorld.org, this year some stores are making returns easier, by extending the time period for returns or offering postage-free return shipping, but for the most part, policies have remained the same. Some companies offer return “perks” to those who use their store credit card. Some companies require the sales tag to be in place to prevent buyers from returning clothing after wearing it to a one-time event. One large company will flag a customer if they return 3 items without receipts within a 45-day period; a flagged customer must get manager approval to make a return. These “flags” will remain in the system for 6 months and will disappear if there are no more returns during that time period.

Return policies are in place to reduce return fraud, which cost retailers an estimated $9.1 billion dollars in 2013. What experiences have you had this post-holiday season when it comes to returning or exchanging gifts? ~Brenda

Consumer Knowledge

Last Minute Shoppers…

December 22nd, 2014

178632874 holiday gift

If you’re in a bind because you’re a last-minute shopper, here are some strategies I’ve used – you might find them useful, too!

I remember a year when I wasn’t able to complete my holiday shopping list because I was iced in.  In that case, I gave the person a coupon for the gift; the gift itself was secured and delivered after the big event.  This strategy works for adults but not children.

How many of you are waiting for the delivery truck to complete your holiday gifts list?  Things happen and deliveries do not always arrive on schedule.  If this happens to you, providing a picture of the intended gift is helpful.  One year I had ordered a personalized 13” x 9” pan to give someone; I thought it was in plenty of time but it arrived after the holiday gathering.

If you need to wrap gifts – look for a charitable group that is doing wrapping at the mall. Or gift bags and tissue paper works great too.  If you have an item that is large – decorative garbage bags or tablecloth works for the big screen TV.  You can use newspaper comics too.

Be thankful for your families and friends and enjoy your holidays.

~Susan

Consumer Knowledge, Smart shopping

Invest in Things? Or Experiences?

December 18th, 2014

girl-flower - smMy parents are trying to reduce the amount of “stuff” they have, knowing they will soon want to move off their acreage into a smaller home in town.  As I see how challenging this is, I can’t help but be aware of all the things I’ve accumulated, too.

Most Americans have a healthy supply of “stuff” . Having more than we need is not a bad thing; but having more than we can use, enjoy or appreciate? That may be the definition of wasteful. 

Frequently, we will enrich our lives (or the lives of our children or others) more if we  invest in experiences rather than in things.  Experiences will never sit and gather dust in a closet; the memory and the learning will always be vital.  In many cases the best gift is not another sweater or another household item, but instead an experience.

What kind of experience?  There are so many options: a meal at a unique ethnic restaurant; attending a play;  piano or guitar lessons; building something with others; a day at the museum.  Experiences don’t need to cost money either: consider volunteering, offering to teach someone a skill;  planning a regular walk with a neighbor or friend.

If the holiday season causes you to reflect on your priorities and you wish to focus your energy and resources where they will really matter, I encourage you to pay attention to how you balance experiences with things.

NOTE: I don’t want to suggest that experiences are right and things are wrong.  All things are not wasteful, certainly; some are needed, some bring lasting enjoyment, and some (such as board games or building blocks) create beneficial experiences.  Likewise, some experiences have little or no value.  But if we are conscious of maintaining an appropriate balance between things and experiences, we’ll be more satisfied, and also less wasteful.  ~Barb

Consumer Knowledge, Spending plans