It’s Thanksgiving week. Many Americans are focused on two things: a fabulous Thanksgiving meal and starting their holiday shopping with a Black Friday extravaganza. They probably give some thought to “budgeting” for Black Friday (the Friday after Thanksgiving) – that is, to having a plan and setting some spending limits for any shopping they do that day. Whether or not they shop Black Friday, many people who will be celebrating holidays in December are probably making spending plans for holiday gift-giving.
It’s funny though – in planning for holiday spending, many of us overlook several whole categories of spending. It’s easy to forget that there will be extra spending on food and drink, decorations, travel, parties (including babysitting) and more. Those less-obvious expenses add up, and can completely derail a holiday spending plan.
So as we consider the upcoming Thanksgiving weekend, let’s all think about ways to keep spending under control for the Thanksgiving meal itself. Here are a few ideas for starters:
- Always have water available as part of your beverage selection. Sometimes people just need to quench their thirst, and water is the best way to do that. Offering a pitcher of ice water (with lemon slices if you prefer) can help save money on other beverages, such as juice, soda, wine, or beer.
- Minimize use of paper products. Using disposable plates, cups and cutlery is tempting, because clean-up is so quick, but it can add significantly to the expense of a celebration. Using “real” dishware can be extremely practical for family gatherings, though, because there are lots of people available to help make clean-up quick and even enjoyable!
- Focus on the things that matter. If stuffing, sweet potatoes, scalloped corn and pumpkin pie are the key elements of your holiday tradition, adding “extras” such as fancy appetizers, unique side dishes, or extravagant desserts may not matter very much to the people at the table. Before going to extra effort and expense, ask yourself if the additional food item will actually add to the enjoyment of the day.
What are your favorite ways to manage the expenses of a holiday meal? ~Barb
Barb Wollan, a Family Finance Specialist, is the Thanksgiving pie-baker for her extended family.
Saving, Smart shopping
The holidays will be celebrated early at our house and I’m pleased to report the stores are ready! Decorations and music are everywhere, setting the holiday mood. While browsing through some articles about managing the holiday without over-spending I found myself in total agreement with some of the tips. They included using online resources to compare prices and selection, shopping with a list, using cash instead of credit, and stop shopping when you are tired or hungry.
I have to acknowledge that the online shopping often results in annoying pop-ups and sidebar advertising (Note: good tips for avoiding these nuisances are available through commercial sites, or check with your internet provider); it was worth it, though, because I was able to sort out some key price and selection differences that saved time and exposure in stores where marketing might have tempted me to buy additional unplanned items. The list kept things on target. I did use a card, but put a limit on the charges, so I’ll be able to pay in full when the bill arrives. I was also nodding my head in total agreement that fatigue sets in quickly after you spend 30 minutes in a store making choices, especially when you are shopping for another person.
If I was adding to the list of holiday shopping tips, I would suggest not looking back when a new ad comes in the mail with a bigger discount. Create a vision of an empty shelf where the item you purchased was located and tell yourself you wouldn’t have been able to use the discount. One well thought out gift is far better than many; the time you spend shopping might be more cherished if it’s spent with the receiver enjoying each others company.
Joyce Lash is a Family Finance Specialist who is celebrating Christmas the day after Thanksgiving! YIKES!
Saving, Smart shopping
Last December I purchased material and a pattern to make my granddaughters a very popular costume. It was not a simple construction project so it was easy to postpone the task, while “thinking about it.” My only incentive to get the job done was the nagging feeling that they might move on to another character or outgrow the pattern before I got it done. Then this fall the call came: both of them had decided they wanted this costume for Halloween. It’s funny how someone helping you set a deadline finally makes a thought turn into action.
I think personal financial goals are the same. Individuals have good intentions to change how they manage their money, but until they have specific steps to take, a deadline for getting it done, and the support and expectation of someone else, it isn’t likely to happen.
The Extension store has available a Money Management Calendar, created by our Extension partners in Alabama. Changes in the 2016 edition include a goal writing page. That’s smart, because until you actually plan to earmark $10-$25-$50 each month (each or pay period) toward a money-related goal, it will probably be something you only “think about.” A clear plan can lead to action.
Another key to taking action is to find someone who will benefit from or support the goal. It can be tough to stay on track if you are alone in your effort; when an obstacle arises, it’s easy to reason your way out of following through with your plans. Another person’s expectations and their voice saying you can do it can keep you on track and moving forward. Get started by taking a look at the goal page of the new calendar. What do you want to move from “thinking about” to action?
Joyce Lash is a Family Finance Specialist and pleased she reached a goal! Happy Dance!
I just got back from a 4-hour vacation. The only thing tropical and warm about this vacation was the fish in the tank at the dentist’s office. Dad broke a tooth and it took the whole morning to remedy the problem. My husband, who farms, would typically be available to help out, but this time he was busy with harvest. As much as I would prefer to save my vacation time for visiting grandbabies, I feel very fortunate to have vacation time available to me for such emergencies AND I appreciate the flexibility my job offers for last minute absences from work. After visiting with a friend about this subject, I was all the more thankful. In her past experience working for a school district it was extremely stressful anytime a situation required her attention and absence from work.
This led me to wonder…What options do caregivers of children or aging parents have if they do not have vacation (paid or unpaid) available to them? And…if an employee does not have vacation available to them, are they in danger of losing their job if they take time off for a medical emergency?
The Family and Medical Leave Act (FMLA) entitles eligible employees to take unpaid, job-protected leave for specified family and medical reasons. In the private sector, the FMLA only applies to employers with 50 or more employees in 20 or more workweeks in the current or preceding calendar year. It applies to public agencies – such as local, state or federal government agencies or public or private elementary or secondary schools – regardless of the number of employees.
Eligible employees include those that worked for the employer for at least 12 months and have at least 1,250 hours of service during the 12 month period immediately preceding the leave. Eligible employees may take up to 12 workweeks of leave in a 12-month period. The leave can be used for the birth or adoption of a child (or receiving of a foster child), or to provide care for a spouse, son, daughter or parent who has a serious health condition. Family Medical Leave can also be used if employees themselves are ill. An emergency involving military deployment of a spouse, son, daughter or parent would also be covered under FMLA, and up to twenty-six weeks of leave during a single year is available to care for an injured or ill service member who is a member of your immediate family or next of kin.
Because Family Medical Leave is not a universal protection for everyone with a job, it is important to have an understanding of what your employer provides. It is also a good idea to set aside funds to cushion short paychecks or periods of unemployment. ~Brenda Schmitt is a Family Finance Specialist and a member of the “stuck in the middle” generation
Last weekend, I took Dad to the DMV for the third time to get a photo ID. It is the last place I would like to take dad, since it reminds him that he wants his driver’s license back; however, a Photo ID happens to be a rather important thing to have when cashing checks, getting a fishing license, acquiring a handicap parking hangtag, becoming a registered voter, accessing Veterans benefits…among other things. It took three trips to the DMV because I didn’t have the needed documentation on the first two attempts: Social Security card, Birth Certificate and two pieces of mail delivered to his current address. Why they didn’t give me all the details at the first visit, I do not know. They were very apologetic and patient and…forgiven.
Dad made a mad-dash to the publication rack to get a book so he can study for his written driver’s test – which he has already failed twice – which is why we need a photo ID; his license has been revoked.
It is an odd feeling sitting in the waiting room with the parents of teens who are waiting to see if their YOUNG driver passed; dreading the mood and disappointment if they fail. I, on the other hand, am praying my SENIOR driver fails his test; also dreading the mood and disappointment when he fails. In the car, he would read and discuss points from the book as he did one last review before arriving at the DMV. He sounded so articulate and knowledgeable. WHAT AM I GOING TO DO IF HE PASSES?!? Turns out, Alzheimer’s makes it nearly impossible to APPLY what you learn or know. It is NOT a timed test; it took an agonizing 2 ½ hours for him to complete.
Dad is going to be really busy this weekend, taking honey off his hives. I am pretty sure he is going to forget/lose his book and hopefully also forget the thought of retesting. If not…I guess I will be enjoying the opportunity to read a good book while I sit through another long session of testing…but that is still better than me telling him he can not drive any more. ~Brenda Schmitt, Family Finance Specialist and adult child with aging parent.
As a grocery shopper, are there standard items you purchase almost every week or every time you shop? Have you thought of putting the “list” in your smartphone? Your list is then always with you as long as you have your phone. You can share your list with family members, too; I have a colleague who receives a list from a family member via phone before making a supermarket run on the way home from work.
The longer you stay in a store, the more you will spend; the grocery industry knows this fact. If you familiarize yourself with the store, you can write your list in the order the items appear in the store, so you navigate the store efficiently and get to the check out quicker.
Plan your coupon shopping before you enter the store. A recent survey found that consumers redeem 10% of mobile coupons, compared with only 1% of print coupons. Mobile coupon apps provide you with a large database of coupons when you need them. Don’t forget to download store-specific apps for exclusive deals.
There is an app that you can download to scan the barcode of a product as well as keep track of your grocery store discount cards and current deals.
If you are like me, you find Loyalty Discount cards to be a nuisance. With your smart phone you can store those loyalty cards for quick retrieval. Look for a host app that is free to help manage the cards.
Save time and money – be organized for your next grocery trip.
~Susan Taylor is a Family Finance specialist who likes using her phone to make life easier.
Consumer Knowledge, Smart shopping, Spending plans
It’s suppertime and the phone rings. You get up from the table to answer the phone, only to find it’s a robocall (a computer-recorded call with no human being at the other end of the line). You are on the Do Not Call Registry, yet these annoying calls continue to interrupt your life. In October 2013, the Federal Communication Commission gave consumers new rights regarding Robocalls, and in 2015 extended those same protections to cell phones.
- A telemarketer needs your written consent before sending a robocall or robotext message. You can give your OK for through paper or electronic means — web forms, a telephone key press, or email.
- Robocalls to your home landline are no longer allowed based solely on an ‘established business relationship’ with you. Simply buying a product, or contacting a business with a question, no longer gives them permission to robocall you. Until recently, this protection did not apply to your cell phone, but it now does.
- Telemarketers who robocall or robotext now must let you immediately opt out of receiving additional messages through an automated menu key press. You no longer have to hang up and make a separate call in order to stop further telemarketing robocalls.
Exercise your rights! If you continue to receive unwanted robocalls or robotexts, the FCC offers steps you can take.
~Susan Taylor is a Family Finance specialist who prefers phone calls from people, rather than machines.
I often talk to people who feel like failures financially. They’re focused on all the things they’ve done wrong. Often they regret past purchases, past borrowing decisions, failure to save… that sort of thing.
It’s natural to regret your past mistakes. But after you’ve learned whatever lesson the past has taught you, there’s no point in dwelling on it. In fact, it is downright harmful.
The best way to improve your financial situation is to focus on what you CAN do. The past is outside your control. So is the price of gas. Thinking about them is just a waste of time. Instead, look for what you can do today to move you toward your goals.
Most importantly, notice when you take a positive step. Did you go to the store and avoid impulse purchases? Pat yourself on the back! Did you return a purchase to the store after deciding it wasn’t very important after all? Hooray! Did you shop around to find the best deal on your new tires? Three cheers for you! And when you reach a savings goal, that’s something to post on Facebook so your friends can celebrate with you!
Noticing the positive steps you take helps you believe that you can be a smart financial manager. As long as you focus on past failures, you will have trouble being optimistic about the future. But when you stop and look, you will see many smart decisions you make, too — both small and large.
People don’t reach for goals until they have reason to be optimistic. By noticing your own smart financial moves, you build confidence and optimism that will help you set and reach even larger goals.
What is a positive financial decision you made this week? ~Barb
Barb Wollan is a Family Finance specialist and a firm believer in the power of attitude
There are many situations where people find reasons to cash out a 401(k) retirement plan. Sometimes it happens with a job change. Other times a divorce leads to splitting the balance in one spouse’s retirement account. It is done for other reasons, too.
Recently I talked with someone who withdrew a substantial sum from her then-husband’s retirement plan as part of a divorce. It seemed like a good idea at the time, but it has turned into a huge black cloud hanging over her head.
Why? Because she didn’t understand the tax implications. An early withdrawal from a retirement plan affects your taxes in two ways:
- There’s a 10% Federal tax penalty because you withdrew before retirement age. For example, if you withdrew $50,000, the 10% penalty would be $5,000.
- The amount you withdrew is added to your taxable income for the year. If your taxable income (after deductions and exemptions) was $20,000, a $50,000 401(k) withdrawal makes it $70,000. On the federal return, that’s enough to bump you from the 15% tax bracket into the 25% tax bracket. It will increase your state taxes as well. The result, for this example, could easily be an extra $10-15,000 in federal and state taxes – perhaps more (on top of the $5,000 penalty for early withdrawal).
The woman I talked with had been told by the 401(k) company that they would withhold taxes, but they didn’t withhold nearly enough. Add on interest (for late payment) and she’ll be probably be paying that tax bill for at least 10 years.
I felt horrible for this woman and the hardships she is facing, but there was nothing I could suggest that would change her situation. What I can do, though, is to continue to share information, hoping to help others to avoid this situation. Remember:
- In a job change or divorce, you don’t have to withdraw from a 401(k) – instead, you can roll the funds into an IRA. This prevents tax hassles and builds retirement security.
- If you do consider an early withdrawal from a 401(k) plan (for whatever reason), be sure to consult a tax specialist who understands the details of your situation. You will still need to pay the taxes, but you’ll plan for that up front and prevent a decade-long debt to the IRS.
Early withdrawals from a 401(k) take careful planning. ~Barb
Barb Wollan is a Family Finance specialist and a VITA volunteer tax preparer
It must be crazy for retail stores right now; with so many new options for receiving customer payments, how do stores decide which ones to install? My Tuesday post gave you a brief intro to the new “chipped” credit cards that encrypt transactions, or create a unique scrambled messages in place of easy to read data.
Smart phones offer a second new way to complete a secure sales transaction. When a newer phone is coupled with a card that has a mobile payment app and a phone network that participates, you can use your phone to pay at a store! You simply place the phone next to a special terminal located on the checkout counter and either enter your PIN (personal identification number) or use the phone’s fingerprint reader. The mobile phone payment is also an encrypted transaction. Check out more details and some safety tips at the FDIC .
Currently, the most common use of mobile banking is to check account balances. It remains to be seen if we move to using our mobile phones for consumer transactions. Like most new technology, it will depend on whether businesses adopt the programs and install new equipment. My hometown bank isn’t participating yet, and to my knowledge most of the businesses in my community don’t have a reader installed.
If the new payment method increases consumer spending, I suspect we’ll see a more rapid installation of the terminals and perhaps a universal program that will accept any smart phone payment. If you are an early adopter, please share your experience using your phone at the check-out counter. What do you like about the system? Do you see room for improvement?