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Money Smart Week – April 18-25, 2015

April 21st, 2015

IMG_0039Money Smart Week, started 13 years ago by the Federal Reserve Bank of Chicago, is designed as a public awareness campaign to help consumers better manage their personal finances. Here in Iowa, more than 200 partner organizations have joined in the fun, promoting financial education with many interesting opportunities to learn. All Money Smart Week programs are free, and strictly educational (no marketing allowed).

ISU Extension and Outreach has been a MSW partner for many years. Programs are offered for audiences from preschoolers to seniors. From scout nights to shred days, essay and poster contests, geocache for college cash, piggy banks, books, and kites – in many cases, a chance to win a prize makes the learning even more fun. Educational program topics include: establishing a budget, protecting financial information, raising money-smart kids, and more.

Go to www.MoneySmartWeek.org for more details about activities in your area. Check out your local libraries for a display as well as programming. Spread the knowledge!
~Susan

Consumer Knowledge, Credit, Goals, Retirement, Saving, Uncategorized

Choosing Home Repair Professionals

April 14th, 2015

wrenchI had to call a plumber a couple weeks ago. That reminded me of one of the luckiest things I’ve ever done.  I’d like to say it was one of the smartest things I’ve ever done, but in truth it was just luck.  I’m sharing it with you, though, in hopes that it may encourage you to do something smart!

I was newly-divorced, new in town, and buying a home.  I’d been a homeowner before, but only as a married person, and I didn’t have much in the way of home repair skills or knowledge.  (I’ve developed some skill since, but it’s still a weak area).  The house I was buying did not have central air conditioning, and I knew I wanted that, so I built a little extra money into the mortgage to cover that cost, and I had the air conditioning installed within the first week of being in the house.

Getting that A/C installed was the luckiest thing I did that year.  Why?  Because a couple months later, when I needed an urgent home repair, I already had a relationship with a plumbing and heating professional and an electrician.  Dealing with home repairs was really stressful, and being able to call someone familiar made it so much easier.

The moral of this story is NOT that you should get central air installed when you move to a new town.  Instead, the moral is that it’s smart to do some research and make some contact with plumbers, electricians and other key professionals before you need them.

When I arranged to install the A/C, I got recommendations from co-workers, and I shopped around a little to decide what type of A/C unit to install and which firm to choose.  I was able to take my time doing advance research and getting suggestions from friends.  Without that experience, then the first time my toilet was clogged I would’ve been in a panic (we only had one toilet). I might have randomly turned to the phone book and called just anyone.

So one benefit was that I felt comfortable knowing I was calling someone I could trust.  There was another benefit too: the professionals I called also knew who I was — they knew they could trust me to pay the bill, and they knew I wouldn’t call them after hours unless it was really important.  Since I was already their customer, they had some loyalty and concern for my well-being.

The next time I move to a new town, I will remember the lucky lesson I  learned, and I will work to develop a relationship with key repair professionals before I have any urgent needs.

~Barb

Uncategorized

America Saves Week – Time to Start Saving

February 22nd, 2015

America Saves is a national campaign involving more than 1,000 non-profit, government, and corporate partners encouraging individuals and families to save money and build personal wealth. Consumer Federation of America is comprised of over 270 consumer education, advocacy, and cooperative organizations dedicated to advancing the consumer interest.

February 23 – 28, 2015 is “America Saves Week,” an annual opportunity for organizations to promote good saving behavior and a chance for individuals to assess their own saving status. Started in 2007, the Week 125183558is coordinated by America Saves and the American Savings Education Council. Thousands of organizations participate in the Week, reaching millions of people.

The 2014 Annual National Survey Assessing Household Savings (released during ASW) revealed that while most Americans are meeting immediate financial needs, they are worse off than several years ago.

  • Only one-third of Americans feel prepared for their long term financial future.
  • Only 68 percent reported that they are spending less than their income and saving the difference. It was 73 Percent in 2010.
  • Two-thirds of respondents (64%) said that they “have sufficient emergency savings to pay for unexpected expenses like car repairs or a doctor visit.” It was 71 percent in 2010.
  • 76 percent said that they are reducing their consumer debt, or are consumer debt-free. It was 79 percent in 2010.

With encouragement and support, more Americans can be persuaded to:

  • Set a Goal.
  • Make a Plan.
  • Save Automatically.

Savings isn’t something you do once a year. It’s important to save, or to establish goals for saving, but the role that savings plays in helping us achieve our individual needs and goals, America Saves Week is a great time to revisit goals – and to start saving, or start saving more.

~Susan

 

Goals, Saving, Uncategorized

“Addicted” to Tax Refunds?

February 17th, 2015

Tax-cash-sm-15495-46DG-1804x2712Getting a large tax refund is common for moderate-income families, thanks to tax credits that are designed to provide a boost for families with children.  Many families use those tax refunds to make important purchases, or they save them for “periodic” expenses – predictable expenses that come once or twice a year, such as back-to-school costs, holiday costs, 6-month car insurance payments, or day care costs during the summer when children are out of school.

Those can be good things – smart ways to use a tax refund.  But what happens when the tax refund disappears?

  • The child tax credit disappears when children turn 17.
  • The Earned Income Credit disappears when children are out of school or turn 24, whichever comes first.
  • Even the benefit of claiming kids as dependents disappears, hopefully, at some point.

The “disappearing tax refund” does not mean that bills will disappear.  Holidays and six-month car insurance bills will still come.  If you have gotten in the habit of using your tax refund to cover those expenses, you may find yourself in a jam, unable to cover key expenses.

As our children grow older, it’s important that we reduce our dependence on big tax refunds, because we know they won’t continue forever.  One way to break that addiction is to begin a regular saving habit long before the tax refund fades away.  If you start small, saving $20/month at first, and gradually increasing the amount over a few years, you may find that it’s easier than you expected!

Of all possible addictions, the tax refund addiction is far from the worst.  Even so, taking steps now to gradually break the addiction can help you avoid suffering from withdrawal symptoms down the road.

~Barb

Uncategorized

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

Halloween Spending – 2014

October 30th, 2014

Tomorrow is Halloween. It is one of the more affordable holidayshalloween-11101702. It is estimated that 162 million people will celebrate this holiday.  You may see  costumes from Frozen to Super Heroes – the options are numerous.  Many people will purchase a costume, some will make them and others will visit the local Goodwill store to create their costume.  Don’t forget your pets – it is estimated that 23 million pets will be dressing up for 10-31-14.  Costume sales will total 2.8 billion dollars – with 1.7 billion for adult costumes.

The average young adult will spend $87 on Halloween festivities.   If you are planning on visiting the local Haunted House – you are one in 33 million.  Two billion dollars will be spent on decorations for this holiday.*

Let’s not forget the candy, as 2.2 billion dollars will be spent this year. What are you handing out?

Susan

*Statistics are from the National Retail Federation.

Uncategorized

Good Debt vs. Bad Debt

October 28th, 2014

It makes sense to borrow… but on the other hand, lots of times it doesn’t.  download

As we head into holiday shopping season, remember…

We would all love to live debt-free but there are several types of purchases – like our home, vehicle, or our children’s college education – for which we may incur debt. The key issue is to make sure our debt does not get out of hand.

Experts recommend that total monthly long-term debt payments, including mortgage and credit cards should not exceed 36% of your gross monthly income. This is a tool that mortgage bankers consider when assessing the creditworthiness of a potential borrower.

Credit cards make it easy to pay, but they also make it easy to overspend. The average U.S. household with at least one credit card with a balance carries nearly $8,200 balance according to Experian survey March 2013.

Avoiding debt at any cost may also be a mistake if it means depleting your cash reserves for emergencies. Clearly then, decisions about borrowing require skill.  We all need to learn how to judge which debt makes sense and which does not, and then to wisely managing the money we do borrow.

Good debt includes anything you truly need, but can’t afford to pay for up front without wiping out cash reserves. Even then, debt only makes sense if you can realistically afford the monthly payments.

Bad debt includes debt you’ve taken on for things you don’t need and can’t afford.  Credit-card debt is generally considered the worst form of debt,  since it usually carries the highest interest rates.

Now, as the holiday season approaches, is a good time to stop and think; avoiding bad debt during the holidays will make the new year much happier.

~Susan

Uncategorized

Health Insurance Auto-Pilot?

October 21st, 2014

health costsIf you bought health insurance in the new Marketplace last year, you will automatically be reenrolled for the same coverage if you don’t log in to your account at www.healthcare.gov and make a change.  That may seem like the easiest route, but it could backfire.  Here are some reasons for avoiding the “automatic pilot” option:

  • Insurance policies can and do change from year to year.  Deductibles, co-payments and premiums can change, along with specific coverage details such as the list of preferred medications, the coverage of specific procedures, or whether you must meet the deductible before the plan will pay for particular services.   If you automatically renew, there is a chance that you may be caught by surprise.
  • Your health needs may have changed since last year.  Perhaps you chose a bronze plan last year because you didn’t expect many health expenses, but next year looks different because you may need surgery or some other kind of treatment or care.
  • Your income and family composition may have changed since last year.  If you do not log into your account and make adjustments in your profile, then the amount of your advance premium tax credit may be far off-target, causing financial hardship.

Now is the time to start thinking about your coverage options for next year.  If your current plan sends you information about changes in your policy for next year, be sure to study the changes planned.  In addition, think about your family’s health care needs — do you expect next year to be about the same as this year?

The Health Insurance Marketplace opens November 15.  It will remain open until February 15, 2015, but if you want to make changes or enroll in coverage that will be effective on January 1, you will need to log in and select your plan by December 15.

~Barb

Uncategorized

Couples and Money

August 29th, 2014

YMYF-CoupleBankFormThis week I saw a report from a respected source which found that within couples, dishonesty about money is surprisingly common.  A third of those who manage money jointly admitted to hiding financial information from their partner – even hiding bank accounts!

Money management is a central element in any household.  Being straightforward and cooperative with your partner on money management brings at least three benefits:

  • Stronger finances and more progress toward financial goals.
  • Stronger, healthier relationship.
  • Children in the household will learn healthier money attitudes and develop stronger money skills.

Both partners in any couple need to be very aware of the household’s finances, including: how much money do you have, how much do you owe, what are the monthly bills, what insurance coverage you have and why, and where are important papers kept.  This is true even if one partner actually takes care of most financial tasks.  Why?

  • Survival – if something happened to one partner, the other needs to be able to find information and take care of business.
  • Shared power – any time all or most of the power (including power over finances) rests with one partner, the relationship is at risk.

Some strategies that can help you build joint money management and awareness include:

  • Shared financial goals, discussed and written down, then reviewed periodically.
  • Regular meetings (weekly, bi-weekly, or monthly) to plan for upcoming financial decisions and needs.
  • Equal access to account information (printed statements or on-line account access) – for bank and investment accounts and also for credit and debt accounts.

Sometimes people resist sharing all information because one partner gets irritated by certain small spending habits of the other (such as regular coffee purchases, or picking up magazines).  In addition, it can be tedious to keep track and report ever purchase of an ice cream cone or a new pair of socks.  When you think about it, It would be difficult to purchase gifts for each other if all spending must be disclosed!

A nice way to allow each partner some freedom for independent spending is for each to have an allowance.  (did you think allowances were just for kids?  Nope! They can be great for adults too!)  Then each partner has some autonomy, and some financial privacy within limits.

If you manage money with a partner, what can you do to make sure your financial relationship is cooperative and straightforward?

~Barb

Uncategorized

Skills to Pay The Bills

August 5th, 2014

Skills to Pay the bills

The unemployment rate is finally going down.  But you may still be looking for a job.  The U.S. Department of Labor has developed a curriculum with six short videos called Skills to Pay the Bills.

This curriculum was created for youth development professionals to use with youth ages 14 to 21.  It offers an introduction to workplace interpersonal and professional skills, and can be useful in both in-school and out-of-school environments. It can also be helpful to adults of any age.

The program is comprised of modular, hands-on, engaging activities that focus on six key skill areas: communication, enthusiasm and attitude, teamwork, networking, problem solving and critical thinking, and professionalism.  Each skill area provides a short video that captures the topic.  The videos are on YouTube and average around 2 ½ minutes long.  The videos can be accessed by anyone, whether or not they are participating in a structured program.

The full curriculum may be accessed at:  http://www.dol.gov/odep/topics/youth/softskills/

Good luck with your job search.

-Susan

 

 

Consumer Knowledge, Saving, Smart shopping, Uncategorized