Thinking Out Loud

If being careful with your money is important to you, and if you have children, then you are probably looking for ways to teach your children good money management skills. You probably also hope they will form values and priorities that are similar to yours.

Depending on the age of your children, you may have already learned that “preaching” (that is, telling them what to believe and do) is rarely the answer — if your children are still quite young, you may not have learned that yet, but you probably will! One strategy I learned when my children were young was that it paid to “think out loud”… to let them hear my thought process as I was making decisions.

The simplest examples would take place at the grocery store – decisions about which box of cereal to buy or which can of tomato sauce. If I spoke my thoughts aloud, they would be exposed to the ideas like: unit pricing (comparing price per ounce of different size packages); generic vs brand-name decisions (when it might be worth paying more, and when it might not be); and trade-offs (if I buy pork chops instead of beef steak, I can use the extra money for ice cream). Those are all assessments I make in my head when I shop alone, but when children are present it becomes a teaching opportunity if I say my thoughts aloud.

Similar “thinking out loud” situations could occur when buying clothing – they would be exposed to my thoughts on quality vs price, ease of cleaning (i.e. dry clean or hand wash vs machine wash) and other factors. I remember the purchase of a recliner where they saw me weighing options and they learned that we’re often unable to find the perfect product, so we have to decide what factors are most important to us.

Setting a good example is a powerful teaching strategy in everything from good manners to personal hygiene. With financial decisions, though, children won’t even be aware of what we’re doing unless we let them in on our thought processes. That’s where “thinking out loud” comes in – it makes them aware of why we make the decisions we make.

Money as You Grow: Resources for Parents and Caregivers is a wonderful resource from the Consumer Financial Protection Bureau for those seeking to help their children learn financial management skills.

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Curious Behaviors That Can Ruin Your Retirement

This week, I discovered a fun tool that can help us all be more ready for retirement. I don’t think it’s new, so I am surprised I hadn’t seen it before, because I pay a lot of attention to retirement information. I guess that just goes to show that we always have more to learn, no matter how much we think we already know!

The tool is provided the Center for Retirement Research at Boston College — one of the premiere sources of quality information on retirement. I tell you that because I want you to know it’s trustworthy. They have other great resources too.

The fun (and enlightening) part is that it prepares us to make better decisions about retirement issues by alerting us to natural human tendencies that can work against us. It’s called “Curious Behaviors That Can Ruin Your Retirement.” I enjoyed it — it took about 10 minutes, and explained things in clear language with great examples.

I’d encourage everyone to check it out — at least everyone who wants the best retirement possible, especially if you’re over 50. Personally, I think I might go back to it about once a year, just to keep myself on my toes!

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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EIP Day November 10

If you did not receive your $1200 Economic Impact Payment, it’s still not too late – they delayed the deadline! Next Tuesday, November 10 is designated as EIP Registration Day. Take advantage of this awareness campaign and claim your credit now! NOTE: If you’ve already received your payment, please help us spread the word. If you have ways of reaching people who are homeless, that may be especially important!

The big push at this point is to reach those who do not normally need to file a tax return. The IRS has a special on-line portal just for you folks, where you can enter all the needed information. This video explains how. NOTE: you will need to enter personal information, so be sure you are using a secure internet connection. This will usually take 10-15 minutes.

Iowans who need help with this process are encouraged to contact their local Extension family finance specialist for help. For more information go to the IRS information page on the EIP; to help spread the word via social media, check out the IRS Facebook, Twitter, Instagram, LinkedIn, or YouTube sites.

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Pandemic-Induced Goals?

The current period of job loss and reduced income has affected people in different ways. The result? Different households face different financial challenges at this point. Whatever your situation, now is s a good time to assess your financial situation, evaluate your priorities, and take steps to improve your situation as necessary. If you’d like some help, your local ISU Extension financial educator is available to work with you, providing free, non-commercial information and a sounding board as you make your plans.

  1. Some of you have been living with seriously reduced income – and still are. Your task has been to find every possible way to reduce your expenses and/or find new income and make use of new resources, including public assistance if you qualify. You must communicate with all of your creditors, but avoid making promises you cannot keep. If returning to something like normal looks unlikely, you may need to consider major lifestyle changes.
  2. Some of you lost income for a while, but are now back to an income you can live on. It is likely that you got behind on bills, built up credit card debt, and/or depleted your savings during your crisis. Strong focus on repaying those debts and building up emergency savings will get you ready in case of an unexpected expense or another loss of income. Careful examination of your spending choices will help you regain equilibrium and then build a strong cushion.
  3. Others of you had stable income, but have realized that if you did lose income, you would be in a very difficult spot. Facing the reality that you lack basic financial security can motivate you to build up savings and pay down debt. Start by cutting your living expenses so that your regular monthly expenses are 10-25% less than your income. Putting the extra funds toward savings and expedited debt payment will build you a cushion that will bring peace of mind and make your life easier if/when hardship strikes.
  4. Still others have stable income, and have felt secure that even if you did have a cutback, you would be okay. In your case there is no obvious need for change, but it’s wise to maintain control of your finances through good planning. You may wish to build an even stronger savings cushion, after seeing others struggle with lost income for six months or longer. As you build savings, seek out accounts that pay slightly higher interest while still providing ready access to your funds.
Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Understanding Health Insurance

This time of year many Americans make health insurance decisions. If your health insurance comes through your employer, you may be making plan choices in the next month or so, and if you purchase insurance individually, open enrollment is November 1 through December 15. Are you equipped to make informed choices about your health insurance?

ISU Extension and Outreach offers two free on-line workshops on health insurance topics:

  • Smart Choice Basics focuses on the key things to know before you sign up for a specific health plan. It’s useful to people who get their insurance through their employer as well as to people who need to purchase insurance on their own. It also addresses questions about how to get help paying for health insurance via the HealthCare.gov Marketplace. It is being offered November 19 and December 1 (6 p.m. each day).
  • Smart Use: Smart Actions for Using your Health Insurance Wisely. This workshop focuses on seven key actions for consumers to take, including keeping track of the health care they receive, reviewing their bills carefully and disputing errors, understanding deductibles and co-pays, and more. It is being offered November 2 and December 8 (6 p.m. each day).

Understanding key health insurance principles can save you money year-round. It also gives you the confidence to ask useful questions about health costs and bills, and to make informed choices about when and where you receive the health care you need.

Pre-registration for the health insurance workshops is required.
Questions? Contact Barb Wollan or Brenda Schmitt. The flier is attached below if you’d like to share it with others.

These two workshops were developed by a team of experts from across the nation led by University of Maryland Extension. They are conducted locally by trained Iowa State University Extension and Outreach specialists.

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Extra Utility Assistance Available to Iowans affected by COVID

Iowans who have experienced a COVID-related income loss any time since March 17, 2020 may be eligible for extra assistance with utility bills including electric, natural gas and water bills if they are at risk of disconnection. Many households whose incomes are above the regular guidelines for energy assistance may qualify for this help.

The Residential Utility Disruption Prevention Program went into effect about a week ago, with an application deadline of November 20, 2020.

Applicants must meet income guidelines (80% of median income, which is more generous than regular utility assistance), and must already have an unpaid utility bill. More eligibility details, as well as required documentation, are found at the program’s website.

You must apply on-line; if internet access is a problem, families are encouraged to get help from a trusted friend. A local Community Action Agency may also be able to help.

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Managing Winter Heating Costs During the Pandemic

When prioritizing expenses, a major household bill is utilities (e.g., electricity, gas, water and sewer, landline and cell phone, and internet/cable). The highest utility cost is typically heating the home.

Plan for increasing home heating costs over the next six months. COVID-19 may increase these costs because many families are spending more time working and/or learning from home.

Average Iowa household utility expense of $2,580 varies widely according to the size of a home, climate, and utility usage patterns. Regardless of what you pay for utilities, there are ways to pay less. 

Step 1: Check Eligibility and Request Energy Assistance. The Low-Income Home Energy Assistance Program (LIHEAP) assists households with a portion of the home heating bills, particularly those facing disconnection or who have trouble paying their utility bill. Early applications for LIHEAP started October 1 (for elderly and disabled applicants), with November 1-April 30 as the annual application timeframe through a local community action agency.

A general overview of the LIHEAP program is available in multiple languages.  Information on where to apply, through your local Community Action Agency, is found on the Iowa Department of Human Rights website. It is generally necessary to call ahead for an appointment.

Step 2: Ask for A Winter Moratorium. You may avoid a utility shut-off during the “winter moratorium” if you apply for and qualify for the Low-Income Home Energy Assistance Program (LIHEAP).

  • If you are certified eligible for LIHEAP, utilities cannot shut off your gas or electric services from November 1 through April 1.
  • You should try to pay as much as you can on your utility bills, even though you cannot be shut off, because the bills will come due in April. If you have made a good faith effort to pay throughout the winter, the utility company is more likely to work with you on a payment arrangement.

It is always best to keep making payments to the maximum extent possible during any period when your utility provider is prohibited from disconnecting your service. Making payments during the winter moratorium creates “good will” with the utility company (with whom you may be negotiating a payment plan) and also keeps the problem from getting worse.

Step 3: Manage Utility Bills

-Know How Much to Expect:  Ask your utility provider for how much the utility bill was last year for your home or apartment. Electric and Natural Gas average monthly costs start at $215 and go higher depending on the size of your home and weather conditions. Pay as much as you can afford monthly.

-Weatherize: Leaky or old windows can account for 10%-25% of heating costs due to warm air escaping. Replace windows with double-pane windows or installing storm windows. Get help from the Iowa Weatherization Assistance Program https://humanrights.iowa.gov/dcaa/weatherization

-Lower the Thermostat- Dial down the thermostat saves energy in the winter by setting the thermostat to 68°F while you’re awake and setting it lower while you’re asleep or away from home. Even one degree lower can make a difference.  Industry figures for every degree you turn down your thermostat (and leave it for 8 hours) you save between 1 and 3 percent of your heating bill.

To provide help in making decisions about bills and expenses, free financial consultations are available to all Iowa residents through ISU Extension and Outreach’s Human Sciences Specialists in Family Finance. We can help revise budgets, prioritize spending and link you to community resources. Find your local contact at our webpage or by contacting your County Extension Office.

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Rethinking Your Retirement During COVID-19

I have several acquaintances who are retiring early because of the pandemic. You probably do, too. Retirement plans are just one more thing that have been thrown into flux due to COVID-19.

Some employers are offering early retirement incentives. Many Iowans are considering early retirement due to job challenges, health concerns, or other reasons. On top of that, temporary policy changes have made it easier for people to withdraw from their retirement accounts during 2020. You may have questions as you sort through your options.

A new 45-minute on-line workshop “Rethinking Your Retirement During COVID-19” from Iowa State University Extension and Outreach is designed to equip you to make informed retirement decisions during this turbulent time.  

The free workshop is available at noon or 5 p.m. on both Tuesday September 29 and Thursday October 1, with more dates likely through the fall. Pre-registration is required. You’ll find the registration links at ISU Extension’s retirement resource page — scroll under the “Upcoming Events” section to find the session you wish to attend!

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Prioritizing Bills

What’s unique about the COVID-19 experience is the financial stress we’re also experiencing at the same time. My colleagues and I (all ISU Extension financial educators) are listening and learning from people facing financial challenges who contact us for unbiased information and ideas.

 “When the crisis hit, I was glad I knew how to pay attention to the most important bills. Obviously rent and groceries were our priority.”

What expenses should I pay in a time of crisis? Step One is to Separate your essential and non-essential expenses. Prioritize bills to keep you safe, help you survive and stay employed— they include: Food, medicine, rent or mortgage payments and utilities. Iowa Legal Aid recommends paying water and energy bills in full to avoid accumulating debt and facing potential utility service disconnection.

The second step is figuring out how much cash you must have to pay the essentials.  You’re responsible for paying all your expenses on time. When we don’t have enough to cover our needs consider building a short-term plan. This plan may involve paying some bills late and needs to consider the consequences of failing to pay certain bills.

Feeling more in control will be worth the time it takes to plan. Research shows that taking these steps builds financial confidence and reduces anxiety.

Establish a short-term plan and reduce the financial stress during these tough times by contacting an ISU Extension Family Finance Specialist near you to talk through ideas and find a place to start. You can also connect with your local educator by calling Iowa Concern 800-447-1985.

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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