First, what is a Digital Asset? It is personal information that is stored electronically on either a computer or an online “cloud” server account. If you use a computer, a password protected cell phone, social media, OR if you make online purchases, pay bills or do banking online – you have digital assets to consider.
Generally required is a user name and a password and/or PIN to access. If a family member or friend becomes incapacitated or passes away, it is almost impossible to retrieve information without the user name and log in information.
Take time to record all of your digital assets in a safe place. Share the information with the person to whom you have granted power of attorney, with your executor, and with other trusted people who would need to have it.
Need help identifying the potential digital assets? Consider the following:
Electronic Devices; Benefit Accounts; E-mail accounts; Financial accounts; online merchant accounts – Amazon or Zappos.; Organization Accounts; Photography and Music Accounts; Publication Accounts; Social Media Accounts; Video Account; Virtual Currency Accounts with Cash Value; and Web Site Accounts.
So how do you plan for your digital assets?
Use specific language in estate planning documents (will, trusts, and power of attorney) that authorizes your representative to handle digital assets as well as tangible assets. Make a list of your digital assets in your will as you would for untitled personal property. Don’t include private information (e.g. passwords) in your will, however, as it becomes a public document after someone dies.
I just completed a pilot series online for a financial class called Small Change. How many of you pick up coins off the ground or from pockets in the laundry? With each dime or quarter, money starts to add up! Starting with small change can pay off a small debt or help you save for one of your goals like a vacation, a down payment for a vehicle or your child’s higher education.
These small coins can make a big difference. Twelve years ago my friends found out their daughter-in-law was expecting twins and during the six months, they saved their coins from purchases and emptied out their pockets: they were able to buy a piece of furniture – a dresser -for the grandsons.
I have participated in a group where part of our fund raising for scholarships is to save the coins. We each have a nifty little box with a lid to transport our coins. During a month’s time, the treasurer collects between $50-$60 dollars. When an I-Pass, (prepaid electronic toll collection system) was needed because of daily travel on the tollway, my coin collection started to flourish. When I moved to Iowa, I am in a community that has parking meters where I now use many a quarter.
What are you doing with your small change?
Some messages are very direct. For example, many parents have a rule against cellphones at the dinner table. The message is clear, and everyone follows the rule. On the other hand, if your parents say they do not want cellphones at the dinner table but they break the rule themselves, this sends a confusing message.
When it comes to money management, children learn through direct teaching from their parents and teachers. They also learn by watching. They see how their parents and guardians manage money. They see how their friends and friends’ families spend money. They receive messages from TV, movies, advertisements and many other sources.
Hidden or mixed messages about money in childhood can turn into adult habits.
- If your parents encouraged you to save money, but your actual experiences in childhood convinced you that saving money was impossible because you are just “not a saver,” then the saving message from your parents didn’t hit its mark. When parents want to teach children to save, it is wise to go beyond verbal encouragement; ideally, they create situations in which children are successful in saving to reach short or longer-term goals.
- As an adult, if you look at your actions and wonder why you are unable to reach your goals, it may be worthwhile to think back to your childhood and teen years. Perhaps you’ll find that when you were a teen, spending money was a way for you to rebel, or a way to find comfort. Those long-ago subconscious motives may have created habits that still haunt you as an adult, causing you to sabotage your own financial goals.
Understand your habits and values and their hidden meanings.
Many students recently marked a big milestone by graduating from school. Looking back, what words of wisdom regarding personal finance would you like to have received when you left high school?
Personal finance does not have to be boring! The National Endowment Financial Education – www.nefe.org has a couple resources to help your graduate be an independent young adult.
On Your Own –is a blog with a range from credit score calculated, making better money decisions, and the pros and cons of college? This is a trustworthy site.
Another option is Smart About Money (SAM) is an in-depth, guided learning experience. There are five sections with valuable tools, worksheets, calculators and quizzes. Each course is about 45 minutes.
Cash Course targets college students. Some colleges and universities offer it especially for their students, but any student can enroll independently. It’s free, with no strings attached, but you do need to create a user account.
Forty Money Management Tips Every College Student Should Know – this Cash Course resource helps young people learn how to take control of their money instead of letting their money control them.
Having a debt – perhaps a mortgage or a car payment – may feel as if you have a ball and chain around you for the duration of the loan. Is there a way to lessen the load?
One option is to simply round up your payments. Suppose your current car payment is $360 per month. If you round up and make monthly payments of $400, that is like making one extra payment during the year on your car, and the extra money goes toward the principal on the loan. You’ll reduce your interest costs, and you will also pay off the loan faster.
Here’s a mortgage example: if your mortgage payment is $900, but you pay $1,000/month, the extra $100 goes toward the loan principal. That’s an extra $1200/year! If $1,000 is too much for your spending plan, try $950, which is an extra $600 per year. Over several years, either strategy will save thousands in interest and get your mortgage paid off years early. Read the fine print on your contract. Make sure your lender accepts larger payments. Need to know so it helps your cause.
You can use the same strategy with any credit card bills where you are carrying a balance, and on any other loans, as well.
Every time you round up you’re getting closer to debt freedom without feeling much of a pinch. Once you start this habit, it will be hard to break. Fortunately, it’s a very helpful habit!
Spring is in the air. Are looking to buy your first home or upgrade your current one? Understanding mortgage vocabulary will help your purchase or refinancing go more smoothly. Do you know the difference between pre-qualification and pre-approval mortgage?
Even though the terms sound similar, mortgage pre-qualification and pre-approval are two very different processes. A pre-qualification is designed only to give you an idea of the mortgage amount you might qualify for, based on information you provide without verification. Some mortgage professionals believe pre-qualification is virtually useless.
A pre-approval letter from a lender shows that you qualify for a specific mortgage amount based on an underwriter’s review of your actual (verified) financial information, such as your outstanding debt, credit history, income and assets. Your home buying journey will be easier with a pre-approval letter. Why? With clear verification that you will be able to get the loan you need, a seller of a home will take your offer more seriously.
If you want more information, Iowa State University Extension and Outreach offers a comprehensive homebuyer workshop online: A Place of Your Own.
Yes, if you have a Medicare Card, you will be receiving a new card in the mail soon. What is different? Your Social Security Number WILL NOT be on the new card. You will have a unique Medicare Number and this will happen automatically.
Why the change? – to protect your identity. Experts have long recommended that we avoid carrying our Social Security card or our number in our wallets, because if stolen or lost people can use it to set up accounts in our name. Until now, however, people who used Medicare didn’t have a choice. It’s generally important to have your health insurance card with you, and unfortunately the Medicare card contained a Social Security number. Consumer advocates have been asking for this to change, and now it will!
New cards will be mailed between April 2018 and April 2019; not everyone will receive their new card at the same time. Here in the Midwest, the new cards will start arriving after June 2018.
After you receive your new card, destroy your old card by shredding it. Start using your new card right away. Note: If you have a separate Medicare Advantage Card, you may need to keep the old card because you still need it to receive treatment.
Share your new card and Medicare number with your doctors, pharmacists, health care providers, insurers or people you trust to work with Medicare on your behalf.
The new card is paper; you will be able to print your own replacement card if you need one. Keep the new card with you. You will need to provide your Medicare card when you need care. If you forget your new card, health professionals may be able to look up your Medicare number online.
Beware! There will be scams – so watch out for them:
- Don’t pay for your new card – it is free. If someone calls and says you need to pay for it –it’s a scam.
- Don’t give personal information to get your card. If someone calls, claiming to be from Medicare, asking for your Social Security number or bank information – it’s a scam – Hang up.
- Guard your card. Safeguard the card as you would any other health insurance or credit card. Even though it no longer contains your Social Security number, you will still want to protect your card because identity thieves could use it to get medical services.
For more information about changes to your Medicare card, check out this short video or go to medicare.gov
When a family saves for an agreed-upon goal, there is more buy-in to succeed.
Are you dreaming of a vacation? You are not alone. Nearly half of people –no matter their age, income, or gender – say vacation is one of their savings priorities. How are they working toward their vacation fund goal? Only 40% indicate they are on track to meet their vacation savings goal. Sixty percent of the savers do not feel on track but are working on the vacation savings goal.
If you and your family have a goal (a vacation or some other goal), you need a plan to succeed. If the whole family is helping, it will be a lot easier to follow the plan. Here are some examples of common-sense ways people have planned and saved for a specific goal:
- My brother-in-law took a job in Geneva, Switzerland. I immediately decided I wanted to visit. That meant considering how I would pay for the trip, airfare, Eurail pass and spending money? At the time, I received reimbursement for miles driven on my job. My gasoline was already paid for, so if I banked the payment checks in an account, I would soon have enough funds for a Europe vacation.
- Several years ago, a friend found out her daughter-in-law was expecting twins. Upon getting that news, she and her husband saved their coins for six months and were able to purchase a dresser for their new grandsons. They had a deadline – the birth of the grandsons, and the coins added up over time to purchase the piece of furniture. This week, those grandsons will be thirteen.
America Saves can offer more ideas.
In a 2017, a T. Rowe Price survey, found parents are talking to their children about shopping, but are skipping conversations about household budgets, savings and financial goals. Close to 75% of survey respondents say they regularly have conversations with their children about money, but the focus is on spending—not the family’s current financial situation.
Are we sheltering our children from money?
The survey found that many parents think they strongly encourage their children to talk about money, the children only agreed 19% of the time. One in four parents discouraged their children from talking about money.
Children want to learn the financial basics – 34% want to know how banks and credit cards work; and 29% want to learn about managing money.
Protecting children from the financial challenges and decisions faced by adults may not be giving them an opportunity to form habits that can prevent financial stress when they are older. Understanding the source of money, choices involved with use, and it’s limitations form a basis that will impact attitudes and skills in management.
There are places to teach money management – the grocery store, or when paying everyday utility bills. Lessons taught by parents will reinforce and strengthen school based lessons in financial literacy. Basic skills become stronger when practiced. It can include balancing a checkbook, keeping spending records, comparing returns from savings to other investment options.
The T. Rowe Price survey shows that only half or fewer of parents have strong financial habits. One example – more parents save for a family vacation than have an up-to-date will. One in ten do not save regularly for retirement, purchase life insurance or save for a family vacation.
Where does your family fall in the 10% or 90%?
Now that the holiday bills are in, what do you think? Any worries or regrets? If so, how can you change your behavior to prevent worries or regrets next year?
This month, many folks have had mailboxes or autopay accounts full of holiday bills or credit card bills; I have a few myself. But next year at this time it doesn’t have to be that way if we take action now.
Think about the amounts you spent on gifts, food, and other holiday-related expenses and add them up. Divide the amount by 10 (months). Suppose your total spending was $400. Then 400 ÷10 = $40; if you save $40 each month until November, you will have $400 available in November for next year’s holiday purchases.
Another approach could involve saving $20 per week; after a year you would have $1,040. This could be a holiday fund or a vacation fund; the money could be used for other annual expenses too, like back-to-school costs or car registration. Think about your goals for this year and save accordingly.
People who plan to save excel in reaching their goals.