Packages on the Doorstep

When will it be delivered?  I’m learning that tracking services offered by vendors vary with accuracy and details. Packages I mailed at Halloween took a broom stick ride in the opposite direction of their destination and then circled back for a late delivery.  I have a purchase that has been “out for delivery” for a week and there are no details.

The Federal Trade Commission enforces rules for online and mail order sales. Packages have to arrive within 30 days. If that isn’t possible, you must be notified and have an option to cancel the order.

Where will I find it? I have an inspection routine at my house when I receive confirmation of delivery. Packages have been found in multiple locations: on the front porch; the back porch; the bushes near the doors; and the back of the mailbox.  I’m thankful I don’t have my son’s dog (shredded packages) and I’m not on a busy city street. There are alternatives to consider: work address, neighbor, requiring a signature for delivery (usually involves a separate charge), using the carrier’s designated pickup and delivery location.

I’m not complaining. “Mail-order” shopping has come a long way from the days of the Montgomery Ward catalog.  I remember when you mailed in an order and instead of a package, the vendor’s letter arrived informing you the item was “sold out” or “not in stock”. Sometimes they sent a substitute item, which wasn’t always satisfactory. Inventory control with access from your home computer has reinvented “mail-order” shopping, and it’s definitely on the up swing.

 

 

Joyce Lash

Joyce Lash

Joyce Lash is a Human Sciences Specialist in Family Finance who wants to keep you ahead of the curve on financial information.

More Posts

Someone May Be Watching You

Last November, my brother-in-law’s vehicle was broken into at the nearby grocery store parking lot.   He had done some banking prior to pulling into the grocery store to pick up a pizza for the night’s meal. While he was in the store, his money and cell phone were stolen.  There was also damage done to both driver and passenger doors, his console, and the car’s paint. There were surveillance cameras in grocery store’s lot, but it was hard to identify the perpetrator.

When my sister and brother-in-law returned from the holidays, they picked up their held mail at the post office; while they were there, a man had money stolen from his vehicle parked outside the post office, also after a visit to the bank.   Note: Both of these incidents occurred in daylight in a large U.S. city.

Based on his recent experience, my brother-in-law was able to encourage the man to call the police and file a complaint;  this would help him to file a claim with his insurance company. Depending what was taken, he might also want to contact his bank, and/or place a fraud alert on his credit reports.  In addition, he would need to make arrangements to have his vehicle fixed.  These were all steps my brother-in-law had needed to take a few weeks earlier, plus he had to deal with the theft of his phone; fortunately, since my brother-in-law’s information on his phone was backed up in the “cloud,” he was able to be back in business soon after the phone was replaced.

We do not always think about who is watching us, but in both of these cases, someone was watching while they visited their banks. These incidents remind us: don’t let your guard down, and watch your surroundings. That guidance is especially important during the upcoming holiday season when many of us make more purchases than usual and may leave things in our cars.

How many times do we go somewhere feeling we are safe, and therefore do not pay attention to the environment around us?

Susan Taylor

Susan Taylor

Resources are important whether you are looking to rent your first apartment, pay your bills, buy your first home or send your child to college. There are many ways to save money to reach your goals, and hopefully ISU Money Tip$ will be one of them. I enjoy traveling, needlework and am a novice gardener.

More Posts

Charitable Giving and Taxes

We’re entering a busy time of year for charitable donations, perhaps because the winter holiday season brings a sense of gratitude followed by a desire to share our abundance. The availability of tax deductions for charitable giving may also contribute to the concentration of donations near year-end.

According to Giving USA, Americans donated a record $410 billion to charities in 2017. What’s more, over 70% of that giving came from individuals, rather than foundations, corporations, or bequests.  However, tax law changes this year mean that for many people there will no longer be an advantage in itemizing deductions; many taxpayers will get better results using a standard deduction. For those households, the tax benefit of charitable donations will be reduced or eliminated.

Will Americans still give?  I have always hoped that the main reason most Americans give is that they care about the organizations they are giving to, and that the tax benefits are just an incidental benefit.

If you are wondering whether you should continue making charitable donations even without the tax deductions, I offer two thoughts:

  • If your standard deduction under the new tax law is larger than your itemized deductions would have been, then you are still coming out ahead. You can give, and still have more available funds than you would have had under the old tax law.
  • There are other strategies that can enable some taxpayers to get tax advantages for charitable donations.
    Clustering donations. Some taxpayers may be able to hold back all their 2018 donations until the beginning of 2019; if they then donate a “normal” amount throughout 2019, they will have twice as many donations as usual to report for the 2019 tax year, which may make itemizing worthwhile in 2019. Following this pattern of no contributions one year and double-contributions the next may enable you to donate the same total amounts as normal, and gain tax benefits by alternating years between itemized and standard deductions.
    Qualified Charitable Distributions (QCD) from an IRA.  If you are at least 70-1/2, you can transfer funds directly from your traditional IRA to a charitable organization; the distribution will not be taxable income to you, AND it can satisfy your required minimum distribution. If your RMD for the year is $5,000, and you are interested in donating $5,000 to a particular organization, then making the contribution through a QCD has the same ultimate impact on your taxes as a tax deduction would have had. IRS Publication 590-B provides details.
    Donating as a business expense.  If you are self-employed or own a business, you may be able to make charitable contributions as a business expense.  For example, farmers can give commodities (e.g. 500 bushels of corn) to a charity. This reduces your business income, and therefore has impact similar to the impact of a tax deduction. Consult with your tax adviser for details.

As always, the best decisions about how to use your money are based on your personal goals and priorities. As you consider your charitable giving decisions, focus on why you want to give when deciding whether and where to make donations. Giving to organizations you know (often local organizations) can ensure that your gifts are used well; when considering larger national charities, check them out with organizations that evaluate charities, such as  www.give.org, www.charitywatch.org, www.charitynavigator.org, or www.givewell.org.

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.

More Posts

Health Insurance: Time to Decide

Making a decision about health insurance coverage is not easy. Most of us rely on our employer to wade through the details of policy coverage and negotiation of rates. We gladly accept what is offered, choosing between 2-3 options that personalize the coverage.  HR sends a letter or hosts a meeting for questions and answers. If we don’t do anything, the policy we have continues into the new year.

It’s not quite as easy when you are purchasing insurance on your own: some parts of Medicare, the Marketplace, and plans offered from private insurance agencies can be more confusing. The options for coverage have experienced a period of volatility.  Assistance with enrollment varies. Here is an overview of the open enrollment time frame, who can help you sort through the options, and major changes to be aware of in 2019:

Medicare:  Open enrollment for Medicare Advantage and Prescription Drug coverage (Medicare D) began on October 15th and closes on December 7th.  SHIIP volunteers are excellent resources to help sort coverage and find plans that will meet your needs. Medicare is also providing assistance through an online education program, Medicare Plan Finder.  Advantage plans are increasing in numbers and are being heavily marketed this season.  Individuals enrolled in supplemental coverage (Medigap) and prescription drug (Medicare D) plans should open and read any notices they received in the past 30-60  days.  Your coverage may have changed.

Marketplace Coverage:  Open enrollment began on November 1 and closes on December 15th. Iowans may call 1-800-318-2596 or visit healthcare.gov for information. Independent insurance agents may be able to assist. If you received assistance last year, try contacting the agency that sponsored the service. Medica and Wellmark will be offering ACA-compliant individual health insurance plans to Iowans statewide for plan year 2019. If you currently have coverage through the exchange and do not choose a plan for 2019 by the end of open enrollment, you will be re-enrolled into the same plan offered by Medica. Reminder: if you want to use Premium Tax Credits to help cover the cost of your insurance, you must purchase it in the marketplace.

Private Plan Coverage: Enrollment is not limited to a set period of time for most policies. The Iowa Insurance Division provides a listing of licensed agents.  New this year for individuals who do not qualify for premium tax credits are association benefits plans.

Children’s’ Health insurance Plans (known in Iowa as HAWK-I): Enrollment is not limited to a set period of time. Contact the Department of Human Services for applications and program details.

Medicaid: Enrollment is not limited to a set period of time.  Individuals may qualify based on income or specific health issues.  Contact the Department of Human Services for applications and program details.

Iowa State University Extension and Outreach has available education programs that can help with understanding choices and coverage.  Contact your local extension office to request delivery for your community.

Joyce Lash

Joyce Lash

Joyce Lash is a Human Sciences Specialist in Family Finance who wants to keep you ahead of the curve on financial information.

More Posts

Cost-Cutting vs. Saving: Not the same thing!

Most of us have dozens of ways we “save money:”

  • We “save” by using coupons and shopping sales.
  • We “save” by saying NO to ourselves and others when temptation arises.
  • We “save” by cooking at home instead of eating out.

Are you wondering why I put the word “save” in quotation marks in all those examples? Here’s why: even if we did all those things every single week, there is no certainty that our savings account balance will increase.

All those steps are ways we reduce costs, but do they automatically lead to deposits to savings accounts? No. Take me, for example: I have never once taken the money I did not spend at a restaurant or grocery store and deposited it into a savings account as a direct result of the decision not to spend. Instead, the money I “saved” would usually just get spent on something else!

A decision not to spend is a key step in saving. But by itself, that decision is not enough; it only turns into saving when we actually move the money into a savings account (or to a dedicated savings location such as a piggy bank).  When I come to a coffee shop or an ice cream store and I go on by without stopping because I want to save that money, I should probably just stop right there and transfer money from one account to another. Or I could carry a “saving” envelope in my purse and move cash into the envelope every time I resist temptation. That would be the way to make sure the actual saving occurred.

Saving is a two-step process. It involves deciding not to spend and  putting money in a designated location. Either step can come first. I can decide not to buy something and then save the money; OR I can put the money away first and then (out of necessity) spend less than I otherwise would have spent.
Note: many of us do better if we put the money in savings first!.When there’s no money in your billfold or your account, it’s easier to resist temptation to spend! 

Do you sometimes wonder why you aren’t getting ahead, despite your efforts? It may be because you’re skipping one of the steps.  How can you turn your cost-cutting into true savings progress?

 

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.

More Posts

Stocking the Grocery Pantry

I threw a list of Pantry items together in 2004 and went shopping. My goal was to confirm or dispel what participants in my budgeting classes would argue: that it was cheaper to purchase groceries at larger markets, especially those in larger towns where there is more than one grocery store.

What I challenged them to consider was the cost of transportation and the added time it took to make a 1 hour round trip each week for groceries; especially if the sale items were the same price in a local store.  Did they save enough to off-set those costs? Even though the cash register receipt is lower for the same items, it wasn’t enough savings to cover the cost of transportation.

I took my list shopping to the local grocery in 2007 and again today.   Here’s what I’ve learned from the comparison:

  • The cost for store brands, 2004-2018, increased 54.7%, the national brands increased 34.3%.
  • The margin between the cost of buying a store brand and buying a national label continues to erode. In 2004 the difference was 30%, in 2018 the difference is 24%. Store brands still cost less, but not as much.  Quality becomes more important.
  • The changes in package sizes has slowed. I found several items in smaller packages between 2004 and 2007; but only Oat Cereal was found in a smaller package in 2018.
  • Some items are lower priced. Brand name stick margarine is priced lower than the 2004 cost and the store brand is equivalent to the brand name price. Oat Cereal, when broken down into price per ounce, is 27 cents today. In 2004 it was 26 cents an ounce.  Brand name green beans have declined slightly since 2007, with store brands getting close to equivalent price.
  • Items on my pantry list with a larger than average increase in price are: a 2 lb. block of processed cheese food – the national brand increased 100%; a 5 lb. bag of national brand flour increased 61%.

A new player in the pantry shopping list is a local dollar store.  My grocery sack included a combination of store brands and national brands. The sizes were equivalent. Not everything on the list was available. Some items were lower, but others were higher in price. In the end my combination sack cost the same as the store brands at the local grocery.   If you have the time and pay attention to prices you could lower your total grocery costs by shopping at both stores if they are close to each other.

Visit the Spend Smart, Eat Smart website for low cost recipes and other tools to manage your grocery dollars.

 

Joyce Lash

Joyce Lash

Joyce Lash is a Human Sciences Specialist in Family Finance who wants to keep you ahead of the curve on financial information.

More Posts

Confirmation Bias? Dangerous

I heard a speaker yesterday refer to “confirmation bias.” It’s an idea I know well, but it had been a while since I heard the actual phrase, so it caused me to think. The idea behind confirmation bias is that if you believe something to be true (or if you even want something to be true), you will be able to find facts you can interpret in such a way that they will seem to support the belief you want to be true.

For consumers, confirmation bias can be a dangerous thing. Here are some hypothetical (but realistic) examples of how that could work.

  • Several friends have purchased a very-expensive brand of Widgets, and they all swear by the benefits of the brand. Undoubtedly, a search will lead to other positive reviews of the widget that persuade you that your friends are right; this may leave you feeling justified in spending much more money than planned on your new widget.
  • You hear a rumor that now is a great time to invest in Company X. You do an on-line search and you find several articles that support your desire to jump into the investment, so you move forward with the idea.

In both of these examples, the fact that you knew in advance what answer you wanted to find made you much more likely to find it.

There has been much discussion in recent months about facts and what to believe. Sadly, the abundance of information available on the internet includes “sources” that claim opposing facts: one source shows how “Fact A” is definitely true, while another source cites information which “prove” the false-ness of “Fact A.”

This simply reminds me how critical it is for consumers to protect against confirmation bias, as well as against unreliable information in any situation. The best decisions are based on research conducted by well-respected scientists. Three tips to protect yourself:

  • Always shop around (at least 3 sellers) before making any significant purchase or consumer decision.
  • Always seek information from multiple sources; ideally, those multiple sources would not be connected to each other. (For example, if you read an article in 3 different publications, but all those publications are operated by the same umbrella company, it’s really not equal to three different sources).
  • The most reliable on-line sources on most topics are sites whose URLs carry a “.gov” or a “.edu” extension. Some “.org” sites are reliable, but use caution because they may have an agenda. Two reliable “.org” sites are www.consumerreports.org and www.nefe.org.
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.

More Posts

Plan for Change

The wife of a dear friend has lived in a care center for about 10 years now. I frequently cross paths with him and can see how much he misses her. I called him, excited to hear the details, when I saw on Facebook that she had moved back home. He explained that as her condition deteriorated over time, the cost of care in the nursing home had increased…so much so that they could no longer afford for her to live there.

That sounds like bad news, but it is truly turning into good news for them. You see, my friend has now retired from farming, and he can provide some of the care in their home. They have found it much more cost effective to hire a nurse to come at scheduled times to provide care and guidance for my friend, who wants only the best for his wife and is eager and able to be her caregiver. This solution has brought much joy to their home, as they are together again under the same roof.

As we plan for the future in retirement, we often think about three stages: early retirement when we do more traveling or activities that cost more…the middle years which cost less, when we are still healthy but do less because our goals have been met…and the later years when our health care cost rise. For my friend, the thought of bringing his wife home was not part of the original plan. Once he retired from farming and was more available to provide care, it made sense. It is important to make a plan but to also revisit that plan and see if it is still the best solution even after it has been implemented. Plans can always be revised.

The Finances of Caregiving is a series of five 2-hour workshops to expand your understanding of possible solutions for providing care for a loved one and help families plan together for the care receiver’s care. Understanding your choices means knowing your current situation. This program guides you through finding and collecting that information; it also provides information about communication strategies and options for care. To find a location of a program being offered near you, check out www.extension.iastate.edu/humansciences/finances-caregiving

Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

More Posts

Prescription Costs: Cash vs Co-Pay

Prescription drug costs are getting a lot of media attention these days, sometimes leaving consumers unsure who to trust.  One question raised by news coverage is the question of how much we should trust our insurance plans to get us the best deal. According to a recent study, nearly one-fourth of all prescription purchases would be less costly to consumers if they paid cash rather than having their insurance cover the purchase. In other words, their co-payments were more than the actual cash cost of the medication.

The report said it is common for this overpayment to occur with generics. A news report gave an example where the difference was dramatic — a $285 copay compared to a $40 cash price. It seems unthinkable, yet it happens!

Consumers have told stories about this problem for years, but the recent paper from the Schaeffer Health Policy Center at USC was the first known systematic study, so only now are we learning how widespread the problem was; the study, which examined 2013 data, indicated that 23% of all prescriptions involved this kind of overpayment. A few states (not yet Iowa) have passed laws against this practice, but anecdotal reports suggest that it is still widespread.

I’m reminded of the classic consumer advice: “Let the buyer beware;” when in doubt, we need to check things out carefully, gathering information on our own rather than trusting an outsider’s guidance. In fact, the report mentioned that pharmacists’ contracts often include gag rules which prevent them from telling patients about this, unless they ask.

SO – next time I fill a prescription, I’m going to ask: how much would this cost if I just paid cash? If it’s cheaper to pay for it outright, then I’m happy to leave my insurance out of the equation.

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.

More Posts

Sales Tax Holiday: Use Wisely

In Iowa, this coming Friday and Saturday (Aug 3-4 2018) offers a chance to buy qualifying clothing items without paying any sales tax. For most Iowans, (depending on local sales tax), that’s a savings of 7% — not a huge windfall, but still an advantage.  That savings is magnified by the many retailers who offer clothing sales on the same weekend.

Sounds like a winning proposition, right? It can be. But like anything else, it requires consumers to use good judgment! Why?

Well, if you’re like me, you’ve had experience with the risks involved in shopping simply because there’s a sale. Who among us hasn’t made a purchase because it was such a “great deal” and then never (or rarely) used it? Hopefully we learn from those experiences, but it always pays to exercise caution when shopping sales.  Here are some ideas to help us avoid regrets:

  • Have a list and prioritize.
  • Plan a dollar limit that lets you fit your purchases into your budget without borrowing. When purchases are paid off over months of credit card payments, the benefit of the sale price quickly disappears.
  • Know what the “regular” prices are, and consider whether items will be on a bigger sale later in the fall. In other words, ask yourself “Are they just giving a small discount to tempt me to buy now rather than waiting for later when bigger discounts will be offered?”
  • Keep all receipts. If you pick something up and later decide it wasn’t that important or that great of a bargain, you’ll simply be able to return it!  Be sure to have the self-discipline to follow through on that… it may be “only” $10 or $20, but that adds up over time.
  • If you are buying for people other than yourself (especially growing children) check out their current clothing stock before you make your list — find out what fits and what doesn’t. This will help you make sure that the items on your list are the most important items.

Iowa’s Sales Tax Holiday applies to most clothing and footwear items priced below $100. Most accessories are not exempt (such as jewelry or watches), but some items do qualify for the exemption (such as scarves).  Certain specialty clothing items, such as clothing specific to a particular sport, are excluded as well. For a full list of items that are taxable vs. exempt, go to https://tax.iowa.gov/iowas-annual-sales-tax-holiday.

Happy shopping! Good planning means no regrets!

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.

More Posts

    

Subscribe to “MoneyTip$”

Enter your email address:

Delivered by FeedBurner

Archives

Categories