Rising Food Prices – Yikes!

Food prices are rising – it’s more noticeable this year than in other recent years. On top of that, many households who receive food assistance (formerly known as Food Stamps) will very soon stop receiving extra benefits that have been available due to COVID. All this makes it more important than ever to be smart with your food dollars.

Spend Smart. Eat Smart.®” from ISU Extension and Outreach can help! This website and app offers information, tools, recipes, how-to videos, a blog and more, all designed to help people eat healthy while not spending a fortune. It’s very practical, with tools and videos focused on planning your meals so you can plan your shopping, ways to save time and money when shopping, organizing your kitchen to make cooking easier, and so much more.

One of the things I like about the website is that all of their recipes have been tested by average home cooks, to make sure the instructions are easy to understand. Recipes also avoid obscure ingredients that you might buy and never use again, or that you might even have trouble finding in a Midwest grocery store.

An added bonus is a focus on health, including tips and tools for building exercise and activity into your life and even some basic workout and stretching videos for use at home. It’s all very practical for the average individual.

When money is tight, often the first place people look to cut costs is with food. Spend Smart. Eat Smart® can help you cut costs without sacrificing nutrition or flavor, and can make your life easier, as well.  Check it out today!

P.S. Find the Spend Smart. Eat Smart app by searching “spend smart eat smart” in your app store.

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

Child Tax Credit Update: Non-Filers Tool

Over the next few weeks we expect to see several updates about how to access the special 2021 Child Tax Credit described in last week’s post. Reminder of what makes the 2021 credit “special:” 1) it is bigger; 2) part of it is payable in monthly advance payments beginning in mid-July; and 3) it’s available even to people who don’t file taxes and/or who don’t have income!

Today the IRS announced a new “Non-Filer Sign-Up Tool” for those who did not and will not file in 2019 or 2020.

For most households, the IRS will base the monthly advance payments on information from 2019 or 2020 tax returns. But what about people who did not file and do not NEED to file for either 2019 or 2020? Today the IRS announced a new “Non-Filer Sign-Up Tool” to help make sure those folks receive their payments. This allows parents/guardians to enter information about the people in their household, AND to enter direct deposit information so they receive their tax credit payments speedily.

Please share this information with those who need it!!

A couple of notes:

  • If you filed a 2019 or 2020 tax return, you don’t need to take any action.
  • If you used the “non-filers tool” LAST year (2020) to receive your Economic Stimulus Payment, you don’t need to take any action.
  • In the coming weeks the IRS will be adding two more tools: 1) an interactive tool to help you find out if you are eligible for the expanded Child Tax Credit; and 2) a Child Tax Credit Update Portal, where you can add children born in 2021 or make updates that matter, including changes to your address or bank information.
  • A non-profit organization has launched a consumer-friendly informational website that may be useful at https://www.getctc.org/en. I recommend sharing it widely!

Source: https://www.irs.gov/newsroom/irs-unveils-online-tool-to-help-low-income-families-register-for-monthly-child-tax-credit-payments
For more information: https://www.irs.gov/credits-deductions/advance-child-tax-credit-payments-in-2021

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

Excited for your Tax Refund?

Tax refund season is an exciting time for many families, because the tax refund is often the biggest financial event of the year. If your family is expecting a sizable refund this year, now is a good time to plan for how you will use that money.

Before making specific plans, I encourage you to think about this: the tax refund is a once-a-year event. That means it’s smart to think about the whole year’s worth of possible uses for that money. It’s a good idea because that reminds you to consider whether you’ll want to set aside some of it for things like…

  • Back to school costs
  • Winter coats for next winter
  • 2021 birthdays and holiday expenses
  • Summer day care costs when children are out of school
  • Car repair needs that might arise (or new tires)

If you think through possible expenses for the year ahead, you will be glad you did. It will help you reduce your overall stress load, since you’ll know you have a head start on meeting some of those needs. Of course I understand that if you have past-due bills right now, you’ll probably need to use your tax refund to catch up on those. I also understand that providing something special for yourself and your family right now may be important – whether that be a new piece of furniture or a trip to a restaurant. Only you can sort through all your options and decide on your highest priorities, but your plans will be stronger when you consider the whole year.

Keeping the whole year in mind as you think about your tax refund makes sense, doesn’t it? It’s just like when you get paid weekly or monthly, and you think about the whole week or the whole month before spending. Your tax refund may not be enough to cover all your special needs for the year ahead, but it sure can help.

Important Note: The IRS announced last week that it will not start processing tax returns until February 12. Why? Because the new law passed in the last week of December made several changes, and they need to make sure their computers have those changes programmed in. Result? Chances are your tax refund will be a little slower this year. No refunds will be issued at all until about a week after February 12. Build that delay into your plans.

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

Tax Law worth knowing: EITC “Look Back”

If a mention of tax law causes your eyes to roll back in your head, I ask you to snap out of it for a minute, because this one is important to ordinary households. It’s new (and temporary) — part of the new COVID relief bill enacted this past week, and it will be huge for many workers who have been unemployed or had reduced earnings in 2020.

The Earned Income Credit is a powerful tool for helping working families with lower wages. The amount you receive depends on your earned income. Higher earnings (up to a point) means higher EITC.

2019 EITC Chart: Married Couple with 2 children

Here’s a 2019 example: A married couple with 2 children and with earned income between $14,550 and $22,400, was eligible for an earned income tax credit of $5,828 in 2019. That’s an extra $5,828 added to their tax refund. If their income was below $14,550 then their EITC was lower, but even if they only earned a small amount from work, they would receive some EITC. If their income was higher than $22,400 the amount of EITC gradually dropped, but they would still receive some EITC even if their income was as high as $52,400.

Suppose: a married couple with 2 children earned $25,000 in 2019, and received an EITC of $5,785. However, in March of 2020 they were laid off. They did receive unemployment, but that is not earned income. Their actual earnings from work in 2020 was only $5,000, which made them eligible for EITC of $2,010. That’s a loss of over $3,700, in a year when they were already struggling. The “look-back” provision in the new relief bill allows them to receive EITC (and also the Child Tax Credit) based on their 2019 earned income if it would be more beneficial.

By contrast, imagine a married couple with two children who had earned income of $60,000 in 2019. Their income was too high for EITC in 2019. However due to furloughs, their earned income in 2020 was only $40,000. They will be eligible for EITC in 2020 based on their 2020 earnings (assuming they meet other eligibility rules). When calculating EITC and CTC, taxpayers can choose to use either 2019 or 2020 income figures, depending which is better for them.

Tax law worth knowing!

Source: Kitces.com

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

Money Guidance via Podcast

graduates

Targeting those in college or planning for college, the U.S. Consumer Financial Protection Bureau recently launched a podcast called Financial inTuition. The six episodes currently available are divided into two categories: three episodes focused on student loans, and three on basic money management skills with a focus on issues faced by students.

Each episode includes an interview with either an expert or a consumer with first-hand experience. It’s always helpful to learn from other people’s experience!

The podcast is available free wherever you get your podcasts, OR directly from the CFPB website. It is part of a broader set of resources targeting students and young adults on topics like paying for college (including information about student loans and the GI Bill), and money management information for economically-vulnerable consumers (which includes most young adults just starting out) on topics like building credit access and finding money to save. They also provide materials for both youth educators and adult educators.

Check out these resources for yourself OR share them with someone you care about!

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

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'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

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'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

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'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

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'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

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'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