Giving

Today is #GivingTuesday, an annual event begun in 2012 to spark a “global generosity movement unleashing the power of people and organizations to transform their communities and the world on December 3, 2019 and every day.”

As it follows on the heels of “Black Friday” and “Cyber Monday” and even “Small Business Saturday,” I find “Giving Tuesday” a huge relief – a welcome change of pace, not focused on shopping.

There are three ways we can use our money: Spend, Save, or Share. I don’t think the “sharing” element always gets its due attention. Sharing happens in many ways, including charitable giving and also including gifts to people we care about. It’s true that for many people, Black Friday and Cyber Monday focus on shopping for gifts we want to give to others; that is sharing, after all. But I see the kind of gift-giving I do with family and friends to be a little different. It’s less of a pure kind of sharing, because it’s usually reciprocal: “I need to give them something nice, because I know they’ll be giving me something nice, too.”

What I really like about Giving Tuesday is that it seems to encourage a more selfless sharing, with a main focus is on promoting the good of others, on something bigger than ourselves. If I can buy gifts for people who already have plenty, then surely I can also GIVE selflessly to causes that will help make the world a better place, or to people who have real need.

As you consider your giving options, 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.orgwww.charitywatch.orgwww.charitynavigator.org, or www.givewell.org.  

Giving is part of my monthly budget every month all year round. So on Giving Tuesday I am reminded to consider where this month’s gifts will do the most good, and also to reexamine whether I can give a little more…

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

A Missing Link in Your Spending Plan?

checking a box

Making a spending plan is a key to being on top of your finances. When you look at the income you can realistically expect and then decide in advance how you want to spend it, that plan puts you in control; it helps you ensure your money is used where it matters most.

But is a spending plan all you need? The answer is a definite NO. Lots of people make spending plans but still don’t gain control. Why?  Because even the best spending plan is useless if you don’t FOLLOW it. And that doesn’t happen automatically. You need a strategy.

The good news is that for most people, part of their spending plan is easy to follow; fixed expenses like rent and other bills are predictable, and are usually paid just once a month. The tricky part for most people is staying within their planned limits for flexible expenses (groceries, fun, etc).

It comes down to questions like this:
If you plan to spend $320 on groceries for the month, how do you make sure you don’t spend more than that?

The answer? Keeping track. The only way to make sure you follow through with your plan is to have a strategy for checking up on your spending throughout the month. There are “old-fashioned” ways to do that, like writing down spending in each category, using either written ledger charts OR computerized spreadsheets. The “envelope method” also can help you follow your plan; it involves separate envelopes containing cash for each category of spending you wish to monitor (groceries, gas, fun, etc).

There are also “apps” that can help you track. These apps work in a variety of ways: with some, you enter your spending in your mobile device as you go along; with others, your debit card spending is linked to the app, so that, for example, all purchases at the grocery store are automatically added to your running total of food expenses.

The money management apps for mobile devices are generally provided by commercial organizations, and Extension does not recommend commercial products, but consumers have found many of these apps useful. One caution I suggest, however, relates to internet security when accessing your financial accounts. Choose settings within the app that will prevent the app from connecting to your bank account via open public wi-fi.

Tracking your spending, especially in the categories where you are most at-risk of exceeding your planned amounts, is the best step you can take to make your spending plan work. And that is the way to achieve your financial goals!

For more information, find our free 4-page publication “Tracking Your Spending.”

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

Sports Betting Tips

Today’s guest blogger is Kalyn Cody, ISU Extension Human Sciences Specialist serving the DesMoines metro region. Kalyn Cody photo

Last week, I, like many Iowans, walked into my local casino to set up a profile for online sports betting. 

After a law passed in May and final rules were approved in July, sports betting began on August 15th at many casinos in Iowa.  The law allows for both in-person and online bets, but everyone must first check in at a casino to verify their age and identity. With this new opportunity to gamble in Iowa, it is important that we remember some key tips to bet responsibly and not get in over our heads. 

First, always gamble with a plan.  Pick an amount you are comfortable losing.  Does this amount fit into your budget?  Will you have to sacrifice things you need if you lose?  Additionally, pick an amount you are comfortable winning.  Set a dollar amount at which you will walk away.  It is very common to see a stack of chips or winning tickets and continue playing, only to look down again a bit later with nothing left.  Whether you are winning or losing, have an exit strategy.

Second, never borrow money to make a bet.  Think of sports betting as entertainment.  Would you take a loan to watch the headliner at the State Fair?  To go out to a 4-star dinner?  Every gambler has a bad beat story—probably many—and taking a loss on borrowed money can easily spiral out of control. 

Finally, if you do find yourself struggling with a gambling problem, be aware of resources that are available to help.  The Iowa Department of Public Health has set up a website with a risk assessment, hotline, live chat, and more.  You can also call the ISU Extension Iowa Concern Line at 800-447-1985. 

Enjoy your new options, but remember to stay in control of your bets.

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

Who needs an emergency fund?

jar of coins

If you’ve gotten along for years without any money in the bank, you might scoff when people suggest that establishing an emergency fund should be a priority. Perhaps you respond with: “I always find a way to deal with emergencies, even without money in the bank!” You are not alone. A recent survey found that 4 in 10 Americans could not cover an unexpected expense of $400; that might be the cost of replacing an appliance that died or an unexpected car repair.

If you’re one of those 4 in 10 Americans, you’ve probably paid a price for your lack of savings. 

  • Perhaps your landlord or the utility company has lost patience with you, and will no longer give you any leeway; they may even threaten to evict you or disconnect your services. 
  • Perhaps family members avoid your calls because they’re tired of you asking for money. 
  • Perhaps you pay tens (or hundreds) of dollars a month in late fees and interest because of unexpected expenses have put you behind on bills.

Here’s the hard truth: living with no savings creates real problems for individuals and families. Savings is essential for financial stability. It can also reduce family arguments and help you sleep better at night.

So the question is this: HOW does a person build up savings? There are lots of “tricks” people use to save money. For example, they may save all their change, or every $5 bill they receive in change; or they may have a “frugal week” each month, in which they give up extras like coffee, soda or eating out, and then save the money they would’ve spent on those things. I love hearing about the variety of strategies people use!

When it comes right down to it, though, there are two core elements of any savings plan:

  1. You must treat your savings like a bill, and pay yourself FIRST. If you wait, planning to save “whatever is left,” the saving probably won’t happen. Make your spending plan for the month (or the week), figure out how much you can save, and do it first. That is the best way to succeed with saving.
  2. You MUST be saving because it is important to YOU. If you try to save just because I told you that you should, it won’t work. You have to want to save in order to be willing to make the changes required for saving. So think about WHY you want to have some savings built up. Maybe you’ll think back to the stress and drama you experienced the last time an unexpected expense occurred; avoiding that stress might be your reason. Setting an example for your children might be your reason. Keeping the utility company happy might be your reason. Note: It helps if your partner and family also agree that saving is important.

How much should you have in your emergency fund? That’s up to you, but I encourage you to set a realistic goal for the short term. If money is tight, it might take a couple of years to get to $1,000. You need some success sooner than that, so a goal of $100 might be a good place to start. When you reach that goal, you can celebrate! (And then start toward $200).

How have you succeeded with saving? We’d love to hear your stories!

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

To Buy or Borrow?

My family just returned from a camping trip in the mountains of Montana. Our decision as to where to camp was determined by the fact that not all campsites would allow soft-sided tents and campers because of bears living in the area. We drove up into the mountains to picnic, visit sites and see the wildlife…including bears. Those that were serious hikers wore bells so bears would hear them coming; as to not surprise the bears that might be along the path. Hikers also carry BEAR SPRAY…a kind of “pepper spray” to temporarily blind a bear, giving a hiker a chance to escape, if they did come upon a bear. This product was sold in all the shops for more than $50 for a small spray can…OR you could rent a can. If you were a visitor to the area, and would not have use for the spray once you returned home, renting was a good option. At $10 per day rental, you would have to spend more than 5 days hiking to justify buying the can of spray.

Our son almost purchased a family pass at their local pool because that is what they had always done. At the last minute, he changed his mind and decided to buy a couple of punch cards. They have hired a high school girl to watch their oldest child for the summer, and wanted their daughter and the sitter to be able to spend time at the pool. The family pass would not cover a caregiver…only family members. When he added up the number of times they visited the pool, divided that into the cost of the family pass, it made more financial sense to buy the punch passes instead of the family season ticket.

I can think of many times where a decision to rent or borrow was a better financial choice…like borrowing an expensive tool that you would only use once or twice. I can also think of times where I mindlessly purchased something rather than looking for a more economical way of doing something…just because it was easier, faster or just “the way I’ve always done something.” How about you? What are some ways you have accomplished something without actually buying something?

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

Defining Unexpected Expenses

Life is full of surprises and events that sometimes shatter our daily routines and our finances. 

Conventional wisdom says that the money in an emergency fund would be earmarked for “unexpected expenses.”  That is true.  However, let’s think about what expenses actually are (and are not) unexpected.

Expenses that are not unexpected: monthly and annual bills

  • Regular annual or semi-annual expenses are not unexpected: these include property taxes, car insurance premiums,  annual life insurance premium, eye exams and other once-a year expenses.  You can plan and prepare for these expenses by setting aside a fixed amount each month.  Since you know these expenses are coming, they cannot truly be considered emergencies.
  • Occasional maintenance or repairs, such as a leaky roof or a dishwasher breakdown are not fully unexpected. either.  The same is true for other ordinary home repair, care repair, and moderate medical bills.  You may not know exactly what expenses will come up, but if you have a body, a car or a home, you need to expect to spend money on maintaining them. Setting aside money each month will build a fund for home repair and maintenance, car repairs, and  ordinary medical bills.

What expenses are truly unexpected?

An emergency fund is intended for expenses that fall outside the categories of “annual bills” or ordinary maintenance of home, car, and health.  Unexpected expenses are events like losing your job or being struck by a massive, out-of-the-norm health-related bill beyond what insurance will cover.  Emergency funds are designed for expenses that are highly unusual, not for common occurrences.

Bottom Line: It is possible that the savings account you were labeling as an “Emergency Fund” is actually your “Yearly Expense and Maintenance Fund.” That’s a good fund to have. But perhaps you also need an emergency fund.

 

 

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

Auto-Pilot vs Mindlessness

Two cardboard boxes delivered to a residential home wait outside a black metal front door on a brick patio, Midwest, USA

We have frequently talked about strategies for making good financial habits. One strategies is to “make it automatic”. For example, if I want to save 10% of my monthly paycheck, I would have a greater chance of making it happen if I were to set it up with my employer. Each month, a portion of my paycheck could be auto-deposited in a savings account while the remainder of my check would go directly into my checking account. Basically, I made the decision once and it happens monthly without me having to remember to transfer money from my checking account to my savings account.

For the last couple of years, I have done a lot of on-line purchasing, including a large portion of my gifts and a few household consumables. Within the online shopping platform, I have always compared prices, companies, and options. I would also check Consumer Reports to compare brands and quality reviews. I considered myself to be a good shopper. When this online platform first arrived on the scene, I was diligent in comparing prices with our local stores to make sure I am getting the best deal.  In recent months, though, I haven’t done much comparison shopping;  …I just assumed…which I am sure is what online “stores” were counting on.  They hook consumers with the price, convenience & variety, and then later, when the prices rise, we either don’t notice or don’t care because we are hooked on the convenience.

This past week, a new study revealed that when compared to local store chains, this online shopping platform (the one I had gotten used to using) was not always a less expensive way to shop. This is NOT what I wanted to hear! I LOVE the convenience and the speed at which things arrive at my home. I WANT (but I don’t need) more brands to pick from.

So I have a mixed scorecard as an effective consumer. On the plus side, I have been effective in putting my savings account deposits on auto-pilot; but on the minus side, my desire to save money while shopping has slipped as it became a bit mindless. Now the I have to decide if the convenience is worth a slightly higher price.

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

Holiday Break – Things To Do And Not Break the Bank

Since we are on holiday break – and have already spent our money on holiday gifts and entertaining — what are some ideas that can entertain the family at little or no cost?

Whether it is checking out a DVD at your local library or from the Red Box or playing card or board games in the evening, there are ways to find entertainment without putting a hole in your pocket.

If you have young children, you may have a chalk mural on your driveway if the weather is warm. Even baking cookies together can be a fun family event.  I remember as a child, my mom would sometimes make a batch of yeast bread dough and my sister and I would shape the dinner rolls.  In addition to being an enjoyable family activity, working together in the kitchen is also a chance to start teaching your child cooking skills that they will use in their later years.

To be healthier, how about a hike in the woods or taking the children to play in the park?  With help from seed catalogs, why not plan your own garden? You will reap the produce next summer. As a family, go for a bike ride.  Have a family pick-up game of one-on-one basketball or invite the neighbors over for a game of volleyball. Invite the neighbors in for a potluck barbeque and have activities for the kids and adults.

In the summer, visit a drive-in movie theatre or tour a dairy farm or a police or fire station.  Enjoy a free concert in the park or community festival.  Visit the public library, check out movies, books, games, music, and take advantage of the programs that the library offers.  Read a good book for enjoyment.

Best to you and your family as we start a new year!

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

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

    

Subscribe to “MoneyTip$”

Enter your email address:

Delivered by FeedBurner

Archives

Categories