Save with a Plan

Happy America Saves Week! We’ll be celebrating all week with special posts focused on ways to make saving happen for real.

One key is to have a PLAN. While I could write more, I want to focus on just 3 parts of a savings plan that can make a big difference.

  1. Save with a clear REASON in mind. And make sure it’s a reason you care about. If you’re just saving because someone said you should, it may be difficult to succeed. After all, finding money to save means letting go of something else you used to spend money on. It will be a lot easier to give up that “other thing” if the reason you’re saving is truly important to you.
  2. Figure out in advance HOW you are going to come up with the money to save. If you simply say “I’m going to save $20/week” and don’t answer questions about when, where and how, then it probably won’t happen.  (Not sure how? stay tuned the rest of the week for more ideas!)
  3. Plan for MOTIVATION. Most savings goals take time; you might need a morale boost along the way, especially when obstacles arise. Think about what motivates you, and plan to build that motivator into your life. Maybe it’s a graph that shows your savings growth. Maybe it’s a cheerleader – an encouraging friend you recruit to your “team” – someone who will remind you of your positive progress even in a week when you did not succeed in making a savings deposit. Maybe it’s a special reward for when you reach certain milestones, or for each week or month you take a step forward; low or no cost rewards like bubble baths, or coffee with a friend, or an evening of reading can help keep your enthusiasm up.

Starting any new habit can be challenging. If you want to start (or increase) a savings habit, making a plan will help you succeed!

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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So Why Do Children Not Understand Money Concepts?

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%?

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.

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Tax Refund? Plan Yearly

We generally budget by the month or by the week — we plan our spending in relation to our income, and that’s how we meet our regular expenses. It makes sense.

A tax refund is different, however. It’s a “bonus” that only comes once a year; it’s often the biggest single chunk of income we receive during the year. If you expect a sizeable tax refund, I suggest you consider the whole year as you plan how to use it. Here are a couple of ways you might do that:

  • In a typical year, are there some big expenses that throw a wrench into your financial routine? Perhaps your tax refund can help you be ready for those expenses. Examples: holidays, back-to-school time, car maintenance (planned and unplanned), summer weekends away,… it could be anything. Setting aside part of your refund to help cover those costs can be a great way to remove stress and unwanted drama from your financial life.
  • Tax refunds are often the way families make special purchases, such as furniture, a computer, or new appliances. Your refund can help you meet an important family goal. Again, though, it makes sense to consider the whole year before deciding. That might mean thinking ahead to all the possible special purchases you might want to make during the year, and prioritizing which of them is/are most important. An example from my imagination: I can imagine getting to summer and realizing you need a new lawn mower, and really wishing you had used your tax refund to buy a lawn mower! Thinking about the whole year can help you get the most value from any special purchases!

No one can foresee the future, and trying to plan for the year doesn’t guarantee you’ll think of everything that might come up. However, if you make an effort to consider the needs of the coming year, you are more likely to be satisfied in the long run!

What are your plans for your tax refund? We’d love for you to share!

 

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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Dealing with Stress

Today was not a good day. Everything took longer to do or seemed impossible to resolve. Once again at the end of the day I moved items forward onto tomorrow’s to do list. Writing them again as unfinished business creates stress that either wakes me up at night or keeps me from getting over a dogged cold.  Holidays can make it worse with “extra” things to do and plan, gifts to buy, and juggling family functions. Throw in some unexpected bills or breakdowns and stress levels top out.

Our colleagues at North Dakota State University Extension have some excellent resources to help you – and me – identify stress in ourselves and others.  Responding to Distressed People (Publication FS1805) gives guidance on symptoms, how you can engage someone in conversations to ease feelings, and when to find help. The materials they have available at their website complement our own Iowa Concern.

Stress, whether rooted in finances or other sources, can become serious. If the holidays, work, business concerns, relationships, money, or other things are getting you down don’t keep it to yourself. Find someone to listen ( Concern Hotline: 1-800-447-1985). Everyone can use a little reminder now and then of the coping methods that will sustain them until stress eases or we work our way through the “to do list”.

Joyce

 

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.

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Controlling Spending

Being frank about managing money hasn’t always been the way financial educators have started a conversation about helping consumers gain control of their pocketbook. A report by the Consumer Finance Protection Bureau begins with the following,  “Organizing financial materials, making a budget, and managing expenses involves paperwork, math, trade-offs, and constraints. In short it’s a hassle.”  What then must be done to make it easy?

Consumer Insights on Managing Spending  points out information about account balances doesn’t always arrive when you need it. A credit card transaction is just a swipe of the card.  You can enjoy the immediate gratification of a new purchase or savor the excitement of a special occasion.  The bad feelings come when you receive the bill 28 days later.

A test was done to see if  just in time information with modified cards and smart phone applications would change how consumers spend their money. Credit card receipts included the amount spent in a month and your total account balance. Cards were modified with a small screen showing current account balances. Individuals used smart phone apps that tracked spending and gave immediate account balances for budget items with preset spending limits.  Did it change spending?

The answer is yes, we do a better job of managing money when we have access to immediate feedback. Switching to debt cards has meant dropping old habits of writing the transaction in a checkbook at the moment of sale; individuals who kept a current balance did receive immediate feedback. Replacing that habit with new technology could be a way to make money management less of a hassle.

Joyce

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.

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Too Many Clothes…

There are just two basic ways to deal with clothing clutter:  1) get rid of it, or 2) organize it. Most people need to do some of both when it comes to their closets.

Decide What to Get Rid Of

Prepare by arming yourself with three large containers plus a laundry basket, using a 3-container variation of the Clear the Clutter Strategy. Designate one bag or box to hold items for each of these means of disposal:

  • Garbage
  • Give away/donate
  • Yard sale or resale/consignment shop (Note: If you are not planning to sell anything, you’ll only need two containers.)

Items that belong to someone else or in other rooms should go in the laundry basket. For example, you  might discover a pair of your child’s socks mixed in with your stuff.

Sorting. Place like items together. Group items by type and then by color. For example, gather all your pants or trousers. Then group them by color.  Examine and try on each piece of clothing, then make a decision: keep it or not? If not, place it in one of the containers.

Organizing. What about the clothes that you are keeping?  Put them back in your closet or drawer—but be strategic.  You may want to leave out only clothing that is in season. You can reduce the clutter in your bedroom closet by storing out-of-season clothes in a box or another closet. When you switch your clothing at the change of the season, it is a perfect time to sort through and dispose of clothing that you no longer want.

Special Situations. If you have clothing of different sizes that you feel you must keep, you may wish to minimize clutter by storing them separately; keep only those items in the size you are currently wearing in the most accessible drawers or sections of your closet. Items that are worn infrequently, such as special-occasion clothing, can also be placed in a separate closet in order to keep your regular closet better organized.

Preventing Non-useful Purchases.  Make a list of clothing items that you need and carry it on your smart phone. Refer to it when you are shopping, to help you focus on purchasing planned items rather than spontaneous choices that may not match other items in your wardrobe.

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.

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Pokémon Go free

Pokemon GoTwice this week, the topic of conducting a time study was discussed. The first was a friend needing to provide proof to her employer that addition help needed to be hired. The second was to decide whether the time and energy spent on a specific enterprise yielded enough return for the dollar spent, to justify continuing that activity.

During a recent youth event, I was amazed at the amount of time the kids spent on their smart phone.  As I looked through the photos of the event, I was disappointed to see nothing but the tops of their heads…they were all looking down at their phones. The planners of this event spent a lot of time and consideration into ensuring the actives were engaging and thought stimulating and until all the phones were collected and stored for the evening, there was no stimulating dialog occurring among the group.

Often times, the thing that annoys me most in others, is the exact thing that I am guilty of. This made me stop and think about the value I put on my time. When Pokémon Go first came out, it was a novelty that I admit to wasting some time on. Now, I only play that game when I am getting my daily walk. It occurred to me that prior to Pokémon Go, I listened to music or just enjoyed nature as I walked. Besides helping with weight management, my daily walk is a stress reliever. I can feel my blood pressure drop and my muscles relax as I walk taking in the sunrise or listening to my favorite instrumental music. During my last walk I tried to pay attention to those same physical conditions as I played Pokémon Go during my walk. The walk may have been entertaining but it was NOT relaxing or stress relieving. I think the best use of my time when walking is to be unplugged…Pokémon free.  

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.

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Sending Your Children to College

Young woman leaving for college and familyI have two good friends that are sending their first-born children to college. Are the college bound students ready to manage money on their own?

Their parents probably don’t want to sit down and give “the money talk” just before delivering the student to college. It is better to talk over time about earning, spending and investing. The gradual approach is more powerful.  Helping students to experience spending money and planning for expenses will strengthen their money skills.

Everyone makes mistakes using money – share a few of your experiences from college or trade school and your first job.

Understanding who is paying for which expenses – Perhaps parents will cover textbooks and school related costs, and the student will be responsible for entertainment and gasoline if they have a car. Or perhaps you divide expenses differently.  The key is that the division should be clear. When I was in college, I had a small part-time job cleaning professors’ homes that gave me a little spending money.  It’s usually wise for students to limit the number of work hours outside of class to prevent work from affecting their school experience and success.

Each student is unique. You know your student better than anyone else does.  If they have already been careful with money, you may not need to set limits.  On the other hand, if they overspent during high school, you may want to give a limit on what they can spend.  You could use a prepaid card, but there are reloading fees.  You may want to look into overdraft protection for your child’s checking account, too.

What happens when your child gets in trouble financially? If your kids get in trouble financially, you are almost certain to bail them out.  By encouraging your kids to be responsible and catching any problems early, you can fix the problem before it gets out of control.  To make this possible, you will want to maintain an open dialogue with your student about money.

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.

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Where to Turn for Help

alice

When I was young adult I longed for the days when I wouldn’t have to count every penny. I envisioned a future where my college education would pay off and I would not have to worry about money anymore.

Well, I am well past college age but I have yet to reach the worry-free future I envisioned. What I have come to realize over the years is that managing money is often complicated and stressful and a recent report published by the Iowa United Way confirms that one third of Iowans struggle financially.

Last month the Iowa United Way published a report on Asset Limited, Income Constrained, Employed (ALICE). The report shows that ALICE families work hard and earn above the Federal Poverty Level (FPL), but still struggle to afford a basic household budget of housing, child care, food, transportation, and health care. Hopefully, when people read the report they will recognize they are not alone.

Many people don’t know where to turn when they have questions about money. As Human Sciences specialists in Family Finance we offer many classes on finances that can help people feel a bit more prepared. Our classes provide a safe environment to ask questions and learn from each other.

One example is the SMART CHOICE health insurance education class. Studies show that the cost of healthcare has become a significant portion of our family budget yet many of us don’t know how to choose a plan. Health MWeinandinsurance coverage and terms can be complicated and there are many decisions about types of care, service providers, out of pocket expenses, etc.

Like many financial decisions, it is important to begin with an understanding of what you need – like your family’s typical usage and healthcare priorities. The SMART CHOICE Health Insurance is designed to help people gain a set of skills so that they can choose a plan that best fits their family’s needs and then use that plan efficiently once enrolled. The course provides core information about health insurance, tools to use to make appropriate decisions, and a chance to compare hypothetical policies.

For more information about our resource list or to contact your local Family Finance specialist visit:

Family Finance Programs  http://www.extension.iastate.edu/humansciences/family-finances-families .

Family Finance Specialists  http://www.extension.iastate.edu/humansciences/staff-family-finance

Related Content Links

Download a copy of the United Way ALICE Report  http://unitedwayalice.org/Iowa/

Smart Choice Health Insurance  http://www.extension.iastate.edu/humansciences/health-insurance

Mary M. Weinand is a Human Sciences Family Finance specialist who works with individuals to help strengthen their ability to make informed judgments and make effective decisions regarding the use and management of money.

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.

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Do Oral Contracts Work?

Oral contracts can be as binding as written contracts. However, the contract may be hard to prove without a written record. If your deal goes south, you may feel like you are the cartoon coyote chasing the road runner. Make it easy on yourself and write up an agreement.Business Meeting

Often, parties enter into agreements that are half-oral and written, based on a handshake and a few letters that may indicate some parts of the agreement without actually being contracts. In this case, the agreement is contained partly in the oral agreement and partly in the letters. It’s best to put all of the information relating to your agreement in one place — a single, clear, and complete written contract.

Some types of oral contracts are always unenforceable. The following four types of contracts, which involve a high risk of fraud, must be in writing by law:

  • Contracts for the sale or purchase of land
  • Contracts for the sale or purchase of goods priced at $500 or more
  • Marital settlement contracts (a promise to do something in exchange for a promise to marry, such as a father promising the groom a job after the groom marries his daughter), including prenuptial contracts
  • Contracts that can’t be performed within one year of the time the contract is made.

Attack of the killer handshake

A written agreement is not final until signed – unless you indicate your agreement to the deal otherwise: say, with a handshake. Do not let an oral agreement sneak up on you by saying that you agree to a deal before you are actually ready to sign it.

Message to take home: Even attorneys can have trouble understanding what they are doing without a written, signed contract.

‘Nuff said – Get it in writing.

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.

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