E-cigarettes

It’s strange to hear marketing promoting the use of e-cigarettes. Legislation has restricted  campaigns promoting tobacco products for many years.  A frequently-used e-cig marketing approach targets smokers who feel their habit has forced them into self-imposed  isolation to hide their habit or protect others from second hand exposure.  Web sites declare the product is for individuals who already smoke, offering them a safer alternative.

Nicotine is an addictive substance and e-cigarette ads or commercials clearly state its presence. E-cigarette use often leads to use of tobacco products. Among individuals who smoke, nine out of ten started as teens.

A 2016 report by the Surgeon Generals Office pointed to data indicating a rapid increase in the use of e-cigarettes (also known as “vaping”) by teens and young adults.  In research designed to measure whether youth understand the risks, the findings clearly indicate that teens and young adults view e-cigarettes as safe. Flavor options are attractive, and natural curiosity are reasons given to try e-cigarettes.

Tobacco product use in any form, including e-cigarettes, is unsafe for adolescents. Lifelong addiction is costly, not only in health terms, but also in financial terms. E-cigarette pods, equivalent to a pack of cigarettes, cost $4-$5. The device to use the pods is around $35.  When a substance is addictive, as e-cigarettes are, users will typically increase consumption over time. This is a bonus for the companies selling the products. Even with low use (2 pods a week), the habit will cost $500 a year.

Running a calculation of what $500 a year could become if it was saved provides an argument against vaping.  A modest $50 deposited monthly into an account earning 3% a year with annual compounding (I’m being intentionally conservative here…) from the age of 16 until age 65 would result in  cash assets of $65,000.  Unfortunately it’s hard to make this example exotic enough to hook individuals on saving instead of vaping.

 

 

 

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

Smile! For the Camera

On Super Bowl Sunday in my area it was so foggy you could not see your hand in front of your face. While many were preoccupied with football (or the commercials), there were others that were taking advantage of weather that easily conceals illegal activities.

Padlock

On Monday morning, my colleague found that the family’s storage unit, located a few blocks from their home, had been broken into. In total, there were 4 or 5 units that had been broken into, plus it was obvious that unsuccessful attempts were made on several other units.  An examination of the storage units that withstood the break-in attempts made it clear that the quality of the padlock is what made the difference in the safety of the contents. My friend was lucky because only tools and equipment were stolen — not the classic car they also had stored in the unit.

This is a common problem among rural properties.  Farmers often have buildings that they only spend time in during the spring, summer and fall months. Thieves will frequently enter these building and take a few small items. Their intent is to see if you notice that the small things are missing AND to take inventory of larger, more expensive items stored in the building. They may also leave something leaned or stacked in a certain way that would topple or need to be moved if someone entered the building. These tactics inform the thief whether someone does visit this building.  After several weeks, if the building still appears un-visited, they will come back and help themselves to the big-ticket items. A lot of farmers use trail cameras, (cameras used by hunters to study the activity of animals in the area) to monitor building sites or even their homestead.

With all the new and fairly inexpensive security equipment on the market – doorbells with cameras, spotlights with built-in cameras and small camera units – it is no surprise that the police are having an easier time catching thieves. It is also interesting to see the number of police and neighborhood postings on Facebook asking for help in identifying thieves that are caught on home security systems. As for my friend, it was suggested by local police to consider using a trail camera to keep an eye on their storage unit and, of course, to purchase a better lock.

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

Winter Weather: Time to organize!

In much of Iowa, our recent winter weeks have held lots of days suitable only for staying indoors. We’ve canceled or postponed many plans, and some of our dogs have missed lots of walks because some days were just too cold or windy.

So what can we do with those snow days?  I have an idea!
No, it’s not binge-watching your favorite shows or movies, nor does it involve baking. You don’t need ME to suggest those!

My idea is less recreational, but much more valuable in the long term: go through your files!

Cleaning and organizing files is a task we tend to procrastinate. But in an emergency, and even in many non-emergency situations, we sure would like to turn to our files and immediately put our hands on the document(s) we need. When need arises, we’ll be glad we invested some time in getting organized.

Here’s the good news: it’s a task that can be broken up into small doses.

  • If you already have a filing system, you can just go through one or two files a day, to pull out old materials that are no longer needed, and make sure the most current information is in front.
  • If you do not have a filing system in place, start with a small stack of papers from wherever you’ve been storing them. Create file folders or envelopes for each category of papers you run across. For example, if the first paper you come to is about your car insurance, then create a car insurance file. Perhaps the next item will be college transcript – if so, create an education file.

Well-organized files have three characteristics:  1) they are clearly labeled; 2) the newest and most important information is in front; and 3) out-of-date and unimportant documents are removed. Determining what is important can be a challenge. Some tips for starters: 

  • Insurance – keep the most recent summary of coverage (declarations page). In addition, keep the full policy booklet if you have one, and any updates you receive about coverage details.
  • Mutual fund accounts – keep your quarterly statements until the year-end statement arrives; that should include all activity for the year, so you can discard the quarterly statements. Keep all year-end statements, with the most recent in front. Keep the most recent prospectus. There is no need to keep annual reports.
  • Monthly bills – once you get the next statement showing that your payment was received, you can safely discard the previous statement, unless you need it for tax purposes.
  • Warranties and purchase records for warrantied items – keep as long as you own the item. Keep the purchase information longer if the item affects your taxes.
  • Taxes – after six years, they can be discarded.

Personally, my biggest filing problem is old folders with labels that have fallen off – I need to go through and re-label files. Which filing task most needs your attention?

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

Early Results from Tax Season

Early returns prepared at the Volunteer Income Tax Assistance (VITA) site where I volunteer are resulting in similar refunds or taxes due from previous years. VITA serves individuals with incomes at or below $55,000.

Dependents listed on returns are the biggest factor resulting in similar results. The child tax credit increased to $2000, the refundable portion of the child tax credit has increased to $1,400, and there is a non-refundable credit of $500 for dependent individuals who are 17 or older on December 31st of the tax year.

At the tax site, parents often state they won’t claim a dependent, even when they are eligible. If someone can be claimed as a dependent on your return it should be done; the IRS doesn’t allow a choice. Income deductions don’t increase and the $500 credit may be lost.

Lower withholding hasn’t been a problem with clients we’ve seen, but it has resulted in slightly higher incomes on the state returns, due to reduced deduction on Line 31. While most individuals won’t exceed the federal standard deduction, it makes sense to gather and record allowable deductions so they will carry over in software to the state return. Iowa has a standard deduction of $2,030 for single and $5,000 for couples, so it’s much easier to itemize on the state return.

If you aren’t setting up your refund to be deposited directly into your checking or savings account, this would be the year to start. As one client stated, ” The Federal government could shut down again. It’s hard to tell when I would get my refund, if I have a check mailed. Here is my bank information!”


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

Have You Reviewed Your Beneficiary List Recently?

Have you reviewed your beneficiary list recently?  Why should you do this?  Some of the biggest headaches experienced by tax, legal and financial advisers occur when their clients are not current with their beneficiaries.  

During a meeting of older adults, I had a woman admit that her mother was her beneficiary.  In the same breath, she mentioned that her mother had been dead for 14 years.  I highly encouraged her to change her beneficiary as soon as possible.

If you have not left clear and up-to-date instructions, your heirs will face real legal obstacles; sometimes long and expensive legal and family disputes result, often not ending well. Many of these mistakes are so easy to avoid: simply check your beneficiary forms while you are still breathing! Encourage your family members to do the same.

Any big life event – such as a birth, a death, a marriage, a divorce, a remarriage, a new grandchild, or a change in the tax law – is a reason to revisit your beneficiary forms.  My brother-in-law had three brothers and all three had been through divorce; there were children and remarriages. In those situations, updating beneficiary forms is critical.

Avoid the headaches.  To avoid beneficiary form problems, it is important to name a contingent beneficiary in case the primary beneficiary precedes you in death or chooses to disclaim the benefit.

Take an inventory of all retirement accounts and investment accounts — locate beneficiary forms for each one.  After reviewing and updating them now, and adding contingent beneficiaries to each, mark your calendar to review them annually. Keep on file a copy of the most current beneficiary form for all your accounts, and make sure your family members know where to locate them.

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

It May Be a Rough Ride: Prepare for Tax Filing

Form 1040

Filing our 2018 income tax returns may be rougher than normal, because much has changed. Why? Three big reasons:
• There are significant changes in tax law, which affect deductions, exemptions and credits used by virtually all Americans;
• The Federal government dramatically revised Form 1040, the form used by everyone when filing individual income tax, and forms 1040EZ and 1040A have been eliminated; in addition, there are minor changes to the Iowa 1040;
• The partial shutdown of the Federal government creates many unknowns with regard to transmitting returns electronically.

Imagine being a tax software developer. They’ve known all year that the law had changed and the forms were going to change, and they received draft copies of what the forms might look like, but the final forms weren’t released until the second week of December. Just imagine how people have been scrambling to make all the needed adjustments and test all the functions. In addition, it seems likely that the federal shutdown has affected their ability to get technical assistance and to test the compatibility of their software with the IRS system. It almost sounds like a horror story! (That’s a joke, but not really)

What does this mean for us taxpayers? Above all, I think it means we need to be cautious about our expectations. I’m thinking of expectations about the timing and the size of our refunds.
• The changes in the law (and the changes made to year-round tax withholding) will affect us all, and until we calculate our returns we won’t really know if our refunds will be similar to past years’, or higher or lower.
• As far as timing, the IRS won’t even be accepting returns electronically until January 28 – about ten days later than normal; that’s a delay for some folks right from the start. And of course we always need to be cautious about timing expectations – it is never smart to spend money before you have it, OR to make promises that you can pay by a certain date “because surely I’ll have my tax refund by then.” The IRS recently announced that it would be processing refunds even if the government shutdown continues; that’s reassuring, but it is certainly not a guarantee that they’ll be able to do it in a timely manner. Note: also keep in mind that since the passage of the PATH Act in 2015, the IRS delays all refunds that include the Earned Income Tax Credit or the Additional Child Tax Credit until at least February 15. This delay may affect more people this year, because more people may be receiving the Additional Child Tax Credit.

What are your questions about your 2018 tax return?

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 Book to Read

How’s your New Year’s resolution going?  Maybe I can help. Add a short term goal to read one book about money or personal management by the end of January and use the content to improve your original plan to improve your well being. Here are few I recommend:

The Millionaire Next Door identifies seven common traits that show up again and again among those who have accumulated wealth. If your resolution was to slow down the purchase of stuff, adopt a minimalist approach to life, or start recycling/reusing what you have, the book could give additional reasons to stick with it.  Authors are  Thomas Stanley, PhD and William Danko, PhD

 

 

Loaded by Sarah Newcomb, PhD, introduces you to behavioral finance. The book explains how our experiences with money have a psychological basis and can often run counter to what we’d like to accomplish. She explains that money is just a tool and how we use it is entirely a matter of personal choice.  The book offers advice about overcoming negative behaviors, so if you are concerned that you might fail to follow through with plans to change your use of money in 2019, this book offers tips that could help you change your goal and make it more achievable.

 

Charles Duhigg is a business reporter. The Power of Habit describes why habits exist and how they can be changed. Your resolution might be failing because you haven’t really examined why you are repeating the same behavior loop over and over again. Taking advantage of his tips to find your weak links and embrace change could lead to success.

 

Finally if you use this suggestion and read one book before the end of January, don’t forget to celebrate.   One short term resolution accomplished!!!

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

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

    

Subscribe to “MoneyTip$”

Enter your email address:

Delivered by FeedBurner

Archives

Categories