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What Your Credit Score Says About You

What Your Credit Score Says About You

 

By Kylee Hale

Wednesday, September 2, 2020

Many people do not monitor their credit or know much about the credit scoring system until they attempt to make a big purchase. Buying a home or starting a business can require a large amount of money and often a loan. Each individual has a credit score. This is a three digit number that lenders use to determine how likely it is that an individual will pay back the loaned amount. A person’s credit score is also used by the lender to determine the interest rate. To the lender, a credit score is like a report card reflecting a person’s success of being financially responsible.

If you are married you and your spouse each have your own credit score. If you co-sign on a large purchase together, both individual’s score will be checked. Credit scores range from approximately 300 to 850. The lower the credit score the riskier it is for a lender to loan money, and it’s less likely the lender will grant the loan. If a loan is approved on a lower credit score, the loan will cost more overall. When it comes to locking in an interest rate, the higher the score, the better your terms of credit will likely be.

To obtain your own credit score you can request your score (for a small fee) and your credit report (for free) from annualcreditreport.com. Many credit card suppliers will provide you a free estimate of your credit score as a benefit. A credit report shows details about the lines of credit that you have established or have had within the past few years. A credit report is available for you to request without charge, once a year, from each of the three main credit bureaus. So you can monitor your credit on a regular basis if you space your request out obtaining one report each quarter of the year.

The most well-known credit scoring system was developed by Fair Isaac Corporation and is called the FICO score. The three major credit bureaus, Equifax, TransUnion and Experian, use the FICO scoring model for their proprietary systems. Since each scoring system uses a slightly different statistical model, your score from each of the three will not be exactly the same. This is because lenders and other businesses report information to the credit reporting agencies in different ways, and the agencies may present that information through their proprietary systems differently. Because different lenders have different criteria for making a loan, where you stand depends on which credit bureau your lender turns to for credit scores.

Composition of a Credit Score

Each individual’s credit score is determined by taking five components into account. Below is a chart of the components and the corresponding percentage of how much each component affects the overall credit score. 

Component Component Weight
Payment history 35%
How much you owe 30%
Length of credit history 15%
Type of credit 10%
New credit (inquiries) 10%

Payment History pertains to an individual’s track record of paying back debts on time. This component encompasses payments on credit cards, retail accounts, installment loans (such as automobile or student loans), finance company accounts and mortgages. Public records and reports detailing such items as bankruptcies, foreclosures, suits, liens, judgments and wage attachments also are considered. A history of prompt payments of at least the minimum amount due helps your score. Late or missed payments hurt your score.

Amounts Owed or Credit Utilization reveals how deeply in debt you are and contributes to determining if you can handle what you owe. If you have high outstanding balances or are nearly "maxed out" on your credit cards, your credit score will be negatively impacted. A good rule of thumb is not to exceed 30% of the credit limit on a credit card. Paying down an installment loan is looked upon with favor. For example, if you borrowed $20,000 to buy a car and have paid back $5,000 of it on time, even though you still owe a considerable amount on the original loan, your payment pattern to date demonstrates responsible debt management, which favorably affects your credit score.

Length of Credit History refers to how long you have had and used credit. The longer your history of responsible credit management, the better your score will be because lenders have a better opportunity to see your repayment pattern. If you have paid on time, every time, then you will look particularly good in this area.

Type of Credit refers to the "mix" of credit you access, including credit cards, retail accounts, installment loans, finance company accounts and mortgage loans. You do not have to have each type of account. Instead, this factor considers the various types of credit you have and whether you use that credit appropriately. For example, using a credit card to purchase a boat could hurt your score.

New Credit (Inquiries) suggests that you have or are about to take on more debt. Opening many credit accounts in a short amount of time can be riskier, especially for people who do not have a long-established credit history. Each time you apply for a new line of credit, that application counts as an inquiry or a "hard" hit. When you rate shop for a mortgage or a car loan, there may be multiple inquiries. However, because you are looking for only one loan, inquiries of this sort in any 14-day period count as a single hard hit. By contrast, applying for numerous credit cards in a short period of time will count as multiple hard hits and potentially lower your score. "Soft" hits—including your personal request for your credit report, requests from lenders to make you "pre-approved" credit offers and those coming from employers -will not affect your score.

Good credit management leads to higher credit scores, which in turn lowers your cost to borrow. Living within your means, using debt wisely and paying all bills on time, every time are smart financial moves. These lifestyle choices help improve your credit score, reduce the amount you pay when you need to borrow and put more money in your pocket to save and invest.

Some information in this article was extracted from a FINRA publication.


Blog Topics:
Credit

Working Hoosiers Beware of Identity Theft

Working Hoosiers Beware of Identity Theft

 

By Kylee Hale

Wednesday, August 19, 2020

ID Theft

When the pandemic hit, we pretty much entered a new recession, cancelling out most of the employment gains from the last 10 years. An improvement from April, the United States unemployment rate in June was 11%. That is higher than it’s been any time in the last 70 years. Whether returning to work or finding a new way to make an income, there is one thing we all still need to worry about: identity theft.

Thousands of Hoosiers have been impacted by thieves using stolen information to cash in on funds from the federal CARES act passed by Congress. The CARES act money is supposed to help those who are unemployed during the pandemic. An investigation by 13News  reveals three Indiana residents who were caught off guard and alarmed to find their information had been used to make an unemployment claim.

 "I was shocked," said Lola Best, as she found out her personal information had been registered under someone else’s account with the Department of Workforce Development (DWD). 

Rosemary McQueary of Noblesville also stated that she no idea how her information ended up in the system as she is very careful. 

Another Indiana man found out he was a victim of identity theft when he received a letter from the DWD requesting he pay back a ten thousand dollar overpayment. He tried to make an account on the Department’s website and was notified his social security number was already in use.

To the average Hoosier, it may be concerning to find that the DWD may not have cross-referenced data to confirm matching birthdates and legitimate information for claims filed. However, there is no system for the Department to verify employment information for claims made under the Pandemic Unemployment Assistance fund. In times of emergency when there is pressure to help those in need as quickly as possible, it’s likely for some errors to occur.

Be Alert Identity Theft

The Department has taken a number of steps to combat the issues and is now cross-checking the applicant’s contact information that is provided when a claim is filed. In August, the Department sent an email to claimants to update their password and check their account status in the system. Additionally, the DWD does not hold victims of identity theft liable for any overpayment.

A recent FBI article expressed the increased amount of fraud reports regarding stolen personally identifiable information used for unemployment insurance claims during the COVID-19 pandemic. Buying stolen information online, data breaches, cold-calling impersonations, email phishing, and obtaining data from public websites are all ways for fraudsters to get their hands on personal information.

There are a few things that can tip you off to a scam. Any type of communication regarding unemployment insurance or payout, if you have not filed a claim, should be a red flag. Be sure to monitor your bank and credit card statements for suspicious transactions related to unemployment benefits. Unsolicited inquiries in any form should be ignored or reported.  Lastly, beware of links and fake look-a-like sites made to mirror government agency websites. You can check the resource by hovering over a link to see where it redirects to and/or directly looking up the agency to confirm you have the legitimate government website.

If you think you are a victim, report unauthorized transactions and contact the three major credit card bureaus: Experian, TransUnion, and Equifax. It’s best to regularly check your credit. Placing a freeze on your credit will protect you from identity theft. Activating a credit freeze is free and secures your information so no scammer can open a line of credit in your name.  The Indiana Attorney General has a website for helping Hoosiers set up security freezes, here is the link.  Fraud cases can be reported to Indiana State Police, DWD, the IRS, credit bureaus, and your human resources department. The FBI also encourages victims to report fraudulent or any suspicious activities to the Internet Crime Complaint Center at ic3.gov . Also, you can use the Federal Trade Commission’s resource, identitytheft.gov, for help reporting and recovering from identity theft.

It’s unfortunate that bad actors are taking advantage of a pandemic. Know that scammers will always try to play on a victim’s emotions. Taking protective measures, like putting a credit freeze in place will stop scammers in their tracks. Remember that if it sounds too good to be true it probably is, and if you think you’ve been a victim of fraud, report it to the authorities.


Blog Topics:
Fraud Prevention

The Economics of Animal Crossing

The Economics of Animal Crossing

 

By Kelly Griese

Wednesday, July 15, 2020

All it took was a pandemic to turn a 19-year-old video game franchise into one of the most popular ways to waste time at home. I’m talking about Animal Crossing: New Horizons (ACNH).

What is ACNH? You start the game by agreeing to move to a deserted island being developed by a somewhat shady raccoon named Tom Nook. Tom is big on upselling. He will always convince you to borrow more money in order to buy and build bigger and better things for your new island home. Through the course of the game, you gradually develop the island into your own paradise, all while making friends with talking animals. 


ACNH was released on March 20, 2020. The franchise began in 2001, but the latest game, exclusively available on the Nintendo Switch, has sold more than 13 million copies. It sold more in its first six weeks than any previous Animal Crossing game. Getting your hands on a copy of the game is easy, though don’t look for a drop in price anytime soon. It sells for close to $60. But getting the console you need to play the game may be challenging. As Forbes reported in April, gamers had better luck finding toilet paper than a Switch. What’s causing the shortage? Well, a few things, all related to supply and demand. The Switch is manufactured in China, and the pandemic forced factory shutdowns, meaning supply dropped. This happened at the same time as an increase in demand (though the Switch was certainly popular before the pandemic). But there’s an even bigger problem driving shortages: bots buying up stock before it can reach store shelves. Once the bots have done their job, the folks who use them can then resell the Switches on eBay or Amazon at a huge premium. Switch’s retail price is around $300, but a quick look at Amazon right now will show you consoles selling for $500.


But enough about the real world supply and demand issues, let’s talk about the in-game economics. I’ve been playing the game myself for about two weeks, and here are the financial concepts I’ve encountered so far: 

  • Loans, Financing, and Home Ownership
  • Fundraising
  • Donating
  • Supply and Demand
  • Producers and Consumers
  • Goods and Services
  • Return on Investment
  • Stock Market

There are two types of currency in the game. Bells and Miles. Think of Bells as cash. Think of Miles as rewards points. You can earn Bells by selling a number of consumable products that you can collect on your island, such as fish, insects, fruits, wood, and minerals. You earn Miles through experience. So what do you do with all this currency? Well, you buy stuff. Lots of stuff. Let me breakdown some of the above financial concepts with examples. 


Loans, Financing, and Home Ownership

When you first move to the island, you immediately owe Tom Nook 5,000 Miles for moving expenses and a tent to live in. These first 5,000 Miles are easy to earn, so you’re able to pay off your debt within your first day of playing. From that point on, each improvement of your living quarters, from a one-room house to a six-room mansion results in you taking out additional mortgages. In total, you will spend 5,696,000 Bells to reach mansion status. (For the record, my home currently has four rooms, and I still owe about 250,000 Bells on my most recent home expansion.) Loans and financing are real world things that adults understand, but these are new concepts for many of the children playing the game. What’s different about ACNH is that these are zero-interest loans and you can take as much time as you want in repaying your mortgage. No late fees! 


Donating

As I mentioned above, the primary method for earning Bells in the game is through gathering and selling consumable items you find around the island. Some of these items are incredibly common, others are rare. As you might imagine, goods that are harder to find fetch a higher price when you sell them. For example, a Coelacanth (a type of fish that’s critically endangered in reality) sells for 15,000 Bells. That’s some serious money that could be used toward paying off your debt or buying cool new stuff. But the game encourages you to donate one of every type of creature, fossil, and piece of art found on the island. These donations are then placed on display in an elaborate museum. ACNH players are quite proud of their museums. I know that I was particularly excited when I caught my first Great White Shark, and even though I could have sold it for a lot of Bells, I donated it to the museum so I could regularly visit and watch it swim. I’m still searching for the elusive Coelacanth. The concept of donating in the game is interesting. The reward players receive for donating is not monetary, but they do receive a great deal of satisfaction in working toward a complete museum collection.


Supply and Demand

While most sellable items in ACNH have a set price, there are times you can earn extra income. For example, Timmy and Tommy Nook, who buy anything you find on the island, have a “hot item” every day. This is an object that you can craft using raw materials you find on the island. My first “hot item” was a simple wooden nightstand. By harvesting wood from every tree on my island, I was able to make several dozen and sell them at a marked up price. There are other ways to maximize profits. Some of the animal characters in the game have particular appetites. For example, C.J. is a beaver who will occasionally visit your island and pay 1.5x more for fish than Timmy and Tommy will pay.


Stock Market

No discussion of Animal Crossing: New Horizons would be complete without talking about turnips. Yes, turnips. Each Sunday, an animal character named Daisy Mae will arrive on your island to sell turnips. The cost of the turnips varies from island to island. For example, mine cost 108 Bells earlier this week, while a friend of mine reported her cost as 103 Bells. Fortunately, we found another friend who had turnips for 92 Bells each. We immediately visited his island to buy as many turnips as we could carry. Why? Because throughout the rest of the week, we will have the opportunity to sell our turnips for a huge profit (or loss). You have just one week to sell turnips bought on Sunday, before they rot. On Monday, I checked the value of turnips on my own island, and I could sell them for 142 Bells each. Yes, it’s a profit, but last week I sold my turnips for 459 Bells each! As with the real world stock market, the goal is to buy low and sell high. I want the best return possible, so I start by asking my friends about the prices on their islands. If they have an exceptionally good price, I simply travel to their island to sell. But if they don’t have good prices either, that’s when I turn to the internet. ACNH players from around the world use social media, apps, and websites to communicate about turnip prices and negotiate island visits. One of the more popular apps is called ACNH Exchange. On it, players can post their current turnip prices and agree to host other players on their islands. But there’s a catch. The lines are long (I’ve seen lines up to 13 hours long), and hosts often demand high value items in exchange for allowing you to visit. This is when a player must consider the return on investment. Is the time spent in line and the fee for accessing the island worth it? I got lucky last week and was able to visit a friend’s island to sell my turnips. There was no wait, and the friend didn’t charge me any fee. This week, I have 2,000 turnips to sell, so now I’m aggressively looking for the best price with the lowest fee and shortest wait.


Economic Education

All of the above commentary might make you think Animal Crossing: New Horizons is a stressful game. Personally, I find it incredibly relaxing. It’s also been a fun new thing to do with my friends while we’re all social distancing. My ACNH character can visit their islands, and they can visit mine. It’s a safe way of hanging out together. 

What I wasn’t expecting when getting the game was the economic education built into it. The financial concepts explored in-game and the real world economics that have evolved with the game’s popularity make it all the more interesting for me, as someone who educates others about personal finance and investment fraud. If you’re looking for a fun way to introduce your children to some basic financial concepts, Animal Crossing: New Horizons might suit your needs. Just make sure you have conversations offline about differences between the game and reality. 

Meanwhile, I’m going to look for ways to integrate Animal Crossing into the activities and presentations we offer for kids. I encourage you to take a look at what we already have to offer by checking out a previous blog post


If you want a lot more in-depth information about the economics of Animal Crossing, here are some of the articles I read before writing this blog post: 


Blog Topics:
Budgeting, Credit, Investing 

A Second Stimulus Check

A Second Stimulus Check

 

By Kylee Hale

Wednesday, July 8, 2020

Man holding dollar billsThe debate continues as lawmakers try to determine if a second round of stimulus checks will be sent out. But the upside is more than likely in the month of July, the decision on if Americans will receive a second stimulus check will be made. One thing is for sure, U.S. Senator Mitch McConnell has said that the next relief package will be the last. Below are some updates on who would qualify for a second stimulus check and the possible timeline for the checks to be distributed. If you have not received your first stimulus check, you can track the status or report a missing stimulus check here. Also if you are still waiting on the first stimulus check, here is a list of some possible reasons of why you haven’t received it yet. 

Decision Making Timeline

There is no official date set for Congress to vote on the second stimulus package. Yet this timeframe gives insight as to when a decision will likely be provided. 

7/3-7/17 As of last Friday (July 3rd) the Senate has been on a planned recess and will return on July 20th. Supposedly during this break the members of the Senate will be gathering the information needed for the second stimulus package and return ready to work. 

7/20 – 8/7 The Senate will return and be hard at work in session. 

8/10-9/7 The Senate will go on August recess, from mid-August through the Labor Day holiday. 

Senator McConnell has already said that the Senate will not work through the August break. If the Senate decides to take up a second stimulus package in July, a new bill authorizing the second round of checks would need to pass both chambers on or before the recess beginning August 7th. After the August recess, the Senate will return on September 8th and continue through September 25th. If the stimulus package is not completed by Congress before the August break, then the discussion will resume in September.

Payment Distribution Timeframe

If the second round of stimulus checks are approved, the next question you may be asking is, when will the checks be sent out? If the bill passes the House and the Senate prior to the August recess, it’s possible the IRS could begin sending out checks in August. 

Thinking back to the first round of stimulus checks, on March 27th the President signed the CARES ACT into law and the first stimulus payments went out on April 15. This three week turnaround on the first stimulus payment shows that it’s possible for the second round of stimulus checks to be sent out before the end of August. If the bill is signed on or before August 7th, following the timeframe from the CARES ACT, the second round of checks could be sent out around August 26th. 

It is possible the processing for the second round of stimulus checks could be faster than first round since some of the hiccups should be already taken care of. The IRS already has the tools established for Americans for sign up for direct deposit and/or check the status of their stimulus payment. However, the guidelines of who qualifies for a second stimulus payment has changed a little and this could affect the speed of how fast or slow the checks are processed.

Who Might Qualify

Man with papers and laptopNo details have been confirmed yet. The HEROS ACT was passed in May by the House of Representatives and proposes more coverage for families and individuals like college students which were not covered in the first round of stimulus payments. However some officials say this second round of payments will be more narrowly awarded to those most in need. There is potential that individuals who reported a gross income less than $99,000 on their 2018/2019 taxes would qualify for the second stimulus payment. In addition, there is speculation that college students, dependents over 17, and disabled relatives would qualify as well. There has also been talk that no one will qualify. It’s possible the second stimulus package could be geared to give tax credits and incentives to businesses with some people awarded travel or dining credit but not a check.

How Much Money?

There is a lot of discussion still to be had before the amount of money that might be on a second stimulus check is clear. As mentioned above there is a chance, no check is sent, but travel and dining vouchers distributed instead. The Heroes Act proposes another $1,200 check for qualifying individuals. While some representatives propose a larger check amount and some suggest a tax credit. The amount remains very uncertain and regardless individuals still have to meet qualifying guidelines before being in the clear to receive a second stimulus payment.

 

With the variance in the information and insight being given regarding the second round of stimulus checks it's best not to take anything to heart.  While uncertainty remains as to how our communities will recover and the best ways to onboard a new stable normal, it’s important to focus on yourself and what makes you secure. Check out this recent post on reducing financial anxiety, and the original COVID-19 Financial Survival Guide for tips on managing and saving money during these difficult times.

Strong Finances for a Strong Emotional Wellbeing

Strong Finances for a Strong Emotional Wellbeing

 

By Kylee Hale

Wednesday, June 24, 2020

There are multiple things contributing to the anxiety Americans are feeling right now. With many people working from home while caring for children, and juggling health concerns, it’s no surprise that people are feeling stretched to the limit. According to a recent survey by the National Foundation of Financial Education, nearly 9 in 10 Americans say that money is a primary cause of anxiety. 

As cities begin to reopen and attempt a slow return to normalcy, the tens of millions of Americans who lost their jobs or were laid off will continue to worry about their livelihood and feel the emotional toll. According to a poll by the Kaiser Family Foundation, 45% of U.S. adults report that their mental health has been negatively impacted due to worry and stress over the virus. Another survey, showed that 69% of American adults have financial worries, which are heighten by three major concerns: not having enough savings, losing a job, and not being able to pay debts. Even in better times, financial concerns can cause a lot of stress. Regardless of the circumstances, here are some ways to ease your mind if you’re dealing with the common money stressors. 

You are in control

Every one of us is experiencing change to some degree, which means we have to think differently to get through this. What you were doing before may not work now, but embracing the things you can control will provide stability during these unsteady times. Some things that you can control are spending, saving, and your reaction to market events. 

If you are struggling and your emergency fund is dwindling, you should examine your expenses. Rethink your budget and prioritize the bills that cannot be put off. For Hoosiers, the Governor’s order prohibits evictions, foreclosures, and utility service disconnects through June 30th. You can read more about this in our Deadlines and Delays post. Many states have issued executive orders to block evictions and many state courts are not accepting eviction filings until further notice. 30% of Americans have not paid their housing payment this month. While this is not something to promote, there are safeguards in place to keep Americans from losing their shelter. 

Creating an emergency budget can be helpful to review spending and saving. Track online spending and avoid triggers to cut out unnecessary purchases. Unsubscribe from emails, unfollow brands and influencers on social media, and delete browser history to help control spending.  It’s still important to save whenever you can, but you may have to redirect some of your saving goals to more pressing financial needs. 

For investors, while you can’t control the market, you can control your reaction to the fluctuation. If you’re wondering how to survive this unpredictable market, try to remind yourself to relax and ride it out. Attempting to time the market isn’t a good strategy and can result in costly mistakes. For help on convincing yourself to be content check out this post on market correction

Rid Yourself of Anxiety

Understanding how anxiety relates to your financial decisions can provide you the peace of mind you need. Stress and worry have adverse effects on our spending habits, often contributing to more spending and less saving. Similar to stress eating, stress spending is something we do to try to make ourselves feel better. On the other hand, saving is really what makes us feel better and more prepared for the unexpected.  Try putting extra thought into purchases and determine if they are unnecessary. Saving more money at this time can put you more at ease in the case of a future unplanned event.

If paying bills is a hassle to you, a way to reduce the stress of remembering to pay on time is by setting up auto pay or bill pay. Auto pay can be scheduled through the service provider and bill pay can be set up through your bank. With bill pay, the bank automatically issues regular monthly payments and you can do this for mortgages, student loans, rent, utilities, car loans, and even credit cards. Give your mind a break and some clarity by not worrying about missing a payment. In addition, to automatically paying your bills, you can arrange to automatically save. Establishing regular payments into your savings account or retirement account is a good way to ensure you do save and this will help you reach your savings goal. 

Being proactive rather than reactive instills a sense of preparedness and minimizes the pressure felt when an emergency does occur. It is difficult to prepare for an emergency as it is unexpected. The best way to stay calm is to be flexible. Come up with a plan or an adaptable process that allows you to maintain your livelihood when the world around you changes. Four proven and effective financial strategies that will help you get through whatever comes at you are to spend wisely, save for emergencies, stick to your goals and invest for the long term. These strategies are successful all around and sure to reduce tension in difficult times. 

Studies have shown that actively managing your finances can have positive side effects. By putting in the effort to save money, you’ll create an emotional buffer that’s sure to reduce anxiety. Being aware of your financial plan will provide confidence and less tension when the unexpected does occur. Even taking small steps or implementing just one or two strategies for better money management will give you a better mental outlook. 

Take Advantage of Available Resources

If you continue to feel worried, reach out to a partner or a friend. Discussing financial fears together can help you find a better solution. If you prefer to talk to a professional, there are multiple free resources available. For example, the National Foundation for Credit Counseling offers a COVID-19 Emergency Financial Help toolkit with access to chat counselors for advice. The National Association of Personal Financial Advisors and the Financial Planning Association also provide certified financial planners and advisors at no cost. 

Virtual health visits are also gaining popularity. Most insurance providers cover a variety of mental health resources and many therapists are available for telehealth appointments. For more information on mental health services contact your insurance provider or employer as some employers have free counseling through employee assistance programs. Lastly if you feel you are suffering from mental health issues, the Substance Abuse and Mental Health Services hotline does not require insurance and is available 24/7.

While it may not be as obvious as stress eating, financial stress can be detrimental to your health, mentally and physically. Just as we try to stay physically fit, it’s important to remain financially stable in difficult times. Being in control of your financial decisions and being prepared can do wonders for your overall health, mentally, emotionally and financially. You don’t have to go into overdrive to be financially prepared but any effort made to better weather the storm will make you feel better all-around when crisis does occur. 


Blog topics: 
Budgeting, Credit, Investing 

Credit Reports: What You Need to Know

Credit Reports: What You Need to Know

 

By Kelly Griese

Wednesday, May 20, 2020

It’s one of my top fraud prevention tips: check your credit reports! I include it in every presentation I give. Checking your credit report regularly not only helps you monitor for identity theft and reporting errors, but it can be a sobering reminder of how you’re managing your finances. Some people confuse the terms credit score and credit report, so let’s start by understanding the difference. 


You can think of your credit SCORE as a measure of your financial trustworthiness, because that’s how it’s used. Banks, landlords, insurance companies, and an increasing number of employers all use credit scores to decide if you can be trusted with money. (For more information about credit scores, we have a PDF you can print linked here.)

A credit REPORT is a detailed listing of your debt, both past and present. It shows all the credit cards and loans in your name. It also shows how much you owe to each creditor and how good you are at paying back what you owe. 


Credit reports have a LOT of information on them, and if you’ve never read one before, you may feel intimidated.  Fortunately, they’re not as scary as you might think.  There are several good websites that breakdown credit reports line-by-line to teach you how to read one. I like the sample credit report on CreditCards.com

Federal law entitles you to one free credit report per year from each of the three major credit reporting agencies: Equifax, Experian, and TransUnion. Requesting your credit report is easy and free. You can do so online, by phone, or by mail. 

Website:  www.AnnualCreditReport.com
Phone: 1-877-322-8228
Address: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA  30348-5281

And now… you can request it WEEKLY! This is a huge change prompted by the COVID-19 pandemic. Equifax, Experian, and TransUnion now offer Americans weekly access to monitor their credit report – for free. You use the same website listed above, www.AnnualCreditReport.com. The credit reporting agencies are making these weekly reports free for the next year. (For a printable worksheet about checking your credit report, click here.)


If you’re one of the many Americans struggling to pay your bills right now because of the Coronavirus crisis, the Federal Trade Commission offers this advice: 

  • Contact the companies you owe money to. Ask if they can postpone your payment, put you on a payment plan, or give you a temporary forbearance.
  • Check your credit report regularly to make sure it’s correct — especially any new payment arrangements or temporary forbearance. The recently passed CARES Act generally requires your creditors to report these accounts as current.
  • Fix any errors or mistakes that you spot on your credit report. Notify the credit reporting agencies directly. You can find out more by reading Disputing Errors on Credit Reports.

Blog topics: 
Budgeting, Fraud Prevention 

The Legacy of the Pandemic: 5 Lasting Financial Habits

The Legacy of the Pandemic: 5 Lasting Financial Habits

 

By Kylee Hale

Wednesday, May 13, 2020

There are very few aspects of our lives that remain untouched by the pandemic. Times are strange, where FOMO (Fear of Missing Out) has been replaced with FOGO (Fear of Going Out) and when wearing a mask to the grocery may seem less strange than wearing a speedo at the beach. Along with the global shutdown, most of us have found a new way of living, some differences welcomed and some we hope will soon be a memory. As we emerge from a quarantine state of mind many of us will continue to embrace our new era of frugality and continue with newly developed habits. From how we do our grocery shopping, to affordable entertainment here are five financial habits we should continue to carry out even after the lockdowns are lifted. 

1. Curbside Pick-up and Ordering Online 

Before the stay at home orders, 13% of U.S. consumers used online ordering and curbside pick-up or delivery to get their weekly grocery list. This percentage jumped up 19% since the survey was completed in the fall of 2019, this spike is attributed to the current circumstances. A lot of grocery stores are offering curbside pickup/delivery and consumers seem to be enjoying the convenience. When consumers were asked about continuing the use of online grocery services after the coronavirus, 43% said they were extremely or very likely to continue use. I think as a consumer the biggest concern with using online grocery services is trusting someone else to select your fresh produce. However, aside from being a time-saver, online grocery shopping can be a money saver. Consumers tend to cut back on impulse buys and stick to the grocery list, and their budget. Not only does online shopping allow you to check your pantry as you shop so you’re not buying cereal just in case you’re out at home, but the online cart keeps a running total. And all the prices in the cart are accurate, no more getting to the register to find out your pop-tarts aren’t on sale after all. Continuing to save money at the grocery store can free up funds for other expenses. 

2. Saving for a Rainy Day

At least 30% of Americans have tapped into their emergency funds during this pandemic, but 1 in 5 Americans didn’t have an emergency fund, to begin with. Emergency funds are supposed to carry us through when we experience a job loss or unexpected change like COVID-19 just showing up. If you have the savings, don’t be afraid to use this set-aside money to help you get through this time. Dipping into savings is a far better choice than taking on debt through a credit card or a similar source. The government implemented lockdowns will help you reduce spending on entertainment and reducing your necessary spending can help conserve your available funds. For necessities like over-the-counter medicine and feminine products, the CARES Act has implemented a change allowing these essentials to be purchased using funds from an HSA (Health Savings Account).  If you are still able to save during this pandemic, you’ll want to continue doing so. For some folks, it may be worthwhile to pick up extra hours, if still working, or look for companies that are hiring during this time. Regardless of your current situation, you should prepare to safeguard your finances as the financial implications connected to COVID-19 will continue for months to come.

3. Eating at Home

It’s expected that 75% of independent restaurants nationwide won’t survive the pandemic shutdown.  Some food industry business owners are afraid the CARES Act Paycheck Protection Plan won’t reach them, or the owners will experience difficulty applying due to language barriers and lack of ability to navigate the application. Some restaurants are holding on by relying on take-out orders and preselling holiday meals or gift cards. Consumers can safely order take-out and food delivery during the pandemic, and soon, while following social distancing guidelines, some folks will be able to go inside and sit down. On average, restaurants charge about a 300 percent markup on the items they serve, but that doesn’t keep us from occasionally splurging to combat the onset of cabin fever. There are many ways to support your favorite restaurant and still save while ordering take out. Most restaurants have reduced their menu for optimized take-out, but still, continue to offer daily specials. You can find deals and gift cards on to-go and carry-out orders on Groupon. Getting take-out may cost more than cooking at home, but you can still save money by getting your drink at home and you’ll save on the dining tax by not eating inside at the restaurant. Also, it seems that tipping on take-out orders is optional, 51% of Twitter users responded “No” to tipping for take-out. If you have a simple order and aren’t asking for over and beyond effort, you may not feel inclined to tip or tip a lesser amount like 10% compared to dine-in, 18-20% is the standard. Although take-out is more expensive, there are times when the convenience is worth it and if you plan for your weekly pizza night you won’t lose out on grocery food going uneaten. 

4. Retail Shopping

E-commerce spending is up 30% as of mid-April and due to mandatory store closures, retail is suffering a record decline in sales. At first, people were stockpiling household and grocery items and home office supplies. More recently sales have drifted towards books, entertainment games and outdoor sporting equipment, including fitness supplies. It seems like the coronavirus has accelerated a structural change that’s been occurring in retail over the last decade. Just like social distancing has created new office atmospheres and remote work, online shopping habits formed during this period may persist far beyond the crisis. The average retail store can last about 30 days without money coming in the door, about 65% of the businesses that weAt CitySpire, a condominium on West 56th Street, coronavirus protocol includes spraying packages with a disinfectant before bringing them inside.Credit...re forced to close during the pandemic, will not reopen. Fewer entrepreneurs will start businesses and the most important step any business can take will be to ensure their ability to make sales online. For consumers, we may experience unexpected consequences from all our online consumerism. If you’ve tried to return or exchange a purchase during this pandemic you may experience a little more difficulty or longer process. Some stores are not processing exchanges, asking consumers to place a new order, and separately request a return. Roughly one in five clothing items purchased online is returned. If sanitation and spread continue to be a concern stores may restrict their return policy or implement restocking fees as retailers increase measures to sanitize taken back items more thoroughly before reselling. Through this pandemic experience, consumers are purchasing more consciously, showing loyalty to brands that give them confidence and patronizing local stores. 68% of consumers who have shopped locally have tipped more than their usual, and research shows that the pandemic is likely to produce a more sustainable, healthier era of consumption over the next 10 years

5. Just Plain Frugality - Save More

 From virtual game nights to outdoor hikes, Americans have found new ways to have fun and curb boredom. Many Americans expect that we will have to wait several months or longer before routines will normalize and many expect their income to be negatively impacted for a long time. During the Great Depression, families relied on kitchen gardens and community thrift gardens for food sources, it’s not far off that Americans will return to growing their own food, space permitting, or consider moving somewhere that it is possible. As we begin to socialize again, it will be common for friends to gather at a potluck, play board games, or share a drink on the patio instead of going out to the movies and restaurants. Consumers have said they will continue to allocate money to emergency funds and paying off debt before rebooking travel and planning excursions. During the pandemic, Americans have cut spending to save money by buying only the essentials and revising their budget. Consumer’s confidence has dropped 30% since February, and many Americans have run out of what they did have in their savings. Coming out of this pandemic, Millennials especially, are saying they will be saving more. This may create a very risk-averse generation of super savers. For almost everyone, not just millennials, this is a first in a lifetime experience to learn from.

As we continue to wade through the uncertainty it can be jarring to think our current situation could be closer to the new definition of normal that we expect. We are all looking for insight as to when businesses can safely invite all their customers back and when gathering in large groups will be fully approved. We must remember how resilient we can be and know that perseverance is universal. We all should have hope, as this too shall pass


Blog topics: 
Budgeting

Deadlines & Delays

Deadlines & Delays

 

By Kelly Griese

Wednesday, May 6, 2020

The Coronavirus pandemic has caused major disruptions in all our lives. It’s also led to a lot of changes to common deadlines and delayed events. This week, we want to take a look at some of those deadlines and delays. This is by no means a complete list, and if you know of other significant deadlines or delays that you think we should include, feel free to email me, Kelly Griese, at kgriese@sos.in.gov


Courts

A few weeks ago, Indiana Chief Justice Loretta Rush said, “We’re hearing from lawyers, judges, litigants, and law students that the legal system must be more flexible at this time. The Supreme Court is ordering rule changes to ensure certain legal services can be provided with remote capabilities and extending the bar exam application deadline.” You can read the full list of orders on the Judiciary’s website. The orders impact everything from administering oaths and signing legal documents to child custody and bar exams. 


Licenses and Registrations

Earlier this week, select BMV branches resumed serving customers in-person by appointment. It’s important to know that the most common BMV transactions, including license and registration renewals, can be completed online at myBMV.com. If renewing online isn’t possible, you should know that some late fees have been waived. Credit card fees for online transactions have also been waived. If you need to make an in-person appointment, you can learn more about that process by clicking here. Driving skills exams are not currently available.


REAL ID

The deadline for enforcing REAL ID has also been extended. You now have until October 1, 2021. That’s when every air traveler 18 years of age and older will need a REAL ID-compliant driver’s license, state-issued enhanced driver’s license, or another acceptable form of ID to fly within the United States. You can learn more about REAL ID by visiting the Transportation Security Administration’s website


Taxes 

The Indiana Department of Revenue (DOR) has extended certain filing and payment deadlines. Individual tax returns and payments, along with estimated payments that were originally due by April 15, 2020 are now due on July 15, 2020. Corporate tax returns and payments, along with estimated payments that were originally due by April 15 or April 20 are now due on July 15, 2020. Corporate estimated payments originally due on May 15, 2020, are now due on August 17, 2020. You can find a list of all returns affected by visiting DOR’s website

Additionally, extensions for payment plans, registered retail merchant certificates and more can be found in the “Helping Hoosiers” COVID-19 relief services agency announcement or on their Coronavirus web page


Housing Payments

If you’re having trouble making rent or mortgage payments due to the Coronavirus pandemic, you have some options. On March 19, Governor Holcomb issued an order that paused eviction cases, and that pause has been extended through July 1. It doesn’t mean you don’t have to pay your rent! As our friends at Indiana Legal Services explain, “failure to pay rent and other lease violations may result in eviction actions being filed or heard in court after the state of emergency ends. Landlords may not forcibly remove tenants from their rental property, nor can they lock out tenants or discontinue utility services. If a landlord does so, tenants should call local law enforcement. If your landlord attempts to evict you while the pause is in place, you may also file a complaints with the Indiana Attorney General’s office.” Indiana Legal Services may be able to help you if your landlord tries to evict you inappropriately. You can contact their office for an application for legal assistance. 

As for mortgages, you may qualify for delayed mortgage payments without late fees and protection from foreclosure/eviction. The Federal Housing Finance Agency provides more information on who qualifies and how to apply. 


Student Loans

The Consumer Finance Protection Bureau did a great job of explaining current changes to student loan repayment, so we’re going to quote them and suggest you read their full blog post on the subject. “Student loan borrowers now have more benefits to consider when planning for the potential financial impact from coronavirus. A new federal law, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, provides automatic suspension of principal and interest payments on federally-held student loans through September 30, 2020. These suspended payments will count towards any student loan forgiveness program, as long as all other requirements of the loan forgiveness program are met.” It’s important to note that PRIVATE student loans are not included in the CARES Act. For more information about private loans and forbearance, check the Experian blog


Car Insurance

It’s possible you’ve already received an email or letter from your car insurance provider discussing their COVID-19 plans. It makes sense, given we’re driving a lot less these days. According to the Consumer Federation of America, more than 82% of car insurance companies are offering refunds and credits, totaling more than $6.5 billion. To see if your car insurance company is providing relief, check this article from USA Today


Blog topics: 
Credit 

Wills, Trusts, and Estate Planning Basics

Wills, Trusts, and Estate Planning Basics

 

By Kylee Hale

Wednesday, April 29, 2020

 

Death is something we all have in common. It is a fact of life, although it’s not something many of us want to think about. Only 21 percent of Americans have discussed their last wishes with their loved ones and just one in three adults have arranged advanced directive documents such as a living will with medical instructions or power of attorney naming a person responsible for final affairs. Planning for death is not a popular topic, however the thought and discussion should not be avoided. If you have a spouse, children, relatives or close friends it is important to plan for your sake as well as theirs. Having a plan not only makes things easier for your survivors, but it also helps to ensure that the money you worked hard for is distributed properly. 

Wills versus Trust:

Wills and trusts are common words that most are familiar with but the differences are not as commonly known. There are a lot of similarities between wills and trusts. The main reason anyone would elect to set up either, is to have a say in what happens after they are gone. Establishing a will or a trust helps ensure that “last wishes” are fulfilled.

Wills

This document is used to name a beneficiary and state who should receive your property upon your death.  The document also allows you to appoint a legal representative to carry out these wishes. A will only goes into effect after death and passes through probate. Probate is a legal process that takes place in court after someone dies. The process takes time and often results in less money going to the beneficiaries due to attorney and court fees. In probate, the information is public which can result in people fighting over the assets and money. Two important things that can be done with a will but not with a trust, are to name a power of attorney and a guardian for children.  

Trusts

A trust serves as a legal agreement, where a “trustee” is named and holds the legal title to your property for a beneficiary. Trusts can have two types of beneficiaries, the first receives income during their life and the secondary receives the left over funds after the first named beneficiaries have passed away. A trust is effective upon creation and can serve as a mechanism for assets to be distributed before, at death and afterwards. It’s important that the personal property to be transferred is in the trust because the trust retitles the ownership of the property. In addition to estate planning, a trust can be used for planning for a disability and optimal tax results. Depending on the size of the estate and state tax laws, a trust can save a lot of money when the property is transferred to the beneficiary. Estate tax is complicated, however a trust can allow you to increase the estate tax benefit, which helps the beneficiary. As with everything discussed in today’s post, you should talk to a professional to get more information. It’s worth noting that a trust does not go through probate which avoids attorney and court fees and allows the assets to be divided in a shorter amount of time than with a will. 

Who should have one? 

Wills and Trust are for everyone. There are clear advantages to each and it is possible to establish a trust and then follow it with a will, where the will can contain anything that is left out of the trust. For example, any assets or property that are not included in a trust, will be treated as part of the estate and without a will, these assets will be transferred to the heirs per law. This is especially important if the intended beneficiaries differ from the heirs identified by law. A legal document, such as a will or trust, being in place, can confirm who should inherit your items. 

How to establish a Will or Trust?

Setting up a will or trust can be something people avoid just because they don’t know how to go about it. There are multiple options as you can reach out to an attorney or Certified Public Accountant (CPA), or use a self-serve document generating website. One factor that may help you decide which route you choose is the cost. An attorney or a CPA will likely charge anywhere from a couple hundred dollars to a couple thousand dollars, this depends on the complexity of your assets. When selecting a professional to help you draw up a legal document like a will or trust, you want to find an attorney that specializes in estate law. If you choose a self-service website like LegalZoom.com, the variable pricing starts at $89 for a will and $279 for a trust. This website does provide a sample and bundling options, but the actual costs depends on the complexity of your assets. 

Life Insurance

When preparing a plan for “in case”, wills and trusts are useful documents to have in place. In addition to delegating who gets what, it may be important to think about how your survivors will continue on after your death. If you are a main provider for dependents or a spouse, life insurance could be something you want to purchase. Life insurance pays a lump sum to the beneficiaries in the case that you die. This is typically intended to cover burial expenses and replace the income of the person who died. There are various kinds of life insurance, but the two main categories are: term and whole life. Term life insurance allows you to buy coverage that expires and typically the costs are lower when you’re younger. Whole life insurance policies last your entire life and the premium is the same price for the duration of the policy. You can determine how much insurance you will need by thinking about your family and what expenses your family expects. The option to buy multiple term policies is available as well, for example you could buy a policy that you expect to expire after your children graduate from college. Increasing the amount of life insurance you have as your family and exposure grows is a good approach. As your net worth grows and your kids get older you might need less life insurance or you may want more as you near retirement. Plotting out what you might need over the long term of the next few decades will help you determine how much insurance you will need, and talking to a professional should give better insight for planning.

“Open In Case of Death”

While it is unpleasant to think about, it’s important to organize a master folder for all the information we’ve discussed. Sharing this folder and its location with a close friend or family member will make everything smoother for your survivors in an unexpected situation. Even if you do not die but become ill or incapacitated, having a designated place for all the special files that someone would need will reduce stress. In addition to legal documents, it’s beneficial to include financial account access for loans and credit cards, billing log-in credentials for utilities and subscription services, personal identification documents such as a passport or birth certificate and relevant medical information in this folder. In many households, one person takes care of paying the bills and if something happens to that person the others are left trying to put the puzzle together. Implementing a plan and selecting a certain person to handle your affairs when you no longer are able to, can prevent family disputes, and create the best case scenario for a worst case situation.

Thinking about end of life is not easy and if you’ve never thought about it, you’re human. “In case of death” planning doesn’t come to us as a natural thought. Taking the initiative to get things in order, set up legal documents and designate someone to take care of your affairs is the best way to prepare your family for the unfortunate. These steps can make it easier on your loved ones and ensure that they are cared for after you’re gone.


Blog topics: 
Budgeting

COVID-19 Financial Survival Guide

COVID-19 Financial Survival Guide

 

By Kelly Griese

Wednesday, April 22, 2020

If you've been laid off, furloughed, or had your hours at work reduced due to the COVID-19 pandemic, it’s likely you're worried about paying bills. 

For millions of Americans, debt is part of everyday life. We were already struggling with credit card and student loan debt before the Coronavirus. Here are some 2019 fourth quarter statistics. According to research by WalletHub, average credit card debt per household reached $9,070, and total credit card debt for the nation topped $1 trillion after increasing by $57.9 billion. But credit card debt is only part of the picture. According to the Federal Reserve Bank of New York, student loan debt rose by $10 billion, and mortgage debt rose by $120 billion. Total U.S. household debt reached more than $14 trillion. Remember, all of these numbers were calculated BEFORE the pandemic. 

It paints a bleak picture. All that debt and now less money to pay it off, in addition to all the other bills we have to pay: food, healthcare, childcare, utilities, and more. We have a lot of expenses. 


If you haven’t already created a plan, you need to do so immediately. Start by making a list of all your monthly bills. It needs to include absolutely everything from your rent/mortgage to your Netflix subscription. Next, factor in how much you typically spend on food, medicine, and other necessities. What can you eliminate from this list? What can you trim? If you’d like to create a budget, you can download and/or print our budget worksheet

Now consider what help is available. Some companies have special programs right now that could help you endure this crisis. Contact any companies you owe money to and try to work out a new payment plan with lower payments, lower interest, or delayed due dates. Make sure you get any changes in writing. 


Here are some other changes and resources that might help.

Housing 

  • On March 19, Governor Holcomb issued an executive order, temporarily prohibiting residential evictions and foreclosures. Read the order here
  • The Indiana Housing and Community Development Authority (IHCDA) can help with mortgage and rent. Their Hardest Hit Fund provides assistance to families who are at risk of foreclosure. 
  • IHCDA also has a new resource guide that can help you continue paying your rent and mortgage. 
  • The Federal Trade Commission recently published a blog post with a lot of great information regarding mortgage payments. 

Utilities

  • On March 19, Governor Holcomb issued an executive order, prohibiting providers of essential utilities from discontinuing service. Read the order here

Food

  • The website FindHelp.org can connect you to service providers that offer free or low-cost support, as well as assistance with basic needs including food, housing, and bill assistance.  
  • You can also visit the Family and Social Services Administration’s website to see their Food Assistance Accessibility Map

Credit

Unemployment


Finally, make sure you read last week’s MoneyWise Matters blog post. Kylee Hale wrote about the stimulus checks. If you need to check with the IRS on the status of your federal economic impact payment, click this link

Remember, this is a universal crisis, and while each of us will experience different levels of hardship, there are a great many people eager to help those in need. If we work together, we will pull through. 


Blog topics: 
Budgeting, Credit

Stimulus Checks: What You Need To Know

Stimulus Checks: What You Need To Know

 

By Kylee Hale

Wednesday, April 15, 2020

Stimulus Checks

As stimulus checks begin to arrive, here’s what you need to know.

By now, you are probably aware of the Coronavirus Aid, Relief, and Economic Security Act or the CARES Act. You can review the 335 pages of the Act here. I know many people have extra time on their hands right now, but I doubt you desire to read all those pages. This post is meant to serve as a compilation of news regarding the CARES Act which will bring many folks a stimulus check. I’ll give you the details you want to know right now and where you can go to find out more. 

According to the IRS here is the lowdown on stimulus checks:

Who:

Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment. For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds. However, for those without children, as single filers with income exceeding $99,000 or joint filers with income exceeding $198,000, these folks are not eligible.

What:

Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples and up to $500 for each qualifying child (at this time, qualifying child  coverage cuts off after age 16).

How:

For people who have already filed their 2019 tax returns, the IRS will use this information to calculate the payment amount. For those who have not yet filed their return for 2019, the IRS will use information from their 2018 tax filing to calculate the payment. 

Where and when:

On March 30, 2020 the IRS said payments will begin in about 3 weeks, so mid-April is when taxpayers will begin to see the money.  The economic impact payment will be deposited directly into the same banking account reflected on your 2018/2019 tax return or in your mailbox. If you have not previously set up electronic direct deposit and want to, the IRS has set up an online tool, here is the link.

Can you track the stimulus check?

If you are familiar with getting a tax refund, you may know that you can track your refund and see the process as it makes its way to you. However, this stimulus check is a whole new program, but the IRS just recently published another online too, so you CAN track it, check here for updates. 

If you have more questions, follow this link to the IRS website. 


How might you use your stimulus check?

I imagine anyone can think of a way to use a thousand dollars, but here’s some practical reminders of how to make the most of the stimulus check.

  1. Needs, use the money to make sure your essentials are covered. From food and toiletries to rent and utilities. To prioritize your needs, you may want to check if your utility company or the bank in your area is offering a relief option to help those who are struggling to make ends meet during this outbreak.

  2. Your taxes, because the filing and income tax payment deadline has been extended to July 15. If you haven’t prepared for paying your taxes you may use this check to pay what you owe and send the money right back to the government. 

  3. Replenish your emergency fund, if you have dipped into your savings to cover costs for essentials during this outbreak, the stimulus check can be a welcomed refill. 

  4. Reduce debt and loans, owing money can be a financial burden and can impact your overall financial stability. If you don’t need the money to provide essentials currently, paying down debt equals less interest paid later on and more money you’ll have in the future. 

  5. Contribute to a long term investment fund. A great way to make money with little effort is to invest but the key is time. Long-term means that you don’t plan to access the funds for a year or years. Consider investing the stimulus check in a 529 account to use towards you or your kids’ higher education, or contribute to your retirement fund.

If none of the above apply to you and you’re thinking I just can’t wait to see my friends and visit my family, here is a thought. When things turn back to normal, and they will, think about putting funds into your neighborhood. Don't shop online, buy local, put money back into your local economy. This is about supporting one another. If you have a favorite coffee shop, pizza joint, or hair salon in your community, think about how bummed you’ll be if they don’t make it through this. Try to support them and help businesses stay afloat so you can exploit your happiness of enjoying their services long after this is all over.  

These are trying times but we must be patient, this is not an instant gratification situation. We have to be in this together to make a change for all of us to overcome this and enjoy more of what life has to offer later on. Results will take time and the benefit for everyone is in the future. 


Blog topics: 
Credit, Budgeting 

Saving Money & Staying Sane While Staying at Home

Saving Money & Staying Sane While Staying at Home

 

By Kelly Griese

Wednesday, April 8, 2020

We’re all spending a lot more time at home these days. Like many of you, I’m working from my couch. My neighbor’s children are finishing out the school semester via e-learning. Even folks in essential industries, like healthcare, law enforcement, and food services have to find something to do with their free time once they return home from a work shift. So I thought this would be a good time to share some FREE resources that can help you stay sane while following stay-at-home orders. 

This list is by no means complete, but it’s a starting point. If you have additional ideas, we’d love for you to share them with us! You can email me your ideas at kgriese@sos.in.gov, or you can share them via Facebook and Twitter

One important note. We can’t guarantee the safety of any of the computer programs listed below. There have been numerous reports in recent weeks about various programs putting user data at risk. It’s important for you to do your research, read those terms and conditions, and create strong, unique passwords. 


Binge Together

Netflix Party allows you and your friends to binge all your Netflix favorites together, without actually being in the same room. Netflix Party is a Chrome browser extension. It only works on laptops and desktops, not tablets or phones. Here’s how it works. Netflix Party synchronizes video playback and adds group chat to your favorite Netflix programs. 

Visit Zoos, Aquariums, and Museums 

Many of our favorite places to visit are closed to the public right now, but that’s not stopping them from providing you with entertainment from a distance. A quick check of your social media feeds will reveal all sorts of videos and live chats being produced by zoos, aquariums, and museums. Here are some examples. The Indianapolis Zoo has been posting behind the scenes videos showing how their keepers take care of the animals. The Monterey Bay Aquarium has ten different live cameras that let you pretend you’re swimming in the ocean. Museums like the J Paul Getty Museum in Los Angeles offer virtual tours of their art collections. And our own Indiana Statehouse has virtual tours available

Learn Something

Even some scientists have had to press pause on their research, but they’re using their free time to educate others. I’m a huge fan of sharks and the ocean, so my favorite finds so far include Instagram live stories by behavioral ecologist Dr. Tristan Guttridge, webinars by oceanographer Dr. Sylvia Earle, and kid-friendly “Shark Talks” with a variety of experts who work with the National Marine Educators Association. If sharks aren’t your thing, that’s okay. Pick your own passion and start Googling. I’m sure you’ll find something fascinating to learn about while you’re stuck at home. You can even try LinkedIn Learning. LinkedIn has 16 of their courses available for free right now, including courses on productivity, building relationships, and using virtual meeting tools. This could be a great time for you to build your resume by learning some new skills. 

Consult a Tutor

Are you struggling to help your child with their e-learning homework? Don’t sweat it. Help is available. Rose-Hulman Institute of Technology’s AskRose Homework Help is a free math and science tutoring service for Indiana students in grades 6-12. Students can call 877-ASK-ROSE, email, or chat live with a friendly tutor to work through and better understand homework assignments. 

Play Games

There are a slew of apps, programs, and websites that make it possible to play games together. Experienced gamers may prefer MMORPGs (otherwise known as “massively multiplayer online role-playing games”) like Elder Scrolls, World of Warcraft, and Final Fantasy. But if you’re new to the idea of playing games online with other people and want to stick with people you know IRL (“in real life”), why not try the AirConsole app or Board Game Arena? AirConsole enables you to use your smartphone as a gamepad and your computer browser as a console to play more than 150 games with friends. Board Game Arena has 175 games to play, including classics and some exclusives to the website. You play the games through your computer browser after creating a login. 

Get Outside 

Of course, the stay-at-home order doesn’t mean you have to stay locked inside your house or apartment. You can still enjoy the great outdoors! Now is the perfect time to explore nature, even in your own backyard. Why not make some bird feeders, or turn your produce scraps into new plants? The Audubon Society has four DIY bird feeders that the kids can help make. Buzzfeed has a list of 16 food scraps that you can use to start your own vegetable garden

Get Creative

Social distancing scavenger hunts are growing in popularity. This is a great activity for children, and you can choose new themes every week. Just make some art to put in your windows, and then go for a neighborhood walk with a piece of paper and pencil. Make notes of all the window art you find. And here’s another way to get creative outside… make some sidewalk chalk art! You can leave inspirational messages or even create sidewalk “coloring books” by drawing outlines only and letting someone else fill in the drawings with the colors of their choice. 

Get Fit

Gyms are among the many businesses closed right now, but you can still exercise. In addition to walking and running outside, there are numerous ways to get fit inside your own living room. The Yoga Studio of Indianapolis is offering free streaming sessions via Instagram Live. The YMCA of Greater Indianapolis posts workout videos on their Facebook page. And if you were working out with a trainer at your gym, why not email or text them to see if they’re offering virtual training sessions? 

75 More Ideas

Finally, if we haven’t given you enough ways to keep yourself and the kids entertained during the stay-at-home order, our good friend Cherie Lowe – AKA, The Queen of Free – has more than 75 amazing tips, and they're all FREE!


Blog topics: 
Budegting 

Much Ado About Resolutions

Much Ado About Resolutions

 

By Kelly Griese

Wednesday, January 29, 2020

Did you make a new year’s resolution? University of Scranton psychology professor John C. Norcorss tells CNN that about 40% of Americans set new year’s resolutions, and about 40-44% of those people actually succeed. So what does it take to turn a resolution into a realized goal? CNN provides some good advice in the link above, and I wrote about S.M.A.R.T. goal setting a couple weeks ago in this blog. 

When we set resolutions, we do so for a reason. We want to succeed. But are you putting the correct pieces in place to ensure you reach the finish line before the next ball drop? Try switching out the word resolution and replace it with the word goal. Make that goal specific (that’s the S in S.M.A.R.T.). Make the goal something that’s actually possible to achieve (that’s the A in S.M.A.R.T.). Know that failure is also possible, but that it doesn’t have to mark the end of you trying to reach your goal. Try again and be kind to yourself in the face of failure. 

Change is hard, especially when you consider that the most popular 2020 new year’s resolutions are exercising more and saving money… two things a lot of people struggle to do! According to survey results shared by YouGov, 50% of Americans making resolutions say exercise is their top priority, while 49% are focused on saving money. We can help you with both of those resolutions. The fitness edition of our Indiana MoneyWise e-magazine includes information on yoga for every budget, meal planning, and more. And the Indiana MoneyWise website as a whole is filled with information to help you get on a better financial path. 

Speaking of finances, not all resolutions are equal when it comes to the cost of success. Let’s use the “exercising more” resolution as an example. There are a lot of different ways to exercise, but new gym memberships peak this time of year. So how much will a membership cost you? According to The Motley Fool, the average cost of gym membership is $58.00 per month, or $696 per year. But the monthly fee isn’t your only area of consideration. Many gyms charge an initial fee just for joining, and there may be other hidden costs. Keep in mind that there is a LOT of room for negotiation when joining a gym, and you should check to see if you qualify for any discounts based on your age, your employer, or even your health insurance provider. There are also numerous specials this time of year, so be sure to check online before walking into a high pressured sales pitch at the gym itself. And before joining, make sure you read the contract’s fine print… especially when it comes to the gym’s cancelation policy. 

There’s one more thing we need to talk about when it comes to resolutions, and that’s when to cut ties with anything that’s draining your budget in order to help you achieve them. Don’t hold on to subscriptions and memberships out of guilt or a belief that if you keep paying for these services, you will magically resuscitate your new year’s resolution. If it’s dead, it’s dead. Bury it in a shallow grave rather than digging a deeper debt hole. Cancel the subscriptions and memberships. If you still want to work toward food choice and exercise resolutions, do so in ways that don’t stretch your budget. There’s a wealth of free information online. You can exercise in your living room or local park without expensive equipment. You can shop for your own groceries and cook your own meals without consulting pricy apps first. And if you need accountability to keep you motivated, ask a trusted friend for such help.


Blog topics:
Budgeting

Financial Relationship Status: It's Complicated

Financial Relationship Status: It's Complicated

 

By Kelly Griese

Wednesday, January 15, 2020

Let’s face it, we are emotional spenders. Few of us are able to make purely logical financial decisions. Instead, we spend based on how we feel, and our feelings are impacted by a lot of internal and external forces. If our relationship with money was a Facebook status, it would be listed as “it’s complicated.” And to make matters more complicated, our financial behavior is set at an earlier age than most of us realize. 

According to a study from Cambridge University, not only are kids able to grasp basic money concepts as early as age 3, but money habits are set as young as age 7. By the time we reach the age of making major financial decisions, we’re already firmly set in our ways. And that’s why it’s okay if you’re struggling to change. Improving our financial behavior is hard, and it takes much more than some facts and figures on a spreadsheet to make changes. 


Pay Yourself First

So how do we begin? Well, I like to start with some of the best financial advice I’ve ever heard: PAY YOURSELF FIRST! When faced with a financial decision, repeat those three words in your head. Each time you buy something new and exciting, you are paying someone else. You are giving them money in exchange for the latest gadget you crave. 

Paying YOURSELF means setting aside money for YOUR future. This requires discipline. It also requires you to think beyond your need for immediate gratification. If you find yourself frequently tempted into making impulse buys, look for ways to remind yourself of the things you want months or even years from now. Do you want a new car? What about an awesome vacation? Retirement? 

Spending that money now can make us feel good in the short term (remember, we spend with our feelings), but in a few years, when we really want/need something big, the money won’t be there. If you’re still working when you’re in your 80s, you may regret not paying yourself first.


Values

Now let’s talk about some of those intangible things that influence our emotional spending. Things like values. Values are qualities or standards people consider to be worthwhile or desirable. These are the basic and fundamental beliefs that guide or motivate our attitudes and actions. Examples include: accomplishment, community, entertainment, generosity, and so on. You may possess some of these values or different ones. Take a moment to think about what you truly value and write it down. Better yet, prioritize your values. When I give financial fitness presentations, I provide folks with a worksheet, so feel free to print a copy for yourself


Goals

Now let’s talk about goals. Goals are the specific plans or purposes we have in life. Short-term goals can be accomplished in a few weeks, months, or even a year.  Examples include setting up a savings account and using it, building an emergency fund, or saving for a family vacation.  Long-term goals require more planning and saving, and they are often not realized for many years.  Popular long-term goals include homeownership, a college education, or a comfortable retirement.  

Unfortunately, goals are somewhat meaningless without a plan to achieve them. That’s why I encourage you to create SMART goals. SMART is an acronym. 

  • Specific – state exactly what you want to buy or accomplish with the money you save
  • Measurable – indicate the exact dollar amount you need in order to reach the goal
  • Attainable/Achievable – identify the necessary steps to achieve this goal
  • Relevant – the goal needs to be meaningful or you may lose motivation
  • Time-Bound – the goal should have a deadline for achievement 

Let’s transform a regular goal, such as “I want to buy a car” into a SMART goal. “I plan to save for a down payment on a new car. I need to save $5,000 for the down payment. I will reach my goal of saving $5,000 by setting aside $200 from my paycheck each month. I need a new car because my current car is getting old and repairs will become costly. By saving $200 a month, I will save $5,000 in 25 months (or two years and one month).”

Now that’s a SMART goal! To help you create your own SMART goals, print the worksheet I created.


Wants vs Needs

Now that we’ve established our values and goals, it’s time to buy stuff, right? Not yet. We need to talk about wants versus needs. 

As children, we are taught that needs are the stuff that’s necessary for survival: food, water, shelter. Wants are all the stuff we can live without but would enjoy having. Using these simple definitions, we can put things like rent, groceries, and transportation into the needs category, and most of our entertainment options are considered wants. But this whole post is about our complicated relationship with money, and wants and needs are not quite so simple. 

A few years ago, I was helping some local Girl Scouts earn their Junior level Savvy Shopper badge. We made collage posters with magazine clippings, with wants on the right side of the poster and needs on the left side. One girl brought up an interesting question: where does deodorant go? It sparked an insightful conversation that helped me realize our wants and needs are more complicated and simply deciding what’s necessary for survival. The girls and I talked about how it might be hard to make friends or get a job if we smell bad. We Googled the history of deodorant (great article can be found here).  We even discussed cultural differences related to hygiene. In the end, we decided that wants and needs are complicated. They are also unique and personal. Everyone has different priorities, and so everyone has different wants and needs. Identify your own wants and needs, just as you did with your values and goals. Your spending and saving decisions should be reflective of these choices. To help you determine your own wants and needs, we have another worksheet you can complete. It’s a great activity to do with other members of your family. 


So how will all of this critical thinking improve your financial situation? Wants, needs, values, and goals are important parts of every budget. After you have identified the emotional drivers behind your spending and saving decisions, start a spending log. I recommend using it for at least a week, but a month is preferred. Keep track of every last cent! In addition to writing down the date, purchase, and cost of all your expenses, also write whether they satisfy wants or needs. You can use this spending log to help you make adjustments to your budget. Spending logs are great at revealing problematic spending. We have a spending log worksheet as well as a budget worksheet that you can print. 


Blog topics:
Budgeting, Credit

New Year, New You, Anatomy of Your Paycheck Part 2

New Year, New You, Anatomy of Your Paycheck Part 2

 

By Kylee Hale

Wednesday, January 8, 2020

On average, an employee’s salary makes up seventy percent of their total compensation, while the remaining thirty percent is compiled of fringe benefits. These “extras” often include; insurance, tuition reimbursement, childcare, retirement plan contributions, and discounts. In my first post about understanding your paycheck, I discussed the common terms on most pay stubs such as Gross Income and Net Pay. In this post, I’m going to dive deeper into the deductions listed on most pay stubs to explain where every penny goes to determine your take-home check. 

Before we talk benefits, I want to point out, about thirty percent of your Gross Income is reduced by taxes. Tax withholdings are dependent upon your W-4 form filling, the example pay stub (right) for John Smith is claiming one exemption. Multiple income tax withholdings are calculated according to a person’s claimed exemptions.

Federal Income Tax: Federal tax is calculated by tax brackets determined by taxable income and your tax filing status: single, married filing jointly, married filing separately, etc. There are Paycheckseven tax brackets, the progressive tax system allows your taxable income to be taxed in chunks according to the portion of income that falls in each tax rate category. John Smith is a single filer with $32,692.30 in annual taxable income. That puts him in the 12% tax bracket in 2019, but he only pays 10% on the first $9,700 of income, then he pays 12% on the rest up to $39,475 of taxable income, because the next bracket of 22% begins with $39,476 taxable income.

FICA/Medicare: Federal Insurance Contribution Act (FICA) tax is a payroll tax that funds Social Security benefits and Medicare health insurance. This tax is split between employers and employees who both pay 7.65% (6.2% for Social Security, 1.45% for Medicare). You can calculate these individually but for many employers, these are lumped together. John Smith is paying $95.38 for FICA and $22.30 for Medicare each pay period, equaling $117.68 together.

State Income Tax: Some states do not collect income tax, some collect a flat rate and some impose a progressive tax meaning people with higher levels of income pay higher taxes. The state of Indiana has a flat tax rate of 3.23%. John Smith will pay $49.69 per pay period or $1,242.25 a year in state income tax.

Local Tax: This is also known as county tax, in Indiana, this is based on your County of residence as of January 1 per tax year. For John Smith's pay stub, he is a Marion county resident with a tax rate of 0.0202%. 

Insurance Premiums: Most pay stubs itemize the insurance premiums for the services you selected. For health, dental, vision, life and disability, your employer likely requires you to pay a portion of the premium. These costs are deducted from your gross pay. If your employer offers TaxSaver benefits, this prevents you from paying tax on the premiums. John Smith has medical, dental, vision and life insurance on a single plan, rather than a family plan. If applicable, this section of your pay stub is also where you will find disability insurance. For state of Indiana employees, I have found that the employee portion of the premium for disability insurance is about 0.0025% per paycheck. 

Other deductions: Depending on your employer, there may be additional deductions. For example, if you choose to donate part of your paycheck to a charity that partners with your employer — like the State Employees' Community Campaign (SECC), this should appear on your pay stub.

Deferred Compensation: These funds are also known as your retirement money. The tax is deferred on this income until payout which is likely in your retirement years. The strategy with this is that you benefit from a lesser tax burden at the pay out because you expect to be in a lower tax bracket after retiring, than when you initially earned the income.

The Direct Deposit amount is your take-home pay, also known as net pay. Most pay stubs include how much you've received year to date (YTD).

The last section of the state employee paycheck, Employer Provided Benefits, is my favorite. Most employers who offer benefits are required to pay a portion of the premiums for the employee’s coverage. For example, while John Smith pays $1.22 per pay period towards his premium for dental insurance, his employer pays $10.38 per pay period towards the premium. This is the same for medical, vision, life and disability insurance premiums. 

Let’s talk about retirement accounts, this will be different for non-state employees, but I hope this information will provide some insight and spur you to find out more about how your employer retirement accounts are structured. 

On John Smith’s pay stub, we see the deductions titled:

Def Comp.: This refers to a Target Retirement Fund account offered by Hoosier S.T.A.R.T., sometimes also referred to as a 457 plan, only for state and local government employees and some non-profits. This is similar to a 401(k) plan that might be offered by a private employer.

PERF St and PERF Spe: This could be referred to as your state employee pension and the state pays 100% of the cost. While employed, the state will continue to put money into these accounts, this is provided by INPRS. This appears as two separate contributions on the pay stub because a portion is invested via an annuity and the other via Target Date Funds

Def Comp St Pd: This is another Hoosier S.T.A.R.T. sponsored retirement plan, sometimes referred to as a 401(a) plan. The unique feature of this plan is, state employees receive a $15-per-paycheck matching contribution which equates to $30/month or $390/year of “free money”. Another way of thinking is to view the state’s match as BOGO, you put in $15 a payday and the state will match that giving you $15 in your account each payday. It’s wise to contribute at least up to the match so you’re getting the benefit of all the money your employer is offering and padding your retirement savings.

HSA Employer: The last thing to mention is a Health Savings Account (HSA). If enrolled in a High Deductible Health insurance Plan (HDHP), you qualify for an HSA, an account allowing you to save specifically for medical costs. As an employer, the state of Indiana contributes thirty-nine percent of your annual deductible into your HSA. Your contributions to an HSA are pre-tax or tax-deductible and you don’t pay tax on the account’s growth nor the withdrawals if used for eligible expenses. An HSA is similar to a Flexible Spending Account (FSA), although an FSA does not allow for the leftover funds to roll over to the next year, and an FSA is often better paired with a lower deductible health insurance plan.

It’s important to stay on top of tracking your deductions and contributions. Any errors are your responsibility to find and report, the last thing you want is for an error to be repeated through several pay periods.

I can write from experience, my first year as a state of Indiana employee, somewhere a mistake was made by HR. The information on my W-4 was incorrectly filed in the system. For about seven months my taxes were withheld in “married” filing status, although I would be filing as “single”. I noticed this on my paystub a little too late in the year, and when tax filing time came around, I owed more than I was excited to pay.

If you have questions about any of the information listed on your pay stub, be sure to contact your human resources representative.     


Blog topics:
Budgeting, Credit  

 

The Anatomy of Your Paycheck

The Anatomy of Your Paycheck

 

By Kylee Hale

Wednesday, December 18, 2019

Most people don’t get a pay stub delivered to them along with the paycheck anymore, because most employers issue a direct deposit check and theState Employee Paycheck funds just appear in your bank account. This doesn’t mean that pay stubs no longer exist, or that pay stubs are no longer important. Reviewing your pay stub can help you spot errors and be aware of where the money that isn’t deposited into your account is going. There is good information about your finances located on this slip, knowing about your withholdings, taxes, benefits and retirement contributions can help you be better off financially. In this post, I’ll show you how to locate your pay stub (for state of Indiana employees), and define some of the information you see on your pay stub. If you are not a state of Indiana employee, check with your Human Resources Department.

For state of Indiana employees, your pay stub can be found in PeopleSoft. The same place you go to submit your time, except instead of selecting "Time Reporting", you'll go to "Payroll and Compensation". From there, you click on "Pay Inquiry" and this will open a new window with your pay stub. 

Now that you've found your pay stub, again, if you are not a state of Indiana employee, be sure to ask your HR department, let's look at the earnings and taxes. Below is an example of a pay stub for John Smith, making a $40,000 salary. 

Pay stub example

For state of Indiana employees, we have information about our employment anniversary (Bonus Date) at the top of our paychecks, this refers to when you will be awarded paid time off. You can find more about this in the State of Indiana Employee Handbook, or your agency's employee handbook. Just below that, is your Tax Filing Status, this correlates to the W-4 tax form that you completed with your HR representative. You can change your exemptions at any time, this will impact your take home pay amount. If you opt for less money withheld for federal taxes, you need to plan ahead for tax filing season, as you might owe money instead of getting a tax return. The IRS has an IRS Withholding Calculator that can help you estimate what you should claim on your W-4.

The majority of your paystub describes income earnings, tax withholdings, retirement contributions and medical premiums. Let's review some common terms. 

Pay Period: The dates on your pay stub will inform you of your pay schedule, whether it's weekly, bi-weekly, or monthly. If you're paid weekly you would multiply the pay by 52 to calculate the annual salary. If paid bi-weekly multiply by 26, and if paid monthly, multiply by 12. State of Indiana employees are paid bi-weekly or 26 times a year. 

Gross Earnings: This is the total amount earned for the pay period, including wages/salary, plus bonuses and tips if applicable. For this example, the pay stub shows how much John Smith has earned year to date (YTD), after 25 out of 26 pay periods. 

Non Taxable Earnings: The IRS definition of a non-taxable wage is fairly narrow, but an example of such is disability wages and worker's compensation. 

Deferred Compensation: This part of your income is set aside to be paid to you at a later time, also known as invested retirement funds. You don't pay taxes on this portion of income until the money is paid out.

TaxSaver Benefits (Cafeteria 125 Plan): This is an employee benefit offered by section 125 of the Internal Revenue Code, allowing for your premiums to be deducted before taxes are applied to your income. This allows for your take home pay to be a little bit bigger. 

Taxable Earnings: This portion of your income, is used to figure the taxes you'll pay to Federal, State and Local entities as well as your premium for Medicare/FICA. You can learn more about tax and premium calculations in the next post, The Anatomy of Your Paycheck Part Two, where I break down the other half of your paycheck.

Some pay stubs summarize your paid time off. Like you can see on John Smith's pay stub, state of Indiana employee pay stubs reflect overall taxes, deductions and take-home income for the pay period and YTD. 

Net Pay: This is your take-home pay. Calculated after all taxes, insurance premiums, deferred compensation/retirement contributions and deductions have been subtracted out, this is the remainder of your income. 

If you're like most people, the number on your pay stub that really matters is the cash dollar amount on your paycheck. We are all excited to get paid and have money deposited into our accounts. Although, it is important to review your pay stub, being tuned into where every dollar goes will help you take full advantage of your employee benefits. If there is a mistake in your pay or an opportunity to better your retirement or take-home pay, this is where you'll likely notice it. In our next post, we will analyze another part of your pay stub: insurance premiums and retirement accounts. Be sure to check out the Anatomy of Your Paycheck Part Two on January 8, 2020. This will be our first post of the New Year. 


Blog topics:
Budgeting, Credit

Save Energy, Save Money

Save Energy, Save Money

 

By Kelly Griese

Wednesday, December 11, 2019

Save Energy, Save Money

We already know you love saving money, because you’re reading the MoneyWise Matters blog (and are hopefully a subscriber)! That’s why we’re confident you’ll love this post, because it’s all about saving money… and energy. How great is that? You can help the planet and your budget at the same time. 

In order to help you improve your home’s energy efficiency, we teamed up with Indianapolis Power & Light Company. They taught us that small changes can have a big impact on energy bills. But if you’re not an IPL customer, don’t worry, we have links to energy providers in your community at the end of this article.

Here are five easy things you can do this weekend to improve your energy efficiency:

  1. Replace the air filter in your furnace every 6 months. A clogged filter is problematic for several reasons. When it comes to energy efficiency, a clogged filter requires your furnace to work harder. Replacing the filter will not only improve the air quality of your home, but it will allow that air to flow through the filter with greater ease. (Side note… you should also consider cleaning the air vents and hoses that connect to your clothing dryer. Dryers also have to work harder when the vents and hoses are clogged with dust, plus, all that debris is a fire hazard.) 
  2. Replace the incandescent light bulbs in your home with LED bulbs. Incandescent bulbs may cost a little less in the store (as little as 70 cents per bulb), but they don’t last nearly as long (about 1,000 hours), and 90% of the energy is wasted in heat, while only 10% goes toward producing light. Meanwhile, standard LED bulbs run anywhere from $1-$3, but they are much more efficient and will last a lot longer (about 25,000 hours). According to Energy.gov, your lighting energy costs can be cut 50%-80% by switching out your incandescent light bulbs to LEDs.
  3. Using setbacks on your thermostat is another great way to get significant savings. In the winter, 68 degrees is the recommended temperature when you are home and awake, and 63 degrees is recommended when you are away at work or on vacation. In the summer, it is best to set your thermostat to 78 degrees when you are home and 83 degrees when you are away.
  4. Seal air leaks and cover drafty windows. Replacing windows can be expensive and time consuming, but there are plastic kits you can buy in most home-improvement stores to help you insulate the windows you have in the meantime. Install new caulking and weather-stripping to help seal air leaks around doors because they can wear out over time or may have never been installed when your home was built.
  5. Unplug electronics and appliances that are not being used. If you have a guest room, that is a great place to start. Nearly everything that plugs into the wall outlet will draw small amounts of power even when turned off. You can save energy by unplugging anything you do not regularly use. You may also want to consider an energy efficient power strip for your entertainment system. It will cut power to devices that are not in use, but still provide power to things like your internet modem and DVR when you are away from home.

To tackle some of these projects and identify other energy bandits in our homes, one of our Indianapolis-based staff members scheduled a FREE energy assessment with IPL. Watch as Brandon Kline, our Elections Outreach Coordinator, tours his home with Casey Roehm from CLEAResult®, who manages IPL’s residential and commercial energy efficiency programs. 

IPL’s eScore™ Home Energy Assessment is free to IPL customers. An energy advisor will come to your home, conduct a walk-through assessment, and install energy-efficient products to help you start saving immediately. Your home will be given an eScore of 1-10, and the energy advisor will provide you with recommendations to improve that score. All of the recommendations will appear in your eScore dashboard, which you can view online when you log into your IPL account.  One of the “coolest” parts about the eScore program is that the advisor can install a FREE smart thermostat by Nest. To qualify, customers must enroll in IPL’s CoolCents® program, and they must have electric heat or central cooling, a compatible HVAC system and working Wi-Fi. You can learn more about the CoolCents® program by clicking here


So what if you’re not an IPL customer? Energy providers throughout Indiana offer similar ways to save. We compiled a list of the energy efficient programs in other parts of the state.


Blog topics:
Budgeting, Credit 

Rein in Holiday Spending

Rein in Holiday Spending

 

By Kylee Hale

Wednesday, December 4, 2019

For some, overspending and under preparing is as habitual as the holiday season itself. An albatross of debt on your shoulders is no way to start the New Year. Financial prosperity requires financial planning. To ensure your holidays are merry this year, check out these approaches to stretch your funds without being a Scrooge. 

A Plan for Affordability:

Make a list and check it twice. Establishing a gifting budget is the best way to keep yourself from overspending. Jot down an outline of who you are buying for and how much can be allotted to each. Look for things you canSant's List trim, try to avoid gag gifts that may go unused or discarded soon after unwrapped. Most importantly, use self-control and stick to your budget. 

Retail SaleAvoid impulse shopping. Retail stores strategically place items conveniently at the checkout and on aisle end caps. It can be hard to resist grabbing additional items, but too many stocking stuffers can add up to a large total of spending. Don’t succumb to the temptation and remember that if you didn’t intend to buy it, then you probably don’t need it. 

Price check online before you buy. If you see something in a store that looks like a good deal, use your smartphone to check prices at other retailers before making your purchase. Some apps, like Amazon, even have barcode scanner to make the price check process easier and you can read the reviews as well. Also, check for price adjustments, many merchants price adjust for up to two weeks, just keep the receipt and an eye on your product’s price. 

gift exchangeDo not buy for everyone and their brother. Do you have a seemingly endless number of family members? Are you compelled to buy for every co-worker? Try alternative ideas, like sharing a meal together as a group or a weekend trip. I’ve heard of relatives agreeing to only buy for the children, that is, if there are less kids than adults in the group. Cut down on the extent of gift giving by trying a White Elephant gift exchange

Use plastic to your advantage. Credit cards can be unnerving, especially during the holiday season when overspending can send you down the rabbit hole of debt. However, if you’re responsible with your spending, why not get cash back for the money you’re spending. Use your credit card to earn rewards by always paying your balance in full. You can receive gift cards or travel miles as rewards, which are often worth more than cash back.

If you’ve stressed about holiday spending before and how to afford all the festivities, these tips will help you enjoy the hustle and bustle a lot more. Time spent with family and friends is more enjoyable when you’re not worrying about your finances. Just remember, the holiday season doesn’t require spending every last dime you have. Being able to afford your holiday spending in cash may be the best gift of all.


Blog topics:
Budgeting

Shop Smart, Shop Safe

Shop Smart, Shop Safe

 

By Kelly Griese

Wednesday, November 27, 2019

Before your Thanksgiving feast even has a chance to fully digest, many of you will start shopping. And while plenty of folks choose to burn a few calories by bargain shopping at traditional brick and mortar stores, others prefer to lean back in the La-Z-Boy to shop online while watching football. No matter your style, these tips will lead to a safer, smarter shopping experience.  


Security
When shopping online, make sure the site is secure before sharing your personal information. Look for a tiny padlock icon, which you can usually find near the browser’s URL bar. Also check the website’s address. Non-secure sites and pages begin with http://. Secure sites and pages begin with https://. You’ll also want to research the online retailer to make sure they’re legit. Creating a website is easy, so you’ll want to verify the online seller’s physical address and phone number. 


Hidden Costs and Fees
Check the total price of an item before purchasing. Look for shipping and handling costs, then compare that price to what you would pay if you visited the store in person. You should also beware of restocking fees. If you return an item you bought online, you may have to pay for that item to be repackaged and replaced. Some retailers charge 25% or more, so it’s important to check the retailer’s return policy before making an online purchase. CBS News recently published its list of the best and worst return policies. If you’re someone who suffers from chronic buyer’s remorse, you may want to read the article before making your next purchase.  


Shipping
Save on shipping. Ship packages directly to the recipients rather than spending the extra money to ship to yourself first. Slower shipping methods are always cheaper, so don’t wait until the last minute to make online purchases. While an increasing number of online retailers offer free shipping (check The Penny Hoarder’s list of 35 stores that offer free shipping), others throw in the free shipping based on how much you purchase. In those cases, it’s best to order from as few stores as possible. One more tip: some of the most popular retailers, including Walmart, now offer free in-store pick-up for your online purchases. 


Credit vs Debit
When shopping online, credit cards are safer than debit cards. Credit cards come with more protections against identity theft and fraud. It’s also helpful if you only use one credit card for all your online shopping. If a thief does access your information, only one card is compromised, making it easier for you to put a stop to the theft. Prepaid cards are growing in popularity for online purchases. Before picking a prepaid card, check out this editorial article from CreditCards.com about some of the pros and cons of these cards. It includes tips for selecting the right card for your needs. 


Layaway
Layaway is back in a big way! Unlike a credit card, which bills you after you have your purchase in hand, layaway allows you to make payments in advance. You won’t receive your purchase until after you have fully paid for it. It’s a helpful tool for staying out of debt around the holidays. To use layaway properly, follow these tips: 

  • Determine what the layaway policies and fees are prior to using it. Ask about the payment period, when payments are due, and what happens if you miss a payment or the item goes on sale while still on layaway. 
  • Make all scheduled payments. Policies vary by store. In some cases, the item could be pulled from layaway and you could be asked to pay a fine if you miss a payment.
  • Get everything in writing. When you put something on layaway, you are entering into a contract with the store and agreeing to pay for the item they’re holding for you. Make sure your responsibilities as well as the store’s responsibilities are clearly outlined and don’t lose your copy! 
  • Know who is in charge of the layaway program. Some retailers use third-party vendors for their online layaway services. Also, you should know whether your merchandise might be held off-site.
  • Understand the store’s refund policy. Some stores may include a cancellation fee if you try to cancel the purchase. Stores may also refund all, little, or none of the money you have paid for the purchase, or they may give you in-store credit. 

For more online shopping tips, check the Federal Trade Commission’s blog. They recently published a great article on the topic, and it includes information about how to report online shopping fraud. 


Blog topics:
Fraud Prevention, Credit, Budgeting

Let's Talk Money

Let's Talk Money

 

By Kelly Griese

Wednesday, November 20, 2019

Having “The Talk”
If you’re a parent, seeing the words “the talk” in quotation marks may make you nervous. You probably assume it pertains to a discussion of the birds and the bees. But in this case, “the talk” pertains to an even more taboo topic: money. A quick Google search reveals article after article on how we would rather have an awkward conversation about sex, politics, or religion than delve into the ultra-uncomfortable subject of money. Gary Dayton, a licensed psychologist and head of Peak Psychology in Glastonbury, Connecticut, was quoted in a recent US News report. “To many, money symbolizes comfort and living with ease, but it can also bring up scary issues of dependence, insecurity and even survival,” Dayton said. When you put it that way, it’s no wonder we’re all so afraid to discuss our finances! Money means a lot to us. It can represent status, power, security, stress, weakness, mistakes and more. We judge ourselves and others based on how much money (and debt) everyone has. Right or wrong, it’s common. So how do we broach such a difficult conversation with our loved ones, and why should we? 

Why You Should Talk about Money
Let’s start with the why. Keeping our finances a secret allows for a lot of problems to fester. Think of the room in your house where guests aren’t allowed. It’s where you hide all the junk you don’t want them to see. The rest of the house may look picture perfect for a party, but that’s because you stashed all the clutter in that one room that’s off-limits. You might impress everyone for the time being, but what happens if someone stumbles into the messy room? Rather than hiding your secrets, wouldn’t it be better to fix the problems you’ve shoved out of sight? Purge the room of all that stuff you no longer need or want and give it a good scrubbing. Most importantly, don’t refill the room once you’ve cleaned it! By opening up our whole home for exploration and presenting an honest version of ourselves to the world, we’re motivated to tackle problem areas and maintain them moving forward. Think of your finances in the same way. Hiding money problems from your spouse, children, and parents won’t make those problems go away. They’ll grow to the point of crisis. So make a plan to discuss what’s wrong and work together to improve your financial lives. 

When You Should Talk about Money
The holidays can actually be a great time to discuss finances. On Thanksgiving, it’s common for multiple generations of a family to gather together to celebrate. It’s a time to reflect on all the good things in your life for which you are thankful. And this date sadly can precede a time of excess spending in preparation for Christmas. So before rushing out to shop on Black Friday, take some time to discuss what you can truly afford to spend. Or, perhaps decide as a family to change up the way you have traditionally celebrated Christmas. You could forgo presents all together, arrange a Secret Santa system, or even decide to pool all your money together for a shared adventure that will create wonderful memories. 

How to Start a Conversation about Money
Starting a conversation about money is easier than you think. You don’t have to air all your dirty laundry right away. It’s fine to ease into these talks and gradually discuss more and more difficult things. Here are some conversation starters from the North American Securities Administrators Association (NASAA) that you can use to begin the process. 


Conversations for Couples - Communication is an essential part of a healthy relationship. Your money talk should be an open and honest dialogue with your spouse or significant other about your current financial situation and goals. 

Budgeting 

  • How much of our income should go toward fixed expenses (i.e. rent, insurance) versus flexible expenses (i.e. entertainment, savings, investments)?
  • Have we determined our priorities for flexible income and expenses?
  • Do we have similar habits or views on how to manage money?

Saving

  • What are our short and long term financial goals?
  • Are we prepared for unexpected financial hardships?
  • Are there ways we could spend less and save more?

Investing

  • How much risk are we willing to take with our money?
  • What investments are appropriate at this time in our life?
  • Where can we get help with our financial/investment decisions?
  • How can we select a financial professional (i.e. broker, investment advisor, financial planner) that’s right for us?

For more help discussing financial matters with your significant other, we encourage you to check out our Money Skills for Newlyweds guide


Conversations for Parents and Kids - Help your children build good money habits by talking with them early and often about finances and by setting a good financial example. Educational games and resources for youth can help get your children thinking and talking about personal finance. Use the questions below to jump start a conversation with your child about responsible money management. 

Budgeting

  • What is the difference between a need and a want? Which is more important?
  • How does our family make decisions about spending and saving?
  • Why is it important to balance income (money coming in) with expenses (money going out)?
  • What are ways to earn more money (i.e. babysitting, lawn mowing)?

Saving

  • What are some ways to save money?
  • How can interest help make your savings grow?
  • Is there something special you want to save for?
  • What are some ways to save for a long-term goal like buying a car or going to college?

Investing

  • What is an investment and how does it work?
  • How can investing make your money grow?
  • What are some of the risks of investing?
  • What are some ways to make investing less risky?
  • Where can you get advice and information about investing?

There’s an argument to be made for parents telling children how much money they make. The New York Times reported on one man’s hands-on budgeting lesson. He withdrew his entire month’s salary in $1 bills, dumped the cash on a table in front of his children, and spent the next few hours explaining where all of that money goes. 


Conversations for Retirees and Senior Citizens - Once you leave the workforce, it’s important to talk with your loved ones about how to ensure that you retain your financial security and independence throughout your retirement. Ask yourself, your partner or your adult children these questions to help you re-evaluate your financial plan in retirement.

Budgeting

  • Are projections for our retirement needs accurate?
  • Will we be able to enjoy the lifestyle we want (i.e. travel or recreational activities)?
  • Have we planned for unforeseen expenses due to inflation and medical expenses?
  • Could we downsize to reduce living expenses?
  • Have we made arrangements for someone to manage our finances if our health should decline?

Saving

  • Have we planned for rising health care costs?
  • Does someone we trust have copies of our estate planning documents and accounts information?
  • Do we have an emergency fund for unexpected financial hardships?
  • Who can we seek advice from to leave an inheritance?
  • Do we know all commissions, penalties, taxes and fees for withdrawing or rolling over retirement funds?

Investing

  • Who manages our investments and gives us investment advice?
  • Does our mix of investments match the level of risk we want at this stage of life?
  • Do we understand the risk and benefits of financial products promoted to senior investors, such as reverse mortgages, variable annuities or life settlements?
  • Do we know all commissions, penalties, taxes and fees for withdrawing or rolling over our retirement funds?
  • Who will handle our investments if our health starts to decline?

There’s another important conversation to have with aging loved ones. It’s crucial that you discuss fraud. It’s everywhere, and senior citizens are a favorite target. Many people fear this topic, because they think it will upset the seniors in their life. To ease your mind, here are some conversational queues flowing right along with “can you pass the turkey,” to ease into talking about protecting their pockets.

  • Now Versus Then - “Back in my day” and “when I was your age” are two common sayings spoken by aging generations. Most parents and grandparents love to tell stories about how they had to “walk 20 miles, uphill, both ways, in the snow.”  Use this to your advantage. Ask them why and how they interpret things have changed. This is a great way to lead into discussing technology and the evolution of scams.
  • Vet yourself - Remember the first time you typed your own name into Google? You were probably amazed at the amount of information returned through your search.  Be sure to ask your loved ones if they have tried this.  If not, grab a device and do this together. This will help them observe “straight from the horse’s mouth” how much personal information is online and available at one click. Feel free to throw in a “wow, look how easy it is for fraudsters to access this information” or similar comment.
  • Add Credibility - By visiting valid alert websites with your aging loved ones, such as Federal Trade Commission and the IRS, you are able to share valuable information with your loved one without seeming pushy or overly dramatic. These sources also have Facebook and Twitter accounts for followers to receive fraud alerts automatically. Additionally, it can help to watch the news together when reports about fraud are discussed.  Our Indiana MoneyWise website also provides ways to spot fraud and avoid becoming a victim.
  • Talk with them, not at them - Most of us pride ourselves on our independence. Engaging in conversation and open discussion rather than telling your loved ones what to do, goes along way.  Remember your parents and grandparents probably have a contrasting viewpoint on scams and fraud.  Back in the day, they didn’t have to lock their doors, and a handshake sealed the deal.  Although times have changed, the mindset still exists. Their trusting nature, accessibility, and polite manners make them tempting targets for con artists. When talking with them, encourage an attitude of empowerment. Discuss ways they can protect themselves.  By arming them with information, you’ll help your aging loved ones avoid fraud and establish yourself as someone they can come to when problems arise. For more information about aging family members and caregiving visit AgingCare.com.

Blog topics: 
Budgeting, Investing

Scary Spending: Halloween by the Numbers

Scary Spending: Halloween by the Numbers

 

By Kelly Griese

Wednesday, October 16, 2019

We spend a scary amount of money on Halloween. Americans in particular love the holiday and can’t seem to get enough of the candy, decorations, and costumes that have come to define October 31st (and the month or so before it). The National Retail Federation, or NRF, has been conducting a survey of Halloween since 2003 to see how Americans celebrate this spooky holiday. This year, shoppers say they will spend an average of $86.27 per household. That means Halloween spending in 2019 is expected to reach $8.8 billion (that’s down from 2018’s projected spending of $9 billion).  

So where’s the money go? The bulk of the money, $3.2 billion, is expected to be spent on costumes. 47% of consumers say they plan to dress in costumes – and 17%, or 29 million people, say they will buy costumes for their pets as well. It seems social media, Instagram in particular, could be driving the pet costume trend. According to the NRF, the most popular pet costumes include pumpkins, hot dogs, superheroes, bumblebees, devils, and sharks. 

Decorations are the second biggest spending category, with consumers expected to spend $2.7 billion making their homes look seasonally spooky. 49% of folks say they plan to decorate their homes for the Halloween holiday. Then there’s the candy. Consumers are expected to spend $2.6 billion on sweets for themselves and trick-or-treaters. 69% of shoppers say they will hand out candy this year. 

Despite our love of Halloween spending, we still can’t say no to a good deal. Most Halloween shoppers (47 percent) get their goodies at discount stores. 38 percent visit specialty Halloween stores, and 25 percent shop at grocery stores. 
     
To learn more about Halloween spending, check out the NRF’s report. And if you're trying to get control over your spending, consider creating a budget. We can help you. Check out the Basics of Budgeting page of the Indiana MoneyWise website. You'll find it under Personal Finance 101


Blog topics:
Budgeting

Free Classroom Programming

Free Classroom Programming

 

By Kelly Griese

Wednesday, October 2, 2019

School is back in session, and the holidays aren’t far away. It’s safe to say teachers are BUSY! And so are our Indiana MoneyWise education coordinators. This time of year, we receive dozens of invitations from Indiana teachers interested in inviting us to their classrooms to speak to students about personal finance and fraud prevention. So in celebration of World Teachers' Day on October 5, we offer you an overview of some of the FREE programming options available to all Indiana teachers. 

Pet $ense Magical Creatures – This is a game that teaches children some of the basics of budgeting using magical creatures from the world of Harry Potter. Children adopt imaginary pets and use an assigned allowance to make purchasing decisions for pet supplies. We throw in an emergency expense, and children will be face with the dilemma of whether they have enough money remaining to afford a class trip to Hogsmeade. 

  • Suggested Time: 15-45 minutes (depending on group size, math skills, and the amount of discussion that takes place)
  • Content: budgeting, credit, debt, emergency expenses
  • Recommended Ages: grade school
  • Ideal Audience Size: any size

Avengers Saving the Day – Connecting with kids using comic books! We use a special edition “Avengers” comic book, created by Marvel Comics in partnership with Visa’s Practical Money Skills to teach children basic financial concepts. Children receive a free piggy bank and comic book (while supplies last). 

  • Suggested Time: 45-60 minutes (more time is needed for larger groups)
  • Content: currency, budgeting, saving, banking, and more!
  • Recommend Ages: grades 2-7
  • Ideal Audience Size: any size

Fraud Fighting Force – Children love escape rooms, and we have created a simulation that uses many of the best parts, such as locks and secret codes. Children are told they have a chance to join a superhero team known as the Fraud Fighting Force, but they must first prove their worth by passing a series of tests. In the process of playing, children learn how to spot the red flags of fraud so they can avoid becoming victims of a financial scam. 

  • Suggested Time: 15-30 minutes (depending on ages and group size)
  • Content: financial fraud prevention
  • Recommended Ages: 5th grade and older
  • Ideal Audience Size: participants should be divided into teams if there is a large audience (4-5 per team)

Financial Football – This is a game that’s available online, but can be fun to play in teams. The fast-paced, interactive game is competitive and helps students learn money management skills. Teams compete to answer finance questions to gain yardage and score touchdowns. 

  • Suggested Time: 45 minutes
  • Content: general financial fitness
  • Recommended Ages: there are three versions, 11-14, 14-18, 18+
  • Ideal Audience Size: 20 or fewer (teams are recommended)

How to Avoid Getting $CAMMED – This $CAMMED presentation is our most popular program. It provides students with the perfect introduction to various types of financial fraud and exploitation. Teens learn about the IRS scam, the grandparent scam, the tech support scam, Ponzi schemes, and identity theft. The presentation includes videos featuring interviews with real criminals and victims. Teenagers learn about methods of persuasion used by fraudsters and are taught how to protect themselves. 

  • Suggested Time: 45-60 minutes (60 is ideal to allow for more questions)
  • Content: fraud and scams
  • Recommended Ages: high school
  • Ideal Audience Size: any size

Adulting 101 – Reality bites! In this presentation, we examine typical “adulting” activities such as budgeting, paying off debt, investing, improving your credit, buying a car, and paying for school. This is a more intensive workshop that is best presented over a course of multiple sessions, or you can pick a few topics for us to cover with your students. 

  • Suggested Time: 3-4 hours total (can be spread over the course of several days)
  • Content: values, goals, budgeting, saving money, investing, credit reports, credit scores, buying a car, paying for school
  • Recommended Ages: high school students (juniors and seniors especially) 
  • Ideal Audience Size: 20-40 students

If you’d like to invite one of our education coordinators to visit your school, please send an email with the following information:

  • Teacher name, email address, and phone number
  • School name and address
  • Proposed dates and times 
  • Student grade level
  • Topics you’d like us to cover
  • Number of class periods you’d like to join

You can email me, Kelly Griese, at kgriese@sos.in.gov. Or you can email my coworker, Kylee Hale, at kyhale@sos.in.gov. All of our programs are customizable to fit your needs, and we are able to bring our own presenting equipment if necessary. And, yes, we really do travel the ENTIRE state of Indiana. All of our programming is available for free for use in classrooms and out-of-school programs. 


Blog topics:
Fraud Prevention, Budgeting

5 Reasons Why Your Budget Isn't Working

5 Reasons Why Your Budget Isn't Working

 

By Kelly Griese

Wednesday, September 18, 2019

First things first… why do we budget? For many people, budgeting is a scary word. For some of those people, the idea of doing math is the scariest part. But budgeting is less about math and more about record keeping and self-control. The basics of budgeting are easy. 

Simply put, a budget is a plan for your money. It’s a document of money coming in and money going out. Keeping track of your money’s movement can help you avoid spending more than you earn. It can also help you plan for long- and short-term goals. Sometimes it can be hard to plan ahead, but doing so now can help you avoid the horrible feeling of NOT being able to make ends meet. 

If you have never budgeted before, a good way to start the process is by printing our free budgeting worksheet and instruction guide. You can find the PDF here

If you’re struggling with budgeting, take a look at some of the common problems below. 

 

1) You left zero room for error. 

A lack of flexibility in your budget, especially when you first begin, is sure to lead to problems. Those problems can include emergencies. If your budget doesn’t include contributions to an emergency fund, make that change immediately! Once you solve that problem, add a little wiggle room to some other categories of your budget. Expenses tend to rise and fall, and your budget needs to be able to roll with the punches. IF you spend less than normal one month, put the surplus into savings. It will come in handy the next time you go a little over budget.

2) You haven’t clearly defined your goals.

Without goals, how can you possibly hope to prioritize your spending? Most budgets require some degree of sacrifice. Figure out what it is you want to accomplish with your money and work toward those goals. The rest of your expenses will likely need some trimming. If saving for higher education is a must, how much do you really need to spend on entertainment? If your career aspirations require you to be up-to-speed on current events, maybe you do need cable, internet, and a daily newspaper, but do you also need to dine out for lunch every day of the week? Probably not.

3) You forgot you have a personality. 

Are you a saver? Are you a spender? Your budget is unique. That’s why you can’t simply copy someone else’s. It should match your personality and lifestyle, as well as your goals. If you are the sort of person who enjoys shopping and has a casual attitude about money, then be sure to build a cushion into your discretionary spending category. If your budget includes other people, such as a spouse and children, you’ll need to take into account all of their personalities as well.

4) You aren’t being honest with yourself.

Once you commit to budgeting, you absolutely must keep track of every cent you spend… especially in the beginning. Until you have a realistic picture of your spending habits, you won’t know how much of your income should be devoted to each budget category. The place where most people slip up is with their “discretionary” spending. You probably have your rent or mortgage payment memorized down to the last penny. It’s likely our biggest bill each month, and paying it is required. But what about all those little purchases you make each day? A morning coffee, an afternoon snack, a trip to the movies with friends, or an impulse purchase on Amazon. Discretionary spending accounts for all the stuff you don’t need. It also accounts for all the stuff you are LIKELY to buy.  Be honest with yourself. Keep good records of your spending the first few months you budget. It will help you identify problem areas and work to correct them. You can print a copy of our spending log to begin the process. The spending log can be found here

5) You didn’t pay yourself first.

Saving for the future is an essential part of every budget. This can be hard when you’re barely making ends meet. It requires discipline. It also requires you to think beyond your need for immediate gratification. We crave the “high of the buy.” Spending money now can make us feel good in the short term, but in a few years, when we really want something big, the money won’t be there. If you’re still working when you’re in your 80s, you’ll regret not paying yourself first. Set aside room in your budget for saving and investing, no matter how small, and work on growing that category over time. 

Be sure to check out the Personal Finance 101 section of the Indiana MoneyWise website to learn more about budgeting. There you will also find information about credit cards, debt management, retirement planning, investing, and more. 


Blog topics:
Budgeting

The Best Way to Save for Higher Education

The Best Way to Save for Higher Education

 

By Kylee Hale

Wednesday, September 11, 2019

The Best Way to Save for Higher Education 9.11.19 postWhether you’re a parent or you yourself are looking to obtain a degree it's easy to get sticker shock from reviewing education costs. With a price tag that's constantly rising, it may seem impossible to pay upfront or even someday pay off financial aid loans. Future students should apply for scholarships, grants and even consider schools with lower tuition fees. But two things ring true in nearly every situation - it's never too early or too late to start, and a dollar saved now is better than one borrowed later. With this, I want to bring light to the beauty of Indiana’s 529 Plans, which might just be your best friend in paying for higher education.  

Named for Section 529 of the federal tax code, 529 Plans are to post-high school education as 401(k)s and similar options are to retirement. 

Earnings on 529 investments are tax-deferred, and become tax-free when used to pay for qualified higher education expenses.

Indiana offers one of the most generous up-front tax incentives for 529 contributors, Hoosiers can get a 20% credit worth up to $1,000. This credit is available to each taxpayer that contributes, even better, the credit is available to account owners and third­party gift contributors, meaning parents, grandparents and others can all pitch in and reap some of the benefits.

529s are also incredibly flexible. Qualified expenses include tuition, room and board, books, fees or computers at any school that's eligible to receive federal financial aid. Whether your child wants to become a doctor or a skilled tradesperson, 529 savings can be used to help them pursue their goals. But one thing to note, is that 529 savings cannot be used to pay off student loans, so it’s better to save up before and take advantage of the tax benefits. 

Perhaps most importantly, 529 Plans are affordable and easy to use, with a variety of investment options and strategies to meet savers' needs.

Here in Indiana, the CollegeChoice 529 program consists of three different Plans:

CollegeChoice Direct CollegeChoice Advisor CollegeChoice CD
The Direct Plan features quick online account setup and a low minimum contribution of $10. The Year of Enrollment portfolios are set to automatically grow more conservative as a beneficiary gets older. The Advisor Plan offers access to a wider variety of investment options. As with any financial service involving professional assistance, the Advisor Plan comes with slightly higher fees. The CD Plan resembles a traditional bank product in that it offers principal protection. Its streamlined lineup of FDIC-insured options includes one-, two­and three-year fixed rate certificates of deposit (CDs) and a savings account.

All three of these 529 Plans share the same core benefits mentioned above - and all three represent a meaningful investment in a child's future. 

The cost of higher education isn't going to suddenly plummet overnight, but when used properly, 529 Plans can help parents and all students prepare for the significant challenge of financing it.

For more information about the CollegeChoice 529 Direct Savings Plan, call 1.866.485.9415 or visit www.collegechoicedirect.com to obtain a Disclosure Booklet, which includes investment objectives, risks, charges, expenses, and other important information; read and consider it carefully before investing. 

For more information about the CollegeChoice Advisor 529 Savings Plan, contact your financial advisor, call 1.866.485.9413 or visit www.collegechoiceadvisor529.com to obtain a Disclosure Statement, which includes investment objectives, risks, charges, expenses, and other important information; read and consider it carefully before investing. 

For more information about the CollegeChoice CD 529 Savings Plan, call 1.888.913.2885 or visit www.collegechoicecd.com to obtain a Disclosure Statement. The Federal Deposit Insurance Corporation (FDIC) generally insures, with respect to each FDIC-insured institution, deposit accounts that are held in the same right and capacity up to the maximum amount set by federal law, currently $250,000. 

 

Please Note: before you invest, consider whether your or the beneficiary's home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in that state's qualified tuition program. You should also consult your financial, tax, or other advisor to learn more about how state-based benefits (or any limitations) would apply to your specific circumstances. You may also wish to contact directly your home state's 529 college savings plan(s), or any other 529 plan, to learn more about those plans' features, benefits, and limitations. Keep in mind that state-based benefits should be one of many appropriately weighted factors to be considered when making an investment decision.

The above is adapted from the Indiana MoneyWise e-magazine March 2018 as written by guest author Troy Montigney. Click here to download a PDF version of the full e-magazine.


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