Twila Van Leer

Learn Good Money Habits Early

September 8, 2015 By Twila Van Leer

Parents teach their children all kinds of things that are useful as the kids take off on their own. But too many parents don’t make personal finances part of their family education.

A survey by Bank of America and USA Today indicated that one in three millennials didn’t learn how to manage their money before leaving home. Schools also failed, by and large, to pick up where the parents failed. Only 19 states require finance education as a condition for graduation. All this in the face of certain understanding that a knowledge of basic finances is key to successful adult living.

Financial experts suggest that at least five of those basics, to be mastered before an individual reaches age 30, would include:

Learn to create and then stick to a budget. That is your concrete picture of where your money comes from and where it goes so you face no surprises. Saves you coming to grips with the reality after the money is gone. Rather than just a simple income and outgo device, let it guide you in determining your mandatory expenses and what to do with what is left, ideally including some savings. Make use of some of the free mobile apps such as Mint and Mvelopes to track income and expenses. Faithfully keep tabs and make adjustments as necessary. There’s no such thing as a successful “set it and forget it” budget.

Live not within but below your means. Studies show that more than 20 percent of millennials spend more than they earn. That’s asking for financial disaster.

Not only are they going behind month to month, scraping to rob Peter to pay Paul, but they are ignoring the future, with no preparations for retirement. You can only build wealth by living below your income and investing a portion. It may call for some sacrifices. Look at your habits and see if you can save on eating out and bypassing some of the “impulse buying” that keeps you broke. Such a simple tactic as cutting out a $7 lunch could save you $1,680 in a year. Save the eating out for special occasions, not routine practice. Set up a small but automatic deposit to a savings account. Even a $25 infusion every two weeks can build up to $6.50 in a year.

Manage credit. Credit cards are costly. Today’s young workers tend to overuse them and other credit matters. Try to avoid a balance than goes on month to month, draining off interest. Make more than minimum payments every chance you get and avoid late fees at all costs, because they cost. Your credit score will thank you. It hurts when you max out your cards and pay late. A bad score, in turn, will be a serious factor when you consider major purchases such as a home or car. If you are depending on a credit card for large purchases, chances are you should reconsider the purchases.

Build an emergency fund. Millennials tend to ignore such advice. Only 33 percent have a fallback plan for emergencies. When you are just starting out in a career and facing the expenses of adulthood, it might seem impossible. But you should think of an emergency fund as an essential, not a luxury. If you suddenly face a medical emergency, major car or appliance repair or other unexpected expense, you’ll figure out the difference very quickly. The answer to such an emergency too often is to call on the credit card, and that just exacerbates the financial impact.

Again, the automatic savings deposit in the amount you can reasonably afford, is the answer. Any windfall, no matter how small, should go into the fund. Couldn’t make it to that brunch you had planned? Into the emergency fund the savings goes. And so forth.

Save for retirement. It seems a long way into the future, but it has a way of sneaking up on you. Only 29 percent of the millennials in the survey said they have started a retirement cushion. At their stage in life, concerns about retirement are competing with student loans that seem never to end. But starting early on retirement savings gives you the advantage of compound interest. That can mean a much cushier cushion when retirement arrives. The numbers show it. If you save $100 per month in a retirement account that earns 8 percent interest, it will mount up to $135,000 over 30 years. Delay the start of a retirement account by 10 years and you’ll have just over $55,000 – the difference between a comfortable retirement and a whole lot of penny-pinching.

Highly Recommended

Free Financial Education Course: You’ll find a 36 module curriculum to enhance your financial education. The site is free and can be used by parents, teachers or anyone interested in personal finance education.
AFSA Education Foundation: Offers numerous free downloads containing all types of personal finance education. Courses are free and cover all aspects of money management.
Dan Kadlec: Dan Kadlec writes articles about personal finance, the economy and financial education for TIME, Money, CBS and USA Today among others. Articles focus on a range of interesting topics everyone can benefit from.
The Council for Economic Education (CEE): This organization is a leader in financial education for grades K-12 and have been in existence for over 65 years. They train over 55,000 teachers a year and their teaching influences 5 million students throughout the United States.
Economic and Personal Finance Resources For K-12: Teachers will find over 435 financial literacy lessons to choose from.
Financial Fitness: You’ll find a 108 page document helping parents teach their children about financial literacy. Sections include learning about checking accounts, debit cards, credit cards and setting a budget.

Being A Good Employee

September 7, 2015 By Twila Van Leer

Getting a job is only half the equation. Building a good working relationship with fellow employees and making an impression that will lead to better things in the future is critical.

Start with a positive attitude. That makes it easier for you and is likely to help you build good relationships with others. Try to look on the bright side, keep complaints to a minimum and stay motivated. Look for new learning opportunities and see them as improvement opportunities. Don’t take baggage from previous jobs to the new work site.

Be flexible. Companies change and you need to be willing to change along with the one that hires you. Embrace change and look for positives in changes. Adaptability is a significant plus in today’s job market.

Be a team player by understanding how your particular job fits into the overall organization. A know-it-all attitude can sink you fast. A sense of humor helps, as does building relationships with fellow-workers. Look for the upbeat and positive people in your immediate work area and don’t become known for negativity, gossip and back-biting.

Build a reputation for positive feedback. Please and thank you are still fundamental courtesies. Don’t fail to compliment a co-worker or recognize a nice bit of work, and especially keep a thank-you handy for anyone who contributes to your training and/or understanding of your job. Negotiation and collaboration are useful tactics that oil healthy working relationships.

Be professional. Being on time to the workplace lets the employer know you are serious about your job. Allow time for traffic, if that is a problem in your commute. If you are ill or otherwise unavoidably unable to get be at the workplace on time, let your boss know as far in advance of your work shift as possible.

At the outset, learn all the office rules and then obey them. Go through the employee manual. Be open to opportunities to learn new things. If you make a mistake, acknowledge it promptly and, if possible, volunteer to fix the problem. It may become a valuable learning experience.

Make yourself an accomplishment sheet and track your achievements, responsibilities and outcomes. Keep a record you can share in your next performance review. Make your bosses aware of any recognition you receive, including positive feedback from clients and/or customers.

Child care issues often get in the way of positive workplace habits. Make every effort to have good, reliable child care provisions so you don’t find yourself stumbling around just before a work shift trying to find a baby sitter.

Building a reputation for good workplace habits will go farther toward keeping you employed in a volatile job market than anything else you can do.

Zero Percent Interest Rates On Car Loans

August 31, 2015 By Twila Van Leer

What could be better? Your new car and no interest to pay for 72 months. But be sure you understand the implications.

A recent J.D. Power Dealer Finance Study said that offering zero percent interest is considered to be one of the most successful motivators to get car buyers into dealerships. The catch is that to qualify for it, the buyer must have an excellent credit rating. Many people don’t qualify for the zero percent interest rate.

For those with less than stellar credit, dealerships arrange financing for your car they often add on 1-2% interest that goes directly into their profits. Although these numbers may seem small, they often add thousands of dollars to the price of your loan.

Before latching onto the no-interest deal, look around. Many car dealers are currently offering cash-back offers that could be the more financially advantageous than the interest-free option. Some car sellers actually offer a choice between a no-interest and cash-back deal. Fiat Chrysler, for instance, will sell you its 2015 Jeep Cherokee SUV for no interest or a $2,000 cash rebate. Experts say the rebate is the better bargain, reducing the loan amount from $27,213 to $25,213. At 2 percent interest, that makes the monthly payment just $440, compared with $452 per month under the zero interest terms.

Car buying is best in the late summer and early fall, when dealers try to clear their lots of the current year’s leftovers. The zero-interest offers are escalating, with many of the producers hoping to snag buyers to help in that process.

The secret to getting in on the best bargains is to nurture your credit rating. A credit score of 754 can probably earn you a 1 percent interest rate. The rates go up as the scores go down. Getting preapproved for a car loan through a bank or credit union enhances your bargaining stance. The dealer is anxious to have you finance through him and may be willing to dicker on the interest issue.

The important thing is to do the math before facing the decision. Factor in your credit score with the understanding that the higher it is, the more likely you will be to get a lower interest rate. There will come a point in the math at which you will find that zero interest actually can lower your payments.

Regional incentive programs, down payments and trade-in values also will affect the bottom line. Remember, too, that zero interest deals usually apply only to certain cars on the lot. If you have something very specific in mind, it may not apply. Once you reach the point at which you qualify for zero interest, the dealer may lose his tendency to haggle. Just be sure before you sign that you have made the best deal possible.

How Secure Is Social Security?

August 13, 2015 By Twila Van Leer

Social Security is 80 years old and many Americans are fearful that the old age benefit might die of old age. Surveys show that fewer than half of Americans feel confident that the program will stay equal to or become better than it is today, according to the Employee Benefit Research Institute.

But the institute’s experts assure that SS will be around to remain the retirement mainstay of those now in the work force an their children and grandchildren. If nothing else, the great majority of those now serving in Congress see it as a necessary element of the country’s personal finances, and they’re the ones who control the purse strings. And they are aware of the very strong popular support for the program.

Over the eighty years Social Security has been in effect, it has become very embedded in the retirement plans of millions of Americans. Private sources of retirement income, such as work-related pensions, have been declining in recent years, making it even more important. From the mid-1980s to 2013, the number of pension plans dropped from more than 112,000 to about 23,000.

Retirement-related saving schemes, such as 401(k)s are helpful, but do not sufficiently offset the loss in pensions. Only about half the workforce has access to a 401(k) or other retirement savings plan through their employer. And few workers are able to save sufficient amounts to cushion their retirement years. One recent survey showed that four in 10 older workers had less than $25,000 in retirement savings.

Women have relied more heavily on Social Security. They usually have less income overall than their male counterparts and they live longer. They are more likely to be single and singles often have greater financial needs than do couples. One research effort found that unmarried boomers were five times more likely to be in “poor” categories than those who were married. The numbers of single adults is increasing with each succeeding “generation,” with more Millennials in the unmarried ranks than either the boomers or Gen Xers.

All of these social statistics point to a greater need for Social Security than ever.

Concerns that SS won’t be able to handle the load are based on the assumption that the financial challenges the programs faces, with fewer workers to support larger retirement numbers, can’t be resolved.

The 2014 trustees report showed a $2.8 trillion surplus that could pay projected benefits for another 18 years. Even if Congress did not take steps to shore up the account, the anticipated revenue from payroll taxes would enable the program to pay beneficiaries 77 percent of their promised benefits.

The experts are looking for ways to ensure that the federal program continues to be active well into the future. The remedies may require increased contributions or modified benefits or a combination of these approaches. One suggestion would raise the cap at which workers no longer pay payroll taxes from the current $118,500 to $255,000, which the number crunchers say would solve one-fourth of the problem without serious harm to most workers. Other options would trim benefits for the wealthy or raise the payroll tax by 1 percent per year over several years. Raising the retirement age is another debated option, but the experts advise caution, since the gains in life expectancy have mostly benefited the segment of the population that is educated and more affluent.

The 2016 elections almost certainly will include Social Security as one of the main points of debate, with both parties hoping to prove leadership on the issue. Tough questions and the potential for trade-offs is very predictable, but those who see SS as a mainstay of America’s retirement population, the advice is that the sooner actions are taken, the more moderate the changes are likely to be.

Chrysler Recalls 1.4M Vehicles After Hacking Incident

July 25, 2015 By Twila Van Leer

Car Checks — In a testing situation, a remote user disabled this vehicle’s brakes sending the car into a ditch.

Imagine yourself traveling down the freeway when a hacker suddenly takes control of your vehicle. It’s a scary thought. And some automotive experts recently proved that is could be done.

First Chrysler Automotive NV issued recalls for some 1.4 million cars and trucks equipped with radios that were shown to be conduits for hacking, based on the results of the experiment. It involved a group of software programmers who proved that a Jeep Cherokee being driven down a Missouri highway could be hacked. Fortunately, there have been no real-world examples of such activities. Fiat Chrysler stressed that the experiment was undertaken out of “an abundance of caution.”

The company acted very quickly to block unauthorized access to some of its vehicles systems by alerting owners through an aired update.

Wired Magazine reported on the simulated hacking in a recent issue. As reported by the employee who was assigned to drive the targeted vehicle, this is how it went:

First of all, the vents in the Cherokee began pouring cold air into the car, although he had not touched the dashboard controls. Then the radio began, on its own, to blast hip-hop music that the driver couldn’t turn off, even by punching the power button. The windshield wipers came on, blurring the glass with wiper fluid, again without the driver’s intervention.

The car’s digital display then coughed up a picture of the two “hackers” in their trademark track suits: a subtle nose-thumbing as they proved they could trump the driver’s control of the vehicle. To simulate a real “highjacking,” they did their work from the driver’s home, 10 miles from where he was tooling down the freeway.

This was all a planned test, so the driver wasn’t flummoxed by the car’s behavior, even though he didn’t know in advance exactly what the “hackers” planned to do. They had only assured him they wouldn’t do anything dangerous. He had come to St. Louis for the express purpose of testing out the car-hacking research the company was conducting. The test proved what they had concluded: that it was possible for a hacker to gain wireless control over the vehicle. Steering, brakes and transmission all were vulnerable, as well as the onboard entertainment system. In theory, a hacker with a laptop far removed from the vehicle could take over control of its functions.

The thought of losing control of your vehicle while in motion is not a happy one. Drivers may have cause to be grateful to manufacturers such as Fiat Chrysler Automobiles NV that are anticipating incipient problems and nipping them in the bud.

Included in the list of vehicles being recalled for preventative updates are the 2015 versions of Ram pickups, Jeep Cherokee and Grand Cherokee SUVs, Dodge Challenger sports coupes and Viper supercars.