Money Management

Wise Shopping During Christmas Time

November 13, 2014 By Sherry Tingley

Get Ready! Get Set! Get Shopping!

Get Christmas shopping done ahead of time.

Anyone who is paying attention knows that holiday shopping begins earlier every year and this year October had hardly dropped off the calendar before the Black Friday/Cyber Monday deals were being ballyhooed.

And you don’t have to wait for the turkey to become skin and bones to get in on the bargains, according to the shopping experts. But the wisest shoppers will go into the season with a strategy and a budget, those same experts say.

Here’s how:

Set A Goal

Be a “mission” shopper. Have the list before you shop and know how much you can afford to spend without fracturing your budget. If you wander around with no clue, looking for the perfect gift, you’re likely to fall victim to impulse buying. And once that starts, it’s hard to draw the line. To help stay on task, plan your holiday shopping as part of a list of things to be done – for instance, picking up the kids from school. That creates a deadline that won’t allow you too much time to be tempted. Or shop with someone whom you know to be impatient and who will hurry you through the process.

Price Match

Avoiding impulse buying can help with saving money.

Price match at the many stores that say they will meet their competitors’ prices. When stores began to lose customers to online shopping, they backed away from non-matching policies. Such tactics have become part of the Black Friday experience. If you find an item you want, use your smartphone to check the prices at other stores. If you can point out a lower price to a cashier or manager, most will meet the competition. It’s worth a try.

Email Newsletters

Keep a separate email address for store mailing lists, subscriptions to daily deal lists and related shopping aids. That helps prevent clogging of your main inbox and streamlines your online browsing for the best deals. Sign up for deal alerts on retailer websites so you can do your shopping at home before facing the crowded stores.

Free Shipping

Be aware of shipping policies before you make your online purchases. Delays with UPS and FedEx left a lot of people giftless on THE day last year. Read dealer shipping information thoroughly, especially if you’re crowding the deadline. If the fine print says the goods will be shipped in a certain number of business days, remember that Saturday and Sunday won’t count. Avoid paying extra bucks for overnight or one-day shipping by allowing plenty of time.

Letting The Present Rob The Future

November 6, 2014 By Twila Van Leer

Proper planning for retirement really helps alleviate stress.

The comparative wealth of Americans born into the post-World War II economy is taking a toll on retirement expectations. With the greatest economy known to history, Americans have tended to become a “gimme more” population, a condition that is reflected in soaring national debt and near-depletion of some natural resources.

The national stress is often mirrored in personal finances. Too many Americans are approaching retirement only to find they don’t have the resources to match their expectations for the “golden years.” Now it’s too late to cut expenditures and put more into savings. The alternative is to lower expectations and live more frugally than they had planned.

For those who still can affect the future, there are some common-sense steps that will ease the challenge when retirement arrives:

Savings: Put a percentage of your income into savings and investments to build a cache for the future. The more generous you are to yourself, the greater the expectation you can have of being able to control your life as you age. Recognize the difference between needs and wants and act accordingly.

Housing: In that spirit, consider housing. You may want a mansion, but you need secure shelter for your family. Opting for a smaller home that does not consume a large percentage of your resources will give you more leeway in the future. Consider all the factors, including down payment, interest, mortgage payments and upkeep over the time you expect to live in the home, then decide if luxury now will offset a skimpy retirement fund.

Possessions: Consider the mental costs of owning many “things.” The care and keeping of many possessions can cause considerable stress, which can in turn manifest itself in physical ailments, psychiatrists say. Count the cost of the time you may spend looking after, protecting and replacing excess possessions. An “attitude of gratitude” rather than obsessive collecting will help you toward a balanced life.

Health: Look after your physical health as a foundation for your retirement. Living long but not well is not a good option. Two in three Americans are overweight or even obese. This contributes to increases in such complaints as diabetes, heart disease and some cancers. Surgical remedies for obesity have surged from 13,386 operations in 1998 to 220,000 in 2009.

Overeating is the simple underlying factor in overweight, compounded by lack of exercise. A huge increase in the number of high-calorie foods and drinks consumed by Americans is part of the problem, abetted by too-large servings, according to health experts. They advise eating about half what a restaurant serves. Reduced trips to eateries and an increase in home-cooked meals will be easier both on the budget and on the calorie intake.

In summary, living lean involves having money in reserve, providing for a reasonable retirement and putting needs before wants. It’s an approach to living that can result in a less stressful, more satisfying present and the prospects of a better future.

Will You Work Past Retirement?

October 27, 2014 By Twila Van Leer

There’s a new term going around among economy experts. “Unretirement.” It has to do with Americans who have reached ordinary retirement age, but haven’t retired.

Chris Farrell of MarketPlace thinks it’s a good thing that will help in the country’s recovery from the recession that began in 2008. Not only does prolonged working benefit the “unretiree” but it is a boon to younger workers, he argues. Farrell even wrote a book about the phenomenon, titled “Unretirement.”

Geoffrey Norman of the Wall Street Journal is another who thinks working longer can have significant benefits. Too often, fresh retirees find there is too much time, too little money to support the retirement dream, he said.

One benefit of working past normal retirement is that Social Security pays more. The annual benefit increases by 8 percent for each year beyond age 65 until the beneficiary reaches 70.

Advocates of the longer work period also argue that there are health benefits, both physical and mental, for the “unretirees.” The majority (62 percent) of those who follow that path say they are motivated by a desire to stay mentally engaged, according to the research group Merrill Lynch and Age Wave, as reported in the Washington Post.

There is criticism from some younger workers who say the unemployment rate is affected when older folks don’t retire. But Farrell says that when older people are getting jobs, it stands to reason that younger people are too. “We’re all in it together. The pie will continue to grow.”

People who continue to work beyond normal retirement keep contributing to the FICA pool that supports Social Security and help keep the system running, he noted.

The Baby Boom phenomenon will have run its course by 2030, when all the Boomers will have reached 65. The huge bulge of retirees will taper off and a more gradual retirement wave be achieved, Farrell believes.

Not everyone agrees. A writer for the Financial Advisor says that “the retirement of massive numbers of Baby Boomers over the next decade or so will put a drag on the U.S. economy. The number of young people coming into the work place is going down at the same time, which will add to the effect.

Farrell remains optimistic. “We are on the verge of a broad, positive transformation of our economy and society,” he proclaims, partly due to the fact that many Americans are working longer.

Here’s How The Money Goes!

October 20, 2014 By Sherry Tingley

Many people don't stick to a budget — About 61% of Americans do not budget or keep close tabs on their money.

How Americans get, spend and save (or don’t save) money was the topic of a 2014 Consumer Financial Literacy Survey conducted by Harris Polling. In the March survey, 2,016 adults were questioned about how they handled money.

Budgeting, at the top of the list, seems to be a problem for the majority (61 percent) of Americans. Only 39 percent of those polled say they have a budget and keep close tabs on what they spend. Experts in personal finance consistently argue that the first step toward controlling money is to have and stick to a budget.

The figures relative to saving for retirement also show a lack of planning for the future. One in three Americans are making no provision for post-working years. In fact, when listing their concerns about their financial well being, the lack of “rainy day” cushioning and retirement money topped the list.

The survey asked if the respondents were spending less than they had the previous year. Twenty-nine percent in the 2014 sample said they were, in fact, spending less, but the percentages have been in a steady decline since that question was added to the annual survey in 2009. More than two-thirds of the respondents said they are spending the same or more.

One in three of those polled said they carry credit card debt from month to month. That proportion has been steadily falling since 2009, from 44 percent that year to 34 percent this year. The recent recession likely has made many credit card holders more cautious. Fifteen percent of adults – more than 35 million people – roll over $2,500 or more in credit card transactions each month.

The majority of those surveyed – 59 percent- said they would grade their knowledge of personal finance at an A or B, but an even higher percent (73) admit they could benefit from expert advice.

Ironically, only about one-fourth (27 percent, which would equate to 63 million Americans) said they would seek outside help with financial problems by counseling with a professional non-profit agency. Seventy-three percent said they would rely on themselves to resolve financial difficulties or turn first to friends or family for financial advice.

Be Prepared for 2015 Tax Time

October 19, 2014 By Twila Van Leer

Start organizing your finances now for tax season.

The annual tax frenzy is months away, but there are things you can do in the interim to prepare for tax season, including possible ways to cut your bill.

The obvious place to begin is with a recap of last year’s return. After analyzing the figures, begin to determine where you might make changes for next year. If you expect to make more money this year, for instance, start now to put more into a 401(k) account, contribute to a charity to increase your deduction, or buy tax-deductible items, such as business equipment, before the end of December.

Look back on recent events. If you had a major life change, it is likely to alter your tax status (think marriage or the acquisition of a small business.) You may be wise to consider some professional advice before the deadline looms. Many CPAs find themselves with more time on their hands after the Oct. 15 deadline for this year’s quarterly tax business. Seek help in analyzing your situation.

Experts say too many small business owners wait too long to get advice. Don’t try to find a professional tax advisor after the first of the year. They advise that when your income tops $75,000 annually, you’re ready for a tax expert in your particular field.

In an article by Teresa Mears, the following steps are suggested:

If you pay estimated quarterly tax, be sure you are current with payments to avoid possible penalties if your estimates are short. The sooner you send the money, the smaller the penalty will be.

Decide before the fact who is going to claim children as deductions if you and an ex-spouse have shared custody. Or if you share responsibility for the support of another relative, decide in advance who can claim the benefit. Consider the Earned Income Credit to determine what makes the best sense for your situation.

If you did not purchase health insurance this year, as required, you could face a penalty. See if you meet the criteria for any of several tax exemptions and file for a number, which you can obtain from the Health Insurance Marketplace.

At the same time, check the Affordable Care Act to see if you are eligible for a subsidy. If you received too much subsidy this year, you may have to pay it back. On the other hand, if your income did not reach expectations, you may receive a subsidy through your tax return. But the time to make changes with the Health Insurance Marketplace is now.

Spend the extra money in your flexible spending account if it exceeds $500. You can carry that amount into 2015, but you should not leave an excess in your account. Re-examine your company’s plan. Evaluate this year’s expenses and compare with what you expect in the coming year and consider adjusting your withholding if necessary.

Some taxpayers may choose to accelerate or reduce income to create the best tax stance. Prepaying mortgage and real estate taxes and undertaking optional business expenses before this year is out rather than waiting for next year may make sense for you.

If you sold stocks at a profit, you can offset the tax expense by selling other stocks at a loss.

Increasing contributions to your 401(k) or IRA if you haven’t reach the maximum will improve your tax picture. Donating cash or goods to charitable causes is a nice way to raise your deductions. You need to provide a written proof of donations worth more than $250 and an appraisal for anything over $5,000.

When you are thinking taxes, don’t forget to consider state and local tax levies. States sometimes change their tax formulas and you don’t want to be caught unawares.

Don’t be lax with your business. Treat it as such and don’t ignore quarterly tax payments. If you have been accustomed to doing your own taxes via a software application, it may be time to consult with an accountant to avoid surprises.