Personal Finance Blog

Tips And Stories To Help You With Managing Money

Finding Good Travel Deals

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With a little bit of research you can find good travel deals.
With a little research you can find good travel deals.

Summer travel time is blossoming and smart air travelers are looking for deals.

And the factors that enter into travel decisions are becoming more convoluted and confusing. That means you need to take care that your search for a cheap flight really ends up that way.

Things such as whether or not an airline charges a baggage fee, options for extra leg room, etc., make it important to look ahead and study all the possible configurations you might choose.

Airline travel is changing in ways that mean some of the old strategies for saving money don’t apply any more. For instance, it used to be that choosing to travel on a Tuesday or Wednesday would save some bucks but that is not necessarily true anymore. More airlines that offer loyalty benefits are looking at how much you spend, not how many miles you travel. That makes it harder for leisure travelers to rack up enough points to make a significant difference.

Travel experts offer these tips to help you make choices:

Discover Restrictions

Read the fine print on the airline website so you are certain what comes with your seat. A less expensive ticket that doesn’t include checked luggage may not be the best deal. Some airlines, including Delta, have a lower basic economy fare, but it places a bunch of restrictions on the package. It’s impossible to change the terms and you don’t get a seat assignment in advance. Do the homework.

Travel Dates

Be flexible regarding travel dates and destinations. Traveling at the end of the season (September, for instance) is cheaper than traveling at the height of the summer. That doesn’t work well for families that have children in school, but it’s worth considering.

Budget Airlines

The budget airlines sometimes have very attractive fares. Iceland’s WOW air and Norwegian Air Shuttle, for example, have added routes across the Atlantic this year and their prices may offer a savings. You may sacrifice a little in comfort and convenience, but the bottom line will look better. If you prefer all the niceties, stick with the familiar airlines.

Seat Assignments

Families should begin right away to confirm free seat assignments. The discount airlines don’t allow you to pick a seat without paying extra and that can quickly add to costs for family travel. The fees for having guaranteed seats range from $2 up to $100 for a round-tripper on Spirit. Frontier charges from $12 up on Frontier. If you have to reschedule due to unforeseen changes in your travel plans, a nonrefundable U.S. ticket on American, Delta or United may cost $200. Southwest doesn’t charge a fee. If you use an airline’s branded credit card, some will waive fees, but not all do. You need to know in advance.

Currently, the federal Transportation Department is considering imposing rules that would require airlines to provide information about fees to third parties, such as online travel agencies. That would greatly simplify making comparisons. But until that happens – not until later this year or beyond – your best bet is to take the time to shop carefully.

Giving Money to Relatives Or Friends Common

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Many households give or lend money to help others out.
Many people give or lend money to help family and friends out.
Opening one’s wallet to help a family member or friend is “a hidden dimension of the financial system,” according to a study from the Pew Charitable Trust. “Transfers of money across household lines are really important for keeping families afloat.”

25% Of Households Lent to Friends Or Family.

About 25 percent of American households gave or lent a median of $1,000 to friends or family in the past year, the study showed. More than 7,800 households were included in the survey. Black households are most likely to give or receive such help, but the practice is spread among all demographics.

Burden Created.

It isn’t always easy. One in five of the respondents said the “gift money” creates a burden on the giver. Not unexpectedly, the households with the least income saw their donations as a difficulty. But even those making $85,500 per year reported that their generosity was a burden.

Single Mothers Receive And Give The Most.

Single mothers are among the most common recipients, but they also are more likely to give when necessary. Half of all the single-mother households either received or gave help, compared with 30 percent of two-parent households. Some 75 percent of the single parents said it was hard to give, but they also are the group that recognizes it may need a boost at some time. They are, in essence, investing against future need, creating a safety net that they can use to tide them over emergencies.

More Common For Parents To Help Adult Children.

The study showed that adult children in the period from 2005 to 2013 were more likely to draw on cash from their wealthy parents than was common in the 1980s. About 10 percent of those in the more recent group received help with a home purchase, Pew found. Slightly more than 30 percent were given money to help with education costs, enhancing their ability to become more wealthy in the future.

The bottom line of the Pew Study: Poor people tend to help each other out so they can get through tough times. Wealthy families benefit financially when they donate to kin.

Make The Tax Return Count: Save It

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A higher percentage of people are choosing to put their refund into savings.
A higher percentage of people are choosing to put their refund into savings.
For a short time each spring, millions of Americans have a fleeting sensation of being rich. They have their tax return in hand and must decide how best to use it. More than ever, according to Prosper Insights, they are opting to put it in the bank.

Refunds Used To Improve Financial Health

“Americans this year see refund season as a time to improve their financial health. Money saved is spending potential down the road,” said Matthew Shay, president of the National Retail Federation, which sponsors the survey.

Plans For Return

The NRF’s annual Tax Returns Survey indicated that 65.5 percent of those contacted expected a return and some 49.2 percent of those had plans to tuck the return into their savings as a means to improve their overall financial health. That is the highest percentage who are of that mindset since the NRF began conducting the survey. Other options include paying down debt or making large necessary purchases. Some 22.4 percent said they would use the return for everyday expenses and 8.3 percent looked forward to an annual splurge that they have had to bypass for the major part of the year.

Young Adults More Likely To Save

In the 18-24-year age group, the percentage of those wanting to save the return is even higher at 57.3 percent. The percentage dips to 52.3 percent in the 25-34-year age group, but that’s still more than half. These younger workers apparently see the tax windfall as a chance to build savings without diminishing their usual income.

Plans For Filing

With the mid-April deadline fast approaching, it is evident that the majority of Americans, 66.9 percent, are filing online. Almost 40 percent are preparing their own with the help of computer software. Only 14.2 percent said they have filed manually or plan to do so. Only 21.4 percent have hired or will hire a professional to get the job done, while 16.1 percent have called on a friend or relative to help with the job.

Two Steps Toward Freedom From Credit Card Debt

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Balance transfers help you get out of credit card debt.
Balance transfers help you get out of credit card debt.
There are perfectly legitimate ways to reduce the interest and ultimately pay off credit card debt. Personal finance experts suggest you use them.

First Step

Find a card that offers a 0 percent introductory balance transfer promotion and transfer your balance to it. These cards often offer new customers as much as 18 months during which no interest is charged on the transferred balances. The experts consistently track all the cards to find that ones offering these terms and there are reviews that are available to the public. Check bankrate.com.

It pays. Think of it: on a $10,000 balance, $100 to $200 of your monthly payment is sucked up by interest, leaving only about $50 to be applied to the principle.

Second Step

After you have found a card that will charge no interest for a certain period of time, use that time to break free of the debt. Continue to make the payments you would have done previously. Add a little if possible. You will see the overall debt dip very quickly.

After having been swimming upstream trying to make headway against your credit card debt, you’ll see immediate improvement. There simply is no way to make inroads until the high interest can be eliminated as a factor. Use this formula and then repeat the process with additional credit cards to see real progress.

Paid Parental Leave Largely Ignored

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Fear of job loss factor in ignoring parental leave.
Fear of loosing a job a factor in people not choosing to use parental leave.
More states are joining the effort to require employers to provide paid maternity leave, but the programs seem to be vastly underused, according to Business Insider. A growing number of employers are opting to provide the service even if their states do not require it. But surveys show that the programs are not being used to their potential. For instance, in California, where parental leave will be paid for six weeks at 55 percent salary, only 25-40 percent of eligible mothers use the leave.

The benefits of being paid at least a percentage of income for several weeks to welcome a new family member should be encouraging. Studies show that there are increases in employee morale, healthier babies, better bonding and fewer problems down the road that require state assistance.

So why are employees not taking full advantage of the option? Studies have consistently shown the following as reasons:

People Fear They Will Lose Their Jobs

In some cases, discrepancies between state and federal laws mean that the employee may have to choose between the paid leave and job loss. Gaps between the federal Family Medical Leave Act, which has guaranteed job protection for some, leaves other employees vulnerable. The act ensures job security up to 12 weeks of unpaid leave, but only for those who work at least 1,250 hours per year at businesses with at least 50 employees. Statistics show that more than half of all American workers are employed by small businesses that don’t meet the requirement.

The Possibility Of Negative Career Outcomes Deters Many

Even if they have FMLA assurance that their job will be protected, there is subtle evidence that employers may discriminate against workers who accept the leave. The New York Times reported survey results that showed women, after passage of FMLA, were 5 percent more likely to keep their jobs, but 8 percent less likely to get promotions. Men who take advantage of the leave may get negative performance reviews and there is a perception that workers of either gender are less committed to their jobs if they stay home for awhile after the birth of a child.

Many Workers Are Not Aware That They Are Entitled To Paid Parental Leave

In California, 12 years after the state initiated its paid leave provisions, only 36 percent of workers were aware of the program, according to paidfamilyleave.org. The organization’s survey also showed that those in the age group 18-29, Latinos, less educated workers and those in lower income brackets – those most likely to benefit from the program – were not aware.

The question of paid maternity leave is gaining momentum, but these obvious flaws must be addressed before it will be a viable option for the many Americans who work during the childbearing years.