Tag Archives: Personal Finance for WAHM

04/23/12

Group Benefits

It’s open enrollment time for us, and I love this time of year! (DORK!) Getting to organize the upcoming benefit year for our family brings me peace of mind and security. 

 

I recently did our family’s open enrollment online, choosing health care and dental options, long-term disability and life insurance, and for the first time for us—both a Flexible Spending Account for Medical and Flexible Spending Account for Dependent Care (ie, Max’s preschool).  All of this will help reduce our monthly after-tax pay, which means less money each year to old Uncle Sam.  That makes me happy :)

 

Here is some information I wrote recently for my Money Matters column in Kentucky Living magazine.  Hope it helps others going through open enrollment.  Can you feel the excitement in the air!?

 

Group Benefits

As an incentive to employees, most employers offer group benefits to eligible employees.  Commonplace are benefits such as health, dental and vision, life, disability, and long term care insurance, retirement plans, stock options, health savings accounts, and flexible spending accounts.  Here are some things to consider regarding your groups’ benefits:

 

Do your own research:

These decisions will have a great impact on your family’s everyday life (such as health insurance) and your family’s future (such as retirement).  Therefore, it’s prudent to devote time, effort, and research before you enroll in any benefit.  Ask your employer questions.   Read over the pamphlets, discuss with your financial or tax advisor, and do some research online.  Consider attending open enrollement info sessions if offered by the provider, free of charge.  Visit the provider’s website for details of benefits, financial calculators, FAQs, and other tools to navigate the process.

 

Review other options:

Many times, purchasing  insurance through a group policy can be cost effective and especially helpful to those with pre-existing conditions.  However, don’t just assume this to be the case.  Compare what is offered with your group to individual life, disability, or long term care insurance you could obtain outside the company.  Even if it’s not cheaper, it may provide more flexibility, options, and continuity than your group benefits.

 

Follow up:

Be your own advocate. Monitor your benefits throughout the year, rather than only during open enrollment.  Major life changes such as a birth of a child, divorce, or marriage, usually mean the employee may make changes to benefits mid-year.  Write down notes during the current benefit year of changes you’d like to make come next open enrollment.

02/14/12

College Fund for 1st Birthday Party

For Max’s first birthday party, we asked our guests for no gifts!  After all, he’s only one year old, and is fortunate to have plenty of toys, clothes, books, and gadgets that any kid can hope for.

Instead, we told friends and family that if they wanted to do something, they could bring lose change or dollar bills to contribute to his college fund.  (With all of daddy’s student loans, we better get started early!!)

 

I wrote this poem and included it as an insert in the guests’ invitations.  I also printed it on a photo and placed it near a bucket for the change at his party.  Some friends brought change and others gave money.  He also got a few checks (our friends and family were tooooo generous!!)

 

I plan to do this for future parties as well.  It’s a great way to teach our children about money—-that they don’t always need more “stuff” and that things like college and saving for your future are so important and necessary.


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12/28/11

Checking your Credit Score

You’ve seen the commercials, urging you to “Get your free credit report today!”

 

Though advertised campaigns and not public service announcements, I encourage readers to indeed, review your credit report for free online.

 

Recently, I checked mine out, assuming to find nothing but on time payments and business as usual. However, I was devastated to discover a charge from a credit agency of $70. It was tearing my credit score apart. I did not recognize the company, the charge, nor had I received any types of notices or information from them about this alleged outstanding balance.

 

I followed the dispute process to have it removed, as I encourage readers to do if they feel there is unfair information on your report.

 

You can check out your credit online at http://www.annualcreditreport.com. The law provides one free credit report annually. However, this is for each of the three major credit agencies. Since they are usually very similar, consider checking your report quarterly, each time from a different agency.

 

Be cautious however, of sites that want you to purchase your credit score. More importantly, is reviewing the information on your report to find any errors or ommissions (as I did) that affect your golden score.

 

Read more about:  Retirement & Getting out of Debt

10/18/11

Basics on Long-Term Care Insurance

Your basic questions about Long Term Care Insurance answered.

 

What is long-term care insurance?


Though a somewhat new concept, long-term care insurance is just like any other insurance policy. The insured makes premium payments to an insurance company in return for the company’s promise to pay for specific coverage—in this case, nursing home costs.

 

Who needs it?


According to Dan Sheets, owner of Kentucky Insurance World, the person who needs LTC insurance is “the individual who wishes to preserve whatever savings they have accumulated for retirement.” With nursing home costs skyrocketing, the danger is that baby boomers will have to exhaust their savings to pay for health care costs. “There is no magic dollar amount of how much you need,” Sheets says, “but a policy that protects and pays for at least two to three years should be minimum.”

 

What should I look for in a policy?
There is more to look for in a policy than just the cost of premiums. “The two most important things to look for are the commitment the company has in the long-term care industry, and the purchasing of an inflation rider,” Sheets says. The inflation rider allows the policy benefits to grow and keep pace with rising health care costs.

 

10/18/11

Online Budgeting Tools

Here are some great online budgeting tools to help you get started on budgeting:

 

Microsoft Office offers custom budget templates: http://office.microsoft.com/en-us/templates

 

A great budgeting tool I use and love is Mint.  It sends alerts based on personal information and settings.  Great Mobile App as well:

www.mint.com

 

For a small business, I highly recommend the use of QuickBooks.  This is what I use for my small business to keep track and send out invoices.

 

http://quickbooks.intuit.com/

 

You might also find that a simple Excel spreadsheet, Word document, or old fashion pen and paper works for you.  Whatever format you choose is less important than making sure you consistently update, review, and follow your family or business budget.

 

 

10/18/11

How to Budget

 A lot of people ask me how they can get started reaching their financial goals. And my answer always starts with the “B” word:  Budget.

Having a budget means you understand where your money is coming from and where your money is going. And once you understand where it’s going, you then have a basis for future financial decisions. In this sense, a budget is the foundation to any financial plan.

 

Do the Math:

Start by listing the basic bills you pay each month such as rent/mortgage, utilities, car, student loan and credit card payments, gasoline, insurance, cable, phone and Internet.  Don’t forget to include money donated to charity, food, clothing, savings, travel expenses, entertainment and miscellaneous expenses.

A great budgeting tool to use is your on line bank or credit card statements. Often these will offer an itemized list of your monthly expenses.

 

I have a budget… Now What?

Making a budget is easy. The hard part is implementing action steps in result of your budget.  If you’re not willing to execute needed changes in result of preparing a budget, then it’s not worth any more than the paper you printed it on.

Subtract your monthly income by your monthly expenses to see what is left over.  This “leftover” money can serve as a piggy bank for your dreams.

Dedicate your piggy bank money to your goals, whatever they might be: paying down debt, saving for retirement, buying a home or vacation home, or taking a family trip. Continue to find ways to make your budget work for you…not the other way around.

Through budgeting, you may discover that you need to increase income–not just decrease expenses.  Consider a part-time job, over time work, or refinancing your house.  Do not consider borrowing from your 401(k), taking on additional debt, or ignoring your cash flow issue.

As with anything in life, perfecting your budget will take practice.  But there is no better starting point to financial success than a sound and basic budget. 

Check out these online budgeting tools to help you get started.
 

 

10/18/11

How to Save Money on Gasoline

With oil prices high, consumers are feeling the impact rising gas prices have on their wallets.  Since drastic changes such as buying a more fuel efficient car, driving less often, or carpooling aren’t realistic options for many, here are four easy gas saving tips for all drivers–regardless of the vehicle.

 

1.  Drive like you’d want your teenage daughter to drive.

Or better yet, how you’d want her sixteen year old boyfriend to drive with her in the car.  That means driving the speed limit and anticipating traffic patterns to avoid sudden stops and aggressive take offs.  According to the Federal Trade Commission, safe driving can improve gas mileage by nearly 5%.   The FTC reports on their website that “gas mileage decreases rapidly at speeds above 60 mph.” It pays to take your time.

 

2.  Plan Ahead:

Planning ahead can save time and money.  Cars are most fuel efficient when the engine is warm, so combine multiple trips into one afternoon and try to avoid rush hour traffic.  When possible, find “one stop shops” rather than driving to multiple venues.  Unpack any unnecessary items in the trunk which might add more weight to the car.  Before leaving home, look on line for the best prices on gas and plan your route accordingly.

 

3.  Maintenance:

According to AAA, ongoing maintenance of your vehicle can equate to more fuel efficient driving.  Important up keep includes making sure your spark plugs are in good condition, checking the air filters twice a year, and inflating tires to the appropriate level specified in your owner’s manual.

 

4.  At the pump:

“When possible, try to buy gas during the coolest part of the day,” suggests Dr. Ron Weiers, author of 365 Ways to Save Gas, “The pumps deliver and charge you according to volume, and gas expands when the ambient temperature is higher,” Weirs explains.  “If you really want to be picky, and you’re forced to buy gas during a warm time of the day, try to favor the pump that’s been in the shade the longest.”

 

10/18/11

Teaching Kids about Money

Most parents think the “birds and the bees” talk will be the hardest conversations with their children. But equally as difficult as well as complex is the discussion about the value of money.

 

According to Certified Financial Planner Tracy Redmon of Ameriprise Financial, it’s never too early to start “incorporating your values about money” to your children.

 

“The first best place to learn about money is at home,” says Redmon. “Involve your children early…it will help them for the rest of their lives.”

 

How do you get them involved? Here is what you should be discussing with your kids at different stages in their life:

 

Age 5-8: Even at age five you can begin to explain the concept of money.  Once children can count, it becomes easy to relate that skill to money management.  When out shopping, let your child count the money and hand it to the cashier.  Ask your child questions at the grocery such as, “Which one of these is cheaper? What can we buy with $5?”  Encourage them to start saving coins in a piggy bank and to count their savings. 

 

Ages 9-13: Now it’s time to help them understand where money comes from.  Explain how you make money and what you do with the money you make.  Let them go through the process—at the bank, let them deposit a check or let them help pay the water and electricity bills online.  Explain how it’s important to share money with those less fortunate and include them in this process. It’s also a great time to have your child start his or her own savings account. Most banks and credit unions offer this with no fees and no minimum deposit.

 

Ages 14-18: It’s now time they work for it.  They understand Mom and Dad work for money, but do they understand how hard it is?  Help them find a part-time job doing something they enjoy.  Instead of giving them an allowance, tie the allowance to the completion of certain jobs around the house.  Give bonuses for good grades or good behavior.  Offer to match their savings (the idea is to provide an incentive just as an employer might do in the future). Use real money, even if it’s a small amount, and teach them how to invest it and the power of compound interest.

 

18 and Beyond: Although they are no longer children, they still look to you as a role model, especially in money matters, says Suze Orman, financial expert and author of The Road to Wealth. “Parents, I know you want the best for your children,” she says. “So you should realize how much that means making sure you’ve got your own financial act together. Children who watch parents do stuff like ring up huge credit card bills buying goodies and vacations they can’t afford tend to dig the same financial holes themselves as adults.”

 

How do you teach your kids about money?  Share with us under Comments…