Category Archives: Finances

Finances

7 Easy Ways To Get Comfortable With Money

The scariest thing many of us have in our minds at one time or another is not having enough money. It doesn’t matter what it’s for, whether it’s real or imagined. Unless we win the lottery (and how many of us have met someone who’s won the lottery?), we always feel like we’re going to need more than we have to do what we want and to feel comfortable and content.

U.S. Dollars - Benjamin Franklins

Donald West via Compfight

You want to know a truth? You can feel comfortable about money now, and get on with the life you want to lead. It doesn’t need to be more money, but it can. All it takes is a shifting of your mindset in some unique ways that will help you feel more comfortable about money overall.
Continue reading 7 Easy Ways To Get Comfortable With Money →

Finances

Educational Debt Can Be Overwhelming

These days one has to ask themselves if the cost of getting a quality college education is worth it. A degree from a major university can end up costing more than 2 good homes, especially if the student decides to go for an advanced degree. One has to ask if it’s worth it and, if so, how they’ll be able to pay for it.

Joint Graduation Day

Sarah R via Compfight

Unfortunately, college debt is one of two debts that you can’t erase if you declare bankruptcy; the other is tax debt. College debt, though it can’t get anyone throw in jail or fined, will most often be higher and harder to deal with. This is because lenders don’t always work with families on how much needs to be paid monthly, though most will work with you as to when you have to start paying on it.

At some point one has to figure out what’s worth it and what’s not worth it when going to college. For instance, is a bachelor’s degree from Harvard really worth more than one from a 4-year state school?

In general no; if the student went to college for theater who’s going to care? If it’s for an accounting degree, probably not. Political science, with an intention on being a politician someday, sure. A law degree; absolutely.

Then there are the advanced degrees one has to think about. Is a master’s degree from Yale really all that much different than a master’s degree from UCLA? Aren’t both big name schools? And won’t the degree from UCLA not only cost thousands less, especially if you live in California, but you’ll also be in better weather?

In any case, if you or a family member is still looking to go to a big name college, you need to have a plan for attacking the debt once college is over and the student is ready to go into the workplace. You also need to figure out way in advance the potential income ratio matched against how much it costs to go to school.

In today’s economy, if the student is getting a master’s in education and want’s to be an elementary school teacher, it’s going to be hard come close to earning enough to pay off a college loan. If the student is going for a doctorate and hoping to land at a major university, there’s a possibility, but nothing’s guaranteed.

The same goes for the medical field. Specialists such as a heart surgeon will easily be able to pay back the loan in good time. If the hope is to be a general practitioner, it might take working 12 to 14 hours a day to have any chance of keeping up on the payments; so much for luxury living.

Parents and students need to be realistic in protecting the student from crushing debt after graduation. There are many good colleges that one can get a very credible 4-year degree from. Many of those same schools offer competitive pricing for masters degrees as well. It’s something to think about for the future.
 

Finances

Can You Protect Your Credit Cards?

Just last week Wendy’s announced that there had been a breach in their system and millions of their customers credit and debit card information was stolen. This seems to be a consistent pattern these days, and it makes the act of using a credit card seem like you’re playing a dangerous financial game.

Credit Cards and Cash
Creative Commons License Sean MacEntee via Compfight

The luckiest consumers were those who had their credit card information stolen because the heads up gives you an opportunity to get new cards pretty quickly, and if your information was used for purchases you know aren’t yours it’s not all that difficult to prove and absolve yourself of the responsibility of having to pay it back.

The unluckiest consumers are those who have their debit card information stolen. I’m not sure how the thieves know, but somehow they’re able to figure out which is which and not only make big purchases on those cards but are somehow able to figure out pin numbers. For many people, it takes longer to get their money back from the bank, and in some cases it’s more difficult to not only show proof but to get the bank to remove fines and fees from these transactions.

It begs the question: can we protect our credit cards?

The short answer is not really; no one wants to hear that. The long answer is that there are some credit cards that have already set up a way to protect information, and there are some other options consumers can employ that might help to protect themselves if they’re willing to pay the cost.

Let’s talk about protected credit cards. There are some institutions that are giving their consumers credit cards that have a computer chip in them, and outlets such as Walmart are already set up to accept those cards. Instead of swiping via that strip on the card, you push your card into the reader and it generates a piece of code that can only be used for that particular transaction. No numbers; that’s pretty neat. Although American Express has had this ready for a while, it’s just starting to become the vogue thing to do but there’s a long way to go.

This leaves the other option of purchasing debit or gift cards that allow you to deposit money into a card that doesn’t access your bank accounts. This means that if someone steals your numbers, there’s only so much they can spend and then the card is dead. The downside is that there are fees everywhere; there’s a fee to put money on it, a fee every time you use it, and a fee if you reach a certain time period without using it for some cards. You’re definitely protected, but at what cost?

What’s the best thing to do? Frankly, it’s probably best if you take a certain amount of cash out of your bank account and use that for your purchases. True, no one wants to walk around with a big cache of money, but most of us are probably spending less than $100 a week, and the reality is that we tend to control our spending better when we’re using money than credit or debit cards.

We can hope that technology becomes standardized so that all our cards have the computer chips. However, criminals are crafty also, so the question is just how long this will be effective before they figure out how to get around the chips?

Just be careful when you choose your options, and where you spend your money. And make sure to check your credit report every so often to see if someone’s commandeered your information.
 

Finances

5 Reasons To Check Your Credit Report

Even though credit scores can seem somewhat arbitrary, based on which credit agency is putting the information together, it becomes obvious pretty quick that they’re pretty important to all consumers. Yet it’s amazing at how few people actually get credit reports before they try to obtain loans or get credit cards, even though every American consumer is allowed to get a free credit score once a year, courtesy of the federal government. Let’s look at 5 reasons you should be availing yourself of this important piece of paper.

1. The higher the credit score, the better credit risk you are.

Most people think their credit is better than it probably is. A study done in 2015 stated that 56% of consumers have subprime credit scores, which is usually a score of 640 or below. having a low credit score doesn’t always mean you won’t get a loan, but your lender might consider you a credit risk and charge you a higher interest rate. It’s better that you know your status before you let someone else run your report because if it’s not up to par, just the act of allowing someone to run your credit report can actually lower your score even more.

Just so you know, not all credit reporting agencies will tell you what your credit score is unless you pay for it. The reports change all the time, so you might not get the score even from the free reports that come. However, usually at least one agency will give you your current score.

2. Sometimes they have errors.

In 2013, a FTC report found that 5% of consumers had at least one error on one of the 3 major credit reporting agencies (Experian, Transunion or Equifax). That’s only considering financial errors, because it seems there are a lot more people who say that addresses are some of the biggest errors seen, although that doesn’t count against you unless it’s within the last 5 years.

3. They may show an outstanding bill that’s been paid

The biggest errors that show up on credit reports are old bills you’ve paid off that don’t show as being paid. These can wreck your credit report because you haven’t received anymore bills and you probably thought it was all taken care of because of that, but it could either mean that the billing system messed up your address or your original creditor didn’t log your payment correctly.

4. Sometimes you can get a negative report reversed.

If you check your credit report and see a bill outstanding and it’s one you agree with, if you have the ability to pay it off you can contact the creditor holding your outstanding debt, make a deal to pay your claim off (at least the amount you actually owe) if they agree to send something to each agency once you’ve made that payment telling them that everything’s been satisfied. Even though it can stay on your report for up to 7 years from the time it made the list, it’s a positive notification that some creditors will take into account in your favor.

5. It’s always better to know.

Like a lot of things, people who fear their credit status are scared to check on it to see where they stand. It’s always better to know because if you know what’s going on and you don’t like it you can always fix it. You never know when you might need to count on it being in the best shape possible.
 

Finances

It’s Always Better To Know Your Financial Status

As we come to the close of another year, we first want to wish everyone a very successful 2016. We also want to wish that everyone’s finances are in order, that money is plentiful, and that all goes well for now and forever.

Roll, break me off some...
Creative Commons License Refracted Moments™ via Compfight

Unfortunately, we also know it won’t be this way for everyone. As accountants, one of the things we deal with are those clients who come in at the last minute with their papers and receipts for us to do their taxes, or those who want to request an extension without knowing whether they actually need it or not.

Anxiety is a hard thing to overcome in life. It’s very strong when it comes to looking at one’s finances. There’s an inherent response to fear and anxiety; we try to run away from it, avoid it, and hope it goes away. It might for a short period of time… but eventually if it’s bad or perceived to be bad it catches up with all of us.

We always stand on the side that it’s better to know what one’s financial position is than not know. If it’s good, it alleviates a lot of stress. If it’s bad, knowing as far in advance as possible gives you the opportunity to do something about it.

For instance, something we talked about earlier this year involved a friend’s corporate taxes and how, if they’d been addressed way earlier than they were, he would have actually come out way ahead of the game instead of owing money to the government. Sometimes running away from trouble causes more trouble.

We talk about budgeting a lot here because if you budget, you know how much money you have, where it’s going, and whether you have enough or need to find ways to generate more. Budgets help a lot of people get out of trouble and also alleviates a lot of stress when people realize just how much money they have.

A couple of years ago we had a post that talked about the IRS’ willingness to work with people who owe money on their federal taxes and how accommodating they can be. In actuality, the same applies to most large creditors. All you need to do is pick up the phone and talk to someone and almost always, the person on the other end is willing to help you out somehow. There’s a great fear of calling customer service over things like this but the reality is that not only are they regular people like us, but they know that things happen and they’re going to do what they can to keep a customer who’s possibly going through a rough patch.

Of course, nothing is ever guaranteed. You could call someone who’s not as accommodating. In that case, you do what you can, learn who you shouldn’t be a consumer with, and move on with life. Things are always better when you feel you have a bit of control over your life and finances rather than being afraid to pick up the phone because it might be a bill collector.

For 2016, we urge everyone to decide to be a more confident person as it relates to their financial status. We’d love to work with anyone who needs or wants our help in figuring things out, and of course when it comes to your taxes. Be strong, be courageous, and be knowledgeable; those are great things to aim for. Happy New Year!