Best of the week – July 26, 2014

Here are some articles that caught my eye this week…

A Singular Focus of Paying Off Debt Leads to Peace

I am a firm believer that lack of focus is one of the things that prevent people from getting out of debt. When you are trying to accomplish ten different financial goals at once, it is hard to feel like you are making much progress on any of them. The natural result of that is discouragement. It becomes very easy to just give up when you feel like all your efforts aren’t really making a difference. When we focus on one thing at a time though, we start to see that our sacrifice is making a difference. That provides the encouragement we need to press forward.

Family Fun…For FREE!

Family fun doesn’t have to imply spending a lot of money. In fact, sometimes the most fun and the things the kids will still remember 50 years from now are things that don’t cost any money at all.

Why Debt Consolidation Doesn’t Work

The biggest problem with debt consolidation is it gives the mistaken impression that you have accomplished something. We give it away in the verbiage we use. We say, “I got a debt consolidation loan and paid off my credit cards.” Truth is, we didn’t pay off anything. We simply reshuffled the deck chairs on the Titanic. Without a change of the behavior that got us in debt, in a few years we’ll find ourselves in worse shape than when we started.

How Much Does it Really Cost to Rent a RV?

We recently got back from a vacation in the west where we visited several National Parks. Driving around I saw lots of the Cruise America rental RV’s. I wondered how much it would really cost to tour around in one of those. Jeff Rose at Good Financial Cents just got back from a family vacation where they rented an RV.  If you ever wondered about the costs and gotchas of renting one of these, Jeff has a very comprehensive write-up on their experiences.

Why Generosity Is Key to Everything — Including Your Career

Only in the movies does the dishonest backstabber get ahead. Think of it this way: You are a manager of two employees. One is usually smiling and always willing to help out. The other you have trouble trusting because it is obvious they want to get to the top and will step on anyone they need to get there. Which do you want to be around? Which are you more likely to promote? In a healthy organization, the generous will be rewarded.

15 Helpful Apps No Single Lady Should Be Without

Many of these apps are great for anyone, not just single ladies, and most of them are free.

12 ideas to make some quick extra money

quick extra moneyFor some, the source of our financial difficulties is out of control spending. Whether it is stuff-itis or just a lack of organization, the answer to the problem is simply getting on a budget and cutting extra spending until we get things under control.

But for others, the problem isn’t really out of control spending. What do you do when you have trimmed the budget and there really isn’t enough left over to move the needle?

This was the case with us a few years ago. I was tired of us living paycheck to paycheck and yet we never could quite seem to get ahead. We were always just a little bit short. It was like when a flooded river gets dammed up by floating trees and debris. At some point, is necessary to dynamite the blocked area to get the stream flowing again.

If find yourself in this situation and you’ve done what you can to cut spending, then the answer to breaking the logjam is to do something to raise your income.

Here are 12 things you can do starting today to make a little quick extra money

Overtime

If you work in a job where overtime is an option, volunteer for as much as you can. I’m not saying working 80 hours a week should become a way of life. But there is nothing wrong with working your tail off for a short while to make progress on your financial goals. And if you show you are willing to work hard on the job, you might just get a promotion out of it.

Check your withholdings

Do you get a big tax refund every year? That isn’t a good thing. It basically means you are giving the government a 0% loan for a year so they can give your money back to you. If you get a $2,400 refund, that’s $200 a month you could be using to pay debt or build savings. Either adjust your exemptions on your W-4 or work with your HR representative to adjust your withholdings so that you don’t get a huge refund. Be careful to not go overboard. You don’t want to end up owing taxes. But if you know you regularly get a large tax refund, you should be able to predict about how much extra you should have in your pay each period.

If you are still unsure, the IRS provides a Withholdings calculator that you can use to estimate how much you are likely to owe in taxes this year and how much of a refund you may be on course to receive. You can adjust the numbers until your tax paid is fairly close to your tax owed and you should then have a pretty good idea of how much should be withheld each pay.

Pause your retirement savings

OK. I know this one is a little controversial and many financial advisers may disagree. In the long-term you need to be saving at least 15% of your income toward retirement. But for a short period = a few months or maybe a year or two – you might want to consider stopping your retirement savings. This is one of the things I did when we were in that position and that extra money in the pay each month was just enough to get us over that hump where we could really start to make progress on paying down our debt. If you decide to do this, just make sure of two things: You use this as a temporary step only. And you must be fully committed to using that extra money to pay down that debt. If you use that money to buy pizza on Saturday night, you’ll never get out of debt and you’ll wake up someday when you are 65 wondering why you have no retirement savings.

Do something that others don’t want to do

Find a task that people don’t like to do and offer to do it.

  • Mow some yards
  • Clean gutters
  • Paint houses
  • Rake leaves
  • Shovel snow
  • Wash windows

These are just some of the jobs that people will often gladly pay someone else to do. Take a walk around town and go door to door offering your services.

Clean out the attic or the basement

Many of us have hundreds of dollars of stuff that has been sitting in boxes for years. We have probably forgotten that we even have some of it. Do some spring cleaning and start selling. Have a garage sale, list them on E-bay or Craigslist. Many areas have Facebook groups for local “online garage sales”. Or if you have a flea market in the area, pay for a spot, pack it up, and spend the day passing your “treasures” on to someone else.

Babysit

If you like children, offer to babysit. As a parent, having a reliable, responsible person that I can trust to watch my child is very valuable, and if you love children, you can get paid for doing something you love.

Tutoring

Have a special skill? Offer to tutor kids after work. Play the piano or other musical instrument? Start giving lessons.

Handyman

Are you one of those people that are blessed with the skills to fix practically anything? Start a handyman service. Print up some business cards and leave them at local businesses offering your services. Talk to local banks. They may have foreclosed homes that are in need of some repairs before it is resold. Talk to local real estate agents. They may be able to connect you with landlords or sellers that are looking for help fixing up properties to rent or sell.

Moonlight

Do you have a special skill? If you work in accounting, find a couple of small business that need help with their books. Computer skills? Do some programming or computer repairs. Graphic design skills? Writing skills? There are many ways you can reuse these skills on the side to make some extra income. Elance, Odesk, Fiverr, and Craigslist are great places to advertise your skills. Just make sure when you do this that you aren’t doing anything that might cause a problem with your primary employer.

Donate plasma

You can earn a few extra bucks by donating your plasma and along the way you might save a life. You can find more information at http://www.donatingplasma.org/

Deliver newspapers or pizzas

Get a part-time job. Deliver newspapers or pizzas. At holiday times retailers are often looking for extra help.

Help a farmer

Live in a rural community? Farmers often are looking for some extra hands during harvest times or for other needed chores.

What do you want to be when you grow up?

If you have a good job with a good income and your problem is simply too much debt, then following these suggestions to earn some extra money while you are paying that debt down may be all you need.

If, however, your problem is you simply aren’t making enough money to support yourself and your family these ideas may provide some temporary relief, but you also need to spend some time considering your future career. If you make $20,000 today, what could you do to be making $40,000 or more 5 years from now? What have you always enjoyed doing? What do people tell you that you do well? If you could go back and advise your 18-year-old self what career would you tell them to pursue?

Think about those questions and then do some research into what you need to do to pursue that career. Do you need some training? A degree? Need to work for a different company? Develop a plan and begin to work toward the career you always wanted. The suggestions above may help keep food on the table in the short-term, but in the long-term you want to move toward a career that will help you support your family and meet all your financial goals.

Break that logjam

If you find yourself in that position where you have cut the budget and there just isn’t enough money to make it each month, or if you are just really tired of being in debt and want to get out as quickly as possible, these are just some of the ways you can jump-start your income and kick that debt out of the house. If you feel like you are stuck, do something this week to start to break that logjam and get your finances flowing again.

What other ideas have you used to make some extra money when you needed it?

Best of the Week – July 19, 2014

Here are some articles that caught my eye this week…

What Day to Shop? 12 Insider Tips on Store Markdowns

Like to shop but concerned about getting the best deals? Here are some tips on when popular retailers tend to markdown their merchandise.

University’s Letter Provides Best Personal Finance Lesson to Students

Interesting what one university is doing to educate young people of the impact that student loans can have on their future. Pretty amazing the impact a little knowledge can have.

A Pro Resume Editor Reveals the 5 Dumbest Things You Have on Your Resume

Remember you probably only have a few seconds to capture the attention of the person reading your resume. Make sure your resume is easily scan-able and that your most important facts are readily apparent. The best tip in today’s job market is still to try to find someone already in the company that can put in a good word for you. Their recommendation stands a better chance of getting your resume read than having your resume stand out in the stack of 100 resumes sitting on the hiring manager’s desk.

How to Eat on a Beans-and-Rice Budget when Your Husband Hates Beans

Dave Ramsey often uses rice and beans, beans and rice as a metaphor for finding ways to eat as frugally as possible when you are struggling to get out of debt. But what if you really hate beans?

5 Steps Before Renting Rooms In Primary Residences

Looking for some extra cash to pay down debt or to help make the mortgage payment? If you have a spare bedroom or perhaps a mother-in-law suite, one option to consider is finding a roommate to rent the space out. This can be a big help if circumstances are right, but there are some important things you need to consider before heading down that path.

How to find great used-car deals

Great list of resources to research your next used car purchases. Some of these I have used; some I’ll have to check out. In addition to fueleconomy,gov for checking out potential gas mileage, another site I really like is Fuelly.com. It allows you to track your own fuel economy. You can also search for the exact year/model car you are researching and see real world averages for fuel economy.

If you died today, would your spouse be able to carry on tomorrow?

There is an old saying that nothing is certain except for death and taxes. Neither of those are topics that we get very excited about. But the truth is all of us someday are going to breathe our last here on earth.

I hope that day for me is years down the road. I think most of us feel that way. But we also know we have no guarantees. Even if we are young and very healthy, accidents or unexpected illnesses happen.

Here is my question for you today, particularly if you are married. If you died tomorrow, would your spouse know what he or she needs to know to carry on?

This is especially important if you are the one who primarily handles the finances in our family.legacy

Monthly bills

Does your spouse know what bills come in each month and when you pay them? If you pay bills on-line does your spouse know the needed passwords to the sites where you pay bills?

If you were suddenly gone tomorrow would your spouse know what was needed to easily carry on with the day to day finances? Or in addition to the grief of your loss would your spouse feel lost in keeping the household afloat?

Insurance

Do you have enough life insurance so that your spouse’s financial needs would be taken care of if you were gone?

While no amount of money could ever replace a loved one, in cold terms, life insurance is basically there to replace economic value that you bring to the family.

For example, did you know that if you are a 30-year-old male in good health, you could get a million dollars in 20 year term life insurance for just a little more than a dollar a day?

If something tragic happened to you, would knowing that their financial needs were covered make handling the grief just a little easier for your spouse? Again, no amount of money can replace a loved one, but if I at least know the bills will be paid and there will be food on the table, then I don’t have that stress added on top of my grief.

Secondly, if you have been responsible about getting sufficient life insurance, does your spouse know what policies you have and what companies/agents they are with? Does your spouse have easy access to the phone numbers they would need to call if something happened to you today?

Investments

The same questions apply here. Does your spouse know what investments you have? Do they know what funds you are invested in and why? Would they be able to carry on your investment plan after you are gone?

If you have an investment adviser, do they have the appropriate contact numbers? Does your investment adviser have a heart of compassion and the heart of a teacher such that they would be able to help your spouse make wise decisions if you were gone?

Have you double checked your beneficiaries lately? Will your money go to the right person? This is really important if you have recently had any significant life events like a marriage or divorce or the birth of a child.

Take time to create a legacy drawer

There are many names for this, but I like the term legacy drawer. Do you have one place where you have a record of all of your important financial documents? The idea of creating a “legacy drawer” is having one central place where you have defined all of your important financial records.

It doesn’t have to be a literal drawer. It could be a folder you keep in a safe somewhere. It could be physical or electronic. It doesn’t really matter as long as it is secure, yet your spouse could easily access it in the event you were no longer here.

This is the place to document bank accounts, investment accounts, debts, insurance details, phone numbers and passwords, location of wills, and any other information that your spouse would need if you were to suddenly pass away.

An act of love

Making sure your loved ones have the information they need to carry on is one wonderful way you can show your love.

I remember several years ago listening to a popular financial talk show. One caller called in to say her very young husband had just passed away and left no insurance and no savings. She was grief stricken and in a panic about how she would even be able to survive financially. Within the same hour another lady called in with almost the same situation with one important difference. He husband had a million dollar life insurance policy. She was calling to see what she should do with the money to invest it wisely so her financial needs would be taken care of. Both women were grief stricken and devastated.  One woman was also wondering how she would eat tomorrow; the other had the comfort of knowing financially she was well cared for. Both were very young and never expected that they might be widows at that stage of life.

I don’t wish to be morbid, but the truth is none of us are guaranteed tomorrow. If we are a Christian, we have the comfort of knowing when that day comes we will be welcomed into our Father’s loving arms. And while that may be a comfort too for those we leave behind, that doesn’t alleviate the day to day needs to put food on the table and a roof over our head. Love your family well by making sure that no matter when that day comes, financially they will be well taken care of.

If you died today, does your spouse have everything they need to carry on financially?

Best of the week – July 12, 2014

Some articles that caught my eye this week…

How a parent’s health-care bills could hurt you

Important things to know as the baby boomer generation nears retirement. Be careful what you sign or you might find yourselves legally responsible for your parents’ health care bills.

7 Genius (Yet Easy) Ways to Save on Back-To-School Shopping

Seems like my son’s last day of school was just yesterday, but it’s really not that long before summer vacation will be over. With the end of summer vacation comes the never-ending list of needed school supplies. One key to keeping school supplies from breaking the budget is to plan ahead. Don’t start shopping the night before school starts. Get the list of what will be needed and start watching for deals now.

BBB’s Top Five Summer Scams

The first rule of avoiding getting scammed is always remember if it sounds too good to be true, no doubt it is. It is always a good thing to look for deals, but use common sense. If you think you are getting great value for nothing, there is almost assuredly a catch.

The Secrets of Buying and Selling for Profit

Needing a little extra cash? Selling items through Amazon.com is one method that some have used successfully.

7 things to know about the ‘new retirement’

One thing that has become more and more clear is that you need to take responsibility for your own retirement. The days of 30 years and a gold watch with a pension no longer exist.

7 Tips for Coming Up with Last-Minute College Cash

If you have a young person in your life heading off to college or if you are that young person, I challenge you to take whatever steps you can to limit the amount of debt that have. No debt would be best of all. It may seem like signing those loan papers is the easy solution, and you’ll have plenty of money later when you are working to pay them off. Sadly for so many though student loans have become a ball and chain that prevent them from reaching their dreams. Don’t do something as a 20-year-old that your 35-year-old self will deeply regret.

3 Dangerous reasons to save money

There are not many topics upon which you could get all financial advisers to agree. One such topic though would be that it is good to save. There might be disagreements about how to save or where to put those savings, but almost everyone would agree that having savings is a good thing. Even the Bible clearly indicates we should save.

The wise man saves for the future, but the foolish man spends whatever he gets. Proverbs 21:20 TLB

But is there a time when saving may not be such a good thing? Could there actually be dangerous reasons to save money?

Pridedangerous reasons to save

Do you have a family member or acquaintance who, every time you get together, very quickly turns the topic of conversation to the latest big financial success they had, or the newest big-ticket toy they bought, or how they are raking in the dough at work, etc? I think most of us have known someone like that.

Particularly for guys, or at least for those with type A personalities, money can sometimes represent a score card.

  • Saving and building wealth.
  • Not just keeping up with the Jones’s but staying a few steps ahead.

These things can come to represent winning on that score card of life. Our self-worth starts to be defined by the size of our bank account. This is a very dangerous place to be.

The problem is when we take pride in what we have accomplished, we start to forget who is responsible for our success. It is easy to forget that we could do nothing, earn nothing if it weren’t for the skills and talents that God has blessed us with.

Yours, O Lord, is the greatness, the power, the glory, the victory, and the majesty. Everything in the heavens and on earth is yours, O Lord, and this is your kingdom. We adore you as the one who is over all things. Wealth and honor come from you alone, for you rule over everything. Power and might are in your hand, and at your discretion people are made great and given strength. 1 Chronicles 29:11-12 NLT (my emphasis added)

When our savings start to become a source for pride, it is a clear sign we have forgotten who is the real source of our success.

Greed

A close cousin of pride is greed. Another danger of saving is it may start to feed a desire to have more and more and more. I think we see this in one of the parables of Jesus:

Then he told them a story: “A rich man had a fertile farm that produced fine crops. He said to himself, ‘What should I do? I don’t have room for all my crops.’ Then he said, ‘I know! I’ll tear down my barns and build bigger ones. Then I’ll have room enough to store all my wheat and other goods. And I’ll sit back and say to myself, “My friend, you have enough stored away for years to come. Now take it easy! Eat, drink, and be merry!”’

“But God said to him, ‘You fool! You will die this very night. Then who will get everything you worked for?’

“Yes, a person is a fool to store up earthly wealth but not have a rich relationship with God.”  Luke 12:16-21 NLT

The rich fool’s response to his blessings was not one of thankfulness to the God who gave him a great harvest. It was not to consider who he could help with those blessings. His response was greed. He was going to build bigger barns so he could keep it all for himself.

Fear

The third and I think perhaps most important reason not to save is fear.

A reasonable amount of fear is not necessarily a bad thing. In fact it may be the product of some God-given common sense. If I have absolutely zero savings such that if the battery died in my car I would have no way to get it replaced aside from going into debt, then the fear I feel may simply be the Spirit prompting me that I need to get a little better control of my finances.

But sometimes fear goes beyond simple wisdom. When we have some emergency savings and we are making at least some progress in savings for long-term goals like retirement, and yet we are still motivated by fear, then there may be a deeper problem with our saving.

Sometimes fear is a sign we don’t really trust that God will take care of us. “I’m not sure I can count on God to provide if I had a serious financial issue, so I better just take it into my own hands.” “If I have a big enough bank account then I can trust it for my well-being, because in my heart I’m just not sure I can rely on God.”

I think this is the reason that Jesus spent more time talking about money than he did about heaven and hell combined. Money is one of the main things that can easily take the place of God in our lives. When my bank account starts to become my trusted source of provision and protection, I have turned money into my god.

Command those who are rich in this present world not to be arrogant nor to put their hope in wealth, which is so uncertain, but to put their hope in God, who richly provides us with everything for our enjoyment. 1 Timothy 6:17 NIV

The Great Recession should be a reminder to us all that wealth can be fleeting. It is foolish to put our hope in earthly wealth that can disappear in a heartbeat, instead of trusting our Heavenly Father who loves us and is eternal. But sometimes fear can lead us to place our trust in that tangible dollar in our hand instead of the God that we do not see.

So why you should save?

I believe there are two valid reasons to save.

To provide for ourselves and our family.

Anyone who does not provide for their relatives, and especially for their own household, has denied the faith and is worse than an unbeliever. 1 Timothy 5:8 NIV

God tells us to take care of our family. That includes providing basic necessities of food and shelter. I think God also smiles when we are able to provide some wants beyond our needs within reason. I also think part of providing for our family is saving for long-term goals like retirement.  All of these things within reason are good and even commanded.

To help those who are in need

In that Timothy scripture I quoted earlier, Paul tells Timothy to command those that are wealthy to not put their trust in their wealth. But if that is the case, what should they do with it? He goes on to say in the following verses:

Command them to do good, to be rich in good deeds, and to be generous and willing to share. In this way they will lay up treasure for themselves as a firm foundation for the coming age, so that they may take hold of the life that is truly life. 1 Timothy 6:18-19

If God has blessed you with savings that exceed what you need to provide for your family, be generous. I have often heard financial teacher, Dave Ramsey, say “Broke people can’t feed starving children.” I think there is much truth in this. When we are barely surviving ourselves, it is pretty hard to meet the needs of those around us.

But when we gain control of our finances, live on less than we make, and save and invest the difference, at some point our focus changes. We reach a point where we can meet the needs of our families, and we begin to see those who are hurting around us. When we have done a good job saving, we are in a position to generously make a difference in our world.

That is a very different place to find ourselves than the places where pride, greed, and fear lead us.

If you examine your motives very honestly, what is your motivation for saving?

Best of the week – July 5, 2014

Here are some articles that caught my eye this week…

30 Everyday Products You Can Make Instead of Buying at Walmart

If you enjoy being a do-it-yourselfer, here are some cool ideas of everyday products that you can make yourself. In addition to perhaps being cheaper, another big benefit of this is you know exactly what you are putting in the product.

Combining Finances: Tips for Newlyweds

They say June is the most popular month for weddings. If you are just starting your new life together, it is so important for both of you to be on the same page financially. Money fights are the number 1 cause of divorce. You owe it to yourself and your spouse to work through these issues together.

The 5 Best Cash Back Online Shopping Sites

I love using E-bates. It’s simple and easy, and they have a wide variety of sites available. The best part is the browser extension they provide. It automatically detects when I go to a web site that has eligible rebates. I simply click on the button that pops up to activate my rebate and then complete my shopping as usual. A few days later the rebate appears in my account. While you certainly won’t get rich from these sites, it is pretty nice getting a few dollars back here and there basically for just the effort of clicking on a button.

8 Ways to Teach Your Kids to Be Financially Independent

Perhaps one of the best ways is to simply involve them in your finances in an age appropriate way and to also gradually give them the ability to make their own spending decisions. It is much better for them to make a mistake on a $150 pair of shoes and suffer for a purchase they come to regret as opposed to making a mistake later in life on a $40,000 car. If they can learn those lessons in a safe, protected environment, they may avoid years of grief down the road.

10 Tips for Buying Your Next Car for Less

I believe new car payments are one of the biggest factors that keep many people from ever making any financial progress. The average car payment is $475.  With many people having 2 cars in the driveway, that’s almost a thousand dollars a month. Imagine how you could change your life if you had an extra $1000 a month to pay off debts, save or invest! But I must have transportation you say? Truth is you can get a very reliable and comfortable used vehicle for a fraction of the price of a new one.

Kid friendly vacations on a tank of gas

If the budget is tight, you can still enjoy some fun family times without spending a lot of money.

Time for a mid-year check-up

It may seem surprising, but we have actually hit the half way point on 2014. Time seems to travel more quickly as the years go by.

Since we are at the mid-point of the year, it is a good time to step back and assess how the year is going financially.

New Year’s Resolutions

A recent study by researchers at the University of Scranton indicated that 62% of people at least occasionally make New Year’s Resolutions but only 8% of those resolutions are actually kept.

That shouldn’t come as a big surprise. The new year brings hope and a desire to change things we wish were different, but the reality is habits are hard to change and most often we slip back into the same comfortable patterns.

So how about you? Did you make any financial resolutions this year? Did you set goals for paying off debt or saving? Perhaps you resolved to stick to a budget? Now is a good time to evaluate how you are doing.

Take a few moments to see if you are on track.

If you are doing well, Congratulations!! You are doing great. Keep up the good work.

Oops, I’m a little off track

If, on the other hand, you are not on track to meet those goals, now is a great time to revisit that goal.

Consider why you are off track. Did unforeseen circumstances get in the way?  Maybe you had planned to increase your savings but then life got in the way.

This happened to me last year. Our dentist indicated my son would need braces soon and so I began to save some extra money in our HSA so that when the time came we’d have the money to pay for them. Then we had an unexpected hospital visit that used up most of what I had saved.

Sometimes life happens. Despite our best intentions, things happen that derail our plans. That’s ok. Just get back up and get back in the game. Maybe you don’t reach your goal as quickly as you planned. Maybe you don’t reach your goal at all. I’ll bet though that you get a lot farther than if you hadn’t had any goal at all.

The good news is I had money to pay the medical bills from the hospital visit. Fortunately, our dentist had given us plenty of warning about the approaching need for braces and so we had time to rebuild the savings. Those braces will be going on this summer and we have the money to pay cash for them.

If you are not on track to meet your goals you set back in January, don’t be discouraged. Either make some adjustments to help you get back on track, or celebrate the fact that although you may come up a little short, you are still in better shape than if you hadn’t had a goal.

Goals, did I have goals??

Perhaps, though that resolution was long forgotten by the second week of January. It’s not too late. Perhaps you had a goal of saving $100 a month, but you never really got started. You could try to save $200 a month to get back on track.

But maybe the best approach is to just give yourself a little grace. Consider why you didn’t follow through with your goal, and resolve to start today. If you save that $100 a month starting today, you’ll miss your goal of $1,200 for the year, but you’ll have $600 in the bank that you don’t have today!

What resolutions?

Or perhaps you are thinking a check-up would be a good idea if I had set some goals, but I’m more of a go with the flow kind of person.

While resolutions and goal-setting are often tied to the new year simply because the new year brings the promise of change, there is nothing magical about January 1st.

Take the time this week to review your financial situation. Do you have some margin in your life, or is debt strangling you to the point that you can barely make the payments?  Is your job going well or do you barely make enough to get by? Or maybe you make a decent wage but wonder where it all goes and why you still feel broke? Are you on track saving for retirement? Do you plan to help Jr. with college? If you had a $1,000 emergency today would you be able to pay cash or would you have to put it on credit?

If any of those questions make you feel a little uncomfortable, today is the day to do something about it. Make a plan. Choose one goal and go after it. Don’t try to do it all at once. We often fail when we try to accomplish too many things at the same time.

While you may not solve all your problems at once I can guarantee you’ll be closer to where you want to be on July 1, 2015, if you start to follow a plan today.

Are you on track to meet your financial goals for 2014?

Best of the week – June 28, 2014

Some articles that caught my eye this week…

Kids and taxes: answers to six common questions

Does Jr. owe taxes on the summer job? What if Jr. earned money mowing lawns or babysitting and did not have payroll taxes taken out? How about investment income? And how does all that relate to college funding. Some good information here. I learned a couple of things myself.

3 Costly Mistakes You Are Making on Life Insurance

Proper life insurance is an important way to show your love for your family. Though we don’t like to think about it, there are no guarantees in life. You could live to be 100 or you could die before finishing this article. If the unthinkable happened to you, would your family be ok financially?

22 Odd and Unusual Ways to Make Extra Money

Needing a little extra cash for an unexpected bill or to jump-start your emergency fund? Here are some options you may not have considered.

Four Ways We Feed a Family of Five for $575 a Month

Groceries are an area in the budget that can vary greatly depending on our shopping habits.

Unexpected Ways Your Home Deal Can Go South

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How to avoid being the victim of identity theft

According to TransUnion, one of the three primary credit reporting agencies, identity theft is the fastest growing crime in America. Each minute that goes by another 19 people fall victim to identity theft. It is estimated that the average identity theft will cost the victim about $500 and 30 hours of effort to clean up.

What is identity theft?

Identity theft most often is characterized by a criminal who obtains information about your identity (your social security number, address, phone number, bank account info, or other personal data) and then uses that information to fraudulently open new lines of credit using your identity.

The saddest part of our current identity theft crisis is most often the criminal is actually a family member, trusted friend, or co-worker. While the big data breaches like the recent Target mess often gain the most attention, more often than not the culprit is someone we know and trust.

So how do I protect myself?

Check your statements

Make it a practice to spend a few minutes reviewing your bills as they arrive, particularly credit card statements. If you see charges that you don’t recognize, or if you receive a bill from somewhere where you did not think you had an account, call and question it immediately. It only takes a minute or two to scan your statements and it could save you a great deal of grief.

Shred, shred, shred!

If you don’t own a quality shredder, you need to get one. Never put items that contain personal information in your trash without first shredding them. This includes:

  • Credit card offers
  • Bank statements
  • Old bills
  • Medical statements
  • Anything that has your social security number or other private data

Believe it or not there are thieves who will go digging through people’s trash looking for items like this that they can use to steal someone’s identity.

Use secure passwords

Generally speaking, online banking and online shopping are safe, but you do need to take  precautions. Always make sure you use good secure passwords for these sites and change those passwords from time to time. Be careful about accessing financial accounts when using a public wifi spot like a Starbucks, or if using a public computer such as your local library.

Guard your social security number

Be very careful with your social security number. Avoid giving it out unless absolutely necessary. Never include it on publicly accessible items like your driver’s license or personal checks. In fact, many states no longer even provide the option of putting your social security number on your driver’s license or state id card, and that is a good thing.

Beware of phishing

One increasingly common method of stealing someone’s identity is phishing. This is where someone sends you a very cleverly crafted e-mail that is designed to appear to come from a bank, or insurance company, government or other financial institution. Often these e-mails then indicate that there may be a problem with your account or perhaps they are offering you a valuable free service, and all you have to do is click on the link and answer a couple easy questions to verify your identity. That link will also take you to a very carefully designed site that will look very much like the real thing. The problem is neither the e-mail or the link is legitimate. Sometimes they will attempt the same thing through a phone call.

Never, ever, ever provide personal information through a link in an unsolicited e-mail or from a phone call. If you are concerned that there might be an issue with your account or think the offer of services may be legitimate, call your financial institution and inquire. Just make sure you only do this through a call that you initiate, not from an unsolicited call or e-mail you receive.

Check your credit reports regularly

You are allowed to get one free copy of your credit report from each of the three major credit reporting agencies each year by going to annualcreditreport.com. If you want to be extra diligent that means you could request a credit report every 4 months by cycling through the three agencies each year.

Check that report and make sure you do not see any unexpected or unexplained items.

Protect your computer

Make sure you are running a good anti-virus program and a good malware detection program on your PC. Check periodically to make sure that you are getting the latest virus updates in these programs. Also make sure that you regularly install any patches on your computer. Many of these patches are designed to close potential security holes. The best way to do all of this is to automate the processes. You can usually set your PC to update automatically when new patches are received and almost all good anti virus and malware programs can be set to download new configuration automatically.

Don’t carry unnecessary documents in your purse or wallet

Never carry your social security card or birth certificate with you unless you have a specific need. Don’t carry extra credit or debit cards with you. Be careful to only carry what you really need.

Opt out of credit offers

You have the ability to opt out of receiving unsolicited credit card offers by calling 1-800-5OPTOUT. My wife and I did this a few years ago and it radically cut down the amount of junk mail that we receive. Those unsolicited credit card offers are a great target for identity thieves. By opting out, you eliminate a potential target and maybe save a few trees along the way.

Freeze your credit

If you do not anticipate requesting credit in the near future, you can place a freeze on your credit reports. This prevents new lines of credit from being opened in your name. There is a small fee associated with this. Additionally, if you later need to apply for credit, you will need to contact the agencies to have the freeze lifted.

This isn’t a guarantee that no new accounts will be opened in your name. Not every financial institution is as diligent as they should be in checking your report before issuing credit. If they do check though, this would prevent anyone from opening a line of credit in your name.

Should you get identity theft insurance?

Lastly, there are many companies that now provide identity theft insurance. Some of these are legitimate and some are not.

What you don’t want to pay for is simple identity monitoring services. There are companies that will monitor your credit report and notify you of suspicious activity. There is no need to pay someone for this service. You can do it yourself for free by following the steps above.

Some companies though also provide services to clean up the mess if you are a victim of identity theft. They will assign a counselor who will work on your behalf to notify the credit issuers that your identity was stolen and to remove any charges that may have accrued as a result. This can be a very valuable service that can save you hours of hassle if your identity is stolen.

Having identity theft insurance is unfortunately a needed part of your financial plan. Just make sure you purchase insurance from a company that will help you fix the problem instead of one that just informs you that you have a problem.

No guarantees

Unfortunately, even if you follow all of these steps there is no guarantee that you might not have to deal with identity theft some day. Just remember that if you are a victim of identity theft, you should not have to pay the charges as long as you discover it quickly and report it. You will however have to take steps to clean the mess up. However, by following these steps you can greatly reduce the likelihood of being a victim.

If you would like to learn more, the Federal Trade Commission provides a great informational site on identity theft. You can find it at:

http://www.consumer.ftc.gov/topics/privacy-identity

Have you been the victim of identity theft? What steps did you have to take to clean it up?