From the mundane to the catastrophic, there’s never a good time for a financial emergency. The funny thing about these emergencies, though, is the fact that they’re never surprising at the core; they’re all inevitable at some time or another, but few are prepared when it happens to them. Continue reading
Making consecutively poor spending decisions can leave you drowning in a sea of debt. The following article explains the most common ways you could end up shooting yourself in the foot financially.
Making Too Many Small Purchases and ATM Foreign Withdrawals
You may be good at keeping up with big expenditures but not so good at monitoring your spending habits when making small purchases. Small purchases can quickly add up, especially when they’re made on impulse or done by habit. Continue reading
Whether you are a teenager or about to retire, it is important that you are able to manage your money effectively. Although your financial goals may be different as you get older, it is never too early or too late to learn and master sound fiscal habits.
Let’s take a look at some common financial goals and how you can achieve them. Continue reading
One of the most shocking pieces of information that most people eventually discover is that their spending habits can literally control their lives.
While most people want to believe that they have full power over what they spend, habits are what truly set the pace for what ends up being spent or saved. Realizing that habits have a dramatic impact on how much money we have is the first step in taking control, but after that, critical decisions must be made in order to create a life of wealth and freedom.
This summer, avoid making terrible financial decisions by understanding how to get rid of the worst of the offenders. The following three bad decisions are some of the worst that can be made, and anyone would be wise to eliminate them from their day-to-day habits. Continue reading
But here are 5 reasons that you should continue to balance your checkbook, even with all of the technological gains.
Fees, Charges & Penalties
Have you ever read the terms and conditions on your bank account? Do you really understand what the financial jargon means?
Banks must notify you usually about 30 days before they add on new fees, charges or penalties.
You should balance your checkbook to ensure that you don’t receive a “non-sufficient funds” (NSF) charge; the bank might have been subtracting money from your account for new fees and you bounced a check because you didn’t know how much was available.
Human Cashiers Still Make Mistakes
Many banks go through numerous customer service representatives in a short amount of time. One mistyped “0” can mean a big difference in your account.
People are only human, we all make mistakes. Balancing your checkbook can find these errors before they become big.
There may be a statute of limitations on certain errors. You want to bring mistakes to your bank’s attention as soon as possible.
Computers are programmed by humans. While it is extremely rare, there may be a computer glitch in dealing with fractions that could effect your bank account.
Remember that your interest is a percentage of the value of money in your account. If the computer does not properly handle these mathematical calculations, there could be an error.
Your credit score could be unduly damaged by human or computer errors.
Cyber Criminals Are Clever
Malware allows hackers to steal millions every day according to federal cyber crime police.
One of the negatives of mobile banking is that the security features are still not completely safe.
Balancing your checkbook can lead you to becoming aware of hacking attacks or identity theft before these dangers can completely ruin your life.
Develop Financial Discipline
Wealth management skills are learned not innate. By continually balancing your checkbook, you become aware of how much you have, how much you added and any discrepancies in your account. Y
our bank account information remains in the forefront of your mind. You also develop better financial discipline. This can help you when there is an unexpected downturn in your financial situation.
Banking technology is better, but nothing is foolproof. Children and adults should learn how to balance a checkbook in order to manage their money. Wealth management skills can be the difference between life success and failure.
There is nothing more exciting than driving off the dealer’s lot in a brand new vehicle. However, before you can take the keys and drive home, you have to determine whether or not to buy the car or lease it.
Let’s take a look at a few of the factors that need to be considered before making such an important decision.
How Much Can You Afford to Spend?
If you don’t have a lot to spend each month, it may be best to lease the new vehicle. This is because the monthly payment is almost always lower when you lease as opposed to buy the vehicle.
However, you may need to pay a security deposit and an acquisition fee when you lease a vehicle that you don’t need to pay when you buy a car outright. Those who have a trade may be able to put their trade toward some or all of the money that needs to be paid upfront.
How Many Miles Do You Drive Each Year?
Those who drive more than 12,000 miles a year should consider buying instead of leasing. In most cases, the lease allows you to drive 12,000 miles a year before charging as much as 20 cents per mile or more after that.
Therefore, it could actually cost you more to lease if you have a long commute or travel regularly for any reason. The good news is that you may be able to prepay for additional miles if you think that you will need them.
How Long Do You Plan to Drive the Car?
Drivers who want to drive the latest model may want to consider a lease because they can simply turn in their current vehicle when the lease expires.
Whether you decide to buy or to lease, you get the same manufacturer’s warranty, which can be important if you want or need something that is reliable. As a general rule, if you don’t plan on driving the car for more than three years, opt for the lease.
Do You Know What You Want to Buy?
At any time during a lease, you can trade in the vehicle if you find something that you really want. You can also try to transfer the lease if you decide that your current driving arrangement isn’t working out.
When the lease expires, you can decide to buy the car at its residual value if you like it and can afford to keep making payments. By purchasing the car, you agree to pay for it until you sell it, trade it or make the final monthly payment.
Therefore, you are often better off leasing if you aren’t sure that you are ready to commit to a particular vehicle.
There is a lot to think about before deciding whether you want to buy or lease a vehicle. For those who aren’t ready to commit or can’t afford to make a large monthly payment, a lease may be the best decision.
However, if you plan on driving the car for a long time and rack up the miles each year, buying is probably the better option.
The banking industry has never been as competitive as it is at this current time. This competitiveness creates an advantageous service and financial environment for consumers.
When a customer encounters a situation in which they believe that their bank is not providing them with the type of service or products they desire, they have the option to switch to a bank that offers products and services that are more in line with their expectations.
According to J.D. Power and Associates, approximately 9.6 percent of banking customers have switched banks over the past 12 months. This figure is on the rise, being significantly higher than the 8.7 percent from last year.
While the reasons that customers give for leaving their bank differ, there are certain indicators that are clear signs that it is time to leave your bank. Additionally, this move should be made expeditiously.
There are two key elements that are at the core of determining if it is time to ditch your bank, and they are the security associated with your money, and the level of satisfaction you are consistently experiencing.
The financial strength of a bank is extremely important in providing security for the funds that are deposited by their customers.
Although the FDIC insures up to the first $250,000 per account holder who is a part of an FDIC-insured bank, no one wants to have to go through the process of filing a claim for their money. This is why customers should check the financial strength of their bank periodically.
This can be done by checking the Federal Deposit Insurance Corp’s website. This will allow you to confirm if the bank is maintaining its FDIC insurance.
If your bank is not maintaining its FDIC insurance, this should send up an immediate red flag. This means that if your bank should go under, you could lose all of the cash and certificates that you have deposited with the bank.
Currently, there is a push by larger banks to increase revenue by raising fees. These fee increases are an attempt to offset losses that have been incurred as a result of a loss in credit card fee revenue, which is a direct result of some significant regulatory changes.
This means that customers from some of the major banks will more than likely begin to see some changes in fees on checking accounts, ATM usage, debit cards, online banking and more.
All banks will vary in the fees that are charged for these services, however, traditionally, local banks have lower fee costs, and they may actually waive some of the traditional fees charged by larger banks.
Another important element that impacts customer satisfaction is convenience.
Maybe you are in a situation in which your bank no longer fits your lifestyle. Initially, your bank was ideal, providing operating hours and locations that effectively serviced your needs and preferences; however, certain changes in your life has created a number of conflicts that make your bank less attractive.
An example would be switching to a job that require you to travel substantially. If you are banking with a local bank with limited locations, this could present a problem. Finding a national bank might be more beneficial to your new lifestyle.
The same is applicable to banking hours. If you have a situation in which you are consistently leaving your office at 6:30 p.m. or later, the chances are that your bank’s branch office will be closed.
This is an instance where switching to a bank that can better accommodate your schedule might be in order.
Financial irresponsibility often leads to future credit and money problems, and it can even prevent your children from developing a savings plan for the later years in life.
These are unique ways you can help your children learn to use money wisely and responsibly.
1. Enlist the help of your children when managing bills. The Pennsylvania Association of Community Bankers suggests allowing your children to handle small aspects of the money flow in your home.
For example, you might consider letting them balance the family checkbook after all major bills have been paid. This helps children get a good look at how finances are affected once expenses have been paid.
2. Set up a matching goal. Depending on how old your children are, they may have already started talking about getting that prized first car once they turn 16.
Abby Hayes of AFCPE notes that one great method for encouraging kids to save their money is to propose a matching goal. This means that however much they save for a particular purchase, you promise to match a certain percentage of their savings.
This is often a great motivator for kids to begin saving and working hard for the things that they want.
3. Define needs and wants. One mistake that many parents often make is merely assuming that their children understand the difference between financial needs and wants.
Children don’t understand that a video game is a financial want, while making a mortgage payment is a financial need. Jacqueline Curtis of Money Crashers explains that it’s your responsibility to distinguish the two.
Start by noting expenses that are required for survival, such as the electric bill, your car payment, or groceries.
Next, list things that aren’t vital to survival, such as going out to eat or toys. Compare the priority levels of expenses to help your children understand the differences between essential and nonessential purchases.
4. Explain how bank accounts and ATMs work. It’s easy for children to underestimate the importance of money when they see their parents swiping their debit/credit cards or taking seemingly free money from an ATM slot.
Jason Alderman, Vice President of Visa Inc. tells parents that it’s important to teach their children that money isn’t free.
Help your children understand that the money you spend from a credit card or receive from an ATM isn’t conjured from thin air. It’s real, and it must be accounted for.
This is also a good time to explain what happens when too much money is withdrawn from an ATM, or too much money is spent using a debit/credit card.
5. Lastly, don’t stop at one piggy bank. You’ve probably already considered getting a piggy bank for your child.
However, Meadows Urquhart from Meadows Urquhart Acree & Cook LLP explains that you can teach your child an even more valuable life lesson by getting them multiple piggy banks.
This gives children a chance to break their money up into spending, savings, or item-specific goal accounts. This provides children with wonderful preparation for real bank accounts.
Getting married is one of the most exciting of life’s milestones.
However, it can be easy for some of the important details about married life to get lost in the rush of the getting married. This is especially true of the financial considerations of getting married.
There are many financial aspects that you must consider when you get married. To help you out, here are some financial tips for newlyweds that will make your life easier.
Sit Down and Have a Frank Financial Discussion
Ideally, this should be done before you tie the knot, but it is never too late to sit down with your spouse to have a frank discussion about your finances.
This should be a no-holds-barred discussion where you are completely honest about every aspect of your financial situation.
Talk about your debts. Talk about whether you are a paycheck-to-paycheck type of individual or a saver. Talk about how you would handle a sudden windfall of cash.
The key is to learn all you can about how each of you approach your finances. This will allow you to avoid surprises later on, and it will also help you plan how to be a financially successful couple.
Set Financial Goals
One of the most important parts of being a financial success is setting goals. When you are a couple, setting financial goals together will help to bring your closer.
There are all sorts of things that couples need for their lives together, and you can set savings goals for all of them. Think about saving for things like a down payment on a home, a vacation and furniture.
You should both be saving at least 10 percent of your paychecks towards your savings goals, but setting a higher goal of 20 percent savings is ideal.
Create a Budget
Setting aside your 10 to 20 percent savings is the first part of creating a monthly budget.
To create your budget, you first need to tally up your remaining income after you have set aside your monthly savings. You then need to subtract all of your regular monthly expenses like groceries, utilities, rent, car payments and student loan payments.
The remainder of your money should be split unto categories of discretionary spending like entertainment, eating out and shopping.
It is very important to stick to the budget. If for some reason you need to go over your budget, it is important that you discuss it with your spouse before you spend money to go over. That way, you can decide together if you really should go over your budget.
Creating and sticking to a budget is the best way to avoid financial problems and arguments when you are married.
Decide How to Set up Your Bank Accounts
When you are married, it is best to have multiple checking and savings accounts.
You should have a joint-savings account that you use for your savings goals. You should also have a joint-checking account that you can both access to pay for bills and things that are a part of your budget.
You also may want to each have separate checking accounts if you so desire.
One of the things you may not have considered is that getting married can affect your tax situation.
You can either file jointly as a married couple or file individually under the category of married filing separately.
Most couples choose to file a joint tax return because of the tax benefits. It is also simpler to file jointly.
However, you if your finances are complicated, you may wish to sit down with an accountant or tax attorney to decide which filing status will benefit you the most.
Finance is difficult even for trained professionals. Here are some serious personal finance mistakes that you should avoid making at all costs.
Not Setting Aside Money for an Emergency Fund
Yes, the first thing you should do when money is tight is to save more money. If you set aside a certain amount to pay yourself like it is a bill, you will not have to worry about any unexpected expenses.
The emergency fund is set up to keep you out of debt if something unexpected happens so that you will not have to pay late fees and penalties on top of any debt that you may have incurred.
Not Choosing a Plan to Pay Off Debt
There are two major ways in which you can pay off debt – the Snowball and the Avalanche.
The Snowball method of paying down debt involves throwing all of your resources at the smallest bill until it is paid off. This will give you a psychological lift for the next smallest bill, and so on and so forth.
The Avalanche method means that you pay off the bill with the highest interest rate first. This will save you money over the long term.
Not Buying Staples in Bulk
Certain items like bread, rice, bottled water, underwear and socks can be purchased in bulk from a warehouse.
This will leave you more money to put in your emergency fund or to pay down debt without having to diminish your lifestyle.
Not Giving Yourself a Grocery List
A great deal of the money that you spend in a month goes down the drain without you ever knowing where it went. This money goes towards impulse buys when you take trips to the store or the laundromat.
If you give yourself a definite list before you go out, you will be much less likely to spend these pennies on the impulse products that will quickly add up to substantial amounts of money.
Instead, put this money to work for you by paying down debt or by putting it into your emergency fund.
Not Cutting Out the Fat in the Budget
Much of the money that you spend is on convenience, not on products and services.
Case in point: You will spend almost 20% more money each month to go out to eat rather than staying home. When you go to the grocery store, purchase healthy foods that you can cook.
One specific way that you can lower your budget each month is to stay away from the convenience aisles in the grocery store. Fresh, raw fruits and vegetables cost much less than TV dinners, believe it or not.
This term can mean different things to different people. For one person, it can mean buying a coffee maker rather than going to a convenience coffee shop every day.
For another person, it can mean investing in stocks. Either way, having some accounts going up in value is a psychological lift that will help you to pay down your debt.
It will be even more of a stretch to set aside money to invest, but this goes along with the strategy of paying yourself first when money is tight anyway.