Volusia Banks

Creating a Beautiful Wedding Day on a Realistic Budget

As we move into the summer months, many parents will also be heading into the wedding months.

Although, as parents, this is a milestone, a rite of passage in your life as well as your child’s, this can also be a very stressful time as well.

The cost of a wedding today can be overwhelming. Whether you’re picking up the entire bill for your child’s big day or sharing the cost with the bride and groom-to-be or his or her perspective in-laws, having a well-thought-out plan and a realistic budget will help keep what should be one of the most memorable days of your life and your child’s from getting out of control.

In a perfect world, we would’ve started saving for this big day shortly after our child was born…in addition to saving for his or her college and our retirement fund. But, if you’re like most parents, this just wasn’t doable. Although, it’s an admirable goal to save for your child’s wedding, most financial experts would advise that this shouldn’t be prioritized over college or retirement.

This is not to say that it’s too late to save, however. As soon as you know that a wedding is on the horizon, you should start saving.

But, don’t promise what you can’t deliver. As much as you’d like to be able to give your child the wedding of his or her dreams, it’s definitely not worth jeopardizing your financial viability to do it. For example, if you withdraw money from your retirement account pre-59 ½, you could face a penalty as well as additional taxes. In addition, you may never be able to replenish the money you withdrew or make up it’s earning potential, which could really set you back.

The first step in reducing the financial stress often associated with wedding planning is by simply talking about it. Sit down and talk with the bride and groom-to-be and put your financial cards, so to speak, on the table. This way, the couple has a realistic idea of what they can expect from you and the big day in general.

The second step is to find ways to save money.

You don’t have to break the bank to give your son or daughter a beautiful wedding day. Here are a few suggestions to save money on the big day without sacrificing the memories.

Limit the Guest List – One of the easiest ways to reduce the wedding budget is to reduce the guest list. Yes, a wedding is a celebration. But, keep in mind, it’s also an intimate moment. Be realistic. If budget is a concern, limit your guest list to the immediate families and closest friends. Not only will this save a lot of money but it will also be a more meaningful day.

The Dress – Many women spend a good portion of their lives fantasizing about their wedding dress…and consequently, spend a good portion of the wedding budget on it. This doesn’t have to be the case. It’s possible to find a gorgeous dress for far less than the exorbitant prices charged by most bridal salons (e.g. secondhand stores, eBay or consider using a family member’s gown).

Reception – This typically is the most expensive part of the big day. Consider cutting the cost of the reception by holding the wedding on a Friday or Sunday and/or opt for a brunch or cocktails and hors d’oeuvres or dessert/cake/champagne or possibly a garden picnic over a full, sit-down dinner. If you want a dinner meal, consider a buffet with less expensive items like chicken, pasta and in-season produce.

Music – Have the bride or groom-to-be load up the playlists on their iPod or iPhone for each part of your wedding – pre-ceremony, ceremony, cocktail hour, special dances, dinner, dancing, etc. Ask a member of the wedding party to act as MC for special announcements.

Flowers – To cut costs on the wedding flowers make sure to only order in-season flowers and use the same flowers at the church and the reception. You can also reduce this expense by ordering loose stems and making the arrangements yourself. In addition, flowers ordered online are typically less expensive than those ordered through a traditional florist.

Drinks – It’s a personal option whether to serve alcohol or not. But, if you’re going to serve alcohol, you can save money by offering only beer and wine and/or a champagne punch. But, make sure to have ample non-alcoholic beverages as well.

What You Can Skip – Most guests toss wedding favors as soon as they get home. If you absolutely have to give out favors, make something yourself…like baking a special treat (cookies).

You can also eliminate the unnecessary expense of save-the-date cards unless it’s a destination wedding, requiring people to make travel arrangements well in advance.

With all of these suggestions in mind, remember that budgeting and saving money doesn’t mean that you’re skimping on your child’s big day. With imagination, creativity and open communication, you can still have a beautiful wedding day for your child on a realistic budget.

Happy planning!

Don’t Fall Victim to a Tax Scam

Tax season is looming and, unfortunately, so are the scammers. With a growing number of reports over the last several weeks, from the IRS and police departments across the country, of people falling prey to tax schemes, it’s the perfect time to share some of the most widely used tax scams. Hopefully, this insight will keep you from becoming another statistic.

Phone Scams – This scheme has been occurring with more frequency over the last few weeks. Basically, someone calls you claiming they work for the IRS. These scammers impersonate an IRS agent and typically try to scare/threaten you. They try to intimidate you with supposed penalties, being arrested or deported, etc. if you don’t pay them right now. They even may know all or part of your Social Security number. Don’t panic. The IRS won’t ever just call you out of the blue. They always initiate communication in writing, even if you owe money. They also will never ask for debit or credit card numbers over the phone or threaten you with arrest, etc. for non-payment. If you have any doubts to the authenticity of a call or any correspondence, you can contact them directly (800-829-1040) or visit their website (IRS.gov).

Phishing – This scheme happens throughout the year. This occurs when scammers try to get your personal information by fooling you with fake emails or websites. However, during tax season they lure you in by claiming they have information about your tax refund, etc. You may, for example, get an email that looks like it’s coming from the IRS, inviting you to click on a link for information concerning your tax return or the money that may be due to you. Don’t fall for it. The IRS doesn’t initiate contact via email.

Identity Theft – This one is the worst…the tax scheme of all tax schemes. You arehappily awaiting your tax return, already happily anticipating where you plan to spend it and then you find out that someone else has been using your Social Security number as well as other identifying information, has filed a return in your name and is claiming your refund. Cut this off at the pass by never giving out personal information unless you know who’s asking for it and why, shredding personal and financial documents, knowing your tax preparer (see below) and filing your return early…beating the scammers to the punch.

Tax Return Preparer Fraud – You are inundated with advertisements of people/services that want to prepare and file your return for you. Just remember, like every service and/or person, some are ethical and honest and some are not. A majority of taxpayers today use a preparer. Just do your homework…check them out…get references, etc. In addition, remember that just because someone else prepares your tax return doesn’t release you from the responsibility of its accuracy. You’re the one who is ultimately responsible for the information contained in your return. So, make sure to review it thoroughly before you file it.

False Promises – Always trust your instincts…your common sense. The old saying, “If it sounds too good to be true, it usually is,” can often be the case where refunds are concerned too. Watch for promises of big tax refunds by people who don’t know anything about you or your financial/tax circumstances.

Tax season can be hectic enough without adding undue stressors. So, eliminate the added stress by being aware of these types of scams, using your common sense, dealing with reputable, longstanding tax preparers and thoroughly reviewing your return. And last, but not least…when in doubt, contact the IRS.
Here’s to a stress-free, safe tax season!

Countdown to College – A High School Action Plan

In the blink of an eye, seeming like it was only yesterday you put them on the bus for their first day of kindergarten, your child is entering high school and it’s time to begin preparing him or her for the next big chapter of their lives – college.

Believe it or not, the classes that your child takes and the activities they do in high school play an integral part in shaping them as an adult as well as a college applicant.  Even if your child plans to attend a local community college or less-selective state college, he or she will still need to successfully fulfill certain requirements, and if they want to gain admission to highly selective colleges or receive scholarships, they will need to accomplish even more. The bottom line, it’s very competitive out there!

In the same breath, high school shouldn’t be a dreary march through class requirements and mandatory community service hours. It should also be a time of exploration for your child – figuring out who he or she is and what he or she wants to be when they grow up.

With that said, here are some basic guidelines to help your high schooler work toward his or her educational and life goals.

First and foremost, have them begin setting goals. Whether your child plans to go to college or immediately head out into the workforce, now is the time for them, with your help and guidance, to take stock of their aspirations, strengths, weaknesses and life experiences and begin the process of ascertaining what they might like doing when they’re on their own. They don’t need anything written in stone, but by their sophomore year they should have some broad ideas of what they might want to pursue in the next several years.

This is also the time to have your child look into the scholastic/collegiate requirements of his or her career interests. Have your child begin setting goals based on this concerning his or her grades, standardized test scores, involvement in school and community as well as the steps needed to reach those goals.

Your child should also begin seeking experiences through clubs at school, volunteer activities and speaking to individuals in the fields he or she is possibly interested in pursuing. A wide range of experiences will help your child narrow down career possibilities as well as help them build an attractive, competitive college resume.

Now that your child has set his or her goals for the next four years (freshman through senior years), he or she should break them down year by year. Having a long list goals and to-dos can be daunting. The process won’t be so overwhelming if it broken down into a yearly check list. His or her high school counselor should be very helpful with this task. This will also help your high school student stay on track and eliminate any last minute surprises.

Below is a basic action plan or check list for your child’s high school freshman, sophomore, junior and senior years.

  1. Freshman year – Have your child meet with his or her counselor and start getting involved in extracurricular activities (e.g. a part-time job, joining a school club or volunteering in the community). This is the time for your child to seriously think about not only their GPA but also the classes they are taking to earn that GPA. If they haven’t been automatically placed into advanced classes, it’s a good time to have them ask to be placed in them. Most schools will allow students to move into accelerated classes if they’re doing well in the ones their currently taking.
  2. Sophomore year – Have your child continue meeting with his or her counselor, keeping grades up and staying involved in outside activities. This is the year to begin looking at perspective schools and their scholastic requirements as well as financial planning. Creating a financial plan can better help you and your child prepare for the financial responsibility of college, establishing an estimate of tuition, housing and ancillary costs (books, fees, meals, etc.), so that your child’s college education doesn’t become a financial burden.
  3. Junior year – This year is when the rubber meets the road so to speak. Your child should begin preparing for standardized tests now instead of waiting until their senior year. Time spent doing this now will allow your child to concentrate on their grades and enjoy their final year of high school. This is also the time to begin searching for scholarship opportunities. A great place to begin is scholarships.com. Again, his or her counselor can be of great help with this.
  4. Senior year – Your child’s high school days are numbered and college is right around the corner. Now is the time to begin the college application process. Here are a few helpful reminders:

a. Begin gathering recommendations – To ace this section of the college application, have your child get letters of recommendation (e.g. teachers, coaches, volunteer directors, summer job supervisors, etc.).

b. Register for the ACT and/or SAT.

c. Apply to selected schools – Pay close attention to deadlines. Your student will stand a better chance of admission if they apply early. Make sure your child also pays close attention to grammar and spelling when completing his or her application form. Have your child personalize their essay to the particular school where they are applying (e.g. citing reasons for their interest in each particular school).

d. Continue searching for scholarships – Have your child begin this at the start of the school year.  Have them see what’s available and what’s coming up so they will have time to apply for those scholarships that are best suited to them. There will be hundreds of scholarships that will be applicable to your child. So, it’s best to have them select their top 10 or 20 to begin and continue moving through the list with another 10 or 20 each month until they’ve exhausted the list.

e. Submit the FAFSA form – the deadline for submitting the FAFSA on the web varies by state. No matter the date, you and your child should try to submit it as soon after January 1 as possible. It’s quicker and easier to submit this form online at fafsa.ed.gov. Beware of sites that want to charge for applying for financial aid. The FAFSA is a free application for federal student aid.

e. Now, it’s just a waiting game – Most colleges will let your child know their decision by May. Once your child has received all his or her letters of acceptance, begin weighing the options. Both of you will want to consider financial needs, the location, and of course, the overall reputation of the college as well as their reputation in the field of study your child is planning to pursue. Have your child let each school know their decision as soon as they can.

Phew! You’re done! Now, you both can sit back, relax and begin looking forward to a life changing and exciting next four years!

 

Finance 101 – Teaching Kid’s About Money

We teach our kids many valuable lessons in their formative years – how to share, right from wrong, respect for others, etc. – but, the one lesson most parents don’t teach early enough is the value of money.

As children grow older, they eventually learn about money with or without our help. But, teaching our children about money, financial literacy, early in life sets them up for a lifelong legacy. Financial expert, author, founder of Youthpreneur, an organization the encourages an entrepreneurial spirit in children, and former member of the President’s Advisory Council on Financial Literacy says, “The more control we have over our money, the less control it will have over you.”

Lechter also explains how important it is to teach children financial literacy because they see us (parents) spend money, but they don’t understand the concept of creating it, keeping it or investing it. “Kids don’t understand the relevance of earning, saving and spending,” she notes.

However, if parents make a conscious effort to teach their kids about money, they are much more likely to value it. By giving children a financial education early, beginning as early as four years old, we can help them learn to be responsible with their cash. We will also do our children and ourselves a huge favor. We will not create and reinforce the fallacy that we are human ATMs (the ole money grows on trees misnomer), setting us both up for friction, frustration and oftentimes failure later in life.

With this said, here are a few ways to get started.

1. Make children work for their money – Most children can do some small chores as early as two years old, like putting their plates in the sink, helping you pick up their toys, etc. By the time they are about four years old, you can begin giving them a small allowance for doing these behaviors. You shouldn’t give them money for doing routine behaviors like brushing their teeth or going to bed on time. They should earn allowance for doing things that are above and beyond normal daily behaviors. Determining the amount to give them is totally up to you. Typically, the recommendation for children starting out is about $4 per week.

2. Teach children to save – Children can learn the concept of saving at a very young age. Let’s say Johnny wants a Lego set that costs $12 and they earn $4 per week doing their chores. Explain to him that it will take three weeks of saving to earn enough money to buy the Lego set. This also begins teaching basic math skills (i.e. 3 weeks X $4 = $12). When they get a little older, you can throw in the lesson about Uncle Sam, the infamous TAX MAN. But for now, keep it simple.
Note: Most young children don’t quite grasp the whole savings concept. You will need to remind them and encourage them often. One great way to begin getting this concept across is with a savings jar (make it clear so they can see the money). Each week when they get their allowance have them put the money in the jar. Tell them how much money they now have in the jar and how many more weeks they have to save to get that Lego set. When they get older, you can encourage them to start putting this money in the bank.

3. Teach children to respect property – We can teach our children a lot by encouraging them to value their own property as well as the property of others. If children grow up respecting the things around them, they will learn respect for money as well.

With a younger child, the best way to teach them this lesson is by taking away a toy or other item if they mistreat it. As children get older, it should be the, “If you break it, you buy it,” philosophy. The best way to teach a child to respect property, his or hers or someone else’s, is to make them pay for (at least part of) replacing it if they intentionally break it.

4. Set a good example – Children emulate their parents. So, if they see you saving, they will save too. Set a good example by showing them that you save for things you want too. For example, have your own money jar to save up for the family summer vacation or something as simple as the family Saturday movie theater outing.
As parents, you should also be open about finances in your household. Talk about money and your financial goals in front of your kids. You must use your common sense about this though. You don’t want to worry your children by discussing serious financial troubles in front of them. But, do talk to them about financial matters – directly and in a manner that they can easily understand.

5. Make learning about money fun – Kids will be more interested in learning about money if you make it fun. A great way to do this is to set a family savings goal for something, e.g. a family vacation or a weekend outing, and begin saving for it. Make a chart and display it somewhere the entire family can see it, like on the refrigerator or somewhere in the kitchen. As you set money aside, for example, for your family vacation fund, have the children participate by coloring in the chart or writing in the new number total of the money set aside, showing the increased savings and how much closer the family is to its goal.

As your children get older, you will need to come up with new ways to teach them about money and finances. But, by beginning early, you will make this more advanced later lesson easier, as well as helping them to avoid the pitfalls of bad financial habits.

Last-minute Ways to Save for Summer Vacation

Summer is just around the corner and most of us have begun thinking about and possibly are already planning for our summer family vacations.

In an ideal world, we’d already have a fully funded vacation savings account to pay for our annual family getaway. However, the reality is that most of us wait until the last minute to begin planning and paying for our summer vacation.

So, here are a few fast track tips to help you save for your summer trip:

1. Start with a budget – discuss and determine upfront how much you want to spend on your family vacation. Have a specific figure in mind. This should include plane tickets or gas if you’re driving, hotel prices and an estimate of cost for meals, admission tickets for theme parks, museums, etc. Then, total it all up. If this figure sends you into a coronary arrest…just kidding…then cut back until you and your bank account are comfortable. The last thing you want to do is to go into debt for a vacation. If money is tight, consider taking a couple of weekend getaways instead of one big dream trip.

2. Prioritize now – are there some items currently in your budget that you can omit or would be willing to sacrifice now for a fun vacation later? Can you downgrade a plan, such as your TV cable or satellite plan or go out to eat less? A typical family with kids younger than 6 spends an average of $240 each month on restaurant meals, according to the National Restaurant Association.

So, go through your current household expenses and cut out some nonessentials or superfluous expenses. Then take that extra money and put it away in a separate vacation savings account.

3. Have a garage sale – a garage sale is a great way to earn some vacation cash quickly. Run an ad in the local paper to attract a crowd and post easy-to-read signs around your neighborhood. Get the entire family involved in this – make this a fun family affair. Have the kids go through their rooms, toy boxes, etc. and tell them whatever proceeds are collected from their items will be put towards their souvenirs. This is also a fun spring-cleaning project. It’s a win-win.

4. Use your tax refund now – if you typically get a sizeable income tax refund from the IRS every year, you are probably having too much money withheld from your paycheck. If this is the case, fill out a new W-4 form and adjust your withholding so that it’s fairly close to what you owe each year. Then begin transferring that extra money into your dedicated vacation savings account. If you still get a refund, stash that away as well.

5. Let your credit cards help pay for your vacation – in the months prior to your vacation, use your credit cards with reward points for everything your normally pay for with cash, debit card or check. Use these accumulated points towards plane tickets, hotels, rental cars and gift cards for restaurants. But, make sure to pay off the balance on your card in full every month or you’re defeating the purpose of a debt-free vacation.

6. Get everyone involved in the saving excitement – chart your savings with a graph, much like you see with fundraisers, on a large poster board. Track your weekly and monthly progress with colorful markers. You can even reward yourself and your family for reaching certain goals, e.g. go out for ice cream when you’ve reach a savings milestone.

In a nutshell, make a realistic plan for your family summer vacation, save for your plan and make the process a fun family affair! By doing this, you will be creating special memories instead of debt.

Tax Season: A perfect time to think about an IRA

With tax day looming, it’s a great time to review your current retirement savings strategies and make any changes that are necessary in an effort to keep your plan on track for long-term financial security. This time of year is also a perfect time to start an IRA if you haven’t done so already.

The IRS allows contributions to an IRA up to April 15, 2014 for the 2013 tax year.

There are two types of IRAs available: a traditional IRA and a Roth IRA. The principal difference between the two is the tax treatment of contributions and distributions or withdrawals.

The traditional IRA may allow a tax deduction based on your contribution, depending on your income level. Earnings on this type of account compound on a tax-deferred basis. In other words, distributions are taxable at the time of withdrawal at the then-current income tax rates.

The Roth IRA doesn’t allow a deduction for contributions. However, earnings and qualified withdrawals are tax-free.

When deciding whether a traditional IRA or a Roth IRA is the right choice for you, you need to weigh the immediate benefit of the tax deduction and earnings that compound on a tax-deferred basis against tax-free distributions in retirement.

If you need the tax deduction to help lower your tax bill this year – and you qualify for it – then you may want to opt for the traditional IRA.

To qualify for the full annual IRA deduction in 2013, you must either: 1. Not be eligible to participate in a company retirement plan, or 2. If you are eligible, you must have an adjusted gross income of $59,000 or less for singles, or $95,000 or less for married couples filing jointly. If you are not eligible for a company plan but your spouse is, your traditional IRA contribution is fully deductible as long as your combined gross income does not exceed $178,000.

If you are covered by a retirement plan at work, your 2013 deduction will be reduced if your modified adjusted gross income (MAGI) is:

Between $95,000 and $115,000 for a married couple filing a joint return for the 2013 tax year.
Between $59,000 and $69,000 for a single individual or head of the household for the 2013 tax year.

You must also consider the tax bracket you think you will be at retirement. If you expect your tax bracket to drop considerably and you qualify for the deduction, the traditional IRA may be the better choice.

If, based on the scenarios above, you don’t qualify for the deduction and/or you expect that your tax bracket will not be significantly lower; a Roth IRA may be the better option.

You should maximize your IRS allowable contributions if financially possible. The maximum is $5,500 per individual, plus an additional $1,000 annually if you are aged 50 and older for 2013. Note, those amounts are per individual not per IRA.

Not everyone can afford to maximize his/her annual IRA contribution, especially if you are already contributing to an employer retirement plan. If your workplace plan offers an employer’s matching contribution, then this “free” money may be more of an incentive to than the annual IRA deduction. If this is the case, it may make more sense to maximize the employer matched plan first and then try to maximize your contributions to your IRA.

The important takeaway from this information is that you shouldn’t hesitate to use the remaining time between now and April 15 to contribute or start an IRA. The ability for you to live comfortably in retirement depends on it.

Note: The above article is intended to provide generalized financial information for educational purposes only. It is not intended to give personalized tax, investment, legal or other business or professional advice. Before taking any action, you should always seek the assistance of a professional.

Awareness is Your Best Defense

With the growth of e-commerce, consumer online presence and email communication, scammers have also adapted to leverage this medium to con people into providing personal and financial information. One of the most common mechanisms is “phishing.”

Phishing is a fraudulent attempt to steal information, such as usernames, passwords, financial details, etc. by masquerading as a trustworthy entity. Some examples of this would include someone pretending to be social media website, a bank site, an auction site, an online payment processor or an IT administrator – the most popular culprits.

Phishing is typically done through email. The email has the look and feel of the legitimate sender. Phishing emails almost always instruct the recipient to click on a link that is contained in the email. This is a fake link that takes you to a fake website where the scammer – cybercriminal gathers your personal information.

>What to look for in a phishing email:

>Generic greetings.

>Forged links.

>Requests for personal information.

>A Sense of urgency – making the recipient believe that something has happened that requires their immediate attention.

>Incorrect spelling and bad grammar.

>Links in email.

>Threats – telling you that your security has been compromised and that you must act immediately to correct it.

>Spoofing websites or companies – scam artists use graphics in the email that appear to be connected with legitimate websites, taking you to phony sites or legitimate-looking pop-up windows. They also use web addresses that resemble names of well-known companies but are slightly altered.

Phishing is big business. As the world gets ready for the XXII Olympic Games in Sochi, Russia, so are the professional scammers. On the heels of the recent payments breach at Target Corp., cybercriminals have already begun targeting the customers affected by the breach, sending fraudulent emails, pretending to act on Target’s behalf, attempting to get personal information.

Quite unfortunately, in a digital world, the safest practice is to trust no one. The Internet is a wonderful too. But we must use it wisely – think before you click and keep in mind:

>No reputable company or organization will ask for your confidential information via email.

>Never click on a link in an email that asks you to give your personal information.

>Never reply to a popup message to provide information.

>Review you accounts (banking, credit cards, etc.) regularly.

>Always check the authenticity of the website.

>Never provide personal or confidential information to “http” links. Look for “https” links and the SSL lock symbol in the browser.

If you suspect that you have received a phishing email, contact the real company and report it to antiphishing.com, the Federal Trade Commission at spam@uce.com or the Internet Fraud Complaint Center of the FBI website.

Getting Your Fiscal House in Order in 2014

Getting Your Fiscal House in Order in 2014

By now, most of you diehard “resolutionists” have committed your 2014 goals to paper. You are full of confidence or at least a hopeful expectation that this year will be the year you really get your life in order. You’ve vowed not to repeat past mistakes and are ready to take the bull, the new year, by the horns.

Before the year gets away from you, as they always seem to do, and you find some of your goals falling by the wayside, again, as they always seem to do, you may want to make sure you get your fiscal house in order first. After all, most people’s resolutions consistently revolve around two things: health and money.

Even the federal government has a New Year’s Resolutions site with links of references to help you stay on track. Not too surprisingly, three of the 13 most popular resolutions are money focused – getting a job, saving money and managing debt.

So before you get caught up in life and your best New Year’s intentions fade away with the glitter of the holiday season, consider the following financial checklist for the new year.

Meet with a financial advisor. If you haven’t had a discussion with a financial advisor in some time, or ever, now is the time to do so. It’s never too early or too late to begin planning for your future/retirement. If you already have a financial advisor it is a good idea to meet with him or her at least once a year to monitor your progress and evaluate your plan.

Look at your taxes. If you are one of the many April 15 procrastinators this could be the year to change that. While you are waiting on your W-2s, 1099s, etc., you can begin getting your receipts in order and/or schedule an appointment with your tax preparer. Why not take the stress off tax season this year and get your taxes done early, especially if you are getting a refund. Please note that the earliest day the IRS will be processing 2013 individual tax returns this year is Jan. 31. This date is slightly later than usual due to the government shutdown last fall.

Develop or review your budget. If you haven’t created a budget, create one, or if you haven’t looked at your budget in some time, it’s time to update it. Things change (having a baby, elimination of a debt, an increase in household utilities, etc.) and consequently this affects your budget. This is also great time to re-evaluate your expenses. Cancel subscriptions or services you never use and contact companies that your do business with regularly (e.g. your cable company) to see if they can offer you a better rate. Increase deductibles on your automobile, home or medical insurance, if possible, to lower your monthly premiums.

Update your will. Like your budget, any changes, good or bad (e.g. divorce), can affect your will. If you don’t have a will, now is a good time to draft one.

Check your credit report. With identity theft on the rise, it’s very wise to monitor your credit. At annualcreditreport.com, you can get a free credit report from each of the three credit reporting agencies once a year.

Evaluate your retirement situation (ties in with ‘Meet with a financial advisor’). If you haven’t begun putting away money for retirement, there is no time better than now to start. Most financial experts will tell you to set aside 10 to 15 percent of your annual income each year for retirement. However, if you can’t manage that, put away as much as you can. Remember, saving something is better than nothing.

If you are on target with your yearly retirement contributions, it’s a great time to review your retirement accounts and strategies. If possible, according to financial experts, savers should increase their retirement contributions by 1 percent each year. You should continue this increase every year as long as you can until you are saving the maximum allowed by the IRS.

As is the case when making any major changes in your life, Rome was not built in a day. However, if you will commit to at least one of these recommendations, your 2014 finances are sure to see an improvement over 2013.

Staying Safe During the Holiday Season

As we begin the hustle and bustle this time of year is so famous for, don’t let your holidays be ruined by becoming a victim of a crime.

Unfortunately, not everyone has the “peace on earth, good will toward men” attitude. So with a little common sense and practicing the following safety tips, you can ensure your holiday is filled with happiness and celebration.

  • Use your ATM card wisely – When using your ATM card, make sure to be observant. Look around for any suspicious persons or activity.
  • What’s in your wallet – Losing your wallet can be a disaster for your holiday and a field day for an identity thief. Limit the amount of confidential information you carry in your wallet. Never carry account numbers, PIN numbers, a passport or your social security card. Most importantly, never set your wallet/purse down – unless your hand is attached to it.
  • Parking – Always park in a well-lit area and take note of where you’ve parked. Lock your car and close your windows (also while driving). When you return to your vehicle, have your keys in hand and when you approach your vehicle look around you for anyone or anything that looks suspicious. Make sure to scan the interior and exterior (especially underneath the car) from a distance to be sure no one is hiding.
  • Packages – Avoid overloading yourself with packages. It’s important to have clear visibility and freedom of motion to avoid potential mishaps. Lock all your packages out of sight in the trunk.
  • Cash – Avoid carrying large amounts of cash. Pay for purchases with a credit or debit card when possible. Notify your credit card company or bank immediately if your credit or debit card is stolen or has been fraudulently used.
  • Children – Make sure to go over a plan with your children ahead of time concerning what to do should you become separated while shopping. Never allow them to go to the parking lot or the car alone.
  • Scams – Be aware of anything that sounds too good – the “good deal” scams.
  • At home – Be extra cautious during the holidays. Make sure to always lock your doors and windows when you leave the house – even if it’s for only a few minutes. Leave lights on and music or the TV so the house appears to be occupied. Don’t have large displays of holiday gifts in open view of windows and doors. If you go away for the holidays make sure your home appears “lived in.” Purchase an automatic timer for your lights. Have a trusting neighbor watch your home and pick up your newspapers and mail while you are away. In addition, if you use lights on your Christmas tree, make sure they are in good working order and don’t leave them on while you’re not at home.
  • Drive defensively – Traffic is heavier during the holidays and drivers may also be indulged in too many holiday libations.
  • Parties – When hosting a party, find alternative transportation for guests who have had too much to drink; and if you are going out, please remember, Don’t Drink and Drive.

I hope by utilizing these helpful holiday tips, you and yours will have a safe and blessed holiday season!

 

 

Balancing and Reconciling Bank Accounts…Still a Good Practice

Even in this electronic age, it is still important to balance and reconcile your personal and business bank accounts. For many, balancing and reconciling their accounts is still something akin to having a root canal. But today, with online banking and smartphone apps, this seemingly outmoded exercise is easier than ever before and believe it or not, just as necessary.

Before we begin this discussion, I think it’s important to differentiate between the terms balance and reconcile. These two terms are oftentimes confusing and mistakenly used interchangeably, especially by consumers who don’t use paper checks or a check register to record their transactions.

Balancing – Balancing a check book shows how much money is available in your account at any given time. To balance an account, simply add all your new deposits to the beginning balance of the account and then subtract from that subtotal checks you’ve written, ATM and debit card transactions, cash withdrawals and bank fees. This process will determine your account balance on that given date.

Reconciling – Reconciling an account compares the bank’s records to your records – your check register. Your register should contain a running total of all of your transactions (deposits, checks, ATMs and debit card transactions, ACH debits and credits, fees, etc.). By performing this task on a routine basis you can quickly discover bank errors and most importantly, unauthorized activity.

Reconciling is completed by adding all of the deposits the bank has not yet credited to the bank’s balance and then subtracting all the payments, withdrawals and bank fees the bank has not cleared from that subtotal, confirming that the bank’s records match your check register. This should be done at least monthly – online banking allows the ability and ease to perform this procedure more frequently.

In the old days, these two tasks required paper and pencil and some mathematical calculations. Today, with the advent of technology, this process can easily be completed in minutes.

The benefits of taking the time to complete these two steps, balancing and reconciling, although much less time-consuming today, are still just as important.

By not reviewing your accounts on a monthly basis, first and foremost, you are not being a good steward of your finances. You are not keeping track of the money you spend or where you are spending it. Keeping an eye on your finances helps you maintain a healthy budget, avoiding overspending, overdrafts and incurring unnecessary and costly bank fees.

Many people are reluctant to critically examine their spending habits. The initial examination can oftentimes be painful. However, the end result, especially if this periodic looksee changes harmful spending patterns, is well worth the effort. In addition, there’s just as much value in simply making sure the math is correct.

Another very important reason to go through the balancing-reconciling-reviewing exercise is to spot financial management mistakes and fraudulent activity. This helps you recognize any unfamiliar transactions and unwanted recurring deductions. The sooner you are aware of this unauthorized activity, the sooner you and your bank can take the necessary actions and precautions.

In the end, taking a few minutes to balance, reconcile and review your bank accounts is time well spent. After all, it’s your hard-earned money!