Tag: Finances

Financial Spring Cleaning

Published on by CarrieLeave a comment

With Spring finally here, many people are thinking about Spring Cleaning. For many, it is a time to tidy and organize around us so that we can focus on all the new things that Spring brings. That could involve cleaning out your closet, organizing your shed, or anything else that makes you feel ready for the coming season. This spring, consider doing some Financial Spring Cleaning! It is a great way to make sure that you and your money are ready for the year ahead. Here are some Financial Spring Cleaning suggestions: 

1. Check your credit report. 

Checking your credit report is a quick and easy way to protect your identity and review your financial picture. If you go to https://www.annualcreditreport.com, you can request a copy of your credit report from each of the 3 credit bureaus (Equifax, Experian, and Transunion). Once you have it, you want to review it to make sure all the information shown on the report is accurate! The Consumer Financial Protection Bureau has a great tool that walks you through the process for checking the accuracy of your credit report, you can find it here: https://files.consumerfinance.gov/f/documents/cfpb_your-money-your-goals_review-credit-report_tool.pdf

2. Have your tax paperwork ready to go. 

Remember that the deadline to file taxes is April 15! To be ready, gather all the documents you need and put them in a safe place. You don’t want to wait too long to get started on your taxes. Many of us hope to receive a refund, but if you do end up owing taxes you want to make sure you have the time you need to figure out a plan to pay that bill. You should also keep in mind that appointments with a professional can fill up quickly and even filing online with tax software can take longer than expected. But if you are ready well in advance, you can file your taxes on time and move on with your spring!

3. Review your spending habits. 

It’s always important to know where our money is going. One way to be more in touch with your spending habits is to look at bank records or credit card statements for January and February. You could go over them generally to see where you are spending money. You could also put expenses into specific categories and add them up to see how much you are spending each month on bills, groceries, going out to eat, or other categories. This is important because we often underestimate our spending and it can make budgeting very challenging! If you review your spending regularly, then you should have a much clearer idea of your spending habits. 

4. Consider creating a chart or visual for an important part of your financial life.

If you want to take reviewing your habits a step further, then consider creating a way to visualize some part of your financial life. One example is creating a bill calendar. You can use a generic calendar (as in one that is not for a specific month) to show the dates your major bills are due. That way you have a quick way to know which bills need to be paid on what dates. Another option is to create a picture of your debt. This could be a chart that shows student loans, car loans, credit cards, or other debts and their overall balance. It can be especially useful if you are working on paying down your debt!

5. Create financial goals. 

Finally, prepare for the season ahead by creating financial goals! Having a clear picture in your mind of what you want to do with your money can help you make financial decisions in the future. For example, it might help to carry a written reminder of your financial goals. If you are getting ready to make a purchase, seeing that written reminder could encourage you not to make the purchase and keep saving or to more deeply consider whether the purchase is necessary. The reminder is helpful because it changes your way of thinking. It helps you keep in mind that you are saying no to purchasing something right now so that, in the future, you are able to achieve an important financial goal! 

Wishing all of you a happy Spring!

Living Well

Published on by LauraLeave a comment

March is Living Well Month! The National Extension Association of Family and Consumer Sciences (NEAFCS) encourages families to live well through raising kids, eating right, and spending smart.

Physically, mentally, socially, and emotionally strong families provide strength for future
generations and Extension initiatives enable Maryland residents to build the knowledge and skill to lead full and productive lives.

The University of Maryland Extension Family & Consumer Sciences team provides comprehensive education for individuals in a variety of areas including nutrition, physical activity, mental health, chronic disease prevention and management, personal finance, and so much more.

Celebrate healthy living and the great work FCS professionals do to educate individuals, families, and communities in Maryland, and across the country, by engaging in one of the Living Well Month activities!

Follow the recommendations of the NEAFCS, or come up with some of your own goals to start Living Well!

Savings Goals for the New Year

Published on by CarrieLeave a comment

Each January we get a powerful fresh start in the form of a new year. That clean slate for the year ahead encourages us to set goals, try new things, and improve our habits for the year ahead. Often fitness and health goals get all the attention. Our friends are on social media sharing their new eating plan or marathon training schedule. Health goals are important, but financial goals can be just as important for overall wellness! As we head into 2023, why not try out some savings goals and shift some focus to your financial health?

Changing our behavior is always a challenge. In many ways, our brains aren’t wired to give up the things we want now for something we might be able to have in the future. And as our goals get bigger and further in the future, this gets more and more difficult. We might really want to pay off our car loan or student loan, but those things can take small amounts of money over many years. Spending that money on things we enjoy now would definitely be more fun and using that money to pay down debt can feel pretty anticlimactic.

One strategy for improving our motivation is to create a vision board. Ideally, this vision board would focus on a specific large financial goal. It would include pictures that show:

  • How it would feel to achieve the goal
  • What you would be able to do when you achieve the goal
  • The kinds of characteristics you will have when you achieve the goal

Looking at the vision board reminds us that the goal is important, possible, and that achieving it will change our lives for the better! It helps us visualize that when we say no to something right now, it is because we want to be able to say yes to something else in the future. I made one recently and hung it where I would see it each morning. It was focused on a dream I have always had to travel. After 5 years of saving, my husband and I took the trip I had always dreamed of last summer! I’m looking forward to making a new one for this year because the previous one was such a great source of motivation.

I tried to find my old vision board and include a picture here, but we moved recently and I can’t find it! So instead, here is a picture of my husband and I in Venice, Italy after saving for 5 years to make this trip!

The vision board is an excellent tool for motivation, but it needs to be paired with strategies you can actually use to save the money. One option is to start small because it gives you the chance to create a new habit without having to stick with any really major changes. For example, my bank allows me to use rounding up to increase my savings. With rounding up, each of my purchases is rounded up to the nearest dollar and the rounded-up amount is placed in my savings account. For example, if I bought dinner and it was 19.20 then my bank would round that charge up to 20.00. Of that, 19.20 would go to the restaurant and 0.80 would go into my savings account. The amounts are small, but they add up over time!

If you’re looking to save in larger amounts, it might be good to look into your bank’s options on savings accounts. At my bank, it doesn’t cost me anything to open an additional savings account and I can do it from right within their app. Once I have the account, I can add a label to it. I usually label my accounts with what I want to do with the money in the account. An example would be an account labeled “Emergency Fund” where I save for emergencies, or “Summer Vacation” where I save to take a trip with my family over the summer. Some banks even let you set a goal for your account and give you a status bar showing how much progress you have made toward your savings goal.

Things like this can really help with motivation! It seems simple, but adding these labels can be a powerful way to change the way our brain thinks about money. If I am running short and need to move some money from savings to make a purchase, seeing that label makes me stop and think. Is it really worth it to me to take money from my summer vacation to buy this other thing? Sometimes it’s groceries or an important bill, and the answer is yes. But other times I realize I’d much rather go on vacation than buy whatever it is I’m considering.

These small changes can add up to some major savings over the course of a year. They can help you establish an emergency fund and save for future needs (and wants). Hopefully you try out some savings goals or other financial goals this year! Drop a comment and let us know, do you have a savings goal for 2023? Are there any strategies you use that work for you?

Check Your Credit for the New Year

Published on by Jesse1 Comment

Why do I need to check my credit report?

There are two primary reasons to check your credit report. One is to ensure the accuracy of information and the other to monitor your credit reports to prevent identity theft. 

As a refresher, there are three major credit bureaus (Experian, TransUnion, and Equifax) that collect information about how you borrow and repay money. I wrote an information paper on Understanding Credit and Credit Reports for more information about credit reports. 

Credit scores can affect your ability to obtain loans. Image from pixabay.com.

The accuracy of information is important as it impacts our ability to obtain new loans and the rate we are charged for those loans. There is only one true source authorized by federal law to get your credit report. It is AnnualCreditReport.com. By federal law, you are entitled to a free copy of your credit report once a year from each of the three major credit reports. Some states may have additional expectations, like Maryland which allows for an additional free copy from each of the credit bureaus. 

Ever since the pandemic, credit bureaus have allowed individuals to get a free copy each week, but the ending date for that continues to change. The Consumer Financial Protection Bureau developed a nice tool / checklist to assist you in reviewing your credit report. 

The Federal Trade Commission reports 5.7 million cases of fraud and identity theft. Checking your credit report periodically can serve as a form of identity protection. The credit report contains a list of all active accounts reported to the credit bureau. You should make sure every account listed is an account that you opened. 

If you don’t plan on opening a line of credit any time soon, I suggest you freeze your accounts. This prevents someone from accessing the information in your credit report. Experian has good information about freezing your account. Remember you need to freeze the account with each credit bureau. And don’t worry, you can unfreeze or thaw your account at any time.If you become a victim of identity theft, FDC developed a website to guide you through the reporting and recovery process.

Open Enrollment for Health Insurance and Medicare Is Happening Now

Published on by brspecialguestLeave a comment

Guest post by Maria Pippidis, Extension Educator, University of Delaware Cooperative Extension

Are you spending too much on health insurance? It’s time to do a health insurance check up! 

Open enrollment for the Health Insurance Marketplace (November 1, 2022, through January 15, 2023) for those under age 65 and Medicare (October 15 through December 7) for those over 65 is happening now. Even if you have health insurance already, comparison shopping can help you save money and get better coverage. It is important to compare not only the premium costs but also other out of pocket costs like deductibles, copayments and coinsurance in relation to how often you use health care services. There are also options for dental insurance. Think back about how you have used health care services in the past to help you do an estimate of how much these other out of pocket costs might affect the choice of plans you consider.

Remember, for health insurance marketplace plans, prevention services like annual check ups with your primary care provider or gynecologist are covered at no charge.

For those under age 65, use the healthcare.gov website to see options for you and your family or for covering employees if you are a small business. Depending on your income and the state you live in you will have a variety of health insurance policy options and tax credits or tax subsidies. Here are some examples for a family of 4 with 2 children under 18 years of age in Delaware:

  • If your income is below $38,295/year you may qualify for the Children’s Health Insurance Program (CHIP) or Medicaid. 
  • An income range between $38,295 and $69,375/year will provide coverage with tax credits on premiums and reduced deductibles, copayments, and coinsurance.
  • An income range between $69375 and $111,000 will provide coverage with reduced premiums.

This is just an example and the income ranges will be based on your family size and your state. By going to the website and adding your specific information, you’ll get a better sense of the costs and coverage. I personally have seen farm operators save thousands of dollars by exploring the marketplace for health insurance options. Even if you have off farm employment covering your whole family, it might be worth exploring the healthcare marketplace options for those not working off farm and your children.

You can explore options online or you can get help by talking to a health insurance navigator. The healthcare marketplace website in your state will provide information about who are certified providers that can assist you in better understanding your options. These individuals have been trained to provide information about the plans. Note that some insurance brokers have been certified as well; these individuals can inform you about the marketplace plans and other plans for insurance organizations which they represent. There are also navigators/assistors who work with non-profit, government or health care organizations who are certified.

For those who are 65 and older, use the medicare.gov website to see which Medicare Advantage Plans or Medicare Supplemental (Medigap) plans are available in your area. You can comparison shop these plans very easily on the website. My advice is to ignore the TV commercials and the junk mail regarding Medicare plans. Rather use your State Health Insurance Assistance Program. You can find your local contact by visiting this website https://www.shiphelp.org/ and searching by your state. This program can assist you by setting up a free counseling session with a trained volunteer at a convenient site near you. Their goal is to empower people with Medicare to better understand their options and enable them to make the best health insurance decisions for themselves. The counselors can help you better understand your options to help you make the best decision for you related to Medicare, Medicaid, Medigap (Medicare supplement insurance), Medicare Part D, long-term care insurance and other types of health insurance. There is no charge for the service.  

Though it takes a bit of time, invest in yourself  because no matter what age you are, reviewing your health insurance coverage is one of the best ways to stay financially and physically healthy in the coming year.

Just for Teachers: A Student Loan Forgiveness Program of your Own

Published on by Dorothy1 Comment

Teachers, you are appreciated! Student loan forgiveness has been given much attention over the last few years, particularly Public Service Loan Forgiveness (PSLF). However, there are other loan forgiveness opportunities. One such program is Teacher Loan Forgiveness, which provides a path to either $5,000 or $17,000 of loan forgiveness for elementary, middle, and high school teachers. Like any other loan forgiveness program, there are several notable eligibility requirements.  

Time. To be eligible for Teacher Loan Forgiveness (TLF), you must complete five, consecutive and complete academic years of employment in a position considered to be full-time. Absences under military orders, the Family and Medical Leave Act and for certain post-secondary education create exceptions to this policy.

School. Loan forgiveness is for K12 teachers who work at a school or educational service agency designated as serving low income individuals. The Department of Education publishes a list of schools and agencies that meet this criteria. Removal of a school from this list does not disqualify the teacher from loan forgiveness, as long as one full year meets this eligibility criteria. 

Credentialing. To qualify for loan forgiveness, teachers must be considered highly qualified for the duration of their five qualifying years. This means they have at least a bachelor’s degree and have met their state’s certification requirements. 

Loan.  Loans must be Direct or FFEL Program loans made after October 1, 1998, and must have been made before the end of the five qualifying years discussed under the time requirement above. This means that new student loans obtained during these five years are eligible for forgiveness. 

Who gets the $17,000?  For teachers who meet the above criteria, there are two career paths to this higher benefit. One is teaching math or science at the secondary school level. The other is as a special education teacher at any level, elementary through high school.  All other teachers remain eligible for $5,000 in student loan forgiveness.  

What about TEACH grants?  The federal Teacher Education Assistance for College and Higher Education (TEACH) program is a separate program from TLF and teachers can benefit from both.  TEACH offers grants up to $4,000 in annual financial aid to full-time undergraduate and graduate students who are enrolled in a teaching degree program.  Grant requirements include four years of service. TEACH and TLF service periods can run simultaneously. More information is available on the government student loan website. Here you can find additional details, application information, and links to the FAFSA. 

Fall is For FAFSA

Published on by DorothyLeave a comment

October 1 of each year marks the date that the FAFSA (Free Application for Federal Student Aid) becomes available. Students who wish to receive any form of student loan or grant from the federal government must complete and submit it. Most states and colleges also require completion before schools offering aid and formulating a financial aid package.  Even some scholarship foundations and other private grantees will ask for the FAFSA.  

The financial aid process can feel somewhat mysterious for both students and their families.  The first step is to complete the form.  It is available on the StudentAid.Gov website and can be submitted online or mailed.  If sent in electronically, the Department of Education processes your application in about three days, and then makes the information available to all of the schools you chose to list on the form.  Each school then uses the information you documented on the FAFSA to determine how much aid you are eligible to receive if you attend that school. Aid can be a combination of subsidized loans, unsubsidized loans, grants, and scholarships. 

To determine a student’s financial package, the financial aid office evaluates a complex formula.  The parts of the formula are the cost of attendance (COA) and an Expected Family Contribution (EFC). The outcome of this formula will determine the amount and mix of student financial aid. 

Cost of Attendance. The COA takes into account the variety of costs that the student will incur in order to reasonably complete their education.  This calculation includes tuition and fees, living expenses such as lodging and food, books and related resources, dependent care expenses if the student is a caregiver, travel to and from the school, costs of disability accommodation, and reasonable study abroad costs if applicable.  

Expected Family Contribution. The EFT is the portion of costs that the student and family are expected to pay toward the cost of attendance.  The EFT is also a formula, and factors in the size of the student’s family, the number of students attending higher education (for now), most forms of income, and certain assets. Whether home equity is considered or not can depend on requirements of some private institutions. 

Be careful with deadlines.  While the FAFSA can be completed and submitted any time between October 1 and June 30, many schools have earlier deadlines, especially for specific scholarships and grants.  Additionally, even some federal grants are available on a first-come-first-served basis, and the opportunity for those funds can close once the budget is used. 

Next year, there will be many changes happening to the FAFSA application.  These changes will not be in effect until the 2023-2024 application period, but they will be discussed in an upcoming post so families can plan accordingly. 

Auto Insurance 101

Published on by JesseLeave a comment

While many of us drive a car, most of us have no understanding of our auto insurance policy. What do the numbers mean like 50/100/25 coverage? How often should I compare rates with other insurance companies? Or, understand terms like liability, collision, bodily injury, etc. I guess we will call this auto insurance 101.

Let’s start with when you need to get insurance. You can buy a car, new or used without purchasing insurance, unless you are borrowing/financing the car. It is when you request a license plate that you are required to show proof of insurance. For most of us that happens simultaneously with buying the car. The requirement is actually proof of liability coverage as needed for registration, which is covered under what is called compulsory automobile coverage. Liability is when you are held responsible for the damage to another or their property. 

50/100/25???? These are simple numbers to explain how you are covered by your insurance policy. It falls into three categories: per person, all persons, and property for each accident. The 50 actually means that each individual is covered up to $50,000 per person in an accident; 100 is $100,000 in payments to all persons in an accident – this is also referred to as bodily injury coverage. And you guessed it, 25 is $25,000 for property damage. 

States vary on minimum requirements. For Maryland, it is 30/60/15. Now think about this, how quickly would someone’s medical bills reach that 30 or 50 limit. So, who would be responsible for payment after that? It could be you. Think carefully when making decisions about how much coverage you need. 

Now if you have a loan on your car, the lender may require some additional coverage such as collision coverage or comprehensive physical damage. This is to protect the lender from losing money if something happens to the car. Collision coverage is just as it sounds; if there is a collision, the insurance fixes it. Comprehensive physical damage is to cover the car if something else happens like a hail storm puts dents in your car. 

The cost of your policy is determined by how much coverage you want and other factors such as the value of the car, safety features on the car, miles driven, how well you drive, age, gender, etc. Another item to consider is how often to compare insurance prices. Ideally, I suggest you get quotes every year, but at least check every other year. You may be surprised how much money you can save by switching plans.