Shopping mistakes to avoid this holiday season

Take a deep breath everyone, the holiday shopping season is fast approaching, but not to worry! Many of us fret at the thought of buying gifts at such a busy time of the year, but with a little helpful guidance, we can make some smart decisions to get over the finish line this year:

1. Black Friday

Many people believe that Black Friday is the best day to shop because it always has the most favorable savings. The day has become a huge marketing ploy for big stores, so don’t feel the pinch of needing to wake up at 4:00am in the morning to beat the people and lines for great savings on a specific day. A lot of stores offer similar deals to the ones displayed on Black Friday throughout the year and a lot of items are the same year after year as well.

2. Going Over Budget

This is an easy mistake to make. The best way to budget your money is to think of all the people you will be buying gifts for. Have a number in mind for how much you would like to spend on each and don’t go over! There are a number of great free applications for your smart phone that will help you.

3. Store Credit Cards

You’ll likely find yourself tempted to open up an in-store credit card at checkout to receive an additional 20% off, but be cautious! If you currently have a high interest rate credit card that you can’t pay off this is not a good idea. Be sure to consider outside factors before you dive in to additional savings. This could have a serious affect on your credit score!

4. Free Shipping

Don’t wait to the last minute to purchase gifts! If you do, you may find yourself paying a great deal of money on shipping in order for the gift to arrive on time. Take advantage of retailers that are offering free shipping. This will likely happen weeks in advance, so don’t procrastinate!

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How Apple Pay Doesn’t Help Personal Finance

Bruce Heen

Through the eyes of personal finance, Apple Pay is not as exciting as it was projected to be. Although boasting numerous pros, its plaguing cons have dubbed the program disappointing.

Apple had a wonderful opportunity to accomplish what Google failed with Google Wallet. It was widely anticipated, and nearly error-free as a mobile payment standard that is better than swiping a card. Apple Pay’s NFC token-based system which is based on a relatively new and important standard called, EMV Payment Tokenization, ensures that no party except your card issuer ever stores your personal card info. If Apple Pay becomes popular enough, it could mean that hackers would have a much harder time accessing accounts and fraud could fall significantly.

Cards for Apple Pay and transactions made with Apple Pay appear in iOS’s Passbook app, which could be transformed from tickets and coupons aggregator to the nexus of many iPhone users’ financial lives. A step in the right direction, it makes it far easier for us to check in on our accounts wherever we are and help us gain an often elusive sense of control over our money.

However, this is where the pros end. Apple Pay only shows you in passbook the most recent purchases you have made on its own network. Because such a small amount of merchants have the capability for Apple Pay, most of the spending will not come up on Passbook which was never designed as a personal finance account aggregator.

Apple Pay launches for in-app payments, we may finally see micro-payments take off. That will make the challenge of tracking your spending from multiple sources even more acute. Aside from the great security potential of the Apple Pay, is it worth it? It looks like a revolutionary technological security and environmental innovation that has the potential, but needs more work.

For more information, check out the full article here.

Personal Finance Game Leads to Scholarship Money


The financial industry has struggled to restore its image since its destruction six years ago. One common approach to do so has been developing programs to inform students about financial education. Tax preparer H&R Block released its $3 millions in college scholarship money to give to high school students who get all the answers right in an online budget game.

Block is following the lead of numerous national banks that sponsor some form of financial education. Visa has also made big commitments to the cause as well. This push has been a way to teach young people practical monetary skills while improving the financial industry’s damaged reputation.

Block is not a bank nor a credit company. However, the company is still passionate about teaching youth about finances. “It’s appalling how clueless many teens are about money,” says Block CEO William Cobb. He is not shy about admitting that Block’s “budget challenge” is as much about smart marketing as it is about helping teens get smart about money. The challenge concludes on Tax Day, April 15. But Cobb says educating high school kids about student loans and more is also “the right thing to do”.

Block’s program is constructed around an online game that simulates real life problems and situations. It is apart of a class with a teacher that teaches lessons for youth personal finance. The push for the high school students is a college scholarship. The first challenge will begin Oct. 3 and last for nine weeks. Five more challenges will run through mid-April next year. Students need about 30 minutes to set up their profile and about 30 minutes per week after that in order to compete.

Although its goal is to teach, the Block program seems not only engaging but fun. Participants will have access to a leaderboard to see where they stand amongst their competitors. Youth will need to figure out what the best choices are and to try to make sense of the world of money so they can make good choices in the future.

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Personal Finance Tips to Consider

Bruce HeenThere’s numerous ideas and thoughts on how to save money but the favorite seem to be to buy less lattes, pay less for data and switch your wireless mobile provider. However how valid are these assertions?

According to data on monthly Starbucks expenditure, people actually do not spend as much money on coffee as they assume, so cutting back won’t really rack in your savings. The average Starbucks customer goes less than 3 times a month and spends a total of $24 dollars. The dollars being spent are not very substantial, and although you could make a much cheaper coffee at home, there are better ways to cut back.

For Cable, analyzing data on how much people spend on major providers, such as Comcast, gives a good indication of potential savings. Most people pay between $50-$150 a month for Comcast so the ability to save is significant. It should not be hard to cut $50 from your cable bill a month which can save you $600 a year. A combination of other services such as Netflix and Hulu might work as well.

With so many cellphone providers, there is certainly an opportunity for savings. T-Mobile seems to be the cheapest based on what an average customer spends a month. The real savings comes from switching to one of the smaller carriers which will have you spending an average of $87 a month lower.

Coffee does not seem to be the money pit it used to be and wireless and cable seem to be where the real savings lie. Cutting $600 a year off your cable bill may be possible for many spending over $150/month and the savings on phone plans over a year could even hit 4 digits for those with some flexibility. So take some action and save some money.

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Financial decisions and family

Bruce HeenRetirement plans and other financial matters are not the most common topics of conversation when it comes to parents and their adult children. But it should be. As a result many young Americans are not prepared to live comfortably in retirement or support their family during a financial crisis.

A study conducted by Fidelity Investments discovered that about 64% of parents and children can not agree on when to have conversations about financial preparedness. The study found that money is a taboo subject for many parents of adult children.

Many families disagree on when the best time is to sit down and have conversations about later-life financial topics such as retirement. According to the study, around 40% of parents indicated they haven’t discussed these matters with their adult children.

“Admittedly, these discussions aren’t always easy, but there can be real emotional and financial consequences when they don’t happen or lack sufficient depth,” said John Sweeney, executive vice president of Retirement and Investing Strategies at Fidelity.

There are three financial misunderstandings that often affect families. Parents lag adult children on sense of urgency about retirement. Adult children are 56% more likely to worry about financial security compared to 23% of parents. Adult children also significantly underestimate the value of their parents’ estate. Lastly, families disagree over who will care for a parent if they fall ill. The study shows that these parent-child disagreements can be avoided by talking about these financial issues earlier.

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Managing Personal Finances

Bruce HeenManaging personal finances is something many individuals and families struggle with. From lines of credit to loans to filing for taxes, it seems like the stream of information surrounding financial matters is never-ending and often difficult to understand. When it comes to tackling personal finances, it is easy to feel over whelmed. One way to combat this is to think of your overall financial situation in small increments and assess each part individually. Focus in on three financial issues that need to be addressed, for example, student loans, IRAs, and car payments, and figure out a plan of action for each. Breaking down financial planning will help you think more clearly, make better decisions, and benefit you in the long run.

One creeping threat to many young adults is the impending doom of student loans. With college tuition at an all time high, paying for education is definitely a financial issue that should be addressed. While a private, academically superior university may be appealing or even thought of as necessary to get a job, many employers say that where an applicant gets a degree matters very little. Consider looking into less expensive, quality colleges as a first step to avoid debt later in life.

Another thing to think about during financial planning is IRAs. Although paying up front may seem like that best solution because it can protect you from higher rate in the future, it is important to weigh all of your IRA options. Different IRAs will benefit different types of people and choosing the right payment method could saving you a good deal of money in the long run.

A third area of personal finance that should be addressed is the question of buying or leasing when you are shopping for a new car. Recently, leasing cars has become very popular and many auto manufacturers are trying to make leasing more appealing through lower pricing on standard three-year leases. However, there are other long-term factors that should be considered when leasing a car to make sure that you are getting the best deal, including the value of the car you are considering buying or leasing and how long you plan to keep the car.

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Key Personal Finance Tips

MoneyMany people will admit that they know less than they probably should about personal finance.  Even if people do not have the time to presently become a finance expert, there are three common personal finance areas that people should focus on learning more about.

First, investing in your employer’s company stock has benefits and drawbacks that should be weighed carefully before taking action.  Employees may be eligible for discounts on stock prices in addition to having a better knowledge of the company’s performance than an outside investor.  However, if your company faces some sort of financial turmoil, you as an employee run the risk of facing unemployment combined with a decreased value of the stock you own.  Still, if investing in the company you work for appeals to you, experts suggest not investing more than 10 percent of your overall portfolio with the company to minimize risk.

A second area of personal finance that may need attention in the near future is open lines of home equity credit.  These loans were popular from 2004 to 2007, but the time to pay back is fast approaching as the 10-year breaks on paying back principals are expiring.  You should review the terms of your equity line and, if you anticipate having any issues making the impending higher payments, talk to your lender about options like refinancing the loan.

Finally, for those who are looking to revamp their personal finance agendas, it may be time to dispel the myths surrounding the glorified platinum credit card.  While platinum cards do offer various perks to cardholders, these perks will not be beneficial to everyone.  Customers already in debt should avoid platinum credit cards all together.  However, if you are debt free and travel often or make larger purchases regularly, a platinum credit card may be a nice option after all as these cards often offer airline perks and longer coverage on large purchases.

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Financial Planning for Retirement

Many people make the mistake of not planning for retirement until just before they want or need to retire.  The immediate satisfaction of planning a vacation from work in the present often trumps making actual retirement plans.  Whether you are pressed for time in figuring out how remain financially stable and make the most of your retirement or you have a little more time to sort it all out, here are some things to think about during the planning process:

Income and Expenses

Figure out what your monthly “income” will be in retirement, whether this comes in the form of a pension or a sum of money you will be allotting to yourself from previous investments, and compare it to your income and expenses today.  A good way to test if you will be able to maintain your current lifestyle, or if you’ll have to cutback on spending, is to try to live on your “retirement income” for a few months.

Taxes and other Expenditures

If not properly dealt with, one of your biggest retirement expenses could end up being taxes.  Make sure you put “find a way to reduce taxes” on your planning for retirement to-do list.  One way to do this is converting retirement accounts to Roth IRAs, which are tax-free.  If you do this correctly over a span of time (five years or so), you could save yourself a good amount of money.

Another tax that often creeps up on retirees is property tax.  Make sure that your retirement income is enough to cover your property tax.  If you realize early that this may be a problem, you leave yourself time to figure out a Plan B.  Also, don’t forget that sometimes relocation, while not always ideal, may be the best option when it comes to paying property tax in retirement.

It may sound obvious, but don’t forget to think about healthcare costs, especially if you will be under 70 and not eligible for Medicare.  Look for health insurance through an employer or private insurer.  Much like every other facet of planning for retirement, the key is preparation.  Health insurance is important at any age, but perhaps even more so in retirement.

Be Smart About Social Security

Put some thought into when you will choose to start accepting Social Security.  Many people believe that taking Social Security at a later age will ultimately maximize the payout.  While this may be true, it does not necessarily result in a better quality of life.  Yes, you can take your Social Security payout at 80, but will that money be more useful to you at a younger age?  Retirement is about finally having time to do all of the things you enjoy and, as long as you have done some financial planning, money from Social Security can help you enjoy those activities.  Think less about maximizing the Social Security payout and more about maximizing your overall experience in retirement.

Keeping Travel Cheap

Ever wondered how you can save money so you can budget funds for travel?

I came across a great article on CBS that explains some helpful tips. The first tip is to simply create a budget for your trip. Where is it that you’d like to go? What activities are you planning on doing while away? For instance, you would like to go skiing. You’ve figured out the amount of money it will cost to get to the mountain via car or airplane. Where will you be staying? How much does a lift ticket cost for how many days? Are you going out to eat most nights or cooking dinner? There are a lot of questions to ask and if you can answer most of them before going, you will have a great sense of how much you will need to set aside for the trip.

The next tip is to save. If you don’t have a timeline of when you need to go away then you can take your time raising the necessary funds. Some simple ways to save your pennies is to sacrifice a few luxuries in the short-term. Stop impulse buying, keep yourself from eating out, pack a lunch, and carpool. These are just a few things that you can do to save a little bit of cash incrementally. It doesn’t have to be all at one time. If you take the time to change the way you spend money over a period of time you will see a vacation fund increase.

The third tip is to plan far ahead. If you know when you’d like to go away, try and plan it for the future instead of last minute. Airlines and hotels raise prices around the holidays. The earlier the better.

Another tip that people don’t consider is their payment cards. If you are traveling outside of the country, you could receive a surcharge or transaction fee. Be sure to check with your bank beforehand. You could also seek out credit cards that don’t have processing fees like a Capital One credit card.

These are just a few tips to help you save a bit of money when traveling.


Saving money tips for college students

I recently came across a great article that talks about college kids and how they can save money by doing a few easy things.

The first thing to consider is creating a budget. You should allot an amount of money each week so you don’t overspend.

The second is to wait at least thirty days to buy big ticket items. You might want that cool new thing, but do you really need it? By waiting thirty days, this will keep you from being a compulsive buyer. If you still like the item after thirty days then go ahead and buy it.

The next thing is to buy used if you can. Textbooks at college can be a huge expense. New books can cost a lot more than used. If you don’t mind having a book that might be a bit worn down and was possessed by someone before hand than by used – you’ll save a bit of money.

Another way to save a bunch of money each day and week is to pack a lunch. Buying from the cafeteria or from local establishments around campus can be expensive.

Avoiding ATM fees is also something you should consider. Try and get a bank that is on campus or near campus if you can. ATM fees might seem like a little bit of money, but overtime it can equate to a large amount.