<![CDATA[Financial Stability Alliance - Blog]]>Sat, 07 Mar 2015 04:45:36 -0500Weebly<![CDATA[Investing]]>Wed, 23 Apr 2014 17:25:58 GMThttp://www.financialstabilityalliance.org/blog/investing Investing can be a great way to make your money work for you, but there are a lot of risks associated with it. Whether you have already started investing or are at a loss for where to start, it’s important to know what options you have and what decisions you should make before diving in.

First, you need to identify your purpose and end goals for investing. Are you investing to make your money grow for your retirement account? Or, do you need money in the near future? You need to establish how much you are going to invest and how much you hope to end up with. These goals will make future choices about where to invest a little easier.

Like we said, investing comes along with quite a bit of risk. A general rule of thumb for assuming risk when investing is that your risk should have and inverse relationship with your age, meaning the younger you are the more risk you can assume. This is because you have a longer period of time to reach your financial goals. If taking a risk ends up badly you still have time to recover. On the other hand, if you are getting ready to go into retirement you want to make less risky decisions because a risk that ends badly could severely decrease your retirement fund.

Another very important rule when investing is to diversify. This means that you do not want to stick all of your money into the same type of investment. However, how do you know where to start putting your money? Below are just some of the most popular investment options out there provided by the Secretary of State’s office.

Money Market Accounts- Money market accounts are a sort of checking account/savings account hybrid. Like a savings account, you deposit money into the account and it earns interest. However money market accounts generally have higher interest rates than savings account. Then, like a checking account, you are allowed to write a certain number of checks each month from this account. Money market accounts are good for stable investing; there is not a lot of risk to incur. They should primarily be left allowed to acquire more money, however can be dipped into as a type of emergency fund.

Certificates of Deposits (CDs) - Like money market accounts, when investing in a CD you deposit money into an interest earning account. However, the difference is that with CDs you and your bank agree upon a maturity (end) date for the investment. At the end of that period of time the bank repays you the principle amount that you deposited plus the interest you earned. With CDs, when your investment reaches its maturity date, you also have the option of rolling the money over into another CD, usually one with a higher interest rate.

Stocks- Stocks are a representation of part ownership of a corporation. When an individual invests in the stock of a certain corporation, they claim partial rights over the assets and earnings of that company. Most stocks pay dividends, which are just a portion of the company’s earnings that are paid to stock holders, annually. If you are interested in purchasing stocks look at the FINRA’a guide for stocks to get a better understanding about all of the options you have.

Bonds- With most bonds, an individual (the loaner) gives money to the government or a corporation to help them carry out their necessary business. However, the borrower (the government or corporation) is required to pay back the entire amount borrowed in an agreed upon time period with interest. Check out Smart Bond Investing from FINRA for more advice on investing in bonds.

Mutual Funds- Mutual funds, which are usually managed by investment banks, pool funds from a lot of different individuals together and then invest that money in a variety of places. Mutual funds are a great option because when you pool your money with others you have a larger amount to invest and the risk incurred is shared among individuals.

If you are still a little unsure about diving into investing on your own, find a financial planner. The Financial Planning Association has a searchable database to help you find a planner that meets your exact needs. You can also do a little more research on what options are out there at the Morning Start Investment Research Center (to use this website all you need is a library card) and learn basic investing vocabulary at http://www.finra.org/Investors/SmartInvesting/.

<![CDATA[Sustainable Living with a Low Price Tag]]>Mon, 14 Apr 2014 16:45:44 GMThttp://www.financialstabilityalliance.org/blog/sustainable-living-with-a-low-price-tagSustainable living can save the earth as well as your wallet!  Living simply and self- reliantly is the key.  Most people tend to think that sustainability means cutting back to save.   However, being green can save you green for your wallet!

It turns out that by making the most of what you already have, you have a great chance to save the world -- as well as your wallet.  Let’s take a look at some ways you can save:

1)      Reduce your utility bills
  •   Try air drying your laundry to cut down on electricity.  Your clothes will smell great! 
  •   Turn off the lights when you leave the room. 
  •   Skip the heat cycle on your dishwasher and air dry your dishes.

2)      Find alternative ways to travel!
  •   Walking is always a healthy, inexpensive way to arrive at your destination.  Get your heart rate up and watch your transportation expenses decline.
  •   Biking to work or school can also help out your wallet and your health!
  •   Taking the bus is an inexpensive, reliable mode of transportation, especially if your destination is too far to walk or bike.  Check out BloomingtonTransit.com for bus schedules and fares in Bloomington!

3)      Maintain a sustainable budget
  •   Try writing down every item you spend for a week to know where your money goes.
  •   Identify spending leaks you didn’t realize you had. 
  •   For bigger ticket items, wait a few days before purchasing it.  You may decide that you don’t really need it.
  •   Consider buying off-brand items.
  •   Look for Do-It-Yourself (DIY) projects to make as gifts for a friend or family member.  Websites like Pinterest have a ton of DIY projects to help you up-cycle old items.
  •   Check out other great budgeting ideas on the FSA website!
4)      Live locally
  •   Explore the destinations in your own backyard by visiting the local park, walking on the over 30 miles of recreational trails offered in Bloomington, or checking out the calendar of local events and festivals at VisitBloomington.com.
  •   Instead of buying your food, considering growing it!  Visit Bloomington.in.gov for local community gardening opportunities. 
  •   Check out the local library for a wide array of FREE classes, books, and movies available to you as a local resident.  
<![CDATA[Wedding on a Budget]]>Wed, 26 Mar 2014 17:46:34 GMThttp://www.financialstabilityalliance.org/blog/wedding-on-a-budgetThere are multiple ways you can save money while planning the wedding of your dreams, believe it or not. With these tips, you can save money on everything from the invitations to the dress without sacrificing elegance and beauty.
1.     Invitations
The cheapest way to go about invites is to print from your own printer, that way you don’t have to bother with  unnecessary costs. Check our Pinterest for cute and easy homemade invitation how-tos. A second way to save money when dealing with invitations is to ask guests to reply by email or telephone, which will help you save money on postage, especially, if you have a larger guest list.

  2.     The Venue
Next comes the venue. It’s most common for weddings to occur on the weekend, mainly Saturday. However, when on a budget, it is ideal to book your wedding on a weeknight or even a Sunday. On that note, having the ceremony as well as the reception at the same place will also save you money.

  3.     The Reception
The reception is another place you can save extraordinary amounts of money on a variety of things. The centerpieces and party favors can be a DIY (Do It Yourself) project.  Not only is that a fun project to do with your bridal party, but again saves tons of money. Check out Pinterest for these great DIYs as well. Catering, food, and drinks are other areas of the reception that can be costly. Having a buffet as opposed to a sit-down meal and a limit on the open bar can be significant money saving options.

4.     The Dress
Now, we know the most important factor (to the brides at least) is the wedding gown. Shopping for a wedding gown with an open mind is key, especially if you want to save money. While it is appropriate to have the type of dress and detail in mind, the bride must be willing to explore her options. Consider various designers, limit the wedding dress details, check out wedding dresses online, and be sure to look everywhere, including department store and vintage shops.

Although this doesn’t cover all of the areas of a wedding, these tips are perfect starters to planning a wedding on a budget.

<![CDATA[Payday Loans No-No's]]>Fri, 14 Mar 2014 20:52:20 GMThttp://www.financialstabilityalliance.org/blog/march-14th-2014 Payday loans are usually seen as a quick fix to keep us going until our next payday. While they may seem attractive at first, these small loans can turn into big problems. Typical interest rates on these loans can be around 400% and on average loans of $100, borrowers end up pay $16 in fees. So let’s get the facts on Payday loans and learn other, more sustainable options!

Why are they so bad?
         ·     The Center for Responsible Lending suggests that repeated payday loans result in $3.5 billion in fees each year. And if a typical payday loan of $325 is flipped eight times, the borrower will owe $468 in interest; to fully repay the loan and principal, the borrower will need to pay $793.
           ·     Some lenders set up direct deposit loans with your bank account. Therefore the loan money automatically goes in, but the fees and interest are also automatically taken out.
         ·     When a loan is not repaid lenders often go after borrower’s social security benefits even though it is technically not allowed. 

So, what are other options?

1.       Call the company first to work out payment plan- Calling a 1-800 number and talking to a recording is no one’s idea of a good time but letting a company to whom you owe money  know you are aware of the situation and working to create a payment plan will make them much more forgiving and willing to help you out.
2.       Go to support your system- Although no one likes asking friends or family for a little financial help, in short term periods such as this they are probably your safest option. Asking for a small, two-week loan to pay the bills won’t seem too bad. Create an agreement to pay some interest on your loan, for example 10-20% and pay it back immediately after you receive your next pay check.
3.       Check out small bank loans- More and more banks are beginning to offer small, short-term loans as alternatives to the dangerous payday loans. A typical small bank loan offers loaning up to $1,000. Also, the FDIC has capped interest rates on these loans at 36%, which sounds much better than the previous 400%.

Monroe County Resources to Help in Tough Times
It’s Your Money
Dial 2-1-1
Bank on Bloomington

<![CDATA[Do I need to file a tax return?]]>Wed, 26 Feb 2014 18:15:57 GMThttp://www.financialstabilityalliance.org/blog/february-26th-2014Picture
You know that you are legally responsible for filing a tax return if it is required by law. But, how do you know if you are required to file one? Determining whether or not you need to file a tax return depends primarily on four things:        
         ·    Your filing status
         ·    Your income level
         ·    Your age
         ·    Your dependency status

The easiest way to determine if you are required to file is through the Interactive Tax Assistant on the IRS website.  You will be guided through a series of questions about your status and income level to determine if you need to file. 

If you do not file a return when one is required, the government will most likely file one in your place. This is known as a “substitute for return.” You do not want to let this happen. When the IRS files for you, they add fees for not filing and you are not given any credits or deductions, therefore taking more of your money.

So what’s the nitty gritty to knowing when you should file to avoid a “substitute for return?” See the chart below from efile.com with minimum income levels for filing for different groups.

*Visit efile.com for information on filing with dependents

There are also advantages to filing even if it is not required. Below are a few reasons why filing may be advantageous:
         ·    Your employer often withholds some of your paycheck for federal income taxes to send to the IRS. When you file a tax return you get the amount back the exceeded the amount of taxes you owed.
         ·    If you work but are not paid a lot you may quality for the Earned Income Tax Credit (ETIC)
         ·    You may qualify for the Additional Child Tax Credit
         ·    You may qualify for Educational Tax Credits if you are currently a student
         ·    Tax returns are useful when applying for loans

<![CDATA[Hidden in the Nooks and Crannies: Indiana Tax Deductions]]>Wed, 19 Feb 2014 21:52:27 GMThttp://www.financialstabilityalliance.org/blog/hidden-in-the-nooks-and-crannies-indiana-tax-deductions When tax season comes around, we are all looking for every deduction we can get our hands on. Here’s a rundown of some of the most popular deductions.

The most commonly claimed tax deductions are homeowners’ and renters’ deductions, according to the Tax Talk blog by the Indiana Department of Revenue. For residents and off-campus college students, rent paid throughout the year can be claimed up to $3,000 as long as the property is subject to Indiana’s property tax. For houses, the amount of property tax paid or $2,500, whichever is less, can be claimed on the homeowners’ deduction, according to Indiana tax law. However, there are exemptions to the Indiana property tax, you cannot claim a renters’ or homeowners’ deduction if:
      -  You live in government owned housing
      -  Your property is owned by a nonprofit organization
      -  You live in student housing (on-campus dorms or apartments)
      -  Your property is owned by a cooperative association
      -  Your property is located outside of Indiana

While these two deductions apply to a large number of tax payers, the state of Indiana allows for 20 other deductions that could save you more during this recession.

A few of these deductions include:
      -  The disability retirement deduction for those who retired on disability
      -  The military service deduction for active, reserve and retired veterans
      -  The deduction for installing new insulation, weather stripping or window panes during the year

Many people do not claim all of their deductions each year because they are unaware of what they qualify for, but with services like the Free Community Tax Service provided by the Financial Stability Alliance and United Way of Monroe County, taxpayers in Monroe, Brown, Greene and Owen counties can claim some extra money when tax time rolls around. More information on taxes in Indiana can be found here.
<![CDATA[Tips for Choosing a Tax Preparer]]>Wed, 12 Feb 2014 18:31:18 GMThttp://www.financialstabilityalliance.org/blog/tips-for-choosing-a-tax-preparer Although Monroe County offers a variety of free, or low cost tax assistance programs, sometimes a paid preparer may be necessary. If you do not qualify for the free services offered in the community but are nervous about filing your taxes on your own, with software like Turbo Tax, ask yourself these three questions from MSN Money:

1. Are you prepared to give your taxes your time? The average tax payer spends between 22 and 32 hours filing their taxes return. Do you have that kind of time?

2. Are you prepared to give up the cash to pay a preparer? Average tax payers pay between $290 and $410 on preparers. However, money that you spend on a preparer this year may be tax deductable on your return next year.

3. Are you prepared to deal with the complexity of the federal code?
The tax code is complicated. To avoid making errors, 90% of Americans pay preparers or use software to ease these complexities.

So, whether you don’t have the time, or your return is extremely complicated, hiring a tax preparer may be your best option. However, not all preparers are created equal. To protect you from preparer scams the IRS has provided a helpful list of tips for choosing a preparer:

  • Check Credentials
           -    The IRS now requires that all prepares have a Preparer Tax Identification Number (PTIN)
           -    Based on your needs choose between am enrolled tax agent, a lawyer, and a CPA (certified public accountant)
  • Check History
           -    For enrolled agents the Better Business Bureau’s website to check if the preparer has any questionable history
           -    For CPA’s, you can determine their licensure status and any disciplinary actions they may have through the state  boards of accountancy
           -    For lawyers, visit the state bar association to review their history.
  • Service Fees
           -    Avoid preparers that charge service fees as a percentage of your tax refund. These preparers may be inclined to claim false deductions to get you a larger refund, resulting in better pay for them.
  • Ask if They Use Electronic Filing
           -    E-filing has been around for 13 years and provides a safer and more secure way to file your taxes
  • Never Sign a Blank Form
           -    You never know what the preparer could write on that form, which you have now agreed to and authorized by signing.
  • Make Sure Your Preparer is Accessible
           -    You may have questions about your tax refunds after April 15th or about how certain purchases, like a home, affect your taxes throughout the year. You do not want a preparer that is finished after your taxes are filed. Make sure that your preparer will be there to help throughout the entire year.

Twitter/Facebook: Are you considering paying a tax preparer this year because you just don’t have the time to do them yourself or your returns are complicated. Check out the latest FSA blog post for advice on choosing a preparer!

<![CDATA[Money Smart Apps]]>Wed, 05 Feb 2014 21:30:34 GMThttp://www.financialstabilityalliance.org/blog/february-05th-2014 These days we don’t leave the house without our smart phones in hand. They are our source of constant communication with friends and family, our mini portable tvs and ipods, and our entertainment. So, why not put the phones to work saving us money? We have found some great, money savvy apps that you will want to download:

ShopKick- If your keychain looks anything like mine it is cluttered with those mini plastic rewards cards. Well, with this app you can be clutter free! ShopKick sends you store rewards and coupons just by walking into a store, so all you have to do is do what you do best, SHOP!

Jingit- Jingit is the newest invention in lazily earning money. Download the app, watch some ads for a variety of products, and answer a couple of questions and earn up to $15 a week. All you have to do is register for a Jingit Visa debit card and the money you earn will be automatically put on the card.

iBotta- Similar to Jingit, iBotta is fun, money earning app. Choose items that you plan to buy from a provided list¸ such as any food item, and then watch a video, take a survey, or read a little information and earn cash. Next, purchase the item at an approved retailer, take a picture of your receipt and the cash will be automatically added to your account.

RetailMeNot- Are you sick of rummaging through newspapers and magazines for coupons to cut? Well cut no longer, RetailMeNot is free app that sends you deal alerts and coupons straight to your smart phone. You can even find nearby malls and retail stores with the best deals when in an unfamiliar area.

Gas Buddy- With gas prices continuing to increase even saving ten cents on every gallon can make a big difference. Gas Buddy is a free app that shows you the price of gas at different gas stations in the area.

ShopSavvy- With ShopSavvy you can scan any barcode in a store and the app will show you if there are cheaper options online on websites such as Amazon. com.

HelloWallet- HelloWallet is a great tool for organizing and managing your finances without affiliation to any bank or other financial institution. This app allows you to keep everything finance related in one place. You can record your financial goals, create a budget, track your progress, and enter your checking, savings, retirement, credit card, healthcare, and investment information.

This is by no means an exhaustive list. Many retail stores have their own apps that send you great coupons and alert users about sales. Search around a little and find the apps that will help you reach and stick to your financial goals!
<![CDATA[Recovering From Holiday Spending]]>Wed, 29 Jan 2014 19:33:58 GMThttp://www.financialstabilityalliance.org/blog/recovering-from-holiday-spending Your bellies are full, the decorations are down, there are new toys and gadgets scattered about the house, and…. your wallet is hurting. The holidays are a fun, relaxing time, but checking back into reality after the New Year can be a little overwhelming.  But don’t fret! There are many ways to recover from holiday spending.

1.       Don’t Ignore Bills- When bills look daunting, the easy thing to do is just push them aside until you save up enough to pay them off. But, this is dangerous. The longer you wait to make a payment the more fees you will incur. Similarly, late payments show up in your credit score. Pushing those bills aside now may mean that you are not granted a loan in the future.

2.       Don’t add more Debt- Put your credit cards away for a little while. Try to pay off the bills for what you bought over the holiday season before adding anything new to the bill. Stick to the debit card or cash for everyday purchases for a month or two.

3.       Pay more than the Minimum Balance- The more you pay off each month means the quicker that debt will disappear. Sacrificing a little after the holidays, like eating at home instead of at a restaurant, can really help to pay those bills off quickly. Save all extra money to pay off your bills.

4.       Return Unused Purchases- So your son/daughter/spouse/friend doesn’t like the sweater you bought them, don’t let it sit and collect dust in their closet, that is just money down the drain. Return items that don’t fit or will not be used.

5.       Prepare for Next Year- Start early! Create SMART (specific, measurable, attainable, realistic, timely) goals for next year’s holiday spending. Create a savings plan for the year so that by the time the holidays roll around again you will be ready to shop worry free!

Most importantly, remember that the holidays are a time to enjoy, but not so much that you are stuck scrambling for money the rest of the year. By planning early and using these great tips, the holidays will be the joyous, relaxing time you need- without breaking the bank.
<![CDATA[Buying Your First Car]]>Thu, 12 Dec 2013 21:13:44 GMThttp://www.financialstabilityalliance.org/blog/buying-your-first-carBuying a car for the first time can be a daunting process. Probably one you’ve dreamed about for a long time, imagining the sporty, new ride that you’d be proud to drive around. At least, that was the dream before finances, loans and expenses got in the way. So before making what is likely the first major purchase of your adult life, here are a few important tips to remember:

1.     Establish Credit
Being without credit leaves you in the same position as a person with bad credit; this is why it is essential to establish that credit before making any large purchases. Be it a credit card from a store or student loans that have plagued you since graduation, credit is easy to acquire and simple to maintain as long as you have the proper financial stability resources to guide you. The best way to establish good credit is by paying off your credit card bills completely at the end of each month. However, this is not always feasible, so be sure you are making your monthly payments on time and you do not leave any outstanding balances. Just pay bills on time and you’ll be approved to finance your first vehicle. Check out the “Ins and Outs of Money” podcasts on getting credit here.

2.     Manage Your Expectations
A first car is something that should be dependable, practical, and affordable. Budgeting and saving for that initial car payment are essential; however, that is not the only expense. You also have to consider gas, insurance, maintenance and even repairs. Buy a car you can afford. Overall, you will be more pleased buying a car a little under you price range and saving money for other aspects of life, rather than splurging on a more expensive car.

 3.     Buying vs. Leasing
Leasing a vehicle means you are at the mercy of the dealers, the bank and the law. The advantages of leasing a car are low to no down payment, lower monthly payments than with buying, and lower sales tax.  If your future is set, you’re staying in the same state, and your driving is limited to the allowance of the dealer, then leasing is an option. If not, purchasing a car may be the better option. The advantage is that you own it. If you decide it’s not the right car, you can always sell it. If you break it, you already bought it. And it’s another way to build credit for when your purchases get bigger.

4.     The Car Search
The car search can be intimidating, but it should be fun hunting. Just remember these tips, do research, do more research and you’ll be driving the car of your carefully managed dreams.

For more advice on buying a car or other large purchases check out the Financial Stability Alliance’s resource, Big Purchases, for great tips and advice.