Tag Archives: militaryfamiliespersonalfinance

Paying Off Holiday Credit Card Bills

By Sharon Hahn Darlin
By Sharon Hahn Darlin

By Barbara O’Neill, Ph.D., CFP®, Rutgers Cooperative Extension

It’s three weeks since Christmas and credit card bills with holiday expenses (gifts, travel, etc.) are starting to arrive.  When there isn’t enough cash available to pay them in full but more than the required minimum payments, questions like this arise:  Should service members pay more than the minimum on credit cards with the smallest balance or on those carrying the highest interest rates?  The answer is “it depends.”

Some experts believe it is cost-efficient to pay off debts with the highest interest rates, while others believe it is emotionally satisfying and motivating to pay off those with the smallest balance. Regardless of which decision is made, start clients off by making a list of all of their creditors and debts (e.g., Sears credit card). Next write down the corresponding balance, APR (interest rate), and minimum monthly payment for each debt.

Next, it’s time for Power Pay. Developed by Utah State University Cooperative Extension, PowerPay assumes that users are paying at least the required minimum payment to each of their creditors and can continue to pay the same total monthly amount until all of existing debt balances are down to zero. The program also assumes that no new debts will be added during the duration of the debt repayment plan. If they are, they will not be included in the debt repayment calculation.

To use PowerPay, log in with a user name and password and enter the following information:

  •  Names of creditors
  • Outstanding balance for each debt
  • Annual percentage rate (APR) on each debt
  • Monthly payment for each debt

Once this information is entered, PowerPay users can print out a calendar that shows how much to pay each creditor monthly. When a debt gets paid off, its previous monthly payment is added to the payment sent to a remaining creditor. The analysis shows when each debt will end and the time and interest saved by following the PowerPay program.

Generally, users save the most debt repayment time and interest with PowerPay by adding extra payment amounts to debts with the highest APRs. This might include credit cards with high penalty interest rates and high-interest rate department store credit cards which often have interest rates in the 21% to 28% range.

For further assistance with debt repayment, military families can contact a non-profit credit counseling agency. Most credit counseling is done by telephone and secure Web sites so driving distance to an agency need not be a problem. Counseling agencies can assist clients with budgeting and enroll them in a debt management plan (DMP) where one monthly payment is made to the agency and proportionately distributed among a client’s creditors. With some DMPs, creditors may be willing to accept lower payments and/or reduce interest rates and fees charged. To find a local credit counseling agency, visit http://www.nfcc.org/FirstStep/firststep_01.cfm.

This post was published on the Military Families Learning Network blog on January 12, 2015.

Year-End Tax Planning Strategies

By Molly C. Herndon

Social Media Specialist 

The temptation to put off organizing financial records and updating accounts until the new year may be overwhelming this time of year. Family get-togethers and the holidays stretch our time and our finances. However, planning now can mean a better outcome when filing your taxes next Spring.

Numbers and Finance  by reynermedia. Licensed Creative Commons CC BY 2.0.
Numbers and Finance by reynermedia. Licensed Creative Commons CC BY 2.0.

In our December 9 webinar, Year-End Tax Planning Strategies, Dr. Barbara O’Neill will discuss ways to plan ahead to increase deductions and be better prepared for tax laws that may impact your wallet. This 90-minute webinar begins at 11 a.m. ET and is worth 1.5 CEUs for AFC-credentialed participants.

The Personal Finance team has presented on the topic of taxes twice before. Earlier this year, Dr. Michael Gutter presented Tax Planning Updates for Members of the Military . This webinar focused on tax laws that affect military members, as well as unique issues related to combat pay and basic tax calculation. Watch the recording here:

In 2012, we presented Income Tax Filing Issues for Members of the Armed Forces. This 90-minute webinar teased apart the dense information that pertains to military members when filing returns. Watch the recording of this session here:

To join the upcoming December 9 session and for more information, click here.

This post was published on the Military Families Learning Network blog on November 25, 2014.

2014: A Financial Review

By Molly C. Herndon
Social Media Specialist 

What hot button topics in personal finance really got you going this year? Are you concerned about the Affordable Care Act? Data hacking? Stock market highs and lows? These topics and more will be covered in our November 25 webinar with Dr. Barbara O’Neill.

wsj.com
Image from wsj.com

We invite personal finance managers and educators to join this 90-minute webinar to learn more and share their own insights on the hot finance issues of 2014 at 11 a.m. on Tuesday, Nov. 25. This 90-minute webinar is worth 1.5 CEUs  for AFC-credentialed participants.

This “Financial Year in Review” webinar will cover updates on financial topics that were newsworthy this year, as well as preview some of the issues that will be on trend in 2015, including:

  • Changes in tax laws
  • Governmental relation changes
  • Financial products and services

This online learning opportunity will be presented on the Department of Defense DCO system and requires security certificate installation. Alternatively, DCO apps are available for many devices and the session will also stream on Ustream. For more information on how to join, click here.

For resources related to this webinar and more information about our speaker, Dr. Barbara O’Neill, visit the event’s Learn page.

This post was published on the Military Families Learning Network blog on November 3, 2014.

Personal Finance Webinar: How to Read a Mutual Fund Prospectus

By Molly C. Herndon

Military families know the importance of saving money, but do they understand the options available for maximizing savings? Along with taking advantage of Thrift Savings Plans (TSPs) and Roth IRA retirement savings options, military families could also be using mutual funds as a savings tool.

"Reading" by Sebastien Wiertz.  Creative Commons.
“Reading” by Sebastien Wiertz. Creative Commons.

In the Tuesday, October 21 webinar, Dr. Michael Gutter will discuss mutual funds in detail and will explain the fees, performance measures, and characteristics of mutual funds that are highlighted in a mutual fund prospectus. Dr. Gutter will also discuss some of the tools and resources available for researching mutual funds. This 90-minute webinar will enable financial educators who attend to work with military families who are interested in using mutual funds as a long-term savings option.

This webinar is approved for 1.5 Continuing Education Units for AFC-credentialed participants through AFCPE. To join the webinar and to view resources, including the presentation slides, click here.

This post was published on the Military Families Learning Network blog on October 14, 2014.

Financial Planning for the Second Half of Life

By Molly C. Herndon
Social Media Specialist

On September 23, Dr. Barbara O’Neill will present Financial Planning for the Second Half of Life. More than a webinar about retirement planning, this 90-minute session will focus on:

  • Common financial errors of older adults
  • Statistics about older adult finances
  • Common later life financial characteristics and required decisions
  • 15 key later life financial planning topics (e.g., creating a retirement “paycheck,” required minimum distributions, untitled property transfers, and leaving a legacy)
  • Personal finance resources for older adults and financial practitioners
https://creativecommons.org/licenses/by/2.0/legalcode
Photo by Jon Rawlinson. Licensed Creative Commons. 

This webinar will allow participants to engage in an interactive discussion of the realities of retirement finances, including selecting and paying for health care benefits, managing asset withdrawals, and creating workable retirement planning strategies for older adult clients.

This webinar is approved for 1.5 CEUs for AFC-credentialed participants. To join, review the slides and for more information about the speaker, click here. 

 

This post was published on the Military Families Learning Network blog on September 9, 2014.

 

The Value of Research for Financial Professionals

By Molly C. Herndon

Social Media Strategist 

For financial professionals working with clients in the field, economic research may seem abstract and non-applicable to their daily practice. Our August 12 webinar, Cliffs Notes from the Journal of Financial Planning & Counseling will highlight some of the more relevant articles from the journal and discuss the practical implications and impacts of the research.

Reading by Pedro Ribeiro Simões is licensed Creative Commons. https://creativecommons.org/licenses/by/2.0/legalcode
Reading by Pedro Ribeiro Simões is licensed Creative Commons.

Indeed, measuring outcomes is a significant way we all benefit from academic economic research. The evaluation of the outcomes of projects, programs, and initiatives encourages the improvement of programs to better reach and connect with their audiences. Thus, financial professionals have better access to programs to continue their own education, and a richer well of knowledge to share with clients.

Of course, financial professionals benefit from consuming research as well. By reading journals, financial professionals stay on top of current practices, trends, and can help develop programs that meet the needs of their clients by incorporating empirical evidence.

So make plans to go through some research briefs with Dr. Barbara O’Neill on Tuesday, August 12 at 11 a.m. ET. She will discuss not only the findings of various economic studies, but also the practical application of these findings. More information about this 90-minute webinar is available here. 

This post was published on the Military Families Learning Network blog on August 8, 2014.

Making Positive Changes for Health and Finances

By Katie Stamper
Project Manager, Child and Family Learning NetworkeXtension-CFLN logo wReg - 2

Health and finances: two things that keep people up at night. Do I have enough money saved? Am I ready for retirement? How do I control my blood pressure? These worry-filled questions leave you wanting answers but where do you turn for credible answers and information? Worry no more! Dr. Barbara O’Neill from Rutgers University will explain the Small Steps to Health and Wealth™ initiative during a webinar on July 29, 2014 10 a.m. CT, and discuss 25 behavior changes that can improve an individual’s health and finances.

SSHW was developed because societal problems have been widely reported in recent years including an increasing incidence of diabetes, overweight, and obesity, low household savings, high household debt levels, and bankruptcy filings. The SSHW program includes 25 behavior change strategies that people can adopt to address these concerns. Each involves taking small positive steps that people can put into practice on a daily basis.

The webinar presentation is a joint collaboration between the Child and Family Learning Network and the Military Families Learning Network. This 90 minute webinar will be filled with research-based, credible information that can jumpstart your finances and health. Invest the time to attend so you can make the greatest investment of all—YOU!!! To access the webinar, please visit https://learn.extension.org/events/1625

Reference:

Small Steps to Health and Wealth™, NRAES-182, Retrieved from http://njaes.rutgers.edu/sshw/

This post was published on the Military Families Learning Network blog on July 9, 2014.

 

How to Vacation on the Cheap

By Molly C. Herndon

Photo by Ruth and Dave. https://creativecommons.org/licenses/by/2.0/legalcode
Photo by Ruth and Dave

A family vacation is an annual tradition for many families but for those on a tight budget, it may be an unnecessary expense. Here, I’ve collected many of the the discounts available to military families that can help make a fun-filled getaway more attainable.

Budget

Like any big purchase, a vacation requires planning. Many vacationers are shocked when they receive their credit card bill after returning from a vacation; the time to create a spending plan is before you leave, not after you return. Creating a budget creates parameters that guide vacation plans. Knowing how much you can realistically afford to spend and how much you have yet to save creates the timeline for your trip as well. Using a goal-setting spending worksheet may be helpful. Professional financial planners can help families by suggesting to clients with wanderlust that perhaps the big family vacation to Disney World can be a goal for next year, and while saving up, the family might enjoy a shorter trip closer to home this summer. Some considerations for determining cost are listed below.

Getting There

Train, plane or automobile? While packing the family into the minivan and setting out on a road trip might seem like the most economic choice, the cost of gas and car maintenance must be factored in to the budget. The AAA Fuel Cost Calculator and the Fly or Drive Calculator  take into consideration the make and model of a vehicle as well the distance and any overnight trips that might bump up the cost of a road trip.

Finding last minute airfare deals can be a great way to save on air travel, but booking well in advance can reap better prices, too. Additionally, it may be difficult for families to to take the risk of finding a cheap deal at the last minute, especially if traveling within a specific date range for an event or due to a work schedule. If flexibility is an option, military families may want to look at flying “Space-A” on military flights. During mission assignment flights, empty seats are offered up as available to eligible travelers, and these tickets can be at a very-low or no cost to passengers. Of course, destinations are limited to military terminals and registration is required in advance, but the possibility of flying across the globe for free makes this option one worth looking at more closely.

Traveling by train is often the cheapest option. Amtrak  schedules offers train trips at convenient times and to destinations throughout the United States, and military Service Members receive a 10% discount off fares. If travel destinations fit within a train route, consider this option, but also consider the added cost of a rental car if one will be required at the final destination.

Hotel

Websites like Groupon and LivingSocial often post deals for hotels in tourist destinations, and clubs like AAA offer discounts at many hotel chains, but military families may want to consider the option of using military lodging facilities to save on lodging expenses. Like “Space-A” travel these accommodations are only open to eligible vacationers as space is available, and advance reservations may or not be possible. These options range from accommodations on military installations to top-notch resorts and hotels with special space and pricing reserved for military members. Military OneSource suggests planning these trips well in advance and calling their offices to speak with a consultant at 800-342-9647. 

Food

Food costs eat up a lot of the vacation budget. Staying in a hotel with a kitchen or refrigerator can help cut down on expenses by keeping restaurant costs at a minimum. Tourist guidebooks often offer coupons for many area restaurants, but be aware that restaurants in tourist areas are generally more expensive. It helps to plan ahead; by researching area restaurants you can plan in advance for a special dinner out while saving on dining expenses the rest of the week. Hotels that include a free breakfast each morning can also be a great deal. Sharing entrees and cutting back on alcohol are also good tips to reduce the bill. Of course, many restaurants offer military discounts, so it never hurts to ask!

Photo by emrank. https://creativecommons.org/licenses/by/2.0/legalcode
Photo by emrank

Activities

Thinking about the fun things you’ll do on vacation is the best part of vacation planning. Think about who will go on this trip: young children? Teenagers? Elderly relatives? Try to match activities with what makes the most sense for your group. Finding deals in advance online can be a huge help. Sign up to receive daily emails from coupon sites, like Groupon, in your vacation destination city during your planning to see what deals are out there. Also, consider the “free” activities available in your vacation destination, like public parks, beaches, street fairs, and festivals.

After taking into consideration all the costs associated with traveling, it’s likely that this summer is a good time to begin planning a family vacation for next summer. But that doesn’t mean this summer can’t be full of family fun. “Staycations,” camping, and visiting and staying with relatives can be great, fun, and inexpensive ways to spend time together and save money. Here are some additional ideas about saving money on family trips.

Share your own vacationing on the cheap ideas in the comments section below!

This post was published on the Military Families Learning Network blog on June 24, 2014.

Small Steps to Health & Wealth

By Molly C. Herndon

Dr. Barbara O’Neill will be presenting a 90-minute webinar on the national Cooperative Extension program, Small Steps to Health and Wealth on behalf of the Military Families Learning Network’s Personal Finance team and the Child and Family Learning Network on July 29 at 11 a.m. ET.

The Small Steps to Health and Wealth initiative encourages participants to make positive behavior changes to simultaneously improve their health and personal finances. Developed by Dr. Barbara O’Neill and Dr. Karen Ensle at Rutgers University, Small Steps to Health and Wealth encourages participants to make positive behavior changes to simultaneously improve their health and SSHW-New Logo-NATIONAL-ABSOLUTELY FINAL (1)personal finances.  It is believed to be the first long-term program ever developed to motivate Americans to simultaneously apply the same personal behavior change strategies to both areas of their lives.  SSHW was developed because many Americans have both health and financial “issues.”  Societal problems that have been widely reported in recent years include an increasing incidence of diabetes, overweight, and obesity, low household savings, high household debt levels, and bankruptcy filings. The SSHW program includes 25 behavior change strategies that people can adopt to address these concerns. Each involves taking small positive steps that people can put into practice on a daily basis.

This webinar will begin by describing relationships between people’s health and personal finances. It will then describe each one of the 25 behavior change strategies and how people can apply them to their lives.

AFC-credentialed participants can earn 1.5 CEUs by participating in this webinar. For more information, click here.

This post was published on the Military Families Learning Network blog on June 16, 2014.

Tips and Advice from our Audience

By Molly C. Herndon

In today’s webinar, 20 Steps to 7 Figures, our audience was on fire! You offered up book recommendations, investment tips, advice for avoiding risk, and shared personal experience about protecting and growing investments. What a great learning opportunity for all of us!

I was able to capture just some of the suggestions our participants made. Here are the book suggestions shared in today’s webinar:

  • Millionaire Next Door – Dr. Thomas Stanley
  • Who’s Afraid to be a Millionaire : Mastering Financial and Emotional Success– Kelvin Boston
  • Warren Buffet Invests Like a Girl – Louann Lofton
  • Think and Grow Rich – Napoleon Hill
  • Business at the Speed of Thought – Bill Gates
  • Getting Loaded: 50 Start Now Strategies for Making  Million While You’re Still Young Enough to Enjoy It – Peter Bielagus
  • Die Broke: A Radical Four-Part Financial Plan – Stephen Pollan & Mark Levine
  • Stop Acting Rich and Start Living Like a Real Millionaire – Dr. Thomas Stanley
  • Rich Dad Poor Dad – Robert T. Kiyosaki

But the investment advice shared was even more prolific! If you want to foster engagement in a chat box, just ask financial educators about investment tips. Here’s what they shared:

  • Teach your children how to save
  • Line goals to work toward
  • Consider being more aggressive while young, conservative when older
  • Mutual funds
  • Roth IRA
  • Index Funds
  • Start early, start small
  • Start now!
  • Buy, buy, buy
  • Start now with the TSP
  • Star early
  • Pay yourself first
  • The sure way to fail is to never try
  • Don’t invest unless you understand what you’re getting into
  • Invest any amount as soon as possible
  • Be educated, ask questions
  • Take advantage of Roth options, TSP expense ratio, use lifecycle funds if don’t have the time or knowledge
  • Lifecycle funds in TSP
  • Savings bonds
  • Roth TSP
  • Save and invest change
  • Be consistent
  • Don’t look at it everyday!
  • Mutual funds!
  • Pay tax now rather than later
  • Be aware that even pre-tax 401(k) and 403(b) are subject to Social Security and Medicare tax withholding – but not income tax
  • Review Roth 401(k) options
  • Claim all of your exemptions and save the difference
  • Maintain good records and substantiate deductions
  • Claim the correct amount of exemptions for your family and invest the rest
  • Track deductions
  • Optimize income tax withholding exemptions and save/invest the monthly difference
  • Maximize contributions to Roth accounts instead of kicking the tax can down the road
  • Keep all receipts if you pay local taxes – will usually be more than the calculated amount figured by tax software
  • Don’t pull 401(k) out
  • Manage exemptions to avoid large refunds
  • Don’t plan for the big refund – ID theft
  • Adjust exemptions to breakeven on tax liability and invest tax savings
  • See if your state has reduced taxes or no taxes for military
  • Try to avoid paying for tax prep
  • If purchasing individual stocks, only buy if you think you can hold for 366 days or longer
  • For military, switch to Roth when in combat zone to enjoy tax free growth on tax exempt dollars
  • Military are only taxed on “base pay” so they are in a very favorable tax situation and may want to put extra emphasis on the Roth side, especially if deployed
  • Don’t take IRA early, most don’t know about tax penalty

Think I missed some? Please share your own advice and recommendations in the comments section. Want to be a part of these great exchanges? Join us for 3 days of online learning June 3-5 during the Virtual Learning Event. 

This post was published on the Military Families Learning Network blog on May 13, 2014.