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Your Annual Financial To-Do List

December 24th, 2014 | No Comments | Posted in Financial News

Things you can do before & for 2015.

shutterstock_239036200What financial, business or life priorities do you need to address for 2015? Now is a good time to think about the investing, saving or budgeting methods you could employ toward specific objectives. Some year-end financial moves may prove crucial to the pursuit of those goals as well.

What can you do to lower your 2015 taxes? Before the year fades away, you have plenty of options. Here are a few that may prove convenient:

Make a charitable gift before New Year’s Day. You can claim the deduction on your 2014 return, provided you itemize your 2014 deductions with Schedule A. The paper trail is important here.1

If you give cash, you need to document it. Even small contributions need to be demonstrated by a bank record, payroll deduction record, credit card statement, or written communication from the charity with the date and amount. Incidentally, the IRS does not equate a pledge with a donation. If you pledge $2,000 to a charity in December but only end up gifting $500 before 2014 ends, you can only deduct $500.1,2

Are you gifting appreciated securities? If you have owned them for more than a year, you will be in line to take a deduction for 100% of their fair market value and avoid capital gains tax that would have resulted from simply selling the investment and then donating the proceeds. (Of course, if your investment is a loser, then it might be better to sell it and donate the money so you can claim a loss on the sale and deduct a charitable contribution equivalent to the proceeds.)3

Does the value of your gift exceed $250? It may, and if you gift that amount or larger to a qualified charitable organization, you will need a receipt or a detailed verification form from the charity. You also have to file Form 8283 when your total deduction for non-cash contributions or property in a year exceeds $500.2

If you aren’t sure if an organization is eligible to receive charitable gifts, check it out at irs.gov/Charities-&-Non-Profits/Exempt-Organizations-Select-Check.

Contribute more to your retirement plan. If you haven’t turned 70½ this year and you participate in a traditional (i.e., non-Roth) qualified retirement plan or have a traditional IRA, you can reduce your 2014 taxable income by the amount of your contribution. Should you be in the 25% federal tax bracket, you can save $1,375 in taxes this year by making a traditional IRA contribution of $5,500.5

If you are self-employed and don’t have a solo 401(k) or something similar, look into whether you can still establish and fund such a plan before the end of the year. For TY 2014, you can contribute up to $17,500 in a 401(k), 403(b) or profit-sharing plan, with a $5,500 catch-up contribution also allowed if you are age 50 or older. Your TY 2014 contribution to a Roth or traditional IRA may be made as late as April 15, 2015; if you have a Keogh or SEP IRA and file Form 4868, you can wait until October 15, 2015. There is no merit in waiting, however, since delaying your contribution only delays the tax-advantaged compounding of those dollars.4,5

See if you can take a home office deduction. If your income is high and you find yourself in one of the upper tax brackets, look into this. You may be able to legitimately write off expenses linked to the portion of your home used to exclusively conduct your business. (The percentage of costs you may deduct depends on the percentage of the square footage of your residence you devote to your business activities.) If you qualify for this tax break, part of your rent, insurance, utilities, and even maid service expenses may be deductible.5

Open an HSA. If you are enrolled in a high-deductible health plan, you may set up and fund a Health Savings Account in 2015. You can make fully tax-deductible HSA contributions of up to $3,350 (singles) or $6,650 (married couples); catch-up contributions of up to $1,000 are permitted for those 55 or older who aren’t yet enrolled in Medicare. Moreover, HSA assets grow untaxed and withdrawals from these accounts are tax-free if used to pay for qualified health care expenses. HSAs are sometimes referred to as “backdoor IRAs,” because once you reach age 65, you may use withdrawals out of them for any purpose, although withdrawals will be taxed if they aren’t used to pay for qualified medical expenses.6

Practice tax loss harvesting. You could sell underperforming stocks in your portfolio – enough to rack up at least $3,000 in capital losses. In fact, you can use this tactic to offset all of your total capital gains for a given tax year. Losses that exceed the $3,000 yearly limit may be rolled over into 2015 (and future tax years) to offset ordinary income or capital gains again.7

Are there other major moves that you should consider? Here are some additional ideas with merit.

Can you contribute the maximum to your IRA on January 1, 2015? The rationale behind this is that the sooner you make your contribution, the more interest those assets will earn. In 2015 you can contribute up to $5,500 to a Roth or traditional IRA if you are age 49 or younger, and up to $6,500 if you are age 50 and older (though your MAGI may affect how much you can put into a Roth IRA).4

What are the income limits on deducting traditional IRA contributions? If you participate in a workplace retirement plan, the 2015 MAGI phase-out ranges are $61,000-71,000 for singles and heads of households, $98,000-118,000 for married couples filing jointly when the spouse making IRA contributions is covered by a workplace retirement plan, and $183,000-193,000 for an IRA contributor who is not covered by a workplace retirement plan but is married to someone who is.4

Should you go Roth before 2015 gets here? You might be considering that. If you are a high earner, you should know that MAGI phase-out limits affect Roth IRA contributions. For 2014, phase-outs kick in at $183,000 for joint filers and $116,000 for single filers. Should your MAGI prevent you from contributing to a Roth IRA at all, you always have the chance to contribute to a traditional IRA in 2014 and then convert it to a Roth.4

Incidentally, a footnote: distributions from Roth IRAs, traditional IRAs and qualified retirement plans such as 401(k)s are not subject to the 3.8% Medicare surtax affecting single/joint filers with AGIs over $200,000/$250,000. Dividends, net investment income from taxable interest, passive rental income, annuity income, short-term and long-term capital gains and royalties are subject to that surtax if your AGI surpasses those respective thresholds.7

Consult a tax or financial professional before you make any IRA moves to see how they may affect your overall financial picture. If you have a large traditional IRA, the projected tax resulting from a Roth conversion may make you think twice.

What else should you consider as 2014 turns into 2015? There are some other important things to note…

Review your withholding status. Should it be adjusted due to any of the following factors?

  • You tend to pay a great deal of income tax each year.
  • You tend to get a big federal tax refund each year.
  • You recently married or divorced.
  • A family member recently passed away.
  • You have a new job at a much greater salary.
  • You started a business venture or became self-employed.

If you are retired and older than 70½, remember your RMD. Retirees over age 70½ must take Required Minimum Distributions from traditional IRAs and 401(k), 403(b) and profit-sharing plans by December 31. The IRS penalty for failing to take an RMD equals 50% of the RMD amount.8

If you have turned 70½ in 2014, you can postpone your first IRA RMD until April 1, 2015. The downside of that is that you will have to take two IRA RMDs next year, both taxable events – you will have to make your 2014 tax year withdrawal by April 1, 2015 and your 2015 tax year withdrawal by December 31, 2015.8

Plan your RMDs wisely. If you do so, you may end up limiting or avoiding possible taxes on your Social Security income. Some Social Security recipients don’t know about the “provisional income” rule – if your modified AGI plus 50% of your Social Security benefits surpasses a certain level, then a portion of your Social Security benefits become taxable. Social Security benefits start to be taxed at provisional income levels of $32,000 for joint filers and $25,000 for single filers.9

Consider the tax impact of 2014 transactions. Did you sell real property this year? Did you start a business? Have you exercised a stock option? Could any large commissions or bonuses come your way before January? Did you sell an investment held outside of a tax-deferred account? Any of this might significantly affect your 2014 taxes.

Would it be worth making a 13th mortgage payment this year? If your house is underwater, there’s no sense in doing it – and you could also argue that the dollars might be better off invested or put in your emergency fund. Those factors aside, however, there may be some merit to making a January mortgage payment in December. If you have a fixed-rate loan, a lump sum payment can reduce the principal and the total interest paid on it by that much more.

Are you marrying in 2015? If so, why not review the beneficiaries of your workplace retirement plan account, your IRA, and other assets? In light of your marriage, you may want to make changes to the relevant beneficiary forms. The same goes for your insurance coverage. If you will have a new last name in 2015, you will need a new Social Security card. Additionally, you and your spouse no doubt have individually particular retirement saving and investment strategies. Will they need to be revised or adjusted with marriage?

Are you coming home from active duty? If so, go ahead and check the status of your credit, and the state of any tax and legal proceedings that might have been preempted by your orders. Make sure your employee health insurance is still there, and revoke any power of attorney you may have granted to another person.

Talk with a qualified financial or tax professional today. Vow to focus on being healthy and wealthy in the New Year.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.
1 – forbes.com/sites/mikepatton/2014/11/25/year-end-charitable-tax-tips/ [11/25/14]
2 – irs.gov/uac/Nine-Tips-for-Charitable-Taxpayers [1/16/14]
3 – philanthropy.com/article/Donors-Often-Overlook-Benefits/148561/ [8/29/14]
4 – irs.gov/uac/Newsroom/IRS-Announces-2015-Pension-Plan-Limitations;-Taxpayers-May-Contribute-up-to-$18,000-to-their-401%28k%29-plans-in-2015 [10/23/14]
5 – turbotax.intuit.com/tax-tools/tax-tips/Tax-Planning-and-Checklists/Tax-Tips-After-January-1–2015/INF12070.html [12/2/14]
6 – tinyurl.com/lqw4pkq [10/11/14]
7 – nbr.com/2014/11/12/6-ways-to-lower-your-2014-tax-bite/ [11/12/14]
8 – irs.gov/Retirement-Plans/RMD-Comparison-Chart-%28IRAs-vs.-Defined-Contribution-Plans%29 [4/30/14]
9 – socialsecurity.gov/planners/taxes.htm [12/2/14]

Your Year-End Financial Checklist

December 24th, 2014 | No Comments | Posted in Financial News

Seven aspects of your financial life to review as the year draws to a close.

shutterstock_145101355The end of a year makes us think about last-minute things we need to address and good habits we want to start keeping. To that end, here are seven aspects of your financial life to think about as this year leads into the next…

Your investments. Review your approach to investing and make sure it suits your objectives. Look over your portfolio positions and revisit your asset allocation.

Your retirement planning strategy. Does it seem as practical as it did a few years ago? Are you able to max out contributions to IRAs and workplace retirement plans like 401(k)s? Is it time to make catch-up contributions? Finally, consider Roth IRA conversion scenarios, and whether the potential tax-free retirement distributions tomorrow seem worth the taxes you may incur today. Be sure to take your Required Minimum Distribution (RMD) from your traditional IRA(s) by December 31. If you don’t, the IRS will assess a penalty of 50% of the RMD amount on top of the taxes you will already pay on that income. (While you can postpone your very first IRA RMD until April 1, 2015, that forces you into taking two RMDs next year, both taxable events.)1

Your tax situation. How many potential credits and/or deductions can you and your accountant find before the year ends? Have your CPA craft a year-end projection including Alternative Minimum Tax (AMT). The rise in the top marginal tax bracket for 2014 made fewer high-earning executives and business owners subject to the AMT, as their ordinary income tax liabilities grew. That calls for a fresh look at accelerated depreciation, R&D credits, the Work Opportunity Tax Credit, incentive stock options and certain types of tax-advantaged investments.2

Review any sales of appreciated property and both realized and unrealized losses and gains. Take a look back at last year’s loss carry-forwards. If you’ve sold securities, gather up cost-basis information. Look for any transactions that could potentially enhance your circumstances.

Your charitable gifting goals. Plan charitable contributions or contributions to education accounts, and make any desired cash gifts to family members. The annual federal gift tax exclusion is $14,000 per individual for 2014 and 2015, meaning a taxpayer can gift as much as $14,000 to as many individuals as you like in each year without tax consequences. A married couple can gift up to $28,000 tax-free to as many individuals as they prefer. The gifts do count against the lifetime estate tax exemption amount, which climbs to $5.43 million per individual and $10.86 per married couple for 2015.3

You could also gift appreciated stocks to a charity. If you have owned them for more than a year, you can deduct 100% of their fair market value and legally avoid capital gains tax you would normally incur from selling them.4

Besides outright gifts, you can plan other financial moves on behalf of your family – you can create and fund trusts, for example. The end of the year is a good time to review any trusts you have in place.

Your life insurance coverage. Are your policies and beneficiaries up-to-date? Review premium costs, beneficiaries, and any and all life events that may have altered your coverage needs.

Speaking of life events…did you happen to get married or divorced in 2014? Did you move or change jobs? Buy a home or business? Did you lose a family member, or see a severe illness or ailment affect a loved one? Did you reach the point at which Mom or Dad needed assisted living? Was there a new addition to your family this year? Did you receive an inheritance or a gift? All of these circumstances can have a financial impact on your life, and even the way you invest and plan for retirement and wind down your career or business. They are worth discussing with the financial or tax professional you know and trust.

Lastly, did you reach any of these financially important ages in 2014? If so, act accordingly.

Did you turn 70½ this year? If so, you must now take Required Minimum Distributions (RMDs) from your IRA(s).

Did you turn 62 this year? If so, you’re now eligible to apply for Social Security benefits.

Did you turn 59½ this year? If so, you may take IRA distributions without a 10% penalty.

Did you turn 55 this year? If so, and you retired during this year, you may now take distributions from your 401(k) account without penalty.

Did you turn 50 this year? If so, “catch-up” contributions may now be made to IRAs (and certain qualified retirement plans).1,5,6

The end of the year is a key time to review your financial well-being. If you feel you need to address any of the items above, please feel free to give me a call.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.
1 – irs.gov/Retirement-Plans/RMD-Comparison-Chart-%28IRAs-vs.-Defined-Contribution-Plans%29 [4/30/14]
2 – tinyurl.com/o7wqk7z [3/27/14]
3 – forbes.com/sites/ashleaebeling/2014/10/30/irs-announces-2015-estate-and-gift-tax-limits/ [10/30/14]
4 – philanthropy.com/article/Donors-Often-Overlook-Benefits/148561/ [8/29/14]
5 – nolo.com/legal-encyclopedia/getting-retirement-money-early-without-30168.html [12/2/14]
6 – turbotax.intuit.com/tax-tools/tax-tips/Tax-Planning-and-Checklists/Tax-Tips-After-January-1–2015/INF12070.html [12/2/14]

Monthly Economic Update – December 2014

December 24th, 2014 | No Comments | Posted in Monthly Economic Update

MonthlyEconomicUpdate-December2014

How we paid off $440,500 in debt

December 24th, 2014 | No Comments | Posted in Lifestyle

Americans owe more than $11 trillion in consumer debt, including almost $857 billion in credit card debt. For many households, all those monthly payments and skyrocketing interest rates are crippling — making it hard just to purchase necessities, much less save for the future.

But just because you’ve accumulated debt doesn’t mean you have to live with it forever. Jumping off the hamster wheel of debt may seem impossible, but those who make the commitment to pay off their debt can attest that it’s well worth the effort. Arianne Fisher, a single mother who paid off more than $40,500 in the past year and a half, went from feeling “completely defeated” to having “a beaming outlook on life.” she says. “I feel proud of my accomplishments and optimistic for the future.”

Here’s how Fisher and five other women broke free from the debt cycle and paid off a total of $440,500.

Arianne Fisher, 30, Topeka, Kan., Paid Off $40,500

arianne-fisherDebts paid off: The single mom of a 2-year-old daughter, Arianne Fisher paid off $40,500 in 16 months. The debt included $35,000 in student loans, $4,000 in credit card debt and personal loans and $1,500 in medical bills from a series of health issues her daughter had.

Getting motivated: “After getting divorced and becoming a single mother, I made a decision that I would do whatever it took to become financially responsible,” Fisher says. “I was determined to support my daughter and myself independently and someday maybe even provide her with a home we could truly call ours.”

How she made it happen: In October 2012, Fisher started “chipping away” at her credit card debt, paying off about $3,000 in four months. In January 2013, she joined HOPE (Helping Ourselves to Prosper Economically), a financial stability program offered by Housing and Credit Counseling, Inc. Working with her HOPE mentor, Fisher “learned the basic concepts of a successful budget and how to use an envelope system to hold myself accountable,” she says.

Fisher started using coupons for expensive necessities like diapers and switched from an expensive cell phone contract with a name-brand provider to a month-to-month plan, downgrading her data and text services. She eliminated all unnecessary expenses, such as cable and magazine subscriptions, and sold unwanted items on Craigslist and eBay. She traded her daughter’s outgrown clothes for store credit at secondhand stores to purchase items in her current size.

“Any excess money that came in from extra paychecks, bonuses or account dividends went straight toward my debt,” Fisher says. “I included a small amount of fun money in my budget so I could splurge on something for myself occasionally, eliminating the urge to justify overspending other places.”

After one year in the program, Fisher had paid off her remaining debts and increased her credit score by 126 points.

Learning lessons: “I learned that living within my means does not have to be miserable and lonely,” Fisher says. “It may be challenging at times, but nothing truly worth something is ever easy. Challenges can be exciting and fulfilling if you choose to rise to the occasion instead of being smothered by it.”

Jackie Beck, 45, Phoenix, Ariz., Paid Off $147,000

jackie-beckDebts paid off: Along with her husband, Jackie Beck paid off more than $147,000 in debt over nine and a half years. Those debts included credit cards, a student loan, a car loan, a home improvement loan and a mortgage loan.

Getting motivated: “I was frustrated and stressed out by debt,” Beck says. “I hated seeing all my money going to pay what I owed. I felt like I couldn’t even keep my head above water.” After she began making progress, Beck became even more motivated, she says. “I realized that the most important reason to get out of bed was freedom,” she says. “That became my goal: being free to make decisions based on what we want to do, not on what we have to do to pay the bills.”

How she made it happen: To pay off $17,000 in credit card debt, Beck turned to Consumer Credit Counseling Services, where debt counselors reviewed their debt and finances and developed a customized payment plan. The cards were paid off in about three years. “We also made the critical decision to never carry a balance on a credit card again,” Beck says. “That decision was huge.”

Beck had just come off a long stretch of unemployment, so she had already cut back as much as she could. In a new job making $2,100 per month, Beck says she “felt rich” and applied as much money as possible each month toward paying off debt. When she did need to buy something, she asked for discounts and tried to pay as little as possible. When the toilet or other household items broke, the Becks learned to make repairs rather than calling a plumber or other service professional. They got rid of their land line and gym memberships, but because their budget was already cut from the years of unemployment, they “came up with most of the money to pay off debt by getting raises and better jobs,” she says. In addition to their full-time jobs, both Beck and her husband brought in extra income on the side — he took odd jobs, and she earned money in her home-based business.

Beck and her husband tackled one debt at a time, “focusing on the target until it was gone,” she says. By the time Beck and her husband decided to pay off their mortgage, she had created a mobile app to help others pay off their debts as well, “so we obsessively tracked our progress in that,” she says. “Being obsessive turns out to be a great way to pay off debt, because it means you focus.”

Learning lessons: Beck says she learned that she’d been making excuses. “I’d borrow money for emergencies, never thinking that I had another choice,” she says. “There’s always a choice. When I stopped assuming that life would go perfectly and started finding alternatives to borrowing, things got a whole lot better. That quote about ‘Expect the best, plan for the worst, and prepare to be surprised’ is a good financial motto.”

Kandy Hildebrandt, 47, New Richmond, Wis., Paid Off $123,000

kandy-hildebrandtDebts paid off: In four years and four months, Kandy Hildebrandt and her husband paid off about $123,000 in debt, which included 11 credit cards and a private, unsecured loan.

Getting motivated: When the Hildebrandts learned that the interest rate on one of their credit cards was increasing to 27 percent, even though they’d never missed a payment, they decided it was time to assess their debt load. After a closer look, Hildebrandt realized they were accruing more than $1,500 a month in new interest fees across 11 credit cards. Hildebrandt says she was most motivated to make a change because the debt was causing severe stress for her husband, and he was fighting depression as a result.

How she made it happen: The Hildebrandts used a debt management plan offered by a consumer credit counseling service. The plan reduced their monthly payments, the annual percentage rate and stopped or reduced late fees and overlimit fees. Once they determined a monthly payment through the debt management plan, the Hildebrandts never lowered it, even after paying off a card. For instance, if they were sending in $400 each month to cover payments on six different cards, after one was paid off, they continued to send $400 per month, allowing them to pay off the next one faster.

“We teamed up as never before,” Hildebrandt says, describing her husband’s role as “offense,” as he took a second job working 12am to 4am five days a week and her role as “defense,” cutting the household budget drastically. “We purchased only the essentials, barely,” she says. “That was food, gas and clothing, with the exception of our commitment to regular giving, which was to our local church.”

Although very few family members were aware of the Hildebrandt’s situation, they graciously received any gesture — food, money, gifts — that were offered. “There was no room for pride anymore,” she says.

Learning lessons: Hildebrandt and her husband celebrated paying off the last of their debt with a trip to the beach — Hildebrandt’s first ever. She says she felt relieved that they’d finally learned to live within their means and to delay gratification. Other lessons learned: “You can do just about anything when you know it’s not forever,” she says. “And when life is tough, a husband and wife cannot afford to both be down at the same time. If he was ‘down,’ then I had to be ‘up’ and vice versa. In tempering one another, we forged ahead, steadily, one day at a time.”

Stephanie Mar, 34, Santa Monica, Calif., Paid Off $10,000

stephanie-marDebts paid off: Stephanie Mar took a year to pay off a $10,000 student loan. Ever since she racked up some credit card debt as a teenager, “debt felt like the norm,” she says. “So taking on two student loans to go to graduate school overseas seemed like a small sacrifice to pay for an incomparable experience.”

Getting motivated: Mar wanted a home. “It was time, but I couldn’t plan for it until I got serious about my debt,” she says. “I made a promise to myself and to my boyfriend of seven years, Ivan, to pay off the student loans and work toward buying a house at the same time. It was a tall order. It meant saving aggressively, contacting Sallie Mae regularly [and] being actively engaged with my bank and my debt.”

How she made it happen: For the entire year she devoted to paying down the $10,000 student loan, Mar allowed herself only six shopping splurges, a drastic reduction from her typical one or two splurges per month. “If there were a ton of birthdays or weddings during one month, I used that as my splurging month,” she says. “I set a limit on each of those splurges based on what the finances looked for the month.”

Mar also opened a savings account to be used solely for loan payment and set up an automatic deposit from her checking to her savings account. “Set it and forget it,” she says. “Eventually, I had enough in the savings account to pay the remainder off all at once.”

Learning lessons: “I learned I could live with less, and that living with less is liberating,” Mar says. “There are fewer things to clean, fold, hang and pack away. Now it’s easy to go without shopping; in fact, I’d rather take a jog or hang out at home.”

Mar stresses that if you decide to make a larger payment than the due amount one month, “make sure you tell them that the overage must go to the principal,” she says. “Otherwise, they put it towards future interest.”

Sonja Fisher, 44, Los Angeles, Calif., Paid Off $80,000

sonja-fisherDebts paid off: In less than four years, Sonja Fisher paid off $80,000 in credit cards and personal loans.

Getting motivated: After getting a divorce, Fisher ended up with a large amount of consumer debt, a majority of which was her ex-husband’s, she says. But because they had merged their finances as a married couple, she shared the responsibility. She decided to get serious and pay it off “so my money was my money,” Fisher says. “I didn’t want to pay interest anymore.”

How she made it happen: When Fisher got serious about paying off her debts, she began using coupons for groceries and other necessities, cut out unnecessary spending and looked for creative ways to further trim her budget. For instance, she took on odd jobs for extra money, such as tutoring students in math and fixing computers for friends and acquaintances. She started an Amazon business to sell household items she didn’t need and bartered for services when possible: For instance, she would repair a hairdresser’s computer in exchange for a free haircut. In addition, Fisher paid closer attention to her tax deductions to ensure she was writing off everything she could, and used credit card reward points to get things she needed for free.

Learning lessons: Throughout the process, Fisher says she learned two big lessons: “Credit cards are awful. And if you are in a relationship, you should keep your finances separate, under your own control.”

Laurie Ferrer, 46, Fairview Heights, Ill., Paid Off $40,000

laurie-ferrerDebts paid off: Over five years, Laurie Ferrer paid off more than $40,000 in credit card debt, including major credit cards, store credit cards and gas cards.

Getting motivated: When she was about to give birth to her youngest son, Laurie Ferrer didn’t have money to buy diapers and formula or pay the electric bill. She was behind on every household bill, including the mortgage. “I was unable to sleep at night,” she says. “I worried constantly about what bill was coming in the mail, who was calling on the phone, what would get cut off next. I was miserable. My children started telling each other, ‘We can’t do that because we’re poor.’ I knew I had to make a change.”

How she made it happen: Ferrer started by visiting Clearpoint Credit Counseling Solutions, where she joined a debt management program. And immediately, she made drastic changes. “My family didn’t take trips, we didn’t go out to eat, we fixed lunches for school and work,” she says. “We turned off all the lights and decreased our electric bill to the bare minimum. We took public transportation, I took a second job, I shopped at re-sale shops and couponed like that was my third job.”

Ferrer saved more money by becoming the “queen of DIY,” making her own lotion, soap, washing powder, deodorant, lip balm and shampoo, she says. Any possession that wasn’t being used she sold online or at a yard sale, or donated it to Goodwill to claim it as a tax deduction.

Learning lessons: After getting out of debt, Ferrer has adopted a new way of life. She has three credit cards, but “I’m very careful with them,” she says. “There are no impulse shopping trips. If I buy it at the store, I have the money in my account. The cards are for unforeseen emergencies. Now, instead of getting excited by the latest Coach bag or Ugg shoe, I get excited by my rising credit score.”

Source: finance.yahoo.com

Beware: 7 Scams Every Travel Needs to Know About

December 23rd, 2014 | No Comments | Posted in Lifestyle

It’s finally time for the vacation you’ve been planning for months. You’ve saved up money, packed your suitcase, and forwarded your mail. Nothing can kill your vibe at this point except for one little thing … a travel scam.

Whether you’re in an airport or on the streets of Rome, there’s always a scammer lurking to take advantage of your good-hearted tourist nature. To protect your wallet and what’s inside of it, here are some popular scams to look out for the next time you travel.

Tie me up

Where: Paris and Rome
Scam: As you’re walking near the famous Sacre Coeur or Spanish Steps, a charismatic man strolls up to you and starts a conversation. Before you know it, he’s tying a bracelet around your wrist or finger and double-knotting it better than a Boy Scout. Then he demands payment. Of course, you can say no. But if you do, he’ll scream that you are stealing his bracelet and embarrass you in public. Most tourists give in to the pressure and pay just to prevent a scene.

Tip: Don’t get too close. If someone is being superfriendly, you have the right to be suspicious. And if he or she gets close enough to put a bracelet on your wrist, don’t be afraid to just walk away.

The diversion

The diversion

Where: Airports and train stations
Scam: This scam comes in many different forms. One is the “hot dog trick,” whereby a stranger accidentally squirts mustard on you while eating a hot dog. As he apologizes and tries to help you clean up, an accomplice grabs your bag and slips away. Another form of this scam involves an old lady falling in a public place. As everyone runs to her assistance, her partner swoops up as many bags as he can carry and disappears.

Tip: Whether you’re sitting or standing, always be in contact with your bags. Keep a hand on your carry-on, or place it between your legs, if you want to keep it from going missing.

Security line switch-up

Security line switch-up

Where: Airports
Scam: Picture this: You’re about to walk through a metal detector when the person behind you cuts ahead of you. Annoyed, you let him go, but your frustration builds as he repeatedly sets off the alarm. He’s forgotten to remove his watch and loose change, so he is holding up the line. What you don’t know is that on the other side, his accomplice has snagged your belongings and is already in another terminal.

Tip: Wait until the last moment to put your stuff on the conveyor belt; this way no one can slip in front of you. Also, keep an eye on your stuff if you get held up at the metal detector. If you see some fishy business, alert the TSA agent.

The drop and swap

The drop and swap

Where: Istanbul
Scam: You’re a tourist in the country and just getting the hang of the foreign currency. You take a taxi, and when you arrive at your destination, you pay the fare with a 50-lira note. Without your noticing, the driver switches your payment with a 5-lira note, which, unfortunately for you, looks quite similar. He accuses you of shortchanging him, and since you’re not totally sure he’s wrong, you give him another 50-lira note.

Tip: Be a confident traveler. Familiarize yourself with the currency before you go, and pay attention when you pay for services. If you think you’re getting duped, threaten to call the police. Local law enforcement officers know about this trick, and the driver probably won’t want to lose his license.

Bait and switch

Bait and switch

Where: Everywhere
Scam: You’re planning a vacation on a budget, and you find an amazing-looking hotel in your price range. It seems too good to be true, but the pictures on their website look idyllic, so you enter your credit card info and book the room. Unfortunately, when you arrive, you discover that the hotel is a dump, and they won’t refund your money. In some countries, one-star hotels will even copy the name of a popular hotel just to lure tourists to their location. Tricky!

Tip: It always pays to book through a reputable tour operator because it will take responsibility for the booking and guarantee that you don’t lose money. Sites such as Oyster and TripAdvisor are also great resources for checking out reviews from customers who have stayed at the hotel.

Wi-Fi data skimming

Wi-Fi data skimming

Where: Airports, hotels
Scam: Let’s be honest, no one ever turns down free Wi-Fi. This fact has made the practice of “skimming” all too common at hotels, cafés, and other public venues. A free W-Fi hotspot is set up and made public for anyone to access. Sure, the Internet is free, but while you’re checking Facebook, your data is getting sent to the host’s computer. Just like that, they have access to your usernames and passwords.

Tip: Only connect to legitimate networks. Check out this list of airports with free Wi-Fi so that you know you’re connecting to a secure network. At a hotel, don’t connect to another guest’s Wi-Fi hotspot. Instead, ask the front desk for the hotel’s preferred network and use it!

Tricky exchange rates

Tricky exchange rates

Where: Western Europe
Scam: You find a great souvenir at a shop overseas, and as you hand your credit card to the merchant, she asks if you’d like to convert your credit card transaction to U.S. dollars. You oblige, because it sounds easier, but actually it’s not. It’s called Dynamic Currency Conversion (DCC), and by using a conversion rate that is higher than the going rate, the merchant is making an extra profit off of your purchase. She pockets the money and you’re left in the dark.

Tip: Always pay in local currency. Also, DCC fees can be added only to Visa and MasterCard credit and debit card purchases. American Express cards use a closed system.

Source: yahoo.com

Are New Year’s Resolutions Obsolete?

December 23rd, 2014 | No Comments | Posted in Lifestyle

Why do we create resolutions every year and who says that January 1 is the start of the New Year? The Chinese and Jewish cultures have different days they use to start anew. With this in mind, remember you determine how important this day is to you. If you had a wonderful 2014, don’t panic that it must come to an end in 2015. On the other hand, if you had a rough year, use this as a time to wash away your troubles and focus on creating a better year.

2014-12-23-New_Year_resolution-thumbIn 2014, I actually started the monthly practice of recounting my successes and failures, removing what doesn’t work for me, and creating a vision of what I do want. Every New Moon I take a moment to check in with myself personally, professionally, emotionally, and spiritually. Where am I close to my ideal? Where am I off? How do I want to be? What I have found is that, like not allowing our stress to build, taking mini resolution check-in’s allows me to react to constant changes in life, revise how I am acting or reacting, and reevaluate what I find important in life.

Constant Changes
Imagine you make a New Year’s resolution to move to a senior position in your company. You lay out how you need to network, where you need to improve your skills, and when you will be ready to ask for the promotion. Then on January 2, you learn that your company is going bankrupt, your spouse is being transferred, or a family member’s health becomes a priority. Life happens. By reevaluating your desires and needs on a monthly basis, you are more easily positioned to adapt to all that life throws at us.

Action/Reaction
Instead of focusing on results and outcomes, I prefer to focus on how I am acting, reacting, and being. When all things are said and done, are you most proud of the expensive car in your garage or the first time you had the power to speak up for yourself? Much more reward is available in our self-control, overcoming fear, speaking our needs, and doing our best. Check monthly to review where you could have acted better and where you made the most of who you are.

What Is Important
Especially when we create an annual plan for our business, we have a tendency to look at outcome versus goals. A great way to stay in touch with what really brings you joy, satisfaction, and accomplishment is to continually reevaluate what is important to you. I learned this one again and again with my book. The number of books sold were not as important as the stories I heard of how the book affected people’s lives. Check in every so often and question if what you desire is truly what makes your heart sing, or is it the false desire of fame, recognition, or success society tells us we should want. Release outcomes which do not add to your happiness and celebrate where you have made a difference in the world.

This New Year, I challenge you not to create annual resolutions but instead to look to the next month. How do you want to be? What do you want to experience? What would make your heart sing? What do you need to do to bypass fear and live fully? Then 30 days from now, see how well you did. Celebrate your wins and make plans for how you can make the next 30 days even better!

Source: huffingtonpost.com

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