Tip of the Month

The holidays are a season of giving. While much of this involves financial expenditures, you can also give in ways that are more affordable and may hold more meaning. Here are some suggestions about how you can engage in acts of generosity and return to what the season is all about.

Cook Food

Nothing nourishes the heart and soul, not to mention your stomach, like food made with love from your own kitchen. Baking cookies is always an easy and fun thing to do, but a main dish (with protein) or hearty casseroles are also good options. People who are homebound due to an illness, those going through financial difficulties or even new moms will appreciate the gift of a warm meal. You might also ask co-workers, local churches or homeless shelters if they’re looking for some extra sustenance during this time of year.

Create Necessity Bags

Giving to those on the streets during the holidays is an easy, inexpensive way to make a difference. Fill a gallon-sized food storage bag with things like gloves, toothpaste and toothbrush, hand sanitizer, sanitary wipes, bottled water, snacks and a gift card to a grocery store. Then contact your local organizations and charities to see where the needs lie. You might also carry these bags in your car and when you see someone, give it to them. Moments like these are invaluable to those in need and for you, too.

Volunteer Time

Showing up with an extra pair of hands is often what someone needs. A great place to check out is VolunteerMatch. Just type in your ZIP code and you’ll find all kinds of opportunities to help everyone from seniors to children in many sectors, including education, arts and health. You might also find ways to help animals or read to the blind. These are feel-good, money-free ways to experience the joy of giving.

Donate Craft Items

How many times have you thrown away your toilet paper rolls or egg cartons? This year, save and donate them to nearby schools or community centers. All it takes is a few phone calls to find out what their craft needs are. You’ll also be helping the environment – sharing some love for Mother Nature. How simple is that?

Declutter Your Dwelling

This one has so many terrific benefits. You can get rid of clothes and belongings that crowd your closets, which is a wonderful feeling. One option is to sell them on eBay Charity and donate to a nonprofit of your choice. You choose what percentage of the sale goes to the organization (from 10 to 100 percent). eBay will even give you a credit on your selling fees based on the percentage you choose. If you want to give away gently used professional clothes, Dress for Success and Jails to Jobs, are groups that empower people to look their best when making a fresh start. If you’d like to rid yourself of shoes you’ll never wear again, Soles4Souls is a great resource and you can ship up to 15 pairs of shoes without paying a fee through the Zappos for Good program. Talk about good for the sole, er, soul!

For the most part, should you choose to get into the holiday spirit with these activities (aside from a few costs here and there), the main thing you’ll be spending is time. However, experiencing the joy of the giving is priceless.

Sources

https://www.discover.com/online-banking/banking-topics/affordable-ways-to-spread-generosity-holiday-season/

If the thought of paying off your student loan causes a bit of anxiety, worry no more. Here are some ways to pay it off faster. Check them out.

Sign Up for Auto-Pay

This might seem like the most obvious thing to do, and yet, some alums don’t take full advantage of it. The psychology of this works well. When you decide to put your payment on auto-draft, you never miss it. You get used to living on a certain amount of money. Better still, there are lenders who offer refinancing at lower rates, ranging from 1.8 percent to 7.84 percent. But there’s more: Some lenders offer cash-back bonuses. With that said, the catch is you give up important benefits like income-driven repayment and student loan forgiveness. However, refinancing can help you save a bunch – like thousands of dollars.

Pay Bi-Weekly

If you can swing this, it makes good sense. Why? Interest on your student loan accrues daily. Just cut your monthly payment in half and make two payments per month. This way, it might be easier to juggle your finances, as opposed to doling out one big chunk every month. Also, paying more often gives you the feeling that you’re making progress – and you are because of the daily accrual. #WinWin

Use the Debt Avalanche Method

With this approach, you’re paying off your highest interest debt first. Makes sense, right? After you do this, make minimum payments on all of your other loans. If you have any extra cash left over, pay your highest interest loan. Keep at this until you’re paid in full.

Claim the Student Loan Tax Deduction

This is cool. You can write off up to $2,500 of your student loan interest. Now, the amount you can write off depends on your income because there are phaseouts and gradual reductions in place. Just use the 1098-E form (you can get this from your loan servicer) to figure out how much interest you’ve paid. Then get going.

Pay While Still in School

Talk about getting a head start.You’ll cut down on interest (a good thing) while forgoing in-school deferment, and start paying down your debt pronto.

Pay Off Private Student Loans First

Should you have public and private student loans, this is the best strategy. Here’s why: private loans don’t offer student loan forgiveness or income-driven repayment. And they have limited deferment options. You’ll be better off doing this, given all the stipulations that exist for these kinds of loans.

Use Employer Repayment Assistance Programs

This is a sweet deal. Check with your employer to see if they offer such a program. Generally, they offer reimbursement or allocate funds to help you. Don’t forget to ask!

Pay During the Grace Period

This is the six-month period after graduation. While this might not be something that’s initially appealing, think it through. It helps keep interest in check and prevents your balance from growing during your grace period. Also, starting earlier means you’ll finish earlier. Gotta love that.

Consolidate Federal Student Loans

This is a great idea for those with limited resources. You can lower your payment and extend the repayment terms. You’ll most likely pay more interest, but for a short-time solution it’s a good one.

Exceed the Minimum Payment

If you have the means to make this happen, by all means, do it. Another great way to make incredible progress is to make double payments. If you can’t pay double, at least try to pay over the required amount. It’ll help eat away at the interest and eventually, the principal.

Student loans are great while you’re in school, right? They enable you to get the education you want. And while paying them off might be overwhelming, if you use these methods, you’ll be ahead of the game and pay them off sooner than you think.

Sources

107 Ways to Pay Off Student Loans Faster (That You Can Start Right Now)

So you want to save for a down payment for your dream house, but you aren’t sure how to get there. It might even feel overwhelming. But take heart, here are some tried and true methods that you can start today that will help you save sooner than you think.

Save a Fixed Amount Monthly

This is super easy, but first you need to figure out how much of a down payment you want to make. Remember, the higher your down payment, the lower your loan and monthly mortgage payment will be. With that said, put this amount on auto draft and deposit it into your savings account. Once you get used to this, you won’t miss it. Never use this savings for any other purpose except your down payment. Keep your eyes on the prize and stay the course.

Lower Your Expenses

If you don’t have a budget, make one. Review how much you’re spending on necessary items like rent, utilities and food. Also look at how much you’re spending on discretionary things, like going out to eat, subscriptions to magazines, driving instead of walking, etc. You might also evaluate how much those short-term indulgences mean to you. Only you can decide, but if you stick to a budget and start saving, the dream of a down payment can become a reality.

Skip Vacations For a Year

This one might be hard to swallow. However, if you save the money you’d otherwise spend on your vacation, you can make a significant contribution toward your down payment. If skipping a vacation is out of the question, try a staycation; or at least drive or take a bus or train to someplace near you that won’t cost an arm and a leg, like a natural park, an area lake or even, if you’re lucky enough to live near one, a beach. With every decision you make to delay gratification and focus on your long-term goal of home ownership, you’ll be more likely to stay on track.

Reduce Your High Interest Rate Debt

Credit card interest rates can really eat into the amount of money you are trying to save. If you can pay them off, do so – and start with the one that’s the highest. When you’ve paid it off, close the account and move on to the next one. You can also apply for a card with a temporary 0% interest rate (for maybe 15 months) and transfer your other balances to this one card. Good options include Bank of America’s Unlimited Cash Rewards credit card, Discover it Balance Transfer and Citi Double Cash Card.

Borrow From Your Retirement Plan

If you want to expedite getting into a house and are comfortable doing this, the look for penalty-free withdrawals from your retirement plan. Many company-sponsored 401(k) or profit-sharing plans allow you to borrow against your nest egg to purchase a home. Just ask your HR or payroll department.

Sell Some of Your Investments

While this option might not be instantly appealing, think of this as a way to move some of your current investments into another – your house. Once you’ve moved in and are paying your mortgage, you’ll be building equity. As your house increases in value, so does your investment.

Look Into Down Payment Assistance

Yes, this is a thing! There are organizations that might be able to help you, like the Federal Housing Administration, the U.S. Department of Agriculture Rural Housing Service and the Veterans Administration. Another source is your local housing authority.

These are a few options to help you move toward a down payment. But no matter what you choose, don’t wait. Get started today. This way, you’ll be packing up and moving in no time.

Sources

https://www.bbt.com/education-center/articles/top-10-ways-to-save-down-payment.html

https://www.creditkarma.com/credit-cards/balance-transfer?gclid=Cj0KCQjwtMCKBhDAARIsAG-2Eu8NmKerM3dO4cPjC0KvMCj_S3HPjJ_r4ge6MV50wWiQf51VLK4HOwUaAncZEALw_wcB

If you’re 40 or 50 and aren’t where you’d like to be in terms of saving for retirement, don’t despair. You can remedy this situation. And since people are living well into their 80s and 90s, it’s never too late to start. Here are a few things you can do.

Max Out Your 401(k)

This could be a game-changer. Stuart Ritter, a certified financial planner with T. Rowe Price, recommends that you save at least 15 percent of your income for retirement, including the amount your employer matches. If your company is contributing 3 percent, then you should save 12 percent. If you can’t go this high, then increase the amount by 2 percent each year. So, if you’re saving 3 percent this year, bump it up to 5 percent, then 7 percent, and so on. If you’re under 50, try to hit the $19,500 limit. After you turn 50, you can increase your annual savings to $6,500 on top of this $19,500 limit. Note: You have to be 59 ½ to withdraw money without any penalties. However, the early withdrawal penalty doesn’t apply if you’re 55 or older in the year you leave your employer. All this to say that the sooner you start doing this, the more you will save and the more you’ll have down the road.

Contribute to a Roth IRA

With this product, you can grow your money on a tax-deferred basis. For instance, if you’re 40 and invest $6,000 each year at an 8 percent return, then by the time you’re 65 you’ll have more than $473,726. Even if you wait until you’re 50 and save 6k a year, using the same rate of return, you’ll save as much as $175,946 by the time you’re 65. However, there are some income limitations. If you’re single and your modified adjusted gross income is more than $125,000, your contribution limit is reduced. If you’re single and make over $140k, you can’t contribute. Michelle Buonincontri, a certified financial planner, says that the beauty of Roth IRAs are that they allow for tax-free compounding. Further, when withdrawal rules are followed, the withdrawals, including the earnings, will be tax-free. And when you’re in the withdrawal phase, it can minimize taxable income, which can add up and help your money last longer during retirement.

Take Advantage of Your Deductions

Not everyone takes standard deductions. That’s why if you have a significant amount of mortgage interest, deductible taxes, charitable donations, and business-related expenses that your employer doesn’t reimburse you for, you’ll most likely want to itemize your deductions. Talk to your CPA and figure out whether this is a good plan for you. Then start saving your receipts and keeping good records. As you get closer to retirement and if money is tight, remember: it’s not what you make, but what you save that makes the difference.

Don’t Forget About Home Equity

While home equity probably shouldn’t be used as your main source of income when you’re retired, it’s a viable solution. Retirees might consider borrowing against it to fund living expenses. In fact, you can use a home equity line (HELOC) to draw from when needed. Other options include selling, downsizing, and either living off the equity or investing it. But before you sell, you should consider tax consequences. Married homeowners who file a joint tax return can make up to $500k without owing taxes on capital gains. If you’re single, the cap is $250,000.

Get Disability Coverage

The reason for this is simple: to protect yourself and at least a portion of your income and retirement savings in a worst-case scenario. It is always a good idea to have a contingency plan.

Consider Your Cash Value Policies

This is a last resort, but again, a good option, especially if the original need for your insurance policy is no longer there. However, before you do anything or access its cash value, consult your tax advisor or insurance professional first.

No matter what your situation is, you can save for your future. All you have to do is begin now and take it one day at a time.

Sources

https://www.investopedia.com/articles/retirement/08/catch-up.asp

https://www.kiplinger.com/retirement/retirement-planning/602191/401k-contribution-limits-for-2021

https://money.usnews.com/money/retirement/401ks/articles/how-to-take-advantage-of-401-k-catch-up-contributions#:~:text=The%20401(k)%20Catch%2DUp%20Contribution%20Limit%20for%202021&text=Once%20you%20turn%2050%2C%20you,temporarily%20shield%20from%20income%20tax

You’ve got loads of experience in your field. You know things that only time can teach you. However, all of your experience and knowledge can sometimes work against you. And even though age discrimination is illegal, it doesn’t mean it isn’t prevalent. You can’t turn back the clock, but you can reshape how you present yourself. Here are a few good ways to get started.

Learn New Skills

If you see a job posting in your industry that requires knowledge of the software you don’t know, hop on YouTube or enroll in an online class. Certifications help, too, and are available in some of the most in-demand programs, such as Amazon Web Services (AWS), Systems Applications and Products (SAP), Hootsuite (used for social media), and Salesforce. This way, you’re demonstrating to employers that you have the necessary qualifications for the job – you’re a viable candidate – and you haven’t fallen behind over the years.

Rethink Your Resume

First of all, limit your experience to the past 15 years, unless there’s a job that reflects a title or skill that’s relevant to the position. You don’t want to appear, upon first glance, overqualified. Second, make sure your CV includes the right keywords. The days of HR managers poring over resumes is mostly gone; they often use applicant tracking systems (ATS) to weed out the candidates that are filling up their inbox at warp speed. Finally, if you’re using AOL or Hotmail, get a new account; this is a red flag that screams too old. Sign up for Gmail instead.

Widen Your Net

Think outside your industry’s box. For instance, you might be attracted to a big-name corporation or a hot startup, but it might not be the right environment for you, especially if there’s a chance you’d report to a much younger manager. You might find a better fit by going outside your comfort zone. Colleges and universities might be good options; you can leverage your experience by teaching. Smaller companies or startups that aren’t as well known might also be good places to look; you could take on multiple roles. Being open to contract or freelance jobs is another good idea. Getting your foot in the door is half the battle.

Use Personal Connections

While job sites like Zip Recruiter and LinkedIn, leads on social media and head hunters are places you might have found opportunities before, reach out to friends and former coworkers. It creates immediate familiarity and, when faced with a sea of resumes, helps move your name closer to the top. When you do get introduced to someone who has an opening, ask about their industry, role in the company, as well as what tools they’ve used, podcasts they listen to, or online classes they’ve taken to keep current. This not only shows your business savvy but also could help keep you top-of-mind if they hear of anything.

Own Your Experience

Your age doesn’t have to be the elephant in the room. Demonstrate why the invaluable skills you’ve accumulated over the years differentiate you from others. Craft an elevator pitch and jump right in. Talk about how, for instance, your breadth and depth of knowledge can help junior executives learn and grow. Busy employers generally want to know how quickly you meet the job requirements and if you can make their life easier, or help them shine.

Remember, you have so much to bring to the table. That’s why serving up your accolades in the right way can make all the difference in the world.

Sources

https://www.themuse.com/advice/jobhunting-after-50-the-new-rules

Slowly, our world is changing. A percentage of the population has been vaccinated and many employees are headed back to the office. However, this may cause a bit of anxiety – and understandably so. Here are few ways to help take the edge off of returning to the workplace.

Wake up Earlier

For some of you, working from home might have caused you to shift your office hours. Maybe you’re starting later and staying up later. Whatever your routine, it’s safe to say that generally, office hours are 9 a.m. to 5 p.m. A few days, perhaps a week, before you expect to go back, set your alarm earlier. Each day, baby step it back a few minutes to the time you roused yourself before the shutdown began. Though things might never be the same, at least your re-entry into the work world might feel somewhat familiar.

Prepare the Night Before Your First Day

Along with starting your day earlier, think through everything you need to take with you. Do you drink coffee? Make sure you have a thermos with a hot cup of joe ready to go. Do you eat lunch at work? Make your lunch the night before; or if you prefer microwavable meals, be sure you’ve got all your favs ready to pop into your work bag. Ensuring that you will have sustenance at whatever time you lunch will save you a lot of worry.

Review Your Workplace Protocols

Here we’re talking about rules to keep you safe. Do you need a mask if you’ve been vaccinated? What if you haven’t been vaccinated? Do you need to always wear a mask? Will there be hand sanitizer onsite or do you need to bring your own? Email HR or leadership to be fully aware of the policy so you can keep up-to-date with any changes. Staying informed will help calm your nerves.

Manage Your Stress

Make sure you’re being mindful of how you’re feeling emotionally before, during, and after you return to work. If you’re dealing with anxiety when you’re back at work, practice self-care. Take a walk outside during lunch to get some fresh air. If you like to exercise and your gym is open, plan a quick workout. If for some reason you can’t leave the office, try meditation apps like Calm, Headspace or Simple Habit. (These are also great when you get home and before you go to bed – anytime, actually.) You might also call a friend or family member and share how you’re feeling. Letting off some steam and expressing yourself helps alleviate some of the pressure that might be building up.

Communicate with Your Team

Making the transition back to the office can be challenging, if not downright tough. To diffuse any misunderstandings, practice transparency with everyone, no matter what their position. If you’re a manager, lay out your expectations so that everyone is on the same page. If you’re an individual contributor, make sure your manager and peers know what you’re working on, your hours, and any out-of-the-office days you have coming up. Many companies are asking employees, initially, to split their time between the office and home, which means that for some a full transition back to the office is yet to come. Regardless, overcommunicating will ensure you don’t miss out on anything important.

We may never return to the days before the pandemic. However, we’re making strides to get back to a place of normalcy and are here to guide you every step of the way.

Sources

Returning To Work In The Office? 5 Tips To Prepare For The Transition

Let’s face it. Saving money is a challenge at best – and really hard the rest of the time. But what if you made it a fun game to inspire yourself to save? Here are a few ways to do just that.

Keep the Change Challenge

Anytime you receive or find loose change in your pockets or house, put it in a jar. Don’t touch it for a year, and then see how much you save. But here’s a great plus-up for this habit: download a money-saving app like Acorns and watch your savings grow. Anytime you buy something, Acorns will round up the total and deposit the difference into a diversified investment portfolio. Talk about easy.

Weather Wednesday Challenge

This is great idea. Every Wednesday,look up the highest temperature in your state and deposit the amount into your savings account. For example, if it’s 100 degrees, deposit $100. If it’s 32 degrees, deposit $32. You’ll probably save more during the summer than the winter, but after 52 weeks, you could’ve socked away several thousand dollars. Pretty sweet.

Kick-a-Bad-Habit Challenge

Do you go to Starbucks every day for your Double Chocolatey Chip Crème Frappuccino with extra whip? How about guzzling those sodas every day? Are you a smoker? Whatever it is that you’d like to cut down on or even stop, this challenge has two great benefits: you’ll not only get healthier, but you will also save money.

The No-Spend Challenge

Start with a weekend (or even a week) and make a vow not to spend any money on anything except bills or other necessities. The idea is to save money by not spending it. It might cause you to be more creative. For instance, do you really need a new dress for that special occasion? Dig a little deeper into your closet instead of buying a new frock. Or maybe you decide to drive less and not put gas in the tank. This way, you’ll either bike or walk to your destination (if doable) and do more fun things at home.

The Pantry Challenge

Look inside your refrigerator and pantry. How much food do you have that you haven’t eaten? What about that spaghetti sauce or sesame oil? As long as the food isn’t expired, it’s your chance to get creative and whip up a new dish or revive an old favorite. This challenge is related to the “No-Spend Challenge,” and again, the intention is to save money by not spending it.

The 365-Day Nickel Challenge

Nickels are currency, too! But seriously, if you can remember to do this (set a timer on your phone), you’ll be rewarded handsomely. Here’s how it works: On day one, deposit 5 cents into a jar. The next day, 10 cents. The next day, 15 cents. And so on. By day 365, the total deposit will be $18.40. At the end of the year, you’ll have saved a whopping $3,339.75. Not bad, huh?

While saving money might feel restrictive, you’re actually planning ahead to be very happy. When you’ve been able to stick to a habit, or in some cases give one up, you’ll see that anything is possible if you just put your mind to it. And that’s a great feeling.

Sources

https://money.usnews.com/money/personal-finance/saving-and-budgeting/articles/money-saving-challenges

Roth IRAs can be a powerful tax tool, but they are often misunderstood and misused. Investment income in Roth IRAs compound tax-free and most distributions are tax-free as well. Another benefit is that there are no required minimum distributions (RMDs) throughout the original owner’s life. Long-term Roth distributions are tax-free to the beneficiaries who inherit the IRA as long as they fully distribute the Roth within 10 years of inheriting.

As the annual contribution limits are rather small, most Roth IRA contributions are made by converting a traditional IRA to a Roth IRA. The downside to conversion is that you’ll have to pay tax on the gross amount converted. Considering this can require a substantial cash outlay and that all the Roth IRA benefits are backloaded, deciding to make a conversion can be a difficult call.

Most people aren’t sure it will pay off in the long term and don’t like the idea of paying taxes now instead of in the future. Consequently, too often people try to make a conversion decision through intuition instead of objectively considering the important factors.

It’s best to use a spreadsheet to do an analysis or work with a tax advisor because you will need to consider many factors, including assumptions about tax rates, investment returns, how long you’ll own the accounts, how much you will convert, etc.

Generally, a conversion becomes more advantageous if tax rates increase and this impact is compounded by higher investment returns. Finally, remember that you can leave the Roth to your heirs who can take distributions tax-free.

Roth IRA conversions are not the right option for everyone, but where it’s appropriate the benefits can be substantial.

While the pandemic is not over, we do have some good news. There are vaccines and they will be available soon. Here’s where we are in terms of an overall plan and where states are with distributing the vaccines.

Operation Warp Speed

The current administration has already purchased hundreds of millions of doses of several vaccine candidates. Two of them are from Moderna and Pfizer and they’ve shown significant efficacy in Phase 3 clinical trials. The incoming Biden administration will take on distribution and has established a COVID-19 Task Force. A limited number of doses may become available as early as December.

The Interim Playbook

This document from the Center for Disease Control and Prevention (CDC) is the roadmap for state, territorial, tribal, and local public health programs and their partners. It focuses on how to plan and operationalize a vaccine response to the pandemic within their jurisdictions. It’s quite comprehensive and is a good reference for the coming months.

Phased Approach

In the Interim Playbook, the CDC has given states a set of planning assumptions by which they can develop their distribution plans and explains how the vaccine will likely be administered in phases.

• Phase 1 – there is an initial limited supply of vaccine doses that will be prioritized for certain groups. The distribution will be more tightly controlled and a limited number of providers will be administering the vaccine.
• Phase 2 – supply would increase and access will be expanded to include a broader set of the population, with more providers involved.
• Phase 3 – there would likely be sufficient supply to meet demand and distribution would be integrated into routine vaccination programs.

Common Themes and Concerns from State Plans

The Kaiser Family Foundation (KFF), a non-profit organization focusing on national health issues, sought to collect plans from all 50 states and DC. As of Nov. 13, they’ve reviewed 47 of these plans and have singled out key areas contained within each plan.

• Identifying priority populations for vaccination. Each state will determine who will be first in line, initially; however, every plan highlights the following categories as being the priority during Phase 1: healthcare workers, essential workers, and those at high risk (older people and those with pre-disposing health risk factors). A majority of states (25 of 47, or 53 percent) have at least one mention of incorporating racial and/or ethnic minorities or health equity considerations in their targeting of priority populations. 
• Identifying the network of providers in their state will be responsible for administering vaccines. Even though states are at different points in the process, providers will likely include hospitals and doctors’ offices, pharmacies, health departments, federally qualified health centers, and other clinics that play a role in administering vaccines today. Given the need to quickly vaccinate most residents, additional partners will be needed, such as long-term care facilities, and will (potentially) set up public locations like schools and community centers for mass vaccinations.
• Developing the data collection and reporting systems needed to track the vaccine distribution progress. Many states are relying on (and often expanding) existing state-level immunization registries, while other states are developing new systems or using those provided by the federal government. To sum it up, each state is at a different stage in this process.
• Laying out a communications strategy for the period before and during vaccination. The CDC has asked states to design plans that anticipate and respond to different populations and include the need to address misinformation and vaccine hesitancy. Not surprisingly, some of these states’ plans are detailed while some are not.

All of these things are high-level summations of what is planned so far. For a more detailed explanation, check out the Interim Playbook from the CDC. The COVID-19 situation is ever-changing, but the most important takeaway is that steps are being put in place to help protect us all. Stay safe.

Sources

States Are Getting Ready to Distribute COVID-19 Vaccines. What Do Their Plans Tell Us So Far?

https://www.newsweek.com/fauci-optimistic-about-covid-19-vaccine-says-high-risk-could-get-it-december-1546384

https://www.cdc.gov/vaccines/imz-managers/downloads/COVID-19-Vaccination-Program-Interim_Playbook.pdf