More Middle-Income Borrowers Seek Debt Help

Debt counselors report more demand from middle-income consumers.
“The average income for consumers seeking debt-management plans is rising, according to Credability, an Atlanta-based nonprofit. Clients entering such plans had average income of $54,000 last year, up from $43,000 in 2007, the group said. High unemployment and the struggling housing market are likely driving the shift, said Mark Cole, executive vice president at Credability.” by Ann Carrns for The New York Times
http://bucks.blogs.nytimes.com/2012/01/30/more-middle-income-borrowers-seek-debt-help/
The Housing and Financial Counseling Service at the USU Family Life Center (493 North 700 East in Logan) provides very low cost financial counseling and educational workshops. For appointment call 435-797-7224. Check out their website which includes helpful worksheets, and their workshop schedule: http://www.usu.edu/fchd/housing/

Earned Income Tax Credit

The Earned Income Tax Credit, (EITC), can be a financial boost for workers affected by hard economic times. However, 1 in 4 eligible taxpayers could miss out on the credit because they don’t check it out. Here are the top 10 things the IRS wants you to know about this valuable credit, which has been making the lives of working people a little easier for 35 years.
1. Just because you didn’t qualify last year, doesn’t mean you won’t this year.
2. If you qualify, it could be worth up to $5,657 this year. EITC not only reduces the federal tax you owe, but could result in a refund.
3. If you qualify, you must file a federal income tax return and specifically claim the credit in order to get it – even if you are not otherwise required to file.
4. Your filing status cannot be Married Filing Separately.
5. You must have a valid Social Security Number
6. You must have earned income.
7. Married couples and single people without kids may qualify.
8. Special rules apply to members of the U.S. Armed Forces in combat zones.
9. It’s easy to determine whether you qualify. The EITC Assistant, an interactive tool available on IRS.gov, removes the guesswork from eligibility rules. Just answer a few simple questions to find out if you qualify and estimate the amount of your EITC.
10. Free help is available at volunteer assistance sites and IRS Taxpayer Assistance Centers to help you prepare and claim your EITC. If you are preparing your taxes electronically, the software program you use will figure the credit for you.
Check it out: http://www.irs.gov/individuals/article/0,,id=96406,00.html

Secrets of Settling Credit Card Debt

5 steps to settle your debt for less than you owe
by Martha C. White, Time/Moneyland, 1/23/12
“Maybe you’ve seen ads that promise to negotiate on your behalf with credit card companies and collection agencies to shrink your debts. It might sound too good to be true, but the truth is that it sometimes is possible to convince your creditors to settle for less than what you owe. And if it can be done, you can probably do it yourself. Here’s what you need to know about the process.” I will be using this information the next time I teach my Consumer Credit Problems class!
1. Try to settle before an account goes into collections
2. Build your case
3. Grow a thick skin
4. Start haggling
5. Before You Pay, Get the Agreement in Writing
Read the details at:
http://moneyland.time.com/2012/01/24/6-steps-to-settling-your-debts-for-less-than-you-owe/#the-secrets-of-settling-credit-card-debt

3 Keys to Successful Savings Webinar

Celebrate America Saves Week - February 19 – 26, 2012
“Set a Goal. Make a Plan. Save Automatically.”
Topics include:
Setting SMART financial goals
Making a savings plan
Finding money to save
Choosing the right accounts to match your goals
Wednesday, February 22 - 10:30 to 11:30 pm MST
Presented by University of Florida Extension
Register at http://bit.ly/Savemoney
Click on the bit.ly link and enter your info in the registration form. You will receive a response and a reminder via email.

SSA Benefit Estimate Statements

“The Social Security Administration is reversing a cost-savings move and will once again mail benefits statements to people 60 and older who don't yet receive Social Security. Also included in the mailings will be 25-year-old employees, who will get an introductory statement explaining their benefits. Others soon will be able to access their benefits information online, but people who don't have Web access can request paper copies.”

“Reducing the number of statements sent out is expected to trim the estimated $70 million annual bill to about $3.7 million.” “Since the 1980s, Social Security statements have been mailed each year to workers older than 25. They include a history of taxable earnings for each year — so people can check for mistakes — as well as the total amount of Social Security and Medicare taxes paid over the lifetime of the worker. The statements provide estimates of monthly benefits, based on current earnings and when a worker plans to retire.”

Sources: Retirement Security SmartBrief rssb@smartbrief.com and the Minneapolis Star Tribune

The College-Aid Shuffle

Just be glad your child is not going to Sarah Lawrence College to the tune of $59,170... per year! The January 21-22, 2012 Wall Street Journal has a great article on ways to obtain more financial aid for your college-bound kids. Examples include postponing income, accelerating tax deductions and "moving assets from one account to another." The strategies work best if you have a couple years before junior or juniorette heads to campus. "But even families with incoming freshman can make moves to maximize their aid and scholarship packages." Best of all the article emphasizes the importance of placing your retirement security first. It's a mistake to not apply for financial aid assuming you won't qualify. Fill out the Free Application for Federal Student Aid (FAFSA)! "If your child is attending a private college, families also must fill out the College Board's CSS/Financial Aid Profile, which schools use to determine how to distribute their own aid funds." The article contains multiple suggestions for maximizing financial aid.
If it's too late to pick up today's WSJ go to www.wsj.com and search for "College-Aid Shuffle." You may need to subscribe to have access to the full article. Or check to see if your library carries the WSJ.

How to Talk to Your Parents About Their Money

"Many adult children are taking a greater role in their aging parents' financial lives, a natural outgrowth of increased longevity as well as rising rates of dementia and Alzheimer's disease in the senior population. Yet getting involved in their parents' financial affairs isn't always easy or natural for children, and some miss the signs that their parents need a helping hand to help them navigate their money matters."

Luckily my parents made it easy for me in 2002 when I stepped in to take over their finances. My father lived to 91 and my mom will be 87 shortly. Because of my experience in teaching personal finance and their encouragement to help, It was easy or me to step up to the challenge. But most adult children need help with the task.

Enter Wall Street Journal writer Jeff Opdyke, Wall Street Journal reporter Jeff Opdyke. "His latest book, Protecting Your Parents' Money: The Essential Guide to Helping Mom and Dad Navigate the Finances of Retirement is essential reading for adult children who would like to make sure their parents have the highest quality of life they can possibly have during retirement without outliving their nest eggs. The book also includes tips for understanding Medicare, identifying and warding against financial fraud, and selecting nursing homes and retirement communities."

Besides being the right thing to do as mental abilities decline with age even for he most astute seniors, it's essential to protect your own future financial security. don't wait until Mom & Dad run out of money or are victims of financial fraud. More details at: http://news.morningstar.com/articlenet/article.aspx?id=532951&SR=COM807&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Morningstar-Articles+%28Investing+Articles+|+Morningstar.com%29

How Much Do You Know About Health Reform?

All the presidential candidates have an opinion but there are many misconceptions and much misinformation about the Affordable Care Act—the health reform legislation passed by Congress and signed into law by President Barack Obama.

Separate fact from fiction with this quiz:
http://www.americanprogress.org/issues/2012/01/aca_quiz.html

Learn more with this short video:
http://www.americanprogress.org/issues/2012/01/aca_success_video.html

Mortgage Foreclosure Review

Did you lose your house to foreclosure in 2009 or 2010? If so, the U.S. Office of the Comptroller of the Currency says you may be eligible for a free independent review of your case. Independent foreclosure reviews let borrowers who faced foreclosure on their primary residences between January 1, 2009 and December 31, 2010 request reviews of their cases if they believe they suffered financial injury as a result of errors in the foreclosure processes of these servicers: America’s Servicing Company, Aurora Loan Services, Bank of America, Beneficial, Chase, Citibank, CitiFinancial, Citi Mortgage, Country-Wide, EMC, EverBank/Everhome, Freedom Financial, GMAC Mortgage, HFC, HSBC, IndyMac Mortgage Services, MetLife Bank, National City, PNC Mortgage, Sovereign Bank, Sun-Trust Mortgage, U.S. Bank, Wachovia, Washington Mutual, and Wells Fargo. Visit http://www.occ.treas.gov/news-issuances/news-releases/2012/nr-occ-2012-1.html for additional information.

Credit card debt: How do you compare?

"Consumers reduced credit card debt by 11 percent last year, and average debt loads dropped in every state, CNNMoney.com reported today. The average credit card balance for 2011 was $6,576, down from $7,404 the previous year, according to a report from credit tracking and financial education website CreditKarma.com, based on data from more than 300,000 of its users. The state that racked up the most credit card debt was Alaska, where consumers had an average debt load of $7,937. Alaska was followed by New Hampshire and Connecticut...." According to the report Utah credit card debt averaged $5,816. BUT the report doesn't say how the numbers were derived. I guess the averages include people who pay their balance in full every month. The # may also include small businesses that run all their expenses through a credit card. Some of the debt reduction is likely due to defaults, not just paying down debt. Read more details at: http://money.cnn.com/2012/01/17/pf/credit_card_debt/index.htm

Credit Score of 760 is "good enough" say experts

"Once consumers hit lenders' threshold for a good credit score, usually in the mid- to upper 700s, they will see no appreciable financial reward from boosting their score further, some experts say. For example, borrowers won't get a better rate if their score is 820 instead of 780, says Ken Lin, CEO of Credit Karma." "If you're at 780 plus, it's all bragging rights from there," according to Lin (www.creditkarma.com). Efforts to boost your score above 760 yield few benefits beyond 'bragging rights.' Read the details at:
http://www.investmentnews.com/article/20120113/FREE/120119963

Health Care Reform

As the presidential campaign heats up you'll hear lots of rhetoric about "Obamacare." Learn what's really included in the health care reform act. Listen to a review of an adult comic book to help you understand what the law means for you and your family. If you have a young adult child you may already know you can keep the child on your health insurance up to age 26 which can be a real life saver (literally).
Check this out: http://www.npr.org/blogs/health/2012/01/10/144977971/to-understand-health-overhaul-try-a-comic-book
Health Care Reform: What It Is, Why It's Necessary, How It Works
Jonathan Gruber with HP Newquist; Illustrated by Nathan Schreiber
Hill and Wang, December 2011
Available online from lots of sources and maybe even from a local bookshop.

Social Media and Investing -- Avoiding Fraud

"The SEC’s Office of Investor Education and Advocacy is issuing this Investor Alert to help investors be better aware of fraudulent investment schemes that may involve social media. U.S. retail investors are increasingly turning to social media, including Facebook, YouTube, Twitter, LinkedIn and other online networks for information about investing. Whether it be for research on particular stocks, background information on a broker-dealer or investment adviser, guidance on an overall investing strategy, up-to-date news, or to simply discuss the markets with others, social media has become a key tool for U.S. investors.

While social media can provide many benefits for investors, it also presents opportunities for fraudsters. Social media, and the Internet generally, offer a number of attributes criminals may find attractive. Social media lets fraudsters contact many different people at a relatively low cost. It is also easy to create a site, account, email, direct message, or webpage that looks and feels legitimate – and that feeling of legitimacy gives criminals a better chance to convince you to send them your money. Finally, it can be difficult to track down the true account holders that use social media. That potential for anonymity can make it harder for fraudsters to be held accountable. As a result, investors need to use caution when using social media when considering an investment."

Details at: http://investor.gov/news-alerts/investor-alerts/investor-alert-social-media-investing-avoiding-fraud

What Kids Should Know About Money and When

Money Milestones by Dan Kadlec

• Ages 3-5 A child should come to understand that you need money to buy things; you earn money by working; you may have to wait before you can buy what you want; there’s a difference between what you want and what you need.
• Ages 6-10 understand that you must make choices about how to spend your money; you should shop around for the best deal; it is dangerous and costly to share too much information online; putting your money in a bank account will protect it and earn interest.
• Ages 11-13 understand that it is smart to save 10% of what you earn; entering credit card or Social Security numbers online puts you at risk of identity theft; the earlier you save the more you’ll have in the long run; a credit card is a loan and you will owe more than you spent if you do not pay your bill in full each month.
• Ages 14-18 understand that college is expensive and you should choose a school and student loans based in part on your career expectations; you should avoid using credit cards for things you cannot afford in cash; you pay taxes on your income and should budget for take-home pay, not gross pay; a great place to save and invest is a Roth IRA.

Quoted from & Read more: http://moneyland.time.com/2012/01/09/money-milestones-what-kids-should-know-about-money-and-when/#ixzz1j5Dic0kw

Mortgage refinancing

Mortgage rates are at rock bottom right now so it's a good time to consider refinancing your mortgage. Kiplinger's magazine (Feb. 2012, p. 45) recommends: use the calculator at http://zwicke.nber.org/refinance to determine the optimal refi rate for your situation. Then sign up at www.mortgagemarvel.com to receive email updates as lenders offer rates that meet your needs. If you want lenders to contact you, sign up at www.lendingtree.com

Save Big by Losing Pounds

That resolution to get fit may also boost your bank account.

“Gym memberships and healthy food, both part of many people's New Year's goals for losing weight, can be expensive. But experts say the savings from being fit outweighs the added costs. Some life insurance companies reduce premiums for people in a healthy weight range. In addition, overall medical costs typically are lower for people who are fit, and some health insurance providers offer financial incentives for participants who meet wellness targets.”

• Cheaper life insurance
• Lower health-care costs
• Better health insurance
• Wellness incentives from employers and insurers

Read the details at: Smart Money
http://www.smartmoney.com/spend/deal-of-the-day/save-big-by-losing-pounds-1325716783715/

For more ideas on boosting your financial status in 2012 come to Financial Planning for Women seminar on January 11 for the Small Steps to Health and Wealth program. Check out: njaes.rutgers.edu/sshw/

5 Things Every Woman Should Do to Become More Financially Secure

“To gain greater security in retirement, women should communicate with their spouses early and make sure they save for their own needs before assisting children, experts say. Other tips include creating a plan to deal with health care expenses, which typically are higher for women than for men, and considering delaying Social Security benefits.”

Read the details from Mark Miller at Morningstar: http://www.businessinsider.com/5-ways-for-women-to-achieve-economic-security-2012-1

To learn more attend Financial Planning for Women seminar on Wednesday, January 11 at 12:30 in TSC 336 or at 7 pm at the USU Family Life Center. Topic: Small Steps to Health & Wealth