What to Do If You have an Accident?

"A new smartphone app walks drivers through the crucial steps to take if they’re in a car accident. Although car accidents happen every day, a recent survey from the National Association of Insurance Commissioners showed many Americans don’t know exactly what to do after an accident.
The NAIC’s new WreckCheck mobile application helps remove the guesswork. It’s free and available for iPhone and Android users: http://insurance.mo.gov/consumers/auto/after-an-accidentchecklist.php
While drivers need to share information, the recent survey revealed consumers aren’t sure about exactly how much personal information to exchange. Consumers generally need only share their names and car insurance information. It’s unnecessary and could be risky to share additional information like driver’s license numbers and home addresses."
“The WreckCheck app is a quick reference that explains what information to share, protecting your safety and helping your insurance claim go more smoothly.”said John M. Huff, director of the Missouri Department of Insurance. Download this app today!

Plan NOW to Increase College Financial Aid

Don't wait until your child is applying to colleges to plan your financial aid strategy. "To ensure the best possible financial-aid package for their soon-to-be college students, parents should reduce some of their savings by paying down consumer debt and move their child's savings to a protected 529 plan, financial counselor Ray Martin writes. And, he writes, parents should mail in their financial-aid forms as soon as they can, because money is distributed on a first-come, first-served basis." CBS MoneyWatch (8/28) http://www.cbsnews.com/8301-505144_162-57500838/increase-college-financial-aid-by-planning-now/

Obama or Romney Will Raise Your Taxes

"Regardless of who wins the presidential election, if you’re middle class, one outcome is certain: Your taxes are going up."
"This fact goes unmentioned by President Barack Obama, who speaks only of tax increases on the wealthy, and is anathema to Republican presidential candidate Mitt Romney and his running mate, Paul Ryan, who insist they can beat the deficit into submission by slashing government spending, cutting taxes and eliminating unspecified loopholes. A look at the arithmetic shows neither campaign is on the level." (Bloomberg editors)
It's time to face reality. Tax rates are currently at historical lows and MUST go up in the future. The Congressional Budget Office (CBO) report is a sobering reminder of the massive deficit facing our nation. Simply cutting programs and services is not enough; taxes must be raised or we'll revert to third world status.
It's strange how the politicians promise they will cut your taxes while demanding federal government disaster funds. Today hurricane Isaac is pounding the Gulf coast. It's been a long wild fire season in the west, the worst drought in decades is drying up midwest crops. We can't turn our backs on citizens affected by natural disaster or personal tragedy.
Read more about taxes and political rhetoric at: http://www.bloomberg.com/news/2012-08-19/obama-or-romney-will-raise-your-taxes.html
CBO report: An Update to the Budget and Economic Outlook: Fiscal Years 2012 to 2022. http://www.cbo.gov/publication/43539
Fiscal Tightening in 2013 and Its Economic Consequences - Infographic: http://www.cbo.gov/publication/43544

Your Retirement Paycheck

Figuring out how to turn a lump sum from a 401(k), IRA, or other retirement account into a stream of income (a regular paycheck) in retirement is the topic for Financial Planning for Women (and Men) on September 12. Spouses and partners are encouraged to attend! Don't wait until you retire to address this critical decision! 12:30-1:30 in USU Taggart Student Center room 336 or 7:00-8:30 pm at the USU Family Life Center (free parking adjacent to the building). Th longer evening session allows more time for Q&A. Free and open to the public; no registration required.

Time to Adjust Tax Withholding

I know behavioral psychologists have research demonstrating that people get a charge out of a large tax refund but it doesn't make economic sense. You decide where you stand. It's much better to reduce your withholding to avoid a large refund and set up an automatic deposit of the extra funds into saving or retirement. If you carry a balance on your credit card, it's crazy to over-withhold taxes. for help on how to adjust your withholding:

Publication 505, Tax Withholding and Estimated Tax, has information for employees and self-employed individuals, available at IRS.gov or by calling 1-800-TAX-FORM (1-800-829-3676).
Links: Form W-4, Employee's Withholding Allowance Certificate

• Form 1040-ES, Estimated Tax for Individuals
• Form W-4P, Withholding Certificate for Pension or Annuity Payments
• Publication 505, Tax Withholding and Estimated Tax

YouTube Videos: Estimated Tax Payments - English | Spanish | ASL 

10 Common Retirement Planning Myths

1. It’s too early to start saving for retirement.

2. I’ll need about 80% of my current income in retirement.

3. I won’t see a dime from Social Security.

4. If I contribute to a retirement plan, my money will be all tied up.

5. I should automatically roll my retirement plans into an IRA when I leave a company.

6. I can’t contribute to an IRA because I have a retirement plan at work.

7. My income is too high to put money in a Roth IRA.

8. My tax rate will be the same in retirement so I don’t get any benefit from tax-deferral.

9. I can be well-diversified by just spreading money around all the options in my retirement plan.

10. I should invest my retirement account in the top-performing funds.  

Quoted from Financial Finesse Workplace Financial Education By Erik Carter, 8/22/12 For details:

http://www.forbes.com/sites/financialfinesse/2012/08/22/10-common-myths-that-could-be-hurting-your-retirement-planning/

Lending Money To Friends Or Family

15 Suggestions For Lending Money To Friends Or Family Members

(This is a long post written by Jim Garrett; this advice could save so much heart ache. JL)
Should you loan money to friends or family members?  My advice is, “Don’t do it! When you mix a lender/borrower relationship with a family/friend relationship, it can be the kiss of death!” It is not about the money, it is about the relationship.
I remember vividly the 76 year-old grandfather who wept in my office after co-signing for his grandson’s first car. The grandson had lost his job and defaulted on the loan after only three payments, leaving the grandfather stuck for the entire debt.
“It’s not the money so much,” the grandfather said, “but he won’t look me in the eye now or even answer my calls! Helping him actually ruined our relationship!”
But some loan their family and friends money anyway, arguing that their situation is a “unique” one in which there is little chance that anything could go wrong!
So since some are going to do it anyway, let me offer 15 suggestions to consider before loaning money to family and friends.
1. Ask a lot of questions. If your friend or family member is offended by your asking questions, take it as a “red flag” to say “no. When it is your money and your risk, you have a right to know these things:

• How is the money to be used?
• What other options for loans have been pursued?
• Why is a conventional loan not being used?
• What is the borrower’s ability to repay?
• What risk is involved in how your money is to be used?
• What security can be used as collateral for larger loans?

2. Loan cash only. It is extremely unwise to loan out your credit card, add them as a joint user to your card, or co-sign a loan for them. This can adversely affect your personal credit if any default occurs. Remember that each name appearing on a credit transaction, loan, or co-signed note is 100% responsible to repay the entire debt.
3. Do not borrow in order to loan. If you have to use credit or secure a loan in order to help your friend or family member, you are not in a position to pretend you are a “bank.”
4. Lend only what you can afford to lose. If your lifestyle will be adversely affected by non-payment of the loan, you are not in a position to be loaning money.
5. Consider charging interest. You may think this sounds cold, but it “elevates” the transaction to the level of a business deal, just like the “real world” requires. Having to pay interest is a good incentive to pay on time or even pay off the loan early, plus there can be IRS consequences for doing a “no interest” loan.

6. Is the loan large enough to require security (collateral)? Posting security for the loan shows that the borrower is willing to “have skin in the game.” It is certainly easier to borrow money if you incur no risk by not repaying it. If security is involved, it would be best to have an attorney draw up the contract.
7. Consider the change of attitude you may have toward the borrower. Will you see this person differently after he owes you money? And how will you think of him if he does not pay you as he agrees?
8. Have a plan of action if the loan defaults. You are not being pessimistic by doing this; you are being realistic. Are you willing to actually charge late fees or even pursue legal action if the loan is defaulted?
9. Avoid micro-managing his finances afterward? If you are constantly going to scrutinize the borrower’s financial management after his loan, it is better to just say “No.”  Will you constantly be thinking, “If he did not bowl in that league, go on vacation, or buy that fancy car, he could pay me on time!”
10. Possibly require some financial education. Before you loan the money, have him read a good book on personal finances or enlist in a money-management course like Dave Ramsey’s “Financial Peace University.”
11. Make the loan against his inheritance. If this person is in your will, maybe it would be best to deduct the unpaid balance from his inheritance if he defaults?
12. Similarly, determine what happens to the loan if you die unexpectedly? Will the remaining monies be owed to your estate, be forgiven, or be deducted from any inheritance the borrower may receive.
13. Discuss and agree on all the terms. Agree on the amount to be borrowed, the interest rate, the repayment schedule, if and when late fees will be charged, and whether pre-payment penalties will apply.
14. Get it all down in writing. Although verbal agreements are legally binding, they open the door to misunderstandings. A signed agreement to terms that are clearly spelled out is the best way to do business.
15. Do not make a hasty decision. Do not allow yourself to be put in a situation where you must make a quick decision. “I have to have the money by midnight” would solicit an immediate “no” from the wise money manager.
If after thinking about these 15 considerations, you still think loaning your friend or relative money is a good idea, then think about it some more!
Relationships are some of the most valuable treasures we possess – way to valuable to be forfeited by money.

© Jim Garnett.

Want Answers to your Personal Finance Questions?

Contact a Cooperative Extension personal finance expert. The eXtension Personal Finance Web site is available 24/7 at http://www.extension.org/personal_finance.  The site includes a data base of over 1,200 frequently asked questions (FAQs) on personal finance topics, as well as an Ask the Expert feature where consumers can receive a personalized response to their questions.  Answers are provided via e-mail, generally within 48 hours. Give it a try!

Utah Elder Rights Resource Booklet

The Utah Division of Aging and Adult Services publishes this resource booklet which is a preview of the upcoming book Navigating Your Rights: The Utah Legal Guide to Those 55 and Over. "Navigating Your Rights is a highly practical and straight talking book that navigates you through legal topics that are important to those 55 and over living in Utah. In question and answer format this book guides you to the right
information for your situation. In it you will discover how to:
• avoid scams
• recognize and prevent elder
abuse
• navigate social security
• get grandparent visitation rights
• express your end-of-life wishes
• prepare a will
• choose a quality long-term care facility
• determine when you do and do not need an attorney
• protect yourself against financial exploitation
• find out what Medicare does and does not cover
• and much more"
 http://www.hsdaas.utah.gov/pdf/utah-elder-rights-booklet.pdf

Getting the Most From a Bank Account

FDIC Consumer Newsletter Features Tips on Getting the Most From a Bank Account.

Other topics include managing a mortgage and adding others to accounts.            

It’s important to have a banking product to handle everyday financial needs that range from making payments to getting paid. However, with the many different choices available, consumers can use a little help understanding how to select the most cost-effective options. The Summer 2012 issue of FDIC Consumer News features tips on how to choose and effectively use a bank account for routine financial needs. Also in this issue are practical suggestions for navigating the mortgage process -- from before a consumer buys a home through the final loan payment -- and a look at potential risks when adding other people to a deposit or loan account. The latest issue can be read or printed online at www.fdic.gov/consumers/consumer/news/cnsum12

Have you recently updated your Facebook status to married?

The IRS has advice for the newly married.

• Notify the Social Security Administration  It’s important that your name and Social Security number match on your next tax return, so if you’ve taken on a new name, report the change to the Social Security Administration. File Form SS-5, Application for a Social Security Card. The form is available on SSA’s website at www.ssa.gov, by calling 800-772-1213, or visiting a local SSA office.
• Notify the IRS if you move  IRS Form 8822, Change of Address, is the official way to update the IRS of your address change. Download Form 8822 from IRS.gov or order it by calling 800-TAX-FORM (800-829-3676).
• Notify the U.S. Postal Service  To ensure your mail – including mail from the IRS – is forwarded to your new address, you’ll need to notify the U.S. Postal Service. Submit a forwarding request online at www.usps.com or visit your local post office.
• Notify your employer  Report your name and/or address change to your employer(s) to make sure you receive your Form W-2, Wage and Tax Statement, after the end of the year.
• Check your withholding  If you both work, keep in mind that you and your spouse’s combined income may move you into a higher tax bracket. You can use Publication 505, Tax Withholding and Estimated Tax, to help determine the correct amount of withholding for your marital status, and it will also help you complete a new Form W-4, Employee's Withholding Allowance Certificate. Fill out and print Form W-4 online and give it to your employer(s) so the correct amount will be withheld from your pay.
• Select the right tax form  Choose your individual income tax form wisely because it can help save you money. Newlywed taxpayers may find that they now have enough deductions to itemize on their tax returns rather than taking the standard deduction. Itemized deductions must be claimed on a Form 1040, not a 1040A or 1040EZ.
• Choose the best filing status  A person’s marital status on Dec. 31 determines whether the person is considered married for that year for tax purposes. Tax law generally allows married couples to choose to file their federal income tax return either jointly or separately in any given year. Figuring the tax both ways can determine which filing status will result in the lowest tax, but filing jointly is usually more beneficial.

Common Holes in Homeowners Insurance Coverage

As a follow-up to August's FPW program on insurance, this article points out that most homeowners have less coverage than they assume. Read this and follow up with your insurance company. For most Americans their house is their largest single financial asset. "Many homeowners are not aware of major gaps in their insurance coverage, according to a MetLife survey. Most policies, for example, do not cover earthquake damage, upgrades to undamaged parts of a house that are required by building codes or the full cost of rebuilding after a fire." "Earthquakes, unexpected deductibles, and flooding are just a few of the costs your homeowners policy might not cover. But if you're like most Americans, you probably don't realize it. According to the MetLife Auto & Home Insurance Literacy Survey, many homeowners are clueless about the ins and outs of their policies, which means they could easily end up paying a lot more than they expected after damage to their home." Don't wait until you suffer a loss to find out it's not covered.  http://money.usnews.com/money/personal-finance/articles/2012/08/15/beware-of-these-common-holes-in-homeowners-insurance-coverage

FPW Insurance Program August 8

Wednesday's Financial Planning for Women will be presented by local insurance agents who will make a brief presentation and answer questions on insurance. Are you covered if the sewer backs up into your house? What's the difference between a percentage deductible and a fixed dollar deductible? The amount your home should be insured for is based on the cost to rebuild which can be very different from the tax assessed value or the appraised value. How do you decide how much coverage to buy? How should you protect your child's belongings in case of theft or other loss when they are away at college? Do you need life insurance and, if so, how much? When does it make sense to drop comp and collision coverage on a vehicle? What kind of proof do I need if I suffer a loss? What are the consequences of filing a claim for a loss greater than my deductible but not really catastrophic? Do I really need earthquake insurance? What about flood insurance when I don't live near a river? How does actual cash value compare to replacement cost insurance?
These are just a few of the questions the speaker can address. Bring your questions and get answers from the experts. Come and learn how to protect your family's financial security.
Place change for 12:30-1:30 program: USU Family Life room 109 (this month only). Evening program (7:00-8:30 pm) at the USU Family Life Center, 493 N 700 E, Logan.