December 30, 2015

Socially Responsible Investing Comes of Age

"There is an evolution under way in socially responsible investing. It no longer means just screening out certain securities from portfolios according to ethical considerations (no sin stocks!), but investing with an eye toward hastening the greater good. Social considerations like gender equality, the environment and good corporate governance become yardsticks to measure a company alongside P/E ratios and sales growth," writes Debbie Carlson. While investing with a conscience is commendable, the expense ratios charged by many socially responsible funds are higher than the average mutual fund and much higher than index funds, reducing investment returns. However, SRI investors should consider Vanguard FTSE Social Index Fund (VFTSX) with a low expense ratio of 0.25% and  minimum investment of $3,000. 
http://wealthmanagement.com/mutual-funds/socially-responsible-investing-comes-age

Changes in Social Security

"The Bipartisan Budget Act of 2015 wipes away 2 key strategies smart couples have been using to maximize their Social Security payments." Jean Chatzy explains the changes in  "restricted application" and "file and suspend" which are viable until April 30, 2016. Details at:
http://www.bankrate.com/financing/retirement/jean-chatzky-social-security-and-boomers/

Forget the power of positive thinking!

"Positive thinking is often touted as a key to wish fulfillment: Simply envision yourself achieving your dream—and abracadabra—it will manifest!
The only problem? It doesn’t really work.
Research by Gabriele Oettingen, a psychology professor at New York University and author of Rethinking Positive Thinking: Inside the New Science of Motivation, found that people who fantasized about success—from losing weight to getting a good grade on a test—actually fared worse in the results department than those who didn’t."
"Yes, imagining a good outcome can lower your blood pressure and put you in a good mood, but as a result of feeling so satisfied, you’re less likely to take the action necessary to achieve your goal." "In other words, in order to succeed, optimistic thinking should be paired with practical methods to overcome the challenges you’ll inevitably encounter.
Based on these findings, Oettingen developed a four-step method she calls WOOP (Wish, Outcome, Obstacle, Plan) to help you bring your dreams to happy fruition." Molly Triffin explains more at: http://www.foxbusiness.com/personal-finance/2015/12/22/5-simple-steps-to-heart-happy-retirement-planning/

What if retirement planning could be a happy endeavor?

5 Simple Steps to Heart-Happy Retirement Planning
“Saving money in itself can be a drag,” admits John Beshears, an assistant professor of business administration at Harvard Business School. “My research, as well as that of others, suggests that humans have an innate taste for instant gratification—and it’s difficult to make short-term sacrifices in the pursuit of a long-term gain.”
"The truth of the matter is that if you approach the planning process from a happy place now, you can help set yourself up for a happy retirement later. Check out these five optimistically minded approaches to heart-happy (and disciplined) retirement planning."
1. Indulge in a Goal-Based Guilty Pleasure
2. Give Yourself a Calculated Savings Boost
3. Dabble in Some Wishful Thinking
4. Take a Fresh Start Approach to Your Planning
5. Envision 80-Year-Old You    

Women are solid investors

3 Reasons Why Women Are Better Investors Than Men
"Study after study shows that when women do invest, they do it well, outperforming men in many cases. In 2001, researchers found that women outperformed men by close to 1% per year, largely due to men’s propensity toward frequent trading."
1. They’re more likely to save
2. They’re less likely to tinker
3. They ask for help 
https://www.nerdwallet.com/blog/investing/3-reasons-why-women-are-better-investors-than-men/

Post-holiday financial recovery plan

"Holiday overindulgence can lead to throbbing heads, expanded waistlines -- and piles of credit card bills. If you overdid the holiday shopping, here are some suggestions for getting back on track."
1. stop buying
2. have a  no-spend month
3. tap your savings
4. look elsewhere for money
5. tackle debts
6. get ready for next year
Details from Liz Westson at:  http://www.cbsnews.com/news/your-post-holiday-financial-recovery-plan/

Volunteer Income Tax Assistance (VITA) in Logan UT

"The Volunteer Income Tax Assistance (VITA) program is a cooperative effort by the Internal Revenue Service and many individual states, including Utah, to provide income tax assistance to low-income individuals. Utah State Volunteers are trained by the Internal Revenue Service and prepare basic income tax returns free of charge at our designated on-campus VITA site on a first come first served basis. Both USU and Bear River Association of Governments sites offer free IRS electronic filing of tax returns."
'Income tax assistance is available for low-income (below $53,000 annually) individuals, individuals with disabilities, non-English speaking taxpayers, and the elderly."
Details at: https://my.usu.edu/web/beta-alpha-psi-bap/vita-program

Unlearn what you have learned’ for financial success

Thanks to Michelle Singletary, Washington Post columnist, for three pieces of financial advice:
1. "Unlearn that there is good debt and bad debt. When it comes to a mortgage or education loans, you’ve probably heard that this debt can be a “good investment.” “Bad debt” is characterized as carrying credit card balances or taking out payday loans.
But debt is debt. The problem with “good debt” is that people take on too much by rationalizing that in the end, they’ll be better off financially"
 2. "Unlearn that it’s okay to hold on to your mortgage even into retirement. People are told that they should keep or get a mortgage for the tax break. Or if they have extra money, they should invest the funds rather than pay down their mortgage." "If you itemize deductions on your tax return, you can usually deduct the interest you pay on a mortgage or for a line of credit tied to your home. But the tax break isn’t enough to offset all the interest you’ll pay over the life of the loan. Many people — most of them middle- and lower-income families — don’t even take the tax break because they don’t owe federal income taxes or they claim the standard deduction rather than itemize deductions." Homeowners: Do your homework & figure out IF you are getting a tax deduction on your mortgage interest and, if so, how much. Prospective buyers: Don't just take the assurance of the real estate & mortgage industry that you'll save lots in taxes with a mortgage. The standard deduction for married, filing jointly is $12,600 in 2016. You only get a benefit of itemizing for amounts above that AND THEN ONLY at your marginal tax rate which for most taxpayers is 10 or 15%. So if your itemized deductions, including mortgage interest total $13,600; you only get to reduce your taxes by $100 if you are in 10% marginal tax bracket!
3. "Unlearn that renting is throwing away money. Take into 2016 this message: You are not a financial failure if you rent."
Read the full column at:  http://wapo.st/1mPtMr7

December 29, 2015

Digital Estate Planning Guide

Ever wonder what will happen to your digital assets., Facebook page, e-mail, etc. at your death? time to start planning your digital legacy with help from Consumer Action. http://www.consumer-action.org/news/articles/digital_estate_planning_spring_2015 
http://www.consumer-action.org/downloads/english/spring_2015_digital_estate_planning.pdf





Medicare Primer: Advantage or Medigap?

"Essentially every 65-year-old American enrolls in Medicare, and many get additional coverage. One form of additional coverage is through supplements to traditional Medicare, which include a Part D prescription drug plan and/or a Medigap private insurance plan to cover some or all of Medicare’s co-payments, deductibles, and other out-of-pocket costs. The other is through Medicare Advantage, a managed care option that typically provides prescription drug coverage and other services not included in the basic Medicare program."
So which to choose?
The Squared Away blog offers assistance at: http://squaredawayblog.bc.edu/squared-away/medicare-primer-advantage-or-medigap/

Credit Card Guide



TheSimpleDollar.com created a comprehensive guide to credit cards and money management.
The guide includes chapters on rules for owning, budgeting, hidden benefits, and tips on how to successfully manage credit cards.
Credit Card Guide:
  1. http://www.thesimpledollar.com/best-credit-cards/
  2. http://www.thesimpledollar.com/best-credit-cards/#rules-for-owning-the-best-credit-cards
  3. http://www.thesimpledollar.com/best-credit-cards/#tips-for-budgeting-with-credit-cards
  4. http://www.thesimpledollar.com/best-credit-cards/#hidden-credit-card-benefits-you-may-not-even-know-about
  5. http://www.thesimpledollar.com/best-credit-cards/#credit-card-basics-8211-tips-that-can-help
TheSimpleDollar.com is designed to help people make better decisions by clearly laying out their options, with content written by industry experts.

STUDENT LOAN REPAYMENT



Student loans are now the largest source of consumer debt outside of mortgages. In 2012, total outstanding student loans reached the $1 trillion mark. Two-thirds of graduates are finishing their bachelor’s degrees with debt that averages nearly $30,000. At the CFPB, we’ve created many resources for students to help them understand their options both before and after they decide to take out a loan for school.

1.  The growing student debt problem
The CFPB offers online tools for students who are trying to pay for college, such as our 2011 Know Before You Owe project which helps potential borrowers compare costs. We also have informational resources for readers seeking to know more about the student debt problem. For more information about the student debt problem, read our 2014 mid-year report about the issues related to co-signing a private loan, and participate in the conversation online at #studentdebtstress.

2.  Repaying student debt
For students looking for information about repaying student debt, the CFPB offers an online tool that provides information and advice for optimizing how you pay off student loans based on individual information. There are also sample letters to send to student loan servicers and collectors, and guides for borrowers working in public service.

Remember: Borrowers who run into trouble can submit complaints directly to the CFPB!
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