Where Are You With This Year’s Financial Goals?

In January, we suggested you sit down and set some financial goals – things you wanted to accomplish in 2011 with your money. Maybe it’s saving more or getting out of debt or doing something to improve your credit score. Did you set a goal?

If you did, it’s time to check on your progress. If you didn’t, it’s not too late to do something before the year ends. In fact, now is the perfect time. Summer is winding down (even though it doesn’t feel like it outside) and we’re heading into the Fall holiday season. That usually when we need more money, which makes it the perfect time to figure out where you’ll get it.

Checking Your Goal’s Progress

To check your progress, ask yourself these questions: 

1. What was my goal?
2. What I have I done to start achieving that goal?
3. Am I where I thought I’d be by this time in the year?
4. If I’m not, what do I need to do to get back on track? Be specific on what action you need to take.

For example, let’s say your goal was to pay more than the minimum payment on your credit card bill each month. You paid $20 each month until about May, and then you stopped so you could afford a summer trip.  You can either reach your goal by paying about $40 extra each month moving forward, or you can adjust  your goal and promise yourself you’ll start paying the $20 extra again each month.

Making a New Goal

It’s not too late to make strides with your finances in 2011. Sit down with your budget and see where your problem areas are. Perhaps you’re living paycheck to paycheck and you’d like to see more wiggle room in your budget. If that’s the case, figure out where you’re wasting money, and make it a goal to free up even $20 a paycheck by skipping fast food lunches once a week or bypassing Starbucks once a week. Put that money in a savings account so you’ll have it when you really need it.

The best thing about goals is they make you accountable, and they’re adjustable. But you have to assign yourself specific steps to meet your goals. If your goal is to save $50 a month, how will you do this? Will you stop spending in specific areas? Will you get a part-time job to make more money? Will you simply have your employer deduct so much money per paycheck and put it in savings?

Remember, you’re in charge of your money. Your money is not in charge of you. If you make financial goals that area reasonable and doable, you have a better chance of reaching those goals.

Don’t wait until January to get your finances in order. Start today or readjust your existing goals today so you can live better moving forward.

 

Celebrate Your Birthday With Free Stuff

I celebrated my 40^th birthday last week (I don’t feel a day over 39 yet). One of the best things about the day, aside from the presents, phone calls and the 200 birthday wishes from friends on Facebook, were all the e-mails I received from restaurants and other places. This is what I received:

Wine.com – 10 percent off my order
Redbox – one free movie rental
Texas de Brazil – Buy one adult meal, get one free
Coldstone Creamery – By one creation, get one free
Disney Movie Rewards – 100 bonus points
AMC Theaters – free large fountain drink
Build-a-Bear Workshop - $5 off any purchase

I didn’t receive as many as I could have, because I have really started cutting down on my e-mail subscriptions. However, there are many other places who offer free and discounted items for birthdays when you either sign up for e-mail or join their online birthday clubs:

Baskin Robbins – free scoop on your birthday (online birthday club)
Jason’s Deli - $5 gift card on your birthday (Facebook online birthday club)
Chili’s – an unspecified birthday freebie when you sign up to receive their e-mails
Blue Mesa grill – free Sunday brunch (online birthday club)
Ruby Tuesday – unspecified birthday freebie when you join its online So Connected club.
IHOP – free birthday meal when you join the Pancake Revolution.
Texas Road House – free appetizer or sidekick or ribs when you join their e-mail club.
Ghengis Grill – free birthday bowl when you join the Khan’s Klub.
Dunkin’ Donuts – free coffee or tea when you join Perks Rewards.

I have no doubt this list could go on forever and ever. As you can see, it pays to go to the websites of your favorite restaurants and stores, as well as their Facebook pages, and sign up to receive your birthday freebies. Don’t forget to sign up everyone in your family so they each get a birthday freebie from their favorite place. If your kids have favorite kids places, sign them up for kids clubs whenever possible.

I think my favorite birthday freebie may be the one I received today. It wasn’t for my birthday, either. It was for the one-year birthday of Longhorn Skywalker, the pet my son made at Build-a-Bear Workshop a year ago today. By signing up his pet for e-mail when he made it, he is entitled to receive a free accessory for that pet this week. You just never know whose birthday will qualify for a celebration in today’s digital age.

Happy Birthday to you on whatever day you celebrate!

How to Benefit from Texas Tax-Free Weekend?

This year’s sales tax holiday will run from August 19-21. A lot of families look forward to this weekend, but I sometimes wonder if people aren’t losing money.

On Texas tax-free weekend, you don’t have to pay sales tax on certain items that cost less than $100. Qualifying items include most school supplies, back packs and back-to-school clothing. You’ll save $8 for every $100 you spend on these things. But even if you spend $1,000 this weekend, the most you’ll save is $80. That’s not a lot of savings for the money you’re spending, and if you wait until tax-free weekend to shop, the items you really need may be out of stock.

The key to saving money on Texas tax-free weekend is to combine your tax savings with big sales on the items you need and to shop early – like now. Obviously you can’t pay for items until tax-free weekend, but if you or your family members try on the clothes and shoes you want to buy, you’ll know exactly where to go and what to pick off the racks on that Friday morning.

An even better option is to shop at stores that offer layaway. Shop now while items are still in stock, put them in lay-away and pay for them on tax-free weekend. Lay-away policies differ from store to store, so check with each store before you start shopping to be sure you can lay-away your items now and pay for them tax free that weekend.

Items You’ll Still Pay Tax On

Tax-free weekend is not a free-for-all. The state only gives you a tax break on specific items related to back-to-school shopping, and even some of those don’t qualify. For example, only certain backpacks are exempt from taxes. They have to cost less than $100 and they have to be something a kid can use at school. Backpacks with wheels only qualify if they have straps so kids can also wear them on their backs. The state also gives exemptions on messenger bags. You’ll still pay tax on backpacks that are more like luggage, briefcases, athletic bags, computer bags, purses or framed backpacks. The same goes for clothing. If you buy cowboy boots or hiking boots, you won’t pay tax. If you buy boots for any other purpose, you’ll pay tax.

Remember, the sales tax exemption is only for items that cost under $100. You can buy hundreds of items if you need to, but you’ll pay tax on any single item that costs $100 or more.

Go the state comptroller’s website for a complete list of items that do and do not count toward the sales tax break.

 

Why Interest Rates Matter

A friend of mine told me a shocking story recently about her son-in-law’s experience buying a car. He found the car he wanted at the price he wanted, but the dealership wanted to charge him nearly 20 percent interest on a loan – all because he had no credit. His parents took him to their bank, but the best the bank would do was 10 percent because he had no credit. In case you don’t know, neither of these rates is good for an auto loan – not by a long shot.

Why does it matter? Your rate often determines if you can afford to pay back the loan. A higher rate makes your monthly payment higher and also can make your loan term longer. In other words, your interest rate costs you money. The higher the rate, the more you pay and the longer you pay.

Let’s say you want to take out a loan to buy a computer that costs $1,000. The store offers to give you a loan at 20 percent interest. If it takes you two years to pay back the loan, that computer will cost you an extra $221 in interest over two years, with a monthly payment of about $51. Your $1,000 computer has cost you $1,221.

Now, let’s lower the interest rate. It’s the same scenario, but instead of 20 percent interest, the store wants to finance your loan for 10 percent interest. You’ll pay about $107 in interest over two years, with a monthly payment of about $46. Up your payment to the $51 above, and you’ll pay off your loan in less than two years. Your $1,000 computer now only costs about $1,100.

Do you see how that works? When your interest rate is double what it should be, you end up spending more than double in interest because of the amount of time it takes to pay off the loan. That is why interest rates matter.

Many lenders will charge higher rates to people with no credit history, because there’s no way to predict if they will repay the loan responsibly. A point or two increase is understandable, but don’t let anyone charge you twice the rate just because you have no credit.

The best thing to do is check with your credit union first. You already know you can trust us.

 

10 Tips for Saving Money on Back-to-School Shopping – Part Two

In our previous blog post, we gave you tips for finding school supplies at a bargain. In this post, we shift our focus to other, more expensive items you or your kids may need to head back to school, like clothes, back packs and even electronics.

6. Know Your Budget and Stick to It

It’s easy to go overboard on school clothes, especially if there’s a sale. I not only have a budget, I have a price limit set for specific items. I won’t spend more than $10 on jeans or shorts for my son, and I won’t spend more than $25 on shoes. That includes tax and even shipping if I shop online. It’s not always easy, but I’ve never spent more on those items, and my son will be eight in September. As a result, I get a lot of stuff on my small budget.

7. Buy Bigger Clothing and Shoes

This may not help you this time around, but what you buy now will save you money in the Spring. I almost always buy my son’s jeans and jean shorts a size bigger than he actually wears, with an adjustable waist. Simply pull the adjustable waist tighter and cuff the jeans if necessary. That lasts me a whole year instead of just one season. His shoes are usually a half size too big, as well.

8. Organize a Clothing Swamp With Friends

There are some private schools that do this to save parents money on school uniforms. You can do the same thing in your home or at a park. Ask a bunch of moms to bring their gently used kids clothing and then shop for free. Have everyone let you know what size clothing will be there so you can let people know a few days in advance. There’s not point in going if your size is not represented.

9. Look for Backpacks and Lunch boxes in Unconventional Places

When I think of backpacks, I think Target and Wal-mart. I don’t think Toys R Us, Kohls, Old Navy or others. All of these places sell back packs and some even sell lunch boxes. In fact, at  Toys R Us, you can get a free lunch kit with the purchase of any back pack $12.99 or higher. That’s a really good deal, and the quality is great. Shop online for even bigger selections.

10. Don’t Forget Electronics

Is your child getting more and more assignments that require computer research? Do they have assigned reading that you can’t find in the library. Now is a good time to shop for laptops and e-readers. Don’t just settle for Wal-Mart of Best Buy either. Shop around online. You may be surprised where you find the best deals. Newegg.com, Overstock.com, Home Shopping Network are just a few of the online retailers offering good deals on some of these items.

11. BONUS tip: Sign Up to Receive E-mails From Stores

I’ve received a ton of unadvertised back-to-school specials from all kinds of retailers.

10 Tips for Saving Money on Back-to-School Shopping – Part One

Before I had kids, Christmas was the only time I had to dole out big chunks of money at one time. Nowadays, it seems like back-to-school shopping can be just as expensive. Here are five tips for saving money as you begin the arduous task of buying everything your kids need to head back to school. These five focus on school supplies. Look for the next five tips, which include clothing and electronics, in our next blog post.

1. Take Inventory Before You Shop

Don’t buy what you already have. We seem to get pencils and erasers at every birthday party we attend. I have so many pencils that I may actually give them away in goody bags this year. I also have a bunch of supplies that my son’s teacher sent home at the end of the last school year. Some were never used and some were gently used. I’m not buying new. I’m sharpening and wiping down and sending those back to school. You should, too.

2. Shop Sales and Use Coupons

This one is obvious but often gets overlooked. Walgreen’s, CVS, Wal-Mart, Target and lots of other places have already started advertising deep discounts on school supplies. Why pay $2 for a box of colored pencils you get can on sale for $.25 cents? Walgreens often has extra savings when you use the coupon in the ad flyer. Print the flyer online and print multiple copies for added savings. The store will be out of flyers by the time you get there. Toys R Us also has a big sale on school supplies right now.

3. Go Basic

There are backpacks, lunch boxes, notebooks, folders, pencils and so many other supplies decorated with your kids’ favorite TV and movie characters, and they tend to cost a small fortune. Last year, I could get a Transformers spiral notebook for $3 or the same spiral notebook in a plain color for $.15 cents. I bought the plain one and let my son decorate it with Transformers stickers we already had at home.

4. Buy in Bulk

Speaking of spirals for $.15, buy as many as you can store in your house. The same goes for pencils, glue, crayons and anything else you never seem to have laying around when your kid brings home his or her first big project assignment. School supplies don’t go bad, but the prices will go up. Get them while they are practically free and use them for party bags and birthday gifts, too.

5. Take Advantage of Social Media and Your Cell Phone

Retailers on Facebook are constantly offering deals to customers who “like” their pages. Like pages such as Mommy’s Wish List and find all kinds of deals, not just on schools supplies, but on everything under the son, including free gas for your car. If you download an app like RedLaser to your phone, you can scan bar codes and go online to find out which store in your area has the cheapest price.

See the next five tips in our next blog post.

 

What Kind of Insurance are You Lacking?

Spending money on something I don’t use is a huge pet peeve of mine. Insurance falls into that category, but I know it’s a necessary evil. This is something many people often neglect because they don’t think they can afford it. Or, they only purchase the bare minimum to comply with state laws or loan agreements. This is a mistake.

The sometimes tough reality to swallow is that you may pay on your insurance for years and never have to file a claim. However, it only takes one situation or tragedy to recoup everything you’ve been paying for years.

Renters insurance

One person falling asleep with a lit cigarette can destroy an entire apartment complex. If you live in an apartment or your rent a house, get yourself some type of renters insurance. If your apartment gets destroyed because of someone else’s negligence, you’re left with nothing – no clothes, no furniture, no food, no appliances, etc. Renters insurance is affordable and gives you the money to replace these items so you can start putting your life back together.

Auto Insurance

State law requires everyone to have auto insurance, but do you have enough? There’s coverage for bodily injury and property damage you cause to others and different coverage when someone else causes to same to you. There’s collision protection and coverage for expenses you incur by a driver who doesn’t have enough insurance to pay you back. And what if you need a rental car while your car is being fixed? All of these are separate line items in an insurance policy. You can pick and choose what you want to pay for, but don’t cut yourself short. If you lose a vehicle next week and don’t have the money to replace it, you need more insurance.

Health

Last year, my son ended up in Children’s Hospital for five days. It happened very suddenly for an illness that can be treated but not prevented. The hospital bill came to $41,000. We were only responsible for $500. If your company’s health insurance isn’t very good, consider supplemental health insurance. Google supplemental health insurance to find providers.

Homeowners insurance

If you have a mortgage, your loan company requires this. Be sure your policy covers your home’s replacement value and not the value you paid for your home.

Life insurance

If your spouse dies, how will you provide for family financially or even pay funeral expenses? Term life insurance is very affordable and is particularly important if you are a stay-at-home mom with no income. The loss of a spouse is devastating enough without worrying about how you’ll put food on the table or keep a roof over your head.

So many people are under insured because they don’t understand how one incident can completely change their lives. Find an insurance agent you trust and protect your family appropriately.

 

How much money is your time worth?

If you’re on a budget, saving money should be one of your top priorities. There are times, however, when the amount you save doesn’t justify the amount of time it took to get those savings.

This week, I paid a cleaning crew $150 to thoroughly clean my home – including washing the blinds and cleaning the ceiling fans. I had them do things I’ve been meaning to do for months but never got around to, and it was well worth every penny.

Some people may think that’s expensive, but let’s consider what I gained. It took two people about four hours to do everything I needed done. Had I done it myself, it would have taken me at least eight hours. That doesn’t even factor in the interruptions like phone calls, kids, e-mails, etc. that my cleaning crew didn’t have to deal with. When you divide 150 by eight hours, it cost me less than $20 an hour to save myself eight hours of time and stress.

Everyone’s time is worth something, and that should factor in to our purchasing decisions. For example, I am not shopping for school supplies this year. Instead, I gave in and purchased the school supply kit from the PTA at my son’s school. From a strictly financial standpoint, it is cheaper to purchase the school supplies at my local store, but only by about $10. Now let’s add the factor of time.

It takes hours to shop for school supplies – sometimes days. I have never had the luxury of finding everything we need at one store. Add time for travel between stores and the money I’m spending on gas. There’s also the hundreds of other people shopping for the same things I need. It is really hard to find glue sticks when you have to climb over 10 other people to get them. The 10 extra dollars I spent bought me time and peace of mind. Now, while everyone else is fighting over the last three-ring binder in the store, I will be enjoying at least one more stress-free day of summer with my son.

We all get 24 hours to spend every day.  Don’t spend it on on savings that don’t add up.

 

Don’t Fall for This E-mail Scam

There’s a relatively new e-mail scam going around that you should be aware of. Unlike others that appear to come from strangers, these e-mails appear to come from people you know who have some type of emergency situation. This is the e-mail I received the other day:

“Sorry for not inform you about our trip,I'm writing this with tears in my eye,Todd and I came down here to London,United Kingdom for a short vacation unfortunately we were mugged at the park of the hotel were we stayed, all our cash,credit card and Cell Phone were stolen off us at gun point but luckily for us we still have our passports with us.Todd was beaten up by the mugged because he was trying to project us,he his current receiving treatment at the hospital.

We've been to the embassy and the police over here are not helping issues at all and our flight leaves soon but we're having problems settling the hotel bills, and the hotel manager won't let us leave until we settle
the bills.

I'm freaked out at the moment.”

It was very clear to me that this was not an authentic e-mail, because it came from the owners of the camp my son attended last summer. I have not seen them since then. These were some other red flags:

 

• This e-mail has a lot of grammar and punctuation mistakes. I don’t know this person well, but I know her well enough to know she wouldn’t send such a sloppy e-mail.
• The e-mail says their flight leaves soon. About two sentences above that, it says her husband is in the hospital. Which one is it?
• If this person was truly in trouble, she would have placed a collect call to a close friend or family member who could wire her some money.

Interestingly enough, this particular e-mail does not give instructions for sending money, but many do. So, what do you do if this type of e-mail comes from someone you know well?

 

• Start by calling them, even if the e-mail says their cell phone was stolen. If they answer the phone, you know they didn’t send the e-mail.
• Do not send or wire money to a hotel or any other location unless you have spoken to this person first.
• Forward the e-mail to the person who supposedly sent it so they know their e-mail has been hacked.
• You can also check snopes.com, which keeps up with all kinds of e-mails scams.

Don’t let crooks get the best of you. Use common sense and follow-up with people before sending money or giving out your personal information.

 

Be Sensible about Credit Card Reward Points

About three years ago, my family took a wonderful trip to Disney World in Florida for my son’s fifth birthday. I had a significant number of reward points about to expire on a debit card I had with a financial institution where I used to work. That was how I chose to use them. What ended up being a $2,500 trip cost my family about $500. The other $2,000 was paid for by my reward points. At that point in our lives, there’s no way we could have taken that trip without those points.

There aren’t many debit card programs out there which offer this level of reward. Most are credit card programs designed to get you to use your credit card more frequently. That’s great if it works in your favor, but you really need to read the fine print before signing on the dotted line. Here are some questions you should ask before applying for a reward credit card.

1. Is There an annual fee and how much is it?
If you are paying for your rewards, it’s not really a reward, is it? If the fee is small, say $25, be sure you are getting more than that amount back in rewards.

2. What is the card’s interest rate?
Many reward programs charge a higher interest rate to help them pay for your supposed rewards. If you pay your balance in full each month, it’s doesn’t matter how much interest they charge, because you won’t be paying interest. Just be aware of how much you are paying in interest and how that compares to the value of the rewards available.

3. What happens if you miss a payment or make a late payment?
Many programs take your points away if you’re even one minute late with your payment. Some will offer you the chance to buy them back, but again, is that really a reward if you’re buying it with your own money?

4. Do reward points expire and how long do you have to use them?
It’s pretty common for rewards to have an expiration date. Be sure you have enough time to rack up the points for the reward you want and actually use them before they will expire.

5. How do you earn rewards?
On my debit card, I earned one point for every dollar spent on a retail purchase. Some credit card programs work that way, and some work completely differently. Be sure the things you buy regularly are covered by the rewards program so you can maximize the rewards you earn.

Whether it’s cash back, travel points, gift cards or merchandise that you want, you will find good credit card reward programs and questionable ones. Know the rules and conditions before you apply and choose the program that will do the best job of earning you the rewards you really want.