Dllrz | FY16 Q1 by Danielle

DLLRZ.COM

FALL 2015

FY16 Q1

WHAT’S ON THE COVER

THIS ISSUE’S TOP STORY

WHY YOUR MONEY SHOULD BE IN A CREDIT UNION THERE ARE SIGNIFICANT DIFFERENCES BETWEEN BANKS AND CREDIT UNIONS. WHICH IS RIGHT FOR YOU?

TABLE OF CONTENTS

Financial literacy and smart financial behaviors cannot be learned overnight. Comprehension takes time and practiceâ&#x20AC;&#x201D;especially with a challenging topic such as finance. As a whole, finance may seem daunting, but it can very easily be broken up into different parts and prioritized. This organization of your finances will seem less overwhelming and more manageable, and thus, more likely to bring you success in managing your finances. Dllrz believes that finances can be broken down into timeâ&#x20AC;&#x201D; topics that need your immediate attention, issues that you will most likely deal with on a daily basis, and areas that you need to plan ahead for the future. Today, everyday and tomorrow create these categories of financial organization that will help you to prioritize your attention and efforts.

Becoming financial literate is a lifelong journey, and in order to become financially fit, you will always want to know where you stand with your finances. Understand where you stand know, and your day to day journey will become that much easier!

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FALL 2015

FY16 Q1

THE MORE YOU PREPARE TODAY, THE BETTER YOUR TOMORROW WILL BE.

TAKE IT ONE DAY AT A TIME...

BANKING INVESTING

ABOUT DLLRZ

BUDGETING

SAVING TODAY

STUDENT LOANS CREDIT SCORE RENTING RETIREMENT TAXES FINANCIAL MARKETS

EVERYDAY

FAFSA CREDIT CARDS CREDIT UNION LOANS FAMILY PLANNING MONEY MANAGEMENT

TOMORROW

STOCK MARKET SPENDING EXPENSES BUILDING CREDIT DEBT STUDENT FINANCE REAL ESTATE

TODAY

EVERYDAY

TOMORROW

These are topics that need your immediate attention—you may not deal with these topics everyday, but the sooner you address them and understand how they work, the more prepared you will when situations arise. Such topics as taxes don’t need your day to day attention, but your preparedness ensures that dealing with them down the road will be a breeze! Understand where you stand with these areas of finance now for less headaches down the road.

Financial topics that fall under everyday, should be a fixture of your every day life, such as budgeting. You should be well versed in these areas, or at least have a conscious awareness of how they impact your daily life, so that you can make smart financial decisions. You may not deal with these directly on a daily basis, but they should be top of mind when it comes to you and your finances, and your financial behaviors.

Financial topics of tomorrow are those that will help you reach your financial goals future, such as investing and retirement. These areas of finance are not something you should have to think about on a daily basis, but they are things that should be put in place to ensure you have a successful financial future for years to come— espeically when it comes time to retire. These finances should be set up early so they build interest—and money—over time!

BREAKING DOWN YOUR FINANCES

CREDIT

FUNDAMENTALS

BUILDING CREDIT FROM SCRATCH—WHERE TO START

KNOW THE BASICS: COMPOUND INTEREST

Haven’t started building credit? Don’t know where to start? We can help... Follow these tips to launch your credit in the right direction.

HOW DO YOU SCORE?

16 20

Your credit score can be broken down into several variables, which generates a number on a spectrum from poor to excellent—where does your score sit?

10 COMMON CREDIT SCORE MYTHS

BANKING WHY YOUR MONEY SHOULD BE IN A CREDIT UNION

Credit Unions and Bank’s pro’s and con’s are compared—decide which is best for you and your money!

COVER STORY ALERT!

STUDENT FINANCES TYPES OF STUDENT LOANS

36 6

Explore the different types of student loans for undergraduate and graduate students—check out what different loans offer to students!

PAYING FOR COLLEGE WITH STUDENT LOANS

If your paying for college with student loans, read these four valuable tips to see if you can apply them to your situation—it can help you save!

TECH & MONEY

48 DLLRZ.COM

TOP FINANCIAL APPS OF 2015

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64 80

Haven’t started building credit? Don’t know where to start? We can help... Follow these tips to launch your credit in the right direction.

DIVERSIFICATION: DEFINED

BUDGETING

50 THRIFTY TRAVEL TIPS

66 EVERY ISSUE HOW TO

HOW TO PLAN A WEDDING & GET MARRIED ON A BUDGET

Check out these great tips for planning for a super budget friendly wedding, and stressing less up to your wedding day!

12 TIPS FOR AUTO BILL PAY

SAVING & SPENDING CHANGE YOUR COUNTER PRODUCTIVE HABITS TO SAVE CASH!

Discover how a one person turned their bad spending habits into saving successes, in order to begin their journey to save more money and spend less!

6 DANGER SIGNS OF EMOTIONAL SPENDING

Do you spend money while emotionally charged? See if these warning signs line up with your spending habits to make sure you are managing your money responsibly.

EVERY ISSUE

94 ACT NOW FOR YOUR TOMORROW!

WHY SAVING (RIGHT) NOW MATTERS FOR MILLENNIALS Credit Unions and Bank’s pro’s and con’s are compared—decide which is best for you and your money!

INVESTING IN YOUR FUTURE

102

Our expert financial advisor goes of his rules of the road for investing, and why you need to begin saving for your future right now, if you haven’t started yet!

112 126

BLOG TO FOLLOW: “AND THEN WE SAVED”

TABLE OF CONTENTS

INVESTING

58 Check out the FY16 Q1 Blog to Follow “And Then We Saved”, which features saver extraordinaire Anna and her ingenious Spending Fast savings plan—learn more and join her plan to begin your saving journey!

TWO MENTAL ROADBLOCKS THAT KEEP US FROM SAVING

RETIREMENT: ROTH IRA OR 401 k?

REAL ESTATE

121 ATTENTION: FIRST TIME HOME BUYERS!

PREPARING TO BUY YOUR FIRST HOME: THINGS TO KNOW! Our real estate specialist Sam walks us through what needs to be done to prepare to buy & what to expect while searching.

THE DLLRZ MONEY PHILOSOPHY

DLLRZ: WHAT WE’RE ALL ABOUT

FINANCIAL LITERACY STATS

QUICK GUIDE: NOT SURE WHETHER TO RENT OR BUY?

132

Use this fun tool to find out if you are ready to buy, need to a little more planning, or destined to be a lifetime renter! CHECK OUT MORE ON-LINE AT THE DLLRZ WEBSITE www.Dllrz.com

TABLE OF CONTENTS

ABOUT DLLRZ

DLLRZ.COM

FALL 2015

FY16 Q1

Growing up and entering adulthood, I noticed a number of my friends struggle with their finances—whether it was poor spending habits, or enrolling in every credit card they were introduced to. Just within my close circle of friends, well over half of them were living paycheckto-paycheck, and unable to create a concrete savings plan after being faced with the same situation month after month. Their struggle was what inspired Dllrz. Many young adults do not have formal education about finances or money management, and furthermore, many lack good financial role models. Additionally, lack of formal education leaves many young adults without the necessary knowledge about money management and finance to create financially successful lives for themselves. To add to the problem, not all resources regarding finance and money management can be trusted. As a graduate student in the Graphic Design program at the Academy of Art University, I realized that there was a design solution to this problem facing young adults—lack of financial resources available to young adults that were reputable, unbiased, and interesting. With financial literacy decreasing among young adults in the United States, I proposed a design solution: present financial information in a clear, concise and most importantly, engaging. With more interesting resources, young adults can better understand and prepare for their financial futures. Dllrz was created based upon these principles—to create resources that are clear and engaging, while also being accountable, reliable and unbiased. Dllrz resources include first-hand stories, articles from reputable sources, engaging infographics, and much more that can aid in financial learning. Let today be the day that you begin taking control of your financial future. Learn what the Dllrz resources can do for you, and the fun tools we have to help you learn!

ABOUT DLLRZ

NEED FOR FINANCIAL RESOURCES

LET TODAY BE THE DAY THAT YOU BEGIN TAKING CONTROL OF YOUR FINANCIAL FUTURE.

“

NEED FOR FINANCIAL RESOURCES

FINANCIAL LITERACY IN NUMBERS

MOST COLLEGE STUDENTS SAY THEY LEARNED PERSONAL FINANCE FROM THEIR PARENTS... [2]

the Hartford Financial Service Group, Inc.

DLLRZ.COM

FALL 2015

FY16 Q1

26%

(APPROXIMATELY) OF STUDENTS SAY THEIR

SAID THEIR PARENTS

PARENTS ARE THEIR

HAVE ACTUALLY

MAIN SOURCE OF

TAUGHT THEM HOW

INFORMATION ABOUT FINANCE & MONEY.

ABOUT DLLRZ

70%

BUT ONLY

TO MANAGE MONEY. [1]

[2]

LESS THAN

50%

68%

50%

THEIR PARENTS MAKE A

SCORES ON PERSONAL

TO LEARN MORE ABOUT

CONSISTENT CONSCIOUS

FINANCE SURVEYS.

MONEY MANAGEMENT.

[1] JumpStart

[3] DoSomething.org

OF STUDENTS SAID

EFFORT TO TEACH THEM.

RECEIVED FAILING

[2]

SAY THEY WOULD LIKE

NEED FOR FINANCIAL RESOURCES

BUILDING CREDIT FROM SCRATCH—WHERE TO START

1.1

WRITTEN BY

PUBLISHER

Erin El Issa

Nerd Wallet — www.NerdWallet.com

#BuildingCredit #Dllrz DATE

September 2015

BUILDING A CREDIT SCORE FROM SCRATCH 4 EASY STEPS

DLLRZ.COM

FALL 2015

FY16 Q1

CREDIT

BUILDING CREDIT FROM SCRATCH

BUILDING CREDIT IS SOMETHING OF A CATCH-22. WITHOUT A CREDIT CARD, IT’S HARD TO BUILD A CREDIT HISTORY. WITHOUT A CREDIT HISTORY, IT’S HARD TO QUALIFY FOR A CREDIT CARD. SO HOW DOES SOMEONE START FROM SCRATCH TO BUILD A CREDIT SCORE? HONEST ANSWER: BY STARTING AT THE BOTTOM AND BEGINNING THE LONG UPWARD CLIMB. FORTUNATELY, IT’S REALLY NOT THAT TOUGH ONCE YOU GET YOUR BEARINGS. AFTER YOU’VE MAPPED A ROUTE, YOU NEED ONLY FOLLOW A FEW BASIC GUIDELINES TO STAY THE COURSE AND ACTUALIZE THE END GOAL. WE’VE PUT TOGETHER A STEP-BY-STEP PLAN FOR BUILDING A CREDIT HISTORY, INCLUDING THE CREDIT CARDS YOU’LL NEED TO COMPLETE THE JOURNEY.

STEP ONE | Understand what factors influence your credit score. These first two steps are simple. By simply reading this article, you can check them off the list. Let’s start with how your credit or FICO score is calculated. Your credit score is affected by 5 factors: Payment History: Your payment history accounts for 35% of your credit score. The goal is to establish a record of full, on-time payments. Recent history is given more weight. Amounts Owed: Your debts account for 30% of your credit score. Credit bureaus look at both your total debt and your debt-to-credit-limit ratio. Not all debts are bad, but loads of credit card debt is definitely frowned upon. Length of Credit History: How much history you’ve already established accounts for 15% of your credit score. This can make it difficult for folks just starting out. New Credit: Recent credit acquisitions account for 10% of your credit score. New accounts are handled with suspicion. Types of Credit Used: The types of credit utilized account for 10% of your credit score. It’s helpful to diversify.

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STEP THREE | Check your credit score & history

Lenders use your credit score to determine your financial trustworthiness. They’re more inclined to give money to people who will successfully pay it back. To prove your trustworthiness, you must demonstrate through example. Here’s a list of simple guidelines to follow as you work your way up the ranks.

You’re entitled to one free credit report a year from AnnualCreditReport. com. However, this won’t give you your credit scores; for that, you can sign up for a credit monitoring service and cancel during the trial period. Some of the top providers and their trial periods include:

1 | Make payments on time. ALWAYS. This is the #1 rule of building credit. This applies to credit cards, loans, mortgages, everything. 2 | Keep credit card debt low. Use your card regularly, but don’t spend money you don’t have. 3 | Stay well under your credit limit. You’ll be scored favorably if you keep below 30% of your total credit limit. To raise your limit, consider a no fee credit card. 4 | Don’t take out cash advances. 5 | Keep accounts open for as long as possible, especially if doing so is cost-free. This raises your average account age and your total credit limit. 6 | Don’t open too many new accounts all at once. This lowers your average account age. 7 | Check your credit report regularly and make sure everything is kosher. This won’t count against you. 8 | If possible, diversify the types of credit you utilize. Paying through installment loans will raise your score. 9 | Stay away from prepaid debit cards. They don’t improve your credit.

CREDIT

STEP TWO | Learn the guidelines for building credit

• TransUnion ($$) 7 day grace period • GoFreeCredit.com ($$) 30 day grace period • PrivacyGuard ($$) 30 day grace period Plus, the Discover it and some Barclays cards offer free FICO scores to cardholders. If you have the Discover it, you receive your score along with your monthly statement. If you have the Barclaycard Rewards MasterCard, Arrival, Ring, Frontier, Juniper or Carnival, you can check your score online.

STEP FOUR | Get a credit card for no or low credit Now that you have an understanding of how your credit score is calculated and how to manage your spending, you’re ready to take action. Finding a credit card for which you qualify can be tricky. If you’re a student, check out our list of the best student credit cards. Otherwise, read on! If you’re starting at square one, you should know the difference between secured and unsecured credit cards. A secured credit card is for very limited credit and comes at no risk to the issuer. When you’re approved, you’re required to make a deposit. The deposit is generally a couple hundred bucks and determines your credit limit. When you eventually close your account, the deposit is returned to you. Essentially, secured credit means you borrow money from yourself rather than a lender. One of the best secured cards out there is the Capital One® Secured MasterCard® . It has a low $29 annual fee, and a $200 initial credit limit. However, based on your creditworthiness, you may need only put $49 or $99 down to get the full $200 limit. And if you don’t have $200 to spare, you can pay in installments for up to 80 days. You don’t want to use the Secured MasterCard forever, but until you qualify for better options, it’s a good place to start.

VISIT US ON-LINE FOR MORE TIPS FOR INCREASING YOUR CREDIT SCORE

www.Dllrz.com

BUILDING CREDIT FROM SCRATCH

HOW DO YOU SCORE?

1.2

WRITTEN BY

#BuildingCredit #Dllrz PUBLISHER

Bank Rate

BankRate.com

DATE

September 2015

YOUR CREDIT SCORE IS A THREE-DIGIT NUMBER GENERATED BY A MATHEMATICAL ALGORITHM USING INFORMATION IN YOUR CREDIT REPORT. HOW DO YOU SCORE? 16

DLLRZ.COM

FALL 2015

FY16 Q1

EXCELLENT

720

POOR

AVERAGE

GOOD

VERY GOOD

CREDIT

780

680

620

WHAT IS IT?

THE THREE BUREAUS

Your credit score is a three-digit number generated by a mathematical algorithm using information in your credit report. It’s designed to predict risk, specifically, the likelihood that you will become seriously delinquent on your credit obligations in the 24 months after scoring.

EQUIFAX

There are a multitude of credit-scoring models in existence, but there’s one that dominates the market: the FICO credit score. According to myFICO.com, the consumer website for the FICO score developer, “90 percent of all financial institutions in the U.S. use FICO scores in their decision-making process.” FICO scores range from 300 to 850, where a higher number indicates lower risk. What’s a good score?

• Often show an 81-month credit history for your credit accounts.

A consumer has three FICO scores, one for each credit report provided by the three major credit bureaus: Equifax, Experian and TransUnion. Unfortunately, consumers currently have access to only their Equifax and TransUnion FICO scores. Most of the information that these different bureaus contain are the same, but there are a few differences.

THEY HAVE ONE SIMILARITY 580

You’re entitled to free copies annually. Pull your credit reports every year by following these steps and make sure you know how to read them. Challenge any discrepancies to keep your score high and your report clean, and the small differences in reporting will hardly matter.

• Reports are the only ones that summarize “Open Accounts” and “Closed Accounts”

EXPERIAN • Experian credit reports contain “Status Details” • Offers a monthly “balance history” for any accounts that are still open, or for those closed accounts with an outstanding balance.

TRANS UNION

TERRIBLE

VERY POOR

• Has the most thorough employment data section in your personal summary

500

• Shows potential lenders how long you’ve been with your current employer. This is especially helpful if you apply for a mortgage.

HOW DO YOU SCORE?

TYPES OF CREDIT What kinds of debts you have. The presence of too many open accounts can have a negative impact on your score, whether you’re using the accounts or not. This activity usually makes up approximately 10% of your score. CREDIT INQUIRIES & NEW ACCOUNTS How many credit requests have you made and how many reports have been pulled on you. Whenever someone else gets your credit report—a lender, landlord, or insurer, for example—an inquiry is recorded on your credit report. A large number of recent inquiries may negatively impact your score. Your new credit accounts and inquiries generally make up about 10% of your score. In the same way inquiries can impact your score, opening multiple new accounts in a short period of time may negatively impact your score. CREDIT HISTORY How long have you had each account. In general, the longer you responsibility manage credit, the more you demonstrate your creditworthiness to lenders Credit history typically accounts for around 15% of your score. DEBT RATIO OR UTILIZATION

How much do you owe on each account, and how much of your credit limit have you used. Lenders generally like to see that you aren’t using too much of your available credit. The more credit you use, the harder it may be to pay back. This typically makes up around 30% of your score.

PAYMENT HISTORY Have you paid your bills on time, and if not, how late were you and how often did this occur. A record of late payments on your current and past credit accounts will typically lower your score. Being consistent about paying on time can, over time, have a positive impact on your score. This, along with public records—such as bankruptcies, judgements, and collections—generally accounts for approximately 35% of your score.

DLLRZ.COM

FALL 2015

FY16 Q1

CREDIT

YOUR CREDIT SCORE IS DETERMINED BY SEVERAL FACTORS, WHICH INCLUDE: TYPES OF CREDIT, CREDIT INQUIRIES, CREDIT HISTORY, DEBT RATIO, AND PAYMENT HISTORY. 10% 10%

35%

15%

30%

HOW DO YOU SCORE?

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FY16 Q1

CREDIT

FACT OR FALLACY? 10 COMMON CREDIT SCORE MYTHS

10 COMMON CREDIT SCORE MYTHS

10 COMMON CREDIT SCORE MYTHS PEOPLE TELL ME

2. 3

WRITTEN BY

PUBLISHER

Leslie Tayne

Credit.com — Credit Score

Let’s face it, credit scores can be a mystery, and there’s a lot of misinformation out there. While it is important to have good credit, you can’t believe everything you hear – because the wrong step, even with good intentions, could send your credit in the wrong direction. Here are just a handful of the myths that I’ve heard from consumers about credit scores.

DLLRZ.COM

FALL 2015

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#CreditScore #KnowTheFacts DATE

January 2015

I BELIEVE I HAVE GOOD CREDIT

FACT

MAYBE... MAYBE NOT!

CREDIT

MYTH

This is always a doozy, since so many people tell me all the time they “have good credit.” Believing and knowing are not the same thing, and you shouldn’t just assume your credit score is OK. Also, just because you had good credit five years ago doesn’t mean you do now. Make sure to get copies of your free annual credit report from all three major credit reporting agencies every year, review the report and also periodically check your credit scores.

CLOSING A LOT OF CREDIT CARDS WILL IMPROVE MY CREDIT SCORE. THINK AGAIN! You’d think having a ton of credit cards would have a negative impact on your credit score and closing them would raise it. Unfortunately, it doesn’t work that way. One of the major factors of your credit score is your debt-to-credit ratio, and closing too many cards at once can drastically change your ratio, which can cause your score to drop. For example: You have $5,000 in debt and $20,000 in available credit between your credit cards. Closing several of those cards would cause your available credit to drop to $10,000, putting a huge dent in your debt-to-credit ratio. Also, the closed account will drop off your credit reports in about 10 years, and from then on you’ll no longer benefit from the age of that account, nor its positive payment history – which are also factors in your score. If you really do feel the need to close your credit cards, pay off your balances and stash away the cards so you aren’t tempted to use them. Close one every few months and monitor your credit reports and credit scores for the impact. Remember, even if you’re not using a card, you should make sure you look at your statements to check for fraudulent activity.

MYTH

MY INCOME AFFECTS MY CREDIT SCORE.

FACT

YOUR INCOME HAS NO IMPACT!

I’ve had a surprising number of people mention that their low income has damaged their credit. The amount of money you make can only affect your credit score if your income affects your ability to pay your bills. Your income itself, however, is not listed on your credit reports, nor is it a factor in your score – so it has zero impact on your credit score.

23 MYTH

WITH A BAD CREDIT SCORE, I CAN NEVER GET A LOAN.

FACT

NOT NECESSARILY TRUE...

This isn’t true, there are plenty of companies out there willing to give loans to people with poor credit. However, the loans will most likely have higher interest rates and require you to either put up collateral or put money down. Make sure to be aware of “predatory lending” offers, where loan amounts and repayment terms — like interest rates — are very high.

10 COMMON CREDIT SCORE MYTHS

MYTH

HOW I MANAGE MY BANK ACCOUNTS, INVESTMENTS AND OTHER PERSONAL FINANCES IMPACT MY SCORE.

MYTH

I DON’T NEED TO WORRY ABOUT MY CREDIT REPORT BECAUSE I WILL NOT BE APPLYING FOR ANY NEW CREDIT.

FACT

CASH DOESN’T EQUAL CREDIT

FACT

EKKKK NO!

Anything pertaining to your bank accounts, investment accounts or transactions made in cash have no effect on your score. That said, overdrafts can have an effect if your bank provides you with a line of credit in the event that you overdraw – then that line of credit may show up on your reports. You should make sure all accounts are closed properly and all fees are paid off. Unpaid fees can also end up on your report if sent to collections.

MYTH

CHECKING MY CREDIT REPORT WILL REDUCE MY SCORE.

FACT

KNOW YOUR SCORE!

So many of my clients have no idea what their credit score is because they thought checking it would hurt it. Looking at your own credit report or score isn’t like sneaking a peek at your notes during a test, you’re allowed to be in the know. While it’s true that if a lender checks your credit report or credit score, it results in a “hard inquiry,” which causes a small, temporary drop in your credit score. However, when you check your own, it’s called a “soft inquiry,” and it has no effect on your score.

MYTH

DISPUTING AN ACCOUNT WILL MAKE IT COME OFF OF MY REPORT.

FACT

NOT NECESSARILY...

Disputing an account with the credit bureau will certainly only do one thing—result in them investigating your claim. Mistakes happen, however, if they find the account or the information to be accurate, the information will not be removed.

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FALL 2015

FY16 Q1

This is like saying you don’t have to worry about your weight because you don’t plan on going to the doctor anytime soon. Just because you don’t think you’ll be applying for credit soon doesn’t mean you should forgo maintaining good financial habits. Lenders aren’t the only ones to check your credit. Insurance companies and potential employers may check and having bad credit can keep you from getting a good insurance rate or a new job. It also takes time to improve credit, which could take years, so don’t put off managing your credit responsibly.

MYTH

CREDIT SCORES ARE LOCKED IN FOR SIX MONTHS.

FACT

YOUR SCORE CAN FLUCTUATE DAILY

Your credit score changes as soon as data on your credit report changes. Which could be on a daily or weekly basis, depending on when creditors report the information to the credit bureaus. This is why staying financially responsible, and checking it often, is important to maintaining good credit. These myths aside, the best way to keep yourself in the know is to do your homework. Keep track of your debts, and review your credit report at least yearly and compare it to your financial history. All it takes is a little initiative and less reliance on hype to maintain a good credit score and good financial health.

DISCOVER MORE CREDIT MYTHS ON-LINE OR AT DLLRZ.COM http://blog.credit.com/2015/01/10-credit-score-myths-ive-been-told-105884/

CREDIT

I DON’T HAVE TO WORRY ABOUT MY SCORE BECAUSE MY SIGNIFICANT OTHER HAS A GOOD ONE.

CREDIT SCORES ONLY REFLECT AN INDIVIDUALS CREDIT! Do you not have to worry about your health because your partner is in good health? This is a terrible motto to live by. Your spouses’ good credit score is not a shield you can both hide behind. And contrary to what some may think, credit scores only reflect an individual’s credit—so your spouse’s good credit is not counted as yours. And if you take out a mortgage together, for example, both spouses’ credit will need to be checked. Furthermore, if you were to ever end your relationship, or if your spouse passes away, your score will become all the more important.

10 COMMON CREDIT SCORE MYTHS

DLLRZ.COM

FALL 2015

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DON’T LIKE.

“

WILL SMITH

BUDGETING

TOO MANY PEOPLE SPEND MONEY THEY HAVEN’T EARNED, TO BUY THINGS THEY DON’T WANT, TO IMPRESS PEOPLE THEY

TITLE OF ARTICLE

DLLRZ.COM

FALL 2015

FY16 Q1

BANKING

WHY YOUR MONEY SHOULD BE IN A CREDIT UNION Enrolling in a financial institution is often one of the first steps a young adult makes as they begin to establish themselves as a financially independent person. Although you may have to go in with a parent to co-sign for you—putting your money in a savings or checking account introduces you to a professional financial establishment, and begins setting good habits of putting your money in a secure place, with the intent of saving. As a beginner, for the most part, getting your money in a bank—whether its federal bank or local credit union—is the most important step. As you become more literate with your money and finances, you may notice differences between banks and credit unions, and you should weigh out the pro’s and con’s of both to determine where your money should be, and where it will have the most impact. Although it may not seem like it, choosing the right bank is an investing decision in its own right, and Dllrz has chosen one of it’s contributors—who has worked in both a national federally backed bank and a local credit union—to give us the low down on both types of institutions! Our banking expert, Corey, who currently works at Travis Credit Union in Vacaville, California, has worked at both a major national bank and a local credit union, where he currently resides. Corey has a unique insider perspective on the differences between banks and credit unions, and wanted to share them with us, so that you can make the right decision when contemplating where to put your money for safe keeping. Although they operate in quite the same way, there are certain motives or incentives behind each that you should be aware of.

WHY YOUR MONEY SHOULD BE IN A CREDIT UNION

CREDIT UNION

BANK

NOT-FOR-PROFIT

FOR-PROFIT

AFFILIATION REQUIRED

ANYONE CAN JOIN

FEWER PRODUCTS

Although these may appear as drawbacks for credit union members, they are in fact what maintain the lower fees and better rates. What may be seen as a benefit for the bank, may carry with it other motives (i.e. “products”).

MORE PRODUCTS

LESS ACCESSIBLE

MORE ACCESSIBLE

FEWER FEES | BETTER RATES

MORE FEES | WORSE RATES

MEMBER OWNED

SHAREHOLDER OWNED

NCUA ($250k)

FDIC ($250k)

Which is right for you?

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WHY YOUR MONEY SHOULD BE IN A CREDIT UNION WRITTEN BY

#CreditUnion #SmartBanking #Dllrz

PUBLISHER

Danielle Schneider

DATE

Dllrz — www.Dllrz.com

October 2015

THE FUNDAMENTAL DIFFERENCE

ARE YOU A MEMBER OR A CUSTOMER?

Very simply, credit unions are not-for-profit financial cooperatives, whose earnings are paid back to members in the form of higher savings rates and lower loan rates. Banks are for-profit corporations, with declared earnings paid to stockholders only.

The relationship between the user and the bank or credit union is also a little different—and very important to be aware of. Banks view their users as customers, while credit unions view their users as members. As a member, you basically own a part of the credit union, as it is a non-forprofit, and your fees pay back into the credit union.

A credit union is run by a board of unpaid volunteers, who are elected by vote, and have a genuine interest in the well being of the establishment. As a member of a credit union, you technically have the right to vote for these elected leaders, but often give your proxy vote to other board members to vote on your behalf. As a not-for-profit, credit unions are seeking no additional funds beyond what it takes to make the bank operate. This provides them with several benefits, including having to pay no state or federal income tax. This not-for-profit framework allows a credit union to funnel its money back into its members, and provide lower favorable interest rates, and charge fewer and cheaper fees. Banks on the other hand are funded by stakeholders, who invest their money, seeking a return on investment. Because banks are for-profit, they have less benefits, and still have to pay all taxes. This means higher rates and fees for its customers. Additionally, because a bank is in the business of making a profit, the mindset towards its customers also differs from credit unions. In addition to higher rates and fees, products— such as credit cards, loans, services, etc.—are sold to its customers.

BANKING

1. 3

In order to bring it’s members lower fees and better rates, credit unions often offer less products—credit cards, loans and promotions. However, these so called “products” are not always necessarily good incentives for the person in which they are being proposed to. Banks usually have to meet a certain sales quota as a company, and will therefore offer certain products to people that don’t need them or that are not right for them. Furthermore, bankers don’t have access to all their customers information, where they can determine which product is right for the person at hand. Credit union bankers on the other hand, have necessary information to provide useful information to the member they are speaking with, and provide them valuable products that could help improve their financial situation. Many variables combine to bring a person’s banking experience to life. Customer service can also be a huge consideration when choosing between a bank or credit union. Motives behind selling products can at times get in the way of properly assisting a customer, and providing

31 CREDIT UNION

BANK

SAVINGS INTEREST

0.05%

0.01%

AUTO LOAN

2.49%

4.99%

CREDIT CARDS

8.9%

12.9-15.9%

High interest rates provide the greatest return for you You want rates for loans or debt, such as a credit card, to be as low as possible

Rates provided are based on work experience with Chase bank and Travis Credit Union, by Corey Johnson | September 2015

WHY YOUR MONEY SHOULD BE IN A CREDIT UNION

them with the resources to best help them and prepare them for their financial futures. Because banks are seeking to make a profit, often the sales quotas they need to meet, overshadow the best needs of their customer. As credit unions do not have to meet certain goals in terms of sales, credit unions are often more member focused, and concerned about what choices will help them the most financially. Additionally, credit unions often have more information available to them to help their members focus in on their financial situation. Corey explains how he is able to review his members financial history so that he can assist them with beneficial offfers that can get them on the right track if they need some financial help. Being able to identify these insights and create tailored plans for members is much different than the general service you may receive at a bank.

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WHY YOUR MONEY SHOULD BE IN A CREDIT UNION

BANKING

MEMBER-OWNED CREDIT UNION COOPERATIVES OPERATE UNDER THE PRINCIPLE OF ‘PEOPLE HELPING PEOPLE’

“

TRAVIS CREDIT UNION

LOCATION, LOCATION, LOCATION! Banks often appear to be the more desirable choice for several reasons. Most notably, they are everywhere—banks can be national chains, and therefore you can bank with someone on the west coast and access a branch on the east coast with no problem. Some National Federal banks you might be familiar with include Wells Fargo, Bank of America, and Chase Bank, just to name a few.

Credit unions on the other hand, are local, and tailor their business to the people in their community. This is why credit unions are not nearly as accessible—they serve a specific region for their local community. This means if you are traveling out of the area in which your credit union serves, you will not be able to find a branch to assist you. However, credit unions are a part of a co-op network, in which they allow members from other branches to access their ATM’s, free of charge, and speak with members of their branch if they have any questions. They can’t do anything within your account, but can answer any questions and be a friendly face when you are away from your branch. Although Credit Unions appear to be not as accessible as banks, consider the number of ATM’s and branches within your area. For example, Chase has 6,500 branches nationwide, and Travis Credit Union has 22 local branches within 12 counties. Just within the city of Vacaville, CA, Travis Credit Union has five branches, and Chase bank has two. Additionally, because of the co-op partnership that Credit Unions have, as a Travis Credit Union member, you have access to over 30,000 ATM’s nationwide.

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Banking with a local Credit Union could provide you with even more access when you are close to home. Being unable to access a branch across the country may be a definite ultimatum for you. If not, keep reading to find out how else banks and credit unions differ! There are a lot of variables to sort through when deciding between a credit union and bank. Although credit unions aren’t nationwide, there are plenty in your area. Take for example, Travis Credit Union—it spans 12 counties, with a plethora of ATM’s and branches at its members disposal. Weight all options out, and determine which financial institution is right for you. Better yet, go in and talk with a banker from both a credit union and bank, and decide for yourself.

FIND MORE INFORMATION & RESOURCES ONLINE ABOUT BANKS & CREDIT UNIONS |

www.Dllrz.com

BANKING

COLUSA PLACER

YOLO SONOMA

NAPA SACRAMENTO

SOLANO

CONTRA COSTA

SAN JOAQUIN

ALAMEDA STANISLAUS

35 MERCED

TRAVIS CREDIT UNION CORPORATE OFFICES One Travis Way, Vacaville CA 95687 | (707) 449-4000

WHY YOUR MONEY SHOULD BE IN A CREDIT UNION

TYPES OF STUDENT AID LOANS KNOW BEFORE YOUR BORROW

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STUDENT FINANCES

TYPES OF STUDENT AID LOANS

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DIFFERENT TYPES OF STUDENT LOANS WRITTEN BY

Cecillia Barr

PUBLISHER

Debt.org

#StudentLoans #FinancialAid DATE

2015

STUDENT FINANCES

1.4

If debt in your life is unavoidable, student loans are among the best debts to have. Although it can be scary to start your adult life with debt, financing a good education should be seen as an investment. Having a college degree can help you start with a better and higher paying job than you would have otherwise. And for many people, a college education is impossible to obtain without borrowing money to pay for it. Student loans come in many shapes and sizes, and the regulations for them can be different as well. There are several types of education loans—described on the previous page—for which you may be eligible. The three primary types of loans include Federal Student Loans, Private School Loans, and Health Profession Loans. Some students may also be eligible for private loans or health professional loans, depending on their credit standing and area of study, respectively. The most commonly used loan is the Federal Student Loan, which this article focuses on. The Federal student loan offers several different options based on your situation and demographics—they include a Stafford Loan, a Perkins Loan and a PLUS Loan, which is eligible for students and parents. Despite your financial standing or field of study, you can find an education loan that suits your needs. It can help you and your family to fund your higher education and reduce the financial burden of school.

TYPES OF STUDENT AID LOANS

HEALTH PROFESSION LOANS

STUDENT LOANS

Specialized student loans exist for students studying specific areas of medicine such as nursing, sports medicine or veterinary medicine. Each loan has its own requirements about accepted areas of study and financial need.

FEDERAL STUDENT LOANS

PRIVATE EDUCATION LOANS Private education loans, also called alternative education loans, are an option for students and parents when other sources of financial aid do not fully cover the cost of school. These loans are provided by private lenders and do not use government funding. Because of this, private education loans more closely resemble personal loans than student and parent loans.

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PERKINS LOANS Perkins Loans are more desirable than Stafford Loans and have more stringent eligibility rules. These loans are funded by the government and are reserved for students who show exceptional financial need.

SUBSIDIZED GOVERNMENT PAYS INTEREST DEFFERED PAYMENTS LIMITED ELIGIBILITY LOAN AMOUNTS LIMITED

STAFFORD LOANS

UNSUBSIDIZED

PLUS LOANS PLUS loans are funded directly by the federal government , and available for both parents and graduate students. Parent PLUS loans are for parents of dependent undergraduate students, and Grad PLUS loans are for graduate students.

ANYONE IS ELIGIBLE DEFFERED PAYMENT ACCRUES INTEREST LOAN AMOUNTS LIMITED

TYPES OF STUDENT AID LOANS

STAFFORD LOANS Stafford Loans are more common than Perkins Loans, the other type of federal student loans. Money for these loans comes directly from the federal government in a program called the Federal Direct Student Loan Program (FDSLP). There are two types of Stafford Loans: subsidized and unsubsidized. The type helps determine your interest rate and maximum loan amount.

If your loan is subsidized, you won’t be responsible for making any payments until after you graduate. Your interest rate typically should be at or below 6.8 percent. The government pays your interest for you while you’re in school. Subsidized loans are reserved for students who can demonstrate a financial hardship. Most go to students whose families’ annual incomes are below $50,000. If you’re an undergraduate, the maximum annual amount of a subsidized loan depends on your year in school. You cannot accrue more than $23,000 in subsidized Stafford Loans throughout your undergraduate studies If you’re a graduate student or medical student, your yearly loan amount is capped at $8,500. Graduate students and medical students can’t borrow more than $65,500 in total, including their undergraduate subsidized loans.

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If you have an unsubsidized loan, you’re responsible for paying off all the interest. Interest builds up at a fixed rate of 4.66 percent while you’re in school, but payments are typically deferred — or postponed — until after you graduate. All students are eligible for this type of loan. Your annual Stafford Loan limit ranges from $5,500 to $12,500. You are eligible for a larger loan if you are later in your education or if you’re financially independent. If you’re financially dependent but your parents are ineligible for Parent PLUS loans, you’re permitted the same maximum loans as if you were independent. These loan caps are for both subsidized and unsubsidized loans combined. This means that if you’re given a large subsidized loan, you are only eligible for a smaller unsubsidized loan. Likewise, if you have a small subsidized Stafford Loan or none at all, your unsubsidized loan can be larger. If you’re a graduate student, you have a higher annual limit of $20,500. In total, your undergraduate and graduate Stafford Loans cannot exceed $138,500. Or if you’re a medical student, you have the highest limits. You may borrow up to $40,500 annually and $224,000 in total.

Perkins Loans are more desirable than Stafford Loans and have more stringent eligibility rules. They have a fixed interest rate of 5 percent. They are all subsidized, so the government pays any interest accrued while youâ&#x20AC;&#x2122;re in school and for a short period after you graduate. Because of their favorable terms, Perkins Loans are reserved for students who show exceptional financial need. These loans are funded by the government but disbursed by each individual college or university. The federal government distributes a limited amount of funds to each school, and the school determines which students to lend to.

STUDENT FINANCES

PERKINS LOANS

As with Stafford Loans, students can only borrow a certain amount through Perkins Loans. Eligible undergraduates may borrow up to $5,500 in Perkins Loans annually, for a total of $27,500. Graduates students may borrow up to $8,000 annually. The total cap is $60,000 and is based on both undergraduate and graduate Perkins Loans.

PLUS LOANS | PARENT & GRADUATE PLUS loans are available for both parents and graduate students. Parent PLUS loans are for parents of dependent undergraduate students, and Grad PLUS loans are for graduate students themselves. As with other education loans, PLUS loans are funded directly by the federal government. But unlike traditional student loans, they have no maximum amounts and can be used to cover any education costs not covered by other financial aid. They have a fixed interest rate of 7.21 percent.

PRIVATE & HEALTH PROFESSION LOANS Private education loans, also called alternative education loans, are an option for students and parents when other sources of financial aid do not fully cover the cost of school. As the name suggests, these loans are provided by private lenders and do not use government funding. Because of this, private education loans more closely resemble personal loans than student and parent loans. Your eligibility and interest rate depend on your credit history. Your interest rate is typically higher than with federally guaranteed education loans but lower than with other debts like credit card debt. Specific borrowing terms vary by lender. Health Professions Student Loans are reserved for a select body of students. Specialized student loans exist for students studying specific areas of medicine such as nursing, sports medicine or veterinary medicine. Each loan has its own requirements about accepted areas of study and financial need.

TO APPLY FOR A FEDERAL STUDENT LOAN, VISIT FAFSA ON-LINE

www.Dllrz.com | https://fafsa.ed.gov/

TYPES OF STUDENT AID LOANS

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STUDENT FINANCE

PAYING FOR COLLEGE WITH STUDENT LOANS? FOLLOW THESE FOUR STEPS

Paying for college is too complicated. A lack of clear and correct disclosures concerning college costs and financial aid causes confusion about college affordability. Some of the more egregious problems include: • Colleges often talk about loans as though they cut college costs or make college more affordable. Loans only postpone paying college expenses. • Financial aid award letters often blur the distinction between grants and loans—two very different things. • Loans are mixed in with grants, without any distinction between the two types of aid. • Loans are not identified as loans and do not present important details like interest rates, fees, repayment terms, monthly payments or total payments. • Loans list the annual limit as the award amount, without any indication that the family can choose to borrow less, making it too easy to borrow to the limit. These problems cause students and parents to take on too much debt or the wrong type of debt. It shouldn’t be surprising that some students graduate with too much debt.

TIPS FOR PAYING FOR COLLEGE WITH STUDENT LOANS

PAYING FOR COLLEGE WITH STUDENT LOANS

2. 3

WRITTEN BY

Mark Kantrowitz

PUBLISHER

Forbes — Personal Finance

FOLLOW THESE FOUR STEPS TO FIGURE OUT HOW MUCH TO BORROW AND WHAT TYPES OF LOANS TO USE:

1 | MINIMIZE DEBT. Enroll at a lower-cost college, such as an instate public college or a college with a “no loans” financial aid policy, to reduce the amount of student loan debt. Maximize free money, such as grants and scholarships. Every dollar you save and every dollar you win is about a dollar less you’ll have to borrow. Since about half of college costs at an in-state public college come from living expenses, try to economize by buying used textbooks, renting them, and/or selling them back to the bookstore, minimizing the number of trips home from college and getting a roommate to split the rent. Live like a student while you’re in school, so you don’t have to live like a student after you graduate. Consider using tuition payment plans, which break up college costs into equal monthly installments, as a less expensive alternative to long-term debt. 2 | CHOOSE LOWER-COST LOANS. The most important difference between different types of education loans is in the cost. The eligibility criteria, borrower and cosigner requirements, loan limits and repayment plans also matter, but ultimately you should concentrate on minimizing the cost of the debt. Generally, students should borrow from the federal government first, because federal student loans are cheaper, more available and have better repayment terms.

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#StudentLoans #Dllrz DATE

September 2015

3 | DON’T BORROW TOO MUCH MONEY. When a student has exhausted the loan limits on the Federal Stafford loan, it may be a sign that the student is over-borrowing. Total student loan debt at graduation should be less than the student’s expected annual starting salary. If total student loan debt is less than annual income, the student should be able to repay his or her loans in 10 years or less. Otherwise, the student will struggle to repay his or her loans, and may need alternate repayment plans like extended repayment or income-based repayment to afford the monthly loan payments. These repayment plans reduce the monthly payment by increasing the term of the loan to 20, 25 or even 30 years. This means you may still be repaying your loans when your children enroll in college. 4 | SHOP AROUND WHEN FEDERAL STUDENT LOANS ARE NOT ENOUGH. Federal Parent PLUS loans, private student loans and private parent loans may be options when a student has reached the annual and/or cumulative limits on federal student loans. Depending on the credit history of the student and parents, as well as credit scores and debt-to-income ratios, private loans may be less expensive than the Federal Parent PLUS loan. But, borrowers must consider the trade-offs. Borrowers with very good or excellent credit may be able to save a percentage point or two on the interest rate and fees. But federal student loans offer other benefits that may be lost, such as flexible deferments and forbearances, incomedependent repayment plans, loan forgiveness options, and death and disability discharges.

STUDENT FINANCE

TIPS FOR PAYING FOR COLLEGE WITH STUDENT LOANS

TOP FINANCIAL MOBILE APPS OF 2015

1.5

WRITTEN BY

Danielle Schneider

PUBLISHER

Dllrz Magazine — www.Dllrz.com

#MobileFinances #Dllrz DATE

September 2015

TOP FINANCIAL MOBILE APPS DISCOVER THE BEST APP’S OUT THERE

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TECH & MONEY

TOP FINANCIAL APPS OF 2015

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2015

FY16 Q1

FREE FREE FREE FREE FREE FREE FREE FREE $2.99+ FREE

LEVEL MONEY

DIGIT

CREDIT KARMA

GOOD BUDGET

WALLY

BILL GUARD

MVELOPES

POCKET EXPENSE

HOME BUDGET

LEARN VEST

201 4

AVAILABILITY

FEATURES

Personal Finance

REVIEW RATING

Loans | Debt | Credit

Compariosn of Top Financial Mobile Apps compiled by Danielle Schneider of Dllrz, based on various resources including: www.nerdwallet.com, www.businessinsider.com, and www.bankrate.com.

FREE

ACORNS

PAYPAL

FREE

COST

MINT

MOBILE APP

TOP MOBILE APPS OF 2015

50 Spending

CATEGORY

Investing

Banking

SECURE TRANSACTIONS

PERSONAL FINANCE

BUDGETING

PERSONAL FINANCE

BUDGETING

ALL-IN-ONE

PERSONAL FINANCE

BUDGETING

CREDIT SCORE

AUTOMATED SAVINGS

AUTOMATED BUDGETING

AUTOMATED SAVINGS

ALL-IN-ONE

Budgeting

TECH & MONEY

Managing your finances when you’re on the go keeps getting easier with the growing assortment of banking and personal-finance app’s that can simplify how you spend and save money. According to a recent survey by the Federal Reserve, 28% of consumers with mobile phones track their money habits with the device, or would like to. Mobile banking and personal finance app’s are growing in popularity and helping more consumers reach their financial goals. And their use will continue to increase, says David Lyon, chief executive of wealth-management firm Main Street Financial in Chicago. “If you look at the timeline of consumer behavior, it’s becoming more digital,” says Lyon, who is also an adviser to clients of the firm. “Everything from shopping to banking to consumer news is becoming more digital. It’s not going away; it’s just increasing.” With that being said, there are a lot of options to chose from when it comes to financial app’s. They possess many different features that will impact how the app can be used, and if its the right app for you. Dllrz has compiled a list of the top financial mobile app’s of 2015, so that you can determine which is best for you! If you need help saving, there are automated saving and budgeting app’s that may be just right for you. If you need an all-in-one financial app that will provide you with all your information at the swipe of the finger, there are several options to chose from! Check out the chart and reviews of the various app’s Dllrz has found for you, as well as our on-line resource for more information!

TOP FINANCIAL MOBILE APPS OF 2015

ACRONS

LEVEL MONEY

DIGIT

LEARN VEST

Acorn is an app that helps you invest your spare change in low-cost ETFs. Once you connect your checking and credit card accounts to it, Acorn automatically rounds up every purchase to the next dollar, and invests the difference in a portfolio of your choice. For example, if you spent $2.25 for coffee, it will invest $0.75 for you. Acorn says users invest $30 to $180 a month on average in “round ups” alone. But if you want, you can also invest a lump sum amount up to $30,000.

Level Money calls itself the “mobile money meter.” Once you connect the app to your bank account, it automatically calculates your income and recurring bills, and then suggests what your daily, weekly, and monthly spending should be. It also comes up with the amount you should be saving every month and subtracts that from your monthly budget. You can set up an auto-save amount too, and any cash left unspent from your budget will rollover to your savings account. It tracks your spending in real time, so you can easily see what you’ve spent and how much you can spend within a given period.

Digit helps you save money that you didn’t even realize you had. It automatically scans your income and spending patterns, and transfers a small amount of savings that it deems you won’t necessarily need in to a separate account that it manages. You can withdraw from that savings account anytime, but you won’t make any interest off of it Digit is free and runs itself with the interest it generates from the users’ savings account. The value proposition is that Digit helps you discover and save money that you would spent elsewhere.

The LearnVest iPhone and iPad apps let you take a big picture view of your finances, wherever and whenever. Once you consolidate all of your financial accounts, you can folder expenses by category to track your spending, as well as set up special folders for specific goals, like building up an emergency fund or saving for a trip. And if you’ve signed up to work with a LearnVest Planning expert, you’ll also get challenges to help keep you accountable for your personal money goals.

CHECK OUT THE MOBILE APPS IN MORE DETAIL ON-LINE www.dllrz.com

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TECH & MONEY

MINT | The Mobile App by Intuit Perhaps the most widely used personal finance app, Intuitâ&#x20AC;&#x2122;s Mint gives you a real-time, complete look into all of your finances, from bank accounts and credit cards to student loans and 401k. It automatically tracks your spending, categorizes it, and alerts you when or if you approach your budget limit. You can even ask for custom savings tips within the app. Everything is shown in simple, intuitive graphs and charts, making it one of the most popular personal finance apps in the world, and our top rated all-in-one personal finance app.

THE TOP MOBILE APPS OF 2015

“

WARREN BUFFET

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DO NOT SAVE WHAT IS LEFT AFTER SPENDING, BUT SPEND WHAT IS LEFT AFTER SAVING.

TITLE OF ARTICLE

FY16 | QUARTER 1

BLOG TO FOLLOW 56

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2015 BLOG TO FOLLOW: “AND THEN WE SAVED”

2.0

WRITTEN BY

PUBLISHER

Anna Jones

AndThenWeSaved.com

“AND THE WE SAVED” HAS BEEN VOTED AS OUR 2015 FALL BLOG TO FOLLOW. THIS INSIGHTFUL BLOG CONTAINS MANY INSPIRATIONAL STORIES FROM SAVER EXTRAORDINAIRE ANNA, AS WELL AS HELPFUL RESOURCES, TIPS AND CHALLENGES TO GET YOU ON BOARD WITH SETTING GOALS AND BEGINNING YOUR SAVINGS JOURNEY. ANNA, HER HUSBAND AARON, AND YOUNG SON HENRY, LIVE IN BEAUTIFUL DENVER, COLORADO. PHOTOGRAPHERS BY TRADE, ANNA AND HER HUSBAND PHOTOGRAPH WEDDINGS AND PORTRAITS WHEN THEY ARE NOT CONTRIBUTING TO THE ATWS BLOG. IN FACT, THE BLOG BEGAN IN AN EFFORT TO KEEP THEMSELVES ACCOUNTABLE IN AN EFFORT TO PAY DOWN SOME DEBT. ANNA PAID OFF CLOSE TO $24,000 IN DEBT IN ONLY 15 MONTHS, AND INCLUDED ALL OF HER STRUGGLES TO OVERCOME DEBT IN HER BLOG.

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#AndThenWeSaved #Blog2Follow

FY16 Q1

DATE

2015

At the tail-end of 2009 I was suffocating from the weight of my $23,605.10 in debt. The cycle of debt and remorse needed to end so I decided to take drastic action when I made the decision to stop all unnecessary spending. On January 1st 2010 my year-long Spending Fast commenced. I also started this accompanying blog to document my progress, and to keep myself honest and accountable throughout the process. Since the Spending Fast meant spending money on necessities only, bare-bones living went into full-effect. When I started the Spending Fast my only goal was to try to get rid of my approximately 6k in credit card debt, because I felt that was weighing on me the heaviest. At the end of the year-long Spending Fast® (2010-2011) I was amazed that I had managed to pay off $17,911.89 in debt! Since I still had some debt at the start of 2011, I began the Spending Diet. (A Spending Diet is a modified version of the Spending Fast where I give myself a $100 a month “non-need” allowance. The Spending Diet turned out to be way harder than the Spending Fast by the way.) I was shocked that 15 months from the beginning of the Spending Fast process I was able to completely eliminate all of my debt! Yes! It’s true! It turned out that the Spending Fast and Spending Diet processes had dramatic results. I was (and still am sometimes) in disbelief that it actually worked, that I was able to stick to the strict and sometimes daunting Spending Fast and Spending Diet plans to make it to this side, the debtfree side! Now, I continue to write on this site about staying motivated, getting out of debt, staying out of debt, and about living life without all the crap (I’m a natural spender, so I need to keep that in check!). I am extremely passionate about sharing my experience with others since I’ve found a way to get (and stay) out of debt that actually works. In a way, I feel obligated to share what I know because I know what it feels like to have those heavy, horrible, hopeless, uncontrollable, and guilt-filled feelings that go along with having debt. I want people (you!) to see that there is another way. You don’t have to die with your debt, you don’t have to make your decisions around your debt, and you don’t have to keep yourself from living the life you really want to live (to travel, work less, be with your kids more, buy a home, get money into savings, etc.) simply because of the debt that is weighing you down. Relief from debt can come the second you make the decision to do the Spending Fast.

BUDGETING

RELIEF FROM DEBT CAN COME THE SECOND YOU MAKE THE DECISION TO DO THE SPENDING FAST—YES, IT WORKS THAT QUICK!

“

ANNA JONES

BELIEVE ME, YOU DESERVE THIS, AND I AM FULLY CONFIDENT THAT YOU WILL BE ABLE TO GET OUT OF DEBT TOO! READY TO GET STARTED?

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My idea is to go on a Spending Fast for a year—spending money on necessities only to see what happens, how much debt I can get out of and how much I can get into savings. When I mentioned to a good friend that I was thinking about going on a spending fast for 2010 she sighed and said “Well, that doesn’t sound very fun.” Then, I told my husband what I was thinking about doing and he wasn’t very excited about it either. He said “Great. No more fun. No more eating out. This is gonna suck.” I have to tell you, I feel the same way. Who would want to not get want they want? I’m the type that buys what she wants when she wants because I work hard and I feel like I deserve it. I know plenty of people who have the same feelings as I do about work and money and spending and not spending. Inside my head I hear this loudly: “YOU DESERVE IT DARLING!” and truly, I believe that I do. I mean, I woke up early for goodness-sake! I did what was asked of me and I was even nice while doing it! I DESERVE that super cute trinket or hat or whatever from Etsy dammit! Besides, I work a full-time day job AND I run a full-time wedding photography business AND what else can I think of? I do a lot and my spending is justified… until it isn’t anymore. When I was planning for our wedding that took place in May 2009 my dad gave me a little chunk of money that I could use as needed for wedding stuff. I got really used to having that money around. Being able to spend like I wanted helped me morph a kinda-bad habit into a superbad habit. And once the wedding rolled around and things changed from “planning the soon to be fond memories” phase to the “Oh, remember that?” phase… guess what didn’t stop when the planning stopped? My spending. And.. that’s where I am today… starting January 1st 2010 I’m gonna spend money on necessities only and I’m fully prepared for this to suck.

FY16 Q1 | BLOG TO FOLLOW

THE SPENDING FAST®

MY NEEDS

So, I know some of you are thinking “Well… you’ve got to spend SOME money this year don’t you!?” and my answer to all of ya’ll (imagine that with a southern twang) is “Yes, I will have to.” Oh yeah, I’ll HAVE TO. Force me why don’t you. I imagine that this will kind of be like a person who is in Overeaters Anonymous who must still eat but can only consume the “right” stuff. Where it would be a whole lot easier if you could just eliminate it completely from your life.

WHAT I WILL HAVE TO SPEND MONEY ON

The goal of this whole spending fast is to get my spending back on track, save some money and get rid of a lot of the clutter and time sucking that comes along with having a lot of stuff and buying the new stuff. Managing it, maintaining it, cleaning it, rearranging it, you know. Plus, I want my priorities to go like this: people and relationships are #1 and I don’t want things to be at the top or even close to the top of the list. Where as now, that can become questionable sometimes. Setting up my priorities like that makes sense. Obviously, situations will happen this year that I won’t be able to predict, so I’m gonna have to weigh those unexpected situations and remember that my motto has to be “Make Do and Mend” rather than “Make More to Spend More.” Ok. So. Here is the brutal break-down of how things will be going down this year...

• Cell phone (taking the internet off of it)

• Rent • Utilities (keeping lights and water off as much as possible; keeping the thermostat at 68 and wearing a hat and long johns inside, if needed)

• Food (store-bought, off brands, in season fruits and veggies and only when I run out of stuff in cupboards)

• Clothes (remember: “Make Do & Mend!” and in honor of that I need this. haha!)

• Trinkets • Etsy stuff (another sad face)

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• Photography exhibits (done inexpensively) • Car payment • Some gas • Bus eco-pass • Box hair dye (hey, I have needs)

WHAT I’M NOT SPENDING MONEY ON

• Coffee at coffee shops (sad face)

• Medicine

MY WANTS homemade crafts or re-gifting will be happening. Hopefully you all like macaroni magnets.)

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• Doctor co-pays

• Gym membership (local gym,

• Gifts (sorry friends and family…

it’s reasonable and health is important)

• New business cards (I have a bad habit of getting new ones because I like a different design better)

• Coats (see Clothes above) • Shoes • Bed linens • Towels • Fancy html email service (downsizing it)

• New make-up

• Decorative house stuff

• Eating out

• Fancy haircuts at fancy hair shop

• Movies

• New music from iTunes

BUDGETING

63 There you have it. There’s no way it can be completely comprehensive but I think it’s a good start. And, my new name is Mrs. Cheapskate. Nice to meetcha’. Get started now and change your life forever! Take the Get Out of Debt Pledge today!

FY16 Q1 | BLOG TO FOLLOW

COMPOUND INTEREST com·pound in·ter·est 1|

Interest computed on the accumulated unpaid interest as well as on the original principal.

LEARN MORE ABOUT COMPOUND INTEREST ON-LINE AT DLLRZ! www.Dllrz.com

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Interest calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan. Compound interest can be thought of as “interest on interest,” and will make a deposit or loan grow at a faster rate than simple interest, which is interest calculated only on the principal amount. The rate at which compound interest accrues depends on the frequency of compounding; the higher the number of compounding periods, the greater the compound interest. Thus, the amount of compound interest accrued on $100 compounded at 10% annually will be lower than that on $100 compounded at 5% semi-annually over the same time period.

FUNDAMENTALS

COMPOUND INTEREST EQUATION:

PV x (1+r)n = FV present value

interest rate

number of periods

future value

FOR EXAMPLE:

$1,000 invested at 10% for 20 years

$1,000 x ( 1 + 0.10)20 = $6,727.50

SIMPLE INTEREST

COMPOUND INTEREST

earns interest on the principle only

earns interest on the principle, plus the interest earned each period

$7,000

$6,000

$5,000

$4,000

compound interest $3,000

$2,000

interest with no compounding

$1,000

principle $0 0

COMPOUND INTEREST | DEFINED

HOW TO PLAN A WEDDING ON A BUDGET

2.2

WRITTEN BY

PUBLISHER

Cassie Slide

Money Crashers

#Weddings #Savings #Dllrz DATE

2015

HOW TO PLAN A WEDDING ON A BUDGET Currently, the average cost of a wedding is more than $20,000, making it one of the most expensive life events. In fact, it’s more expensive than the cost of most births (even without insurance), most first cars, home down payments, and funerals. For many students who receive scholarships, even four years of college can cost less than a one-day wedding! If you don’t have $20,000 to blow, don’t worry. You can still have a stylish, fun, memorable wedding, while saving money at the same time. Here are 15 ways to do just that.

You will hopefully save a lot of money on your wedding using these tips, but regardless, you will be spending some money on each and every one of your guests. They will want to spend money on you, too, to show their appreciation for being invited to your wedding and to show their support and happiness for your marriage. Make sure you create the perfect wedding registry so that there is an absolute guarantee that they will buy you a gift that you truly love. And above all remember, the amount of money you spend on your wedding day is not a direct correlation to how wonderful it will be. You can have a beautiful, memorable day for far less than the average $20,000.

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BUDGETING

WEDDING PLANNING

WEDDING ATTIRE

1 | WEDDING VENUE The only two things that are usually decided on before the wedding venue are whether or not to get married and the date. The wedding venue can be costly, but you can save a lot of money by getting married on a day other than Saturday and by finding a place outside the city limits.

9 | WEDDING DRESS It’s easy to get out of control when it comes to spending money on what is usually the bride’s favorite element of the wedding – her wedding dress. Fortunately, it is also easy to save money on the dress if the bride sticks to her budget and shops wisely.

2 | RECEPTION FOOD & DRINK MENU The best way to save on food, drink, and desserts for your wedding is to provide your own. Enlist your friends and family to help, and make sure that you don’t overextend yourself with complicated fare. If you don’t want to make your own, consider serving heavy appetizers instead of a sit-down meal, and find a venue that allows you to bring your own liquor, beer, and wine. The bar tab is generally the most expensive part of the refreshments.

10 | MENSWEAR Even though most people will be looking at the bride, it’s also important that the groom looks good. And luckily, menswear is not nearly as costly as the bride’s dress. Men need to be flexible when choosing what they will wear on the big day and should consider alternatives to tuxedos.

3 | WEDDING PHOTOGRAPHER & VIDEOGRAPHER When your wedding is all said and done, you want to make sure that you have a keepsake that will remind you of every moment and every emotion of that day, which unfortunately can be very expensive. Consider ways to save, like hiring someone that’s just getting started in their career or someone who shoots weddings as a side gig. 4 | WEDDING CEREMONY & RECEPTION MUSIC It can be expensive to hire a professional musician, a band, or a DJ, but luckily there are many ways to save in this category. You can hire a student musician, or consider a friend or family member to perform.

WEDDING DECOR 5 | WEDDING FLOWERS Wedding flowers can cost thousands of dollars, but if you are frugal you can easily cut your flower bill down to only a couple hundred dollars and still have beautiful arrangements. Be smart about what types of flowers you choose, and think about how you can re-purpose them throughout the wedding. 6 | CEREMONY DECORATIONS Sometimes less is more, and this will help you keep the price of decorating your wedding ceremony venue reasonable. Keep in mind that depending on your venue, the setting itself may be all you need. 7 | RECEPTION DECORATIONS The best way to save money on wedding reception decorations is to have a little fun with it. Get creative and pick a good, solid theme. Once you do that, everything else will fall into place. 8 | TABLE CENTERPIECES Similar to the other reception decorations, this is another area where you can have a lot of fun but not have to spend much money, especially if you make all the centerpieces yourself.

11 | BRIDE’S HAIR Having a stylist come to you on your big day may be convenient, but the big bill may cause unwanted stress. Doing your own hair or going to a cosmetology school are two great ways to avoid spending a fortune on your hairdo. 12 | BRIDE’S MAKEUP The same holds true for the bride’s makeup. If you have a professional do your makeup, it can be expensive. Alternatively, you can buy your own makeup and do it yourself, but that also can be costly. Consider ways to cut makeup costs, such as by using coupons to buy makeup or by visiting a department store’s cosmetics counter for a free makeover. 13 | WEDDING JEWELRY Not only will there be an exchanging of rings during the wedding ceremony, but the bride will most likely want to wear a few pieces of jewelry to complement her wedding gown. The best way to avoid spending above your jewelry budget is to stay out of high-end stores, and borrow from friends and family.

OTHER WEDDING COSTS 14 | WEDDING INVITATIONS The wedding invitations are another category where you can save a ton of money by doing part of it or all of it yourself. Consider providing your own card stock to the printer or go electronic by sending out e-mail invitations, or couple your save the dates and invitations into one! 15 | WEDDING FAVORS It is traditional to give wedding favors to your guests as an appreciation for their loving support of your marriage. When you have a large wedding, the cost of favors can be fairly expensive, so consider making them yourself, by doing something as simple as bagging up some candy or burning a CD.

MORE FUN TIPS ON-LINE... PLUS, SHARE HOW YOU SAVED! www.Dllrz.com

HOW TO PLAN A WEDDING ON A BUDGET

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YOUR GOOD ONES.

“

BENJAMIN FRANKLIN

BUDGETING

YOUR NET WORTH TO THE WORLD IS USUALLY DETERMINED BY WHAT REMAINS AFTER YOUR BAD HABITS ARE SUBTRACTED FROM

TITLE OF ARTICLE

50 THRIFTY TRAVEL TIPS

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50 THRIFTY TRAVEL TIPS

THRIFTY FIFTY TRAVEL TIPS

2. 3

WRITTEN BY

#TravelTips #TravelSavings PUBLISHER

Rick Steves

RickSteves.com

2015

01 | A B&B OFFERS DOUBLE THE WARMTH AND CULTURAL INTIMACY FOR HALF THE PRICE OF A HOTEL. You’ll find them in most countries if you know the local word: Husrom is Norwegian for sobe which is Slovenian for Gästezimmer which is German for rooms in a private home.

13 | LOOK UP FRIENDS, RELATIVES, AND CONTACTS. Assume you are interesting and charming and enjoy local hospitality with gusto. This works best if you actually are interesting and charming. Bring a show-and-tell Ziploc baggie filled with photos of your family, house, and hometown.

02 | AVOID TOURISTY RESTAURANTS WITH “WE SPEAK ENGLISH” SIGNS AND MULTILINGUAL MENUS. Those that are filled with locals serve better food for less money. I look for a short, handwritten menu in the local language only. Go with the daily specials.

14 | ADAPT TO EUROPEAN TASTES. Cultural chameleons drink tea in England, beer in Prague, red wine in France, and white wine on the Rhine. They eat fish in Portugal and reindeer in Norway. Going with the local specialties gets you the best quality and service for the best price.

03 | FLY OPEN-JAWS — THAT’S INTO ONE CITY AND OUT OF ANOTHER. Save time and money by avoiding a needless costly return to your starting point. When considering the beginning and end points of a long trip, try to start in mild countries (such as England) and work into the places with greater culture shock (such as Turkey). This way you’ll minimize stress, and save countries offering the cheapest shopping — and greatest health risks — for the end of your trip.

15 | LOOK FOR CONSOLIDATOR TICKETS FOR OVERSEAS FLIGHTS. Consolidator or “discount” air tickets are perfectly legitimate. By putting up with a few minor drawbacks (no changes allowed and no frequent flier miles given) you can save hundreds of dollars. Student agencies are not limited to students and offer some great airfares.

04 | TRAVEL OFF-SEASON — generally October through April in Europe. You’ll get cheaper airfare, find more budget rooms, spend less time in lines, and meet more Europeans than tourists. Big cities such as London, Paris and Rome are interesting any time of year.

DATE

16 | DON’T LET FREQUENT FLIER MILES CLOUD YOUR JUDGMENT. Choose a plane ticket, car rental, hotel or tour according to the best value for your trip, not in hopes of scoring a few extra miles. 17 | KNOW YOUR RAILPASS OPTIONS. Railpasses can offer big savings — if you’re traveling a lot. For short trips, point-to-point tickets are cheaper.

05 | FAMILY-RUN BUSINESSES OFFER THE BEST VALUES BECAUSE THEY EMPLOY FAMILY MEMBERS TO GET AROUND EUROPE’S COSTLY LABOR REGULATIONS. In mom-and-pop shops you’re more likely to be served by people who care about their reputation and their customers.

18 | SECOND-CLASS TRAIN CARS GET THERE JUST AS FAST AS FIRST-CLASS ONES. Throughout Europe first-class tickets cost about 50 percent more than second-class. The difference in comfort is usually minimal — it’s not like first versus coach on a plane. The vast majority of Europeans don’t travel in first class unless someone else is paying for it.

06 | PICNICS SAVE MONEY. Ten dollars buy a fine picnic lunch for two anywhere in Europe. Stock your hotel room with drinks and munchies upon arrival. You can pass train rides enjoyably over a picnic meal. Many grocery stores have elegant deli sections. Know the metric system for buying produce. In Italy 100 grams (about a quarter pound) is a unit in itself called an etto.

19 | BUSES, WHILE OFTEN SLOWER, ARE CHEAPER THAN TRAINS—especially in Britain, home of Europe’s most expensive train system. For instance, traveling from London to Edinburgh could cost $145 by train or only $45 by bus.

07 | EAT WITH THE SEASON. Germans go crazy for the white asparagus. Italians lap up the porcini mushrooms. And Spaniards gobble their snails (caracoles) — but only when waiters announce that they’re fresh today. You’ll get more taste for less money throughout Europe by ordering what’s in season.

20 | GROUPS SAVE BY DRIVING. Four people sharing a car generally travel much cheaper than four individuals buying four railpasses. And don’t worry about gas costs. Even at $6 a gallon, you’ll find cars get great mileage and distances between sights are short. A single two-hour train ticket can cost you the price of a full tank of gas.

08 | USE A GUIDEBOOK. Guidebooks are $20 tools for $3,000 experiences. Saving money by not buying one is penny-wise and pound-foolish. An up-todate guidebook pays for itself on your first day in Europe.

21 | PARK CAREFULLY. Thieves recognize and target tourist cars. Judge the safety of a lot by how it twinkles. Broken glass means thieves like this spot. Paying to park in a garage with an attendant can be a good investment.

09 | USE ATMS RATHER THAN TRAVELERS CHECKS. You’ll get your cash cheaper and faster. While ATMs give the best possible rates, they do come with transaction fees. Minimize these fees by making fewer and larger withdrawals. Store the cash safely in your money belt.

22 | IN MANY NORTHERN COUNTRIES, TRAIN-TICKET HOLDERS GET DISCOUNTS ON BIKES RENTED AT THE STATION. And in many cases you can rent a bike in one town and drop it at another for free.

10 | STAY IN TOUCH CHEAPLY BY DIALING DIRECT. International phone cards with PIN numbers are sold at newsstands throughout Europe. They offer calls to the US for ten cents a minute — a huge savings over the $3/minute rates offered by the big American services. 11 |

CARS ARE WORTHLESS AND COSTLY HEADACHES IN BIG CITIES. Pick up your rental car after the first big city and drop it off before the final big city of your trip. Paying $20 a day to store a $40 a day car while touring a city is an expensive mistake.

12 | DO YOUR SHOPPING MOSTLY IN THE CHEAPER COUNTRIES WHERE GIFTS ARE MORE INTERESTING AND YOUR SHOPPING DOLLAR STRETCHES THE FARTHEST. The difference is huge: For the cost of a pewter Viking ship in Oslo, you can buy an actual boat in Turkey.

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23 | PAY WITH CASH, NOT CREDIT CARDS. While credit cards get you a good exchange rate, many places offering Europe’s best deals —from craft shops to bed & breakfasts— accept only cash. 24 | WHEN CHANGING CASH, AVOID EXCHANGE BUREAUS THAT DON’T SHOW BOTH THE BUYING AND SELLING RATE. By seeing both rates you can derive the profit margin — which should be within 5 percent. Places showing only the selling rate are hiding something... their profit margin. 25 | WEAR A MONEY BELT. You’ll save money by not losing it. Thieves target Americans not because they’re mean but because they’re smart. They know we’re the ones with the good stuff in our purses and wallets. Assume beggars are pickpockets. Be wary of commotions in crowds and fake police who ask to see your wallet. When you know the scams, they’re almost entertaining.

BUDGETING

26 | STUDENTS, FAMILIES, AND SENIORS SHOULD ASK FOR DISCOUNTS. But be warned: Because the US doesn’t reciprocate, many countries don’t give their standard senior citizen discounts to Americans. 27 | STUDENTS, FAMILIES, AND SENIORS SHOULD ASK FOR DISCOUNTS. But be warned: Because the US doesn’t reciprocate, many countries don’t give their standard senior citizen discounts to Americans. 28 | IN ANY TRANSACTION, UNDERSTAND ALL FEES AND EXPENSES. Ask to have bills itemized. Assume you’ll be short-changed. Always ask how much. Do your own arithmetic and don’t let the cashier rush you. Smile but be savvy. You’ll save lots of money. 29 | BUY YOUR MAPS IN EUROPE AT HALF THE PRICE YOU’D PAY IN AMERICA. And you’ll find a wider selection. 30 | TRAVEL WITH A PARTNER TO SHARE AND SAVE. A single hotel room often costs nearly the same as a double. And by splitting taxis, chores, guidebooks, and picnics couples save both time and money.

50 THRIFTY TRAVEL TIPS

31 | KNOW YOUR HOTEL’S CANCELLATION POLICY AND KEEP TRACK OF WHAT YOU RESERVED. No shows are generally charged one night. If you won’t make it, cancel long in advance. Reconfirm all hotel reservations two days in advance. Even a fine hotel can mess up a booking. Arriving and finding no room can become a huge and costly headache.

32 | COMMUNICATE ONLINE RATHER THAN BY MAILING POSTCARDS. For the cost of a postcard and a stamp you can be online in a cybercafé for about 15 minutes. Many libraries, hotels and hostels offer free Internet access. 33 | EUROPE’S 2,000 HOSTELS OFFER COUNTLESS CHEAP DORM BEDS. A hostel membership pays for itself in four nights. And it’s not limited to youths. In fact, those over 55 get a discount on a hostel card. Using the hostel’s kitchen, you can cook for the price of groceries — a great savings for traveling families. 34 | TAKE ADVANTAGE OF DEPARTMENT STORES ANYWHERE IN EUROPE FOR CHEAP FOLK ART, SOUVENIRS, AND POST CARDS. Local shoppers eat cheaply at department store cafeterias and restaurants. Savvy travelers can too.

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35 | WHILE NOTORIOUS FOR RIPPING OFF TOURISTS, FLEA MARKETS CAN OFFER SOME GREAT DEALS. Time to haggle! 36 | CONSIDER USING A BUDGET AIRLINE TO CONNECT DISTANT CITIES. Europe’s highly competitive no-frills airlines — such as Ryanair and Virgin Air — can often get you from one city to another faster and cheaper than the train. You generally book the flights yourself by phone or on the Web. Beware though: Cheap airlines often use small airports located far from town, which can cost a little extra time and money. 37 | HIKE IN THE ALPS. Even if you pay for a lift ticket to get you quickly into the high country, the glories of the Alps are one of Europe’s great values. The Alps are littered with helicopter-supplied mountain huts offering cheap beds and menu prices that don’t go up with the altitude. 38 | AVOID TRAVEL AGENT AND TOURIST OFFICE ROOM-FINDING SERVICES. They charge a fee and generally offer only the highest-priced rooms with no discounts. For the best accommodations values, use a guidebook, shop around, and go direct.

BUDGETING

39 | FIND ROOMS ON THE FLY, AND CHECK BUSINESS HOTELS FOR OFF-PEAK DEALS. Brussels and the Scandinavian capitals, which cater to business travelers, offer deep discounts to travelers who arrive without reservations when business traffic is slow. During summer and weekends year-round, you can get a fancy business hotel room at a cheap one-star hotel price. It’s not unusual to score a $300 double for $100. 40 | THROUGHOUT EUROPE, BUDGET CHAIN HOTELS RENT ROOMS AT B&B PRICES. Since these cookie-cutter rooms cost the same for singles, couples, or even a family of four, they offer the greatest savings for traveling families. 41 | BE SMART ABOUT HOTEL CHOICES. A three-star place (with room service and a 24-hour reception desk) is a bad value for a budget traveler who’s satisfied with one-star services. Lavish lobbies can hide crummy rooms. See, smell, and hear the room before accepting it. If you’re interested in sleeping, choosing a view room overlooking a noisy square is a mistake. Opting for the shower and toilet down the hall can save you $30 a night. 42 | ASK FOR A DEAL ON YOUR HOTEL ROOM. You’ll have the best chance of getting a discount if business is slow. Go direct, offer to pay in cash, or stay at least three nights. 43 | PACK THE ROOM. The more people you put in a hotel room, the cheaper it gets per person. A quad is only a little more expensive than a double. 44 | AVOID HOTEL BREAKFASTS. While convenient, these are rarely a good value. If breakfast is optional, increase the character and lower the price by joining the local crowd at the corner café for your coffee and croissant.

45 | THROUGHOUT SOUTHERN EUROPE, DRINKS ARE CHEAPER AT THE BAR THAN AT A TABLE. The table price can be a great value if you’ll linger and enjoy the view. But those just tossing down a quick drink do it at the bar for about half price. 46 | EVERY COUNTRY HAS EARLY BIRD AND “BLUE PLATE” SPECIALS. Know the lingo, learn your options, and you can dine well with savvy locals anywhere in Europe for under $15.

SECOND-CLASS TRAIN CARS GET THERE JUST AS FAST AS FIRST-CLASS ONES. Throughout Europe first-class tickets cost about 50 percent more than second-class. The difference in comfort is usually minimal — it’s not like first versus coach on a plane. The vast majority of Europeans don’t travel in first class unless someone else is paying for it.

47 | DON’T OVERTIP. Only Americans tip 15 to 20 percent in Europe. We even tip when it’s already included or not expected. Ask locals (who are customers rather than employees of a restaurant) for advice. 48 | TO SAVE MONEY IN RESTAURANTS, COUPLES CAN ORDER A SIDE SALAD AND SPLIT AN ENTREE. To save more, request tap water instead of mineral water, drink the house wine, and skip desserts. 49 | MAKE THE MOST OF PUBLIC TRANSIT. Many single tickets are actually good for round-trip, transfers, or an hour of travel. Three rides generally cost more than a day pass. Airports almost always have cheap and convenient public transit connections to the town center. 50 | MUSEUM PASSES CAN SAVE TIME AND MONEY. The Paris Museum pass, for example, pays for itself in three visits and saves you hours by letting you skip the long lines and scoot right into each sight. Also, with some passes, you’ll pop painlessly into sights that might otherwise not be worth the expense.

50 THRIFTY TRAVEL TIPS

12 TIPS FOR AUTOMATIC BILL PAYING

2. 3

WRITTEN BY

Adrienne Samuels-Gibbs

PUBLISHER

CreditCards.com

#AutoPay #SafeBudgeting DATE

September 2008

12 TIPS FOR AUTOMATIC BILL PAYING FOLLOW THESE TIPS BEFORE SIGNING UP

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If managed well, using your credit card or your online bank account to pay your bills online is a great idea that could manifest in anything from free plane tickets to actual cash back rewards. The upside to online bill pay is that you are more likely to pay your bills on time. But this convenience can have a dark side in that it sometimes breeds financial laziness, says Bruce McClary, a certified financial specialist with the Virginia-based Clear Point Financial Solutions agency.

found that consumers are choosing electronic payment methods over everything else, with cash and checks only accounting for 45 percent of consumers’ monthly payments in 2005, down from 57 percent in 2001 and 49 percent in 2003.

”You still have the obligation to make sure that everything is accurate because nobody is checking for you,” says McClary. “We see a lot of people get into serious trouble because they have 20 different accounts they are managing and they’re trying to set up automatic pay. They end up falling behind on two or three or four of them and their credit is damaged through the oversight.”

As more people discover the ease of paying their magazine subscriptions, utility and insurance bills and mortgages online, it is important to be vigilant at monitoring the transactions and to take note of ever changing due dates and minimum payments. Why? Because the ease of paying your electric bill, for example, online -- but then getting hit with a late fee -- can quickly erase any of the “perks” you could have received from any rewards program attached to your credit card (if paying via credit card), as well as possibly dinging your credit and ratcheting up what you originally owed.

According to a 2007 Consumer Bill Payment Survey released by Harris Interactive and The Marketing Workshop, around 74 percent of Americans pay at least one bill online. The American Bankers Association also

Here’s what the experts have to say about the various forms of online and auto bill-pay, ranging from paying everything with your credit cards online to using your bank’s online system to pay all the credit card bills.

15 TIPS FOR AUTOMATIC BILL PAYING

AUTO PAY RULES OF THE ROAD 1 | Is it free? Some banks and credit card issuers charge for automatic bill pay. Some don’t. Do your research to find the right one for you. 2 | If paying your bills with a credit card, pay off your balance every month. Don’t be afraid to use your credit card as the auto pay option for your bills—just be sure to pay off that credit card bill on time every month so as not to rack up your balance and any interest on that balance. If you sign up for a rewards program with your credit card and expect points (or miles) to accrue as you pay your bills, be sure to read the fine print as automatic bill payments don’t always qualify for these promotions.

3 | Check due dates every month. Always check your paper or electronic bill and check your due date and minimum payment. Then be sure to reconcile what you think you paid out with what your credit card company or bank has actually paid out. “You always want to reconcile and make sure that what your account is saying is accurate,” says Monica Beaupre, manager of public affairs for AMEX. 4 | Keep informed. Stay on top of memberships that require you to use a checking account or credit card for automatic payment, such as gyms. If you quit, be sure to tell your credit card issuer or bank representative. Some athletic clubs require a 30-day notice of a membership cancellation before the billing stops.

YOU’RE IN CHARGE. IF YOU CANCEL A MEMBERSHIP OR A SUBSCRIPTION, REMEMBER TO CHECK YOUR STATEMENTS AND INFORM THE BANK IMMEDIATELY IF THE CHARGE STILL APPEARS ON YOUR CREDIT CARD OR THE MONEY CONTINUES TO BE DRAWN FROM YOUR ACCOUNT,” SAYS PAM GIRARDO, A SPOKESWOMAN FROM CAPITAL ONE, IN AN E-MAILED STATEMENT.

5 | Take your time. Don’t rush to set up auto-payments with a new merchant, bank or credit card. Take a few months to see if you like the services, if it’s a legitimate company and if you are comfortable allowing the company to have access to your account numbers. You may not want to set up automatic payments right away,” says Allison Brown, Senior Attorney for the FTC’s division of financial practices. You might want to sign up for monthly movie theatre debits or monthly credit charges to pay for your monthly massages— but hold off for a few months. The time you spend waiting -- and paying your bill via old-fashioned checks -- lets you know if you like the services provided and lets you know the company’s level of professionalism. MORE GREAT TIPS & TRICKS ON-LINE www.creditcards.com/credit-card-news

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6 | Know your rights. According to the Fair Credit Billing Act, if you dispute a charge on your card the card issuer is obligated to investigate or remove the charge. (That means that if you canceled your gym membership and the gym refuses to stop billing you, and your credit card refuses to stop paying that gym bill, you can take your argument to a higher power.) 7 | Check and double-check. Don’t set up a automatic monthly payment schedule for your credit cards without also scheduling your own monthly viewing of due dates for each bill. Unlike public utilities or mortgage lenders, credit card issuers might change your due dates, which may make one of your 15th-of-every-month payments a late payment. Says ClearPoint’s McClary: “These credit card companies issue their bills on cycle dates and from month to month the cycle date may change.” 8 | Keep a paper or electronic trail. Sign up for electronic bills from billers, print them out and save them, or be sure to look at and file your paper statements. This way, if there are any discrepancies down the road, you have a paper or e-mail trail to follow. 9 | Protect your identity. To prevent fraud, don’t use easy-to-guess passwords to access your bill pay account, such as your spouse’s name, your birthday or any other obvious bit of information. Also, change your passwords regularly.

ALSO, BEWARE OF SPYWARE OR KEY-LOGGING SOFTWARE THAT CAN BE INSTALLED ON BOTH YOUR PRIVATE COMPUTER AND ON PUBLIC COMPUTERS. THE SOFTWARE CAN RECORD YOUR EVERY BILL-PAYING MOVE, GRANTING THE “SPY” INSTANT ACCESS TO YOUR PASSWORDS AND ACCOUNTS. (SOME KEY-LOGGING SOFTWARE CAN EVEN BE INSTALLED REMOTELY, SO IT DOESN’T MATTER IF THE PERSON HAS ACCESS TO YOUR HOME.) FOR YOUR PERSONAL COMPUTER, BE SURE TO RUN ANTI-VIRUS SOFTWARE REGULARLY TO FIND AND DESTROY SPYWARE. SOME SPECIALISTS SAY YOU SHOULD NEVER USE PUBLIC COMPUTERS TO ACCESS YOUR BILL PAY ACCOUNTS.)

10 | Is the bill-pay website secure? Check the bill pay website to see if it is “encrypted.” If the site uses Secure Socket Layer (SSL) technology, which encrypts your personal information, you should see a locked padlock image as well as an “s” after the URL addresses on the pages that contain your personal information. 11 | Be accurate. Be sure to type in the correct spelling of the Web address for your bank or credit card issuer. Scam artists often make a bundle off of stealing information when you accidentally visit the “wrong” (i.e. phony) site and enter your personal information. 12 | Log out. After paying a bill online, make sure that you use the “Log Out button” when you are finished. Then close your browser completely. This ensures that no one can use the computer after you and pull up your account information.

15 TIPS FOR AUTOMATIC BILL PAYING

DIVERSIFY di路ver路si路fy 1|

to make diverse : give variety to

to balance (as an investment portfolio) defensively by dividing funds among securities of different industries or of different classes

to increase the variety of the products of

A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique contends that a portfolio of different kinds of investments will, on average, yield higher returns and pose a lower risk than any individual investment found within the portfolio. Diversification strives to smooth out unsystematic risk events in a portfolio so that the positive performance of some investments will neutralize the negative performance of others. Therefore, the benefits of diversification will hold only if the securities in the portfolio are not perfectly correlated.

LEARN MORE ABOUT DIVERSIFICATION AT FIDELITY ON-LINE! https://www.fidelity.com/viewpoints/guide-to-diversification

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s Yea r Wo rs

s Yea r t5 Bes

Mo nt t 12 Wo rs

Mo nt t 12 Bes

-0.37

17.24

-17.67

31.06

-6.18

23.14

-40.64

76.57

7.98 8.97

109.55

-52.92

27.27

-10.43

9.64

136.07

-60.78

31.91

-13.78

60% 25%

15%

AGGRESSIVE GROWTH

21%

25%

GROWTH

49%

15%

35%

10%

BALANCED

40%

30%

14%

6.01

CONSERVATIVE

50%

Ave ra

annual return percentage

FUNDAMENTALS

EXAMPLES OF DIVERSIFICATION

U.S. Stock

Bonds

Foreign Stock

Short-term Investments

Data Source: Ibbotson Associates, 2015 (1926â&#x20AC;&#x201C;2014). Past performance is no guarantee of future results. Returns include the reinvestment of dividends and other earnings. This chart is for illustrative purposes only and does not represent actual or implied performance of any investment option.

DIVERSIFICATION | DEFINED

CHANGING COUNTER PRODUCTIVE HABITS TO SAVE CASH 82

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SAVING & SPENDING

CHANGING COUNTER PRODUCTIVE HABITS TO SAVE CASH

2.4

WRITTEN BY

Vanessa McGrady

PUBLISHER

Forbes — Personal Finance

Nikki Pierce, 33, a Los Angeles actress, felt like she couldn’t hold on hard enough to each penny. The $550 she earned each week from her main gigs as a deli clerk and Lyft driver disappeared as fast as it came in— sometimes faster—on rent, gas, bills, dining out, a debt collection agency, and child support for her 12-year-old daughter, who lives primarily with her father and stepmother in a better school district. It finally came to a head when she realized that she was spending way too much time and effort nickel-and-diming herself to death. “I was SO tired of feeling out of control of my finances. I am in my 30’s, watching my friends back home get married and have babies and second babies and purchasing homes, and I am still renting, working odd jobs, and auditioning as much as possible. I regularly feel my line of work, where I am, doesn’t have job security, so I wanted to make sure I had financial security so I didn’t go completely crazy.” Pierce knew she needed to make some changes, and one sunny Saturday morning, sat down and took a hard look at how she was earning, spending, saving and wasting money.

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#SavingMindset #Dllrz DATE

September 2015

SHE WAS OVER-SHOPPING FOR GROCERIES: “I took note of what I was throwing away, and made a conscious effort when going to the grocery store to make a ‘do not buy’ list. I saved a lot of money that way, as I was buying things I thought I needed, but was really just tossing.” She was shocked to see that she was wasting about $30 on extra fruits, salads, and vegetables every time she went to the store. SHE WAS SPENDING TOO MUCH GOING OUT: Pierce mitigated her “on the go” situation by being better prepared. “I made simple things to eat, and took them with me, and kept my home stocked with beer and wine so I wouldn’t be tempted to spend triple the amount at a bar.” She stopped socializing over dinner and drinks, and saw her friends in other venues where she wouldn’t need to spend so much.

SO, SHE SHIFTED HER MINDSET: Pierce did an about-face, adopting a prosperity mindset. “I rerouted my thinking to focus on earned income rather than pinching pennies,” she said. “I had a few really rough months, as three of my good friends were getting married over the course of three months. All were out of town. I was constantly wondering, ‘why am I so broke?’ but seeing that 60% of my funds were going to travel really made me feel more stable. I was able to see it was a temporary bind, and not going to be the case forever, which made me feel a lot better.”

SAVING & SPENDING

HERE’S WHERE SHE REALIZED SHE WAS BEING COUNTER-PRODUCTIVE, AND WHAT SHE DID ABOUT IT:

She also employed some helpful tools and rules, including Mint to track her money flow. She set up automatic payments for her debts and student loans. Pierce’s income includes tips and it varies from week to week. “I keep track of the money each shift, then add it up at the end of the week to make sure I am making enough to cover bills. If I make a lot extra, I will usually put some in savings, and treat myself to something nice as well,” she said.

NIKKI PIERCE MADE A SERIOUS MIND-SHIFT ABOUT MONEY, AND IT’S WORKING FOR HER. CASH WAS FLOWING TOO FREELY: “I was spending a lot of time worrying about cheaper gas, and would keep cash on me in order to pay 10 cents less, but when I had cash, I would spend it more readily, and be less likely to know where it was going,” she said. “I made an effort to immediately deposit the cash I made into the bank, so I wasn’t tempted to spend it.” SHE WASN’T SAVING: She worked out a deal that instead of sending monthly cash to her daughter’s father, who is in a dual-income household, she’d instead funnel the money into a savings account for her daughter to pay directly for things as needed, such as dance lessons. SHE WAS MISSING OPPORTUNITIES: She made a conscious effort to pick up more shifts at work, and if she didn’t have an audition the next day, she’d ask people working if they needed the day off, just in case, and let it be known if they needed shift coverage, she was their woman. She got into a work-study program for her improv class, saving about $400 every two months on tuition. SHE WASN’T MAXIMIZING HER EARNING POWER: She looked for holes in her schedule and started driving Lyft a morning or two each week. She also turned on her app on her way home from work, so she could make more during rush hour. When she was driving across town after an audition, she’d make a few bucks by picking up a fare on her way home. “I also am a really great nanny, and finally put my name in the hat of an online group for actors who are also sitters. I was connected with a dad, who uses me for six to nine hours a week now, which is flexible, as he’s an actor as well.”

BUILDING HER FUTURE For the first time in 10 years, Pierce has a credit card, paying off the full balance immediately and keeping her purchases on it minimal. She was told by her bank that within six months, if she did well, “I could probably be approved for a new card, which would enable me to get cash back rewards on purchases like groceries and gas.” In the few months she made the switch, she’s bumped up her earnings by about $400 a month. Any acting money she makes goes directly into savings. And finally, she’s got her eyes on another prize: Her own wedding next spring. “I am using all my babysitting money as savings for that.”

CHECK OUT MORE GREAT MONEY SAVINGS IDEAS ON-LINE www.Dllrz.com

CHANGING COUNTER PRODUCTIVE HABITS TO SAVE CASH

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BECOME ONE WITH YOUR FINANCES WITH MONEYFIED 速

INTRODUCING A NEW WAY TO CONNECT WITH YOUR MONEY GET THE APP TO LEARN MORE | VISIT DLLRZ IN THE APP STORE OR WWW.DLLRZ.COM

TITLE OF ARTICLE

6 DANGER SIGNS OF EMOTIONAL SPENDING

2.6

WRITTEN BY

PUBLISHER

Sabah Karimi

U.S. News — Money

#SmartSpending #Dllrz DATE

May 2014

6 DANGER SIGNS OF EMOTIONAL SPENDING 88

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SAVING & SPENDING

6 DANGER SIGNS OF EMOTIONAL SPENDING

RETAIL THERAPY CAN ACTUALLY BE GOOD FOR YOU BECAUSE IT WILL BOOST YOUR MOOD AND EVEN REDUCE ANXIETY... HOWEVER, ANY TYPE OF SHOPPING EXCURSION PROMPTED BY EMOTIONS CAN QUICKLY TURN INTO A PROBLEM.

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A stressful week at work, difficult interpersonal relationships or even financial stress could put you on course for a retail therapy session—or two. Many experts agree that retail therapy can actually be good for you because it will boost your mood and even reduce anxiety. However, any type of shopping excursion prompted by emotions can quickly turn into a problem. When you start spending beyond your means and buying things you don't need, you may be fueling a shopping addiction instead. Watch out for these six warning signs of an oncoming emotional spending spree.

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SAVING & SPENDING

1 | Seeking immediate gratification. When stress levels run high and you're feeling anxious, restless or even irritable, you might seek out pleasure or satisfaction just to escape those negative feelings. Shopping can fulfill this need for satisfaction, but only temporarily. As soon as you're done with the purchase and head home with your new items, you may end up with a case of buyer's remorse and still have to deal with the situation that prompted the purchase. Instead of making an irrational buying decision in the heat of the moment, give yourself at least a week or two to think about the purchase so that you can review your budget, comparison shop and make the most informed decision. 2 | Justifying the purchase with 'I deserve it.' Telling yourself that you deserve to splurge on something may be a sign you need to give your self-esteem a boost. Spending money is one way to take care of yourself, but the need to spend may be rooted in emotions. If you don't address the emotions or feelings of lack in your life, you could be setting yourself up for a round of emotional spending. 3 | Spending because of financial woes. If you have just received some bad financial news or are still struggling to keep your budget in order, you might spend more money than planned to avoid the situation—only to make your financial standing that much worse. Whether you turn to credit cards or cash to fuel your shopping spree, coping with financial distress by spending is a surefire sign that emotions need to be addressed first. Take some time to review your budget and financial standing, determine what you actually need to buy and consider whether you can afford to splurge before you head out the door or click the checkout button. 4 | Shopping to decompress from stress. Some people turn to food or alcohol during stressful times; emotional spenders go shopping. If you're dealing with several stress-filled days or recovering from a stressful life event, steer clear of the mall and online stores so that you can cope with the situation in a healthier way. You need to make clear-headed decisions during stressful times, and shopping will only serve as an escape. Call a supportive friend, go to the gym or take a relaxing bath to decompress from stress without serious financial ramifications. 5 | Competing with friends, family members or co-workers. When buying new things or collecting high-end items to outdo other people becomes a part of your lifestyle, you may be on a perpetual shopping high in an effort to feel powerful. Striving to always have the best of the best – and making an effort to show off your recent acquisitions to friends, family members and co-workers – is a sign your spending habits are fueled by emotions and not necessarily based on need. When you're trying to maintain a certain image and always seem to have the urge to splurge, take a step back and consider what is really fueling that desire to spend. 6 | Buying and returning more items than you keep. For the casual shopper, returning an item is only necessary when it's the wrong size, wrong color or just isn't what you needed. For an emotional spender, buying and returning several items at a time is a way to exercise some damage control, but it still perpetuates the shopping cycle. While you may not end up paying for the items you pick up on that next shopping haul, you will have spent a significant amount of time engaged in the shopping process to escape from emotions and feelings. If you end up missing the return policy date or pay restocking fees, your spending sprees could end up costing you both time and money.

6 DANGER SIGNS OF EMOTIONAL SPENDING

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BEST INTEREST.

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BENJAMIN FRANKLIN

BUDGETING

IF A MAN EMPTIES HIS PURSE INTO HIS HEAD, NO MAN CAN TAKE IT AWAY FROM HIM. AN INVESTMENT IN KNOWLEDGE ALWAYS PAYS THE

TITLE OF ARTICLE

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WHY SAVING NOW MATTERS FOR MILLENNIALS WHY SAVING (RIGHT) NOW MATTERS FOR MILLENNIALS

INVESTING

THE SINGLE WORST PIECE OF MONEY ADVICE A TWENTYSOMETHING WILL EVER RECEIVE

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IF YOU HAVE SAVINGS IN YOUR TWENTIES—ANY SAVINGS AT ALL—YOU ARE NOT DOING SOMETHING WRONG. IN FACT, YOU ARE DOING SOMETHING VERY, VERY RIGHT.

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THE SINGLE WORST PIECE OF MONEY ADVICE WRITTEN BY

Maggie McGrath

PUBLISHER

Forbes — Investing

#InvestInYourFuture #KnowTheFacts DATE

INVESTING

3.1

September 2015

It’s no secret that there’s a lot of really bad “advice” on the internet. If you dive into the deepest corners of the web, you can find some truly deplorable stuff. But I think I just found something that takes the cake. It’s a new piece on EliteDaily (yes, I know, consider the source), and its headline reads, “If You Have Savings In Your 20’s, You’re Doing Something Wrong.” It only gets worse from there. While the author (who has not yet responded to a request to comment for this story) is presumably trying to get twenty-something’s to relax about their financial states and just enjoy life, the end result is something akin to financial malpractice. “People who are saving in their 20’s are people who don’t set their sights high. They’ve already dropped out of the game and settled for the minor leagues,” she writes. “Your 20’s are not the time to save; they’re the time to gamble. $200 a month isn’t going to make the dent that a $60,000 pay raise will after spending all those nights out networking.” Other quips include: “Don’t waste your youth worrying about expenses when you should be worrying about experiences” and “when you care about your 401k, your life is just ‘k.’” There’s a lot to address here, but let’s start at the top. If you have savings in your twenties—any savings at all—you are not doing something wrong. In fact, you are doing something very, very right. If you’re saving anything at all, you’re ahead of a large portion of your generation. A recent Consumer Federation of America survey found that just 56% of adults ages 18 to 34 are saving at least 5% of their income; other surveys have shown that as little as 17% of Millennials feel they’re on track to save what they’ll need in retirement. And heck, forget retirement (for now): if you have even the tiniest bit of savings, you’re doing better than nearly a third of the country—this study found that 29% of Americans have no emergency savings at all. But if you are a part of that 29%, don’t beat yourself up. Between rent, utilities, debt payments and general cost-of-living expenses, it can be hard to find extra money to save at the end of each month. (A new study from the Investor Protection Institute found that 34% of Millennials have seen their savings ability impacted by their student loans.) The key is to cut yourself a break and start small. “For most people, if they haven’t been able to save anything, a dollar is better than zero, ” says Chantel Bonneau, a certified financial planner at Northwestern Mutual (and, as it happens, a Millennial herself, so she understands the demands on our wallets). Those dollars eventually add up, and watching savings grow can be motivation to save even more.

WHY SAVING (RIGHT) NOW MATTERS FOR MILLENNIALS

AS LITTLE AS 17% OF MILLENNIALS FEEL THEY’RE ON TRACK TO SAVE WHAT THEY’LL NEED IN RETIREMENT. AND HELL, FORGET RETIREMENT: IF YOU HAVE EVEN THE TINIEST BIT OF SAVINGS, YOU’RE DOING BETTER THAN NEARLY A THIRD OF THE COUNTRY—29% OF AMERICANS HAVE NO EMERGENCY SAVINGS AT ALL. DLLRZ.COM

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A RECENT CONSUMER FEDERATION OF AMERICA SURVEY FOUND THAT JUST 56% OF ADULTS AGES 18 TO 34 ARE SAVING AT LEAST 5% OF THEIR INCOME. OTHER SURVEYS HAVE SHOWN THAT AS LITTLE AS 17% OF MILLENNIALS FEEL THEIR ON TRACK TO SAVE WHAT THEY’LL NEED FOR RETIREMENT.

WHY SAVING (RIGHT) NOW MATTERS FOR MILLENNIALS

While it’s beautiful and lovely to imagine a future in which nothing goes wrong—the car never breaks down, your health remains pristine and your dog never inhales a three-pound bag of chocolate—the cruel fact of life is that stuff happens. And if you have an emergency cushion to fall back on, recovering from the financial impact of these emergencies will be far easier than if you charge the $1,000 bill for your new transmission to your 19%-APR credit card. Planning for these emergencies and building your savings doesn’t mean you’re not “setting your sights high”; it means that you’re avoiding hundreds upon hundreds of dollars in interest charges. (Literally: that $1,000 charged to the 19% APR credit card would take 115 months to pay off—if you’re only making the minimum $25 per-month payment, costing $989.65 in interest, nearly the full amount you originally charged to the card.)

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As for the claim that $200 saved per month is a drop in the bucket that is a $60,000 pay raise: well, sure, $200 is less than $60,000. But this conveniently overlooks two things. For one, wages are (and have been) flat. The monthly jobs reports have shown as much, and a survey from the Census Bureau released Wednesday revealed that “real median incomes in 2014 for family households ($68,426) and non-family households ($32,047) did not experience statistically significant changes from the levels in 2013.” For another, this blatantly ignores the fact that if you save $200 every month, the money adds up. After a year, you’d have $2,400. After two years, $4,800. And if you were putting these $200 monthly deposits into a portfolio that is then invested in the market and earning a 6%

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return, you’d have $14,000 in just five years. After 30 years, that figure will have ballooned to more than $200,000. This—the magic of compound interest—is why starting to save in your twenties is so critical: the more time your money has to grow, the more you will earn. As this post explains, if you wait until your mid-thirties to start saving, you will be at a $100,000 disadvantage. Ultimately, the EliteDaily post attempts to impart a Ferris Bueller-ish lesson: “Life moves pretty fast. If you don’t stop and look around, you might miss it.” But what the author either doesn’t know or willfully ignores is the fact that budgets don’t have to mean deprivation and savings aren’t handcuffs. You don’t have to surrender every fun thing in your life in order to build a cash cushion; you just have make a few strategic choices so that your monthly spend is less than your monthly take. Making some of those strategic choices now can mean financial freedom later on, too. And don’t just take it from me. Take it from this couple, who saved 71% of their income so they can retire at the age of 33. Or these roommates, who drastically cut their spending for one year and are now $55,000 richer. Or this couple, who saved $40,000 in two years and are now traveling around the world. So maybe you should spend your youth worrying about expenses—so that you don’t have to worry about experiences later on.

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WHY SAVING (RIGHT) NOW MATTERS FOR MILLENNIALS

INVESTING IN YOUR FUTURE INVESTING 101

Retirement typically isn’t on the minds of many young adults—after all, it’s a long way off, right? Depending on how old you are, retirement may be 30-40 years down the road, but that doesn’t mean you should wait to start thinking about how you will plan for your retirement. Unfortunately, the millennial generation may not have the same retirement security that our parents once did—looking forward to Social Security to one day pay us back what we paid in. In fact, the 2014 report from the trustees of the Social Security program “estimated that the trust fund reserves will run out in 2034” (1). Young adults shouldn’t fear that Social Security will cease to exist, but it will most likely be a very different kind of program in the future. It’s important to understand retirement, and how investments play a role in preparing your financial future. Without understanding how to properly prepare, your retirement could be more than fifty years in the future, and you may be forced to work until you simply can’t anymore.

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Dllrz sat down with expert financial advisor Daren, to discuss general topics about retirement, investing, and steps young adults should be taking to prepare themselves for their tomorrow. Financial guidance is often specific to each individual person, so we went over very general guidelines of investment opportunities. If you want to learn and prepare for your financial future, we encourage you to find a financial advisor in your area who can help you with an individualized approach to getting you on the right track for your future.

RESCOURCE 1 | Bankrate.com — Retirement “Will Social Secuirty be there when you need it?” by Sheyna Steiner

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INVESTING IN YOUR FUTURE

2. 3

WRITTEN BY

Danielle Schneider

#Investing #FinancialFuture PUBLISHER

Dllrz Magazine — www.Dllrz.com

DATE

September 2015

THE ROLE OF A FINANCIAL ADVISOR “My job as a financial advisor is to give advice that is particular to one person,” Daren explains, “that advice can be totally different from person to person.” This tailored approach ensures that your money is going where it will make the most sense for you. A financial advisor takes multiple variables into consideration, such as the money you have to invest and your risk level, to create a diversified portfolio. There are a ton of options when it comes to investments, and they carry with them different risks and rewards. For example, the stock market often yields high returns, but can be very risky. Likewise, a bond is a lot less risky, but yields slower and minor returns. Generally speaking, Daren encourages you to open a retirement account the minute you start making at least $5,500 a year. Open a Roth IRA and start saving away your money. In addition to retirement accounts, there are several investment types you should be aware of, which typically fall into one of two categories: loan or own. “You can either loan your money to someone, or you can own something” Daren explains.

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A bond is an example of a loan investment. Bonds build our roads, our schools and our cities. You give your money to an institution, and they pay you an interest rate for the duration the money is borrowed. At the end of the maturity of the bond, you get your money back. Historically and traditionally, bonds have been viewed as being a more secure investment. The downside—it’s a slow growth investment. A CD is another type of loan investment. Similar to a bond, a CD is essentially a loan with a bank—they give your money to someone else in the form of a loan. A CD is also considered a pretty secure investment, but with the disadvantage of slow growth. There are several different types of ownership investments, which include owning a business, home or real estate, stock, etc. Ownership of a business or real estate often has a high entry point, which makes it difficult for a new investor to get into, so stocks can make great own investments for newbies. For example, “if you want to own a business like Starbucks, you can buy stock,” Daren demonstrates. In addition to ownership in a company, you can also buy stocks in real estate. Daren

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goes on to explain that “historically, owning something has paid more, but its higher risk because you can loose principle”—or all of your money. You are less likely to loose all your money with a loan investment, such as a bond. So the question you have to ask yourself is, do you want to loan your money to someone or do you want to own something? Your answer may not be as simple as own or loan. Having both of these types of investments can be beneficial, and help to balance out your portfolio, or collection of investments. You may have heard the term mutual fund before—it is nothing more than a basket of bonds and stocks, or all bonds, or all stocks. A mutual fund is managed by a person that decides what goes in that portfolio for you, so essentially, you own a share of that portfolio. It is a great way to invest because you get diversification. ETF’s, or exchange trade funds, are similar to mutual funds—a basket of bonds, stocks, etc.—but they are not managed by someone. “The core of your portfolio,” Daren explains, “is the diversified good investments you have, made up of mutual funds or ETF’s.” A financial advisor will help you by advising you what to pick, how to pick it, when to pick it, etc. based on your criteria (time investing, risk, etc.).

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Financial Advisor

INVESTING IN YOUR FUTURE

INVESTING

IS YOUR MONEY SUPPORTING YOUR NOW LIFESTYLE, OR IS YOUR MONEY SUPPORTING YOUR FUTURE LIFESTYLE?

DAREN BLONSKI

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OWN

HIGH RISK

STOCKS

When you buy an ownership investment, you own that asset—something that’s expected to increase in value.

REAL ESTATE

HIGH RETURN

BUSINESS

DON’T GET CAUGHT UP IN THE HYPE

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“The problem is that many young adults have been taught to day trade,” Daren explains. The stock market is the first thing we learn about in terms of investing, and so naturally, there lies an automatic association with trading stocks and investment strategy. There are an abundance of different types of investments, and stocks can run on the riskier side, so trading stocks of any kind should be made with the assistance of a financial advisor. To add to young adult’s misconception of the stock market, they are encouraged to buy into the latest and greatest tech company. Daren explains that many young adults aren’t “buying Johnson and Johnson stock—they want to invest in the newest tech company, which leads to a lot of legalized gambling essentially.” So, what should you do? Daren explains that a financial advisor will temper someone’s investment, or likelihood to be risky. They can pull back the reigns if you

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begin getting too overzealous, and balance out your risk which will preserve your investment over time. Another smart move is to utilize the different investments you have available to you. Balance out your portfolio by investing in both high and low risk investments, so that you aren’t putting all your eggs in one basket. As previously stated, a financial advisor can help to temper your risk, and develop a variety of investments that will work for you.

INVESTING

LOAN

LOW RISK

LOW RETURN

Loan investments are when you buy a debt, that gets lended to another, that’s expected to be repaid—sort of like a bank.

BOND

MUTUAL FUND

stocks real estate business

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bond CD

INVESTING IN YOUR FUTURE

RULES OF THE ROAD FOR INVESTING NEWBIES Daren had several key pieces of advice, or “rules of the road”, as he called them for investing in your financial future: start early and pay yourself always. Being a new investor is always intimidating, but it is absolutely critical to your financial future. Your investment of any amount, should begin today. “The best tool a new investor has is to save”, Daren explains. The more money you have, the easier and faster it will grow. Daren emphasized the importance of paying yourself— meaning pay into your future self—and into your retirement or investments that will provide you with income later on. With these ideas in mind, it’s important to begin investing your money where it will do the most work. Although individual financial goals and situations vary, there are obvious opportunities to begin taking advantage of right away, including retirement accounts such as a 401k or Roth IRA. If your employer provides a retirement benefit to you, Daren suggests taking advantage of these. In fact, Daren suggests that “as soon as your have a dollar or start making money, begin putting your money into these right away.” 401k and Roth IRA accounts are intended to grow your money, so the sooner you put your money into them, the sooner they will begin growing. If you can contribute money to your retirement account, 10% is a great place to start—16% is ideal, and if you can pay that percentage into your retirement, you will be in a very good place when it comes time to retire. There are several benefits that come along with contributing to a retirement account, such as a 401k or Roth IRA. Most importantly, your income is automatically transferred into a 401k account before your income is taxed. Pre-tax benefits are huge, because they allow your taxable income to decrease, and therefore you will be taxed on a smaller amount of income. If you’ve ever noticed how much in taxes are taken out of each paycheck, you can understand how beneficial and cost-saving pre-tax retirement saving can be! In addition to pre-tax savings, a

401k offered by your employer may also carry a company-match benefit. If your company offers this, stop what you’re doing and enroll in your company’s 401k match program—it’s basically free money! While 401k’s are offered through your work, a Roth IRA is an independent retirement account that you can open on the side. It works similarly to a 401k, but has some added benefits as well. Check out the comparison between the two on page 128. Investing can be an intimidating and scary step—not only is it something you need to educate yourself about, but you are also taking money out of your income to invest in your future—which can seem pretty far away when you consider you won’t be retiring for another twenty, if not thirty or forty years. You may need to look at your income and expenses to determine the right amount to contribute to your retirement accounts, as well as reassess your lifestyle and spending habits. Daren encourages you to ask yourself: “is your money supporting your now lifestyle, or is your money supporting your future lifestyle?” If your money is supporting your now lifestyle, you most likely aren’t prepared for your financial future. You may need to take another look at your budget, and determine if your money is going where it should. Poor spending habits can be the culprit of spending for “now.” It is easy to get caught up in the need to “keep up with the Jones’s,” but your splurges now can negatively impact your financial standing down the road. If you follow any piece of advice, Daren hopes it is this: “live below your means.” He explains that many young adults are concerned with chasing life and buying toys, instead of saving. If your money is supporting your future lifestyle, you are preparing for a life you will be excited to live after you retire. Creating a balance between the two—now and future— can leave you better prepared for retirement, and prevent frivolous spending on a daily basis. Prepare yourself today for the future you want tomorrow!

$42,000

STILL NOT CONVINCED? CONSIDER THIS!

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Consider two scenarios with the same earned income of $42,000 per year. In scenario one, 10%—or $4,200—is put away into a retirement account, which causes the taxable earned income to drop to $37,800. The drop in taxable income also creates a drop from one tax bracket to the next. Previously, with an annual income of $42,000, you would be in the $40-50k tax bracket—federally taxed at 11.7%. After contributing 10% to your retirement account, your annual income drops, putting you in the $30-40k income tax bracket—federally taxed at only 8.5%. That’s a huge difference and big savings!

10%

RETIREMENT CONTRIBUTION

$4,200

ANNUALLY SAVED

$37,800 8.5%

TAX BRACKET

TAXABLE INCOME

$42,000 11.7%

TAX BRACKET

CHECK OUT WHAT TAX BRACKET YOU ARE IN BY VISITING THE TAX FOUNDATION ONLINE AT: http://taxfoundation.org

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Taxes rates shown are average tax rates for combined federal taxes, 2015

INVESTING

THE EFFICIENT FRONTIER a modern portfolio theory tool that shows investors the best possible return they can expect from their portfolio, given the level of volatility they’re willing to accept.

HIGH RISK/HIGH RETURN

RETURN %

MEDIUM RISK/MEDIUM RETURN

LOW RISK/LOW RETURN

RISK % (STANDARD DEVIATION)

THE EFFICIENT FRONTIER The Efficient Frontier is a set of optimal portfolios that offers the highest expected return for a defined level of risk or the lowest risk for a given level of expected return (2). Portfolios that lie below the efficient frontier are sub-optimal, because they do not provide enough return for the level of risk (2). Portfolios that cluster to the right of the efficient frontier are also sub-optimal, because they have a higher level of risk for the defined rate of return (2). Since the efficient frontier is curved, rather than linear, a key finding of the concept was the benefit of diversification (2). Optimal portfolios that comprise the efficient frontier tend to have a higher degree of diversification than the sub-optimal ones, which are typically less diversified (2).

RESCOURCE 2 | Investopedia.com — Efficient Frontier

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RALPH WALDO EMERSON

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THE ONLY PERSON YOU ARE DESTINED TO BECOME IS THE PERSON YOU DECIDE TO BE.

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TITLE OF ARTICLE

TWO MENTAL ROADBLOCKS THAT KEEP US FROM SAVING PREPARE FOR YOUR FINANCIAL FUTURE 112

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TWO MENTAL ROADBLOCKS THAT KEEP US FROM SAVING

2 MENTAL ROADBLOCKS THAT KEEP US FROM SAVING

2. 3

WRITTEN BY

Richard Eisenberg

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PUBLISHER

Forbes — Personal Finance

#Checking #Checkbook DATE

September 2015

WHY DON’T AMERICANS SAVE MORE FOR RETIREMENT? THE ANSWER ISN’T WHAT YOU THINK. Yes, the familiar reasons account for some of the explanation: many of us are money-crunched (or at least that’s what we tell ourselves) and some employers, especially small ones, don’t offer retirement plans. But 95% of Americans have two mental roadblocks preventing them from saving more, according to new research from a team of retirement analysts. And, these analysts say, if we eliminated them, the level of U.S. retirement wealth could increase by at least 12%—or $2 trillion.

INVESTING

University Of Minnesota Labor Economist

WE WANT TO SAVE, BUT THERE’S THE HASSLE OF ENROLLMENT, SO WE’LL DO IT TOMORROW...

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AARON SOJOURNER

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I’m hoping that once you learn about what economists call these “investor biases,” you’ll see if one or both are problems for you and, if so, you’ll get past them. In layman’s terms, the two biases are procrastinating (known as “present bias”) and an inability to estimate how much saving money today will provide in retirement income (known as “exponential growth bias”).

TWO MENTAL ROADBLOCKS THAT KEEP US FROM SAVING

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THE ANALYSTS FROM THE UNIVERSITY OF MINNESOTA, STANFORD UNIVERSITY, THE LONDON SCHOOL OF ECONOMICS AND CLAREMONT GRADUATE UNIVERSITY WHO SURVEYED 2,300 PEOPLE, ESTIMATE THAT 55% OF AMERICANS HAVE PRESENT BIAS AND 45% HAVE EXPONENTIAL GROWTH BIAS. DLLRZ.COM

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THE TWO BIASES ARE PROCRASTINATING (KNOWN AS “PRESENT BIAS”) AND AN INABILITY TO ESTIMATE HOW MUCH SAVING MONEY TODAY WILL PROVIDE IN RETIREMENT INCOME (KNOWN AS “EXPONENTIAL GROWTH BIAS”).

TWO MENTAL ROADBLOCKS THAT KEEP US FROM SAVING

THE PROCRASTINATING BIAS

WILL GOVERNMENT ADDRESS THIS BIAS

Procrastinating bias is “pernicious,” University of Minnesota labor economist Aaron Sojourner said, presenting his team’s study at the Retirement Research Consortium meeting in Washington, D.C., I recently attended. “Present bias can create procrastination around things that are good for you,” he said. “We want to save, but there’s the hassle of enrollment, so we’ll do it tomorrow.” People who are naïve about their present bias save less than otherwise, said Sojourner, because they trick themselves into thinking they’ll just save more in the future. “It’s always more rewarding to do something that pays off today,” Sojourner told me in an interview after the conference. “Retirement is so far down the road and people don’t want to give up the ability to buy nice things.” I think that’s a bias that many procrastinators can easily overcome if they just allow themselves to think of the future benefit for a little present sacrifice. Employers can help by offering 401(k) automatic enrollment so employees don’t need to remember to sign up to save; today, just 62% of plans offer auto-enrollment today. One study found a 48 percentage point increase in 401(k) participation among newly hired employees and an 11 point increase overall at one large U.S. company over 15 months after adopting auto-enrollment.

Some retirement researchers in the government are well aware of this problem. In 2013, the U.S. Department of Labor proposed a regulation requiring employers include in their 401(k) statements the monthly income that plan participants could expect to receive over their lifetimes. As I wrote previously, it would be like what federal employees see in their Federal Thrift Savings Plan statements. Unfortunately, the proposal is still just talk, even though in an Insured Retirement Institute study of 1,500 workers with 401(k) balances, nine in 10 said they want such a monthly income estimate on their benefit statements. A bipartisan group of Senators and Representatives, however, recently introduced the Lifetime Income Disclosure Act that would essentially require employers to do what the Labor Department proposed. In the meantime, the Labor Department has a free Lifetime Income Calculator on its website to see how much your 401(k) might deliver in monthly income. Sojourner notes that there are many tools online to help understand how savings today will translate into retirement income. “I recommend seeking out those tools and testing different scenarios,” he told me. “A lot of people would be surprised by the answers.”

THE EXPONENTIAL BIAS PROBLEM

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The “exponential bias” is tougher to overcome, because it truly is difficult to figure out how much you’ll ultimately get by saving $x every month for several decades. “A lot of people who have this bias don’t realize it,” Sojourner told me. That’s because many of us have trouble understanding how much investing $100 today will grow, over time. And yet compound interest, Albert Einstein reportedly said, is the greatest invention of all time. When retirement investors are overconfident about much their savings will grow, they tend to save less than they would otherwise, Sojourner said. And for those who underestimate the returns for saving, Sojourner told me, “savings doesn’t seem like a great deal, so they’d rather put the money to other purposes.” DLLRZ.COM

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DISCOVER MORE ABOUT INVESTING & SAVING ON-LINE OR AT DLLRZ.COM http://www.forbes.com

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TWO MENTAL ROADBLOCKS THAT KEEP US FROM SAVING

PREPARING TO BUY YOUR FIRST HOME THINGS EVERY FIRST-TIME HOME BUYER SHOULD KNOW

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PREPARING TO BUY YOUR FIRST HOME

2. 3

WRITTEN BY

Danielle Schneider

PUBLISHER

Dllrz

#FirstTimeHomeBuyer DATE

September 2015

READY TO BUY YOUR FIRST HOME?

SPEAK WITH A LENDER

ENSURE YOUR FINANCES ARE IN CHECK: YOUR CREDIT SCORE & FINANCES ARE GOOD & YOU HAVE A DOWN PAYMENT

GET PRE-APPROVED

FIND A REALTOR

LOOK AT HOMES, HOMES HOMES!

An offer that is not agreed upon requires negotiation or may cause the seller to walk away

SUBMIT AN OFFER

TITLE COMPANY COORDINATES BETWEEN BUYING & SELLING PARTIES

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CONGRATULATIONS! YOU ARE A HOME OWNER

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An approved offer or agreed upon negotiation allows the buyer to move forward into escrow

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SO YOU WANT TO BUY YOUR FIRST HOME?

FIRST THINGS FIRST—TALK TO A LENDER

The large majority of us wish to own our own home one day. Many view home ownership as a major accomplishment, and something that establishes themselves as financially successful. These statements are true—owning your own home is a huge accomplishment and something to take pride in. Additionally, if you are able to purchase your own home, you are most likely on the right foot as far as your finances go. However, as owning a home is such a large responsibility, it is important to be informed with all of the facts before setting out on this venture.

Before you can even begin looking for a home, you need to make sure that you are fully capable of actually purchasing one. This involves getting in touch with your money, including: your credit, spending habits, account of your income, and employment history.

Have you ever heard of the term “house poor”? If you have not properly saved and prepared for expenses involved when buying a home, or you are spending the maximum amount you can afford, you may be setting yourself up to be house poor. This term often refers to “a person who spends a large proportion of his or her total income on home ownership, including mortgage payments, property taxes, maintenance and utilities” (Investopdeia). Someone that is house poor, may put a large amount of their income into their mortgage payment, and have little left over to do extra things they enjoy, such as eating out or vacationing. Additionally, when buying a home, many run into unanticipated expenses, either during the buying process, or even after you are moved into your home. You no longer have a landlord, and all the responsibility—good or bad—falls on you. Although the professionals you work with when buying a home should explain all the expenses and costs with you, it is ultimately your responsibility to be well informed. Luckily, our expert real estate agent, Samantha Dubs, provided us with some key information that she teaches her clients, which prepares them for all aspects of the home purchasing process.

Sam strongly suggests, “work with a lender first.” A lender can review all of your financial history for you, and make recommendations on how you can either improve your financial standing to put you at a better place to buy a home, or help you move forward with the home buying process. The lender will work with you to determine, based on your financial overview, what you qualify for and write up a pre-approval for you to begin your home buying adventure. The reason you take care of this ahead of time, is because you “want to know how much you can spend before your go out and start looking at houses.” Although you may hope to be approved for as much as possible, you really have to take what this means into consideration. The total amount you pay for a home gets broken down into your monthly mortgage payments. Your pre-approval will be based around the number that you feel most comfortable paying every month. Sam explains that “the pre-approval letter is the price point you should be staying under.” You could view it as a max home buying budget. Looking at homes outside of your price point can just be a disappointment, so learn your budget before you begin looking! In addition to narrowing down your price range, a pre-approval letter also adds a level of earnest and preparedness as a buyer. When you go to submit an offer, “a pre-approval letter will make you look like a much more serious buyer,” Sam explains, “most people ask for it now.”

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READY TO START LOOKING

YOU’VE FOUND YOUR HOME!

Once pre-approved, your house hunt can begin, and that’s where your realtor comes into play. Based on your pre-approval, your real estate agent can begin finding listings that meet your criteria. You will want to speak with your realtor about what is important to you in a home. Come up with a list of wants and must haves. Prioritizing these items can speed up the process for you, and bring about things that you must have. Although you should hold strong on your wish list—or must haves—also be willing to compromise, and understand the potential in a property. Sam’s key advice to first time home buyers, is to understand what is a non-negotiable and what is a quick fix. Paint, floor and fixtures are all quick fixtures, and can be updated over the first couple years you’re in the home if necessary. However, major elements to the home, such as square footage, location and number of bedrooms or bathrooms, are major changes that are not easy fixes. As these may be deal breakers for you, also be conscious that this is your first home. Although you should plan to be in the home you buy for several years, it may not be your forever home, and it is very normal to outgrow a space as you and your family grows.

Once you have found the home you would like to call yours, it’s time to submit an offer. An offer is a 10-page written contract that discloses the price the buyer is willing to purchase the home for, as well as contingencies, closing requests, what is and is not included in the purchase, among other details. The offer gets presented to the seller, in which they can then accept the offer, reject the offer or counter back. The sellers response depends on a lot of variables, including how the market is doing and the price of the offer extended in comparison to the price it was put on the market for.

If you are unsure what exactly you are looking for in a home, speak with your real estate agent. They interact with a lot of clients, and can help you narrow down what might be right for you. Better yet, your real estate agent has the ability to search hundreds of homes on the MLS, narrowing down searches based on your criteria. He or she can create customized searches just for you, to ensure you can view everything that meets your needs and wants. Once you begin looking at properties, and based on Sam’s experience, you will look at a lot of properties— depending on the market, you may look at just a few homes, or a lot over a long period of time. You may find the home of your dreams right off the bat, or search for a while to find everything that lands on your list!

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A deposit is often submitted with the offer by the buyer. This is a sign of good faith, and shows the seller that the buyers are serious about purchasing the property. The deposit usually ranges from $1,000-2,000, which comes out of the initial down payment if the home is purchased. Say the home you are purchasing is $300k with a 10% down payment— you would submit a deposit of $2,000 upon presenting the initial offer. If all goes well and you go into escrow, you then pay the remaining $28,000 of the down payment. If something were to go wrong, you would be able to get your money back. Contingencies are essentially buyer protection, and they cover things such as the preliminary title report, inspections and appraisal all need to be reviewed before closing on a home. If the home inspection does not go well or the house doesn’t appraise for what it’s selling for, the buyer can renegotiate with the seller with a price that they feel more accurately reflects the value of the home. Before an offer is ever put in on a home, the seller should be prepared to divulge any inspection disclosures, which would include what’s going on with the property and if there are any problems the seller is aware of.

When you get into escrow, you are that much closer to owning the home! During escrow, a neutral third-party company—usually a title company— opens up a file for the sale and coordinates between the buyer and seller to complete the deal. The title officer assigned to the sale takes care of a lot of the paperwork that will make the home yours. They are also responsible for checking the title report, tax deeds on the house, where money gets deposited, and record all transactions. You will visit the title company when it is time to sign all of the closing paperwork.

REAL ESTATE

ESCROW & CLOSING

Typically a home sale closes between 30-45 days, however this time period can vary depending on the contingencies by either the buyer of seller. For example, if the sale is contingent upon the seller finder their home, it could extend the length of escrow. Typically, escrow is no sooner than a month because that is the time required for the loan to be put in place for the purchase of the home. Home sales that close sooner are often paid for in all cash, as Sam explains, “if you have cash, you can move a lot quicker!” During escrow there is a lot going on, including home inspections and a home appraisal. Your real estate agent is knowledgeable about both of these and can walk you through everything. These additional examinations of the property are to ensure you are getting the home you think you are. If there is anything that needs to be fixed, you can go back to the seller a request a reduction in price, or for the issue to be fixed before escrow closes. Once all of that is complete, you can sign papers and get the keys to your new place.

SAM’S #1 PIECE OF ADVICE FOR FIRST-TIME HOME BUYERS:

BE REALISTIC Having realistic expectations of your budget, what to expect, and the potential in a home is huge. First of all, Sam explains that you should be “realistic about what you can afford, and also the lifestyle you like to live.” When you know your price range, it makes finding the home for you that much easier. When it comes to what to expect, Sam encourages people to understand must haves versus easy fixes. Being able to see the potential in a home is what realtors love because you are being realistic about your house hunt. If you don’t like a home because of the interior paint, you may be missing out on a huge opportunity. Paint is a super easy fix and shouldn’t hold you back from an incredible home. Lastly, if you are purchasing with a partner, Sam encourages you to communicate. This is a big purchase, and it is important that both parties are happy, so communicate with whoever you are buying a home with—align your must haves and wants, and be willing to compromise.

PREPARING TO BUY YOUR FIRST HOME

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ROTH IRA OR 401k? WRITTEN BY

Trent Hamm

#RothIRA #401k #Retirement PUBLISHER

DATE

The Simple Dollar

INVESTING

2. 3

July 2015

ROTH IRA OR 401k? YOU MAY NOT HAVE TO CHOSE

ONE OF THE MOST COMMON RETIREMENT QUESTIONS I GET ASKED IS: ROTH IRA OR 401(K)? Although both are good options worth considering, the answer isn’t always as straightforward as one might think. Also, it’s crucial for you to understand that you may not even need to pick one or the other. If you’re able to contribute to a work-sponsored 401(k), there is no reason you can’t also contribute to a Roth IRA, provided you meet certain conditions. Before we delve deeper into this debate, let’s first make sure we have a working understanding of each of these options for retirement and what they entail.

ROTH IRA OR 401K? YOU MAY NOT HAVE TO CHOOSE

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401 k

EMPLOYER-SPONSORED DEFERRED CONTRIBUTION RETIREMENT PLAN

MAX YEARLY CONTRIBUTION

POTENTIAL EMPLOYER MATCH CONTRIBUTION

FUNDED WITH PRE-TAX DOLLARS TAXED UPON WITHDRAWAL WHEN INCOME IS LESS

$18,000

INCOME LIMIT FOR CONTRIBUTOR

NONE

MANAGEMENT & INVESTMENT OPTIONS DECIDED BY

EMPLOYER

WHAT IS A 401 k?

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A 401(k) is an employer-sponsored deferred contribution retirement plan, so named because it’s defined under section 401(k) of the IRS code. In a nutshell, it works like this: You sign up for a 401(k) plan in your workplace and choose investment options within the plan. Your workplace takes money out of your paycheck before income taxes are taken out and deposits this in your plan. In some workplaces, your contributions are matched by the employer. Then, when you reach retirement age, you can take money out of the 401(k), but those withdrawals are subject to income tax – since you didn’t pay it earlier, you have to pay it later on. (The benefit of the deferred tax structure is based on the assumption that you’ll be in a lower tax bracket in retirement compared to your prime earning years.) Currently, there is no upper income limit on who can contribute to a 401(k), but an individual can contribute at most $18,000 to his or her 401(k) in 2015, and the maximum total amount that can be contributed between employer and employee is $52,000 in the same year.

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BENEFITS • Your contributions may result in tax savings during each year you contribute. • Your employer may offer an employer match — a.k.a. free money. • In most cases, the money you contribute can be taken directly out of your paycheck. Out of sight, out of mind. • You can contribute a lot more each calendar year using this option (up to $18,000 per year in 2015)

INVESTING

ROTH IRA

MAX YEARLY CONTRIBUTION

INDEPENDENT INDIVIDUAL RETIREMENT ACCOUNT

FUNDED WITH POST-TAX DOLLARS WILL NOT BE TAXED WHEN WITHDRAWN IN RETIREMENT

NO EMPLOYER MATCH CONTRIBUTION

$5,500

ANNUAL INCOME LIMIT FOR CONTRIBUTOR

$116,000

MANAGEMENT & INVESTMENT OPTIONS DECIDED BY

YOU!

WHAT IS A ROTH IRA? A Roth IRA is an independent individual retirement account that you set up directly with an investment firm. Its name comes from its chief legislative sponsor, Senator William Roth. With a Roth IRA, you can set up an account with any of the online brokers, choose investment options with them, and then directly deposit after-tax money (from your checking account, for example) into the Roth IRA. Then, when you meet a few basic requirements (once you’re 59 1/2 years old or older, and have had the plan for five years or more), you can withdraw both your deposits and investment gains completely tax free. You can also withdraw funds penalty-free to pay for a child’s education or a down payment on your first house. In 2015, the maximum contribution you can make to a Roth IRA is $5,500 a year (unless you’re over 50). However, there is one big caveat: There are income limits on who can contribute. If you make more than $116,000 individually or $183,000 jointly, you can’t contribute the full amount (and may not be able to contribute at all). You can find out a lot more detail in the Wikipedia entry on Roth IRAs.

BENEFITS • Your eventual withdrawals will be tax-free since you funded your account with after-tax dollars. • You can actually withdraw your contributions at any time without penalty. (You cannot begin withdrawing your earnings before age 59 without incurring a penalty) • Unlike with a work-sponsored 401(k), your Roth IRA will allow you to pick and choose a brokerage firm and your individual investment options.

ROTH IRA OR 401K? YOU MAY NOT HAVE TO CHOOSE

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EMPLOYER CONTRIBUTIONS With a 401(k) retirement plan, an employer may match contributions made by an employee up to a certain percentage. For example, let’s say you contribute 10% of your gross salary to your work-sponsored 401(k). In some cases, your employer will match your contributions up to a certain percentage, usually somewhere between 3-6%. When your employer offers a perk like this, it is crucial that you take advantage of it. It’s free money, after all – don’t turn it down. In a nutshell, employer contributions are also one of the advantages of using a 401(k) in the first place. Since a Roth IRA is funded only with your after tax dollars, you won’t receive this benefit when you use that particular type of account. ADVANTAGE: 401 k

INVESTMENT OPTIONS/MANAGEMENT Although receiving an employer match when you use your 401(k) can be rather attractive, that doesn’t mean that using that particular type of retirement account doesn’t come with its own set of drawbacks. With a 401(k), you’re tied into whatever management and investment options are made available to you by the plan your company offers. In some cases, that means that your choices could be rather sparse and not all that great, although that isn’t always the case. Important items to look out for in your investment plans are expense ratios and investment options. The best employer plans will have low expenses and as many options as possible. With a Roth IRA, you are allowed to choose your management and thus also your investment options – you pick the investing house you want to use. Roth IRAs offer an advantage in that they allow you to choose your plan’s manager, though if your 401(k) offers good options, this may not be a big advantage. ADVANTAGE: ROTH IRA

TAXES Another big difference between a 401(k) and a Roth IRA is the way taxes are paid on both your contributions and your withdrawals. In short, your 401(k) plan is funded with pre-tax dollars, which can be beneficial since it reduces your tax liability during each year you contribute —

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often in the prime of your career. However, the money you eventually take out of your 401(k) will be taxed upon withdrawal at your current tax rate. Meanwhile, a Roth IRA works in almost the exact opposite way. The money you contribute has already been taxed, which means that making a Roth contribution won’t affect your taxable income in the year you contribute. However, since you have already been taxed on your contributions, you won’t need to pay taxes when you begin withdrawing funds for retirement. ADVANTAGE: DEPENDS

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WHICH RATE WILL BE HIGHER? HERE ARE A FEW THINGS TO ASK YOURSELF: Will my income increase between now and retirement? If the answer is yes, you’ll likely be in a higher tax bracket when you retire, which favors the Roth. If you’re near your peak, you’ll probably be in the same bracket or lower, which favors the 401(k). Will I be working in my retirement years? If the answer is yes, you have a much higher chance of being at the same tax bracket you are now. Will the political landscape shift towards higher tax rates? This one, honestly, is complete guesswork. If I had to guess, I would speculate that tax rates will go up in the future. If that’s the case, you might want to lean towards a Roth IRA since your future distributions will be taxfree. If you expect to pay a lower tax rate in the future, however, a 401(k) funded with pre-tax money might be a better bet since you won’t be taxed on that money until you retire and begin taking distributions.

BEST STRATEGIES FOR MAXIMIZING YOUR ROTH IRA OR 401 k CONTRIBUTIONS: Contributing to at least one type of retirement account faithfully is crucial if you ever hope to retire. In most cases, Social Security funds will not be enough to sustain you, and your cash savings probably won’t have the opportunity to grow the way they would if you had invested that money all along. When it comes to picking between a Roth IRA and 401(k), there really is no perfect answer. Your individual situation will impact which plan works best for you.

It’s also important to note that you don’t have to pick one type of account over the other. You can contribute up to $18,000 to your 401(k) and put up to $5,500 in a Roth IRA or traditional IRA that same year. Here are a few different strategies you might want to consider as you move forward. Max out your 401(k) and contribute to a Roth. If your work-sponsored 401(k) offers low fees, plenty of options, and an employer match on your contributions, you might want to max out for your 401(K) and contribute to a Roth IRA. This is a great strategy for anyone who has extra money to invest and wants to lower their tax liability. Contribute to your 401(k) up to the company match, then begin funding your Roth IRA. If your work-sponsored 401(k) doesn’t come with the best options but you still want to take advantage of your company match, you could always contribute a percentage equal to what your employer has pledged to contribute, then focus on contributing to your Roth IRA. Young people especially should consider the future benefits of a Roth IRA since many experts agree that tax rates could go up significantly over the next few decades. Contribute a set amount to each type of account each month. If you are struggling to decide which type of account will benefit you in the long run, you might just want to split the difference and contribute equal dollars to both. Set up your 401(k) contributions to include a percentage of your income that you can easily match in your Roth IRA. Then make a commitment to invest every month, no matter what.

GO ON-LINE TO CHECK OUT THE BEST IRA PROVIDERS http://www.thesimpledollar.com/roth-ira-vs-401k/

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NOT SURE WHETHER TO BUY OR RENT?

3.2

WRITTEN BY

Danielle Schneider

#BuyOrRent #Dllrz

PUBLISHER

Dllrz Magazine — www.Dllrz.com

DATE

September 2015

NOT SURE WHETHER TO RENT OR BUY? A QUICK GUIDE TO FINDING YOUR MATCH

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Some people are destined to be home owners, while others prefer the rental life—there are pros and cons to both. Home ownership should not be approached lightly. There is a lot of responsibility and money that goes into buying and maintaining a home—whether it be an apartment, condo, or single-family home. Renting often costs less money up front, but lacks the financial gain of equity over years of owning your own place. However, with home ownership comes the burden of responsibilities, including fixing issues, property taxes and insurance. Which is right for you? Take the guide as an initial test, then visit us on-line at to learn more about what is involved with both owning and renting a place.

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There are a lot of costs and fees involved in buying your own home, and you should have a significant amount of money saved up—but don’t let the idea of money scare you away! By educating yourself about what a down payment costs, as well as standard fees involved in the process, you can begin saving for your future investment and get on track to owning the home of your dreams.

VISIT US ON-LINE FOR FINANCIAL PLANNING TOOLS & RESOURCES www.dllrz.com

Do you want to relocate in the next couple years?

YES

What is your employment status?

EMPLOYED PART-TIME

YES

Do you have money saved or set aside?

REAL ESTATE

Are you looking for a new place to call home?

EMPLOYED FULL-TIME

Are you looking for an investment?

YES

Are you prepared for the risk & responsibility of owning a home?

YES

Do you know your credit score?

Do you have enough money for a down payment?

YES

13 3 NO

THE RENTING LIFESTYLE IS RIGHT FOR YOU!

PLAN A BIT MORE... RENTING IS BEST FOR NOW!

YES

START SAVING... A HOME IS IN YOUR FUTURE!

YOUR READY TO BUY, LET’S START LOOKIN’!

QUICK GUIDE: NOT SURE WHETHER TO RENT OR BUY?

“

ROBERT KIYOSAKI

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BUDGETING

FINANCIAL FREEDOM IS A MENTAL, EMOTIONAL & EDUCATIONAL PROCESS.

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TITLE OF ARTICLE

WWW.DLLRZ.COM

FINANCIAL LITERACY QUIZ ANSWERS

INQUIRIES CALLING ALL EXPERTS! If you are a financial advisor or expert and would like to contribute to the Dllrz® Magazine, please contact us | contribute@dllrz.com HAVE IDEAS FOR DLLRZ? If you have a topic of interest or don’t see a topic that you would like to be featured, please contact us | ideas@dllrz.com COMMENTS OR QUESTIONS? Have a comment or question your would like to ask Dllrz®? Contact us | help@dllrz.com

DISCLAIMER Dllrz provides articles, information and stories about financial topics that come from trusted and reputable financial sources. Dllrz and Dllrz.com is not a financial advisor or expert, but simply a resource containing information pertinent to young adults.

1 | More than $102 | You’ll have more than $102 at the end of five years because your interest will compound over time. In other words, you earn interest on the money you save and on the interest your savings earned in prior years. Here’s how the math works. A savings account with $100 and a 2 percent annual interest rate would earn $2 in interest for an ending balance of $102 by the end of the first year. Applying the same 2 percent interest rate, the $102 would earn $2.04 in the second year for an ending balance of $104.04 at the end of that year. Continuing in this same pattern, the savings account would grow to $110.41 by the end of the fifth year. 2 | Less | The reason you have less is inflation. Inflation is the rate at which the price of goods and services rises. If the annual inflation rate is 2 percent but the savings account only earns 1 percent, the cost of goods and services has outpaced the buying power of the money in the savings account that year. Put another way, your buying power has not kept up with inflation. 3 | Fall | When interest rates rise, bond prices fall. And when interest rates fall, bond prices rise. This is because as interest rates go up, newer bonds come to market paying higher interest yields than older bonds already in the hands of investors, making the older bonds worth less.

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Blurb | www.blurb.com SOFTWARE

Adobe Creative Suite SCHOOL

4 | True | Assuming the same interest rate for both loans, you will pay less in interest over the life of a 15-year loan than you would with a 30-year loan because you repay the principal at a faster rate. This also explains why the monthly payment for a 15-year loan is higher. Let’s say you get a 30-year mortgage at 6 percent on a $150,000 home. You will pay $899 a month in principal and interest charges. Over 30 years, you will pay $173,757 in interest alone. But a 15-year mortgage at the same rate will cost you less. You will pay $1,266 each month but only $77,841 in total interest—nearly $100,000 less.

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5 | False | In general, investing in a stock mutual fund is less risky than investing in a single stock because mutual funds offer a way to diversify. Diversification means spreading your risk by spreading your investments. With a single stock, all your eggs are in one basket. If the price falls when you sell, you lose money. With a mutual fund that invests in the stocks of dozens (or even hundreds) of companies, you lower the chances that a price decline for any single stock will impact your return. Diversification generally may result in a more consistent performance in different market conditions.

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