- Money Mondays with Sanyika!
-
Do you have a question for our Financial Fitness Coach Sanyika Calloway Boyce?
• Send your e-mail to comments@mandjshow.com!
• Sanyika will be providing financial tips every Money Monday and it may be the advice you’ve been looking for!
_______________________________________________________________________________
• Money Monday Questions: June 30Q. I’m 27 years old, single and live with my parents; I have very little debt and drive the same car they bought me for my 17th birthday. I don’t buy extravagant clothes or spend lots of money for no reason. All my friends say I need to “live a little,” but I tell them that I am “living a little now” so I can “live big later.” My friends do seem to have lots of fun, but they are always borrowing money from their parents and me to pay for stuff that they can’t afford. How do I have fun without going broke?
— Debbie, San Francisco, CA
A. I wish I had your discipline and money smarts when I was your age. Unfortunately I was more like your friends and “fun” in the moment cost me big time in the future.
Millionaires, by definition are accumulators of wealth. Not true for most people in America – or the world for that matter - most people spend all or most of what they make and borrow even more than they can comfortably repay, all for the illusion of fun.
I’d suggest giving yourself a set amount of money that you will spend on something you deem “fun” each month. But never have fun at the expense of setting yourself up for future success.
You’re on the right track. Keep going and don’t allow yourself to be derailed. The next time you look around and it seems like your friends are having more fun than you, remember this, according to a recent financial survey “More than 60 percent of Americans admit to living above their means and 19 percent say they regularly overspend to ‘keep up’ appearances.”
So just because someone is buying it doesn’t always mean they can afford it – or that they’re having fun.
———————————————————————————————————————————————
Q. I just got my credit card statements and almost passed out! The interest rate on one of them jumped from 15 percent to 29.95 percent after I missed one payment. But it gets worse; the card that I did pay on time increased my rate too. It’s 25 percent now. I know I shouldn’t have been late but I couldn’t help it and why did my other card that I wasn’t late go up? Is this legal? What can I do to get my interest rate down again?— Alexis, Albany, GA
A. Credit card companies are surprising their customers with increased interest rates, even if they were never late on a payment directly due to their company. It’s a practice called “Universal Default” and you – like millions of credit card consumers are experiencing it firsthand. Some card holders have noticed their interest rates were increased as much as 50 percent.
While several credit card companies have agreed to stop this practice, there are many more that defend and continue to use it.
Believe it or not, this practice is legal. But it is being strongly debated in congress. I would strongly urge you put your tax dollars to work for you. Contact your state’s Attorney General’s office and let them know about the credit card company that changed your interest rate. You can find your state Attorney General’s office online at: www.naag.org
Don’t stop there; your elected representatives need to be notified as well. Senator Carl Levin of Michigan (Democrat) has played a key role in challenging the credit card companies to self-regulate or be regulated. You can get contact details for your state’s representative’s at: www.house.gov and www.senate.gov
Fight back and win!
———————————————————————————————————————————————
Q. I’m a single Mom with children ages 7 to 16. I want them to know the importance of making good decisions with money. If you could pick one thing you wish you would have learned as a young kid about money, what would it be?— Julia, Washington, DC
A. Growing up I had no idea how to handle money responsibly, I only knew that we didn’t have any money and that it didn’t “grow on trees”.
In my workshops I teach parents how to be, “TransParents,” what that means is to tell the story behind the story. We are wired to learn by example and by doing, so talk to your children candidly about your financial situation.
I recommend that you hold monthly money meetings. The purpose of the meetings is not to burden your children with your bills, but to give them insight about the great and not so great choices you’ve made with money. Use this time to make decisions that affect the entire household and allow your children to give input into how they would handle a particular financial decision you have to make.
Also, take the “Change Challenge” as a family and commit to save all of your spare change in one big container for three months. Before you start saving decide together what you will use the money for as a family and enjoy the process of knowing that you’re going to get something that everyone wants by saving for it. This exercise teaches financial discipline and will encourage your child develop a healthy relationship with money.
———————————————————————————————————————————————
• Money Monday Questions: June 23Q. I have a 12 yr old daughter and a 10 yr old son and due to my past and current financial status, I feel that it is imperative that my husband and I do what’s necessary to teach our children to be money smart. Can you please give us an outline or advice and to get started?
— Kimberly, Royal Oak, MI
A.The way that we learn about money when we’re younger tends to follow us in our adult lives so you’re absolutely right to want to give your children a solid financial foundation.
As a parent you want the best for your children, however when you give your child too much of what they want without providing them opportunities for being financially responsible, they are not able to make the connection between the cost and value of what they are getting.
I suggest give your children access to a set amount of money each month and allow them to be responsible for the use of it. Determine in advance what they will be responsible for paying with that money (i.e. magazines, candy, movies with friends) and set a limit to how much you will give.
This teaches a basic lesson: Selective spending. When your children know that they have the power to choose how they will spend the money available to them, however when it’s gone it’s gone they will learn financial discipline without you “drilling it into them” because they will draw their own conclusions from the experience. It will encourage your child develop a healthy relationship with money.In my book, Teen Money Tips: Simple Steps for Banking, Saving & Making Money, pre-teens and teens can learn about money management in an easy-to-understand way. From understanding the purpose of a checking account and how they work, to creative ways to pay for prom, and what they need to know about getting their first car.
———————————————————————————————————————————————
Q. I am a single mom working a full time job and trying to complete school in between raising my son and recovering from surgery. I have about $17, 000 in debt and a low credit score. I am behind on bills and trying to avoid bankruptcy but I feel like I have no choice. I can’t get any help. What do you suggest?— Renee, Richmond, VA
A.You are not alone. Usually that statement would cause a bit of relief but with the rising cost of gas, electricity and food coupled with stagnate wages and the current unemployment rate - the situation is quite difficult. It is not however impossible to handle.
Personal bankruptcy is considered an option of last resort to get out of debt. A bankruptcy filing will stay on your credit report for up to 10 years, and can make it even harder for you to get more credit in the future, buy a home, get life insurance, or sometimes get a job.
Having said that, just as in cases of divorce where all other options have been explored bankruptcy is something that you may want to consider it.
Chapter 13 bankruptcy will allow you to consolidate all your debt and restructure it into a three to five year repayment plan. A reputable credit consolidation company can help you negotiate a similar arrangement without the stigma of a bankruptcy.I recommend that you contact a credit counseling service for the support and financial relief you seek.
———————————————————————————————————————————————
Q. My wife and I love each other very much but we seem to always get into the biggest fights about money. I think she worries about it way too much and she thinks I’m careless with it. I want to stop fighting about it but even when I try to just change the subject the frustration is still there. Help!— Mike, Queens, NY
A.You and your wife are experiencing a classic case of opposites attracting. Often the things that we find “intriguing” about our partners when we first meet are the very things that make us crazy about them later on.
I created a formula for “financial har-money,” that comes down to having a mixture of seven key ingredients:
1. Respect for each other (this is the one ingredient that MUST be included and can’t be skimped on)
2. Mutual understanding (talk it out - preferably before there is a problem)
3. Agreed upon goals (short and long term)
4. Compromise (from both sides)
5. Organization (know the state of your financial union)
6. Hard work (the only way it’ll work is if you work at it)
7. Determination (there are no fillers or substitute ingredients for this)Now just mix in a touch of understanding a heaping of patience and a full portion of determination and you’ve created a version of financial har-money that tastes oh so sweet.
———————————————————————————————————————————————
• Money Monday Questions: June 16Q. I need an aggressive retirement plan, is it possible to save $1,000,000 in 4 or 5 years. Is there somewhere I can read up on the topic?
– Rick, Tucson, AZ
A. I’m not sure how close you are to retirement, however less than 10 years is a pretty aggressive timeline to accumulate one million dollars.
In addition to contributing the maximum to your 401k plan and IRA plans, I’d suggest reading:
• Beating the Street by Peter Lynch to get a good foundation of investing and learning how to choose stocks that outperform the pros picks.• Real Money: Sane Investing in an Insane World by Jim Cramer which stresses that investing is for anybody willing to put the time into learning how to do it right; starting with studying the stocks you want to invest in at least one hour a week.
• Start Late, Finish Rich by David Bach offers some real word examples of how you can achieve your financial goals no matter how late you start – as long as you have a plan – which the book helps you create.
Few cars and even fewer people can go from zero to 60, so while you may not be able to make the leap from where you are to the million dollar mark in such a short period of time, your desire to get serious about saving will be of tremendous benefit when you make it a long-term commitment.———————————————————————————————————————————————
Q. My fiancé and I just had a child and with one of us working it’s hard to make ends meet. We’ve been considering some of the work from home jobs on the internet, such as the rebate processor offers but are afraid of getting swindled out of our money, can you make any suggestion.— Morgan Sacramento, CA
A.You are wise to be cautious because many offers to make money with little or no effort are less than legit. I would suggest you take the following steps in moving you towards an ability to do rewarding and profitable work from home:
1. Take an online skills assessment to determine your strengths so you can make the best determination of the type of work that would be a right fit for you. This is especially important because working from home requires a level of self-management.
2. Consider what types of skills you have which would be suitable for making yourself available to entrepreneurs and small business owners on a freelance basis. Find freelancing opportunities online at work-on-demand sites such as http://www.elance.com
3. Invest in a course that will allow you to obtain a marketable skill like becoming a Virtual Assistant. There are several options to choose from, such as http://www.ultimatevatraining.com
4. Research legitimate work from home options by picking up a copy of “Moonlighting on the Internet” by Yanik Silver
Be sure to talk with your fiancé about what additional income you need to life a more comfortable lifestyle and also realistically determine just how much time you’ll be able to commit to your work from home efforts as a new mom.———————————————————————————————————————————————
Q. I am 52 and single. I was let go from my company of 20 years and am now in a position because of my investments to be able to take a less stressful job for less money and start enjoying life more. I can start to live off my dividends and not touch my retirement money, which will continue to grow. I will need to work for the Medical coverage and to make a salary enough to cover some of my bills and receive some dividends to make up the difference. I have a low overhead. My fear is I am not adding to my savings as much and at 52 since I have a lot of years left. It is possible to do this though? The economy scares me. Do you think it is wise?— Donna, Chestnut Ridge, NY
A. I applaud your decision to start enjoying your life and looking at the ending of your 20 year career as the beginning of a new phase of life. Fear is often a big reason more people, especially women, don’t take a more active role in managing their money.
I would encourage you to incorporate the following money moves into your pre-retirement plans:
• As you embark on a new and less stressful career, make a goal to save $10,000 a year (that is just a little over $800 per month) until you are 65 and with your sound investments, retirement nest egg you’ve already started, plus Social Security you should have what you need to continue living a stress free life.
• Since there are 13 years until you reach 65, diversify your money that you intend to keep invested for ten years or longer by allocating 70 percent in a U.S. stocks with a global presence and the 30 percent balance in an international index fund.
• Be in it for the long haul. No matter what the market is doing your focus should be to continue funding your investments on whatever level you can afford. Sometimes your money will buy fewer shares, but in a down market your money actually buys you more shares and when the market rebounds – and it inevitably will, you will benefit from remaining consistent.
With the new found time that you have now, I would also encourage you to take an active role in learning more about how to manage your finances. Combat any fear with education that will allow you to make informed choices and become financially fearless.———————————————————————————————————————————————
• Money Monday Questions: June 2
Q. Do those debt solution companies really help clear up your credit and if so how do I choose the best one?
— Avila, Detroit, MI
A.There are many companies that claim to offer debt solutions and relief and while there are those tha deliver what they claim, others do not. As a credit consumer, especially one who is experiencing financial hardships you need to know your rights as well as which options will be the best for you.
Because these companies tend to charge a fee for the services they offer I’d suggest you look into credit counseling as a no cost option. In situations when both finances and emotions are involved we just need someone we can talk to about what seems to be an impossible situation.
The counselors at National Foundation for Credit Counseling (NFCC) and Consumer Credit Counseling Service (CCCS) are trained to help you find solutions that you might not be aware of for repaying, negotiating with creditors for more favorable interest rates, getting fees removed and putting you on a more solid footing. And best of all, there is no cost of the services they provide.
To speak with the credit counselors at NFCC, call (301) 589-5600, or visit www.nfcc.org and for CCCS, call (800) 251-2227, or visit www.cccsatl.org for more information.
———————————————————————————————————————————————
Q. I was recently terminated from my job and my current credit situation makes it impossible to find employment. When did it become legal for companies to discriminate against you because of bad credit and what can I do about it?— Carmichael, Jackson, WY
A.You’re not alone Carmichael, I know firsthand what you’re talking about. When I graduated from college I had a high GPA and a very low FICO score, even thought I did all of the things I was “supposed” to do to set myself up for post-college success – I still couldn’t get a job!
Statistics vary on the number of employers who pull credit reports or do some sort of personal profile check on potential employees and it is perfectly legal. In fact, according to the FTC Consumer Alert, “Employers often use a credit report when they hire and evaluate employees for hiring, promotion, reassignment and even retention.”
You’ll need to take a two part approach to getting a job and getting back on your financial feet.
Part 1: Start to clean it up – Now that you know there are issues on your credit report you need to work on a plan to clean them up. I’d suggest using the service, www.brightscore.com, toll free 1-800-889-1512.
I like them because for just $24.95 you will get access to your credit report so you are aware of what information each credit bureau is reporting on you. They also give your credit score a “grade” with a full analysis of your problem areas and how to fix them so you know exactly how you could improve your credit score.
Part 2: Come clean, up front – The reality is your future boss has a right to know what your credit report says about you. So before they have the opportunity to pull some less than favorable information about you, let them know what they can expect.
Tell the person you’re interviewing with that you are aware of your current credit standing. Also let them know that you have formulated a plan for repayment which you will use a portion of your new salary to implement.This will make your look responsible and honest – two very favorable qualities in a potential employee.
———————————————————————————————————————————————
Q. I turn 52 this year, and do not have anything saved for retirement. I know that I’m soo behind and feel like there is no hope to catch up. Is it too late? Where do I start?— Jane, Sarasota, FL
A.First let me assure you that it is never too late to start saving. Taking the first step is always the hardest, but now that you have made the decision to begin saving there are some specific action steps you need to take.
I suggest you start by reading “Start Late, Finish Rich” by David Bach. It offers some great real word examples of how you can achieve your financial goals no matter when you start saving. He helps you lay out a clear plan specific to your circumstances.
Next I would recommend contributing to your companies 401k plan. It is estimated that only 1 out of 4 eligible employees contribute to this voluntary retirement plan and of those who do contribute, only 1 in 10 contributes the maximum allowed. So commit to having the maximum amount deducted which will give you the benefit of having your employer match your contribution plus lower your taxable income.
Finally, reduce your interest bearing debt (i.e. credit cards) so you are not paying for things you purchased in the past with money you’ll need in the future.
———————————————————————————————————————————————• Money Monday Questions: May 19
Q. I am recently divorced and I am in a panic about choosing a financial advisor I can trust. My ex-husband handled our financials and now I am doing it by myself plus raising 2 kids. What can I do to make the best choices for our financial future?
— Rachael, Pittsburg, PA
A.Money knows no gender and will respond favorably to whoever is managing it properly, so you’re the perfect person to assume the responsibility of your family’s finances. However, for some assistance in navigating these unchartered waters it is wise to seek the advice of a certified financial advisor who can answer your money questions and develop a plan specific to your unique needs.
What it really comes down to is comfort and trust. Do you must feel comfortable asking him or her all of your money questions, even the ones that seem “stupid?” Also, you must ask yourself, “Do I trust the information I am getting is complete, accurate and in my best interest?” If you’ve truthfully addressed those critical elements you have a candidate worth interviewing further.
To help, the Financial Planning Association www.fpanet.org offers a useful checklist to make the process of finding the best certified financial planner for your needs a lot simpler.
———————————————————————————————————————————————
Q. My husband and I are swamped with bills since we went from two incomes to one after the birth of our child. We are trying to pay down our debt without filling bankruptcy or having our house foreclosed. What types of mortgage programs are available to help us keep our house?
— Faith, Madison, WI
A.There are several homeowner programs that you may qualify for, however the best place to start is by contacting your current mortgage company. Ask to speak to the “loss mitigation” or “default alternatives” department. These departments are there to help determine your best options including a “forbearance agreement” which could reduce or suspend your payments for a specific period of time until you can start making payments.
Because this is a particularly stressful time for you, beware of individuals or businesses claiming to be “foreclosure rescue specialists.” Any person or company claiming that they will stop your foreclosure if you sign a document allowing them to act on your behalf could really be getting you to sign over the title to your home. Don’t do it. Instead, look into these two completely legitimate options:
• The Neighborhood Assistance Corporation of America www.NACA.com provides services and counseling for distressed homeowners such as lower interest rates, fixed rate mortgages and refinancing options.
• You can also contact the U.S. Department of Housing and Urban Development www.HUD.gov for reliable information on real pre-foreclosure options.
———————————————————————————————————————————————
Q. I am a stay-at-home mother of 4 kids, my husband has a good salary but our bills are always late and we can’t seem to catch up. We’ve gotten rid of everything that isn’t a necessity but how do we catch up so we can stay ahead of things?
• Trina, Syracuse, NY
A.The first thing I’d suggest is that you get a calendar and figure out when each of your payment due dates are in relation to your husband’s pay periods. Generally what happens is if the majority of your bills are due between paychecks it could cause you to always be behind with payments.
To help with this you can ask for a change in your payment due dates to better match when you have access to most income. When the payment dates are working in your favor, then you want to put as many of your regular expenses on automatic payment so they are paid on time.
Then to stay ahead of your bills commit to paying an additional $25 to $50 per month on at least three bills per month. This will not only allow you to pay off outstanding balances quicker, but it will also give you a credit on your accounts that are due monthly and put you ahead of your payments.
Finally, as a stay-at-home Mom think of ways you can help bring extra money into the house. Consider making yourself available to take on freelance work or even opening an eBay store online to earn extra money.
———————————————————————————————————————————————
Money Monday Questions: May 12Q. I’m a 29 year old female, I’m desperate to finish my college education, but I’m scared of adding a student loan to my list of debt. What should I do to get out of debt and go back to college?
— Lee, Wilmington, DE
A.To get a handle on your debt, you need to begin “telling your money where to go instead of wondering where it went,” so the first thing you need to do is develop a habit of tracking your spending so you are conscious of what’s going out and coming in.
This practice will allow you to get a reality check on how much money you actually have access to so you can determine how much you can afford to contribute to your education.
There are options for going back to school that will not leave you drowning in debt. First look into your current employers benefit plan and see if tuition reimbursement is offered, many companies will cover the costs of all or a portion of your tuition costs in exchange for staying with the company for a set number of years upon graduation.You can also look into loans that will offer deferment of payment until you have graduated and are employed. This will give you the ability to pay for the education you received when you making money.
You might also want to look into a less expensive education route, consider taking online courses which will allow you to learn at your own pace and are generally more cost effective than traditional college courses. You should also look into the viability of specialty certifications which make you more marketable in your field for a fraction of a college degree .
———————————————————————————————————————————————
Q. I have a couple of small certificate of deposits and don’t like paying taxes on the interest. I need to know that I can access them without too many penalties, my CDs are currently 6 months to a year. I’m considering mutual funds or an IRA. What do you think I should do?
— Sandy, Dallas, TX
A.Sandy, I suggest that you determine your investment reasons and style before you look into any other investment vehicles. Ask yourself these 2 questions:
• How much risk are you comfortable taking? Are you looking for high risk — high return or moderate risk/return. Knowing your risk tolerance level will help you choose the right investments.
• How much time do you have to let your investments grow? Will you be needing to access to the investment in five, ten, twenty or more years?
Most investment options are meant to be long-term investments in which the investor benefits over the life of their investment because they are committed to letting the money grow untouched. Six months is hardly a long-term investment and you probably have not made enough interest off of the CDs for it to be worth the charges you will incur for taking it before the maturity point.
———————————————————————————————————————————————
Q. I have a lot of credit card debt. I am trying to pay one balance down at a time. One of the balances is $8,100.00 @ 16%. I have $3100.00 and I’m contiplating spreading it out over 10 months that which would allow me 2 things. Is this a good idea or should I pay the $3100.00 on the one card and bring that balance down to $5000.00?— Lisa, Spokane, WA
A.At 16% interest you will want to pay the debt down in a lump sum rather than spreading it over a period of time. In fact I would suggest that when you pay it down to the $5,000 then you ask your creditor for an interest rate reduction. Be bold and ask for a 13 or even 12.5% rate, the difference between three percentage points may not seem like a big deal but it could equate to a savings of more than $400.
They will be more favorable to honor the request after you’ve made such a “good faith” effort to repay the debt.
Then I’d suggest that you ask for a balance reduction. Meaning, you are asking that they cap your ability to spend at $5,000. This will ensure that you are not tempted to bring the balance up to the original amount and you know that you have less credit available to you which really means that more of your future earnings will belong to you — the rightful owner.If you do it the other way — paying the debt over time — you will pay more interest and less of your balance over time. Consider this:
If your average daily balance is $5,860.44 with a periodic rate of 1.1667% (you’ll need to check what your specific periodic rate is on your billing statement) then you’ll pay $68.37 in finance charges/ interest.If you make a payment of $100 you are only applying $31.63 to the actual balance — the rest is being pocketed by the credit card company.
———————————————————————————————————————————————
Money Monday Questions: May 5
Q. My husband and I are expecting our first child and want to start saving for his education and future now. Where should we save the money and how should we start?
— Cynthia & Stan, Chicago, IL
A.I always say, “College is fundable — retirement is not.” What that means is you need to ensure that you have properly funded your retirement (through your companies 401k plan, IRA and other investment accounts) before you look to fund your child’s education.
If you plan to have $500,000 or even the recommend $1,000,000 saved by the time you retire, you must check your current contribution to your savings and work with a certified financial planner to make any necessary adjustments in your retirement savings.
Then I’d suggest you looking into a 529 Plan (also known as a qualified tuition plan) which will allow you to put money into a tax-advantaged savings plan that will help cover future college costs.
One final note, as new parents there are several ways to save on buying for the baby which are smart and will leave more for you to fund your retirement and their future too. Check out this article about saving money on everything from baby formula to car seats: (DIRECT ARTICLE LINK - http://www.mommysavers.com/baby/save-money-babys-first-year.shtml
———————————————————————————————————————————————
Q. I feel that we have plenty in investments and resources to cover us. We love to travel and enjoy it, but my husband is quite reluctant to spend money on house maintenance and new furniture. How much would you recommend retired folks keep on hand for emergencies?
— Barbara, Charlotte, NC
A.If your husband is reluctant to approve such purchases because he fears there is not enough in the emergency reserve fund then ask him how much would be a comfortable amount. I suggest for a couple in your situation you should consider keeping $7,000 to $10,000 liquid money in case of emergencies as there is not an existing income source to replenish your fund if you have to tap into it.
Next, I’d suggest that you come up with a spending plan on how much you should invest in the renovations and upgrades. This will support you both in getting what you want — he will get the peace of mind that all of the money you’ve saved won’t be spent on renovations and you get the satisfaction of redecorating.
———————————————————————————————————————————————
Q. I am two months behind on my mortgage and most of my bills are one month behind except my credit cards. I am not seeing any financial relief anytime soon. Should I apply for a home equity loan?— Melody, Prince Fredrick, MD
A.I understand that you feel as if you are in a no win situation, however you must fully consider the implication of taking out a loan against your home. Your credit card debt is what is known as “unsecured” debt, however your home is considered “secured” debt.
Quite simply what that means is if you do not pay your home equity line of credit bill on time, your home could be foreclosed and unlike credit card debt which could be included in a bankruptcy settlement, your home cannot.
I suggest that you look for alternative income opportunities. Could you work overtime at your job and make more money? Maybe you could get a part-time job to get back on track. Or consider freelancing, what are your talents that you are able to market to others? Next, contact your mortgage company to work out a payment arrangement that will allow you to bring your payments current.
———————————————————————————————————————————————
• Money Monday Questions: April 28
Q. I just got my tax refund. How should I use it, where should I invest it?
— Dave, Hoboken, NJ
A.Dave, I hate to break it to you, but if you’re getting a tax rebate that means that you’re missing out on the ability to use that money throughout the year. Meaning — it’s not a gift…it was yours to begin with.
The first thing I’d suggest you consider doing is reviewing your withholding details with a tax advisor or someone in your employer’s benefits office. They may be able to help you determine how to keep more of what you make in real time. You can also find information about your withholdings at www.IRS.gov
Next, depending on the amount of your refund, you want to take at least one of these actions:• Get out of debt — at least the high interest debt: If you have credit card interest rates that are more than 12.5% you need to put as much money as you can towards paying off the high interest.
• Boost your “Rainy Day” fund: Job loss is at an all time low and it is taking the average American up to four-months to replace their job and income after a loss. Put the money into a high-yield account and know that you’ll have it if you need it.
• Invest it — wisely: The stock market is having a sale! You might be getting a little nervous watching your 401k plan do a few dips, but if you’re 20-30 years away from retirement then now is the time to buy more stocks. The market has proved — what comes down does go up — while stock values are down buy more of them so you can benefit big time when they go back up.
• Have fun — at least a little: I get that all work and no play doesn’t feel very good. So, give yourself permission to use 15% of your refund to buy or do something fun. It’ll feel good and stimulate the economy too!
———————————————————————————————————————————————
Q. Sanyika, will my negative credit history transfer to my soon to be 18-year-old daughter’s fresh credit history if we are on a residential application together? The apartment complex that I am trying to move in requires anyone 18 years or older and living with you, to fill out the application as well. I don’t want my history to impact hers.
— Frida, Minneapolios, MN
A.That’s a great question and I’m glad that you’re conscious about and concerned for the protection of your daughters credit history.
If her information is being asked for simply for tracking of residence purposes then there will be nothing that you will have to worry about. This is a common practice. However, if she will needs to sign the lease or be added as a co-renter then the payment history of the rental will be part of her credit history.
Your past credit history will not transfer to her as a result of this joint agreement, however the way that you pay the rent on this property could appear as part of her credit file.
———————————————————————————————————————————————
Q. We are a family of five, I currently spend around $400 each month on groceries and I do not spend alot on snacks. Fresh fruit is so expensive that I am unable to provide fruit regularly for our one-income family. So I just buy the pretty basic things. I was just wondering what the average grocery bill for a family of five is and any tips you may have so that I may be able to buy healthier for cheaper.
— Becky, Atlanta, GA
A.I’m not sure if there is such a thing as an “average family grocery bill” because there are so many factors that come into play such as where you live and the types of food that you enjoy. I would say that what you’re spending is about what families of your size are spending.
The fact that you’ve chosen not to go with a lot of “empty calories” that can hike up your food bill is a good thing. I’d also say to you that it might be time to get back to basics and that means growing a garden.
If you’re tired of making the same meals over and over because the cost of fresh herbs, fruits and vegetables is so expensive then grow your own. Even if the idea of gardening is a bit overwhelming with all that you already have on your plate a great way to get fresh herbs is to plant a windowsill garden.
Go to a gardening center for the dirt and planter which are not expensive, then you can pick your rosemary, basil, dill and other plants or seeds and get to gardening. The best part is you can get your children involved in the process as and make gardening a family affair.
———————————————————————————————————————————————
Money Monday Questions: April 21
Q. My son is 14-years-old and has been begging me for a cell phone. It seems like a reasonable request, but I’m afraid that he won’t be responsible and stay within the minutes of the plan. How can I give him what he wants without breaking the bank?
— Michelle, Miami, FL
A.It seems like cell phone users are getting younger by the minute and your teen is no exception. Before you consider getting him his own cell phone or adding him to your existing family plan, I suggest that you consider purchasing a pre-paid cell phone for two reasons:
•: They allow teens to have a level of responsibility for managing their talk time/phone usage in a way that nagging them not to “go over” their minutes never could. Plus, since they will have to pay for usage of the phone— and that includes every text message too — they’ll learn to use the minutes a lot more carefully.
• If you start with a pre-paid or pay-as-you-use cell phone and allow them to graduate up to an unlimited usage phone you could set a firm foundation for financial responsibility.
———————————————————————————————————————————————
Q. I recently went through a tough divorce, and it left me with nothing but bills and a broken heart. I don’t want to file bankruptcy, but I see no other way out. What should I do?
— Tom, Philadelphia, PA
A.I know that it feels like bankruptcy is the best option, but it shouldn’t be taken lightly, because it is the financial equivalent of divorce. There are many emotional and financial aspects to bankruptcy that are just as hard hitting as what you’re going through right now.
I’d suggest you look into credit counseling as an option. I’m sure you could benefit from talking with someone who can look at your specific situation and offer solutions that will feel and be a whole lot better than bankruptcy.
The counselors at the National Foundation for Credit Counseling www.nfcc.org and Consumer Credit Counseling Services www.cccsatl.org both offer counseling services free of charge for those consumers who cannot afford to pay. They’re trained to help you find solutions that you might not be aware of for repaying, negotiating with creditors for more favorable interest rates, getting fees removed and putting you on a more solid footing.
———————————————————————————————————————————————
Q. All of my friends have husbands or boyfriends that they can rely on to help them if they fall short with money, but I’m still single, so I really need to get my act together because if I don’t I have no one to turn to. What should I do?
— Melissa, San Francisco, CA
A.First let me tell you that even if you were married or in a committed relationship I would say you need to “get your act together.” Having a spouse or a partner does not ensure that you will be taken care of automatically.
As women we all know we are supposed to pay attention to our financial affairs, but many of us don’t. Because it seems intimidating to us. It is never too early (or too late) to take control of your finances so good for you for taking this necessary step.
I suggest you get a handle on your finances in four steps. No matter your marital status, you cannot afford NOT to save, because women live an average of nine years longer than men you’ll need more saved to support your lifestyle.
• You must have a saving account solely in your name, this is just a smart thing for every woman to do.
• You must commit to saving at least 5 percent (preferably 10) of everything you earn.
• Find the best saving vehicle, companies like ING Direct pays 3.4 percent (more than you can get on most no-minimum savings accounts) and the account is online which makes it very convenient.
• Max out your 401k plan or at least up to the company match. This is pre-tax dollars and will allow you to save automatically while reducing your tax obligation.
———————————————————————————————————————————————
For more tips and information from financial fitness coach Sanyika Calloway Boyce, log on to http://www.financialfitnesscoach.com/
This website is designed to provide accurate and authoritative educational information in regard to the subject matter covered. It is distributed with the understanding that the author (Sanyika Calloway Boyce, dba Financial Fitness Institute, LLC) is not engaged in rendering legal, accounting, financial or other professional service. If legal, accounting, financial or other expert assistance is required, the services of a licensed, competent professional person should be sought by the individual in need of such services.
Personal details of individuals and persons referenced on this website have been changed to ensure privacy.
— Adapted from the Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations
