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Author: Mary Hurlburt, CCCC

How to Save for Your Vacation

When summer rolls around it is usually time to take that family vacation. It should be a relaxing, fun time for you and your family. One way to have more fun and reduce stress is to plan and budget for your trip.

The summer vacation season is the second largest credit card spending season, after the holiday season. More credit card transactions are done in June, July, and August than all other months except December.

Here are some tips that can help you avoid returning to a huge pile of credit card debt:

• Create a vacation budget. Review your regular budget and figure out how much extra you have available for your vacation. Once you know the amount, stick to it.

• Discuss your plans with your family. Once you know how much you can spend, get your family together to decide on where you can go and what you can do.

• Research your options. Look at travel guides, use the internet, and get information from local visitors bureaus to find the best deals, discounts, and coupons that are available.

• Have a credit plan. Decide in advance how much you will put on your credit cards.

Plan now for next year. Now is the time to start setting money aside for next year’s vacation. You will be surprised how fast it adds up.

Credit cards can be a useful tool for vacation. They are safer than cash and may give you some type of reward or bonus for their use. But they can also make it easy to overspend. Limit your charges to budgeted expenses and make every attempt to pay your balances in full when you return.

 

If you need help getting started, feel free to give us a call (513-868-9220) to schedule an appointment with one of our financial coaches. We are here to help in any way we can!

Mary Hurlburt, CCCC

Phone: (513) 868-9220
Toll-Free: (888) 597-2751

Scams: Social Security Number

Avoid Scams: The IRS will not call you!

Start with knowing who can legitimately ask for your Social Security Number.

We talk a lot about privacy issues and ways to avoid identity theft. One of the best ways to protect yourself is to avoid giving out your Social Security number just because someone asks for it. For example, many scam callers will ask for this and other confidential information by saying they are calling from the IRS or even from a charity. The IRS already has your Social Security number.  A charity does not need your Social Security number. But who does have a legal right to your number and who does not?

Many businesses have no legal right to your Social Security number. They can ask for it, but many people don’t know they can refuse to provide it. Unfortunately, the use of Social Security numbers in business transactions has become so routine that far too many businesses ask for it and many people think it is required.

The organizations that can require your Social Security number are:

  • Government agencies. Any federal, state or local government agency has a legal right to your information. This includes agencies like the department of motor vehicles, job and family services, and tax departments.
  • Businesses that involve transactions that impact taxes. Any business that reports tax information on you has a legal right and need for your Social Security number. This includes banks, brokerage firms, and of course, your employer.

If another type of organization asks for your Social Security number, ask them why they need it and if they will take an alternative form of identification. Many will take another type of identification. Some may put you through some additional paperwork and a few may refuse to do business with you. You have to decide if it is a legitimate request for your Social Security number and if the consequences of not providing it outweigh your privacy issues. Remember, you always have the right to take your business elsewhere.

If you have any questions or concerns, please give us a call at 513-868-9220. We are here to help; it is better to ask the questions before there is an issue.

 

Settling Debt with a Collection Agency

Financial-education

Why should a person consider settling an old debt?

Having substantial collection items on your credit report hinders a person’s ability to create wealth. Loans for any item (home, car, business) are either more costly, harder to get or impossible to get with poor credit.

Why is January through April a particularly good time of year to settle?

This is the time of year collection agencies are offering to settle debts because families are receiving tax refunds and may have available cash they do not have other times of the year. Deals may even be a little more generous.

How do you settle a debt?

  • All communication must be confirmed in writing! Keep a paper trail.
  • Keep a record of the date, time and who you spoke with.
  • Insist on proof that the agency currently owns the debt – that includes copies of your original signed paperwork.
  • You need a letter stating that if you pay this amount of money for this particular debt; your account will be considered Paid in Full or better yet – ask that it be deleted from your credit report – a Deletion Letter.
  • Make the payment with a cashier’s check from another financial institution or with a money order from the Post Office (an order you can track).
  • Then check your credit report in 90 days to be sure it was done. If it was not, then notify the credit bureaus that the account has been paid.
  • File all debt settled paperwork with your will. You need to keep a record until you die; things have a way of reappearing.

Medical Debt

According to a Consumer Financial Protection Bureau 2014 study, over half of all the debt that appears on credit reports is related to medical expenses. For 15 million consumers, medical debt is the only blemish on their credit report.

There are a number of reasons this may be more prevalent now than in the past. The family doctor, who carried accounts, is long gone. Medical practices are now run like businesses. High deductible health plans require significant out-of-pocket money when there is a “surprise” health care issue; think heart attack. There has been no “standard” time when bills are being sent to collection agencies so some are reported when as little as 30 days past due. Collection items hurt anyone’s credit score and until recently carried the same negativity as any other collection item.

That all changed, effective September 15, 2017. There is now a 180-day waiting period before the medical debt is to be reported on a credit report. In addition, any medical debt eventually paid by the insurer will automatically be removed from a person’s credit report.

Those with current collection items on their credit report should not get too excited though. The new rules are not retroactive, although the major credit bureaus say they have taken steps to remove medical bill collections that are less than 180 days old.

Older credit scoring models from FICO and VantageScore treat medical debt and other debt the same way. Their newer scoring models, which will take some time to be adopted by lenders, treat medical debt less harshly than other debt. This could lead to as much as a 25 point rise in some people’s credit score – but it may take a significant amount of time to be evident.

The number one reason the credit bureaus are doing this for the consumer, besides the 2015 settlement negotiated by New York State Attorney General Eric Schneiderman and the three major credit bureaus: not paying medical debt is a poor indicator that someone will default on other debt.

We have steps available for paying down your medical debt.

Financial Tips for College Graduates

Every college graduate faces a long road of challenges.  Getting a good 
start with your finances will remove some of those challenges.  Here are some tips to get started:

  • Live as if you will be unemployed tomorrow. First jobs are often not our “dream jobs.” Lots of graduates find themselves in dead end jobs that they cannot leave because they have committed their whole salary to payments for rent, a new car and the good life charged to credit cards.
    • Live on 75% of what you make. Hoard the first 25% of what you earn. You do not have to do this forever, just until you have a fairly substantial savings – enough money to relocate if necessary or to be out of work for six months.
  • Create a reasonable budget. Your budget is your plan of action to achieve your personal American dream. In this case that means your new lifestyle is as an employee, not a student. There are any number of budget forms or online programs that you can use: www.mint.com or www.everydollar.com are two of the most popular. Before you start apartment hunting, looking for a car or whipping out your credit card without thinking, work the numbers.
    • Have a clear idea of what is most important to you. If having a night out on the town every weekend is your idea of fun, then do not commit your total income to a fancy apartment or car. There are no right or wrong decisions.  This is your life, so consider how you want to live it and plan accordingly.
  • Do not forget your student loans. Just because you do not have to start paying on your student loans for six months does not mean you do not have to think about them until then. Your student loans will probably be a huge part of your budget. There are numerous options to repay federal student loans. You can go online and study your options at https://studentaid.ed.gov/sa/repay-loans or schedule an appointment with one of LifeSpan’s certified student loan counselors by calling 513-868-9220.
  • Save for emergencies. Life happens and sometimes what happens can be financially devastating. That is why everyone needs an emergency fund. Start putting money into your emergency savings immediately. And if you are of the lucky few who receive a “signing bonus,” let that be the seed money for your emergency savings. The first time you have a huge car repair bill, you will be grateful you did.

  • Retirement: Yes, now is the time to start thinking about when you will not be working. If the option is available, sign up for your company’s 401K plan as soon as you are eligible. Consult a financial planner and start putting money into an IRA as well. The more you save, the happier and more secure you will be!
  • Make all these savings automatic. Set up transfers from your checking account to your emergency savings and your retirement savings and then forget them.

 

Follow these tips and you are on your way to being a financially secure adult.  If you would like additional information, one of our certified financial coaches can help you create a long term savings plan.

Set up Automatic Savings

Making the decision to arrange automatic saving takes some of the hard work out of steady saving deposits. Here are some tips to get started:

 

  • Every month, have your bank or credit union transfer a fixed amount (like $25) from your checking account to a savings or investment account. Talk to your local bank or credit union to set this up.
  • Every pay period, have your employer deduct a certain amount from your paycheck and transfer it to a savings account. Ask your HR representative for more details.
  • Set up automatic payments towards your debt by providing your checking account information to your loan provider to ensure that the payments are on time and in full. Enrolling in automatic payments may even qualify you for a small interest rate deduction with some types of loans and providers, such as some student loans.
  • If your employer offers a retirement account, sign up and put in at least the minimum contribution to receive any matches they may offer. Ask your HR representative for more details.

  • If your employer does not offer a retirement account, start saving with myRA, a new retirement savings account from the United States Department of the Treasury. The account features no cost or fees, no complicated investment options and no risk of losing money.

 

10 Quick Tips for Saving

 

If you would like additional information about automatic saving, one of our financial coaches can help you create a long term savings plan.