Bad decisions can turn financial treats into financial tricks

Halloween has passed, but any time of year financial treats can turn into tricks. Some options may seem good on the surface. But, if not handled properly, they can have long-lasting negative 7 money tricks and treatsconsequences.

The next couple of weeks I’ll be sharing a few financial moves that can work against you as shared by the National Foundation for Credit Counseling (NFCC)

  • Discontinuing the use of credit
    • Treat:Living on a cash basis means that you never overspend or pay interest on your purchases. Typically, people who pay with cash save 20 percent over those who charge their goods and services.
    • Trick:At some point in their life, most people will need access to credit. Consumers will be well-served by creating a thick and positive credit file. To do so, it is necessary to have at least three open and active lines of credit.
  • Automatic bill paying
    • Treat:Arranging for your payments to be sent to creditors before the due date means you’ll never have a late fee or a dinged credit report.
    • Trick:If you neglect to balance your check register and the automatic payment results in an overdraft, you’ve defeated the purpose.
  • Bundling of services
    • Treat:Consumers can often enjoy a significant savings if they use the same provider for their land phone, cell phone, cable and Internet services.
    • Trick:If you use the savings from the bundling of services for a larger, more expensive plan than you really need, it’s no savings at all.
  • Co-signing on a loan
    • Treat:You can help another person establish credit, rebuild credit, or purchase something beyond what they could on their own credit worthiness.
    • Trick:The co-signer and primary borrower are equally responsible for payment of the loan. As well-meaning as people are, things happen. Never co-sign on a loan unless you can afford to solely take over the payments.
  • Balance transfers
    • Treat:With a lower interest rate, you can repay the debt sooner and save the money you would have paid with the higher APR.
    • Trick:Faulty thinking leads you to believe that since the interest rate on the new card is so low, it won’t hurt to charge a few things. Before you know it, the introductory period with the low rate has expired, and not only is your original balance not paid off, but it’s higher than when you began.

Consumers should thoroughly research and fully understand the risks and benefits to any financial decision they make. Simply because an offer sounds appealing, doesn’t mean it is.

Saving for your child’s college vs. saving for retirement

As one of my co-workers says, “There’s no scholarship for retirement!”

Parents want to provide the best for their children. Saving money for your child’s education will help them avoid taking out large loans they will need to pay back later. But don’t forgo retirement saving and only save for education. Research lower-cost schools, find free money for schools, and continue to save for retirement. Remember, you can apply for grants and scholarships – or take out student loans, if your savings doesn’t quite cover the costs – but these options are not available for retirement.

And thanks to the Tennessee Promise, students wanting to further their education past high school can go tuition-free for two years of community college or technical school. But the last day for the Class of 2015 to apply is Saturday, November 1. Exact times vary for Eastern and Central time zones. Here’s more about what parents need to know from Tennessee Promise.


Buying a house vs. saving for retirement

Workers in their 30’s and 40’s may be tempted to cash out their retirement saving accounts to buy their first home. But this could be detrimental to their retirement savings. Don’t touch your retirement savings to buy a home. Instead save a portion of your pay in addition to saving for retirement. You might scale back your retirement savings to just the amount that your employer will match. Ask your bank or credit union to regularly transfer a certain amount from your checking account to your savings account.

Balancing savings vs. paying down debt

Should I save money or pay down debt? Valid question because prioritizing multiple goals can be difficult. The good new is that in many cases people can do both.

Young and first-time workers may want to pay down their student debt as fast as possible. And paying down debt is a good thing. But, if these workers are not also saving for retirement, they are missing out on some of the most important years to save. Because of the miracle of compound interest, money saved for retirement in your 20’s grows more than money saved later. Contribute at least enough money to get a company match while you continue to pay at least the minimum payment on student loans.

Adapted from America Saves

3.5 reasons to think twice about getting a pet

Okay, so now I have a grand-cat. Her name is Cleo and this is her selfie.

My son really wanted a dog to keep him company in his new apartment. I get that pets provide companionship and I do like pets. Getting a pet can be training for a young adult on becoming responsible for another being.

It’s just that:

1) They need to be fed. Cats need a litter box–at least until you might train them to use and flush the toilet.

2) They need visits to the vet along with vaccinations. This is just once a year as long as they are well, but….

2.5) What if they get sick, or have fleas? This is an added cost.

3) And heaven forbid you find you are allergic to your beloved.

He’s had the cat three days and the cost so far is $150. Glad he has a job! I hope he isn’t allergic to this one because I’m not wanting to adopt right now.

Seven sources of free movies and TV

On-this-top-10-list-you-will-find-the-best-ways-to-watch-movies-online-read-movie-reviews-and-enjoy-film-streaming-for-free_My son moved to the fourth place to start his fourth year at UTK. He’s excited for this next step in his life adventure. He’s also learning that money doesn’t go as far sans roommates. He quickly decided the cost of cable was not necessary….even though he’s a movie junkie!

Many options are available for movie and television entertainment at no cost. Most folks are familiar with the pranks, cute pet tricks, music videos and educational/information content on YouTube. But it also has older movies. Another non-ad-supported option is Internet Movie Archive, which as the title might suggest, has a library/database search engine appearance. It’s a source for full-length older movies, sporting events, propaganda films and news broadcasts. As I scanned the sections and clicked on various items, I found political speeches, old commercials, and September 11 programming. Vimeo offers a wide variety of content including short form videos from amateur and indie filmmakers. Without joining, you can check out staff picks by scrolling down their main page.

Several free options are supported by advertising. Crackle mixes B-movies and older television content with the occasional hit. You can view some of this content without registering. Hulu has television shows and movies as well as a subscription services for a greater variety of content. SnagFilms categorizes documentaries, classics and film festival favorites. It has an app for major platforms. Viewster also has an app and offers obscure movies and television, but it also offers other content. For example, there is a celebrity news category that referenced Robin Williams’ recent death.

After perusing all these options, I think I will look into cutting out a paid movie service myself. :)



Is College Still a Good Investment?

Student Looking at GlobeRecent media reports might have you thinking that a college education is no longer a good investment. Some of the stories are of student loans topping a trillion dollars. Other stories note that student loan debt surpasses the total amount of credit card debt. But the news isn’t all bad…

Last month the Federal Reserve Bank of New York wrote that attending college is still a good investment because workers with a bachelor’s degree earn over $1 million more than those with only a high school degree.

Students and their parents are also increasingly turning to grants and scholarships to pay for college. On average this type of free money now pays for 30 percent of college costs, up five percent from four years ago, according to Sallie Mae. But parents and students still carry the burden. In the 2013 Sallie Mae study parents covered 36 percent of college costs and students covered 29 percent on average. Since it is still such a great investment to attend college, the trick becomes building your savings and finding as much free money as you can to reduce the amount of your loans.

5 Tips for Saving for College

  • Start Saving as Soon as Possible – Even small amounts of saving will build up over time and will reduce the amount of loans you have to pay back later. Two popular ways to save are through 529 plans and savings bonds. There is a lot to know when choosing a savings option, so visit the links to learn more.
  • Find Free Money – This can be the key to saving you thousands of dollars in interest you would need to pay later. There are billions of dollars available to those who put in the effort to apply. Check out, Sallie Mae scholarships, and College Board financial aid.
  • Work While You’re in School – Remember that any money you can save or earn before and during college will reduce the amount of loans you need to take and save you money you would pay later.
  • Consider Your Options – College costs a lot. You may have dreamt about going to that Ivy League school , but can you afford it? Compare the amount you will need to pay at the colleges you get into. You may find that one school offers you more grants than another.
  • Get Tips and Reminders to Save – America Saves can help students and their parents keep college savings top of mind. Sign up for our free text message tips and reminders by taking the Pledge to Save and choosing “Education” as your savings goal.

Need to find ways to save. Consider taking the Personal Financial Management Made Easy  course to find spending leaks.


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