Do You Know How Your FICO Credit Score Is Calculated?

  • 21 Apr 2017
  • Posted by Amarasco


credit scoreGuidewell Financial’s’ “Incredible Edible Credit Score” Has the Answer

Credit scores and reports aren't just used to determine if consumers qualify for loans and credit cards. They also help determine what interest rate and terms borrowers receive and are increasingly used in decisions by landlords, cell phone companies, utility companies, insurance companies, and employers. Most Americans know that it's important to have a good credit score, but fewer are fully aware of the factors that affect the score they receive.  To help remedy this situation, nonprofit Guidewell Financial Solutions has created the "Incredible Edible Credit Score," a one-minute video that's informative, tasty and FUN. It shows how your FICO score is calculated. This is the credit score most lenders will use to evaluate your financial standing.

Why not join their virtual pizza party and share the video with your co-workers, family, and friends? In return here are three credit score facts everyone needs to know:

  1.   Credit reports and credit scores are not the same. 

Studies show that many of us don't know the difference between credit reports and credits scores. To keep them straight, just remember when you were in school: Your credit report and credit score are a lot like the school report card and grades you used to receive.

Like report cards, credit reports provide an overview of your performance, showing how well you manage your finances and credit. Compiled by the three major credit reporting companies -- Experian, Equifax, and TransUnion, they each contain a detailed history of your current and past credit accounts and debt,

third-party collections, certain public records and requests by lenders for the credit reports. They also list the dates accounts were opened, loan amounts, current balances and payment history, including late payments or defaults.

Consumers are legally entitled to request and receive a free credit report copy from each of the major credit reporting companies every 12 months. To access yours, visit or call 1-877-322-8228.

Credits scores are like the individual grades you received in school.  Each one offers a numerical snapshot measuring how much of a credit risk you are. There are many types of credit scores, each with its own scoring model.  FICO scores are the most common, but even these focus on slightly different information relevant to the industry for which they're geared. Scores are generally based on information from your credit report. There's also a rising movement to help consumers who don't have credit scores build and qualify for credit using other means.

  1. Your credit score regularly changes. 

It's true.  Your credit score may change any time new information is added to any of your credit reports.  For example, if you miss a payment, close an account, or apply for a new loan, this may change your score. One thing that doesn't change your credit score: How often you check it.  That's right, you can do so at any time and it doesn't affect your credit rating in any way.

If you want to check out your current credit score, charges a small fee.  Sites like and also provide consumer versions of a person's score. If you choose to go this route, make sure the site you use is reputable and be aware that the score it shows may not be the same as the one FICO provides.

  1.   Building a good credit score is more important than ever.

Why?  Because credit scores are used in more ways than ever.  They may help determine the rate you pay for insurance or what terms you receive on your next mobile phone plan. In the coming months, if interest rates go up and you have a low credit score, you'll pay even more for interest when you apply for credit cards, mortgages, and other loans than you did before. Understanding how your credit score is calculated provides you with an important key to building better credit.
That brings us back to the "Incredible Edible Credit Score."  Check out the video to see the factors that affect your FICO score and receive tips on how to improve your credit. You may go away hungry but also better informed!


About Guidewell Financial Solutions   

Guidewell Financial Solutions (also known as Consumer Credit Counseling Service of Maryland and Delaware, Inc.) is an accredited 501(c)(3) nonprofit agency that helps stabilize communities by creating hope and promoting economic self-sufficiency to individuals and families through financial education and counseling. Maryland License #14-01 / Delaware License #07-01

Copyright © 2017 by Guidewell Financial Solutions.


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The ABCs of Retirement Planning

  • 05 Apr 2016
  • Posted by Admin

by Kathy Armstrong

Are you saving enough for retirement? You know, “the golden years”, the time when you kick back, relax and enjoy a life of leisure?  It’s possible that a very large percentage of people who answer that question with a nod may be mistaken.

 Ouch! While whether or not you are saving enough depends partly upon the lifestyle you expect to have at retirement age, there are some general rules you should be following to help ensure you can focus on your newfound hobbies – and not whether or not you can afford to replace your aging Buick.

The general rule of thumb has been to save 10 percent of your income for retirement, but for women, that percentage needs to be bumped up to

12 percent. (Attribute it to our longer life span!)

But it’s not enough simply to tuck away your 12 percent into a savings account, and then expect to retire comfortably. All savings methods were not created equal, and investing wisely is the key to retiring comfortably.

First, the smartest thing you can do is to invest as much as you can of your pre-tax income before Uncle Sam and the state get their share.  For example, if you pay 28 percent of every dollar you earn to federal taxes, and another 7 percent for state taxes, 35 percent of your earnings are gone before you have touched it.

But there is a way to pay yourself first. Tax-deferred retirement plans.

The three workhorses of tax-deferred retirement plans are the 401(k), the SEP IRA, and Individual Retirement Accounts (IRAs).

  • The 401(k) is a company-sponsored plan where the employee elects to defer a portion of their salary up to $18,000 a year in 2016 ($24,000 if you’re age 50 or older).  The employer often matches the contribution (up to a set amount) -- it’s free money, but only if you contribute.
  • The SEP (Simplified Employee Pension) IRA is a traditional IRA that may accept an expanded rate of contribution (even as high as $53,000 in 2016).  It is owned by the employee, who might be self-employed.
  • A traditional individual retirement plan is a personal retirement savings program toward which eligible individuals may contribute both deductible and nondeductible payments.  The traditional IRA allows you to make contributions up to $5,500 each year ($6,500 if you are age 50 or older) in 2016 with the benefit of tax-deferred build-up of income.  The Roth IRA, on the other hand, is an after-tax retirement savings program whereby qualified distributions are received income-tax free!

I will stress, however, that retirement plans and options are complicated, and require much more space than provided in this single column to explain.  Whichever plan you use, though, make certain that you allocate your dollars wisely. The biggest mistake people make where retirement plans are concerned is placing money into their accounts, but failing to move it into the right mix of stocks and bonds. By default, undesignated monies might go directly into a money market account which currently pays less than 1% in interest.

How you allocate your funds when you are 30 should differ from when you are 50.  A financial advisor can help you in selecting a proper mix of stocks and bonds.

Just remember, if you ever question whether or not you are saving enough, save a little extra for good measure! And recall the adage “better safe than sorry”.



Kathy Armstrong is a CERTIFIED FINANCIAL PLANNERTM professional and works with Heritage Financial Consultants in Hunt Valley.  She is an investment advisor representative through Lincoln Financial Advisors Corp, a broker/dealer (member SIPC) and registered investment advisor, 307 International Circle, Suite 390, Hunt Valley, MD  21030, 410-771-5655.  Neither Heritage Financial Consultants nor Lincoln Financial Advisors is affiliated with Howard Bank. Heritage Financial Consultants, LLC is not an affiliate of Lincoln Financial Advisors Corp.  CRN-1264151-080315

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10 Things Millennials Should Do to Reach the Next Financial Level

  • 29 Mar 2016
  • Posted by Admin

Millennials have come a long way, but they're still behind on many key measures. ObstaclesMillennials have had a rough road when it comes to money. Not only did they come of age during the Great Recession, which made jobs scarce and benefits even scarcer, but many saw their parents lose big time in the stock or real estate markets, which scared them off of making their own investments. Still, there's no more time for excuses, because millennials are all grown up and taking on increasing amounts of responsibility. From mortgages and parenthood to caring for aging parents, millennials are facing big financial milestones, whether they're ready or not. According to Bank of America's Year-End Millennial Snapshot, which analyzed 2015 data from over 3,500 millennials, this young cohort of 20- and early 30-somethings continues to struggle financially: a tough job market, hesitancy to invest and student loans are just a few of the challenges in their way to prosperity. Still, the data suggest they are firmly committed to achieving financial independence one day. About half of millennials said the Great Recession changed the way they think about saving, investing and spending, with 40 percent saying they are more reluctant to invest in the stock market and 36 percent saying they are more hesitant to buy a house. Yet over 80 percent of millennials are optimistic that they will be able to save and invest more in the future. There is still a sense of optimism with the millennials. Although they're more hesitant, it's not stopping them. They feel good about the future Many are also getting some big financial assists from their parents, and 46 percent of millennial-supporting parents say they don't plan to stop anytime soon. A survey by the investment app Acorns of 1,020 millennials found that almost half of those surveyed said they were "treading water" financially or worse and would be in big trouble if they missed a paycheck. Most millennials (85 percent) said they haven't yet invested any money in the stock market, largely because they don't feel comfortable with it. While respondents said they wanted to save more, they found it difficult to do so given the pressures of living expenses and student loans. ADVERTISING "So many millennials are working on a contract basis or as freelancers; they don't have full-time benefits," says Jennifer Barrett, vice president of editorial and founding editor of Grow, a digital magazine published by Acorns and aimed at millennials. "They have to be more proactive ... [and] engage with finances much earlier than with earlier generations. Millennials are on their own in a lot of ways," she says. That's why forming good money habits is a key part of creating financial stability for the millennial generation, Barrett adds. "We recommend that people get in the habit of investing early on," she says. That's a message echoed by other millennial financial experts. "The biggest money mistake most people make – and I know I certainly did – is simply waiting too long to care," says David Weliver, 34, founder of the millennial finance website Money Under 30. When you're juggling your career, love life and other big issues, it's hard to also find time for your finances. Here are some steps millennials can take to bring their finances to the next level.

  1. Skip the credit card offers.

After college, young people tend to get bombarded with credit card offers, Barrett says, but they're usually better off skipping them. If you take on credit card debt, especially on top of student loan debt, then it's easy to get stuck in a trap of constantly feeling like you're falling behind. "Some millennials are embarrassed by [their debt]; it weighs pretty heavily on them," she adds.

  1. Increase your savings whenever you get a raise.

Anytime you experience a windfall – perhaps you earned a bonus or got a raise – Barrett suggests putting it directly into your retirement savings. "If you can increase your contribution right away before you have time to even register that you have a raise, that's what really makes the difference," she says.

  1. Get comfortable with investing.

Because so many millennials are scared of investing in the stock market (and understandably, since they came of age during the Great Recession), Barrett says it's particularly important to dive in early so long-term savings can outpace inflation. At the same time, though, she adds that it's important to have an emergency fund stashed in a safe spot, like a bank account, so you can cover unexpected expenses without reaching for a credit card.

  1. "Stop the bleeding."

That graphic expression is how Weliver describes the need to prioritize. "Make sure you're not going into more debt," he says, adding that you should look for ways to downsize your lifestyle or earn more money (or both). Once you find a way to end the month positive at least a couple hundred dollars, then you can start making choices about saving, investing and paying off debt.

  1. Pay off student debt.

Student loans are the albatross that hounds so many millennials; Weliver still remembers the day he made his final payment. Along with the day he realized he had enough in savings to live on for a year if necessary, it was a momentous occasion, and one that reinforced his choice to be more conscious about his spending and money management.

  1. Imagine your future.

Considering where you want to be down the road can help you make the right choices today, Weliver adds. While taking out insurance or funding retirement aren't the most exciting investments now, they could save you from financial challenges in the future.

  1. Embrace your earning power.

If you're working entry-level jobs or getting by on sporadic freelance work, then it's hard to feel in control of your finances, warns Stefanie O'Connell, 29, author of "The Broke and Beautiful Life," a money guide for millennials, and contributor to the U.S. News Frugal Shopper blog. "Even if you reduce your monthly expenses to zero, you're only saving as much as you were once spending … I tripled my income in 2015 and it's been absolutely life changing," she says. O'Connell adds that given today's tough job market, millennials have to show initiative and aggressively pursue higher-earning opportunities. "Take the initiative to show how you contribute to the bottom line. It's hard to argue against a raise when you have the numbers and track record to back it up," she says.

  1. Talk to your parents.

With parents still playing such an outsize role in so many millennials' financial lives, Jordan says parents and adult children should each make an effort to have open conversations about money. "Parents should take a proactive approach to shore up their own finances and teach children about responsible saving. Parents don't realize how much of a connection they're going to have; that conversation is really important, and they need to start early," Jordan says. On the flip side, millennials should also prepare to potentially assist their aging parents with money one day. "That's a conversation they really need to start having," he adds.

  1. Keep things as simple as possible.

It's easy to feel overwhelmed with the various financial management choices you have, but the bottom line is that you need to save more and spend less to accumulate more wealth, says Erin Lowry, 26, founder of and contributor to the U.S News My Money blog. "Don't get so aggressive with paying down debt that you completely eliminate savings of any kind. Everyone should have at least $1,000 tucked away in an emergency savings fund," she adds. "The best way to shed the feeling of living on a tight budget is to cut spending while increasing your earning power." That's exactly what she did: When she first moved to New York City in 2011, she was living paycheck to paycheck with a desirable but low-paying job in the entertainment industry. She picked up shifts at Starbucks, worked as a babysitter in her off-hours and severely limited her spending. Eventually, she created enough of a buffer that she could scale back her extra work (and catch up on sleep).

  1. Always look for the next level.

Once you achieve a basic level of comfort with your savings and budgeting efforts, then it's time to tackle the next task. Perhaps it's fully filling your emergency savings fund, investing or opening a retirement account. "Don't get comfortable with your status quo," Lowry says. "Push yourself further by contributing another percent or 5 to your 401(k). Learn more about investing. Most importantly, set financial goals and make them specific."  

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10 Bad Financial Habits You Need to Break to Get Out of Debt

  • 08 Mar 2016
  • Posted by Admin

We all have our creature comforts – those habits that, for better or worse, we indulge on a daily basis. However, while a regular morning latte or a new pair of shoes might seem harmless, you’ve got to consider their effect on your bottom line. A dollar here and a dollar there add up over time – and, despite your efforts in other areas, they could be one of many reasons you’re still mired in debt.
Those of us who find ourselves experiencing chronic debt problems often share similar behaviors and financial habits. If you catch them early enough, you can avoid trouble. But even if you’re already in the red, recognizing and adjusting these behaviors can help you get back on track.

Bad Habits of Perpetual Debtors
According to data compiled through the U.S Census Bureau and the Federal Reserve, average household credit card debt in 2014 was a whopping $15,191, with Americans owing more than $854 billion to their credit card providers altogether. It’s a set of consistent habits that sets those prone to debt apart from those who stay in the black. By watching out for the following behaviors, you might be able to stop some of those bad habits in their tracks and reassess the way you think about and approach debt.Debt
1. Impulse Buying
Those who are constantly in debt are often the type to snatch up something whether it’s on sale or not – even if the purchase wasn’t exactly planned. However, impulse buying can lead to a series of dangerous spending behaviors:
• Justifying Unplanned and Poor Purchasing Decisions. By justifying a “need” for an expensive bag or new gadget, you allow yourself to

overspend and find reasons why it makes sense.
• Using Your Credit Card for Impulse Purchases. Because impulse shopping is unplanned, you may not actually have the funds to cover costs. That means you’re using credit to purchase items you can’t afford.
• Losing Track of Your Budget. Even the most diligent budgeter can mess up every now and again. However, impulse spending causes you to lose sight of your budget and your financial goals: When you decide your budget is already blown, you might just keep swiping that card – and that’s a slippery slope.
While an impulse buy here or there may not leave a lasting impression on your finances, making it a habit can seriously derail your goals. Develop a plan that helps you cope with that irritating itch to spend without thinking.
Julian Ford, a professor of psychiatry at the University of Connecticut School of Medicine, suggests coming up with a mantra so you remember your goals – for example, “I only buy what I need.” Before you make a purchase, stop – think of your mantra, and walk away. If it’s something you really do need, it’s still going to be there in a few days.

2. Using Credit Cards for the Points
Not all rewards credit cards are evil. In fact, when used responsibly, some definitely have their place in your wallet. However, there’s a reason credit card companies offer those rewards, and it’s definitely not out of the goodness of their hearts. Rewards encourage you to spend more, plain and simple.
A 2010 study presented at a meeting for the American Economic Association found that simply using a rewards or points-based credit card with a 1% return actually increased monthly spending by $68, and overall credit card debt by $115 per month. Suddenly, that pursuit of points doesn’t seem so savvy.
While you might score a little cash back on that purchase, many cards impose heavy restrictions. From annual caps, to higher cash-back rates only for limited purchases (such as gas and groceries), you might not be getting back as much as you think. Going deeper into debt in pursuit of the almighty credit card point is simply not worth it.

3. Keeping Up With the Joneses
Real estate agents often say that it’s better to be the worst house on the best street than the best house on the worst street. However, when your neighbors seem to have it all, the drive to be the best house on the best street can overshadow your spending savvy. Competition is a psychological trigger that can cause spending, and keeping up with the Joneses – or competing against family members, neighbors, or friends – can lead you to overspend.
While some people simply don’t care about measuring up to others, it can be a real challenge for certain families. When a friend purchases a new vehicle or home, takes a pricey vacation, or even wears expensive jewelry, it can trigger competitive behavior that leads to poor spending decisions.
It’s important to remember that success is hard to measure from the outside. When you see a neighbor pull up in a shiny new car, remind yourself of your priorities and goals. No one can see your retirement account balance, but you know that you’re working to secure a comfortable future by contributing to it, instead of that new watch.

4. Shopping to Be Happy
Raise your hand if you’ve ever gone on a mood-based spending spree. If you have, you’re not alone. Shopping can actually release endorphins in the brain, similar to other activities such as exercise, sex, and even eating chocolate. Unfortunately, like those three things, spending money in order to feel good can actually become addictive. Shopping to boost your mood creates a link between happiness and buying material goods – and it’s a link that can be seriously hard to break.
Ryan T. Howell, assistant professor of psychology at San Francisco State University, suggests checking your emotions before you buy as a way to stop emotional shopping. Before you hand over your credit card, think about why you’re making the purchase – because you really need it, or because you’re hoping to boost a bad mood?
Of course, if you can’t get your emotional spending under control, you may need professional help. Shopping addiction is real and can be difficult to break, but with the help of a dedicated mental health professional, you can learn your triggers and find coping mechanisms to help keep you out of debt.

5. Expecting a Miracle
Often, people who are consistently in debt mistakenly believe that righting their finances would take a money miracle. However, you’re never going to get out of debt by winning the lottery, landing a windfall from a wealthy relative, or having the world’s best-paying job simply fall in your lap.
What makes this way of thinking so dangerous is that it removes you from a position of control. When you’re hoping for someone else to swoop in and save you from your bad habits, you’re handing over the financial steering wheel and emotionally cutting yourself off from your debt. Of course, we all know that your credit, debt, and lifestyle belong only to you – and only you can solve the problem.
Instead of waiting for a miracle, start opening your bills and taking the time to make a budget. Set up payment agreements to stay current, pay all new bills on time, and remember that you’re the one who is affected when you’re stuck in debt.

6. Excessive Lifestyle Inflation
As you get older, you probably expect to achieve a better financial status than you had as a young adult. A better job, a raise, and even natural economic inflation can all affect your earning power. However, the difference between those who are always in debt and those who stay in control of their own finances is that the perpetual debtors buy more than they can afford.
It’s tempting to put that raise to work to buy a new house, take a vacation, or simply increase your living expenses, but it could land you back at square one. For example: If Bill earns $60,000 per year and spends $45,000, but Jeff earns $150,000 and spends $175,000, who is truly in a better financial position? Although Bill earns less, earnings aren’t the only factor when it comes to staying out of debt. It’s how you manage your money.
Lifestyle inflation is a natural part of earning more and moving up the chain at work – but it’s only acceptable if you’re spending within your means. As soon as you start going into debt to afford a certain way of living, it becomes problematic. Make sure you only spend what you can afford, and maintain your valuable financial freedom.

7. Keeping Debt Out of Sight and Out of Mind
When you put your fingers in your ears during the debt conversation, you’re engaging in risky behavior that could plunge you even deeper into the red. Those who tend to ignore their debt may engage in the following red-flag behaviors:
• Avoiding phone calls from creditors and collection agencies
• Ripping up bills and statements before they’re opened
• Becoming visibly uncomfortable, defensive, and angry when debt is discussed
• Not knowing how much debt is owed
Getting hit with late and nonpayment fees, dealing with collections, and falling deeper into debt than you realized are all consequences of taking an “out of sight, out of mind” attitude toward what you owe. It’s dangerous and simply perpetuates your bad behavior.
You don’t have to like your debt, but you do have to acknowledge it. Get in the habit of opening your mail when you feel calm and ready. The more you know about your debt, the better prepared you can be to face it.
Once you know how much you owe, work out payment plans. If you owe a lot to several different creditors, pay your utility and fixed bills first and then focus on the account with the smallest balance. This can feel more achievable, and paying it off can give you the motivation you need to move onto the next balance.
These are small steps, but they can make a big difference in how you view debt: as a surmountable obstacle, rather than an unbeatable foe.

8. Taking Interest-Free Loans
Like credit cards that offer points and rewards, stores that offer no-interest loans are simply luring in potential debtors and enticing them to spend more than they can. The sad part is that many people who bite on such offers won’t pay off their loans before the interest-free period ends, after which they’re often slammed with fees and even retroactive interest from that so-called “interest-free” period.
Always read the fine print, and remember: Unless you’re certain you can pay it off before the grace period ends, interest-free loans are anything but.

9. Only Paying the Minimum
Paying the minimum every month doesn’t mean you’re getting out of debt – in fact, minimum payments are often calculated to be about 4% to 6% of your balance, which could mean you’re not only staying in debt, but actually accruing more interest. When you open your credit card statement, remember that you owe the balance – not just the amount listed under “minimum payment.”

10. No Debt Planning
I used to think that going into debt was no big deal: I’d just pay it off later. That bad habit caught up with me when I found myself owing several creditors, all of which wanted payment at the same time. I was completely overwhelmed.
I finally got wise and created a plan – I sent in all budget surpluses to my debts, starting with the smallest balance first. Of course, that also meant keeping up with minimum payments until I could tackle each balance. With a plan in place, attacking your debts becomes a lot less overwhelming. I could see my balances going down and accounts being closed, which motivated me to keep going.

Paying off debt is great, but trying to do it without a plan in place can leave you throwing your hands in the air and returning to your bad habits. You have to plan ahead and know where every dollar is going if you want to quit your harmful behavior and start fresh.

Final Word
Obviously, the solutions to each of these bad habits varies from person to person. Someone might need to take up hiking to replace the mood-boosting properties of shopping, while another should probably cut up that cash back card to reduce temptation.

However, as with all bad habits, the first step is recognizing that your behavior needs to change. If you find yourself chronically sabotaging your financial stability, it’s time to hit “pause” and take stock of yourself. Knowing that you’re hurting your own chances for freedom just might be the kick you need to finally get yourself out of the red.

Do you have any habits that sabotage your financial freedom?

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Don’t Just Sit There. Be The Ethical Guy!

  • 01 Mar 2016
  • Posted by Admin

Who is the Ethical Guy?.....

The Ethical Guy is the guy who is confident in their ability to participate in scenario planning and strategy but is still able to identify if the risk is a long shot or unethical.

Don’t Just Sit There. Be The Ethical Guy!

Ethical Guy


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Banking On The Weatherman...... And Your Banker

  • 05 Feb 2016
  • Posted by Amarasco

First Friday- February 5th is National Weatherman's Day. This day honors weathermen, and woman who work hard to accurately predict the often fickle weather. Despite major technological advances and supercomputers, forecasting the weather is still a tricky, and ever changing business. Knowing the weather is important in so many ways. It helps you make wise decisions on how we dress, where we go, and even if we go.  The most obvious example is knowing when and where hurricanes or tornado's may hit.

Another person that you should bank on is your Banker.Your Banker also helps you make wise decisions with your financial forecast. Your Banker must understand their customer needs and make recommendations of products that are suitable. By investing their time, energy and resources into one business after another, one family after another, your Banker will help to assure you are prepared when that financial "hurricane" or "tornado" hits. Whether it be face to face, over the telephone or in writing you should be able to Bank on Your Banker!

If you see a Weatherman or your Banker, give them your appreciation for a job well done.

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6 Money Strategies for the Sandwich Generation

  • 28 Jan 2016
  • Posted by Amarasco

SandwichWhen you're caught between the financial pressures of parents and children, you have to plan ahead.When caring for your children and parents, it is especially important to hone your budget and routinely assess your financial situation.

The Sandwich Generation – adults who simultaneous care for children and aging parents –Individuals who find themselves in the sandwich generation are forced with contemplating taking care of things today in a way that may negatively impact their future. Family members might cut back on their work hours or sacrifice savings in order to care for aging parents, she adds. The pressure, both financial and emotional, weighs on people.

Those pressures are one reason that 37 percent of Gen X, who are between ages 35 and

49, do not feel financially secure, according to the 2015 Northwestern Mutual Planning & Progress Study of 5,474 adults. About 1 in 4 said they are "not at all confident" they will achieve their financial goals, and 2 in 10 said they believe they will never retire, largely because they won't have enough retirement savings.

"The number of people who find themselves sandwiched between generations continues to grow as the baby boom generation gets older and is expected to live longer than ever before – longer than they're capable of caring for themselves. At the same time, children are living at home for longer, which means people in middle age are often caring for, and financially supporting, both generations at once. It is estimated that 1 in 8 Americans between the ages of 40 and 60 are caring for both children and parents or grandparents at once. That care giving often coincides with intense years of career demands as well as the need to save for retirement.

If you're a member of the sandwich generation, here are some financial strategies to help your family get through the challenge:
Pick your priorities. "Maybe we start saving for college tuition later, or we save less now with the idea of ramping it up later, when our incomes are back at full stride," Make it a priority to continue saving for retirement, but to scale back in other areas, such as spending on luxuries such as vacation and cars.

Stick to a revised budget. Taking on responsibility for parents can make it especially important to hone your budget. Because they have so much on their plates, making a plan is critical. Set limits on spending, shopping sales and to stay within your means, When it comes to vacation or holidays, focus on shared family experiences rather than dollars spent. Use your banks' spending alerts to stay within budget.

Give yourself an annual checkup. It's like going to the doctor. Take a few minutes off work and sit down with a financial advisor to review current financial priorities, and make sure everything is aligned." A recent survey of 519 adults with incomes $75,000 and up found that among those in middle age (ages 45 to 54), just 37 percent say they are saving enough to live comfortably in retirement, compared to 57 percent in other age groups. An annual checkup can help determine where you stand and what adjustments need to be made.

Plan for eldercare. While parents often anticipate the costs that come with children, they are less likely to budget for the expense of caring for their parents. Those costs can include paid caregivers, a nursing facility or medical expenses, he adds. Budgeting in advance, as well as checking for any available benefits through the federal government, particularly Social Security or veterans' benefits, can help ease some of that pressure.

Coordinate with siblings. Work out a plan with your siblings. Work through any tensions with siblings and other family members before a health crisis hits, because coordination becomes essential. You have to sit down and have these conversations that you never thought you would have.

Because you're the person in the middle, you have to be prepared!

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Are Your Financial Planning Goals in Order?

  • 23 Jan 2016
  • Posted by Kathy Armstrong

Save, save, save is a message you’ll hear me drive home on more than one occasion.

But the fact of the matter is, tucking the money away is only about half of the story. The other half involves doing everything in your power to see that all those dollars you’ve so faithfully set aside are where you want them.

Studies have shown that asset allocation is the single most important factor in achieving a successful portfolio; but there is no guarantee that asset allocation will prevent a loss in declining markets. The key is to have a proper allocation of your portfolio, one that matches your investment objectives. While what’s “proper” may vary from one

person to the next, the fundamental motto of asset allocation is the same for everyone: Diversify!

Having a diversified portfolio is a key element toward achieving your financial planning goals.

Whatever comprises your portfolio, three key factors should drive your allocation decision: your time horizon (how soon you’ll be needing to use this money), your tolerance for risk, and your financial objectives. This is why a sound financial plan is so important.

In today’s economic environment, obtaining investment information is easy; choosing the investments that are suitable for you is much more difficult. You need to identify your investment objectives, evaluate your risk tolerance, analyze your current portfolio, develop an appropriate asset allocation strategy and recognize various alternatives tailored to meet your individual needs and goals.

Your financial advisor should use sophisticated modeling tools which illustrate the future implications of different portfolio scenarios related to your financial situation, assets and cash flow needs. Then you should agree on your optimum allocation.

While all this new information may seem confusing, it’s empowering simply to be aware of the questions you should be asking your financial planner to ensure you get prudent advice. So I encourage you, keep reading, learning and saving. And remember, one of the greatest risks you can take is to do nothing at all – and miss out.

Diversification may help reduce, but cannot eliminate, risk of investment losses.
Kathy Armstrong is a CERTIFIED FINANCIAL PLANNERTM professional and works with Heritage Financial Consultants in Hunt Valley. She is an investment advisor representative through Lincoln Financial Advisors Corp, a broker/dealer (member SIPC) and registered investment advisor. 307 International Circle, Suite 390, Hunt Valley, MD 21030, 410-771-5655. Neither Heritage Financial Consultants nor Lincoln Financial Advisors are affiliated with Howard Bank. Heritage Financial Consultants, LLC is not an affiliate of Lincoln Financial Advisors. CRN-1264134-080315

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What Does Football And Finances Have In Common?

  • 21 Dec 2015
  • Posted by Amarasco

Your personal finances Football-moneyhave a lot more in common with a football team than you might think.

Most people like football and it is especially exciting to watch. Although we don’t always understand all the strategies just yet, we enjoy watching the carefully planned plays. Sometimes they work, sometimes they don’t, but nevertheless, very fun stuff to watch.

Football and finances have a lot in common. The plays are carefully planned, the teams spend countless hours

practicing and strategizing, there is an experienced coach that guides the team to victory and they never give up.

Their goal is specific, understood by all and there is serious motivation to win.

Your money matters, your financial road map, require the same mindset as those big, bad, burly football players. If you don’t have a specific plan in place, if you don’t practice and don’t have someone guiding you, you will probably not end up where you want to. When it’s time to send your kids to college, go on that vacation or retire, where are those funds coming from? What if you lost your job unexpectedly? Do you have reserves to fall back on?

Read the playbook.

Imagine those football players running onto the field with no plan, no plays. It would almost be painful to watch. Complete chaos. Is that what we enjoy watching? Doubtful. So, is your financial picture complete chaos? If so, don’t panic. It’s never too late to get things in order.

Start by having a plan.

Write down specific goals, what action steps are necessary to achieve those goals and by when. If lifestyle changes must occur, define what those changes are and commit to that change. Sit down and pull all your bills out for the last month. Determine your fixed expenses and compare that to what you actually spend every month. Sometimes this alone can be a real eye opener. Where does all that extra money go? The local coffee house? Lunch out? Those shoes you had to have? Here’s an interesting statistic: If you saved $4 per day (one coffee) for 5 days per week for 52 weeks and invested that money at 10%, do you know how much you would have after 40 years? Some would say about $80,000, $90,000 even $100,000. Nope, you would have $553,396. Wow. Compound interest could be your new best friend.

Are you ready for some football?

With the start of the New Year, We encourage you to spend some time and make a plan. You deserve this. If you need some help, seek guidance. Taking action is the most important step you can take.



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Bookkeeping Basics for Small Business

  • 16 Dec 2015
  • Posted by Amarasco

bookkeepingBookkeeping is vital to properly managing your business resources. Additionally you will need these records for tax purposes. Whether you DIY or hire someone to keep track of everything you should understand the importance and the basics of bookkeeping.

Keeping good records of operations will alert you to any cash flow issues and potential legal problems as well. Here are a few basics that should always be standard practice to keep in your books.

Revenue and Expenses
Every transaction should be recorded. How much is coming in and how much is going out and

where is it is all coming from and going to.

It is important to record the cash your business spends so you'll have an accurate number of expenses each year. Writing reimbursable checks and keeping detailed petty cash records are both valid methods of documenting cash expenditures.

Maintain records of all inventory! This will help you to forecast for the upcoming year by tracking trends, prevent stealing and misplacing merchandise, keep inventory holdings to a minimum. Dates purchased, stock numbers, purchase prices, dates sold, and sale prices are all relevant information for inventory records.

Accounts Receivable and Payable
Always keep track of what customers owe you and what debts you owe others. It's prudent to record as much data as possible including invoice dates, numbers, amounts, terms, dates and amounts paid or due, balances, and client information in real time.

Hiring even one employee invokes your responsibility to file and pay forms and payroll taxes and each state has its own tax obligations. Employers are responsible for maintaining employee forms such as the W-4 (Withholding Allowance Certification) and the I-9 (Employment Eligibility Verification). You are responsible for maintaining records on withholding, employer matching, unemployment, and worker's compensation.

If you decide to do your own bookkeeping you should consult with an expert especially at the beginning to make sure that you are on track. As your business grows you may want to bring someone on and/or deploy more sophisticated bookkeeping software.

How do you keep your books up to date and on track?

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