SMART SPEND: Using Your Stimulus Check Wisely

  • 29 May 2020
  • Posted by ccrossen

By now, you should have received your Economic Impact Payment (stimulus check) if you were eligible to receive it by direct deposit. Some people may have needed to submit information to the IRS to receive their Economic Impact Payment by a check. You can sign in to your online or mobile banking app to see if your stimulus check has been deposited. Please note, Howard Bank does not control when payments will be deposited. If you have not yet received your check, you can track the status of your payment at

You might be wondering what to do with your stimulus check. In these uncertain times, the best thing you can do is plan ahead. Below are some helpful tips for using your stimulus check wisely:

  • Focus on the necessities: Prioritize to pay the bills that keep a roof over your head, the lights on, and food on the table. You should check with your local jurisdiction as many utilities and communications providers are working with customers to waive fees, provide power, or keep your internet connected.
  • Talk to your banker: At Howard Bank, we’re dedicated to helping you make the right choices for your finances. You may need a loan or even loan modifications. We’re happy to help guide you to the best of our abilities.
  • Don’t hoard cash: Keep your money in your bank account. It’s safest there and may even earn interest! As an FDIC Insured bank, Howard Bank customers have protection for up $250,000 per depositor, per institution, and per ownership category.* Howard Bank is also an Insured Cash Sweep® (ICS) network member. That means having access to multi-million-dollar FDIC protection. If you have large-dollar deposits, you can learn more about the ICS service here.
  • Save what you can: Even if it’s just $100-200, that can help to provide a cushion for future bills or emergency needs. If your check was not directly deposited and you received your check by mail, you can deposit the funds with your mobile phone! Watch this quick video to see how easy it is to make a mobile deposit.
  • Protect it from scammers: Unfortunately, there are many scammers trying to use this crisis to get your money. Be cognizant of suspicious emails, texts, or phone calls. Visit our Security Center to learn about how you can help prevent and monitor for scams. 
  • Pay your taxes: The deadline for filing and paying income taxes has been extended to July 15th, so if you haven’t saved to pay your income taxes, you may want to consider using the stimulus check to pay your taxes.
  • Donate it (if you can afford to do so): Food banks and other charities are seeing a rise in demand for their services. If you are lucky enough to be financially unaffected by the coronavirus, donating your stimulus check could make all the difference in someone else’s future. You could even purchase supplies for making masks and give them to your local communities. There are many ways to step up and be a good neighbor in these trying times. 

And since we mentioned taxes… if you have refunds coming your way, be sure to consider these tips again!

*FDIC insurance covers deposit accounts – checking, savings, and money market accounts, and certificates of deposit.  FDIC deposit insurance does not cover other financial products and services that insured banks may offer, including stocks, bonds, mutual funds, life insurance policies, annuities, municipal securities, or safe deposit boxes and their contents.
For more information about FDIC insurance visit: 

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What's a Good Use for a HELOC?

  • 22 Jun 2017
  • Posted by Amarasco

When you take out a second mortgage, a name for a home equity line of credit, you're offering your house as collateral to secure another loan. The upside: You can gain access to up to 85% of your home's value, minus your current mortgage balance and adjusted based on your creditworthiness. The downside? If you can't make your payments, you could lose where you live. Because the stakes are high, you want to make sure you use a HELOC for the right reasons. Here are a few.

Making home improvements

Most people who take out a HELOC do so to make home improvements. Experts say you should only do this if the improvements you're considering will increase your home's value. This way, the money you're borrowing will be returned when you sell your house at a higher price. The National Association of Realtors' 2015 Remodeling Impact Report lists these six changes as the ones with the best return on investment:

  • Installing a new front door.
  • Installing new siding.
  • Upgrading your kitchen.
  • Adding on to your deck and patio.
  • Making an attic into a bedroom.
  • Installing a new garage door.

These improvements can range from a few hundred to tens of thousands of dollars, but they don't change the footprint of your home and tend to be what future buyers look for.

Supplementing an emergency fund

Everyone should have an emergency fund to cover events such as unexpected car repairs and appliance breakdowns. Most people keep these in savings accounts, but you might consider a home equity line of credit as another source of cash. You only pay interest on the amount you borrow, and you could pay the loan off quickly to save money. Still, it makes more sense to have an emergency fund that's earning a little interest rather than one that charges you interest.

Paying off high-interest debt

Because the average interest rate on a HELOC is much lower than the average credit card interest rate, many people think about using a HELOC to pay off their credit cards. This is a great strategy if you're committed to never carrying a balance again. Otherwise, you're just adding another debt at a lower rate. Regardless of how you use a HELOC, remember that the interest rate is variable and may change each time you tap it. And you'll have to repay the entire loan by the end of the payment period set by the lender. On the upside, the interest you pay on a HELOC is tax-deductible, like your mortgage interest. If you use a HELOC for the right reason, that's just one more benefit. © Copyright 2016 NerdWallet, Inc. All Rights Reserved

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How to Be a Money-Smart Graduate Student

  • 13 Jun 2017
  • Posted by Amarasco

Whether you’ll be pursuing a master’s degree in English literature or a Ph.D. in chemical engineering this fall, life as a graduate student likely will require a good deal of thriftiness. But that doesn’t mean you have to limit yourself to a steady diet of instant noodles and cereal for the foreseeable future.

Here’s a look at several sustainable ways that grad students can maximize their stipends or other income and cut costs in the process.

Find a roommate

Sharing a house or an apartment with others may have taken some getting used to as an undergraduate. By now, though,

you’re probably a seasoned veteran. And that’s a good thing, since finding a roommate is still one of the best ways to save money.

As well as being able to write a smaller rent check every month, you may also want to divvy up utilities and split groceries. Consider using an app like Roomi to find someone who has similar attitudes toward noise and cleanliness, which can reduce tension down the road.

Catch the bus

Unlike your first college stint, you probably won’t be running back and forth between the far corners of your school’s campus to get to class. In grad school, you’ll probably spend most of your time in one or two buildings. A car, therefore, may not be essential. Instead, use a bike or hop on public transportation. Many schools offer subsidized transit passes to lighten the load on students’ finances.

Use student discounts

It can be disheartening to create a budget only to find that there isn’t much money left over for meals out or nights at the neighborhood bar. But if you take advantage of student discounts — and memorize that bar’s happy hour schedule — having a good time doesn’t have to put a major dent in your wallet.

From movie theaters to museums, many places offer student discounts. Although saving a couple of bucks may not seem like much, it’ll make a difference over time. This extra cash can then be put toward your future, either by eliminating debt or saving for retirement.

Tackle debt, save what you can

Only about 1 in 10 millennial's say they feel “very confident” that they’ll have enough cash for retirement, according to a recent survey. If you’re worried about running out of money during your later years, consider starting to set aside some of your income now. A good amount to shoot for is about 10% of your monthly earnings.

You’ll also be doing your future self a huge favor by slashing as much credit card or student loan debt as possible. Also, do your best not to rack up any new consumer debt. Use your plastic only in emergencies.

The bottom line

Pursuing an advanced degree can be an incredibly rewarding experience, but not financially, at least not right away. It’s therefore essential to take advantage of all the breaks you can get, such as subsidized transportation passes and other student discounts. That way, the only thing you’ll graduate with is more knowledge, and not mountains of credit card debt.

© Copyright 2016 NerdWallet, Inc. All Rights Reserved



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How to Save $1,000 a Year -- Without Breaking a Sweat

  • 13 Apr 2017
  • Posted by Amarasco

Nonprofit Guidewell Financial Solutions offers 10 tips for saving big on a limited budget.

GuidewellConsumers who have never saved before sometimes worry they won’t be able to make it a habit, especially if they’re living paycheck-to-paycheck.  However, small changes in financial choices and lifestyle can lead to tangible savings rewards. To celebrate Financial Literacy Month, nonprofit Guidewell Financial Solutions (aka Consumer Credit Counseling Service of Maryland and Delaware) shares these tips on how to save a thousand dollars in a single year:

Use direct deposit. This is an effective way to start saving. Here’s how it works - Have paychecks electronically deposited into a checking account.  Before the money goes into checking, have $10 automatically deducted and directly placed in a personal savings account.

Savings = $240/yr or more 

Brown bag it!  Bring lunch from home ($1-3 per meal) instead of dining out at work ($8-15 per meal).

Savings = $1,300/yr or more

Less is more.  Downsizing the family cell phone, cable, or satellite television package is a simple way to put more money in the bank.

Savings = $600/yr or more

Avoid putting the pedal to the metal.  Even in this era of low gas prices, the cost of fuel, oil, tires, and vehicle depreciation averages about 52 cents a mile for consumers who regularly drive to work. To reduce transportation costs, consider carpooling, walking, or biking just two days a month.

Savings =  $288/yr or more

Compare banking options. Paying for checking account services? Shop around and find an account that doesn’t charge monthly fees.

Savings = $120/yr or more

Say “no” to the one armed bandit.  Putting change into the office vending machine is convenient, but it comes at a cost.  Bring snacks and sodas from home instead.

Savings = $100/yr or more 

Stick to in-network ATMS. It’s handy to get cash from on-the-spot ATMs, but the fees really add up. Plan withdrawals so they only take place a ATMs that belong to your bank.

Savings = $100/yr or more

Go local. Rent free books and DVDs from the public library instead of renting or buying them online or at a store.

Savings = $100/yr or more

Do some homework. Comparison shop before purchasing or renewing auto, renters, or homeowners insurance. Also think about increasing the plan deductible.

Savings = $100/yr or more

Practice paycheck power. Employees who get paid bi-weekly receive three paychecks for the month twice a year.  Each time this happens, place the extra paycheck into savings.

Do the math!

Consumers who have never saved before can begin by tracking where their money goes. Before setting up a savings plan, it may also help to get outside budgeting advice and support from a reputable nonprofit agency. Guidewell Financial provides financial counseling and financial coaching in person or by phone. For an appointment or resources, call 1-800-642-2227 or visit the agency website. Small changes made now and carried throughout the year will lead to less stress and greater financial security in 2016.

About Guidewell Financial Solutions

 Guidewell Financial Solutions (also known as Consumer Credit Counseling Service of Maryland and Delaware) 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 Guidewell Financial Solutions.

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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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What’s the Fastest Way to Pay Off a Mortgage?

  • 02 Feb 2016
  • Posted by Amarasco

If you’re like most homebuyers (almost 90% in 2013), then you took out a fixed-rate 30-year mortgage. There are plenty of reasons to go this route, the most important of which is low monthly payments, but it’s hard to deny that 30 years is a long time.



Many first-time homeowners assume they won’t stay in their home for that long, but for those that do—or who are already halfway there—owning your house outright is the ultimate end goal. There are several ways to pay down your mortgage, but as far as actual speed goes, which method will be fastest for you depends on your individual financial situation. Here are the two strategies that have worked for other homeowners in the past:

Refinance to a shorter term.
Most lenders offer 10- and 15-year mortgages, and not only can refinancing to one from a 30-year help you pay off your home faster, it can also cut down on the total amount of interest you’ll pay. If you haven’t refinanced recently, this may also be an opportunity to grab a lower rate. There are some downsides, though. Your monthly payment will increase, and closing costs mean it may be a year or two before you actually feel like you’re saving money. If you’re already very close to the end of your current mortgage, you may want to consider another route. Because refinancing resets your amortization, the majority of your early payments will go to interest, not principle.

Pay extra.
If refinancing isn’t right for you, then your next best option is to pay more or increase the frequency of your payments. Check your contract for prepayment penalties, though. If you pay off your loan early, the bank misses out on some of the interest they expected, meaning they may try to get the money another way. There are all sorts of creative ways to pay extra without feeling the pinch. Try the following:
  • Waiting for tax season. This year, the average tax return is $2,893. For most people, that’s at least one mortgage payment. So instead of spending it on other expenses or treating yourself, put your refund money back into your mortgage.
  • Making extra principle-only payments. Interest is front-loaded into your payments, so for the beginning of your mortgage, the majority of your payment actually goes toward interest, not your principle. Check to see if your lender allows you to make additional payments on just your principle. By paying down your original loan amount, you’ll save interest as you shorten your term.
  • Paying every two weeks. Most people pay their mortgage once a month, but by splitting your payment in two and paying twice a month, you actually end up making one extra full payment a year. That doesn’t sound like much, but it can still shave years off the end of your mortgage, and save you thousands. Plus, if you or a spouse get paid bi-weekly, it can actually make things simpler.
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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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On a Budget? Cut Back with These Frugal Tips

  • 26 Jan 2016
  • Posted by Amarasco

Whether you’re a recent college grad out on your own (and paying bills) for the first time, a new homeowner feeling a little house-poor, or a reluctant apartment dweller saving up for a down payment, you can probably agree on one thing: budgets are hard. But after you’ve stopped eating out and going to see a movie each week, where else can you cut back? Here are a few pretty simple ways to stay frugal:

Learn what things actually cost. How can you expect to land a good deal if you don’t know what one looks like? Scope out all the grocery stores in your area, so you can compare the prices of staples like milk and eggs. Once you know what your stores carry and how their prices vary, you’ll be able to spot deals like a pro, and the same goes for just about everything.

Stay organized. When your pantry is a mess, keeping track of what you’ve already bought gets tough. To avoid buying food (and other things) you don’t need, have an organizational system in place and know what you have. Minimize waste. In the US, around 30-40% of the food we produce is thrown away uneaten. This is bad for a whole host of reasons, not the least of which is your wallet. Minimize the amount of food that goes bad in your fridge by washing, drying, cooking, and otherwise prepping your fruits and vegetables as soon as you get them home. That way, they’re convenient and ready to go, whether you’re snacking or throwing together a last-minute meal.

Go homemade as often as possible. Convenience comes at a price. Often, putting in the elbow grease yourself can shave 50% or more off the cost. Great DIY recipes are all over the internet, you just need to find one that works for you. And this isn’t limited to food. You can even make your own laundry detergent, or start using vinegar for cleaning.

Breakup with your cable provider. With all the streaming services out there (Hulu, Netflix, and Amazon prime, plus others), cable TV is looking like less of an entertainment necessity these days. Unless you’re a huge sports fan, odds are pretty good that you can find your favorite shows online. By cutting the cord, you stand to save several hundred dollars a year.

Only rent (or buy) as much house as you need. Most sources advise that you spend no more than 30% of your monthly income on housing, but if 30% equals out to a 3 bedroom apartment just for little ol’ you, opt for a smaller (and cheaper) space that you can actually use. Just because you were approved for a $200,000 loan doesn’t mean you have to use all of it. In fact, sticking to the bottom of your loan limit means more manageable monthly payments and less interest due overtime.

Reevaluate your phone situation. Phones and data plans are expensive. Stop feeling the need to constantly upgrade! And stop using so much data. If waiting at the dentist’s without Candy Crush sounds completely unbearable, take a look at your landline. When you carry a phone around with you all day, do you really need one plugged into your wall?

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5 Ways to Help Lower Your DTI

  • 21 Jan 2016
  • Posted by Amarasco

Your debt-to-income (DTI) ratio is one of the three most important factors that lenders look at when deciding whether or not to approve you for a mortgage (the other two? Your FICO score and the loan-to-value ratio, which varies with the price of the house you plan to buy).DTI is considered especially important in determining your ability to repay the mortgage. It is computed with your total monthly debt payments and gross monthly income (before taxes are taken out). It is expressed in one of two ways, either including your estimated monthly mortgage payments (”back end”) or your debt obligations before you take out the mortgage (“front end”). In 2014, an important new rule promulgated by the Treasury Department had a major impact on DTIs. Known as the QM Rule and designed to toughen ability-to-repay requirements, it had the effect of limiting DTIs to 43 percent. That means borrowers with DTI’s above 43 won’t get loans. In practice, lenders are actually even more conservative; the median back end DTI is about 37 percent for approved mortgages. That means most monthly debt payments including mortgage payments total no more than 37 percent of total monthly gross income. Your DTI can be a killer for young adults making sizable student loan payments or for consumers who have run up debt. However, even those with long term debt payments like student loans, auto loans, or back taxes can get a mortgage if they improve their DTI. Here are five steps anyone can take to help lower their DTI.

1. Pay off your smallest debts first. Even a hundred dollars on a credit card requires a minimum monthly payment, which will increase your DTI. Pay these off in full. Dollar for dollar, you will get more debt reduction with this tactic than any other.

2. Refinance high APR credit card debts with a low APR card. APR means annualized percentage rate—the actual interest you pay over a year. It’s a way to look at the interest you are paying without focusing on special introductory rates, which can be misleading. Many lenders offer cards with very attractive APRs to customers who have good credit ratings. If you have cards that are past their introductory period, though, you may be paying a higher APR than you need to. Contact one of the major credit card lenders to see what they will offer in the way of a lower APR card. When you find one, consolidate your high APR debts under your new low APR card. You will reduce your monthly debt load and pay at a lower rate of interest. In a year, review where you stand. If the marketing rate that made your new card attractive has expired, consider finding a new one and consolidating again.

3. If you thought you outfoxed the dealer and got a great deal on a new or used car, check again. You might be paying interest at a rate much higher than you need to. The median APR for car loans today is 4.38% for a 60-month loan (five years) on a new car and 5.2% on a 36-month loan (three years) for a used car. Refinance your car with the most competitive rate you can find from an online lender. When you refinance, you can increase the length of time of the loan if you have had your car for a reasonable length of time. Lowering the interest and stretching out the principal over a longer period of time could significantly reduce your monthly payments.

4. Refinance long term debt to lower your monthly debt payments by stretching out the term of your loan and take advantage of lower rates. If you graduated more than three years ago, chances are good you can find a better interest rate today, depending on your credit rating. Remember, if the interest rate is the same, when you refinance a loan to lengthen its term, you will be paying more in interest over the long term than you would have if you had not refinanced.

5. Borrow from your 401K retirement plan at no interest to pay off smaller debts or pay down larger ones. As you make future monthly contributions to your plan, a portion will go towards paying off the amount you withdrew. You will also have to pay taxes on your withdrawal. Repay the withdrawal as soon as you can to keep your retirement savings on track.

The bottom line? Take a hard look at your debt situation before you start applying for a loan. Compute your DTI. Count only income you can document with pay stubs or tax returns. If you find yourself close to the 37 percent threshold, take steps now to reduce your monthly debt payments.

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Can You Really Save on Small Business Travel?

  • 14 Jan 2016
  • Posted by Amarasco

TravelDo you have tips for saving money while traveling for business?


Planning ahead before the trip seems to be a surefire way of saving money and being prepared for the unexpected.
Of course, there will always be business travel horror stories that make a disaster out of even the best laid plans.
Still, here are some money-saving tips for the small business traveler:


Before You Go
Obviously, planning ahead is the best way to save money on your small business trip. This can prevent a lot of headaches and expense if something unforeseen should occur.The small business owner may only travel a couple times a year, so they may not have all the tricks of the seasoned corporate flyer – WiFi hot-spots, battery backups, noise cancelling headphones, better access to get off of standby and

onto a flight. You can be penalized for not being a frequent flyer.

Before you pack those bags, peruse the Web to look for better deals on everything vital to the trip.
1. Planning and use of an itinerary.
2. Check the best rates for flights and hotels and make the necessary changes, if possible.
3. By packing snacks, planning ahead, investigating lower prices for hotels, airfare, and rental cars.
4. Go Online for hotel reservations to get the best price for the location.”
5. Be married to rewards programs for air, car, hotel BUT still shop each, before every trip!”
7. Book airline tickets as early as possible, the closer to travel dates the more expensive the tickets. I always try to stay as close to the client as possible so I don’t have to worry about as much traffic.

In today’s business world, sharing is caring. And there are plenty of services to share, especially for travelers. Rides and rooms are two major expenses that can be offset by the use of apps and services like AirBnB and the ride share companies like Uber or Lyft (if they operate where you’re going).
8. Ride share and weekly rental of hotels.
9. Stay at friends or family to save on hotel.
Of course, sometimes all the Web surfing in the world will only get you so far. It may be prudent to do the old-fashioned thing and ask for possible discounts.
10. Always ask for an extra discount. Ask three times. It works. People don’t want to say no. They will only do it (say No) if they have no control to offer.”

On the Go
You may feel panicked or rushed while you’re in a new place with unfamiliar surroundings. The best practice is to not get stressed. Losing your cool could result in losing your shirt (hopefully not literally).
11. Be conservative.
12. Spend less.
13. Give employees a daily budget to buy snacks at the grocery store in larger sizes.
14. Spend as if it’s your personal money.
15. Put everything on a 0% frequent flyer miles credit card.
16. Travel during Monday-Thursday. Air fare and hotels are less expensive.
17. Use AirMiles.
Despite the possibility of Frequent Flyer miles accruing and the like, it may not always be best to just throw all expenses onto a single card or to limit yourself to a single airline.
19. Use two separate airline carriers and always take the cheaper of the two.
20. Don’t go with one airline all the time just because you get miles from them! Always go for the lower cost options. Just because you’re getting reimbursed doesn’t mean it’s a vacation.
Of course, not all savings can be had in the air. There are some on the ground, too.

Before You Go Again
Saving money on your next business trip can actually start while you’re on the previous trip. A lot of the spending you do now can lead to savings later.
22. Keep all receipts of transactions to allow for consistency and budgeting on future travels.
23. Having a good expense tracking program allows you to see trends in spending as well and figure out where you can save some money.
24. Hotel Rewards points equal free rooms.

There’s one tip that was shared by a lot of the people, and guaranteed, it will save you money from your business travel budget. The solution?
25. Just don’t travel on business.
(Of course, that’s not always an option for your business.)

So if you have to leave the comforts of your home office, remember these tips and have a safe and productive trip.

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