Activities, Kids & Money, Money Management, Saving

Six Fun Ways to Save as a Family

By: America Saves

Meeting financial goals as a family can be challenging. But inspiring your family to help and contribute to a financial goal doesn’t have to be a painful process, especially when the result is an exciting vacation, a car, or college savings. Here are some ideas on how to save as a family for all those items and bucket-list experiences:

1. Gamify It!

In my family, we often make a game of who contributes to a joint family pot for that month’s fun activity. A game of Monopoly can turn into a real contest, as anyone who loses is asked to contribute a small amount to that month or week’s activity of choice (such as a meal out, or movie). Of course, contributions should be proportional to earnings – teens might contribute $5 from their part-time job or allowance, while adults would be expected to contribute much more. Still, the spirit of the game is focused on sharing and enjoying together – and because everyone has a stake, we enjoy it all so much more.

2. Making Money Can Be Fun

Every year around the holidays, my entire extended family likes to take a vacation somewhere warm, so we start planning and saving a year in advance. By each contributing to the holiday vacation fund, our money goes much farther, and we’re often able to visit really cool places we might’ve not otherwise afford. Of course, if we can easily afford to contribute our share, we do so, but when money is tight, we find fun ways to raise cash for our share of the contributions. Last year, for example, some of my cousins hosted a bake sale. Others sold items they’d knitted, art piece they’d produced, and so forth. All of the proceeds went straight into the family vacation fund.

3. Sell, Sell, Sell!

A family garage sale can be an enjoyable and rewarding way to raise extra cash for shared activities or purchases. If your family wants a new flat-screen TV, game console, or other pieces of technology or furniture, why not start by selling what you already have and don’t need? A traditional garage sale is one good way to raise cash, as is selling unused items online (this tends to be the better option for selling electronics and gadgets).

4. Match It!

Often, children’s only way to save is to use their holiday or birthday gift money. It can be challenging for kids to save money they so badly want to spend and enjoy immediately, so it’s important to offer incentives for doing so. One idea is to match dollar for dollar every bit of money they save from their gifts. That ensures kids get the immediate gratification of knowing their saved gift money is being doubled, but also enables them to feel empowered by having chosen to save and contribute to family goals.

5. The Envelope Method

When saving for multiple goals, the envelope method is an excellent way of keeping all the monies separate for their intended uses. Simply mark each envelope with a stated goal, and contribute regularly to each until the goal amount is met. For small children, it can be rewarding to contribute to smaller family goals, such as ice cream or a movie rental. A $10 or $15 goal can mean a $1 or $2 monthly contribution from their allowance. This helps children learn the value of saving, and builds confidence in their ability to do so.

6. Your Credit Union Can Help

Your local credit union can be an excellent resource for helping your family save together. From traditional savings accounts or CDs to holiday savings accounts, your credit union can help you select a financial product that can help your family in reaching its shared goals faster. For larger goals, in particular, a shared family account can be an excellent resource for keeping your family on track to realizing your financial wishes.

Family can be great accountability partners when it comes to saving! Make a savings goal, and choose a reward to celebrate once you accomplish it. Create a fun tracker so everyone can see your progress! 

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Kids & Money, Money Management, Saving

Saving as a Family

By: America Saves

In most circumstances, we build our financial foundation from experiences that we go through as children and youth. Sometimes when children hear their parents or other adults in their lives talking about cutting spending or saving money, they assume that the family is going through a rough patch. As appropriate based on children’s ages, family conversations about money goals, including saving and spending plans, reassure children. It is also a great way to introduce (or remind) children about the reasons we save.

Talking about family saving goals helps children understand that putting money aside for the future – whether to be prepared for unexpected expenses, for short-term goals such as summer vacation, or for longer-term goals such as paying for college – is important to you. They will also likely be interested in knowing how they can help. They may even want to set their own savings goals and be motivated to work toward achieving them!

Make Saving a Family Affair

Get your family involved with your saving plan by brainstorming ways to cut expenses in order to free up money to put toward your saving goals. Explore low- and no-cost activities you can do together as a family. Consider selling rarely used books, toys, clothes, and other items in a garage sale or other marketplace.

Here are four easy ways to make saving a priority for everyone under your roof:

1. Have a conversation

Get the whole family together, make some popcorn or hot chocolate and make talking about money fun. Keep it positive by talking about ways the family can work together to lower expenses, increase income and save money.

2. Involve everyone

Take time to explain how things that everyone in your household uses comes with a cost, like the utilities, internet, and cable. Make it an activity for everyone to review your local grocery store circular/app and identify products that you can save on that week.

3. Set a goal

Decide as a family what your financial goals should be. These could be household goals and individual goals. Is it saving for college? Is it saving for a family vacation? A car? Having a financial cushion for unexpected emergencies? Whatever you decide, make a commitment to save. Jumpstart that commitment by taking the America Saves Pledge, and we’ll help keep you on track by sending goal-based emails and texts.

4. Make a plan

Setting a goal is a great start, but how will you reach it without a plan? Making a plan to reach a savings goal requires establishing a plan for how you will spend and save your money. Savers with a plan are twice as likely to accomplish their savings goals. Get some tips and tricks about making a plan with our Save with a Plan Toolkit.

Encouraging Children to Save

Everyone in your household can play a role in the financial success of your home. A lesson all kids can learn early: the pride that comes with saving for something they want! Encouraging your child to sell toys they no longer play with, or even having a bake sale or lemonade stand puts them on the path to smart money habits. Involve children by:

  1. Encouraging them to be aware of their energy and water use by turning off lights and electronics when not needed and by turning off the water when brushing teeth and taking showers.
  2. Thinking about things that the family regularly spends money on and talking about if the family stills want or need the items or if they can select cheaper alternatives or perhaps do without them.
  3. Teaching them to comparison shop and choose generics or use coupons when it makes sense.
  4. Challenging them to suggest ways to enjoy time together as a family for less. Not sure where to start? Check out these suggestions!
  5. Including children in trips to your financial institution (or an ATM) to deposit or transfer money into a saving account make the process real. Consider posting a running total of the dollar amount of deposits and the progress made toward a family saving goal on the refrigerator or bulletin board.

Saving money is a habit that is developed over time. In addition to letting children know that you save, help them begin to develop their own saving habit. Money as You Grow, a framework that links money-related activities to children’s developmental stages, is a great resource for conversation starters and activities for children of all ages at consumerfinance.gov.

America Saves can help you save money so you can feel confident about your finances. It all starts when you make a commitment to yourself to save. Take the first step today and take the America Saves pledge to save money, reduce debt, and build wealth over time. And it doesn’t stop there. America Saves will keep you motivated with information, advice, tips, and reminders to help you reach your goal. Think of them as your own personal support system.

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Investing, Money Management

Investing 101

You and Your Investments

Maybe you have asked yourself, “How do I start investing?”  It’s very simple, but before you start, make sure you have your house, budget, and savings in order.  There are many things you can invest in: stocks, bonds, mutual funds and real estate, to name a few.

Bonds

One type of investment can be in the form of a bond.  Many refer to it as a “Fancy IOU.”  This is when you lend out your money and in return you gain interest on it.  However, the return may be very small.  Bonds have predetermined intervals of when they pay interest which usually occurs semi-annually.  The maturity date on a bond refers to the end date of the agreement between the lender and the buyer.  Also, it is important that you know that interest rates and bond prices have an inverse relationship.  As interest rates fall, the price of the bond increases and vice versa.

Stocks

Stocks are another type of investment and the way people make a profit is when they increase in value.   When you own stocks in a company like Coca Cola, it means you own part of the company.  The concern with stocks is that the value fluctuates on a daily basis.  Stocks can have a high return, but the loss can also be very high.  To safely invest in stocks, invest in a company that will be around for a long time, for example, Pepsi Co, Apple, etc.

Mutual Bonds

Mutual bonds provide more of a safety net than regular bonds and stocks because you are not putting all your eggs in one basket.  Putting together money from many investors and purchasing stocks, bonds, etc., form a mutual bond and another person manages them.  Having the money professionally managed is a positive for many because it adds a level of security.

Researching Investments

With investing there are no guarantees but with the proper research you will be investing your money in a safer outlet with a higher chance of gaining profit. Regardless of what you choose to invest in, check the track record and know what you are getting into.

If you are still doubtful about investing, think of the money you set aside for savings that is not accumulating any interest, meaning you aren’t making any extra money. In fact, you are losing money at the current inflation rate if you do not invest at a higher interest rate, so use this as motivation to start growing your money!

Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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    Car, Christian Credit Counselors, Consumer, Finance

    Car Buying – Four Tips to do it without Regrets

    1. Don’t trade in your car

    It is a known fact that the dealership is only interested in making money off of you.  So when you decide to succumb to the convenience of trading in your car, know that you will get a lot less than if you had sold it.

    2. They will try to up-sell you

    The dealer will offer many deluxe options for your new (or leased) car, don’t fall for it! Especially if it is a leased car–you will be customizing their car that must be returned at the end of the contract, and with no refund for the customizations. If you want something added to the car, shop around for the best deal.

    3. Get the proper insurance

    .Worst case scenario: you get in a car accident directly after driving off the dealership lot.   You paid $35,000 for the car but as soon as you drove away its worth depreciated to $20,000.  The insurance company will only pay you what it’s worth, but you still owe the total of $35,000.  For scenarios like these, there is Guaranteed Auto Protection or GAP insurance.  This means the difference will be covered and you won’t be stuck with a $15,000 bill and no car.

    4. Buy a car that makes sense

    . Many people shopping for a car look for something they like now, but to get the most out of a car you must see yourself being able to drive it for the next 10 years.  Think of the repairs it will need and whether it will be worth buying the extended warranty. Whatever car you decide on, make sure it will fit your needs for years to come.

    Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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      Kids & Money, Loans, Student Loans

      Student Loan Forgiveness Options

      Student Loan Forgiveness

      After my last post about Student Loans, I received a question asking for more in depth information about student loan forgiveness.  I researched and found the following information.  These are the careers that can possibly eliminate your student loans.  If you decide to partake in one of these programs, make sure beforehand that you can use it towards loan forgiveness.

      Military Forgiveness

      Students who are in the Army National Guard may be eligible for their Student Loan Repayment Program, which offers up to $10,000.

      Teaching Forgiveness

      Students who become full-time teachers in an elementary or secondary school that serves students from low-income families can have a portion of their Perkins Loan forgiven under The National Defense Education Act. This program forgives 15% of your loan for the first and second years of teaching service, 20% for the third and fourth, and 30% for the fifth. Contact your school district’s administration to see which schools are eligible.

      See also the US Department of Education’s pages on Cancellation/Deferment Options for Teachers and Cancellation for Childcare Providers, as well as the Teacher Loan Forgiveness Form.

      The US Department of Education maintains a database of low-income schools eligible for teacher loan cancellation for Perkins and Stafford loans.

      Legal and Medical Studies

      Many law schools forgive the loans of students who serve in public interest or non-profit positions. For more information, contact Equal Justice Works.

      The US Department of Health and Human Services offers loan forgiveness programs through the National Health Service Corps and the Nursing Education Loan Repayment Program. These programs offer loan forgiveness to physicians and registered nurses who agree to practice for a set number of years in areas that lack adequate medical care (including remote and/or economically depressed regions).

      The US National Institutes of Health’s NIH Loan Repayment Programs repays up to $35,000/year of student loan debt for US citizens who are conducting clinical medical research.

      The US Department of Agriculture’s Veterinary Medicine Loan Repayment Program (VMLRP) offers loan forgiveness of $25,000 per year for three years for veterinarians who commit to work in a veterinary shortage area for three years. The application deadline is June 30.

      Federal Agencies

      The Federal Student Loan Repayment Program allows federal agencies to establish loan forgiveness programs to help recruit and retain employees. This is technically a loan repayment program and not a loan forgiveness program, as the agencies make payments directly to the loan holder and the payments represent taxable income to the employee. The agencies can repay up to $10,000 in Federal student loans per employee per calendar year, with a cumulative maximum of $60,000 per employee. Employees must agree to work for the agency for at least 3 years.

      Public Service Loan Forgiveness Program

      This program lets borrowers off the hook from their remaining student loan debt after 10 years of full-time employment in public service.

      To be in the program, borrowers must be employed by the federal, state or local government; or any nonprofit, 501(c)(3) organization; or work full-time for AmeriCorps or Peace Corps.

      To qualify for loan forgiveness, the borrower must have made 120 payments during a decade as part of the Department of Education’s Direct Loan program.

      But, if the payments fall short or the borrower stops working full time, then there is the same risk of being kicked out of the program, with no loan forgiveness.

      I hope this information helps you further understand your options for eliminating student loans.

      Information found on finaid.org and money.cnn.com

      Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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        Budgeting, Kids & Money, Loans, Saving, Student Loans

        Student Loans: A Necessary Evil?

        Student Loans and Debt

        More than ever before, a college degree has become a necessity.  But many parents and students wonder how they are going to pay for college.  With a high number of students graduating college with student loans, the average debt will likely hit a record $28,700, projected by Mark Kantrowitz, publisher of Finaid.org.  It is important to have the necessary information on student loans before signing on the dotted line.

        Government and Private Student Loans

        There are two types of student loans – government and private.  Government student loans have flexibility with programs to help students pay back the loan because they can change the rules whenever.  This can work towards the advantage of the borrower but can also hurt the borrower.  If the student will take out multiple loans, a government loan is better because it provides continuity.

        Private loans are provided by traditional banks and they do not have as many programs to help students repay their loans.  These loans come with a low interest rate but can hurt the borrower because it accumulates over time.  Also, most of these loans include a clause that does not allow the signer to file for bankruptcy.  After graduation, you get a six-month grace period during which you don’t have to pay back your loans giving you time to find a job.

        Financial Respoinsibility

        If you decide you need a student loan, you must decide who will be signing for it.  There are two options, the student, who must be at least eighteen years old, or a (step) parent.  If a step parent or parent decides to sign he or she is now responsible for the full payment of this loan.

        For example, if a step parent signs and afterwards gets a divorce, the step parent is still held responsible for the full payment.  Also, if a student signs for a three year loan for $30,000 but he or she drops out of school after the first semester he or she must still pay the full amount of the loan.  The result is parent and child is equally stuck.

        Budgeting for the Loan

        Ideally, the student should work while going to school and open a savings account.  This way the student will have a cushion for after graduation.  This cushion should include living money and money to make loan payments.  Proper budgeting and planning when a student begins school will be more beneficial than starting to plan after graduation.

        However, if there was no proper budgeting or planning there are ways you can receive help.  Keep in communication with the lender, there are consolidation programs and government programs that can help.  Consolidation programs are for students who took out multiple student loans throughout their school career.  For example, John has four $100 monthly payments to different banks.

        Loans and Credit Consolidation

        With consolidation, his overall payments will be lowered and he will have the benefit of simplicity which will help him track the progress of his student loans.  With government loans, a student can work for a nonprofit organization or public agency for ten years which will reduce the amount owed on the account.  Also, if you are willing to commit a year volunteering for AmeriCorps, you get $4,725 to pay off your college debts, and a stipend up to $7,400.  For more information visit their website.

        In addition you can work for 27 months with the Peace Corps.  If you travel with the Peace Corps, you will get to defer most of your student loans until after you leave the program, and may get some of your loans reduced by as much as 70%. Visit their website for more details.  If you decide one of these programs is beneficial to you, make sure you have it approved before hand, know the rules, and always get it in writing.

        Other options for repayment include: pay in full, standard payment, graduated payment, income-based payment, and long-term payment.  In the majority of cases paying in full is never an option.  Standard payments are monthly payments with interest over a period of 10 years.  It gives you a great interest rate but high monthly payments.  For graduated payments, the payments will start low but increase every couple years for a 10-30 year period.  With income-based payment, your monthly payments are decided proportionate to your income and you get 15 years to pay it off.  The long-term payment method is a monthly payment plus interest for 30 years.

        Regardless of whether you decide student loans are for you or not, you now have the knowledge to make the right decision.

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          Student Loans

          Student Loan Repayment Plans

          Repaying Student Loans

          Congratulations Class of 2011! You finally got that college degree! What an exciting accomplishment. However, that moving-over-of-the-tassel means you’ll need to face your student loan sooner rather than later.

          Typically, you get a six-month grace period after graduation before you need to begin the repayment process. But don’t wait until December to start considering your options. There are four main types of repayment plans for Federal Student Loans that apply to most student loans as well (if you filled out a FAFSA and then received money in the mail that you haven’t paid back, you have a federal loan).

          1. Standard Repayment: your payments would be relatively the same throughout the life of your loan (for federal loans this is 10 years). You will get a letter in the mail shortly after graduation with your monthly payment and interest rate. However, if you have a variable interest rate, your payments might fluctuate based on interest rate changes.
          2. Extended Repayment: this plan lengthens your repayment period, allowing you to make lower monthly payments. If you have a federal loan, your loan can be extended to 12 to 30 years, depending on the loan amount. However, you will end up paying more interest on the loan with this plan.
          3. Graduated Repayment: this allows you to make lower payments in the first few years of the loan and your payments will increase gradually over the duration of the loan. For example, many repayment plans allow you to only pay the interest for the first 2-4 years of the loan. However, the repayment period is the same as the standard repayment method (federal loans are 12 to 30 years, depending on the total amount borrowed).
          4. Income Contingent Repayment: this plan is based on your income. It is recalculated each year depending on your income: if your income is low, your monthly payment will be also. However, if you land an awesome job and your pay increases, your monthly payment will also increase. For federal loans, the loan term is up to 25 years and any remaining balance after that time is discharged.
          5. Forbearance: this allows you to reduce your payment amount, stop making payments temporarily or extend your repayment period. You lender will most likely ask you to provide documentation supporting this request. However, you still need to make interest payments while your loan is in forbearance.
          6. Deferment: this allows you to postpone your payments for a period of time. If you just graduated and haven’t made any student loan payments, your loan has been in deferment for the past four years (or 5 or 6 years depending on your “super senior” status). You can defer your student loan again under the following conditions:
          • You are enrolled in school at least half time (this is about 6 credits depending on the school)
          • You are actively seeking, but not able to find, employment
          • You have economic hardship

          A Financial Alternative

          If you have read through all of these options and realize that you don’t think you will have a well enough paying job by the time December rolls around, you might want to consider taking a couple classes and defer your student loan. Classes at community colleges are about $25 per credit, meaning you will only be paying $150 for the semester (if you take six credits/two classes) versus the $200 per month you might have to pay. That isn’t to say you should do this forever; once you have a full-time job, taking extra classes might  get in the way of your work rather than being an enjoyable learning experience.

          Do you have any student loans? What kind of advice would you give to recent grads?

          Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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            Activities

            Saving Money with Daylight Savings Time

            I know I am not the only one feeling more tired today than usual. Every spring, we lose an hour during daylight savings time when we “spring” forward our clocks in order to have longer days of light. This spring jet lag can take a few days to get use to, but once our bodies and minds have adjusted, we should use the extra light to accomplish tasks after work that we couldn’t before. Here are some great ways you can start saving money with that extra daylight.

            Yard work time! Extra light means you can now get some yard work done after you get off work. This may not be something you want to do during the week, but just think, if you do it during your work week, you will have more free time on the weekend.

            Take the kids to the park. It is recommended that we get at least 30 minutes of exercise each day, so why not spend it with your children. If you maintain an active lifestyle, your children will want to mirror your behavior. That is one habit you do want to pass down to your kids.

            Take your dog on a walk. Depending on where you live, some pets do not get the luxury to run around a yard all day while their owner is away at work. If your pet is cooped up inside all day, when you get home they are bursting with energy, so why not treat them to a nice walk outside. Not only will it calm them down, but it will give you a little time to reflect on the day and wind down.

            Exercise Outdoors. Gym memberships can sometimes cost a fortune, and if you are unable to afford it, you need to find additional options to work out. Now is the perfect time to utilize the extra sunlight we have. Go running on the beach, go on a hike, play an outdoor sport, you have so many options to keep yourself in shape. Make it a priority!

            These are just a few ways to spend your extra hour(s) of sunlight. There are many other fun, yet productive, ways to enjoy this time. What are you planning to do with the extra light in your day?

             

             

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