How a school bus can drive you to good financial decisions

By AlicBus Backendsia Kellebrew, NFCC Certified Financial Professional
The Village Financial Resource Center

When people walk into my office, they may notice the little, bright yellow die cast school bus prominently displayed on my bookcase. It sits there right in my line of sight, and that of my clients, for a reason. Every now and again someone will notice it, smile, and ask me what it is doing there. I always respond with the short version of why it is there: to remind us all that WE have to drive the bus. Of course, that’s the short version because it is a metaphor, not only for money management, but also for other life issues as well.

Here are just a few of the things that we can take away from my little yellow school bus:

  1. First, “YOU have to DRIVE the bus!” No matter what type of situation or struggle that is going on around us, we have to do our part to be proactive, take charge and do what we can with and in the situation. No situation gets resolved by doing nothing; in fact, that is usually the worst idea. “Driving the bus” may include determining and evaluating options, seeking advice or assistance from others, or simply deciding on a plan of action and putting the wheels in motion.
  2. There are are a lot of people counting on the bus driver: the school, the parents, and the kids. What would happen if the bus driver didn’t take care of themselves and couldn’t drive the bus? Not only would they be compromising themselves, but they would also be creating a ripple effect that would cause issues for many others as well. Who is it that counts on you? Your family? Your friends? Your employer? Before we can do anything else, we have to make sure that we are taking good care of ourselves, which means prioritizing essentials above other expenses, even debt payments.
  3. The stop sign on a school bus reminds us that sometimes we have to stop and carefully consider all options and consequences before making any big financial decisions. The point at which we have the most say in the matter is BEFORE we sign any contracts not AFTER. If things become difficult after we sign a mortgage, car, or student loan, there may not be as many desirable options available to us as we would like. This shouldn’t stop anyone from trying to communicate with creditors if they are having issues though, as there may be ways they can help.
  4.  The door on the bus reminds us that we have to stay open-minded when looking at possible solutions to financial difficulties. Even the options that are not our first choices or the most desirable should be considered. Sometimes we end up making the hard choices by eliminating the options that just won’t work at all and then picking the best of what is left.
  5.  The cheery yellow color of the bus reminds us that even the most difficult situations are easier to deal with if we can stay positive. When clients who are struggling with finances come into my office, I try to be an encourager to show them that no matter what the situation is, things can get better; it just takes time.Bus Backends


About the author
Alicia Kellebrew is a NFCC certified financial professional with The Village Financial Resource Center.

 

Sharing Credit Card with a Parent can be Risky

Think twice before becoming an authorized user on your parents’ credit cards — even if you are handling their finances for them. If they have great credit, being an authorized user can help raise your score. On the other hand, if you have great credit but your parents don’t, being an authorized signer on their cards is risky. If the banks report you as an authorized user on credit cards with an iffy track record, your credit score could fall fast.

Except on a temporary basis when necessary — for example, when a parent cannot get out and needs someone to do the shopping — financial experts don’t recommend becoming an authorized user on someone else’s card. Co-mingling finances is just too risky.

— Adapted from article by Sally Herigstad on www.creditcards.com. Used with permission.

Change your perspective on money to change your financial life!

old lady young ladyThere’s an classic optical illusion that features a drawing of an elderly woman or a young woman depending on how you look at it. It’s purposefully ambiguous. The nose of the elder woman could be seen as the chin and jawline of the younger. The ear of the younger could be seen as the eye of the elder.

The difference is in how you look at it.

As a financial counselor, I work with people to help them reach their financial goals. The process almost always entails, at minimum, a discussion about goals, a comprehensive review of assets and liabilities, putting together a comprehensive budget, and creating an action plan that details steps a person can take to reach their financial goals. And once that’s done, the real effort begins as the person sets out to follow through on steps to reach the goal.

Now, to a budgeting nerd like me, that sounds exciting. The chance to sit down with someone and plan out the steps needed in order to reach some life-changing goals sounds thrilling … to me. But in truth, for most people, there isn’t a great sense of excitement surrounding the process. Talking money isn’t sexy. People are rarely excited to talk to me about personal finances. No one in my office is sitting at the edge of their seat chomping, at the bit to dive into the process.

Working toward financial goals requires discipline over time; many times it requires sacrifice. And sometimes working toward your goals or dealing with a financial problem can become monotonous and tedious. In fact, some people do avoid it, which just compounds the problem or delays the progress.

But that’s just one way to look at the situation. If you shift your perspective just a bit, you can see something very different. It may not be thrilling to pore over numbers and make tough decisions. But do you know what is thrilling? Pulling out of the car lot in the vehicle you just purchased, taking your seat in the plane as you wait for takeoff to an exotic locale, pulling into the driveway of your new home, retiring early. And I could go on and on.
Don’t let the way you look at the task of dealing with money keep you from making changes for the better. Focus on your goals and remind yourself why you are working so hard. Don’t let tedium derail you from working toward your goal. Set smaller milestone goals and celebrate the successes. Working toward financial goals doesn’t have to be boring. Find your own ways to get excited about it, and see it from a different perspective – the perspective of possibility.old lady young lady horiz


Joshua Huffman, The Village Financial Resource Center

 About the author
Joshua Huffman is an NFCC certified financial professional with The Village Financial Service Center.
Joshua Huffman is an NFCC certified financial professional with The Village Financial Service Center. He can be reached at (800) 450-4019.

How New Credit Reporting Agency Rules Impact You

credit rules impact pinterest

Editor’s note: This article is reprinted with permission from our partner site www.Moneytalksnews.com.

The country’s three major credit reporting agencies have announced plans to overhaul how they collect information about consumers and how they interact with consumers seeking to correct reporting errors, according to a press release.

For example, medical debts won’t be reported until after a 180-day waiting period. This will allow insurance payments to be applied. In addition, medical collections that have been or are being paid by insurance will be removed from credit reports, the press release states.

The agencies will no longer report debts like tickets or fines that didn’t result from a contract or agreement by the consumers to pay. Also, they will no longer accept reports that don’t include a consumer’s date of birth. Other revised rules will make it easier for consumers to dispute credit report errors that might hurt their credit ratings.

Here are the free steps you can take to repair your bad credit:

Step 1: Access free copies of your credit reports

Visit AnnualCreditReport.com for a free copy of your credit report from each of the three credit reporting agencies. Once they’re in hand, thoroughly analyze the information for errors, omissions, and fraudulent accounts.

Also, be on the lookout for negative marks that should have dropped off your report because they are more than seven to 10 years old. Most bad items drop off in seven years

Perhaps you received your three free credit reports through AnnualCreditReport.com earlier this year and do not want to pay for new reports from the credit bureaus. According to the Federal Trade Commission, you are still entitled to a free copy of a credit report if

  • You are denied credit, insurance, or employment, or offered unfavorable rates because of the content of your credit profile. You have to ask for the free report within…

credit rules impact

Read the full article on The Village Financial Resource Center website.

How to fight fair to resolve conflict

fighting fair facebookHow you spend your money is just one of the things on which you and your spouse will disagree. You are bound to have different viewpoints about a variety of topics, so it’s important to learn how to deal with your differences respectfully and effectively. The University of Texas at Austin provides the following ground rules for fighting fair.
Remain calm. Try not to overreact to difficult situations. Your partner is more likely to consider your viewpoint if you remain calm.

Express feelings in words, not actions. If you start to feel so angry or upset that you feel you may lose control, take a “time out.” Take a walk, do some deep breathing, play with the dog, write in your journal—whatever works for you.

Be specific about what is bothering you. Vague complaints are hard to work on. Deal with only one issue at a time. Don’t introduce other topics until each is fully discussed. This avoids the “kitchen sink” effect where people throw in all their complaints while not allowing anything to be resolved.

No hitting below the belt. Attacking areas of personal sensitivity creates an atmosphere of distrust, anger, and vulnerability. Avoid accusations. Talk about how your partner’s actions or words made you feel. If you make accusations, your partner will be likely to defend their actions rather than focus on understanding you.

Try not to generalize. Avoid words like “never” or “always.” Such generalizations are usually inaccurate and will heighten tensions. Avoid make believe. Exaggerating or inventing a complaint—or your feelings about it—will prevent the real issues from surfacing.

Stick with the facts and your honest feelings. Don’t stockpile. Storing up lots of grievances and hurt feelings over time is counterproductive. It’s almost impossible to deal with numerous old problems for which recollections may differ. Try to deal with problems as they arise.

Avoid clamming up. Positive results can only be attained with two-way communication. When one person becomes silent and stops responding to the other, frustration and anger can result. However, if you feel yourself getting overwhelmed or shutting
down, you may need to take a break from the discussion. Just let
your partner know you will return to the conversation as soon as
you are able and then don’t forget to follow-up.

Establish common ground rules. You may even want to ask your partner to read and discuss this information with you. When both people accept positive common ground rules for managing a conflict, resolution becomes much more likely.

Fair Fighting: Step by Step

  1. Before you begin, ask yourself, “What exactly is bothering me? What do I want the other person to do or not do? Are my feelings in proportion to the issue?”
  2. Know what your goals are before you begin. What are the possible outcomes that could be acceptable to you?
  3. Remember that the idea is not to win but to come to a mutually satisfying solution to the problem…

Read the full article on The Village Financial Resource Center website.

fighting fair fint

What a Financial Pro Learned About Money From Her Parents

By Alicia Kellebrew
NFCC Certified Financial Professional

I would say that the two most common comments that my clients make to me in my office are “My parents never talked to me about money” and “Your parents must have talked about money with you a lot for you to know what you do.” I absolutely credit my parents for my money know-how, but what people have to understand is that it isn’t always what you SAY but what you DO and model for your family. My parents have always led by example, and I am very thankful for the example that they set. I would like to share some of what I learned from them with you as it has served me pretty well in my life.

  1. Cars are a mode of transportation. Hence, the most important consideration is “Does it get you from point A to point B safely?” If so, it is serving its purpose. My family’s philosophy on cars has always been buy used cars for reasonable prices, take good care of them, and hope for the best. I understand used cars can sometimes be a gamble.That’s why buying them for the right price, maintaining them well, and knowing when it’s time to move on to something else is key.
  1. More wisdom on cars: If you must take out a loan try to put down a sizable down payment without cleaning out your emergency fund to lower your payment. Finance the loan out for the five years to make sure the payment is manageable, but, by all means, pay it off as quickly as possible. Lastly, even after you pay it off, continue making that payment to a separate “car fund” for as long as you are able. This will give you money for repairs, and, when it is time, a down payment on something else. You are already used to making that payment so you may as well build up an additional cushion.
  1. There is a definite difference between a “need” and a “want.” I remember being a kid and always wanting the name brand clothes and shoes. I also remember being really irritated when my parents told me shoes were shoes. But I am so thankful now that they stood their ground. While there is nothing wrong with splurging every now and again, if you make that a habit it can really get you in trouble.
  1. If you make being careful and smart with your money a priority, it will pay off in so many ways. I always watched my parents save money wherever they could which gave us the freedom and ability to take care of what we needed to when it came up (and a little extra for some fun too!).
  1. Having a financial cushion provides a sense of security. While no one “enjoys” carefully accounting for their money or saying “no” to their wants or those of their family, it gave all of us a sense of security and peace knowing that we had a cushion in case something unexpected happened. Seeing it work so well for my parents when I was young made me want to strive for the same for myself. Besides, it is much better to be able to “borrow” from yourself!
  1. Buying and/or receiving stuff doesn’t equal happiness or love. While it is nice to buy things for people sometimes, the emphasis in my household is always on spending time together. Those are where the memories are – my mom spending hours upon hours teaching me how to craft or my dad dropping everything to take me to see the Stanley Cup, for example.
  1. Life is not a competition of who has the most or best stuff. It is about who you are and what you do. We often compare ourselves to others based on what we have or don’t have and what they have or don’t have. What we must remember is we don’t know the whole story; for all we know, they might be struggling with a large amount of debt to keep up the appearance that things are going well.
  1. Life is about sacrifice and compromise. Sometimes you have to say no to something in order to say yes to something greater. For instance, in some jobs there is high pay but it may come at the cost of time with your family.
  1. “Lifestyle inflation” is very real and something we have to watch out for. Have you ever wondered to yourself how you made it on the income from your first job? I do and when you really look at it you realize that back then you made it on what you had because you had to.Sometimes it is helpful to look back and take note of what we trimmed or cut out to make everything fit. If we could do it then chances are we could do some of it now to free up some funds for other purposes or goals.
  1. Never loan something to someone you can’t afford to lose – money or possessions – as it might result in the loss of the item/money loaned AND the relationship.

About the author
Alicia Kellebrew is a NFCC certified financial professional with The Village Financial Resource Center.

Dishonesty and disagreements related to money are common

Nearly half of all participants (47%) in the January online poll by the National Foundation for Credit Counseling® (NFCC) responded that disagreements about money are most likely to cause the greatest stress in their relationships.

Disputes about money management can begin as early as the first date, but they become lethal to relationships when they go unaddressed. As the years go by, what could have started as a constructive conversation about finance becomes a heated battle over who is right. Observations become accusations, and trust becomes suspicion. Growing levels of mistrust can lead to financial infidelity, which registered on the survey as a top stress point for 25% of the respondents.

The NFCC recommends that couples press the pause button before things spiral out of control and have a constructive conversation about money. “Most people have a different approach to money management than their spouse or partner. Left unaddressed, those differences can lead to the end of the line for many couples. Understanding those differences means having honest discussions early in a relationship so the rules are mutually accepted and the financial goals are clear. No matter the differences or challenges, the best approach is to start communicating early” said Bruce McClary, spokesperson for the NFCC.

Financial counselors at The Village Financial Resource Center recommend the following guidelines for couples:

  • Be honest with yourself and each other when it comes to financial matters. As financial challenges appear, work together to address them directly instead of ignoring problems and wishing they will resolve themselves.
  • Establish money rules for the relationship and hold each other accountable. Discuss what will be jointly managed and set rules for making independent spending decisions.
  • Don’t conceal debt or sources of income from each other. Financial infidelity should be taken as seriously as any other form of cheating. Adhere to a policy of financial transparency to strengthen trust in the relationship.
  • Set a time and place where financial matters can be discussed on a regular basis, free of distractions.
  • Keep the tone of the conversation casual, and remain open to what each other has to say.
  • If a disagreement should go unresolved during a conversation, take a moment to find acceptable ways to compromise or consider revisiting the issue after a short time-out.
  • If a financial mistake is made, couples should work together to find solutions without assigning blame. Be willing to accept a fair share of the responsibility for the problem and the solution.
  • When tracking joint financial goals, understand that changing circumstances require a degree of flexibility from both partners in a relationship.
  • Understand that a single financial setback impacting one person ultimately affects the entire relationship, no matter how large or small the issue.

Often, money issues may reveal deeper problems in the relationship that require outside intervention. Sometimes, it helps to seek advice from a relationship counselor if matters cannot be resolved through normal communication. The same is true for the financial side of the equation. Seeking advice from a Village financial counselor can help address challenges and restore financial health, making it easier to focus on other aspects of the relationship.

Call The Village Financial Resource Center at 1-800-450-4019 to make an appointment.

 

You can improve your credit score — here’s how!

Most people are aware that their credit report is a determining factor in whether or not they get a car loan, a home loan, or a credit card. And that their credit score can impact the interest rates they are offered if they qualify for those types of credit. However, many don’t realize that their credit report can impact a great many other things in their lives.

  • According to a 2012 survey by the Society for Human Resource Management, 47 perc ent of employers check an applicant’s credit history before deciding whether or not they make a job offer.
  • Insurance companies use credit history, among other things, to determine your premium.
  • Want to rent an apartment? You better hope your credit report is in good shape.

Here are some ways you can improve your credit report and score.

  1. If you aren’t current on all debts, get current and stay current. Payment history has the biggest impact on your credit score, so keeping your accounts in good standing is important. If you have made mistakes in the past, that’s OK. You can always work to improve your credit. While negative information can appear on a credit report for up to 10 years, the last two years have the biggest effect on your score. If you fell past due on an account, get current and stay that way—and you see your score begin to steadily rise.
  2. Pay down your debts, especially credit cards. Credit scoring takes into account the ratio of outstanding debt to available credit. If you have a credit card with a $2,000 limit and you have a balance on that card of $1,800, you are using 90 percent of the available credit. That looks bad to the credit score models. It looks like you are close to maxing out your limit and therefore has a negative effect on your credit score. Ideally, keep your balances as low as possible for the best credit score. If your balances are high in relation to your limits, work to pay them down. In my opinion, the best way to use a credit card is to use it once every couple of months for a small purchase and pay the balance off right away. That way you don’t risk having the credit issuer close your account for inactivity, you don’t spend money on interest, and you build your score without going into debt.
  3. Focus on your oldest accounts. The longer you have had a credit card, the more impact it has on your score. A card that you’ve held for three years gives a much better idea of how you manage credit than one you’ve had for three months. If you are uncomfortable with the number of credit cards you have and are looking to close some, make sure you keep the ones that have been open the longest. By closing an old account, you could be losing some good history. It’s not often that I see credit scores in the 800 (850 is the top end of the FICO credit score). However, the credit reports I do see that have broken into the 800’s almost always have accounts that have been open for years.
  4. Pull your own credit report. This is important for many reasons. For one, you really don’t know what you need to work on if you don’t know what is on the actual report. It is very common for people to come see me and have no idea what is actually on the report. Yes, there are lots of numbers, dates and different tables, but once you take some time to get familiar with it, it can make sense. If it doesn’t, you can always get help from people like me. The second reason you want to pull and review your own report is that errors can occur. It is really not that uncommon to find errors on credit reports. Some errors are minor and have no bearing on your score, but others can be significant and can really make a difference.

Everyone is entitled to a free credit report once yearly from the three major credit bureaus—Equifax, Trans Union and Experian. Go to annualcreditreport.com to get a copy of your reports. While you can get the entire credit report, it does not come with a credit score. However, keep in mind that the report is what drives the score. If you know your report and work to improve it, your score will move in the right direction.

Knowing your report and taking a few of these steps can really help to improve your credit and improve your financial health. Improving your score can mean lower interest rates on loans, lower insurance premiums, better access to housing, etc. A better score saves you money.

It isn’t always easy and it can take some time, but with hard work and determination, I have seen many people take control of their credit report. I have seen scores go from really bad to great in just a couple of years, sometimes even quicker. But remember, the longer you wait to take control of it, the longer it will take to get your credit report to where you want it to be.


Joshua Huffman, The Village Financial Resource Center

 About the author
Joshua Huffman is an NFCC certified financial professional with The Village Financial Service Center.
Joshua Huffman is an NFCC certified financial professional with The Village Financial Service Center. He can be reached at (800) 450-4019.

8 Creative Ways to Clear Clutter in 2015

Editor’s note: This article is from partner site Money Talks News, www.moneytalksnews.com

Are you feeling a little overwhelmed by the post-holiday excess all around you? Have the past several years of your family’s success with Santa left your closets, garage, attic, and office filled to the rafters? If so, it may be time for some creative clutter-busting strategies. Here are eight ways to kick the new year off right by kicking the clutter habit now:

Start with three questions – Cut through your material clutter by cutting through the mental clutter that often makes it difficult to part with things. With each item you consider, ask yourself: Do I love it? Do I use it? Will I ever need it? If your response to each of these questions is “no,” then it’s much easier to rationalize passing the item along and letting it find a new home.

Target one area at a time – It’s easy to feel overwhelmed by the sheer volume of stuff that most of us live with. Instead of diving right in and burning out quickly, focus on one area of your home or office at a time. Because a little positive reinforcement never hurts, start with the easiest areas first. Declutter a chest of drawers, a hall closet, one kitchen cupboard, or a single drawer in your desk. Then, use that momentum to move on to the next spot. If it helps, make a list of all the clutter hot spots that need attention and check each one off as you calm the chaos.

Get rid of one item per day – If taming the clutter in your environment seems like an impossible task, start slowly. Decide to rid yourself of just a single item per day but be determined and relentless. As the weeks and months pass, you’ll begin to notice and enjoy the extra elbow room your efforts have created.

Adopt a one-in-one-out rule – To achieve and maintain a clutter-free home or office, adopt a zero accumulation habit. For every new item that comes into your space, make sure one item goes. Donate or sell usable items and toss what’s left.

Think inside the box – The four-box method is a tried-and-true way to quickly get a handle on large amounts of clutter while still ensuring that each item is consciously considered. To begin, get four large boxes and assign each box one of these labels: donate, sell, trash/recycle…


Read the full article on The Village Financial Resource Center website.


 

5 tips for building up savings

Americans are finding more satisfaction from saving money than spending money, according to The Gallup Economy and Personal Finance poll. Their results indicated that, on average, Americans prefer to save (62 percent) versus spend (34 percent).

However, the poll also found that people are not acting on this desire. So the looming question is: How can we become savers? Here are some tips.

  1. Have a budget and stick to it. While most of us hate the idea of a budget, it is an important part of the saving process. For example, if your expenses are equal to, or exceed, your income, savings will require additional effort and other issues will need to be addressed. Having a budget will help you determine how much you have available for savings.
  2. Review your budget for discretionary expenses you could reduce. Review your spending habits to find problem areas. Once you’ve identified where you are spending your discretionary income, evaluate its impact on your budget, and, ask yourself if you’d be willing to eliminate some of these items from your budget to free up more income for saving.
  3. Set Goals. Without a specific goal in mind, saving becomes more burdensome. For example, if you are saving for something specific, such as a down-payment on a home, new vehicle, family vacation, you will likely be more successful because you have a tangible goal. If you want to boost your general or ‘emergency’ savings, you can still set a goal. Maybe it is to save 3 months of your income, or maybe it is a specific dollar amount you’d like to save. Having a specific goal gives you something to work toward, rather than the ambiguous, “It would be nice to have some savings.”
  4. Separate your savings from your spending money. Whether you keep your funds in a bank or operate on a cash basis, co-mingling your savings and spending money can be too much of a temptation to spend. Separating your savings and spending money makes you less likely to dip into your savings. You will also typically find satisfaction in hitting certain milestones in savings. So even if you occasionally pull funds out of savings, you won’t want it to dip below that milestone. If you mix everything together, those milestones are not as obvious.
  5. Save first, not last. It is common for people to save whatever is left at the end of the month or pay period. But operating in this fashion results in significantly less savings, if any. If you feel like you have more funds available (because it shows in your checking account balance) you may be more tempted to make impulse purchases and less likely to comparison shop. When you remove the amount you’d like to save at the beginning, you begin to live on less. We’ve all had those months where something unexpected happens, such as car repairs or unexpected medical expenses, and we find a way to trudge through the month and make ends meet. Saving first operates under this same principle. Once you’ve proven to yourself you can make it through the month with less money in your budget, by taking the savings out first, you will find you can still get by.

No one ‘accidentally’ saves money. It is a conscious effort. By implementing some saving strategies intentionally, you will see your savings grow. Typically starting is the hardest part. Once you experience the satisfaction of a growing savings account, continuing to save will become easier.



Jenna Boerger is a certified financial professional at The Village Financial Resource Center. For more information about FRC, visit helpwithmoney.org or call (800) 450-4019.