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The Money Minute - January 2014  

In this Issue


 New Years Resolutions

New Year’s Resolutions – Who Says They Can’t Be Achieved?  

Come on, we all do it. We will make a New Year’s resolution to get in shape, make more time for ourselves, save more money… you get the picture. Our intentions are good, it’s the follow thru that we have a hard time with. So change it up this year. Don’t look at your resolutions as an all or nothing proposition. Break them down to baby steps. Think of things you can do today that will ultimately get you to your goal.

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Don't Let the Target Hackers Hit Your Credit
Bulls-Eye!

If it weren’t bad enough, we now hear that possibly 70 million consumer’s personal information has been hacked from Target’s database – thieves could potentially have names, addresses, phone numbers and email accounts. Before, with only bank account information, we were subjected to fraud; the illegal use of an account to make unauthorized purchases. Now, there is potential for identity theft; the use of personal information to open new accounts. This has the potential to affect consumers for years to come. But there are some things you can do to protect yourself.  

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Apprisen Warns Consumers About
Financial Amnesia  

The December poll hosted on the National Foundation for Credit Counseling (NFCC) website, which Apprisen is a member, revealed that more than half of the respondents, 56 percent, predicted they would be in a better place financially at this time next year. This response rate tripled the next highest category where 18 percent of respondents indicated their situation would remain about the same as it is this year. 

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Webinar Holiday Hangover

Webinar: January 28, 2014 
Recovering from Your Holiday
Spending Hangover              

Get started on the right track this year. In this webinar you will learn:

  • How to create a spending plan
  • Strategies to pay down debt
  • Great tips to be financially prepared for next year's holiday season

Tue. January 28, 2014 - 12PM EST, 11AM CST, 9AM PST

To learn more or register click here.

 

 

New Year’s Resolutions – Who Says They Can’t Be Achieved?     

Come on, we all do it. We will make a New Year’s resolution to get in shape, make more time for ourselves, save more money… you get the picture. Our intentions are good, it’s the follow thru that we have a hard time with. So change it up this year. Don’t look at your resolutions as an all or nothing proposition. Break them down to baby steps. Think of things you can do today that will ultimately get you to your goal. For example, if you want to lose weight, make a choice not to park in a space close to the building but further out in the lot. Once you are doing that on a regular basis, make another small change to your routine. Before you know it, you will be losing the weight.
  
At the top of many New Year’s resolutions there is one that deals with finances; saving more, paying down debt and improving your credit score are some examples. Again, create a plan to start making changes to the little stuff that will help you build the foundation and allow you to reach your goals. Here are some suggestions.

  • Check Your Insurance Rates - Paying your auto or home insurance is a routine occurrence. You get the bill, you pay it. Often times, the rates increase and you don’t even realize it. This is the perfect time to get out your policies, so you are comparing apples to apples, and call around for new quotes. Insurance companies want your business and you might be surprised at how much you could be saving by switching insurers. Most insurance companies offer discounts for multiple policies (car, home, etc.). If this applies for you, make sure you are getting that discount and use it as leverage in negotiating with your current provider.
  • Check on Your Retirement Plan - If you have a company-sponsored 401(k) plan, make sure you’re enrolled and contributing enough to get the full company match. Consider increasing your deposit to this account by one percent; you will be surprised how little this would affect your paycheck but could make a significant difference when you retire. If you don’t have a company 401(k) plan or want to save more for retirement, consider an Individual Retirement Account.  Also, use this time to make sure you are happy with your investment choices and if necessary, make changes.
  • Update your tax profile - The tax code changes yearly and you could be paying too much or too little. You can go to the IRS website (www.irs.gov), and use their tax withholding calculator to get an estimated tax for this year. It will tell you, based on the information you provided, how much you would owe or get refunded and how to adjust your withholding. If you find that you need to make changes, ask your employer for a new W-4.
  • Track Your Expenses - Make a commitment for the next two weeks to write down where you are spending your money. You might be surprised at how much you are nickel and diming yourself. If you find your spending is out of control, give yourself a cash allowance for eating out, entertainment and any other “extras” you might be purchasing. 
  • Put Your Utilities on a Level Payment Plan - With the winter cold surrounding us, your heater is getting a workout and your gas bill is skyrocketing. Call your utility provider and ask about their level payment plan. They will evaluate your usage for the past year and average that out over the 12 months, providing you with the ability to better budget for these costs. The benefit is that you have the same payment every month and won’t be surprised with a large bill. May is a good time to call your electricity provider to get on their level payment plan before the heat of summer and high electric bills.
  • Plan for the Holidays - Time goes by quickly; look how fast last year went. This is the perfect time to plan for this year. Determine your budget based on what your spent last year. Examine who you are buying for, food, travel, entertainment, decorations, postage, etc., and start saving. If possible, start shopping now. It will give you time to look for deals as well as purchase that perfect something without all the holiday stress.

Your New Year’s resolution can be achieved. Start with something simple and then build on it. Don’t give up. Whether you are trying to lose weight or build your savings, it is one step at a time, but you’re not going to get there unless you start!



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Don't Let the Target Hackers Hit Your Credit Bulls-Eye!

If it weren’t bad enough, we now hear that possibly 70 million consumer’s personal information has been hacked from Target’s database – thieves could potentially have names, addresses, phone numbers and email accounts. Before, with only bank account information, we were subjected to fraud; the illegal use of an account to make unauthorized purchases. Now, there is potential for identity theft; the use of personal information to open new accounts. This has the potential to affect consumers for years to come. But there are some things you can do to protect yourself.

  • Be on alert. Armed with your contact information, you might receive a phone call, letter or email requesting information because “you possibly could have been a victim of the Target breach”. If someone calls you claiming to be from the bank, hang up and call back the number on the back of your card.  Do not click on any link in an email.  Instead contact your financial institution or go to the Target website for information.
  • Put a freeze on your credit report. By contacting the credit bureaus and placing a freeze on your files, you are ensuring that accounts cannot be opened up without your authorization. If at some point in the future you are anticipating needing immediate access to credit, you can contact them to remove the alert.
  • Check your statements. This is a good reminder to check all of our statements for fraudulent purchases on a consistent basis. Be aware of small transaction amounts – that could be a test to verify the account before larger amounts come through.  
  • Change your passwords. Any email account that you have provided Target, change your password. Use upper and lower case letters as well as numbers and symbols to make them more secure. 
  • Get new cards. If you believe that your credit or debit card numbers have been compromised, contact your bank and request replacement cards for those accounts. 

Target is offering one year of free credit monitoring to all Target guests who shopped in U.S. stores, through Experian’s® ProtectMyID® product which includes identity theft insurance where available. To receive your unique activation code for this service, please go to creditmonitoring.target.com and register before April 23, 2014. Activation codes must be redeemed by April 30, 2014.

  

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Apprisen Warns Consumers About Financial Amnesia

Excessive Financial Optimism Can be Dangerous

The December poll hosted on the National Foundation for Credit Counseling (NFCC) website, which Apprisen is a member, revealed that more than half of the respondents, 56 percent, predicted they would be in a better place financially at this time next year. This response rate tripled the next highest category where 18 percent of respondents indicated their situation would remain about the same as it is this year.

Financial optimism is a healthy sign, but it’s going to take more than hope, more than a New Year’s Resolution, to make financial success a reality. People need to guard against financial amnesia, the affliction of too quickly forgetting the financial mistakes and pain of the past. One way to do that is by having a financial plan. Although the future can’t be predicted, consumers can protect themselves from financial unknowns by making smart money decisions today.

Financial control starts with financial awareness. New Year’s Resolutions typically involve getting out of debt, but the basic step of creating a spending plan is rarely on anyone’s list, as many people don’t want to face the financial facts. Continuing to ignore current spending patterns can prevent a person from identifying and addressing the very reason that debt reduction is not achieved. 

Apprisen encourages consumers to take the first step toward debt reduction by building a 2014 financial plan, including the following often forgotten or ignored areas. The result will be a comprehensive and realistic budget, moving the goal of debt reduction closer to becoming a reality.

  • The unexpected. It’s usually not the daily routine expenses that wreck people’s budgets, but the emergencies.  Prepare for these by socking away 10 percent of each paycheck into a rainy day fund. At the end of a year, it will total more than one month’s income, enough to cover most short-term emergencies.
  • Long-term savings. Protect against serious set-backs such as job loss. Even though the unemployment numbers are improving, no one is immune to job loss. If the unthinkable happens, bridge money will be needed to help manage daily expenses and existing debt obligations. Without it, people frequently resort to living off of credit cards, often amassing an unmanageable amount of debt. Experts recommend having a minimum of six months income as a cushion. Since it takes quite a while to build up this amount of money, now is the time to start saving toward this goal. 
  • Known periodic expenses. Birthdays, anniversaries, holidays, vehicle tags, and quarterly insurance premiums are examples of expenses that occur at the same time each year. In spite of being able to anticipate these expenses, many people neglect to set aside the money necessary to satisfy such events.   
  • Household and vehicle maintenance. Things are going to break, and usually at the worst possible time.  Without a plan to cover the expense, people are left with poor resolution choices: take money from a higher priority such as the rent or mortgage, thus compromising that category; charge the expense and add to an already burdensome debt load; borrow from family or friends which is awkward and potentially puts the relationship at risk.  
  • Travel. Whether it is a family vacation, an out-of-town funeral or wedding, or sporting events for the kids, traveling costs money. Try to anticipate as many of these events as possible, and work the cost into the budget.
  • Major purchases. Buying a home, purchasing a vehicle, remodeling the house or that long-awaited state-of-the-art entertainment, are examples of expenses that need to be considered and planned for.
  • Charitable giving. Being generous is a virtue.  However, being generous to a fault isn’t. Review previous giving patterns to estimate 2014 donations.
  • Health insurance choices. Recent changes will potentially have a major impact on a spending plan. In addition to medical insurance, account for anticipated dental and prescription drug needs in the budget.
  • Investing. Time is money’s best friend, particularly for those with a long time horizon. Regular, disciplined investing is a critical part of long-term wealth building.
  • Debt reduction. Instead of allocating minimum monthly payments into the budget, set a date by which all current credit card debt will be eliminated. This step will free up money to go toward satisfying goals such as saving or investing.

The likelihood of being in a better financial place at this time next year starts with the decisions we make now. Although there are things outside of our control, planning today protects against tomorrow’s uncertainties. 

The NFCC December poll question and results are below:

At this time next year, I predict that my financial situation will be
A. Better = 56%
B. Worse = 17%
C. About the same = 18%
D. No idea, as the economy is too unstable for me to make a guess = 9%


 

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