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The Money Minute - March 2013  


In this Issue

 

 

Give Your Finances a Spring Cleaning

Spring is the perfect time to reorganize your home, but many of us don't ever consider a "spring-cleaning" of our finances. Now is a great time get your personal finances in order and Apprisen can help!

 

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To Invest or Not to Invest?

In a tough economy, many people look for ways to earn extra income. One way is to join a network marketing company.  A home-based business may sound like a dream come true, but for many it can also turn into a nightmare.

 

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Protecting Your Online Identity

Recently in the news, we heard that 13 politicians and celebrities had their personal information hacked from their computer and posted on an online website. While some of the information was false, the credit reporting agency Equifax was able to confirm that in at least 4 cases the information posted was accurate. Consumers should take notice. 

Read the entire article.

 

The Card Act – Three Years Later

Consumer Action recently released results from a survey taken by 706 consumers on their experiences with credit card companies since the implementation of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act. Their findings were that although consumers still have issues, credit card complaints did not make Consumer Action’s Top Ten list of consumer complaints.

Read the entire article.

 

 

Webinar: March 26th & 27th

Understanding Credit Reports and Scores  

In this webinar you will:

  • Understand how credit issues can impact many areas of your life
  • Find out how to access your free credit report
  • Learn how to dispute information
  • Recognize the factors that make up your credit score
  • Learn ways to improve your credit score

Attend this free webinar on:

Tuesday, Mar 26th - 12:00pm EDT & 12:00pm PDT.

Wednesday, Mar 27th - 12:00pm CDT.

To learn more or register click here

 

Making the Case against Receiving a Federal Income Tax Refund

Millions of Americans celebrate receiving an income tax refund each year.  Many of these same people live each month under the burden of financial hardship, struggling to make ends meet, often falling behind on living expenses and debt obligations.

Read the entire article.

 

 

Give Your Finances a Spring Cleaning 

Ever wonder where the term "spring cleaning" originated? No one knows for sure. Several ethnic groups and faith traditions had springtime rituals that may have evolved over time to what we consider spring cleaning today. Another theory is that, when homes were heated with coal, oil and wood, spring allowed the house to be aired out and soot removed from the furniture. But, what does this have to do with your finances? Simply put, it’s time to get a renewed look at where you are money-wise, get rid of habits or routines that are not working for you, and freshen up your finances so you can achieve your financial goals.

Apprisen offers some suggestions for getting rid of the cobwebs attached to your money management plan.

  • Roll up your sleeves and everyone get ready – When everyone is involved, there is more ownership, commitment, and accountability from each individual.  The tools and equipment you will need for this job can be as simple as paper and pencil or as sophisticated as specialized computer software. Get everyone in the house involved.
  • Set aside a specific time – Most people designate a whole day or week when cleaning their house. You may not need that much time for this task, but don’t short yourself time. You can’t be thorough if you are rushed. 
  • Open the curtains and dust all the corners – Just as in housecleaning, you need to shine lots of light on the situation to see what’s really there. Your light is your honesty and thoroughness. Write it all down. Don’t be afraid to really inspect where the money is going. Look realistically at income you expect to bring home and expenses you anticipate throughout the year.
  • Define your vision – When you redo a room, you have a finished look in mind. Similarly, a newly “spruced up” budget requires visualizing what you want it to look like. Set some goals for yourself – savings for a new car or home improvements, reduced debt, more retirement savings. This helps clarify money management decisions you will make in the next step.
  • Throw out what you don’t need – Non-essential spending can clutter your budget like too many knick-knacks. Too much debt weighs you down and keeps you from reaching your goals. Now that you have your goals set, you can more easily prioritize where you want the money to go and what spending you can do without.
  • Make the upkeep easy – Create a financial housekeeping system that is simple and organized. Regular touchups may be all that is needed if you set it up right from the start. Give it another “whole house” cleaning in 6 months and see how you are doing.

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Protecting Your Online Identity

Recently in the news, we heard that 13 politicians and celebrities had their personal information hacked from their computer and posted on an online website. While some of the information was false, the credit reporting agency Equifax was able to confirm that in at least 4 cases the information posted was accurate. Consumers should take notice. Even being diligent with online security measures is sometimes not enough. While hackers are getting more sophisticated in the ways they are obtaining information, there are still things that you can do to make sure your information is as protected as it can be.  

  • Install anti-virus, anti-spyware and firewall protection, and keep them up to date.
  • Don't open e-mails from strangers. Malware can be hidden in embedded attachments and graphics files.
  • Don't open attachments unless you know who sent them and what they contain.
  • Don't click on pop-ups. Configure Windows or your Web browser to block them. 
  • Don't provide your credit card number online unless you are making a purchase from a Web site you trust. Reputable sites will always direct you to a secure page with an URL starting with https:// whenever you actually make purchases or are asked to provide confidential information. The “s” is important. It indicates that you are on a secure web page. 
  • Use strong passwords: at least six characters, including at least one symbol and number, and no reference to your name or other personal information. Use a different password for every site that requires one, and change passwords regularly.
  • Store your passwords in an online password manager.  
  • Never send a user name, password or other confidential information via e-mail, even if you think it is coming from a reliable source.
  • Consider turning off your computer when you're not using it or at least putting it in standby mode.
  • Don't keep passwords, tax returns and other financial information on your hard drive.

Don’t be complacent when it comes to protecting your online identity. When you receive a bank or credit card statement, skim over it. Take the time to verify that everything is correct.  It is also important to check your credit report once a year for accuracy. There could possibly be accounts on it that you don’t know about. You are entitled to one free report from each of the three credit agencies by going to www.annualcreditreport.com.        

 

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Making the Case against Receiving a Federal Income Tax Refund

Millions of Americans celebrate receiving an income tax refund each year. Many of these same people live each month under the burden of financial hardship, struggling to make ends meet, often falling behind on living expenses and debt obligations.

The February poll hosted on the National Foundation for Credit Counseling (NFCC) website, in which Apprisen is a member, revealed that a significant majority of respondents, 58 percent, intentionally plan to always receive an income tax refund, unnecessarily allowing Uncle Sam the use of their hard-earned money, only to have it returned to them without benefit of interest.

“Not only is the American taxpayer self-inflicting financial pain, they are doing so with intentionality,” said Jana Castanon, spokesperson for Apprisen. “It boils down to a simple choice of determining if it’s more important to have extra money in their pocket each month or once per year.”

The average income tax refund in recent years has been in the $3,000 range, or approximately $250 per month. For many people, that amount can mean the difference between financial solvency and financial distress, yet they continue to have too much money deducted from their paycheck month after month. Further, although well-meaning, many who receive the refund don’t spend it wisely, and even for those who do, once the money is gone, the cycle of struggling to responsibly pay monthly bills begins all over again.

Many consumers argue in favor of an income tax refund saying that it is a forced savings. That is correct, but there is a better way to save. Apprisen advises consumers to implement the following three-step program when they receive this year’s refund:

  1. Put this year’s refund into an interest bearing savings account. Upon receipt of the refund, seize the opportunity to establish an emergency savings account. This will protect against the financial unknown and create a position of financial stability. 
  2. Adjust W-4 withholding allowances. Although receiving a refund is not a good idea, no one wants to end up owing the government, either. To determine the correct number of withholding allowances, use the worksheet at www.IRS.gov, then submit the revised form to your employer.  Know that changes such as the birth of a child, a death, or divorce may impact the number of necessary deductions, thus requiring further revisions. An adjusted form may be submitted at any time during the year.
  3. Responsibly allocate additional monthly income as appropriate. Now that the money that was going to the government is coming to the consumer in the form of a larger paycheck, it is his or her responsibility to make smart decisions regarding how to spend it. Make it a priority to keep living expenses, the rent or mortgage, utilities, and insurance premiums current. The next most important payment is any secured loan, for instance a vehicle payment, followed by unsecured debt such as credit cards. If the savings account has been tapped, replenish it. 

This system stops the dependency on an income tax refund, establishes savings, and provides additional money each month in order to remain financially stable.

“Since worker’s paychecks are smaller this year due to the Social Security deduction having been increased to its former level, it becomes even more critical that consumers find ways to increase their disposable income. For those receiving a refund, adjusting withholding allowances is an easy and effective way to put more money into their pockets each month,” continued Castanon.

The actual poll question and answer choices are below:

Regarding income tax refunds
A. I intentionally plan to always receive a refund each year = 58%
B. I intentionally plan to never receive a refund = 29%
C. I have not given it any thought = 13%

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