Why Financial Capability Matters in 2014

Last year, the White House declared April Financial Capability Month, proclaiming that “all Americans deserve the chance to turn their hard work into a decent living for their families and a bright future for their children. Seizing that opportunity takes more than drive and initiative -- it also requires smart financial planning. During National Financial Capability Month, we recommit to empowering individuals and families with the knowledge and tools they need to get ahead in today's economy.”

With the unemployment rate in South Carolina steadily decreasing from 8.1 percent in February 2013 to 6.4 percent as of February 2014, it’s crucial that those gaining employment use practical money management skills. That’s where financial education comes in. Financial education is a means to help alleviate and prevent poverty. Although the unemployment rate is down in South Carolina, the number of those in poverty is up. Currently 1 in 5 South Carolinians live in poverty compared to 1 in 6 in 2000. That’s nearly 300,000 more residents.

Image via Pearson Foundation

Regardless of your economy or your household income, it’s important to realize that financial education matters. Those individuals who receive it are more likely to make the right financial decisions for themselves and their families that will help them build and maintain assets. When people are buying houses, maintaining a home or steady residence, and are paying on their debts, it positively affects the local economy.

Financial education is more than just gaining a budgeting tip here and a saving strategy there. This knowledge converts into skills, which convert attitudes, and those attitudes affect behavior. What you’re left with is healthy financial habits. Those that take charge of their personal finance and choose to become informed consumers avoid scams, predatory lending and other deceptive practices, and can effectively address their needs versus wants.

Family Services, Inc. (FSI), as a charter member of NeighborWorks America, aligns itself with the initiative to help end poverty and raise better awareness for financial education. Their staff of licensed professionals is dedicated to highlighting the importance of financial capability and helping those in the community establish and maintain healthy financial habits. Through its programs and services, FSI advocates, counsels, and educates for clients so they can make the most of what they have.

Written by: Sarah Cornwall, Marketing Resources, at Family Services, Inc.

Make a New Year’s resolution to rid stress from your life…

It’s simple, get your finances in order--you won’t believe how good it feels to be money smart.

Tips for making the list:

BE POSITIVE.

Sometimes this is easier said than done. To keep in the mindset, try wording your goals positively, such as “we’re going to spend money only on things we truly value.” If you stray from your goals, don’t beat yourself up or dwell on your mistakes. It will only serve to make you feel worse and keep off track. Just jump right back on that horse and promise yourself to stay on the path.

Keep your resolutions attainable.

Check in with your goals at least once a month. Set a reminder for yourself. For instance, decide that every time you make a payment on that credit card bill, you’ll revisit your financial resolutions; this will help you track how far you’ve come. Remember that if you’ve made it this far, you can reach your goal!

Be specific.

Make instructions for yourself for just how exactly you plan to attain your goals. Instead of saying you will save more, write a budget up. This will help keep you on point.

Make a contract with yourself.

With your resolutions set, document all your goals. You could even include reasons for committing to them. At www.FutureMe.org, email this to your future self a month, two months, six or 12 months in advance, or print out the letter and place it on the fridge, so you can be reminded of why these goals are important, especially when other crises seem to get in the way.

What our in-house experts recommend you put on the list:

Review your insurance.

Your policies may be outdated and not suited for your current needs. Review what you have: homeowners, life, even auto may be insufficient relative to your present financial situation.

Check your credit score.

Be aware of where your credit stands and take steps to repair any negative aspects. You get three free credit reports each year, there is no excuse for not reviewing what is one of your most important financial reports, especially since errors in these reports are not uncommon. www.annualcreditreport.com

Invest what you can.

Even if it’s just a little, invest in yourself and family. It could be as simple as paying yourself first by contributing to your savings each month, or it could be a retirement fund, an education fund, or making extra mortgage payments. Consider these things as investing in yourself and your future.

Taking care of these will allow you to enjoy a happier, more prosperous and stress-free new year.

Written by: Sarah Cornwall, Marketing Resources, at Family Services, Inc.

Don’t stress! There are still deals to take advantage of, even after Black Friday!

Budgeting isn't easy, but it’s a GREAT feeling knowing you have a healthy bank account. Let us help make holiday budgeting and purchasing easier—attend December’s Credit Club! In the meantime, here are some suggestions from our budgeting professionals.

Have a plan

Avoid holiday headache overspending and make a detailed budget plan. Encompass all that is part of the holiday season into the budget, including travel, food, events and parties. There should be a long list of what your holiday expenses are. While planning and spending, think of ways where you can cut back on your budget or save on expenses.

Comparison shop all your planned purchases

Check ads in newspapers and visit retailers’ social media pages or websites. Saving just a few dollars on each expense adds up! If getting the better deal means driving to several different shops, save gas money by grabbing everything while you are already out or try carpooling with a friend.

In the true spirit of the season, the thought really is what counts

It’s tempting to use shopping as a way to get into the holiday spirit. Instead of making time for shopping, make time for friends and family, and creating gifts that are personal. If holiday expenses really have you worried, talk about it with friends and family; they might be just as eager to set limits on gift spending.

Food for thought for the New Year

Employ multiple saving strategies in addition to savings accounts, such as the whole family pooling and saving change over the year. Every little bit only serves to help, and you might be surprised just how much you can actually save in a year while still making ends meet.

If you do especially well this holiday season and spend under your budget, consider getting a head start on Christmas for the following year. After-Christmas sales are competitive with Black Friday deals; cards, decorations, and Christmas-themed gifts will be hugely discounted.

Don’t miss out on a workshop that is sure to help make your holiday full of cheer! This month’s Credit Club “Creating Memorable Christmas Traditions” on Thursday, Dec. 5 at 6 p.m. will help you create those wonderful Christmas memories for you and your family that will last a lifetime! Click here to learn more and register.


Written by: Sarah Cornwall, Marketing Resources, at Family Services, Inc.

Bargains for a Happy Halloween

Halloween is expensive and although it is over, the immediate week after is perfect for taking advantage of steep discounts. Decorations and all other overpriced Halloween accessories are priced for cheap; which usually reflects the quality of Halloween-themed products.

Think about stocking up for the following year. With decorations and costumes already purchased you will have more time and money next Halloween for carving pumpkins and enjoying hayrides.

If you miss the window for after-Halloween sales, there are plenty of other ways to save big. Purchase candy after other big holidays such as Easter or Valentine’s Day. Make the decorations yourself—this pairs as a great Halloween activity for kids.

Shop online to price compare and be sure to check reviews. Many reviews will not be great, but if it’s a cheap price, then you’re getting the expected value.

Avoid those Halloween-themed retailers that appear every October. Their items are almost always over-priced.

There are many ways to save money on costumes, which, once purchased for the whole family, can add up to a hefty price. Try to reuse or repurpose costumes from previous years. Swap costumes with friends or relatives. More and more funny costumes tend to be the simple but clever ones.

For more ideas, check out this list of easy, cheap, and humorous costumes: http://www.essortment.com/halloween-costume-ideas-50-funny-ideas-52248.html

Trick or treat!

Written by: Sarah Cornwall, Marketing Resources, at Family Services, Inc.

How to Save Big on Healthcare

You have probably heard that big changes are coming to healthcare this month, but you might not be sure how it affects you. Here's what you need to know to save big on healthcare this year.

The Affordable Care Act caused state healthcare exchanges to open on October 1. A healthcare exchange is a kind of marketplace where insurance companies offer different plans to consumers.

However, just because these plans are available to you does not mean that you should automatically drop your employer's insurance. This is because, under your company's insurance, your employer is actually paying for some of your coverage. 

On the other hand, there are specific circumstances that may make shopping the healthcare exchange worth your while. If you fall into one or more of the categories listed below, you should consider shopping the exchange for a better deal on your healthcare coverage:

• More than 9.5% of your household income goes to health insurance. Even if you have your company's healthcare insurance, you may be paying a significant portion of the cost. If so, you can drop your company plan and find assistance in the state healthcare exchange. 

• Your employer pays for less than 60% of your healthcare costs. This is another indicator the government uses to identify inadequate coverage. It usually applies to high-deductible plans. 

• You work for a company with less than 100 employees. The Affordable Care Act only requires companies with more than 100 employees to provide health insurance. If  your employer offers no or minimal coverage, you might be able to find a better plan at the exchange. 

• You earn less than 400% of the poverty level. If you qualify for a government subsidy, shopping the healthcare exchange is a good idea. To qualify for a subsidy, you must earn between 133 and 400% of the poverty level. If you fall below the 133% mark, you qualify for Medicaid. If your income is above the cutoff point, you can still use the exchange to shop for health insurance. However, you will not receive a tax break. 

Whether or not you are enrolling in the healthcare exchange, there are other ways that you can save on your medical expenses. One way is to have a healthcare savings account. It could save you money on taxes as well as provide free money for medical bills. Here are THREE types of healthcare savings accounts to consider:

• FSA - A Flexible Savings Account is set up through your employer and puts pretax dollars aside for medical expenses. FSAs are especially helpful for expenses that you know are coming, such as paying for children's braces. In order to be reimbursed, you must turn in your receipts. When using a FSA, it is important to budget carefully since the money must be spent within the calendar year or it returns to the company. 

• HSA - The money in a Health Savings Account can be invested, so it could earn more for you than if it was just sitting in savings account. The earnings are rolled over every year, and you can withdraw all of it when you turn 65. These accounts are available through employers and banks, and many of them come with fees. To sign up, you have to a high-deductible insurance policy.You must also be careful not to use the funds for a non-qualified medical expense before you turn 65. If you do, the IRS will add an extra 20% to your federal taxes. 

• HRA - The only type of account that employers completely fund is a Healthcare Reimbursement Account. The money in this account will stay there from year to year, and it covers nearly everything that a FSA or HSA would. While some require you to file a claim, others simply give you a check card to use for your health expenses. However, you do not keep the money once you leave that job, so keep that in mind if you are preparing to retire or change careers. 

With these tips in mind, you should be well prepared for the coming healthcare changes. If you have any other ideas on how to save money on medical expenses, please share them in the comments below!

Written by: Meg Thompson, Marketing Resources, at Family Services, Inc.

Making Ends Meet: Budgeting made easy!

Forget penny-pinching, unless you enjoy that. We like to make budgeting fun. Making minor adjustments to your financial behavior can make a world of difference.

• Start with a WARM-UP. No one ever begins an exercise routine with a marathon. Pledge a few minutes a day for a week to get organized. Gather those bills and sort them into piles. Maybe even create a calendar with bill due dates. If you are “techy,” try a Google calendar with reminder emails.

• Time to ASSESS. The next week, use that same few minutes a day to check in on your financial health. Look up your credit score on annualcreditreport.com (nowhere else, please!), check your bank account balances, and review your retirement plan.

• Now... PLAN with a purpose! Choose a goal that would change your life in the short-term. Maybe you want to switch careers, go back to school, maybe BUY A HOUSE?!

• STRATEGIZE. Break that goal into smaller pieces. Once you accomplish it,
move on to the next goal!

And, if you decide that buying a home may be one of your upcoming life goals, be sure to contact us!We can assist you in credit improvement, budgeting, debt management, and homebuyer education.


Call to learn more or to schedule an appointment at 843.735.7862 or email info@fsisc.org.


Written by: Jenna Johnson, Marketing and Development Director at Family Services, Inc.

4 ways to use your tax refund to strengthen your overall financial situation

If you are anything like me, you’ll be more than tempted to use your tax refund for that flat screen you’ve wanted, or maybe that weekend vacation you keep putting off. It feels good to finally get those material things you’ve “needed”. However, like most material indulgences, the charm wears thin and quick…especially when an emergency comes up, or reality hits that you should invest more in your future.

I asked our experts here at Family Services, Inc. for different ways to use a refund that will leave you feeling secure, and confident about your financial situation.

 1.       Pay off/down debt: This encompasses a lot. Who doesn’t have debt these days? Pay off a credit card balance. Double up on a mortgage payment. Doing this once a year can shorten your overall payment period (provided it's allowed under the terms of your loan). If you’re not a homeowner, apply this trick used for mortgages to your student loan debt. Paying down debt, whether it’s a credit card, car loan, mortgage, student loan, or any other kind, is usually a guaranteed return equal to the interest you would have otherwise paid.

2.       Make an emergency fund: If you have your debts under control, and don’t feel it’s necessary to make an extra payment, then your tax refund might be an excellent starting point for building an emergency fund. Personally, my refund will be put away as “emergency funds”. The other day I left work to find that I had a flat tire. Needless to say, I had NO money to pay for this unexpected expense and was forced to charge it, maxing out my credit card!

3.       Invest: If you have no debt and a healthy emergency fund (kudos to you), then you can always look to the future. A tax refund can be used to put a down payment on a house, buy a car, or help pay for an education for you, or the little ones (look to ESA plans and 529 plans). Try one of these: 401(k), 403(b), Roth IRA, Traditional IRA, SEPs. Have questions? One of our licensed financial coaches can help! The purpose and the time frame will help you decide the kind of investment you should be looking at.

              

4.       A savings account: Instead of a regular savings that would perhaps hold your emergency fund, try a Christmas club account. Christmas is the same time every year, but it still catches the majority of people off guard. Even better, invest in a Certificate of Deposit account, similar to a savings account but with higher interest for your benefit.

Go to www.fsisc.org or call 843-735-5522 for information or assistance.

Written by: Sarah Cornwall, Marketing Resources Assistant at Family Services, Inc.

Poll Reveals Consumers Committed to Retaining Cell Phone and Internet Service

When trying to save money, consumers choose to keep technology and cut back in other areas

Washington, DC – The June Financial Literacy Opinion Index poll hosted on the National Foundation for Credit Counseling (NFCC) website revealed that in order to save money, people are willing to give up eating out, shopping, fancy coffees and cable TV, but they remain very attached to their cell phone and Internet services.

When asked to select the last thing they would give up in order to save money, only one percent of the 3,148 poll respondents insisted on keeping their designer coffee, one percent couldn't do without online or catalogue shopping, four percent would have trouble eliminating eating out, while eight percent were reluctant to pull the plug on their cable TV.

By contrast, 32 percent said they would be least likely to discontinue their home Internet service, while the majority, 53 percent, would refuse to say goodbye to their cell phone.

“It appears that Americans love their technology and are determined to stay connected,” said Gail Cunningham, spokesperson for the NFCC. “However, they may still have the opportunity to save money in those areas by examining their current cell phone and Internet plans. People often have plans with bells and whistles they seldom use, and discontinuing such services can save a significant amount of money.”

The poll results indicate that consumers are making logical choices when determining where to cut back, as they elected to eliminate spending in the areas where the lifestyle change would be least noticed, thus increasing the likelihood of sustainability. For instance, they can brew coffee at home, prepare meals at home, and control their shopping. Giving up cable seemed doable possibly due to the many viewing options available online or via a cell phone.

It is not surprising that consumers are reluctant to part with their Internet service and cell phones, as the poll confirms that Americans consider these as must-haves. Computer use has become ingrained as a part of people’s everyday activities as they rely on their Internet access to, among other things, search for a job, connect with friends, research a project, trade stocks, for entertainment and to stay up to date on breaking news.

Today’s consumers may be reluctant to give up their cell phone, not only due to convenience, but because they have disconnected their land line in favor of their cell as the main source of verbal communication. Considering the capabilities of today’s smart phones, tech-savvy consumers have begun to rely on their cells to perform many of the same tasks as their computer.

“It is encouraging that consumers appear to have thought through their cost-cutting decisions, and have made wise choices,” continued Cunningham. “This level of awareness will not only help people ride out the difficult economic times they’re currently experiencing, but result in a more stable financial future.”

If you need help finding realistic ways to control spending, reach out to a trained and certified housing counselor through an NFCC Member Agency. To be automatically connected to the location closest to you, dial (800) 388-2227, or go online to www.DebtAdvice.org. For assistance in Spanish, call (800) 682-9832.

The June poll question and results are as follows:

In order to save money, the last thing I would give up is

A. My cell phone = 53%

B. Cable TV = 8%

C. Designer coffee = 1%

D. Eating out = 4%

E. Internet/catalogue shopping = 1%

F. Home Internet service = 32%

Note: The NFCC’s June Financial Literacy Opinion Index was conducted via the homepage of the NFCC Web site (www.DebtAdvice.org) from June 1 - 30, 2011 and was answered by 3,148 individuals.

FATHER KNOWS BEST – OR DOES HE?

Survey Reveals Definite Lack of Financial Skills

Washington, DC – As Father’s Day approaches, many dads begin reflecting on the life skills they’re teaching their children. Nice manners, discipline and a good work ethic top many lists. Not to be overlooked, however, are financial skills, because regardless of whether they are taught formally or by example, parents pass along their financial habits to their children.

This concept is confirmed by the National Foundation for Credit Counseling’s (NFCC) 2011 Financial Literacy Survey in which the majority of respondents, 42 percent, indicated that they learned the most about personal finance from their parents. At first glance, this appears to be a good thing, as the home should be the ideal place for children to learn skills and habits.

However, the same survey also revealed that 41 percent of adults gave themselves a grade of C, D or F regarding their knowledge of personal finance. This is a disturbing decline in financial literacy, as one short year ago “only” 34 percent of Americans gave themselves a low grade. Further, five percent of U.S. adults, or about 11.5 million people, indicated that the failing grade of F best represented them, marking a sharp increase from previous years when less than three percent of adults self-identified at this level.

Taken together, these results suggest that many parents are ill-prepared to teach their children sound financial principles.

“The good news is that Americans recognize and are willing to admit their financial deficiencies,” said Gail Cunningham, spokesperson for the NFCC. “Now it is up to them to do something about it, particularly if they have children who will invariably model their parent’s financial behavior.”

There are many resources available to consumers desiring to improve their level of proficiency in personal finance, including self-help books, the media, the Internet or financial professionals. Interestingly, the survey showed that while Caucasian and Hispanic adults are more likely to identify the home as the primary learning ground for personal finance, African-Americans are more than twice as likely as Caucasians to garner such information from self-help books, the media or friends.

Looking at gender, men were more than four times as likely as women to give themselves failing grades for their knowledge of personal finance, eight percent versus two percent, respectively.

“During these painful economic times, it can be argued that keen personal finance skills are more important than ever,” continued Cunningham. “The NFCC calls on parents to stop the cycle of financial illiteracy by improving their own level of financial expertise, thus enhancing the likelihood that their children will some day be able to give themselves a grade of A in this important life skills category.”

If you want to improve your level of personal financial skills, reach out to an NFCC Member Agency where you can meet with a counselor one-on-one, or participate in group workshops on a variety of financial topics. The services are free or low-cost and are open to the public. To be automatically connected to the NFCC Member Agency closest to you, dial (800) 388-2227, or go online to www.DebtAdvice.org. For assistance in Spanish, dial (800) 682-9832. OR, if you're in the Charleston Area contact Family Services, Inc at (843) 735-7802

The National Foundation for Credit Counseling (NFCC), founded in 1951, is the nation’s largest and longest serving national nonprofit credit counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior and build capacity for its Members to deliver the highest quality financial education and counseling services. NFCC Members annually help over three million consumers through close to 800 community-based offices nationwide.