A Word of Caution

It’s important to understand a few things upfront. First, there are several types of standard homeowners policies, and each provides different coverage. What’s more, even policies of the same type often don’t provide exactly the same coverage. Another key point: To say that you’re covered for something doesn’t always mean that you’re fully covered. Out-of-pocket deductibles typically apply to the dwelling and personal-property portions of your policy, and every part of your policy is subject to coverage limits. Losses that exceed these limits must be paid out of your own funds.

Home Coverage

Are you covered if…?

• Lightning strikes a power line leading to your house and starts a fire?
  Yes. Fire damage is standard coverage.
• A delivery truck careens off the road and smashes into your house?
  Yes. Damage from vehicles is standard coverage.
• A pipe bursts in your cellar and covers your downstairs room with water?
  Yes. Water damage from burst pipes is standard coverage.
• A huge gust of wind blows a tree onto your house?
  Yes. Windstorm damage is standard coverage in most parts of the country.
• A repairperson damages your walls and ceilings?
  Yes. It doesn’t matter who caused the damage.
• The river behind your house floods, and you have water damage?
  No. Flood protection requires separate insurance. So does earthquake coverage.
• Your house slides down a cliff?
  No. You need separate insurance to protect against this.
• Mice infest your home and chew up your insulation?
  No. The same exclusion applies to infestation by insects and other pests.
• The market value of your home plummets?
  No. Market value has nothing to do with insurance, which is based on replacement cost.
• A house that you haven’t lived in for months is vandalized?
  No. To be covered, the house can’t have been vacant for more than 30 days.
• You need to upgrade your home to meet local building codes?
  It depends. You may need an optional endorsement for this.
• Your home is damaged by water coming in from backed-up sewers?
  It depends. This coverage may also require an endorsement.

Personal Property

Are you covered if…?

• A wild animal gets into your house and rips apart your upholstery?
  Yes, unless the animal is a rodent or a pet of yours. If the rodent or pet causes a fire, you’re covered for the fire damage.
• A thief breaks into your home and steals your stereo, jewelry, and the family silver?
  Yes, but keep in mind that separate coverage maximum limits apply to some types of personal property.
• Your golf clubs are stolen from the trunk of your car?
  Yes (even though the theft occurred off your premises), but you may not receive the full replacement value.
• Your wardrobe is ruined by the smoke from a fire?
  Yes. Clothing falls under personal property coverage.
• The power goes out on your block, causing the food in your refrigerator to spoil?
  Yes, under most policies ($500 is a standard limit).
• The laptop computer that you use for your home business is stolen?
  No. The laptop would be covered only if it were for personal use at home.
• Your boat is damaged in a storm?
  No, unless it meets the requirements for a “small-motor” boat. Boats generally require separate insurance.
• Your central air-conditioning breaks down in the middle of summer?
  No. Homeowners insurance doesn’t cover heating, cooling, and plumbing systems or home appliances for simple breakdown. If they are damaged by a covered peril, such as fire, they are covered.
• A repairperson scratches up your furniture?
  No, in most cases. Damage to your personal property is usually covered only when it’s caused by a named peril (e.g., fire or vandalism).
• A company dumps toxins into the creek that runs through your yard?
  No. The company that did this would be responsible for the cleanup bill and other damages.
• Your fine art collection is stolen?
  It depends. In many cases, you need a special endorsement to cover valuable art and antiques.
• The movers you hired damage your belongings?
  It depends. Some policies will cover insured property during a move. Otherwise, you need separate transit insurance.

Your Liability

Are you covered if…?

• You accidentally leave your boots on the front step, and your invited neighbor trips over them, breaking her hip?
  Yes. This is a straightforward liability question.
• You accidentally run your shopping cart over a man’s foot at the grocery store, breaking his foot?
  Yes. Your liability coverage protects you off your premises as well as on.
• Your son hits a baseball through your neighbor’s window?
  Yes, as long as your son didn’t break the window on purpose.
• Your dog bites a passerby on the street?
  Yes. However, many insurers will cover you only for a certain number of dog bites (in some cases, only one).
• After an accident at your home, the injured party brings a lawsuit against you, and you’re saddled with legal fees?
  Yes. Most homeowners policies cover the costs of defending you against lawsuits.
• A client is injured by falling boxes in your home office?
  No. Separate liability coverage is needed when you run a business out of your home.
• You’re renting out part of your house, and your tenant’s stuff is stolen from the premises?
  No, and you’re not liable, either. Your tenant needs renters insurance to protect his or her belongings.
• You beat up someone who insulted your wife?
  No. Homeowners insurance does not cover liability arising from injuries you have intentionally caused.
• You throw a rock at a squirrel and it hits and injures a neighbor?
  Yes, because even though throwing the rock was an intentional act, you didn’t mean to hurt your neighbor.
• You swing the sail on your boat and accidentally hit your passenger with it?
  No. Homeowners insurance does not cover liability arising from the use of boats and watercraft.
• You accidentally run someone over while driving down the street?
  No, because your auto insurance would cover your liability in a case like this.
• A tree falls from your yard into your neighbor’s yard, breaking his fence?
  It depends. Your neighbor’s insurance would generally cover damage to his own property. However, if you were negligent (e.g., your neighbor told you the tree was dying, and you did nothing), you’d have to turn to your own liability coverage.

If something just happened and you need to know if you’re covered, you should immediately call your insurer or agent or take a look at your policy. But if you’re simply wondering what’s covered (and what’s not) for future reference, you might start by familiarizing yourself with some real-life scenarios.

If you’re curious about your insurance needs or emergency funds, our experts at Choice Wealth would love to meet with you.

Important Disclosures:

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

The information provided is not intended to be a substitute for specific individualized tax planning or legal advice. We suggest that you consult with a qualified tax or legal professional.

LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.

This article was prepared by Broadridge.

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What are Capital Gains Taxes?

Capital gains come from the sale of an asset, such as stocks or real estate. Assets will not incur taxes until they are sold or realized. There are two types of capital gains: short-term and long-term.

• Short-Term Gains
  Short-term capital gains taxes are levied on the profits from the sale of an asset held for one year or less. These gains are taxed at the same rate as your ordinary income depending on the marginal tax bracket you fall under. Capital gains could also push you into a higher tax bracket as it increases your income.
• Long-Term Gains
  Investments held for more than a year are considered long-term and are generally taxed less than ordinary income. High earners may also be subject to net investment income tax (NIIT), an additional 3.8% tax that people at a certain income level must consider.

Proposed Capital Gains Tax Rate Increases

Over the past year or so, the financial world has been abuzz with different proposals put forth regarding increasing the capital gains tax. For those who invest their hard-earned money, this news is likely unsettling. Early on, there was talk that the proposed capital gains tax rate increase would double from 20% to nearly 40%. Though not completely eliminated, that talk has cooled some. However, there is still a proposal on the table of a possible increase of around 28% for individuals who earn over $1 million or more.

For ultra-high-net-worth individuals, there is a proposed change to the capital gains tax in the fiscal year 2025 budget that may be of some concern to certain investors. The proposed change suggests a modification requiring individuals with a net worth above a specified amount to pay a minimum tax on their unrealized capital gains from assets such as stocks, bonds, or privately held companies. This differs from current capital gains tax laws where taxpayers pay taxes on realized gains. If passed, some may worry this could create a precedent for the future that could impact investors at any income level.

Potential Impact of Capital Gains Tax Increase Proposals

Pros

• According to the Joint Economic Committee, there are no real benefits to investors, across the income spectrum, regarding the increase of capital gains taxes.

Cons

• Capital gains tax increases raise the cost of capital, decreasing investments and hindering economic growth, including:
  • Decreasing real gross domestic product (GDP)
  • Potentially hurting the jobs market
  • Decreasing real business spending
• Taxpayers would pay capital gains on illusory, inflation-generated gains.
• Early economist, Adam Smith wrote in 1776, “A tax which tended to drive away stock from any particular country would so far tend to dry up every source of revenue both to the sovereign and to the society.” He was trying to make the point that too much tax on capital gains has a greater effect on society than just who (the wealthy) is being taxed.
  • According to the Joint Economic Committee, increasing capital gains tends to drive down wages as well as the general standard of living.

Capital Gains Tax Strategies to Consider

• Hold onto your investment for over a year to prevent the profit from being taxed as regular income.
• Don’t forget about tax-advantaged accounts such as Roth IRAs.
• Your investment losses can be deducted from your investment profits to lower your income by up to $3,000 annually.
• Look into exclusions that may allow you to exclude a portion of gains from the house sale.
• Talk with a financial professional regarding your concerns.

Discuss Capital Gains Taxes With Your Financial Professional

If you are an investor concerned about capital gains, consider reaching out to your financial professional to discuss the potential changes to capital gains tax rates and to help you develop or modify strategies to prepare for whatever legislation gets passed. It may be helpful to create a list of the pros and cons of a capital gains tax increase and going over it with your financial professional.

Sometimes people view trading to make a quick buck by buying low and selling when the price is higher than when you bought it. However, if you fail to consider the capital gains implications, a large chunk of your profits could be lost. This is one of the many risks involved when it comes to investing. Remember, there is no guarantee you will make money and some loss is to be expected. Working with a financial professional can be a beneficial approach to help mitigate some of the risks. Don’t wait, schedule that consultation today!

Sources:

FINL-PDF.DOC (senate.gov)

Harris Unrealized Capital Gains Tax Proposal: Details & Analysis (taxfoundation.org)

DeepDive: The capital gains tax hike will hurt the middle class too – The Hub

Kamala Harris Golf Tax and Unrealized Gains? What You Really Need to Know | Kiplinger

Important Disclosures

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific situation with a qualified tax professional.

This article was prepared by LPL Marketing Solutions.

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The post The Economic Impact of a Capital Gains Tax Increase appeared first on Choice Bank.

The Pros and Cons of Refinancing

Refinancing your student loans can be a powerful financial tool, potentially offering a lower interest rate, a reduced monthly payment, or both. In ideal circumstances, this move could translate into substantial savings over the life of your loan, potentially amounting to thousands of dollars. However, like any financial decision, refinancing comes with its own set of considerations.

When Does Refinancing Make Sense?

1. Securing a Lower Interest Rate

If you qualify for a lower interest rate than your current one, refinancing could result in significant savings. Lower interest rates mean less money paid over the life of the loan.

2. Reducing Monthly Payments

Refinancing may also allow you to secure a lower monthly payment, making your budget more manageable and freeing up funds for other financial goals.

3. Improving Credit or Financial Situation

If your financial situation has improved since you first took out your loan, refinancing can be an opportunity to secure better terms and potentially release any co-signers.

Considerations for Federal Loan Borrowers

It’s crucial to note that for borrowers with federal loans, refinancing comes with a significant trade-off. Federal loans converted through refinancing become private student loans, stripping away federal benefits such as income-driven repayment plans and forgiveness programs. Understanding this trade-off is paramount before deciding to refinance.

Co-Signer Release: A Path to Independence

For those who initially needed a co-signer to qualify for their student loan, refinancing can offer a chance to stand on their financial feet independently. By refinancing, borrowers can release their co-signers from legal liability for the debt, provided they meet the lender’s requirements.

While some lenders allow for a “co-signer release” without refinancing, the criteria are often strict. If you can secure a lower interest rate through refinancing, it may be a more attractive option, both for your financial independence and potential savings.

Caveats and Considerations

Before jumping into the refinancing decision, it’s crucial to assess your overall financial situation.

Consider factors such as your credit score, income stability, and the current interest rates. Additionally, explore alternative options, such as income-driven repayment plans, to ensure that refinancing aligns with your long-term financial goals.

Refinancing your student loans can be a strategic move to alleviate the burden of student debt, but it’s not a one-size-fits-all solution. Before making this significant financial decision, thoroughly assess your circumstances, understand the implications of refinancing, and explore alternatives. By taking a thoughtful and informed approach, you can determine whether refinancing is the right choice for you and pave the way toward a more financially secure future.Top of FormBottom of Form

Your Financial Professional

The weight of student loan debt can be an immense burden for many, casting a shadow over long-term financial goals. Here, the significance financial planning becomes paramount. A financial professional, who may be armed with a deep understanding of fiscal intricacies, can help you devise strategies to manage and alleviate the strain of student loan debt.

By incorporating repayment structures into your financial planning, individuals can chart a course towards financial freedom while addressing other critical objectives, like saving for retirement or investing in their future.

This plan serves as a roadmap, offering clarity and direction, helping individuals strive towards their desired financial milestones with confidence despite the weight of student loans.

Meet With One of Our Financial Professionals

Important Disclosure:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This article was prepared by FMeX.

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The post Is Refinancing Your Student Loans the Right Move? appeared first on Choice Bank.

When it comes to personal finance, there are a number of competing priorities that can make it difficult to determine where to focus your efforts. For many people, the choice between building emergency savings and working towards their retirement goals is one of the biggest dilemmas they face. So, which should you focus on first?

In order to answer this question, it’s important to understand what emergency savings and retirement goals are and why they are both important. Emergency savings refers to the amount of money you have set aside in a readily accessible account to cover unexpected expenses such as a job loss, medical emergency, or major home repair. Retirement goals, on the other hand, are the plans you have in place to provide for yourself financially once you stop working.

Both emergency savings and retirement goals are important, but the order in which you focus on them will depend on your individual financial situation. If you have a stable income and few financial obligations, you may be able to focus more on your retirement goals, knowing that you have a safety net in place in the form of your emergency savings. However, if you have limited income and high debt, you may need to prioritize building up your emergency savings in order to protect yourself from financial shocks.

Emergency Savings First

Here are a few reasons why emergency savings should come first:

1. Peace of mind. Having a solid emergency fund in place can help you sleep better at night, knowing that you have a safety net in case of an unexpected expense.
2. Protects against debt. If you don’t have emergency savings, you may turn to credit cards or loans to cover unexpected expenses, which can quickly spiral into debt. Building up your emergency savings can help you avoid this trap.
3. Provides flexibility. With an emergency fund in place, you have more flexibility to make decisions about your financial future, such as taking on a new job or starting a new business.

Retirement Goals First

However, there are also some good reasons why focusing on your retirement goals first can make sense:

1. Time value of money. The earlier you start saving for retirement, the more time your money has to grow, which can make a big difference in the amount you have saved when you retire.
2. Compound interest. The power of compound interest means that the earlier you start saving, the less you have to save each month in order to work towards your goals.
3. Employer matching. If you participate in a 401(k) or other retirement plan at work, your employer may match a portion of your contributions. By maximizing this match, you can significantly increase your retirement savings.

Emergency Savings vs. Retirement Goals

So, which should come first? Ultimately, the answer will depend on your individual financial situation and goals. In any case, it’s important to find a balance between the two. You don’t want to neglect your emergency savings and end up in debt when an unexpected expense arises, but you also don’t want to neglect your retirement savings and end up struggling to make ends meet in your later years. A good rule of thumb is to aim to have three to six months of living expenses in your emergency fund, and then start contributing to your retirement goals as soon as you can.

Important Disclosures

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

This article was prepared by FMeX.

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The post Emergency Savings or Your Retirement Goals? appeared first on Choice Bank.

1. Keep an Eye on Your Budget

With inflation hitting nearly double digits since the COVID pandemic, those planning for a steady 2% to 3% per year have found themselves adjusting to significant increases in consumer prices. It is important to keep a close eye on your budget so that you may quickly make adjustments to your committed expenses or your savings withdrawal rates. Sometimes, you may even need to reevaluate when to claim Social Security payments.

2. Plan for Gifts

You may want to begin distributing your assets to your children and other loved ones so you may watch them enjoy your hard-earned money. And by providing these gifts during your lifetime, you may be able to manage the value of your estate enough to avoid any estate tax.

However, not all gifts are equal. It is important to have a gifting plan so that you and the recipient might get the most out of your financial gift—whether this means avoiding taxes or even setting up a “spendthrift trust” to manage the spending of the money.

3. Watch Out for Fraud

Scams continue to become more sophisticated. The older you get, the fewer defenses you may have against a well-prepared scam artist. Take advantage of the resources available to guard against fraud, such as multi-factor authentication or an encrypted password manager. Above all, do not click on links in an email you do not recognize, and do not make payments in gift cards or untraceable money transfers.

4. Set Specific Goals

Whether you want to fund a home improvement project or lower your expenses to prepare for a move, it is important for any goals you set to have specific parameters and to break the goals down into stages. Not only may this make it easier for you to assess progress, but it might help you identify what works — and what does not — when it comes to sticking to a financial goal.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.

This article was prepared by WriterAccess.

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1. Check that your income and spending are in balance. You must be aware of your spending patterns, limit your use of credit, and be mindful of not spending more than you make. Review your online banking, bill payments, and credit card statements to ensure you’re not overspending.
2. Develop a monthly budget. A monthly budget helps you track exactly where your money is going so you aren’t living paycheck to paycheck due to overspending. Budgeting can help you save for retirement and create a plan to pay off debt. A budget can also help you learn to live without wants because you can see where your hard-earned dollars are going.
3. Save money to cover unforeseen emergencies. Ideally, save three to six months of living expenses in an emergency savings account. Once you reach six months of emergency savings, continue saving in your emergency fund until you reach another milestone, such as one year of living expenses.
4. Consistently save for retirement and other goals. Invest in yourself by automating your monthly 401(k), IRA, or Roth IRA retirement savings contributions. Save for different purposes through automatic savings account contributions through payroll or other bank apps into an account set up for a specific financial goal.
5. Discuss significant financial decisions with others. Before making financial decisions or purchasing big-ticket items, discuss the pros and cons of your decision with others before spending. Discussion can help determine if the financial decision aligns with your budget and goals.
6. Regularly monitor and adjust your financial plan. You should have a written financial plan that aligns with your goals and timeline. Self-monitor your progress toward your goals and adjust your financial plan as necessary as your life changes.
7. Educate yourself. Financial literacy is the confluence of the economic, credit, and debt management knowledge necessary to make financially responsible decisions that are integral to our everyday lives. The more you know about personal finance, the more likely you are to make comprehensive financial decisions.
8. Work with a financial professional. Working with a financial professional can help you determine strategies appropriate for your goals, risk, and timeline. They can also help you develop a budget, create a financial plan, save for your child’s education, and keep you on track toward your goals.
9. Don’t let your emotions impact your financial decisions. Weighing out the pros and cons of financial decisions before making a final decision is essential to financial wellness. When it comes to investing, emotions can be tricky since investors don’t always make rational decisions, according to the CFA Institute. Financial decisions require evidence and reasoning to make the most thoughtful choice so that you don’t regret your decisions later.
10. Save money in small ways. Look for discounts, promos, and coupons on items you regularly buy. Also, consider negotiating a reduced price for memberships and subscriptions such as internet, gym, and streaming channel services.

Financial wellness is essential for many reasons since it can impact your mental and physical health and overall quality of life. By improving your financial wellness, you can build wealth for a more financially secure future.

Important Disclosures

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations, nor is it intended to provide any specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing.

Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal.  Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax.

The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.

This article was prepared by Fresh Finance.

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Lesson 1: Handling earnings from a job

Teens often have more expenses than younger children, and your child may be coming to you for money more often. But with you holding the purse strings, your teen may have difficulty making independent financial decisions.

One solution? Encourage your teen to get a part-time job that will enable him or her to earn money for expenses. Here are some things you might want to discuss with your teen when he or she begins working:

• Agree on what your child’s pay should be used for. Now that your teen is working, will he or she need to help out with car insurance or clothing expenses, or do you want your teen to earmark a portion of each paycheck for college?
• Talk to your teen about taxes. Show your child how FICA taxes and regular income taxes can take a bite out of his or her take-home pay.
• Introduce your teen to the concept of paying yourself first. Encourage your teen to deposit a portion of every paycheck in a savings account before spending any of it.

A teen who is too young to get a job outside the home can make extra cash by babysitting or doing odd jobs for you, neighbors, or relatives. This money can supplement any allowance you choose to hand out, enabling your young teen to get a taste of financial independence.

Lesson 2: Developing a budget

Developing a written spending plan or budget can help your teen learn to be accountable for his or her finances. Your ultimate goal is to teach your teen how to achieve a balance between money coming in and money going out. To develop a spending plan, have your teen start by listing out all sources of regular income (e.g., an allowance or earnings from a part-time job). Next, have your teen brainstorm a list of regular expenses (don’t include anything you normally pay for). Finally, subtract your teen’s expenses from his or her income. If the result shows that your teen won’t have enough income to meet his or her expenses, you’ll need to help your teen come up with a plan for making up the shortfall.

Here are some ways you can help your teen learn about budgeting:

• Consider giving out a monthly, rather than weekly, allowance. Tell your teen that the money must last for the whole month, and encourage him or her to keep track of what’s been spent.
• Encourage your teen to think spending decisions through rather than buying items right away. Show your teen how comparing prices or waiting for an item to go on sale can save him or her money.
• Suggest ways your teen can earn more money or cut back on expenses to resolve a budget shortfall.
• Show your teen how to modify a budget by categorizing expenses as needs (expenses that are unavoidable) and wants (expenses that could be cut if necessary).
• Resist the temptation to bail your teen out. If your teen can depend on you to come up with extra cash, he or she will never learn to manage money wisely. But don’t be judgmental—your teen will inevitably make some spending mistakes along the way. Your child should know that he or she can always come to you for information, support, and advice.

Lesson 3: Saving for the future

As a youngster, your child saved up for a short-term goal such as buying a favorite toy. But now that your child is a teen, he or she is ready to focus on saving for larger goals such as a new computer or a car and longer-term goals such as college. Here are some ways you can encourage your teen to save for the future:

• Have your teen put savings goals in writing to make them more concrete.
• Encourage your child to set goals that are based on his or her values, not on keeping up with what other teens have or want.
• Motivate your child by offering to match what he or she saves towards a long-term goal. For instance, for every dollar your child sets aside for college, you might contribute 50 cents or 1 dollar.
• Consider increasing your teen’s allowance if he or she is too young to get a part-time job.
• Praise your teen for showing responsibility when he or she reaches a financial goal. Teens still look for, and count on, their parent’s approval.
• Open up a savings account for your child if you haven’t already done so.
• Introduce your teen to the basics of investing by opening an investment account for your teen (if your teen is a minor, this will be a custodial account). Look for an account that can be opened with only a low initial contribution at an institution that supplies educational materials introducing teens to basic investment terms and concepts.

Lesson 4: Using credit wisely

You can take some comfort in the fact that credit card companies require an adult to cosign a credit card agreement before they will issue a card to someone under the age of 21 (unless that person can prove that he or she has the financial resources to repay the credit card debt), but you can’t ignore the credit card issue altogether. Many teens today use credit cards, and it probably won’t be long until your teen asks for one too.

If you decide to cosign a credit card application for your teen, ask the credit card company to assign a low credit limit (e.g., $300). This can help your child learn to manage credit without getting into serious debt.

Here are some things to discuss with your teen before he or she uses a credit card:

• Set limits on what the card can be used for (e.g., emergencies, clothing).
• Review the credit card agreement, and make sure your child understands how much interest will accrue on the unpaid balance, what grace period applies, and what fees will be charged.
• Agree on how the bill will be paid, and what will happen if your child can’t pay the bill.
• Make sure your child understands how long it will take to pay off a credit card balance if he or she only makes minimum payments. You can demonstrate this using an online calculator or by reviewing the estimate provided on each month’s credit card statement.

If putting a credit card in your teen’s hands is a scary thought, you may want to start off with a prepaid spending card. A prepaid spending card looks like a credit card, but works more like a prepaid phone card. You load the card with the dollar amount you choose and your teen can generally use it anywhere a credit card is accepted. Your teen’s purchases are deducted from the card balance, and you can transfer more money to the card if necessary. Although there may be some fees associated with the card, no interest or debt accrues.

One thing you may especially like about prepaid spending cards is that they allow your teen to gradually get the hang of using credit responsibly. Because you can access account information online or over the phone, you can monitor your teen’s spending habits, then sit down and talk with your teen about money management issues.

This article was prepared by Broadridge.

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The post Teaching Your Teen About Money appeared first on Choice Bank.

These top Amazon finds can help you create a monthly budget, plan your spending, and safely store your important insurance or personal documents for easy access when you’re at home or on the go.

On Your Desk

It’s important to sit down and budget, and your desk is the best place to do so. You can focus more comfortably from an office space. Find a safe and secure place for the items below in a desk drawer or, at the very least, away from any windows.

Simple Mesh Organizer with Sliding Drawer

Use this desktop organizer for bills and any other important papers that need immediate attention or follow-up. Keep your pens, postal stamps, and sticky notes in the conveniently attached drawer.

Budget Book

Plan your daily, weekly, and monthly finances with an easy-to-use budget book!

Fireproof Waterproof Document Bag

When disaster strikes unexpectedly, don’t let your documents fall victim to it. Instead, you can protect your passports, medical receipts, and other hard-to-replace personal information with this fireproof and waterproof document bag. Plus, it has a lock to keep it from being opened by the wrong hands.

In Your Car or Purse

Financial safety and planning don’t take a break once you leave the comfort of your home. Put the items below in a secure place in your car or purse for help on the go.

Car Registration and Insurance Holder

It’s already anxiety-inducing to be pulled over or get into an accident, so keep your insurance and car registration handy in this sleek organizer you can put in a glovebox or center console for easy access in an emergency.

Aippdo Budget Binder with Cash Envelopes and Expense Budget Sheets

When you’re out and about shopping, it can be easy to overspend what you’ve budgeted for. So, put this discrete cash binder in your purse to help you see how much you have left to spend for the week or month in a particular category, such as groceries or coffee.

Diversion Safe Box

Disguise your emergency cash or credit cards in these inconspicuous tissue and gum safes. Be sure not to keep too much in these, as they could be accidentally thrown away by someone else in the car. Keep just enough cash so you can purchase gas or food in a pinch.

Try these helpful and inexpensive Amazon products so you can be more proactive with your finances!

This article was prepared by ReminderMedia.

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Two financial “snapshots” you can take at any time to help view your financial landscape are a balance sheet (or net worth statement) and a cash flow statement. These tools demonstrate where you are today, and they can also help you make important financial comparisons in the future. Although various software programs are designed to help with budgeting, it can be easy and helpful to create your own worksheets on paper.

Assessing Your Net Worth

To create a balance sheet, simply draw a line down the center of a blank piece of paper. Label one column “Assets” and the other column “Liabilities.” Assets are everything you own, and liabilities are everything you owe.

You can add structure by grouping your assets into three categories: 1) cash or cash alternatives: checking and savings accounts, money market funds, and certificates of deposit (CDs); 2) investments: stocks, bonds, mutual fund accounts, and retirement accounts; and 3) personal property: your house, home furnishings, autos, boats, and other personal items.

Liabilities can be labeled as follows: 1) short-term: auto loans, most personal loans, and credit card debt; or 2) long-term: home mortgages, some home equity loans, and some educational loans.

Enter all of the relevant numbers and add up the two columns. We’ll examine the outcome later.

How Fluid Is Your Cash Flow?

Next, create a cash flow statement. Draw a line down the center of another blank sheet of paper, and label one column “Cash Inflow” and the other “Cash Outflow.” On the inflow side of the ledger, list monthly or yearly income from all sources, such as wages, self-employment, rental properties, and investment income (interest and dividends).

On the outflow side, list all monthly or yearly expenditures, separating fixed expenses (mortgage payments, other periodic loan payments, and insurance premiums) and variable or discretionary expenses (utilities, food, clothing, entertainment, vacations, hobbies, and personal care). You may choose to put taxes (federal, state, FICA) in a separate category. Again, fill in the relevant numbers and total the columns.

The Results

If your balance sheet shows your assets exceed your liabilities, you have a healthy net worth, especially if your cash flow statement shows more inflow than outflow. This picture shows that you are solvent and spending within your means. The degree of your financial health depends on the amount of your surplus.

Your financial picture may look somewhat different if your balance sheet shows your liabilities exceeding your assets and/or your cash flow statement shows more outflow than inflow. This indicates that you are spending beyond your means. It may be time to assess areas in which you can decrease your liabilities.

Each year, strive to increase your net worth and keep your expenditures under control. If your financial picture is a little out of focus, taking action now to sharpen the view may help you create a more fulfilling snapshot in the future.

Important Disclosures

This material was created for educational and informational purposes only.

This article was prepared by Liberty Publishing, Inc.

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But what goes into your credit score, and how can you make sure you’re doing what you can to improve your score? Below, learn more about five of the most common mistakes that can harm your credit score.

Carrying High Balances

The closer your total balance is to your credit limit (known as your debt utilization ratio), the more it can impact your credit. If you have a handful of credit cards with a combined limit of $60,000 and your debt load is $30,000, your score could likely suffer.

Although the rule of thumb is to keep your debt utilization ratio at 30 percent or less, this ratio can begin negatively impacting your credit at a much lower level. To ensure your credit score stays as high as possible, shoot for a debt utilization ratio of five percent or less.

Closing Out Old Accounts

One of the factors that goes into your credit score is your age of credit history. Generally, the longer your credit history, the lower credit risk you pose, as lenders can get a good idea about your habits based on the credit you’ve taken in the past. This means that closing out your oldest credit account will erase it from your age of credit history, potentially reducing your credit score.

The other side of this coin involves taking out new accounts. Even if you have a long credit history, if you go for years with just a handful of accounts and then take out several new lines of credit within a short period, your credit age will decrease significantly.

Making Late Payments

Although paying a bill a day or two late is rarely a cause for concern, when it comes to maintaining a high credit score, timely payments are crucial. If a lender or other creditor reports a late payment to the credit reporting agencies, your credit score could plummet. This also illustrates why it’s important to check your credit report annually at annualcreditreport.com, a website run by the three major credit reporting bureaus: Transunion, Equifax, and Experian.

Co-Signing for Someone Else

When you co-sign a loan, you’re indicating your own willingness to be financially responsible for the collateral. Even if you and the other borrower have a firm agreement requiring the borrower to repay the loan, the bank simply wants its collateral back–no matter who may be the current legal owner—and will come after you if the borrower misses payments. Outside of the supportive gesture, there is little upside for the person who cosigns. Therefore, co-signing is an option that should be exercised judiciously—if at all.

By steering clear of these major mistakes, as well as a few others, you can be well on your way toward a solid credit score.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
https://www.thebalance.com/having-good-credit-score-960528
https://www.cnbc.com/2019/08/20/why-that-30percent-rule-of-thumb-about-credit-card-use-could-be-costing-you.html
https://www.experian.com/blogs/ask-experian/credit-education/score-basics/credit-utilization-rate/
https://www.fool.com/the-ascent/credit-cards/articles/heres-how-much-my-credit-score-fell-when-my-utilization-rate-topped-50/
https://www.lexingtonlaw.com/credit/length-of-credit-history
https://www.creditcards.com/credit-card-news/closing-oldest-credit-card-pros-cons/
https://www.myfico.com/credit-education/credit-scores/new-credit
https://www.myfico.com/credit-education/credit-scores/payment-history
https://www.myfico.com/credit-education/credit-scores/payment-history
https://www.annualcreditreport.com/
https://www.nerdwallet.com/article/loans/personal-loans/3-bad-reasons-to-co-sign-a-loan
https://www.foxbusiness.com/money/what-happens-loan-cosigner-does-not-pay
https://www.nerdwallet.com/article/loans/personal-loans/3-bad-reasons-to-co-sign-a-loan

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