How Does Financial POA Work?

Q: What is a financial power of attorney and how does it work?

A: A financial power of attorney (POA) is a legal document that grants a designated agent the authority to act on behalf of the principal agent in financial matters. The designated agent is often referred to as the attorney-in-fact and the principal agent is often referred to as the “principal.”

Here’s all you need to know about financial POA:

What is the purpose of financial POA?

The primary purpose of financial POA is to protect the principal and their family from a legal battle. The POA ensures that the principal’s finances will continue running smoothly, regardless of what happens to them.

How does a financial power of attorney work? 

Financial POA allows the designated agent to manage all of the principal’s financial matters. This includes paying bills, managing all accounts and investments and signing financial documents.

Financial POA is most commonly used when the principal is out of commission due to a medical emergency. Being laid up in a hospital bed does not mean the principal’s financial accounts are frozen and bills are put on hold. Having a financial POA in place will allow their finances to continue running smoothly until the agent is functioning in their usual capacity.

Which powers are granted to the attorney in a financial POA?

The extent of authority a POA grants can vary greatly, depending on how it’s worded. Most POAs extend the following powers to the agent on behalf of the principal:

  • Make financial decisions
  • Manage the principal’s accounts and investments
  • Manage the principal’s property
  • Conduct financial transactions
  • Collect retirement benefits
  • Pay bills
  • Pay medical expenses
  • Pay taxes
  • Purchase insurance
  • Sell assets

When does a power of attorney become effective?

The circumstances that dictate when a POA becomes effective will vary according to how the POA is worded. It may become effective as soon as it’s signed, or only upon the occurrence of a future event as indicated in the document.

If the document stipulates that the POA is effective immediately, the agent can act upon the principal’s account even if the principal is not incapacitated in any way. This kind of POA is often used for an agent to represent someone who travels often and may not be physically present to make important financial decisions.

Usually, though, a POA only becomes effective if the principal can no longer manage their own finances because they have become incapacitated, or one or more doctors have certified that they are physically or mentally unable to make decisions. This can be due to mental illness, a medical emergency, the onset of dementia, or any other event that renders the principal unable to function as usual.

In some states, a POA automatically becomes effective when the principal is incapacitated, even if this is not indicated in the contract.

When does a power of attorney end?

The authority conferred by a POA will always end upon the death of the principal.

Unless otherwise indicated in the contract or state law says otherwise, the POA also ends if the principal becomes incapacitated. If the authority continues after incapacity, it is called a durable power of attorney, or a DPOA.

A POA can also end if the principal revokes it, a court invalidates it or the agent is no longer able to represent the principal. In some states, the POA also becomes invalid upon divorce if the agent is a spouse.

What are the potential consequences of not appointing a POA? 

If an individual becomes incapacitated for any reason and they have failed to appoint an agent to act on their behalf, their financial matters will generally be left up to the government of their home state. If there are family members who want to step up, they will need to go through the courts to gain legal control of the principal’s finances. Generally, though, when someone does not have a durable power of attorney and becomes incapacitated, their financial accounts and assets will automatically revert to the state.

Can anyone be granted power of attorney? 

Most states have very few guidelines for who can serve as a financial agent. The only general stipulations are that the document be signed, witnessed and notarized. Of course, it’s best to choose someone you trust to responsibly manage your finances in your stead.

If you’re looking to set up a POA, we can help. Reach out to us at 734-676-7000 or shoot us a line at news@myaocu.com to talk about your options.

Your Turn: Have you drafted a POA? Tell us about it in the comments.

Learn More:
investopedia.com
daveramsey.com
legalzoom.com
legalnature.com

If You Hear This, You’re Talking to a Tax Scammer

It’s tax season, and scammers are working overtime to get your money. Tax scams are as varied as they are common, but when you know what to look for, you can beat fraudsters at their game and keep them from getting your money and your information.

If you hear or see any of the following 12 lines this tax season, you know you’re dealing with a scammer:

1. “We’re calling from the IRS to inform you that your identity has been stolen and you need to buy gift cards to fix it.”

If your identity has indeed been stolen, no amount of purchased gift cards will get it back. Unfortunately, there is also no way to reclaim funds that are lost through this kind of scam.

2. “You owe tax money. We’ll have to arrest you, unless you purchase iTunes gift cards.”

Yes, this really happened. A 20-year-old college student was tricked into putting $500 onto three separate iTunes cards and $262 on a fourth, when she received a call from an “IRS agent,” USA Today reports. As unbelievable as it sounds, when threatened with arrest, people will believe or do almost anything.

In this ruse, the scammer will make sure to get the access numbers of the iTunes card, which gives them easy and untraceable access to cash.

3. “If you don’t pay your tax bill now, we’ll cancel your Social Security number.”

Your Social Security number cannot be canceled, suspended, frozen or blocked.

“If taxpayers receive a call threatening to suspend their SSN for an unpaid tax bill, they should just hang up,” the IRS says.

4. “We’re calling you about a tax bill you’ve never heard about before.”

The IRS will never initiate contact about an overdue tax bill by phone; they will first reach out by mail.

5.  “This is the Bureau of Tax Enforcement. We’re putting a lien or levy on your assets.”

The Bureau of Tax Enforcement does not exist. If you receive a call from this, or a similar bogus agency, hang up.

6. “This is a pre-recorded message from the IRS. If you don’t call us back, you’ll be arrested.”

The IRS does not leave pre-recorded voicemails, especially those claiming to be urgent and/or threatening.

7. “You must make an immediate payment over the phone, using our chosen method.”

The IRS says that its agents will never call to demand immediate payment using a specific payment method, such as a prepaid debit card, gift card or wire transfer. If you hear this, you’ll know you’re talking to a scammer.

8. “Click here for more details about your tax refund.”

The IRS will never send emails with information about tax refunds. Emails worded like this will lead the victim to an IRS-lookalike site that is actually created by scammers. Clicking on the link will load the victim’s device with malware.

9. “We represent the Taxpayer Advocate Service and we need some information.”

Although the Taxpayer Advocate Service (TAS) is a legitimate organization within the IRS to assist taxpayers, representatives of the TAS don’t call individuals out of the blue. The TAS also will not ask taxpayers to share sensitive information, such as their Social Security number, over the phone.

10. “You owe the federal student tax.”

The federal student tax is yet another invention of tireless scammers. It does not exist, and if you receive a call about it, you’re being targeted by a scammer.

11. “This is an SMS/social media post from the IRS. We need more information.

The IRS doesn’t initiate contact with taxpayers, or ask for sensitive information, via text message or social media.

12. “We don’t need to sign your tax return even though we prepared it.”

A legitimate tax preparer must sign your tax return and will have a valid Preparer Tax Identification Number (PTIN). If a tax preparer is reluctant to sign yours, or to share their PTIN, you are likely dealing with a scammer.

If you’ve been targeted by any of these tax scams, you can fight back by reporting the scam to the proper authorities. Phishing emails that appear to be from the IRS can be forwarded to phishing@irs.gov. Alert the FTC about IRS phone scams and report Social Security Administration phone impostor scams on the Social Security Administration’s website.

Stay alert during tax season and keep your money and your information safe!

Have you been targeted by a tax scam? Share your experience in the comments.

Learn More:
clark.com
nerdwallet.com
mybanktracker.com
irs.gov

Big Money Energy: How to Rule at Work, Dominate at Life, and Make Millions

Title: Big Money Energy: How to Rule at Work, Dominate at Life, and Make Millions

Author: Ryan Serhant

Hardcover: 240 pages

Publisher: Hachette Go

Publishing date: Feb. 2, 2021

Who is this book for? 

Anyone who is ambitious enough to dream big and willing to learn how to achieve the one thing they can always control: the energy they give off.

What’s inside this book?

Serhant’s rags-to-riches story, which includes the steps he took to pick himself out of the low-rent life and move upward until he earned his first million.
An in-depth look at how pure energy can change the direction of your life.
A lively guide for how to attain “Big Money Energy” and reach your goals.

5 lessons you’ll learn from this book: 

  • The significance of the energy you give off and how it directly impacts every area of your life.
  • Why anyone can climb the ladder of success, regardless of their life circumstances.
  • How to exude confidence in any situation.
  • How to take control of your life and achieve your deepest ambitions.

3 questions this book will answer for you: 

  • What is Big Money Energy and how can I bring it into my life?
  • Do I need to accept an average life?
  • Is it possible to dream too big?

What people are saying about this book: 

  • “Big Money Energy is like a mentor for anyone with a big dream they want to make a reality! Ryan Serhant guides readers to find their confidence, overcome self-doubt and exceed their own expectations.” ― Barbara Corcoran
  • “This book isn’t just about changing your energy — it’s about taking control of your life. Big Money Energy provides an actionable blueprint that readers can use to create positive change now.” ― Mel Robbins
  • “Big Money Energy is the ultimate primer for success. Ryan Serhant shows readers how to exude positive energy, own a room and make their biggest dreams a reality.” ― Daymond John
  • “In Big Money Energy, Ryan Serhant shows readers that when positive energy is mixed with self-confidence and topped off with a heavy dose of hustle… anything can be achieved.” ― Sophia Amoruso

Your Turn: What did you think of Big Money Energy? Share your opinion in the comments.

Save Money When Shopping Online

With tens of thousands of people still out of work and the economy still limping toward a recovery, wise spending remains important. And with huge parts of life still happening on your screen, for many, this means saving on online shopping.

Here are some tips for saving money when shopping online:

Wait on every purchase 

Online retailers purposely make it quick and easy to buy the stuff in your cart. Outsmart them by waiting between choosing your purchases and actually purchasing them. This trick serves a dual purpose: First, you may find you don’t really need or even want the item after a few days. Second, the retailer will almost always email a coupon for you to use for the “forgotten items” in your cart.

Outsmart dynamic pricing

Dynamic pricing is one of the most powerful tools merchants use to get online shoppers to spend more. It involves using sophisticated algorithms and tracking to show shoppers prices based on their location, browsing history and spending patterns. Retailers learn each shopper’s price point and show them products in that range.

Fortunately, you can outsmart dynamic pricing by following these tips, especially when shopping for items with a wide price range, like airline tickets.

  • Clear your browsing history and cookies or shop with your browser in incognito or private mode.
  • Log out of your email and social media accounts.
  • Choose localized websites of international brands instead of being redirected to the U.S. site.
    Time your purchases right

Believe it or not, there’s a method to the madness of online pricing. Learning how to crack the code can help you unlock substantial savings.

Sunday’s your day to score cheap airfare, with Mondays being the most expensive day to book your tickets, according to Airlines Reporting Corporation.

Bookworms are best off shopping for new titles on Saturdays, as this is when Amazon and Barnes & Noble launch most book sales.

Shopping for a new laptop or desktop computer? Major retailers, like Dell and Hewlett-Packard, distribute coupons each Tuesday.

For most other purchases, it’s best to wait until the end of the week for the best deals. According to Rather Be Shopping, most stores roll out discounts and special deals on Wednesdays, Thursdays and Fridays.

Layer coupons

You may already be in the habit of never completing a purchase without doing a quick search for coupons, but even when you have those coupons on hand, there’s a technique that will guarantee the best savings.

Always use a promo code before a discount coupon. A promo code will take a specified percentage off your entire purchase while a discount code will take off a dollar amount. For example, say you have a 15% off promo code and a $5-off coupon to use on a $100 purchase. First use the promo code to shave $15 off your purchase. Next, apply the discount to bring your total down to just $80. If you’d do it the other way, you’d save less money.

Ask for price-drop refunds

Discovering that an item you purchased yesterday has just dropped in price can be incredibly frustrating; however, some companies take the edge off by offering to refund the price difference within a specific time-frame. Amazon, for example, gives a grace period of seven days from the delivery date to claim discount refunds. You can use camelcamelcamel.com  to monitor price changes on the retail giant’s website.

Use multiple emails for discounts

Many online retailers offer one-time promo codes for new customers, but you can be a new customer more than once. All you need is a different email address.

Don’t shop alone

Take advantage of the many apps, websites and browser extensions that can help you save money every time you shop online. Here are just a few you may want to try:

  • PriceGrabber – Use this app to compare prices on millions of products to find the best deal.
  • Rakuten – Shop your favorite retailers through this site for instant kickback cash.
  • Ibotta – Shoot a photo of your receipt for rebates that will go right back into your pocket.
  • Retailmenot.com  – Check this site for discounts and coupons you may have missed.

Online shopping just got cheap again!

Your Turn: How do you save money when shopping online? Share your best tips with us in the comments.

Learn More:
lifehack.org
blesserhouse.com
people.com
rather-be-shopping.com

Know Yourself, Know Your Money

Title: Know Yourself, Know Your Money: Discover WHY you handle money the way you do, and WHAT to do about it!

Author: Rachel Cruze

Hardcover: 272 pages

Publisher: Ramsey Press

Publishing date: Jan. 5, 2021

Who is this book for? 

Anyone who’s ever wondered why they make the money choices they do and how they can change them for the better.
Anyone who has ever tried to understand why the people in their lives make the money choices they do.

What’s inside this book?

The introduction and explanation of the 7 Money Tendencies:

1. Saver or Spender

2. Nerd or Free Spirit

3. Experiences or Things

4. Quality or Quantity

5. Safety or Status

6. Abundance or Scarcity

7. Planned Giving or Spontaneous Giving

New ways to understand how your parents, your fears and your beliefs impact your money mindset.

5 lessons you’ll learn from this book: 

  • Where you land on the scale of the Seven Money Tendencies and why it matters.
  • Which of the Four Childhood Money Classrooms shaped your money mindset.
  • How the Six Core Money Fears can drive your most common money mistakes.
  • Why you handle money the way you do, and what to do about it.
  • How to take control of your money to achieve financial freedom.

3 questions this book will answer for you: 

  • How does my childhood impact the money choices I make today?
  • Why do I constantly make money mistakes?
  • How can I change my money mindset for good?

What people are saying about this book: 

  • “Rachel does such a great job of getting to the root of why we make the money decisions (and mistakes) we do. This book is a self-discovery necessity.” — Marcus Buckingham
  • “I have often said if you want to understand someone, look at their checkbook and their calendar. How we spend time and money says a lot about who we are. Rachel goes deep into unraveling that mystery.” — Dr. Henry Cloud
  • “We’re all faced with the responsibility of managing finances. Rachel Cruze dives deep into why we interact with money the way we do… so you can make real progress toward your money goals!” — Candace Cameron Bure
  • “This book will not only change your money habits, it will also improve your relationships — and your life!” — Christine Caine

Your Turn: What did you think of Know Yourself, Know Your Money? Share your opinion in the comments.

Beware Romance Scams

With COVID-19 forcing more singles to meet and date online, America’s most expensive scam is on the rise. Romance scams are all over the internet and can be difficult to spot  While the data for 2020 is not yet available, according to the FTC, Americans lost a collective $201 million to romance scams in 2019.

Don’t be the next victim of a romance scam! Here’s all you need to know:

How the scam plays out

In a romance ruse, a scammer will create a bogus online profile and attempt to connect to singles on dating apps and websites, as well as through social media platforms. After a connection is formed, the scammer will work to build up the relationship with the victim, calling and texting often. Once the scammer has gained the victim’s trust, the scammer will spin a sorry story and ask the victim for money.

The scammer may explain that they cannot meet in person because they are currently living or traveling outside the United States. They’ll claim to be a doctor working for an international organization, a blue-collar worker in the middle of a construction project or to be part of the military and currently serving overseas. They may ask for money to help cover travel expenses, pay for medical treatment, cover customs fees at the airport or to pay for a visa or other official travel documents.

The scammer will ask for payment via wire transfer or prepaid debit card. Once they’ve received the funds, they will disappear. Alternatively, the scammer will ask their “date” to share personal financial information and then go on to empty the victim’s accounts.

How to spot a romance scam

If you’re in the market for a new date and you’re hoping to meet someone online, look out for these red flags:

Profile is too good to be true. If a single’s profile has unrealistic credentials, including a magazine-worthy photo, you’re likely looking at a scam.
Single rushes into the relationship. If the contact comes on too strong, too fast, it may be a scam.

Single asks you for money. Don’t believe a money-starved story of someone you just met online, especially if they start asking you to help them out.

How to play it safe online

Avoid falling victim to romance scams and similar ruses by following basic online safety rules.

First, never share personal details online with anyone whose identity you cannot verify. This includes all financial information, credit card details and personal information that can be used to unlock a password on any of your accounts.

Second, only visit secure sites and keep all the settings on your social media pages private. Never engage in conversation with a stranger who reaches out to you on a platform you’ve just begun using, or who sends you personal texts or emails you without any prior communication.

It’s equally important never to send money to anyone online.

If you suspect a romance scam

If you believe you’ve been targeted by a romance scam, take these steps to avoid further damage:

Research the name on the profile to see if the details check out. You can also use an online background checking tool, such as BeenVerified or TruthFinder, to verify the credibility of the profile.

Do a reverse-image search of the profile picture to see if it’s a stock photo or an image that was plucked off the internet. You can also ask the contact to share a current photo of themselves.

If your research confirms your suspicions, stop all communication with the scammer immediately. Block the scammer’s number and flag their emails as spam. If you’ve already paid a romance scammer with a prepaid gift card, call the company that issued the card to ask them to refund your money.

Report the scam to the FTC. It’s also a good idea to alert the website or app that the scammer is using. You may also consider warning your friends about the scam.

Follow the tips outlined above to keep your love life scam-free.

Your Turn: Have you been targeted by a romance scam? Tell us about it in the comments.

Learn More:
consumer.ftc.gov
romancescams.org
fbi.gov

5 Reasons We Overspend (and How to Overcome Them)

We’ve all been there. Maybe it’s that I-gotta-have-it urge that overtakes us when we see a pair of designer jeans. Maybe it’s that shrug as we reach for the $6 cup of overrated coffee that says “I deserve this.” Or maybe it’s that helpless feeling as the end of the month draws near and we realize we’ve outspent our budget — again.

What makes us overspend? Let’s take a look at five common reasons and how we can overcome them.

1. To keep up with the Jones’s

Humans are naturally social creatures who want to blend in with their surroundings. When people who seem to be in the same financial bracket as we are can seemingly afford another pair of designer shoes for each outfit, we should be able to afford them, too, right?

The obvious flaw in this line of thinking is that nobody knows what’s really going on at the Jones’s’ house. Maybe Mrs. Jones’ expensive taste in shoes has landed the family deeply in debt and they are in danger of losing their home. Maybe her Great Aunt Bertha passed and left her a six-digit inheritance. Maybe all of her Louboutin’s are cheap knockoffs she bought online for $23 each.

Break the cycle: Learn to keep your eyes on your own wallet and to ignore how your friends or peers choose to spend their money. Develop a self-image that is independent of material possessions. Adapt this meme as your tagline when you feel that urge to overspend as a means to fit in: Let the Jones’s keep up with me!

2. We don’t have a budget

A recent survey shows that 65% of Americans don’t know how they spent their money last month.

When all of our spending is just a guessing game, it can be challenging not to overspend. We can easily assure ourselves that we can afford another dinner out, a new top and a new pair of boots — until the truth hits and we realize we’ve overspent again.

Break the cycle: Create a monthly budget covering all your needs and some of your wants. If you’d rather not track every dollar, you can give yourself a general budget for all non-fixed expenses and then spend it as you please.

3. To get a high

Retail therapy is a real thing. Research shows that shopping and spending money releases feel-good dopamine in the brain, just like recreational drugs. David Sulzer, professor of neuro-biology at Columbia, explains that the neurotransmitter surges when people anticipate a reward — like a shopper anticipating a new purchase. And when we encounter an unforeseen benefit, like a discount, the dopamine really spikes!

“This chemical response is commonly called ‘shopper’s high,’” Sulzer says, likening it to the rush that can come with drinking or gambling.

This explains the addictive quality of shopping that can be hard to fight. When life gets stressful, or we just want to feel good, we hit the shops or start adding items to our virtual carts.

Break the cycle: There’s nothing wrong with spending money to feel good, so long as you don’t go overboard. It’s best to put some “just for fun” money into your budget so you can make that feel-good purchase when you need to without letting it put you into debt.

4. Misuse of credit

Credit cards offer incredible convenience and an easy way to track spending. But they also offer a gateway into deep debt. Research shows that consumers spend up to 18% more when they pay with plastic over cash.

Break the cycle: When shopping in places where you tend to overspend, use cash and you’ll be forced to stick to your budget. You can also use a debit card with a careful budget so you know how much you want to spend.

5. Lack of self-discipline

Sometimes, there’s no deep reason or poor money management behind our spending. Sometimes, we just can’t tell ourselves — or our children — “no.”

Scott Butler, a retirement income planner at the wealth management firm Klauenberg Retirement Solutions in Laurel, MD, explains that it takes tremendous willpower to say no to something we want now.

“One of the big reasons people overspend is that they don’t think ahead,” Butler says.

Too often, we allow our immediate needs to take precedence over more important needs that won’t be relevant for years — such as a retirement fund or our children’s college education. We simply lack the discipline to not exchange immediate gratification for long-term benefit.

Break the cycle: Define your long-term financial goals. Create a plan for reaching these goals with small and measurable steps. While working through your plan, assign an amount to save each month. Before giving in to an impulse purchase or an indulgence you can’t really afford, remind yourself of your long-term goals and how much longer your time-frame will need to be if you spend this money now.

Your Turn: What makes you overspend? Tell us about it in the comments.

Learn More:
thebalance.com
thedollarstretcher.com
hermoney.com
money.usnews.com
elle.com

How to Celebrate Valentine’s Day on a Budget

Love is in the air and the money is flowing like heart emojis. According to the National Retail Federation, the average American spends $221.34 on Valentine’s Day each year. That’s a lot of money to spend on a one-day celebration!

Lucky for you, there are ways to enjoy a romantic evening with your partner without going into debt. Here’s how:

Work with a budget

Instead of spending mindlessly and regretting it afterward, designate a budget for all your Valentine’s Day expenses, and be sure to stick to it. In addition to helping you keep costs under control, working out a budget in advance will allow you to choose how to spend your money. You may decide to spend more on a gift and less on dinner, or maybe you’d rather skip both of these and splurge on a fun activity instead. Best of all, a preplanned budget means there will be no regrets spoiling the memory of your special day.

Shop smarter with a sales app

Check out shopping apps, like ShopSavvy or PriceGrabber, to score deals on that dream Valentines’ Day gift. The apps help you compare prices at online and in-store retailers, locate coupons for items you’re searching for and even bring up cash-back options to put money back into your wallet. Why pay full price when you don’t have to?

Save on flowers

Did you know that Americans spend close to $2 billion on Valentine’s Day flowers each year?

Save on those beautiful blossoms with these tips:

  • Shop for flowers at Costco, Trader Joe’s or Aldi. You’ll find great deals on fresh flowers that will outlast the cheaper ones you might find at street vendors.
  • Don’t buy flowers online. They’re unlikely to last well through the shipping and delivery process.
  • Use the food. The small packet of flower food that comes along with your blossoms will help them last longer and stay vibrant and fresh — but only if you use it.

Bring down your dinner costs

Don’t break your budget on a romantic dinner for two.

First, consider dining in. Yes, we know your kitchen table isn’t the hottest place in town, but you can find another area in your home and turn it into a special spot for a special meal. Consider laying down a blanket in front of the fireplace for a picnic-inspired experience, moving a small table into the living room or even setting up a cozy corner in a rarely used room in your home, such as a storage room or guest bedroom. Cook up a storm, or order in — you’ll still save on restaurant costs by forgoing beverages, gratuities and other add-ons you end up blowing money on when you eat out.

If you or your loved one are really looking forward to dining out, make it less expensive by learning how to beat the psychological tricks that restaurateurs play on diners to get them to spend more:

  • Look left. Restaurant owners strategically place the most profitable items on the menu in the right-hand corner — the spot most people look to automatically.
  • Say the price out loud. Notice the lack of dollar signs on the menu? It’s a trick to get you to spend more. Make the price real in your mind by saying it out loud.
  • Ignore the decoys. Restaurants famously place popular dishes near ridiculously overpriced items on the menu to make diners believe they’re getting a great deal. Your weapon against this trick is to completely ignore the most expensive item on the menu.
  • Dumb it down. Reading a restaurant menu can sometimes feel like reading French — even if you’re eating Italian. When choosing what to order, isolate the actual item on the menu instead of getting lost in all those descriptive phrases.
  • Take no notice of negative space. Another restaurant trick that gets diners to spend more is to create a pocket of empty space around high-profit items on the menu. This draws the eye to where the restaurant owner wants it to go and gets you to spend more than planned.

Celebrate late

If you dare, postpone your Valentine’s Day celebrations by a day or two for steep savings on all related expenses. You’ll find Valentine’s Day candy and greeting cards on clearance, gifts already marked down, and you won’t have to pay inflated restaurant prices for the same meal.

Use these hacks to plan the perfect Valentine’s Day on a budget.

Your Turn: How do you save on Valentine’s Day costs? Share your best tips with us in the comments.

Learn More:
clark.com
rd.com
nerdwallet.com
mentalfloss.com

Simple Steps to Start Saving

Everyone knows how important it is to regularly put money into savings, but research shows that 25% of Americans have no emergency savings at all.

Don’t let this be you! If you’re ready to start saving, but you don’t know where to begin, Advantage One Credit Union can help. Here are seven simple steps that can get you on the fast track to building your nest egg today:

Step 1: Set a goal

It’s always a good idea to work backward when setting up a plan.

Take a few minutes to think over your long-term and short-term savings goals. These can include saving for retirement, a dream vacation or covering a large purchase like a recreational vehicle or a new phone. Make sure to assign a dollar value for each goal.

It’s important to note that, when you actually start putting money into savings on a regular basis, it’s best to start with building an emergency fund that includes three to six months’ worth of living expenses before moving on to other saving goals.Outlining your more personal goals before you get started will help motivate you on your journey toward saving.

Step 2: Start tracking your expenses and income

Determine exactly how much money you need to get through each month. For three months, keep a paper or digital record of each of your expenses and all streams of income.

As you complete this step, be sure to include seasonal and occasional expenses. Calculate an estimated annual expense amount for these costs and then divide it by 12. Add this value when factoring your monthly expenses.

At the end of the three-month period, review your expenses and income to see how much money you really require to live on each month.

Step 3: Trim your expenses

If you find that your income exceeds your expenses by a generous amount, you’re in a good place and you can skip to the next step.

If your expenses are greater than your income or the numbers are too close for comfort, it’s time to scale back. Look for ways to trim your expenses without feeling the pinch. Start with your biggest non-fixed expense, and move from there, cutting costs wherever you can.

The money you trimmed from your expenses can be used for savings.

Step 4: Create a budget

With your newly trimmed expenses, you’re ready to create a monthly budget. Using your list of monthly expenses and income, designate an appropriate amount for each monthly expense. Be sure to include savings in your budget — as if it were actually an expense.

When working through this step, you can go the old-fashioned route and use pen and paper for a detailed budget, or use a budgeting app, like Mint or YNAB.

Step 5: Choose your savings tools

With your numbers all worked out, you can move on to choosing a place to park your savings.

It may be a good idea to choose a separate location for your long-term and short-term saving goals.

For long-term savings, look for a savings option that offers an attractive interest rate, like a share certificate at Advantage One Credit Union or an IRA for retirement savings. Keep in mind that you may not be able to open a long-term savings account immediately if you don’t have the amount of funds required for your minimum initial deposit.

Short-term savings are better off in an account that allows for easy access and some monthly transactions if needed, like a checking account or money market account at Advantage One Credit Union.

Step 6: Make it automatic

You’ve got your numbers worked out, and if all goes well, your savings should start growing today.

Unfortunately, though, impulses can sometimes get in the way of our best intentions, holding us back from reaching our goals. Keep this from happening to your savings by making them automatic. Ask us about setting up an automatic transfer from your checking account to your savings account so you never forget to feed your savings again.

Step 7: Review and adjust as necessary

Your savings plan is good to go! Remember, the earlier you start, the more interest your funds will accrue.

While you may have automated your savings, that doesn’t mean you can set it and forget it. Be sure to review your budget every now and then and to check whether you should adjust the amount allocated for savings.

Your Turn: What are your saving tips for beginners? Share them with us in the comments.

Learn More:
thebalance.com
nerdwallet.com
lifeandabudget.com

Rewire for Wealth: Three Steps Any Woman Can Take to Program Her Brain for Financial Success

Title: Rewire for Wealth: Three Steps Any Woman Can Take to Program Her Brain for Financial Success

Author: Barbara Huson

Hardcover: 256 pages

Publisher: McGraw-Hill Education

Publishing date:  Jan. 12, 2021

Who is this book for? 

  • Women who’ve gotten a harsh financial wake-up call.
  • Women who want to learn about money management to be financially independent.
  • Women who have always been intimidated by money.
  • Women who think they’re just not “wired” to handle money well.

 What’s inside this book?

  • Huson’s story of how the men in her life handled her money and then hung her out to dry when things got tough.
  • A physiological explanation for why men and women often have very different approaches toward money management and wealth growth.
  • Huson’s revolutionary approach toward changing financial habits.

Five lessons you’ll learn from this book: 

  • How to apply a proven three-step formula ― recognize, reframe and respond differently ― to rewire the brain for a more confident approach to wealth building.
  • Why women often process financial information in a detrimental way.
  • Why every woman needs to know about financial planning.
  • How to eliminate damaging financial behavior.
  • How women can empower themselves to build wealth.

Four questions this book will answer for you: 

  • Why do all the men in my life have such a vastly different approach toward money than I do?
  • Is there a way for me to rewire my brain to process information differently?
  • Will I be stuck in a financial rut forever?
  • Which obstacles are standing between me and financial empowerment?

What people are saying about this book:

  • “If mastering your money feels daunting, you need this book. Barbara expertly exposes what could be holding you back with simple, practical solutions to finally rewire your thinking and truly build a wealthy life.” — David Bach
  • “Barbara Huson is the unequivocal leader in helping women rewire themselves for wealth. This book will go down in history as a total game changer for us.” — Ali Brown
  • “This book will change your life, if you let it.”— Marci Shimoff
  • “Barbara Huson has done it again. By digging into the ways women think about money differently than men do, she is able to chart a path toward lifelong security — and wealth.” — Jean Chatzky

Your Turn: What did you think about Rewire for Wealth? Share your thoughts with us in the comments.