Author Archive: Rusty Zappo

Bad Habits (its killing your budget)

These Time Savers are Ruining your Budget

  1. ATM Fees:  Just don’t do it!  These fees are killer and they aren’t worth it.  Most banks have apps that will show you where your closest ATM is.  Some banks waive fees, its worth checking into.
  2. Other Banking fees:  Check those bank statements!  Be sure to check if there are any fees associated with your account.  If there is anything weird call the bank right away to get them sorted out.
  3. Bottle Water: Go with the Eco-friendly travel water bottle or buy them in bulk.
  4. Pizza Delivery: We’ve all been there, its so nice to have them deliver a pizza to the door.   Try take-n-bake or buy frozen in bulk.
  5. Coffee Shops: Just bring it, There is extra sugar in the latte anyway!
  6. Prepared Fruits and Veggies: Planning ahead is hard to to, but it will save you a buck or two (oh, that rhymes).  Wash, cut, and separate food upon returning from the grocery store.  This makes it easy to grab and go.
  7. Vending Machine Items:  It is so easy to just plug in a few coins for a needed snack!  Just don’t do it!
  8. Fast food @ Convenience Stores:  Ah, the gas station, heat lamp, burger.  Its not healthy and not cheap!  Its time to start brown bagging it.  Bring a lunch or snack to make it thru the day.
  9. Soda from checkout cooler: Marketing, they know what they are doing.  Don’t fall for it.  Buy in bulk and plan ahead.
  10. Drink more water not soda:  This one is a bit odd, but stay with me on this one.  If soda isn’t on the grocery list then money saved!  Many reusable water bottles have built in filters now too.

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My Budget killer is an expensive coffee… What is your go to time saver that costs you?

 

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Credit Checkup: Managing your Credit Score

Credit Score Management

Credit Score Management

How is your Credit Score is it time for a credit checkup?  Here are a few items to ensure you don’t pay extra interest due to a poor credit score.  But it can be more than just an interest rate hike, a credit score might effect insurance rates, apartment rental, or a potential new job!

What is a credit score?  Dictionary.com says that credit is:

confidence in a purchaser’s ability and intention to pay, displayed by entrusting the buyer with goods or services without immediate payment.

There are a few different credit scores, but I’m focusing on the FICO score as it is most widely used by banks or major lenders now.

A FICO Credit Score can generally fall between 300 and 850, the latter being the better.  Or a high score wins in this case.  It is predicting the likelihood of your intention to pay the bills or loans on time.

Credit Score Tips:

  1. Pay those Bills!  Preferably pay them on time.  Set up bill-pay with your bank, then no cost of stamps or forgetting to mail that bill.  Additionally “Payment History” is weighted as 35% of your FICO score.  Lenders are concerned about ability to pay that loan that you are about to take out and the credit history is the best indicator they have of receiving future payments.  Unfortunately, younger lenders will have lower scores because they do not have history.
  2. Review your own credit report: Some credit card companies offer this on the monthly statement.  This is free and an easy tool to monitor what is happening with on that credit card.  There are free sites out there that offer credit reports:
    • CreditKarma.com
    • Creditsesame.com
    • LendingTree.com
    • Quizzle.com
    • Discover credit card shows a monthly FICO score with your bill.
    • Caution: IF a site asks for a credit card number or provides your credit with a fee, this might become a recurring fee, beware that this isn’t the case before you check your score!  Equifax shows some good tips on monitoring so it may be worth the price.

Debt Payoff:

  1. Pay down credit cards:  “Debt Level” is weighted at 30% of your FICO score.  Which ironically enough if you keep your credit at about 30% of your credit limit or less this will help you score go up (which is good).  For example: If my Home Depot credit card has a credit limit of $500, then I should keep the balance at $150 or less. ( or $500 x 0.30=$150)
  2. Use Credit: But be smart about it.  Zero interest for 6 months is a no brainer, but pay the balance off within those six months.  Use bill pay to your advantage here.  Auto payments for six months and done!
  3. Monitor Credit Report: Different from reviewing your credit report, as monitoring means re-visiting the credit report to ensure there isn’t any weird.  For example, and strange loans or new credit cards need to be investigated.
  4. Mix of Credit: the “Mix of Credit” is weighted at 10% of the FICO score, but its not worth it to run out to get an auto loan or personal loan to go with your credit card debt.
  5. Other options:  Be caution of items that can hurt your credit like Debt Settlement.
  6. Get Equifax Business Credit Monitoring Now!

Don’t Do This:

  1. Don’t close old credit cards:  This can play into the “Length of Credit History” which is weighted at 15% of the FICO score. Additionally, getting into credit cards at a younger age can be a double edge sword.  I fell into this at college, signing up for a credit card and buying those books, only to pay more in the long run with high interest rates.
  2. Limit applications for new credit: “inquiries” are weighted at 10% of the FICO score.  Each time they run a credit check it is an application for new credit.  This means any application for an apartment, auto loan or new in store credit card are inquires.  These all have an impact on your credit score.

Use these tips wisely.  Do you have any other tips to boost that credit score?

 

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Fast, Fresh, Affordable

This may sound like a Millennial thing, but we are all looking for fresh local food, local produce, organic choices, low prices, and more convenience.

Do we go super sized, Costco or Sam’s Club and get convenience with bulk?  Boxed Meals or Meal Delivery services now offered by several local groceries.  Or, is there another option?

If you do have to go to the local grocery store here are some common ideas about saving money.

  • Look Up Look Down: Eye level items pay a premium to be there.
  • Use Discount Apps, my favorite is Ibotta (I’m not adding an affiliate link, you can find it on Google Play yourself).  I’ve heard a lot about Flipp as well, I’ve just begun using this one and I’m trying to make a decision on it still.  I’m also a fan of the store app, especially Target Cartwheel.  Yes, I know big data, but if it saves me some money I’m OK with that.
  • Navigate the store:  Flipp or Cartwheel will help you make that trip to the store in one easy route, not the usual… you know go to the dairy, then produce, then back to the dairy, both while walking past the bread, then back to the bread isle.
  • Calculate: Keep track of the cost of the bill as you go thru the store.  Also, use that smart phone to figure out the cost per unit when comparing items.

What is your favorite app while at the grocery store?

Other Options:

  • CSA (Community Supported Agriculture) Deliveries: Locally organic grown fruits, vegetables, or eggs delivered fresh right to a central drop site.  We pick-up our vegetable delivery at our local food co-opp.  These have been some of the best vegetables we’ve ever had and some we’ve never seen!  Last year they gave us a yellow watermelon, the red part was actually yellow!  It tasted just like a watermelon, and it was easy to get over the color difference.  We also found some new vegetables we’ve never had before, luckily our CSA sends us an email on what is in our box and suggestions on how to prepare them (very helpful!).
  • Organic boxed meal deliveries are another option.  You might have to do some footwork to see what is available in your area.  This is worth a try, we might get into it again in the winter as our CSA deliveries stop around October-November.
  • Off the path: Farmers markets, natural food stores, Food cooperatives, or direct from roadside stands.  Some of the best fresh corn on the cob is from a roadside stand, and your money is going directly to the farmer!
  • Coming soon: Amazon delivering fresh food to your door.  It’s only a matter of time people…

What is your preferred location or method to get groceries?

Summer Jobs

My first summer job was mowing lawns for a family resort in northern Minnesota. I was handed a check at the end of the week, and the first thing I did was run to the bank and cash it!  I subsequently spent all of it over the weekend, only to be broke again Monday morning.

The Consumer Financial Protection Bureau says “Having a summer job is an important milestone and often when young people first take control of their finances..”

A Healthy Financial Starting Point

Paycheck Management:

  • First thing: Where to put that money made from that summer job?  Don’t spend it like I did!  There are several credit unions or banks to choose from.  Having cash on hand can be dangerous, because if the money is there, ready to be used, and it’s more likely to be spent.  It is best to deposit the entire check into a bank or credit union,  then only allowing a small amount of spending money.
    • What is the difference between a Credit Union and a Bank?
      • Credit Unions: Personable; higher savings rates; not-for profit
      • Banks: Convenient; lower savings rates; for profit
  • Direct Deposit is king!  Deposits can be made into various savings accounts automatically.  Both banks and credit unions offer this, or another option is to set up a direct deposit to an online bank (not having a brick & mortar location at all).

Cash Flow Management:

  • Budget: Which is defined by “an estimate of income and expenditure for a set period of time.”  There are several apps, spreadsheets, and analysis tools to figure out how to spend money.  Figure out and plan what those expenses will be, don’t overspend!
  • Expenses:  Expenses play into a budget with forecasting, but it is also important to track where the money went.

Savings

  • Saving 10% of all income is a good rule.  So, if the paycheck is $200 then set aside $20 for the emergency fund.  Gifted a cool twenty dollar bill, make sure at least two dollars get into savings.  These small amounts will add up fast!  Direct deposit allows an easy automatic withdraw of a percent or set dollar amount to go into a separate savings account.
  • Have a plan for those savings too.  Is the goal to save for college, a car, or even an early emergency fund?  Try to explore various options for higher interest rates.
    • Savings Bonds
    • 529 Plans
    • Online only savings account

Check out my article on completing that Form W-4 and getting the correct amount of withholding set up so you aren’t smacked with a bill at tax time.

Most importantly make some friends, make some memories, and save that money!

What was your first job?

Where to find a Withholding Calculator

Did you fill out that W-4 form right?  Will you have enough withholding, owe at tax time, or will you get a huge refund?  A huge refund in’t necessarily a bad thing but it is an interest free loan to Uncle Sam.

What is a Withholding?

You get paid, Uncle Sam takes his cut, that is what withholding is.  Either you pay as you go or you owe a lot at tax time and if you don’t pay as you go then you may owe penalties on top of those taxes!

Have your current pay-stub handy, and your recent tax return, if you don’t have this info and want to estimate it just know that the results are only as accurate as the data entered (remember garbage in = garbage out).

Here is the website for the calculator on withholding.  If the results scare you then you can easily change your withholding by printing a new Form W-4  and submit it to your employer.  Some companies have websites that allow a user to log-into and update the withholding with a click of the mouse.

If you don’t know how to fill it out then you are in the right place because here we go:

The personal allowances worksheet gives you an idea of how many allowances you should be claiming.  Most people write zero  in items A though H to offset any taxes and get a large refund.

If you are married, both spouses work and have kids the calculation can become more complex.

A New Summer Job! Now fill out this W-4

You finally got that summer job and they give you this W-4 Form that they say fill it out, but how?

Ask Mom and Dad?  They don’t know either because they haven’t filled one of those out in years…

Ask the boss?  Well, you just got the job and don’t want to look like an idiot.

Here is how you do it.

We’ll just work from top to bottom front to back.

Personal Allowances Worksheet:

A:  Enter “1” for yourself if yo one else can claim you as a dependent:   Enter 0 (that is a zero) because most likely your parents are claiming you.

B:  Enter “1” if your single and have only one job; or your married, have only one job, and your spouse doesn’t work; or your wages from a second job or your spouses wages are $1,500 or less:  Enter 0 (another zero) 

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Valuable Credits- Savings at Tax Time

Every year millions of dollars go by the waste side.  Why?  Because people don’t know to claim the credits that are available to them on their tax returns.

These are honest tax credits, no trickery here.

Working Families:

Earned Income Tax Credit (Also known at the EITC), this is supposed to help low and moderate income workers and working families.   This means you worked for someone for a wage or independent contractor (you got a 1099-MISC form in the mail).  The IRS offers a cool EITC Assistant to help you see if you qualify.  Check the correct year and have at it.  This is offered in both English and Spanish.

Families with Kids:

Child Tax Credit is available for those with children under the age of 17 (on December 31st).  This credit can be up to a whopping $1,000 per eligible child!  This is not the child care credit or the dependent exemptions.   (more…)