How to handle a money emergency when you don’t have savings

First things first: take a breath.

If you recently received a big bill that threatens to eat up all your available cash, you know how fast stress and fear sets in. But don’t let these feelings paralyze you. As dark as it may seem, you still have options.

So breathe deep, and get ready to meet your problem head on. Here are five helpful tactics to consider when tackling your money emergency.

1. Find immediate ways to save

You need to free up some cash—fast. If you don’t already have a budget, access your checking account statement and review your expenses. Are you spending money on things that you don’t really need? Do you eat out a lot? Have an expensive cable bill?

Tighten your budget ASAP. If it’s a true emergency, you may need to make some tough decisions, but having the extra cash will be worth it.

2. Ask a relative

Before you max out your credit cards, do you have a relative you can ask for help? Obviously, you need to pay them back in a timely manner, but the so-called Bank of Family typically has more flexible terms than most financial institutions.

But remember this—some people draw a line at mixing family or friends with finances. So make sure you have a secure relationship with the person, and be honest about your ability to repay when you ask to borrow money.

3. Use credit carefully

If putting your emergency debt on a credit card or getting a personal loan is your only option, be careful. You may get immediate relief, but high interest rates can dramatically increase the size of your debt.

Pro tip: if you’re applying for a new card, try to find one with a zero-percent APR intro rate, and pay off the debt before the offer expires.

4. Be wary of payday loans

Payday loans can be a quick way to access money if you have bad credit. However, like other lines of credit, they can be expensive—really expensive.

These types of loans are notorious for gouging consumers with sky-high rates. In other words, you’ll end up paying much more than your current balance in the long run. And if you miss a payment, the fees aren’t pretty.

5. Seek counseling

Remember, you’re not alone. No matter how helpless you might feel in a money emergency, there’s always help. Certified Financial Counselors can assist you in making a plan and can identify the most productive ways to save, and review the best options for paying off your debt.

August 2017

Student loans, retirement or your first home: Where should your money go?

Recent college grad? Getting proactive about your finances?

No matter your situation, saving money for long-term goals (aka, “adult stuff”) is tricky on a limited budget. So-called experts tell you to put X dollars away for retirement by Y age, but the reality is this: everyone’s finances are different.

So rather than offering a one-size-fits-all solution, here are a few suggestions to help ensure that your personal financial future stays secure.

Review future plans

What are your priorities? Do you aim to settle down in one place for a long period of time, or would you rather travel and work remotely? Answering these questions can help you determine if buying a home is even something you need to put on your financial radar.

Just remember, saving up for a big purchase like a home may take a long time. You can always decide you want to buy later, but it could delay your goal by several years.

Compare interest rates

The bad news is your student loans probably aren’t going away by themselves. But the good news is that the interest on federal loans is typically pretty low.

If your student-debt interest is five percent or less, you may consider paying smaller amounts every month and re-directing the extra money to saving for a home, or another long-term goal.

Open a retirement account—no matter what

No matter how long you intend to work or how much you care about money, at some point you’ll want to retire—and you’ll need to support yourself.

The thing about retirement accounts is they pay off over time. That means the earlier you invest, the more you’ll get later. If you’re a late starter, you can always catch up, but if you’re young, open an account now and begin making deposits as early as possible.

Even if you’re new to the workforce and can only put away a small amount every month, your future self will thank you.

August 2017

Five Pro Tips to Nailing Your Savings Goal


What’s your savings goal?

Some people want to stash cash for a home, while others need to save for their kids’ college. Not sure yet? There’s no time like the present to figure out long-term financial priorities for you and your family.

No matter your goal, achieving it is easier when you follow these specific guidelines. Check it out:

Set a timeline

Timelines help put your goals into focus.

For short-term goals like a vacation, you may be able to set an exact date by which you plan to save. A long-term goal such as retirement, however, may be a little more open-ended and require benchmarks along the way.

So if you set a number for your retirement target, measure your progress through the years by hitting planned dollar amounts.

Find ways to cut monthly expenses

Savings may require some sacrifices.

If you want to save more in a shorter amount of time, take a look at your spending habits. Can you eat out less? Wait to upgrade your smartphone until it’s necessary?

If your goal dollar-amount is high, you might want to consider bigger actions, such as moving to a more affordable area.

Use a savings tool

For many long-term savings goals, investments and special accounts will help you earn more money.

Typically, experts recommend mutual funds for goals over five years. For shorter-term goals, your financial institution may offer a money market account with high rate of return.

Don’t give up

As with any other type of goal, you may experience setbacks along the way, such as a sudden change to your financial situation. Try not to get too discouraged.

Adjust your finances to meet your immediate needs, but don’t forget your end game.

Reward yourself along the way

Maintaining your money motivation can be difficult, especially over a long period of time. That’s why it’s important to treat yourself along your savings journey.

If you hit a benchmark (e.g., six months of consistent savings or a specific dollar amount), do something nice for yourself. Just try not to blow your budget on a big celebration; that kind of defeats the purpose.

BALANCE June 2017

Student loans: four essential tips for parents

For many families, student loans are just a fact of life. According to recent numbers, the average cost of college tuition and fees per year breaks down like this:

Private College

Public Universities
$9,650 — state residents
$24,930 — out-of-state residents

529 Plans and long-term savings accounts can help cover costs, but with those sky-high costs, many parents look to student loans for additional financial help.

As you start to explore student loans, keep these four important things in mind:

1. Fill out The FAFSA

The Free Application For Federal Student Aid (FAFSA) is a must for families who need help paying for college. Filling out the FAFSA makes students eligible for grants and scholarships, as well as federal student loans.

Visit the FAFSA website to fill out the relatively simple application, and check important deadline information.

2. Choose federal over private loans

If you have the option to choose, it’s almost always smarter to go with a federal over a private student loan. Federal loans have lower interest rates and more flexible repayment options.

Typically, private loans come with higher rates and require a co-signer, which puts an additional person on the hook (probably the parent) if the student can’t keep up with payments.

3. Consider Parent PLUS loans

If you want to help your child pay for college, you might consider a Parent PLUS loan. One of the biggest differences between it and other student loans is it requires a credit check. To be eligible, your child needs to complete the FAFSA.

4. The best bet for eliminating student loans? Pay them back

While student loan forgiveness programs technically still exist, their future is uncertain. Additionally, student loans are notoriously hard to discharge in bankruptcy. In fact, they can only be eliminated in the event of death or permanent disability.

So if your child takes out a student loan, make sure he or she is committed to paying it back.

BALANCE July 2017

Three Reasons Why You Live Paycheck-to-Paycheck (And How to Break the Cycle)

Does saving money seem impossible? You’re not alone. Reportedly, more than half of Americans have less than $1,000 to their name.

While it’s hard to imagine keeping extra cash when you live paycheck-to-paycheck, there is hope. If you take a big-picture view of your spending habits, you’ll be surprised at the savings opportunities you might find.

Here are three reasons that may be preventing you from building a stronger financial future:

1. You don’t track your spending

If you’re feeling the pinch of limited income, tracking your spending habits is crucial.

Start by reviewing expenses from the past three months, and look for areas of excess.

How often are you buying coffee versus making it at home? Can you cut the cable cord and save? Re-assess necessities, too. Obviously you need groceries, but try trimming your bill with strategies such as choosing store brands over name brands or buying in bulk.

2. A big appetite for eating out

In 2015, Americans spent more money eating in restaurants than they did buying groceries at the supermarket. Eating out often, especially if you’re feeding a family, adds up fast.

One great way to save money is to simply eat at home more often. If you’re pressed for time, prepare meals during the weekend and defrost them for quick—and affordable—meals throughout the week.

3. The credit card curse

If you rely on credit cards to fund day-to-day purchases, stop; save them for emergencies only. The interest and credit fees can drive up your monthly expenses, keeping you in debt longer.

Instead, go old-school and try to exclusively use cash. That way, if an impulse purchase costs more than what’s in your wallet, you won’t be tempted to buy it.


Four Simple Retirement Strategies That Work for Anyone

Retirement looks different for everyone. Whether you want to travel the world or spend your golden years on the golf course, you need a financial plan to keep you afloat when you stop working.

Check out these four strategies that can help everyone retire well, no matter your age:

1. Start today

When it comes to investing your money for retirement, it pays to start early. The longer your investments can generate earnings, the more money you’ll have at retirement. Bottom line? If you haven’t started putting money away yet, don’t wait any longer!

2. Contribute to your 401(k)/open an IRA

Traditional employer-based 401(k) plans let employees contribute pre-tax dollars to their retirement accounts. Those accounts include a mix of investments such as money market funds, stocks and bonds. When the value of your investments goes up, you earn more money for retirement.

If a 401(k) isn’t an option, open an IRA account. With an IRA, you can likely access your investment money after age 59½ without incurring a tax penalty (as long as you’ve held the account for at least five years).

3. Match your employer

If your employer offers to match your 401(k) contribution (up to a point) and you decline, you’re walking away from free money. Take advantage of the match perk. It’s one of the easiest ways to earn more for retirement.

4. Catch up if you’re 50 or older

If you started putting money away for retirement late, or just haven’t been able to contribute as much as you would’ve liked over the years, you can play catch up once you get older. Starting at 50, you’re able to invest more money in your 401(k) or IRA. If possible, invest up to the maximum allowed to make up for lost time.