ACCI Advisor Newsletter

Reclaim the American Dream!

February 2015

In This Issue

Stop Budgeting

Giver Yourself Credit

Five Ways to Cut Costs

The Broke Grads's Guide

Five Financial Risks in Retirement

Staying Healthy to get Wealthy

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Stop Budgeting and Start Saving

"People so often fail to budget because, just like going on a bland diet, it's restrictive and makes us feel deprived," says Donna Skeels Cygan, author of The Joy of Financial Security." That's why I suggest to my clients that they ditch their budgeting efforts ASAP and focus on saving instead."

Cygan admits that at first glance, this may feel like splitting hairs. But there's one important difference between budgeting and saving.

"With saving, you stay focused on something positive because there's (almost) literally a pot of gold waiting for you at the end of the road," she explains. "Instead of dwelling on what you're doing without, you can track the growth of your assets and take comfort in your future financial security. And along the way, you'll find that the areas of your finances you would otherwise have tackled via your budget organically fall into place."

Cygan shares tactics to help you save your way to financial security in 2015:

First, figure out how much you are (or aren't) saving right now. Responses like, "I'm saving a decent amount," or, "I'm saving in my 401(k)," or, "I'm not saving enough," aren't good enough. Cygan says it's crucial to get clear on the exact amount of your savings. If you don't know where you stand, you can't effectively move forward.

"Don't worry if you aren't a math whiz or if you are intimidated by finances," Cygan assures. "There are plenty of free resources available including www.joyoffinancialsecurity.com.

Set a savings goal for 2015. Once you know the percentage of your current income that's currently going to savings, decide how much you want to increase that number in the coming year. If you're not saving anything now, aim for 5 percent. If you are saving 5 percent, aim for 10 percent. Any improvement is great.

"Savings goals have to be reasonable; otherwise, you'll never stick to them," Cygan points out. "Eventually-whether it's in 2015 or later-try to save 15 to 20 percent of your gross income. Most people save much less than 15 percent. The old rule was to save 10 percent, but that was when pensions were prevalent and Social Security was a definite. Now, the minimum recommended savings rate is 15 percent, and 20 percent is even better. If someone saves 20 percent throughout their career, they can sleep well knowing they are on track for financial security during retirement."

Make savings automatic. Face it-when it comes to being financially responsible, good intentions don't last long in the face of a great sale, or a tempting vacation deal, or even that $6 latte you're really craving. Deciding to save the money left in your account at the end of each month simply doesn't work.

"That's why I suggest making savings automatic," Cygan comments. "Many people save through their 401(k) or 403(b) at work, and the money is swept into the account before it ever appears in a paycheck. This works great, and you can do the same thing with saving in a Roth IRA or a taxable account. Set your savings up so it is automatic, occurring on the first of each month or as soon as your paycheck is deposited into your checking account."

Consider front-loading your yearly savings. There are certain times of year that are more expensive than others and during which extra expenses make it more difficult to save money. Vacations and the holidays come to mind.

"Start now, and get as much saving done as possible during the first half of the year," Cygan suggests. "By the time vacation season rolls around, and then the holidays, you will already have made great headway. Track your progress and watch your savings or investment accounts grow each month."

Give Yourself Credit

Reviewing your credit report

Reviewing your credit report for accuracy is very important. But, what should you look for?

Make sure that you recognize the accounts and loans on your credit report. Then check that the information on your credit report is correct. If you find information that you believe is not correct, contact the company that issued the account or the credit reporting company that issued the report.

For more information visit here

Looking for signs of Identity Theft is also a good practice when reviewing your Credit Reports. Here are some common warning signs for identity theft?

Credit card charges that you don't recognize
Calls or letters about things you didn't buy
Bills that arrive on unusual days
New credit cards or statements for accounts that you didn't open
Denials of credit for no apparent reason
Information on your credit reports you don't recognize, such as accounts or addresses

For more information visit here

Get your three credit reports for free each year by visiting www.annualcreditreport.com. Or, call toll free 1-877-322-8228.

Five ways to cut costs

One of the quickest ways to make more money is to spend less of it. According to Patrice C. Washington, the Money Maven of the Steve Harvey Morning Show, keeping track of monthly expenditures and cutting those expenses offer a simple way to boost your bank account.

"Even if it is $20 here or $10 there, many people don't realize that money adds up over the course of a year," says Washington. "It is easy to throw away money; the only way to stop that cycle is to change spending habits."

Below are five frivolous costs to cut:

Lower Data Usage on Cell Phone Plans: With the smart phone revolution taking over, many individuals are shelling out extra bucks for an upgraded plan. "Instead of opting for increased data usage, be diligent about connecting to free WiFi whenever you can. At home, be sure to always connect to your wireless network," says Ms. Washington.

Revamp Your Work Route: If your work location allows for it, public transportation is becoming an increasing attractive option for commuters. Consider taking the train and purchasing a monthly pass rather than all the costs associated with owning a car such as gas, parking, and other incremental expenses.

The Latte Factor: Starbucks once in a while is a nice treat. As a daily expense, however, it can quickly add up. The best bet is to make your morning brew at home or to bring your favorite coffee components (milk, sugar, etc.) to work. If your office lacks a coffeemaker, Dunkin Donuts and McDonald's both offer less pricey options.

Cut the Cable Cord: The Millennials might be on to something. 24 percent of 18-34 year olds don't subscribe to a traditional TV service and instead are streaming entertainment from sites such as Hulu, Netflix and Amazon.

Pack Your Lunch: On average, ordering out lunch can cost anywhere from $7 to $15 per day. Creating a weekly menu and purchasing groceries for the week, however, is going to cost much less. Packing your lunch and some snacks the night before will keep you on track from making impulsive and likely, unhealthy purchases.

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Want to pay off your debt more quickly?

If you have the desire and the ability to make extra payments towards your DMP, contact ACCI Customer Service to coordinate making the extra payment. Since your DMP is set up to pay a certain amount each month changes must be handled properly to make sure you do not get removed from the Creditors DMP.

ACCI Customer Service 1-800-708-1335.

The Broke Grad's Guide to Thriving in the Real World

By Andrea Waroch

Graduating college is an exciting moment, right? Maybe not.

Total student debt has topped $1 trillion this year and the average college graduate owes more than $33,000 in outstanding payments upon commencement. So, it's understandable why young adults are filled with more fear than joy about earning their diploma and entering the real world. While finding a good job is paramount, learning how to budget and discovering ways to save on everyday expenses offers the best chance to surviving life after college.

If you or a college grad in your life faces this same scenario, consider these top money moves for making the switch from college to real life manageable.

Optimize your repayments. Get a handle on what you owe by reviewing all your accounts. If you find you're struggling or falling behind, get help before it's too late. Making late student loan payments (or missing them altogether) will negatively impact your credit score which can take years to rebuild. For help, check the Student Debt Repayment Assistant from the Consumer Financial Protection Bureau. You can often negotiate a repayment schedule that fits your budget or even get your loan payments deferred.

Lower your rental costs. You may be eager to live on your own, but roommates offer a significant financial relief for rental costs. The more roommates you have, the cheaper your total living expenses will be. Keep in mind that location matters, too. The closer you live to the city center, the more expensive rent will be, so look for a place located further from the hot spot of town. To avoid broker fees, use sites like

Craigslist and Apartable.com for no-fee listings.

Join a credit union. Credit unions offer the same services as regional and national banks but typically have less fees and lower loan rates. Credit unions also typically pay higher savings yields and are more sympathetic toward struggling borrowers.

Search for coupons before you pay for anything. Whether you need new shoes, food for your pooch or an oil change, search for coupons before pay. Free mobile tools like the Coupon Sherpa mobile app make this task easy, offering savings for our half a million physical locations in the U.S. You can also use your phone to compare prices with the Pricegrabber barcode-scanning app or earn rewards while you shop with Shopkick.

Get savvy in the kitchen. Eating out for breakfast, lunch and dinner will seriously drain your paycheck and leave you with just enough to cover basic living expenses. Get in the habit of preparing lunch and cooking meals for yourself. Cook one large meal like Roast Chicken to give yourself plenty of options throughout the week, including chicken salads, sandwiches and pasta dishes.

Live without cable and prepay your cellphone. Cutting the cord on pricey cable bills is easier to do these days thanks to free online video streaming services like Hulu that hook right up to your TV. For more programming and newer release options, check out Hulu Plus and Netflix for just $8 per month -- a cheap bill when split among roommates. You can also hook up an indoor HDTV antenna to get more channels than basic cable with no monthly bills. When it comes to your cellphone, consider switching to no-contract, prepaid wireless services to avoid hidden fees and punitive charges. This way, you pay for what you use and nothing more.

Become a second-hand shopper. A wise man once told me that no one will know the shirt you're wearing was bought at the Salvation Army. This is a great principal to live by considering buying used can reduce your total spending by up to 90 percent. Whether you need professional clothes, kitchen goods or furniture for your new apartment, search gently-used options at garage sales, local consignment stores, speciality sites like RecycleYourFashions.com and thredUp.com or more mainstream sites like eBay. Don't forget, this is a great time to sell clothing and other goods you no longer use for funds towards a future purchase.

Get a side hustle. At this point, maximizing your cash flow will help you pay down debt faster. Take on an extra gig after hours like waitressing, bartending or freelancing. Or consider doing other people's "to-dos" via TaskRabbit, where you can peruse tasks in your area and submit offers for such activities as grocery shopping, dog walking and even photography. If TaskRabbit is not available in your area, check the "gigs" section on Craigslist for options ranging from labor to writing to creative.

Build your credit wisely. Opening a new line of credit may seem counterintuitive while paying down school debt, but building a healthy credit score now will ensure you receive the best rates on future mortgages, insurance and other expenses. To help manage your credit card wisely, treat it like a debit card and only charge transactions for which you have the cash to cover. Pay off the balance in full each month so interest doesn't overwhelm any rewards.

Save for the future. It's tough to think about retirement when you have student-related debts to pay. However, if your employer offers a 401k match plan, turning it down is like leaving money on the table. Even if you can only match the percentage they're contributing, you're doing your future self a financial solid. Most experts agree that young people have a distinct advantage over everyone else when it comes to saving for the future: time. Don't waste yours!

Andrea Woroch is a nationally-recognized consumer and money-saving expert for Kinoli Inc.

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Do you have a friend or relative considering bankruptcy? Remind them that it's a short-term solution with long-term consequences. Have them call ACCI for some debt relief advice from a certified counselor.

1-877-969-3328.

5 Financial Risks to Consider in Retirement

After a Lifetime of Climbing, Retirees need to be Cautious on their Descent

Most people don't know that 80 percent of mountain-climbing accidents don't occur on the way to the summit - they happen on the way down, says financial expert and extreme sports enthusiast David Rosell.

Although arriving at the top of the mountain is considered by many mountaineers to be one of life's greatest accomplishments, I can tell you firsthand that summiting is not the ultimate goal for climbers," says Rosell, CEO of Rosell Wealth Management and author of "Failure is NOT an Option," (www.DavidRosell.com).

"They know that most climbing accidents and deaths occur on the descent. With this in mind, they will tell you that their objective is to reach the summit and get back down alive to see their family and friends. They understand that the second half of their journey presents the greatest risk and requires the most planning."

"Likewise, we need to think of retirement as the descent from the financial mountain, which can be treacherous."

Retirees and pre-retirees need to evolve from the traditional view of retirement, especially with so much legitimate concern about an unprecedented retirement crisis on our immediate horizon, he says. According to a 2013 report by the National Institute on Retirement Security, 45 percent of working-age American households have no retirement savings.

That's on top of the 3.5 million baby boomers who have been retiring each year, and will continue to do so for more than a decade.

To help his clients thrive while experiencing descending their own financial mountains, Rosell briefly touches upon five major financial risks many experience during retirement.

-Inflation: During the second half of your financial journey, it's critical that you're able to maintain your purchasing power. Inflation simply means that every year your money buys a little - or a lot - less than it did the year before. Currently, inflation is 3.5 percent, which doesn't sound like much. However, even if the rate holds steady and doesn't increase, prices will have doubled in 20 years.

-Longevity: According to U.S. Census Bureau figures, the over-80 population is increasing five times faster than the overall population. By 2030, the demographics of 32 states will resemble those of Florida today. With more golden years to play, you'll want the funding to make them fun! "Today," Rosell says, "going gray means time to play."

-Health/long-term care: Sadly, the escalating costs associated with long-term care during retirement can make the possibility of outliving one's retirement income a reality for many. Statistics reveal that as we age, there's an increased probability of our eventually needing assistance with basic daily activities. The truth is that most of us will need long-term care in our later years.

-Market risk: Economic recessions have occurred throughout the history of modern economics and always will, averaging one almost every nine years. If the market loses 50 percent one year and then increases 50 percent the following year, where are you? Many people get this wrong; after the fall and subsequent rise of 50 percent, you will have lost 25 percent. "This happened twice in the last decade," Rosell says.

-The sequence of returns: Gains or losses, or the order in which you receive your returns, can have a major impact on your retirement portfolio. It can mean the difference between having enough income in retirement and running out of money too soon. Be careful when an analysis states that you should achieve your goals by obtaining a specific rate of return. In most cases, this statement has not accounted for the sequence of returns.

"These are by no means the only tricky slopes that may have an affect on your retirement," Rosell says. "Just as you have worked a lifetime to have money for your golden years, now is the time to manage your wealth wisely."

Have a money saving tip that you'd like to share? Send it to us for possible publication in this newsletter at:

education@acchelp.org

Staying Healthy to get Wealthy

Open Enrollment is over - You may still be able to get covered.

Open enrollment is over. But if you were trying to enroll on February 15 and couldn't finish, you may still be able to get coverage.

We know many of you worked hard to enroll in a plan through the Health Insurance Marketplace. Despite your best efforts, you may not have been able to complete your application and select a plan.

If that happened to you, don't worry - you may still be able to get covered in 2015 if one of these applies to you:

You tried to enroll in health coverage by February 15, but you didn't complete your enrollment because of longer than normal wait times at the Marketplace Call Center on February 13, 14 and 15.
You tried, but weren't able to enroll in health coverage by February 15 because of a technical issue on HealthCare.gov, such as being unable to submit your application because verification sources were down.

To finish your enrollment, you must attest that one of the statements above is true. This opportunity will only be available until February 22, 2015. You should enroll in coverage as soon as you can. To complete your application, log in to your Marketplace account on HealthCare.gov, or contact the Marketplace Call Center at 1-800-318-2596 to complete your enrollment over the phone.

Note: This opportunity is intended to help you enroll for 2015 for the first time. If you are already enrolled in a plan through the Marketplace, you can't switch to a different plan now unless you have recently experienced a life change that grants a Special Enrollment Period.

Questions about using Exchanges to get Health Insurance coverage? Call HealthCare.gov at 1-800-318-2596, 24 hours a day, 7 days a week. (TTY: 1-855-889-4325).

American Credit Counselors
Educational Workshops

As a non-profit Credit Counseling and Financial Education organization, ACCI is dedicated to reaching out to the community. ACCI provides free financial education seminars and workshops at community centers, local organizations, and companies.

Ask about customized seminars for your group, staff, congregation, team, or club! Call 1-800-708-1335 or email education@acchelp.org.