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CACC Moneywise Monthly
Budgeting & Savings News You Can Bank On
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July 2013
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The Gender Gap remains pervasive, but women are improving their investing habits and behaviors
Financial Finesse, a leading provider of workplace financial wellness programs, announced today the release of its fourth annual research study on the gender gap in financial literacy.
According to the study, the gender gap is holding steady, with women trailing men in virtually every area of financial planning outside of the percentage who are participating at some level in company sponsored retirement plans and IRAs.
Key Findings:
* The gender gap is highest with respect to basic money management habits and behaviors, which significantly impacts women's ability to save sufficiently for long-term financial goals like buying a home, sending children to college, and retirement planning. Only 65% of women reported having a handle on their cash flow and spending less than they make, compared to 83% of men. Only 45% of women reported having an emergency fund in place to cover unexpected expenses, compared to 64% of men. This is particularly concerning because on average women earn less money than men, live longer, and generally have higher health care costs throughout their lifetimes. For these reasons, women actually need to save more than their male counterparts to achieve financial parity. This is why both the depth and pervasiveness of the gender gap has serious implications for women and society as a whole. * In general, the gender gap decreases as household incomes increase. Women who live in households with incomes of $150,000 or more are in much closer parity with men than those that live in households with incomes below $150,000. Since women that live in lower-income households also face more financial stress, it is clear that more needs to be done to improve the financial wellness of this segment of the population. * In general, younger women (Gen Xers and Millennials) have not shown improvement in closing the gender gap. Women 44 and under actually have a slightly larger gap than their older counterparts in the Baby Boomer generation, indicating we are not making enough progress as a society in solving this problem. * Despite the general lack of progress, women have made significant strides in their investment habits and behaviors. Compared to Q1 2012, a greater percentage of women are rebalancing their portfolios, reviewing all investments to develop a master asset allocation plan, and analyzing fees and expenses associated with their investments. Men actually reported a backslide in each of these areas. There is a lot of data supporting women's natural skills as investors, in particular their prudence in strong markets, and the report's findings support this. Liz Davidson, founder and CEO of Financial Finesse, believes that there needs to be more focus on this issue. With all the press on retirement, one thing often overlooked is the fact that there are more women retirees than men due to longer life expectancies (currently 81 years for women and 76 for men). Davidson notes that "even marginal improvements in women's retirement preparedness could have dramatic impacts on society. Imagine if 10% more women could retire comfortably, had long-term care insurance in place, could live more happy and productive lives, and didn't have to face the end of their lives in Medicaid-supported nursing home facilities. Every single one of us would be impacted, either directly or indirectly by this." She adds, "We talk a lot about government spending and its impact on future generations. Whatever side of the aisle you are on from a political perspective, it's pretty clear that the best scenario for all of us is to prevent poverty in the first place. And with women more vulnerable, it's critical to figure out how to address this issue." TAKE ACTION: Whether you are male or female, this is your wake-up call to begin planning your financial future. Start with small steps but Start today!
Change your money management style for free with the Money Smart program developed by the FDIC? It's the smart way to improve your fiscal fitness!
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7 ways to save on Back-to School Shopping
by Andrea Warroch
It seems like just yesterday the kids were in school but summer break is flying by and soon students of all ages will find themselves back in classrooms.
For parents this means they must confront the dreaded back-to-school shopping list. Considering the average family with school-age children spent $690 on supplies last year, shopping smart is essential. To keep more money in your pockets this year, follow these helpful strategies.
1. Take Inventory
When you go grocery shopping, you generally have a good idea of what's filling your fridge and pantry. Take the same approach with back-to-school shopping and search around the house for any supplies you already have or can reuse. If there are optional items on the supply list, hold off on buying those until you're absolutely sure your student needs them.
2. Shop Tax-free Days
In order to encourage education and provide families with some much-needed financial relief, many states offer tax-free shopping days for school supplies. The range of eligible items varies by state, but supplies such as clothing, shoes and even computers usually qualify.
3. Consider Second-Hand
There's never an end to the need for children's clothing. Sizes don't stick around long, adding up to a lot of expense. Instead of buying everything brand new, see what kind of second-hand options are available. This doesn't mean you have to comb through the shelves at your local Salvation Army store, either. Sites such as thredUP.com specialize in consignment of like-new clothing for kids.
4. Keep Coupons Handy
Coupons are more popular than ever, with nearly 80-percent of consumers reporting they regularly shopped with them last year. During back-to-school time there will be plenty of offers available, it's just a matter of knowing where to find them. Though traditional coupon clipping still works, mobile coupon apps are especially convenient and widely accepted by retailers.
5. Mix & Match
There always seems to be one supply you've accumulated a massive stockpile of. Maybe you have notebooks stacked to the ceiling, but there's nary a pen or pencil to be found. Before you start buying, see what other parents have in their inventory. A neighborhood swap is simple to organize and saves everyone money.
6. Comparison Shop
Whether it's writing a book report or shopping for school supplies, procrastination is king for both kids and adults alike. This year avoid the expense of last-minute shopping and start early by comparing prices for more expensive items online. Generic items can be found through PriceGrabber, while deals on more specific items like ink cartridges are available through sites such as InkjetWilly.com.
7. Wait for Back to School Saturday
Sponsored by Teen Vogue, Back to School Saturday is a one-day event where partnering retailers offer big discounts on back-to school clothing and cosmetics. This year's event will take place Aug. 10 and includes big-name participants such as Aeropostale, PacSun and Macy's. Otherwise, wait even longer on those not-so-urgent purchases like denim and sweaters. Retailers will promote markdowns on fall clothing come October as they make room for winter and holiday merchandise.
Andrea Woroch is a nationally-recognized consumer and money-saving expert who helps consumers live on less without radically changing their lifestyles. From smart spending tips to personal finance advice, you can follow her on Twitter.
To order your free credit reports, visit annualcreditreport.com or call 1-877-322-8228.
** Do you need help creating your family budget? Talk to a CACC Credit Counselor toll-free 1-800-763-1874 or visit www.caccdebt.org.
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Tips to ensure you get your Rental Deposit back after moving out
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In the height of moving and apartment leasing season, leading property management franchise Real Property Management is addressing an issue that manyrenters face: not getting the majority or any of their security deposit back after move-out. In fact, according to a recent Rent.com survey, more than 25 percent of American renters lose their security deposit upon move-out, which can amount to more than an entire month's rent.
"There are various reasons tenants wouldn't get the security deposit back in full, such as pet damage, unauthorized renovations, or even leaving the unit dirty after move-out," said Chuck Thompson, COO of Real Property Management, clarifying a security deposit is not only the collateral to hold the unit, but also the amount used to fix any damage done during the leasing time. Real Property Management advises renters on the following ways to ensure maximum return of the security deposit, creating a seamless experience for both renters and landlords:
-Upon move-in read the fine print; make sure all parties are clear on
responsibilities and terms of the lease including the advance notice
required to vacate.
-Photograph the unit with date stamps before and after the leasing term as evidence for damage cost responsibility.
-While a tenant, make sure you report all maintenance issues as they
occur.
-Receive verbal and written approval before nailing holes or painting;
small fees to supplement repairs add up.
-If you are housing pets, be sure they are all documented with the
leasing office; pet wear-and-tear may not be covered minimizing the
return.
-Have the house professionally cleaned and make sure the refrigerator and oven are clean.
-Return all keys, remotes and entry cards.
-Know your state's law regarding what is deemed suitable use for the
security deposit and the timeline for a return.
For more information on rental properties visit www.realpropertymgt.com
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If you have the desire and the ability to make extra payments towards your DMP, contact CACC 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.
CACC Customer Service: 1-800-763-1874 Do you know someone who would benefit from money management strategies and information? |
4 reasons to plan your child's College Funding Wisely
Avoiding the Debt Trap Can Be Just as Important as Getting a Degree, Says Financial Specialist
Generation after generation, parents have taught their children to prepare for college now, which often means in elementary school or even earlier.
These days, financial experts like John McDonough are giving parents the same advice.
"Can you afford the college that will give them the best chance in life? Will paying for their education force you to have to work well into your golden years? These are the questions I ask parents every day," says McDonough, CEO of Studemont Group College Funding Solutions, CollegeFundingFreedom.com, which offers advice for parents worrying about how to pay for their child's education.
"Many parents really don't know how to begin answering these questions; they are afraid of walking into a financial situation that they won't be able to safely walk out of. But the alternative - saddling their children with debt well into their 30s and 40s - is not an appealing alternative."
McDonough reviews four disturbing trends in the challenge of paying for a college education:
* The net worth of today's 30-somethings: Adults in their 30s have 21 percent less net worth than 30-somethings 30 years ago, according to a new Urban Institute report. Why? Much of it has to do with high-interest student loans and credit card debt. The return on investment of a college education is excellent - college grads earn 84 percent more than those with only a high school diploma, according to Georgetown's Center on Education and the Workforce. But paying off that investment without outside help is exceedingly burdensome for a graduate.
* Student loan debt is even greater than credit card debt: That's right - topping all Americans who have made poor decisions with their credit cards are ambitious high school graduates, whose collective student load debt shoots past $1 trillion! More important than this being a crucial social epidemic, it's potentially a very real problem for your child. President Obama scored some political points in identifying with most Americans when he said his student load debt was paid off only after he was elected to the U.S. Senate. Two-thirds of students leave college with some form of debt, according to the Federal Reserve Bank.
* Fluctuating interest rates: Recent controversy over federal Stafford loans interest rates adds to the insecurity of borrowing as a college financing strategy. Given the unpredictability of Congress, which allowed the U.S, credit rating to drop while standing on political principles, one can't reliably predict whether interest rates will rise or fall.
* Your children cannot refinance their loans: While a borrower who has racked up tens of thousands of dollars in gambling debt can refinance their payments, student loans remain at fixed rates. In collecting money on student loans, there is no statute of limitation, and today it's very common - the norm, actually - for student loan holders to take nearly two decades to pay off their debt. With the annual average cost of public universities exceeding $22,000 per year, and the same often surpassing $50,000 at private universities, it's no surprise.
John McDonough is the managing member at Studemont Group, which is primarily focused on helping retirees gain peace of mind with unique market rescue and recovery programs.
Thank you for choosing Consumer Advocates Credit Counselors. We welcome your comments and suggestions for future issues. Please email education@caccdebt.org with your ideas.
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8 things NOT to buy for your College-bound student_________________________________________________
College is expensive. Beyond tuition, chances are your child will also have to buy books, new clothes, and even some housewares to furnish a dorm room or apartment. With all this spending going on, the line between need and want might get a little blurred. Though ultimately a lot of these expenditures are up to the parental unit, we've put together a list of things that you might think a college student needs, but that you really should avoid buying for back to school all together.
1. A Printer
Most schools offer printing facilities that are either free or cheap to use. If this notion sounds like an inconvenience to your teen, remember this: Ink is expensive, not to mention annoying to replace. Sure, your kid could be popular being the only one with a printer, but once the ink runs out, these so-called friends will seek free printing elsewhere. And though it might be a valuable lesson for a young adult to learn, you're the one who is going to get a call to replace the black and color ink every other week - and that adds up.
2. A Tablet
In a college setting, even a budget laptop can better handle school-based tasks than an iPad. Writing and editing a term paper on a touchscreen is so difficult, it could easily be a torture worthy of inclusion in Dante's Inferno. (As a punishment for plagiarists, possibly?) Function-for-function, laptops are cheaper, too. All in all, if the back-to-school computing decision boils down to a laptop and a tablet, opt for the laptop... and definitely don't waste your money on also buying a new tablet.
3. Expensive Bedding
Even if your teen's college isn't one that stocks its dorm rooms with extra long mattresses (which are more common than you think), you shouldn't invest in any particularly special bedding; Bobby and his friends are probably going to destroy the whole setup by eating and drinking recklessly on his bed with great frequency, so grab the bargain bin bedding deals instead of the 600-thread count sheets. Your kid is going to have to buy all new bedding after he graduates, anyway, so why spend a lot on something that is, for all intents and purposes, disposable?
4. An HDTV
As old people, you might be thinking that your kid will need a TV, but times they are a-changin'. Heck, we're not sure that millennials even watch TV sets anymore. These Internet-agers tend to consume their shows and movies via Netflix, Hulu, YouTube, and the like, so a laptop is all they'll need. If they do want to watch something on broadcast TV like us old folks, most colleges have TVs located in common rooms or other meeting areas.
If your kid says he needs a new HDTV for playing video games, it's cool to remind him that college is for studying, not playing games... and then consider giving him a hand-me-down set. No need to invest in a new HDTV, because even with their low prices, there's a pretty big chance that the TV will get damaged (moving it back and forth every year, wild parties, general poor judgement). It'll be easy to part with your old TV, especially if you plan on buying yourself a nice new one.
5. An Iron and Ironing Board
The ironing board is a thing that no college student has ever been seen using. Ever. If you don't want your kid to look like a rumpled mess, it may be smarter to buy a wardrobe of wrinkle-free clothes.
6. A High-End Laptop
Our unscientific estimate shows that 99% of all college students use their laptop for nothing more than word processing, Wikipedia-ing, and watching TV. These kids don't need eight cores of Haswell processing to put words onto the screen, despite the attractive price points of the latest Haswell laptops. Moreover, since laptops have become lighter and more portable, they're being brought far and wide. But lugging a laptop all over campus means an increased likeliness of damage. Would you rather receive a phone call from your kid telling you that he spilled a can of Mr. Pibb onto a cheap-o laptop or a high-end model?
7. An External Hard Drive
With the advent of accessible and cheap cloud storage, there's little to no reason for the average student to own a portable hard drive. Documents for school can be uploaded to Google Drive or Dropbox, and Facebook likely already serves as an accessible photo album anyway, so why bother with an external solution? If you said, "Why, for backup and crash recovery purposes, of course!" then know this: College students will remember to backup their laptop as often as they iron their clothes. Instead, give your kids this guide for getting up to 83GB of storage online for free.
8. An Apple iPhone
Though not typically considered a back-to-school item, if your kid just happens to need a new iPhone right before school starts, we suggest you hold off. Not only do new iPhone models tend to be released shortly after school is in session, but our deal archives also show that whenever Apple announces a new product, current generation Apple products fall in price. Your kid can just hold tight with his (gasp!) old iPhone until this happens.
Avoiding these items will definitely help keep the back-to-school spending down, as well as avoid the, "Then why did we buy that for you in the first place?!" conversations. No one likes having those. But surely there are some additional "lived-and-learned" don't-buys for college.
Have a money saving idea that you'd like to share?
Send it to us for possible publication in this newsletter!
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Help your Beneficiaries "Beat the Odds"
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Tips for Helping Your Family Survive the "3 Generations" Rule
Two-thirds of baby boomers will inherit a total $7.6 trillion in their lifetimes, according to the Boston College Center for Retirement Research -- that's $1.7 trillion more than China's 2012 GDP.
But they'll lose 70 percent of that legacy, and not because of taxes. By the end of their children's lives -- the third generation -- nine of 10 family fortunes will be gone.
"The third-generation rule is so true, it's enshrined in Chinese proverb: 'Wealth never survives three generations,' " says John Hartog of Hartog & Baer Trust and Estate Law, (www.hartogbaer.com). "The American version of that is 'shirtsleeves to shirtsleeves in three generations."
There are a number of reasons that happens, and most of them are preventable say Hartog; CPA Jim Kohles, chairman of RINA accountancy corporation, (www.rina.com); and wealth management expert Haitham "Hutch" Ashoo, CEO of Pillar Wealth Management, (www.pillarwm.com).
How can the current generation of matriarchs, patriarchs and their beneficiaries beat the odds? All three financial experts say the solutions involve honest conversations - the ones families often avoid because they can be painful - along with passing along family values and teaching children from a young age how to manage money.
* "Give them some money now and see how they handle it." Many of the "wealth builders," the first generation who worked so hard to build the family fortune, teach their children social responsibility; to take care of their health; to drive safely. "But they don't teach them financial responsibility; they think they'll get it by osmosis," says estate lawyer Hartog.
If those children are now middle-aged, it's probably too late for that. But the first generation can see what their offspring will do with a sudden windfall of millions by giving them a substantial sum now - without telling them why.
"I had a client who gave both children $500,000. After 18 months, one child had blown through the money and the other had turned it into $750, 000," Hartog says. Child A will get his inheritance in a restricted-access trust.
* "Be willing to relinquish some control." Whether it's preparing one or more of their children to take over the family business, or diverting some pre-inheritance wealth to them, the first generation often errs by retaining too much control, says CPA Kohles.
"We don't give our successor the freedom to fail," Kohles says. "If they don't fail, they don't learn, so they're not prepared to step up when the time comes."
In the family business, future successors need to be able to make some decisions that don't require the approval of the first generation, Kohles says. With money, especially for 1st-generation couples with more than $10 million (the first $5 million of inheritance from each parent is not subject to the estate tax), parents need to plan for giving away some of their wealth before they die. That not only allows the beneficiaries to avoid a 40 percent estate tax, it helps them learn to manage the money.
* "Give your beneficiaries the opportunity to build wealth, and hold family wealth meetings." The first generation works and sacrifices to make the family fortune, so often the second generation doesn't have to and the third generation is even further removed from that experience, says wealth manager Ashoo.
"The best way they're going to be able to help preserve the wealth is if they understand what goes into creating it and managing it - not only the work, but the values and the risks," Ashoo says. The first generation should allocate seed money to the second generation for business, real estate or some other potentially profitable venture, he says.
Holding ongoing family wealth meetings with your advisors is critical to educating beneficiaries, as well as passing along family and wealth values, Ashoo says. It also builds trust between the family and the primary advisors.
Ashoo tells of a recent experience chatting with two deca-millionaires aboard a yacht in the Bahamas.
"They both built major businesses and sold them," Ashoo says. "At this point, it's no longer about what their money will do for them -- it's about what the next generations will do with their money."
John Hartog is a partner at Hartog & Baer Trust and Estate Law. He is a certified specialist in estate planning, trust and probate law, and taxation law.
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Countdown to Healthcare Reform
What will the Health Marketplaces cover?
All private health insurance plans offered in the Marketplace will offer the same set of essential health benefits.These essential health benefits include at least the following items and services:
- Ambulatory patient services (outpatient care you get without being admitted to a hospital)
- Emergency services
- Hospitalization
- Maternity and newborn care (care before and after your baby is born)
- Mental health and substance use disorder services, including behavioral health treatment (this includes counseling and psychotherapy)
- Prescription drugs
- Rehabilitative and habilitative services and devices (services and devices to help people with injuries, disabilities, or chronic conditions gain or recover mental and physical skills)
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services
Essential health benefits are minimum requirements for all plans in the Marketplace. Plans may offer additional coverage. You will see exactly what each plan offers when you compare them side-by-side in the Marketplace.
Learn more about the Affordable Care Act requirements and your State's Health Insurance Marketplace at:
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As a non-profit Credit Counseling and Financial Education organization, CACC is dedicated to reaching out to the community. CACC provides financial education seminars and workshops at community centers, local organizations, and companies.
Popular Topics Include:
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Consumer Advocates Credit Counselors, Inc. is a 501 (c)3 non-profit credit counseling organization providing credit counseling, financial education, and debt management services. Please visit our website at: www.caccdebt.org
Additional consumer resources:
Free Birthday Gifts
Stay Safe On-Line
US General Services Administration Federal Citizen Information Center
National Drug Abuse Hotline 1-800-622-HELP
National Domestic Violence Hotline 1-800-799-SAFE
Suicide & Depression Hotline 1-800-999-9999
National Council on Problem Gambling 1-800-522-4700
Fair Debt Collection Practices Act
Homeowners Hope Hotline for Mortgage Counseling and Assistance 1-888-995-4673
Benefits.gov
Learn about a variety of Government Benefits, how to qualify and how to apply.
Supplemental Nutrition Assistance Program (SNAP)
SNAP is the new name for the federal Food Stamp Program.
Temporary Assistance for Needy Families (TANF)
TANF is designed to help needy families achieve self-sufficiency. States receive a block grant to design and operate their programs to accomplish the purposes of TANF. These are:
-assist needy families so that children can be cared for in their own homes
-reduce dependency of needy parents by promoting job preparation, work and marriage
-preventing out-of-wedlock pregnancies
-encouraging the formation and maintenance of two-parent families.
Medicaid
Medicaid is health insurance that helps many people who can't afford medical care pay for some or all of their medical bills.
Good health is important to everyone. If you can't afford to pay for medical care right now, Medicaid can make it possible for you to get the care that you need so that you can get healthy and stay healthy.
Supplemental Security Income (SSI)
is a Federal income supplement program designed to help aged, blind, and disabled people, who have little or no income.
It provides cash to meet basic needs for food, clothing, and shelter.
Low Income Home Energy Assistance Program (LIHEAP)
If you can't afford to pay your home energy bill, your home may not be safe, and you may be at risk of serious illness or injury. The LIHEAP may be able to help keep you and your family safe and healthy.
National School Lunch Free Lunch Program (NSLP)
Established in 1946, The National School Lunch Program (NSLP) is a federally assisted meal program operating in public and nonprofit private schools and residential child care institutions. It provides nutritionally balanced, low-cost or free lunches to children each school day.
Federal Housing Assistance/Section 8 (FPHA)
Public housing assistance was established to provide decent and safe rental housing for eligible low-income families, the elderly, and persons with disabilities. Public housing comes in all sizes and types, from scattered single family houses to high rise apartments for elderly families.
Home Affordable Modification Program (HAMP)
888-995-HOPE
If you are struggling with your monthly mortgage payments or have already missed a payment, now is the time to take action.
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Contact Us:
phone: 1-800-763-1874
CACC Money Wise Monthly Editor in Chief:
Mike Schiano, "The DebtBuster"
'Til Next Month, Consumer Advocates Credit Counselors, Inc.
This newsletter is designed to provide accurate and authoritative information with regard to the subject matter covered. This information is given with the understanding that neither CACC nor the Editor and Writers are engaged in rendering legal, accounting, or other professional advice. Since the details of your situation are fact dependent you should always seek the services of a competent professional before making any financial decisions.
Copyright©Consumer Advocates Credit Counselors, Inc. 2013. All Rights Reserved.
Use of all or part of this newsletter is allowed with proper attribution and link: Source: Consumer Advocates Credit Counselors, Inc. www.caccdebt.org
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