Personal finance

Practical money matters by Nathaniel Sillin

FOR ALL THE planning we do during the holidays, the last couple of weeks before the big parties and family gatherings can trip up the best of budgets. Perhaps what’s needed is some last-minute tricks to keep overspending to a minimum. Here are a few ideas to get you through.
Track your spending. If you’re close to the upper end of your budget and you’re not quite sure what’s happened, go through your purchase receipts.
Maybe you and your partner are shopping independently, spending too much on gas, meals out or failing to coordinate on the items you need. Maybe the kids are adding items to their lists at the last minute.
It’s toughest to say no to kids, so see if there are adult gifts, decorating items or seasonal specialty food you really don’t need to purchase. In other words, if your budget is tight, identify the expenses you can alter and adjust your spending plans.

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Don’t ignore the cost of returns. Some retailers are strict about return policies on a host of items, which makes it doubly important to save all your receipts.
If you’re giving gift cards, make sure the recipient has the purchase receipt in case the card doesn’t work. If you’ve bought items online, make sure you keep critical return information and package-return stickers in case you need them.
However, take one additional step with shipped returns – see whether the seller is charging you more for their convenient shipping-label option than shipping the item back locally in your own packaging.
Finally, keep restocking fees in mind – some retailers charge in excess of 10 per cent of the item’s cost to accept a return, particularly for electronic and mechanical purchases that involve heavy packaging.
Ultimately, the best time to check return policies is before you buy but, if you do have to return items, consolidate those trips to save time, gas and money.
“Piggyback” the purchases of others. If you have a large gift list for loved ones or family, be a nosy shopper.
Maybe your sister is finally giving her movie-freak husband the room-sized flat-screen TV he’s always wanted. Maybe your nieces and nephews are being given expensive dolls, toys or high-technology items that require clothes or software of some sort.
If you are trying to cut your holiday budget, check in with your loved ones to see if you can supplement these expensive gifts with accessories that might be easier on your budget and appreciated just as much.
Pitching in for a couple of outfits for the expensive doll – rather than having to buy the expensive doll itself – saves you money, gives your loved ones a break on the subsequent purchases they’ll need to make and gives the recipient more of what he or she wants. A win-win all around.
Watch out for theft. All the smart shopping in the world won’t lessen the headaches from thieves who target your packages, personal and online data or the contents of your wallet.
Fast-approaching holidays and busy schedules can leave us tired and distracted, so keep a close watch on potential risk for identity theft, package theft from cars, homes and apartment vestibules.
If you take public transportation, use extra caution to keep your money, purchases and personal technology hidden from thieves.
Bottom line: Don’t let the last, busy weeks of the holiday season knock you off budget or threaten your financial security in other ways.
Editor’s note: You can find information on identity theft online through the link included in our electronic version of this article above.
Nathaniel Sillin directs Visa’s Practical Money Skills For Life financial education programs. Follow him on Twitter at twitter.com/PracticalMoney. His articles are intended to provide general information and should not be considered legal, tax or financial advice. Always consult a tax or financial adviser for information on how the law applies to your individual financial circumstances

Practical money matters by Nathaniel Sillin

UNEXPECTED money from a friend or relative can be a great surprise or a potentially difficult financial lesson. How you plan for unexpected money issues overall can be a key to how well you’ll handle a sudden windfall.
Many people don’t do so well. A recent study from Ohio State University suggests that adults who inherit money save only about half of what they receive.
Researcher Jay Zagorsky reported that only about 11 per cent of the study participants had received an inheritance, with the median amount around only $11,340. He believes awareness of the high-spending numbers suggest it is time for a campaign on saving inherited wealth.
Want to get there early? Here’s a plan for dealing with an unexpected inheritance or any other surprise money issues in the future:
1. Start by taking control of your current finances. Why wait for an inheritance? In 2013, the Gallup organization reported that only one in three Americans actually prepared a written or computerized household budget.
If you’ve never prepared a budget before, know that it is the traditional starting point for all personal-finance decisions.
2. Start saving now. The long-term purpose of budgeting is to find excess dollars so you can save and plan for the future. Even if it’s a few dollars a week as other resources go toward everyday expenses, get into the habit of regular savings and investment now.
Consider activating a direct deposit to build those amounts automatically. If an inheritance comes along, you will already have savings habits in place and account relationships set up to receive the money.
3. Line up qualified advice. Skilled financial or tax experts can help you review what you’ve done so far with your money and suggest ways to make your personal savings or investments go further.
Having these relationships in place before an expected – or unexpected – windfall is valuable. They’ll know your situation and the best ways to handle new money. If an inheritance arrives, consider a certified financial planner, certified public accountant and an attorney involved in trust or estate matters for your financial team.
4. Evaluate your relationships. Money can change people for better or worse. That is why you see so many troubling news stories about people who have had an unexpected windfall.
The best approach to sudden money is to go quietly and immediately into the planning phase – don’t make announcements and involve only your key loved ones who need to be part of the process.

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5. Don’t go on a spending spree. If you’re lucky enough to receive an inheritance of significant size, planning doesn’t mean quitting your job, buying a car or moving out of your current place, at least not immediately.
Involve members of your financial team in your planning. After any tax or estate issues are settled and the money is free for your use, extinguish long-standing expenses, build an emergency fund and then establish savings and investments that are appropriate for you and your loved ones.
Once details are complete, do have some fun, but try to keep the cost below 10 per cent of the total inheritance amount.
Bottom line: Inherited money can help build a financial future. Seek some advice, plan thoughtfully for taxes and investments and save a little bit for fun or luxury. Without proper planning, windfalls don’t always last as long as you might think.
Editor’s note: You can find the Ohio State University study and budgeting advice online through the links included in our electronic version of this article at thepostnewspaper.net.
Nathaniel Sillin directs Visa’s Practical Money Skills For Life financial education programs. Follow him on Twitter at twitter.com/PracticalMoney. His articles are intended to provide general information and should not be considered legal, tax or financial advice. Always consult a tax or financial adviser for information on how the law applies to your individual financial circumstances.

ALL THOSE “beat the rush!” ads for holiday shopping will begin soon enough but, right now, you have a great opportunity to beat the rush to organize your year-end finances and make some smart moves for the new year.
Total up your year-to-date spending. Make sure your tracking system for spending, saving and investment is up to date so you can make sure you are on budget for the year and ready with data for tax time. When finished, determine your net worth – what you own less what you owe – for an early idea of what you need to change next year.
Check in with your advisers. Late December is a busy time for financial professionals. See if they can review your numbers now and make suggestions on year-end financial activities and new moves you should make in 2016.
Review all your credit reports. You are entitled to one annual free copy of each of your credit reports from TransUnion, Equifax and Experian. Schedule delivery of each at different points in the year to catch errors or irregularities.
Check your portfolio. With the dramatic market swings this year, check that your retirement and other investments are still on track with your goals. Seek qualified help if necessary to see if the assets you own still fit your needs and if you need to do any tax selling by the end of the year.
Check your insurance coverage. Contact agents representing two or three highly rated insurers for your home, auto, life and other insurance to review the adequacy and pricing of your coverage. Make sure any structural changes or improvements to your home are reflected in your homeowners insurance. Such work may boost your home’s replacement value. If you’ve had a major life or financial event, like a new baby or the purchase of a new home, make sure your coverage is sufficient.
Update benefits and health coverage. Stay on top of your W-2, benefits and estate planning. Seek qualified help if necessary to see if your tax withholding and employee health coverage and investments need review.
Empty out flexible spending accounts. If you have a flexible account for health care or other qualifying expenses, it’s time to submit outstanding claims from your doctor, dentist or optometrist. You can only transfer $500 of your remaining balance to next year, so make all the appointments or medical purchases you need now and submit paperwork quickly.
Do a last-minute tax review. See if there’s anything you can do in the final weeks of the year to save on taxes. If tax-deductible donations to qualified charities and nonprofits are recommended, websites such as GuideStar, CharityWatch and Charity Navigator can evaluate your choices.
Use online bill pay and deposit services. Scheduling bill payment through your checking and savings accounts and setting up regular electronic deposits to savings and investment accounts can save time and money.
Bottom line: Doing a last-minute review of your finances can potentially save money and help you save, spend and invest smarter in the coming year.
Nathaniel Sillin directs Visa’s Practical Money Skills For Life financial education programs. Follow him on Twitter at twitter.com/PracticalMoney. His articles are intended to provide general information and should not be considered legal, tax or financial advice. Always consult a tax or financial adviser for information on how the law applies to your individual financial circumstances.

EVEN IF you’re only moving across town, it’s likely to cost more than you think when you change your home.
According to the latest figures from American Moving And Storage Association, the average cost of an in-state professional move – based on 7,570 pounds of stuff – is $1,170. The average state-to-state move costs $5,630.
How can you control moving expenses? Start making a master checklist to collect data and consider all costs and personal aspects of a potential move. You might even want to include a pro-and-con list that addresses all conceivable economic and lifestyle outcomes – the real long-term costs and benefits of a move.
After deciding whether the move is worthwhile, consider these subsequent steps:
Seek solid advisers. Whether or not you plan to sell your home through a licensed real-estate broker or agent, most are open to conducting a market valuation of your property and suggesting repairs or improvements that could maximize its sale price.
If you use a qualified financial planner or tax adviser, include that individual in early discussions on how a move might affect your finances. Also, if you’re selling property, find an experienced real-estate attorney to review your broker and sale contracts.
Take estimates from movers. An early walk-through at your home or apartment by two or three movers registered with the US department of transportation, or DOT, can provide a reality check on how much you’ll want to take and whether you can afford luxuries like packing or storage. Online resources can also help you evaluate those estimates.
Watch for fraud. Recent news reports have highlighted a trend called “hostage load”, a practice whereby unscrupulous moving companies demand more money from customers before finishing a delivery.
Obtaining references from trusted friends and advisers is a good first step to finding the right registered mover for your relocation. DOT has launched a site called Protect Your Move that allows you to download a moving fraud protection guide and offers tips on proper ways to investigate and hire a mover.
Start downsizing – now. Obtaining early estimates from movers certainly helps you decide what you’re really willing to take. If there are valuables you think you can sell, consult professional appraisers and even general marketplace sources like eBay to find a realistic idea of value. Otherwise, consider garage sales and donations for the rest.
Insure what you’re moving. Whatever plans you’re making for home or renter’s coverage at the new destination, make sure you have proper coverage in place for the contents of your move. Insurance Information Institute provides a useful guide to properly insuring the possessions you’re moving.
Build a cash reserve for deposits, fees and incidentals. Keeping moving costs low can help you handle dozens of smaller and sometimes unexpected expenses that crop up immediately before, during and after a move. Budget for hidden costs that can include deposits, fees and numerous trips to a discount shop, home center or grocery store.
Bottom line: Thinking about moving? Give yourself adequate time and resources to plan all aspects of this major life and money event.
Editor’s note: You can find further advice online through the links included in our electronic version of this article at thepostnewspaper.net.
Nathaniel Sillin directs Visa’s Practical Money Skills For Life financial education programs. Follow him on Twitter at twitter.com/PracticalMoney. His articles are intended to provide general information and should not be considered legal, tax or financial advice. Always consult a tax or financial adviser for information on how the law applies to your individual financial circumstances.

PLENTY OF people are now putting the sun, wind and water to work to cut their energy bill. Should you join them?
Before any shift to renewable-energy technology, you must do some very individualized research and, above all, work the numbers.
Solar energy seems to be given the most attention. You might have heard recent news reports about its sliding costs and rising support in Washington. A recent White House report noted that the average cost of a solar-electric system has dropped by 50 per cent since 2010 and that federal agencies are working to make it easier for lower-income taxpayers to borrow up to $25,000 for solar and other energy-efficient home improvements.
Many are rushing to do installations by the current expiration date – year-end 2016 – for the 30 per cent federal consumer-energy-efficiency tax credits covering solar-energy systems, small wind turbines and geothermal heat pumps.
How should you evaluate the cost of a renewable-energy project? There are some questions to be considered first.
Could incremental energy-saving projects be more practical? Start with baby steps. Before you decide on an expensive solar or other “renewables” project, see if smaller changes around the home could save money. You can improve the performance of your heating and air conditioning systems and seal air leaks from windows, doors and other areas of your home. A do-it-yourself or professional energy audit might be a good first step in detecting energy waste.
What’s going on locally? When it comes to renewable energy, geography matters – and not just for tax breaks and credits for systems. Generally, weather, temperature, wind and sun exposure measurements matter when you’re choosing a particular project.
For example, Solar Energy Industries Association reports that solar-panel installations are more common on the east and west coasts, mainly because sun exposure is greater near the sea than in the center of the country.
State and local organizations dealing with renewables can offer guidance to cost, effectiveness, installation and many other issues you’ll need to evaluate. A local evaluation of options is essential.
Do you really understand the technology? There is no doubt that technology is always evolving and this is one of the reasons why solar and other renewable-energy options are becoming cheaper.
However, falling costs are one thing, but you need to fully understand what you’re buying so you can hire the best people to install it and service the system over time. For the basics, a good place to start is the renewable-energy section on the federal energy department’s energy.gov website.
Should you buy, lease or borrow? One of the drivers behind the recent growth in solar-powered systems is a new generation of vendors who provide one-stop shopping, installation and billing for systems at little or no initial cost.
These vendors facilitate options for both purchasing by loan and leasing. As convenient as either option might be, watch for inflation clauses, fees and penalties that could drive you above what you’re paying for conventional, utility-produced electricity.
How will it affect your home’s resale value? There’s a fair amount of debate as to whether green home improvements actually boost home prices. Also, many real-estate experts have mixed opinions about how prospective buyers feel about purchasing a home with existing renewable-energy equipment that’s either been bought or leased.
Should I involve my financial and tax advisers? Whether you plan to buy, borrow or lease a system or do intermediary energy improvements around your home, talking to a qualified financial or tax adviser isn’t just worthwhile; it’s essential.
It is also a good idea to speak with your homeowner-insurance agent to see if your project will affect your coverage.
Bottom line: Want to save money while saving the planet? Do your homework and make sure an investment in renewable energy works for you.
Nathaniel Sillin directs Visa’s Practical Money Skills For Life financial education programs. Follow him on Twitter at twitter.com/PracticalMoney. His articles are intended to provide general information and should not be considered legal, tax or financial advice. Always consult a tax or financial adviser for information on how the law applies to your individual financial circumstances.