Personal finance

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 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 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.

ARE YOU worried about your financial situation? For the eighth consecutive year, American Psychological Association has identified money as the number-one stress trigger, with 72 per cent of Americans reporting stress about money and nearly one in five saying they have either skipped or considered skipping going to the doctor because of financial concerns.
As for relationships, almost one third of adults with partners reported that money is “a major source of conflict”.
Here are tips for tackling the most common money stresses.
You’re just one paycheck from financial disaster.
Corporation For Enterprise Development’s recent Assets And Opportunity Scorecard reported that more than 40 per cent of American households are “liquid-asset poor”, meaning that they have less than three months of savings to
help them absorb a financial shock like a lost job, medical emergency or other unforeseen financial expense.
Tip: Build a crisis fund.
After learning how to budget, building an emergency fund is the next essential step in financial planning. Saving and investing for other goals are equally important but they should follow the creation and annual review of a healthy emergency fund.
You’re lost financially.
A 2014 survey by economists from George Washington University and the Wharton school of University Of Pennsylvania states that only 30 per cent of Americans could accurately answer three basic personal-finance questions dealing with savings and investment returns. Respondents from other major developed countries – including Germany, the Netherlands, Japan and Australia – scored roughly the same. It’s a global problem.
Tip: Identify your biggest financial problems.
Does every dime you make go toward paying bills? No savings or investments? No emergency fund? Once you’ve identified your main money blind spots, seek help. Reach out to a trusted friend or relative with good money habits or a qualified financial adviser who can help you see where you stand, establish realistic goals and restart your financial education.
You’ll never catch up.’s March financial security index said that nearly half of Americans aren’t saving enough for emergencies or retirement. Only a quarter of middle-class households earning between $50,000 and $75,000 were savings champs, putting away more than 15 per cent of their income.
Tip: Forget the past and begin today.
Start by figuring out where you stand financially. Then address your expenses and whether there’s an opportunity to boost your income so you can make up for lost time.
Your money troubles are putting your closest relationships in jeopardy.
Money issues affect all relationships but couples can be hit the hardest by money secrecy or so-called “financial infidelity”.
Tip: Face the music.
Take qualified advice, quantify the extent of your problem, make a plan and share the details face-to-face with all loved ones or business partners who need to know. Assume you won’t be able to control their response, so focus on solving the problem and vow to end your secretive behavior for good.
You can’t face financial paperwork.
When you can’t face bills, statements and other financial calls or communications, it generally reflects financial uncertainty in some form.
Tip: Seek help.
Pull the information together and take advice if you need to. Put payments and other financial decisions on a paper or digital calendar with reminders to act.
Bottom line: Fear about money issues can affect your health and relationships. Diffuse that stress through education, assistance and positive action to improve the outlook for your financial future.Editor’s note: You can find more advice on how to budget and building an emergency fund online through the links included in our electronic version of this article at
Nathaniel Sillin directs Visa’s Practical Money Skills For Life financial education programs. Follow him on Twitter at 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.

A GENERATION ago, most families didn’t think about financial fraud. Today, it can come in many forms – over the phone, through the mail and, increasingly, online. It’s an equal-opportunity crime that affects consumers of all ages.
For the 15th straight year, the federal trade commission tapped identity theft as the number-one source of consumer complaints in its 2014 Consumer Sentinel Network Data Book, which was released in February. The agency also noted a “large increase” in so-called “imposter” scams – phone calls and e-mails from thieves purporting to represent the government as a way to steal data and money from unsuspecting adults.
Young people – particularly students – could be the fastest-growing group of fraud targets. According to a 2015 study by Javelin Strategy & Research, they could be the greatest potential victims of financial fraud because of their dependence and sometimes unwitting use of computers and mobile devices.
More than 64 per cent of the study’s respondents said they were not “very concerned” about identity fraud but were far more likely to find out they had been fraud victims long after the damage occurred through measures such as a call from a debt collector or a rejection letter from a lender.
Most consumers under the age of 18 shouldn’t have a credit record at all but, as digital thieves become more sophisticated and federal agencies become occasionally vulnerable to hackers, critical privacy data could be at risk years before a child ever opens a bank account or applies for a loan. Such data includes social-security numbers, which many parents obtain for their children in infancy so they can save or invest money for them or buy insurance on their behalf.
For all these reasons, it might be time to think about a family fraud plan. Here are some steps to consider:
• Check the accuracy of all family credit data. Parents should begin by checking their own credit reports to make sure creditor data and loan balances are accurate and that no inaccuracies or unfamiliar lenders have crept into their information. Once clear, adult children can make sure senior relatives are taking similar steps. As for minors, the three major credit agencies – TransUnion, Equifax and Experian – have their own website guidelines for confirming and evaluating a minor’s credit data.
• Make sure mailboxes are safe from thieves and any document with an account number or identifying data is destroyed before it is placed in the trash. The same goes for tax returns that are no longer needed.
• Learn how to protect all mobile-computer and handheld-device data and have a plan in place in case any family member loses a smartphone, tablet, laptop or desktop computer. Tips are available online from smartphone service providers and device manufacturers.
• Online, by phone and in person, be wary of collection demands or requests for social-security numbers or other specific account data unless the identity of the caller can be verified. Fraudulent calls are called “vishing” scams as they are similar to “phishing”, which involves fraudulent e-mails, texts and websites used to illegally collect personal data.
• Install all software security updates immediately on your mobile devices and computers and ensure your passwords are unique and frequently updated.
• Sign up for fraud alerts from your banks, credit-card issuers and investment companies to receive immediate word of unusual or potentially illegal activity on your accounts.
Bottom line: Identity thieves and other financial fraudsters watch consumer behavior closely and are equally adept at stealing money and data in person, over the phone and online, so have a plan in place to protect your entire family.

Nathaniel Sillin directs Visa’s Practical Money Skills For Life financial education programs. Follow him on Twitter at 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.

IT COSTS parents an average of $245,340 to raise a child from birth to age 18. That figure, from the US agriculture department, is just one reason why prospective parents are advised to consider parallel financial planning for child-based expenses and retirement.
The key is to start doing it as early as possible – according to a December 2012 article in The New Republic, adults are starting families later than in previous generations. In short, savings needs for childcare, college and retirement seem on a tighter collision course than ever.
Prospective parents should first discuss the pros and cons of starting a family in terms of personal, lifestyle and career success. The question “Do we want kids?” should come before the “Can we afford kids?” investigation.
Once family goals are settled, it’s wise to evaluate where current finances stand. While many couples have a thorough money talk before they wed, it works for family planning, too. Prospective parents will benefit from complete financial transparency before pregnancy, adoption proceedings or fertility treatment.
Utilize qualified financial and tax advice to fit specific circumstances. Consult trusted family and friends for referrals to qualified financial-planning and tax experts. Also check current tax rules for how to handle and potentially deduct certain costs related to adoption or fertility treatments.
Research thoroughly and bookmark resources online. The IRS website continually updates its summary of tax issues for parents, which can guide overall planning. New authors and bloggers emerge daily on virtually every aspect of parenting; friends, relatives and colleagues can also provide resources.
For prospective parents who are employed, it is a good idea to evaluate benefits well ahead of a pregnancy, fertilization procedures or adoption. Depending on specific circumstances, employees should review their employer’s health and general benefits for routine and emergency medical coverage, medical-leave policy and extras such as child-care benefits. Couples should compare their individual coverage to determine whose employer has the better family coverage overall.
Start planning for childcare expenses as soon as possible. Full- or part-time childcare services for working parents can be surprisingly expensive and difficult to obtain depending on location. In 2015, the White House reported that the average cost of full-time care for an infant was about $10,000 a year, while a 2014 Boston Globe report noted state-by-state estimates that were significantly higher.
For peace of mind and affordability, it is advisable to tackle the childcare issue as early as possible. Prospective parents might also speak with a qualified tax adviser about whether it is more advantageous to claim the child and dependent care credit on their taxes or pay childcare expenses from a flexible spending account at work.
Loved ones can also lend financial assistance to a new family in a variety of ways. Affordable basics include general parenting advice, babysitting services and sharing coupons and hand-me-down clothing, toys and unneeded child-related equipment in good condition. For folks willing to lend financial support, such options might include a Coverdell education savings account, 529 college savings plan or a gift of cash or assets to the child, subject to IRS rules. Also, anyone can directly pay medical expenses in full for someone they do not claim as a dependent under certain circumstances. If friends or family members offer financial help, encourage them to evaluate their options with qualified financial and tax experts.
Finally, prospective parents should become dedicated bargain hunters and savers with an equal focus on handling childcare expenses and supporting retirement objectives. Both financial goals are equally important.
Bottom line: It pays to plan early for a family. Evaluate your finances, reach out to friends and current family members for advice and seek help from qualified experts if you need it.
Nathaniel Sillin directs Visa’s Practical Money Skills For Life financial education programs. Follow him on Twitter at 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.

Sillin, nat               Nathaniel Sillin

IF YOU’RE not sure whether you’re going to be able to retire, it could be time to focus, take advice and build a realistic plan, especially you’re older than 50.
You’re not alone. The US government accountability office recently reported that most households approaching retirement have low savings, adding that nearly half of households led by individuals or couples aged 55 and older have no retirement savings accounts at all.
The first step is to define where you really stand financially. Consider speaking with a qualified financial and tax adviser to define your present financial circumstances.
Your conversation should take into account your household income, tax situation, debt and your retirement assets in any form. Reviewing these factors can help shape your decisions about supersizing your retirement plan for maximum safe returns.
While a customized plan is generally the best way to approach shortfalls, here are some general approaches.
Take time to reevaluate your budget. To accelerate retirement saving and investing, you need to find the money first. Non-mortgage debt is a major retirement savings obstacle. Better budgeting can help you find the money to pay off debt quicker. Adjust your spending across the board so you can accomplish this while adding more money to savings over time.
Know that you’re going to need to accelerate your savings. Estimates vary but, generally, after age 50, it’s best to direct at least 10 per cent of your gross income to savings and investments to cover living expenses when you stop working. If you are employed, review your contribution and income limits for the most popular self-directed and tax-advantaged retirement savings vehicles, including:
• 401k, 403b and most 457 plans, which will have a maximum annual contribution limit of $18,000 in 2015;
• Individual retirement accounts – IRAs, both traditional and Roth – which will have maximum “catch-up” contribution limits of $6,500, consisting of the regular $5,500 limit plus $1,000 for taxpayers aged 50 or older by the end of the year.
If after all this effort you’re still not able to find enough money to put away, consider making a greater effort to earn more income. Many individuals boost their savings through a second job or freelancing from home.
Consult qualified financial and tax professionals to make sure you’re handling this extra income correctly from a tax perspective and putting it in investments that make sense for you.
Downsizing to a smaller home in a lower cost-of-living destination or moving in with friends or family at minimal costs may provide additional retirement savings. But, first, consider what you might get for your home.
If you are able to sell a primary residence at a significant profit – above $250,000 for a single taxpayer and above $500,000 for married taxpayers filing jointly – speak to a tax professional about ways to avert a significant tax liability.
Finally, put proper financial safety nets in place. Start an emergency fund so you won’t be forced to dip into savings to cover unexpected expenses. And don’t forget insurance – adequate property and casualty, health and disability insurance can protect your retirement nest egg from significant risk.
Bottom line: Building a retirement fund after age 50 is challenging but not impossible. Take solid tax and financial advice, start downsizing immediately and don’t forget critical financial safety nets.

Nathaniel Sillin directs Visa’s Practical Money Skills For Life financial education programs. Follow him on Twitter at 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.