Two Ways to Express your Love

Valentine’s Day is a time when we express our love with flowers, chocolate, dinner, and cards. We continue to express our love every day through many ordinary tasks: making and sharing meals, offering to run an errand, shoveling the front walk, listening when someone needs to talk. The list is endless. When it comes to money, here are two ways you can express your love. 

Prepare your loved one for when you can no longer manage your finances.

In many families, one person manages the day-to-day financial tasks: paying the bills, pricing insurance, storing online account logins and passwords, understanding all sources of income, knowing where the life insurance policy is stored, etc.

  • Perhaps your spouse or partner handles all these details.
  • Perhaps you have adult children or other family members who will need to take over these tasks if you are no longer able.
  • Perhaps you are in your twenties just starting your career. What happens if you become ill or have an accident and can’t manage on your own?

When our spouses, partners or other key family members don’t have access to vital information when they need it, they face an extremely challenging task to recreate it. The task is more daunting when much of this information is stored in your password protected computer or in the cloud. Eventually they will figure out all or most of the pieces of your financial picture, but it could take months. Why send your loved ones on a frustrating treasure hunt? This hunt is especially painful if your loved one is grieving your death.

If you can, show the key person or people in your life the details of your finances. If they resist or are likely to forget the details, write it down and store it in a safe place. It may take you several weeks to record all the information, but your loved ones will someday thank you.

If you don’t know where to start or are concerned you will miss something important, you can purchase a workbook which serves as a guide and provides space to record information. One guide I like is MemoryBanc: Your Workbook for Organizing Life by Kay H. Bransford. MemoryBanc is available in both paper and electronic editions.

Teach Your Child How to Be Financially Independent

In my practice as a daily money manager, I have seen many young adults struggle financially. Many have never learned solid money skills and don’t know how to live within their means.  Without these core proficiencies, they may have a hard time with all types of financial matters. Consider:

  • When your children don’t understand how loans work, can they find the best financing when buying a car?
  • If they hope to purchase a house someday, will they be able to postpone unnecessary expenses and purchases to save enough for a down payment?
  • If your child faces a time of hardship such as job loss or an illness, will he have enough money saved to carry him through that hard time?
  • Does your child understand what impacts her credit score, and how that score influences the interest rates she receives on credit cards and other loans?

When we see our adult children struggling, parents want to help. It is our natural instinct. Handing over money, however, is not always the best solution. Financially enabling our children can lead to adult children becoming dependent on their parents and being less motivated to become independent. Not all parents can afford to give money without putting their own financial security at risk.

Whether your child is six or sixty, it is never too late to teach money skills. It may be emotionally difficult, and there may be hurt feelings. Overall, however, teaching another person life-long financial skills is a wonderful gift.

There are many resources avaible for you and your children: books, online resources and articles, banks and credit unions, financial coaches, financial therapists, even the Federal Trade Commission.

For ideas and resources to teach financial skills to minor children, see my blog: Teach Your Kids About Money

The US News and World Report article, “How to Help Adult Children Become Financially Independent”, offers strategies to help grown children.

When you think of ways to show your love this Valentines’ season, I encourage you to think beyond traditional gifts. Taking steps to prepare your loved ones for both their own and your financial future is a priceless gift.

 

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 

How to Protect Yourself and Your Loved Ones from Three Common Types of Scams

The following article is from the American Association of Daily Money Managers (AADMM).

Fraud takes an enormous financial, as well as emotional, toll on victims. It can destroy businesses and ruin financial lives. Many individuals, businesses, and organizations are affected by scams and other fraudulent activity on a daily basis. A report in the American Journal of Public Health estimates that 1 in every 18 older adults experience some form of fraud or scam each year. Often, they are too embarrassed to report it or don’t know where to go to do so. With the complexity of ongoing identity schemes, the number of victims impacted are on the rise. According to the Insurance Information Institute , the amount stolen was $16.8 billion last year alone, an increase of 12 percent from 2016.

To assist with recognizing and avoiding fraud, the American Association of Daily Money Managers (AADMM) has developed a list of common scams that are becoming more prevalent each year. Here is information on three of these scams.

FUNERAL/CEMETERY SCAMS

Some funeral homes may try to take advantage of a grieving family by trying to sell them products they do not need or by adding fees for additional services that they don’t really want. Examples may be attempts to sell them an expensive fancy casket, convincing them to get embalming prior to cremation (almost never required) or selling a rubber gasket to preserve a body (they do not work).

The “Funeral Rule,” passed in 1984 and which is overseen by the Federal Trade Commission, sets forth certain guidelines that funeral homes must abide by. These include rules that the funeral home must itemize their prices, offer products individually (although they may offer package deals), and allow a family to bring in caskets from third party vendors (such as Walmart or Costco). Even with these rules, some funeral homes are unscrupulous and violate them. Read more.

TELEMARKETING/PHONE SCAMS

Many older adults enjoy talking on the phone. It’s a great opportunity to communicate with family members, friends and acquaintances. However, the telephone is also widely used by scammers to prey on unsuspecting individuals, especially seniors, who are often the victim of these fake telemarketing calls.

Scammers will say anything to cheat people out of their money. Some may appear to be very friendly — using your first name, making small talk, or asking about your family. If you receive a call from someone saying that you’ve won money in a sweepstakes or contest you haven’t entered, but you just need to send money to claim your prize, be aware this is probably a scam. Contests and prize scams are on the rise. These fraudsters are difficult to catch because there is no paper trail and the calls cannot be traced. Read More.

INVESTMENT/PONZI SCHEMES

Seniors and other vulnerable populations are often targeted by investment fraudsters. Common scams include:

  • Ponzi schemes in which early investors are paid with the assets of later investors
  • Bogus promissory notes
  • Offshore market instruments
  • Oil and gas investments
  • “Risk free” investments

If you encounter any of these situations, first and foremost, talk with trusted advisors or family members before making any investment decisions. Take time making investment decisions and verify that sellers are licensed and registered to sell products by visiting investor.gov or your state securities regulator. If you do not know the state securities regulator, visit nasaa.org or call 202-737-0900. Read more. 

Here are some additional tips and resources to prevent fraud and identity theft. Click here to download a full copy of this article.

Daily Money Managers (DMMs) can help protect their clients by acting as a first line of defense against fraud. Using their experience in financial matters to monitor and recognize suspicious activity, they help prevent their clients from falling victim to various scams. In the event that fraud is detected, DMMs can also work with clients toward resolving the issue. To find a DMM, please visit AADMM.com.

 

The American Association of Daily Money Managers (AADMM) is a national membership organization representing individuals and businesses in the growing profession of daily money management. These professionals provide financial services to seniors and older adults, people with disabilities, busy professionals, high net worth individuals, small businesses and others. AADMM’s mission is to support daily money management services in an ethical manner, to provide information and education to members and the public, and to develop a network of dedicated professionals. Click here to learn more about AADMM.

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

Three Ways to Streamline Your Bill Paying

Welcome to the New Year, a time for fresh starts. For many people, keeping track of bills and paying them on time can be a hassle. Here are three daily money management techniques you can use to make a fresh start and streamline your bill paying.

1. Create and use a financial calendar

A financial calendar keeps track of payment due dates. This helps you avoid late payments and their associated penalties and fees, which can be costly. You can also have your financial calendar keep track of regular income deposits, remind you to review your account statements, and to reconcile your accounts.

There are many ways to keep a financial calendar. The method isn’t important; choosing one that you will actually use is. Those who like pen and paper can dedicate a 12 month calendar for this use, keep track in a notebook – one page for each month, or create a chart on a single piece of paper. Those who prefer electronics can use financial software, calendar reminders, apps, bill payment services, and spreadsheets.

To create a financial calendar, comb through your bank statements, bills and checkbook register to find all the bills you pay and their due dates. Locate your regular income and deposit dates. Transfer this information to your calendar.  When noting when to pay bills, leave sufficient time for the payments to reach the vendor.

2. Automate your bill payments

Automated bill payments save significant amounts of time. You don’t need to handwrite or print checks, or spend time making online bill payments. You save money on stamps. Electronic payments are also considered more secure than mailing checks. When payments are set up to arrive before their due dates, you don’t need to worry about forgetting to pay a bill and incurring late fees.

There are two basic ways to pay bills automatically:

  • Automatic or direct debit is where service providers take the funds directly from your bank account or charge them to your credit card. The exact amount due will be paid each time.
  • Online bill payments are where you log on to the bank’s website and instruct the bank to send payments to vendors. You can automate payments to be sent regularly on the dates you predetermine. If there are variations in the amount due, you will need to make adjustments.

Many banks will gather bills that can be sent electronically. You can then view the bills on the bank’s website.

There are also independent online bill paying services. These sites help you aggregate your electronic bills and set up automated payments from one or more bank accounts.

Some of my clients express concern about losing control over their bill payments or not knowing how much money is being deducted from their checking accounts. When companies debit your account, you will receive a bill before the money is deducted. This gives you time to review the bill and call the company with any concerns.

If you hesitate to have vendors automatically draft your primary checking account, you can reduce your exposure by charging bill payments to your credit card or by setting up an auxiliary “bill-pay” bank account from which they withdraw the funds. With an auxiliary account, you can keep the balance to just a little more than what is needed to cover the bills. You will need to monitor the account balance and regularly transfer funds into the account to cover the bill payments. Transfers can be automated from your bank’s online banking feature.

3. Prepare for large lump sum payments

I have frequently seen people struggle to pay large bills that are due once or twice a year, or irregularly.  These bills include property taxes, insurance premiums, heating fuel pre-buy programs, and estimated income taxes. You may have others. When people don’t plan for these bills, they have cash flow problems. The trick is to set aside money each month so you have it in-hand when these payments are due.

To figure out how much you need to save each month, determine the annual amount due and divide that amount by 12 months.

Many people struggle to keep these reserves in their checking or savings accounts. If the money is there, they see it as available to spend. One technique is to remove it from your primary account and store it in an account dedicated only for this purpose. Set up an automatic transfer from your primary account to the “storage” account. If your employer can do this, have money from each paycheck direct deposited to the storage account. (To determine how much to save, divide the total amount you need to save each year by the number of pay periods in a year.)

If you do not trust yourself to not raid this account for purposes other than the bills that this money will pay, make it hard to reach. Open it at a different bank. Skip setting up online access. Do what you need to do to keep this money available to pay those infrequent big bills.

By employing these techniques, you can make a fresh start this year and reduce a lot of stress around paying your bills.

 

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 

 

 

New VA Rules for A&A

The Veterans Administration recently updated its rules for veterans to qualify for needs based pension benefits. My November blog post, “Know the Rules When Applying for VA Pension Benefits” included information which is now outdated. This post discussed Aid & Attendance and Housebound Benefits, supplemental benefits available to low income veterans and their survivors under the Veterans Administration (VA) pension program.

On September 18, 2018 the Veterans Administration issued new rules regarding veterans and their survivors’ eligibility for the needs based Aid & Attendance program. The new rules went into effect on October 18, 2018.

The previous rules were not well-defined, making it both difficult for Veterans and their advisors to plan, and simpler for high net worth claimants to qualify. The rules are now more straightforward.

For need based programs, the VA has established a maximum net worth in order to qualify, and implemented a 36-month look-back period for the transfer of assets.

Veterans cannot have assets totaling more than $123,600.

  • This amount is also the maximum “Community Spouse Resource Allowance” allowed by Medicaid. It will increase when Social Security raises the cost of living allowance.
  • Net worth includes the veterans and certain dependents’ monthly income. Monthly income is multiplied by 12 months and added to the applicant’s assets.
  • Qualifying medical expenses can be deducted from income. The VA has clarified which medical expenses qualify.
  • The claimant’s primary residence and two-acres are exempt from the net worth limit. If the veteran or the surviving dependents own more than two-acres of land, other rules apply.
  • Vehicles used for personal transportation, personal items, household furnishings, and pre-paid burial plans are excluded from assets.

There is now a three year “look-back” period.

  • There may be a penalty assessed when a claimant transfers assets during the 36 months immediately prior to submitting an application. The penalty is a specified amount of time, based on the transferred assets, a claimant must wait before receiving benefits. Asset transfers include making gifts, setting up trusts and purchasing certain financial products.
  • The penalty period applies only to transfers of assets over the $123,600 asset limit. If a veteran’s net worth is less than $123,600 and he or she transfers some assets, there is no penalty. If the veteran’s assets total more than $123,600, he or she will be penalized for amounts transferred over the asset limit.
  • There are exceptions to the new transfer penalty rule such as when the claimant sets up a trust for a disabled child, or was a victim of fraud or unfair business practices related to the sale of financial products.
  • The penalty period cannot exceed five years.

This is a very general overview of the Veterans Administration’s changes to its Aid & Attendance program qualification rules. The VA has made many new points of clarification. If you or your loved one would like to explore or apply for VA pension benefits, I recommend consulting a Veterans Administration accredited claims preparer. For a searchable list of accredited preparers, which includes veterans’ service organization representatives, independent claims agents and attorneys, visit va.gov/ogc/apps/accreditation/index.asp 

 

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 A special thank you to Attorney Glenn Jarrett of Jarrett & Luitjens Estate & Elder Law in South Burlington, Vermont.

 

How to Choose a Credit Card

There are many credit card offers available to us.  They come in the mail, reach out to us in advertising, and are on display at airport and store counters. We know people who have found the best credit card ever and think we should have it too.

If you come across a credit card offer that seems really great, or you are actively looking for a new card, you will want to make your choice carefully.

The trick is to find a credit card that best suits your payment and spending habits.

Here are five things to consider:

1. Interest Rates

If you carry a balance on your card, you pay for borrowing that money. This interest can add up to a significant amount of money depending on the amount of your balance, how many months you carry the loan, and your interest rate. You want to look for a card with a low rate.

Some credit card offers give a grace period of several months with no interest when you transfer a balance. Pay attention to the length of the grace period and the anticipated interest rate once the grace period ends.

If you pay off your balance in full each month, the interest rate is less of a concern.

2. Annual fees

Some annual credit card fees are pretty hefty. If you are considering a card with such a fee, analyze whether the card’s benefits will at least cover the fee. If, for example, the annual fee is $250, will you make enough use of the perks or spend enough on qualifying purchases to earn more in rewards than the annual fee? There are plenty of cards with no annual fees that offer decent rewards.

3. Rewards

Reward cards benefit people who pay off their credit card balance in full each month. If you carry a balance, the amount you pay in interest could be more than the rewards.

There are many types of reward cards. Look for one that matches your spending. Do you use your credit card frequently for travel and restaurants? Or, do you spend primarily on gas or groceries? Consider the complexity of the rewards program. Do you need to navigate a confusing point system to claim your rewards?

4. Cash Back

Cash back credit cards without complicated point systems are often the simplest to understand. These cards give you back a percentage of what you spend with the card. Some cash back cards credit the amount you earn to your statement, reducing your payment. Others send it to your bank account for you to spend. Some give you a choice. As with reward cards, these cards benefit consumers who pay their balance in full each month.

5. Brands

Credit cards tied to a brand, such as an airline, hotel chain or retailer, work best for people loyal to that brand. If you typically search for the best deal, a credit card tied to a brand is probably not a good choice. You may not spend enough to qualify for the rewards.

With so many credit card programs available, I recommend you determine what is most important to you. Then look for cards with that feature at the lowest interest rate possible.

 

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 

Know the Rules When Applying for VA Pension Benefits

The Veterans Administration provides many benefits for our veterans. While many of us are familiar with health care benefits, the VA also provides home loan guaranties, education assistance, and employment assistance programs, to name a few. One important benefit for low income veterans and their survivors is the pension program.

The Veterans Administration (VA) pension program is needs-based, and is designed to provide supplemental income to veterans and their survivors when the veteran:

  • Was honorably discharged
  • Served during a period of war
  • Has low income and few assets
  • Meets age and/or disability requirements

When veterans and their survivors qualify, their VA pension be supplemented with additional funds under the Aid & Attendance and Housebound benefits. These benefits assist people who are housebound due to disability, have limited vision, are confined to nursing homes, and/or need the help of another person to perform personal functions.

When applying for benefits, you can submit an application yourself or seek assistance.

When seeking assistance, you will want to know the VA’s rules.

Authorized claim preparers

An individual helping to prepare your claim must be accredited by the VA. This ensures applicants for VA benefits receive qualified assistance in preparing and presenting their claims.

The VA accredits three types of individuals:

  • Veterans Service Officers who are affiliated with VA-recognized veterans service organizations (VSOs)
  • Independent Claims Agents
  • Attorneys

Claim preparation fees

Fees can be charged only in certain instances.

  • Veterans’ service organizations provide free assistance with filing a VA pension claim.
    • VSOs include The American Legion, Military Order of the Purple Heart, Vietnam Veterans of America, Disabled American Veterans, Veterans of Foreign Wars, AMVETS, and Paralyzed Veterans of America.
  • Accredited attorneys and claims agents may not charge a fee for preparing and presenting a claim.
    • Preparing and presenting a VA claim includes gathering the necessary information, completing the application, submitting the claim to the VA, and communication with the VA on behalf of the claimant.
  • Accredited attorneys and claims agents may charge a pre-application consultation fee. The rules around this are tricky.
  • If you go for a consultation and say you intend to file for VA pension benefits, the accredited consultant may not charge you.
  • If you say you are exploring the possibility without expressing an intent to file, they may charge a fee for general advice about possible eligibility for benefits.
  • If the VA denies your claim, attorneys and claims agents may charge for work done after you file a “Notice of Disagreement.”

Sales of financial products

If an attorney or a claims agent is also a financial planner, he or she may not use the VA accreditation to sell or promote financial products.

Reducing your assets to qualify

Some organizations sell financial and estate planning services, such as annuities and trusts, to help veterans lower their assets to qualify for the pension program. The VA frowns on this practice.

The VA is well aware some people abuse the intent of the pension program by reducing their assets before submitting an application. In response, to “maintain the integrity of the pension program” the VA has proposed a 36 month “look back” period for calculating benefits. If implemented, the VA would scrutinize and question any asset transfers (including the establishment of trusts and the buying of annuities) in the 36 months preceding the claimant’s application for benefits. Disallowed transfers could lead to penalties not to exceed ten years. In the meantime, an attorney familiar with the VA’s rules should be consulted before transferring any assets to qualify for pension benefits.

If you or your loved one is considering applying for VA pension benefits, you want to be aware of the VA’s rules around the application process. You do not want to make any unnecessary payments for application preparation, and you do not want to make any mistakes that could jeopardize your application.

The VA pension benefit program has many details, rules and nuances. This blog is a general overview only. Please use the following links for more information and to locate resources in your community:

General overview of Veterans Administration benefits: https://www.benefits.va.gov/benefits/

Detail and eligibility on Veterans pension benefits: https://www.benefits.va.gov/pension/vetpen.asp

Detail and eligibility on Aid & Attendance and Homebound benefits: https://www.benefits.va.gov/pension/aid_attendance_housebound.asp

Information on how to apply for pension benefits: https://www.benefits.va.gov/pension/index.asp

Searchable list of accredited VSO representatives, agents and attorneys: https://www.va.gov/ogc/apps/accreditation/index.asp

VA Publication, What Veterans And Their Families Should Know When Applying For Department Of Veterans Affairs (VA) Pension Benefitshttps://www.benefits.va.gov/PENSION/Pensionprograminfo.pdf

 

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 

Estate Planning: Not a Game of Hide and Seek

This week’s blog is a guest blog from Attorney Jennifer Luitjens of Jarrett & Luitjens Estate & Elder Law.

Games are usually a lot of fun, but you don’t really want to play hide and seek with your estate planning documents.  After you have signed and implemented your plan, you may want privacy, but you should not hide your documents from everyone.  If you excel at concealing, it may not be found when needed.  How and with whom you share will depend upon the document and your goals, but here are some considerations:

Will — while this document has no effect until after death, it has zero effect if never discovered; you can store the original:

  • In a fire-proof safe at home, if someone else knows location and its key
  • In a safe deposit box at a bank, if someone else has joint access and a key to the box; without a surviving joint owner, no one will be allowed in the safe deposit box after your death without Court authority; if the joint owner cannot locate a key, there will likely be additional procedures and costs involved in accessing the box
  • At the Probate Court in the county in which you live, for a modest fee (currently $30); however, if you move out of the county or update your will, it will be necessary to either retrieve your original will or replace it with the updated version

Trust — a revocable living trust is effective during your lifetime, and the Trustee may need to produce a copy of it, or a Certificate of Trust, when managing its assets.  While you may be your own Trustee, if you resign, become incapacitated, or die, a Successor Trustee will need to have a copy.  A copy is often acceptable in place of an original, but either should be stored as follows:

  • In a fire-proof safe (see prior Will discussion); or
  • In a safe deposit box (see prior Will discussion)

Power of Attorney — although a financial Power of Attorney is extremely powerful and susceptible to abuse by the named agent, it is only effective during your lifetime, and its existence should at least be known to a trusted individual.  Many powers of attorney are effective immediately and do not require a determination of medical incapacity, but they have no useful life if undiscovered.  Copies will often be accepted, but an original is sometimes necessary, such as for recording purposes.  The original, and any copies, should be stored as follows:

  • In a fire-proof safe (see prior Will discussion); or
  • In a safe deposit box (see prior Will discussion)

Advance Directive — an advance health care directive (Living Will) also grants an enormous amount of decision-making power to the named agent, but it cannot override the wishes of the patient.  To ensure it is available when medically needed, you should share it as follows:

  • With your medical provider;
  • With your named agent(s); and
  • Filed with Vermont’s free Advance Directive Registry

Jennifer R. Luitjens is a partner at Jarrett & Luitjens Estate & Elder Law in South Burlington, Vermont. She is certified as an Elder Law Attorney (CELA) by the National Elder Law Foundation (NELF), a non-profit organization accredited by the American Bar Association.  Please visit her at https://vtelaw.com/

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 

 

Plan Now for the Holidays

It’s time to plan for the holidays. “Wait a minute,” you might think. ”School just started and Halloween hasn’t yet arrived! Why should I think about the holidays now?”

Without planning, the holidays, which I will define as the period of time from Thanksgiving through New Year’s, can put financial strain on families. When unprepared for the additional expense, many people overspend. They put purchases on credit cards to be paid off later with significant interest. This can make the holidays quite expensive and stressful. It does not have to be this way.

The first thing to do is to make a plan. Consider all the categories of expenses associated with the holidays. In addition to gifts, there are special foods, parties, entertainment, travel, charitable donations, etc.  Make a list of all your anticipated spending categories and determine how much money you need for each one. For gifts, write down how much you will spend on each person. Total it up. This is the amount you need to save between now and the end of the year.

One source of money is your paycheck. Divide the total amount you need by the number of pay periods remaining this year. This is the amount you will need to contribute each pay check between now and the end of December. If it is too much, go back and reevaluate each category.

Another source of money is rearranging your current spending. If you can reduce one expense, you can earmark the savings for the holidays. Say you spend $40 each week for dinner in a restaurant. If you switch to dining out every other week, you could save $1,040 in 12 months. Eliminating a $5 daily weekday sandwich or specialty coffee can save $1,300 a year. Are you paying for services you don’t use or are under using? Consider eliminating that expense or switching to a less expensive plan. Finding one way to reallocate your money can go far in helping to cover holiday costs.

You can also reduce holiday expenses. Then you will need less money overall. Here are some ideas:

  • Gifts: Can you give fewer gifts? With extended family, adults can draw names, or perhaps only the children receive gifts. Some people on your list might appreciate a gift of time. Agree to price limits.
  • Decorating: You can find holiday decorations in your home and backyard. Use every day items in unique ways or add festive bows and ribbon. Check out second hand stores. Find creative ways to wrap gifts and reuse gift packaging. Magazines and sites such as Pinterest offer ideas.
  • Entertainment: It is fun to go to the theater and attend concerts at holiday time. Can you find free performances? Consider other low-cost types of entertainment. You can go sledding or ice skating, watch classic holiday movies, bring friends or family together to bake cookies, drive around in the evening to look at holiday lights, or find a place to volunteer.
  • Parties: Consider renting or borrowing a special holiday dress instead of purchasing it. Hold a pot luck. Throw a dessert party instead of a dinner party. Use costly ingredients, such as expensive meats, as side dishes. If you have freezer space, buy food in advance when it is on sale. Cook from scratch and use seasonal foods.

Saving for the holidays is easier when you open a dedicated savings account. You can have money automatically transferred to your holiday account regularly. If you fear you will raid the funds for non-holiday spending, make the account hard to access and don’t get a debit card.

Once the holidays are here, follow your plan. When you shop, stick to your list. Leave your credit card at home and use cash. Shop on a full stomach. Avoid opening store credit cards as they typically have very high interest rates. Use coupons, reward points and discount offers on social media.

It’s important to write down on paper every purchase and keep a running tally. While this is work, it helps prevent overspending. If you spend more than you planned in one category, reduce your budget in another.

Once the holidays are over, keep your special savings account open and continue to add to it each month. When the holidays roll around again, you will already have the funds.

Although it is early, I wish you Affordable and Happy Holidays!

 

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.