Month: October 2016

No excuses: Preparing for earthquakes goes beyond the ‘Big One’

(BPT) – Through September, more than 2,700 earthquakes with a magnitude of at least 2.5 have rattled the contiguous United States in 2016, according to the U.S. Geological Survey.

A majority of those tremors are harmless and might provoke little more than a “Did you feel that?” However, the pure volume of seismic activity should spur more homeowners to be more proactive in mitigating any potential damage.

Earthquakes are unlike any other natural calamity in that there aren’t any warning signs or advanced notice that one will occur. There isn’t a natural earthquake season and, as a result, homeowners may put preparation on the back burner.

Sunde Schirmers, product management director at USAA, believes these common excuses can put property homeowners in a bind should the rumbling come knocking on their doors. Schirmers says it is important to practice emergency plans with your family, review your insurance coverage and prepare your property to help minimize damage.

“Earthquakes don’t happen where I live.”

In a game of word association with a typical U.S. citizen, the word “earthquake” would probably elicit responses like San Andreas and California. Given how quakes are depicted in movies, television and other media, it’s not surprising. Earthquakes are a west coast thing, right?

Wrong. The truth is that every state has a record of earthquakes. In 2015, for example, more earthquakes occurred in Oklahoma than California. Just because one hasn’t hit recently doesn’t mean one won’t hit eventually. Sure, living along the Pacific Coast — from Washington down through California — means having exposure to earthquakes, but there is also a major fault in the Midwest that affects Missouri, Arkansas, Illinois, Kentucky and Tennessee.

“I can’t protect my home against major earthquakes.”

No, there is not a lot homeowners can do when the big one hits. Earthquakes reaching a 7.0 magnitude are considered major and can cause a significant amount of damage. Gladly, those are rare.

The bad news is that earthquakes need only reach a magnitude of 4.0 to cause minor damage according to the Modified Mercalli Intensity Scale. Of the 2,700 earthquakes mentioned above, more than 60 reached that threshold.

Household damage from a minor quake is most often broken dishes and shuffled wall decor, but it could stretch beyond that without some basic preparation.

Potential trouble spots could include:

* Chimneys: A few well-placed metal straps may prevent it from toppling — and taking chunks of wall with it.

* Water heaters: Brace your household water heater to the wall. A fallen water heater may expose pipes and lead to flooding and even fire.

* Windows: To prevent shattering, install protective safety film on the inside of your windows to minimize damage from a temblor.

“My homeowners/renters insurance should cover any property damage.”

Simply, earthquake damage is not covered by a standard homeowners insurance policy, but coverage can be added by endorsement or by purchasing a separate policy. Though USAA renters insurance includes earthquake coverage, many leading insurers do not. The seemingly growing prevalence of tremors should make supplemental earthquake coverage a serious consideration for homeowners.

In addition, the cost of a serious quake could devastate your finances. According to a 2010 study by the Consortium of Universities for Research in Earthquake Engineering (CUREE), estimated damage resulting from an earthquake with a magnitude of 6.0 will equal more than 30 percent of your home’s value.

According to Schirmers, for most states, the average cost for coverage is between $100 and $300 annually. California, Oregon, Washington and Alaska tend to have higher average premiums, with an average cost around $800.

For more information on earthquake preparedness and insurance, visit and search “earthquake.”

Scaring up cash: Liberate yourself from haunted finances and prosper

(BPT) – Did you retire the checkbook and register years ago? Do you now pay your bills automatically? If you answered yes to these questions, then you may be in the dark about your account balance(s) and exactly where your money is going. One or more skeletons could be lurking in your financial closet. Oh, the horror!

Fear not this Halloween season. Let’s get you to a healthier, happier place. It’s time to reverse the ghastly trends bewitching your finances and scare up some cash for life’s next big moment.

1. Prioritize for less trick or more treat.

To get the most out of your money, you need priorities. Start with a list of core expense categories: home (mortgage, repairs, utilities), health (meals, gym, medical), vanity (clothing, hygiene), entertainment (movies, sporting events), travel, commute (car loan, gas), savings and miscellaneous. Organize as many expenses as you can under these. When one doesn’t fit, boot that skeleton and it won’t spook you any longer. Now, order the categories from most to least important. When money is scarce, priorities help you to reduce or cut an expense altogether. Here’s a budget tracker to help you get started.
TIP: Any system you create or adopt to eliminate distractions and better sort through the numbers will increase your ability to make sound financial decisions.

2. Look into your haunted habits.

Pull aside the cobwebs on your checking account and closely examine the ghosts of intentions past. Maybe it’s a gym membership you no longer use, or perhaps you’re spending too much on a hobby. Here’s one that can really haunt cash flow — dining out too often. It’s easy for new expenses to creep in, stay too long and burden you. Some begin as an investment in a good thing, but then life happens. Be honest — you won’t finish all you start. The wind shifts and so will you.

TIP: By facing the realities, you can re-align your spending with your greatest wants and needs.

3. Don’t get spooked.

Financial habits form easily. While some can be difficult to reverse, few things are as frightful as a shrinking account balance! Be strong and level with yourself. Which expenditures can you continue to afford? Which need to be retired? Calm those eerie voices in your head that won’t leave you alone. You should be doing this. You could be there instead. The calling may be medical expenses, a bigger car to accommodate the kids, a much-needed home repair or a vacation.

TIP: As Benjamin Franklin warned, “Never leave that till tomorrow which you can do today.”

4. Be patient, but be constant.

Depending on the amount of money you’re trying to scare up, it could take months or years to save, so start now. Monitor progress and hold the course dutifully. The ghosts that once haunted your cash flow probably lingered for months (if not years). Saving money often takes time, and while the impact of your new financial priorities could produce an immediate bump, most will take longer to deliver. Some experts in supernatural phenomena recommend you clean your house regularly to discourage ghosts from returning. Some believe ringing a bell is a good practice.

TIP: Set alarms in your phone to encourage regular reviews of expenses and other sound financial habits.

5. Live peacefully and prosper.

The hard work has been done — you faced the ghosts, weren’t spooked, retired them and got your financial house in order. Congratulations, you chose the future over the past! Now, go forward with renewed energy.

Here are a few suggestions for the cash you’ve scared up:

* Open or boost a savings account.
* Take on a certificate with a yield.
* Invest in a money market fund.
* Enjoy that vacation you’ve wanted to take.
* Contribute to your retirement savings.
* Get a head start on home improvements before the spring.

“You rarely hear anyone say, ‘I started saving for retirement too early in life,’” says Kevin Driscoll, vice president of advisory services at Navy Federal Financial Group. “If you start saving earlier than later, you’ll be financially healthier throughout your retirement years.”

TIP: Align your money closely with short and long-term goals to reduce anxiety and enhance your well-being.

Get started.

Money matters are so much more than a series of cold numbers. How you manage your financial house can bring warmth to your life or haunt your cash flow. Here’s to taking a few sound steps toward scaring the horror from your finances.

“Invest in your future today and reap the rewards of financial freedom later,” says Thomas Racca Jr., manager in Navy Federal’s Personal Finance Management division. “The choice is ultimately up to you. If you work hard at following these steps, then you can achieve your personal goals and also enjoy the journey along the way.”

Open Talk About Open Enrollment: 5 Surprising Ways Americans React to the Annual Process

(BPT) – We all have annual to-do’s — from filing our taxes to celebrating our birthdays, these once-a-year rituals are in the fabric of our lives. Some tasks we enjoy more than others, but each holds significance. One of these important yearly tasks is selecting your insurance benefits at work during what is commonly referred to as open enrollment. With the stresses of work and life already bearing down on us, having to choose from a sometimes complicated set of benefit options can be a struggle. But is this process really so bad? How do people really feel about open enrollment?

For the second year in a row, VSP Vision Care, the nation’s only not-for-profit vision care company, conducted the “Open Talk About Open Enrollment” national survey to get to the bottom of what this time period really means for people — and some of it may surprise you.

Here are five key takeaways revealed by the 2016 survey:

1. You may not know it, but you’re probably not looking forward to it.

More than a third (36 percent) of respondents reported approaching open enrollment with “dread” or “annoyance.” However, more than half (53 percent) of respondents felt “satisfied” or “relieved” when the process was over.

2. Most people take their time with the open enrollment process, but don’t push the deadline.

Among all respondents, the majority (54 percent) chose “Relaxed Rule Follower” (not early, not last-minute) to describe the timeliness with which they actually complete open enrollment. Just over a third (35 percent) chose “Eager Completer” (get it done right away) and the remaining respondents (11 percent) went with “Persistent Procrastinator” (put it off until the last possible moment).

3. The ultimate question: open enrollment or doing your taxes?

In a list of other annual to-dos, open enrollment landed in the middle when survey respondents were asked to rank in order what they would most like to do:

1. Doing your taxes
2. Celebrating your birthday
3. Completing open enrollment
4. Doing holiday shopping
5. Getting your yearly physical

4. Public speaking trumps all.

When included on a list of possible things to never have to do again, open enrollment came in last, with the majority preferring instead to eliminate speaking in public, waiting in an airport security line, and going to the dentist (in that order) from the rest of their lives.

5. Vision plan knowledge and importance are up.

The number of respondents who reported feeling “more knowledgeable” about their vision benefits increased by 11 points this year (66 percent compared to 55 percent in the 2015 survey). Additionally, the number of respondents who ranked having a vision plan as “important” or “very important” was up by 10 points (83 percent compared to 73 percent in 2015). Vision care is typically one of the easiest, quickest and least expensive benefit options to review and select. When it comes to vision care, just “check the box”. Learn more at

Chores earn high marks as financial teaching tools, parents agree

(BPT) – When you pay your child $5 to clean the garage or $6 to mow the lawn, you’re accomplishing far more than just getting the tasks done. A majority of parents use chores to teach their kids that money should be earned, a new study reveals.

“Sixty-eight percent of parents believe kids should get an allowance for doing chores,” says Troy Frerichs, director of wealth management at COUNTRY Financial, which sponsored the survey. “Assigning kids chores and paying them for accomplishing their tasks is one way parents can teach their children about finances and the value of money, in a way that they can easily understand. Paid chores also instill work ethic, impart an understanding of the value of money, and inspire financial independence.”

In teaching kids about the value of money, today’s parents appear to be trying to spare their children some of their own pitfalls when it comes to learning about finances. The survey found that nearly half of parents learned about money on their own, and only 39 percent were taught by parents or family members. Among millennials, 48 percent learned from their parents.

Chores are a powerful way to help children learn money management skills that will be valuable throughout their lives.

Using chores to teach

COUNTRY Financial, which recently launched the free ChorePal app to help parents teach children the basics of money, asked a panel of family bloggers how they use chores to help teach financial lessons to their children.

* Ari Adams, who blogs at, suggests playing a grocery-themed game with children. Gather grocery items from home and put price tags on everything. Give children play money to shop with, making sure you have more groceries than they have money. The “shortfall” teaches children the importance of planning and making careful selections. Older children can use coupons to make their money go farther.

* Turn “no” into a teachable moment. “When a child asks for something in a store, instead of just saying no, take the opportunity to teach a financial lesson,” suggests Paula Rollo of “Show your child something you want to purchase in another area of the store, and explain why that item, along with the toy he or she wants, is staying at the store. This helps children understand budgeting and smart spending.”

* Establish a time for chores. Just as you have set hours for work, set kids up with a time of day for doing chores. “This will teach them how to plan ahead to get their responsibilities done,” Rollo says. “It will also help them to start creating their own daily schedules so they have time to do everything they want to get done each day.”

* Introduce spending, saving and giving concepts. “Giving teaches them to be generous first,” Kristen Chidsey of says. “And saving teaches money management skills at an early age. If children can master these lifelong skills at an early age, they will have a better chance of being financially responsible adults.”

* Teach children how fortunate they are by serving with them at local food banks, visiting nursing homes or children in the hospital, making cookies for a friend, or helping with a community cleanup project. “When your children see the needs of others, it opens their eyes to how blessed they are,” Chidsey says.

* Tap technology to communicate money and chore-related lessons. The ChorePal app, which is available on Apple and Android devices, allows parents to set chores and rewards, helps kids see their earnings add up as they complete tasks, set long- and short-term goals, and even earn fun badges for accomplishments. Parents and children can discuss household chores, schedule them, and agree on rewards. Learn more at To download the free app, visit or

4 popular benefits that can help protect your retirement savings

(BPT) – Would you plug a leak if it cost $6 billion a year?

That’s the amount of “leakage” or retirement savings lost every year from retirement savers defaulting on their loans from 401(k) plans, according to a 2014 report by the Pension Research Council (PRC), Borrowing from the Future: 401(k) Plans and Loan Defaults. Draining retirement savings for other purposes ultimately makes is harder to prepare for retirement.

But loans and withdrawals from 401(k) plans are sometimes the only options available to workers who are faced with unexpected financial emergencies.’s 2016 Financial Security Index finds that 29 percent of Americans have no savings to address emergencies. But other options are increasingly becoming available.

“Employers are focusing more on improving their employees’ financial wellness by making available educational programs and introducing financial products that can help workers protect their savings,” says Tom Foster, spokesperson for workplace solutions at Massachusetts Mutual Life Insurance Co. (MassMutual). “It’s important to make sure you’re aware of all of the benefits your employer makes available and how they can help you manage your personal finances.”

Benefits are being introduced at the workplace to help employees address financial emergencies such as a critical illnesses, disabilities, accidents, big car repair bills or other misfortunes without cracking open their retirement savings:

* Pre-approved emergency loans: Some programs allow employees to obtain credit online without having to fill out forms or visit a bank. The most helpful programs prequalify employees for credit based on their employment and their ability to repay. Often, employees can repay the loans through payroll deduction. The rates on such loans can be as low as 6 percent.

* Critical illness coverage: Medical treatment and other expenses related to a serious illness can quickly run into several thousands of dollars, especially with the growing prevalence of high-deductible health care coverage. Critical illness policies provide cash for insureds to pay for a myriad of expenses, from medical deductibles and co-pays to pharmaceuticals and comfort-related costs if an employee or a family member suffers a serious illness.

* Accident insurance: Few emergencies can derail personal finances more quickly than an injury caused by an accident, especially for those who live paycheck to paycheck. More than 40 million injuries are treated by emergency rooms every year, according to the 2014 FastStats report on Emergency Department Visits by the U.S. Centers for Disease Control. Policies typically pay cash in a lump-sum to cover anything from medical insurance deductibles and co-pays, down time from work and other unanticipated expenses.

* Disability protection: Many people can’t make ends meet for more than a few weeks without a paycheck. A disabling accident or illness can easily knock someone out of work for weeks or even months. Group disability policies are available to cover short-term disabilities that last as long as six months or long-term disabilities that can take years or even become permanent. Many workers should consider securing a policy that protects at least 50 percent of their paycheck and buy additional coverage of up to 60 percent or 70 percent, if available.

Many employers make these benefits available on a voluntary basis, meaning employees pay the premiums at relatively low group rates.

“Taken together or individually, these protection benefits can help shield you against financial misfortunes and give you an alternative to tapping your retirement savings,” Foster said. “Then, as your financial situation improves, you can gradually boost your personal and retirement savings to enhance your financial wellness.”

Wireless home phone devices offer savings and mobility

(BPT) – It seems more and more of us are “cutting the cord” these days, moving away from hard-wired connections to cable TV, internet service and more. The freedom to go wireless offers options that we couldn’t have imagined just five or 10 years ago — you can stream movies on your phone while sitting in the backyard, or do a Google search as you wait in line at the grocery store.

The last bastion of hard-wired service, the good old home telephone, is undergoing this transformation as well. Cellular providers now offer devices that let you turn your traditional home phone into a line on your cellular account. You keep your home phone number, and even continue using your existing home telephone. But you’re no longer required to stay tethered to phone jacks — nor do you have to keep your home phone at home.

Small device, simple setup

Wireless home phone service is offered under various names — usually Wireless Home Phone or Home Phone Connect. It allows a regular wired telephone to connect to cellular networks as if it were a mobile phone.

Connections are made via a small device you can place almost anywhere in your home. It’s about the size of a wireless router, and contains the necessary electronics to provide voice-only telephone service to your phone from one or two jacks on the back of the unit. It also has a small radio antenna and a transceiver for the wireless side of the connection.

The only plug-ins required are your phone (or its charging base) into one of the rear jacks, and a power cord. Most wireless home phone devices also include LED indicator lights on the front to show signal strength and indicate waiting voicemail messages.

Savings on landline, long distance

If you already have cellphone service, you can add wireless home phone to your account for the cost of purchasing the device (expect to pay around $50), plus the cost of adding a secondary line for the service, which can be as little as $10 per month.

With most carriers, you’ll simply share the airtime minutes on your existing monthly cellular plan with your home phone line. Nationwide coverage is also a feature of most cellular calling plans, so in addition to your redundant landline service, you eliminate the need for a long distance carrier. There are even special rates just for seniors: for instance, Consumer Cellular, which specializes in service to users over 50 years of age, offers no-contract, post-paid plans at discounted rates to AARP members.

If you don’t currently have cellular service, you can still convert your landline to mobile simply by ordering a wireless home phone device, then signing up for a monthly service plan that covers the number of minutes you’re likely to use each month.

Never miss a call — anywhere you go

Wireless home phone service redefines the meaning of “home.” The device is completely portable, so your service is, too; you can make and receive calls anywhere you have access to a cellular signal and an electrical outlet. Set it up anywhere you want in your home — you’re no longer restricted to locations near a wall jack.

Perhaps more significantly, you can take it with you to a second home, a hotel or even a campsite and still receive calls made to your home telephone number, if cellular reception and a power source are available. It also works well with home phones that have additional handsets. By connecting the wireless home phone device to the base of your primary cordless phone, it becomes accessible to your other cordless extensions, giving you even more calling flexibility.

Making the cut

Like any cord cutting measure, wireless home phone service isn’t necessarily for everybody. Your telephone service becomes completely dependent on a cellular signal — if, for instance, the nearest cell tower experiences an outage, you’ll be unable to make anything except emergency calls. There’s also no data signal on the line, so wireless home phone devices can’t be used with medical monitoring devices or fax machines.

But if you’ve been seeking a way to cut the costs of your landline service while also keeping your longtime home telephone number, it offers a practical and affordable solution. You save on monthly service, eliminate long distance charges, and the portability offers true modern luxury, especially for “snowbirds” or retirees who travel frequently. It’s a nice way to make yourself feel at home — wherever you go!

Pension plan funding shortfalls threaten retirees in all 50 states

(BPT) – Everyone knows it is important to save for retirement in order to build a nest egg and enjoy the “golden years.” So why is it that state and local governments many times act irresponsibly when it comes to saving for the future of public employees?

Government pensions are the way in which state and local public employees like teachers, police officers and firefighters receive retirement benefits. Typically both the employee and the government set aside money each year to be invested. The investments will hopefully grow over time, and both the annual contributions and the investment growth is understood to form the pool of money public employees will be able to use once they reach retirement. That’s the theory.

Unfortunately, according to Unaccountable and Unaffordable 2016, a new, state-by state analysis from the American Legislative Exchange Council (ALEC), government pensions are being massively underfunded across the states, and now hardworking taxpayers are on the hook. What is the price tag? Across the 50 states, unfunded pension obligations now total $5.6 trillion. Now, that number sounds large at a national scale, but what does it mean for the average American? To be exact, this state pension debt equates to an average price tag of $17,427 for every man, woman and child in the United States.

There are numerous reasons why pension liabilities are so large. For one, the stock market is not growing as quickly as many assumed it would, exiting the recent economic downturn. Therefore, investments for many pension funds are not meeting expectations. The average pension fund assumes they will earn a whopping 7.37 percent on their investments over the long term. These overly-optimistic assumptions fly in the face of what many financial experts are calling a “new normal” of lower than expected investment earnings in the future.

Another inconvenient truth is that many state governments have failed to deposit the annually required contributions into pension funds every year. The urge to spend more money on other government projects, however well intentioned, has diverted much-needed contributions away from pensions and has contributed significantly to unfunded liabilities.

When pensions are unstable, millions of Americans are faced with an uncertain retirement. However, this is not only a problem for government workers — it affects all Americans. Without a sustainable solution to underfunded pensions, higher taxes will be the reality for all hardworking taxpayers.

What’s more, an increasing percentage of state budgets are being drained to pay pension benefits, with less money available for important functions like funding public schools and fixing roads. One especially sobering story comes from Illinois, where since 2009, this trend is so extreme that 89 cents out of every new dollar of education spending has gone to teacher pensions, leaving just 11 cents for salaries, textbooks, building costs and the various in-classroom costs of education. And by 2025, Illinois will spend more on teacher-retirement costs than it will spend on the classroom.

Pension funding is not a Republican vs. Democrat issue. It’s a retirement issue that affects all Americans. Unfunded pension liabilities will be harmful to the future of workers, retirees and taxpayers alike, if forward-thinking policymakers do not tackle pension reform in a timely fashion.

To find out more about how prepared your state is and to see the full report, Unaccountable and Unaffordable 2016, is available at