Crunching dollars and planning weddings: How to financially plan for the big day

(BPT) – Attending most weddings, with the exception of your creepy uncle’s third marriage, is great. You eat free food, get to dance to music and leave without having to take part in the cleanup or the costs.

It gets a little different when you’re the one footing the bill. Then you’re confronted with 127 different invitation styles, a guest list that keeps growing and awkward phone calls to cousins to tell them they can’t bring their bratty 7-year old twins.

Falling in love might have been easy and making the decision to spend the rest of your life together was probably a no-brainer. However, celebrating your love and funneling all that joy into one beautiful ceremony and one memorable party is where things get a little more complicated.

As a leader in creating credit scoring models and educating consumers on credit, VantageScore Solutions shares how important it is for couples to agree on how to manage their finances.

So let’s get into it and look at some of the financial topics you and your partner should go over.

Paying for your wedding

No doubt how to pay for your dream wedding will be one of the first conversations you’ll have with your loved one. Some people have months, sometimes even more than a year to plan and save up for the big day. Other times you may need to make a deposit or pay for something upfront and you might not have the cash to do it.

This is when you reach for your credit card.

Even if you don’t plan to use a credit card, it’s more than likely you’ll have to put some things on credit. This might include just about anything you purchase online, from the cute decorations you find on Etsy or novelty gifts you find on Amazon. In addition, many venues require you to have a credit card on file.

The point is, it’s likely that at some point you’ll use credit to pay for your wedding. When you do this, both you and your partner need to be aware of the potential perils of racking up debt. Provided you can responsibly manage the debt and have a plan to do so, your credit score won’t decline, which can lead to more purchasing opportunities in the future.

But first, you need to talk about credit with your partner.

The talk

Talking about credit might not exactly be a champagne and strawberries moment, but it is probably one of the most important discussions you can have.

Because it might be hard to get started on this topic, many couples find it’s easier to start by taking The Credit Score Quiz. This 12-question quiz is easy to take and can do a lot to reveal the knowledge gaps you and your partner may need to fill.

While the quiz is a great way to get started, resources like The Score, a monthly newsletter from VantageScore Solutions that covers all things credit, can help you continue on your conversation and guide you on your journey.

So while you’re debating what shade of off-white is right for your invitations, take the time to talk and use these credit-related resources. After the big day has come and gone, you’ll be glad that together, both of you were smart about your finances.

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How savvy Wi-Fi use saves data and dollars

(BPT) – Access to cellular data has become the lifeblood of communications in the 21st century. We stay connected to keep up with news, weather and sports, listen to music, check email, watch movies and videos or grab new apps that let us do even more. With today’s technology, a few clicks on your smartphone screen can bring the whole world into the palm of your hand.

This is great news for cellular providers, who ply us with increasingly large (and increasingly expensive) data packages to feed our modern need to surf and stream wherever we go. However, it may not be such great news when your cellphone bill arrives each month and you find yourself ponying up big bucks for cellular data.

So what’s the easiest way to stay connected without breaking the bank? Fortunately, the answer is now all around us.

Find the hotspots

Wi-Fi networks (“Wi-Fi” is short for wireless fidelity) are available just about anywhere you go these days, from hospitals to coffee shops to hotels to department stores. By connecting to Wi-Fi, it’s possible to stay connected all day long without using any of your cellular data. With rare exceptions, it’s completely free.

Wi-Fi technology allows you to connect smartphones, laptops or tablets to the internet through a communal access point, or “hotspot.” The resulting data usage is not occurring on your mobile network, meaning it does not count against the data on your cellphone plan.

It’s easy to connect to Wi-Fi by turning it on in your smartphone’s settings. By leaving it on, your phone will always be searching for a strong Wi-Fi signal, and will either connect automatically or alert you to sign-in if an available network is password protected.

More speed, more power

There are other advantages. In many cases, the speed of a strong, dedicated Wi-Fi connection will actually be faster than your cellular network. The difference might not be that obvious if you are only reading email or checking out a web page, but it is very noticeable if you need to transfer larger files.

In addition, using Wi-Fi can make a difference in extending your device’s battery life. The further you are from a cellular tower, the more energy you need for that data signal to be of any use. Wi-Fi access points are typically much closer, and therefore use less power to communicate and transfer data.

An essential “Plan B”

While hotspots are now quite common, you’ll still find yourself in locations where Wi-Fi simply isn’t accessible, especially when you’re traveling. That’s why having an adequate cellular data plan is still a necessity, even if you’re using it very little.

How much data do you really need? After you’ve started using Wi-Fi on a regular basis, take a look at your monthly cellphone bill. Compare the amount of data your plan offers to the amount you actually use. The average consumer uses about 1.8 gigabytes (GB) of data each month, which is far less than what’s included in most standard cellphone plans.

Don’t pay for more than you need

Today, many carriers tout the advantages of having “unlimited” data. The reality is that most people will never need it. See if your carrier offers a plan that’s better aligned with your actual usage, and if so, find out if it’s easy to switch.

If not, look to carriers like Consumer Cellular, who specialize in providing smaller, more affordable data plan options along with the flexibility to switch plans from month-to-month with no additional fees. This gives you the freedom to adjust your data plan to fit your specific needs, rather than paying for more than you’re likely to use.

Regularly connecting to Wi-Fi lets you preserve your cellular data for those situations when you really need it. Perhaps more importantly, it can help you save significantly on your monthly cellphone bill. It is a great way to enjoy the best of both worlds.

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How the state you live in affects your college savings strategy

(BPT) – The cost of a four-year college degree now hovers around the $100,000 mark, according to data from the National Center for Education Statistics. While high college costs seem universal these days, college savings strategies are far from a one-size-fits-all. Many factors influence how you’ll save for college, including your children’s ages when you start saving, what schools they might want to attend, and how old you’ll be when they enter college.

The factor most people don’t know about, however, is that the state you live in actually can dramatically affect how you save for education.

“Because states offer different incentives for college savings, the state you live in can play a large role in how you prioritize different savings opportunities,” says Nick Holeman, a certified financial planner with independent online financial adviser Betterment. “Tools like 529 savings plans, state tax credits and matching savings programs vary by state, creating a checkerboard of different savings opportunities.”

Why states affect college savings: 529 plans

The central reason why states have such an impact on college savings strategy is because of a special college savings account, created by the Internal Revenue Code, called a 529 plan.

States administer the plans, and so, different states can choose to offer different incentives for improving their residents’ college savings. In general, there are two types of 529 plans: pre-paid tuition plans and savings programs.

Pre-paid tuition plans allow you to pay for your child’s tuition, in advance, years before he or she will go to college. This allows you to pay current tuition prices, rather than the going rate when your child attends school in the future — when costs could be even higher. Compare that to savings plans that allow you to put money away for college, invest it so your money can grow, and forgo paying federal income tax on the earnings from your investment when you withdraw money to pay for college.

In general, 529 accounts are a great option for college savings because of their tax advantages. However, those tax savings also come with restrictions. Depending on where you live and your personal preferences, you may find these restrictions don’t outweigh the benefit of your state’s 529 plan.

Important questions to ask when building a college savings strategy

Because 529 plan incentives play such a big role in developing a college savings strategy, Holeman points to five key questions that savers should answer about their state before opening any accounts.

1. Does the state offer a match program?

According to SavingforCollege.com, 10 states currently have programs that provide matching dollars for contributions made to 529 savings plans held by low- and middle-income families. These programs may match contributions dollar-for-dollar up to a certain amount (as in Kansas) or have a tiered structure that increases the match for families with lower incomes (as in Arkansas). Other states allow employers to offer 529 matching dollars as a benefit to their employees. However, 529 match programs are only available for in-state account-holders, so if you have a 529 from Arkansas, but live in Ohio, you won’t be eligible for Arkansas’ program. If you’re eligible for a 529 match, you should consider contributing at least enough to max out that match.

2. What types of 529s does the state offer?

In addition to pre-paid tuition and savings accounts, a third type of 529, called 529 ABLE, helps people with disabilities save for college and other expenses without affecting other government benefits they might receive. Further, each of those three types of 529s can have structural differences from state to state. Some states may offer all types of plans, while others may offer only one or two. If your state doesn’t offer the type of 529 you’re looking for, you can opt for another state’s 529. Be aware though that you will likely miss out on any state tax benefits if you go with an out-of-state 529 plan.

3. What is the maximum account balance permitted?

While 529s can be a great way to save money for college, they do have limits. Every state sets a maximum account balance, and if your 529 reaches that limit, whether through contributions, investment growth or both, you won’t be allowed to make any more contributions to it. Limits vary from state to state. For example, Pennsylvania’s 529 max is $511,758, while Mississippi’s is less than half that. If you’re planning on saving for a private college or graduate school, these limits can become a factor.

4. Does the state offer a tax deduction for its 529s?

Some states offer full or partial tax deductions for 529 contributions, while others don’t. Most states only offer the tax deduction if you choose your state’s 529 plan. If you do get a tax deduction, it likely makes sense to stick with your state’s 529. If not, the tax benefits are much less.

5. What is the quality and quantity of schools in the state?

While most 529 funds can be used anywhere, there can be additional benefits to using 529 funds in the account’s home state. Before you commit to a 529 savings plan from any state, explore the availability of higher education in that state. For example, Texas has great public schools, so their pre-paid tuition program might make sense. For other states, the savings plan can make more sense though.

The key takeaway is that the state you live in can affect how beneficial a 529 plan is for you. Some people may even decide a 529 is not worth the added restrictions and instead opt to save for college in a standard taxable account.

To learn more about 529s and how they can help you save for college, visit www.savingforcollege.com. The most effective college savings strategies are part of a personalized financial plan. Learn more about setting goals to help maximize your savings at Betterment.com/financial-planning.

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Seeking a small business loan? What you should know

(BPT) – Small businesses still struggle to obtain credit; nearly half of those who applied for credit in 2016 didn’t get all the funding they sought, and 17 percent of those who didn’t apply for financing skipped it because they didn’t think they could get what they needed, according to the Federal Reserve Banks’ Small Business Credit Survey. However, a growing number of small businesses are turning to alternative sources of financing.

“The process for accessing and receiving funding can be slow and cumbersome and alternative forms of lending are greatly helping to improve the availability of financing for small business owners,” says Jacqueline Reses, head of Square Capital. “Ensuring that the financial system is more inclusive and addresses the needs of small business owners who may have been previously underserved by traditional lenders is paramount.”

The Federal Reserve study has shown steadily increasing numbers of small businesses, with annual revenues of less than $1 million, seeking financing through non-traditional sources such as online lenders. In 2014, just 18 percent applied to online lenders, while in 2016, 21 percent did.

As the alternative lending industry continues to grow, small business owners should keep five points in mind when evaluating loan offers, Reses says:

Total payback amount of a loan

Knowing how much a loan is going to cost isn’t always easy. For a small business owner, being able to see exactly how much you will need to repay and accounting for that in your budget is crucial, and you should always look for transparency. Total payback amount is the dollar value that represents all costs, so business owners know exactly what they will owe over the life of the loan. Businesses should look for this when they assess loan offers. Assessing offers solely on other metrics like APR may not always provide a fair or easy comparison.

Repayment Method

The ease of repayment is also important to consider and there are some unique options available to small businesses looking for flexibility when it comes to repayment. With Square Capital for example, a fixed repayment amount is automatically deducted from the business’s daily card sales processed through Square until the loan is repaid, enabling the business to pay more when things are busy and less if things slow down. Businesses also have the opportunity to repay early and without penalty at any time before the end of the loan term.

Speed

Traditional small business loans can take weeks to process from the time you collect all the paperwork to apply, to the time you actually get approved, to when you see the money in your account. Yet, according to the Fed’s survey, the majority of small businesses that applied for credit in 2016 did so in situations where time was a factor; 64 percent wanted to expand their business or take advantage of a new opportunity, and 45 percent needed the money to cover operating expenses.

While some funding sources have a reputation for being faster to approve, getting the money can still take time small business owners don’t have. Others have been able to tackle both of those challenges. For example, Square Capital can see the health of a small business based on its sales and transaction data, allowing it to evaluate the business’s stability and actual ability to repay over time. With this unique insight, it can assess eligibility for a loan and deliver offers right to the small business owner. From there, an application takes as little as a few clicks to complete and once approved, funds are deposited as quickly as the next business day.

Affordability

Business owners may know how much they need, but be less aware of what size loan they can afford. It’s important to accept a loan offer that your business can repay within a reasonable time period while also helping it grow.

Square Capital’s ability to use unique data to assess the eligibility of a business for a loan also enables it to provide access to loan offers tailored to a business’s cash flow, reducing the risk of businesses borrowing more than they can afford to repay. Loans are sized based on a reasonable projected payback period so that a small business can use its funds to grow and not be stuck in debt for extended time periods.

Trust

Before applying for credit from any lender, it’s important to do your research. Know how they present their offers, look for transparency and flexibility that puts the borrower first and understand customer satisfaction and lender dependability. Working with a trusted brand is important to many small business owners and should be to you as well.

While online lenders are opening up access to the financing small businesses need to run and grow, it’s important to do your homework and carefully determine which financial partner best meets the needs of your business. To learn more about small business loans through Square Capital, visit www.squareup.com/capital.

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Tips to prepare your budget before buying a home

(BPT) – It’s virtually impossible to know what size home you can afford if you aren’t fully aware of how much money you are earning and how much you are spending each month.

Start with your income: How much do you bring home after taxes and retirement plan contributions?

Next, look at your expenses: What are your necessary expenses? How much are you paying each month toward your debt? What additional expenses do you have that wouldn’t be deemed “necessary?” How much money do you have left (if any)?

This will help you see how much breathing room is in your current budget, what expenses might be on the chopping block and the space you have for additional home and mortgage expenses when buying a home.

Consider the potential costs of being a homeowner

While rent payments are generally straightforward and predictable, the same can’t always be said for homeownership costs. Your situation can vary depending on a variety of factors, but here are a few things you might need to prepare your budget for.

Property taxes: The amount you pay will depend on the area in which you are purchasing a home. This amount can be subject to annual adjustment by the municipality or local taxing authority.

Homeowners insurance: Lenders will require you to provide proof of coverage before closing. The amount you pay will depend on your level of coverage, your property and the location. Insurance costs can increase from time to time.

Private mortgage insurance (PMI) or mortgage insurance premiums (MIP): If your down payment is less than 20 percent on a conventional mortgage, your lender will require you to carry private mortgage insurance. If you have an FHA loan, you’ll be required to pay mortgage insurance premiums throughout the life of the loan.

Home ownership assistance: A company like Unison Home Ownership Investors can strengthen your down payment overnight and eliminate the need for private mortgage insurance (see their Unison HomeBuyer program). Using this method will typically save you between 15 and 20 percent per month on your mortgage payment, but you could owe a portion of the appreciation on the home when you sell.

Homeowners association fees: Fortunately, not all homes have a homeowners association to pay into. Purchasing a home with HOA-covered amenities could cost, on average, an additional $200-$400 per month.

Maintenance fees: Ah, the pitfalls of being a homeowner. The costs that would normally fall to a landlord, like fixing broken plumbing or a heater on the fritz, will now fall on your shoulders. Some suggest saving one percent of your home’s value annually for maintenance.

Utility costs: Unless your rent has included the cost of utilities, this is probably already an expense you’re used to. However, if you’re moving into a bigger home with less energy efficient appliances, you should be prepared to see an uptick.

Start living like a homeowner

If you want to avoid experiencing sticker shock after your home purchase is complete, start living like a homeowner now.

Consider your current rental or home-ownership costs and compare them to the costs for a home in your target price point. Can your current budget handle the difference? Are you still able to pay for your necessities plus shore up your financial future through short- and long-term savings? Or do you find yourself feeling desperate by the end of the month?

Not only will this allow you to get used to the change before the stakes are higher, but it can also help you save more money to put toward unexpected costs for your future home purchase.

Determine where to make adjustments

Does living like a homeowner make you a little wary for what’s next? Now is the perfect time to create space in your budget by cutting back expenses and paying down debt.

Now that you know where your money is going, determine the unnecessary leaks. Maybe your monthly food bill is exorbitantly high. Or maybe your subscription services have gotten out of hand. If your priority is purchasing a home — and being financially comfortable in that home — work to cut expenses that are contradictory to that goal.

Next, tackle your debt. There are two big benefits to beefing up your debt repayments now: You can lower your monthly obligation and improve your chances of getting approved for a loan. It’s a win-win.

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Finding success in direct sales

(BPT) – What’s better than being your own boss, setting your own hours, determining your own salary and having an office wherever you happen to be? It’s a Utopian idea that is reality for tens of thousands of people working independently in direct sales worldwide. But getting there isn’t easy. It takes grit to abandon the familiar grind and build a business — especially in direct sales.

Just ask Wayne Nugent, founder and chief visionary officer of WorldVentures(TM), the leading direct seller of travel and leisure club memberships. He got his start as a direct salesman and, after more than two decades in the business, he has seen it all. In that time, the industry has faced many challenges largely due to a minority of companies recruiting representatives, charging them large upfront fees and persuading them to purchase large volumes of nonreturnable inventory with little or no tangible value. Though many reputable companies exist today, mere mention of direct sales, multilevel marketing or network marketing can stir memories of the pyramid schemes and shattered dreams that made headlines in the past.

Nugent contends you can’t paint all network marketing companies with the same broad stroke. He created his company in 2005 to help people find fun, freedom and fulfillment through affordable travel with family and friends. The company’s success is based on the principle of work-life balance, a philosophy Nugent is spreading through a growing network of representatives who — in his words — Make a living … Living!(TM)

“I have a creation goal,” says Nugent, who also serves on the board of WorldVentures Foundation(TM), a nonprofit that supports sustainable programs for children in need worldwide. “If we get somebody making a little extra money per month, it gives them some financial breathing room. If they’ll pursue that with some consistency, and it’s fun, we can get them making more. At that point, they’re feeling abundant. So now, guess what they do? They give back. Network marketing makes this possible.”

On the move

According to the latest figures from the World Federation of Direct Selling Associations, global direct sales grew 7.7 percent in 2015, reaching a record $183.7 billion. The industry’s potential is particularly appealing to millennials now entering the workforce. These individuals born between 1977 and 2000 have witnessed their parents lose jobs despite devotion to their employers, then struggle to find work regardless of their education and experience. As a result, millennials embrace entrepreneurship as an alternate path to financial freedom.

The direct-to-consumer model has been leveraged successfully to sell goods and services in the cosmetics, household wares, nutrition, travel and technology industries for more than half a century. Growth and longevity aside, there are several reasons to consider a career in direct sales, including:

  1. Entrepreneurial freedom: You can be your own boss — with virtually no overhead costs. It’s recommended that you keep your day job at first and work your business part time. If you finesse it just right, you can ultimately be on your own full time.
  2. Unlimited earnings potential: Unlike in the corporate world, where your rise in rank may hinge on anything from your talent and tenure to your temperament, direct selling allows you to determine your worth. No salary caps here. Set a financial goal, then go for it.
  3. Personal development: Direct-sales companies are big on helping you become your best self. This ensures you become a more effective entrepreneur, and promotes continued company growth. From books and videos to conferences and one-on-one coaching, you’ll have the tools you need to tap your full potential.
  4. Continuous training: You are your own boss without being on your own. Much like personal development coaching, career training is always accessible. No more filling out a training request and waiting for your boss to approve it based on budget. Everything you need to know to be successful in your business is at your fingertips. Ongoing support is available through sales, product and marketing tools such as websites, back offices, print collateral and more.
  5. Camaraderie: There’s nothing like connecting with people who share your vision. As the saying goes, “Iron sharpens iron.” By joining a direct-sales organization, you will align yourself with like-minded people who can identify with your struggles and support your success.

After you’ve taken the leap and joined a direct-selling organization, what’s next? You’ve probably heard it so much that it sounds cliché, but staying around the campfire is key. Partnering with others and plugging into the trainings can mean the difference between mediocrity and meteoric success.

Whether you want to earn supplemental income or replace your current salary, Nugent says, “If you lean in and give 100 percent, this industry has the power to support all aspects of your well-being — financial, physical, emotional, spiritual and intellectual.”

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3 tips to save money every wedding guest should know

(BPT) – Wedding season fills summer weekends with nuptials, and while we enjoy celebrating the bride and groom, all the “something borrowed and something blue” adds up to some serious green. In fact, a new survey from Bankrate.com (April 2017) found that nearly half of those surveyed — 47 percent — will spend $100 or more on a wedding gift for close friends or family.

Here are three tips for taking in the festivities without going broke:

1) Use gift cards: You may be used to giving gift cards as wedding presents, but you also can use them to save money on gifts, guest attire, travel and other wedding expenses. Gift card exchanges like Cardpool.com buy gift cards from people who don’t plan to use them in order to sell them, at a discount, to someone who does. Gift cards for airlines, hotels and registry staples, like Target, as well as retailers where you can find the perfect guest attire, including Saks Fifth Avenue, Nordstrom and more are all available at great discounts on Cardpool.com, saving you money on everything you need to get through wedding season without breaking the bank.

2) Stack savings: Be sure to search for coupons for the stores on the bride and groom’s registry to save money on purchases. While most retailers don’t allow you to stack coupons, there is a discount-stacking trick you can try: use coupons in addition to discounted gift cards. Doing so means you save by redeeming the coupon and by using a gift card you purchased at a discount as your method of payment.

3) Gift as a group: Gathering up a group of friends to buy a nice bottle of champagne or a larger registry item helps you stay in budget while still giving a more extravagant gift than you’d give on your own. In fact, a number of popular retailers for newlyweds are making group gifting even easier. Target, for example, allows groups to set up accounts where friends and family can chip in toward items on the couple’s registry.

No matter the venue, registry location, travel needs or attire, these go-to tips could save you hundreds of dollars this wedding season. Whether you have one wedding to attend or 10, keep these in mind while shopping or booking travel.

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How to use your home equity in retirement

(BPT) – Most of us save and plan for decades to enjoy the period of our life when we no longer need to go into the office and work an eight-hour day for a paycheck.

But even with those decades of hard work, it can be tough to save up enough cash to cover all your costs in retirement. Many soon-to-be-retirees face a shortage between what they saved for retirement and what they actually need to live on.

For homeowners, that may be a problem that’s relatively easy to solve. Tapping into the equity in your home can help you stretch your nest egg quite a bit further.

Use a home equity loan or line of credit

You can tap the equity in your home with a home equity loan or a home equity line of credit (known as a HELOC). A home equity loan works like most other loans: you agree to borrow a set amount of money, receive a lump sum, and pay that back with interest and in installments each month.

A HELOC works a little differently, because it’s not a loan with pre-determined monthly payments. Instead, it’s a revolving line of credit, similar to a credit card. You usually have between five and 25 years to borrow against a certain amount of equity and repay (with interest) whatever you take out.

The time during which you can use the HELOC is called the draw period. The line of credit revolves during this period, so you can borrow and repay the balance multiple times. The total amount is due back in full with interest at the end of the draw period. Any time you have an amount outstanding, you will make monthly payments.

You can use a HELOC or home equity loan during retirement, but remember that you will need to pay the money back. You should have a plan in place for how to repay the funds — and the interest — before you agree to take a loan or a line of credit on your home.

Use a home ownership investment

A home ownership investment is a powerful way to unlock some of the equity in your home without taking out a loan.

The Unison HomeOwner program can unlock up to $500,000 of your home equity and the money can be used for anything you want — including paying monthly expenses, paying off debt or making home improvements. Because it’s a home ownership investment, not a loan, there are no monthly payments and no interest charges. Learn more at www.unison.com/homeowner.

Unison invests in the home alongside you. In return for the company’s investment in your home, they receive a portion of the future change in the value of your home. Unison shares both the upside and downside risk with you. When you choose to sell your home, up to 30 years later, if the home value rises, both you and Unison share in the appreciation. If the home value falls, both you and Unison share the loss.

Consider a reverse mortgage

A reverse mortgage can allow homeowners 62 years or older to turn equity in their homes into cash in a way that provides them with the income they need through retirement. You can get your cash in a lump sum or in monthly payments, or in a line of credit.

But it’s important to remember that a reverse mortgage is still a loan that comes with origination fees and interest charges. It requires that you have no other debt on your property, so if you have an existing mortgage loan, you will have to repay that in full from the reverse mortgage proceeds. You will also need to pay the reverse mortgage loan back when you move out of the home, sell it or pass away.

A reverse mortgage can give you income in retirement and whenever the home is sold, the money is used to pay off the loan. However, reverse mortgages can cause a lot of trouble if you’re not careful, and the high fees that you incur when you sell the home can leave you in a worse financial position than if you skipped the reverse mortgage altogether.

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