7 Ways to Save $2,000 for Your Summer Vacation

The best vacations are debt-free. Here’s how to save for one.

Sometimes, you need a real vacation. Not just a weekend camping at the lake or a road trip to Grandma’s cabin – a real getaway. It can be hard to justify a spendy trip when you have to save for retirement or pay off student loans, but with a nip here and a tuck there, you can remake your budget without too much pain. And at the end, with the worries of home far away, you’ll be glad you did.

Make a budget.

Sit down with everyone who’s going on the trip and figure out everyone’s priorities. Take into account transportation, lodging and food, of course – but don’t stop there. Familiarize everyone with your destination’s main attractions. You don’t want to get all the way there before you find out those aquarium tickets are $75 at the door and it’s the only reason Aunt Sally wanted to go.

Use your tax refund to start a savings account.

Most American families get more than $1,000 back from the federal government every year. Instead of blowing that money, start a separate account devoted to vacation savings. You’ll have fun watching it grow while you get excited for your trip.

Change your direct deposit.

Yeah, it can be a pain, but take the time to fill out a new direct deposit form with your employer. Socking away $50 to $100 from every paycheck into your new vacation savings account will add up fast.

Side note: If your tax refund was huge, you might be able to offset the effect of saving more by just altering your withholding. A giant refund means you’ve been giving the government an interest-free loan.

Make up for that extra savings.

The idea of a vacation fund is that you don’t have to loot it for funds. So you’ll have to make some sacrifices. You might consider a monthlong spending freeze, where you don’t spend on anything except necessities like food and gas. Get tips on weathering a freeze here.

Meal planning is another good way to save. If you look at how much you spend on food every month, you might be shocked. So eliminate those takeout lunches and pizza deliveries for a while. Dust off your cookbooks, examine your pantry, and make a plan every week before grocery shopping. You’ll save a ton, and you might even look better in your swimsuit when it’s time to hit the beach.

Get everyone involved with earning and saving.

If you’re taking kids or teens on your jaunt, tell them their souvenir and shopping budget for the trip is their responsibility. They can mow the lawn, babysit, organize the garage – all the stuff they got paid for before, only now that cash goes into the vacation fund.

Don’t underestimate how much money you could earn by having a garage sale or putting outgrown toys and furniture up for sale online, either. You’ll just be freeing up more space for vacation memories.

Use the right credit card.

If you’re flying to your dream destination, consider a credit card with a rewards program that pays off in airline miles. Use the card to buy gas and grocerrosan-harmens-18418.jpgies, then pay it off every month while the miles rack up. Just make sure you can use those miles when you actually want to – and that the affiliated carriers go where you want to go.

Book in advance.

This vacation is happening, right? So book it. You’ll get better deals on airfare, hotels and tickets to big attractions like museums. Sometimes, getting early passes to theme parks lets you cruise past long lines like a VIP. And forgetting to pre-book tickets to some in-demand attractions means you just won’t get to go.

The fastest and best way to pay off big credit card debt

credit-card-cut-upWhat’s the best way to pay down a large credit card balance as quickly as possible? All while paying the least amount of interest and not hurting your credit? Glad you asked.

First, understand that the sooner you pay down the principal, the sooner you erase debt. For example, if you owe $10,000 on a credit card and pay $200 a month, $150 of your payment goes toward paying interest. Only $50 goes toward paying down the $10,000 principal (based on an annual APR of 18%).

At this rate, it would take 94 months to pay off your debt, while costing you a whopping $8,622 in interest! That’s an uphill battle everyone should avoid.

Luckily, credit card companies, competing with one another, actually make it easy for consumers. By simply leveraging their special introductory rate programs, you can be on your way to paying down that 10K in no time.

Find a new credit card offer with a zero percent introductory balance transfer – one of the best deals in personal finance. Many banks offer these cards, which today are the strongest promos and longest zero percent APR intro periods since before the 2008 financial crisis. So, apply for one of these cards. Once you’re approved, immediately transfer all your credit card debt to the new card.

Need help finding an offer? Here’s a list of zero percent APR credit cards (with terms).

Once you’ve transferred your balances, it’s time to capitalize on the interest-free period to really break free of debt. And it’s so simple. Just keep paying the same amount you were paying your old high-interest card, only now to the new no-interest card. Now you’re paying off principal at 100 percent.

Pay attention to the terms because once the introductory period is over (typically 12-18 months) the interest rate could actually be higher than your original card. Use this period to pay down as much of your debt as possible.

Stop getting crushed on interest. And start planning that going-away party for your debt. Move your high-interest balances to a zero percent interest card now.

Eight great ways parents pass along financial success

Tommy Jr. has his dad’s home run swing and your love of gardening. Lorelei got your love of baking, but also your less-than-ideal kitchen cleanup tendencies.

On their road to becoming full-fledged individuals, kids start off by taking parts of you. It shows in the things you pass down, whether you mean to or not. Hopefully, all your kids will get your savvy saving habits. Money: You can’t be an adult without it.

Families pass down financial habits, just like football Sundays and rib recipes. If you ask parents what they most wish to bequeath to their children, a responsible attitude about money is usually at the top of the list.

But all families are different, so those “inherent inheritances” take different forms. Some of the most common:

Aim for the 80/20 split.

Live on 80 percent of what you make and save the remaining 20 percent. A less specific form of this philosophy goes by the title “Spend Less Than You Earn.” As long as you follow this philosophy, major financial disasters can be avoided.

Credit card debt is poison.

Don’t put more on cards than you can pay off every month, or you’re letting Borgia-strength financial toxins into your life. Think of interest payments as flushing fistfuls of cash down the toilet. Until it clogs, and you have to pay the plumber with a credit card, too.

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Keep an ace in the hole.

The people hit hardest by recessions or job losses are those who were already living paycheck to paycheck. Those who keep six months’ worth of bill-paying emergency funds stashed away in a savings account sleep better at night, even if they never have to use it.

It’s not about stuff.

Life is about experiences, not the pursuit of material goods. If you’ve got good friends and a blanket in the sun, you’re richer than everyone standing in line for the latest gaming console or smartphone.

Except when it’s about stuff.

If there’s something you really want, it will be there tomorrow. Sleep on it. Sometimes, 24 hours of perspective takes the shine off impulse purchases. If you still want something after saving the money for it, go ahead. Just try not to assume debt for luxuries.

Have a plan for any and all stuff.

When it’s time to make a big purchase – or even a weekly grocery store trip – don’t put yourself in danger of making impulsive decisions. Research cars thoroughly before wandering through a lot filled with temptation. Try on leather jackets at several different stores. Above all, make lists.

Don’t pass up free money.

There’s no such thing as a free lunch, but employer matching funds to retirement savings come pretty close. As soon as you get a full-time job that allows you to contribute to a 401(k), put in enough to maximize your company’s matching funds. Even if it hurts. It’s like picking up $100 bills on the sidewalk that never belonged to anyone.

Productivity is its own reward.

Happy people attack their jobs with gusto. Even the superrich keep themselves busy with creative pursuits or charity work. The more you think of your job as a chance to be rewarded for true accomplishments, the more successful your career will be.

If these sound similar to adult-focused money-management tips you’ve heard, that’s no coincidence. After all, kiddos absorb most of their values through example. That’s why your admonitions about eating healthy ring hollow if you’re clumsily stashing Oreos all over the house.

Want to pass on good habits? Just make sure you’re following your own advice.

Making the Down Payment

Buying a house is part of the American dream. But for most, the biggest roadblock to that dream is coming up with a down payment. Many lenders require five percent down. If you can put that together, you’ll have a much easier time getting approved.

The problem is, that kind of money is hard to come by for first-time buyers. The average price for a house in Boone County is $152,500 according to Zillow. Buyers would need $7,625 for the average Boone County household. And that doesn’t even include added homebuying expenses like closing costs and pre-paid items such as taxes and insurance.

Saving that much can take years. And for renters facing rising rent, health costs and more, it can be hard to save anything at all.

The good news is, there are several programs designed to help you become a homeowner with as little as 3 percent down. The Federal Housing Administration, for example, helps homebuyers, especially first-time buyers, get approved. Fannie Mae and Freddie Mac, government-sponsored companies that drive the residential mortgage credit market, also offer low down payments. And if you’re an active or retired service member, or live in a rural area, you may have access to zero down payment programs through the Department of Veterans Affairs or the United States Department of Agriculture Rural Development Program.

Sounds like an easy decision, right? Sure, but don’t skip the fine print. A lower down payment makes you a bigger risk in the eyes of some lenders. So you’ll have to pay private mortgage insurance (PMI) and you’ll likely pay a higher interest rate for the life of the loan, in addition to other fees.

Shop around and find an experienced mortgage lender that can provide good advice on your down payment options. Lenders are required to disclose all fees so you can compare easily. Plus, the more you explore your options, the more you’ll learn about the process.

2017 Tax Breaks That Will Impact Your 2018 Return

Fortunately your taxes aren’t due. Not yet. You have until April 18 to file your 2016 tax return if you haven’t done so. For most of us (4 out of 5 of us, according to the IRS), a refund is waiting. This is largely because the IRS offers a variety of tax deductions, exceptions and credits to lower your tax bill. Many of these are adjusted for inflation, so they often change from year to year.

Tax year 2017 has several annual inflationary adjustments to consider. Here’s a breakdown of some key changes to help you plan for your taxes. Keep in mind that these are for the 2017 tax year – they’re not rates you’ll use to prepare your 2016 returns.

The big change for everyone is in the individual income tax brackets, which have been adjusted for inflation. They’re typically adjusted so you can earn more without moving into a higher tax bracket. Inflation has been nominal, so there wasn’t a significant shift upwards in the tax schedule. Still, if you were on the cusp, it’s good to be aware of where you might be now. You can see 2017 tax bracket tables here.

More good news is that your standard deduction will go up a smidge in 2017. Individual filers and heads of households will receive a standard deduction of $6,350 and $9,350, respectively, up $50 from 2016. Couples filing jointly get a $100 year-over-year bump to $12,700 in 2017. This may not seem like much but anything that will reduce your tax liability without you having to do a thing is money in the bank.

There are several other important changes that may also affect your taxes, including that traditional and Roth IRA phaseouts will be adjusted higher and health saving accounts (HSA) contributions have increased for individuals. You can find more detailed information about those and other changes here. Please see your tax advisor to determine how this information may apply to you.

Digital Nomads. What you need to know.

Are you interested in becoming a digital nomad?

Digital nomads use modern technology to earn a living and conduct their lives in a nomadic lifestyle, whether from their homes or across the globe. Wireless internet, smartphones, VOIP and cloud-based applications are allowing more and more people to work remotely, untethered to a workplace.

While the lifestyle is growing in popularity, it is not without challenges. Here are some tips to help you decide if it’s for you and some skills to help you make a successful transition.

There are no off days

The good news is that you’re essentially the boss of your own company – You Inc. The bad news is that your company never really closes. The work hours will greatly depend upon what time zone you’re doing business with, so be prepared for early mornings and late nights. But that also means you can leave days open for other things, like visiting a new city.

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Learn to juggle

Most likely, you won’t be working with only one source of income, or client. So you will have to learn to juggle competing projects, each with its own rules, guidelines and topics. Some days you will love the variety and other days will tax you to no end.

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Procrastination is a constant temptation

It’s not like there aren’t already enough things that tempt you to waste time.

However, when you are your own boss, nobody will be there to tell you to get to work, so you need to have plenty of self-discipline. Find the work rhythm that works for you and stick to it.

Work on skills that you can leverage

You’ll need to work on the skills you can leverage to build the life you want; you can’t simply declare yourself a digital nomad and expect everything to fall into place. So sit down and figure out the skills you have. Then, sharpen those skills and find the people who are looking for what you have to offer.

Most importantly, network, network, network. There are many communities built around the digital nomad lifestyle with plenty of great advice for building a successful career away from a traditional daily workplace. Meet other digital nomads and take advantage of their experience.

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Raising Selfless Children

Our children are growing up in an age filled with relentless messages to consume more, more, more, as well as immediate access to almost anything. Add to that the rapidly evolving technology available to them and the ever-present competition among peers, and the difficulty of raising selfless children in a materialistic world can seem impossible. But it’s not hopeless, of course, and there are plenty of things you can do to help them maintain a level of humility. Here are a few ways you can start:

Set limits, and when you say “No,” mean it.

One reason kids become selfish is they get too used to getting their way. It’s important to be clear about what you expect of them and then adhere to those limits. Giving in to tantrums, whining, complaining or attempts to make you feel guilty simply teaches them that they get their way if they complain enough.

Go through possessions with them and donate to charity.

You already know kids are constantly outgrowing clothes and toys. But don’t just deal with them on your own, make time to go through their belongings with them and donate some to charity. It is very useful to give them an understanding of the lives of the less fortunate and how some help can really make a difference.

Do chores with them.

Kids don’t innately understand that hard work pays off. Assign chores and then help them complete them. They may not understand that the house looks nice because you spent hours cleaning it, but if they do their part they can see concrete results and how it directly affects their world.

Nurture empathy.

Babies are by nature selfish, and so are young kids. It takes awhile for them to realize the world isn’t centered on them, so encourage them to consider how others feel. You nurture their empathy by helping them understand the mindset of someone else. “Imagine you just moved here and are walking into school for the first time. How would you feel?”

Reinforce selfless acts.

One of the quickest ways to increase selflessness is to “catch” them doing unselfish acts and praise them. Doing so will encourage them to repeat the behavior. Just remember to describe the behavior and point out the impact it had. “Did you see the smile on your brother’s face when you shared your toys? You made him so happy.”

 

 

Payment Plans for Airline Tickets: Smart or Not?

Read the fine print before buying airline tickets in installments

Airfares have been inching downward in recent months, thanks to lower fuel costs and more seats on new planes. The new lower prices are tempting many consumers to consider once-in-a-lifetime trips that would have previously been out of reach for them.

Those same would-be travelers are now facing temptation from a trend that lets people book their flights and pay for them in installments. Basically, you can now put your plane tickets on layaway.

The idea of layaway has been making a comeback lately. When you want to make sure you get an in-demand, big-ticket item, layaway allows you to claim it for a fraction of its final price, and then make small payments over time. When you’re done paying, you take your purchase home. It’s a concept popular with parents planning for holidays and couples shopping for engagement rings.

But does it make good financial sense?

CheapAir.com lets you take out a loan for your flight and pay it back over three, six or 12 months. The business model is aimed at people who don’t use credit cards, but it’s also for those who just can’t afford that flight to France all at once. A similar philosophy is in place at startup site Airfordable.com, where travelers pay a third of their ticket costs up front, then pay the rest off in monthly or biweekly installments.

Major carriers like American Airlines have had layaway-esque programs for years, but they usually require travelers to apply for an airline credit card to qualify.

These new offerings open air travel up to people who couldn’t – or wouldn’t – charge their fares in the past, usually because of bad credit. Buying tickets well in advance is usually a surefire way to get the best deals, too – even if you can’t pony up for the whole amount at the moment.

But when you look a little more closely, paying in installments has its drawbacks. A CheapAir loan is based on your credit history, with interest charged between 10 percent and 30 percent. Airfordable doesn’t charge interest, but it tacks on a flat 20 percent fee. In the end, the average traveler might not be much better off paying in installments than putting tickets on a credit card and paying them off that way.

An even better option is to squirrel away the funds for trips using a targeted savings account. You can even set up your direct deposit to direct a set amount from each paycheck, keeping your travel money separate and insulated from your everyday spending while you watch it grow.plane-airplane-airliner-passenger-sky-sky-cumulus-clouds-clouds-flight-flight-aircraft-wing-wing-morning-bright-sun-beautiful-background-blur-bokeh-wallpaper

That way, when you do purchase tickets online, you can pay your card off immediately and avoid taking that interest hit. You might have to put off your trip for a while if you want to get early-bird fares several months before takeoff. But it means you’ll have more spending money – or even more nights in a hotel – when you get there.

Paying for airfare a little bit at a time is a great idea when it’s earning interest for you. It’s not so great when you’re tied into a high-interest loan or paying more than you have to for your seat.

 

7 Things 20-somethings Should Know

Jobs you don’t leave at the end of summer. Real bills to pay. Planning for life beyond next weekend. If you’re an average 20-something, life’s probably getting serious. And if you feel like you don’t know what you’re doing, you may be right. Or you might just need some time to figure it out. Here are few pointers.

Everybody Is Confused

No one has it all figured out and people who tell you they do, don’t. This shouldn’t concern you. After a mistake, and you will make many, keep moving forward. You can’t make all the right decisions but you can make your next decision the right one.

Just Say Yes

Don’t turn down opportunities to gain experience. You may think you know where your career’s going, but you’re probably wrong. Saying “no” to a task or responsibility you don’t think will be useful is missing the point. Saying no is saying no to the opportunity. Saying yes expands your skills and simply helps you be a better you (which always pays off).

Failure Is Part of Success

You will not be a complete success at everything you try. But if you keep trying you will succeed more and more often.

Unless You Master Money, Money Will Master You

Spend less than you make. Always. Don’t become house- or car-poor. Put something toward retirement now, no matter how small. Learn about investing before you try it on your own. Avoid easy credit card pitfalls and loans that can lead to issues that take decades to fix. Learn how to make your money work for you. (MCU members have access to our Dollar Dashboard with scores of helpful budgeting and planning tools.)

You Will Have to Work With People You Don’t Respect

You’ll interact with a wide range of personalities and some you won’t like very much. In short, however, bite your tongue and get the job done. You don’t have to be friends but you do need that paycheck as well as the valuable experience of dealing with difficult personalities.

Find a Balance Between Work and Life

You’ve probably already heard the advice to be the first to arrive and the last to leave at work, and it is crucial that you demonstrate hard work and commitment to your job. But it is also important that you don’t overdo it. Leave time to be you outside of work and you’ll be a better, happier and smarter employee.

More Books, Fewer Texts

Reading skills are still important, especially when it is done in bursts beyond 140 characters. Reading books cover to cover will increase your creativity as well as your thinking and analytical skills. You’ll tell better stories too.

One final piece of advice: Enjoy the ride and good luck.

 

Protect yourself from debit card fraud

Debit cards – which require a personal identification number (PIN) and deduct money straight from your checking account – offer convenience without the debt-related downsides of credit cards. That convenience can be a double-edged sword, though, because debit cards are tied to your checking account, which most people think of as their everyday spending cash. img_4297

If someone uses your credit card illegally, you won’t take a financial hit while you’re getting the situation resolved, and most major card companies have a zero-liability policy on fraudulent transactions. Financial institutions are offering more protection for debit cards, but it’s far less stressful to protect yourself from fraud in the first place.

Follow these tips to keep your debit card use under wraps.

Protect your PIN.

The first and most important rule to follow is to always protect your PIN. Don’t share it with anyone. Memorize it instead of writing it down somewhere. Never give it out over the phone, and always cover keypads with your hand when entering the code.

Whenever possible, use only ATMs associated with your card issuer, and do it during regular business hours. Don’t use an ATM if other people are milling around.

Choose ATMs wisely.

Stay away from ATMs that seem to be in disrepair. Be wary of card machines at convenience stores and gas pumps as well. It’s easier to set up “skimmer” devices on them to steal your information when you swipe or insert your card. To spot skimmers, look for different-colored materials on the façade of the ATM, partially obscured lights, misaligned on-screen graphics, protruding parts on the card reader and sluggish keypads.

Keep balances lower.                                         

Think twice about keeping a large balance in checking or savings accounts that can be accessed via ATM. Check your account charges and balances regularly, and sign up for daily bank alerts if offered. Use debit card controls on your financial institution’s mobile banking app. Many users are now able to activate and deactivate their debit cards as many times as they wish. Compare monthly statements with your receipts.

Write down contact numbers for your checking account holder and credit card companies and keep them separate from your cards. Alert your bank or credit union immediately if your card is lost or stolen, and let them know if you plan on traveling out of state, to prevent potential blocks on your card. Always have other forms of payment on hand when you travel in case this happens.

Like cash and credit cards, debit cards deserve a place in your wallet. They can be a great way to track your spending and keep debt from getting out of control. Just remember that you need to use extra caution to keep your funds safe.