You raised your right hand and did solemnly swear (or affirm) that you will support and defend the Constitution of the United States against all enemies, foreign and domestic. So, now what? Did you know that military enlisted personnel, on average, receive cash compensation higher than that of approximately 90% of civilians of the same age and education level? Not only is your cash compensation higher, but your military benefits are great!

So how can you, as a new recruit, navigate your many military benefits? As an Army veteran with 12 years of service, I’ve learned a thing or two about using military benefits. Here are five insights to get started.

The first step to navigating your military benefits is knowing what they are so you can take advantage of them. You can keep up with your benefits by visiting Military.com. You might be surprised by what your benefits cover. Take your education benefits, for example. The GI Bill not only helps pay for college and graduate school, but it can also fund vocational training and trade schools, licensing and certification courses (including CFP® certification) and can even pay for flight school! You only need to honorably serve three years to access the full financial benefits.

For those with student loans, the Loan Repayment Program can repay close to $65,000 of your certain student loan debt, depending on the branch in which you serve.
Use Savings and Discounts. If you want to keep more of your money, you must spend less. New military recruits can save by taking advantage of both on-base and off-base financial savings.

The on-base grocery store is a great place to start saving money on your everyday essentials. You will find the same items and brands as you would at any store, but at much lower prices. From banking and car repair services to entertainment and legal services, take advantage of all financial benefits offered at your base or post to save as much money as possible.

The same goes for off-base savings. Car rentals, travel, cellphone plans, vacation spots — before you ever pay for anything, always ask, “What are your active-duty discounts?” If you don’t ask for it, you won’t get it. Make saving part of your financial plan.

Access Retirement Savings Plans. Sadly, you won’t serve in the military forever. Whether you are planning to serve 20 years or still figuring it out, one day you will be back to living your life as a civilian. The good news is that even if you serve for just a few years, you still have access to one of the finest retirement savings plans available: the Thrift Savings Plan (TSP). The TSP works like a 401(k), where you can contribute part of your paycheck pre-tax, allowing the account balance to grow without paying taxes until the funds are withdrawn. There is also a Roth TSP option, where you contribute after taxes and withdraw some, or all, of your funds tax-free.

One of the biggest advantages with your TSP over most 401(k) investors is lower fees, which means more of your contribution is working for you.

Reach Out for Support. You don’t know what you don’t know. One of the best websites for anyone in the military is the Military OneSource website: militaryonesource.mil. Military OneSource is a 24/7 information hub that supports servicemembers and their families to help them reach their goals, overcome challenges and thrive. This Defense Department-funded program can be accessed anytime, anywhere. You can also call 800-342-9647 for help.

Work With a Professional. Lastly, check out LetsMakeAPlan.org, which has resources for the unique financial needs of members of the military as well as the “Find a CFP® Professional” search tool. When you work with a CFP® professional, you can be confident that you are working with a financial advisor who has met rigorous qualifications and has made a commitment to putting your best interest first. They can help you set up a financial plan that works for you. Find your CFP® professional today.

posted by Steve Repak
on January, 29
Source: Good Reads

In 2023, back-to-school spending is expected to drop for the first time in nine years, with consumers spending 10% less than usual amid inflation. Even as shoppers try to budget more carefully, back-to-school shopping expenses can add up quickly. So before heading out to the mall or getting online, consider making a back-to-school shopping plan you can stick to. Use these tips below to get started.

1. Make time to do some research.

From a 10-second online search, I found a deal for a 45-Piece School Supply Kit that includes folders, notebooks, pencils, pens and much more for the low price of $19.99! Instead of grabbing whatever is on the shelf, check out sales and shop around. Online marketplaces such as Facebook Marketplace can also have great deals, which are always helpful as we grapple with ongoing inflation.

2. Be practical when it comes to back-to-school clothes.

Summer is the perfect time to go through your child’s wardrobe and discard or donate any items that can no longer be worn or can’t be passed down to a younger sibling. Take inventory of what you already have and what you need. It might not be a long list — you don’t have to buy an entire wardrobe. Your children will keep growing, so plan to spread these purchases over the school year to avoid the expense of buying a closet full of clothing that might be unwearable in a few months.

3. Be realistic about what your kids will wear.

No joke, when my boys were younger, they wore shorts all year! After two or three years of letting blue jeans go to waste, I purchased only shorts until they got older and wiser. Who would have thought “buy only shorts” would be a financial lesson I’d learn as a parent?

4. You can also consider shopping at clothing consignment stores and used-clothing sites like Poshmark.

You can find new and nearly new clothing in all the popular clothing lines for a fraction of the price. Shop these first, and save the malls and department stores for the rest. But buyer beware — at sites like Poshmark, all sales are final.

5. Take advantage of tax-free weekends.

Sales tax can add up quickly, and it makes perfect sense to plan your back-to-school shopping around these weekends to take advantage of significant savings. Many states have tax-free weekends in August before school starts. Read about your state’s tax-free regulations to see what purchases are included and at what prices.

6. Save expensive items for holidays and birthday gifts.

It’s normal for your children to want the latest sneakers, designer jeans or trendy backpacks. If these items fall outside of your back-to-school budget, give your children the option of putting these on their birthday or holiday wish list. Your child will get something that they really want, and you’ll make Grandma and Grandpa’s job much easier.

7. Teach your older children the value of a dollar!

It is always easier to spend someone else’s money. If your kids are older, consider letting them do their own shopping. Drop them off at their favorite store with a universal gift card preloaded with your child’s budget and a list of needed items. Allow your children to make difficult choices when it comes to limited resources and unlimited options. If they are old enough to have a job, make buying some items their financial responsibility. Your child will either impress you with their creativity or you will have to make some exchanges, but either way, it’s a learning experience.

posted by Steve Repak
on January, 29
Source: Good Reads

Retirement isn’t an “if” question, it is a “when” question. As an 18-year-old stepping off the bus for basic training in Fort Dix, New Jersey, the last thing on my mind was retirement! But to tell you the truth, if I had just followed a few simple retirement rules I could have secured my retirement years sooner. Working with a CERTIFIED FINANCIAL PLANNER™ professional can allow you to take full advantage of the many benefits available for active-duty service members and veterans.

Here are four simple retirement rules that I have no doubt will help you be successful in securing your retirement:

1# The sooner you start, the better!

It doesn’t take a million to have a million. The longer your money can compound, the better your chances of securing your retirement. Imagine if, at 21 years old, you started putting $150 a month in your Thrift Savings Plan or some other employer retirement account for the next 20 years. If your retirement money was able to compound at 10% annually, at age 65 you would have more than one million dollars! Now, keep in mind that past performance doesn’t represent future returns of any investment product, but that example of the mathematical compounding principle should serve as a wake-up call to start saving for retirement now.

2# Something is always better than nothing!

We can all make excuses why we can’t put money away now to secure our retirement, but whatever your excuse is, I am asking you to put something toward retirement now. By saving something now, you will have something in retirement later, and if you put nothing toward retirement now, you will have nothing in retirement later. I have always said that the hardest weight you must push every morning is the front door to the gym. In other words, the hardest part of anything you do in life is starting. So instead of making an excuse, make changes by spending less money and saving more toward your retirement. Take the money from your next promotion or raise, your COLA (cost of living adjustment) and/or bonuses, and instead of spending the extra money, put it toward retirement, because the more you save now, the more you can have later.

#3 Eliminate debt!

Debt will put your retirement health at risk. This includes credit card balances, car loans, mortgages, and student loans. The more debt you have in retirement, the greater the chances you will run out of money. One of your top priorities when it comes to securing your retirement is to have little to no debt. Your money will stretch a lot longer if you are not spending it on a new car payment, multiple credit cards or a large house note. You will always be better off earning interest on your money rather than paying interest to someone else. So, make a plan with your financial planner now to reduce your debt by eliminating or at least reducing wasteful spending and using that money for securing your retirement.

4# There is no “I” in teamwork!

Just as in the military, it takes teamwork to accomplish the mission of securing your retirement. As a member of the military, you have some unique financial needs, but keep in mind you also have access to special financial benefits and savings opportunities. Take time to consult with a CERTIFIED FINANCIAL PLANNER™ professional to ensure you are taking advantage of all your benefits. No matter if you need help with budgeting, getting out of debt or, even more important, saving for your retirement, you can find a CFP® professional near you by visiting www.letsmakeaplan.org.

posted by Steve Repak
on July, 11
Source: Good Reads

As an Army veteran, I was taught in the military that “planning is the art and science of understanding a situation, envisioning a desired future and laying out effective ways of bringing that future about.” Regardless of which branch of service you may have served, or what career path you’ve taken since, all veterans can apply this definition of planning as a guide. Take the following three-step approach to what all military veterans need to know about creating a financial plan and you can be on your way to accomplishing your goals.

1. Understand your current financial situation

2. Envision a desired future by setting short-term and long-term financial goals

3. Lay out effective ways of bringing that future about by developing a financial plan

To get you thinking about where to start, let us begin with the basics:

Budgeting

No matter if your goal is paying down debt or saving for your short- and long-term goals, you must first develop a budget.

Start by reviewing your bank statements to assess your current income and your current spending. Next, identify areas of your spending where you can cut out or reduce. Then, lay out effective ways to accomplish those goals such as keeping receipts whenever you spend money, using cash instead of your debit or credit cards, and selecting a financial accountability partner to provide encouragement or a kick in the butt when you need it.

You will measure your success by how much you can cut from your spending. Your next step is to effectively deploy that additional saved capital. As a note, you will follow those exact same planning steps for your debt and savings.

Debt Reduction

If you have debt, understand your current financial situation by determining how much you owe, the interest rates on each of those debts and the amount you are paying monthly. As an example, you might set a short-term goal of having your credit cards entirely paid off in 5 years and a long-term goal of reducing your 30-year mortgage to a 15-year mortgage. Next, develop a financial plan. For example, you may want to pay extra money toward your higher interest debt and less toward your lower rate interest debts.

Once a credit card or debt is paid off, you would take that payment and apply it to the next debt and repeat until all your debt is paid off.

Savings

Lastly, determine your short-term and long-term savings goals. Consider setting a short-term savings goal of having at least 6 months of your nondiscretionary spending (i.e., food, housing, utilities, healthcare, insurance, transportation and clothing expenses) in an account that is separate from the account that you write your bills from and also separate from your Thrift Savings Plan (TSP) where you keep your long-term savings.

Your plan may be to allocate 5% of your income toward your short-term savings goal and 5% toward your long-term savings goal. Once you have reached your short-term savings goals you might allocate 10% of your income toward your long-term savings goals.

For all military veterans, what you need to know about financial planning also includes what you actually do! “Do” is an action verb, which means the only way of bringing that future about is by acting now. A CERTIFIED FINANCIAL PLANNER™ professional can help you assess your current situation, set short-term and long-term financial goals and develop an effective plan. You can search for a CFP® professional in your area by visiting www.LetsMakeAPlan.org.

“Let us remember the service of our veterans, and let us renew our national promise to fulfill our sacred obligations to our veterans and their families who have sacrificed so much so that we can live free.” – Dan Lipinski, U.S. Representative for Illinois’s 3rd congressional district

article courtesy: https://www.letsmakeaplan.org/blog/vi…

posted by Steve Repak
on November, 23
Source: Good Reads

According to a survey conducted by CreditCard.Com more than a third of Americans incurred debt over the holiday season. I have always said that you will have more money if you are earning interest on it instead of paying interest to someone else and the reason I always say it is because I had to learn that lesson the hard way!

After 12 years of service in the Military I had over $32,000 in credit card debt! The worst part is that I did not accumulate that debt because of a medical emergency or because I lost my job. In the Army my housing was paid for, my food was paid for, the Army provided me with a uniform, and my dental and medical were free. The bottom line is that I spent more money than I made. To be brutally honest I didn’t need to wait for a holiday to use my credit cards; I used them all of the time! I would charge a little here and a little there and the balance would continue to get larger and larger. I kept on telling myself this lie, that as long as I could afford the minimum payment, I had my debt under control. I thought my real issue was an income problem but in reality, it had nothing to do with how much money I made, it was how much I was spending. I was addicted to the Plastic Crack (Credit Cards).

I overspent because I thought I would be happier and I wanted others to view me differently because of the clothes I wore, the car I drove and the money I spent. The sad part that it wasn’t even really my money; it was someone else’s because I had to pay that money back, plus interest. Eventually I got sick and tired of living paycheck to paycheck with so much credit card debt that was weighing me down like a ton of bricks. I made the conscious decision that I didn’t want to be in credit card debt and I finally admitted that I had a spending problem.

I am hopeful you are not in the same dire predicament but if you did happen to acquire some credit card debt over the holidays, the steps I took to solve my problem can help you get out of debt for 2020!

Step 1. Take accountability

Nobody else is going to manage your money better than you, so you must take accountability for your financial decisions. Many of our problems are often caused by our own actions and we wonder why things never change. It may be tough hearing that, but until we face that reality, our behaviors won’t change. Once I quit blaming my problems on things I couldn’t control like the amount of money I made and acknowledged that I had a spending problem which was something I could control, I was able to take the first step of getting out of debt.

Step 2. Keep a spending journal

If you asked me what I had to show for $32,000 of credit card debt, I would not be able to answer you. That is very eye-opening. I fixed that problem by keeping a spending journal. I would ask for receipts and write down exactly what, where, and how much money I spent. Sunlight is the best disinfectant, so by keeping a journal of all of your expenditures you will start to uncover wasteful and unnecessary spending and hopefully eventually you will start spending less.

Step 3. Build your savings

Savings is the cure for debt! Nobody plans on unexpected financial issues, but the truth is, it is not a matter of if you will have one, it is only a matter of when. Unanticipated medical bills, home repairs or vehicle problems are just a few examples of things that can happen and if you don’t have any money in savings, you will very likely have no choice but to use your credit card to pay for it. Your goal is to set aside a minimum of 5-10% of your income towards your emergency savings that is safe and easily assessable. (i.e. FDIC Savings Account). Your first goal is to have at least $1,000 in savings but ultimately you should have a minimum of 3 to 6 months of your income saved that is separate from your checking account, retirement accounts, or any other savings goals.

Step 4. Develop a plan

There are two strategies you can consider when developing a plan to get out of debt. But for either one to work you have to quit charging on your credit cards and you must be able to pay more than the minimum payment. One way you can tackle your debt if you have multiple credit cards is to to pay more towards the credit card with the lowest balance and pay less towards the credit cards with the larger balances. Another option is to pay more towards the credit card that is charging you the highest interest and less towards the others. Whichever option you choose, the most important part is whenever you pay off one of your credit cards, you take that payment and apply it to another debt until all of your credit cards are paid off.

Step 5. Stay Committed

I can tell you from my own experience that it can be tough staying committed. The truth is that I didn’t get into $32,000 of credit card debt overnight so there was no way I could get out of debt overnight. I understood that making a commitment meant I would be required to make sacrifices now, for something better later. I relate it to diet and exercise. You don’t see a lot of results in the beginning but the longer you stick with it, the better the results will be and the more motivated you will become. By staying positive and living one day at a time, there isn’t anything you can’t accomplish, if you will only stay committed.

To tell you the truth, getting out of debt has more to do with your behaviors than following some formula because at the end of the day it is not what you know but what you are doing that makes the difference.

Take accountability for where you are spending your money. Your goal is to start spending less which means you need to have a spending journal to see exactly where your money is going. As for building your savings, the antidote to debt is having money put aside for the unexpected bills that always seem to come up at the worst of times. Next you will develop a get out of debt plan that makes sense to you. If you are motivated by winning the little battles, then focus on paying off the debts with the smaller balances. If you want to pay the least amount of interest, you may consider concentrating on the debt that is charging you the most interest. Finally, you have to be committed. There were many times when things got difficult and I questioned if I would ever be able to get out of debt, but I can tell you that I stuck with it and if someone like me was able to was able to get out of $32,000 of credit card debt, I have no doubt that you can too!

Steve Repak, CFP®, Speaker, Army Veteran, and the Author of “6 Week Money Challenge: For Your Personal Finances” and “Dollars and Uncommon Sense: Basic Training For Your Money”

posted by Steve Repak
on January, 03
Source: Good Reads

The Holidays are upon us and if you are a parent, you are likely stressing over finding the perfect gifts for your kids. Instead of fighting the crowds at the mall this year why don’t you instead put together a shopping plan that will make the Holidays a little easier on you and your pocketbook while at the same time provide some valuable financial lessons for your children and they won’t even know it!

Give

Growing up most of us have heard a million times that it is better to give than to receive. There is logic behind that. The positive feelings you experience when you give last much longer than the temporary euphoric feeling you get when you spend money on yourself. Giving develops discipline and an awareness of others’ misfortune that helps keep you focused on what is truly important, which can have a profound impact on finances as well as every other aspect of your life. The most satisfied people are the ones that give the most so help your child learn this by making a donation in your child’s name to a charity of their own choosing.

Want

I believe there is nothing wrong by giving your child something they want. Notice I didn’t say get them everything they want. I don’t think any parent wants to disappoint their children but one of the most valuable lessons you can teach them is that they will never have everything they want. Too many people try to tie in happiness with having things and we know that money can’t buy longer term happiness. The financial lesson you are teaching your children is that happiness does not have to depend on things that can’t love you back.

Need

There are only a few things you really need; food, a roof over your head, transportation and clothing. Many grown-ups still have a difficult time distinguishing between ‘wants’ and ‘needs’, and for children the difference is usually nonexistent. Children think everything is a need! The earlier your children learn the error of this thinking, the better off both of you will be financially. The first thing you need to do is pick one of the four categories of needs and decide on a gift that falls within that category.

For instance, you might select transportation, wanting to give your child a bike so that they no longer have to walk to school. Once you have the gift in mind, decide how much you want to spend on that gift. You will give your child a gift card or cash in this amount and your child will be responsible for purchasing the gift themselves after the Holidays and take advantage of the year end sales!

They must follow three simple rules: 1) they must use the funds to purchase the gift you selected, 2) they cannot go over budget and 3) they can keep half of any savings to spend as they wish but must add the rest to their charitable gift. The lesson here is that it is very easy to spend other people’s money, but when you have to spend your own, you will make different decisions. Most kids do not grasp the concept of money management and it is better that they learn this at an early age when the consequences of bad decisions are not as painful.

Read

As a parent myself, I understand the temptation to take the path of least resistance and allow my children to spend too much time playing video games or watching television and YouTube. Though some children will not immediately see this as a good thing, a good old fashioned book is a great way to ease a little moderation into their electronic habit. If you need help picking one out, go to your local library and spend a few minutes talking to the librarian about your child to get some great recommendations!

It has been shown that reading can greatly improve vocabulary, communication skills, creativity, concentration, focus and memory. All this will help your child do better in school which can mean financial awards to help them pay for college, better performance in college, and better job opportunities and job performance, all of which are linked to better financial health for both the parent and the child.

Instead of stressing, fighting crowds, and spending way too much money at the mall on a bunch of stuff that will end up broken, lost or thrown away, come up with your own family tradition and at the same time provide your children some financial lessons that they will one day value!

Steve Repak, CFP®

posted by Steve Repak
on December, 12
Source: Good Reads

If your finances are more frightening than The Texas Chain Saw Massacre, treat yourself to these five tricks so your financial future doesn’t end up a horror story!

Have you ever been all alone and all of the sudden things just don’t feel right, like maybe the hair starts standing up on the back of your neck. Do you have that same feeling about your money? If your finances are more frightening than The Texas Chain Saw Massacre, treat yourself to these five tricks so your financial future doesn’t end up a horror story.

(Trick)
Ask for receipts whenever you spend money

(Treat)
Have you ever been victim of leaving the restroom with your zipper unzipped? You probably didn’t have any idea until someone pointed it out to you. That same analogy works when it comes to money. People have no idea just how much money they are wasting until they are somehow made aware of it. For the next 30 days, ask for and keep all of your receipts every time you spend your money. When you get home each night write down in detail where, when and how much you spent for the day. The Treat: at the end of the month you should have an extra $100-$250 in your account because you become aware of exactly how much you are wasting on non-essentials A $4.00 coffee beverage doesn’t sound extravagant, but if you purchase one every day you can rack up a $120 coffee bill. Now it starts sounding expensive, and you will quickly realize that there is some low hanging fruit when it comes to cutting back on your spending.

(Trick)
Give Some Money Away

(Treat)
It might sound like a trick but believe me once I explain it you will see that it is truly a treat. See, it doesn’t make sense that by giving money away, you can end up having more. I am not here to tell you where you should gift your money. It is not important to which charitable organization you give… only that you are giving! Here’s where the Treat comes in: I believe that if you give, you will receive. The rewards of generosity are many, but first and foremost, it feels good to give, so when you give you will fill a void that buying can never fill. And when you start giving you will have no choice but to learn how to live on less, and the cornerstone to financial security it learning to live on less than you make. Depending on your situation you might even get a deduction on your taxes from your charitable giving so keep track throughout the year.

(Trick)
Reduce the Number of Personal Exemptions You Are Claiming on your W-4

(Treat)
If you are married with 2 Children and are claiming 4 people, consider reducing the number of personal exemptions on your W-4. I know I will have some people that will say I’m dead wrong because you are essentially giving the government an interest free loan. The fact is, some people just can’t save and put money away. By claiming fewer exemptions on your W-4 you will have more money withheld in taxes. The Treat: you will either have a bigger tax refund which is a nice unexpected windfall the following year that you can used as the foundation for your savings, or you will owe less money to the IRS when April 15 rolls around by working this bill into your monthly budget.

(Trick)
Freeze Your Credit Cards

(Treat)
(Yes, I want you to literally freeze your credit cards) Take your credit cards and put them in Tupperware bowl, fill the bowl with water and then place in your freezer. If you get tempted to use your cards, you will have to wait a while until your cards thaw out. The Treat: When you are NO longer charging on your credit cards, you have taken the first step in getting yourself out of debt! You will build your savings faster when you are receiving interest on your money instead of paying interest to someone else. A great website to help you put a get out of debt plan is www.powerpay.org.

(Trick)
Open a “Me” Account

(Treat)
Spend, spend, spend will lead to the poor house, while save, save, save gets old after a while. I relate it to people who want to lose weight and solemnly swear to never eat dessert again. Extremes seldom work and I have found that people who can find balance are generally happier. Open up a “Me” account and allot a small portion of what you bring home towards this account. Set it up as a draft or bill pay just like you do with many of your other expenses. The Treat: you can spend this hard earned cash any way you want to and you won’t bust your budget.
Doing things differently can be scary sometimes. But if you don’t want your financial house to turn into a house of horrors, it is imperative that you start doing something different with your money. Cut out wasteful spending by first finding out just what you are spending your money on. If you want to have more, learn to give. If you find it hard to save, try to be a little creative so you can have some money stashed away in case of an emergency. If you want to earn interest on YOUR money, quit paying interest to someone else and finally incorporate some balance in your life and before you know it, you can shut of your porch lights because all of the trick and treaters have gone home for the night.

posted by Steve Repak
on October, 31
Source: Good Reads

A wise person once told me that values and traits are mostly caught not taught. Does that mean that we shouldn’t teach children about money? No! However, it does mean that we should practice good money behaviors and reinforce those behaviors through financial literacy. In layman’s terms, that means that along with teaching someone how, it is just as important for them to understand why.

Financial literacy for kids is the knowledge, skills and motivation that will best prepare children to achieve their personal financial and life goals. So where do we start? When dealing with financial literacy for kids, you need to start with the basics.

1. There are only three things you can do with money.

(a) You can spend it
(b) You can save it
(c) You can give it away

2. Income (minus) expenses better equal a positive number.

I have joked that if you can add and subtract, then you can make a successful budget. Most kids learn addition and subtraction in school, but most are not taught on how to make a budget. A great way to help kids learn about budgeting is through practice. For example, if your child receives money from birthday gifts, holidays or perhaps a part-time job or allowance, teach them to pay themselves first by putting a certain amount into savings (an account in their name). Then teach them the importance of giving by having them donate a portion of their funds to a charity of their choosing. Lastly, allow them to spend the rest. Reinforcing these money habits when they’re young can help them continue applying the lessons learned when they are older and independent.

3. Distinguish between true needs and wants.

Everyone needs food, clothing, shelter and transportation. But while food is a need, eating out every night is a want. Clothes are a need, but the latest designer clothing is a want. That doesn’t mean that you can never go out to eat or purchase a pair of designer jeans, and a great way to teach your children the difference between needs and wants is through back-to-school shopping.

If you have older kids, consider letting them do their own shopping. Drop them off at the mall with a universal gift card preloaded with their budget and a list of items that they need. Let them make the difficult decisions when it comes to limited resources and unlimited options. Your child will either impress you with their ability to stretch a dollar, or you will have to make some exchanges. Either way, it’s a learning experience.

If your kids are on the younger side, you have the final say in what they will purchase, but give them choices: gently worn instead of new, one expensive item instead of two affordable ones, tops from the fashion stores but generic bottoms.

4. Stay on the correct side of compound interest.

You don’t need to be a rocket scientist to figure out that you will be better off earning interest on your own money instead of paying interest to someone else.

(a) Earning interest on your own money

It’s not what you know but what you do that matters most. While it is not a hard concept to grasp that earning interest on your own money is better, you can put that knowledge into practice by opening a children’s savings account. I would encourage you to search “bank account for kids” as that is where you will find the top children’s savings accounts. Always read the fine print about fees and minimums before opening an account. Once the account is open and funded, review the monthly statements with your child and show them how the interest grows over time.

(b) Paying interest to someone else

While you should teach your child there is no such thing as good debt, you should emphasize the many uses of credit. Credit is a tool that, if used responsibly, can help you put a roof over your head, provide transportation, or possibly fund higher education, such as college or trade school—both of which could lead to higher income potential.

Most people learn the dangers of debt the hard way, but it doesn’t have to be that way for your child. Explain to your kids that credit is not their money. It is a loan they must pay back, with interest and the longer it takes for them to pay it back, the more it will cost them. If your child understands all of that, they can avoid becoming another statistic.

5. The importance of giving and volunteering.

You are probably wondering what charitable giving and volunteer work have to do with financial literacy. Money in and of itself is very easy; it’s the behaviors and emotions involved with money that get many people into trouble. This is why it’s important to teach your kids the value of giving and volunteering. Growing up most of us have heard repeatedly that it is better to give than to receive, and there is logic behind that. The positive feelings you experience when you give last much longer than the temporary euphoric feeling you get when you spend money on yourself. Teaching your kids to give and to volunteer helps develop discipline and empathy toward others that will help them stay focused on what is truly important. which can have a profound impact on their finances as well as every other aspect of their lives.

article I wrote courtesy of: https://www.letsmakeaplan.org/blog/vi…

posted by Steve Repak
on October, 01
Source: Good Reads

The concept of saving money by cutting expenses may not be top of mind for you. When I was a young soldier serving in the United States Army, I thought the only way to save money was by earning more money. However, earning more money is not the answer to helping you save more money. After 12 years of service all I had to show for it financially was over $32,000 of credit card debt – even when my food and clothes were paid for and I was provided a place to live! I ended up with NO SAVINGS and a ton of debt because with every promotion my pay would increase but my spending would increase even more. If I have said this once I’ve said it a million times: what separates those who have savings from those who don’t comes down to the simple formula of spending less money than you make.

I believe a large contributor to people being unsuccessful when it comes to spending less is that they take an all or nothing approach. When they do this, they make such drastic cuts in their spending that after only a short time they become frustrated and give up. I am not saying that making drastic cuts in one or two areas of your spending doesn’t work, but finding many places where you can cut out a little can help keep you on track for a longer time.

For example, if you cut out your daily latte, you could save over $150 a month. The same goes for the mid-day energy drink pick-me-up; that afternoon ritual will cost you over $100 a month. If you take an all or nothing approach, you will likely end up with a caffeine withdrawal headache and after a short period of self-denial, you may find yourself back to spending hundreds of dollars each month on those drinks. Instead of purchasing both drinks every day you, what if you decided to alternate one per day? You can save roughly $125 a month and still get to enjoy both of those drinks. In addition to simple changes to your spending habits like this one, below are my two best tips to help you cut your overall expenses:

#1. Track your expenses.

Grab a notebook and commit to tracking your expenses for the next 30 days. Doing this is as easy as writing down what, where, when and how much you spend every time you spend money. On average, you can expect to save anywhere from $150 to $250 after performing this exercise. So how does that work? Sunlight can make a great disinfectant, and it is only after you know what you are spending your money on that you can choose where to reduce or cut.

#2. If you don’t see it, you can’t spend it.

Before you pay anyone else, make sure you are paying yourself first. To do so, put money into savings, preferably at a financial institution other than where you have your checking account so it is harder to quickly transfer money from your savings directly to your checking account. Direct deposit and auto-draft are two terrific options to do this each month without any effort on your end. By getting that money out of your checking account, you will have no choice but to spend less because the money won’t be available to spend.

via @CFPBoard http://www.letsmakeaplan.org/blog/vie…

posted by Steve Repak
on March, 04
Source: Good Reads

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Get to know God through his real-life stories and apply his word to YOUR real life! The following link is ONLY for my #Radio listener’s and #socialmedia followers!

https://gumroad.com/l/getting-to-know…

posted by Steve Repak
on December, 29
Source: Good Reads