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Channel: financial wellness – Personal Finance Blog | LSS

How to Minimize the Potential for Identity Theft

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Identity theft can literally happen to anyone. From children and teens to adults and seniors, no one is 100% protected from being scammed. However, there are ways that you can minimize the possibility of being a victim of identity theft. Here are 4 simple tips:Identity Theft

Review Your Credit Report

Pull your credit report from all 3 reporting agencies (Transunion, Equifax, and Experian) at least once per year. Because you can get them all for free through AnnualCreditReport.com, you could always pull one each quarter instead of all 3 once per year. Look for anything out of the ordinary, such as accounts you didn’t open or balance increases that seem too high.

Shred Documents

You might think that no one will ever dig through garbage, but that’s exactly what happens in some identity theft cases. So never throw away anything without shredding it if it has your personal information listed, such as Social Security Number, date of birth, and full accounts numbers.

Don’t Click the Link

Be cautious of any and all texts or emails you get if they’re trying to get you to click a link – even if it’s from a trusted company because scam emails can look legit. If the email creates a sense of urgency, like your account is suspended, call customer service or login to your account to check out the status instead of clicking the link.

Update and Use Strong Passwords

Hackers are really good at what they do. So it’s important to avoid using the same password for multiple sites. Create strong passwords with capital letters and special characters. DON’T use any dates of birth, family names, pet names, etc. If you haven’t updated your passwords in a while, it’s a good idea to do that.

The key is to make it difficult for scammers to get your information.

For more tips, read Tips to Protect Yourself From Identity Theft or if you are a victim of ID theft, check out What to Do If You Become a Victim of Identity Theft and visit IdentityTheft.gov.


Author Elaina Johannessen is a Program Director of LSS Financial Counseling.

The post How to Minimize the Potential for Identity Theft appeared first on Personal Finance Blog | LSS.


Still Helping Your Adult Children?

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Our blog on parents helping grown children continues to be our number one read blog 4 years in a row! There is a reason for this: it is a pervasive and disturbing issue for families. I know I see it almost daily in my office to some degree or another. I’m a parent of an adult child, so I understand the compulsion to help.

Reasons We Help Our Adult Children

Many of my clients are parents going into credit card debt, mortgaging their homes, or sacrificing their own needs to help out adult children. The kind of assistance given that I’ve seen:Adult Child and father

  • Finance a business venture
  • Pay for college
  • Pay for health insurance
  • Help support grandchildren
  • Pay for living expenses (rent, phone, car, auto insurance, etc.)
  • Pay for leisure activities (travel, tobacco use, sports…)

Teach and Launch

We need to remember, though, that our job is to show our little birds the ropes of getting food, being safe, and building their own nest. Sometimes we even have to kick them out of the nest for their own good.

Still, it can be hard to say “no” or not jump in and help. And, if you choose to not help, you can feel like a jerk. When my daughter graduated from college and was living at home, I charged her rent. My friends and sisters were aghast that I would do that. I didn’t need the money, after all. I felt a lot of guilt.

But, I stuck to my guns because I also see plenty of adult children in my office who are being helped by parents. They come in with their own growing financial issues, despite having help from parents. What I often see are young adults with the newest iPhones, several streaming subscriptions, or new car loans. They took on these unnecessary expenses because they were being subsidized by parents. They didn’t get a chance to stretch their personal budgeting wings.

Importance of “Tough Love”

When the subsidy ends by parental choice, or more sadly, because the parents suffered some serious misfortune like job loss, divorce or death, it can create huge problems for the adult child. If a parent dies, adult children can experience homelessness because they were never pushed out of the nest. They no longer have a place to live, nor the skills to find one.

That’s an extreme example of a real situation, of course, but it certainly motivated me to make sure my child understood what it takes to survive which, in our species, includes paying for housing. It is harder for young people today, too. While incomes have remained stagnant the past 20 years or so, rental costs have gone up an estimated 70%! This makes it even more critical they have the skills to survive.

Changing the status quo, especially when it comes to our children, can be very difficult for us and for them. Read the most read blog and this one, too, on breaking the cycle to help you with the conversations. Not handing out money but lending money to adult children? Read this.

As a point of encouragement, I still remember my daughter telling me not long after college she felt more like an adult than her friends because she was paying her own way. That was a huge relief for me! And worth every minute of guilt.


If you or your adult child needs a little more personal finance guidance, LSS Financial Counseling offers free budget, debt, and credit counseling. For more info, call LSS at 888-577-2227 or visit our website at www.ConquerYourDebt.org. Or CLICK HERE to get started online.

Author Mary Ellen Kaluza is a Certified Financial Counselor with LSS Financial Counseling.

The post Still Helping Your Adult Children? appeared first on Personal Finance Blog | LSS.

Why Giving Actually Makes You A Happier Person

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We’re flashing back this Friday to Mary Ellen’s post about giving to others and why people who give are generally happier, regardless of income.


A colleague recently loaned me her copy of Happy Money: The Science of Happier Spending by Elizabeth Dunn & Michael Norton. It’s all about the scientific research on how we can increase our personal happiness with our money—what we spend our money on, when we spend it, with whom we spend it, and for whom we spend it. (Read Elaina’s blog about spending money on experiences Buy experiences instead of things.) The entire book is quite interesting, some of it provocatively counter-intuitive, but I was particularly struck by the chapter on giving.By helping others we help ourselves

I can recall many instances of giving or sharing (referred to as “pro-social spending” in the book) that made me feel happy, although I never gave much thought to it. I’m not alone in getting pleasure out of giving. In the book, the authors relate an experiment where random people are given an envelope with either $5 or $20 in it, and instructions to spend it on themselves or others. The participants were called later that day to report on what they did with the money and how they felt. Those who spent the money on others were “measurably happier” than those who spent it on themselves, whether it was the $5 or the $20.

The chapter goes on to highlight a representative sample of 600 Americans whose average spending was better than 10 times more on themselves than on others.

How much people spent on themselves did not impact overall happiness, but the more money they gave or gifted, the happier they were, despite income bracket.

A Gallop World Poll of more than 200,000 people in rich and poor countries showed the similar results. Giving more created as much happiness as making more.

I recall a time when my daughter was 6 and we went to an event about the plight of struggling bus drivers in Mexico. She was so moved by their story, she emptied her piggy bank back at home to give to the strikers’ families. She was thrilled to help and did not regret her loss of spending money. Even very young children exhibit more delight in sharing treats than consuming them themselves. A study with toddlers showed they actually derived more happiness “when the treat came from their personal stash.”

It is easy to raise an eyebrow at these kinds of studies because we have to depend on people to honestly respond or observers to not have desired results color their interpretations. I’m the first to raise an eyebrow. But, an interesting study measured cortisol (the stress hormone) of participants given Happy family portrait$10 to do whatever they wanted with the money showed that those who gave the least to others had higher levels of cortisol in their saliva. We’ve all heard that stress can have serious impact on our physical health. Pro-social spending may help us live longer!

Whether I live longer or not, I am now more conscious of my feelings after giving and more observant of others. I was recently sitting at a stop light where a panhandler stood with his sign. We were a line of 5 cars, I was 3rd down. I rolled down my window to give the elderly man a few dollars. It must have inspired the other drivers because 3 more followed suit. I thought how generosity begets more generosity. I felt good about my gift and imagined the other drivers felt the same. All that happiness in a simple act at a stop light!

As a financial counselor my typical advice is cutting back and saving. Cutting back as necessary to stop digging the debt hole, and saving to stay out of the hole. I don’t recall ever recommending someone give more; usually I suggest just the opposite.

While I may not always change my recommendations, I will certainly view them differently and encourage the people I meet with to think more about what makes them happy when deciding where their money goes.

For some, giving financially may not be realistic and that’s okay. The good news is there is still a way to become happier…give your time. Check out this post: Change your life in one easy step: Volunteer.


If you’d like to give more, but credit cards are holding you back, LSS can help. By meeting with a financial counselor, you will work together on an action plan to become debt-free for good. Think how financial freedom can change YOUR life! For your free session, call us at 888.577.2227 or begin your online session by clicking here: GET STARTED.

Author Mary Ellen Kaluza is a Certified Financial Counselor with LSS Financial Counseling.

The post Why Giving Actually Makes You A Happier Person appeared first on Personal Finance Blog | LSS.

How to Manage Money in a Relationship

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Communication is key to a happy relationship and that also applies to managing money. The more you talk about it and work on it together, the better off you’ll be together. But different methods work for different couples. So here are a few options to talk through and find the best option for you both:

1. Completely Merge Your Finances

One option is to ditch your separate accounts and pool all of your money into one account. This may be easier for couples to budget and keep track of their money since it’s in one account; there’s only one place to look.

2. Have a Joint Account Along With Separate Accounts

Personally, this is my preferred method and what my husband and I do. We have a joint account for paying the main bills such as the mortgage, utilities, insurance, etc. Then we each have a separate checking account for personal spending. While this works for us, it may not work for everyone. If you choose this method, you need to make sure you’re talking to each other if you make any big purchases and ensure that there’s money going to savings.

3. Keep Accounts Separate

For some, it may just be easier to keep everything separate if you’re both comfortable managing money and can have frequent conversations about your budget and bills. If you go this route, it’s a good idea to set up automatic payments to avoid any missed payments.

Tips for SuccessMoney and Relationships

Talk About Money and Goals

Be sure that you’re both on the same page with your finances. What are your goals? Do you want to take a vacation soon, pay off debt faster, or purchase a home? Keep the lines of communication open and talk about it regularly; aim for at least once a month. Sometimes our finances change, whether it’s a new bill or increased/decreased income. So it’s important that you both know what’s happening.

Save

Open either 1 or 2 separate savings accounts (whichever you prefer) and set up automatic deposit(s) into your savings account. Savings will be your safety net in case of an emergency/unexpected expense and will hopefully help you avoid debt. Also, you both should try to set aside money into a retirement account like a 401k or 403b. If your employer offers this option and/or an employer match program, take advantage of it.

Create a Shared Calendar

Regardless which of the 3 money management options you choose, put all your due dates and payment info on a shared calendar. That way, if one of you is ever out of town or injured, the other person will always know what payments are due and when.


If you and your partner have credit card debt, LSS can help. You will receive realistic, action-oriented advice and options to pay off your debt faster so you can achieve your other financial goals. Call us at 888.577.2227 for your free session or GET STARTED ONLINE at your convenience.

Author Elaina Johannessen is a Program Director with LSS Financial Counseling.

 

The post How to Manage Money in a Relationship appeared first on Personal Finance Blog | LSS.

Revenue Recapture

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It is that time of year with qualifying Minnesotans getting refunds from the state for property taxes or rent paid. Or not. Some unhappy folks are not getting their tax refunds, thanks to Revenue Recapture.

The Revenue Recapture Act authorizes the Minnesota Department of Revenue to take your state tax refunds to pay debts you owe to other public agencies, including the Minnesota college and university system, local governments, or the IRS. They can also “capture” other monies that might come through the State, like lottery winnings. Learn more at the MN Department of Revenue website.

OPEN YOUR MAIL!

You may be shocked and angry when you don’t get your refund. But, you wouldn’t be, not if you opened and read your mail. Notices of the debt have been sent out for some time before it ends up with the Department of Revenue. And, the entity that is making a claim on the refund has to send a letter within 5 days of notifying the Department of Revenue with details of the debt, how to contest it, and the right to appeal. The law allows for 45 days to contest the recapture.

DEBTS SUBJECT TO REVENUE RECAPTURE:

  • State taxes
  • ​Child support
  • Court-ordered criminal restitution
  • ​Debts owed to a hospital or ambulance services
  • Debts to other Minnesota agencies
  • Debts to government agencies from other states
  • Federal taxes

In that order.

THE LAW DOES ALLOW FOR EXEMPTIONS FROM RECAPTURE:

  • Medical debt if the debtor’s income was below a certain threshold at the time of service. That limit changes each year, but it isn’t very generous. For example, in 2016, the limit for an unmarried single person was $12,620. The income limit is based on the number of dependents, so a family with 2 dependents can earn $19,110.
  • Your debt was for over-payment of public assistance and you still get assistance. But, if the over-payment was due to dishonesty or purposefully broken rules of the program, they can take your refund.
  • You have a payment plan set up, are making payments, and the plan specifically says they won’t use recapture.Income Tax Revenue Recapture
  • The debt is more than 6 years old. Except for federal student loans – they follow you to the grave.

The big BUT here is that you must tell the Department of Revenue you are exempt based on a situation above.

APPEALING THE RECAPTURE

The appeal starts with the agency requesting the recapture, not the Department of Revenue. Write the agency explaining why they shouldn’t keep your refund:

  • You don’t owe the debt (because it isn’t yours, or it has been paid.)
  • You are exempt from recapture.

Remember – you’ve got 45 days to appeal after getting the written notice. When they receive your appeal request, they must set a hearing within 30 days.

You didn’t get your notice? You then get a hearing on both the notice not received and the issue of taking your refund.

 THE FEDS AND OTHER STATES

The IRS will also take federal tax refunds to pay debts (“offset” in IRS-speak), including:

  • Federal tax debts
  • Federal agency debts like a delinquent student loan
  • State income tax obligations
  • Past-due child and spousal support
  • Certain unemployment compensation debts owed to a state

The IRS apply the offsets to federal debts first. Like MN Revenue Recapture, you will get a letter noting the original refund and the offset amount. It will also give the contact information for the agency that received the offset.

State laws can vary, so if you live in another state or are expecting a refund from another state, check with the taxation or revenue department of that state.

ON THE POSITIVE SIDE – REVENUE RECAPTURE IS A RELATIVELY PAINLESS WAY TO PAY A DEBT

I have heard from people that they don’t file taxes because the government just takes their refund for their student loans or other debt. Some debts never go away – like debt to the government. If you are eligible for a refund, file your taxes! Reduce that debt! It’s not like that money is coming out of your pocket – it was never in your pocket.


Author Mary Ellen Kaluza is a Certified Financial Counselor with LSS Financial Counseling.

 

 

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What to Consider Before Buying Your First Home

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Rents are crazy high. I regularly meet with people who tell me they want to buy a house because that rent money is just going into someone else’s pocket. On the surface this seems like sound reasoning, but there are lots of things to consider in this decision.

DO YOU LIKE HOUSEHOLD CHORES?

If you buy a single family home with a yard, expect to spend most weekends doing chores:

  • Mowing
  • Raking
  • Shoveling
  • Painting
  • Cleaning gutters
  • Weeding

And that’s just on the outside! Chores don’t have to feel burdensome, though. I like shoveling snow, for example. Being outside after a fresh snow, getting exercise, chatting with neighbors, eyelashes frosting up is enjoyable. (I realize I might be in the minority there 🙂 ) You can pay someone to do it for you, of course; it just increases your costs.

HOME MAINTENANCE AND REPAIRS

As a homeowner, you don’t get to just call the landlord and say the hot water heater went out. You are responsible! The rule of thumb is to save 1% to 1.5% of the value of your home for home maintenance. So, for a house worth $250,000, you will want to put aside at least $210/month. You may not spend $2500 each year, but the year you have to replace the roof, you’ll be glad you did.  And seriously regret it if you didn’t!

TAXES AND INSURANCE

Like maintenance and repairs, your landlord is including taxes and insurance costs in the total rent. As a homeowner, you will pay these out of pocket – either through an escrow account with your mortgage lender or directly.  If taxes are $3000/year and home insurance is $1500/year that is an additional $375 per month. These costs are not fixed, like a (fixed rate) mortgage payment. You can expect them to increase some almost annually.

PRIVATE MORTGAGE INSURANCE (PMI)

PMI is not insurance for your benefit – it protects the lender in the event you stop making payments. PMI is usually tacked on if you have less than 20% down on your new home. Now, 20% of $250,000 is $50,000. Who among us has $50,000 in savings?! While there are some down payment assistance programs available, conditions apply. Most often PMI is added to the mortgage payment. The annual amount is determined by the loan-to-value ratio, or how much savings you do have to bring to the table.

The important thing to remember here that that $250,000 mortgage payment is not simply the $1200 – $1300 payment, but includes all these additional expenses, increasing that payment $500 – $600, or more.Buying your new home

BUT DON’T BE DISCOURAGED!

There are good reasons to buy a home, despite the increased cost:

  • Relatively fixed housing expense
  • Stability
  • Freedom to decorate and change the home as you like
  • Space for children, pets, stuff
  • Growing equity
  • Eventually the home is paid off and no more mortgage payments

Homes are long term investments. For most Americans, our homes represent the biggest percentage of our wealth. A paid home can be inherited, giving a step up to the next generation; can be a source of income in our old age; can be leveraged for other wealth-producing activities – like starting a small business.

The key is to be realistic and prepared:

  • Understand your lifestyle and priorities.
  • Don’t buy more home than you can afford. Lenders and real estate agents have a vested interest in getting you to spend the most money on a home.
  • Be sure to utilize services of non-profit agencies, like LSS Financial Counseling, to help guide you in the process.

HOMEOWNERSHIP AND THE GREATER GOOD

Homeownership benefits the larger community, too, such as:

  • Stable residents, which stabilizes community institutions like schools, churches, and civic groups
  • Better academic performance by school-age children
  • Sources of community history – longtime residents are treasure troves of information
  • Cleaner environment – homeowners are more likely to pick up litter, and not litter in the first place
  • Better public safety – homeowners are more apt to report pot holes or other hazards
  • More trees and flowers – homeowners tend to plant more of these, which not only beautify the community but provide food and habitat for birds, butterflies, and pollinators
  • More attractive homes – homeowners care about the appearance of their home, which benefits surrounding property values
  • Greater concern about all aspects of quality of life in their community

Promoting homeownership is good public policy for towns and cities for those very reasons. As housing costs – both in ownership and rental – continue to outpace incomes, we will need to look at more innovated ways to make homeownership possible.

HOMEOWNERSHIP IS NOT FOR EVERYONE

All of those benefits is not to say we all need to own a home:

  • Some of us might have jobs or lifestyles that make it hard to set down roots
  • Maybe we don’t want the time-consuming responsibilities (not everyone shares my love of snow shoveling or fall yard chores)
  • It is not affordable

Nor should a healthy community want strictly homeowners:

  • The rental market provides jobs and increased property tax revenue
  • Rental units create communities of mixed generations
  • Rental property enriches the diversity of the population

There are both lots of good reasons to own a home and valid reasons to not own a home. Need help knowing where you fall? Call 888.577.2227 for free homeownership counseling.


Author Mary Ellen Kaluza is a Certified Financial Counselor with LSS Financial Counseling.

 

The post What to Consider Before Buying Your First Home appeared first on Personal Finance Blog | LSS.

How to Keep Your New Year’s Resolution This Year

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New Year's resolution

Each year you choose a New Year’s resolution…whether it’s to lose weight, declutter your house, eat healthier, or exercise more. So many people fall off their resolutions because something gets in the way or they get discouraged due to lack of progress. Here are helpful tips to help you actually stick to your resolution this year.

CHOOSE ONE RESOLUTION

The best way to keep your resolution is pretty simple: only choose one. If you have too many goals, it is too easy to get spread thin and tasks to stay on track will seem overwhelming.

KEEP IT SIMPLE AND CLEAR

Don’t choose a complicated goal; instead keep it simple. For instance, we’re going to choose paying down debt as our goal for this post. So the goal would be: “Pay off my credit cards.”

CHOOSE CLEAR, ACTIONABLE STEPS TO TAKE

Without actionable steps, you will never reach your goal. Think about meaningful, concrete actions that will help you pay off debt. For instance: create a budget and stick to it, reduce spending, stop charging, cut up credit cards, pay with cash only, save for more expensive items you need, pay more than the minimum payment due, and save for emergencies.

PRIORITIZE YOUR STEPS

Prioritize the actions you came up with. In this case, the first step would be to STOP CHARGING and if necessary, cut up cards if you think you may be tempted to continue to charge. Next, create a realistic budget and determine where you can cut spending.

If you don’t stick to your budget and reduce spending, then you won’t be able to pay more toward your cards. And that is what will help you pay down debt faster so it’s a crucial action to take. Next, when you do spend, have a plan and pay with cash / money you have set aside for what you need. Finally, without emergency savings you are in danger of falling back into the debt trap. Therefore, it’s important to include savings in your budget.

BE REALISTIC

You are more likely to fail if you are unrealistic with your plan. For example, you say you’re going to cut out every unnecessary expense or that you’re never going to the coffee shop or dining out.

But if those are habits you have maintained for years, it’s unrealistic to think you’re just going to stop them cold turkey. Instead, set limits and just reduce those trips to start with.

Instead of 3 days a week, switch buying coffee or take-out to once a week. Then, if you’re able, cut back to once every other week if you can. It all adds up!

DON’T GIVE UP

One of my favorite phrases is “life happens.” And it couldn’t be more true for the average person. We will all have to deal with an injury or illness, broken appliance, emergency vet trip, broken down car, or even a government shutdown at some point. So even if something like this comes up, do your best to get back on track.

REPLACE BAD HABITS WITH GOOD ONES

Perhaps you are a retail therapy kind of person or as mentioned above, you and your family dine out quite a bit. It’s so much easier to replace a habit than to just stop doing something. Instead of dining out, make dining in fun: plan a meal in and cook together as a family. Taco Tuesday, anyone?? Make it a weekly thing. Figure out what you can do to still have fun together while saving money at the same time. Food themes, game, and movie nights are always fun. When I get together with my family all we need are a few decks of cards and some snacks and we always have a blast. 🙂

TELL YOUR LOVED ONES

Tell the people closest to you what you’re trying to accomplish. It’s much easier to stick to good habits and reach your goal if you have support.

DON’T FORGET TO CELEBRATE VICTORIES – EVEN SMALL ONES!

When you reach a goal or even accomplish part of a goal, be sure to celebrate. Whether it’s sticking to a budget or avoiding charging purchases for a few months, you need to pat yourself on the back and maybe even treat yourself a little. But the key is a little. Don’t go overboard and make sure it doesn’t create a slippery slope back into back habits. Take the family out for ice cream or go out to a movie; don’t purchase a trip to Mexico or a new TV. Keep it small and simple…and of course cheap because you’re trying to become debt-free after all!

YOU CAN DO IT

With a little motivation and planning, you CAN achieve your goal. If you have started taking action or haven’t even picked a resolution yet, that’s okay. Now is as good a time as any to start. Because you can’t get anywhere without starting. You got this!!

If you would like help creating a realistic budget or options for paying down debt the fastest, LSS Financial Counseling can help. Call us at 888.577.2227 for or GET STARTED ONLINE with your free and confidential appointment.


Author Elaina Johannessen is a Program Director with LSS Financial Counseling.

The post How to Keep Your New Year’s Resolution This Year appeared first on Personal Finance Blog | LSS.

America Saves Week 2019: Saving for the Unexpected

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Well it’s America Saves week and today’s post is going to talk about one of the most crucial actions to take: saving for the unexpected.

What is the unexpected?

It might sound simple, but just to clarify, you want to save for things that may happen that you’re not expecting. For instance, your car breaking down is an unexpected event. However, things you know you will need to do such as an oil change is not the unexpected. (So you should be planning for that type of expense differently.)

Why should I save for the unexpected? What if it never happens?

Well if you’re one of the lucky few who never has an emergency expense come up, you should play the lottery! (Just kidding!!) But seriously, at some point in our lives we are all going to have an expense pop up that we didn’t plan. So many people nowadays don’t have enough in savings to cover a $1000 or even $400 expense. And that can lead to debt and/or falling behind on other bills if you don’t have money in an emergency savings account.

What’s the easiest way to save?

I encourage anyone that hasn’t done so to set up a separate savings account with automatic deposits directly from your paycheck into savings. It works best if it’s out of sight and out of mind; then you won’t be tempted to spend that money.

What if I don’t have any extra money to save?

This is the toughest part about saving. BUT you simply must do it.

Savings is the best way to provide yourself a safety net to avoid debt in the case of an emergency/unexpected expense.

The first step to take is to determine where your money is going by creating a budget and/or looking at your online banking info (or whatever works best for you). Regardless what method you use, look at where every penny you spend is going.

Then, determine what expenses are flexible, such as dining out, memberships, video streaming services, grabbing coffee to-go, etc. You will need to determine your priorities and then make savings a priority instead of one of those non-necessities. Also, any time you get change from a transaction, put that money into a jar. (There are apps for that, too, that you can look into. Be sure you find one that has good ratings and watch out for hidden fees.)

Make it work!

The moral of the story is in order to maintain or achieve financial stability, saving for the unexpected is a must. The more you can build up emergency savings, the better you’re setting yourself up for the future.


If debt is holding you back from achieving financial stability or even building up savings, LSS can help. Call us at 888.577.2227 for your free session or create your online profile and get started at your convenience.

Author Elaina Johannessen is a Program Director with LSS Financial Counseling.

The post America Saves Week 2019: Saving for the Unexpected appeared first on Personal Finance Blog | LSS.


Planners, Advisors, or Counselors: Who should you turn to?

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Financial Planner vs. Financial Advisor vs. Financial Counselor

Have you ever been confused by where to turn when you need help with your finances? With over 183 different professional designations, (according to the Financial Industry Regulatory Authority (FINRA)), it wouldn’t be surprising if you were! The following definitions may help clear things up a bit.

Financial Advisor

Simply put, a financial advisor is anyone who advises you on your finances. Think of it as an umbrella term in the way that “medical professional” could be used to refer to a surgeon, a general practitioner, a nurse, or a psychiatrist.

A Financial Advisor may specialize in estate planning, insurance, investment/wealth management, debt repayment, tax planning, or many other areas of the financial industry. The important thing is that you are meeting with the right kind of financial advisor (medical professional) to meet your needs.

Financial Planner

A Financial Planner is like a general practitioner who works with you on your long-term health goals. They can refer you to other financial advisors when you need a specialty they don’t have.

A Financial Planner must complete coursework and pass rigorous testing to be able to advise individuals on how to reach long-term goals like planning and saving for retirement, obtaining life insurance (and other types of insurance), estate planning, and other long-term financial goals. Like Financial Advisors, they can specialize in one or several different areas.

It’s important to make sure any Financial Planner you meet with is a Certified Financial Planner; this means they have not only passed all coursework and testing, but they also have at least three years’ experience in the field and they have a fiduciary responsibility to you.

Someone who has a fiduciary responsibility is required by law to offer plans and products in the client’s best interest; not the option that makes the planner the most amount of money.

Fiduciary Responsibility

Financial Planners either make their money by charging a fee for service or through a commission selling you products, or a combination of both. Our friends at NerdWallet offer a good guide for finding a Financial Planner that fits your needs.

Financial Counselor

If a Financial Planner is a General Practitioner that you work with and build a relationship with for your overall, long-term health, a Financial Counselor is like a doctor at an Urgent Care center.

A Financial Counselor (also known as a Consumer Credit Counselor) will work with you on a short-term basis to reach an immediate financial need or goal:

  • Paying off medical or collection debts
  • Setting up a Debt Management Plan to pay off high interest credit cards
  • Making a plan to improve your credit score
  • Learning solid budgeting skills

At LSS Financial Counseling, we have Financial Counselors who specialize in Pre-Purchase Home-buying Counseling, Foreclosure Prevention, Reverse Mortgage Counseling, and Student Loan Repayment Counseling.

Unsure where to begin?

If you are still unsure who you should work with to reach your goals, it may make sense to start by determining which of your goals needs the most immediate attention.

If overspending or debt is holding you back from being able to invest more towards retirement or build emergency savings it makes sense to meet with a Financial Counselor to make a plan to pay off your debt and get your spending under control.

If your goal is to talk about retirement, investments, estate planning or making sure you have the proper amount of insurance in place the professional for you would be a Financial Planner.

If you just don’t know which is most important, make an appointment with an LSS Financial Counselor for a Financial Health Check-up and they can help you plan your next steps. Call 888.577.2227 to set up an appointment with a certified LSS Financial Counselor today!


Author Shannon Doyle is a certified LSS Financial Counselor.

The post Planners, Advisors, or Counselors: Who should you turn to? appeared first on Personal Finance Blog | LSS.

Mental Health and Finances

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May is Mental Health Awareness Month! According to NAMI-MN, mental illnesses can affect persons of any age, race, religion or socioeconomic status: in fact, about one in four American adults experiences an episode of mental illness per year. Mental health disorders account for more disability that any other illness, including cancer and heart disease reports the Centers for Disease Control and Prevention (CDC).

In his June 2018 article on the links between financial, physical and mental health, Brett Whysel of Decision Fish LCC wrote that:

  • Individuals with debt are three times more likely to have a mental health issue, especially depression, anxiety and psychotic disorders,
  • Financial stress is the second most common cause of suicide, after depression, and
  • According to Therapist Rachel Mickenberg, humiliation among the financially stressed makes it harder to seek help as it worsens mental health.

If you or someone you know is struggling with money and debt after an episode of mental illness, please know that you are not alone. As overwhelming as it may seem in the moment, you can take control of your finances, whether it’s for the first time, or starting over again. Here are some basic steps to get you started.

Get connected to resources

Some people experience periods of unemployment or reduced hours at work after an episode with mental illness. This can make continuing regular activities – including covering living expenses –  difficult and more stressful, especially if there is no income coming in.  Check out these resources to help you get through:

  • If you live in Minnesota, you can use Bridge To Benefits website to screen your eligibility for public benefits programs like Cash Assistance, SNAP, Medical Assistance, etc. You will get a report of what you may be eligible for and how to apply for it. In other states I recommend you contact your County Financial Assistance programs and/or call United Way’s 2-1-1 to find resources in your area.
  • Hunger Solutions Minnesota has a list of local food shelves and other food resources available in Minnesota Communities.
  • Talk to your employer about the Family Medical Leave Act (FMLA) and the availability of any short or long-term disability you may be eligible to receive. Disability typically pays out sixty percent of your regular pay which could help get you through until you can work full time again.
  • Explore other community resources: for example, in Minneapolis eligible Metro Transit riders can enroll in TAP – Transit Assistance Program – and purchase bus rides for just one dollar!  

Make a list of your debts and prioritize

If you have debts before, during, or after a mental illness episode, that episode can make it even more difficult to deal with the debts due to late payments, extra fees, reduced income, or sheer overwhelm. If you are ready to tackle debts, or are just want to make a plan so you know what to do when you are ready, here are some starting points:

  • Get current on basics: make a plan to pay up rent or mortgage payments, utilities, car payments, etc…these are most important to your immediate well-being
  • Get organized: Open your mail and sort your bills by creditor: this small act can feel enormously overwhelming to start, but takes away some anxiety by just knowing what you are dealing with
  • File any appeals: If you have insurance or Medicaid/Medicare and some bills aren’t covered that you believe should be call your insurance company right away and file an appeal. Medicaid may go back up to three months and pay medical bills.  Ask what the process is to submit those bills.
  • Get current on credit cards: call credit card companies and work out payment plans to either get caught up or see if it is possible to enter into an internal hardship plan.
  • If there is money left over prioritize any collection accounts if you have them. Start with the smaller accounts that are easier to pay off.
  • If there is not enough money to go towards any or all of your debts, you may want to consider bankruptcy.

Give yourself a break

How do you eat an elephant? One bite at a time. Money issues and debt are overwhelming whether you have a mental illness or not. When you start to feel overwhelmed with bills or from dealing with debts take a break. Go for a walk, meditate, practice some yoga, or talk with a friend. Come back to it in a day or two with a new perspective or level of energy. You may find it easier to tackle.

Enlist Support

If you find that looking at your situation is just too overwhelming and increases your symptoms, consider enlisting a trusted friend or family member to help you. Make sure they are supportive, empathetic, and non-judgmental.

If you aren’t comfortable reaching out to a friend or family member, LSS Financial Counselors can help you make a plan to manage your finances. From figuring out income and expenses, to prioritizing debts, and making a plan to get them paid we are here to help. For private, confidential, and non-judgmental help with your money call 1.888.577.2227.


Author Shannon Doyle is a certified LSS Financial Counselor.

The post Mental Health and Finances appeared first on Personal Finance Blog | LSS.





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