Isabella Blanca, Author at The Free Financial Advisor

Four Ways To Optimize Your Personal Finances In 2017

February 9, 2017 by Isabella Blanca Leave a Comment

As 2017 picks up steam, more and more people are hunting for strategies to optimize their personal finance picture. Is that you? If so, let’s tackle several techniques you can employ to make it happen.

1. Visit Your Insurance Agent.

If you’re serious about optimizing your personal finances in 2017, be sure to visit your local insurance agent. I’m always surprised by the number of people who don’t think to find out what special deals and offers are available.

One insurance agent friend of mine said that you should check every year, because every time you have a birthday, insurance companies may have different solutions that you now qualify to receive. While one company specializes in people in their 20’s, for example, another may not offer great rates until you turn 30. To make your search for a local insurance agent simple, you can use an insurance agent search website that will allow you to be geo-specific.

2. Create A Detailed Budget.

While this advice might seem obvious and not worth mentioning, we’re always amazed on our podcast about the number of new studies every year that show how many people DON’T have a simple spending plan. Don’t have one? 2017 is a great year to start.

A budget will help you optimize your personal finances for 2017 in numerous ways… but how about the biggie: it gives you a roadmap to a very clear understanding of where you’re spending your money and how much disposable income you have after paying all of your bills….which leads us to #3.

3. Find Money-Saving Apps.

There’s an app for almost everything, isn’t there? I was just reading yesterday about an app that would monitor my toothbrushing activity. While the huge number of apps in the Google and iOS stores can be overwhelming, the growing popularity of apps can work in your favor as far as personal finance goes. From Mint to Finovera and Acorns, there’s a personal finance tool for just about every part of your financial life. Finding the perfect app can be as simple as conducting a simple internet search.

4. Talk To Your Kids About Money.

Kids need to be taught about everything, including how to spend and save money. To put this process in motion, it’s a good idea for you to set aside time each week to provide them with clear, practical examples of smart money decisions they can make to start building wealth. Not only will this process benefit your children, but it could help you maintain financial stability in your elderly years in the event that you need assistance from one of your kids. Don’t have your financial house in order? Helping your kids learn could be the kick in the butt you need to get your act together, too!

Conclusion

If you’re serious about getting your personal finances in order in 2017, what are you waiting for? Any of the strategies listed above can help you accomplish your objective. By systematically implementing these tips and tricks, you will likely find that 2017 is one of your most lucrative financial years yet. Good luck!

Photo: Steven Depolo

6 Pointers for Better Conference Calls

March 16, 2016 by Isabella Blanca Leave a Comment

The popularity of video conferencing continues to climb, with 96 percent of business managers and leaders saying the technology has been instrumental in allowing them to collapse the barriers of distance and culture, says Scoop. The article further shares different views of users on a couple of issues, based on the results of a Polycom survey:

Appearances:

Participants from countries like India (30 percent), Singapore (26 percent) and Poland (21 percent) were more likely to pay attention to what their counterparts on the other side of the screen were wearing while 13 percent or less from participants in the UK, France, Russia and The Netherlands were less likely to mind or find it distracting.

Video Conferencing in the Asia Pacific:

Results also pointed out that video conferencing was a valuable tool for Asia Pacific businesses, allowing 60 percent of disparate teams to touch base or keep regular contact, without resorting to travel. Given the boom of startup companies in many parts of Asia, with many management teams overseeing offsite staff in different countries, it’s not a big surprise that the technology has proven indispensable for companies in the region.

Client talks:

60 percent of respondents from India said they would use video for drumming up new business and reaching out to clients. Russia followed behind with 49 percent and Brazil at 44 percent. On a global context, 38 percent expressed that they would use or have already used video conferencing in capturing new business opportunities and clients.

Hiring and Attracting Talent:

US came on top as the country that used video conferencing the most to fulfill hiring and recruitment goals, with 32 percent of participants saying they would use for these purposes—or have already done. APAC fell in step, with 28 percent. From conducting preliminary meetings to panel interviews through video, companies are able to cut hiring and recruitment costs as well.

Flexible Workplace:

Europe, the Middle East and Africa emerged as the top three countries to use video conferencing as a means to build flexible working environments for employees, which included work-from-home or telecommuting solutions. With industry players like Blue Jeans offering conference call options, HD clarity, and collaborative features, working remote has never been easier or simpler.

Improving Your Conference Calls

As video conferencing grows invaluable to business, knowing how to improve the quality of your online conferences becomes even more important as well. If you’re reaching out to a client, one wrong move—a bad shirt, unprofessional surroundings or inappropriate background noises—could kill the deal instead of cinch it. So here are a few tips from Computer World on what video conferencing rules you should know and follow:

Dress for it. You won’t have to break out your trousers or skirts. A professional top will suffice. Just make sure you don’t stand up within camera range if you aren’t wearing the right bottoms. Also, don’t try anything until you’re dressed and ready. One woman tried out a mobile program, using it to contact her colleagues. She was working from home in the buff. By activating the program, she didn’t realize she was sending video calls to her colleagues—naked. So don’t make that mistake. Dress for the part before you sit down in front of the screen.
Ditch the bed. Keep it professional. Don’t make or take calls in bed. You could find a pleasant and well-lighted place to make or take those conference calls instead. Allowing your colleagues to see you in less-than-professional surroundings can derail the conversation or worse, put you in a bad light.
Never video conference while in the bathroom. Enough said.
Be more mindful of your actions. Using video conferencing often takes some getting used to. Just always be on alert. Otherwise, you find might find yourself doing things you wouldn’t want anyone from the office to see—like scratching your privates or picking your nose.
Don’t emit strange sounds. To be fair, you might not even know you’re making them. So be careful not to stand too close to the mike. You wouldn’t want your team to hear you breathing heavily, emitting sighs, groans, moans and other sounds that, while completely innocent, might not seem appropriate on a video conference.
Keep your pets out. Again, the point is to keep your conference calls professional. This is especially important if you’re conducting a presentation. Don’t do anything on your end that could detract from the discussion at hand, distractions included. So make sure Fido doesn’t come running into the room, treating your team to the sight of you being smothered in dog kisses and spit.

So pull off your conference calls with confidence. Know what you can and can’t do online. Improve the quality of your relationship with colleagues and clients by changing the way you reach out and communicate.

Video Conferencing – Allows Companies to Reduce their Expenses

August 4, 2015 by Isabella Blanca Leave a Comment

Everyone likes saving money, and most people will do all they can to save as much as they can. As a business owner, you are probably interested in saving money wherever you can as well. And while cutting back on expenses and shortening hours may be one route you’ve thought about for saving money, you don’t need to do anything like that if you adopt a video conferencing system. Actually, you won’t have to change much of anything in your business’s day to day routine if you start using a video conferencing system. But, you may be wondering how a video conferencing system can help your business save some cash, well, it can do so in a number of different areas, some via cutting back on expenses, while others through increasing productivity.

Reduce Travel Needs

The most obvious and most significant change video conferencing can bring to your business is a huge reduction in travel needs. It costs a lot to go visit clients in another state, or even another country, and there are a lot of extra expenses tacked on to traveling besides things like gas or airfare. You need to deal with food, lodging, perhaps some rental vehicles, and so on. Adopting a video conferencing system can completely negate your requirements to travel anywhere as you can get in contact with clients, partners, other business branches, and anyone else you need to talk to that isn’t in the same building. Biz Tech emphasizes the fact that video conferencing not only allows you to stay in contact and share documents with anyone else in your company, no matter where they are, but that it also is a great method for saving time. Traveling somewhere for a meeting isn’t just costly, it also takes a great deal of time. No matter how fast planes become or how advanced maglev trains get, you’re always going to be dealing with time wasted in getting from A to B. With video conferencing, you no longer need to worry about all those wasted hours; you can meet with whoever you need to, discuss whatever you need to, and then get right back to work without any delay. Without video conferencing, that whole process could take days depending on the circumstances; with video conferencing, it’s a matter of hours, or even minutes.

Productivity and Teamwork

This benefit isn’t so much one that cuts back on expenses as it is increasing the amount of money your company can make. Adopting a video conferencing system like Blue Jeans for Business won’t directly increase your profits, but it can and will increase your employee’s productivity and foster better teamwork. Think about it for a moment, setting up even an internal meeting within your office requires all those who will be participating to stop what they’re doing and meet up with you in the conference room or other location. While the actual time spent walking there isn’t too much, with a video conferencing system set up, all participants can instantly join the meeting from their office right when it starts.

Being able to instantly being meetings from wherever you and the other participants are is a huge benefit. Alongside that is how it can help foster an increase in teamwork by keeping all your employees and any different departments in constant contact with each other. Additionally, Social Barrel discusses how many video conferencing systems have options for instant and direct sharing of files and other documents in real time. So you can send out memos and itineraries and anything else digitally during the meeting.

All of the money saved on travel and increase in productivity can help give your company a competitive advantage over your competitors. Inc. states that the constant communication and connection with clients can help foster closer ties and more loyalty. It also drastically cuts back on the time needed to deal with quality checks, revisions, and other changes. Projects that may have taken a week before might only take a day or a few hours with video conferencing.

Going Green

The environment and humanities impact on it has become more and more of a major subject in today’s world. Regardless of your personal stance on climate change, there are definite benefits to shifting your business towards the green side of things. Video conferencing, whether you use a provider that uses green power or not, is a fantastic way of making your business greener without really changing much in your operations. According to Tree Hugger, a report by the Carbon Disclosure Project found that video conferencing systems can cut back CO2 emissions from US and UK businesses by close to 5.5 million metric tons, as well as save upwards of $19 billion across the entire economy.

Getting in on that piece of savings pie may be fantastic, but video conferencing can also cut back on your paper usage, which can cut back on printing usage on costs and so on. Adopting a video conferencing system like Blue Jeans isn’t just a good way to make your business greener; it’s a great way to save your business some serious time, effort, and money.

Work Relocation 101: Don’t Underestimate Moving Expenses

May 20, 2015 by Isabella Blanca 2 Comments

Member corporations of Worldwide ERC Workforce Mobility Association spend an average of $12.2 billion annually on relocation assistance, according to a report recently published by the group. But what does that figure mean for an employee’s own out-of-pocket expenses? Moving Company Reviews compiled data to show moving from Chicago to Denver with 12,000 pounds of personal property could cost around $8,000. Meanwhile, a local move may run about $2,000.

For employees who need to be mobile and jump at a new job opportunity, thousands of dollars can be out of reach. Some companies offer relocation packages, but they don’t always cover the full expense. To figure out what your true budget for moving is, calculate some of these hidden expenses before you pack up your things.

Moving costs

Many companies will still offer reasonable location packages for employees and even take care of the details of organizing the move. Others will give you a sign-on bonus or flat fee to budget out everything yourself. When you need to find movers on your own, find out if they’re insured, if they offer flat fee services and if materials like moving boxes and packaging are included. Check out major moving companies like Mayflower and compare their prices.

If you’re not moving far for your job, an hourly fee may be the better option. Some companies like College Hunks Hauling Junk and Moving calculate a reasonable hourly rate depending on where you live, a flat-rate to cover the movers getting to and from your homes along with dollies, tools and protection for your personal property. Regardless of how much it costs to move, remember to budget out your move in advance and come back to your boss to negotiate their offer. They may not want to budge on relocation assistance, but may increase your annual salary or offer other perks.

Storage

Storage expenses are easy to forget in the frenzy of relocating and starting a new job. You may find your new property isn’t as expansive as your last and requires a monthly storage budget. Or you may discover your new house isn’t as move-in ready as you thought and you need to bunk in corporate housing for a few months. The cost of storage can send your budget into overdrive if you wind up with damaged property or need to invest in extra boxes, tape and packaging.

Mortgage or rent

Buying or renting a new home can add to the joy and excitement of relocating for a job. Unfortunately, there are many hidden costs to acquiring a new property from first and last month’s rent and closing costs. Getting a similar space in a quality neighborhood in your new city may may cost more than you realized. There are also less obvious fees attached to moving into a new home. For instance, many utility companies require a disconnect and reconnect fee.

Insurance

Your homeowners, health, life and even car insurance can vary drastically depending on what part of the country you live in. Don’t get caught busting your budget before factoring in these next steps. Search online for insurance quotes to determine the average cost of specific types of insurance by state. For example, car insurance in Georgia could cost less than 14 percent of the national average. Meanwhile, moving to Louisiana could cost more than 41 percent of the national average.

Replacing items

Make a budget for all of the items you plan to throw out and keep an ongoing tab on moving day. It’s tempting to think you’ll either throw out junk or keep everything tidy and organized for your move. But it’s unlikely you will move away with milk, bread, spices, half-empty cleaning products and old shower curtains in tow. Although these small items may not cost much individually, it could add up fast and put a strain on your budget.

6 Simple Steps to Financial Health

May 1, 2015 by Isabella Blanca Leave a Comment

Organizing your finances can be a daunting task. And because of your fears, you’ve been avoiding the process for quite some time. But it must be done if you desire to achieve the financial freedom you’ve been dreaming of. Simplicity is the key. Here are a some big steps that’ll help you create a clear action plan:

1. Get Organized

Do you have piles and piles of old statements from service providers, creditors or financial institutions lying around? If so, grab a shredder and purge. Doing so should take away some of the anxiety that accompanies getting your financial life in order. And for those items you need to keep, consider purchasing a small filing cabinet and organizing the documents by type. To determine what to keep, for how long, and what you can toss, check out this chart on USA.gov.

Also, opt-in for electronic statements; they’re usually available and eliminate the frustration that arises when you need to access an important document at the drop of a dime.

2. Conduct an Audit of Your Financial State

Next, you’ll need to assess where you stand financially in order to come up with a feasible plan to take your finances to the next level. To do so, create a comprehensive list of your assets and liabilities. This should include any retirement accounts, securities, income and outstanding debt balances you have on hand, just to name a few.

Once you’ve done so, list any sources of income you receive each month and the estimated expenditures. (For the latter, track account activity for at least one month to get an accurate figure).

3. Implement a Spending Plan

There are tons of software programs to choose from, or you can do things the old-fashioned way. Regardless of which method you use, here are a few key points to keep in mind:

• Every dollar should have a name on it before the month starts. The more stringent the plan is, the higher the chances of compliance.

• If your outputs exceed your inputs, you are left with no choice but to make cuts. Many ignore this pertinent tidbit of advice because they figure as long as the bills are paid, nothing else matters. That’s until a financial emergency arises.

• The plan should be helping you build a cushion, pay down debt and accomplish any goals you have in mind, simultaneously. If not, you won’t be motivated to stay on track.

4. Fund Your Safety Net

Life happens, and you may need a financial infusion to get out of the hole. And there’s no easier way to send your finances haywire than robbing Peter to pay Paul. That’s why the first order of business on your spending plan should be paying yourself to ensure your emergency fund is receiving the boost it needs each month.

5. Create a Debt-Management Plan

Before you decide to aggressively attack the outstanding debt balances, bring any delinquent accounts current. This is important to minimize the damage done to your FICO score for recurring delinquencies, not to mention the excessive late payment fees, interest and penalties. If you’re having a tough time formulating a plan due to limited income, consider making cuts to the variable expenses in your spending plan.

6. Capitalize on Existing Resources

Be proactive and take advantage of all the free tools at your disposal. A host of financial institutions offer online bill-pay as an added perk of being a member or for a small fee. In additional, there are spending tracking features to help you identify problematic areas and make adjustments moving forward. If you’re an AOL user, you’re granted complimentary access to Lifelock’s identity theft protection services, which can protect your personal information from fraud and preserve the financial freedom you’ve worked so hard to achieve. Most importantly, remain vigilant of your account activity at all times to confirm the activity is accurate.

Home Improvements Worthy of Your Tax Refund Check

April 13, 2015 by Isabella Blanca 1 Comment

Whether you’re to looking to increase the value of your home for resale or switch things up to give it a fresh new look, your tax refund check provides the opportunity to do so. And no, an extreme overhaul, like the ones you see on HGTV, isn’t required.

Here are some cost-efficient ideas:

Paved Driveway

Tired of saturating your vehicle in dirt each time you leave or return to your home? How about the rocky ride along the way? A paved driveway, comprised of asphalt or concrete, is the perfect solution. You’ll no longer have to step into grass or dirt each time you open the car door, which is especially important if you’re constantly having to tidy up the floors because of dirt being tracked into your home.

New Roofing

Are you constantly forking over cash to contractors to fix that leaky roof? If so, it’s time that you give your home the new roof it deserves. Champion Home Exteriors, which offers expert installation and Advanced Protection® Technology Advanced Protection® on Lifetime single choices, has an array of affordable options to choose from.

Finished Basement

A finished basement makes an excellent addition to any home that could use some extra square footage. It’s ideal for a game room, play area, movie theater, home office or an oversized bedroom, just to name a few. If you’re going to be housing a relative in the near future, a finished basement is also the perfect place to create a mini-apartment for their added privacy.

New Air Conditioning Unit

Is your air conditioning unit on its last leg? Since you have some extra cash on hand, now’s the time to start searching for a replacement. Just be sure to consider additional factors, such as the Seasonal energy efficiency ratio (SEER) and quality of the unit’s components. While it’s tempting to go with the cheapest unit, you could spend much more than you initially anticipated over time, in the form of energy costs and repairs. Energy efficient units may qualify you for Residential Energy Credits. See IRS Form 5695 to learn more.

Mini-Kitchen Remodel

It’s not necessary to invest thousands of dollars to completely overhaul the kitchen. A better option is to freshen up the paint, refinish or replace or the flooring, and swap outdated appliances for energy-efficient models.

If your appliances are not that old, a local expert like Mesa az appliance repair can help fix them and look as good as new.

Upgrade Outdoor Living Space

Adding a screened patio or fence can work wonders for your backyard. And with the right decor, it can quickly be converted from a standard space for the children to play to a stunning space for entertaining guests.

New Garage Door

By installing a new garage door, you will alleviate yourself of manually lifting the door (on outdated models) while adding a new look to the exterior of your home. And you’ll no longer have to get soaked on those rainy days.

Not only will these home improvements will give your home a new look and feel, but you may be able to derive tax benefits on select upgrades. See IRS Publication 530 for additional guidance.

Can a Robo-Advisor REALLY Beat Passive Investment Strategies?

April 6, 2015 by Isabella Blanca Leave a Comment

If you’re familiar with the basics of investing, then I’m sure you’ve heard of terms like “mutual funds” and “ETFs.” In a recent Yahoo! Finance article, robe-advisor firm Wealthfront challenges the status-quo by saying that their direct investing approach will beat ETFs at their own game.

Really? So will this happen? Let’s take a look.

In case you aren’t too familiar with the concept or you just need to shake off the rust, diversifying your investments is a central idea to finance. Mutual funds and exchange traded funds (known as ETFs), hold diversification as their central tenant.

Diversification, of course, is the whole idea of being able to have all of your eggs in one omelet, but just don’t put all your eggs in one basket.

And, so long as you remember, the idea is as long as one region, sector, industry, or even point of view (like normal goods, depression goods, sin goods, etc.) suffers significant hardships then you still have the remainder of your portfolio to offset potential losses.

Finance at its finest.

It’s true that diversification has taken greater steps forward over the last few decades. In fact, the advancements of technology have taken the realm of finance into a brand new idea (or at least they claim it to be a new phase anyway). With the ability to program, process, compute, and spit the world into algorithms and complex math formulas, the world of finance has continued to churn out more sophisticated ideas in less time than it takes us to compose thoughts.

So, for me, the idea of robo-advisors is the obvious next move in a long line of advances.It’s also why, just like with every other advancement, strong proponents of robe-advisors think they’re not only the future, but they will bring the future to us now.

The Truth About Robo-Advisors – ETF + Tax Efficiency

The specifics about using these robo-firms is that they truly are nothing “new.” In fact, just like you could argue that robots themselves are nothing more than a scaled up version of programmed commands, the way in which they operate is truly basic as well. By programming in rules for these robo advisors to follow, the basic idea is that a robot or program can execute trades to sell off a falling stock, take a position in a similar stock (at least a comparable one from the indexed position), but still manage to capture the losses of the original stock. The end result is that the investor retains the original (at least similar) makeup of the ETF which was owned in the beginning, but they have also captured losses with a hefty tax benefit as well (currently up to $3,000 can be used to reduce taxable income annually). It’s not the system that is so sophisticated; it’s a simple set of algorithms and rules that just happen to be carried out to perfection.

I’m not the only one calling robo-advisors ETFs. Burton Malkiel (one of those arguable “founding fathers” of modern finance) is calling this the next big thing. He says robo-advisors, in fact are not a fad or a substitute, but a more efficient upgrade onto existing ETFs. The idea is that this strategy truly is, at it’s heart, an exchange traded fund and comes with all of the benefits of a normal fund; it just has the added bonus of positive tax implications.

Furthermore, the most important point to make isn’t just the ability to save $3,000. (By the way, if you are willing to toss aside $3,000 just for fun, I’m sure there are a few places you could send it if you just email me!). While the $3,000 annual tax harvest truly can add up to be a pretty impressive chunk over the course of several years, the fully implemented strategy is about deferring the tax liability. Over the course of the entire portfolio life (or even for a long time), a “tax loss harvesting system” as it has been called will accumulate and will allow investors to have significant taxable benefits on their side all while obtaining the original assets for pennies on the dollar.

As Malkiel puts it, “tax deferral translates into real money when the savings can be reinvested and compounded.”

What is a robo-advisor, then? Basically, it’s an EFT with an option to supercharge and grow due to the tax benefits.

Marketing To The Masses – You and Me

Some have already pointed out that this strategy is not necessarily brand new, but it has been used by some institutional investors in the past. The benefit of course is that while institutional investors and the rest of the elite may have had access to this, they probably don’t pay much attention to the engine under the hood. By refining this strategy, robe-investing could be a major jump with smaller players coming into the picture for their piece of the pie.

Of course, just like most “new strategies,” there are already some naysayers. And who is to say they are wrong?

That being said, if you don’t have a history book handy it still won’t be hard to remind any investing buff the way that diversification pioneers were treated when they brought about prior items such as mutual funds, EFTs, or even a modern day stock market on the internet. (Can you even imagine a world without online trading!?). All of them were panned by the naysayers.

The Future of Robo-Investing

So, while there is no-one calling this a sure thing, the simple idea of enhancing current day funds with tax benefits and the ability to jump returns is at least appealing to the full spectrum of investors.

Plus, even if those who invest don’t have the ability to capture as significant a tax advantage as is being proclaimed, the fact of the matter is you are still investing in a vehicle that is an ETF at its roots.

Even if the tax benefit doesn’t fulfill your hopes and dreams, you won’t have to worry about losing out on the market. The worst case scenario is that you have still eliminated risk, diversified your position, and while you might have had your hopes dashed, you haven’t lost a significant position to try and jump on board a new train before it leaves the station. Unless of course you are investing solely in trains, in which case that’s an entirely different lesson for a different day……

Really, This Is About Innovation

Robo advisors are not just bringing about a new product, but they continue to show how thinking outside the box is enabling a significant amount of efficiency and accuracy to be injected into what some regard as the best vehicles out there today. By covering positions even more with a shield, losses incurred in a normal ETF can truly be captured and turned into an advantage. What used to be a boulder sized loss is now literally being catapulted thanks to the next wave of technology.

And while there are some who think that this could be more of a fad and that some net bonuses are being overestimated and not what they are cracked up to be, there are others who think at worst this is just another added service and a potential option for those who do believe in the power of robo-advisors for an investor without the assets to hire a full-fledged pro in their corner. Even if they don’t know where it will lead, it’s thrilling to see new pioneers of investing. Even though Christopher Columbus sailed the ocean blue and discovered the new world, every other sailor on the ship who went along for the ride also made it there as well. These investors don’t need to create or refine this strategy, but they can still possibly tap into a more efficient vehicle and what could be the next “norm” in the marketplace before it becomes too popular.

What’s Next?

As with waves of innovation before this, no one truly knows how this one will play out. There doesn’t seem to be a lot of downside. What’s the worst that could happen? You could take a chance at something new and wind up overpaying for a fairly standard ETF (I’m sure you can already point out a handful of customers and clients who do that anyway but without the upside). While the upside is potentially significant gains that only increase over time. It truly could be an upgraded form of diversification.

The most important thing to do at this time would be to try and decide if this is something for you, as there might not be a lot of opportunity to test it out before the market finds a correction, starts making it more difficult (financially of course) to tap into this possibly proven strategy. On the other hand, I don’t know that trusting all of your money to a robe-advisor is a good idea. When has it ever been a good idea to throw money at the next big thing just because it could be big? After all, there’s a sucker born every minute and if you are going to realize you’re a sucker, hopefully you aren’t burning money in the process as well.

Invest with confidence and caution. Understand the products you want to put your wealth (i.e. your future) in. And above all else, know more about your assets then the people who handle them. This might just be a boy who cried wolf, but with some due diligence and a little bit of faith you could be spring boarding yourself to a more diversified system of nicer returns.

Phil is a firm believer in not just understanding how finance works, but someone who thinks investing and business should be connected to every part of our lives and not just a segment of it. “By reading the thoughts of others, we can get caught up. By merging our views and connecting ideas, we can move forward and grow.”

Photo: Frankieleon

Don’t Be Afraid to Refinance: 6 Options to Meet Your Financial Needs

March 26, 2015 by Isabella Blanca 2 Comments

The 2008 recession did a number on the housing market. So many people were behind on their mortgage payments while others lost their homes entirely, and to top it all off, the unemployment rate was sky high.

But amid the rubble, there’s a silver lining: Interest rates are lower than ever.

Because of the circumstances surrounding the crash, the Federal Reserve System started buying mortgage-backed securities in 2008, which drove down the interest rates homeowners were paying. While those purchases have since ceased, the Federal Open Market Committee plans to keep low interest rates for at least the rest of 2015.

That means that now could be the perfect time to refinance your home and bring those payments down.

The Abundant Refinancing Options

Refinancing can seem confusing, but with a little information, it’s pretty straightforward. For our purposes, think of your options in two buckets: You can either refinance simply to get your interest rate down, or you can refinance to raise some cash for unexpected large expenses.

The first option will capitalize on lower interest rates as well as decrease your monthly payment (and possibly your total payment over time). There are a few different options within this loan type, and each option targets a different customer base:

Federal Housing Administration streamline refinance: If you have an FHA loan, this streamline is a good option to lower your rate or change the terms of your loan. This option is also good for homeowners with less equity in their homes or less-than-stellar credit scores.

Veterans Affairs Interest Rate Reduction Refinance Loan: This loan is specifically for veterans with a VA loan. It will help you lower your interest rate, convert an adjustable rate to a fixed rate, and alter the term of the loan. Like the broader streamline loan, it often requires less documentation and has a lower funding fee.

Conventional refinance: Like the above two options, this loan will help you lower your interest rate or change terms. With a conventional refinance, though, you typically need more equity in the home and a higher credit rating.

Life happens, and sometimes you have a large unexpected expense, such as medical bills. On the other hand, things might be going well, and it’s time to make some home upgrades. Either way, there are a few options with cash-out refinances, too:

FHA cash-out refinance: This loan allows you to access up to 85 percent of your home’s value. Customers using this option are subject to both up-front and monthly mortgage insurance premiums. However, make sure you’re up-to-date on the rules, as the FHA has changed them since the housing market’s decline.

VA cash-out refinance: Veterans can access up to 100 percent of a home’s value with this option. There’s typically no mortgage insurance, but there’s a funding fee based on several factors, including disability rating, type of veteran, down payment, and how many times a person has used his or her VA loan benefits.

Conventional cash-out refinance: The conventional option allows you to access up to 80 percent of your home’s value. Like its streamline counterpart, it usually requires good credit and a decent amount of equity. However, this loan doesn’t require any kind of mortgage insurance.

Find the Right Refinancing Plan for You

If this still seems like a lot, simply ask yourself whether you want some cash or simply want to lower your interest rate. Remember: If you’re a veteran, you have access to different types of loans, so always take this into account. Evaluating your situation will help you zero in on what loan suits you.

For example, let’s say you purchased your first home in 2010 through an FHA loan with a 30-year term and a 6 percent rate. You’ve been successful in your job, and you’re not a veteran. While you love your current home, you can’t afford a higher mortgage payment, and you want to pay off your loan as quickly as possible. However, due to a couple mistakes in college, your credit history isn’t the best.

Taking all of these factors into account, your best option would be another FHA loan — possibly a streamline refinance if you don’t need to cash out. This would allow you to lower your rate and term while still taking your poor credit history into account.

Or perhaps you currently have an FHA loan, but you want to look into obtaining a lower rate and term. You have more than 20 percent equity in your home and an exemplary credit history.

In this case, you’d be better off refinancing your FHA loan into a conventional cash-out refinance. Because you have more than 20 percent equity, there would be no private mortgage insurance, which would decrease your current monthly payment. If you decreased your term and rate, payments might go up overall, but they’d be significantly less than what you were paying before.

Refinancing can be daunting, but with interest rates this low, it’s worth your time to do some research and see whether it’s right for you. Still, the process shouldn’t be taken lightly. Make sure you nail down the goals of your refinance, shop around for the right lender, and always weigh the costs against the benefits. If you follow these steps, you can’t lose.

Annie Doisy is a reverse mortgage expert who helps seniors enhance their lives by taking advantage of the equity in their homes. Annie writes about reverse mortgage information to inform homeowners on how to access the equity in their homes. She believes that staying well versed in all types of mortgages is necessary, regardless of your or your company’s specialty.

7 Commonly Overlooked Write-Offs to Consider for 2015

March 24, 2015 by Isabella Blanca Leave a Comment

Do you tend to cringe at tax time when the exorbitant liability or measly refund amount is revealed? Chances are your return is missing some tax deductions or credits you’re entitled to. However, determining your eligibility is easier said than done, particularly if you aren’t well acclimated with tax law.

But don’t fret. Here are some commonly overlooked opportunities that will open the door to tax breaks and possibly more money in your pocket:

1. Education Expenses

Are you, your spouse or qualifying dependents enrolled in an institution of higher learning? You may qualify for the Lifetime Learning Credit or American Opportunity Tax Credit if the institution is eligible, per IRS standards. And, if you spent your own funds for qualified education expenses, you may also qualify for the Tuition and Fees Deduction.

2. Jury Duty Fees

If you were paid by both your employer and the courts during jury duty, chances are your employer demanded you to turn over the proceeds from jury duty to avoid double compensation. So, when filing this year’s return, don’t forget to adjust your income on line 36 of Form 1040 to account for the funds you relinquished. See IRS Publication 17 for additional information.

3. Job Search Expenses

Were you in the market for employment last year? Even if your efforts were unsuccessful, you may be able to deduct the expenses associated with a job search if you weren’t reimbursed by the prospective employer. For guidance, see IRS Publication 529.

4. Relocation Expenses

By contrast, if you managed to land employment that required you to relocate, the expenses incurred may be deductible if you meet the distance and time test. According to IRS Publication 521, “your move [meets] the distance test if your new main job location is at least 50 miles farther from your former home than your old main job location was from your former home. [To meet the time test], you must work full time for at least 39 weeks during the first 12 months after you arrive in the general area of your new job location.”

5. Child and Dependent Care Credit

If you expended funds for the care of your qualifying child who was under the age of 13 or for a spouse who is physically or mentally incapable of self-care and resided with you for over 6 months last year, you may be eligible to take the Child and Dependent Care Credit. Expenses for other qualifying individuals who meet these same criteria may also deem you eligible for the credit. See IRS Publication 503 to learn more.

6. Charitable Contributions

Did you pay it forward in 2014? According to IRS Publication 526, “you can deduct contributions of money or property you make to, or for the use of, a qualified organization. A contribution is ‘for the use of’ a qualified organization when it is held in a legally enforceable trust for the qualified organization or in a similar legal arrangement.” However, deductions are limited to 50 percent of your Adjusted Gross Income (AGI).

7. Car Donations

If you were able to downsize your 20-year old clunker for a great deal you saw on Kelley Blue Book, you may be able to save even more. If you donated your car to a charitable organization, don’t forget to write it off. Publication 4303 provides the guidance you need to do so.