Are you Ready for a Storm?
One of the biggest lessons of the April 27 tornadoes that raved the state was that you can never be too prepared for an emergency. Many people had to go days without electricity, gas, telephones, and/or water. The Department of Homeland Security recommends that you have an emergency plan in place. You plan should include an emergency kit with essential survivals items. Here are some handy tips that can help your family prepare for emergencies.
When preparing for a possible emergency situation, it’s best to think first about the basics of survival: fresh water, food, clean air and warmth.
Recommended items to include in a basic emergency supply kit:
Additional items to consider adding to an emergency supply kit:
For more details on preparing an emergency plan for your family, go to www.ready.gov
(Provided by State of Alabama Real Estate Commission)
Have furnace and other gas appliances inspected for safety issues.
Clean or replace HVAC filters.
Clean ovens, stoves and vent hoods.
Add extra weather stripping to garage door.
Yes, it’s that time again. As New Year’s Eve approaches, it comes with the prospect of making New Year’s resolutions that we hope to finally keep this year. These resolutions usually revolve around health and finances. While I can’t help you much with the first, here are 12 ideas for financial resolutions in 2012:
1) Set goals. As Stephen Covey put it in The Seven Habits of Highly Successful People, begin with the end in mind. After all, it’s hard to know how to get to where you want to be if you have no idea where that is. Take a break from the in-laws this holiday season and ask yourself what you really want, what steps you need to take to achieve those goals, when you’d take those steps, and what they would cost you. Most importantly, write it down to hold yourself accountable and make them more likely to actually happen.
2) Plan your estate. Speaking of “the end,” this is a good place to start because we never know when we might need estate planning documents like an advance health care directive, durable power of attorney, and a will and/or living trust. These are also notoriously easy to procrastinate so it’s good to get them out of the way. You can use software or a template if your situation is relatively simple but you may still want to have an estate planning attorney look it over. For more complex situations, you’ll definitely want to hire a qualified attorney.
3) Check your credit. If you’re like most people, you’ve probably been using your credit cards all over the place for the last several weeks so keep an eye on your credit card statements for any purchases you didn’t make. You can also take it a step further and check your credit report for free at www.annualcreditreport.com if you haven’t done so in the last 12 months. You can order a copy from each of the 3 bureaus or space them out throughout the year as a way to monitor future changes. In any case, look out for errors (about 70% of credit reports have them) that could be hurting your credit and be sure to get them fixed. You can also use sites like quizzle.com and creditkarma.com to see your score for free and learn more ways to improve it.
4) See where your money is going. Now that you’ve thought about your hopes (and fears) for the future and gotten glimpse of your past through your credit report, this is where we see where you are now. Take a look at your last 3 months of bank and credit card statements then categorize your expenses on a worksheet like this to give you an average of your monthly expenses. You don’t want to include all your recent holiday binge shopping though. For non-monthly expenses like gifts and vacations, figure out how much you tend to spend on them per year and divide that number of 12. It might be a good idea to then set that much aside each month to cover those expenses as they arise. This could help you decide how much you can really afford to spend and avoid ending up in a financial hangover every January.
5) See where you can cut back. Once you know where your money is going, try to think of ways you can reduce some of your expenses to spend less than you earn every month and save for your goals. Ask yourself if there are ways of doing the same thing while spending less money. How about canceling the subscription to that magazine you never read? Can you bring lunch to work instead of eating out every day? Do you really need to drink Starbucks every morning? Here are some other money-saving ideas.
6) Make sure you have the right amount of insurance. You want to have enough disability insurance to cover your necessities and enough life insurance to provide for anyone dependent on your income. Don’t forget to check what you have available through you and your spouse’s employer. This is also a good time to examine your health and property and casualty insurance coverage too.
7) Build an emergency fund. There are always those expenses we can’t plan for like the roof needing repairs or the car breaking down and not all of these costs are covered by insurance. That’s why it’s so important to have some cash somewhere safe and accessible like a savings account or money market fund. Try to save at least $1k and ideally 3-12 months worth of necessary expenses in case you or your spouse were to lose your job. The riskier your income is, the more you should have in savings.
8) See if you can refinance your debt. One expense that no one likes to pay is interest. With rates near record lows, this can be a great time to see if you can consolidate student loans or refinance your mortgage to a low, fixed rate before rates eventually start moving up. If you were able to improve your credit score, you might also qualify for rates you weren’t able to in the past.
9) Pay down bad debt. There are some debts, like credit cards, that you generally can’t permanently refinance below what you can expect to earn by investing your money. In this case, your best bet is to try to pay them down aggressively by focusing all the extra payments on the balances with the highest interest rates. As one debt is paid off, you’d then apply those payments to the next highest interest rate debt. You can use this calculator to figure out how long it will take you to become debt free using this strategy.
10) Get on track for retirement. If your employer offers a retirement plan with a match, try to contribute at least enough to get that full match so you don’t leave any free money on the table. You should also be able to contribute the extra 2% of income from the recently extended payroll tax cut. Since it’s temporary, you don’t want to get used to spending it. After that, you can calculate how much more you need to save (especially after all the market turmoil over the last few years) with this retirement estimator. You can then get additional tax benefits by contributing more to your employer’s plan, a traditional IRA, and/or a Roth IRA. Don’t forget that you will be able to contribute more to your 401(k) next year and that you have until April 15th to contribute to IRAs for 2011.
11) Consider saving for education. Your kids can borrow for school but there’s no financial aid for retirement so that should be your first priority. But if your retirement needs are on track and you’d like to put some money away for future education expenses, look into various tax-advantaged vehicles like state 529 plans, Coverdell Education Savings Accounts, and U.S. savings bonds to see which best fits your needs. You can learn more at savingforcollege.com.
12) Make sure your investment portfolio is properly diversified. In addition to saving money for retirement, education, and perhaps other goals, you’ll still need to decide how that money is invested. Rather than try to predict the market, you can use this risk tolerance questionnaire and asset allocation worksheet for guidelines on how much to invest in stocks, bonds, and cash based on how long the money will be invested for your goals and how comfortable you are with the ups and downs of the market. You would then re-balance your portfolio periodically to keep it in line with your strategy. This can also help you resist the temptation to buy stocks when they’re doing well (priced relatively high) and sell stocks when they’re doing poorly (priced relatively low).
There are quite a few steps here to choose from and not all of them will necessarily apply to you but taking even just one or two of these steps can help put you in a better financial position. Do all 12 and the only thing you may have left to work on is sticking to your diet and getting back to the gym. These don’t seem so bad now, do they?
Liz Davidson is CEO of Financial Finesse, the leading provider of unbiased financial education for employers nationwide, delivered by on-staff Certified Financial Planner™ professionals. (Compliments of Forbes.com)
Holiday Safety Tips for Home and Away
The Christmas holiday season is one of the most anticipated times of the year. Unfortunately, criminals also look forward to the season as more people are out shopping and leaving their homes unattended during holiday travel. Combine this season of opportunity with yet another holiday in a bad economy, and crime rates for things such as burglary, theft by snatching, etc. are particularly high.
Here are several holiday safety tips to protect you and yours this holiday season, and into the new year.
Safety Tips Around the House
Before traveling, contact your local law enforcement agency and ask to have your home placed on “vacation watch.” Most municipalities offer this service. The nearest patrol officer will ride by your home for a safety check once during their shift. Be sure to notify authorities when you have returned. Note, please do not call 911 to discuss this service. A non-emergency number should be listed in your phone book.
Try to make your house look lived in while you are away. Consider picking up some inexpensive timers for lights and radios, and have them come on at times when you are normally home. I even suggest staggering the timers so that living room lights come on and off early in the evening and bedroom lights come on later. This is consistent with most schedules, but adapt it to fit your family’s routine.
Ask a friend or neighbor to pick up your mail. And while they’re at it, maybe your newspaper and garbage can, too (if you left it by the curb). It is possible to have your mail and paper delivery held, but doing do may just be another tip off that you are away. Don’t forget your neighbor’s act of kindness when shopping for souvenirs.
Do not broadcast your plans to everyone. You may be proud that you are taking your family on a week-long cruise over the holidays, but don’t brag too much. You never know who might be taking note of your travel plans. Don’t mention your trip on Facebook or Twitter until you have returned. Ask kids not to discuss holiday travel plans at school.
Leave a spare key and emergency telephone number with a trusted neighbor or friend. In an emergency it may be necessary for someone to enter your home (water heater leak, etc.), so it is a good idea to leave a key with someone local.
Pay someone to rake up leaves and/or blow off your drive way. Tall grass in the summer and down leaves in the winter are a sure sign of an unoccupied house.
Silence the ringer on your home telephone. One trick of the criminal trade is to stake out a house and call the phone number. If the phone rings and rings with no answer it is a safe bet no one is home. If the phone doesn’t ring at all, crooks may suspect they are dialing the wrong number, or someone is home and using the phone. Do not mention your travel plans on voicemail or answering machines.
Remove garage door openers from cars parked in the driveway. It is a good idea to leave a second car parked in the driveway, but be sure to remove the garage door opener. Burglars can easily bust out a window and open your garage with the click of a button.
Lock garage entry doors. If you live in a home with an attached garage, lock the door from the garage to the home when leaving for Christmas vacation. Garage doors have been known to malfunction, or be manually forced up, allowing access to your home.
Trim shrubbery and trees close to your home. Overgrown shrubs provide the perfect cover for a burglar working to pry open a window.
Do not leave remnants of Christmas morning by the curb. Large appliance boxes and containers are a sign Santa was really good to someone in the neighborhood! They are also a sign to thieves that the house just got a new plasma television for Christmas. Break down boxes and put them in cans or black garbage bags to conceal the products that were inside them.
Holiday Shopping Safety Tips
Use the buddy system. It is always a good idea to shop in pairs as thieves are less likely to target two or more individuals.
Lock your gifts in the trunk. An electronics store bag filled with goodies sitting on the back seat in plain view is tempting for a smash-and-grab burglar.
If shopping at an outdoor mall or outlet stores, consider moving your car when you drop off presents. No one likes to lug around too many items from store to store, so most people return to their cars several times to drop off purchases and resume shopping. When you do this, consider moving your car a few lanes away. Thieves like to stake out parking lots for people leaving purchases in their car and returning to stores. If they see you get in and drive away they will likely assume your shopping trip is over and look for another target.
Don’t flash your cash. I love to see others shopping with cash instead of plastic, but I don’t like to see their entire wad of cash when paying for a $15 DVD at the electronics store. Remember, others are watching. Leave your cash envelope locked in the glove box of your car and only take into the store what’s necessary, or keep some cash in your pocket and the rest in your wallet, so you don’t have to show your entire hand at the register.
Ask for a security guard escort. If you approach your car and see an unsavory character staked out nearby, return to the store and ask for someone to walk you to your car. Most store security personnel are used to this, so there is no need to feel embarrassed. Besides, better to be safe than sorry!
Keep credit and debit cards close. One of the most popular forms of counterfeit credit card fraud is to swipe a credit card in a “dummy” reader to capture the magnetic strip information before swiping in a legitimate card reader. A counterfeit card is then produced offsite using this electronic data, and before you know it, you are shopping the streets of Thailand while the real you is home in Nebraska. This is much easier to pull off if you hand your card over to a restaurant server, or a clerk who has to “go to the back” to run the charge. Consider using cash, and if using cards, alert your credit card company to any suspicious behavior by merchants.
Have keys ready, and don’t take your time getting in your car. There is nothing I hate to see more than a single woman approaching her car while digging through a purse for her keys. With her head down and her attention diverted she is such an easy target. Find your keys before you leave the store and have them in hand. Walk quickly and confidently to your vehicle, and unlock, enter and lock the doors in quick fashion. Once safely inside you can verify receipts, store your purse, etc.
Park in well-lit areas. If you know you will be shopping for a long time, anticipate coming out into a dark parking lot and look for light poles to park under. Besides providing light, light poles also serve as a reference point in a crowded parking lot to remind you where you parked your car.
Parents, park next to the shopping cart return area. When you are finished shopping it is nice to put Junior in the car seat and return the shopping cart one lane away, rather than walking fifty feet away with Junior alone in the car, or you toting him and three bags of groceries.
These are just a few things to keep in mind while out and about this holiday shopping season. Actually, they are good tips for any time of the year, but especially during times when criminal activity is high.