Tis' The Season To Be Spending

The Holidays are here, and it’s a tough time for the fitness world. On one side, the mouths of many are watering at all the tasty family foods flying around. On the other, pressure to be a Holiday hero is running high. Here’s how to make it through this holiday season with your financial integrity intact.

Pay cashPost-Holiday interest charges are about as fun as weighing in after Thanksgiving. You can't have regrets in January if you limit your spending to money you actually have. The tab for unpaid credit card balances in the U.S. is $690 billion. 

PrioritizeIt takes a plan to make it through this season unscathed physically and financially. Here's a three-step strategy: Set a spending limit, stick to a firm list of recipients and most important, no wavering from steps 1 and 2.

Spending Limit Rules:

·         No dipping into savings (unless it was designated for Christmas)

·         No cheating by not making your Roth IRA deposit this month

·         No skipping the kid's 529 College savings contribution

Don't get playedRetailers know we are suckers for anything that seems like a deal. Instead of offering a $50 sweater for $50, they advertise that the sweater was $75 but they are going to let you steal it from them for $50.

Maintaining financial fitness through the Holiday season isn’t just about feeling guilt free in January. When we stick to the budget, we remove layers of stress and panic. And that makes us happier and more present for those we love. I hope you all have a wonderful time with your families this Holiday season.

The Mint Makes It First, It’s up To You to Make It Last

-Jainie-

Why You Shouldn’t Tap Your Roth IRA

In times of financial hardship it can become easy to look for the quickest way out. Making a withdraw from a savings account such as a Roth IRA can seem like a quick fix for a pesky high interest debt. However, the long term effects can come back to bite you. Here are some reasons you should give it a second thought before touching your IRA:

You might have to pay a penalty if you withdraw from a Roth IRA. A distribution is only qualified if you withdraw on or after the date you reach the age of 59 ½; if the withdrawal is made because you become disabled according to the IRS; if the withdrawal is used toward the purchase of a first home; or if the withdrawal is left to your beneficiary in your will. The withdrawal of earnings must also be made five tax years or more after your first contribution.

A distribution that is not qualified will be subject to a ten percent additional tax penalty. The larger the distribution the more this is going to hurt.

You diminish the power of compounding interest if you withdraw from a Roth IRA. Even if your distribution is qualified, you will have a smaller balance after you withdraw. This means earning less interest, diminishing your returns over time.

You might be unprepared for retirement if you withdraw from a Roth IRA.A Roth IRA is designed to help you pay for your living expenses when you can no longer work. Withdrawing money from it today may leave you with less money decades from now, increasing the odds of being short on cash when you retire.

Financial problems can happen to anyone. Speaking with a financial advisor or a Financial Service Officer at your local financial institution can be a great way to get advice. If you have questions about your own finances, head over to the forums. You can get free advice from experts in the field, and start the tradition of financial fitness in your own home today.

The Mint Makes It First, It’s up To You to Make It Last

-Jainie-

Low Returns: Why You Should Save

With interest rates at an all-time low, meaning that borrowing money is cheaper than ever, it’s hard to see the benefit of saving. In fitness when you exercise you don’t expect to see the benefits immediately; financial fitness is the same way. It’s all about average returns over a period of time.

How Interest Rates Work

Right now, finding a savings account that yields more than a 1% return is tough. However, finding an auto loan below 2% is fairly easy. When it’s cheap to lend out money, it doesn’t pay much to keep it. People forget that the rule is also reversed because when savings accounts yield 8%, loans have much higher interest. Your best bet is to save all you can now by taking advantage of the low cost of lending so that when the rates rise, you are ahead of the game.

Saving Versus Investing

If you’re looking to maximize returns, a savings account isn’t the best place to park any funds you don’t need to withdraw in the near future. If you’re looking to earn more on your money, consider an index fund, mutual fund, or even a well-tended stock portfolio. Remember that placing your money in the market is a give and take. You could earn higher dividends even in the current market, but you could also lose it if the market takes a dive.

The Key to Better Returns

The key for investors and savers is not to worry so much about what the rate is right now, but to set up a habit of saving consistently and keeping that money invested.

Consistency forms habit and habit forms tradition. Share your tips on the forum about the steps you take to ensure a financially fit family!

Debt - The Four Letter Word

Debt — it's the four-letter word nobody wants to think about. I talk a lot about ways to reduce your debt or tackle it all together, but here are some tools for tracking it and avoiding it in the first place.

Spreadsheets

• The Money Management Template from Vertex42.com is a free alternative to Quicken. Plug in all of your expenses and income, and keep track of where your money goes. Once you have your budget in place, or if you're just looking for a fast way to track debts without worrying about the rest, you can use the Debt Reduction Calculator (great for using the snowball method for paying off debt) to focus on paying off your debts as quickly as possible.
• DebtTracker from “It's Your Money” is a simplified Excel spreadsheet that allows you to see a list of your debts all in one place.  You can then sort them by type of debt, interest rate, or current account balance.

Personal Finance Software

• Mint.com offers free personal finance software that will pull in information from all of your financial accounts (once you set it up). As a bonus, you can also access your information via a smartphone and set reminders for bill payments.

Smartphone Apps

• Pay Off Debt, an app for iPhone, iPad, or iPod Touch, gives users a quick and easy method for organizing and keeping track of their debt.
• DebtTracker Pro also uses the snowball system of paying off debt, but you can choose from other built-in payment strategies or come up with your own if you prefer.

Avoiding debt starts with strong financial traditions at home, but some high tech tools never hurt in the battle of the budget!

The mint makes it first; it’s up to you to make it last!
-Jainie-

Fighting Financial Crisis

Staying financially fit is all about smart budgeting, avoiding debt, and staying on the financial straight-and-narrow, but what do you do in the middle of a financial crisis? If you’re suffering from a financial fitness injury, here are some tips to a quick recovery: 

Have a Family Meeting

Financial problems affect the whole family. Unfortunately, most parents respond to the issue by attempting to shield their children from the realities of the financial challenges and end up panicking the kids with severe cut-backs without explanations. Make it clear that the responsibility to fix the problem lies with the adults in the household, but everyone can pitch in and help.

Ruthlessly Reduce Expenses

Start with the easy ones first — which fixed costs can be temporarily snipped, what expenses can be negotiated, and what can be eliminated entirely? Next, focus on just the essentials as you take a more granular look at the other expenses you can eliminate or reduce.

Creatively Boost Income

With the job market tight, look for new and innovative ways to boost your income. Part-time, seasonal, and temporary work might not be permanent solutions, but they can smooth out the rough edges in your budget. Think about your skills as marketable assets outside of your day job. How can you put them to use as a free agent?

What was your financial storm, and what methods did you use to make it through?

The mint makes it first; it’s up to you to make it Last

-Jainie-

According to College Board nearly half of fulltime students attend college with prices around $9,000 a year, the other half attend schools at around $35,000 a year. This may seem intimidating but whether saving for your education or your child’s, these are steps you can take towards keeping financially fit and avoiding the damper of student loans:

• Grants:  You never have to pay a grant back, and just for the Pell Grant alone (one of the most popular grants) the max payout for 2010-2011 school year was $5,550. For more information about applying for Financial Aid click here.
• 529 Plan: Nothing beats the old fashioned method of stashing away some extra cash. 529 Plans are not ordinary savings accounts so it’s important to check with a financial advisor to make sure it’s right for you and your family.
• Coverdell Education savings Accounts: A common concern with a 529 plan is that it’s exposed to market risk and can actually decrease in value. Coverdell’s are similar to IRAs and not at risk for market fluctuation. A few things to keep in mind, the max contribution per year is $2,000 and Contributions to a Coverdell ESA are not deductible, but amounts deposited in the account grow tax free until distributed.

Paying for college can be a scary thing, but the longest marathon begins with a single step! How did you make the grade? Share your tips and tricks in comments or through the forum.
The mint makes it first, it’s up to you to make it last.

-Jainie-

Cutting a few extra calories can add up to pounds lost, but cutting a few pennies adds up to dollars saved. Here are some tools you can use to help trim a few dollars off your bottom line.

• RetailMeNot.com –Have you ever purchased something online and at check-out you see the box asking for a coupon code? Head over to RetailMeNot.com and you may get free shipping or even 10-20% off your purchase. They also have printable coupons and grocery coupons.
  


• Groupon.com –Using a city or zip code you provide, Groupon shows you local “Deals of the Day.” With up to 50% discounts on everything from food to exercise classes, it never hurts to check this site out. Mobile apps are available that allow you to buy from your phone and use it as the coupon. LivingSocial.com and DailyDeals.com are other great sites like Groupon.


• 
  RedLaser.com – RedLaser is a free application for iPhone and Android users. With this app you can scan the barcode or QR code of any product using your smart phone’s camera and compare prices to online and local stores around you. You can also check food allergens and nutritional facts as well as scanning the barcode of most books and locating a copy of it in a nearby library.

These are just a few of the tools I use to spend smart. What are some tools or strategies in your arsenal? Let us know in the forums!

Investments: To Bulk Up or Slim Down?

Investing money is understandably scary. It’s like joining a new gym and worrying whether all the money spent on startup fees and registration will really pay off. Here is a guide to investments based on where you are in your journey towards financial fitness:

If you're in your 20s …
Some say to make your riskiest investments at this age because you have time to recover. Half of that is true, you wouldn’t jump off a bridge because you are young and in shape would you? Invest in solid stocks because even with a lower return, you still have time to reach your financial goals. As you invest, don't ignore your debt. Paying off a credit card that charges 25% is the rough equivalent of earning 25% on your investments.

If you're in your 30s …

Prioritize retirement savings - Don’t let fear keep you from contributing to your retirement accounts. Even baby steps can run a marathon.

Protect yourself from unemployment - Keep enough cash to hold you over for six months.

Try playing with 401(k) contributions - If the market has you nervous, try moving 30% of it into the safer money market options.

If you're in your 40s …
These are your prime earning years. That means you should be stuffing as much as possible in your retirement savings plan, even if it means cutting back on spending. When it comes to stocks, stay diversified. A diversified portfolio has a good mix of stocks and bonds, and also contains some real estate and precious metals. Just like a diversified diet exposes you to all different kinds of nutrients, this will keep you exposed to high earning areas.
How has the market been for you lately? Tell us on the investment board in the forums.

The mint makes it first, it’s up to you to make it last!
-Jainie-

Flex That Fico!

The key to getting the most results the fastest from your workout is targeting the right muscle groups. Have you been targeting your FICO to build your financial fitness? Your FICO score (credit score) is your muscle in the financial fitness world. In this blog, let’s talk about how to target the right areas specifically your FICO score. Here are your target areas regarding your FICO:

1. Payment history- 35 percent of your FICO is based on history, making the repayment of past debt the most important factor in calculating credit scores. According to FICO, past long-term behavior is used to forecast future long-term behavior.
   


2. Debt amounts- 30 percent is based on total outstanding debt. Credit cards count the most in this category.
   


3. Length of credit history- 15 percent is based on how long each account has been open and how recently the account's most recent action occurred.
   


4. New credit and credit mix- 10 percent is based on each. FICO suggests that borrowers only take on additional credit when they must have it or when it makes sense financially. Credit mix is simply having different forms of credit on your credit report such as mortgage, auto loans, credit cards, unsecured lines of credit, etc…

Paying with cash needs to be the first choice when it comes to building a tradition of financially fit choices, but sometimes that’s just not an option. Knowing the ins and outs of your credit score will help in making better credit and financial choices. In the words of Francis Bacon, “knowledge is power.” So now FLEX that FICO!

The mint makes the money first, it’s up to you to make it last!

-Jainie-

Getting Fit Basics - Paying Yourself First

Just like strength training is the first step to a healthier you, "Paying Yourself First (PYF)" needs to be your first step in getting financially fit. This month's video fit tip gives you one technique to start this financially fit tradition, but the 5 steps below are like your PYF circuit training.

1. Isolate Savings - Separating your savings is a great way to focus on your goals. Create different accounts for paying yourself first, getting that new TV, kids college fund, or even a new car. Isolating your goals shows the real impact of your savings.




2. Calculate Monthly Expenses - Knowing what you spend may lead to saving. Seeing the real cost of your "daily cup of coffee" over a month may suprise you. If you find a place to make savings, you could add those funds to one of your goal savings account.




3. Pass It On - You modeling the PYF habit is vital for kids. They practicing it for themselves turns an idea into a movement. Use money earned for chores or their allowance and let them save for their own goals. Insist they pay themselves first to create their own healthy financially fit habit. Remember: kids are more visual so creating a chart or an online visual aid may help.
   



4. Get Interested in Interest - Make your savings work for you. Find an account, such as a CD or Money Market which pays you every month. Be sure to do your homework as every account's options are different. Even kids can get in on the fun. For example, Texas Trust Credit Union has a smart start CD for kids under 18 with a minimum balance of $100.




5. Set Up Automatic Deposits - You can gain without pain. Have some of your check deposited straight into your savings. Since you don't see it, you won't even notice. Then, honor your own word and stick to a regular PYF plan. It is just like your exercise routine. You're the one who knows if you cheated or not. Just think of me as your personal financial trainer.

Stick to your circuit training, and you will build your financial fitness every month.

Need a word of encouragement or have a great story? Stop by our forums. Share your successes and tips on building a financially fit family. Together, we can start a movement.

The mint makes the money first, its up to us to make it last.
~Jainie~

Negotiating Credit Card Debt
Hey everyone! Hope you all had a fantastic week! Last time I talked about why you should save your money, but I know that sometimes certain things can get in the way of doing that. A common culprit is credit card debt. If you can't make more than the minimum payment, watching that interest pile up is about as fun as running through poison ivy in your birthday suit. If you have a lot of credit card debt holding you back, try some of the steps below. It may seem overwhelming but just remember that every marathon starts with a single step.

Credit Card Debt Settlement
When settling credit card debt, what you’re trying to do is typically this: you call your creditors and offer to pay off part of your debt in exchange for them forgiving the difference. For example, if you owe $10,000, you can offer to pay $6,000; if your creditors agree to it, the remaining $4,000 is written off their books. Every issuer has their own policy when it comes to settling debt and the terms that you get will vary, yet most of them will try and help you.
Why? Because if you’re trying to negotiate a settlement, that usually says you’re near the breaking point and there’s a strong chance that soon they won’t be receiving any money from you. It would be even worse if you had to file for bankruptcy, and since credit card debt is unsecured, they’d be guaranteed not to receive anything at all. So the logic behind accepting a settlement that’s lower than what you owe them is that it’s better to get a percentage of something than 100% of nothing.

There are two drawbacks to settling your credit card debt, though. First of all, when you settle, your creditors expect to get paid right then and there. What this means is that you can’t ask for a settlement if you don’t have the money ready to make your lump sum payment. This option is best when you have savings or some other way of coming up with the necessary payment. The second drawback is one that most people don’t know, and are shocked when it hits them: the portion of your debt that is forgiven is treated as regular income, and you will have to pay tax on it.

Negotiating Better Payment Terms
If settling your credit card debt is not an option (and really, not many people have that luxury), you can try and negotiate better payment terms. If you have been a good customer, paying your bill on time with very few late payments, you should not have any problems negotiating a lower interest rate. This will lower your monthly payment. Even if you’ve been unable to keep up your payments, it’s worth a phone call to see if there’s anything that can be done about it. You won’t know until you try, plus it’s free to ask.

You can request that the fees charged to your account be waived, especially the late payment fees. While some companies will refuse to waive them, others might reconsider.
You also have the option of negotiating a payment plan, although the way this works with most companies is kind of wonky. If you have been making your payments on time, most of the time they will refuse to negotiate a payment plan with you (go figure). On the other hand, if your account shows that you’re several payments late and are in seriously bad financial shape, you’ll find that they’ll be much more willing to arrange a repayment plan that suits you better. Once again, it’s better to receive some money over time than no money at all.

I hope that some of these tips can be applied to your own financial fitness strategy. What other obstacles are in your way when it comes to saving your money? If you or anyone you know needs help you can always feel free to jump over to the forums. I'm always over there, and together we can make the first step of your marathon an easy one.

The mint makes the money first, it's up to you to make it last!

-Jainie-

Hey everyone, I hope you all had a fantastic weekend! I was running this morning and started to think of how frustrating it can be when your taking those first steps towards becoming financially fit. It's like not eating so many almond joys (my favorite) when you start to eat healthy. One thing that always helped me was knowing why I was eating healthier foods, and I think that applies to healthier finances as well! So starting at the very basic level, the first step for financial fitness is...saving your money. In today's times there are multiple ways to save, but again let's focus on the why, because without the why it's hard to care about the how.

• Emergency Funds: This is probably the first thing everyone thinks of in regards to saving your cash. No matter what your age we have all been hit by some sort of unexpected expense. This could be from a car breaking down, home repairs, or even medical expenses. A general rule of thumb is to have enough in your savings account to cover at least three months of bills.





• Retirement: Saving sooner rather than later is always the best when it comes to your retirement. The earlier you put money away, the more your money can work for you. This can be intimidating at first because now, saving is not as easy as just throwing some money under the mattress. There are 403b's, 401K's, and all kinds of other forms of retirement accounts with different pros and cons for each. Luckily there are plenty of financial planner out there willing to help you decide which one is best for you. Texas Trust has an awesome financial planner by the name of Jim Blazek who's services are available free of charge.





• School: I don't just mean education for your child. Many adults are going back to school to either finish a degree or start a new one all together. This is all in hopes of higher paying jobs, which I think is fantastic because the more you make the more you can save. According to USA Today, in 2009 a survey was compiled from 100 different community colleges by the AACC that showed adult enrollment had risen from 2% to 27% from the previous year.

What are some reasons to save that you can think of? These are some of the major reasons, but much like unexpected expenses there are always some we overlook. When it comes to money, the mint makes it first, it's up to you to make it last.

-Jaine-

Hey Guys and Gals!

Hey everyone, This is Jainie Fitness!

Welcome to my Money Fit Tips blog, I would love to give you a quick tour!

If I had to take a wild guess I bet you came from our website MoneyFitTips.com...Think of that site as a gym, only instead of building muscle it has all the tools you need for building the traditions of a financially fit family.

The resources section is like your own army of personal trainers to help you no matter what level of financial fitness you are.

I'll be posting my new Fit Tips video smack in the middle of the homepage, but if you missed one you can always click on the Fit Tips Videos link to watch all the previous months. We all miss a work out every now and then right? ;)

I'm really jazzed about our Forum. One of the hardest parts of building good habits is finding the motivation to change. Inside our Forum you can see what other families are doing to stay financially fit and how they built their traditions. Maybe you have a tip you would like to share, or possibly a question you need answered...whatever the case may be, myself and some of the awesome employees of Texas Trust Credit Union will be happy to find a solution for ya!

I'm thrilled to be helping with this site, and I can't wait to see the movement we can all start together! Let me know what you think in our comments section.

-Jainie-