Smart Money Moves for the New Year

The following post is by MPFJ staff writer, Melissa Batai.  Melissa is a freelance writer who covers topics ranging from personal finance to business to organics to food.  She blogs at Mom’s Plans where she shares her family’s journey to healthier living and paying down debt.

The new year is often a time for renewal; people frequently vow to get healthier and be more responsible with money.  However, there’s no need to wait until the calendar turns to January 1^st.  There is plenty you can do now to help your finances as you head into the new year.

Reduce the Interest You Pay

If you owe money, there are many ways you can cut the amount of interest that you’re paying so you can get out of debt more quickly.

Transfer credit card balances to a 0% APR card.  If you have a credit card balance and are paying high interest, take the time to stop that now.  If you have good credit, there are many 0% APR offers available.  Just do a simple Google search.  You’ll likely have to pay a transfer fee of 2 to 3% of the balance you’re transferring.  Crunch the numbers to make sure that the transfer fee is lower than the interest you would pay on the card you’re currently using.  Also, try to get an offer for 0% rate that lasts 15 to 18 months, giving you time to pay off the card.

Negotiate your interest rates.  If you don’t want to transfer your credit card balance, another option is to call your credit card company and ask them for a lower interest rate.  Really, it’s that easy.  This strategy works about 50% of the time, so it’s worth the time.  If the person you speak with tells you the company can’t change your interest rate, ask to speak to the supervisor who may be more likely to negotiate with you.

I did this about a year ago, and I was originally refused.  I asked to speak to a supervisor, and I was again refused.  I called back a few days later and again worked my way up to a supervisor.  This time, the supervisor not only reduced my rate by 3%, but he also gave me enough rewards points to cover the cost of my annual fee and additional to give me $50 cashback.  Persistence is key with this strategy.

If you try to call several times and don’t make any progress, tell them that you plan to move your balance to another card.  This is a last resort option and may provide the incentive the company needs to reduce your interest rate.

Be Mindful of Your Money

Money has a way of leaking out if we’re not careful.  There are several steps you can take to stop the leaks and keep more of your hard-earned dollars in your pocket!

Set up a budget.  If you have not done so already, take the time to set up a budget.  For years I did our budget with paper and pencil, but as our finances grew more complex as our family grew, I found this method increasingly frustrating.  A few months ago, I switched over to You Need a Budget! (YNAB), and I love it.  It’s made budgeting so much easier!

There are other budgeting tools available, too, like PearBudget, EveryDollar, Mint, CalendarBudget, Mvelopes, and many others.  Just find the tool that works best for you.

Delete ghost accounts.  Most of us have accounts that we’re still paying for regularly, but we no longer use.  Are you paying for a magazine subscription for a magazine you no longer read?  Do you still pay $40 to the gym, but you quit going months ago?  Take an afternoon to go through your checking and credit card accounts to see if you have any ghost accounts—things you’re paying for that you no longer use, need, or want.  You may be surprised to see that you have several!

Set up auto pay.  If you have trouble remembering to pay your bills on time or you don’t want to set reminders for yourself, consider setting up auto pay.  By utilizing auto pay, you can reduce the chance of having a late payment and suffering the accompanying late fee.

Check your tax withholding.  If you routinely get a tax refund, check your tax withholding.  You may want to claim more dependents so that you don’t get a big refund each tax season.  It’s far better if you put that money to work for you throughout the year rather than getting back a large lump sum in the spring.  Your accountant can help you determine the appropriate tax withholding.

Increase Your Savings & Retirement Contributions

Once you’ve lowered your interest rates and set up a budget, it’s time to look at your savings and retirement contributions.

Set aside money for Christmas.  Do you routinely put all of your Christmas shopping on credit card and then find yourself unable to pay it off quickly?  If so, you’re paying even more for the presents than you realize.

“You can figure out just how much your Christmas debt is costing you to carry by using calculators on the internet.  Plug in $1,000 at 17 percent (the prevailing credit card rate) in the calculator at www.bankrate.com, and you’ll find that your interest totals $94 over one year and $187 over two” (ABC News).

Rather than paying interest, take steps now so you’re prepared for next year.  If you spend $600 on presents, set aside either $11.50 a week or $50 a month.  When the 2017 shopping begins, you’ll have the cash to pay for your gifts.

Set up automatic savings withdrawal from your paycheck.  Most of us have trouble saving money.  One easy way to save more is to set up an automatic withdrawal from your paycheck to your savings account.  When I worked full-time, I did this.  At first, I missed the money from my paycheck.  But after a few paychecks, I forgot all about the money that was being deducted, and I learned to live on the paycheck I was getting instead of counting on the money that was being funneled into savings.

I truly forgot about this, so I was always in for a pleasant surprise when I checked my savings account balance.  It was growing steadily, with no help from me.

Simply go to the payroll department and fill out the form to have whatever amount of money you would like transferred to your savings account every paycheck.  You can likely also do this online.  A perfect time to make this adjustment is when you receive a raise.  You won’t yet be depending on the additional income, so you won’t miss it when it goes to savings.

Put money in your retirement savings.  If your employer offers a retirement savings match, make sure to allocate money for a retirement contribution, at least to the point that your employer matches.

If you’re in a better financial situation, consider adding to your Roth IRA or your regular IRA.  Remember that you have the first several months in 2017 to add to your account for 2016, which can help lessen your tax burden when you file your taxes.

Financial changes don’t happen overnight.  However, as we head into the new year, you can slowly make these changes so that you’re in a much better financial position in 2017.

How about you all? What financial changes do you plan to make for the new year?  What strategies would you recommend others implement?

Share your experiences by commenting below! 

***Photo courtesy of https://www.flickr.com/photos/scruch/2304897733/in/

Compound Interest: Your Friend Or Your Enemy

The following post is by MPFJ staff writer, Laurie Blank.  Laurie is a wife, mother to 4 and homesteader who blogs about personal finance, self-sufficiency and life in general over at The Frugal Farmer. Part witty, part introspective and part silly, her goal in blogging is to help others find their way to financial freedom and to a simpler, more peaceful life.

At the root of many financial failures is the failure to understand the power of compound interest. Depending on which side of the river you’re on, compound interest can be a tool that will catapult your journey to financial independence, or a destructive enemy that will work to destroy your financial world.

Compound Interest: Your Wealth Building Friend

The effects of compound interest in the investing world are almost unbelievable. A commonly used scenario that works to illustrate the benefits of compound interest when used to grow wealth is this one:

At age 19, Joe decides to invest $2,000 per year in a retirement account for a period of eight years until he turns 27. He puts a total of $16,000 of his own money into an investment account, committed to leaving it there until he retires at age sixty-five.

Mike, also 19, decides to put off retirement investing until age 27, right when Joe decides to stop adding his own money to his retirement account. Mike puts $2,000 a year into his retirement account starting at age 27 and every year after that until age 65.  Both men net an average annual return of twelve percent.

Who has more money saved in his retirement account when the men reach age 65?

Joe: $2,288,996

Mike: $1,532,166

(Source: http://www.daveramsey.com/blog/how-teens-can-become-millionaires )

It seems impossible, but any investment calculator will show you that although Mike contributed over $60,000 more of his own money to his retirement account than Joe did, Joe still ends up with nearly double the amount of money in his retirement account that Mike has.

This, my friends, is the wondrous miracle of compound interest.

Compound Interest: Your Financially Destructive Enemy

In the same way as compound interest can help you build enormous wealth, it can also assist you in systematically destroying any opportunity for financial freedom.

How? By continuously carrying high amounts of debt.

For example, if you carry a credit card balance of $15,000 (the average of credit card balance carriers in the U.S.), and your credit card has an interest rate of twelve percent, you could be paying on that credit card forever. If your card has a minimum payment due of one percent of the balance, the payment will match the monthly amount you’ll pay in interest and you’ll never make a dent on the balance, even if you pay on it for forty years. If you pay a minimum payment of 1.5%, it will take you over thirty years and over $40,000 in payments to get to a zero balance, as shown by the chart below.

The longer you hold onto debt – especially high interest consumer debt – the more that compounding credit interest charges will cost you money.

Credit card, mortgage and other loan interest charges not only eat up your monthly income, they take from you money that could be used to make compound interest your friend by using it to grow wealth, as in the first scenario I shared.

How to Turn Compound Interest from Foe to Friend

If you’re stuck on the wheel of compound interest destruction don’t worry; you can turn things around. Here are some tips for minimizing compound interest payments and freeing up more cash for wealth building.

Transfer Credit Balances to Low or Zero Interest Cards

If you’re carrying credit card balances that are too large to be paid off each month, work to transfer the credit card balances to zero interest card offers. Then work hard to get the balance paid off by the time the zero percent interest rate offer expires.

Crush Your Debt Quickly

The sooner you pay off your debt, the less of your money that will go into the profit margins of big banks and the more that will be available to go into your own pocket. Devise a debt payoff plan such as the debt snowball and get to work on crushing your debt.

Start Investing – NOW

Even if you can only afford to invest a little bit each month as you work to get out of debt, invest something. Get the power of compound interest working in your favor now, and increase the amount of money you invest as you are able.

Don’t let compound interest work against you any longer. Instead, use it to help you grow wealth and reach all of your financial goals.

How about you all? How is compound interest working in your life?

Share your experiences by commenting below! 

***Photo courtesy of https://www.flickr.com/photos/torley/7072696591/in/

5 Monthly Cost Reductions That Can Keep Your Budget on Track

The following is a guest post. Enjoy!

Creating a monthly budget is one of the significant steps forward you can take in your personal finances. Not just a way to limit unnecessary spending, budgets also allow you to plan for future goals. They let you chart your progress towards those milestones. However, it’s always a challenge to stick to your budget. That’s especially so if you’ve just made one for the first time.

While I previously wrote about bad habits that can harm your budget, there are other steps you can take as well. Many people don’t realize just how much they could rescue their monthly expenses. Take a closer look at some ways you can cut back on your spending.

1. Lower consumption to reduce utility bills

One of the big slices of your budget pie-chart likely goes to utilities. Do you feel like your bill each month is too high? You can make an effort to lower it. Changing your consumption of electricity and water can have a big effect on your budget. Best of all, there are many ways to save money on your utility bill. That includes everything from shorter showers to using energy efficient appliances. As your bill goes down, budgetary wiggle room increases.

2. Spend more time cooking meals at home

Do you love to go out to eat? Many of us do, and it’s often a social occasion as well. However, all those meals add up quickly. It doesn’t take long before your food budget goes strictly to restaurants. To gain more control over your finances, cook your food at home. In more cases than not, it works out to be cheaper than eating out. It’s also frequently more enjoyable. Playing a bigger role in making your own food can only be a good thing. Try to plan your meals in advance. Pay close attention to local grocery sales. Taking advantage of these can enable you to stock up on delicious ingredients at budget-friendly prices.

3. Cut out daily luxury purchases

Coffee, cigarettes, smartphone application purchases — we all have our daily vices. We’re all probably aware of how much it costs us, too. Rarely does that stop us from grabbing a coffee on the way to work, though. Don’t carry on with these kinds of purchases. I wrote about how “small” purchases can stack up fast. So can these expenses, which we often know we don’t need in the first place. Try to wean yourself from them. If you find it difficult, try only getting your coffee every other day. Eventually, you can cut it out altogether.

4. Look for a better car insurance rate

Like utilities, a car insurance payment can be a substantial chunk of your monthly budget. Could you be paying less than you are now, though? It might be time to look into finding a better rate. That could come from speaking to your current insurer. You could also consider changing providers. No matter where you are, from Maine to California, it’s easy to get a quote for auto insurance from many companies. Frequently you can even request a quote online or over the phone. It’s worth taking some time to investigate a lower rate, because you may find you could save a few hundred bucks.

5. Use public transportation more often

Do you live in a place where driving everywhere is a necessity? You may frequently spend more than you’ve budgeted for fuel each month. This extra expense can be a very frustrating problem to encounter consistently. What’s the solution? Make an effort to commute without your car. If you can use public transportation, a carpooling service, or even a bicycle, you can save money. Gas prices are volatile by nature; you never know when the cost may skyrocket. In other words, it’s smart to try and cut your fuel consumption regardless. Plus, the less you drive your car, the easier it is on the environment!

These are just a few of the ways you can knock your monthly expenses down to size. When you gain control of these costs, you gain control of your budget. That empowers you to work harder and faster towards meeting your goals. Take the time today to sit down and think about how you could reduce these and other expenses each month.

5 Things I Do Every Month to Save Money on Groceries

The following post is by MPFJ staff writer, Chonce. You can read more articles by Chonce over at her personal blog, My Debt Epiphany. Enjoy! 

According to a Gallup poll, the average American spends $151 per week on groceries and 1 in 10 Americans admitted to spending $300 or more per week.

That sounds like a ton of money to spend on food alone, but if you have a standard family size of 3-4 people, you might find lowering your grocery spending to be quite the challenge.

Next year everyone will be setting New Year’s resolutions and one of your goals may be to lower some of your expenses.

My family of 3 have been eating well by only spending $300 per month on groceries and I know that anyone can meet their goal of lowering their grocery spending by doing using some of the strategies I implement every month.

Use Coupon and Discount Apps

One of the best things you can do before a shopping trip is scope out the deals and see if you can use any valid coupons to lower the cost of your final bills. It sounds great and all, but who has time to do that?

If you’re getting off work on a Friday afternoon and you just want to get your shopping over and done with, you probably aren’t going to want to go through the effort of hunting down your newspaper circular and making things off and clipping coupons.

To simplify this rigorous process, I use mobile apps to do all the hard work for me so I can still reap the benefits. Favado is an app that compares prices across local stores in order to find the best sale/discount for you. Flipp is another app that collects circulars from local stores so you can compare sales and it allows you to clip coupons digitally as well.

Limit Your Trips to the Store

Another way I save money at the grocery store is simply by shopping less. We shop once every two weeks and I love the fact that I don’t have to be in the grocery store every weekend.

I never go shopping without a detailed list, so I know exactly what we need and how many meals we need to prepare in order to avoid going to the store every week.

The less you shop, the less likely you’ll see things you want to purchase so this helps my family and I eliminate temptations to make impulse buys.

Price Matching

If you haven’t tried price matching, you could be missing out on a ton of savings. Shop at stores that have price matching policies where they promise to provide you with the best deal in town.

At stores that offer price matching, you can bring in an ad from a competitor that is offering a discount on a specific item and that store will need to match their price which can save you money on the spot.

My friend price matches all the time for groceries and loves it. When she moved 25 minutes away from her hometown for college, she started bringing ads from her favorite grocery store that offered a 10-cent produce sale every month to the Walmart in her new town and they honored the prices on the flyer.

With price matching, it’s important to check the store’s policy and see what they accept. For example, some stores will only price match ads from competitors with a 30-mile radius so you can’t compare a local deal in California if you live in Colorado.

However, if you keep your eyes out for ads with savings and become familiar with your favorite store’s price matching policy, you should be able to price match some of your food items and save a decent amount of money as a result.

Utilize Your Crock Pot to Cook Meals in Bulk

Purchasing a crock pot/ slow cooker was one of the best decisions I could have made to lower my grocery spending. Grocery shopping can be stressful and hectic especially if you are trying to eat a large majority of your meals at home.

To stretch our low grocery budget, I prepare filling and affordable meals in our slow cooker all the time. I make a lot of stews, soups, pasta dishes and more. Our favorite slow cooker meals right now include beef stew, chicken tortilla soup, and rice and beans.

The ingredients for each of these meals cost less than $10 and makes enough for us to eat for 2-3 nights so it averages out to around $3-5 per family meal. You can’t get that deal at a restaurant!

With your homemade meals, try to focus on the price per portion if you’re trying to spend less on groceries and consider using a slow cooker to help keep costs low.

Buy In-Season Fresh Produce

I’m all about eating healthy, but I’m not interested in buying a $7 bag of grapes or cherries during the offseason. This is why we stick to seasonable fresh produce in order to save money.

You might notice that berries go on sale in the summer then get expensive in the fall and winter. Plus they taste pretty bad during the offseason too.

I always shop for fresh in-season produce because it’s always on sale so I can get more bang for my buck.

Also, shopping fresh is usually cheaper too seeing as how processed foods can get pretty costly. Even buying fruits and veggies that are pre-cut can add an extra few dollars to the total price.

How about you all? Do you do any of these things to lower your grocery budget every month?

Share your experiences by commenting below! 

***Photo courtesy of https://www.flickr.com/photos/andrefariagomes/4088061570/in/

Why Is The EUR/USD Currency Pair So Popular?

The following is a guest post. Enjoy! 

­One currency pair enjoys so much trading volume that it is almost synonymous with the whole world of foreign exchange (forex).

The EUR/USD currency pair sometimes nicknamed ‘fiber’ by some traders, tracks the movement in value between the world’s two most liquid currencies, the Euro and the US Dollar.

But what makes the EUR/USD such a popular trading choice?

One reason is the large number of multinational corporations (MNCs) actively trading both in the US and in the Eurozone. These businesses have an ongoing interest in the currency pair, given their need to actively hedge against exchange rate volatility.

That same volatility is also an attraction for newcomers to the world of forex trading. Given the large number of worldwide market participants, liquidity is never in short supply on the EUR/USD. This makes it a great option for those interested in opening short-term positions on the pair, such as day-traders.  The pair’s continuous and incremental changes, driven by ample liquidity, are important to discerning short-term market trends.

The pair can be significantly affected by geopolitical and economic developments in both the US and the 19 Eurozone countries, where the currencies are the official tender.

For those with a keen eye for spotting how global events play into market fluctuations, the pair offers the possibility to take positions based on the expected outcome of major world events, such as elections, monetary crises, and even wars.

Knowledge of the Eurozone’s ‘macro-economy’, including the complex monetary policy administered by the European Central Bank (ECB) in Brussels, will also play dividends for traders looking to explore the pair.  On the US side, policies set by the Federal Reserve (or simply the ‘Fed’) can have a significant impact on the rate.

Given the prominence of the pair, customers also have a vast array of trading websites from which to choose from when looking for an outlet that supports the pair.

For both newbie and veteran traders wishing to find a currency pair that affords plenty of possibilities to leverage both short-term and long-term trading strategies, the EUR/USD is a great place to start.

Forex Basics

The following is a guest post. Enjoy! 

Everyone’s looking to make some easy money, and the older we get the more we learn that such a thing doesn’t exist. But there are ways you can make a little extra money on the side and during your free time such as with forex trading.

Forex trading is seeing a wave of popularity because of the opportunities it gives traders to trade on their own schedules and make some serious cash. The forex markets are decentralized which means that traders can access them via a simple internet connection. This is liberating for many traders that want to trade during their free time, from any place in the world.

Also, forex trading offers a real opportunity to make money. That said, you have to take the time to learn forex basics before you can begin trading and profiting off your trades. Let’s take a look at the forex industry, how it works, and how you can learn about the industry to begin trading as soon as possible.

What is Forex Trading and How Does It Work?

Forex trading is based on a simple concept: currencies have values that fluctuate over time. Throughout the day, week, month, or even year, the currencies go up and down in value as a result of a number of external factors. These factors include the forces of supply and demand, events like war and economic recessions, and even statements and announcements made by governments and political leaders.

Traders take advantage of these value changes to buy and sell currencies. The whole concept is to buy a currency when its value is low, and sell it when its high. Traders that have a well-developed strategy and understand the rules of the forex markets are able to profit off currencies in this way.

The truth is that forex trading takes a lot of time and effort to learn. That’s why it’s important to learn forex basics from the very beginning so you have a sturdy foundation to begin trading and you can build on that foundation as you learn more about the markets and hone your skills.

Learn Forex Basics with Broker Resources

The question that many beginner traders have is where they should begin learning about forex markets. Many novice traders don’t know that brokers often have resources that will help them learn about the industry, get their feet wet, and start trading successfully.

These brokers often have full websites dedicated to educating their customers. Some even offer virtual trading simulations where you can make some sample trades without risking any of your valuable money.

These resources are an invaluable source of information for beginner traders that want to learn and shouldn’t be ignored. If you are able to take advantage of the information that forex brokers provide, you can become a successful trader and make some money.

Overall, the forex industry offers a great opportunity for those that want to make some extra money by trading during their free time. Just keep in mind, you have to invest the time to learn about the markets before you begin trading. Don’t skip this step, otherwise, you may be disappointed with your trading results.

How to Keep Kids’ Activities from Breaking the Bank

The following post is by MPFJ staff writer, Laurie Blank.  Laurie is a wife, mother to 4 and homesteader who blogs about personal finance, self-sufficiency and life in general over at The Frugal Farmer. Part witty, part introspective and part silly, her goal in blogging is to help others find their way to financial freedom and to a simpler, more peaceful life.

Studies show that the average cost of raising a child from birth to age eighteen is nearly $250,000, and a recent study reveals that a decent chunk of that cash is spent on extracurricular activities. In the case of elementary-aged children, it’s an average of $463 this year, and in the case of secondary-aged children, it’s a whopping $1,124 this year.

If you’re “average”, that means you could be spending nearly $10,000 on each of your children’s extracurricular activities over the 13-year period that they’re in school. And that’s simply the national average, which takes into account all school-aged kids – even those not participating in after-school activities. If you’ve got a kid involved in a serious sport such as baseball, hockey, gymnastics or dance, you’re likely spending a lot more than $1,100 a year, even for elementary-aged kids.

If that seems like an astronomical amount of money to spend on kids’ activities to you, you’re not alone. The fact of the matter is that the days when the education system picked up a large amount of the financial burden for extracurricular activities such as sports is long gone, and parents are left to foot the bill.

How can you as a parent keep kids’ activity costs reasonable but still make sure your kids can have the sport or other extracurricular experiences that help make for a fulfilling life? Here are some tips.

Limit Activities to One or Two per Year

Many parents these days feel as if their kids need to be involved in some type of extracurricular activity all year around. The truth is that even one or two activities a year for your child will benefit them and help them to grow in teamwork skills, discipline and obedience.

When considering which activities to sign your child up for, ask them to decide which activity or activities they like best, and narrow the list down to their top one or two. Not only will this save you money, it’ll save time and lower stress levels as well.

Pick Activities That Will Benefit Them as Adults

The reality is that the majority of kids won’t grow up to be professional athletes or world-class Olympians, no matter how much promise they show at a younger age. If your goal as a parent is to raise up a professional athlete, you may want to reconsider your motives and instead choose an activity that will hold life-long benefits.

Activities such as self-defense classes that will show them how to handle themselves should they get trapped in an attacker situation or school sports such as cross country that will help them develop a life-long habit of self-care through exercise are some examples of activities that will benefit your kids long after they’ve graduated from high school.

Do Activities as a Family or With an Organized Group of Friends

Many families choose to do activities together instead of being involved in school-sponsored sports. Some families train for marathons, triathlons and obstacle courses together, or bike together in charity or other events.

Planning regular activities with family members or groups of friends allows those same benefits of teamwork and training for a fraction of the cost.

If you’re set on providing extracurricular activities that do cost more than you’d like, there are a few ways to help make the financial burden less impactful.

Work the Costs into Your Budget

Just like you would with a regular bill such as your utility bill, it helps to figure out the annual amount you’re spending on activities and adding that monthly “bill” into your regular budget, saving the money in a separate savings account or envelope. This way when fees are due you won’t be scrambling to come up with the cash.

Ask if the Studio Will Do a Work-for-Pay Trade

Some sports centers will allow you to volunteer or work there in exchange for lowering your child’s participation fees. Just remember if you do participate in some type of a barter situation to check and follow the bartering tax laws for your state.

Kids reap many benefits from being involved in extracurricular activities. With a little planning, choosing and creativity, those activities can be affordable for almost any family.

How about you all? How do you keep kids’ activity costs affordable?

Share your experiences by commenting below!

***Photo courtesy https://www.flickr.com/photos/luigi_and_linda/7240626210/

Don’t Lose the Farm at an Investment Seminar

The following post is by MPFJ staff writer, Marie. You can read more of Marie’s articles over at her own blog, Family Money Values. Enjoy! 

Attending seminars and training sessions to learn about a topic of interest to you is a worthy endeavor, but you have to be careful about taking action based on those seminars.

Some are entirely legitimate and you might find the perfect financial resource to accomplish your goals.  Financial advisors come in all shapes and flavors – some are just broker house representatives, others are highly trained and certified professionals and some are just shady dealers trying to get your money.

Often my spouse and I get invitations to attend investment related seminars – including a free dinner.  We get them more often now that we are over 65.  Typically they are for dinner at a popular local restaurant with pretty good food.  Headliners have included things like:  “Come learn how to make your money last in retirement”.  “How to invest in a down market”.  “Plan your retirement income” and etc.

It’s not surprising that we receive these invitations. Forbes article Beware The Free Lunch (Or Dinner) Investment Seminar reported:

“According to FINRA research, 64 percent of those responding to a survey of people age 40 and over had been invited to an “educational” seminar with a free meal offered.”

The North American Securities Administrators Association says:

“State securities regulators warn senior investors to be aware that a combination of “free lunch” seminars, misleading professional “senior specialist” designations, and abusive sales practices can create a perfect storm for investment fraud. Remember: there’s no such thing as a free lunch.”

The Alberta Securities Commission has a list of various types of scams including these.  They note some red flags – such as:

• “Above average returns with little or no risk. No investment is risk free.
• Offer of loans to cover both the investment and further investment seminars.
• Claims of a secret or exclusive technique for building wealth. The salespeople at seminars can make misleading claims that entice you to sign up right away.
• Limited time offer that discourages investors from getting independent advice.
• Promises to ‘be a millionaire in three years’ and ‘get-rich-quick’.
• Sales pitches of no cost involved or free attendance at seminars. The first session you are invited to attend may be free, but you may have to pay fees and commissions that the promoters did not tell you about beforehand”

A few years ago, we (my spouse and I) actually attended one of these free dinner investment seminars.  The dinner was hosted by a broker (supposedly associated with one of the big wire houses – I don’t remember which).  The event took all evening, from about 5 pm until about 9 pm.  It was at a nice steakhouse in my home town – one that is on the upscale side of the price range.  We did get a nice dinner.  After dinner, there was a presentation and a long sales pitch.  We listened and squirmed, wanting to leave and get home so we could get some rest for the next day.  We bought nothing and we gave no information.  We were not contacted much afterward.  Overall, it wasn’t an unpleasant experience.  We felt we paid for our dinner by listening to the pitch, but didn’t feel obligated to buy because we had a ‘free’ dinner.  We’ve never been back, preferring to rely on our own research and studies to figure out our investments.

Junk mail isn’t the only avenue used by brokers and other’s dealing in securities investments for a living to offer free seminars.

You can find one in most local ‘communiversity’ classes (classes taught by community volunteers, usually held at a local school and charging only a small fee for participants).  Heck, your company may even host one.  Mine did.

My company brought in local financial advisers to teach a course that covered retirement saving and investing.  The company offered it only to people 55 and over.  As part of the course, the advisers offered to do a free financial plan – a value (they claimed) worth hundreds of dollars.  At the seminar the advisers really played up the benefits of variable annuities.  They did such a good job that one of my co-workers fell, hook, line and sinker for the pitch.  She turned over her entire retirement savings to them to invest.  I’m pretty sure she is back at work now!

Even Vanguard offers a ‘financial planning’ service.  They, however, are very up front on their web site with the fact that their recommendations will put you into Vanguard mutual funds only – so if that’s not what you are looking for, don’t ask them to do a financial plan for you, even if it is free!

So, if you read your junk mail, and want that free dinner, be prepared to invest your time to pay for it and don’t feel obligated to buy something just because you got dinner!

• You don’t owe the broker a sale for the dinner.
• You don’t owe the charity a donation for the return address stickers.
• You don’t owe the company a response because they sent you a dollar in the mail – unsolicited.
• Heck, you don’t even have to get the junk mail (but it does help the USPS stay afloat).

How about you all? Have you ever attended a financial seminar? Did you feel pressured to buy any of the products?

Share your experiences by commenting below! 

***Photo courtesy of https://www.flickr.com/photos/ctbto/7995586057/in/

How to Painlessly Switch Mortgages When You Need a New Home

The following is a guest post by George. George writes at Sobredinero.com, a personal finance site for Latinos in the US. Enjoy!

Let me tell you about a man named David. The first thing that attracted David to his condo when he first bought it was how close he was to his job. On top of that, it was near a trendy area packed with nightclubs, bars, and fancy restaurants. It was perfect for David when he was single with no kids. However, David started a family and his housing needs changed.

With a wife, one child, and another child on the way, waiting 10 years to build equity and then liquidate that equity in his condo was not an option for David. He was ready to trade in his two-bedroom downtown condo for a three-bedroom home in the suburbs.

Analyze the Options

David knew which house he wanted, but like most people, he could not afford to pay for two mortgages at the same time and even though he was fairly certain that his condo would sell quickly for the asking price, he did not want to risk his family’s financial security.  He thought about moving to the new house and renting out his condo to cover the mortgage while he had the condo on the market. However, after speaking with the condo board president and reading the homeowner’s association paperwork, David discovered that renting out his home would require a lengthy and rigorous vetting process with the board.  He did not have the time or money to do that.

David also considered borrowing against his 401k for the second mortgage, but if he were to leave his job before paying back the loan, he would be obligated to pay the outstanding balance of the loan within 60 days or be hammered with taxes and penalties. He learned fact by reading through the 401k materials he’d received at orientation three years earlier and he also learned that those terms were common for 401k plans. That was a dicey and expensive option.

After thoroughly weighing all of the possibilities, David decided to put his condo up for sale and simultaneously file for a second mortgage. This sounds risky on the surface, but David knew that the bank would only grant the second mortgage after the condo sold. This practice protects the interests of both the lender and the borrower.

Factor in the Real Cost

Once David decided on the list and file simultaneously route, he put in some research on mortgage terms. Taking on a mortgage is not just about paying back the amount of the loan itself. Smart borrowers also consider the interest rate, total annual cost, monthly payment terms, and the total payment. Additionally, ancillary costs such as bank fees, housing association requirements, taxes, and transportation need to be factored into the real cost of a new home purchase. David used a mortgage calculator to help him understand the true costs of his mortgage options.

Time It

David had everything in place and the only thing left to do was to sign the paperwork. To cancel a mortgage and acquire a new one requires the bank as well as a notary public, so David made sure to schedule the two transactions in one meeting and ensure a smooth process.

This didn’t always used to be the case. Historically, purchasing and selling a home at the same time was a long process. Say for example if David had purchased that condo recently to “flip” (buy for a low price and quickly re-sell at a higher price with inexpensive upgrades), he might not have been able to sell the condo because of restrictions that prevented a home sale if the home been had purchased within 90 days. However, the Federal Housing Administration has eliminated this restriction.

Get the Happy Ending

At the end of everything, David and his family turned out just fine. The condo sold, the mortgage terms for the new home were agreeable, and everyone settled into a more comfortable arrangement. Gone are the days of being tied to a house simply because you signed a mortgage. Granted, it’s not as easy to move when owning a piece of property as it is for renters, but it is certainly possible in today’s modern housing market, and the last thing you want to do is be unhappy with your home. Happy house hunting! Be sure to check out more advice about mortgages here, or here.

How I Afforded Christmas as a Single Mom

The following post is by MPFJ staff writer, Chonce. You can read more articles by Chonce over at her personal blog, My Debt Epiphany. Enjoy! 

Single moms have a lot on their plate especially since they usually act as the single source of financial support for their family.

I was a single mom for about 6 years and I recently got married. Before I met my husband and back when I was still working on establishing my career, I remember that tense feeling I would get whenever the holidays came up.

I know that the holiday season is not just about money and gifts, but I still wanted my son to have a nice Christmas and have all his needs met. Luckily, I was able to meet all my holiday expenses and more while being a single mom and here are a few things I did to make it more affordable.

I Started Saving Up Ahead of Time

I’d recommend that everyone start saving up for the holiday season early especially if you are a parent. I never really spent a ton of money throughout the year so holiday gifts were always a mix of things we wanted and needed.

I kept holiday expenses in the back of my mind as early as July of each year and started to sock away a little cash every month. Sometimes it was small amounts like $20 each pay period, then I gradually increased the amount to $50 and son on. By the end of the year, I had quite a bit of money saved up.

I Picked Up Extra Work

I worked a part-time job with very limiting hours when I was a single mom and this was partly because I was juggling college at the time. During the holiday season, hours at my job picked up a bit and I always volunteered to work extra hours for Black Friday and on special weekends when there was in–store promotions.

Another thing I did was pick up extra shifts doing in-store demonstrations to promote certain products. Being a brand ambassador was a great side hustle for me because the pay was always more than minimum wage and the shifts were short and flexible.

Some days, I’d host alcohol tastings in popular stores for $20/hour. After a 4-5 hour shift, I had made quite a bit of extra money to put toward holiday expenses.

I Joined Holiday Sponsor Programs

The holiday season is all about giving. When you don’t have a lot, it’s okay to be open to receiving help as well. When I had a low income and was a single mom, I would sign up for holiday gift programs where sponsors help provide Christmas gifts for kids in the community.

There were quite a few groups and organizations that provided kids with gifts like local churches and the Salvation Army. Some programs had income limits for families to meet since they wanted to make sure they were serving families in need but for a lot of programs, household income didn’t even need to be disclosed.

At my college, there was a program called Christmas for Kids and it allowed kids to create holiday wish lists that would be matched up with a sponsor so they could receive Christmas gifts. The gifts were given at an annual event that included dinner so kids could meet with their actual sponsors and take pictures with them.

These events and programs were super helpful when I was a single mom because they helped provide my son with gifts that I might not have had the means to buy.

Now that I am in a better place financially, my family actually gives back by sponsoring a child for Christmas each year through our church.

I Participated in Gift Exchanges and Gave in Other Ways

Buying gifts for my child was one thing, but exchanging gifts with other people like family and friends also weighed heavy on my wallet. When I couldn’t afford to gift everyone, I decided to form a holiday gift exchange as well similar to a Secret Santa where each person was assigned someone to get a gift for instead of buying something for everyone in the group.

I usually didn’t stress about giving a bunch a gifts when I couldn’t afford to do so and focused on showing my appreciation for people and giving in other ways like baking special treats, doing a favor for someone, sending a holiday greeting card, etc.

I Accepted Gently Used Things

To stretch my budget even more so I could make ends meet and have a pleasant holiday season, I accepted some hand-me-down items especially holiday decor. Decor can be expensive so when my mom offered to give me her old tree and all her ornaments and decorations for it, I couldn’t pass up the offer.

Decorating our home for the holidays and putting up our tree is an important tradition we have that it a lot of fun. I’ve replaced the tree my mom gave me after a few years but we still use the decorations year after year which saves me a lot of money.

I also wasn’t (and I’m still not) opposed to picking up used toys and clothes depending on what they were. I’ve already shared my strategy for saving money on clothing, and I realized that young kids will play with just about any toy thanks to their imagination.

I’ve found some really nice thrift store finds for my son including toys he absolutely loves so mixing in something used with new items is just another way I liked to keep holiday expenses affordable.

The Holidays Don’t Have to Be Super Expensive

Christmas in my house has always been bright and special no matter what my financial situation was. It’s so fun to see how excited my son is each year and be able to create some special memories with him.

As you can see, the holidays don’t have to be so costly as long as you know your budget, can utilize local resources, and start saving up ahead of time. Worst case scenario, there are plenty of ways to earn extra money so your finances aren’t super tight around this costly time of year.

The tips and strategies I used can be used by anyone to make Christmas more affordable.

***Photo courtesy of https://www.flickr.com/photos/pagedooley/3132286400/in/