On The Subject Of Credit

All right all you spenders, there’s a subject near and dear to me and that’s on the subject of credit. Now you may be thinking to yourself that poor old Frank Money has no life. That may be true but I’m not poor and I’m not in debt, but thinking about the different kinds of debt can really knock me off my feet.

There are costs and benefits for carrying different types of debt. Some credit accounts are viewed more favorably by lenders than others but all require the ability to repay your debts in a timely manner. For example, there’s non-revolving credit like taking out a mortgage that’s paid in installments. Revolving credit deals with credit cards and fluctuates how much you pay each month.

Believe it or not carrying debt and paying it off monthly can raise your credit scores because it clearly shows how you manage your finances. Just remember the higher your credit score the better you can negotiate lower credit rates.

April is National Financial Literacy Month, Detective Frank Money’s favorite month! To celebrate the importance of being financially literate, Detective Money is going to post financial literacy tips every day.

Fiduciary

Today’s secret word – Fiduciary!

Now as words go, this detective finds that word to be a long…and maybe a little intimidating.

But when it comes to your finances, fiduciary is your friend! The definition of the word is involving TRUST, especially to the relationship of a trustee and a beneficiary.”

In my line of work, trust is a big deal! In the world of money and financing, it establishes how the relationship between you and a financial advisor or institution works.

Here’s a case – Mark wanted to put the money he is saving in his IRA for retirement in a mutual fund. He asked a financial advisor for advice on which fund to purchase. The advisor gave him a couple of choices, but when Mark investigated the funds closer, he discovered that the funds carried high fees. Which would mean, he might make less on his investment over time.

Now there was nothing wrong with the funds the financial advisor recommended, but most likely the reason he recommended them was because the advisor would profit from the sale of the mutual fund to Mark – probably in the form of a commission. Which means that the advisor has some ‘skin in the game’ when it comes to selling something to Mark. The advisor is working in both his own and Mark’s interests – and just so everyone understands, there is nothing illegal about this, in fact, it’s quite common.

But if Mark had an advisor with a FIDUCIARY DUTY on his behalf, that advisor would be required to ONLY act in Mark’s best interests.

A fiduciary is expected to manage the assets FULLY for the benefit of the other person rather than for his or her own profit.

TRUST me, take this detective’s advice – when you are asking for financial advise, also ask whether the advise comes with a FIDUCIARY DUTY,

April is National Financial Literacy Month, Detective Frank Money’s favorite month! To celebrate the importance of being financially literate, Detective Money is going to post financial literacy tips every day.

Bad Credit Will Cost You

Frank Money here, your financial detective trying to save you money. Ok, listen up all you financial hotdogs out there who don’t pay attention to their credit scores. I’m about to give a lesson in world of hard knocks. Let’s cut right to the chase, bad credit will cost you money. If you’re planning to purchase large ticket items like a mortgage, car loan or even another credit card, you’re going to pay a lot more.

Your credit score under FICO ranges from 300 to 850, with the highest being the best score. I’m guessing anything under 620, you’re going to have trouble even being considered with some purchases without paying extra for insurance of payment.

So pay off your credit cards and get rid of the ones you don’t need. Don’t be late with any of your loan payments, and don’t be afraid to check your credit report, it does not affect your score. It will take a couple of years to build your credit back up to a decent score but it’ll be worth it and that’s coming straight from Frank Money.

April is National Financial Literacy Month, Detective Frank Money’s favorite month! To celebrate the importance of being financially literate, Detective Money is going to post financial literacy tips every day.

Tomorrow Is Tax Day

Tax day always seems to be a day of chaos and dread for taxpayers. We’ve all seen traffic jams and long lines at local Post Offices with last minute taxes held tightly in their hands hoping to get their taxes sent out on time. In 2017, tax day is actually tomorrow, April 18th!

Other than having your taxes prepared sooner there are other options than racing to the Post Office. Need more time to prepare your federal tax return? If you are not able to file your federal individual income tax return by the due date, you may be able to get an automatic 6-month extension of time to file. But to do so, you’ll need to not owe anymore income tax for last year. Best to check with the IRS for the proper forms and understand that there’s a nominal fee on the amount that’s being filed.

Also, don’t forget you can e-file your federal taxes right from your computer. It’s quick, easy and gives you immediate confirmation that Uncle Sam has happily gathered in your taxes.

April is National Financial Literacy Month, Detective Frank Money’s favorite month! To celebrate the importance of being financially literate, Detective Money is going to post financial literacy tips every day.

Mind Blown!

We’ve all heard and read a thousand times how we should save on a regular basis and the younger you start the more we’ll have when getting closer to retirement. But as sure as the sun rises there will always be something that happens in your life that will make it difficult for you to part with your money to put into savings. That’s why every paycheck you should have a set portion of your salary automatically deposited into your savings account.

I’ve done the detective work on this and the later you wait to start saving, even a year or two, could mean the difference of up to $200,000 or more! Remember compounding interest? Over time your money will make more money for you. Mind blown!

In fact, if you want to have what we financial literacy fans call ‘fun’ here’s a link to the government’s Securities and Exchange Commission’s handy, dandy Compounded Interest Calculator. GO ahead, plug some numbers in, step back, and get ready to be surprised!

https://www.investor.gov/tools/calculators/compound-interest-calculator

Good old Benjamin Franklin once said: “An investment in knowledge pays the best interest.” So it’s up to you to be a wise investor with your savings.

April is National Financial Literacy Month, Detective Frank Money’s favorite month! To celebrate the importance of being financially literate, Detective Money is going to post financial literacy tips every day.

April 15th

It’s Tax Day!

Surprise, no it’s not!

This year it’s on Tuesday, April 18th! Thats because of Emancipation Day in Washington D.C. (observed on the weekday closest to April 16), when April 15 falls on a Friday, tax returns are due the following Monday; when April 15 falls on a Saturday or Sunday, tax returns are due the following Tuesday.

If you have filed your taxes and signed on the dotted line, then good for you! If this is your first time, it’s not that far-fetched that you have joined society, contributed to keeping the wheels oiled and turning so our country can keep moving forward. Okay, sometimes I can get carried away.

With your return due next Tuesday, we thought we would share another date with you – Tax Freedom Day – This is the day of the year where everything made up to that date goes to Uncle Sam, and after that date, everything you make is yours. In the United States, it is annually calculated by the Tax Foundation, a Washington, D.C.-based tax research organization. In the U.S., Tax Freedom Day for 2015 was April 24, for a total average effective tax rate of 31 percent of the nation’s income. The latest that Tax Freedom Day has occurred was May 1 in 2000. In 1900, Tax Freedom Day arrived January 22, for an effective average total tax rate of 5.9 percent of the nation’s income.

Tax Freedom Day for 2017 is April 24th! Woo Hoo!

April is National Financial Literacy Month, Detective Frank Money’s favorite month! To celebrate the importance of being financially literate, Detective Money is going to post financial literacy tips every day.

As for the second half of the month of April, each day we’ll be doing the detective work on lots of financial literacy information such as, just what are the taxes taken out of you paycheck, your credit and the benefits of keeping it at a high number, keeping on track using a budget and a lot more.

The Good Old A&Q

How many times have you passed by an electronics store and saw that X-Box you always wanted was finally on sale or the newest smart phone has hit the market? Temptations are thrown at us everyday in many different forms of ads. They know how to get your attention.

But where do you stand financially? Are you strong enough to stick to your budget or are you ready to throw caution to the wind? If so, then let’s at least recognize that there are alternatives & consequences to most financial decisions. Frank Money likes to call the ‘The Good Old A&Q’

Think of setting financial goals so you can purchase these items by saving for it on a monthly basis. But remember, the more you save, the more you have to sacrifice other things like movies or eating out. So there’s your alternative, but if you spend and don’t have it, the consequences means going into more debt. So check out your A&Q!

April is National Financial Literacy Month, Detective Frank Money’s favorite month! To celebrate the importance of being financially literate, Detective Money is going to post financial literacy tips every day.

Preparing For Tax Day

Paying taxes can seem like handcuffs on your wallet.

When preparing for tax day don’t just assume that Federal, State and other income taxes will be the only thing you can declare hoping you’ll get some kind of tax return. Depending on what kind of job or jobs, or what kind of savings or purchases you’ve made, you may qualify to reduce your taxable income and get a larger refund.

Some of the more popular deductions you can take are charitable contributions, business expenses such as operating costs, mortgage interest, losses such as theft or property values. Also let’s not forget contributing to your 401k or Roth IRA. If you’re a first time home buyer, Uncle Sam gives you a nice financial credit to encourage you to own your home.

There’s a long list that will probably fit your reduction of taxable income. There’s no shortage of information out there, as well as, consulting a professional tax preparer.

April is National Financial Literacy Month, Detective Frank Money’s favorite month! To celebrate the importance of being financially literate, Detective Money is going to post financial literacy tips every day.

Employee Sponsored
Savings Plans

You’re young and just starting out in the workforce and lucky enough to be able to join in an employee sponsored savings plan – but you’re not sure if you should.  After spending years investigating what you should do, this detective’s answer? Yes, definitely, do not hesitate – don’t be a Schmo. I hope that’s clear enough. To understand it better let’s take a look at the definition.

A pooled investment account provided by an employer that allows employees to set aside a portion of their pretax wages for retirement savings or other long-term goals (i.e. paying for college tuition, purchasing a home). Many employers match their employees’ contributions up to a certain dollar amount, or by a certain percentage.

If your employer matches all or part of your contribution, that’s like found money! Which is Frank Money’s favorite kind of money! Keep in mind that there may be plans that require employees to remain employed for a minimum amount of time before they are vested and eligible to withdraw employer-matched funds. ESPs can be an attractive and relatively easy way for employees to lower their taxes and save for long-term goals.

April is National Financial Literacy Month, Detective Frank Money’s favorite month! To celebrate the importance of being financially literate, Detective Money is going to post financial literacy tips every day.

Keeping Financial Records

There’s one private investigator who’s middle name is ‘Organized’! Talkin’ Money’s own Frank Money!

Keeping your financial records organized is no small feat. So put down that slice of pizza, wash your hands and listen up. If your papers are scattered all over the place, not put in their proper folders and not kept up to date then how do you expect to find anything when you really need them, especially during tax season?

Here’s another question. Do you even know what records should be kept? We’re not only talking about Income Tax Records but how about Warranties, Insurance Policies, Home Purchase and Lease Contracts. The list keeps growing and that’s why you need to get organized.

Now in today’s world a lot of these financial records can be kept in your fancy computers or online. Either way be sure to keep back-ups on all of your information by using a flash drive or external hard drive. Remember computers and other electronics don’t last forever so keep up to date with your back-ups. Now don’t say I didn’t give you anything free, Sometimes it just takes a little detective work.

April is National Financial Literacy Month, Detective Frank Money’s favorite month! To celebrate the importance of being financially literate, Detective Money is going to post financial literacy tips every day.