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Should I get an EMV card for my overseas travels?

Filed under: Credit Cards General on June 20, 2014 @ 9:33 am

I’m planning a family trip to Jordan this summer, and like a good traveler, I sat down one recent Friday and called our credit card companies. I wanted to know if we needed EMV cards, also known as chip-and-PIN or chip-and-signature cards, to make purchases in Jordan.

We will be with family, which means expenses will be minimal, but I wanted to make sure we’ll have a card we can use as a backup.

After calls to four card issuers who gave me four different answers, I realized this wasn’t going to be easy. It begins with the fact that there is no universal system for secure cards. Every country is different, and there are even differences within the same country.

Chip and PIN refers to a technology that makes credit cards more resistant to data theft, requiring a personal identification number for payment to be accepted.  It’s common in other parts of the world, including Europe and parts of Asia. But not in the U.S.

You see, the less-secure magnetic-stripe card dominates in the U.S. (although that will change over the next 16 months, when merchants will need to have appliances in place that take the chip cards). Chip-and-PIN cards are hard to get for U.S. cardholders, although some companies offer a similar chip-and-signature card (which is less secure than chip and PIN, but still safer than mag stripe).

However, as handy as it is to know what kind of technology a country’s merchants have, it isn’t necessary, says Doug Johnson, vice president of risk management policy for the American Bankers Association. For example, Johnson used his chipless card throughout London last week without any problem. “It’s at the discretion of the retailer,” he says. “The exception is when it isn’t accepted.”

As expirations come up, debit and credit cards are being issued with the chip, Johnson says.

Still, even if your current card will usually be accepted, here are some card tips for you before you go overseas:

1. Tell your card issuer when you will be traveling. That lessens the likelihood your card will be rejected for security reasons.

2. If you want to know whether the magnetic stripe is accepted in your destination, search or start a thread on a site like CreditCardForum.com or flyertalk.com and find someone who has recently traveled to your area. If you want to avoid the possibility that your card will be rejected, ask your issuer for a card with a chip in it, says Johnson.

3. Bank of America advises that you allow for extra time when traveling abroad, because unless you have a chip-and-PIN card, you will need to go to attended train terminals in some regions, such as Europe.

4. Most American issuers are releasing chip and signature cards. While you may run into some self-service kiosks that require a PIN, the signature cards will work with most international merchants.

5. Keep a list of your card numbers, PINs and the issuer’s contact information separate from your wallet or purse in case of theft or loss.

6. Clarify which phone number to call the issuer in case of an emergency. The overseas number is usually different from the one for domestic calls. In some cases, it’s the “collect” number on the back of the card.

7. Does the issuer charge a foreign transaction fee? Capital One in particular is known for not charging these fees, but others can charge upward of 3 percent, Bankrate.com reports.

8. Bank of America advises you to have two forms of payment in case one is rejected. For example, carry both a debit and a credit card.

I’ve learned from a co-worker who recently traveled to Jordan that the magnetic stripe is still accepted there. But just in case, my husband received a chip-and-signature card from one of his issuers.

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How I cut cellphone costs in half

Filed under: Credit Cards General on June 18, 2014 @ 11:52 am

For a long time, I felt I was paying too much for cellphone service. I was right: Last year, I switched to a pay-for-what-you-use service and cut my bill in half.

When we switched cellphone providers, my husband and I were in the midst of paying off a massive student loan debt and some credit cards, and we were trying to cut costs wherever we could. So, it hurt to fork over $135 a month to T-Mobile for moderate cellphone use. Neither of us watches movies on the phone or texts constantly.

One trick I learned while trying to save was to look at yearly expenses to get a better idea of the real cost. As the personal finance blog Get Rich Slowly points out, recurring monthly expenses are “potential money sinks.” And looking only at the per-month cost can make the amount you pay seem like less of a budget buster.

So, I did the math and found we were paying $1,620 a year for cellphone service. I asked T-Mobile if they could give me a better deal. I explained my situation and told them I thought I was paying far too much and was considering breaking my contract. They told me I was stuck: They couldn’t do any better. Using a tip I’d found online, I asked to speak to their “customer retention” specialist, who I had heard had extra power to negotiate. No luck.

So, I researched and came across a company called Ting that doesn’t use contracts and calculates your bill each month based on the amount of talk time, texts and data you use. Ting has categories from extra small (no usage) to extra large, and you pay based on which one you fall into. So, if you use 1,000 minutes of voice time but don’t send any texts, you’d pay $18 for the time you talked and nothing for texts. If you suddenly took up texting and sent 500 the following month, you’d pay $5 for texts that month.

Joe and I were hesitant to switch, partly because we had to buy our own phones with Ting. Choosing from a variety of price points, we picked decent Samsung smart phones for about $250 each. We also worried the service would be bad, even though Ting uses Sprint’s network.

But it’s been over a year, and our service is as good as it was with T-Mobile. Our bills fall between $60 and $75 a month, saving us over $800 a year (minus the cost of the phones, which we plan to keep for several years.)

If we had broken our T-Mobile contract early, we would have had to pay an early termination fee of $50 to $200, depending on how much time we had left. We waited to avoid the fee, though Ting offers a credit of 25 percent of your early termination fee with another carrier.

Now, I don’t think Ting makes sense for everyone. In fact, very heavy data users might find it costs more than going with a traditional carrier, though Ting did lower its rates this year.

But if you’re a moderate cellphone user, you might be able to save quite a bit by exploring non-traditional options. Other bloggers, including J.D. Pohlman at Pohlman’s Personal Finance blog, have also been happy with Ting.

Or, GoBankingRates.com offers three alternative cellphone companies that could help you save. For example, Republic Wireless offers unlimited calls, texts and data for $19 a month. The company is able to offer low rates because your phone will switch to Wi-Fi whenever that’s available.

That could cause some hassles, though. According to CNET.com, Republic offers a lot of bang for your buck. But, switching between available wireless and cellular might cause service quality issues , according to Xaprb.com. Also, having to enter passwords to connect to password-protected Wi-Fi could be annoying. And, you might need to look into downloading privacy apps if you’re worried about security or privacy issues with public Wi-Fi.

If you want to save on cell service, CNET suggests also looking into Virgin Mobile, Tracfone or T-Mobile’s prepaid plans.

In any case, I think it’s a good sign that there are many more cellphone plan choices than there were just a few years ago. If you think you’re paying too much for cell service, you probably are — like I was — and looking into alternatives can help you save big.

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What exactly you should shred for security reasons

Filed under: Credit Cards General on June 11, 2014 @ 9:26 am

I’ve owned a shredder for about five years, and the excitement of having a new shredder wore off long ago. Now, destroying documents is a chore I often put off.

That’s partly because using a small home shredder can be annoying: Feeding documents takes time, and the waste collection tub fills up quickly.

But it’s also because I’m never sure what needs to be shredded, and I tend to err on the side of shredding too much. Somehow, even junk mail addressed to “resident” finds its way to the pile by the shredder. I recently went through my to-shred box and saw that only a quarter of what was in there needed to be destroyed.

So, I set out on a mission to find out: Exactly what should you shred, and when? Here’s a handy list of items that should get shredded before being tossed:

  1. Credit card offers. It’s a good idea to shred credit card offers or applications, according to DailyFinance.com. While card offers don’t always contain all of the information a stranger might need to get credit in your name, they could tempt an unscrupulous family member.
  2. Pay stubs. Your pay stubs contain personal information that an ID thief would love to get his hands on. Keep your pay stubs until you get your yearly W-2 wage and tax statement from your employer. Check the W-2 for accuracy, then put your stubs through the shredder, certified public accountant Rob Seltzer recommends.
  3. Health insurance explanation of benefits. When you visit the doctor or have a procedure, you get an explanation of benefits (EOB) form from your insurer that contains sensitive medical information, such as which health care provider you visited, when and why. Professional organizer Suzanne Kuhn writes that you should keep EOBs for a year if you don’t qualify for a deduction, the bills have been paid in full and you are no longer being treated for the condition. You need to keep the documents considerably longer otherwise.
  4. Doctor bills. When you no longer need medical bills for your personal records, you should put them through the shredder, according to DataShield, a document destruction company.
  5. Statements you no longer need. Keep canceled checks that support tax deductions or any you think might be helpful, says BB&T. Otherwise, they take a lot of space. Keep statements for about three years.
  6. Old tax returns. Once you’ve kept a tax return for the recommended three to seven years, you definitely want to shred it, according to H&R Block. A tax return contains reams of sensitive information, including your Social Security number.
  7. Expired IDs. Don’t leave your old driver’s license, passport or other picture ID lying around: shred them instead, DataShield recommends. It says even expired IDs can be useful to criminals. (First make sure your shredder can handle these items, though.)
  8. Old insurance documents. Keep current insurance policies, but shred your old ones, Consumer Reports recommends.
  9. Investment statements you no longer need. Keep your annual investment statements as long as you own the investments, but shred monthly and quarterly 401(k), IRA and other statements when new ones arrive, Consumer Reports recommends. Also, says BB&T, keep investment records to to support your tax returns. “Documentation of purchases and sales (either confirmations or brokerage statements including the information) must be kept for three years past when you report the sale on your tax return.”

Now that I know what to shred, I plan to stay more on top of my document shredding and recycle all paper clutter that doesn’t contain sensitive information. I hope shredding regularly will make the task much less of a hassle.

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I’ve proven you can make credit mistakes and recover

Filed under: Credit Cards General on June 6, 2014 @ 2:07 pm

You would think with my current credit scores that I have always been a model credit citizen. But nothing could be further from the truth.

In fact, I am a testament to the fact that you can improve your score to good and even excellent ratings just by following a few simple rules.

Twenty years ago, I was vaguely aware of Equifax, one of the three credit bureaus (the other two are Experian and TransUnion), and I had never heard of FICO, the credit score company most lenders use when assessing your creditworthiness.

Here are some of the things I was doing wrong 20 years ago:

Living without a budget. This was at the heart of all of my money problems. I didn’t have kids, so I didn’t worry about the expenses of future years. I had enough money to travel and eat out, so there was no thought about saving. I just socked away money in my 401(k), and that was that. I remember my best friend telling me one January weekend that she couldn’t hang out because she needed to draw up her budget for the year. Until then, it had never occurred to me to do such a thing.

Using my credit card as a loan. Later, after we had kids, we incurred a fair amount of credit card debt. We weren’t buying extravagant items, and now we had a budget, but it wasn’t realistic, so we always seemed to have a balance on at least one card. Because we did that, we were paying ridiculously high interest rates. Mary Hiers of Mint talks about the forgotten items we fail to budget for, such as the annual power washing of your driveway and charitable donations. Make sure you include EVERYTHING when you draw up your budget.

Taking out a cash advance on my card. I only did this once, but that’s one too many times. You incur interest rates immediately with cash advances. Never a good plan.

Paying bills once a month. Most of my bills came at the first of the month in those days, so it was usually OK. But my card bills were high by the end of the month, something Eric Rosenberg of NarrowBridge avoids by paying twice monthly. And there were times when I was late on a bill, usually when I was overseas. I suffered for this when I applied for a loan in 1994. To this day, I don’t know what my score was, but the lender expressed concern about three late payments, likely reasons my interest rate wasn’t that great.

Only in recent years have I known what my score is, and I now pay more attention to my credit reports. The reality is that lenders care deeply about your score, so there are a few things you have to pay attention to. Here’s what I’ve learned over the years:

Pay on time, every time. Even if you have to make a minimum payment on a card, do it by the due date. No exceptions.

Pay in full. Don’t let yourself get behind on card bills. If at all possible, pay your card off every month. If you must have a balance, keep your credit utilization ratio to 30 percent or lower.

Use your credit cards. Don’t cut up your card and don’t lock it in a drawer. If you don’t want to think about it, put a small, recurring, automatic charge on it each month, such as your gym bill.

Follow these three simple rules, and you’ll see a noticeable uptick in your credit score within a year.

I made a lot of financial mistakes when I was younger, but I am proof that you can recover and enjoy an excellent credit score.  It’s only a matter of following three simple rules.

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5 money tips for organizing group excursions

Filed under: Credit Cards General on June 4, 2014 @ 1:51 pm

A few months ago, my husband, Joe, told me that tickets were going on sale for the Phish Summer 2014 tour. He floated an idea: Invite a few friends to go to the concert in Orange Beach, Ala., then, spend the next day by the ocean.

Before I knew it, I was agreeing to Joe buying seven tickets on our credit card, even though we were carrying 0-percent interest credit card debt, and I really didn’t want to use our credit cards until that was paid off. “Please? Everyone will pay us back right away,” he said sweetly.

So, Joe bought the tickets. Weeks went by, then over a month. I started to wonder about the Phish tickets, and I asked Joe about it. “Oh, could you draft up an email to ask people to pay us back?” he requested. A money argument ensued.

Within the next two weeks, one of our friends backed out of the trip and the rest paid us back — two via PayPal, two with cash and one with a check. Then — you guessed it — the check and the cash sat on the bookshelf in our front hall for another two weeks. (Also, someone might have swiped a bit of the cash to buy lunch.)

When it came time to reserve the vacation rental, and to pay the required deposit by credit card, I told Joe someone else in the group would have to use their plastic. Luckily, one of our friends volunteered.

Planning a summer trip with friends or family? Group vacations can be a fun bonding experience, but coordinating the money can cause hassles and even credit card debt with interest.

If you’re planning a group trip, here are five tips for dealing with the finances to avoid the inconvenience and added expense:

  • Keep it small. CreditKarma.com recommends keeping group trips to three or four people to reduce headaches. With a smaller group, the expenses are, presumably, less of a burden for one person to put on a credit card.
  • Set a budget in the planning stages. Maybe you’re sitting around at a happy hour with friends and, before you know it, someone has proposed a trip and you’ve agreed to go without knowing how much it will cost. Instead, do the reverse: Set a budget first and get input from everyone in the party before making any reservations, recommends travel blogger Heather Yamada-Hosley, writing for Lifehacker.
  • Think carefully before volunteering your credit card. If you have credit card debt or a history of iffy money management, it’s probably not the best idea to volunteer your card to pay a large group expense — even if you will get reimbursed. As you can see from our checks-and-cash-in-the-front-hall example, it can take some time and wrangling to collect money owed, deposit it, wait for the deposit to post, then pay your credit card bill. On the other hand, if you have a rewards card with no balance on it — and plenty of money in the bank just in case — you might decide getting the points or miles for the group expense looks pretty good, and that you’re willing to take the chance someone could flake out.
  • Create a kitty for small expenses. If you’ll be taking taxis or grabbing group lunches or ice cream on the fly, get everyone to kick some cash in to create a group fund, Lifehacker recommends.
  • Consider a travel-planning tool. The online travel planning tool Travefy allows you to plan group trips and handle the splitting of expenses. One caveat: Travefy charges a 1.5 percent fee for collecting and distributing funds, plus the sender has to pay a fee of 2.5 percent plus 30 cents for using a debit or credit card. But you might decide it’s worth it to simplify group payments.

And finally: Communicate with your fellow travelers, from the planning stages through the journey home, Yamada-Hosley writes. I agree — and next time Joe proposes a group trip, I plan to talk it through fully before either of us pulls out the credit card.

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How to embrace your shredder … and what to discard

Filed under: Credit Cards General on May 30, 2014 @ 12:20 pm

I’m a bit of a purger.

When furniture or a knickknack breaks, I’m inclined to throw it away, rather than save it for 10 years, hoping I’ll find someone who can fix it.

I wasn’t always that way.

About 10 years ago, I owned a table that had been my great-grandmother’s. Then, with slight pressure, the frame cracked in two. I was heart-broken. I knew it was too heavy to transport on my own, and even if someone could repair it, would I ever trust it again around small children?

That 100-year-old table stayed in my dining room for a year, too loved to be thrown away. But, eventually, after much internal struggle, I came to the realization that our lives would be just as full without the repaired table. So, with the help of neighbors, we hauled the table to the curb. I’ve never looked back.

That act was so freeing for me. I’ve since rented dumpsters twice, purging my house of items we no longer use, whether broken or of a prior decade. I love having a house free of clutter, no small task when you have two teenage boys.

But there’s one thing I wasn’t able to free myself of completely: mail.

I knew that I should be destroying statements, credit card offers, old credit cards for reasons of security, but I couldn’t seem to get myself to Office Depot to use their shredder. What if I needed that scrap of paper at some point? My old tendencies of holding onto things too long remained with mail. But eventually, the mail pile would get to me, and I’d cut up the cards and bills in a spontaneous purge. But I still couldn’t take that final step toward shredding. It was too permanent.

Then, I began packing for the move to our new house. I found a box of old checks I hadn’t thrown away since our last move. My husband, Mo, saw me tearing up the checks and took charge. He bought a shredder from Best Buy, brought it home and plopped it down in the dining room. Within minutes, I was shredding old bills and the old checks. The kids took their turn. Even the collie came by and sniffed this noisy new contraption.

Having a shredder is the next natural step for a purger. It allows for instant gratification when you are trying to clean up the mail pile, the last bastion of hoarding. But there is the risk you will freeze when you are trying to make decisions. Lifehacker.com posts that once you decide what documents to keep (he lists some suggestions), you should shred everything else. He writes, “A good rule of thumb to think about when you’re deciding what to keep is to think about how hard that document is to replace.”

FightIdentityTheft.com says you should shred anything with a signature, account number, Social Security number, or legal or medical information. They go into much more detail, advising you even shred address labels from junk mail and magazines.

TheNest.com advises that you pick a shredder that does more than cut your documents lengthwise. There are cross-cut, confetti and diamond-cut shredders. Mo bought a cross-cut shredder.

I can’t believe it took me this long to finally get a shredder. And if it hadn’t been for the quick-thinking of Mo, I might still be cutting checks with scissors (although I admit to a slight tinge of panic every time I run something in the shredder). If getting rid of the table was my first big step toward purging, the shredder was the next natural progression.

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Is the cost of hiring for chores worth the money?

Filed under: Credit Cards General on May 28, 2014 @ 12:53 pm

There are two things Americans never seem to have enough of: time and money. So, how do you decide whether to save money by doing a task yourself or save time by hiring it out?

As a frugal freelancer with a job that can easily stretch beyond traditional working hours, I often struggle with this. Just in the past few months, I’ve had to decide whether to hire out various tasks: interior house painting (I was going to hire a pro but decided to do it myself), yard work (I hired a landscaper to get my wild yard under control, but plan to do the upkeep myself), and exterior painting (I’m hiring a pro due to lead-based paint issues.)

So, sometimes, deciding whether to outsource involves more than a simple numbers calculation. Here are four tips on how to decide whether to save money by tackling a task yourself:

  1. Hire someone if you can use the time to make more money. If you’re self-employed or have a side gig, consider outsourcing chores, then use that time to earn more money than you spend, the blog Suburban Finance points out. I’d add a caveat: Be honest with yourself. Will you really spend the extra time making money? Or will you park in front of the TV with old episodes of “The King of Queens” and a tub of cookie dough ice cream?
  2. Ask yourself: How well can you do the task? If the chore you’re considering outsourcing is easy, like mopping the floor, it’s a no-brainer. But what about fixing a leaky faucet or changing your brake pads? If you’re confident that you can do a competent and efficient job, you might consider DIY. But if you don’t have the skills, you could botch the job, end up outsourcing it and lose even more time and money. In my case, part of the reason I chose to paint the interior of my house is because I like painting, and I’m pretty good at it.
  3. Gauge your stress level. Maybe your to-do list is so overloaded that you feel you can’t take on one more thing. In that case, it might be worth it to hire a pro. Suburban Finance recommends you outsource if you’re not carrying debt, and if you have trouble fitting personal items like exercise or family time into your schedule.
  4. Look at your financial picture. This is critical: Don’t pay for a non-essential service with a high-interest credit card if you can’t pay your bill in full right away. If you’re struggling to get out from under high-interest debt, rolling up your sleeves and doing something yourself might be your best option. When my husband and I had high-interest credit card debt and he had a flexible schedule, he took on many tasks — such as yard work and growing some of our food — that we sometimes pay for now. Personal finance site Money Crashers notes that you can save $50 by washing and detailing your own car and even more by filing your own taxes.

When I was growing up, I learned the value of DIY from my dad, a guy who still changes his own oil and brake pads and recently fixed a 20-year-old vacuum cleaner by watching how-to videos on YouTube. So, outsourcing chores I could do still feels a tiny bit decadent to me, and I’m not sure I could ever bring myself to hire someone to clean my house.

But I’d argue that hiring a pro often has its place, despite the price tag.

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The real secret to high credit scores

Filed under: Credit Cards General on May 16, 2014 @ 8:00 am

I’ve told you about my storied credit scores — they’re in the 800s.

My lender gushed about them when my husband and I recently took out a mortgage. Mo’s scores are actually higher than mine — he has an 831, which is apparently unheard of.

You might think with scores like those, we are obsessing about them, checking them multiple times a year through MyFico.com, and taking out cards that provide scores as a free service. But, nothing could be further from the truth.

What is our secret? How do we maintain enviable credit scores, get rock-bottom interest rates on our mortgage and obtain credit limit increases without asking?

It’s simply this: We forget about our scores.

That’s right. All we do is … nothing. No obsessing. No scheming. In fact, Mo and I didn’t even know our credit scores until two years ago.

We do check our credit reports, though, through AnnualCreditReport.com, a free service that allows you to check your reports annually at the three major credit bureaus, Experian, Equifax and TransUnion. We are primarily looking for incorrect or suspicious information. But the credit scores? We save those for the lenders to check.

Why? Because if you are doing everything right and checking your reports for suspicious activity, the great scores will follow.

Here’s what I mean by “doing everything right.”

Quizzle.com’s Ann-Marie Murphy breaks it down to six steps for the budding consumer. At the heart of her advice:

  •  Only charge what you can afford to pay off in full.
  •  Pay on time every month.

Do those two things, and the rest falls into line. You can take out more credit cards; you can vary your types of loans; you can avoid cash advances. You can do these things to improve your score, but what it really comes down to is paying on time and paying off your credit cards in full each month.

CreditCardGuide.com’s Editor-at-Large Erica Sandberg explains to one reader the best way to raise your credit scores, pointing out that the way you use your credit cards can make or break your scores.

Erica also explains that multiple types of credit help your score, and it’s true that Mo and I have had diverse credit over the years. But we didn’t do it intentionally. We just lived our lives, paid our bills and kept our jobs. (I might add that there is hope for the at-home mom. I was at home for a decade, and my score was actually above Mo’s when we finally checked them two years ago.)

Let’s say you don’t want to have credit cards, which, owned correctly, are the easiest way to build your credit. There are alternatives such as using installment loans responsibly, as Experian‘s Maxine Sweet explains to a reader. Geoff Williams goes into more detail about how to build credit without credit cards in his article for US News & World Report.

Mo and I have pretty much kept our financial affairs simple over the years, and I believe that has been key to our great scores. We didn’t even know about the FICO score until two years ago, much less how it’s calculated. (To learn how the FICO is calculated, read Erica’s piece on the subject.)

As tempting as it might be to check our scores often, now that we know that ours are great, we are resisting the urge. We’ll just keep living our lives, paying our bills and only borrowing what we can afford to pay back. It’s really that simple.

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Budget for gifts or pay the consequences

Filed under: Credit Cards General on May 14, 2014 @ 9:16 am

For many years, my husband Joe and I never budgeted for gifts. Then, every gift-giving occasion caught us by surprise. This seems like a small issue, but it caused assorted problems for us. For example:

  • It messed up our budget. This wasn’t a big deal if we just needed to grab a bottle of wine or a gift card for a casual friend’s birthday party. It was a bigger deal if we had to give multiple gifts in the same month, or a pricier gift, such as a wedding present for a close friend or relative.
  • It caused stress. It doesn’t matter whether it’s flowers or an oil change: When you fail to budget for something, weird things can happen psychologically. In my case, I’d put off making a decision about the gift since it wasn’t budgeted. The whole thing became more complicated: How much should I spend? What category should the money come from?
  • It caused resentment. Failing to plan for gifts annoyed me and made gift-giving more of an obligation than a joy.

But last year, Joe and I sat down and tried to eliminate vagueness in our budget — for example, we had been shoving things we didn’t plan for into random categories after we spent the money. We did this with gifts.

Now, we keep a “gifts” line item on the spreadsheet we use for our monthly budget. We plan the budget at the beginning of each month, and that line item forces us to think about upcoming presents. If there are none, we put down $0, leaving the category as a reminder for the next month.

Recently, when it was time for me to PayPal my sister $50 for my half of our traditional Mother’s Day gift of fresh morel mushrooms (our mom hunts morels, but doesn’t always find them), I didn’t stress. We had the money budgeted.

I think we also buy better gifts because we have time to plan — after all, thoughtfulness counts for a lot. Think of the best gifts you’ve ever gotten: The thought that went into them made you feel understood and loved.

Do you have wedding, graduation or birthday gifts to give this season? Here are three tips from personal finance experts on how to fit those presents into your budget:

  1. Make sure you budget enough. If you’re giving cash, it’s easy to know how much to budget. But if you’re giving a tangible gift, you might want to budget a little extra, according to Miriam Caldwell, blogger for the Money in Your 20s section on About.com. And, if you’re mailing the item, add in postage costs.
  2. Don’t forget the office. If you work in an office, you’ve probably experienced the surprise of getting hit with a birthday pool request. It’s smart to plan for these occasions so you’re not short of cash, Caldwell recommends.
  3. Be kind to your budget. Just because you hear about someone else giving a $100 or $200 gift every time someone gets a degree or ties the knot, doesn’t mean you have to, too. Broke Girl’s Guide offers a list of nice but budget-friendly wedding gifts, and The Dollar Stretcher offers ideas for frugal graduation gifts.

Just the act of budgeting will allow you more creativity with gifts — and I can tell you from experience that last-minute gifts tend to cost a lot more than ones you have time to plan.

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Financial planners are our friends … really

Filed under: Credit Cards General on May 7, 2014 @ 10:56 am

For the past year, I’ve been saying I want to sit down with my husband, Joe, and a fee-only financial planner to look at our overall financial picture. I want advice on what we can be doing better — especially in terms of retirement investment. But, I keep putting it off. Why?

A fee-only financial planner is a professional who charges for services but does not accept any commissions for selling products. You can find one via the National Association of Personal Financial Advisors.

Joe and I were somewhat financially irresponsible in our 20s. Then we both made major career changes (he went back to grad school to become a college professor, and I went into freelance writing) and the recession hit. Now that we’ve come out well on the other side, I know we have some catching up to do.

Getting all that sorted out will be a relief. So, why am I dreading it so much? I can break it down into several reasons:

  • General anxiety about opening up our finances, and possibly being judged for mistakes.
  • Fear that I might have to spend hours gathering financial information to prepare for the meeting (the same reason I hate tax season).
  • The fee — even though I know it will pay for itself many times over, actually paying for advice isn’t cheap.

It turns out I’m not alone. In fact, in February, USA Today ran this headline: “Do you have ‘financial adviser anxiety?’”

In the article, financial psychologist Brad Klontz says that shame around money keeps many Americans stuck.

The article cites an Australian report that found almost half of adults surveyed expressed mild anxiety about meeting with a financial adviser, while about one quarter had moderate to severe anxiety.

But Marv Kaye, a certified financial planner, writes that clients shouldn’t worry.

Financial planners are “accustomed to seeing clients with dysfunctional financial backgrounds,” Kaye writes.

In fact, a good financial planner will look at your situation objectively and try to be sensitive and detached while making recommendations. So, your initial nervousness should quickly turn to relief, he writes.

If you want to seek the services of a financial planner, but you’ve been putting it off, certified financial planner Jeff Rose provides tips on the personal finance blog Get Rich Slowly.

He gives great advice on how to check your adviser’s background and qualifications. For example, he advises you to not only check the planner’s credentials, but to understand what they mean.

Just don’t use checking out the adviser’s credentials as a way to procrastinate even longer.

Now that I know what I know, I feel a little silly. I’m not sure anymore why I worried about meeting with a financial planner. What’s my next plan of action? I’m picking up the phone to make an appointment right now.

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