By Lauralynn Schueckler

Debt can mount up fast; sometimes catching us off guard. However, there are some Dos and Don’ts on debt management that will help you manage your debt more effectively.

One “Don’t” tip is to never sign for a mortgage or loan before reading everything; especially the fine print. If you don’t read the fine print, you may agree to a loan that has high interest or agree to an “interest only” type of payment. Another “Don’t” debt management tip is to never pay the minimum on your credit card statements. By paying more than the minimum amount required on your credit cards, you will be able to pay off your credit cards in less time and also pay less interest.

In addition, a “Do” tip is to cut back on your spending. Sure, it’s tempting to max out on a credit card, but if you know you can’t pay it off when the next bill arrives, you shouldn’t be using it. Also, if you “Do” have credit card debt, pay it off as soon as you can. If you don’t, your interest rates will accumulate and you will be paying off the debt for a very long time. A big “Don’t” with debt management is to not be in denial. Being in debt is a very uncomfortable feeling. But, unless you are willing to face the facts, your debts will just continue to grow.

Another “Do” is to sit down and make a reasonable budget for you and your family. For example, instead of going out for dinner and a movie every week, go out for a dinner and a movie once a month, or make plans for a nice dinner at home, followed by a great DVD rental with popcorn in your living room. An important “Don’t” is to never miss a debt payment. If you miss a debt payment you will get a bad mark on your credit score, plus pay extra in fees and interest. If you feel that you will miss a payment, communicate with the business or organization and make arrangements for an extension.

A “Do” tip is to organize your debts by highest priority. Examples of high priority debt are a mortgage on your home or a loan on your car. These debts should be paid off first because if you don’t, they can be taken away from you and affect your daily life. Then, look at your highest interest rate debt and start paying that off first, regardless of the balance. By paying off the highest interest ones first, you’ll be saving yourself thousands of dollars in interest down the road.

In addition, a much needed “Do” tip is to always seek help if you need assistance with your debts. Talk with a certified credit counselor or financial advisor on how you can pay off your loans. There are many professional non-profit agencies that can help you make responsible decisions that will keep you on the right track.

Lauralynn Schueckler is the Online Marketing Specialist at Advantage Credit Counseling Service. She is the author for Advantage CCS’s Blog called Dollars & Sense. Advantage Credit Counseling Service is a member of the National Foundation for Credit Counseling. Contact Advantage Credit Counseling at 866.699.2227, or visit them online at www.advantageccs.org.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

By Erica Sandberg

Dear Erica,
Do I need to be concerned about my credit score being affected in the future if I ignore attempts to collect from an agency after the statute of limitation for my state has expired? Currently I am in the mid-700 range because I have “bitten the bullet”, and paid a higher interest rate on my auto purchase that I later refinanced at a much lower rate. Thank you for taking the time to look into my question.  – Thom 

Dear Thom,
Your credit score is excellent, so I can understand not wanting to do anything that will hurt it. Here’s what you need to know so you can handle that collector while also preserving your high score.

First, get clear. When an account is past the statute of limitations, it means that the creditor can no longer sue you for an outstanding balance. It has absolutely nothing to do with a credit score. The only information that does impact your credit score are the items that are appearing on your credit reports right now.

Even if the collection agency can’t file a lawsuit against you, the debt may still linger on your reports for quite some time. As per the Fair Credit Reporting Act, an unsecured debt can be listed on a credit file for seven years from the date of last activity. That might mean when you last made a payment, or when it was charged off by the original creditor and sold to a third party collection agency. In general, the clock starts ticking about 180 days after your first delinquency.

The number of years a creditor has to sue you for a debt depends on state, not federal, law. In some states, such as Kansas and Alabama, a creditor has only three years to file a lawsuit. In others, the statute of limitations can exceed the amount of time a debt may even appear on a report. Take, for example, Wyoming. Live there and you could be sued for a balance 10 years from when the balance first went delinquent!

So what are the credit scoring repercussions for ignoring this particular debt? Not much. While all the borrowing and repaying activity that’s listed on a credit report is factored into a credit score, older information carries less weight than newer information. As the account ages, its importance will continue to decrease.

When the account finally drops off your reports for good, it will not be included in your scoring calculation at all — and your score should shoot up even further. Because it’s in the mid-700s now, the collection account must not be harming it too much. Handle all other accounts (such as that car loan) well, and it will have even less relevance.

Now for some warnings: It sounds as if the collector is contacting you and requesting a payment. Approach this matter very carefully. You can choose to pay (if you feel is the right thing to do), but you’re under no legal obligation to do so. Just know that if you promise to deal with it — either over the phone or by mail, you can restart the statute limitations clock. That’s called re-aging an account.

You may also cease all communications. The FCRA stipulates that you can tell the collector to stop calling and writing. Do that and the collector has only two options — honor your request or sue you. However, if they can no longer take legal action against you, that’s it. The worst thing they can do to you is send information about the debt to the credit reporting agencies until the seven-year time frame has expired.

Erica Sandberg is editor at large for Bankrate’s Credit Card Guide, columnist and features reporter for CreditCards.com, and the consumer protection spokeswoman for Western Union. She is a contributing personal finance writer for the San Francisco Chronicle’s online edition, and author of Expecting Money: The Essential Financial Plan for New and Growing Families. Prior to her work as a national money and credit expert and journalist, Erica was affiliated with Consumer Credit Counseling Service of San Francisco for 10 years.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

By Neale Godfrey

It’s six o’clock, the pizza delivery boy is on his way, and you just remembered you forgot to stop at the ATM on your way home from work.  Hectic days happen, and we have certainly all forgotten to withdraw cash before. Luckily, you know that your daughter faithfully budgets her allowance money – she always has her medium-term and long-term savings in those jars she has hidden behind her DVD collection. You can help yourself to pizza money, and put it back in her jar tomorrow after you get to the ATM. You won’t be embarrassed in front of the pizza boy, or by having to ask your 12 year-old to kick in to pay for dinner.

Dinner accomplished. Mom saves the day, again. Problem solved.  

Or is it?

You certainly wouldn’t be the first parent to borrow from her kids. Recently, Parenting Magazine  teamed with HLN for a survey of moms’ most revealing confessions. They sampled more than 1,000 readers, viewers, and social-media users (99 percent women) – we’re going to address the “Work & Money” portion, for which I was interviewed and quoted. Do you recognize yourself in the pizza scenario? Over 37 percent of responders admitted to having used money that their child had received as gifts to pay bills.

Survey Results Relevant to Family Money:

Have you ever returned a gift your child received and gotten something for yourself? 

                        11.6% Yes                    88.4% No

Have you ever spent any of your child’s birthday or special occasion money on bills?

                        37.5% Yes                   62.5% No

Have you started saving for your kid’ college education?

◦     21% Yes, I/We started practically at birth.

◦     16.9% I/We put money toward college off and on, when possible.

◦     44.9% I/We intend to, but there are other financial priorities right now.

◦     2.9% No, I’m/we’re hoping to hit up the grandparents.

◦     13.7% No.  Are you kidding?  The kids will pay their own way.

Have you ever dipped into your child’s college savings account to pay bills, take a vacation, or do a home improvement – intending to replace it?

15.3% Yes                   84.7% No

If “yes,” did you replace it?

50.8% Yes                   49.2% No

Do you trust your partner to handle your family’s money?

27.2% Yes, he does all.           37.6% We share.     35.3% No, I do it all.

Have you ever lied to your partner about the cost of a purchase you made for yourself or your kids?

50.2% Yes                   49.8% No

When you go shopping, even if it’s mostly purchases for the kids, do you worry about your partner finding out how much you spent?

36.5%  Yes                  63.5% No

Returning to the pizza dilemma, there is another, healthier way that mom could have saved the day. The daughter had stashed her savings for safekeeping so that her pesky little brother wouldn’t be tempted –  she never imagined that her mom would be the one to worry about.  As I see it, the main theme throughout the survey is that of transparency. 

Mom could easily have asked permission to borrow the pizza money – instead of stealing it. There was an opportunity for a real-world money lesson, and mom missed it. It goes without saying that mom would have had to repay the loan at the soonest, practical time – with interest. 

In a recent Huffington Post article  on money mistakes I addressed the topic of transparency.  Don’t shield your kids from the cost of living. We are passing our bad habits down to our kids. They see us spend but not save, pay bills or give to charity. You have to get your child involved in all of it.  The only way to get money is to earn it.  Make sure your handling of money is visible and simple for them to understand.

Parents have many reasons for not talking to their kids about family’s finances: “We don’t want to take their childhoods away from them.” Or you may have been taught, “Polite people just didn’t talk about how much things cost.” Anything that involves money, and exchange of value, can be used as a learning tool – if you take your kids out to dinner, show them the check. You can explain the tax and tip. For younger kids, it’s a math lesson.

Shielding your children from the cost of things can keep them from getting a good start of their own, when the time comes. Transparency includes managing your kids’ expectations. Your kid probably won’t be able to attend their top college choice if you haven’t saved for tuition. Don’t lead them on. Don’t say “We’ll figure out how to pay for it if you get accepted.”  That is offering false expectations.  If you haven’t started saving for college regularly and early enough, you have to be honest and explain if it was difficult surviving, financially, in a bad economy and that other bills came first.  The choice may have to be community college, and your child will have to be ready for that possibility.

Neale Godfrey is the New York Times #1 Best Selling author of 27 books, and financial literacy curricula for kids and parents. She created the topic of “kids and money” while President of The First Women’s Bank when she opened up The First Children’s Bank, and an Institute for Youth Entrepreneurship in Harlem in 1988.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

By Gary Silverman

I’ve been a proponent of the investment technique called Dollar Cost Averaging (we’ll abbreviate it DCA for this article). DCA is when, instead of putting a lump of money into your investments, you split that lump up into equal amounts and invest at fixed intervals. For instance, let’s say that Uncle Jack left you $300,000. You’re worried that the mutual fund you use might go down. So instead of putting all $300,000 in at once, you divide it into thirty $10,000 blocks invested monthly over the next 2-1/2 years.

By investing at set intervals you keep from letting the market’s emotions control you. By investing set amounts you’ll tend to buy more shares when the market is down, and fewer shares when it is up. In fact,  if the market zigzags you’ll actually pick up your shares at less than the average cost during that time. That’s the way it’s supposed to work. Here’s what actually happens. You start the DCA process and the market drops like a rock (sound familiar?), so you stop the DCA investments because you don’t want to buy shares if all they are going to do is go down. When you are sure the market is going back up, you restart the DCA. If the market goes up rapidly, you end up dumping in all that you’d planned to invest at once so that you don’t miss ‘certain’ gains.

Let’s review: In theory, DCA helps you by mechanizing your trades so that emotions don’t take over. You’ll end up buying more shares if the market is down, and less if the market is up. Thus you’ll, on average, pay less for your investment and generate greater profits. In reality, you let the emotions of the market turn off your mechanical DCA strategy. You buy fewer shares when the market is down, more shares when the market is up, and a lot more shares when the market is up ridiculously. This means you’ll, on average, pay more for your investment and generate fewer profits.

Don’t do that.

Another time honored way to getting a lump of money in the market is to just put the lump of money in the market. “Oh, but it might go down,” you say. First, you’re likely only thinking this if the market already went down—a great time to dump a lump of money into it. Second, the market will, eventually, go up. You could, of course, divine the future and wait with your lump of cash until the market is about to go up and then put it all in. Good luck with that. There is a two-thirds chance that a year after you could have put the money in the market, it is already up and you missed it.

So, if you’ve been given a lot of money and are wondering when to invest it, go ahead and Dollar Cost Average or go ahead and put the lump sum all in at once. Just don’t try to second guess the market in either case. It seldom comes out well.

Gary Silverman holds the Certified Financial Planner (CFP®) license, and is a member of the Financial Planning Association (FPA®). Gary is the founder of Personal Money Planning, a retirement planning and investment advisory firm. Find out more about Personal Money Planning at the company website or follow on Facebook.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

By Sarah Clark Oster

This week one of our CCCS staff members received great news – she was notified that she had won $150,000 through the UK’s Mega Lottery! Accompanying the letter she had received was a check for $3,990 (a portion of her winnings). All she needs to do is send $1,995 to the lottery claim agent to cover taxes on her winnings.

Was our staff member excited? Did she treat everyone to lunch because she’s now $150,000 richer?

No, she didn’t – she recognized that this is a scam.

Many, though, are duped by such ploys. Con artists are adept at generating notifications that look official and quite legitimate. The letter that our staff member received tells her that this information is highly confidential, and that she shouldn’t share the news with anyone. It tells her that they’ve tried to reach her many times, and that this is her final notification. If she doesn’t act now, she’ll miss out.  Click here to see the actual letter that our staff member received.

Here’s what the Federal Trade Commission says about Fake Check scams: “The check is no good, even though it appears to be a legitimate cashier’s check. The lottery angle is a trick to get you to wire money to someone you don’t know. If you were to deposit the check and wire the money your bank would soon learn that the check was a fake. And, you’re out the money because the money you wired can’t be retrieved, and you’re responsible for the checks you deposit — even though you don’t know they’re fake. This is just one example of a counterfeit check scam that could leave you scratching your head.”

For more information on how con artists use this scam to take advantage of consumers, check out the FTC’s full article on their Scam Alert blog.

Sarah Clark Oster is the Director of Marketing and Education Outreach at Consumer Credit Counseling Service of the Tennessee River Valley, a non-profit organization committed to helping individuals resolve their financial difficulties. Consumer Credit Counseling Service of the Tennessee River Valley is a member of the National Foundation for Credit Counseling. To schedule an appointment contact CCCS of the Tennessee River Valley at 888.381.8178 or visit them online at www.credithelptoday.org.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

By Barb Miller

Most people I work with are very concerned about improving their credit scores post-bankruptcy. This is a good thing since nearly all important transactions like finding a job, buying insurance, financing a car or home, or even renting an apartment may well depend on your credit score. The good news is you can have excellent credit again! But, it will take time and hard work to get there. If you’re groaning over the “time and hard work” comment, simply recall how long it took to get to the point of filing bankruptcy and all your hard work to avoid that step. In comparison, working on your credit should be a piece of cake.

First Things First
Start by checking your credit report for accuracy. You can get your credit reports free at AnnualCreditReport.com or by calling the toll free number (1-877-322-8228). If you received free copies within a year of your request, you must pay a small fee. When you get your credit reports, review them carefully to make sure your name, address, and employment information are correct. Look over the account information carefully. Any account you included in the bankruptcy should show a zero balance, and may have a notation that the account was part of a bankruptcy.

In addition, your bankruptcy will show under the “Public Record” section of each credit report. You should know that the bankruptcy filing can legally stay on your credit report up to 10 years, although it can fall off sooner. As time goes by and your credit improves, new creditors will be more concerned about how you used credit since your bankruptcy discharge rather than the bankruptcy itself.

Ongoing Secured Loan Obligations
If you filed bankruptcy and had car loans or mortgages but were current (or got current) during the bankruptcy, continuing those payments on time every month will help to rebuild credit faster. The key is on time payments since 35% of your credit score is based on whether you pay bills when they are due. Paying early is even better if at all possible.

Be Ready to Use Credit Again
Although it helps your credit score to have a payment history, don’t rush out looking for new credit until you are certain you can handle it responsibly. This means you can stick to a budget, and save money every month for emergencies. Only then should you consider using small amounts of credit that you pay in full when the bill arrives. Start small, perhaps getting a gas card or one for a retail store. But beware! These creditors typically charge double digit interest rates so be sure to pay the bill in full each month to avoid expensive interest charges.

Existing Credit Cards
You may have an open credit card account from before your bankruptcy. If so, use the card but keep balances low. Again, make monthly payments on time. Ideally, you should be able to repay the monthly balance in full because you are simply using credit as a tool to rebuild your score, not to supplement income or in place of emergency savings. On the other hand, you must use credit to rebuild credit. Consumers who use credit moderately are considered a better risk than those who don’t use credit at all.

Secured Credit Cards
If all else fails, talk with a local bank or credit union about getting a secured credit card. Secured means you must deposit money into an account which becomes collateral for using the credit card. Your line of credit depends on the amount you deposit. Make sure the lender reports your account activity each month to the 3 credit reporting bureaus. Without a solid payment history being documented on your credit reports, no one will know what a terrific job you are doing. When creditors don’t report, your new and improved credit history will remain a mystery.

Use the card for small purchases each month and again, pay your bill in full when due. You can’t use the funds in the account for payments so be sure not to charge more than your budget allows you to pay in full. After a year, talk with the lender again to see if you qualify for an unsecured credit card. Before signing on the dotted line, make sure the interest rate and other terms are affordable for you.

How Long to Rebuild Credit
Anyone who promises they can repair your credit quickly is likely a scammer or con artist. Building good credit takes time and patience. But, time will pass regardless so you may as well make good use of it. Once actively trying to improve your credit, it typically takes 2 years before you’re accepted for a major credit card at decent interest rates. To qualify for a mortgage with reasonable terms, it takes about 4 years.

Barb Miller is a Certified Financial Counselor and Bankruptcy Specialist with LSS Financial Counseling. She specializes in blogging about bankruptcy, student loans, and financial education. LSS Financial Counseling is a member of the National Foundation for Credit Counseling. To schedule an appointment with a certified financial counselor call 877.577.2227 or visit their website at ConquerYourDebt.org.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

By John Ulzheimer

Ok, I get it…the world of financial services can be complicated and confusing. It’s hard to calculate APRs, and it’s hard to forecast interest paid on long term credit card debt. And, according to a recent survey by VantageScore Solutions and The Consumer Federation of America, consumers don’t know very much about credit scores. But nothing, and I mean nothing, has caused more confusion lately than the misuse of terminology as it pertains to plastic. The goal of this article is to provide a clear definition and proper terminology as it pertains to commonly used “plastic.”  Here goes…

Prepaid Debit Card – A prepaid debit card is a card that has value loaded straight to the card. You can load your paycheck, or pay a service like Western Union to add funds to the card. Prepaid Debit Cards are not credit products. You buy them, like a gift card. You don’t apply for them, like a credit card. They usually are loaded with fees and offer no credit building benefit, regardless of what you may hear or read. A prepaid debit card is not a….

Debit Card – A debit card is basically a plastic check. There are no funds loaded onto a debit card. The funds are in your account with a bank or credit union. When you swipe your debit card the funds are transferred from your bank to the merchant. Debit cards, like prepaid debit cards, are not credit products and do not offer credit building benefits. A debit card is not a…

Secured Credit Card – A secured credit card is actually a real credit card. But, the issuer requires that you make a deposit with their bank or credit union and then issues the card with a credit limit of an equal amount. Because it is a credit product you do have to apply for them, and they are commonly reported to the credit reporting agencies. A secured credit card actually IS a…

Prepaid Credit Card – A prepaid credit card is the same thing as a secured credit card. It just seems like some folks would rather call them “prepaid” than “secured” despite the entire secured card industry referring to them as “secured credit cards.”  And yes, calling them “prepaid credit cards” is causing people to believe that you’re actually referring to prepaid debit cards, which they are not.  A prepaid credit card is not an…

Unsecured Credit Card - An unsecured credit card is what most of us carry in our wallets, and we almost always refer to them simply as, “credit cards.” We had to apply for it, and the issuer had to approve us for it. And, we have a credit limit, a due date, an interest rate, and we get a statement once a month. We have late fees, over limit fees, and other fees…if we mismanage the card. Most of us have plenty of these credit cards on our credit reports. An unsecured credit card is not a…

Charge Card – A charge card is a “pay in full” product, like the American Express Green Card. These are sometimes referred to as “Open” accounts, as that’s the standard credit industry “Account Type” designation for a pay in full account. And no, “open” in this case does not mean the opposite of “closed.” If you charge $500 on a charge card then you must pay $500 by the due date. You can’t roll part of the balance to the next month like you can with a credit card. A charge card is not a…

Gift Card – A gift card is just that…a card you buy for someone as a gift. You probably got some for your birthday, or for Christmas as they’re the most common gift given each year. A gift card is a piece of plastic that has some dollar amount loaded onto it, like a prepaid debit card. But, there are no fees other than the fee to initially purchase the card (unless you never use it). Gift cards can either be “general use”, like the American Express Gift Card (able to be used wherever Amex is accepted) or they can be “chain specific”, like a Macy’s Gift Card (able to used only at Macy’s)

By the way, the reason some people are calling secured cards “Prepaid Credit Cards” is because of SEO (Search Engine Optimization). The folks that are marketing secured credit cards want the “rankings” and traffic for the term “prepaid” as it pertains the plastic. We can partially thank keyword ranking desires for this intentional misuse of “plastic” terminology.

This article originally appeared on Credit Card Insider.

John Ulzheimer is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a contributor for the National Foundation for Credit Counseling. He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, Ulzheimer is the only recognized credit expert who actually comes from the credit industry. Follow John Ulzheimer on Twitter: http://twitter.com/johnulzheimer.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

By Jason Alderman

Most people who grew up during the Great Depression and World War II learned to scrimp and save as a matter of necessity. Many also gained financial security during subsequent decades when pension plans were more common, homeownership became the norm, and government programs like Social Security and Medicare expanded. For a time, it seemed their Baby Boomer children stood to inherit amounts unheard of for previous generations.

However, many economic factors have taken their toll on seniors’ nest eggs in recent years. Thus, if you were counting on a sizeable inheritance to help finance your own retirement, you may want to rethink that strategy. Here are several reasons why many seniors have been forced to revise their estate distribution plans (and indeed, to reevaluate how to fund their remaining retirement years) – and why their heirs may need to rethink their own savings and retirement plans if they were relying on an inheritance:

Plunging retirement account values. Most people who invested heavily in the stock market during the Great Recession watched helplessly as their accounts lost significant value. Although the market has mostly recovered, many people – especially those in or approaching retirement – stashed their remaining balances in safer investments earning very low interest, worried the market might plunge further. 

Younger savers still have many years to catch up, but it may be very difficult for retirees. Unless they reentered the stock market a few years ago, chances are they’ve missed out on much of its resurgence and their accounts are thus doubly dinged. Many likely will have to draw on their account principal to make ends meet, thereby depleting their savings much more rapidly than planned.

Home equity woes. One primary cause of the stock market crash was an out-of-control housing market where prices rose unrealistically, and people acquired risky mortgages they couldn’t afford. Many seniors, hoping their home’s equity would help fund retirement, instead found its value drastically reduced. Fortunately, the housing market has begun to recover. But many tapped-out seniors have turned to reverse mortgages and home equity loans to draw on their home’s equity to cover living expenses, thereby lessening their estate’s future value.

We’re living longer. As average life spans increase, so does the period we’ll need to survive on our retirement savings. According to Social Security calculations, a 65-year-old man today will live until 83 on average; for women it jumps to 85. And a quarter of 65-year-olds will live past age 90. Many people never imagined their savings would have to last that long and didn’t plan accordingly.

Skyrocketing healthcare costs. Even if they buy Medicare prescription drug and Medigap coverage, seniors, like everyone else, spend an ever-increasing percentage of their income on medical care. Such costs usually far outpace benefit cost-of-living increases and interest earned on investments – especially from low-risk investment vehicles many seniors favor.

Government programs are overburdened. Baby Boomers have begun tapping Social Security and Medicare benefits, and that number will grow rapidly. Plus, far fewer younger workers now fund those programs, so it’s possible that benefits will decrease, premiums will rise or taxes will increase – or a combination of all three; all options would strain fixed incomes.

Misguided early retirement. When the market was booming, many people retired early, assuming they could afford to bridge the gap before receiving Social Security and Medicare. But plummeting home equity and reduced 401(k) balances have forced many retirees to aggressively withdraw from savings, trim expenses, or even return to work.

Spreading the wealth early. Many seniors help their children and grandchildren pay for high-ticket expenses like home down payments and college. Although such gifts reduce the eventual value of their estate, there are certain tax advantages (lower estate taxes, state tax deductions for 529 Plan contributions, etc.); not to mention the joy of being able to help loved ones.

Just be sure that if you’re the recipient you don’t take such assistance as license to take on additional debt. And if you’re on the giving end, be sure to consult a financial planning expert to help properly structure any such gifts. If you don’t have a trusted referral, good resources include the Financial Planning Association, the National Association of Personal Financial Advisors and the Certified Financial Planner Board of Standards.

Long-term care. Unless they’ve purchased comprehensive long-term care insurance (which is quite expensive and can be difficult to qualify for), your parents will likely burn through most of their savings should they ever require assisted living. And keep in mind that Medicaid will only pay for a nursing home once they’ve exhausted most of their assets.

Bottom line: With seniors facing increasing financial challenges, don’t depend on an inheritance to provide your financial security.

Follow Jason Alderman on Twitter: http://twitter.com/PracticalMoney

This article is intended to provide general information and should not be considered legal, tax, or financial advice. It’s always a good idea to consult a legal, tax, or financial advisor for specific information on how certain laws apply to you and about your individual financial situation.

Jason Alderman is Senior Director, Global Financial Education, with Visa, Inc.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

By Jana Castanon

Finances are a hot topic for any couple, and one that must be discussed prior to making a permanent commitment to each other. There are three basic money management styles that a couple could choose – they could combine all their resources into joint accounts, have completely separate accounts, or a combination of the two. There’s isn’t one right way to do it. It depends on personalities, upbringing, and values.

Joint Finances
Mark and Rebecca deposit their money into a joint account where there is no division of who it belongs to. They did not have a discussion prior to getting married on how they were going to handle their finances. Rebecca assumed that task because she was taught at an early age the importance of having a plan in place in order to reach financial goals. Mark is rarely involved in the details of their finances, but is aware of what the bills are, when they are paid, where the money is, and current account balances in case he would have to assume that responsibility. Having a plan in place is critical for their financial success. “I don’t like surprises”, states Rebecca, “so at the beginning of every year, I re-evaluate our spending plan and review the progress towards our goals and make adjustments accordingly. Tweaks need to be made here and there, but it is helpful to have an overall picture”.   

Tips for Success:

Have a spending plan.

• Include spending money for each spouse in the plan.
• Determine a threshold, and discuss purchases over that threshold.
• Set joint savings goals.

Yours, Mine, and Ours
When Jim and Mary met they both had an established financial life – credit cards, student loans, saving accounts. When they started to acquire bills together they decided to open a joint checking account, and allocate a percentage of their income to pay those debts. This style works well for them because they have their own discretionary money to spend how they please. “I like that I can buy a pair of shoes and not feel guilty”, says Mary. “But, I also like that when it comes to major purchases that I have someone to discuss it with. I can be impulse, so this is a big plus!” Lastly, when it comes to setting a goal, for example, to take a vacation, they each put an established dollar amount in an account until they reach the desired amount.   

Tips for Success:

• Contribute to savings and retirement individually.
• Acknowledge that one may be saving their money and the other spending it.
• Discuss long term goals and plans for retirement.
• Research tax implications if filing a joint return.

Independent Finances
Pete and Angela married in their mid-thirties and had seen what worked, and didn’t, in previous relationships. They felt they were in a place in their lives that they liked being financially independent. Based on income they divided up their expenses, and each pays their own separate bills each month. “The only problem we have using this system is that we have a hard time looking at the ‘big picture’. We need to do a better job, and sit down more often and discuss things like retirement”, states Pete.   

Tips for Success:

• Contribute to savings and retirement individually.
• Be watchful that all bills are being paid, especially in community property states.
• Discuss long term goals and plans for retirement.
• Research tax implications if filing a joint return.

Jana Castanon is the Community Outreach Coordinator for Apprisen. Apprisen is a member of the National Foundation for Credit Counseling. To schedule an appointment with a certified financial counselor call 800.355.2227, or visit Apprisen’s website at www.apprisen.com.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

By Mark Foster

As school lets out for the summer vacations are on many families’ minds. A Credit Counseling of Arkansas (CCOA) website poll showed that 84 percent of families haven’t had a vacation in the past year. Many can’t afford to take one unless they pinch their pennies. But, whether someone plans an elaborate vacation or something close to home, it is vital to first create a vacation budget to avoid overspending as spending too much will ultimately just add more stress to a family and their finances. 

As CCOA’s website poll shows, people are still feeling pinched by the economy so in order to take a vacation they have to look at affordable options. But, a family’s first step is to take a look at their budget and see how much vacation they can afford. If credit cards will be used to finance the trip it’s important not to charge any more debt than can be paid off within a few months’ time so families aren’t still paying on the vacation when next summer comes around.

Because of tight budgets many families vacation close to home, opting to travel to nearby places they can drive to in the morning to visit and return to their home by night. This is called a staycation. It eliminates lodging costs, and can significantly reduce travel and meal costs. There are probably numerous fun choices within a three-hour drive from home – perhaps a zoo, a science museum, a park, an aquarium, or sporting events. For those who think no vacation is financially possible for them, a staycation can be doable for many on very tight budgets. Instead of going anywhere, staycationers can plan something fun at home, such as renting movies, camping in their backyard, or grilling on their patio.

More vacation savings tips from CCOA: 

•      Pack your own food, drinks, and snacks rather than paying $3 for a bottled water at a park, hotel, or convenience store. Taking snacks, food, or drinks can save a small fortune.

•      Eat at restaurants where kids eat free. Also, stick with water and no dessert. A family of four can easily spend $10 a meal just on drinks alone.

•      Give children a trip allowance. Kids will learn to manage their money as they contemplate buying souvenirs and snacks.

•      Look in the newspaper and the Internet for discounts and coupons to area events and attractions.

The most important thing is to first find out how much vacation you can afford and then plan from there.

Mark Foster is Director of Education with Credit Counseling of Arkansas (CCOA). CCOA is a member of the National Foundation for Credit Counseling. Contact CCOA at 800.889.4916, or visit CCOA online at www.CCOAcares.com.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.