Margins and Paddings Update

This guest post is by Gail Cunningham, Vice President of Membership and Public Relations, National Foundation for Credit Counseling (NFCC). Experian’s recent State of Credit Study revealed that The Greatest Generation has something else to brag about: responsibly managing credit. And that’s no small achievement considering that some of these folks have 50 or more years of credit history under their belt. That’s a lot of on-time payments. If you fall into the 65+ age bracket, congratulations! You’ve done a lot right. Now let’s keep a good thing going. Here are some tips to help you stay financially healthy moving forward:   Make financial decisions with your head, not your heart. This is difficult to do when a family member reaches out to you for financial help. But remember, you won’t be in a position to help anyone if you can’t support yourself, so think of ways that you can assist family members without putting your own finances in jeopardy. Stay alert about protecting your identity and personal financial information. Seniors are prime targets for scam artists. Never provide personal information over the phone unless you initiated the call, and if you receive an email requesting financial information, don’t respond. Phony emails can look very real, so play it safe by picking up the phone and calling the sender. Make your wallet a little lighter by removing your Social Security and Medicare cards, as these can be the gateway to your personal information if they fall into the hands of a criminal. Get your financial ducks in a row. Know your retirement options in order to maximize your benefits. The decisions you make when leaving your job, beginning Social Security or signing up for Medicare can have long-term implications. Also, review documents such as your will and medical power of attorney to make sure they are up-to-date. Getting advice from a professional in advance of major decisions will pay for itself many times over. Take care of yourself. Medical costs can increase substantially for people as they age, and there are currently many unknowns around healthcare. Therefore, it’s important to do what you can to avoid any unnecessary medical issues. Embrace a healthy lifestyle of eating right and exercising to help keep medical and prescription costs down. Don’t be shy about taking advantage of age-based discounts. There are many perks for people in their 60’s, 70’s and beyond. Look for travel discounts, cheaper cell phone plans, and special discounts at restaurants and movies to make date night even better! The bottom line is to stay the course and not abandon the financial values that have served you well and gotten you where you are today.

This guest post is from Ted Jenkin, CFP®. Ted is co-CEO of oXYGen Financial and is a top ranked personal finance blogger (www.yoursmartmoneymoves.com). He is a regular contributor to Investment News, The Wall Street Journal, and The Atlanta Journal Constitution. It’s official. For years and years everyone has labeled my generation (Generation X) the slacker generation. We were the ones that really started on the video game revolution with games like Pong and Atari and now we have relegated ourselves to worst in class when it comes to overall debt. Although the average balance on credit cards is neck and neck with baby boomers at $5,343 per card and we don’t carry quite as many credit cards as baby boomers, the average debt for a Gen X’er has soared to over $30,000. The Experian study showed that nationally, the average debt in the United States is $27,887 and the average bankcard balance is $4,501. So, why is such a successful generation getting so deep in debt? What actions can you take today to start improving your situation? There is a reason why Gen X’ers and Millennials are using their credit cards more and falling behind on their payments. I call it lifestyle envy. While social media has become really effective in bringing the world closer together, it has also created a set of unrealistic expectations for my generation based upon last night’s Facebook post. Doesn’t it make you angry that your childhood friends are all taking vacations to paradise whereas you suffer from having to take staycations? Aren’t you frustrated that your co-workers all seem to be driving a Porsche or an Audi and you are stuck rolling around in a 2001 Honda? How is it possible that your neighbor’s kids are having birthday parties like they are rock stars while you are still playing pin the tail on the donkey in your basement? You should learn by reading the study from Experian that although it appears they are living life like they are on an episode of Entourage, the truth of it is that their finances are a sinking ship weighted by an anchor of credit card. All the pictures on Facebook, Instagram, and Pinterest might give you the appearance they are doing well. But that is all smoke and mirrors as these images produce a level of irrationality in our minds when it comes to how we spend our money. The pictures tell us, “If they can do it, surely I can do it as well!” Notice there are no facts about income or net worth on Facebook. Notice that there are no budget numbers shown on Facebook. Since pictures are worth a thousand words, the posts we see night in and night out psychologically work on our brains to make us think we should be spending more than we need to with our credit cards. So, how can you fix your situation? Use these five rules as you manage your personal finances: Adopt The Pay Yourself First Rule – I’ve been doing this personally for 22 years in my own financial plan, and I recommend to save a minimum of 10% off the top before you plan out the rest of your budget. If you can get to 20% to 30% even better, but start at a minimum of 10%. If you try to save money after you spend, it’s likely you’ll have nothing because everyone is after your money. When It Comes To Raises At Work, Use the 1/3rd Rule – Hopefully, if you are between the ages 34 to 48, your income will continue to go up in your peak earning years. It is easy to expand your lifestyle as you make more money. Consider saving just 1/3rd of every new pay raise you get at work whether it be in your 401(k) or personal savings. 1/3rd will go to tax and keep a 1/3rd for fun. Get Down To Two Credit Cards You Use – Once you begin to pay off debt don’t cancel your existing credit cards, just stop using them. I’ve maintained a high credit score over the years by carrying several cards, but being disciplined to using two cards and paying them off all the time. Do you really need five more store cards? Use The Acid Test For Purchases – Before you make a purchase, ask yourself whether or not you need it, you want it, and you can truly afford it? Since the internet has created a wave of ease for our spending compulsions, before you click purchase give it 48 hours and then come back to the website to see if you still really want the merchandise. If You Are Struggling, Go To A Forced Budgeting Site – In the good old days, people used envelopes to sort out the cash from their weekly paychecks for paying bills. Today, there are websites such as www.mvelopes.com that can help you do this electronically as a family. This can be an especially powerful tool for those that lack self-discipline. Remember that sound from Pac-Man when you got caught by one of the Ghosts? If you don’t get your spending under control, that is what your personal financial picture will look and sound like as well. Use these smart money moves to get your debt under control and make your cash work toward making work optional one day soon!  

Underscoring Experian’s goal to help consumers and be an advocate for credit education, the National Foundation for Credit Counseling (NFCC) awarded Victor Nichols, CEO of Experian North America, its “Making the Difference” award from their Annual Leaders Conference in Denver. This prestigious award is presented to organizations that have made significant contributions to assisting consumers with financial literacy, awareness and education, furthering the NFCC’s mission, visions and programs through a national presence. To learn more about Experian’s work with the NFCC, check out: Experian honored by the National Foundation for Credit Counseling for its Commitment to Financial Literacy; CEO earns NFCC’s “Making the Difference” Award Experian Provides 80,000 free memberships to the National Foundation for Credit Counseling®, the nation’s largest financial counseling organization