Money 101, the basics

April is Financial Literacy Month and a free resource is available! Money 101, the basics is a free web-based financial education designed to educate, empower and increase financial knowledge.

The eight modules cover the following subjects:

·         Employment

·         Income

·         Taxes assets

·         Credit cards

·         Debt

·         Expenses

·         Goals

The information in this course is presented as real world practical application. The in-depth assessment report includes a budget, other important financial statements and personalized items, suggestions and strategies that are relevant and specific to the financial situation.

This is a great FREE resource. Sign up today to get started!

http://www.money101thebasics.com/

Overcoming Barriers to Saving

Did you read the new article from America Saves? Virginia Saves' own Lori Irwin was featured as a guest writer! Lori discussed the barriers to saving and gave four great resources to overcome these common problems. Check out the article and see these small changes can improve your financial situation!

All enrolled Virginia Saves receive this monthly email publication. Enroll today for this and other powerful saver tools.



A Budget is not for Babies!

Most people do not have budget.

Budgets have really gotten a bad rap! The feelings that the word ‘budget’ evokes are usually negative and constraining. Budgets are usually associated with restricting the activities that are enjoyable. It does not have to be that way! Think instead, ‘spending plan’!

Income – expenses = Spending plan!

The calculations required is grade school math, therefore, everyone is qualified to make a spending plan.

The National Syndicated Radio Host Dave Ramsey recommends a zero based budget which means the income minus the expenses equals zero. He says to “spend every dollar on paper before the month begins.”

Budgets, AKA Spending Plans, can be written on paper, saved on a computer document or created in a computer software program. A great free online budgeting tool is available at http://www.mint.com/

It is important that all monthly expenses are covered by the income coming into the home. This will avoid the need to use credit card debt for basic living expenses. Credit should not be used to purchase items which you cannot afford!

If the expenses exceed the income, a deficit is present. The expenses must be reduced or income increased to balance the budget. If the income exceeds the expenses, this surplus allows additional savings or preparing for upcoming predictable expenses.

Predictable expenses are maintenance, holidays, bills or miscellaneous things that may not come due every month. A few examples would include Christmas, tires for the car, personal property taxes, and car insurance premiums. These expenses are not surprises but they can take the wallet by surprise!

Be prepared for these ‘budget busters’ by saving some money the expenses each month. Some things are not UNEXPECTED expenses is a Savvy Saver article that details a great method to be prepared for these kind of expenses.

Virginia Saves motto is ‘Start small, think big.’ Start small by creating a budget for you family this month! Think big. You may have to be creative to make all expenses to fit into that first budget.

Budgeting is the first step toward financial freedom! Will you take that step?

Home is where the financial lessons start

Remember, the little ones are learning how to manage money by your example. Children learn a whole lot from what they see modeled in everyday life. They see how family members spend, save, give money. They are forming their ideas about the value of money.


The last video in the series Financial Planning for Your Future is about the next generation.


Week six: Teach Your Children





Kids are very smart and it is never too early teaching them about money. Chores teach children they must get a good job to have money to support a family. A child may not like it when a toy cannot be bought, but that is a real life lesson. Teach children to purchase needs before wants! Scarcity is real. That means wants will always outnumber the bills in a wallet.


For more information, check out these sites:


Virginia Saves Parent Resources


Teaching Kids About Money


Virginia Saves hopes you have enjoyed this six part video series. Please feel free to leave a comment of contact us at virginiasaves@gmail.com

Good Debt vs. Bad Debt

The third video in the series Financial Planning for Your Future is about debt. Watch this short video and find out what is considered good debt!





Debts used to make purchases that will not increase in value over time is 'bad debt'. In other word, almost all credit card purchases are not going to increase in value, and therefore, are 'bad debt'. Items purchased on a credit card are usually either something that was not in the budget or something to be paid next month for convenience. A checking account debit card will give the convenience of the quick transaction, but not allow money to be spent unless it is in the account.


The budget is key to paying off debt. Budget for expenses and plan to pay more that the minimum on credit cards. www.powerpay.org is a free site that helps develop a plan to pay debts off more quickly.

Dreaming about the Tax Refund. . .

According to the Bankrate.com, this year 30 percent of Americans intend to pay down debt with their tax refund, 28 percent say they will save or invest it, and 26 percent plan to use the refund for necessities such as food or utility bills.

How should the tax refund be spent this year? The BEST idea is have a plan, then stick to it.

Virginia Saves recommends splitting the tax refund into three parts:  

ü  30% Emergency savings- Prepares for the next emergency.

ü  30% Pay down debt- Improves financial outlook.

ü  40% Discretionary spending- Allows spending on needs or wants.

An Emergency fund is the first step to financial security. Even a modest savings of $300 will prevent relying on using debt for an unexpected expense. Emergency savings breaks the cycle of crisis living and living payday to payday. Saving 30% of the tax refund in a savings account prepares for the next unexpected emergency.

Reducing Debt will reduce the minimum monthly payment due on credit cards and other debts. The reduced monthly payment leaves more money in the budget for other needs. Paying down debt with 30% of the tax refund improves the financial outlook for the year.

The remaining portion of the refund is allotted for discretionary spending. Purchase needs before wants and look for sales to stretch the dollars. Spending 40% of the tax refund on desired items is the reward for money smart choices.

Taxes can be prepared for free for families with incomes below $49,000. South Hampton Roads EITC Coalition is offering free income tax preparation. This includes roving site service and a site may be close to you. The South Hampton Roads Earned Income Tax Credit coalition has the free tax preparation sites listed at http://www.shreitc.com/en/free-income-tax-preparation-sites. AARP are also offering free tax preparation for low income families and seniors at many local libraries.  http://tidewatertaxaide.org

Many families qualify for the Earned Income Credit (EIC) and only have to file to receive a refund. Even if no taxes were paid, you may still be eligible to receive a tax refund with the EIC. Click here for more information.

Spend your tax refund wisely. You will be glad you did!

Seven Ways to Save

We all want to save money, it’s the “how” that causes some confusion. If you’re not currently saving or living paycheck-to-paycheck, you need to start by changing your behaviors. Begin by tracking your spending and making a plan to save. Saving money is simple once you realize where it’s going.

Here are seven ways that you can save $100 or more in 2010:
Reduce your cell phone plan or switch to a prepaid plan. Many of us overestimate our cell phone usage. Drop minutes or features you’re not using to add to your savings.
Walk rather than drive to destinations less than a mile. You’ll not only burn calories, but also save the wear-and-tear on your vehicle.

Shop around for auto and homeowners' insurance: Before renewing your existing policies each year, check out the rates of competing companies (see the website of your state insurance department). Their annual premiums may well be several hundred dollars lower.
Utilize a cash-only spending plan. Unlike using your credit or debit card, you can’t spend what you don’t have on you, and it makes resisting temptation easier.

Take full-advantage of discounts! Ask your HR department at work to see what discounts or group deals like are offered.

Make your own entertainment by hosting a game night with family and friends. One board game costs less than $20 and produces hours of entertainment.

Ask your local electric or gas utility for a free or low-cost home energy audit. The audit may reveal inexpensive ways to reduce home heating and cooling costs by hundreds of dollars a year.
Make sure to bank your savings! Track your progress towards a savings goal by becoming an Virginia Saver, where you can utilize the America Saves My Savings Tracker for free to record deposits and monitor your progress.