Don’t Overlook Financial Freedom; Help Available

?????????????????Despite Indiana’s less-than-exemplary health status (too much obesity and smoking), financial wellness is a factor that cannot be overlooked. Primerica is one of many organizations trying to make a difference through employee education.

Chase Eaton has been a regional vice president for the organization in the Indianapolis area for the past nine years. (During that time, he has also been a member of the Indiana Pacers’ Power Pack — that high-flying dunk team that entertains fans during each home game.)

Eaton says there are two parts to the Primerica plan for businesses:

  1. Group presentations that teach employees basic money concepts such as the Rule of 72, debt stacking (how to pay down debts faster), efficient budgeting, saving for retirement and more.
  2. Individual sessions in which associates can develop, with a coach, a personalized financial game plan. Outcomes include a debt freedom date, financial independence number (amount of savings needed to retire), itemized budget worksheet and comprehensive insurance review.

Contact Eaton to learn more.

The Wellness Council of Indiana focuses on the financial side of wellness as part of its work with organizations throughout the state. Membership is an excellent first step to establishing an overall culture of wellness.

Financial Fitness for Freshmen

The following Money Management column is provided jointly by the American Institute of Certified Public Accountants and the Indiana CPA Society as part of the CPA profession’s nationwide 360 Degrees of Financial Literacy program.

As you get ready to go away to college for the first time, this is a good time to expand your knowledge of day-to-day money management, including smart budgeting and debt management steps. The Indiana CPA Society offers these tips to students who want to get through college with the right financial footing.

Start on a Budget

You may be surprised at the high everyday costs of college, including books and supplies, daily living expenses and travel to and from school. That’s why it’s a good idea to get a sense of what you will spend – outside of tuition costs – before you begin each semester. Include savings you plan to use, any money you may receive from your family and the income you can expect from any jobs.

According to a Nationwide survey, the average student income is about $1,400 a month from part-time jobs and parents. Semesters usually last about four months, so divide your projected total to determine how much you can spend each month, after deducting the amount you can expect to pay for books at the beginning of the semester. It’s also a good idea to track your actual spending throughout the semester, so that you can more accurately project and adjust your budget for the years to come.

Get What You Need

Once you know your income, determine a list of expected expenditures each month. Be sure to remember the difference between wants and needs. Textbooks and supplies are clearly mandatory, but weekend trips, nights out and new clothes are not. Even a car can quickly drain your resources if you’re cash strapped.

Feed the Pig, the AICPA’s financial literacy site aimed at young people, recommends recording every time you make a purchase so that you get a good sense of where your money goes. Then categorize all the items, to see if you’re spending as much on morning coffee as you are on weekend entertainment. These steps allow you to understand where you might need to cut back or reconsider your spending choices. If you’re honest about your real necessities, it will be easier to create a workable budget, and find ways to save.

Avoid Credit Card Debt

College seniors with credit cards graduate with an average of $4,100 in credit card debt, according to the Nationwide survey. The importance of budgeting is clear when you see the consequences of spending beyond your means. Many students use credit cards to stretch their spending money, but given the high interest rates involved that can be a costly choice.

For example, if you have a $4,100 credit card balance, at an 18% interest rate and you make a $200 payment each month, it will take you 25 months to pay off that balance and it will cost you a whopping $836.27 in interest, money you could have spent on other purchases or put aside in savings. That debt is a big burden to carry, especially since so many graduates also have significant outstanding student loan debts.

Debt can make it more difficult to find or afford your own place or to qualify for an auto or other loan. The best advice: If you’re going to reach for the plastic, make sure it’s a debit card. That way you will spend only what you have in your bank account now and avoid overextending yourself.

Your Local CPA Can Help

College is an exciting time that offers many new experiences, including managing your own money. If you or your family has questions about financial topics, be sure to consult your local CPA. He or she can help you address all your important financial concerns.

Financial Literacy: Too Many Lacking

It’s Financial Literacy Month. Hopefully it has arrived in time as far too many people are lacking in just that concept. Witness a new survey from the National Foundation for Credit Counseling and the Network Branded Prepaid Card Association.

Witness a few results from the survey:

  • More than half of U.S. adults admitted that they do not have a budget

  • One-third of survey respondents do not pay all of their bills on time

  • Thirty-nine percent of adults carry over credit card debt month to month

  • Twenty-five percent of those who do not currently have non-retirement savings indicated that, if they did begin to save, they would keep their savings at home in cash

“This year’s survey unveiled some disturbing trends, showing that a significant number of Americans are saving less, spending more and carrying credit card debt over from month to month, suggesting that the painful financial lessons of the past are quickly being forgotten,” said Susan C. Keating, president and CEO of the NFCC.

My reaction is a little more straightforward, 15 words in fact. "Really? Come on, people. Get in the game or you only have yourself to blame."