Tarra Jackson, known as Madam Money, is a seasoned Personal Finance Expert with over 20 years experience in the personal finance sector as a corporate trainer, loan officer, Vice President of Lending and Executive Vice President at several major financial institutions. Tarra is the author of the best-selling book “Financial Fornication” as well as a nationally acclaimed speaker, commentator, consultant, author, & syndicated blogger covering topics from cash and credit management to insurance and investment basics.
It’s April Fools Day, full of pranks and jokes all for fun. However, there is nothing fun about being foolish with money.
So, here the top 5 Foolish Money Mistakes to Avoid.
Avoid impulse shopping.
Make shopping a planned activity with a list or a budgeted amount. Unplanned or impulse shopping will sabotage your spending plan / budget. If you really want to purchase the item, give yourself 24 to 48 hours to shop for a better deal, figure out if you really want it and can afford it. You’ll be glad you waited.
Avoid retail therapy.
When you are emotionally down or distraught, avoid shopping or making any large purchases. We are less financially objective when our emotions cloud our judgment. Do something that doesn’t cost anything or very little, like go for a walk, spend time with family or friends, etc.
Avoid overdraft protection.
Overdraft or “Courtesy Pay” will allow you to you overspend and charge you a fee for letting the debit card transaction go through. A fee of $27 up to $35 will be charged for every overdraft, even if the bill runs just $1 or $5 over the amount you have in your account. Some banks charge the fee if you’re a penny over. Essentially, you’re getting very short-term credit at effective interest rates that reach the high triple digits. Now was that cup of coffee really worth $40?
Avoid savings tampering.
If you have to tap into your savings to make a purchase, you may not be able to afford the purchase. Establish a savings account that is not easily accessible with a certain amount directly deposited every pay period. Savings accounts are supposed to grow, not be chiseled away.
Avoid financial promiscuity.
Financial Promiscuity is when we use unsecured revolving credit (credit cards) for small purchases when cash should be used. Avoid using credit to purchase that “value meal” or anything less than $50. This will ensure that we do not slowly acquire Financial STDs (Substantially Tremendous Debt).
So, enjoy the day and play an innocent joke or prank on someone you love and keep the foolishness away from your money!
I have been trying to save but it is so difficult when I barely have enough to pay my bills. How can I save with limited money for emergencies or opportunities?
Sincerely,
Desperately Seeking Savings! Athens, GA
Dear Desperately Seeking Savings,
It can be extremely difficult setting aside money when your bills takes a huge chunk or all of your paycheck. I find that most people use their current “Savings” Account incorrectly. In fact, what most believe is a “Savings” Account is actually what is called a “Side Piece” Account. #LetMeExplain
The video below will explain and give you some tips on how to #SaveSomethingSooner regardless of your financial situation.
I’ve seen many articles about the characteristics of the Proverbs “Virtuous Woman.” But, I haven’t found any about how to be a “Financially” Virtuous Woman. So, here is my interpretation of the characteristics of a “Financially” Virtuous Woman based on Proverbs 31:10-31 (KJV).
She knows her value.
“10Who can find a virtuous woman? for her price is far above rubies.”
Like an authentic and priceless gem, she knows her value and doesn’t settle. When a woman knows her value to an organization that she is working for, she will not settle for low pay or abusive working conditions. She knows that she is worth more and deserves better.
She is trusted by her spouse (or God).
“11 The heart of her husband doth safely trust in her, so that he shall have no need of spoil. 12 She will do him good and not evil all the days of her life.”
She protects the financial security of her family and is fiscally responsible. She only has the best intentions and helps to reach her family’s financial goals. Therefore, her spouse “safely” trusts her and in her personal financial management. If she is single, she is trusted by God.
She will work to provide for her household.
“13 She seeketh wool, and flax, and worketh willingly with her hands. 14 She is like the merchants’ ships; she bringeth her food from afar. 15She riseth also while it is yet night, and giveth meat to her household, and a portion to her maidens.”
Whether it is going to work, getting another job, or starting a business, she will do whatever it takes to financially provide for her family, when and if necessary.
She is a homeowner or owns real estate.
“16 She considereth a field, and buyeth it: with the fruit of her hands she planteth a vineyard.”
She owns or has owned real estate as a homeowner or as an investor. This not only shows that she is financially self-sufficient, but it also shows that she is responsible with her finances and credit to be able to qualify and afford real estate.
She is fit.
“17 She girdeth her loins with strength, and strengtheneth her arms.”
She is not only physically fit with strength to handle the demands and responsibilities placed upon her; she is financially fit with the strength of personal financial knowledge to handle or assist with the financial demands and responsibilities of the household.
She is disciplined.
“18She perceiveth that her merchandise is good: her candle goeth not out by night. 19 She layeth her hands to the spindle, and her hands hold the distaff.”
Even when she doesn’t feel like it or want to do it, she is disciplined enough to do what is necessary to do whatever needs to be done for the betterment of herself and her family.
She volunteers to help others.
“20 She stretcheth out her hand to the poor; yea, she reacheth forth her hands to the needy.”
Whether at church, for a non-profit organization, or in her community; she gives her money, resources and time to help others who are less fortunate than she is. She understands that the Power of Prosperity lies in her Gift of Giving.
She is proactive and saves.
“21 She is not afraid of the snow for her household: for all her household are clothed with scarlet. 22 She maketh herself coverings of tapestry; her clothing is silk and purple.”
She plans for what is to come as well as prepares for what could happen. She saves for emergencies, establishes a budget, and ensures her household has what is needed at all times.
She respects her spouse.
“23 Her husband is known in the gates, when he sitteth among the elders of the land.”
She creates a strong financial foundation with her spouse for their family. She may not agree with her spouse all of time but she respects him and his financial decisions. Because of her power of influence, her spouse is respected within the community.
She is an entrepreneur.
“24 She maketh fine linen, and selleth it; and delivereth girdles unto the merchant.”
She is a business owner or has an entrepreneurial mind and spirit. She is able to create a product or service that creates an income source to provide for her family.
She is respectful and respected.
“25 Strength and honour are her clothing; and she shall rejoice in time to come. 26 She openeth her mouth with wisdom; and in her tongue is the law of kindness.”
She respects others and commands respect from others. She helps to educate those around her about finances with honesty and love. This is why people appreciate her advice.
She is NOT lazy.
“27She looketh well to the ways of her household, and eateth not the bread of idleness.”
She understand when it is time to rest and when it is time to get up and make it happen. She is not lazy and idle with her thinking or her ways.
She is loved and respected by her family.
“28 Her children arise up, and call her blessed; her husband also, and he praiseth her.”
She is loved and adored by her children and her husband and they appreciate everything she does to protect, defend, support and take care of the family. They know that the love she has for her family is her driving force to do what she does, only the way she can do it for them.
She is competitive.
“29 Many daughters have done virtuously, but thou excellest them all.”
She is driven to do her best. She may not be competing with others. Rather, she is usually competing against herself with a goal to be financially better off than she was a month or year before. She reads books and seeks information and assistance to improve her personal financial management skills.
She is humble & loves the Lord.
“30 Favour is deceitful, and beauty is vain: but a woman that feareth the Lord, she shall be praised.”
Although she is beautiful and has nice things, she remains humble and does not boast. She also has a relationship with God and understands that all that she has is a gift from God. She tithes because she believes that “You can’t beat God’s Giving!”
She is a Role Model.
“31 Give her of the fruit of her hands; and let her own works praise her in the gates.”
She is admired by others by the way she carries herself in public and at home. She doesn’t take this responsibility lightly and understands her impact on her family and her community. Her financial success and freedom are her fruit she bears and shares.
Yes, owing taxes SUCKS, especially when it is an absolute surprise. Owing the IRS can be a financial burden on an already tight budget. Despite how we may “feel” about it, owing taxes is essentially another “Loan” owed and can potentially negatively affect credit scores. Here’s how, as well as three things to do to avoid having to owe taxes next year.
Too much, too little, too late
When “not enough” OR “too much” taxes are being taken out during the year, it means that the exemptions on your W-4 or your tax deductions may be incorrect.
If “too much” taxes are being taken out of your check throughout the year, the government is “borrowing” that money from you. They pay the amount they “borrowed,” throughout the year, in a lump sum called a “Tax Refund.” Getting a refund may mean that you gave the government an interest-free loan.
Conversely, if “not enough” taxes are being taken out of your check throughout the year, you are “borrowing” the money from the government. The amount, you owe in taxes, is money “borrowed” that you must pay back. The great thing is that if you are not able to pay it back in a lump sum, you can make payment arrangements with the IRS over time to avoid additional fees and penalties.
How taxes can affect credit scores
If the Taxes owed are not paid in a timely manner, the IRS may report the delinquent taxes as a “Tax Lien” on your credit report under the Public Records section of your credit report. This will negatively affect the Payment History category of your credit score, which is 35% of the calculation. The amount does not matter. Whether $500 or $5,000 is owed; the negative effect on the credit score will be the same.
If the tax lien is reported on your credit report as “unpaid” and you have paid the taxes due in full, get a copy of the Satisfied Tax Lien notice from the IRS and then dispute the information on your credit report to have it updated as “Satisfied.”
Here are three things to do to to not owe taxes next year.
Trust but verify
Some people love to DIY (Do It Yourself) everything, including their taxes. And there are great Tax software available to help you do your taxes. You can even do your taxes online for free. If you choose to do your taxes, just remember President Ronald Reagan’s quote, “Trust but Verify.”
If you owed taxes last year, consult with a tax accountant or tax professional, like Dryden Tax and Accounting, Inc., to make sure you don’t leave out any new deductions. Also, consult with the tax professional to make sure you don’t write off something that doesn’t qualify.
Know your place
One of the reasons people end up owing taxes is because they have the wrong number of exemptions on their W-4 form.
Make sure to review, and update if necessary, your W-4 form with your employer annually, preferably at the beginning of each year. Consult with a tax accountant or tax professional, like Dryden Tax and Accounting, Inc., for guidance.
Give yourself credit
Many people have turn their hobbies into a business. However, they don’t give themselves credit because they don’t take advantage of available business tax write offs. Not taking advantage of every eligible business tax write off is like giving away extra money. So, whether you’re selling your secret homemade recipe cakes or providing consultation; make sure you keep your track of all business related expenses and receipts.
Certain business meeting meals to cell phones used for your business, and more, may be eligible for business tax write offs. Again, consult with a tax accountant or tax professional, like Dryden Tax and Accounting, Inc., to help you understand what business expenses are eligible tax deductions.
The best way to win the Tax Game is to GET NOTHING back and more importantly, OWE NOTHING!
Can you imagine going on an extended vacation without making any plans?
No websites or tour guides consulted. No hotel reservations made. No itinerary mapped out.
Of course not. If you wanted your vacation to be a success, you’d budget enough money to cover your costs. You’d know when you were going, how long you could stay and at least generally what you would do while there.
But when it comes to the longest vacation most people will ever take – retirement – fewer than half of all Americans have a formal plan.
And that can spell trouble.
“There’s nothing worse than being 85 years old, full of life, and being flat broke,” says Randy Becker, a retirement planner and co-founder of the Becker Retirement Group in Bellevue, Washington.
But it takes some work to avoid the many pitfalls that can ruin your golden years, Becker says. Inflation, taxes, bad health and bad investments can be devastating.
“It’s up to you to have a sound plan, so you can focus on the important aspects of a wonderful retirement life,” he says.
Becker offers these tips for getting started so you’ll know you’re ready to begin your retirement journey:
Get everybody on board.
You and your spouse need to agree on your retirement goals – and the financial decisions that will get you there. Start talking about priorities: Do you want to relocate? Stay close to the grandkids? Are you emotionally and physically ready for retirement? How long will each of you keep working, and how will that affect the income streams you’ll rely on when those paychecks stop?
Make a budget
Most people think their expenses will go down after they retire, but usually that doesn’t happen. Your wardrobe budget might go down when you aren’t working, but other expenses might go up if you travel, enjoy new hobbies, or start going out more for dinner, movies and concerts.
Know where your money will come from.
Most financial professionals agree that income is king when it comes to retirement planning. A pile of scattered paperwork and account statements is not a plan. A good advisor can help you maximize your Social Security benefits, come up with tax-efficient distribution strategy and talk to you about other options, such as annuities, that can guarantee income in retirement. This is vital as people now live 20, 30 or even 40 years after retiring.
Know your retirement timeline and reevaluate your risk tolerance.
One of the biggest mistakes investors nearing retirement make is sticking with the same advisor and portfolio they had when they were younger. You’ll need to move to a more diversified approach, with fewer risks and more protection for that all-important income.
Although he’s a financial professional, Becker says retirement is about more than money. There’s also the adjustment retirees must make from working every day to suddenly having too much time on their hands.
“Perpetual Saturdays are exciting for about a week,” Becker says. “Maybe you’ll find ways to volunteer. Maybe you’ll learn to paint or play guitar. Maybe you’ll end up working part-time. But most people discover that they need something in retirement that will keep them engaged and excited about life.”
Randy Becker is a retirement planning professional and owner of the Becker Retirement Group in Bellevue, Washington (www.beckerretirement.com). He has 30 years of experience in the insurance industry and holds a degree in personal financial planning from Metropolitan State College of Denver. Randy is co-host with his wife and business partner, Arwen Becker, on Real Retirement Radio which airs on Newstalk AM 870 on Saturdays at 8 a.m. and Sundays at 6 a.m. Real Retirement Radio is a one-hour show dedicated to all things retirement.
The saying that youth is wasted on the young may be especially true when it comes to saving for retirement. Chris Heerlein, Investment Advisor and author, shares 3 Major Financial…
Tarra “Madam Money” Jackson is a financial educator, international speaker, author, and wealth empowerment strategist helping you heal, build, and grow your wealth.
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