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    Budgeting in a Spending Season

    Friday, November 28th, 2008

    Thanksgiving is over and the giving season has just begun. Today’s unofficial holiday, Black Friday, kicks off the holiday shopping season with a wide variety of retailers offering huge savings on high ticket items. Unlike the tamer Thanksgiving week traditions, such as the Macys Thanksgiving day parade or the traditional Thanksgiving feast, Black Friday is marked by epic lines at local stores and chaotic masses of shoppers, many of whom are willing to wake up before dawn for doorbuster deals and prime access to the soon to be out-of-stock sale items.

    It’s hard to remember anything when you’re rolling out of bed at 5am, still drowsy from last night’s turkey paired with a lack of shut-eye. But it’s especially hard to remember your budget. Maybe that budget amnesia accounts for these poll results: according to the Washington Post, half of the respondents to a poll early last year said they would carry their holiday credit card debt into spring. And this was before the current economic slump. So how do you stop yourself from overspending this holiday season? Why not give yourself a few gifts before you start shopping for everyone else:

    Gift 1: A Budget
    I know, it’s scary. When there are people to shop for, holidays parties to attend, even holiday parties to throw, you may not want to have your financial reality mapped out in front of you when you could have a piece of pie and a healthy slice of ignorance instead. But soon enough it will be January, the month of New Years resolutions and no more holiday splurge excuses. So why not get a head start and make a budget now? Include holiday gifts and get a better idea of how much you can spend this holiday season. You can use WISER’s budget worksheet to get you started. For help on keeping track of your spending, check out WISER’s “Keep Track of Your Spending” Fact Sheet.

    Gift 2: A Low-Interest Credit Card
    Look for low-rate and no annual fee credit cards. You can get a list of credit cards, interest rates and fees: send $5 to RAM Research’s CardTrak, P.O. Box 1916, Frederick, MD 21702, or for free on the Internet at http://www.ramresearch.com/. See also the http://www.cardtrack.com/ website .

    Gift 3:A Free Credit Report
    Get a better idea of your credit situation, for free! As of September 2005, all US Citizens are eligible for one free credit report from each credit agency per year. To receive your free annual credit report visit www.annualcreditreport.com or call 1-877-322-8228. This can help you improve your credit and set some long term financial goals.

    Gift Trapped? [Washington Post]
    Tips for Reining in Holiday Giving [Washington Post]


    Posted in Budget, Credit Card Debt, Credit Report, Holiday, Holiday Spending, Savings | Comments »

    Happy Thanksgiving from WISER!

    Thursday, November 27th, 2008

    Looking for a gift idea you can feel good about? Well look no further than I Savings Bonds. One thing to be thankful for today is the new and improved interest rate on I Savings Bonds. While I Savings Bonds were earning 4.28% this time last year, the interest rate has increased to a whopping 5.64% through April 30, 2009. I Savings Bonds are government-issued bonds that earn interest each month, and the interest is compounded every six months. The I Bond is currently providing a higher return than the EE Bond. Since becoming available, the I Bond has been very popular; sales of over $3.2 billion were reported in the first year.

    Here are a few things you should know about the I Bond:

    • You can buy I Bonds at face value; for example, you would pay $50 for a $50 bond.
    • Earnings are exempt from state and local income taxes
    • Federal income taxes can be deferred for up to 30 years, or until you cash them in, whichever comes first.
    • You can earn interest on them for up to 30 years and can cash them out after 5 years without losing interest (You will lose three months’ interest if you cash them in sooner.)
    • You can now buy savings bonds with automatic deductions from your checking or savings account on a regular basis through the Easy Saver plan, or on the Internet.

    I Bonds are a great gift for kids! You can show them how to calculate the value of their savings bonds every year. For more information on I Bonds, go to www.savingsbonds.gov or call 800-487-2663.

    Posted in Holiday Spending, Investing, Savings, Thanksgiving | Comments »

    The "Sandwich" Dilemma: Caregiving Concerns Facing Female Baby Boomers

    Wednesday, November 26th, 2008
    Thanksgiving has nearly arrived, bringing with it a much needed, calorie-laden respite for all. As you, your friends and your family count the things you can be thankful for (e.g. the thriving economy…), do not forget to include America’s caregivers. After all, November marked National Family Caregivers’ month, a celebration of the 34 million caregivers who provide $375 billion in unpaid help to friends and family.

    According to Kelly Greene of the Wall Street Journal, the typical caregiver in the United States is a “46-year-old woman who works outside the home and spends more than 20 hours a week providing unpaid care to her mother.” Not only are these women not paid for the care they administer, but they also face “opportunity costs” such as lost wages and subsequent loss of employer-sponsored health insurance and retirement benefits. Some even pay out of pocket during the course of their caregiving; in 2007, caregivers spent an average of $5,531 of their own money when caring for those over the age of 50.

    The current group of caregiving women is mainly baby boomer women born between ages 45 and 59, according to Tom Riekse, Jr., a managing principal at a brokerage general agency. This demographic often finds itself caring for their parents and their children. This “sandwich effect” has begun to cause women to start thinking about how to prepare themselves for the time when they may require long-term care.

    There are many avenues to consider when thinking about financing one’s future circumstances. Medicare and Medicaid are examples of public resources that are in place to assist those requiring long-term care. Visiting www.longtermcare.gov, a website created by the Department of Health and Human Services, will provide you with information on financing care publicly. While these government options can prove invaluable, Rieske recommends that his clients also research private long-term care insurance…..and the sooner, the better.

    There are a number of reasons why purchasing long term care coverage in advance can be a smart decision. For one, long-term care insurance is medically unwritten. As such, healthier clients obtain better rates. According to Rieske, while those ages 40 to 49 qualify for “good health discounts” 63.2% of the time, only 51.5% of those ages 50 to 59 qualify. Also in respect to age, the premiums and benefits change depending on how old you are. In this way, the premiums you pay over a longer period of time may can end up being less than what you will be paying if you choose to purchase an insurance plan later on.

    There are many routes to consider when thinking ahead about long-term care. Whatever path you choose, it is important to seek out all available information on both public and private options. You may want to consider consulting with a financial advisor, especially if you choose to purchase long-term care insurance and are unsure which plan is right for you. Visit the WISER website and click the “Caregiving” where you can find more information.

    Posted in Caregiving, Thanksgiving | Comments »

    Want to Work for WISER?

    Wednesday, November 26th, 2008

    WISER is hiring an intern for the Spring 2009 Semester. We’re looking for an excellent writer with research skills and an interest in retirement and financial planning. This is a paid internship that will give you the opportunity to participate in conferences, meetings on the Hill, DC events as well as write for WISER’s newsletter, collection of Fact Sheets and this blog! To apply, send your resume, cover letter and writing sample to info@wiserwomen.org

    Posted in Uncategorized | Comments »

    Financial Planners vs. Psychics

    Tuesday, November 25th, 2008

    Looking for a new career? Facing pay cuts or, worse, pink slips? Wondering where the money is these days? Well it may be time to polish that crystal ball and peer into a new profession. As a vast number of industries experience the sharp blow of our weakened economy, one industry appears to be thriving: the divination arts. That’s right: in a time of dwindling business, psychics are enjoying a lucrative wave of popularity.

    While previous visits to the psychic may have involved questions about a spouse’s fidelity or on the future of your love life, psychics are noticing an increase in economy-related shop talk, along with a significant increase in business. According to Ryan Singel at WIRED magazine, “internet psychics across the board saw a spike in traffic in the days following the initial market crash.” Psychics are now fielding questions that may have previously been directed at a financial planner or job counselor: What should I do with my money? How do I avoid getting laid off? Ruth la Ferla at the New York Times says “These days, [psychics] are besieged with questions about whether a pink slip is in the cards, whether a condo will sell, or whether a company will continue to prosper.”

    If you’re interested in receiving assistance on money matters, but don’t want your advice to come from a pack of tarot cards, consider hiring a financial planner. Here are the top 3 questions to ask a financial planner, from the Certified Financial Planner Board of Standards:

    1. What Experience Do You Have?
    Find out how long the planner has been in practice and the number and types of companies with which she has been associated. Ask the planner to briefly describe her work experience and how it relates to her current practice. Choose a financial planner who has experience counseling individuals on their financial needs.

    2. What are Your Qualifications?
    The term “financial planner” is used by many financial professionals. Ask the planner what qualifies her to offer financial planning advice and whether she is recognized as a CERTIFIED FINANCIAL PLANNERâ„¢ professional or CFPR practitioner, a Certified Public Accountant-Personal Financial Specialist (CPA-PFS), or a Chartered Financial Consultant (ChFC). Look for a planner who has proven experience in financial planning topics such as insurance, tax planning, investments, estate planning or retirement planning. Determine what steps the planner takes to stay current with changes and developments in the financial planning field. If the planner holds a financial planning designation or certification, check on her background with CFP Board or other relevant professional organizations.

    3. What Services Do You Offer?
     The services a financial planner offers depend on a number of factors including credentials, licenses and areas of expertise. Generally, financial planners cannot sell insurance or securities products such as mutual funds or stocks without the proper licenses, or give investment advice unless registered with state or Federal authorities. Some planners offer financial planning advice on a range of topics but do not sell financial products. Others may provide advice only in specific areas such as estate planning or on tax matters.

    Check out the rest of the CFP’s “10 Questions to Ask When Choosing a Financial Planner” list here.

    “In Troubling Economic Times, Consumers Flock to Online Psychics” [WIRED]
    “Love, Jobs and 401(k)s” [The New York Times]

    Posted in Economy, Financial Planner | Comments »

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    WISER is a nonprofit organization that works to help women, educators and policymakers understand the important issues surrounding women's retirement income. WISER creates a variety of consumer publications including fact sheets, booklets and a quarterly newsletter that explain in easy-to-understand language the complex issues surrounding Social Security, divorce, pay equity, pensions, savings and investments, banking, home-ownership, long-term care and disability insurance.

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