The First Financial Steps for
While a new baby is a joyous addition, children also bring added financial responsibilities for new parents. The Pennsylvania Institute of Certified Public Accountants (PICPA) offers this advice on making the right financial choices:
- Create a budget: Take the time to consider how the new addition will affect your family’s monthly finances. As soon as you learn you’re expecting a baby, begin putting together a regular monthly budget so you’re prepared for changes in your financial situation.
- Make a will: If you don’t already have one, now is the time to write a will that spells out who will receive your money and other assets if you die. In the document, name the guardian who will care for your child if you die before he or she is 18. This is also a good time to analyze your disability and life insurance needs.
- Plan for the future: Preparing for the long term means saving both for retirement and your child’s college education. When you create your budget, be sure to include regular deposits into retirement accounts and college funds. If you have to make a choice between the two, CPAs advise that you put your retirement savings first. If you don’t have the money to cover tuition when your child reaches college age, there are options such as scholarships and relatively inexpensive loan programs to help.
- Get out of debt: If you are already carrying heavy credit card balances or other debt, analyze your budget to see if you can raise your monthly payments. Remember, you’re not just paying for past purchases, you’re also paying interest on your outstanding debt each month.
- Don’t go broke: There are many necessary expenses associated with a new baby, but don’t fall into the trap of spending more than you can afford. Many people mistakenly believe that a happy childhood requires elaborate toys, birthday gifts, and room decorations. In fact, the best choice you can make for your child is to spend wisely and keep your family on a sound financial footing.
Source: The Pennsylvania Institute of Certified Public Accountants (PICPA).
Re-Evaluating the Grinch: Should You Really Be Shopping?
Consumers are heading into the big holiday shopping season with unemployment at high levels and personal savings at all-time lows.
Considering the volatility of the economy, consumers would be well-served to take a hard look at their personal financial situation and evaluate how to best approach the holiday season, warns the National Foundation for Credit Counseling (NFCC).
The NFCC suggests that consumers take a Holiday Spending Quiz to assess their current financial stability before they begin shopping. To take the quiz, answer true or false to the following statements:
- There are arguments in my home about money.
- I sometimes hide my purchases.
- I have thought about filing for bankruptcy.
- I struggle to make my mortgage payment.
- I sometimes pay my bills late.
- I have used more than 30% of my available credit lines.
- My debt interferes with my sleep, job or home life.
- I have little or no savings.
- I am receiving collection calls or notices.
- If I lost my job, it would mean an immediate financial crisis in my life.
The harsh reality is that consumers who answer “True” to two or more of the above are not candidates for a holiday shopping spree. Ignoring the reality of their financial situation will almost certainly lead to further financial distress down the road.
If you’re wondering how to deal with holiday spending on a limited budget, you can go on-line to www.DebtAdvice.org for more help.
Source: The National Foundation for Credit Counseling (NFCC).
Personal Finances On-Line: NAPFA Webinar Series
The National Association of Personal Financial Advisors (NAPFA) has started a Consumer Webinar Series that provides an opportunity for anyone to learn about a wide range of financial issues from NAPFA-registered financial advisors. Consumers can attend the live session after registering for free, or listen to an audio file after the program.
The series includes monthly one-hour sessions delivered via the Internet. The individual sessions are conducted from 1:00 to 2:00 p.m. Eastern time and cover:
January 8, 2010 Investments: Advanced
February 5, 2010 Managing Your 401(k)
March 5, 2010 Leaving a Legacy
April 2, 2010 Women and Money
May 6, 2010 Financial Planning and
Small Business Owners
June 4, 2010 Your Retirement
July 1, 2010 Financial Windfalls
You can learn more by visiting www.napfa.org/
“Cash for Whatever”: Rebate Programs Continue
Missed out on the “Cash for Clunkers” program for trading in your old car? The American Recovery and Reinvestment Act also included funds for a new national “Cash for Refrigerator Program,” designed to boost the appliance manufacturing industry and increase the nation’s energy efficiency. Unlike the “Cash for Clunkers” program, this new federal program is allowing each state to provide program details. The California Society of CPAs suggest the following strategies to help consumers with this new rebate program:
- Understand what the rebate program values are in your state, and when the rebates will be available. Many state energy commissions have Web sites that are publishing information on rebates.
- Understand the criteria for obtaining the rebate under your state’s program.
- Understand who will be administering the rebates. Partnering examples include utility companies, retailers, and manufacturers.
Source: California Society of CPAs.