Holiday Shopping on a Shoestring

November 20, 2014

6:30 pm - 8:00 pm

Virginia Beach Adult Learning Center
4160 Virginia Beach Blvd.
 


 
Holidays can be really stressful, especially when you are just trying to make ends meet.  This free workshop will help you with creative strategies for making the most of the season while still keeping control of your cash flow! 
  • Gift Giving
  • Decorating
  • Meals
  • Entertaining
  • Travel
  • Parties and Events
This workshop has everything you need to make this a season of peace!

RSVP to bankonvb@vbgov.com or call 757-385-3551

 

Drawings to Reward Savings

Get rewarded for saving using a new program to incentivize the positive steps Bank On participants are taking to grow their savings. 

 
Save Up offers daily drawings for savers.  The way it works is retailers offer prizes for the drawings.  Some are big prizes like a $2 Million drawing and others are smaller weekly prizes like a $100 gift card. 

Signing up is free.  You get points you can use to buy more chances to win prizes for every $1 you add to your savings.  You were saving anyway to help you reach your goals.  Save Up makes saving more fun.  Check it out at www.saveup.com 

January 2015 Bank On Classes


Do you know of someone looking for a free financial makeover?  Now is the time to register for September classes for Bank On Virginia Beach.  Bank On Virginia Beach helps you break free from living payday to payday and to take control of your financial future.  
 
You attend 10 once per month classes and meet monthly with a personal financial coach who will help you create your own personal financial plan. 
 
Choose from one of five available classes:
 
Pembroke Six
289 Independence Blvd., Room 431 1st Tuesday
12:00 p.m. - 1:00 p.m.
Starts January 6, 2015
Williams Farm Rec Center
5252 Learning Circe
Second Tuesday
6:30 p.m. - 8:00 p.m.
Starts January 13, 2015
Municipal Center
2449 Princess Anne Road, Building 14
2nd Floor Conference Room
Second Wednesday
12:00 p.m. - 1:00 p.m.
Starts January 14, 2015
Potter's House
1709 Pacific Avenue
Third Thursday
6:30 p.m. - 8:00 p.m.
Starts January 15, 2014
Joint Use Library - TCC Campus
1700 College Crescent, Building L
Fourth Wednesday
6:30 p.m. - 8:00 p.m.
Starts January 28, 2015
Start Your Financial Makeover!
 
To register call 757-385-3551 or visit our website at www.vbgov.com/bankon

Save the Date

Financial Planning Day is scheduled for October 18, 2014.  This is one of the most exciting events for Financial Empowerment.  Each year financial professionals volunteer their time with no strings attached to answer your personal questions about financial matters.  Meet with Certified Financial Planners, Credit Counselors, Retirement experts, Accountants, Career experts and more. 


Bank On will hold a graduation ceremony for those who complete requirements for Bank On and Mayor William D. Sessoms will recognize those who complete the Mayors Action Challenge.

Workshop: Creating Your Retirement Plan

In today’s economic climate, you know you can’t count on Social Security alone to have the retirement you want. After decades of hard work, you want financial independence and security to enjoy your future.

AARP Virginia and the City of Virginia Beach are working to help you plan with free, unbiased information so you can make smart financial decisions. Join us at a free workshop to learn about
increasing savings, reducing debt and planning for your future.
 
No products will be promoted. Free refreshments will be served.
 
The event is free and open to the public. Space is limited.

Pre-registration is requested.

Tuesday, August 26, 2014
7:00 pm - 8:30 pm
Meyera E. Oberndorf Central Library
4100 Virginia Beach Blvd., Virginia Beach, VA 23452





 
 

Jobs, Jobs, Jobs

Growing our income opportunities is an important component in securing our financial future.  Bank On Virginia Beach has received the following job notifications recently:

Education Program Manager: Urban League of Hampton Roads.  Details

Retail Services: Town Center Area new Wal-Mart hiring 300 employees for opening this fall.  Wal-Mart has a commitment to hire any qualified veteran who has been honorably discharged within the past 12 months.  Applications accepted online or at the temporary hiring center 4712 Princess Anne Rd., Virginia Beach, Monday - Friday 9 am - 2 pm.

Warehouse/Loaders/Unloaders:  Simos is hiring for immediate openings in Chesapeake and Williamsburg areas.  Apply at Virginia Employment Commission Job order #460109

Healthcare Career Fair:  August 5th Chesapeake Conference Center 9:00 am- 12:30 pm.  Seeking Bachelors Nurses, RNs, LPNs, Radiography Techs, Physical Therapy Assistants and more! For more information call James VanCleave 757-461-7537.

Job Readiness Training for Returning Citizens:   Virginia Employment Commission  8/12/14 and 8/19/14 9:00 am - 10:30 am.  Learn how to market yourself, do's and don'ts of completing an application, the benefits of volunteering and more.  For more information contact Cynthia Thompson, Facilitator 757-453-5181.

Career Coach:  Meyera E. Oberndorf Central Library.  Contact the information desk to schedule an appointment for individual session with a career coach.

Don't forget to check out the employment resources listed in your passport for growing income opportunity as well. 


Free Clothing Aug 2

Check out the free clothing distribution at Tidewater United Church of Christ at 2660 West Neck Rd. this Saturday from 10:00 am - 4:00 pm.  There is clothing of every size for children through adult. 

Free lunch and hourly couponing classes being offered at this event as well.


The church is located across from the new Kellam High School on West Neck Rd.  Everyone is welcome!

Financial Empowerment News

Get your newsletter today

Financial Empowerment Newsletter highlights resources available through the City of Virginia Beach to help consumers gain greater financial control and to strengthen their financial situation.   Get your copy today.

Reporting Abuse

When someone has gotten the better of you every instinct in you wants to see justice.  They have been unfair and wronged you, but who can stand up to the bad players in our financial lives? 

Financial Empowerment programs like Bank On Virginia Beach help you to know your options and to stay informed as resources become available to you. 

Just this week, the Consumer Financial Protections Bureau has issued a notice that they will accept complaints against  financial services like prepaid cards and additional non bank products such as credit repair services, pawn, title loans and payday lenders.  Historically these businesses operated under the rules of each state they do business in, but with the growth in this industry, CFPB is now taking forceful actions to protect consumers.  If you have done business with one of these providers and found them to be less than forthright in dealing with you, you now have a forum to submit a complaint and be heard.  To file a complaint visit: www.consumerfinance.com/complaint.

Other agencies hear different types of complaints.

Banks: Has your bank not done right by you?  FDIC would like to hear about it:  https://www2.fdic.gov/starsmail/index.asp.

Credit Unions: The Federal Reserve takes complaints on both Banks and Credit Unions: http://www.federalreserveconsumerhelp.gov/index.cfm

Scammers calling you?  If you have registered your phone number with Do Not Call Registry and are still receiving solicitation calls you can file a complaint with the Federal Trade Commission: https://www.ftccomplaintassistant.gov.

 Now you can engage a champion on the side of the consumer to help you resolve your beef with the financial bullies of the world.  Have you registered a complaint and had successful resolution?  Write and tell us about it.  bankonvb@vbgov.com

Bank On Graduation

 Bank On Graduation Ceremony

 
This is it!  You have made it!  10 months of financial conditioning and perseverance paid off for our Bank On graduates.  We encourage family and friends to join us as we recognize the achievements of these Bank On participants on July 19th at 11:00 am.
Location: Good Samaritan Episcopal Church 848 Baker Rd., Virginia Beach
Come an enjoy a festive celebration of achievements followed by light refreshments.  Mayor William Sessoms is expected to be in attendance to recognize Mayor's Action Challenge completions.   To RSVP: email bankonvb@vbgov.com.
 
See you there!

Adjustment Dials for your Spending Plan

Getting greater financial control may mean spending some time examining what elements in your plan can be adjusted to tighten down on spending leaks while giving you more money for the things that are really important. When going through your monthly budget, consider ways you can adjust to accelerate your way to your financial goals.

Dial #1:  Increase Income - Increasing income through overtime or a second job can be a way to get you over a hump.  It doesn't have to be a long term gig, but an extra boost to help you though a tight spot can be a real help.  You might even consider turning a hobby into an extra income source so that you can make some money doing the things you love to do.  For some, extra income is a necessity for maintaining self sufficiency.  In those cases it is important to consider your career path and whether you can grow your income longer term.

Dial #2: Mitigate Expenses - This means finding a way to fund your needs with minimal cash outlay.  For instance, can you swap babysitting services with a friend or neighbor to cut the cost of date night?  Perhaps you can find a way to get along with something less expensive until you are able to save a little more.  If you were planning on a movie, can you find less expensive alternatives to the theater?  Lessening these expenses allows you more money to fund the other categories of your spending plan. 

Dial #3: Cut Other Expenses - You may find that cutting back on other categories of your spending plan may be necessary to make ends meet or to fund your emergency savings.  Use the Financial Decision Tree to determine what categories are most controllable.  For instance, in my housing category of my spending plan are there some things that I can control in the short term?  Perhaps I can minimize utility usage or cut the cost of telephones.  Discretionary expenses like eating out, entertainment, savings, or clothing might be more easily controlled in the short term, but if you have to eliminate an expense to get you over a hump, remember to make a plan to add some living back into your budget as soon as you overcome the crisis.

Dial #4: Tap Savings - Savings is there for when something unexpected throws you off track so don't feel bad if you have to use some of your emergency fund, but always make a plan to restore that fund as soon as you can, because you don't know how much time you have until the next emergency.  Savings is part of your longer term financial security blanket, so always consider shorter term adjustments before moving to reduction of savings.

Dial #5: Sell Assets - Do you have something hanging around not being used or some heirloom you can part with can help generate a little extra cash to tide you over?  Selling assets may be a means to helping you through a tight spot.  This time of year is great for yard sales and clearing out the precious treasures you no longer use.

Dial #6: Debt - While not a long term solution, sometimes using a credit card for an emergency and then making a plan to pay it off can help you address your current needs.  It is important that in using debt that you don't create a long term problem for yourself that you can't easily address.  Too often people find themselves in financial stress because of their debt, so use debt sparingly and repay as quickly as possible. Another solution related to debt might be to use an asset that has equity such as a home or a car to restructure the regular debt payments for the household so that monthly expenses are more manageable.  This will likely lengthen the term of your debt, but stretch out the payments enought that you can breathe a little easier. 

How have you gotten through a crunch?  Write to us at bankonvb@vbgov.com and tell us!

When is an Emergency NOT and Emergency?

All of us have unexpected expenses.  Truth be told, we all probably have unexpected expenses each month in one form or another that we didn't count on.  The price of gas goes up, personal property taxes are higher than we planned, the cost of a purchase that didn't include the additional shipping and taxes all little expenses that when unplanned can throw us off.

But since we know the unexpected is coming does it constitute an emergency necessitating the use of our precious emergency savings?  You may be saying that is what emergency savings is for; but if every time we have a blip in our spending plan we need to deplete our savings we will never be able to maintain that cushion for the true emergency that may be future. 

Emergency savings should be like insurance.  You have  to have it, but you hope you never have to use it.  Emergency savings is used when we have no other alternative barring debt to overcome the expense.  For smaller little unbudgeted items, we should first look to adjust our lifestyle spending.  In a true emergency, you fund just the basics.  Extra's like entertainment,clothing, even needed items that can be deferred for a while are.  If you have attended a Bank On Virginia Beach class you know about your 4 walls that need to remain in place: housing, transportation, food and clothing.  All else is put off until you get through the crisis. 

Here is a strategy you can use: 
  1. Quick Cash: when unexpected expense arrives, sit down as a family team and discuss ways that you can either quickly raise some money or cut back on expenses for the month to cover this additional cost.  By getting the entire family involved, everyone is on the same team and the forfeiture of a pleasure along the way is something that each team member willingly offers for the benefit of the larger picture. 
  2. Evaluate the expense:  is this something that will recur in the future?  Does your spending plan need to adjust?  What will flex to accomodate the additional expense? Can you plan now to keep it from happening again?
  3. Celebrate:  when the added expense has been addressed and the monthly bills are paid, celebrate as a family that you were able to come together and meet the challenge.  Working as a team paid off and hopefully, your family is all the stronger for meeting the challenge together.

Do you have a strategy for overcoming surprise expenses?  Write to us and tell us about it at bankonvb@vbgov.com.

Brushing up on Computer Skills


Are you looking to get a new job, but need to improve your computer skills?  Opportunity Inc. offers a number of classes each month to help you build your resume.  Check them out by reviewing the calendar of classes at www.opp-inc.org
 
Computer Basics

·   Getting Started– learn about hardware, software, how to use the mouse, and much more!

·   MS WORD 101- learn to “launch” the program and navigate the MS Word window.

·   MS Word 102 - learn to copy and paste a resume to a Flash Drive then format a resume.  You MUST have attended MS Word 101 to attend this workshop. By using the web based GCF Learn Free, www.gcflearnfree.org website you will find tutorials and FREE classes for MS Word, Excel and Access.

 ·   MS Excel Getting Started – learn MS Excel basics and what spreadsheets can do for you.

·   MS Excel101- learn to “launch” the program and navigate the MS Excel window.

·   MS Excel 102 - learn to create basic spreadsheets then format to create a finished product.. 

·   You MUST have attended MS Excel 101 to attend this workshop. By using the web based GCF Learn Free, www.gcflearnfree.org website you will find tutorials and FREE classes for MS Word, Excel and Access.

Why You Need $300 Emergency Fund

Joseph lives paycheck to paycheck.  His job at the supermarket barely pays enough to keep a roof over his head.  When our Bank On classes mentioned the need for emergency savings, he was the first to raise his hand and challenge the idea since there is virtually no money TO save.  Having a big emergency fund is great, and can protect you in the event of a job loss or some larger emergency, but the average emergency is in the area of $300 - $500.  That is just enough to make ends not meet for the month. 

Without an emergency fund, when Joseph encounters an unexpected expense like a flat tire or a doctors visit, he will have to use other sources to fund that need. Alternatives to the emergency fund might include:

  1. Credit Cards:  Many people use credit cards to fund the cost of unexpected expenses and make a plan to pay them off over time, but before they can get one emergency paid off, another happens.  The interest and the fees associated with the credit cards compound the cost of that unexpected expense. 
  2. Payday Advances:  Some employers have been known to offer their employees a payday advance.  That can help meet that immediate need, but when payday comes, there will still be the regular bills to pay and now not enough payday to pay those regular bills so the cycle continues.
  3. Payday Lenders:  For a small fee (about $15 - $20 per $100 borrowed) you can get a quick loan at the corner payday lender.  This like the payday advance will keep you in the cycle of debt as the loan comes due at the next payday cycle and that leaves little for you to meet your current needs.  Additionally, that annual percentage interest rate can be as much as 400% for that short loan you took out.  Where the lenders really make their money is when you renew your loan and pay another fee to extend your loan for a litte longer.  Both payday advances and payday loans do not report your payment to the credit bureau (except in circumstances of delinquency) so they don't help you build your credit.
  4. Family/Friend Borrowing:  With family and friends, while they may be willing to help you in a pinch, you will find that they are not as accomodating when you are not able to repay on time.  This can damage relationships and make Thanksgiving very tense.
  5. Charity:  There are charities to assist in a crisis, but the funds available from charity are minimal and they need to stretch their dollars over all the emergencies that come to their doors each month.  They may want to help you but not have the funds to give.
Our best defense is to give a priority to saving regularly.  If you can squeeze even a little into a savings account out of each payday and look to tax refunds and other windfalls to help boost that savings, you and Joseph can be in a better position when the next thing happens.  Things do happen to all of us don't they?

Adjusting Your W-4

Did you get a big tax refund?  Just a question.... do you still have some of it saved?  I love big refunds, but the problem is the money goes away so quickly.  One way you can make that money stretch all year long is to get a little each payday.  All you have to do is take a W-4 form to your Human Resources person and have them enter in the adjustment to your payroll. 

Which way do I adjust?
If you want MORE money each paycheck, you will want to INCREASE the number of exemptions on your W-4 form.  If you want LESS money in your paycheck (and more sent to taxes) DECREASE your exemptions. 

If you have multiple jobs or two spouses working, you may choose as few as ZERO exemptions to have more withheld from your paycheck to cover your tax bill.  If you got a refund and want more now throughout the year, you can raise your exemptions.  You can use the worksheet on the back of the form to help you get to the right number for you!

Payment Plans for Savings

Do you want to save more, but are having a hard time getting started?  Put yourself on a payment plan! Start by identifying what you are saving for.  Specify the amount and how long you are willing to wait for that item. 

Example: 
GOAL:  Emergency Savings of $300
TIME:  10 months
MONTHLY PAYMENT:  $30 each month or $15 each payday (300 / 10)


Are you saving for holiday
purchases?  Now is the time to get started if you haven't already. 

GOAL:  Holiday Spending (gifts, food, travel, decorations etc)  $500
TIME: 7 Months
MONTHLY PAYMENT: $71.43  (500 / 7)

Savings goals with timeframes allow you to break them down into attainable steps.  Try it for your goals!

Five Tips to Help You Pay Your Tax Bill

From IRS:

If you get a tax bill from the IRS, don’t ignore it. A delay may cost you more in the long run. The longer you wait the more interest and penalties you may have to pay. Here are five tips to help you avoid those extra charges:

1. Pay electronically.  Using an IRS electronic payment to pay your tax is quick, accurate and safe. You also get a record of your payment. Your options include:

  • IRS Direct Pay
  • Electronic Federal Tax Payment System
  • Credit or debit card

Direct Pay and EFTPS are free services. If you pay by credit or debit card, the company that processes your payment will charge a fee.

2. Pay monthly if you can’t pay in full.  If you can’t pay all at once, apply for a payment plan. Most people and some small businesses can apply using the IRS Online Payment Agreement Application on IRS.gov. You can also apply for a plan using Form 9465, Installment Agreement Request. The best way to get the form is from the IRS.gov website. You can also call the IRS at 800-TAX-FORM (800-829-3676) to get it by mail.

3. Check out a direct debit pay plan.  A direct debit pay plan is the lower-cost hassle-free way to pay. The set-up fee is less than other plans – $52 instead of $120. With this type of plan, you pay each month automatically from your bank account. There are no reminder notices from IRS, no missed payments and no checks to write and mail. For more on these rules see the Payment Plans, Installment Agreements page on IRS.gov.

4. Consider an Offer in Compromise.  An Offer in Compromise allows you to settle your tax debt with the IRS for less than the full amount. An OIC may be an option if you can't pay your tax in full. It may also apply if full payment will create a financial hardship. To see if you may qualify and what a reasonable offer might be, use the IRS Offer in Compromise Pre-Qualifier Tool.

5. Pay by check or money order.  Make your check or money order payable to the U.S. Treasury. Be sure to include:

  • Your name, address and daytime phone number
  • Your Social Security number or employer ID number if business tax
  • The tax period and related tax form, such as “2013 Form 1040”

Mail it to the address listed on your notice. Do not send cash in the mail.

Find out more about the IRS collection process on IRS.gov.

Test Your Credit Score Knowledge

Your credit score can affect many parts of your financial life. And while the large majority of consumers have basic knowledge about credit scores, there are a few knowledge gaps according to the Consumer Federation of America’s latest survey findings:
  • Only 42 percent know that a credit score measures the risk of not repaying a loan rather than factors such as knowledge of, or attitude to, consumer credit.
  • Only half of consumers (50%) understand the three instances when lenders who use generic credit scores are required to inform borrowers of the credit score used in the lending decision – after application for a mortgage loan, whenever an application for a consumer or mortgage loan is rejected, and whenever the best terms, including lowest interest rate available, are not offered on a consumer or mortgage loan.
To encourage more individuals to increase their credit score knowledge and complete the quiz at CreditScoreQuiz.org, Vantage Score and Consumer Federation of America (CFA) are offering those who complete the quiz the opportunity to enter a drawing for a $500 gift card. The 20 –question interactive quiz allows consumers to test their knowledge of credit scores and receive the correct responses with explanations. The quiz is available in both English and Spanish.

How Much Will You Need To Retire?

From Pension Benefit Guaranty Corporation.

The best time to start thinking about and saving for retirement is always right now.

While that's true for everyone, recently there's been a steady flow of stories about twenty and thirty-somethings to get them ready for life after work.

That's because the estimates for how much a 20-year-old needs to save go as high as $7 million.

For some, the enormity of the task has paralyzed them into inaction, while others view themselves as highly disciplined money managers - a trait discussed in a recent report by Time.

There are many in the financial planning community who advise starting a savings plan with at least 10 percent of your yearly income. But for a generation with competing financial concerns like rent, car payments, and student loans, it's too easy not to save now for a need that's decades away.

And for those over forty, with children to raise and older parents to care for, meeting saving goals can be just as challenging.

But no matter what your age, there are practical tools that can help define your retirement needs. For example, visit the Department of Labor's lifetime income calculator. For those of you with a 401(k)-type plan, the calculator will create an estimate of your monthly income based on your current account balance, and on the projected value of the account upon retirement age. Even for those without a 401(k), it is a good idea to start saving for retirement by putting money away each month into a savings account. The DOL calculator tool can give you a sense of how much you should put away so that you will have sufficient lifetime income after you retire.

Make Plans Now for Next Year’s Tax Return

From IRS Tax Tips:
Most people stop thinking about taxes after they file their tax return. But there’s no better time to start tax planning than right now. And it’s never too early to set up a smart recordkeeping system. Here are six IRS tips to help you start to plan for this year’s taxes:

1. Take action when life changes occur.  Some life events, like a change in marital status, the birth of a child or buying a home, can change the amount of taxes you owe. When such events occur during the year, you may need to change the amount of tax taken out of your pay. To do that, you must file a new Form W-4, Employee's Withholding Allowance Certificate, with your employer. Use the IRS Withholding Calculator on IRS.gov to help you fill out the form. If you receive advance payments of the premium tax credit it is important that you report changes in circumstances, such as changes in your income or family size, to your Health Insurance Marketplace.

2. Keep records safe.  Put your 2013 tax return and supporting records in a safe place. That way if you ever need to refer to your return, you’ll know where to find it. For example, you may need a copy of your return if you apply for a home loan or financial aid. You can also use it as a guide when you do next year's tax return.

3. Stay organized.  Make sure your family puts tax records in the same place during the year. This will avoid a search for misplaced records come tax time next year.

4. Shop for a tax preparer.  If you want to hire a tax preparer to help you with tax planning, start your search now. Choose a tax preparer wisely. You are responsible for the accuracy of your tax return no matter who prepares it. Find tips for choosing a preparer at IRS.gov.

5. Think about itemizing.  If you usually claim a standard deduction on your tax return, you may be able to lower your taxes if you itemize deductions instead. A donation to charity could mean some tax savings. See the instructions for Schedule A, Itemized Deductions, for a list of deductions.

6. Keep up with changes.  Subscribe to IRS Tax Tips to get emails about tax law changes, how to save money and much more. You can also get Tips on IRS.gov or IRS2Go, the IRS’s mobile app. The IRS issues tips each weekday in the tax filing season and three days a week in summer.

Remember, a little planning now can pay off big at tax time next year.

Pew Study Finds Half of Banks Still ‘Reorder’ Checks in Overdrafts.

From CBS News:

Nearly half of banks still "reorder" checking account transactions – a practice that can dramatically increase overdraft fees by processing larger withdrawals first, leaving smaller transactions to pile up the fees – one of a number of findings in a new survey by Pew Charitable Trusts. The survey of 44 major banks looked at their checking account practices, including their efforts to increase transparency and make banking more consumer-friendly. Of the 44 banks only one – Ally Bank – came out with a perfect score. The study also found that an increasing number of banks are imposing new limits on consumer rights when resolving disputes, and, while progress is being made with disclosures, one-third of big banks surveyed have yet to adopt summary disclosure graphics that cut through confusing checking account agreements, which average 44 pages in length, to highlight the key terms.

Are Prepaid Cards a Good Solution?

Prepaid cards can be a solution for many people who don't need the hassle of opening accounts and the costs of big banks.  Prepaid cards don't allow your account to go negative, so there are built in safeguards against overdrafts and other fees.  Historically, prepaid cards had a fee schedule that could be costly depending on your usage.  Great news is that these fees are beginning to improve for consumers.

Prepaid cards may be a great way to manage your montly expenses, but may not be your best option for building savings that will keep you from crisis in the future.  As with any product, know the costs and the benefits before signing up!  Here is an article we thought you would like.
 Bankrate Study: Prepaid Card Fees Improving, But Still Vary Considerably. Bankrate surveyed 30 widely-held prepaid cards and found that while all charge fees, their fee structures vary greatly. The survey finds half of pre-paid cards available on the U.S. market either have no monthly fee or will waive it down, and that 10% have no activation fee if the card is purchased online or by phone.

Big banks and financial services companies are introducing cards with one flat fee, rather than several ancillary charges, and allow for free bank branch and ATM access. Bankrate finds bill payment fees are not charged by any of the cards it surveyed, which is down from last year’s 8% that did charge fees.

Inactivity fees are charged by only 17% of the cards surveyed, down from 29% last year. More than three in four (77%) do not charge for declined transactions under any circumstances, while 10% charge either $1 or $2 for transactions declined at an ATM.

Paying for College

Every Bank On participant knows that education = opportunity.  As you increase your knowledge and skills, you have more flexibility in your employment options and greater access to higher salaries.  While we all want to gain access to higher income, we also need to be smart about how we pay for that education. 

In the Commonwealth of Virginia, the average cost for a state-run University degree over the course of 4 years is right around $44,000.  That is a heap of dough to dish out for tuition, books, fees etc.  If you finance the cost of this education using a Stafford loan, you are likely paying 6.8% interest (with interest rates expected to rise in 2014).  You can expect to repay $506 monthly over 10 years to finance that education and pay approximately $17,000 in interest!  That is an equalivalent of reducing your annual salary by $1,676 per year just to pay the interest or $6,076 to make payments annually!

The picture gets much worse if I roll in the housing expenses to the total cost of education.  You would have to increase your salary over $10,000 annually to pay for the costs. 

Finance  Borrowed Amount   Payment   Total Payments   Total Interest  Ann. Salary Equivalent for Interest 
4 Yr University  $             44,000  $              506  $        60,763  $        16,763  $           (1,676)
2 yrs Comm College then 2 yr University  $             30,000  $              345  $        41,429  $        11,429  $           (1,143)
Rolling in Housing Expenses  $           100,000  $          1,151  $     139,097  $        38,097  $           (3,809)

Paying for college doesn't need to be this painful.  With some wise planning, you can make college or other higher education pay off.  Too many students are sold on the need for education without having a solid plan for the costs.  To help you build your career without all the debt, consider some of these strategies:

1. Qualify for Grants and Scholarships:  Grants allow you to reduce the cost of education.  Grants do not need to be repaid and can be a great resource.  Check out the Education Opportunity Center to meet with a counselor who can get you started.  EOC will help you complete your FASFA application and has career counselors who can match you up with an education plan that is in demand assuring your employment after graduation.  You can reach the EOC at 757-683-2312.

2.  Living at home:  As long as your parents will allow, live at home and save the cost of room and board at the university.  As you can see, financing these costs can more than double the cost of your degree.

3.  Work as you go:  Paying for education as you are working can reduce the amount you need to borrow.  Having employment allows you to gain experience, thus building your resume demonstrating you have what it takes to be a long term employee after you graduate.

4.  Career laddering:  Consider layering certifications, diplomas and degrees.  For instance, if you are interested in a career in the medical field, consider getting certification in pharmacy or emergency medical technician allowing you to work in your field.  As you pursue your education, look for ways to layer certificates and 2 year degrees to allow you to grow your income even as you are working toward a 4 year, Masters or even Doctorate degree. 

5. Virginia Individual Development Accounts:  IDA's pay you $2 for ever $1 you save.  Over the course of 2 years, you can save up to $2,000 and get a $4,000 match to help you reduce the cost of education.  Consider if you can use VIDA along with grants, and some work as you go, you could get through your 4 years of education with very little debt at all.

We are always looking for ideas on ways to acheive education goals.  Do you have a strategy that works for you?  Write us and tell us about it.  bankonvb@vbgov.com

Tax season is over. Now what?

With our tax return supplying a nice refund we were finally able to pay off our truck loan.  Now what?  My first thought is that summer is around the corner and the kids and I could use a new wardrobe.  Then it hits me, this is the same thinking that filled my closet with clothes and emptied my savings account.  This bad habit it trying to re-enter my life!  Habits are hard to break so I must protect my thoughts to change my behavior.  Instead of going on a shopping spree I am increasing my savings contributions.  Rather that shop I will clean out my closet and sell the items I don't wear; then I will use the money I make to buy summer clothes at the thrift store for my kids and I.  I may even splurge on a new blouse, when the kids aren't around. 

How Many Hours Do You Work?

You work hard for your money!  Our paycheck funds our life, but have you ever considered how long you have to work for the things you use each month?  Our Bank On Virginia Beach investigator has created a chart we can use to give us a sense for how long we need to work for our things.

We all know that if your hourly wage is less, you take less home.  But if your hourly wage is less, you also have to invest more labor to purchase the things you enjoy.  For instance, if you buy a 20 gallon tank of gas for your car, you would have to work 10.9 hours for that tank if you earn $8.00 an hour before tax, but if you earn $18.00 per hour, you would only have to work 4.9 hours for the same tank of gas.

Would you be willing to work 1/2 hour for a cup of premium coffee?  People do it every day.  Likewise would you be willing to work almost 1/2 a week to have coffee every day?  People do it all the time.  When we take time to consider how long we have to work to earn the things we enjoy, our choices take on new life.

Note: Assumes 20% tax rate for federal and state taxes.
 
 
 
 
 
HOURS WORKED
Before Tax Hourly Pay
$5 Cup of Coffee
Coffee for a Month
20 Gallons of Gas at $3.50
$350 Car Payment
$1200 Tuition
$10,000 Loan at 7% Interest
$8.00
            0.8
            23.4
                   10.9
          54.7
        187.5
                1,856.3
$12.00
           0.5
          15.6
                   7.3
         36.5
       125.0
              1,237.5
$18.00
          0.3
          10.4
                   4.9
        24.3
        83.3
                  825.0
$25.00
           0.3
            7.5
                  3.5
         17.5
         60.0
                   594.0