Money Talks Blog by Oxford Planning Group

At Oxford Planning Group we hope you will be amazed by a unique experience. In our two blogs we will include periodic information and viewpoints that we hope you will find interesting. Seasoned Savers is geared towards financially experienced individuals. OPG Basics is aimed towards younger generations just starting out.

We welcome your thoughts and ideas, if you'd like to learn more about any specific area, send us an email at kirsten@oxfordplanning.com

COVID-19 and Your Community

Social Distancing

               This is the big buzz word on social media right now. While there are many jokes and memes out about this, it isn’t a joke. This is a very important concept right now that could help us slow down the spread of the virus. The fact is that this virus can have very serious consequences. From what we have seen from other countries, it will most likely only continue to get worse here. Even if you aren’t that worried about getting it yourself, you need to be following the CDC and state guidelines to protect those around you. While a night out with friends sounds fun, the consequences of potentially passing on the virus to someone who is going home to family members that could be affected definitely isn’t something to take lightly. So, let’s all do our part and try to keep our community safe.

Work from home tips

               Many people are finding themselves newly working from home or working from home a lot more than they did before.  While this is such a great opportunity to be able to continue working while also practicing social distancing, it can be a little difficult to get into a good routine and keep yourself on track while at home.

Here are a couple of tips to help you stay productive during your new “normal” workday:

·         Start the morning by making a list of things to get done that day

·         Change out of your pajamas to get your brain into work mode

·         Get up and stretch for 5 minutes every hour

·         Keep a normal lunch hour

·         Create a clutter free space specific for you to do work

For those of you home with kids right now, my sincerest apologies.

On a more helpful note, I know many teachers are going on Facebook and posting what grades they teach if you need any help. I’ve also seen posts from schools telling parents not to overwork themselves trying to keep a perfect school schedule. This is a weird time so give yourself a break. If the kids just aren’t having it one day, do something creative instead or read a book together instead of working on that impossible math question that has just led to tears.

 

Health tips

The CDC has been updating their website daily with new information and reports on the Coronavirus.

                          https://www.cdc.gov/coronavirus/2019-ncov/index.html

Go to their website listed above for more in depth information on what to do during this time. 

Small Businesses

               With states starting to shut down restaurants, bars, and shops other than the necessities such as grocery stores, small businesses are struggling already. While some jobs are not as affected and can continue their day to day operations, these small businesses are not as fortunate and are having to close completely. No sales means no money coming in at all. People are struggling to figure out how to pay their employees and keep their businesses afloat.

·         Buy gift cards to your favorite places – for your self and consider them as gifts for others

·         See if any of them are doing take out

·         Businesses can sell beer and wine for delivery

·         Spread the word about your favorite local places!

One of my favorite local shops has a sign that means more in these times – it simply says commUNITY.

It really does take a village.  Save lives and stay inside. 

Continue reading
13 Hits

Coronavirus (COVID-19)

With all the news reports on coronavirus, specifically COVID-19, it's hard not to be concerned. There are new reports out daily that bring new fears about health and the markets. 

Health Concern

Coronaviruses are not new themselves. They are a large family of viruses common in many animals and rarely infect humans. However, this specific coronavirus has not been seen before. 

The CDC has stated that the new coronavirus (COVID-19) spreads from close person-to-person contact through respiratory droplets. Close contact counts as about 6 feet apart. A person may be able to pick the virus up from surfaces recently in contact with an infected person. People are thought to be most contagious when they are the sickest and showing symptoms; however, the virus may be able to be spread when someone is asymptomatic. The coronavirus is still considered an emerging virus and there is a lot to be learned about it. 

Right now, the concern to the U.S. general population is listed as low.  Keeping up with current news to stay informed on the virus is a good idea. While the coronavirus is not a high threat yet, flu season is still here. The best recommendations right now are to stay current on news and keep good hygiene practices. Avoid touching your eyes and face while out in public, wash your hands thoroughly, avoid close contact with anyone who is sick. If you haven't already gotten your yearly flu shot, it's a good time to get that as well. While it won't protect against this new virus, it can help you keep healthy from the current flu strains going around. 

Market Concern 

Watching the news on the coronavirus, we are seeing effects on daily volatility of markets as the markets try to predict the effect of GDP and corporate earnings. Going forward the virus’s effect on the market will likely depend on how far reaching the virus is. Further spread or a prolonged time period would likely rattle the markets.  We continue to hope for a slowdown of both the spread between people and the geographic spread.  

 

The CDC keeps their webpage on COVID-19 up to date with new information every day. For more information click on the link below. 

https://www.cdc.gov/coronavirus/2019-ncov/index.html

 

Continue reading
25 Hits

Talking about Money with Friends

 

 

Have you ever been in a situation where you wanted to talk to your friends about money, but you weren't sure how to bring it up? Money is a tricky subject with anyone - check out a couple of common scenarios below for some tips: 

Splitting the Bill

If you've ever gone out and purposely ordered something cheap only to have someone suggest you split the bill, you know how frustrating this can be. If someone asks you to go out to grab a bite with them and you know they like to split the bill there are a couple of options. Be up front about it by saying you would love to go but are on a tight budget 

The Friend Who Over Spends and Complains About Not Having Enough Money

This is a tricky one. It's only natural to be concerned about a good friend if you see them overspending and worrying about money. However, personal finance is exactly that, very personal. In my opinion, unless they directly ask for your advice or you are extremely close with the person, you should probably keep your advice to yourself. Even with these two situations it's important to not overstep. If someone asks for your opinion on a small issue, give them advice on that topic and maybe anything directly related. This is not the time for a full-blown finance lesson or for you to bring up other issues you have noticed.

As for bringing up something with a close friend, if you truly feel like you have a close enough relationship, then you could try to start up a conversation. Try to do it in a positive way. Instead of saying "It seems like you are spending too much money and you need to stop" try phrasing it like "I've noticed you've been worried about money lately, maybe we could sit down and work on a budget worksheet because that has really helped me stay on top of things lately".  Even if you think that you have a close enough relationship, some people just don't want to hear about it or talk about money problems with friends. If you bring up something and your friend seems upset or uninterested, just take a step back, apologize for overstepping and don't keep bringing it up. 

Money Loans 

If a friend asks you for a loan, take a minute before you say yes. If you say yes, you need to be ready for the fact that they might not repay you. A very smart woman once told me if you loan money to family or friends, it’s best to consider it a gift. If they wind up repaying it, great! And if they don't, then it won't be an issue. The reason for this is that it can really ruin a relationship when money is loaned and expectation for repayment are not met. You should also be prepared for what your friend then uses their money for afterwards. If you loaned them money and agreed to consider it a gift in your mind, then see them going on a fancy trip a little while later, that will probably not feel good and can cause strain between people. If you have the money and want to help, then just think about these issues before hand. If you don't have the money, then let them know that. It can be hard to say no but you don't want to put yourself in a bad spot because you wanted to help someone who may or may not pay you back. 

Share your own thoughts on money with friends.  Who knows?  You may make it easier on them to start a conversation. 

 

 

Continue reading
0 Hits

New Year's Resolutions

Who is excited for the New Year? For me, it feels like this is the first year that I will really be marking my year in January. I graduated last December but with the whirlwind of everything going on, I was still in the mindset that my year began in August with the start of a new school year. With that in mind, I decided I wanted to set up some goals for myself for 2020.  

Many think that New Year's Resolutions are overrated, and I tend to agree. I don't want to make any extravagant goals.  The beginning of a new year can have so much going on, it can be hard to keep up with a strict goal such as making it to the gym every day of the week or eating perfectly healthy.  

Simple Goals

Instead of making one really big, really hard to achieve goal, I want to make a few simple goals to work on throughout the year.  

Goal 1Improve my cooking. I want to take a cooking class at some point during the year. Maybe with some friends as a fun activity to do together. For this goal, I also want to try making one or two new recipes a month depending on time.  

Goal 2: Start a travel fund. Over the next year, I want to determine a reasonable amount that I can put aside every month into a travel fund. I'm going to leave it generic at first and set a goal I would like to reach.  

Goal 3: Make time for friends while balancing time for myself. As this year is coming to a close, I've gotten to see friends and family and been able to do a lot of cool things. However, I lost a little bit of balance. I reserved a lot more time for other people and then the only time I had for myself was taken over by studying. In the new year, I hope to set aside some time every week that won't be for chores or studying. It will just be for me to relax, maybe do some yoga, and enjoy time by myself.  

My plan is to get a journal just for my goal progress and once a week I will sit down and write down any ways I worked on one of my goals.  

What are your goals for the new year? Whether they are financial, family, or health related, give yourself some credit for the things you are already doing well and make the best of the new year.  

Happy holidays from all us here at Oxford Planning Group! 

 

Continue reading
80 Hits

Black Friday Budget Killers

 

The holidays are a great time of year. They can also be an expensive time of year. Some stores advertise their Black Friday sales for weeks before Thanksgiving. Consumers are constantly seeing signs stating "best sale of the year" or "one time chance". The goal of these slogans is to make consumers feel like they have to take advantage of the sale or they are wasting money. The truth is if you are on a budget, Black Friday sales can seem like such a great way to save money, when in reality they cause a lot of people to overspend.

If you want to take advantage of Black Friday, think about a couple of things first.

Planning Ahead

Know that you need to replace or buy something specific this year? If it's not urgent, it's a great idea to plan ahead and save up money for that item and see what kind of discount you can get around the holidays or right after. With Black Friday right around the corner, this probably isn't an option if you are just now thinking about it. However, it's a good idea to look at the deals going on to get an idea for next year!

Do you need it or want it?

Would you want or need this item at its full price? A great deal can sometimes make people think they need an item, but if the item was still full priced, they wouldn't even look at it. For example, say you see a brand-new coffee maker with different settings that can make tons of drinks and it's $100 off. This item is still probably pretty expensive, and you could get a much cheaper and less fancy coffee maker if you really do need one.

Can you afford it?

I won't lie, there are some pretty tempting sales that go on this time of year. If you haven’t done my first suggestion (planned ahead) but see something that you really want or really need, ask yourself if you can really afford it right now even with the discount. If you are going to have to put it on a credit card and can't pay off the amount in full before the due date, you could wind up paying the full price of the item anyway.  This is due to the fact that credit card interest rates are very high and not paying off your balance in full each month leads to a lot of money paid in interest.

Compromise

If you find something you really love, see if there is any wiggle room you can give yourself. Look at your budget and see if you take some money out of your savings to buy the item now but can lower one area of your budget the next month or two to replenish those savings. It could be something simple like committing to not eating out at all for the next month and putting the money saved into savings or something bigger such as changing a weeklong trip to a long weekend.

Enjoy the holidays but remember that “deals” are only worth it if you don’t overspend and regret it  later!

Continue reading
75 Hits

Choosing an Apartment

Whether this will be your first time looking at an apartment for yourself or you've already been living on your own for a bit, choosing a new apartment can be time consuming and confusing, but also exciting! 

 

How Much Should You Pay for Rent? 

Money no object, everyone has their dream ideal of an apartment. Depending on the area that you are looking to live in, maybe you can get most of those features or maybe it's a little out of your price range. 

  • Rule of Thumb: Your housing costs should not be more than 30% of your gross monthly income. 

So, let's say your take home pay per month (before taxes) is $4,000. Following this rule would mean you should not be spending more than $1,200 a month on rent and utilities. 

 

Location  

Location is obviously a huge factor when looking at an apartment. Do you want your place to be close to work for a short commute or near a downtown area, so you have easy access to restaurants and places to go on a night out? If the answer is yes, but the apartments in these areas for you are expensive, you might have to change your game plan. If the location is really important to you but the rent would mean going over that 30% mark, consider getting a roommate or two to split the costs. If location is more of a want, start looking at apartments slightly farther away to see if the prices are better. 

Other things to consider for location: 

  • Proximity to a grocery store: if you want to cook at home a lot, but the nearest full-size grocery store is 30 mins away, is that going to work for you? 
  • Surrounding area: love running outside? Maybe consider somewhere with a park close by or communities to run through instead of an urban area 
  • Libraries: public libraries are a great resource to have around, they host programs for kids and adults, and a lot are starting to add new tech to their facilities including apps that allow you to download books to your phone (so check that out if there isn't one close to you) 
  • Noise: being a light sleeper and living in the heart of a city are typically not the best mix. When looking for a place, take time to consider the noise level and look at the surrounding area 

Wants Vs. Needs 

Before looking at an apartment, make a list of things that are must haves for an apartment and things that are just wants. Here are some common wants people look for: 

  • In-unit washer and dryer (instead of a separate laundry area in a basement) This could be considered a need as far as security 
  • Central air and heating 
  • Fitness center: it could save you money to look for a place with a gym for residents to use instead of paying a gym membership 
  •  Carpet vs. Hard wood/ faux hard wood 
  • Smoke free apartment 
  • Bathtub vs. Standing shower only (for if you have kids or simply want to be able to use bath bombs) 

Extra Costs to Be Prepared For 

  • Utilities 
  • Parking costs 
  • Pet fees (usually an initial larger fee followed by monthly reoccurring lower fee – also take note of any fees for pet damages) 
  • Internet & Cable (consider a streaming subscription instead of a pricey cable package!) 
  • Application fee 
  • Security deposit 

Renter's Insurance 

This was already briefly mentioned in our previous post about insurance (How Much Insurance Do You Need?) Check it out if you haven't already! Renter's insurance can be fairly inexpensive and straight forward. Make an inventory of your stuff and choose how much coverage you want. A basic policy should cost around $10-20/ month. If you have a lot of very expensive items in your apartment, your insurance cost will be higher. Not a lot of renter's choose to get renter's insurance - which can be such a mistake. For less than the price of eating out once, you can cover yourself if something happens. I won't lie and pretend that I always considered it a necessity; however, a large portion of an apartment complex at my University was recently was affected by a huge fire. Could you afford to replace everything in your apartment if something like that happened? 

 

Enjoy the hunt! 

Continue reading
114 Hits

What Scares You?

 

 

Happy Halloween everyone! Hopefully you get to enjoy some candy and fun tonight. Today's post is about financial fears, how they can affect your day to day life, and simple ways to ease your worries about some of these challenges. First, check out this infographic from a recent survey on Wallet Hub by John S Kiernan:

2019 Halloween Spending & Financial Fears Survey

https://wallethub.com/blog/halloween-spending-survey/53821/

As the survey shows, money was the top category that scares people (even over politics, yikes). With the biggest financial fear being unplanned emergencies, followed by lack of retirement funds. As a recent college graduate, there are many financial issues that can be cause for distress. Sometimes it seems like there are so many factors to think about when it comes to my money, it can be a little overwhelming. So, let's address a couple of common "fears" for young adults just starting out.

Scarcity mindset

With a small paycheck coming in, sometimes it can seem like spending money on "non essentials" is always a waste of money. This is especially true if you have a lot of bills to pay, debt, and high price items you are trying to save for. However, it's okay to treat yourself sometimes and spend money on activities that keep you happy. You risk burn out creeping in if all you do is work and stress about money. Make time to do things you enjoy and treat yourself occasionally.

FOMO

Love doing stuff with your friends but not the price you pay to do it? This is kind of the opposite of the scarcity mindset. When you are young and see your friends doing all sorts of fun things and they invite you to do them as well, it can be hard to say no and miss out on the fun. If you are worried that you spend too much money with friends when hanging out, try suggesting options that don't cost much money. Hiking is an awesome option if you enjoy the outdoors, the weather is perfect for it right now. You could also try out a girl’s night where everyone brings wine and an appetizer. Those fun wine painting classes can be done easily (and cheaper) at home if you pick up a few supplies from the craft store.

Debt

Student loans keeping you up at night? Get all your loan information together and determine how much you need to be paying off each month. Research the best options for student loan repayment and work it into your budget.

Big Expenses

When you are just starting out, the idea of having enough money to buy a car or a house can seem insane.  Start by doing some research and figuring out how much you would need for your purchase. Then, set yourself a goal of how much to save and by when. Then, looking at your budget see how much you can reasonably set aside each month towards your goal. If you aren't able to set aside as much as you would like, the next time you get a raise, put the extra money from that towards your goal.

 

With any of these issues, including the first I mentioned, it all comes down to proper planning. Having a solid emergency fund to fall back on can ease a lot of worry. Starting to save for retirement at a young age (the younger the better) will encourage you to keep it up as you and your salary grow. Even if you can only put away a small amount each month, get into the habit of doing so. Review your savings plan when you get a raise or a new job and see if you can be putting any more away.

Fears go away when you face them head-on.  The best time to start tackling them is right now.  Happy Halloween!!

 

Continue reading
135 Hits

Choosing Health Insurance

 

Health insurance as a young adult is so important. As I mentioned in a previous post, keeping up your insurance when you are young and don't have a lot of money is one of the best things you can do for yourself. When you are on a tight budget, it can be hard to think about paying for multiple types of insurance each month. Realistically though, if you get into an accident and your car is totaled or you require a hospitalization, you will be so happy for that insurance.

Does your job provide health insurance? If so, it's typically cheaper to go with your company plan than it would be to search on the open marketplace. However, if you want to search for an alternative plan you can.

Open Enrollment Friday, November 1- Sunday December 15, 2019

Health Insurance Marketplace:

  • For those who do not have insurance through a job, Medicare, Medicaid or CHIP
  • If you have insurance through your job, plans through the marketplace will be full price unless your coverage at work does not meet certain standards

Insurance offered through an Employer:

  • Often cheaper because they are group plans
  • Choose between plans available through your employer

Individual Plans:

  • Plan is not tied to a job
  • Can choose the insurance company you want and choose a plan with the doctors and hospitals you prefer
  • Change plans during open enrollment on the open marketplace

Basic Health Insurance Terms to Know:

  • Copay: predetermined rate (flat dollar amount) you pay for health care services in addition to what is paid by the insurance company
  • Deductible: amount you must pay before an insurance company will pay a claim
  • Maximum Out of Pocket Cost:the maximum you have to pay for covered services during the year (note the word covered here)
  • Premium: Monthly amount paid for the insurance coverage
  • Coinsurance: percentage of the claim payment that the insured must pay

Health care is expensive. Many people avoid going to the doctors because of the cost of health care. However, this can lead to some conditions going undiagnosed and you risk getting really sick. Most insurance will cover preventative care at little or no cost to you. So even though you are young and healthy, take advantage! Keep up with yearly doctor's appointments and get your flu shot.

For more information regarding the Health Insurance Marketplace go to:

https://www.healthcare.gov/

Continue reading
146 Hits

Another Subscription Service?

Have you seen an ad for some type of subscription service today? Most likely the answer is yes. From streaming services to clothing companies, it seems like everyone has made a subscription service. A study by Forbes found that among the most popular subscription services in 2018 were Ipsy, Dollar Shave Club, and Amazon Subscribe & Save. While a couple dollars a month for a service seems fine, most of them add up to at least a $100 a year and having multiple subscriptions can mean hundreds of dollars spent over the year.

Do you really need it?

  • Think about the Latte Factor here (discussed in the "Worried About Your Latte?" post previously).
    • That small number builds up over the months and if you have multiple subscriptions, think about cutting down to save money throughout the year.
  • Subscription services know how to market their products these days. Their ads make it sound like such a great deal that you can save so much money with. But realistically, take a step back, and ask yourself "Do I really need or really want it?"
  • I've found myself logging onto some sites because I've seen an Ad that looked really cool. They show the product value as double what you pay, and everything looks so neat. Then I really think about it and I realize I wouldn’t use half the stuff in the box. It's the fun of receiving the package and looking at everything that draws me in, but I realize I'd rather save the money to buy myself one thing I really want later on instead of a bunch of random things I don't really need.

Too Good to Be True?

  • I see more and more monthly clothing boxes popping up. Some of them seem like such as good deal at first. You need to look at all of the small print though. Most automatically charge you for their service at the beginning of the month and a lot do not have an opt out option.
  • Ask yourself if you would really be spending that much money on clothes from their website each month. It might be worth it if they are clothes you really enjoy, and you won't be buying other clothes. However, you need to look at the quality of the clothing as well before signing up.

Not All Bad

  • This post isn't supposed to make you cut out every single subscription, it's simply to try to get you to look and see if you really need all of the ones that you currently pay for or are considering getting.
  • Cable packages can be pricey, $12 for a Netflix subscription per month would save you money compared to an entire cable package.
    • With so many streaming services popping up now though, try not to get hooked on too many because you'll just pay more and more each month.

Every couple of months, re-evaluate if you are still enjoying the service. Before getting another subscription see if it can replace an existing one to offset the cost. Overall, if you just stick with the subscriptions you really need or really want and they fit within your budget, go for it and enjoy.

For more facts about how much the "subscription economy" has grown check out this article by Forbes:

 

Continue reading
77 Hits

Fall Planning

It's officially fall! Doesn't quite feel like it yet, but we'll get there soon hopefully. With the holidays fast approaching, now is the perfect time for some fall cleaning and preparation.  Why should we save our big cleans for spring? Fall and winter are jam packed with holidays and events, so it's a perfect time to get organized. I recently read a book that inspired me to finally tackle cleaning out my closet. The book was about spending less and appreciating the clothes you already have by getting rid of what you don't wear. When I was done, it felt so nice to have everything organized and I could actually find the clothes I wanted to wear.

Here are a couple of suggestions for some fall cleaning for yourself:

  • Look back on your budgeting
    • How have you done with your budget and goals throughout the year?
    • Are there any goals that you haven't made a lot of progress towards?
    • Re-evaluate your goals and make adjustments.
    • Be kind to yourself and realize that life happens, so if you haven't gotten as far along with a goal as you wanted, figure out why and see if you can change anything to help yourself achieve it.
  • Clean out your closet as well!
    • As we go into a new season, take note of anything that has seen better days and may need to be replaced. This way, if you are shopping, you'll already know what you do and don’t need.
  • Looking towards the end of the year
    • Are there activities that you do every year or a certain one you just really want to try this year?
    • It's a great idea to look ahead at the next couple of months to see if there are big or small events that you should budget for.
  • Gift planning
    • Gifts can be a sore spot for budgets because unless you have an exact item in mind it's hard to know exactly what you want to spend.
    • Think about any upcoming birthdays, events, or holidays that you will need gifts for and set yourself and overall budget, then start figuring out what you want to spend on each person/gift.
  • Hosting
    • Are you planning on hosting family or friends for the holidays?
    • If you are on a tight budget, planning out your meal in advance will help you save money and stay on budget.
    • If you are hosting a night for friends, consider doing a pot luck where everyone brings a dish to save you time and money.

Have fun!

This time of year is packed full of fun activities and events so join in! Trying to stay on budget can make it stressful when you want to enjoy the season, so get all of your planning done early, leave some wiggle room for random things that come up, and enjoy time with family and friends.

Continue reading
137 Hits

How Much Insurance Do You Need?

Happy National Life Insurance Awareness Month! Hopefully I didn’t just lose everyone reading this. I know insurance of any sort is a hard topic when you're young and don't have a ton of money. However, insurance is even more important when you don't have a lot of extra cash. Trying to learn about all the types of insurance you may need and figuring out how much to get can sometimes be overwhelming. Take it one step at a time and start learning about your personal needs to see what will work best for you.

Types of Insurance:

Compulsory insurance (has a minimum requirement)

  • Health insurance
    • Minimum requirement set by the Affordable Care Act.
    • Various levels of health insurance to pick between.
    • While you may think being young and healthy means you need very little health insurance, there are many things out of your control that could cost you a lot should they happen.
    • Figure out what you want your out of pocket maximum to be to see how much insurance you feel comfortable paying for.
      • In a future post I will get more into how to pick what type is best for you.
  • Car insurance
    • State by state minimum requirements.
    • The minimums are often not enough coverage, so do your research to see how much you need.
    • The more coverage you have, the less likely it is a plaintiff will go after your other assets.
    • Generally, the more assets you have, the more car insurance you want.
  • Home owner's insurance
    • Insurance companies will often not fully cover the cost of damage to a house unless you have at least 80% of your home's value in coverage.

Other types of insurance to consider:

  • Life insurance
    • Do you have someone else depending on your income?
    • Life insurance is less expensive when you are young and healthy. 
    • If you wait and apply for life insurance later in life, you could be denied for many reasons.
    • Partially replaces your salary if you can’t work (this insurance is important for most of your working years for everything from accidents to long term illness).
      • Could you cover your expenses if you couldn't work for a while?
  • Renter's insurance
    • Covers your personal belongings from possible events listed in the policy
    • If there was a fire at your apartment could you afford to replace what was lost by yourself?
  • Travel insurance
    • Good idea for more expensive trips.
    • Some credit cards offer forms of complimentary travel insurance.
    • If a hurricane or illness ruins your vacation plans, would you be out a couple of thousand dollars?

An inexpensive way to get started outside of the insurance you buy yourself:

  • Insurance provided through an employer, either employer paid or employer offered.
    • Fees through group plans can be cheaper, but this insurance is often not portable if you change jobs so be aware.
  • Also, small amounts of insurance can sometimes be included with credit cards at no cost such as the travel insurance mentioned above. 
  • If affordable, pays to get some insurance while younger as rates are cheaper and your health is still good.

It's impossible to insure for every event in life

Insure your biggest risks first that would be most catastrophic to you. Regardless of what type and how much insurance you get, always make sure you know what is covered and what type of restrictions there are. Lastly, each year or if any big events happen (like having a baby or one partner deciding to start their own business) re-evaluate your insurance needs. As you grow and life changes, your insurance needs will change as well.  Oxford Planning reviews insurance as part of your overall financial planning.  Call us with questions – we’re here to help.

 

 

 

 

Continue reading
50 Hits

Worried About Your Latte?

Have you heard of the latte factor recently? The concept has been around for years and recently a book was released called The Latte Factor by David Bach, that has become pretty popular. If you google "finance latte" you'll get tons of different articles related to this idea. So, what's all this buzz about?

Why Coffee?

Latte’s have become the icon for saving money lately because it’s a common indulgence. Many of us are willing to the pay extra money to buy it in a coffee shop for either convenience or the simple pleasure of the routine. 

What's Your “Latte”?

As I said above, your daily cup of coffee isn’t under attack, a latte is simply an icon right now. The bigger message is to be mindful with your money during the week - and realize that small costs can add up to a lot of money if bought often.

Mindfulness

Are you into the minimalist or mindfulness movements? Every time I look at new books there are so many on these topics it’s overwhelming. However, mindfulness is what the base of the Latte Factor is all about!

  • Take a good hard look at your spending. Do you like online shopping for clothes? Maybe you use Uber Eats multiple times a week? Identify what you are spending your hard-earned money on and determine if it's really worth the cost.

Enjoyment versus Price

If that cup of Starbucks every morning is what makes you look forward to work and keeps you sane, then go for it! But first, try some cheaper options like making it at home with some fun ingredients. If it's not for you after a couple tries, then maybe consider only buying coffee twice a week as a special treat. Whatever works best for you and keeps you and your wallet happy.

Change Your Mindset

By being mindful about what you’re spending, you can evaluate what’s most important to you. A common phrase I hear is that people want to contribute money into the retirement plans offered by their workplace; but retirement seems so far away and they don't have extra money to put in.

  • By looking at your spending, maybe you can find an extra $50 a month that you would have spent on eating out to put into your 401(k) plan. It's great to get into the habit while you are young of putting money away every month for retirement even if it's a small amount at first.

 

So figure out what your latte is today and see what that money could add up to over a year, two years, or even more!

Continue reading
190 Hits

Reaching High for Your Goals

 

Let's talk about goals! Everyone has them, but how measurable are yours? In financial planning, a goal should have three parts: Purpose, Time, Amount (PTA). By having these three things, your goals will be measurable and realistic. For example, everyone I know wants to travel right now while we're young, but - it's hard to find the money.

Look at these two goals:

Goal 1: “I want to travel to other countries soon!”

Goal 2: “ I want to travel to England, Scotland, and Ireland in two years and I want to save $6,000 for it.”

 Which one of these goals seems better? Goal 2! It has the PTA all written out. By setting these ideas, you give yourself the purpose to work towards instead of a general idea, you give yourself a time frame to save during, and you have a total amount of money. It can be a little daunting to try to save a lot, so having a set goal that you can see yourself chipping away at is really rewarding.

Step 1: Making your goals!

Take an hour one day and sit down with no distractions. Grab some pen and paper and start writing out some goals that you have for your future. Start with some general ideas and work your way to more specific thought out goals.

 Here are some common goals for recent post-grads like me:

  • Emergency fund (4-6 months living expenses)
  • Travel Fund
  • Down payment for a house

 Step 2: Set your Time and Amount

 Look at your salary and mandatory expenses to see how much you can save every month towards your goals.

  • Save for your most important goals first! (Emergency fund should be at the top of your list)
  • Short term vs. Long term goals: Consider which goals you have less time to save for and determine how much you want to put towards each goal

 Don’t Forget About Retirement

  • While thinking about all your goals, don’t forget about setting aside money for your retirement accounts and FSA or HSA accounts for medical bills

 Staying on Track

  • Set up automatic savings withdrawals
  • Don't skimp on everything you want to do just to save more money but - do pause and take a moment to think about what things are worth the money and what you can pass on

Re-evaluating

  • Every couple of months sit down to take a look at your goals.
    • Are all of them still valid things you want?
    • Have you been able to stay on track without depriving yourself?
  • Salary increase? Take a look at what you can be saving more for!

It’s so easy to have fun and let that paycheck slip right out of your wallet without planning.  Get started today – you’ll be so glad you did!

Continue reading
120 Hits

Buying a New Car vs. a Used Car

Buying a car is a big decision. You want something reliable, spacious enough for your needs, and preferably in a style you will enjoy for years. A big part of this decision can be whether to buy a new car or a used car. As a young adult, there are so many things to be saving for. While a car is most likely a very necessary purchase, you don't want to spend extra money you didn't have to that could be saved for a home or travel fund. Let's look at some of the pros and cons for buying a new car or a used car.

Buying a New Car

Positives

  • No history: you don't have to worry about looking for accident histories or wear and tear
  • Latest technology: each year’s cars are coming out with new technology to make you safer and make your drive more enjoyable
  • Newer cars can be more fuel efficient
  • Can pick and choose what features or color you want 

Negatives

  • Depreciation: a car’s value depreciates the most in the first 3 years
  • Higher auto insurance cost for higher cost vehicle
  • Tech makes repairs more expensive
  • Must be bought through a dealer: if few dealers around, ability to negotiate price goes down
  • Sales tax: taxed on entire price you pay: meaning a more expensive car will cost more in taxes

 

Buying a Used Car

Positives

  • Less expensive: the upfront cost, auto insurance, taxes, and interest can all be less
  • No big depreciation hit: new cars lose value the moment you drive it off the lot
  • Easy to explore a car’s history with the use of companies that give out history reports
    • Title history, record of maintenance, number of owners, collision and repair info
  • Reliability record: used car rankings and reviews can help determine which cars will requite less maintenance, hold value best, and save you money overall

Negatives

  • History reports are thorough, but they are not perfect
  • Used cars sold as is: can't return if it has unexpected problems
  • Limited or no warranty coverage
  • Can't be as picky: may have to compromise on a few things such as color or mileage

 

Check out this video from Bank of America that breaks down the cost comparison even further:

https://bettermoneyhabits.bankofamerica.com/en/auto/buy-new-used-car

 

Certified Pre-Owned Vehicles

  • Blend some of the advantages of new and used cars
  • Gently used, usually only a few years old, low mileage, and no major accidents
  • Closely inspected
  • Typically, leased returns or vehicles driven by employees of the dealership
  • Can get special low interest financing deals on CPO cars

Reminder: Keep your credit score high!

  • Your credit score can affect
    • Your ability to get a car loan
    • The interest rate given to you

Regardless of whether you get a used or new car:

  • Make sure your credit score is high
  • Have a down payment ready to decrease the loan amount you need
  • Do your research to figure out what you really need in a car and what you can go without

 

Safe travels - whichever you choose!

Continue reading
90 Hits

Freezing Your Credit

With the Equifax hack settlement promises coming out and the recent Capital One hack, many people are wondering how safe their credit is. Even if your credit hasn't already been leaked, it may be a good idea to freeze your credit as a preventative measure. Fortunately, after the Equifax incident, a federal law was passed to make freezing your credit free.

Why Should You Freeze Your Credit?

It seems like credit breaches are becoming more and more common and each time millions of people can be affected. Freezing your credit protects you by making sure no one can open credit in your name. It does not hurt your credit score, it simply blocks new applications.

When Should You Not Freeze Your Credit?

If you are trying to open a new credit card or thinking about applying for a loan soon.

  • Fortunately, federal law states that if a request for a temporary or permanent unfreezing of your credit is made online or by phone it must be unfrozen within one hour. So, if you freeze it and then want to apply for credit later, it should be quick to undo.

 Things to Keep in Mind

  • To freeze your credit, you need to contact each of the three credit bureaus (follow the link below to the FTC website).
  • Parents can freeze credit for kids under 16.
  • Freezing your credit only stops someone from opening a new account in your name, current account information is still susceptible to fraud so keep an eye on currently open credit accounts.

More experts are recommending freezing your credit to give yourself a better chance at protection from fraud.  Weigh the options of convenience versus security and decide for yourself.

 

Resources:

https://www.consumer.ftc.gov/articles/0497-credit-freeze-faqs

 

Continue reading
98 Hits

Focusing on Your Tomorrows

What does financial planning mean to you?

When you hear the term "financial planning", what do you think of? I don't think most people often associate the term with young people. That's a big problem though because early financial planning can have lifelong benefits. Financial planning goals can vary depending on your age. Look below to see a list of some common goals for young adults.      

  • Paying off Debt
    • Student Loans
    • Credit Cards
    • Car Loan
  • Emergency Protection
    • Emergency Savings
    • Disability Insurance
  • Future Savings
    • Retirement
    • Big Purchases (Home)

Paying off Debt

  • Take a look at any debt you have and determine how much you can afford to pay off each month and give yourself a target date to have it paid off by.
  • Keep credit card debt as low as possible, ideally pay off your entire balance on time every month.

Emergency Protection

  • Start building up some emergency funds for when your car breaks down or you drop your phone in the toilet (it happens!).
  • Disability insurance - not a lot of young people consider this a need; however, what would happen if you injured yourself tomorrow and could no longer work?
    • Whether or not you work in a high-risk job, disability insurance is worth the cost.
    • Generally, costs about 1-3% of your salary

Future Savings

  • Large future purchases- start saving now to meet your goal quicker
    • If you know you want to buy a house at some point, start saving for a down payment of at least 20% of the home price to avoid having to pay private mortgage insurance and save yourself money.
  • Start investing for your retirement! You are never too young to start putting money into a retirement account. We can’t impress enough how compounding interest can do wonders to help grow your retirement account balance and the earlier you start, the more time you give your money to grow.

Set aside a couple of hours on the weekend and start your own financial planning as soon as you can. By understanding your personal finances and giving yourself goals, you are giving yourself the greatest shot at success in the future.

 

Continue reading
187 Hits

Bitcoins & Cryptocurrency

A Little History

By now most people have heard of Bitcoins and how those that were fortunate enough to invest in them at the right time may have made great profits. Bitcoins were the first established cryptocurrency and today there are currently more than 1000 different types of cryptocurrency, but Bitcoins are still the most commonly known name. Bitcoins became available to the public in 2009 and rivals started coming out in 2011. Over this time the price of bitcoins had been rising; however, in 2013 the price crashed. It wasn't until 2017 that we saw the huge growth in Bitcoin price before a steady decline in 2018. New cryptocurrencies are continuing to come out and more people are getting interested in learning about what they are exactly.

How are they Purchased?

Purchase directly from an exchange

  • Expensive
  • Number of risks:
    • Viability of the exchange
    • Legitimacy of exchange
    • Cybersecurity threats

Purchase through private fund (accredited investors only)

  • Illiquid & expensive

You typically need to create a “wallet” before you can purchase any cryptocurrency. You register your identity and bank details to transfer money to buy cryptocurrency and the cryptocurrency is held in your “wallet”.

Potential Upside

  • Decentralized – no single bank or single administrator. No “middleman” and no Federal Reserve.
  • Reduced risk of manipulation from authoritarian governments
  • Blockchain shows promise to transform major elements of the financial system
  • Some experts claim that bitcoin will do to banking as email has done to the postal system
  • Crypto assets challenge the model of state‐issued money and the dominant role of central banks
  • Controlled by function of mining
    • Performed by “miners” – software solves math in exchange for currency
  • Instant settlement of payments globally

Potential Downside

  • Extremely volatile
  • Short History
  • Considered an Alternative Asset Class- allocations should be very small
  • No central bank control which means no oversight – may present an unfair competitive advantage derived from lighter regulation (regulatory arbitrage ‐ when firms capitalize on loopholes in regulatory systems in order to circumvent unfavorable regulation)
  • Touted as non‐taxed, but IRS Notice 2014‐21 provides the it be treated as property for federal tax purposes (investment income)
  • Due to the mostly anonymous nature of the peer to peer electronic cash system, potential to facilitate illicit activities
    • NY Dept of Financial Services recently sent subpoenas to Bitcoin businesses requesting their policies to prevent money laundering and ensure consumer protections

End Notes

If you're really interested in cryptocurrencies and are considering investing in them, do your research! Find a specific one you want to consider and look into how long the currency has been around, how long the company has been operating, and volatility. Consider how much you are willing to risk for the investment because there are still many questions about safety and stability for any cryptocurrency.

Will cryptocurrency be the currency of the future? We think for now it is too soon to tell, and a lot of caution should be used with them.

 

Continue reading
211 Hits

Is Social Media Making You Overspend?

Our generation has grown up in the height of social media, with the good and the bad. Social media has made it easier than ever to stay connected with friends and family. However, studies have shown that social media could be changing our spending patterns. 

How many times do you get onto Facebook or Instagram and see pictures from trips and wish you had an upcoming getaway? How many adds do you see in a typical day of social media usage?

Sneaky Advertising

Companies realize that social media can be a huge advantage for their marketing. Not only with the direct Ads you see but also through people's actual posts. Influencers, actors, and models are all targeted by companies to try to get them to advertise their product. What some people don't always realize is that they get paid to promote these products and may not always be giving honest reviews. Social media platforms are starting to create rules for these types of posts that require disclosure if the post was sponsored.

Schwab's 2019 Modern Wealth Survey found that 49% of millennials reported spending money on certain things due to something they saw on social media.

Take a look at the accounts you follow and see if any of them do more "advertising" than others. Do they post a lot of pictures with certain products as the highlight? Do they always link the clothes they are wearing in the description? Some people just genuinely want to share a cool product that they love. However, you need to be cautious when it's coming from someone with a big social media following.

Before you buy something, take a couple of minutes and think about:

  • If you really need or want that item?
  • Can you afford it without sacrificing something else?
  • Are there cheaper alternatives of the same quality?

Do your research! If you see something advertised and really want it or do actually need it that's okay! Just make sure there aren't cheaper alternatives just as good and make sure what you're buying is good quality for the price.

Does it spark Joy?

Taking some advice from the now famous KonMari expert, think hard about your purchases. Sometimes it's useful to think about it for a week. If by the end of the week you still think it's worth it to you to spend the money, then go for it! Our brains can convince us that we really need things, when in fact the product just looks cool so you start rationalizing how much you need or want it. I know I'm not the only one to buy something just for it to be used once and then sit in a corner, never to be touched again.

 

Check out the survey listed below for some more statistics and information on how social media is impacting our generation's spending!

 

2019 Modern Wealth Survey: 

https://www.aboutschwab.com/modernwealth2019

Continue reading
149 Hits

Ready for Vacation?

With summer right around the corner, everyone is getting excited to enjoy the warm weather and go on vacation. Here are a few tips on how to plan for your own trip.

Plan early!Set a budget and start saving for the trip or maybe you already have some savings for vacation. Determine a realistic amount you feel comfortable spending (you don't want to undo all that relaxation time by stressing about finances when you return).

Consider the cost of:

  • Lodging
  • Transportation: Gas or airplane ticket
    • Local transport: Can you drive? Do you need to take a bus, train, ect.?
  • Food (groceries and eating out)
  • Daily Activities
  • Shopping (souvenirs)

Location & Transportation

Obviously, the first decision should be where you want to go. Staying closer to home is generally a cheaper option because driving can often be a lot more affordable than flying. Consider the cost of other transport during your trip. Do you need to take a bus anywhere or a train? If you’re luckily enough to go somewhere that you can walk most places, then this cost will be minimal.

Lodging

Do you want to stay in a hotel, apartment, or house? Lodging can be the biggest expense for a vacation (unless you're camping!). If you’re looking for a really cheap option, consider camping with some friends. Some camp sites even have cabins you can rent if you’re not too keen on tent sleeping.

If you choose a hotel, look around at the best prices for places in the area you are staying and make sure to read the reviews as well. Consider going on a trip with friends and renting a place together either through a local rental service or Airbnb! This can cut down on the cost of a trip by a lot.

Food

Do you love to eat out? Plan specific nights you want to eat out and other nights make simple meals that are easy to prepare to save money. Taco night is always a great go-to for vacation, set out ingredients and let everyone make their own! Pack snacks and small sandwiches for day adventures if you don’t want to eat out for lunch.

Daily Activities

If you’re not the type to just sit on the beach all day during vacation, consider looking on sites like Groupon or even Airbnb for activity discounts during your vacation. You can find some cool options that you may have not even thought about before and save money.

Travel Points

If you happen to have a credit card that gives you travel points, look into different options and see how many of them you could use for your upcoming trip!

Weekend Getaway

If you don’t want to or can’t take a full week off of work, consider just doing a weekend trip. They can give you the break you need while also being more affordable. Take off one or two days to give yourself some extra time and find a destination not too far away to get the most out of your time. 

Going Off Season or “Shoulder” Season

Peak season for summer vacation destinations is mid-June to August. April to mid-June and September through October is known as Shoulder Season. This is when the weather is still warm but there are a lot less people vacationing, and prices are usually cheaper! Look at the prices for hotels and house rentals during these times to compare to what you would pay mid-summer.

Hopefully some of these tips can help you plan the vacation you deserve. Having fun while not breaking the bank is the best kind of relaxation there is!

Continue reading
219 Hits

Which Credit Card Is Best For You?

There are tons of different credit cards available today, many offering some type of reward or benefit with them.  What's the best one to have, though? That really depends on your personal spending habits.

Each credit card sponsor company will have descriptions for each card that should include:

  • Annual Fee
  • Annual Percentage Rate (annual rate charged for borrowing money)
  • Rewards
  • Foreign Transaction Fees
  • Fraud Coverage
  • Other important details: account alerts, autopay features, Apps for your account

To determine which type of card is best for you, figure out what you spend most of your money on. Some cards offer more rewards for dining out or traveling, while others just give a percentage of purchases back in cash. It's a good idea to keep notes of the benefits of each card you look at to compare and decide which will be the best for you. Some companies even have calculators for how much you can earn in rewards by estimating your monthly spending on your credit card.

 

If you pay your card off fully every month:

  • Cash Back Cards
  • General Rewards Points
  • Travel or hotel Points
  • Gas Points
  • These cards offer a variety of rewards, if you really can’t choose between two, see if one gives a better sign on bonus

If you have credit card debt or usually carry a balance:

If you travel a lot:

Retail Cards:

  • Usually easier to get if you are just starting out and don't have much credit history
  • Having multiple store cards could hurt your credit though

Things to look out for:

  • Cards that have an annual fee- some waive the fee at first and then you have to start paying one after the initial year is up
  • High APR- even if you pay off your card on time every month, you could always forget at some point

It can be a little overwhelming with the amount of credit cards available today. Take your time, make comparisons, and slowly determine which is best for your personal needs.

Continue reading
187 Hits

Featured News

Financial Briefs

Company Info

10713 B Birmingham Way
Woodstock, MD  21163
Phone: 410-995-8711
shaun@oxfordplanning.com

Follow Us