No Need to Go Back to School to do the Budget Math

The carefree days of summer are coming to an end and your brain is starting to kick back into gear. It’s time to think about getting organized and picking up on your financial goals. Oh, and not to put a damper on things but, you do realize that Christmas is only 137 days away and it’s only Hanukkah is in just 122 days.

Have no fear. We’ve got a load of online calculators right on our website to help you get it together.  Take a look…

Home Loan Calculators

Home Loan Calculator 
Use this calculator to determine your monthly payment and amortization schedule.

Home Loan Payoff Calculator
Save thousands of dollars in interest by increasing your monthly mortgage payment.

Home Loan Qualifier
Can you buy your dream home? Find out just how much you can afford!

Rent vs. Buy
Are you better off buying your home, or should you continue to rent?

Loan Calculators

Amortizing Loan Calculator
Enter your desired payment – and let us calculate your loan amount. Or, enter in the loan amount and we will calculate your monthly payment!

Equity Line of Credit Payments
What will my monthly payments be for an interest only equity line of credit?

Existing Loan Calculator
Use this calculator to analyze one of your existing loans. Calculate your remaining balance based on the number of monthly payments you have remaining.

Loan & Line Payment
This calculator helps determine your loan or line payment.

Loan Comparison Calculator
Use this calculator to sort through the monthly payments, fees and other costs associated with comparing loan options.

Credit Cards and Debt Management

Accelerated Debt Payoff
Consolidating your debt is only half of the battle. You still need a plan to get your debt paid in full. This calculator can show you how to accelerate your debt payoff.

Credit Card Pay Off
Use this calculator to see what it will take to pay off your credit card balance, and what you can change to meet your repayment goals.

Home Equity Debt Consolidation
This calculator is designed to help determine whether using your home equity to consolidate your debt is right for you.

How much do you owe?
Use this calculator as a starting point for your debt management plan.

Personal Debt Consolidation
Should you consolidate your debt? This calculator is designed to help determine if debt consolidation is right for you.

Auto Calculators

Auto Rebate vs. Low Interest Financing
Use this calculator to help you determine whether you should take advantage of low-interest financing or a manufacturer rebate.

Auto Loan Early Payoff
Find out how much interest you can save by increasing your monthly auto loan payment.

Retirement Savings and Planning

Retirement Nest Egg Calculator
Do you know how much it takes to create a secure retirement? Use this calculator to help determine what size your retirement nest egg should be.

Retirement Planner
Quickly determine if your retirement plan is on track – and learn how to keep it there.

Savings Calculators

Benefit of Spending Less
Reducing your spending can be worth more than you might think. Use this calculator to see just how much your budget reductions may be worth.

College Savings
Use this calculator to help develop or fine tune your education savings plan.

Compare Savings Rates
Even a small difference in the interest you are paid on your savings can add up over time. Use this calculator to see how different savings rates can impact your savings strategy!

Cool Million
Find out when your savings plan may make you a millionaire!

Emergency Savings Calculator
This calculator helps you determine how much emergency savings you may need, and how you can begin saving toward this important goal.

Savings Calculator
Find out how consistent investments over a number of years can be an effective strategy to accumulate wealth.

Savings Goals
What will it take to reach your savings goal? This financial calculator helps you find out.

Personal Finance

Checkbook Balancer
Balance your checkbook with this quick and easy calculator.

Credit Assessment
How is your credit? Use this calculator for a quick assessment!

Student Budget
This calculator is specifically designed to help students understand their expenses and income while attending a university, college or other full-time educational institution.

Tax Calculators

Payroll Deductions
Use this calculator to help you determine the impact of changing your payroll deductions.

How Your Debit Card Got Compromised

You’re careful. You never give out personal information, unless absolutely necessary. You never click links in emails. You don’t even open emails that look suspicious. You don’t keep PINs or passwords in your wallet. You change your passwords every six months. You use online banking to monitor your account, but last week you noticed a strange transaction on your account. It’s for some place in Atlanta, Georgia. Even though it’s only for $4.95, it bugs you. You look up the name of the establishment and find out it’s a night club. You map the location of the club on Google maps. It’s not in nice part of town. Now it really bugs you, but you decide to wait until tomorrow to call the credit union. When you call the next day, the credit union tells you that there is another suspicious transaction pending. This one is from Tempe, Arizona and it’s for $695. So, now it’s clear, your card has been compromised. Though you aren’t liable for the fraudulent charges, it’s a huge pain. You’ll need to update your accounts with Amazon, PayPal,  iTunes, and all the other services that bill directly to your card.

HOW DID THIS HAPPEN?

It could be your gas pump. Gas stations are a common gold mine for thieves. It takes thieves just minutes to install skimming devices on pumps with outdated equipment and poor security screening. Skimmers that capture account numbers and PINs can be easily disguised. Once you swipe your card the device stores your card information which is then sold to other criminals who replicate cards or use them for shopping sprees. That initial small charge that you saw on your account was a test to see if the data was valid.

In June, a man named Aleksandr Goukasian was convicted of participating in ring of criminals who stole 38,000 account numbers and data using gas pump skimmers in three states.

Lessen Your Chances of Getting Skimmed

Steer away from sketchy stations

Just because a station is low-budget, doesn’t mean it’s prone to skimming, but it could be a sign that their security isn’t up to par. These stations might offer a lower per gallon price, but the risk is probably not worth it. Low budget stations often have outdated pumps. Security cameras might be mounted around the station, but are they even on and monitored?

Compare pumps

Take a quick look to see if the card reader and keypad on the pump your using looks like the others. Thieves don’t often take the time to install skimmers on all the pumps, it takes too much time. Though you might not be able to tell which pump is compromised, if they look different move on to another station.

Stick with big companies.

Try to use well-lit, well-maintained gas stations. The big name companies can afford to keep their pumps monitored with updated readers and security.

Select credit over debit

Use the credit option to pay for your fuel purchase and avoid having your PIN captured.

Trust your instincts

If you get that creepy feeling, go with and drive to another station.

As always, you are the best security monitor for your accounts. Check your account frequently and contact the credit union regarding any suspicious transactions.

Paying by Phone Catching On, but is it Safe?

Almost twenty years ago, I saw Bill Gates speak about the future of technology. Among the dozens of predictions he made was one that sparked much controversy. Gates said that one day we would no longer carry cash and that we would use our phones to pay for everyday items, like coffee.  In 1994, this idea sounded futuristic to many and gave fuel to those who think that the government is conspiring against them.  Now here we are carrying powerful computers that double as phones around in our pocket.

Probably the biggest question on everyone’s mind…are mobile payment apps like Square, LevelUp and PayPal safe?

The first personal computer, PET, we’ve come a long way.

The answer is a clear ‘probably’ or at least as secure as anything other financial device. Certainly, the people who make these apps are not out to steal your identity. They are trying to build successful businesses and that means employing (we should hope) the highest security measures.

Here’s what the people at Square say, “We stop fraud via live monitoring programs that analyze transactions as they’re happening. This is known as risk visualization. The approach helps us detect and investigate suspicious activity before a fraudulent charge takes place. This method is not only a pioneering way for us to protect merchants, but it’s also a better way to build an automated system to detect criminals that will scale as our business grows.”

And LevelUp has this to say, “LevelUp is definitely a new way to pay, but it isn’t actually a new payment method. It’s just linked to your credit or debit card. So at the most basic level, you get all the security of your card PLUS all the security of LevelUp.”

Now here we are carrying powerful computers that double as phones around in our pocket.

PayPal adds, “Every payment is confirmed by a PIN or password, so there’s no need to worry if you lose your phone.”

Paying by phone is still rather new, but it’s catching on fast. The biggest issue I can see is that there are too many players. Starbucks even has their own and is one the leader in pay by phone acceptance. For each app you need to check to see which establishments accept the app you have. So either apps could determine where we do our business, or your favorite businesses will determine which app you use. There is also the immediate danger that like too many passwords, too many social media venues, we’ll also suffer from app overload.

The Beige Book is out! You’re excited right?

What’s that you say…what’s the Beige Book? Why should you get excited about the dullest color on the planet?  It’s economics, baby! The stuff that affects you every day.

The Beige Book is the hip name for the Federal Reserve’s Summary of Commentary on Current Economic Conditions. It’s actually published eight times a year, just before Federal Open Market Committee meetings. The report is comprised of anecdotal information collected from bank and branch directors and interviews with key business contacts, economists, market experts, and others. It’s not a statistical review, but the Fed does consider it valuable in setting national economic policy.

Below is a summary of what Beige says about our region, known as the Kansas City based 10th District. This district includes Colorado and six neighboring states.

  • Stronger than expected consumer spending aided the moderate expansion of Colorado economy in June and early July. Automobile sales and summer tourism were main contributors to the “moderate expansion”. However, Colorado’s wildfires “hurt traffic in the Rocky Mountain region”.
  • Retailers reported increased sales for seasonal items, mid-priced appliances, apparel and fashion accessories. However, high-end retailers reported slow demand for luxury items.
  • Restaurant sales were higher than expected.
  • Commercial and residential real estate prices rose.
  • Some banks reported “reported improvements in loan demand and quality,” led by mortgage loan activity.
  • “The price of raw materials for manufacturing rose at a slower pace compared to previous surveys and finished goods prices generally held steady.”
  • Oil and gas drilling held at peak levels, but is expected to decrease with lower global demand.
  • Draught conditions hindered crop development and drove crop prices higher.

SmartMoney features Colorado Springs Resident’s Experience

“you can’t protect yourself from every disaster, but you can certainly do things to tilt the odds heavily in your favor.”–  BILL BISCHOFF

This article in SmartMoney hits close to home. Bill Bischoff was evacuated from his Colorado Springs home, an event he never anticipated. Here he shares his learning experience and what he wished he had done before the evacuation call.

Below are a few lessons learned.

Put Together a Financial Go Kit

View from Mountain Shadows neighborhood, Colorado Springs
Photograph by Erin Christie

Things you’ll need:

  • homeowner and auto insurance coverage summaries;
  • health insurance information;
  • banking, mortgage, and credit card statements;
  • investment and retirement account documents;
  • tax returns for at least the last three years;
  • your will;
  • birth certificates;
  • social security cards;
  • and a key to your safe deposit box.

Place the case in a known location where you can grab it on the way out if you’re forced to leave your home in a big hurry.

We’ve all heard that you should put your important documents in a fireproof box, interestingly the author found that this wasn’t enough.

“By the way: those allegedly fireproof strong boxes don’t work in a really hot fire. An acquaintance of mine had one, and everything in it became toast when his house burned down.”–Bischoff

Take Lots of Pictures of Your Property and Your Stuff

This is probably the best advice. You may want to go a step further and take photos of your documents. You might store them on an Internet photo site that you can access from any computer.  Just make sure that it is a private, password-protected site.

Make a Grab-and-Go List

You probably have a list of important phone numbers posted on your fridge or prominent place in your home. The author suggests that you also have a list of reasonably portable items that you would most hate to lose. These are the things you’ll gather up if you’ve been called to evacuate your home.

Lessons Learned

Being prepared for emergencies is something that we all read and talk about, but seldom follow through. One lesson we can all learn from the wildfires of this summer is to be prepared because this can happen to anyone.

FYI: The Mile High Chapter of the Red Cross responds to a house fire on average once every 36 hours each year.

No More Hidden 401(k) Fees

If you’ve been worried that your 401(k) is sneakily ripping you off, then you’ll find some comfort in the new federal rule that took effect on July 1.

The rule requires 401(k) plan providers to disclose certain 401(k) fees, and employers to distribute these disclosures to plan participants by Aug. 30.

The idea behind is two-fold:

1) plan participants (that’s you) should be able to easily determine how much of your savings is being put toward fees and what those fees are; and

2)that employers can more easily compare retirement plans and shop around for the best options.

The new disclosure is required to be sent to plan participants at least once a year. It is required to include a list of available investments and the fund management fees associated with each. It will also outline the administrative costs of each investment option. These may include charges for services like recordkeeping, accounting and fees incurred for trades or withdrawals.

It’s not that this information was kept from plan participants in the past. It has always been “available” in some way. However, this is the first the fee information will be consolidated into and single document and mandatorily sent to participants.

Fees for 401(k) plans can vary depending on whether you’ve signed up for a passive or active account. Passive investments are tied to certain benchmarks, like the Standard & Poor’s 500 Index, and don’t require individual stock picks of investment managers. Active investments require portfolio managers to make trades in an attempt to outperform the market. Fees on passive investments typically hover around 0.5% of your total assets per quarter. Fees on active investments tend to be more than 1%. This may seem small, these costs can really add up.

A study earlier this year found that overall; the average median-income household with two income-earners pays nearly $155,000 over the course of their lifetime in 401(k) fees — shrinking their investment returns by about one-third. The new disclosure are not required to show you how much you might spend in fees overtime, for that you’ll have to use your noggin.

Federal disclosure requirements are not a cure for hidden fees. Some people may still find the disclosures less than intuitive. Still, it a good step in the direction of consumer education. As always you should take it upon yourself to learn more about your investments.

For help in assessing your investment strategies, give a call to our financial consultants at (303) 279.6414 or (800) 770.6414 between 9:00AM and 5:00PM Monday through Friday.

Psychologists Answer the Question, “Can Money Buy Happiness?”

In an article published last year by the Journal of Consumer psychology, scientists revealed insights of a study regarding the relationship between money and happiness.

Their general conclusion is:

“If money doesn’t make you happy, then you probably aren’t spending it right”
-Elizabeth W. Dunn, Daniel T. Gilbert, Timothy D. Wilson*

Often the first thought about whether or not money can buy happiness is how much money is necessary for happiness. This is calculated by a simple formula.

To achieve peak happiness you must earn more than 3 times the poverty level. The following chart shows the poverty levels as determined by the U.S. Department of Health & Human Services. Visit their website for more information.

2012 Poverty Guidelines for the
48 Contiguous States and the District of Columbia

Persons in
family/household

Poverty guideline

1

$11,170

2

15,130

3

19,090

4

23,050

5

27,010

6

30,970

7

34,930

8

38,890

For families/households with more than 8 persons,
add $3,960 for each additional person.

For example, a family of four would need to have an income of more than $69,150 to reach a happy income. But, reaching this income alone does not guarantee happiness. To be happy, you must spend it correctly. The good news is that the psychologists have identified 8 principles to help you spend correctly and reach happiness.

1. Buy experiences instead of things

Things don’t last forever, but memories do. When it comes to happiness, it’s the doing that matters. Sure, some activities are more enjoyable than others, but in the end it’s the activity that brings rewards. Experiences are also more likely to be shared with other people, and other people—are our greatest source of happiness.
This might sound altruistic, but numerous studies and experiments have shown that when we spend money on others we feel good. Almost anything we do to improve our connections with others tends to improve our happiness as well—and that includes spending money.2. Help others instead of yourself

3. Buy many small pleasures instead of few

The scientists back up this principle with the following reasoning:

“(the) advantage of small pleasures is that they are less susceptible to diminishing marginal utility, which refers to the fact that each unit increase in the magnitude of a pleasure increases the hedonic impact of that pleasure by a smaller amount than did the previous unit increase.”

In other words: Eating two 6oz cookies on different days is more pleasurable than eating one 12oz cookie on one day.

4. Buy less insurance

This principle specifically speaks about extended warranties and the fact that nothing lasts forever. If you understand this to begin with, you won’t be so sad when your flat screen TV, or toaster quits.

5. Pay now and consume later

Impulse buying and immediate gratification (i.e. buy now, pay later) remove the anticipation that makes us value and enjoy purchases. When things come too easily, we don’t appreciate them as much, therefore, they do not make us happy.

6. Think about what you’re not thinking about

Consumers who expect a single purchase to have a lasting impact on their happiness might make more realistic predictions if they simply thought about a typical day in their life. So before making a major purchase consider both the good and the bad associated. You might look great driving in a big new truck, but will you use all of its features? Can you afford the gas?

7. Beware of comparison shopping

Consumers often get caught up in comparison shopping by comparing features rather than what makes them happy. Someone shopping for a home might compare houses based on physical characteristics and pricing. This could lead to buying a home that meets certain criteria, but doesn’t meet needs that will make the shopper happy.

8. Follow the herd instead of your head

It pays to find out what other people think. If you want to see a good movie, read viewer’s reviews. If you thinking about a vacation spot, find out what other people think. Don’t, however, go by what the professionals say, you’ll have more success following peer reviews.

Now, go spend and be happy 🙂

*E.W. Dunn et al. / Journal of Consumer Psychology 21 (2011) 115–125

What Influences Mortgage Rates

The financial world is all-abuzz with how low mortgage rates are, but do you know what causes rates to be low? Is it:

A. The supply of available homes vs. the number of buyers

B. The Fed’s strategy

C. Economic uncertainty in Europe

D. Both A and B

E. Both B and C

Any of the above answers might be correct, but the closest would be E: which actually translates into economic factors. Mortgage rates are influenced by a number of factors, including policy decisions from the U.S. Federal Reserve and the overall economic picture both in the U.S. and abroad.

The Fed has been keeping long-term interest rates low, in part through its Operation Twist program. Operation Twist involves the Fed buying long-term securities and selling short-term debt. This program is set to expire at the end of this month. However, there has been discussion of the possibility of extending the program or taking other steps to keep long-term interest rates low.

Uncertainty in Europe has investors moving their money to safe havens, pushing yields on investments such as 10-year Treasury notes downward. The secondary mortgage market uses yields on the 10-year Treasury as a barometer of how to set 30-year fixed-rate interest rates. Right now there does not seem to be a clear picture of how things will play out in Europe, so investors could be playing it safe for some time.

The Mortgage Bankers Association expects the 30-year fixed-rate mortgage to end the year at an average 4.2%. That’s higher than current rates, but still relatively low. Freddie Mac’s most recent projection also pegs the 30-year fixed-rate mortgage at 4.2% by year-end. For borrowers, that means low mortgage rates aren’t expected to go away anytime soon.

Meanwhile, Denver has been cited as the best place to buy real estate either for your home or as an investment. Across the eight-county Denver-Aurora area, an estimated 3,702 new and resale homes were sold in April. While this figure is down 1 percent from March, it is up 9.1 percent when compared to rates experienced in April 2011. Housing experts declared this year’s slight sales rate decrease between March and April to be normal. In addition to rising home sales levels on a monthly and annual basis, the sales rate experienced for the first quarter of 2012 rose 11.2 percent to 12,646 compared to the same time period last year. (source: zipreality.com)

For buyers, this means that it may not be wise to play a game of waiting for rates to fall even lower.

Get the edge on your home purchase. Come talk to our home loan consultants about a pre approved loan, before you begin shopping for a home.

Long-Term CareInsurance Could Provide the TLC You Need

There are only two things you count on taxes and death, for everything else, there’s insurance.

Long-Term Care Insurance is relatively new in the long history of insurance. For most people in brings to mind images of nursing homes, but it actually covers any type of long-term care.

Long-Term care is basically anything that isn’t crisis care. It includes:

• Assistance with Personal Care Services
• Not Rehabilitative in Nature
• Commonly Understood as Lasting 90 Days or More
• Due to Physical or Cognitive Impairment
• Not Acute Care

Long-Term Care is care that is needed for more than 90 days. It can be accessed in cases of accident, decline or loss of cognitive ability. In general, long-term care refers to help with basic activities of daily living such as bathing, dressing, eating, and using the toilet. Long-Term Care can be provided at home, in assisted-living facilities, or in nursing homes.

Long-Term Care Insurance, however, is something that you have to think about before you can even predict if you’ll need Long-Term Care.

So who needs Long-Term Care Insurance?

Consumer Reports suggests that you skip Long-Term Care Insurance when:

  • Your net worth is less than $200,000, because you would soon be eligible for Medicaid should you need long-term care.
  • Your net worth exceeds $1.5 million, because you can afford to pay for that care yourself.
  • You can’t afford the premiums, or won’t be able to do so in the future should a sharp increase in premiums occur.

The magazine suggests it might be wise to purchase Long-Term Care Insurance when:

  • You are age 55 and have a chronic medical condition, or you have a family history of debilitating disease that may create a need for long-term care services in the future.
  • Your assets are between $200,000 and $1.5 million, and you must protect those assets for a spouse or other relatives.

That’s a simplified view-point, but not a bad guideline. Long-Term Care Insurance has grown up a lot since it was introduced in the 1980s. You can purchase policies that avoid the “use or lose it” barrier. There are also varieties of options that help you protect your assets for your loved ones. To learn more about Long-Term Care Insurance options contact one of our Investment and Retirement Center Team.

Can You Use Your IRA to Start a Business?

If you’ve seriously thought about opening your own business, you know that the capital requirements can be huge. In fact, this is probably the biggest deterrent for hopeful entrepreneurs. This especially true if you’re looking into franchise opportunities. Often franchises will require $75,000 to $1,000,000 in liquid assets. That’s quite a chunk of change.

If, after seeing these figures, you’re still determined to buy into a franchise, you might start looking into financing options, which could lead you to an Internet search, which might bring up articles that suggest you tap your retirement funds to start your new business. And where will all this Give a Mouse a Cookie thinking take you? Well, it’s not a simple answer and if you get it wrong you might end up paying big taxes and hefty penalties.

So, yes, it is possible to tap your IRA and/or 401(k) to start a business, but you can’t simply make a withdraw. It’s also not an easy DIY transaction. In other words, it’s complicated. It involves rolling money over to a corporate retirement account that permits you to invest in a business. To make this happen you really need the assistance of a financial planner or third-party retirement-plan administrator. Essentially, you are setting up to invest in the new business.

Making this work with IRS is tricky business. While there are no clear rules against or for the practice of tapping funds to start a business, it sort of goes against the purpose of retirement accounts.

This brings us back to what it was the mouse wanted in the first place. The majority of new businesses don’t make it. Are you willing to risk your retirement investments?

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