Category Archives: Opinion

Practical Money Matters – May 27, 2015

By Jason Alderman

Clean Desk, Clean Finances – 5 Steps to Streamline Your Money Management

If your financial life is confined to boxes, file cabinets and various piles of statements and receipts that only you can navigate, it might be time for a little de-cluttering.
Software- and Internet-driven advancements (http://guides.wsj.com/personal-finance/managing-your-money/how-to-choose-and-use-financial-software/) in money management not only provide paperless alternatives to planning and tracking savings, spending and investments, they make finances easier to handle in an emergency. If you’re thinking about resetting your recordkeeping, here are some steps to get started.
Think about financial goals first. Before tackling the job of reorganizing your financial recordkeeping, think through your current financial objectives and what changes might give you better data and efficiency to achieve them. You might want a system that tracks spending, saving, budgeting and on-time debt payments. If you already have that system in place, you might want more detailed information on retirement or your child’s college fund. Consider involving your financial and tax advisors in the discussion and see what suggestions they have.
Create a system that makes it easy for loved ones and financial professionals to help in an emergency. If something were to happen to you, could a loved one easily navigate your finances? When organizing, always keep your spouse, children and/or executor in mind. Consider creating an ICE file, short for “In Case of Emergency,” and let your representatives see it in advance. On paper or on a computer document or spreadsheet, your ICE file should be a handy guide or index to find the following quickly:

Contact information for doctors as well as financial and tax advisors
Locations for all essential estate documents including your will, your health and financial powers of attorney and any letters of instruction you have written to accompany these documents
All ownership documents for real estate, autos and other major assets
Usernames and passwords for Internet-accessible financial accounts as well as personal websites and social media if such items need to eventually be updated or removed
Contact information and statement access for all savings, investment and debt accounts, particularly joint accounts that will be used to pay bills
An up-to-date list of monthly bills that need to be paid on time
All insurance information including health, home, auto, disability and business policies

Know what paper documents you need to keep or shred. Here are some general rules:
Keep: All tax-related documents for up to seven years, including annual tax returns; statements that show a gain or a sale of a security or the purchase or sale of a major asset like real estate; mortgage documents, vehicle titles and insurance policies; multiple copies of birth and death certificates; marriage licenses and divorce decrees; deeds and title documents.
Shred: With identity theft on the rise, it is generally better to shred financial documents before they go in the garbage. After recording all transactions, immediately shred the store and ATM receipts and credit card statements. After a year, shred monthly bank account statements unless you or a family member are close to qualifying for state Medicaid benefits. States generally require applicants to save bank and investment statements for anywhere from three to five years to qualify.
Estate documents and directives generally should be kept in their original paper form in a safe, accessible place with copies as advised. Other documents can be digitally scanned for printout as needed.
Finally, no matter how you revise your recordkeeping, create a backup system. If you are wedded to paper documents, consider keeping copies at a secure offsite location or with a trusted friend or relative. If you’ve gone digital, external hard drives or cloud storage are possibilities. Above all, protect all password information and regularly check your credit reports throughout the year to monitor potential information breaches.
Bottom line: Build a financial recordkeeping system that not only saves you time and money but helps you reach financial goals faster.

Practical Money Matters – May 20, 2015

By Jason Alderman

A First-Year Money Management Guide for the New College Grad

A young adult’s first months out of college are about personal freedom and finding one’s path as an adult. Building solid money habits is a big part of that.
Most grads are managing money alone for the first time – finding work, places to live and if they’re in the majority, figuring out how to pay off college loans. For many, these are daunting challenges. If you are a young adult – or know one – here are some of the best routines to adopt from the start:
Budgeting (www.practicalmoneyskills.com/budgeting/) is the first important step in financial planning because it is difficult to make effective financial decisions without knowing where every dollar is actually going. It’s a three-part exercise – tracking spending, analyzing where that money has gone and finding ways to direct that spending more effectively toward saving, investing and extinguishing debt. Even if a new grad is looking for work or waiting to find a job, budgeting is a lifetime process that should start immediately.
A graduate’s first savings goal should be an emergency fund to cover everyday expenses such as the loss of a job or a major repair. The ultimate purpose of an emergency fund (www.practicalmoneyskills.com/emergencycalc) is to avoid additional debt or draining savings or investments. Emergency funds should cover at least four to seven months of living expenses.
Retirement may seem a distant spot on the horizon after graduation, but success depends on saving and investing as soon as possible. New grads can benefit from the IRS’s Withholding Calculator (www.irs.gov/Individuals/IRS-Withholding-Calculator) to determine the right amount of tax is being withheld from weekly paychecks. From there, he or she can evaluate personal retirement savings options and employer’s plans as well – both will be necessary to retire effectively. Signing up for automatic deposits into retirement accounts and personal savings allows money to grow without the temptation of spending it first.
Insurance is crucial. Renter’s insurance is important not only to cover personal belongings that are lost, stolen or damaged, but most policies cover living expenses in an emergency and offer liability and medical coverage if someone gets hurt at one’s apartment. Auto insurance is the law in many states, and even though disability coverage may be available at work, it is important to determine whether additional individual coverage should be purchased. Finally, the Affordable Care Act has made health coverage a must for young adults. New graduates may stay on a parent’s plan until the age of 26 even if they have the option for health coverage at work. After age 26, health insurance can be bought privately or through federal and state exchanges.
Young adults should get into the habit of tracking their credit reports from the beginning. By law, everyone has the right to receive all three of their credit reports for free (https://www.annualcreditreport.com) each year, and it is important to stagger requests from the three credit bureaus – Experian, Equifax and TransUnion – to better check for inaccuracies and potential identity theft.
Finally, for those still having trouble making ends meet, moving home for a limited time period could be an option. New grads should negotiate an affordable rent on a fixed timetable and use those savings to create investment accounts that can pay for major goals like a home, a wedding or graduate school. If you’re working with a financial advisor already, ask them to weigh in with additional ideas.
Bottom line: The first year out of college, young adults encounter a range of financial challenges that will shape their money behavior for a lifetime. Embracing budgeting, saving and investing is crucial even with the smallest of amount of resources.

Simply Put – May 20, 2015

The Progress Review’s first Memorial Day tribute to veterans was published in 2007. Looking back, it’s interesting to note the actual size of the photos published in that issue. In 2015, our ninth tribute, the photos have gotten considerably smaller, and that’s a good thing, as the total number of veterans featured has grown from 43 to 175. We were especially pleased to add several “new” veterans to the roll call this year, including some who are currently serving on active duty.
In the early 1990s, when America became engaged in Operation Desert Storm, appreciation of veterans came to the forefront of the nation’s consciousness. When “boots on the ground” were deemed necessary in Iraq, then later in Afghanistan, reports of casualties brought the harsh realities of war home to the civilian population. It had been many years since so many American troops had been put in harm’s way, and the deaths of our soldiers were shocking, particularly to the those who had never experienced the somber consequences of war.
It is appropriate that our recognition of veterans with ties to La Porte City is sandwiched between Honor Flights hosted by Sullivan-Hartogh-Davis Post 730 in Waterloo. More than 90 veterans made the trip to Washington, D.C. on May 5. Another group will make the journey next month on June 16.
Four years ago, after a last-minute cancellation, I was invited to accompany the group of veterans aboard Waterloo’s second Honor Flight. It was an incredible experience to spend the day in our nation’s capital with a group of men and women who were well-acquainted with the ultimate sacrifices made by their friends and comrades during World War II and the Korean War. The Progress Review has been fortunate to travel on each of the successive Honor Flights to continue the tradition of producing a souvenir DVD for each veteran aboard the flight.
With each trip I make to Washington D.C., I am reminded how pleased and proud my dad would have been to view each of the monuments and memorials on the Honor Flight itinerary. Of course, as a 22-year veteran of the Air Force who served a tour of duty in Vietnam when I was very young, he would have been partial to the USAF Memorial and its spires that soar 270 feet into the wild blue yonder.
This year’s Memorial Day tribute to our veterans is a special section that begins on page 11. Each of the 175 veterans pictured have their own unique stories of the service that was given to their country. At the same time, it is important to also remember the sacrifices made by the families of the members of our armed forces.
As we pause on this Memorial Day, we offer a heartfelt, “Thank you for your service,” to veterans and their loved ones for their service and sacrifice to ensure our way of life.
As a special tribute, we invite our readers to enjoy some of the images from the May 5, 2015 Honor Flight we’ve posted online in the form of a video slideshow. While the brief program represents just a fraction of the Honor Flight experience, it summarizes their day in a very powerful way. To view the slideshow, logon to www.theprogressreview.co.

Practical Money Matters – May 13, 2015

By Jason Alderman

Improving Millennials’ Financial Literacy with Mobile Technology

The 2015 Financial Literacy Summit 2015, (www.practicalmoneyskills.com/summit2015/) held April 15 in Chicago and co-hosted by Visa Inc. and the Federal Reserve Bank of Chicago, focused on how mobile technology might improve millennials’ learning, savings and investing behavior in the future.
A recent FICO study said millennials, the demographic born between 1980 and 2000, not only represent the largest group of individuals using mobile banking applications, but also the biggest cohort partaking in Internet browsing, emailing, searching, social networking and news consumption on a smartphone or tablet, bypassing desktop machines entirely. By comparison, only 5 percent of 35-54 year-olds and 3 percent of those 55 years and older are using mobile devices exclusively.
The Summit audience heard particularly eye-opening insights from a panel on how early education and mobile technology applications can help build future generations’ financial literacy. While online gaming (http://practicalmoneyskills.com/games/) is showing particular success in training grade- and high-school age students in financial fundamentals, panelists suggested that the broader solution will depend on national educational policy and a broader understanding about young adults and their financial needs.
Amando M. Tetangco, Jr., governor of Bangko Sentral ng Pilipinas, the central bank of the Philippines, told the audience that young Filipino adults are “struggling more than their older counterpart groups with regard to budgeting” and retirement planning, but he said he is still optimistic: “I believe there are certain characteristics of millenials that provide opportunities to build [their financial capabilities]. They have a desire for change.” Such change, he said, should be driven by data and policy should be made personal and tied to technology solutions embraced by younger citizens.
Panelist Jason Young, CEO and Co-Founder of MindBlown Labs, an Oakland, California-based software developer behind the Thrive ‘n’ Shine personal finance game app for teens and young adults, said mobile technology will bridge the gap between financial literacy and a lifetime of successful financial decision making. “Eighty to 90 percent of U.S. teens have smart devices. That’s huge, but the important thing to understand is that these aren’t just things they use. They’re a way of life.”
Developing a stronger connection between financial literacy education and mobile technology could be beneficial for global educators and policymakers trying to improve spending, saving and investing knowledge for future generations. In January, the Organization for Economic Cooperation and Development (OECD) released a first-time global financial literacy study (www.oecd.org/pisa/keyfindings/pisa-2012-results-volume-vi.htm) that revealed that U.S. students ranked between eighth and twelfth place among all 18 participating countries in overall literacy skills.
Bottom line: Focusing on the way under-35 consumers use smartphones and tablets might provide a way for educators, financial services companies and policymakers to narrow the financial literacy gap.

Practical Money Matters – May 6, 2015

By Jason Alderman

A Guide to Travel Insurance

A sudden storm, a missed connection or a family emergency can turn a hard-earned vacation or important business trip into a big disappointment. Travel insurance can save the day, but picking the right coverage requires research, cost comparison and above all, reading the fine print.

A quick online search can make it easy to identify and price highly rated travel insurance carriers. But personal circumstances and coverage should be examined thoroughly before any trip reservations are made.

First, travelers should evaluate their own life, home, auto and health insurance coverage. It is wise to call personal insurance agents to discuss the future trip and its accommodations and activities. The idea is to see where personal coverage ends and where additional travel insurance might be beneficial.

Some travelers, for example, might be surprised to know that their homeowners’ policy actually offers liability coverage for out-of-state or foreign trips and their health insurance might offer full or partial evacuation insurance. Credit card companies may offer additional protection. List specific risks and circumstances surrounding the trip to discuss with insurers to determine whether additional travel coverage might be necessary.

For business trips, employees should repeat this process with their benefits or human resources departments. Employers that regularly do business in risky areas where crime, geopolitical conflict or rough weather are common may have specific systems in place for these issues. But it is important to know how extensive an employer’s protections might be to determine whether you’ll need additional coverage.

Travel insurance covers these main risks: trip cancellation and/or trip interruption, baggage loss, medical and/or dental, pre-existing (medical) conditions and evacuation (medical or otherwise).

It is difficult to cite average premiums for trips because every trip and traveler is different. Coverage for short domestic trips with basic coverage for cancellation or lost baggage might cost some money; comprehensive coverage for a major world excursion may go well into the hundreds.

Travel companies like airlines and cruise lines sell various forms of trip insurance, but it might be wise to buy directly from an actual insurance company in the travel insurance business, better known as a “third-party” carrier. While travel insurance sold by travel companies might be adequate, they generally cannot match the quality of coverage or customer service that a full-time insurance provider can.

Before you buy travel coverage, it is particularly important to know what the policy’s exclusion clause says. That section of the travel insurance policy indicates particular activities or circumstances that will prevent the payment of a claim.

Insurance companies respond to claims when customers file documents properly. Travelers who need to make a claim should have copies of receipts, ticketing and paperwork relevant to losses such as flight delays, lost luggage or any other potential loss indicated in the policy. If the claim is the result of a criminal act, policyholders should make sure they obtain and file copies of police, hotel or other relevant documentation safely.

Finally, it never hurts to visualize potential risks on an upcoming trip. Quick online searches make it easy for travelers to check on weather and potential conflicts at their destination. The U.S. State Department features its own global travel alert and warnings webpage (http://travel.state.gov/content/passports/english/alertswarnings.html) to prepare travelers for local crime, terrorist attacks or geopolitical conflict. The U.S. National Weather Service also features sites for long-term storm and hurricane prediction, though travel insurers will generally not issue coverage after a particular storm system is named.

Bottom line: Travel insurance can be a financial lifesaver. However, it’s important to thoroughly evaluate such coverage in light of personal and business coverage you already have and, most of all, to read the fine print.