Saturday, June 28, 2014
Do you donate to charity? Do you know why you donate to a specific charity? Do you make anonymous contributions or like to receive recognition? Whom do you give to, and why? Do you donate to small charities or larger ones? If you do not give back to your community now is the time to start.
Google executive Sheryl Sandburg states that less than 1/3 of the money that individuals gave to nonprofits in 2005 reached the poor. A study by the Center on Philanthropy at Indiana University showed that only 8% of charitable donations provide basic necessities, food and shelter. Sandberg names two possible explanations for this “charity gap”: (1) It is easier to give to those in our own communities than to the truly economically disadvantaged who are outside our immediate circles of relationships; and (2) donors do not fully understand where their contributions are going.
Sandburg encourages Americans to consider the disconnect between their desires to do help the poor and the destination of their money. According to a 2012 study from the Women's Philanthropy Institute at Indiana University women are more likely than men to give to charity in all income brackets. Women donate the most to animal welfare, medical research, health and human services, faith based charities, arts and culture.
People give based on their identity: who they are and how they view themselves. The degree to which identities are flexible, involve a willingness to act, and help make sense of the world has significant implications determining whether and how much people give. If you are a professional successful woman you understand the importance of giving back and should make giving back a habit.
According to Lauren Shin of Learnvest.com, “Giving to women doesn't just impact the woman who receives the gift. It can improve the family's lives for generations. In fact, if you help enough women in one location, you can even lift a whole community out of poverty”. Here are 4 ways to give back:
Charitable Organization Donations.
The organization must be recognized by the Internal Revenue Service as a 501(c)(3) tax-exempt nonprofit organization. If you donate a cash gift greater than $250, the charity must acknowledge the gift in writing. If less, you’ll need a receipt, canceled check, or credit card statement. If you do payroll deduction, you need the pay stub or W-2 and they’ll provide acknowledgement saying this deduction was a charitable contribution. For non-cash gifts, request a receipt with the name and location of the nonprofit, date of the donation, and description of the item.
Give appreciated assets.
Give appreciated assets. Appreciated assets include stocks and real estate. By donating an appreciated asset, you can get the tax deduction based on the current value, not the lower value of the property when it was obtained.
Mentoring. Encourage women and girls.
Mentor or encourage women and girls in your personal and professional life or volunteer to mentor girls and women in your community. Your community and workplace will definitely benefit from your advice no matter what it is. Just a kind word of encouragement “I believe in you”, can change someone’s life.
Invest in Others.
Donate money to a relative, friend who want to start a business or to a crowd funding initiative you believe in. Obtaining business funding is a huge problem for many women business owners. Also consider becoming an angel investor for a woman-owned startup or existing business.
“The most notable fact our culture imprints on women is the sense of our limits. The most important thing one woman can do for another is to illuminate and expand her sense of actual possibilities.”—Adrienne Rich
Tuesday, June 24, 2014
Your credit score it is one of the most critical factors in your financial life. It determines if you will be approved for a loan or line of credit. Credit scores are used to determine: if you will be hired for a job, interest rates, terms and conditions, downpayment costs, rates for medical and other insurance coverage, approval for cable and internet service and more.
A credit score is a mathematically calculated number developed by the Fair Isaac Corporation (FICO) that lenders use to rate potential customers in determining the likelihood that a customer will pay their bills on time.
A credit score or credit rating is determined by using five main criteria as defined by MyFico.com: your payment history which accounts for 35% of your credit score, the amounts owed which accounts for 30% of your credit score, the length of your credit history which accounts for 15% of your credit score, new credit which accounts for 10% of your credit score, and the types of credit used which accounts for 10% of your credit score.
Payment history shows the history of how you paid your bills either on time or late but unfortunately does not show if your bills were paid before the due date. Amounts owed shows the total amount of credit you have available. The length of history indicates how long you have had credit. New credit indicates how many times you have applied for new credit. If you open too many new accounts in a short period of time this may lower your credit score. The types of credit used indicate the types of accounts you have such as revolving or installment accounts. Revolving accounts are usually credit cards and installment accounts are usually mortgages, auto loans, etc.
The FICO credit score model ranges from 300-850 with 850 being an excellent score and 300 being the worst score. The higher the credit score the lower the interest rate you will receive for a loan or line of credit. Possessing a good credit score can save you thousands of dollars in interest over the life of the loan or on a line of credit. A good credit score is generally in the range of 720 or above but may vary from lender to lender.
When applying for credit or a loan if all three credit scores are pulled, the middle score is generally the score used with the application. Your credit score varies from each bureau because each agency collects their own data from various sources and may collect different data for the same account. Your score can vary anywhere from 5-40 points between the three credit bureaus.
Your credit score changes due to updates to your credit file which changes based on account activity such as balance changes or additions to your credit file (i.e. new accounts or deletion of older negative accounts more than 7 or 10 years old). As a result, you may see a difference in your score from one month to the next. If you have bad credit or a low credit score here are 9 things you can do to boost your FICO credit score:
- Keep total amount of debt owed low. Keep credit card balances at 20% or less of the credit limit.
- New Accounts. Number of new accounts opened. Don’t open more than one new account every 2 years. If you are applying for a mortgage loan or credit card shop within a 2 week period, the inquiries will count as one inquiry (versus multiple inquiries).
- Denied. Don’t apply for credit if you know you will get denied the inquiry will temporarily lower your credit score.
- Mix of accounts. You need a mix of revolving (credit card) and installment (loan) accounts to boost your credit score.
- Payment history. You will need a payment history of at least 7 years or more with no late payments to have excellent credit. You will need a payment history of at least 3-5 years with no late payments to have good credit.
- Length of credit history. You will need a credit history of 2 years or more to establish a decent credit history profile.
7. Pay your bills on time. Get current on all late accounts.
8. Errors. Fix errors on your credit report.
9. Review your credit reports at least once a year at www.annualcreditreport.com.
If you plan on purchasing a large item such as a car, house or investment property, it is best to pull your credit yourself to see if any negative items appear so you can fix those issues before applying for a loan. The best way to understand your credit score is to do research and read the information that is provided when you order your credit report.
Friday, June 20, 2014
June is National Home Ownership Month. One of the happiest times in my life was when I became a homeowner. I feel a great sense of accomplishment and have been blessed to remain in my home despite the economic woes of the country and many other homeowners.
The best time to buy a home is during with fall and winter season when demand is low. However, many Americans purchase homes during June, the start of the summer season. Owning a home is one of the best ways to generate wealth. However, owning a home requires financial discipline and sacrifice. Create a budget or spending plan to help manage your finances to make sure you can stay in your home for as long as you like and to help reduce the chances of filing for bankruptcy or foreclosure.
Your monthly mortgage payment should be no more than 32-38% of your total monthly income. This will ensure that you have extra cash to pay for unexpected expenses and will reduce the chances of using a credit card and going into debt. The advantages of owning a home are: it increases your credit score, proves that you are a responsible spender, provides stability, provides a tax write-off, increases your financial worth, and provides you with an asset that will appreciate over time.
Renting should be a short-term option not a long-term solution. Although becoming a homeowner may not be an option for everyone, owning something of value should. You can: become an entrepreneur, invest in a profitable business or purchase investment property.
Before you buy a home you need to prepare for the home buying process. Estimate your monthly mortgage payment. Subtract the difference of the estimated monthly mortgage payment and your current rent (if you pay rent). Start reducing your spending at least 3 months prior to looking for a home and use the money to save towards downpayment and closing costs and to save the difference between your current payment and your estimated mortgage payment. Here are 8 tips to help you buy a home:
2. Find a real estate agent
3. Get pre-qualified
4. Find the best loan
5. Use home buying programs
6. Find a home and make an offer
7. Get a home inspection, home energy audit, lead and radon tests
8. Shop for homeowners insurance
9. Prepare for settlement and closing and confirm in writing all dates, dollar amounts and what is needed from you
Monday, June 16, 2014
African Americans are expected to spend $1.1 trillion per year by 2015. One dollar circulates in Asian communities for 30 days, in Jewish communities for 20 days, and white communities 17 days. However that same dollar in African American communities circulates every 6 hours. What this means is that a dollar earned in the African American community leaves that community before the sun goes down. In other communities it stays for weeks on end. In addition, a mere .2%, or $.02 of every dollar an African American spends in the U.S. goes to African American owned businesses. According to a 2013 Prudential Research Study, 94% of African Americans have some type of debt: credit card debt, student loan debt, mortgage debt, or personal loan versus 5% of Americans who have some type of debt.
By comparison African Americans spend most of their money or credit on: clothing, appliances, alcohol, cars, electronics, computers, cell phones, clothing, travel, hair care, accessories, food, and household furnishings versus other communities who balance their spending with saving, investing and homeownership. Brand name products represent 82% of African American households’ total purchases compared with 31% of private labels and less than 1% of purchases from African American businesses. African Americans don’t balance their consumer spending with investing, saving and generating wealth the way other communities do and are most affected by economic crises.
Some possible solutions to help African Americans effectively manage their money and have extra income to support African American businesses are:
- Do more than save. Generate wealth. Some ways to generate wealth are becoming a homeowner, starting a business, investing in real estate, planning for retirement, becoming a franchise owner, capitalizing on compound interest, and keeping debt low. Home ownership is 44% among African Americans, but should be much higher.
- Create small businesses to serve the specific and specialized needs of African American communities.
- Spend at least 5% of every dollar with an African American-owned business along with your regular consumer spending.