Financial Planning for the Elderly

Many elderly Americans struggle to make ends meet due to their limited fixed income, increasing prices and inflation. Some elderly Americans file for bankruptcy, have to downsize their home, move in with family or friends or get a roommate to stretch their income.

According to Alliance to End Homelessness, in 2008, 43,000 elderly age 65 and over relied on the shelter system. According to AARP, an excessive amount of debt and increasing medical bills have caused bankruptcies among the elderly to increase by 150 percent from 1991 to 2007. The percentage is even higher for those aged 75 to 84 years of age. The highest costs for the elderly are medical bills, medical services, prescriptions, food and housing costs. Here are some tips on how to save money on a fixed income.

Utilities
1. Invest in energy efficient light bulbs to save money on power bills
2. Improve home insulation to reduce heating and cooling bills
3. Use coupons when they truly represent a saving opportunity
4. Insulate hot water heater
5. Rinse clothes in cold water
6. Take luke warm baths or showers
7. Keep heat at 68 degrees Fahrenheit, keep a/c at 78 degrees Fahrenheit
8. Keep hot water heater at 120 degrees Fahrenheit

Household goods
1. Watch for the items you use to go on sale and stock up when prices are at their lowest
2. Submit available rebate offers for products you use regularly
3. Buy generic vs. name brand
4. Bulk items on sale or “day old” items
5. Use coupons or shop at discount stores such as Sam’s Club, BJ’s, Costco, Wal-Mart or Target

Electronics
1. Craigslist
2. eBay
3. freecycle.org

Healthcare
1. Free Dental Clinics www.freemedicalcamps.com
2. Operation Blessing International, 800-730-2537
3. Ask about discounted Dental programs www.dentalplans.com, www.choiceplusdentalplans.com, AmeriPlan, Aetna, Avia
4. Flat Fee clinics or sliding fee scale – search for “flat free clinic and the state you x”, x is the state you live in to find a clinic near you
5. Medicare supplement, 877-494-9296 Code: TIG
6. Prescriptions – buy generic, fill prescriptions at discount stores – Wal-Mart, Target, Walgreens

Food
1. Plan meals around items that go on sale or that are in season
2. Look for the items you use to go on sale and stock up
3. Comparison Shop
4. Don’t go shopping when you’re hungry
5. Generic vs. name brand
6. Shop at the dollar store for household products, spices, packaged foods and other foods
7. Feeding America Food bank - 800.771.2303 (nationwide)
8. Meals on Wheels 703.548.5558 (nationwide)

Finances
1. Create an emergency fund – with enough money to cover expenses for 6-9 months
2. Downsize – downsize to a smaller home, trade in a luxury car for a cheaper model
3. Get Tax Preparation Assistance – VITA Volunteer Income Tax Assistance 1-800-906-9887
4. Needs vs. wants - buy more needs vs. wants
5. Reduce spending – don’t buy things you don’t need or just because something is on sale
6. Budget - Create a budget and track spending daily or weekly
7. Reduce expenses – use coupons, buy in bulk, buy on sale, coupons.com
8. Debt – pay rent/mortgage, car payment first, then setup payment plans for collection accounts, judgments, tax liens, then everything else
9. Transportation costs – do you need a car, can you carpool or take public transportation
10. Insurance – do you have adequate health, life and disability

Housing
1. Reverse mortgage, 800-569-4287
2. Co-elderly housing, 812-618-2646 (nationwide)
3. Housing Information - www.seniorliving.com, www.SeniorsForLiving.com, www.aplaceformom.com, SeniorLivingSource.org/Housing, SeniorOutlook.com, www.seniorresource.com/ageinpl.htm#other
6. Low income apartments – www.rent.com, section8-help.com

Other
1. Aging Services Network - 202-872-0888 (nationwide)
2. Discounts - www.seniordiscounts.com/newsletter.aspx, seniors.lovetoknow.com/Are_There_Any_Discounts_Senior_Citizens_Receive
3. Aging Services - www.seniorresource.com/ageinpl.htm

Freebies
1. seniors.lovetoknow.com/Freebies_for_Senior_Citizens

Celebrate Saving

Are you saver? Many Americans today don't have a savings account. Start by creating an emergency fund. Your emergency fund is your safety net, in case you get sick or lose your job you can use your emergency savings to hold you for a few months until you can find a new job.

Your emergency account should be separate from your checking or savings accounts and should only be used for emergencies such as an unexpected expense, unemployment, medical bills, etc.

An emergency fund should be enough savings to pay your bills for at least 6 to 9 months. Money for an emergency fund should be readily accessible and stored in a checking or savings account, preferably a high interest savings account such as Emigrant Direct or ING or a money market account where you can make money while saving money.

To determine how much money is needed to pay 3 to 6 months worth of your bills do an inventory and write down all your bills and expenses and the monthly amount spent for each. Calculate the total. Use this amount and multiple by 3 or 6 to determine the total amount you need to save in your emergency fund.

Make sure you do some comparison shopping before opening an account for your emergency fund to ensure that they are no minimum or other fees for accessing your account. A good source to use is Bankrate.com.

Start by contributing small amounts to your emergency fund until you are able to contribute more even if it is just $5. Once you are able to contribute more to the fund do so. Make several short-term goals for your emergency fund. Once you have saved enough money to pay one bill pat yourself on the back. Then keep saving until you have enough to pay three bills and so on until you have enough saved to pay your bills and expenses for 3 to 6 months.

Once you have reached your emergency fund goal it is time to start developing some long-term goals such as an additional savings account and to start planning for retirement. A great site to learn about retirement planning is Morningstar.com and look under the Personal Finance section.

Having an emergency fund will ensure that you are on the road to becoming financially secure and will prevent you from going into debt when an unexpected tragedy happens or unexpected expenses arises. An emergency fund is the first step to getting out of and staying out of debt.

You have to prepare for the future and a critical component of that is having a savings account. You may not know what the future holds but if you prepare your finances now, it will ease the burden of what tomorrow holds.

How to Verify Your Credit Score is Accurate

A credit score ranges from 300-850 with 850 being the higest score. Your credit score is obtained when applying for credit, a loan or a job. Your credit score is viewed as an indication of your trustworthiness and your ability to pay your bills on time. The three major credit bureaus, Equifax, Experian and TransUnion use different evaluation systems and criteria to determine your credit score. Each credit bureau may provide a different credit score for the same individual.

A good credit score ensures you get the best terms possible which can include lower interest rates, discounts, little to no downpayment, no hidden or extra fees, no upfront costs and more. Seventy-five percent of Americans have at least one mistake on their credit report and seventy percent have at least one major mistake on their credit report. These statistics show how important it is to view your credit report and make sure that you dispute any errors and get them corrected immediately. Here are 7 steps to help check your credit report and ensure your credit score is accurate.

1. Order. Order a copy of your credit report from www.annualcreditreport.com or call 877-322-8228.

2. Annually. Check your credit report at least once a year especially before a big purchase or if you suspect identity theft.

3. Verify. Verify all information on your credit report is accurate including personal information such as SSN, address, date or birth, name spelling and suffixes, account balances, history, statuses, open and closed dates, etc.

4. Dispute. Dispute errors as soon as you notice them. Dispute online or by mail. Disputing online takes two weeks, disputing my mail takes four weeks from the time of receipt of your dispute.

5. Consistency. Information will not be the same on all 3 major credit reports. TransUnion only reports information for the past 2 years. Experian and Equifax may have different information for the same account and may list different accounts on each report.

6. Negative accounts. Ensure negative accounts that are 7 years old or older are removed. Inquiries that are 2 years old or older should be removed.

7. Get current. Get current on any late accounts. Judgments, tax liens, repossessions and collection accounts lower your score the most, then mortgage and credit cards payments.

How to Save on Cell Phone Costs

There are over 292 million cell phone users in the country. Cell phones have difference pricing depending on the company and features offered. Most cell phones only last 2-3 years and after that time the features of the phone stop working or start to diminish in quality. The average cost for basic cell phone service can range anywhere from $19.95 to $100 a month. The average cost of an actual cell phone can range from $19.95 to $1,000.

Most cell phones offer additional features for a cost such as ring tones, unlimited texting, unlimited nights and weekends, roaming and more. Prepaid cell phones charge by the minute and/or charge a daily fee. Most cell phone plans included caller id, voicemail and call forwarding. Some also include long distance. Here are 8 tips to help you save money when buying a cell phone.


1. Basic plan. Get a basic plan with basic features. Comparison shop shop online or by calling different cell phone companies to see what company provides the best value for your money.

2. Discounts. Ask about discounts and specials. Some discounts are provided through employers and certain organization memberships.

3. Bundle services. If you have multiple services with the same company get your cell phone service with the same company to save money.

4. Features. Eliminate unused or unnecessary service features such as: caller id, caller ring tones, conference call, detailed billing, etc. to save money.

5. Same plan. Use the same provider as your family and friends.

6. Calls. Don’t make calls during times when you will be charged, i.e. out of service areas, after 7:00pm, on holidays, etc.

7. Prepaid. Get a prepaid phone and keep track of your talk time to help determine how much you spend monthly.

8. Contract. When your contact ends contact the company to negotiate a lower price or a new phone. Ask for free activation, a free phone or other discounts.

Help for Upside Down Homeowners

There are approximately 2,172,099 foreclosed homes in the country. Many people are frustrated with trying to find options to remain in their homes and or simply walking away from their homes and moving in with friends or relatives. Others are buying smaller second homes and walking away from their first home before it goes into foreclosure. To avoid doing this and to remain in your home, here are some options that lenders can offer to help you.

Lender Options:
1. Loan modification. Your lender modifies your current loan to make your payments more affordable by lowering the interest rate and/or extending the mortgage term and adding the default amount to the back end of your loan or forgiving it. Provide documentation to show you are experiencing a hardship.
2. Reinstatement. Your loan is reinstated to current status after you pay the default amount and any other costs or fees.
3. Forbearance. Your lender works out a short term payment plan for you to get caught up on your payments. After you are caught up, you go back to paying your regular mortgage payments. Occasionally, the lender will reduce the principal amount on your loan as well.
4. Short Sale. If you cannot afford to keep your home and you are upside down on your mortgage, then a short sale might work for you. Your lender must approve the sale because you would have to sell your home for less than what you owe your lender. As part of your negotiations, you need to make sure that the lender agrees to accept the sold proceeds as satisfying your loan debt.
5. Deed in lieu of Foreclosure. Signing the deed back to the lender, handing them the keys, and walking away owing the lender nothing.
6. Refinancing. If you have equity, you can refinance by obtaining a new loan with a lower interest rate, at a fixed term with a lower monthly payment and pay off your existing mortgage.
7. Gradual interest rate
8. Repayment. Pay the past due amount over a period of months. Read the terms carefully to be sure you can afford the payment.

Here are some programs that can assist you with staying in your home.
1. FHA Secure Loan Program - http://portal.hud.gov
2. Hope Now Program – www.hopenow.com, 888-995-4673
3. Home Affordable Refinance Mortgage Program (HARP) -www.makinghomeaffordable.gov/refinance_yes.html
4. Home Affordable Modification Program (HAMP) - https://www.hmpadmin.com/portal/programs/fha_hamp.jsp
5. Second Lien Modification Program (2MP) –https://www.hmpadmin.com/portal/programs/second_lien.jsp
6. FHA Second Loan (FHA2LP) – https://www.hmpadmin.com/portal/programs/fha2lp.jsp
7. HAFA (Home Affordable Foreclosure Alternatives) Program - https://www.hmpadmin.com/portal/programs/foreclosure_alternatives.jsp
8. FHA HAMP (FHA Home Affordable Modification Program) –https://www.hmpadmin.com/portal/programs/fha2lp.jsp
9. UP (Unpaid Principal) – https://www.hmpadmin.com/portal/programs/foreclosure_alternatives.jsp
10. Retired Veteran Program - www.va.gov

Here are some companies that offer loan modifications:
Debt Stoppers, www.debtstoppersusa.com, 800-440-7235
NACA, www.naca.com/refinance/refinanceTenStep.jsp, 888-404-6222 option 5

If you are behind on other bills such as debt consider working with a financial planner or financial advisor. Bankruptcy should be your last resort.

Tips From Cupid

Valentine's Day gifts should be a bonus to a healthy relationship not a chore or ultimatum. Gifts should not be an indication of how much someone loves and you should not fall in love with someone because of the gifts they give you.

If you know your significant other is financially strapped don't be selfish and ask for or expect an expensive gift. Be realistic and understanding and know that sometimes men need a little help with gift ideas and be appreciative of whatever you get. You could be with someone who didn't get you anything. Remember to give love and you will get love in return. Here are 9 tips to celebrate Valentine's Day and save money.

1. If you suspect your date feels uncomfortable or is short on cash offer to split the bill and don't get upset about it. Things happen. At least he was thoughtful enough to want to spend time with you. He may just be afraid to admit he is having financial problems.

2. Be honest. If you don't have money or your funds are limited be honest, she/he will understand and if she/he is not understanding she/he may not be the one for you.

3. Write a love letter or love note. If you aren't in love yet, write a note expressing how you feel and what you like about your significant other.

4. Be creative with flowers. Everyone buys roses on Valentine's Day. Find out what her favorite flower is and buy that instead of roses. It will show her that you really care about her.

5. Give something from the heart. If you get a balloon or chocolate get a balloon with your significant other's name on it or get personalized chocolates or baked goods.

6. Make a quick getaway. Check online for specials for bed and breakfast inns that are inexpensive or stay overnight in a local hotel room.

7. Be romantic. Give each other massages with scented massage oils. Read love poetry. Watch romantic movies. Cook a romantic dinner, slow dance, gaze into each other's eyes, and then have "desert".

8. Free entertainment. Check your local newspaper for free events during Valentine's Day weekend.

9. Cook. If your significant other likes baked goods. Bake their favorite baked good and feed it to them or fix them breakfast in bed.

Are Your Business Skills Costing You Money

Many people have the passion and background knowledge to become business owners but do not take time to educate themselves about how to start and sustain a business. Many business owners cannot generate increased revenues to produce consistent cash flows due to lack of business skills or business knowledge. Lack of business skills can cause lost revenue.

Some of the most common mistakes business owners make are: having no website or using a free website, no business bank account, using a free email address, no physical mailing address, using a cell phone number as a business phone number, limited or no use of social networking, manual business processes, not accepting multiple forms or payments, credibility - what makes you different from your competition, having bad credit, limited use of technology and lack of creativity. Here are 7 tips on how to increase your business skills and your revenue.

1. Appearance. First impressions are critical to turning prospective clients into potential clients. Word of mouth is the cheapest and best way to generate business. If your physical and/or office appearance are low quality you may be missing out on potential clients. Create a budget for your business and stick to it. Always look and speak in a professional manner. Surround yourself with at least three successful business owners and ask them for advice on how they achieved their success.

2. SSN. Using your social security number as your tax id can cause problems in the future when filing taxes. It is best to obtain an employee identification number when first starting your business or obtain one as soon as possible. This ensures that you keep your personal life separate from your business. It has helped those who had to file bankruptcy for their business and were able to retain the personal assets and credit score.

3. Tax Filing. There are several options when filing your business status with the IRS such as sole proprietorship, limited liability corporation, corporation, partnership, non-profit, etc. Make sure you file the correct status for your business.

4. Social Networking. Social networking is the easiest and cheapest way to get new clients and increase revenue. Everyone is on the internet. Employers are seeking employees and companies are selling products and offering discounts every day. If you are not connected you are missing out on a big market. Ensure you social network profile remains professional. Don’t allow others to post negative or inappropriate comments on your profile. Keep your profile neutral on all subjects. Ask trusted friends and clients to recommend your product or service.

5. Website. Free websites may scare away potential customers who may feel that you are inexperienced, not serious about your business or that you cannot be trusted. Free websites also have advertisements that may distract potential customers from your website. Take the time to hire a professional web designer and make continual updates.

6. Cash flow. Before starting your business determine the startup costs if any and set aside at least 3 months reserve for any expenses that you may incur. After you get your business up and running work hard to maintain at least 3 months reserve because there will be a vendor who doesn’t pay on time, a client whose check bounces or a provider who prices increase. It is easier to run a business without worrying about how to pay business costs each month. If you need additional funding visit the Small Business Administration or get a line or credit.

7. Protection. Get the right amount of business and health insurance coverage. Hire experienced professionals to help support your business such as a financial advisor, lawyer, accountant, business coach/mentor, office support staff and website designer.

Don’t let your lack of business skills cost you revenue. Educate yourself about being a business owner and take your business to the next level.

What is a 1099 and Do You Need One

A 1099 also known as an information return is a tax document businesses are required to file to report certain business transactions to the IRS. The form is required by the IRS and other government regulations for businesses to file.

If you never received a 1099 form, don’t be alarmed. At some point in your life you will receive one. However, if you were told you were going to receive a 1099 wait until you receive the 1099 before filing your federal and state taxes. If you did not receive the 1099 by January 31st of the current year, contact the company and ask to be sent a duplicate copy.

If you receive a 1099 you are required to file it along with your income to the IRS because a copy has already been sent to the IRS in your name from the specified company.

There are over a dozen 1099 forms that you may receive during tax time. The most common 1099 forms are:

A. 1099-R – sent to tax filers for: annuities, charitable gift annuities, direct rollovers, excess deferrals/contributions, IRA distributions, military retirement, Roth IRA distributions, SEP distributions, SIMPLE distributions

B. 1099- sent to tax filers for: distributions

C. 1099-MISC – sent to tax filers for: non-employee bonuses/commissions, health care services, non-employee nonqualified deferred compensation, royalties

D. 1099-C – sent to tax filers who had debt canceled - charged off, written-off or settled

E. 1099-DIV – sent to tax filers for: capital gain distributions, dividends

F. 1099-Q – sent to tax filers for: Coverdell ESA distributions, direct rollovers

G. 1099-A – sent to tax filers for: foreclosures

H. 1099-H – sent to tax filers: health insurance advance payments

I. 1099-G – sent to tax filers: state and local income tax refunds, unemployment benefits

J. 1099-INT – sent to tax filers: interest income, tax-exempt income

K. 1099-LTC – sent to tax filers: life insurance contract distributions

L. 1099-Q – sent to tax filers: qualified tuition program payments

M. 1099-S – sent to tax filers: real estate sales


For more information on the different types of 1099 forms visit the IRS website.

Make Money During Unemployment

Since the recession many Americans have become unemployed and have experienced financial crises. Other Americans have taken the opportunity to start businesses or go back to school to improve their financial life. If you are currently unemployed take time to reflect on your life and develop short and long term goals you want to achieve. Develop an action plan to ensure that you achieve those goals.

The days when a recruiter or head hunter finds you to hire you for a job are over. If you want to get employed you have to make opportunities happen. If lack of finances are a major factor in your life you will have to think outside of the box and think of creative ways to make money. Here are a few tips to help you earn money while you are unemployed.

1. Cleaning. Become a maid or janitor by cleaning houses or office buildings.
2. Dog walker. Walk dogs and/or groom pets. Offer to bathe dogs or cats.
3. Part-time. Look for part-time opportunities including those not in your field. Some companies hire part-time employees as full-time employees or offer benefits.
4. Volunteer. Offer to become a volunteer at a company that is in the same field or a similar field you want to work in. Some companies hire volunteers as permanent employees.
5. Babysitter. Offer to watch children during the week or on weekends when parents need to run errands or go for a night out.
6. Seasonal Work. Get hire during seasonal employment recruiting periods such as Christmas and the summer time.
7. Temp Agency. Sign up with 5-10 temporary or staffing agencies that find part-time or full-time temporary jobs. Some jobs are converted to permanent employment after 90 days.
8. Service Industry. If you have good customer service skills you can work as a customer service representative answering phone calls, serve as a hostess, waitress or receptionist.
9. Secret Shopper. You can become a secret shopper for a company or go shopping for elderly or sick individuals.
10. Sell Items. Sell new or unused items on eBay or Craigslist.
11. Network. Network with neighborhood workers to see if they need assistance with doing odd jobs such as lawn care, snow removal, tree removal, washing cars, etc.