Balancing your checkbook is very important. This simple act can save money by eliminating possible bounced checks and overdraft fees, gives an accurate view of the account, and it returns financial control back to YOU by taking the guess work out of finances.

Your checkbook register should be balanced at least once a week if not once a day. For people who do not use their checking accounts that often, once a month is okay.

In order to balance your checkbook you will need your current bank statement (online statements are the best), checkbook and register, calculator, and a pencil.

Start off by writing down the balance shown on the bank statement. Now take all your deposit slips and make a pile and in a separate pile put all the withdrawal slips. This includes ATM withdrawals, extra fees, checks, ACH debit, etc.

Start off with the deposit slips and verify that all of them have been credited to the account using the statement. If there is a deposit missing, verify with the bank that this deposit was made and then add it to the balance that was shown on the bank statement.

Then take all the withdrawal slips and verify that each one has cleared the account. The transactions that have not cleared will need to be subtracted from the balance that has the recent deposits added.

The final balance can be entered into the checkbook register. Now you can use the checkbook register to maintain an ongoing balance.

Tips

-Use one checkbook and debit card.

-Do not use a pen when balancing your checkbook since the marking cannot be easily corrected or erased.

-Keep all receipts from transactions until they have been recorded into the register and cleared the account.

Time to start Spring Cleaning!

This includes organizing statements and bills so they are readily available when needed.

The benefit of becoming organized is less mess, less stress, and saves money. In order to become organized, a filing system must be established and there should be only one person in charge of it.

A filing system can simply be made out of a box with some folders or one can be bought at a local store. Just make sure it is adequate in size for the needs of that particular household.

At the minimum, make sure there is a folder for current bills, past statements, and miscellaneous items.

It is important to have a collective involvement in getting organized but remember to have only one person responsible for the finances.

Have everyone that lives in the home get together with blank sheets of paper and pencils. Have them sit down and write out all the expenses and bills that they can think of both for themselves and the household.

Then combine all the lists to make a final expense list. Once this has been completed, gather all the stacks of papers that consist of bills, statements, and checks.

Separate the stack of papers into the respective smaller piles. These piles can be, as an example, the current months, last months, or future bills.

Compare the newly made list of expenses to the actual bills.

If anything was missed, add it to the expense list. By double-checking the bills and list for missed items, this will make the process of getting organized more accurate and much easier.

Now you can use the expense list to make a budget and double check financial records. Now, all the bills and statements need to be sorted. Remember that these records need to be updated monthly.

Only keep cancelled checks, paid utility bills, credit card statements, etc., for one year. The exception to this is if any of the receipts, checks, or statements is needed to support past filing for state and federal taxes.

Income tax records and federal tax records will need to be kept for seven years as this is the time the IRS has to audit past returns. This is the same with all receipts and statements that support these records. After the seven years have passed, it is okay to dispose the old records.

Remember, these items should be kept in a accessible, safe, and secure place:

• Birth Certificates
• Social Security Cards
• Marriage License
• Deeds/Titles
• Contracts - Mortgage Papers
• Home Improvement Receipts
• Wills or Power of Attorney
• Veteran’s Papers
• Transcripts, etc
• Family Health Records
• Warranties and Manuals
• Large Purchase Receipts
• Insurance Policies
• Credit Card Information

Federal Financial Aid

Obtaining financial aid to attend college can be challenging at times, but it is very rewarding once it is awarded. With the proper planning and organization, searching and applying for financial aid will be less hectic.

There are several forms of financial aid available and incentives for students that have a desire of continuing their education past high school. These incentives and types of financial aid are:

• Scholarships
• Military Aid
• Savings           
• Grants                   
• Loans
• Federal Work Study
• Educational Tax Benefits
• Tuition Payment Plans

Everyone should plan for future education; couples who plan to have a child, to the student already in high school getting ready to graduate. If there is a set of plans made for future education, the opportunity will be present when the decision to continue with higher education is made. An online guide to financial aid check out www.finaid.org.

The best financial aid is savings. Parents should start to save for their children as soon as possible to help defer the cost of tuition. The benefit to savings is that there are educational savings plans such as 529’s that have important benefits that cannot be received from other savings plans. Benefits differ state to state and certain institutions.

Grants and loans can be received for higher education from both the state and federal government. To apply for this type of aid a Free Application for Federal Student Aid (FAFSA) needs to be filed out and sent in as early as January 1st of the year that you are applying for. The FAFSA application is a Free service so do not pay to have one done or sent in. FAFSA can also be done online at www.fafsa.ed.gov with faster results, but remember to get a PIN number first. Sign up for a PIN on FAFSA web site in the upper left hand side.

The five most important things to do when filling out the FAFSA:

• Read the form - Read the form in its entirety and if there is a question, ASK.
• Apply early - As early as possible, which is January 1st. Make sure you know what type of deadline is being enforced. Does the whole process need to be completed by that deadline or is it a deadline for submitting the application?
• Complete your tax return - In order to get the most accurate information, your tax return must be completed. All aid is based on the federal and state tax return.
• File Electronically - This is the fastest way to apply for financial aid. Information that is entered is edited online to help against errors that may cause delays.
• Fill out additional forms - Talk to the school’s financial aid advisor and find out if the school or state requires additional forms to be filled out.

Grants are money that do not need to be repaid as long as the requirements of the grant have been fulfilled.

For student loans there are several types and variations, with the Stafford Loan being the most popular. Stafford loans can be subsidized, which is where the government pays all interest on the loan while enrolled in school full time. There is also a unsubsidized loan where payment and interest is deferred while in school, but the recipient is still responsible for all interest that accrues on the loan.

Other options for financial aid are scholarships. Scholarships can be offered for a number of different reasons making everyone eligible to hopefully at least one. Scholarships can be given for grades, sports, community service, and many other endless reasons such as being left handed. It all depends on who is offering the scholarship and for what educational institution it will be for.

A great place to do a free search for scholarships is www.fastweb.com.

The best time to plan on financial aid is the first year of high school. Focus on getting good grades, sports, activities, and community service. Do not use the excuse; “I won’t qualify” as a reason not to apply since there are programs for everyone out there.

Call the Federal Student Aid Information Center (FSAIC) at

1-800-433-3243 or 1-800-730-8913 (if hearing impaired) and ask for a free copy of “The Student Guide: Financial Aid from the US Department of Education.”

This toll free hotline is run by the US Department of Education and can answer questions about federal and state student aid programs and applications, or write the address below to obtain the guide.

Beware if you need money fast…

Short-term loans are small loans between $100-$1000 for a period of time ranging from three to thirty days. The due date to payback the loan is usually by the next payday of the individual taking out the loan, hence the term “Payday Loan.”

The majority of these payday loans are less than $500 and has a payback time between seven to fourteen days with an average APR (Annual Percentage Rate) of 474% according to a study conducted by the Consumer Federation of America. Current research shows APR’s range from 390-1,303.57% for short-term loans. This is not including
non-sufficient funds or administrative fees.

The way it works is a Payday Loan establishment loans a person between $100-$300 based on a post dated check, the title of an automobile, or income tax return. The person will usually write a post-dated check for the amount approved plus the fees and interest rate. The company will hold that check and the individual can bring in cash for the return of the check that was written or let the loan company deposit the check for payment of the loan.

For example, a person borrowing $100 will write a check for $125 that will be cashed on that person’s following payday, which is fourteen days away. The actual APR for the loan is 651.79% as long as the loan is paid in full and is not “rolled.”

If for some reason the individual does not have the full amount of the loan they can pay just the finance charges in-order to “roll” the account. To “roll” the account means that a new deadline will be set and new fees and finance charges will apply. This is where people get trapped if they are unable to pay off the debt in full. If the above loan was rolled four times the person will have paid a total of $100 in interest and fees just to borrow $100 for two months. 

The consequences of a Payday Loan is that the cost of the loan is very high and once a loan has been received where will the additional funds come from in order to pay it back! If there is no money to cover the postdated check, criminal charges for writing a “bad” check are possible, as well as additional fees for non-sufficient funds from both the lender and the bank. If the account is “rolled” there is the possibility of getting caught up in a cycle of never ending debt. The money being paid is only going to the interest and finance charges and not the principle amount.

In order not to get trapped in a short-term loan, there may be other options. First thing to do is find out the cause or why the money is needed. Is it for bills, food, an emergency, or to cover an overdrawn account? 

Try to figure out other options, such as contacting the business that the money is owed to and inform them of the situation and see if there is a payment plan or alternative solution to get current with the debt. Gather all information about possible fees for such changes to the account and compare with other possibilities.

Contact local organizations such as the Red Cross, Salvation Army, churches, or a non-profit credit counseling service for programs or possible solutions. If a loan is the only option, try and borrow the money from a friend or family member or ask for a payroll advance from an employer.

If there is no way around a Payday Loan, shop around for the one with the lowest APR, combined fees, and has the most agreeable payback time. Since most people use these types of loans because they are not fully aware or misinformed on the true cost and consequences, make sure to get all the information as required by the Truth in Lending Act.

Annual Percentage Rate is the cost of credit based on a yearly rate. Do not confuse this with the weekly, bi-weekly, or monthly interest rate. Remember under the Truth in Lending Act, which states that the cost of the loan must be disclosed; the finance charges must be put in writing in both actual dollar amount and the APR. If these requirements have not been made, which is required by law, a complaint can be filed by calling 1-877-FTP-HELP or online at www.ftc.gov.

It is that time of year again, either yourself or someone you know may be graduating. It could be from elementary, grammar school, high school, or even college and you would like to get them something for this special occasion.

The gift does not need to be big or small since the size of the gift does not matter. What really matters is that the gift is from the heart and has a lot of thought and meaning behind it.

• Hand made gifts are the most special.
  
• Keep in mind that graduation gifts are more than a material object. A true gift has feeling, expression, and a reminder of yourself or time shared in the past.
  
• With this in mind, a few good gift ideas are:
  • Picture and frame
  • Home made video
  • Inscribed watch, locket, or bracelet
  • Ice Cream, treat, or dinner
  • Spend some extra time, or
  • A Graduation PARTY!

The packaging of the gift is just as important as the gift itself so put some thought and time into packaging the gift in a special way. Make it fun and entertaining. Be creative and do not be afraid to try something different than everyone else. Make it special!

There are no rules or mandatory gifts that need to be given. If you are not sure what to get the graduate for their special day, ask them what they would like or need.

Keep the gifts simple so that the thought and time will shine bright. Gifts from the heart are the most memorable of all.