Tuesday, January 12, 2010

Getting Your Finances Back on Track

Many of us have good intentions to get our “financial house in order” and take control of our finances rather than letting them control us.  Daunting as that may be, here are some practical suggestions excerpted from a CBS news story (www.cbsnews.com) about David Bach, best-selling author of "Start Over, Finish Rich," to get your finances organized for 2010 and help save you some money at the same time.

Asked how much money people are losing by being disorganized with their bills and receipts, Bach said, "The key is to start by 'finding your money' - getting organized is where you start. People can lose thousands of dollars a year when they don't know where their money is. Just losing itemized deduction alone because you didn't keep you records can cost you thousands of dollars. Not keeping your home improvement records can cost you tens of thousands when you sell your home."

Bach said the biggest mistake people make is not organizing their statements, stuffing all into a drawer without any system. Asked why, he said, "Most people don't know how to 'get organized financially.' They were not trained, they don't have a system. I have a system. It has helped thousands of people. It's easy and you can do it in an hour."

To get organized, Bach says to shred it and forget it - that is, shred and throw away old bills and statements. "You can get rid of most old statements. First clean out everything that is not tax related for 2009. Old warranties, old annual reports, newsletters etc. Out with the old and in with the new," he explained.

But what if you get audited? How far back should be keep financial documents?

"The IRS recommends you keep records for three years, and as far back as seven. But old tax documents can be filed in the garage or storage. They don't need to stay in your home office," Bach explained,

His next step is called "find it and file it."

"My start-over file folder box has 14 folders. It's a system in a box, that you can build in less than an hour to organize everything in your financial life," Bach explained.

The folders are: Tax Returns, Retirement Accounts, Social Security, Investment Accounts, Savings and Checking Accounts, Household Accounts, Credit Card Debt, DOLP Worksheet, Credit Scores, Other Liabilities, Insurance, Family Will and Trusts, Children's Accounts, Latte Factor.

Bach said, "You can completely automate your financial life in less than an hour, if you do it correctly."

"The secret to 'finishing rich' is to have an 'automatic' financial life," he said. "When you earn a paycheck, you automatically have you retirement account, emergency account, and other savings accounts funded. In 'Start Over, Finish Rich' I go as far as teaching you exactly how to automate your entire financial life into seven categories and that includes paying your bills."

Bach said that part of getting organized is fixing and protecting your credit score. "Everyone should start the year by pulling their credit score for free.  You want to check it for mistakes, and get those mistakes fixed in January. Having mistakes on your credit report can cost you thousands of dollars a year in higher interest," he explained.

(TRIP recommends that you contact one of our housing counselors to pull and review your credit report with you.  Not all sites provide free reports, despite their claims.  And knowing how to correct inaccurate information is key to controlling your financial situation.)

And Bach recommended to "recommit to wealth."

"All recessions lead to recoveries," Bach said. "We are already in the beginning stages of a massive recovery now. The stock and bond markets have posted staggering gains in 2009. Home prices are stabilizing and earnings are improving. You cannot afford to stay down and miss this next economic boom. This is your year to 'Start Over, Finish Rich' and get your finances back on track."

Visit David Bach's Web site, FinishRich.com.

Tools for Tough Times

Economic problems facing you in 2010?   If you need help as a result of the economy, check out “Help Wanted,” a new public television series and web portal that provides information about vital resources available to consumers.  Public Television stations WMHT-Albany and WCNY-Syracuse shed light on the current economic crisis in New York State with the brand new series “Help Wanted,” which premiered on Thursday, January 7th at 8:30 PM (WMHT-Albany). Click here for broadcast schedule. Previous episodes can also be viewed online.

Partnering closely with government and non-profit organizations, “Help Wanted” features a weekly 26-episode television series, a web portal that serves as a vital tool for resources, and public outreach events to expand the reach of the project and the resources. WMHT’s Dan Bazile is the host of the series with field reporting from WCNY's Liz Ayers. Together, WMHT and WCNY recruit guests from various backgrounds and give them real world advice for their real world situations from organizations that can truly help.

The series invites viewers to follow 44 diverse individuals as they are connected to employment and financial resources and both WMHT and WCNY feature stories and spotlight guests within the communities of New York State.

The series gives New York citizens useful and trustworthy information in an accessible centralized manner regarding the factors affecting their family economic situation. Four elements of concern will be addressed in each episode: Employment Resources, Job Training, Consumer Protection, and Family Finances. 

More information on “Help Wanted” - including available resources  -- can be found at www.helpwantedinteractive.org.

Monday, January 11, 2010

Dreaming of Buying a Home?

Considering home ownership in 2010?  TRIP’s national partner, NeighborWorks America, has created a web site to assist people who are considering buying a home called “Keys to My Home” at http://www.keystomyhome.org.   NeighborWorks America tells consumers that “Your dream of owning a home can become a reality if you set realistic goals, get sound advice, plan carefully and clearly understand the costs of homeownership." That is why  NeighborWorks America  has partnered with E*TRADE Financial to create the educational Web site “designed to help you make informed, sound decisions related to the home buying process.”  Topics include getting ready, understanding credit issues, financing considerations, finding a home and managing one’s home.   If you are considering buying a home, this website will help you understand the big picture to prepare you for each step.

 You should also plan on attending one of TRIP’s Homebuyer Orientations. They are offered once a month and provide useful information about local home buying programs as well as what TRIP can offer someone on their path to becoming a homeowner.  To register for an orientation or to access quality, free financial and housing counseling, contact the TRIP NeighborWorks Homeownership Center at 690-0020 or rose@triponline.org.