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This weekend a number of college students will be putting on their caps and gowns to celebrate their graduation! As grads look forward to the future, we offer our advice for maintaining financial wellness during this new stage of life.

Congratulations college grads! Do you remember the scene from “The Graduate” with Dustin Hoffman where he is barraged with questions and advice at his graduation party about where to work? Oh wait, you weren’t born yet when the movie came out 48 years ago. Come to think of it, your parents likely weren’t either. Well, get the movie from the library and watch it sometime. It is a classic scene.

I do intend to barrage you with advice, but not about going into plastics. This advice is to help you avoid some typical financial pitfalls of a new college grad as you enter a new phase in life.

Understand Your Student Loans:

Do you have federal loans? Private loans? State loans? Do you owe the school directly? It can be a daunting task to sort it all out. Where to start:

  1. Find all your federal loan information at the National Student Loan Data System (NSLDS).
  2. Private loans probably required a co-signer. To confuse matters, some private lenders also service federal loans, so it can be hard for the lay person to distinguish between them. You may find your private loans on your free annual credit reports at www.annualcreditreport.com.
  3. States have their own educational loan programs, and rules and terms will vary. Some states report the loans to the credit bureaus, others don’t. You will most certainly get mail from them. Be sure mail is being saved for you at your permanent mailing address. If you went away to college, remember to change your address with your college post office.
  4. You may have a debt to the school itself. The school business office or financial aid office can help you track down that information.
  5. Did your parents take out federal Parent Plus loans to help pay for your education? You may have an agreement with your parents that you will pay these loans. You won’t find them on your credit report or NSLDS report, but your parents will on their own reports. (FYI to parents: you are legally responsible for the Parent Plus loans.)
  6. Set up a file folder for each loan program. Know when payments begin and due dates. Federal loans and some private loans have a grace period of 6 months after graduation before payments begin.
  7. To learn about payment options for your federal loans go to www.studentloans.gov.

Major take-away here: Don’t ignore your new job.

You Need A Car To Get To Your New Job

(Note that I used need, not want. Know the difference.) Promise me one thing: Be sure you develop a budget based on your net (after taxes, take-home) monthly income to know what you can afford before you take on a car loan. Find a useful worksheet here: Expense Tracking Form. Car dealers are happy to sell you more than you can manage. In that budget, factor in your student loan payments. They may not be in repayment yet, but they will be. I can’t tell you how many recent grads have come into my office with “student loan” problems, when I see a brand new car loan on their credit report. Without that car loan, their student loans wouldn’t be such a problem.

Major take-away here: Do the math, know what you can afford!

You Want Your First Apartment

Promise me another thing: Don’t sign any leases until you’ve got that budget. Again, don’t forget the impending student loan payments. I know it is harsh to hear, but you may have to continue to live at home. Trust me, your parents aren’t likely to be thrilled about the idea, either. To make life easier for all of you, offer to pay rent. Refer to your budget to know what you can afford. Be a considerate renter—clean up after yourself, help with house/ yard chores, don’t fight with your siblings … You know what a considerate person would do. (Do I sound like your mother?) Maybe you can work out a car sharing deal with your parents to reduce your transportation costs, too.

If your own place (with or without roommates) can be realistic, read this blog post: YOUR FIRST APARTMENT!

Major take-away here: Ditto above—do the math!

Save. Save. Save.

I have three SAVE’s for a reason. There essentially 3 levels of saving we should all be doing.

Periodic expenses: Classic example is car repairs. You heeded the advice above and got a less expensive used car. Cars are mechanical and they need maintenance and repairs. Comes with the territory. Be prepared. Other periodic expenses can be gifts and holidays, vacation, insurance premiums, etc.
Emergency savings: Prepare for the unexpected. Good example is a broken wrist horsing around and you can’t work. Your employer offers disability insurance but it likely only provides 60% of your income.
Long term: Retirement savings. I know it is impossible to believe at your age that you will ever be old. I am here to tell you that, with any luck, you will be old. If your employer offers a 401k plan and a match, you are a fool not to contribute. That match is free money. Even if you don’t have a match, contribute! Time is on your side. Even modest contributions at your age will grow to be real money when you need it. The miracle of compound interest is truly a miracle.

Major take-away here: SAVE! SAVE! SAVE!

Left School With Credit Card Debt?

Like many college grads, you may have a hefty credit card balance following you home from school. Start out your new phase of adulthood with a concrete plan to pay off that debt. A Debt Management Plan (DMP) can be just the ticket. Look at the full credit card statement. What is the APR (interest rate) on that debt? How much of each payment is going just to pay interest? How long will it take you to pay the debt with minimum payments? If you audibly gasped in horror, call us now at 888-577-2227! The DMP can help lower those rates, set up a concrete plan to pay the debt in full, and in many cases can help improve your credit score. Get started online to take control of your debt!

Major take-away here: Tackle the credit card debt head on with a DMP.

Okay, I’m done lecturing. I wish you a wonderful life!

Author Mary Ellen Kaluza is a certified LSS Financial Counselor.

The post Flashback Friday: 5 Must Read Tips For All New College Grads appeared first on Personal Finance Blog | LSS.

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The overdraft cycle is quite vicious and can be difficult to break. When budgeting monthly household expenses, it can be easy to overspend in various categories. Most commonly, it is easiest to overspend in the food/groceries and entertainment categories. This combined with reoccurring automatic charges can easily cause your bank account to become negative. In addition to this, you will very likely be hit with overdraft charges, which average about $35.

The overdraft cycle is quite vicious and can be difficult to break. When budgeting monthly household expenses, it can be easy to overspend in various categories. Most commonly, it is easiest to overspend in the food/groceries and entertainment categories. This combined with reoccurring automatic charges can easily cause your bank account to become negative. In addition to this, you will very likely be hit with overdraft charges, which average about $35.

To make matters worst, it often takes several days for the notification of the overdraft to reach you, and you may be continuing to spend, and racking up many more charges.

This can form a vicious cycle, because it will affect the upcoming amounts of money you deposit into your account. It means that you will have less to spend, and it really can be a difficult cycle to break. Each year banks and credit unions collect billions of dollars in overdraft fees. It is a large scale issue and a major concern for consumers.

An article published by Consumer Reports which states, “About 15 percent of consumers overdraw at least once a year, according to a Pew research study conducted in 2013, the latest data available. Among overdrafters, about one-third paid three to nine penalties in the previous year, and 16 percent paid at least 10 to 20 penalties.”

Breaking the Cycle

So with that said if you end up over drafting on your bank account, here are the steps you will want to take to break this cycle:

Overhaul Your Household Budget

In general, it is very important to develop a household budget you stick to each and every month. However, it is very easy to lose track of your finances. Spending leaks or unnecessary monthly subscriptions are usually a catalyst for over drafting on a bank account. Therefore, it is important to make cuts quickly by reviewing all of the non-essentials. Some changes you might want to consider are pausing your gym membership or steaming subscriptions for a couple of months, as well as taking more drastic measures such as permanent cut backs on your budget.

Ask your bank for a courtesy waiver

If you have multiple overdraft fees, it never hurts to ask your financial institution to waive a few of those fees. While some banks may not grant this, others might have a “one-time” policy. You will want to keep in mind that if they do grant you this that it may be your only “get out of jail free” card.

Boost your funds by producing extra income

Nothing is more effective in eliminating your overdraft fees like new forms of cash flow. This may include making extra money from landing a part time job or gig (e.g Uber/Lyft, Door Dash or Amazon Prime). Iff you have extra space, you could could list it on Airbnb. You can also figure out what clothing or excess items you can sell to make a little extra cash.

Begin a savings account

As a bonus tip, you will want to develop an open a savings account and link it to your primary checking as a protective measure. Overdraft protection can protect you by transferring money to your checking account to cover the transaction. Although you still may have to pay a fee, the fee is much cheaper than an overdraft coverage fee.

If you would like help getting started on a budget or setting up a savings plan, call 888.577.2227 to set up your free appointment with an LSS Financial Counselor.

Author Ray McCoy is a certified LSS Financial Counselor.

The post Tips for Breaking the Overdraft Cycle appeared first on Personal Finance Blog | LSS.

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May is Mental Health Awareness Month! According to NAMI-MN mental Illnesses can affect persons of any age, race, religion or socioeconomic status: in fact, about one in four American adults experiences an episode of mental illness per year. Mental health disorders account for more disability that any other illness, including cancer and heart disease reports the Centers for Disease Control and Prevention (CDC).

In his June 2018 article on the links between financial, physical and mental health, Brett Whysel of Decision Fish LCC wrote that:

  • Individuals with debt are three times more likely to have a mental health issue, especially depression, anxiety and psychotic disorders,
  • Financial stress is the second most common cause of suicide, after depression, and
  • According to Therapist Rachel Mickenberg, humiliation among the financially stressed makes it harder to seek help as it worsens mental health.

If you or someone you know is struggling with money and debt after an episode of mental illness, please know that you are not alone. As overwhelming as it may seem in the moment, you can take control of your finances, whether it’s for the first time, or starting over again. Here are some basic steps to get you started.

Get connected to resources

Some people experience periods of unemployment or reduced hours at work after an episode with mental illness. This can make continuing regular activities – including covering living expenses –  difficult and more stressful, especially if there is no income coming in.  Check out these resources to help you get through:

  • If you live in Minnesota, you can use Bridge To Benefits website to screen your eligibility for public benefits programs like Cash Assistance, SNAP, Medical Assistance, etc. You will get a report of what you may be eligible for and how to apply for it. In other states I recommend you contact your County Financial Assistance programs and/or call United Way’s 2-1-1 to find resources in your area.
  • Hunger Solutions Minnesota has a list of local food shelves and other food resources available in Minnesota Communities.
  • Talk to your employer about the Family Medical Leave Act (FMLA) and the availability of any short or long-term disability you may be eligible to receive. Disability typically pays out sixty percent of your regular pay which could help get you through until you can work full time again.
  • Explore other community resources: for example, in Minneapolis eligible Metro Transit riders can enroll in TAP – Transit Assistance Program – and purchase bus rides for just one dollar!  
Make a list of your debts and prioritize

If you have debts before, during, or after a mental illness episode, that episode can make it even more difficult to deal with the debts due to late payments, extra fees, reduced income, or sheer overwhelm. If you are ready to tackle debts, or are just want to make a plan so you know what to do when you are ready, here are some starting points:

  • Get current on basics: make a plan to pay up rent or mortgage payments, utilities, car payments, etc…these are most important to your immediate well-being
  • Get organized: Open your mail and sort your bills by creditor: this small act can feel enormously overwhelming to start, but takes away some anxiety by just knowing what you are dealing with
  • File any appeals: If you have insurance or Medicaid/Medicare and some bills aren’t covered that you believe should be call your insurance company right away and file an appeal. Medicaid may go back up to three months and pay medical bills.  Ask what the process is to submit those bills.
  • Get current on credit cards: call credit card companies and work out payment plans to either get caught up or see if it is possible to enter into an internal hardship plan.
  • If there is money left over prioritize any collection accounts if you have them. Start with the smaller accounts that are easier to pay off.
  • If there is not enough money to go towards any or all of your debts, you may want to consider bankruptcy.
Give yourself a break

How do you eat an elephant? One bite at a time. Money issues and debt are overwhelming whether you have a mental illness or not. When you start to feel overwhelmed with bills or from dealing with debts take a break. Go for a walk, meditate, practice some yoga, or talk with a friend. Come back to it in a day or two with a new perspective or level of energy. You may find it easier to tackle.

Enlist Support

If you find that looking at your situation is just too overwhelming and increases your symptoms, consider enlisting a trusted friend or family member to help you. Make sure they are supportive, empathetic, and non-judgmental.

If you aren’t comfortable reaching out to a friend or family member, LSS Financial Counselors can help you make a plan to manage your finances. From figuring out income and expenses, to prioritizing debts, and making a plan to get them paid we are here to help. For private, confidential, and non-judgmental help with your money call 1.888.577.2227.

Author Shannon Doyle is a certified LSS Financial Counselor.

The post Mental Health and Finances appeared first on Personal Finance Blog | LSS.

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Do you feel stressed? If you do, you are not alone. Poll after poll shows that somewhere between 75% – 80% of all American Adults are stressed. The top three stressors: money, relationships, and work – in that order.

Many employers are recognizing the effect that stress has on their employees in the workplace and trying to do something about it. Your employer may offer an Employee Assistance Program (EAP) that offers short term mental health counseling for you and your family members. That can be really helpful for workplace stress and relationship issues, but where do you turn if your stress is money related?

In 2018, 83% of employers (according to SHRM) also offered financial wellness programs in the workplace because they understand the impact financial stress has on their employees’ health and productivity. If your employer offers this service, take advantage of it! Here’s a few reasons why you should.

Your Health

Stress doesn’t just make you feel anxious and it’s not a harmless feeling that comes and goes. Stress has real-life consequences on your mental and physical health, such as:

  • Increased levels of depression and anxiety
  • Decreased quality of sleep
  • Higher blood pressure
  • Increased risk for heart attack
  • Migraines
  • Ulcers and digestive issues

If you are feeling stress due to collection calls, credit card bill payments, high student loan debt, high mortgage or rent payments, or simply worry that you won’t have to retire one day, you are not alone. If it’s keeping you up at night, causing you to check your accounts several times a day, or even making you irritable or angry, you are probably experiencing enough stress for it to affect your health.

Utilizing the financial wellness benefit offered through your employer can help you put together a plan to overcome your financial stressors, whatever they may be, especially if your employer offers one-on-one counseling sessions. Having a knowledgeable, non-judgmental guide on your side can make all the difference.

Your Happiness

It’s hard to feel happy when you’re worried about anything, but there are few things that touch every part of your life more than money does. In fact, I challenge you now: take a minute to think of one area that isn’t affected by money. It’s okay I’ll wait…

Couldn’t come up with anything? I’m not surprised. Having provided financial counseling for over twelve years I met with many people who were discouraged by the stress, worry, and problems that money brought into their lives. This phenomenon reached across all income levels, all races, all genders, all marital statuses, and all levels of indebtedness. Money can’t buy you happiness, but if you engage in these free(ish) activities your stress levels will go down over time, increasing happiness:

  • Exercise: a recent Yale and Oxford study showed that exercise makes you happier than money does, and it doesn’t even have to be that rigorous. A calming walk can do just as much good as a strenuous run, and in some cases, even more!
  • Get enough sleep: lack of sleep negatively affects mood, concentration, and cognitive function, leaving you unable to get into problem-solving mode.
  • Practice Mindful Meditation: pick a study, any study, about mindful meditation and you will quickly learn that research shows that mindfulness meditation leads to calmer and happier minds
  • Talk to someone about your stress: whether you meet with a mental health counselor, an EAP provider, or a financial counselor talking to someone about your stressors, and making a plan for overcoming them, will bring relief that may lead to more happiness.
Your job satisfaction

A 2017 study by PricewaterhouseCoopers (PwC), found that “nearly half of employees who are worried about their financial health miss work occasionally and are less productive when they are at work, spending at least three hours of work time dealing with personal financial Issues.” The study then states that for a company with 10,000 employees this translates to $3.3 million in lost productivity per year, with another $166,000 per year due to financial-related absenteeism. That’s a lot of money lost and a lot of time spent on financial-related problems!

Beyond the impact that lost productivity has on a company’s bottom line, lowered productivity can lead to compounding stress for employees: with missed deadlines, missed meetings due to “mental health” days, and a sense of dread that you may lose your job on top of everything else.  I don’t know about you, but when I am less productive at work I feel less engaged, and it can turn into a loop of negative feedback – even if it’s only in my head.

If you are like 75% of Americans and are feeling stress and it’s due to finances check with your Human Resources department to see if you have a Financial Wellness program that offers one-on-one financial counseling. If not, ask if there are any plans to bring one on in the future – 14% of companies indicate they intend to offer financial wellness benefits in the upcoming years.

If your employer doesn’t offer a financial wellness program, make an appointment with an LSS Financial Counselor today. It’s free and confidential and the only thing you have to lose is stress itself! Call 888.577.2227 today to schedule your free appointment.

Author Shannon Doyle is a certified LSS Financial Counselor.

The post Employers Care About Your Financial Well-being: 3 Reasons You Should Too appeared first on Personal Finance Blog | LSS.

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When searching for your next home, should you buy or rent? There is no right or wrong answer, but definitely some things you will want to consider.

  1. Do you want to stay in the area or do you want flexibility to move around? Do you want to stay in your next home for more than 5 years or have the ability to move after 1 year?
  2. What is the current housing market like in your area? Are prices soaring and bidding wars common or are prices at an all time low?
  3. Do you want to be responsible for repairs and maintenance on a home? If you’re not handy, consider maintenance costs before purchasing a home. These expenses can add up fast!
What is included with payments? Mortgage Payments

Most mortgage payments will cover principal, interest, taxes and insurance. However, you may be able to choose to not have your taxes and insurance included. This will allow you to have a lower monthly mortgage payment, but you will need to pay the taxes and insurance on your own.

Rental Payments

Be sure you verify what is covered with your rental payments. Some might include utilities, like electric and water.

Financial Considerations Before Buying a Home

How do you know if you’re ready to buy a home? Some signs you are financially ready to purchase include:

  1. a stable income,
  2. 6-8 months of living expenses in emergency savings,
  3. no desire to move again in the next 2 years and
  4. money saved for a down payment.
Credit and Homebuying

Having a higher credit score will allow you to qualify for a mortgage loan with a lower interest rate and payment. An interest rate difference of 1-3% may not seem like a lot, but over a 15 to 30-year term it can really add up. 

Down Payments

How much down payment do you need to buy a home?The amount you will need for a down payment will depend on the type of loan you are taking out. Keep in mind if you are putting less down you will have a higher loan to value ratio and on a conventional mortgage you will have to pay private mortgage insurance if you are putting less than 20% down.

Pre-qualification VS Pre-approval

Pre-Qualified is when the lender has decided that you will likely be approved for a loan up to a certain amount based on unverified information you have provided them. Being Pre-Approved means you have actually been approved by a lender for a specific loan amount. With a pre-approval the lenders have reviewed documented financial information like pay stubs, bank statements, and credit reports. 

Mortgage Rates

Mortgage interest rates and closing cost can vary from one lender to another. Therefore, shopping around and applying with multiple lenders will allow you to find the best loan option for you. As long as all of your applications are within a 45-day window it will only count as one credit inquiry. 

Real Estate Agents

You can purchase a home without a real estate agent. In fact, according to Bankrate, 10 to 15 percent of home sales each year are done without a Realtor. Even though there is no legal requirement to use a Realtor, hiring an agent can be beneficial. With their expertise and knowledge they will be able to help you navigate the housing market and find your dream home quicker.  They can provide you facts about the neighborhood, negotiate the sales price and help you secure financing. 

First-time Homebuyer Mistakes to Avoid
  • Talking to only one lender
  • Taking out the max loan amount you are approved for
  • Underestimating hidden cost of homeownership

If you’re considering buying a home in the future, schedule a meeting with a certified housing counselor with LSS Financial Counseling. We work with Minnesota home buyers long term to get financially ready and informed about resources and options before purchasing a home. Call 888.577.2227 to schedule your free appointment today or visit our website for more information.

The content of this blog was written by Tasha Symiczek, a certified LSS Financial Counselor. All questions are a part of Experian’s weekly Twitter chat.

The post To buy or to rent? appeared first on Personal Finance Blog | LSS.

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Finances are one of the leading causes of conflicts in relationships, according to studies by Suntrust Bank, and the Harris Poll.

When faced with conflict, what do you hope for? Consensus? Consistency?  Cooperation? Peace? Unity? Understanding? Compatibility? With open communication and little guidance, financial unity is possible.

Getting Started

Together, and individually, look at what is most important to you. Consider and list your priorities. Do you seek a balanced budget? Savings? Paid bills, debts? Short or long term goals? Start by agreeing on at least one goal.

Stick with the Difficult Conversations

Open communication is key to building the relationship with money and your significant other. Speaking openly about finances can be difficult, but tough money conversations can lead to emotional closeness, which is a plus for couples.

To begin the conversation:

  • Talk through your current financial situation.
  • Commit to making a positive change, and keep your promises.
  • Communicate in a respectful manner, accepting each other for who each is as an individual.
  • Compromise – Stretch without losing yourself. Respect each other’s needs.
  • Claim responsibility, and don’t blame each other. Don’t use money to try to control your partner.
  • Division of duties – play to each other’s strengths. Share responsibilities as evenly as possible.
  • Set aside a regular time to discuss finances.

Here are some important items to discuss:

  • Basics- balance of accounts, costs of expenses, and how much can be spent each week and month, assets and debts.
  • Will you have separate or joint accounts?
  • Will you blend income and expenses, or have some separation of finances?  
  • What to do with any extra expected, or unexpected funds.
  • Short term and long term financial goals – time frame, costs, and steps to reach those goals.

Remember, how you handle your finances is up to you as a couple.  It’s not dependent on how your parents, or your neighbors handle their money. Find out how talking about money daily or weekly, can enhance your relationship.

If you would like additional financial guidance as a couple, LSS Financial Counseling is available for appointments, at no cost.  Call us at 1-888-577-2227.

Author Michelle Style is a certified LSS Financial Couneslor.

The post Enhancing Your Relationship with Money & Each Other appeared first on Personal Finance Blog | LSS.

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Back in January I wrote a blog post about my New Year’s Goals and stated I would enlist all the readers of this blog to help me reach my goals. I talked about one strategy that I read over and over again: write down your goals, and then enlist help in being held accountable. I also read that having to confess that you haven’t kept a goal can be motivating as well. How is it going? Read on….

Goal #1: Spend 50% less on dining out, take out, and alcohol

If you recall, my husband and I were going over our spending report for 2018 and were shocked by some of the areas we spent too much money on: namely dining out, take out, and alcohol.

We decided we would cut back this spending by 50% so that we could start saving for our dream trips to the UK and Spain. I thought tying our reduced spending to something we really wanted would motivate us to spend less.


Failure is not falling down; it is refusing to get up

Chinese Proverb

Things didn’t go quite as planned. Late January, February and March turned out to be incredibly stressful and busy months for us. My husband missed some work due to a wrist injury, our daughter experienced some health issues, and my workload increased.

Between being stressed and tired and having too little time (and energy) to plan or prepare meals, we continued our old habits of ordering take out or going out. Our spending records also show that we did not reduce our spending on alcohol, but at least it didn’t increase!

Moving Forward

Last weekend we had a “money meeting” and recommitted ourselves to this goal. We instituted a couple changes as well:

  1. Implement a pain-point: Humans are risk averse; we hate to lose things we’ve already earned. We decided to use this information to help us reach our goal. In May, we will budget $230 per month towards our dream trips and anything we overspend on take-out, dining out, or alcohol will have to be pulled from this spending category.
  2. Make a plan: Instead of going out to dinner (or ordering in) just because we “feel” like it, we made a plan for the nights we will order in or go out for dinner. This gives us something to look forward to. Also, we bought easy-to-make items as an option for nights we just didn’t feel like cooking.
  3. Check our emotions: A huge realization we had was that we often ordered in or went out to eat on the days when we were tired, upset, or stressed. We agreed to check-in with each other on our emotions when we felt like straying from our plan.  So far we have avoided unplanned ordering or dining out twice using this strategy: in just one week!
Goal #2: Plan for the “Big Exit”

Turning fifty this year lead to this goal: I will complete my health care directive, put together a Will, and plan my funeral. As I said before, I want to make sure my funeral is planned so when my loved ones are grieving they have little to do except grieve (and they will be less susceptible to expensive up charges from highly skilled sales people). I pulled out my copy of “Get It Together” and started making some lists. So far I have:

  • Made sure all my beneficiary information is up to date on my checking and savings account as well as my Life Insurance policies and 403(b) retirement account
  • Put together a list of all my online accounts, including emails and social media accounts, along with usernames and passwords so that my spouse and/or family can close these down.
  • Gave my husband contact information for work in case I pass away while still employed

While that’s a very short list of activities, it all took time to pull together. I still have the biggies to attack – completing a health care directive, making a will, and planning my funeral – but having these little things taken care of will make some things easier to deal with when the time comes.

Goal #3: Move more for physical and mental health

Like I said in January, as I get older I don’t want to be a burden to anyone and I want to live an active lifestyle. The best way to ensure this happens is by taking care of my physical and mental health now. The research is out there that exercise is just as important for our brains as it is for our bodies. I live with Anxiety and Depression and have read study after study about how important regular exercise is in treating both of these conditions. My goal for this area was to increase my happiness, soothe anxiety and have a healthy body by starting a 22-minute a day workout routine. And I did just that…for about a week.

Moving Forward

Let’s face it: behavior change is hard. And when times are stressful and busy those things you are trying to add to your life can get pushed aside. In my thirties exercise was something I did daily without a second thought. In fact, the days when I wasn’t engaged in something active were few and far between. As I’ve gotten older I have found it more difficult to get back into the habit of exercising; especially in the winter with the short days and bad weather. I consulted an article/podcast from Life Kit, a series from NPR, to help me figure out how to improve in this area. Here’s what they said:

  • Give it a month: apparently there is no magic number of days to create a habit, but after a month you may see a habit forming
  • Try temptation bundling: this is where you bundle something you love doing with something you have to get done. For example, only listen to podcasts while exercising.  This would work with TV shows as well. Or exercising with a friend (see “make it social” below)
  • Avoid the “What-the-Hell” effect: The “what the hell” effect says that if we fail to meet our goals we can give up and go crazy. How can we avoid this? Set goals that are achievable and ambitious, but give yourself a pass if you don’t meet them.
  • Be flexible in your schedule: If you decide you have to work out in the morning, but miss it one morning it’s easy to fall into the “what the hell” effect. If you give yourself permission to exercise at other times of the day it can help you avoid this trap.
  • Make it social: Are you competitive? Check in with your neighbors, co-workers or friends about their workout schedules. How do you measure up? Another option would be to schedule time to work out with a friend (see “temptation bundling” above).
  • Put some money on the line: Remember how I mentioned above that people are risk averse? One of the things we hate losing most is money. Set up a commitment device, a sort of contract with your future self to follow through on your goals. Life Kit recommends the website stickK.com as a means of doing this. At this website you can commit to giving a certain amount of money to a person or charity if you don’t reach your goals. They even go so far as to suggest committing your money to an organization you don’t want to support for further motivation. Diabolical!

I think I’ll start with the first three strategies. If those don’t work I just may check out StickK.com. What have I got to lose?

Author Shannon Doyle is an LSS Financial Counselor.

The post New Year’s Goals: A Journey of Accountability pt. 2 appeared first on Personal Finance Blog | LSS.

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Recently the Eastside Financial Center (EFC) and its full range of integrated financial counseling and employment support services have relocated to a new home at 709 University Avenue West, Saint Paul, MN 55104 in the Lifetrack building.

While we will be leaving our Eastside building and will no longer use the name “Eastside Financial Center,” we will maintain our strong partnerships in the area and continue our community-based approach.

As a location of LSS Financial Counseling, we will meet the needs and aspirations of individuals with low-to-moderate incomes, and services will remain available to everyone regardless of income. Many of our counselors are bilingual and we will continue to offer support at the new location in English, Hmong and Spanish.

We see a high value in offering a unique set of products and services to a community that is under served by financial institutions so that people in this community can have a better chance at building financial assets, meeting their own financial goals while becoming part of the financial mainstream.

The hope and design of these services is to appeal equally to those having little or no bank interactions to middle-income customers. We will continue to connect customers to other supportive services to help them establish financial stability to meet financial emergencies. Through education programs and debt and credit counseling services, we will help community members develop personal financial management skills to protect, sustain and grow assets.

Our current offering includes a focus on the healthcare field through a financial lens. We employ a continuum of services to help people achieve financial wellness, whether that be through financial education, employment, financial products or asset building.

Services at the new location will include:
Financial Counseling

Providing assistance with budgeting, credit card and student loan debt, credit report review, and services to help you keep your home or prepare to buy a new one.

Healthcare Careers Program

Pairing career support for jobseekers looking to enter or advance in the healthcare industry with financial counseling.

Financial Products

Staff provide information about and getting started with Checking and Savings Accounts (in partnership with Sunrise Banks), or a Credit Building Loan (in partnership with Metropolitan Consortium of Community Developers), to help individuals and families manage debt and improve their finances.

Author Viva Yang is a Senior Program & Communications Manager with LSS Financial Counseling.

The post Integrated Career & Financial Services appeared first on Personal Finance Blog | LSS.

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Opportunity Costs

Have you ever heard of the term Opportunity Costs? Believe it or not, it is a concept that can affect our everyday decisions about spending money: if it currently doesn’t affect yours, it should. At its core the concept of opportunity costs is simple: it’s the idea that the money you spend on one thing today will not be available to spend on another thing tomorrow, or in the future.

Put even more simply, Opportunity Costs is about making a choice between one purchase or another, or none at all. Learning to use the logic behind opportunity costs can help you control spending and allow you to feel better about what you spend your money on.

The Opportunity Costs of Car Ownership

In the book Dollars and Sense, Dan Ariely and Jeff Kreisler describe an experiment: Dan and a research assistant went to a Toyota dealership and asked people what they would give up if they purchased a new car. Almost no one had an answer. They were spending tens of thousands of dollars and never considered what else they could spend that money on, or what they would have to give up to spend that money.

Borrowing money to purchase a car makes the opportunity costs seem lower, but imagine if you were paying for a car in cash: would you still spend as much as you would if you were borrowing the money?

Consider this: for vehicles driven 15,000 miles a year it costs, on average, about $8469 to drive and maintain a new car. This includes loan payments, insurance, gas, maintenance, tabs, etc. That’s $706 each and every month. Now ask yourself, what could you do with $706 if it weren’t going towards owning and operating a vehicle?

“Don’t give up what you want most for what you want now”

Dollars and Sense
Small Opportunity Costs Add Up

If you read my blog about my new year’s goals you would know that in 2018 my husband and I spent enough money on dining out, take out, and alcohol that we could have funded one of our dream trips to either Spain or the United Kingdom.

We spent our money on what we wanted in the moment and never considered that it was forcing us to give up what we wanted most! We decided to cut our spending in half so we could take our dream trip in two years. Stay tuned for an update on that plan in the next couple weeks.

This concept works with small purchases as well. Think about something you spend money on that doesn’t seem like a big deal. It could be anything for you, but I will use fancy coffee for my example. If I spend $5.00 once a week at a coffee shop what am I giving up? I no longer have that $5.00 to spend on something else like a cheap movie ticket or a glass of wine at happy hour. Over a year I am giving up the opportunity to spend $260 on something else that I might enjoy much more. Since I can’t name what that something else might be (a new phone, a pair of nice leather boots, a new winter jacket, you name it) it doesn’t feel like I am losing anything, but I am.

Making a Change

So how can you change this? Here are some strategies I am trying – these strategies also work great for time management!

Be mindful of opportunity costs

If every choice I make to purchase something (or spend time doing something) means there is something else I won’t be able to purchase (or spend time doing) I want to make good decisions about what I am purchasing (or doing). I am challenging myself to simply ask, “What am I giving up if I spend this money now?” At times it will be impossible to know. But if I know what I really want I can also ask myself “Will this purchase move me towards or away from what I really want?”  

Set goals

In order to answer the questions above I need to know what it is I really want which means I need to set goals. If I do this I am hoping I will have more of a reason to say no when temptation (not opportunity) comes knocking!

Plan ahead how I will spend money

Have you ever found yourself at the end of the month with little to no money left over and regretting purchases you made earlier in the month? You think to yourself, “If only I hadn’t spent all that money going out to eat” (or whatever exciting thing you had to have at that moment). That is opportunity costs catching up with you. It happens to me all the time. I am committing now to make a plan for my “fun money” so I can spend it on what I really want, not just what I want in the moment.

To learn more about opportunity costs check out the book Dollars and Sense. Remember – it’s free to do from the library, but you will be giving up some time!

To get some help setting goals and making a plan for how you will spend your money make an appointment with an LSS Financial Counselor today by calling 888.577.2227 or visiting our website.

Author Shannon Doyle is a certified LSS Financial Counselor.

The post Changing Financial Behavior appeared first on Personal Finance Blog | LSS.

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Getting out of debt can be an incredible challenge. Managing multiple payments, soaring interest rates, and never ending collection calls gets old incredibly fast.

If a Debt Management Plan is part of their debt free journey, it’s important to stick with it to the end. Bumps in the road might be common, but keep in mind that you are taking steps in the right direction! Here are five reasons to stick with a DMP.

1. Reduced Fees & Interest

Payments for a DMP are typically lower than your current payments. Additionally, most creditors will significantly reduce interest rates and stop fees once you are on a DMP.

“I have had clients I’ve worked with who have saved tens of thousands of dollars on a DMP versus paying it off on their own.”

Shannon Doyle, LSS Financial Counselor

Saving your hard earned money is fantastic, but the best part of all the savings is that it helps break free from debt. Often times the minimum payments for credit cards don’t even pay down the accrued interest, which creates an endless cycle of debt.

2. Simplifying Repayment

Juggling multiple payments and due dates is a hassle. A DMP provides you the simplicity of one payment and one due date. Life is complicated enough – let us handle the details to ensure all creditors are paid on time.

Did you know that you can add new accounts to the DMP? Feel free to get in touch with the DMP Support Team or your counselor with any additions you would like to add. Just make sure that all promotional rates on the account(s) that you are looking to add have expired. Once we confirm that the new account is applicable, we will send you out a revised contract for you to review and sign!

3. A Supportive Team

Navigating debt repayment can not only be complicated, but it can also get difficult to take it on solo. With a DMP at LSS, you have an experienced team advocating for you and helping you work through any issues with creditors.

If you’re struggling to keep up with payments, the unexpected occurs (job loss, car repairs, medical bills, etc.), or you just have questions about your DMP, the DMP Support Team is always here to off non-judgmental assistance.

We can also do a “DMP review” appointment where a counselor can check with you on your current financial situation. We can refresh your budget and see if there are some other areas to your finances that can be adjusted.

4. Debt Freedom in 5 Years or Less

With a DMP, you are debt free in 5 years or less. Without the reduced interest rates and waived fees, repaying the same debt will often take double or triple the time, depending on several factors. Sticking with the DMP means debt freedom in 5 years or less!

Did you know that you can pay more than the standard monthly payment on your DMP? There is NO pre-payment penalty with a DMP! Therefore, any additional money that you pay on top of your normally monthly will go towards your balances. It could even potentially accelerate the time of your DMP!

5. Better Credit

As long as there are no new debts that are past due or in collections being added to your overall debts, most likely your credit score is increasing!

Did you know that we can pull another copy of your credit report to see how you have been progressing? Schedule another appointment set up with a counselor here at LSS for a credit report review. It is free and a will not adversely affect your credit. During a credit report review, we can see if your credit score is having an upward trend. It it’s not, we’ll try to identify any potential issues that might be keeping it down.

If you’re intererested in meeting with a financial counselor for a credit report review or budget review at any point during your DMP, call 888.577.2227 to set up your free appointment.

If you have any questions about your DMP, you can contact the DMP Support Team by calling 800.764.0351 or emailing lssdmp@lssmn.org.

Author Dan Park is a certified LSS Financial Counselor.

The post 5 Reasons to Stick with a Debt Management Plan appeared first on Personal Finance Blog | LSS.

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