Lots of Variables with Fixed-Rate Mortgages

Tip: Payment Practices. Depending on the loan, a home buyer who chooses a 30-year mortgage may have the option to make extra payments. In a sense, this enables the borrower to treat the long-term loan like a short-term one.

When selecting a fixed-rate mortgage, a prospective borrower has to determine how many years to finance the loan. Some financial institutions offer 10- and 20-year fixed-rate mortgages as well as 15- and 30-year fixed-rate home loans.

For the purpose of comparison, this worksheet takes a look at 15-year and 30-year fixed-rate loans.

The payments on a 30-year mortgage are generally lower than 15-year loans, but their interest rates tend to be higher. The lower payment comes from spreading out the loan over twice as many payments. Because of the longer time frame, a 30-year mortgage owner pays more in interest payments than a 15-year mortgage holder.

15 Years vs. 30 Years

Fast Fact: Go Short. Thirty-four percent of borrowers who refinanced a 30-year fixed-rate loan in the first quarter of 2015 opted for a shorter term.
Source: FreddieMac, 2015

A 15-year mortgage is paid off twice as quickly as a 30-year mortgage, which allows the home buyer to build equity at an accelerated rate. The payments on a 15-year loan are higher — but they aren’t usually twice as high — as a 30-year loan.

To get a better idea of the differences, take a few minutes and add some numbers to the accompanying worksheet.

Worksheet

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2017 FMG Suite.

Should You Choose a Fixed or Variable?

Tip: Common Indexes. The most common indexes to which the interest on adjustable-rate mortgages is pegged are the 1-Year Constant Maturity Treasury Index, the 12-month Treasury average, the Cost of Funds Index, and the London Interbank Offered Rate Index.
Source: Bankrate, 2015

Buying a home is the single largest financial commitment most people ever make. And sorting through mortgages involves a lot of critical choices. One of these is choosing between a fixed- or variable-interest-rate mortgage.

True to its name, fixed-rate mortgage interest is fixed throughout the life of the loan. In contrast, the interest rate on a variable-interest-rate loan can change over time. The mortgage interest rate charged by a variable loan is usually based on an index, which means payments could move up or down depending on prevailing interest rates.¹

Fixed-rate mortgages have advantages and disadvantages. For example, rates and payments remain constant despite the interest-rate climate. But fixed-rate loans generally have higher initial interest rates than variable-rate mortgages; the financial institution may charge more because if rates go higher, it may lose out.

If prevailing interest rates trend lower, a fixed-rate mortgage holder would have to refinance, and that may involve closing costs, additional paper work, and more.²

With variable-rate mortgages, the initial interest rates are often lower because the lender is able to transfer some of the risk to the borrower; if prevailing rates go higher, the interest rate on the variable mortgage may adjust upward as well. Variable-rate mortgages may allow borrowers to take advantage of falling interest rates without refinancing.³

One of the biggest advantages variable-rate mortgages offer can be one of their biggest disadvantages as well. Rates and payments are subject to change, and they can rise over the life of the loan.

Fast Fact: Death Pledge? The word “mortgage” comes from the Old French words “mort,” meaning “dead,” and “gage,” meaning “pledge.”
Source: Dictionary.com, 2015

Should you choose a fixed or variable mortgage? Here are four broad considerations:

First, how long do you plan to stay in the home? If you plan on living in the home a short time before selling it, you may want to consider a variable-rate mortgage. With a shorter time frame, the loan will have less time to move up or down.

Second, what’s happening with interest rates? If interest rates are below historic averages, it may make sense to consider a fixed rate. On the other hand, if interest rates are above historic averages, it may make sense to consider a variable rate loan. Then if interest rates decline, your interest rate may fall as well.

Third, under what conditions can the lender adjust the rate and payment? How frequently can it be adjusted? Is there a limit on how much it can be adjusted in each period? Is there a lifetime limit on how high the interest rate and payment can be raised?

And fourth, could you still afford your monthly payment if interest rates were to rise significantly? How would it affect your finances if your payment were to rise to its lifetime limit and stay there for an extended period?

For most, buying a home is a major commitment. Selecting the most appropriate mortgage may make that long-term obligation more manageable.

1-3. Nerdwallet, 2015

Average Interest Rate: 30-Year Fixed-Rate Mortgages

According to Freddie Mac, the average rate on 30-year fixed-rate mortgages was 3.85% in 2015, which was up from the previous year, but still below historical averages.

Average Interest Rate

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2017 FMG Suite.

To Catch a Thief

Tip: If You’re a Victim. If you think you may have had your identity stolen, take action immediately. Start by contacting the Federal Trade Commission (www.ftc.gov), where you can find information about what to do next.

Many Americans have taken steps in recent years to protect their identity, yet The Federal Trade Commission reported in February 2016 that identity-theft complaints rose by 45% in 2015. About 300,000 people have their identities stolen every year. If you haven’t taken measures to protect yourself, it may be a good idea to consider your options.1

Identity theft is a crime in which an individual illegally obtains and wrongfully uses another person’s personal information—such as a Social Security number, bank account number, or credit card number—generally for financial gain. Once a thief has possession of your personal information, it may be used to obtain a loan, run up credit card debt, or commit other crimes.

The U.S. Department of Justice recommends that individuals take four steps to help protect themselves against identity theft. These steps are represented by the acronym SCAM.2

S — Be stingy when it comes to giving out your personal information. Make sure the person requesting the information is on a “need-to-know” basis. For example, someone who claims to be calling from your bank does not need to know your mother’s maiden name if it’s already on file with the bank.

Fast Fact: One well-known case of identity theft involved criminal-turned-FBI-consultant, Frank Abagnale, Jr. During a five-year period in the 1960s, Abagnale assumed at least eight separate identities and amassed millions of dollars using forged checks.

CCheck your financial information periodically. If you get hard-copy credit card or bank statements mailed to you, consider keeping these documents in a safe, secure location. Be skeptical if it appears the financial institution missed a month. Identity thieves may try to change the address on your accounts to keep their actions hidden from you for as long as possible.

A — From time to time, ask for a copy of your credit report. This report shows bank and financial accounts in your name and may help provide evidence if someone has used your name to open another account. To obtain a report, contact any of the three major credit bureaus, Equifax, Experian, or Transunion.

MMaintain good records of your financial accounts and obligations. Experts recommend that you keep hard copies or electronic versions of monthly bank and credit card statements. Easy access to this information may make it easier to dispute a transaction, especially if your signature has been forged.

Recent trends indicate that government agencies, credit card companies, and individuals have become smarter about protecting personal information and identifying perpetrators.

Nevertheless, having your identity stolen may result in out-of-pocket financial loss, plus the additional cost of trying to restore your good name. Help protect yourself by using caution when sharing your personal information and keeping an eye out for warning signs.

The Age of Risk

Instances of identity theft are more frequent among individuals aged 40 to 60.

The Age of Wisdom

Chart Source: Federal Trade Commission, 2016

  1. Federal Trade Commission, 2016
  2. U.S. Department of Justice, 2015

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2017 FMG Suite.

A House Divided

Tip: School of Thought. Researchers typically peg the divorce rate at around 50%, but for those with at least a bachelor’s degree, the number falls to below 30%.
The Washington Post, April 6, 2016

The latest research suggests that divorce rates in the U.S. have been falling in recent decades. Still, many people face the difficult crossroads that comes when their marriage ends.1

Getting a divorce is a painful, emotional process. Don’t be in such a hurry to reach a settlement that you make poor decisions that can have life-long consequences. If divorce is a possibility, here are a few financial ideas that may help you prepare.

The most important task you can do is getting your finances organized. Identify all your assets and make copies of important financial papers, such as deeds, tax returns, and investment records. When it comes to dividing up your assets, consider mediation as a low-cost alternative to litigation. Most states have equitable-distribution laws that require shared assets to be divided 50/50 anyway. When a divorce becomes contentious, attorney’s fees can accumulate.

Fast Fact: Expensive Split. The most costly celebrity divorce on record involved Rupert Murdoch, who paid his wife Anna $1.7 billion.
Yahoo Finance, March 10, 2015

From a financial perspective, divorce means taking all the income previously used to run one household and stretching it out over two residences, two utility bills, two grocery lists, etc. There are other hidden costs as well, such as counseling for you or your children. Divorces also may require incurring one-time fees, such as a security deposit on a rental property, moving costs, or increased child-care.

Finally, dividing assets may sound simple but it can be quite complex. The forced sale of a home or investment portfolio may have tax consequences. Potential tax liability also can make two seemingly equal assets have varying net values. Additionally, when pulling apart a portfolio, it makes sense to consider how each asset will suit the prospective recipient in terms of risk tolerance and liquidity.

Remember, the information in this article is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation.

During a divorce, many factors are competing for attention. By understanding a few key concepts, you may be able to avoid making costly financial mistakes.

Marriage History for Americans

Only 40% of men and 37% of women are currently married to their first spouse.

Chart Source: U.S. Census Bureau, March 2015. “Ever married” indicates those who have been married once or more times.

1. The Washington Post, April 6, 2016

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2017 FMG Suite.

Healthy Body, Healthy Pocketbook

Tip: Healthy Targets. Generally speaking, cholesterol should be 200mg/dL or lower. And a good blood pressure level is 120/80 mmHg or less.

People save for a variety of things in retirement. Some dream of vacation homes in tropical destinations, others plan to spend time with grandchildren and family. Of all the activities you are saving for in retirement, did you know that healthcare may have the biggest price tag? One study found that a man would need to save $124,000 and a woman would need to save $140,000 for health care in retirement if they want a 90% chance of being able to pay all their future medical bills.1

Thankfully, your retirement health costs are not set in stone. Of course, you won’t have total control over your health in retirement, but there are things you can do to manage your health risks and potential costs. Here are a few tips.

Get informed — Medical expertise and advice are constantly changing. Keep yourself up-to-date on healthcare news, particularly with regard to issues that have affected you or those related to you. Ask your doctor to help you identify areas of particular concern.

Develop (or maintain) a healthy lifestyle — This boils down to simple wisdom: eat healthy, exercise regularly. Limit fats and sugars and increase your intake of whole grains, fruits, and vegetables. If you haven’t already, embark on an exercise program you can stick with long term. If it’s been a while since you last exercised, consult with your doctor before you begin. Start slowly and work up to your goals.

Relax — Stress can be detrimental to your health. Maintaining friendships, focusing on hobbies, and taking time to relax may help ensure good mental health. In fact, research shows that staying socially active in retirement can alleviate stress and reduce the risk of depression. It may also aid in the prevention of Alzheimer’s disease.

Fast Fact: No Need to Save? According to the EBRI, Medicare only covers about 60% of health care expenses for its beneficiaries.
Employee Benefit Research Institute, 2015

Learn your numbers — Staying healthy means monitoring a few key numbers. You should know your blood pressure, cholesterol, and body mass index (BMI). Your blood sugar level indicates your risk for diabetes. Your doctor can perform simple tests to help you identify these numbers and recognize any vulnerability you may have.

Get preventative care — Preventing a disease or illness can be much less expensive (and painful) than treating one. As recommended by your doctor, take advantage of free or low-cost diabetes and heart disease screenings, mammograms, and vaccinations. And make sure to get your annual physical.

There is no way to guarantee you won’t have unexpected healthcare costs in retirement. But maintaining a healthy lifestyle can help you reduce possible health-related expenses—not to mention avoid spending precious time in the recovery room.

Watch Out, Florida

Bankrate recently ranked the 10 best states to retire, considering several key factors that are important to retirees, such as cost of living, access to medical care, climate and crime rates. The results may surprise you.

Healthy Body, Healthy Pocketbook

  1. Wyoming
  2. Colorado
  3. Utah
  4. Idaho
  5. Virginia
  6. Iowa
  7. Montana
  8. South Dakota
  9. Arizona
  10. Nebraska

Source: Bankrate, 2015

1. Employee Benefit Research Institute, 2015

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2017 FMG Suite.

Do Your Kids Know The Value of a Silver Spoon?

Tip: Give Them a Look. Find a credit card calculator on the web to give your kids a real-life look at what it actually costs to “buy now, pay later.”

You taught them how to read and how to ride a bike, but have you taught your children how to manage money?

One study of 2015 college graduates showed they had an average $35,051 of college-related debt. And the share of those graduating with debt was about 70%.1

For current college kids, it may be too late to avoid learning about debt the hard way. But if you still have children at home, save them (and yourself) some heartache by teaching them the basics of smart money management.

Have the conversation. Many everyday transactions can lead to discussions about money. At the grocery store, talk with your kids about comparing prices and staying within a budget. At the bank, teach them that the automated teller machine doesn’t just give you money for the asking. Show your kids a credit card statement to help them understand how “swiping the card” actually takes money out of your pocket.

Fast Fact: Pass It On. 71% of current college students say they learned money management from their parents.
Sallie Mae, Majoring in Money, 2016

Let them live it. An allowance program, where payments are tied to chores or household responsibilities, can help teach children the relationship between work and money. Your program might even include incentives or bonuses for exceptional work. Aside from allowances, you could create a budget for clothing or other items you provide. Let your kids decide how and when to spend the allotted money. This may help them learn to balance wants and needs at a young age, when the stakes are not too high.

Teach kids about saving, investing, even retirement planning. To encourage teenagers to save, you might offer a match program, say 25 cents for every dollar they put in a savings account. Once they have saved $1,000, consider helping them open a custodial investment account, then teach them to research performance and ratings online. You might even think about opening an individual retirement account (IRA). With the future of Social Security in question, your kids may be on their own to pay for their retirement. Some parents offer to fund an IRA for their children as long as they are earning a paycheck.2

As you teach your children about money, don’t get discouraged if they don’t take your advice. Mistakes made at this stage in life can leave a lasting impression. Also, resist the temptation to bail them out. We all learn better when we reap the natural consequences of our actions. Your children probably won’t be stellar money managers at first, but what they learn now could pay them back later in life—when it really matters.

Tell Me About It

More than eight-in-ten college students say they want to learn more about specific aspects of managing money. Here’s what they want to know.

Chart Source: Sallie Mae, 2016

1. CBS Market Watch, May 9, 2015

2. Contributions to a Traditional IRA may be fully or partially deductible, depending on your individual circumstance. Distributions from traditional IRA and most other employer-sponsored retirement plans are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty. Generally, once you reach age 70½, you must begin taking required minimum distributions.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2017 FMG Suite.

Buying vs. Leasing a Car

Tip: No Down. Many leases require a down payment, but you may be able to talk the lender into lowering the payment or omitting it entirely.

Some people approach buying a car like they approach marriage, “till death do us part.” Others prefer to keep their options open, trading in every few years for the latest body style, the hottest technology, or the highest horsepower. Whichever describes you best, we all face a similar decision when it comes to acquiring a car: finance, lease, or pay cash.

About one-third of people lease their cars, but most choose to finance, and some still pay cash.¹ From an investment perspective, which choice is best? That depends on your lifestyle, cash flow, and personal preferences.

For many, paying cash for a car is the simplest way to get one. When you drive off the lot, you own the vehicle outright and are free to do whatever you want with it. You face no penalties or mileage restrictions, and you have no monthly payments. However, you have paid cash for a vehicle that is expected to depreciate over time.

Financing a car requires a smaller initial outlay of money, usually 10% to 15% of the vehicle’s value, in the form of a down payment.² When you drive off the lot, the bank owns the car, not you. As with most loans, you make monthly payments of principal and interest with the promise of eventual ownership. The amount of your payment depends on a variety of factors, including the value of the car, the length of the loan, and the interest rate offered by the lender. Car dealers sometimes will offer “no money down” or low annual percentage rate loans, which can make financing more manageable.

Fast Fact: Watch the Miles. Mileage overages can cost 15 to 25 cents per mile, but you may be able to purchase extra miles up front at a discounted rate.
Source: DMV, 2015

If you like to have a new car every few years, leasing is an approach to consider. Leasing a car is like renting an apartment. You pay a monthly fee to use the car for a specific amount of time, usually two to three years. Monthly payments are typically lower than when you finance since you are paying for the depreciation on the car while you drive it. In certain situations, lease payments also may have tax considerations.³ However, there are caveats to leasing. For one, a lease typically stipulates the number of miles you are permitted to drive during the course of the lease. At the end of your lease, you may face penalties if you have exceeded the total number of miles in the contract.⁴

Whatever your relationship with your car, it may eventually come time for a new one. Familiarize yourself with your options. You may find that changing your strategy makes sense in light of your lifestyle or financial situation.

  1. Experian.com, 2016
  2. Cars.com, 2015
  3. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation.
  4. Cars.com, 2015

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2017 FMG Suite.

Countdown to College

Tip: Parlez-vous Francais? Many universities like to see multiple years of foreign language on a transcript.
Source: Collegeapps.about.com, March 11, 2016

Most parents want to give their children the best opportunity for success, and getting into the right college may help open doors. A recent study found that individuals with a Bachelor’s degree or better accounted for 34% of all workers in America — and 53% of all earnings.¹

Unfortunately, being accepted to the college of their choice may not be as easy as it once was. These days, preparing for college means setting goals, staying focused, and tackling a few key milestones along the way.

Before High School

The road to college begins even before high school. Start by helping your elementary and middle school children develop a love for learning. Encourage good study habits and get them dreaming about college. A trip to a nearby university or your alma mater may help plant the seed in their minds. When your child reaches middle school, take the time to find out which prerequisite courses may set the right track for math and science in high school.

The earlier you consider how you expect to pay for college costs the better. The average college graduate today owes $35,051 in debt, while the average salary for a recent graduate is $45,478.²

Freshman Year

Before the school year begins, consider meeting with your child’s guidance counselor. Discuss college goals and make sure your child is enrolled in classes that are structured to help him or her pursue those goals. Also, encourage your child to choose challenging classes. Many universities look for students who push themselves when it comes to learning. At the same time, keep a close eye on grades. Every year on the transcript counts. If your child is struggling in a subject, don’t wait to get a tutor. One-on-one instruction can be a huge benefit when mastering difficult material.

In addition to academic performance, many colleges want prospective students to be well rounded, so encourage your child to engage in extracurricular activities, such as sports, music, art, community service, and social clubs.

Sophomore Year

During their sophomore year, some students may have the opportunity to take a practice SAT. The practice test is a good way to give your child an idea of what the test entails and which areas need improvement. If your child is enrolled in advanced placement (AP) courses, encourage good performance on AP exams. A solid grade shows universities your child can succeed at a higher level of learning.

Sophomore year is also a good time to get some depth in extracurricular activities. Help your child identify passions and stick to them. Encourage your child to read as much as possible. Whether they read Crime and Punishment or Sports Illustrated, they will expand their vocabulary and critical thinking skills. Summer may be a good time for sophomores to get a job, do an internship, or travel to help fill their quiver of experiences.

Junior Year

Near the beginning of junior year, your child can take the Preliminary SAT, (PSAT), also known as the National Merit Scholarship Qualifying Test (NMSQT). Even if he or she won’t need to take the SAT for college, taking the PSAT could open doors for scholarship money. Junior year may be the most challenging in terms of course load. It is also a critical year for showing good grades in difficult classes.

Top colleges look for applicants who are future leaders. Encourage your child to take a leadership role in an extracurricular activity. This doesn’t mean he or she has to be drum major or captain of the football team. Leading may involve helping an organization with fundraising, marketing, or community outreach.

In the spring of junior year, your child will want to take the SAT or ACT. An early test date may allow time for taking the test again in senior year, if necessary. No matter how many times your child takes the test, colleges will only look at the best score.

Senior Year

For many students, senior year is the most exciting time of high school. They will finally begin to reap the benefits of all their efforts during the previous years. Once your child has decided which schools to apply for, make sure you keep on top of deadlines. Applying early can increase your student’s chance of acceptance.

Fast Fact: Pre-Approved. The U.S. Department of Education says that all students, regardless of financial status, are eligible for up to $31,000 in federal Stafford Loans over four years.
Source: U.S. Department of Education, 2015

Now is also the time to apply for scholarships. Your child’s guidance counselor can help you identify scholarships within reach. Also, find out about financial aid and be thorough. According to research by NerdWallet.com, nearly $3 billion in free federal grant money went unclaimed in the last academic year simply because students failed to fill out the free application.³

Finally, talk to your child about living away from home. Help make sure he or she knows how to manage money wisely and pay bills on time. You may also want to talk about social pressures some college freshmen face for the first time when they move away from home.

For many people, college sets the stage for life. Making sure your children have options when it comes to choosing a university can help shape their future. Work with them today to make goals and develop habits that will help ensure their success.

South Paws Wanted

Your child doesn’t have to be the high school valedictorian to qualify for a scholarship. In fact, thousands of dollars are awarded each year for the most unusual things. Consider these:

  1. Right-handers need not apply. Frederick and Mary F. Beckley offer $1,000 to lucky left-handed students (who also want to attend Juniata College in Huntington, PA).
  2. Stick It. Duck Brand Duct Tape offers $3,000 to students who go to their high school prom dressed entirely in duct tape
  3. How Tall Is Tall? Tall Clubs International offers $1,000 each year to a tall person attending college. Get out the measuring tape. A woman must be at least 5’10” and a man must be 6’2” or taller to qualify.
  4. Candy Connoisseurs Unite. The American Association of Candy Technologists offers $5,000 to students who have exhibited an interest in confectionary technology.
  5. From “Mr. Top Ten” Himself. David Letterman offers $10,000 to students of Ball State University (his alma mater) who produce an original video, audio, written, graphic, or film presentation.

Source: Financialaidfinder.com, 2015

  1. Georgetown University, 2015
  2. MarketWatch, May 9, 2015; National Association of Colleges and Employers, 2015
  3. NerdWallet, January 12, 2015

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2017 FMG Suite.

What to Look for in Personal Finance Apps

Since Apple launched its iPhone App Store in July 2008, the mobile applications market has exploded.

In 2016, Statista reported that Apple customers had downloaded 130 billion apps. On the other side of the smart phone universe, Android users have downloaded 65 billion apps since the Google Play launch in 2010.1

To put those numbers in perspective, that’s over 26 apps downloaded for every person on the planet.2

While many of these apps are games and social media programs, an increasing number have been developed to help individuals with their personal finances. Which leads to an interesting question: what should you look for in a personal finance app?

Tip: Like any good tool, apps are as useful as you make them. An app may be able to help with financial decisions and transactions, but it won’t get you to stick to a budget.

Category

One of the first things to consider is what type of financial apps may be most useful. Bankrate.com breaks them into four categories:

Budget tracking apps allow users to record expenditures as they are made to keep track of bank balances and budget categories. Some allow users to make a budget and then watch how closely expenditures are tracking to it.

Financial assistant apps collect, store, and report information from users’ various savings and investment accounts, providing a single place to keep track of asset performance.

Loan calculator apps estimate payments and current balances for loans. Some also track how long it will take to pay off one or more loans.

Spending and saving apps allow users to perform a wide-range of activities, including “what if” scenarios.

Fast Fact: By 2017, one-third of the world’s population will own a smartphone. That amounts to almost 2.6 billion users worldwide.
Source: Statista.com, 2015

Criteria

Once a user has decided on a category of app that may be useful, there are additional criteria to consider.

Credibility. As everyone knows, not everything written on the internet is true. For example, The Wall Street Journal and The New York Times are generally considered more credible than an anonymous blog. The same principle applies to apps: understand who’s providing the information.

Security. Before using any financial app, read the privacy or security statement. This can typically be found at the bottom of the company’s web page or in the About section of their website. If you don’t find one online, contact the company to request a copy.

Clarity. A personal finance app should provide information that is easy to understand. There are some apps that provide detailed charts on stock performance using a wide variety of financial analyses. However, if you don’t understand the underlying analysis, the app may be useless.

Relevance. Remember the old saying: “If the only tool you have is a hammer, you tend to see every problem as a nail.”3 The same applies to financial information. A mutual fund company may be a great source of information about mutual funds, but it may be less useful at providing information about estate planning.

Using an app to help with your personal finances may be a great first step in becoming a better money manager. And asking yourself a few key questions before you download may help you select the app that best fits your personal finance needs.

  1. Statista, 2016
  2. U.S. Census Bureau, 2016
  3. Abraham Maslow quote from Brainy Quote, 2016

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2017 FMG Suite.

Putting a Price Tag On Your Health

We hear over and over again how important it is to maintain a healthy lifestyle. But being healthy for its own sake isn’t easy — especially when you’re facing down temptation or battling procrastination. For some, the monetary benefits of a healthy lifestyle may offer helpful incentive.

Being healthy not only makes you feel good, it may also help you financially. For example, one study found a steep increase in annual medical expenditures for individuals whose Body Mass Index was above 30.¹

If you’re wondering how your health habits might be affecting your bottom line, consider the following:

  • Regular preventative care can help reduce potential healthcare costs. Even minor sicknesses can lead to missed work, missed opportunities, and potentially lost wages. Serious illnesses often involve major costs like hospital stays, medical equipment, and doctor’s fees.
  • Individuals can lower dental costs by receiving regular checkups and performing basic preventative care.²
  • When poor health persists over time, lost earnings may make it harder to save for retirement.
  • Some habits that lead to poor health can be expensive in themselves. Smoking is the classic example. A person who smokes a pack a day can spend up to $2,000 or more a year on cigarettes alone.3 Smokers also pay higher premiums for health care and life insurance, and their houses, cars, and other possessions tend to devalue at a quicker rate because of damage from the smoking.
  • Obesity is another expensive condition that affects many Americans. One study set the lifetime cost of obesity at $92,235 per person .4

By focusing on your health, eliminating harmful habits, and employing preventative care, you may be able to improve your self-confidence and quality of life. You may also be able to reduce expenses, enjoy more of your money, and boost your overall financial health.

  • 1. The National Bureau of Economic Research, 2015
  • 2. American Dental Association, 2016
  • 3. QuitDay.org, July 9, 2015
  • 4. The Fiscal Times, May 15, 2015

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2017 FMG Suite.