Category: Tip of the Month

It’s that time of year again. Halloween has just come and gone – and now we’re hurtling headlong into Thanksgiving and Christmas. For holiday shopping, it’s tempting to turn a blind eye and put everything on your credit cards. However, if you don’t want to have a financial hangover in January, February (and so on), you might want to take a look at these tips.

Create a Budget and Stick To It

The earlier you sit down and do this, the better. Decide on a financial cap per gift per person, then shop. Then, get creative. For instance, what if you bought a pre-loved item for someone? Made something for someone? You might also decide on a gift, then shop around and compare. So, when Black Friday and Prime Days raise their heads, you’ll already have made your selections. More on that below.

Put a Lid on Impulse Buying

This is a tough one. As mentioned above, Prime Day and Black Friday are hard to avoid. They scream at you on your TV and phone scroll, so it’s easy to get off track. If you want to avoid runaway spending, here are two ways to approach these retail spectacles. First, you can keep an eye on which item you want – then plan and research. Buy it when the price is crazy low, and walk away from all the frenzy, all the while tracking your spending. Second, you can dive right in, browse all you want, then put some things in your cart. But don’t buy it then. Come back a day later and decide if the purchase is really necessary. At this moment, you might also imagine the pain you could feel in 2025 with a bunch of debt hanging over your head. Employing this mindset could make all the difference.

Use Your Credit Cards Wisely

According to Jennifer Ellis, senior consumer manager at BOK Financial, credit card debt is on the rise. And with high interest rates, if you do have a balance, you’re going to pay more for your items. Before you set out to buy gifts, try to pay your credit card balances in full to avoid big fees. This way, you won’t carry the burden of a lot of debt into the new year.

Try Envelope Stuffing

This is an old trick, but a good one. Get envelopes, put the name of your giftee on the front, then put the amount of money you’re going to spend in it. Once you’ve used up the cash in the envelope for said person, you’re done. Also, using cash is more startling – you see the money go bye-bye! It’s so easy to gloss over the actual cash amount when you’re using plastic, as it almost doesn’t seem real. Working with real moolah is a tried-and-true technique, a wake-up call that you’ll appreciate.

Plan Early for Travel

Buy your tickets early for Thanksgiving and the December holidays. Monitor airline, bus, and train websites. Set alerts to notify you when the prices go up or down. All it takes is a little time and elbow grease. In the end, it’s worth it.

Most importantly, having a financial plan during this time of year is key. Yes, life is busy, but if you want to step into the new year without carrying the shackles of debt, using some of these ideas might be your saving grace.

Sources

https://thestatement.bokf.com/articles/2024/10/the-spookiest-trend-spending-too-much-on-the-holidays 

 

Annuities are one of many products that folks have in their nest egg. But first, what exactly is an annuity?

Simply put, it’s a contract with an insurance company that promises to pay the buyer a steady stream of income in the future. It can be either a fixed or variable income stream. The term “annuity” can also refer to a sum of money payable yearly or at other regular intervals.

There are some things to know before you charge headlong into putting your assets into an annuity. So, here are a few watchouts to consider before you head in that direction.

Ask the Right Questions

First up, what kind of annuity is it? What about the fees and optional riders? Is there a Market Value Adjustment, aka MVA? What is the AM Best rating and Comdex rating? How long is the rate guaranteed? How much can you take out penalty-free? How is the gain calculated for index annuities? Is there a surrender charge assessed if I die? How long is the contract term? How is their service? Lots of questions, yes, but the more you ask, the better.

Learn About New Features and Products

Here’s something interesting to ponder: Did you know that 99 percent of index annuities don’t include dividends? Or that 99 percent of index annuities only lock in the rates for 1 to 2 years? In fact, there are new products that include dividends and lock-in rates for the length of the term. Who knew? Here’s a list of the 10 best annuity companies as of September 2024 you might want to check out.

Vet the History of the Company

This is key. For instance, how long have they held their AM Best rating? How long have they been operating under their current name? And finally, did you know that start-ups buy shell companies formed 75+ years ago to advertise they’ve been around since then? Yep, make sure you do your research.

Watch Out for Fees on Variable Annuities

Here’s the thing: Variable annuities have lots of different layers of fees. Make sure you secure an itemized breakdown of all of the fees before you commit. If your variable annuity earns 7 percent to 9 percent gross and you pay 3 percent to 4 percent in fees, you might be better off in a fixed-rate product.

Check Out Long-Term Care Riders

Believe it or not, some annuities offer 200 percent to 300 percent of your initial deposit in long-term care benefits with an optional rider. In fact, long-term care riders on life insurance policies can be more affordable than standalone long-term care policies. However, should you not utilizeyour long-term care benefits, your heirs will get the full death benefit from your life insurance policy, less what you owe on any of your policy loans.

Take a Look at All Types of Annuities

Typically, most banks sell only five to eight annuity companies. So don’t rely on just your bank. If you do, you’ll miss out on 95 percent of the products that are out there. And this is important to know: Lots of insurance agents and “advisors” focus on selling a few index or variable annuities. Make sure you shop around before buying. 

Annuities are just one of many diversified assets you might want to include in your investment portfolio – as you know, diversity is crucial. But when it comes to annuities, there are specific questions and things to think about. Make sure you do your due diligence before you invest.

Sources

11 Annuity Tips You Should Know (annuityresources.org)

Long-Term Care Rider: What It Is, How It Works (investopedia.com)

Drafting a will is not something that people, for the most part, want to think about. But no one gets out of life alive. So, if you want to have a say in what happens to your property and assets after you’re gone, a will is a very smart idea. Here are a few specific reasons why having a will makes good sense.

Facilitates Probate

First, a definition: Probate is the legal procedure your estate goes through after you pass. During this process, a court will start the process of distributing your estate to those you designate. When you have a will, the probate process has a legal document as a guide, one the court uses that clearly defines your wishes. This way, there are fewer roadblocks. Things go a lot more smoothly.

Protects Your Estate

Now, if you don’t have a will, there’s no binding legal document that espouses what you want to do with your assets. Instead, the probate court will distribute your estate according to your state’s intestacy laws. There’s no guarantee that the state agrees with what you want.

Designates Who Gets What

This is one of the most important. If your family includes ex-spouses and/or estranged relatives, having a will helps prevent squabbles. An unhappy relative will think twice about protesting when you have a well-drafted will.

Disinherits People, Too

If you don’t have a will, again, probate courts will distribute your estate based on your state’s intestacy laws, which create a hierarchy of inheritance among your surviving family members. Because families – and life – can be messy, when you have a will, you can specify who doesn’t get parts of your estate. Better still, you can even specify certain people to receive your assets as beneficiaries, who aren’t necessarily relatives. When you’re this specific within a legal document, it can further safeguard your wishes.

Provides For Your Children and Pets

When you have a will, it gives you the power to decide who will care for your children if they’re minors when you pass. If you don’t decide, a court will appoint a guardian. It’s safe to say that most people don’t want this; you know your children best. Since pets are considered property and they can’t inherit, you can make sure your beloved furry family members are adopted by a person or organization that you know and trust.

Specifies the Executor and Administrator of Your Estate

You get to decide who these people are, though sometimes they can be the same person. Generally, their function is to make sure your beneficiaries receive the assets you’ve designated for them. Having these trusted people in place will give you peace of mind. When you don’t have these individuals in place, you give up the control you could have had.

Helps Minimize Estate Taxes

Yes, it’s true. Your family, should they inherit property from you after you’re gone, might have to pay taxes on it. That’s why it pays to look into estate planning tools. When you have a will, you can build these stipulations into it. Just ask your accountant and/or lawyer to help you navigate these waters. It’s well worth it.

These are just a few of the reasons you need a will. Probably the main reason is that tomorrow isn’t guaranteed. When you’re gone, you’ve missed your opportunity to legally draft your final desires. That’s why, when you’ve set up provisions for all the things you’ve worked so hard for and all the people you leave behind, it’s truly an act of love.

 

Sources

Top 10 Reasons to Have a Will (findlaw.com)

Executor vs. Administrator: What’s the Difference? – Policygenius

Probate – What Is Probate & How To Avoid It | Trust & Will (trustandwill.com)