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April 2019 E-Newsletter

Four Tips to Spring Cleaning Your Finances

Spring is here, and it’s the perfect time to get your home and your finances in order. Here are a few ways to get started spring cleaning your finances:
Woman Gardening and on laptop
1.Request a free credit report

You can request a free credit report every 12 months from each of the three major consumer reporting companies (Equifax, Experian and TransUnion). Once you have your credit report, you can check for and correct any errors. This is especially important if you’re thinking of making any big purchases, like buying a new home. Our checklist will help you know what to look for in your credit report. Try setting a calendar reminder so you remember to check your credit reports on a regular basis. You can request all three reports at once or you can order one report at a time.By requesting the reports separately (for example, one every four months) you can monitor your credit report throughout the year.

Just like with the big three consumer reporting companies, you can also get free copies of your nationwide specialty consumer reports every 12 months from many of the specialty consumer reporting companies. Specialty consumer reporting companies collect and share information about employment history, medical records and payments, check writing, or insurance claims.

2.Address debt

If you’re facing a large debt or your payments are overdue, your first instinct may be to ignore the debt or hope it goes away. But, that may make things worse and lead to more stress down the line. There are strategies that can help you make payments that work for your current financial situation.

First, review your bills and make sure you understand what you owe. Our bill tracker can help you stay on top of your payment due dates.

Second, contact your lender to see if alternative payment options are available. You may be able to change your due date so that a payment is due closer to when you receive your income. Or, you could explore extended repayment options depending on your financial situation.

3. Review your spending

Have you ever looked at your credit card bill and wondered where all those charges came from? Or, have you found yourself swiping your credit card for a purchase before you’ve had a chance to think about it?

Gain control over your credit card spending by taking a close look at your credit card purchases over the past couple months. If you're looking to cut back, try breaking down necessary expenses vs. wants. Once you see how you’re spending, try creating a “rule to live by” to make sure you stay on track. These kinds of simple personal guidelines, such as using cash for smaller purchases, make it easier to stick to your goals over time.

4. Save automatically

After checking your budget, you may see some more opportunities to boost your savings. For example:
• If you have a bank account and direct deposit, you may be able to arrange to automatically deposit some of your paycheck to a savings account every time you're paid, instead of all of it going into a checking account.
• You can check with your employer to see if it’s possible to split your paycheck into two accounts. You may also be able to transfer some of the money in your checking account into a savings account.
• You can check with your bank or credit union to see if you can set up automatic transfers.
• You may also be able to use a prepaid card to set aside money for savings.

The article 4 Tips to Spring Cleaning Your Finances originally appeared on the Consumer Financial Protection Bureau.

What You Should Really Do With Your Tax Refund

If you’re like most people, the only good part about tax season is when it’s finally over — especially if you end up with a refund. But before you make plans to burn through that check as soon as it hits your bank account, consider the 90/10 rule.

Image of Woman using ComputerThis handy guideline recommends using 10% of a windfall however you want — a spontaneous weekend getaway, a new spring wardrobe, a bottomless brunch (or five) — completely guilt-free.

Now you’re probably wondering what to do with the remaining, and much larger, 90%. With the right strategy, you can use that refund check to make some powerful money moves in your life. Here are our favorites.

Fill Your Emergency Fund

A recent GOBankingRates study found that 57% of people surveyed have less than $1,000 in savings, and 68% of that group has nothing saved at all. But, when you face an unexpected expense, a solid emergency fund can protect you against having to rack up credit card debt, dip into a line of credit or take out a high-interest payday loan.

Saving up for six months' worth of expenses is a good rule of thumb, says Brian Frederick, CFP®. So if your cash reserve is looking a bit thin, think about opening up or adding to a high-interest savings account with a portion of this year’s tax refund.

Squash Your Debt

Once you’re on your way to building a healthy emergency fund, it’s time to start tackling your debt. First, make sure you’re covering the minimums on each of your lines of credit. Then, take whatever extra money you have for debt repayment and put it toward the debt with the highest interest rate. Starting with the highest interest rate is known as the debt avalanche method, and it can help you save time and money when you’re trying to chip away at your balances.

Pay Your Future Self

Are you on track with your retirement savings? With the power of compound interest, today’s tax refund could blossom into a healthy chunk of change that you can enjoy down the line.

If you don’t have a 401(k), consider if getting a start on your retirement savings through traditional or Roth IRA works for your situation. Just be sure to know what the contribution limits are ($6,000 for 2019) and what the Roth IRA income restrictions are to avoid a hassle at tax time next year.

Contribute to a Big Savings Goal. 

If you’re squared away on your emergency fund, debt payoff plan and retirement savings, one of the best things you can do at this point is put your refund toward one of your financial dreams. For instance, you might want to …
• Save to buy your own place
• Pay for a career development course
• Launch your own business or go freelance
• Finally take that dream vacation

If you’re saving for multiple goals, consider opening a high-interest savings account for each one. You’ll be able to direct money easily into specific buckets and track your progress toward that magic sum. If you’ve got a goal that’s more than five years out, you may want to consider saving for it in a brokerage account to give it more potential to grow.

Share Your Windfall

Want to spread your good fortune around? Giving to a nonprofit is an excellent way to improve the world with your win. Plus, when you donate to your favorite charity, you may be able to deduct your contribution on next year’s tax return if you choose to itemize deductions.

A Parting Note For Next Year's Taxes...

Getting a refund is preferable to owing, of course — but, in reality getting a huge refund isn’t necessarily a great thing.

Getting a lot back means, in essence, that you’ve temporarily but voluntarily given the government money that was yours all along. And, while the tax man was holding onto it, you were denied the benefit of that money. In other words, maybe you could have used more cash throughout the year to cover certain expenses, or perhaps you missed out on interest you could have earned if you had put that cash in a high-yield savings or investment account.

So how do you know if you’re in the right ballpark? Aim for a refund check or tax bill of $500 or less, Frederick recommends.

Even if you haven’t dealt with significant refunds or big tax bills in the past, the recent overhaul to the tax law could change that. Frederick recommends that you feed your financials into the updated IRS Withholding Calculator to ensure that your W-4 withholdings and estimated tax payments are on target.

If you think you need to readjust mid-year, don’t worry. You can file a new W-4 with your employer or, if you’re a freelancer, tweak your estimated tax payment for the next quarter.

The article What You Should Really Do With Your Tax Refund originally appeared on LearnVest.

Coulee Bank's Q-Tip: Fake Charging Stations Can Hack Your Smartphone

Photo of phone charging stationIs the Juice Worth the Squeeze? Nobody wants to run out of battery power while they’re out and about. In fact, a recent study found that we check our phones at least 80 times a day. This attitude has become prevalent in today’s connected world simply because we use our mobile devices for more than just making calls.

In a world where we rely on our phones for virtually everything – from online banking and email accounts, to social media, games and more – public charging stations can be the ultimate lifesavers when your battery is running low.

But security experts warn that the juice is never worth the squeeze if a charging station is rigged to steal your data.

There’s always two sides to a connection. Fraudsters are likely to set up fake kiosks in areas where victims will need a charge on-the-go. But when you’re in a rush and only looking for the charging icon to appear on your phone, it can be easy to overlook a hacked charging station.

Juice jacking is effective because it manipulates something we use every day. USB cords allow both data and power to be transferred between two connected devices. While they may look harmless, fraudsters can use these cables to collect your data, share your screen or even infect your device.

Juice jacking vs. video jacking. Another variation of this hack includes “video jacking” where fraudsters use an HDMI connection (as opposed to a USB connection) to hack into your smartphones. Instead of transferring data when you plug in, fraudsters use an HDMI connection to mirror your phone screen onto another device. This hacking method can be used to capture sensitive information like passwords, login credentials and financial account numbers by recording what you do on your phone.

What Should I Do? While public charging stations can be convenient when your battery is running low, use these tips to protect your devices from juice jacking:

• Verify the power source. The safest way to charge your phone is by directly plugging into an outlet. Avoid charging your phone in places where the power source is not easily visible.

• Bring your own cord. By using your own cord, you can avoid using a pubic charging station and opt to plug into a wall outlet instead. You can also purchase power-only USB cords that do not support data transfer capabilities.

• Invest in an external battery pack. Battery packs work as portable power sources for extra power on-the-go. Plus, you can also safely recharge external batteries at public charging stations without worrying about data being transferred back and forth.

• If you have no other option, turn off your phone before plugging into a charging station.

The article Fake Charging Stations Can Hack Your Smartphone originally appeared on Fighting Identity Crimes.

Business Corner: 17 Tips to Manage Your Small Business Finances

KnowImage of a woman outside of storeing the state of your financial affairs back to front is one of the best ways to make sure the cash keeps flowing. Staying on top of your finances means you can avoid unforeseen business debt and have enough money to invest in and grow your business.

Stay on top of the day-to-day money management

1. Properly manage your accounting. You can hire a good bookkeeper or purchase DIY accounting software. It is crucial that you keep accurate track of your income and costs.
2. Review your costs. Keep track of all of your small business expenses. These can add up quickly, but reviewing them allows you to fine-tune where your money goes.
3. Make financial projections. Having clear financial projections is important. Your main business plan will help you to anticipate and address possible future obstacles.
4. Don’t get slack on invoicing.
• Send out invoices as soon as possible after providing goods or services.
• Set payment terms of seven days to make sure that payments are not forgotten or lost in the process.
• Always follow up on sent invoices. You can make this easy by creating set templates for email or SMS follow-ups.
• Reference invoice numbers and cross-reference these with payments.

Separate business, pleasure and private accounts

5. Keep a separate business bank account. Mixing business money with your personal finances is a recipe for unexplained losses and tax-headaches. Keeping your business’s money separate will make gauging profitability easier and help you to keep proper track of your expenses.
6. Keep track of personal loans to your business. Keep accurate records of what you loan to your business. When your business starts making money, you can easily pay back the director’s loan first before paying tax on the remaining profit.
7. Make sure to pay yourself first. This doesn’t mean sucking up all the profit the moment you make it; start with 10% of the earnings. This is a good way to set aside money consistently and to test the profitability of your business. It also provides a safety net for unexpected expenses.
8. Remain frugal. Even though you pay yourself, don’t get sucked up in the benefits of business ownership even if you can afford it. Set your salary as low as possible and offer government-mandated benefits only. What you save now will give you more flexibility in future lean months.
9. Keep traveling costs minimal. Most hotel and travel costs should be spent on a place to simply lay your head at night and a way to get from meeting to meeting. Don’t overspend on luxurious travel and accommodation. This sets a bad precedent to employees and can be an unnecessarily large cost with little return. Plan your business trips as if you were paying for them yourself.

Take care of the bigger business issues

10. Don’t let legal fees get out of hand. A reasonable amount to pay per hour for legal services is $450. How can you manage this cost? 
• Make your expectations clear to your lawyer when procuring their services.
• Choose the billing option that is the most cost-effective for your business, for example, hourly or per project.
• Ask whether it is possible to defer payment until the project is funded.
11. For the more simple necessities, consider DIY legal documents. There are various kinds available online.
12. Take care when expanding. Make sure expansion is done steadily and wisely. Pushing large amounts of money into expansions that are too quick and too drastic can be disastrous. 13. Take control of your own marketing and public relations. Follow a PR and marketing strategy to make sure efforts are intentional and focused.
14. Consider renting instead of buying. Leasing equipment instead of buying helps you avoid maintenance costs and can also prevent you from overpaying on equipment only needed for a specific period of time. You could also consider renting your office space, as it makes relocation and expansion easier.
15. Don’t wait too long before seeking a loan. An easy mistake to make is waiting until your business is in financial trouble before applying for loans or other credit. This is exactly when you will be least likely to receive financing.
16. Make sure you have enough capital. Small businesses tend not to have enough capital to get themselves through the startup phase. To prevent this, have three months’ living expenses saved plus the amount you are expecting to need for the first three months’ business expenses. Plan as if you expect to receive no business revenue.
17. Don’t spend prematurely. Don’t go big on business cards, sign writing, marketing materials, cars or inventory before any actual revenue comes in. This can create a cash flow blockage.


Coulee Investment Corner: Investing for Your Later Years? Think Asset Preservation but Don’t Forget Growth

After years of investing for retirement and other goals, you may have accumulated a substantial portfolio. If you're approaching or already enjoying retirement, there are important steps that you can take to help ensure that your investment plan -- and your nest egg -- is on track for your Golden Years.

Reassess your income needs and portfolio

A few years before a planned retirement, it's important to know where your money will come from and how much you'll need. It's number crunching time. Figure out how much income you will receive from Social Security, a pension plan and personal savings and investments. Weigh your anticipated income against your estimated living expenses; be sure to pad your estimate to account for unexpected events or market drops. Do the two match up? If not, review your portfolio with a qualified financial professional.

Hedge against inflation

Your investment focus will probably shift from growth to income in your later years. Naturally, you want to help protect your nest egg from market volatility. But that doesn't mean moving your portfolio's entire stock allocation into less risky holdings -- like bonds and cash. People are living longer, increasing the risk that some will outlive their money. You may want to gradually shift some stock investments into more liquid, income-oriented investments. However, it may be important to keep part of your portfolio in growth-oriented investments -- stocks and stock funds -- to give your portfolio the potential to outpace inflation.

Protect what you've achieved

A solid financial plan also includes estate planning to help preserve assets for your heirs. "I'm all set," you say. "I've drawn up a will." A comprehensive and effective estate plan often involves a variety of tools in addition to wills, including trusts and different types of insurance. Talk with an attorney about your specific needs.

After a lifetime of investing, make sure that your financial plan is on target in your later years. Annual reviews of your portfolio with a qualified financial professional can help you pursue your objectives and spot potential problems before they occur.

Disclosure: This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. LPL Financial and its advisors are providing educational services only and are not able to provide participants with investment advice specific to their particular needs. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

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