As the parent of a growing teen, there are several ways that you may be able to help your child build a strong credit history that sets them up for success.

1.  Educate Your Teen on Credit Card Basics 

Unfortunately, personal finance isn’t always taught in school, so it is a good idea to sit down with your teen and teach them how a credit card works and how building good credit can help them in the future.

Warn your teen about the consequences of poor credit and carrying too much credit card debt. There are also several credit card mistakes that they should learn to avoid:

• Don’t get caught up in the cash, points, or miles game, as it can lead to overspending and debt.
• Available credit isn’t an extra paycheck. If you lean on credit cards to pay for things you can’t afford, your troubles will only worsen.
• If you want something special, save for it. You’ll be able to charge the expense and pay the bill with the money you’ve set aside.
• A missed payment will remain listed on your credit report for seven years and ding your credit rating.
• You may want to spread the payments of an exceptionally costly purchase over time, but don’t let it linger for over a year.

When discussing credit with your teen, be sure to keep things simple and stick to the basics.

2. Try Out a Prepaid Card 

Before you open a credit card for your teen, consider providing them with a prepaid card. A prepaid card will allow them to make purchases while getting used to living within their means.

Because prepaid cards come with fees and cannot build your teen’s history, they should only be used for a short time until your child has demonstrated good financial habits and you believe they are ready for a credit card.

3. Open a Checking Account 

Most banks and credit unions offer checking accounts for minors or students, typically having lower fees than standard accounts. By opening a checking account for your teen, you can help them get used to making deposits and keeping track of how much money they have. When you believe your teen is ready, you can add a debit card that’s linked to their checking account.

If you want to monitor your teen’s account to make sure they are going down the right path, you can become a cosigner on their account. Keep in mind that if you cosign your teen’s checking account, you’ll be responsible if they overdraw it.

4. Sign Your Teen Up for a Credit Card

Once your teen has proven that they are financially responsible, it’ll be time to take the next step and sign them up for their first credit card so they can begin building their credit history.

According to the Credit CARD Act of 2009, anyone under the age of 21 cannot get approved for a credit card without a cosigner or their own source of income. If your child does not work, you will need to cosign their application.

Another solution is to make your teen an authorized user on your credit card. This is the ideal option if your child is still in high school, as it can help them establish a good credit history while they are living with you and you have more control over their actions.

5. Consider Opening a Joint Secured Credit Card 

If you’d like your teen to have their own credit card but are concerned they may ruin their credit or your own, you can open a joint secured credit card. Because secured credit cards require an initial deposit that serves as the credit limit, doing so will limit the amount of credit available on the card and help them prevent overspending. Although secured credit cards usually carry higher fees than traditional cards, they can still help your teen build credit and provide you with some peace of mind. Some secured credit cards will transition cardholders to a standard unsecured credit card if they maintain good financial behavior with the card.

6. Teach Your Teen How to Monitor Their Credit History 

After you have either opened a credit card for your child or added them as an authorized user on your card, you’ll need to teach them how to monitor their own credit history. You may want to show them what your credit report looks like so that they know what to expect.

7. Be a Good Role Model

Children tend to learn from their parents’ behaviors, so it’s essential to set a good example for your high school or college students. Pay your credit cards on time and in full, live within your means, and stay out of debt as much as possible. If your child knows that you practice healthy financial habits, they’ll be more likely to do the same.

In this guide, we’ll walk you through some maintenance tips that could delay or even prevent the need to pay for a big fix to your ride.

1. Inspect & Maintain Tires

The lifespan of your tires quickly depreciates if they aren’t properly maintained. A new tire, on average, costs about $120 dollars. Checking your tire pressure includes finding the recommended pressure and checking the PSI.

For every 3 units of PSI below recommendation, your vehicle consumes 1% more fuel and incurs about 10% more tread wear.

A flat tire is a hazard that can be dangerous to you and your car. There are several preventative steps you can take to help avoid this, such as rotating your tires

When: Set a monthly date on the calendar to check your tires or check them every 5,000 to 10,000 miles.

2. Change the Oil

Routinely checking and changing your car’s oil is essential to keeping its engine in running condition. The simplest task to increase the life of your vehicle is to maintain the proper amount of oil in the engine.

It’s better to spend as little as $25 to get the oil changed than to put it off and risk wearing out your engine.
When: Check your oil each month or every 5,000 miles and change it as directed in the car’s owner’s manual.

3. Check Your Engine Air Filter

Many car problems are due to clogged air filters or loose fittings. A dirty engine air filter can allow dirt and other particulates into your car’s engine and reduce its efficiency. You can get the filter replaced by your mechanic or in the comfort of your garage in just 10 minutes.

When: Inspect your car’s air filter once a year or every 12,000 miles, and replace it as needed.

4. Check the Fluids

Several fluids should be kept at the appropriate levels to help keep your car running properly. According to Popular Mechanics, you or your mechanic should check:

• Engine oil
• Coolant
• Power steering fluid
• Brake fluid
• Transmission fluid

A leak with any of these fluids can affect the way your car drives. If you spot a leak, you may be able to identify the fluid by its color.

When: It’s a good idea to check these fluids twice a year—once before the warm weather hits and again before the cold weather swoops in.

5. Check Your Battery

Corrosion comes in the form of a white or bluish powder and can form on the terminals of your battery. If you don’t keep them clean, the battery could develop a crack or not function properly, leaving you stranded. Buying a $5 wire brush and keeping the terminals looking spiffy is money well spent.

When: Test your battery twice a year and inspect it for corrosion

6. Check Your Spark Plugs

If you notice that your car is not performing efficiently, or your engine is not working well, then the reason could be the spark plugs. You might want to check the spark plugs and wires if they are old or they could be covered in a buildup.

When: Spark plus usually lasts for 30,000 miles or more; see your owner’s manual for more information.

Set Up a Car Maintenance Line Item in Your Budget

Even though keeping up with car maintenance is less expensive than doing major repairs, it can still add up. Make a line item in your budget for car maintenance. This way you can save up over time for that new spark plug, oil change, or set of tires.

Just like regular car checkups, it’s also a good idea to review your car insurance policy from time to time. This can help ensure your policy’s coverages, limits and deductibles are up-to-date and suitable for your current situation.

 

 

It may be just a simple three-digit number, but your credit score plays a significant role in determining the interest rate you pay for credit cards, loans, and mortgages. Credit scoring agencies, such as FICO, use information from credit reports to rank consumers by a number ranging from 300 to 850. The exact number can change on a monthly basis, and can be surprisingly volatile; according to a study by the Consumer Financial Protection Bureau (CFPB), two-thirds of consumers have experienced a change in their credit score of 100 points or more.

FICO’s formula for determining credit scores is a closely guarded trade secret, but it’s known to take into account such factors as the length of your credit history, the amount of available credit you’re using, and whether or not you’ve made any late payments.

The effect of one change

Another CFPB study revealed the impact on credit scores that was created by one change to the information provided in credit reports. The three major credit reporting bureaus — Equifax, Experian, and TransUnion — are now excluding tax lien and civil judgment data from all credit reports, following a settlement with attorneys general in 31 states.

These records were provided by courts when someone owed money as a result of a lawsuit or other legal ruling. The bureaus estimated that as many as 96 percent of civil judgment records and 50 percent of tax lien records lacked sufficient identifying information — they could wind up in the credit report of someone with a similar first and last name — so they agreed to drop the data from their reports.

The only public data now being included in credit reports is bankruptcies.

According to the CFPB study, among consumers who had existing civil judgments or tax liens that are no longer being included in their credit reports:

• 25 percent saw a significant change in credit score
• 17 percent saw a boost in their credit score
• 6 percent moved to a credit score band of prime or higher (more than 680)
• 66 percent stayed subprime (below 550) or deep subprime (300 to 500)

Alterations to Life Insurance Settlements

Some of the new provisions offered in the Tax Cuts and Jobs Act can have a positive effect on life insurance planning. However, this may only impact a small portion of the population.

Life insurance settlements allow owners to recoup portions of their losses if the life insurance plan expires. Essentially, you can sell your life insurance policy to a private buyer for a portion of what it’s worth. The new changes reduce the size of depreciation during these sales, allowing a larger payout for those looking to sell their policies. This might provide a little extra income to someone who wants to get rid of their plan, but it only offers little value to someone with long-term plans for their life insurance policy.

Bolstered Tax Exclusions

Perhaps the biggest new change to life insurance planning is the revision to gift tax exclusions. The size of tax exclusions offered on gifts and estates has been increased significantly, and can have a major impact on whether or not you should alter an existing life insurance policy or trade for a new one.

Given the scale of the exclusions in the Tax Cuts and Jobs Act, most changes benefit wealthy individuals. However, there are some things to keep in mind regardless of your income bracket.

The extended exclusions are designed to only last for the next seven years. Therefore taking advantage of the gift tax in lieu of a long-term life policy wouldn’t be a reasonable course of action for most individuals. In addition, long-term insurance policies have a cash value in and of themselves. Therefore, life insurance can serve as a valuable asset in its own right.

Gifting to Your Own Trust

One of the best strategies when life insurance planning under the new regulations of the Tax Cuts and Jobs Act is to use trusts to fund your life insurance policy. By setting aside a tax-deductible gift to establish a trust, and then using that money to fund a life insurance policy, you can essentially do so tax-free. This allows you to get the benefits of a more generous policy with less tax liability.

Benefits to Life Insurance Providers Could Lower Your Premium

One big boost offered by the Tax Cuts and Jobs Act goes directly to life insurance providers. A new provision expands the required time period for the capitalization and amortization of certain expenses. While the details of this expansion are complicated, it has a simple yet important impact on those going through the planning process. This expansion should increase the income of insurance providers, offering them the leverage necessary to lower their policies’ rates.

The changes made in the Tax Cuts and Jobs Act are too great to cover in a single blog post. The bottom line, however, is that these changes offer plenty of opportunities for Americans looking to buy a new policy. Due to the limited window of opportunity for exclusions, it’s recommended that you pursue your life insurance planning options now.

However, home insurance may kick your efforts up a notch. Just make sure you have the right coverage for your needs, your lifestyle, your home and your location. For instance, someone living in Indiana may not need to purchase insurance coverage for a hurricane. However, for those living in Florida, hurricane coverage is as essential as fire coverage in California. In addition, there are many locations where homeowners will need insurance coverage for a flood.

One key bit of information about flood insurance is that you don’t need to live in a flood zone to need this vital protection. In fact, FEMA reports that between 20 and 25 percent of all flood claims occur outside of areas designated as high flood risks. And those numbers only include the homes that HAVE flood insurance protection.

TYPES OF HOME INSURANCE YOU DON’T WANT TO LIVE WITHOUT

Home insurance comes in a variety of shapes and sizes. It’s meant to not only offer financial protection to wealthy homeowners, but also to those of more modest means who need protection against disasters. The following coverage includes the types of insurance that are truly invaluable when disaster strikes:

• • Liability Insurance– provides you with financial protection and legal expenses up to the policy limit if someone is injured while visiting or passing through your property, or even if one of your trees fall through the neighbor’s window. Yikes!
  • Property Insurance– helps you make repairs to your home, condo, etc. if it is damaged by wind, hail, fire, or any other covered damages.
  • Flood Insurance– not covered by your standard home insurance policy, flood insurance can replace items destroyed by a flood, or repair homes that are damaged by them.

• Personal Belongings Protection – helps you replace items you lost due to a covered event like fire, theft, etc. Make sure you discuss replacement value protection with your insurance agent, and see if it’s the right choice for you.
• Loss of Use Coverage– provides you with reimbursements when you’re forced to make alternative living arrangements if your home is under repair.
• Umbrella Insurance– when your liability protection isn’t enough, umbrella policies offer additional coverage without forcing you to pony up the funds for legal representation or judgments awarded against you (once again, up to the coverage limit).
• Valuable Item Protection– most items in your home are protected by the property damage coverage of your insurance policy. However, that protection has limits, and if you have any valuable items or collectibles that may depreciate immeasurably, this protection could help cushion the financial blow.

Each type of coverage can offer outstanding protection if you get the right amount to suit your needs. Working with an insurance agent can help you decide what’s best for you.

Though shopping for health insurance may seem overwhelming, breaking down the process can make it much easier to digest. To help you break down this daunting process, we’ve created a guide to help simplify your steps and what you should consider.

Premiums

A premium is the amount of money charged by your insurance company for the plan you’ve chosen. It is usually paid on a monthly basis but can be billed in a number of ways. You must pay your premium to keep your coverage active, regardless of whether you use it or not. Since premiums are the amount of money you’ll pay every month for coverage, they are the most obvious expense associated with health insurance.

While it’s important to find insurance that fits your budget, the cheapest plan may not be the best. Low premiums can mean higher deductibles or a restricted network. Instead of buying based on premiums alone, the monthly cost should be just one criterion you consider when selecting a plan.

10 Factors that Affect Premiums: 

1. State and federal laws dictate what health insurance must cover and how much insurers can charge. 
2. Whether you are insured through an employer’s group plan or buy it on your own
3. Your income. Low-wage workers tend to pay more through employers but may pay less through a federal or state exchange due to subsidies 
4. Your employer’s size. Insurance is usually cheaper at large companies. 
5. The state in which you reside. 
6. Where you live. Premiums tend to be lower in urban areas versus rural areas. 
7. The county in which you live. Some counties have only one plan, while others have more competition, which helps to reduce costs. 
8. The type of plan you choose. Preferred provider organizations (PPOs) and platinum plans through the federal health insurance marketplace tend to cost the most. 
9. Your age. Older individuals may pay up to three times more. 
10. Your tobacco use. Premiums for tobacco users may cost up to 50% more. 

Out-of-Pocket Expenses

Most health insurance plans come with several out-of-pocket costs. The deductible is the amount you’ll pay upfront before insurance coverage begins. Some preventative care services, such as immunizations and cancer screenings can be exempt from deductibles, thanks to the Affordable Care Act. Health insurance policies may also charge copayments and coinsurance once a deductible is met.

Prescription Drug Coverage

It’s not enough to know your plan has prescription drug coverage. It’s also important to know that your specific prescriptions will be covered. Many insurers use formularies, or lists of covered drugs, that categorize prescription tiers. Generics may have a low copay while brand-name drugs may cost more. Keep in mind, some insurers may require patients to try lower-tier drugs first or get prior authorization before the plan will pay for expensive medications.

Networks

Most policies have networks of participating providers, so you are unable to go to whichever doctor you prefer. Using a physician or facility outside the network could result in higher copayments or even a denied claim.

Before switching health plans, ensure your preferred doctors will be covered. Since networks can change each year, it’s smart to double-check the physician list before re-enrolling in your current plan. People should also consider the type of policy that will be best for their situation.

• HMO: A Health Maintenance Organization (HMO) plan is one of the cheapest types of health insurance. It has low premiums and deductibles and fixed copays for doctor visits. HMOs require you to choose doctors within their network. When you sign up for the plan, you’ll select a primary care physician (PCP), whom you’ll see for regular checkups. Because all your health services are funneled through your PCP, it’s important to find one you trust. HMOs are a good choice if you’re on a tight budget and don’t have many medical issues.
• POS: As with an HMO, a Point of Service (POS) plan requires that you get a referral from your PCP before seeing a specialist. However, for a slightly higher premium than an HMO, this plan covers out-of-network doctors, though you’ll pay more than for in-network doctors. This difference is important if you are managing a condition and one or more of your doctors are not in-network.
• EPO: An Exclusion Provider Organization (EPO) is a lesser-known plan type. Like HMOs, EPOs cover only in-network care, but networks are generally larger than for HMOs. They may not require referrals from a PCP. In terms of premium costs, they are higher than HMOs, but lower than PPOs.
• PPO: A Preferred Provider Organization (PPO) has pricier premiums than an HMO or POS. But this plan allows you to see specialists and out-of-network doctors without a referral. Copays and coinsurance for in-network doctors are low. If you know you’ll need more health care in the coming year and you can afford higher premiums, a PPO is a good choice.
• HDHP with HSA: A High Deductible Health Plan (HDHP) has low premiums but higher immediate out-of-pocket costs. Employers often paid HDHPs with a Health Savings Account (HSA) funded to cover some or all of your deductible. You may also deposit pre-tax dollars in your account to cover medical expenses. Depending on your age, services such as mammograms, colonoscopies, annual wellness visits, and vaccinations may be covered free of charge, even if you haven’t met your deductible.

Your Claims History and Future Expectations

Knowing a plan’s deductibles and network details is most helpful when viewed in the context of your health history. People should look at their claims from the previous year for guidance on the upcoming year’s enrollment. Take into account if you met your deductible, which prescriptions you filled, and which specialists you saw. If you expect any changes in the coming year, such as marriage, the addition of a baby, or a major surgery, you’ll want to ensure your insurance will provide adequate coverage.