Let’s Talk Money – Fiscal Sis

Free Money

fiscalsis — Sat, 25 Feb 2023 02:19:17 +0000

Knowing the rules and taking advantage of the benefits is one of the best ways to make your retirement savings work for you. Here are a few updates to consider for the 2023 contribution year.

Oh, What a Relief It Is!

fiscalsis — Fri, 22 Jan 2021 16:29:31 +0000

The swearing in of Joseph R. Biden as the 46^th President of the United States, the subsequent celebratory festivities and the collective released breath of billions of people around the world were not the only high notes to this past Wednesday’s inaugural events. Among the 15 Executive Orders that Mr. President immediately enacted, with the Day One wielding of his pen he directed the Department of Education to increase student loan relief.

As many of us will remember, at the onset of the coronavirus pandemic in The States back in 2020, some financial relief was provided to student loan holders. As a part of the CARES (Coronavirus Aid, Relief, and Economic Security) Act legislation, American borrowers were granted a reprieve on their student loan payments. The interest on those loans was also set to 0% and collections on defaulted loans was halted through the end of 2020. In December, then President Trump and former Secretary of Education Betsy DeVos extended that grace until January 31, 2021.

With coronavirus cases in the U.S. now topping 24.7 million (a quarter of the 96.2 million cases globally), deaths exceeding 400 thousand and states across the nation implementing sheltering measures and business restrictions and closures, the personal and economic impacts of the virus cannot be understated. Which is why the new president’s extension on the halting of principal and interest payments on all direct federal student loans until at least the end of September 2021 makes so much sense.

In a presser released from the Department of Education, the consensus was the same:
“Too many Americans are struggling to pay for basic necessities and to provide for their families. They should not be forced to choose between paying their student loan and putting food on the table.”

And although President Biden stated last month that he’d be unlikely to entertain any resolutions introduced by House and Senate Democrats for an all-out cancellation of the debt (of up to $50,000), understanding that so many Americans need this extended relief now, seems to be a responsible and compassionate step in the direction toward human and economic recovery.

What’s Your Financial Freedom Wishlist?

fiscalsis — Tue, 05 Jan 2021 20:37:06 +0000

It’s the time of year again…you know, when we all reflect over the past 365 days and vehemently declare to never do those reckless things that we did, ever again.

The problem for many of us though is that no matter how good or noble our intentions are, the goals we aspire to achieve without a plan of action ultimately remain just fanciful and wishful thinking. And many times, otherwise attainable results like getting healthier, learning a new language or saving more money end up resurfacing year after year without having ever gained much traction.

WHY IS THAT?

A lot of times, we simply put the cart before the horse. Our grand and desired end-results make sense, but lack the practical detail needed to build upon. Because this is a finance blog, let’s look at that theory in terms of money goals. If this is the year of Financial Freedom for you, what does such an accomplishment actually look like?

The first step is actually assessing where you are. Before deciding to make 2021 the year of your power move, you have to know what you have and what you don’t. Make a list of the debt you’ve accumulated and add it all up. Then take a look at the money you’ve saved. These are the baseline numbers that are going to keep you honest throughout the process.

Next, you want to write down your financial goals. Don’t be arbitrary in determining what financial freedom means to you (because despite the rat-race that we all run, not all financial goals are created equally). For some, financial freedom means making in excess of what they spend. For others, it means having the flexibility to do whatever they want to do whenever they want to do it. Neither of these notions are wrong, but they aren’t necessarily one-size-fits-all objectives either. Specific targets may be to eliminate all student loan debt before age 30 or make at least $50K in passive income a year in order to retire early. No matter how ambitious the goals, document them!

You then want to affirm. Cite exactly how you are going to achieve the goal. Indicate steps like, “I will begin saving $15K for a home down payment by not eating out for the next year,” or “I will cancel my premium cable subscription and allocate those funds to my savings account.”

Once you are clear about what you want and what you have to do to get it, then start tracking (this is of course, a nuanced word for budgeting :-)). Record all of your income and from it, begin deducting your expenses. Because you’ve outlined in your affirmations all the things you are willing to do to reach your financial goals, your expenses should look less like a spending free-for-all, and more like the payments for necessities and the costs for essential items only. Subsequently, the net amount of your income less your expenses is what you’ll have left. And having something left is one of the most important steps in reaching your ultimate goal(s).

Sure, in fairness, financial experts always make activities like investing, saving and debt reduction sound straightforward and easy to achieve, especially to those who may be marred in debt and feel like there is no way out. But the truth is, these practices aren’t just money management exercises, but ways to realign mindsets. Once a person becomes disciplined enough to stick to a budget, they are more likely to see the necessary financial transformations that they could previously only dream about. So don’t be afraid to plan, vision and goal set around your money this year. Just also remember that no successful results will come to fruition without a clear objective, deliberate strategy and actionable steps.

What changes have you implemented that have positively impacted your financial trajectory? How are you moving closer to reaching your goal of financial freedom in 2021?

The Wealth Gap Hangover: Redlining

fiscalsis — Mon, 10 Aug 2020 02:53:17 +0000

In this current climate of advocacy, social unrest and outcries for reform around systemic practices specially designed to advance select members of society while exploiting others, more and more people have become willing to acknowledge (and begin the work of dismantling) the types of systems created during this country’s founding—and maintained in the hundreds of years beyond that—in an effort to finally come to terms with the very real disparities that exists between dominant culture (the America that is decidedly white) and minority culture (the America whose black and brown children have enjoyed citizenship primarily in name only).

One such practice (though now illegal) that many people have been refocusing on lately due to its devastating effects in furthering the wealth gap in an already disparate society is the practice of redlining. During the 1930’s, the United States Government (through a former agency known as the Home Owners’ Loan Corporation), worked with real estate agents and lending institutions to create maps of large cities with high concentrations of residents of color to identify neighborhoods that they deemed more likely to default on home loans. These maps also indicated desirable neighborhoods where loans would be more likely to be approved.

As the name suggests, these maps were then marked up with red ink, effectively labeling areas around many of the nation’s largest metropolises that essentially prevented people of color from obtaining loans to buy homes in certain (read: white) neighborhoods.

Think about that…

As a legal, commonplace, best practice, the United States Government backed an exercise that allowed financial institutions and real estate agencies to make certain areas around the country geographically off-limits for minorities to not only live in, but to establish the very American Dream of home ownership. Now, although the practice was banned thanks in part to the 1968 Fair Housing Act, it is believed that redlining further expanded the chasm of wealth disparity between whites and people of color.

How, you might ask?

Well, for most people, home ownership has been the fastest way to build wealth in America. Real Estate for the most part is an appreciable asset that builds equity over time. Many have used that equity to pay for a child’s college education or to fund a business endeavor. In Estate Planning, a home is a safety net for a family that often becomes an investment into their future. For many black and brown communities across the United States between the 1930’s to almost the 1970’s, it is believed that at least $200K in personal wealth per household was deemed unattainable due to redlining.

It would seem that in playing an active part in discriminating against American citizens and significantly and adversely impacting the likelihood of those citizens achieving financial freedom through home ownership, the U.S. Government would have worked to stridently implement some sort of corrective measure to rectify such malicious financial wrongs, wouldn’t it? Sadly, aside from determinations under the Community Reinvestment Act of 1977 where lenders are rated outstanding, satisfactory, needs improvement or substantial noncompliance when approving or denying loans to people (in low-income households), I’d say much is still left to be desired (I mean, how can we forget the predatory lending and subprime mortgage crisis that lead to the 2008 Great Recession).

In actuality, this realization coupled with the ramifications of other restrictive regulations and open acts of historic racial injustices levied against this nation’s minority population for no other reason than the color of their skin, has made it more and more evident that rectifying these racial and financial disparities has to begin with sweeping, corrective and fair legislation. Until there are politicians in office who acknowledge and are willing to help legislate change for the many socioeconomic conditions that have plagued people of color for hundreds of years, gaps like this one will continue to broaden and practices like redlining may find a subtle, and more nuanced resurgence.

Your Credit: Mastering The Mystery

fiscalsis — Sun, 09 Dec 2018 23:43:43 +0000

While millions of consumers have a general anxiety or respond in a reactionary manner when considering their personal credit, there are definitely tips and tools to ensure that good credit is not some mysterious force, but an attainable financial tool. Listed below are a few pointers to incorporate into your own positive financial relationship with credit.

Understand the importance of you FICO Score: A FICO Score is a credit scoring metric that lenders use to assess a consumer’s credit worthiness and risk. The measurable components of a FICO Score include payment history, debt load, credit history, credit mix and new credit. Each category accounts for a percentage of the consumer’s total FICO calculation.
Pay your bills on time: Setting up payment reminders and opting for automatic draft payments from your banking institution will ensure that you don’t miss a payment. Paying your bills timely and responsibly not only impact your credit score positively, but accounts for roughly 35% of your credit worthiness in the eyes of potential lenders.
Reduce your debt load: Carrying too much debt may reflect as irresponsible or as living outside of your current means in the eyes of lenders. One way to get your debt under control is to pull your credit report and make a concerted effort toward paying down the active debt listed there.
It’s never too late to get current: Despite your previous delinquency history, getting back in the rhythm of making timely, if not consolidated and/or reduced payments will assist greatly in establishing a consistent payment history and a good illustration of credit responsibility.
Manage your revolving debt: If you apply for credit, max out your credit cards, stop using credit (entirely), or miss monthly credit payments, your credit score will go down. Because extended credit is simply borrowed money (with interest), you are ultimately required to repay what you owe. Not doing so could lead to late fees, default or the risk of legal action being taken against you. While it is always my recommendation to make more than the minimum monthly payment on your revolving debt accounts (to avoid prolonged and accruing interest), it is very important that you pay at least what is due each billing cycle.

While practical in concept, the application of these recommendations will go a long way toward increasing and solidifying a robust FICO Score and financial future.

Money Minute: A Financially Strong Fourth Quarter

fiscalsis — Tue, 02 Oct 2018 19:39:35 +0000

The New Year is just around the corner, but there are still three months left in order to end 2018 on a positive note.

What adjustments can you make starting today to ensure that your Year-End financial goals are still attainable?

In today’s practical Money Minute Tip, we explore the “If-Then” Model.

Why Can’t Women Have It All?

fiscalsis — Sun, 30 Sep 2018 01:37:25 +0000

In today’s patriarchal society, the world just can’t help but to put constraints on women. If she is an executive, she likely has no time for a family. If she is a nurturer, how can she ever hope to be an ardent and effective businesswoman?

And don’t get me started on money. Aside from the fact that she makes 80% of what her male counterpart does who performs a comparable job, the financial services industry would have her to believe that women are too risk-averse to even benefit from investing their hard-earned money the same way that men do.

But aside from the naysayers and deliberate detractors, there is a much better question to ask and it isn’t why women can’t have it all, but instead where do we start? I would contend that we begin by first knowing what we want and making a specific plan to obtain it. We should be continually asking ourselves if and how close we are to meeting those goals, and if we aren’t, what we can do to right our proverbial ships.

That same world that would have women to believe that we cannot have every single thing that we desire, is actually a world that is ours for the taking!