Financial Education

Back to School Shopping – Fall 2018

Use back-to-school shopping as a way to teach your kids about money by getting them involved as you budget and plan. Consider splitting your back-to-school budget among each of your kids and provide each child with an individual budget for new clothes and school supplies. You’ll be surprised how quickly name brands can lose their appeal as your child carefully tries to make their budget stretch. Then again, if a name brand pair of shoes or jeans is incredibly important to your child, they may choose to make do with more of their old school supplies so that they can have enough money to afford those name brand items.

Talk to your kids and find out what’s important to them. You might be surprised to find out that they’d like to re-use some supplies from previous years or that an after-school activity isn’t of interest anymore. As parents we often forget that our kids’ expectations may be very different than our own, and when it comes to back-to-school spending, it’s a great time for our kids to learn about budgeting and paying for needs versus wants first.


Basic Budgeting Tips – Summer 2018

With another beautiful Wisconsin summer in full swing, but before we are into the holiday season, now is a great time to revisit your finances and get on track for the rest of the year and beyond. So, what’s the number one rule to financial success? Spend less than you earn! The best way to do that is to keep track of what you spend with a simple budget. Here are some tips for getting your finances in order.

Start with the basics:

  • How much do you spend on bills every month?
  • How much are you (or would you) like to invest?
  • How much would you like to save and spend?

Once you divide your money into these basic categories, you have a good foundation to build a more specific budget:

  • Start by accounting for every dollar you make. This includes the money you save and invest, not just the “stuff” you buy. By splitting your money into categories helps ensure that it is all accounted for.
  • Focus on what matters. When we think of budgeting, we often think of the basics – housing costs (rent, mortgage), food, utilities. From there, the average person goes straight to “how much is left to spend on fun stuff?” Our minds often trick us into prioritizing our wants over our needs. By prioritizing our needs (shelter, food, clothing) followed by safety (insurance, utilities, etc.) and then the “luxuries” you’ll ensure that you have the freedom to do what you want with your life.
  • Prioritize your debt. Most of us have some sort of debt so whether you’re living paycheck-to-paycheck, drowning or doing OK, you should prioritize getting out of debt.
  • Use a budget tracking strategy that works for you. There are many budgeting tools out there, from simple spreadsheets to budgeting apps that help you track and monitor your progress. Find one that works for you and start tracking.
  • Use separate accounts if necessary. If you have trouble keeping track of your money because it’s all lumped together, consider separate accounts for each category. For example, you might have one checking account for fixed expenses and one for spending money – this strategy can help to reveal areas where you’re spending too much.
  • Adjust your budget as time goes on. Life changes will often mean changes to your budget. Chances are, you won’t get your budget exactly right the first time so tweak it as needed.
  • Go easy on yourself, but hold yourself accountable. This can be the hardest part for most of us. Don’t stress yourself out if you falter. Give yourself reasonable expectations, but stick with it! If you do, your budget can help to ensure that you have a healthy relationship with money.

How long should you keep financial records? – January 2018

If de-cluttering was one of your New Year’s goals, you may be wondering which financial documents you can safely shred. While some documents need only be kept for a few months, others should be kept for several years, or in some cases indefinitely.

The IRS recommends you keep the following records for six years:

  • W-2 and 1099 income forms
  • Year-end bank and brokerage statements
  • Receipts or cancelled checks for deducted expenses
  • Home purchase or closing statements, insurance records and receipts for improvements

Home ownership is a special case and homeowners should keep these records for six years after selling their home. They should also retain records of legal fees and commissions related to selling their home. These expenses are added to the original purchase price or cost basis and can lower their capital gains tax. Monthly loan statements do not need to be kept once you have received a year-end summary, but always keep final loan payoff notices in case the loan mistakenly goes into collection and you need proof of payment.

Some documents need to be kept for only a few months. There’s no need to hold debit and credit card receipts for more than three months after you’ve reconciled them with your statements. If, however, the purchase will be reported as an itemized deduction on your income tax return, keep this documentation for six years.

Some records should be kept indefinitely, for example:

  • Records of IRA contributions (particularly nondeductible contributions)
  • Annual summaries of retirement/savings plan statements
  • Copies of your tax returns
  • Receipts for big purchases – jewelry, rugs, appliances, antiques, cars, collectibles, furniture, computers – as proof of their value in the event of loss

To reduce paper clutter, elect to receive eStatements from your bank and investment companies. You can also scan your records and save them as PDF files. (Be sure to back them up!) And finally, any document that contains a Social Security number or bank account number, should be shredded to deter identity theft.