Publications

Identity Theft…Are you protected?

By, State Treasurer Kelly Schmidt

Over 3 million identity theft and fraud reports were recorded in 2018!  As we near “prime time,” the holiday shopping season, for identity theft here are some friendly reminders to keep your financial information SECURE whether you shop online or your local retail store.

• Do not carry your Social Security card with you, and do not leave it stored on paperwork or laptop.  Keep it at home in a safe place.  Only give your SSN as necessary.  Thieves can use this information to do a great deal of damage. 
• Review receipts with your account statements, and watch for unauthorized transactions.  A first credit/debit card attempt is typically for a small amount which goes undetected. 
• Shred receipts you no longer need, credit card offers you receive in the mail, and expired credit cards.  This will prevent thieves from gaining access to your information as they dig through trash and/or mail.
• At the checkout, keep the keypad protected while you key in your PIN.  The person behind you in line or at the ATM may be paying close attention. 
• When purchasing online, be sure to double-check for the “lock” icon on the status bar of your internet browser.  When you see the lock, you know your information will be transmitted safely.
• Create complex passwords that are not easy to guess.  Create a password that uses a combination of uppercase and lowercase letters, numbers, and symbols.  It’s also wise to change your passwords on a regular basis.  Avoid having one universal password for all of your major accounts…if your password is hacked, all of your accounts are in jeopardy.

Anyone can be a target from your small children to seniors - do your research for best practices in keeping your identity SAFE.    

Is the sale too good to be true?

By, State Treasurer Kelly Schmidt

Do you sometimes feel the sale is too good to be true? Do you find yourself impulsively buying just because it is on sale? When is a good deal not a good deal? Sale signs cloud our reasoning, which results in some of the worst shopping decisions we make as consumers. 

Here are a few ways to decipher if it is a real deal and too good to pass by. 

Do you need it, or are you buying it because it is "on-sale"?  If it is something already on your list to purchase and you can save money, then it can be considered a good deal. For example, if you buy diapers every month and have a $10 off coupon, you already know you will be purchasing them in the future.  So yes, this is a good deal. However, if it is $10 off on a dinner entrée, but you typically cook at home; spending $30 to get the $10 saving makes little sense. 

Try using comparison search engines, especially when you are purchasing at Back to School or Black Friday sales.  It is easy to do a quick Google search first to ensure you are getting the best price. During this time of year, everyone is competing for your business, so use it to your advantage. 

Beware of the "50% off" scam. Before getting excited that the item you are looking for is listed as 50% off go out to the original manufactures website to verify the original price. Sometimes retailers will double their original amount and then mark it down 50%.  In reality, this is not saving you any money.

Watch out for Door Buster Deals.  These deals are typical around Back to School and Black Friday. Beware that you are buying what you need and not merely because it looks like a good deal. Stores like to offer a deep discount on a limited quantity of items to get you in the store.   Once you are there, the hope is you will spend more money on things you may not need. These deals are also usually early in the morning when you might be tired and likely to spend more money than if you had a good night's rest.

Finally, before rushing to the store to snag the next deal, make sure it's something you genuinely need.  Would you buy it if it was not on sale?

Christmas in July

by, State Treasurer Kelly Schmidt

Summer is finally in full swing!  Like most, you have been enjoying the outdoors as much as you can, but now is also the perfect time to think about Christmas. That's right Christmas! Or should I say your Christmas budget?   Those non-planners do not want to be in the same position as last year; when the calendar turns to December 1st, and we haven't given a thought to how we will afford the things we want to do this holiday season.  Parties, charitable giving, travel, decorations, and gifts; the amount of money we spend in December can add up quickly.  Preparation is the key.  So instead of relying on credit this year, make a plan and use cash. 

While we continue to enjoy the summer fun, take a few minutes to layout your holiday plan.  Here are a few tips that will help you prepare. 

First, put together a budget.  Sit down and compile a list, start with those you would like to give a gift and how much you can afford to spend.  Travel plans, year-end charitable giving, and those work parties should also be included.  Once you have a realistic idea of your expenses, you can now put together a plan.

Next, start a savings account for the holidays.  We have approximately 23 weeks until Christmas, divide your entire holiday budget by 23.  That's what you will want to set aside into your account each week.   If that amount does not seem workable, it is time to adjust your budget.  Cut back on the number of gifts, how much you spend on each person, travel, or charitable donations. 

Another tip is to review the list of people you buy gifts for, are there gifts you can buy now and store until Christmas?  Spreading out your gift purchases can save a lot of last-minute overspending and stress.

Third, look at your travel plans, can you book airfare tickets earlier to save on the last-minute holiday travel rush?  Can you be flexible with your travel dates?  These options can save on your airfare?

Finally, something I learned years ago, the things I thought were necessary for that "perfect" Christmas holiday was not as essential as I thought.  I asked my family to answer the following.  It wouldn't be Christmas without 1.  2. and 3.  What I learned from that exercise changed everything.  It wasn't the number of gifts under the tree; it wasn't the number of parties we attended, and it wasn't the decoration in the house.  It was our time together, attending church as a family, their favorite holiday cookie and "Mom, don't mess with the Christmas Day menu." 

Scam, Don't fall for it!

By, State Treasurer Kelly Schmidt

The day does not go by without my phone ringing from another SCAM.  The IRS, Apple, auto warranties, insurance, and most recently, Social Security. They are endless and exhausting!

Like many of us, I have stopped picking up calls from unknown phone numbers. If someone needs to contact me, they can leave a message. But, the scammers are getting so sophisticated like using numbers that look local and other tactics. 

One of the most common phone scams involves someone calling from the IRS. They say we owe them money and threaten legal action. Don't fall for it! The IRS will NEVER call you. They will initiate their contact through the US Postal Service.

Gift card scams are a recent development.  People are asked to pay with gift cards by a caller claiming to be from the IRS, tech support, or a family member in need. Don't fall for it!

Or the scammer is calling to say your insurance or auto warranty is about to lapse. They then proceed to ask the potential victim to provide personal information so they can "renew" the policy. Don't fall for it!  Call your insurance representative to confirm all is well. 

And the most recent scam, a caller claiming to be from the Social Security Administration claiming your number has suspended. Never give or confirm your Social Security number to anyone. Don't fall for it!

Some scams use a voice recording.  Remember, the more you talk, the more likely you will give the crooks the information they can use on their next attempt. Your best line of defense is to hang up, immediately.

If you have lost money or have given out personal information, you are unlikely to get your money back.  However, there are steps you can take right away to limit the damage. 

• Report scams to Law Enforcement
• Tell your Family and Friends
• Contact your financial institution
• Change your online passwords
• Contact the Social Security Administration

Remember your best line of defense is do not answer the call or hang up immediately.

Staying on track for summer

By, State Treasurer Kelly Schmidt

Winter… it is FINALLY over!  Has it as brutally cold and seemingly endless for you as it has for me?  It is time for some sunshine to help get us out from underneath the hibernation of these winter months.  As the days get longer and the temperature warms, we get ready to do our seasonal activities such as lawn projects, camping, house maintenance, and summer vacations.   There is one thing in common with each…spending money.  Through the dark, cold days of winter, we tend to stay home, but when summer arrives, we are ready to get outside and enjoy life; which may leave us financially stretched by the end of the summer. 

So how do we stay on track during the summer months and still feel like we are enjoying yourselves?

It’s never too late to start planning.  One tip that works well for us is using a bucket system.  The “general expenses bucket,” the “savings bucket,” the “retirement bucket,” and the “summer expense bucket.” When we sit down to complete our monthly budget, we make sure our dollars are committed to one of these buckets and ensure there is nothing left over to spend on last-minute items.  This is often referred to as a zero-balance budget.  This way we are saving every week and by the time summer arrives; We are prepared and do not need to take from our “general expense bucket.”  This may be a bit late for this summer, but there is time for next summer.  

ere are ideas to speed up your savings: 1.  scale back on leisurely expenses for a few months. It’s incredible how quickly dollars add up with small changes.   Ask yourself if you really need that new purse or fishing rod?  Could you put that $50 towards your savings?  2. Have you decluttered your home or closet lately?  Are there items you could sell and add to your savings? 3.  prepare your own food.  Bring lunches to work every day for a few months, and limit dinners out.  It’s healthier, and the money spent on groceries will be much less than what you would have spent while dining out.

Plan, plan, plan early, do not wait to commit to your summer plans.  Create a list of all the activities you want to do and what the estimated costs for each event, so you can prepare.  Once you have set aside those dollars for summer, you can enjoy those activities guilt-free.   What a great gift!

May your summer be filled with family, friends and beautiful memories! 

Financial Literacy Month

By, State Treasurer Kelly Schmidt

Do you remember the days when people wrote a check for everything, or prior to that cash was used for purchases?  Today it seems I seldom have cash on me, and rarely do we use checks. We have come to a time when it is all about online shopping or using debit or credit cards, creating ample ways to overspend.  Using debit and credit cards can lead us to believe we always have “cash at our fingertips” which can easily lead us into financial trouble.   Our children are growing up in a society where you can buy anything as long as you have “plastic,” and they do not understand what that truly means.   I still recall, when our sons were young, saying to me, "Just go to the machine, Mom".  The machine had money, but Mom didn't.   

April is Financial Literacy Month; an entire month created to help educate adults, teachers, and students on financial responsibility.  Many consumers do not fully understand the checks and balances of money.  This has been identified as one of the main challenges faced by Americans. 

It is important to help our youth understand financial literacy; how to pay bills, the use of credit, saving for retirement and how to invest.  According to the FINRA (Financial Industry Regulatory Authority) Foundation, nearly two-thirds of Americans could not pass a basic financial literacy test.  In the US there are only five states that require a personal finance course for high school graduation: Alabama, Missouri, Tennessee, Utah, and Virginia.  Here in North Dakota, a class may be offered but it is not a requirement for graduation.  It's up to parents to teach our youth financial literacy. 

What can we do to help? The most important thing we as parents can do is talk to our kids about money and start that conversation when they are young.  They need to know the difference between a need and a want, or what it means to save money and how to earn money.  Children need to understand delayed gratification.  Create self-discipline to save for a car, college, living expenses, insurance, etc.   How does credit work?  Our youth must understand “plastic” comes with a cost.  Practice this concept with your family.  If they ask for money, charge them a little interest each day until they pay you back.  The more we can instill these good practices in our youth the better for them, our families and our communities.    

What to do with your tax refund?

By, Treasurer Kelly Schmidt

The tax season is upon us.  Every year, people ask what should I do with my tax refund?  First, if you are expecting a tax refund remember that the government is not giving you a bonus, this is money you should have received all year.  (you may want to check your withholdings for 2019) Rather than thinking of your tax refund as a bonus consider it as an extra paycheck.  Instead of spending it carelessly, plan where this money should go before you spend it on frivolous items.

Here are a few ideas to help you use your refund wisely this year.

1. Create an emergency fund

Do you have 3-6 months of your salary built up in a savings account just in case there was an emergency?  What if you lost your job, or the furnace went out, would you be able to survive without having to resort to credit cards?  Using your tax refund to build up a safety net is incredibly money savvy.

2. Pay off debt

Do you have a credit card that could be paid off?  Instead of putting money in savings, pay off that credit card with the high- interest rate. It will save you more money in the long run when you are not paying interest or making a payment each month.

3. Retirement

Are you close to retirement, have you maxed out your Roth contributions?  By contributing to your retirement, you are contributing to your future self.

4. Make an extra mortgage payment

This is a great way to save money over the long term.  If you can make a payment to the principal, it will reduce your interest which can have great long-term benefits.

5. Start a side business

There are many side businesses to choose from and having more than one source of income can be beneficial for long term financial stability.

Whatever your tax refund is put your money to work for YOU!   What better way to invest

than to yourself. 

Credit Scores… What do they mean!?!

By, State Treasurer Kelly Schmidt

We all hear a lot about credit scores and checking our credit and increasing our credit score but what does this all mean!?!

Many of us struggle as we try to understand what the “credit score stuff” really includes and why does it matter.  Yet, we all know it is a deciding factor for financial institutions when determining if we will receive a credit card or a loan. 

What exactly is a credit score?  A credit score is a tool that lenders use to determine how likely it is that you or I will repay a loan or make a payment on a credit card. 

There are three credit reporting companies: Experian, Equifax, and TransUnion.  It is important to check your credit score at least once a year from one of these firms.  However, I would encourage you to check your score annually from EACH company.  For example, the first quarter of the year check your credit score from Experian, the second quarter of the year pull your credit score from Equifax, and finally from TransUnion.  If married, you and your spouse may check a score from each company, however, do not check the same company in the same quarter.  This allows the greatest FREE opportunity to find any errors in a timely manner or identify suspicious activity.  Time is of the essence when challenged with a possible stolen identity. 

There are two different credit checks.  The first is referred to as a “hard inquiry” which removes a few points off your score.  Hard inquiries occur when a financial institute, such as a lender or credit card issuer, checks your credit when making a lending decision such as a mortgage or auto loan.  You typically have to authorize a “hard inquiry”.  According to FICO (Fair Isaac Corporation, the creator of the software used to calculate credit scores), your score can drop 5 points with a hard inquiry but remember this does not last forever and that your score changes monthly.

The second is referred to as a “soft inquiry” which does not affect your credit score. This may occur when a credit card issuer checks your credit to see if you qualify for a special offer.  Your employer may also run a soft inquiry before hiring you.  

Now you have checked your credit score what does this number mean?  The rule of thumb is the higher your credit score the better, scores range from 300 to 850.  A credit score of 700 or above is considered good while a score of 800 or above is excellent.  Payment history and if you have made your payments on time, the number of credit accounts and how long you have had them, total debt, bankruptcy, these all influence our credit score. 

The financial decisions we make today have a direct impact on the opportunities we have tomorrow.  Our credit score is one of them.  To get your free credit report go to www.freecreditreport.com.   

Happy New Year!

By, State Treasurer Kelly Schmidt

Happy New Year!  

I love the start of a new year and the opportunities it brings.  I am not one for resolutions, but certainly, use this time of year to assess.  We all know nothing changes if nothing changes.  Financial changes require goals, family discussion, and organization.  Here are a few ideas to get you started in the new year.    

1. Complete a budget each month

 It is important to know where your money is going each month and there is no better way to get ahead of your finances than to write it down.    

2. Reduce your debt

Once you have determined where your money is going, you can form a plan to reduce or eliminate your debt.  Start with the smallest amount first and continue from there. 

3. Automatic Savings Transfer

Set up an automatic transfer to your savings account. The best way to do this is to have it taken automatically withdrawn from your paycheck.  Many will agree, after the first month or two, you will not notice the change.    

4. Manage your retirement

When was the last time you evaluated your retirement goals?  How much are you saving? Will you be able to retire comfortably?  Can you add another $50 a month?   

5. Review your beneficiaries

Most people select their beneficiaries and never look at it again.  It is a good practice to review who would receive your assets in the event of your death.  Circumstances may change in a year, so it is important to review these documents. 

6. Create a Will

If you already have a Will, now is a great time to update it.  Help your family by putting a plan together; you will be comforted to know that your wishes are laid out and your family will be grateful you have made those decisions.

7. Insurance policies

Do you and your family members know where your insurance policy is if something were to happen?  Part of reviewing documents is placing them in a central location where they can easily be found.  Gather all your insurance documents and policies in one binder and review them. 

Starting the year with your finances in order is beneficial to everyone.  It gives us all peace of mind…which is priceless.   Wishing you and your family a blessed 2019.   

PRESENCE not PRESENTS

By, State Treasurer Kelly Schmidt

It’s that time of year again, Christmas!  A time to focus on our fellow man, our family and The Child given to us in a manger.  Or is it? Too many it’s a time to spend, spend, spend.    

According to NerdWallet, a group that monitors consumer spending habits, “on average, consumers will spend $116 more than last year on their holiday shopping. Of that group, 73 percent will charge their expenses to their credit card, up from 58 percent last year.”  This is a concerning shift.  When relying on credit, it suggests an increase in debt levels and reveals that consumers are struggling to make payments on time.  Is this Christmas?! 

The holiday season can be a difficult time of year for so many reasons.  It may be family strife, losing a loved one, financial challenges or a nagging case of perfection as we look for that Norman Rockwell Christmas. 

I am blessed to have wonderful memories of the Christmas season when our time was the greatest gift and the number of gifts under the tree was not the focus.  The value of time and our PRESENCE, not our PRESENTS was the most important.  I remember only a few of the wrapped gifts I received as a child. What I remember are the gifts of time.  The weekends spent with my Grandma Dot (without my brothers).  We wrapped gifts, baked cookies, and she would share the stories of her childhood.   As a young girl, I spent hours embroidering monogram handkerchiefs for my Dad, a special gift from me to him.  Riding through town with family, hot cocoa in hand, to view the Christmas lights. 

We have tried to continue that legacy with our son’s and their families.  We write handwritten letters to our grandson’s; they love to receive mail.  They bless us with beautiful pictures in return.  The new trend is rocks!  We paint rocks for them to hide for someone else or save for themselves in their special drawer.  Reading a story or putting together a puzzle from the dollar store are special ways to give the gift of time.  The value of a gift isn’t the dollar amount associated with it, it’s the heart of the giver and the grace of the receiver. 

Let’s use this Christmas season as an opportunity to pull away from the commercialism and give of ourselves.  Remember the most important gift of all, The Child lying in a manger.  Merry Christmas!

Keeping Your Online Information Safe

By, State Treasurer Kelly Schmidt

Our phones, iPad, and computers have changed our world.  We shop online, pay our bills online and view personal and financial information online; but is it safe?  Financial fraud is on the rise. In 2018, there were over 600 data breaches at major companies: Under Armour, Facebook, Orbitz, Panera Bread just to name a few.  The financial reporting companies Equifax and Experian were also on that list.   Scary! North Dakota is among the top 10 states for cases of identity theft and fraud in the United States.  Many individuals have an “it will never happen” mindset.  It is not a matter of “if”, it is a matter of “when”.  In 2017 the cause of these intrusions cost Americans over $27 billion!  Before you enter your credit card information into a website, check to ensure your online habits are secure.  Here are a few tips. 

·        Change your passwords regularly, at least once a month.  Do not use the same password or the same version of the password for more than one account.  Mix it up using upper- and lower-case letters, numbers and symbols. 

·        Do not over-share on social media networking sites.  Someone can use information such as your birthday or address to steal your identity.  Adjust your privacy settings on your social media accounts.  This will reduce the number of options hackers may use to steal your information.  

·        How often are you reviewing your bank transactions and your credit card statements?  Establish a habit of checking your accounts regularly.  I check my account daily!  The sooner you can identify an issue of fraud the sooner you can take corrective action.

·        Never send personal information electronically.  For example, never send your credit card information via e-mail or your social security number.  Do not carry your social security numbers in your wallet or purse. 

·        Secure your home wireless network with a strong password to prevent someone from trying to get your personal information.  Remember, you are not safe using public wireless access. 

·        Is the website you are accessing secure?  Verify the web address begins with HTTPS vs HTTP, the “S” signifies the website is secure.  Always make sure you are shopping online with a reputable company. If you question the company, search for it on Google to verify its authenticity. 

I hope these tips are useful to you and help to ensure your online experience is safe.  Your personal and financial information is important.  Protecting it is vital. 

Holiday Whirlwind

By, State Treasurer Kelly Schmidt

The leaves are changing and most of North Dakota has experienced the first snowfall.  These changes lead to the whirlwind of the next three months of holiday planning.  October just started, and Christmas items have already been placed on the store shelves, but wait we have two big holidays before that… Halloween and Thanksgiving!

It never fails, summer flies by, school begins, and before we know it the holidays are upon us. It’s time to buy Halloween candy, and costumes, then on to turkey and all the fixings, and wrapping up the year is Christmas.  With the right mindset, this can be a joyful time of year, however, many times it can bring a great deal of financial stress. We typically remember to save for the purchase of our holiday gift-giving, but how about those extra groceries for the Thanksgiving meal or Grandma’s Christmas goodies.  Traveling to see family and friends can also mean unexpected gas and hotel costs.  Finally, donating during the holidays to your favorite charities.  This can throw your budget off for months. 

Now is the perfect time to start preparing,

1. Slash your spending.  Remove all unnecessary spending from your budget and put it away for holiday expenses.  Decide not to go to the movies, take out $40 that you would have spent and put it in your holiday savings account. 
2. Get a seasonal job.  There are many stores looking for help and this provides a great way to make extra money. 
3. Credit Card Rewards – do you have rewards sitting on your credit card?  Think about cashing those in on Christmas gifts.
4. Watch for sales and coupons.  Stores send out tons of coupons and sale books this time of year, so consider shopping early to get the deals which could save you hundreds of dollars. 
5. Specialized Shopping Days – Mark your calendar now for days like Cyber Monday or Free Shipping Day. 
6. Plan your budget for each holiday now so you are not caught off guard when they get closer.  Break down how much you’ll spend in travel, food, gifts, charities etc.
7. Holiday gifts do not have to cost a fortune.  Sometimes the best gift is spending time together. 

Embrace the holidays with gusto and remember, no gift is worth the financial stress in the new year.

A Rainy Day Fund

By State Treasurer Kelly Schmidt

The fall, cool, crisp air is making its way back into North Dakota which means water toys are getting stored for the winter, the kids are going back to school, and warm chili with cornbread is on the stove.  The changing of the season reminds me to take a minute and reflect upon the last few months. 

Summer brings so many great memories of lake cabins, bonfires, s’ mores, ice cream treats, traveling, and spending time with family and friends.  Summer can also mean splurging on making memories more than we normally do the rest of the year.  As we transition into fall it’s a great time to re-evaluate our spending and our budgets.    Where can we cut back and start replenishing our rainy-day fund?  Are we prepared for the extra expenses during the holidays?  Do we have enough saved should the furnace go out this winter?  What about the vehicles, are they ready for winter?  The list seems to go on and on of the things that we should be saving for; so how much savings is considered enough? 

A Federal Reserve report on the economic well-being of U.S. households found that 40 percent of survey participants could not cover a $400 emergency expense. Most Americans have become very obsessed with instant gratification so how do you save for something that you don’t know if it will ever happen? Most financial “gurus,” say to start with at least three to six months in an emergency savings fund.  This would be spent on housing, transportation, healthcare, or utilities if something were to happen unexpectedly.  Once you have that established you can start looking at your other saving buckets: travel, holidays, rainy day funds, all the extra “wants” that we have on our lists.   It is more enjoyable to take a vacation that is completely paid for by cash than having to put it on a credit card and pay for it plus interest later. 

It can be overwhelming to start developing a savings fund, so start simple.  First, determine what your emergency savings fund looks like.  Add all your expenses for the month, mortgage, insurance, car payment, utilities, groceries, etc.  Add the average cost of these and multiply by 3 to 6 (depending on how many months feels comfortable to you) this is the total for your emergency savings. 

Next start taking $10, $20, or $100 each week and create a rainy day fund.  One suggestion is to open a separate savings account and label it “Walt Disney Trip” or “Holiday” money.  People that label their accounts tend to save more since they can watch their account grow.  People are less likely to take money out of their savings account if its labeled “travel fund” and you need the money for a new phone.   I would recommend setting it up as an automatic transfer from your checking account, even if you start small just start. 

Soon you will be prepared for unexpected expenses and your rainy-day fund will be replenished.  You will enter the holiday season confidently or begin to plan your next trip to make lasting memories. 

Cut Your Back to School Spending

By, State Treasurer Kelly Schmidt

August is finally here, which means less time spent at the lake and more time spent shopping for back to school supplies, clothing, and electronics.  With the rapidly approaching school year, the school lists can be daunting especially if you have not budgeted for the extra spending.  The back to school industry is the largest “holiday” following Christmas in which households spend their money on.  With the average household spending $1000 per child on back to school supplies it can be extremely overwhelming.

To help ease the stress this year here are a few tips and tricks to save a few pennies.

1. Shop end of summer sales: buy clothing that you can wear year-round.  Many kids wear

t-shirts and basic long sleeve shirts or sweatshirts year-round.  Purchase them when they go on sale and hold on to them till they go back to school, so they are still new.

2. Track the sales: do your research, find out when each store is going to have its sales and calculate which store has the best price on notebooks, pens, etc.  Most stores will offer items at below-market cost hoping that you will buy more than just those items.  Do not fall for their game, go in buy the 1 cent notebook and get out!
3. Stick to the list: each school provides a list of items for what your child needs to bring to school, do not buy more than what is on the list.
4. Buy plain office supplies and decorate them yourself.  Buying a plain white folder is usually cheaper than the design ones, and your child will enjoy personalizing the folder to their own interests and hobbies.
5. Host a back to school swap: join groups and neighbors to come together and swap kids’ clothes, books, and shoes.
6. Shop at consignment stores: you can find gently used clothing for ½ the price compared to buying them new.
7. Give your kids a budget: back to school shopping is a great time to teach kids budgeting.  Give them a dollar amount which you are willing to spend and let them put together the best way to spend their money and still get everything on their list.  You stick to your budget and your child learns the lessons of budgeting. 

Using these tips and tricks you will help reduce the stress of your back to school shopping because you know you will be sticking to a budget and not overspending.  Happy Saving!

Simple Ways to Cut Unnecessary Spending

By, State Treasurer Kelly Schmidt

The most important aspect of personal finance is deciding the best way to utilize your money. It can be especially challenging to save money on a small or fixed income. The key to reducing your spending is to cut back a small amount in each area.

Receive an unexpected bonus at work? Find a 20-dollar bill in your winter coat? Instead of pocketing that cash, pay yourself first by automatically depositing it into your savings account.

Going out to eat is very tempting after a long day at work, it can be tough to find the energy to make a meal at home. Start with a goal of cooking at least twice a week and slowly build up to three or more times a week.

Going to the store when you are hungry and without a list is a recipe for overspending. Pre-plan what you will need for the week before going to the store to avoid picking up extra items you do not need.

As fall approaches, it’s a good time to go through your closet and get rid of the items you never wear. These clothes take up extra space and could earn you some extra cash.

Cancel gym memberships or entertainment bills. It is easy to forget about our automatically reoccurring monthly bills. Online subscriptions that you forgot you purchased, magazines that you never look at, a gym membership that you never use; all could be good candidates to cut from your budget.

It’s easy to overspend when we are not setting limits and holding ourselves accountable. Cutting unnecessary spending frees up money to put towards an emergency fund, retirement or even a house. Eliminating these extra expenses could make a significant difference in your budget and your future. 

National Insurance Awareness Day

By, State Treasurer Kelly Schmidt

National Insurance Awareness Day is observed each year in June. This day was created as a reminder to review your insurance coverage and make changes or adjustments.

Why is Insurance Important? You have worked hard to build a solid financial foundation for you and your family, so you want to be sure that everything is protected. Accidents and disasters can and do happen, and if you are not adequately insured, it could put you in financial trouble. You need insurance to protect your life, your ability to earn income and keep a roof over your head. 

While you want to ensure that you are adequately protected, there are a lot of insurance policies that are unnecessary for most people. Purchasing the wrong insurance, or simply spending too much on insurance can take money away from other areas, such as your emergency fund and your retirement savings.

When it comes to buying insurance, there are so many options today that you might not know what is necessary and what is redundant.

When it comes to insurance, there are basically five types that everyone needs.

Health Insurance

When purchasing health insurance, consider the following:

Needs: Young and healthy single people require less coverage than those with young families, the elderly, or those with chronic health issues. Do you plan on using your insurance a lot? If so, you’re going to want a low deductible and copays.

Doctors: One of the first questions you should ask about a plan is if it allows you to keep your current physician.

Car Insurance

Not only will you want car insurance, but nearly every state also requires that you have it.

Liability: Liability coverage comes in two forms: bodily injury and property damage liability. These cover damage to others and their property.

Personal Injury Protection: This type of coverage will cover medical expenses related to driver and passenger injuries.

Collision: Get collision insurance if you want your insurance to cover the cost of damage done to your car, whether you are at fault or not.

Comprehensive: Collision only covers damage done in an accident. For example, if a tree falls on your car and destroys it, you’ll need comprehensive insurance to get compensation.

Uninsured or Underinsured Motorist: This covers you in the event that the person who hits your car does not have enough insurance to cover the damage — or any coverage at all.

Homeowner’s or Renter’s Insurance

This insurance is absolutely essential. It protects your most valuable asset against damage and theft.

Life Insurance

No one likes to think about it, but life insurance is an essential component of protecting your family in the event that you pass before your time.

There are costs associated with dying, such as burial and mortuary fees. Additionally, if you are the primary breadwinner, life insurance will help your family to offset the lost income.

Disability Insurance

Disability insurance is similar to life insurance. It reimburses you for income lost during periods of time that you are not able to work.

Unnecessary Insurance Policies

Accidental Death Insurance: Even the accident-prone should skip this insurance, which generally contains so many restrictions that it is nearly impossible to collect.

Disease Insurance: A good health insurance policy is probably a far better investment than trying to cover yourself for every type of ailment out there.

Mortgage Life Insurance: Another redundant form of insurance, a good term life policy will cover your mortgage in the event of your death.

Protect yourself without paranoia, the urge to protect yourself against any calamity is understandable. Most people would rather pay a little bit of money every month rather than worry about coming up with a larger amount of money during a time of crisis.

On the flip side, some people might think that they have nothing to worry about. The five types of insurance identified in this article are general policies most should have.  Contact your local insurance professional.  Don’t have one?  Ask a friend or family member.   It is an important step in protecting you and your family from the unexpected. 

Unexpected Expenses

By, State Treasurer Kelly Schmidt

What is an unexpected expense and what is not? First, let’s start with what they are not. Quarterly payments such as taxes or a garbage bill, semi-annual car insurance premiums, or yearly expenses like vehicle registration or eye exams are not unexpected. These types of expenses can be planned for and included in your budget. Some types of unexpected expenses are medical emergencies, natural disasters, major car repairs or major home repairs. Although these expenses are unexpected, there is a way to prepare for them but it can be different depending on what type of expense it is.

Medical emergencies can be very stressful. Along with having to deal with the stress of the actual illness or possible hospital stay, you always know there is a bill looming in the distance. If you don’t have health insurance it can lead to even more devastation. If you are otherwise very healthy, one thing you can do is check your options for health coverage of major illness or accident and that can possibly save you some money. Ask your insurance agent for the best option for your individual situation. Once the bill arrives, check in to your options with the healthcare provider as far as making payments. If they don’t offer that option, you may be able to reduce your other household expenses temporarily to free some money up.

Natural disasters and major home repairs are two other very common unexpected expenses. Home owner’s insurance can help keep you covered in the event of a natural disaster but what happens when you need to replace your furnace or water heater? Tapping into your emergency fund may only get you so far, so you may need to explore other options.  You may need to consider taking on temporary debt such as a credit card or a small loan, just be sure you don’t end up with bad debt. Interest rates and fees can be more trouble than they are worth, so proceed with caution.

Car repairs are another thing that can sneak up on you. Even with regular maintenance, which sometimes can prevent larger problems, there are still unexpected things that can happen. Things to budget for include tires, oil changes, and regular maintenance. A general rule of thumb is to plan for roughly 10% of the value of the car. So, if your car is worth $20,000 then you should plan about $2,000 a year for maintenance.

The best way to ease the financial burden of unexpected expenses is to have your budget in order and an emergency fund in place.  Generally speaking, we are all advised to have enough cash on hand to cover three to six months of living expenses.  That is a tall order!  Starting your emergency fund is the first obstacle, building on it is the challenge.  The unexpected happens to everyone but taking time to ensure you have a safety net in place and a plan for emergency situations will definitely help you in the long run.

April is Financial Literacy Month

By, State Treasurer Kelly Schmidt

Would you be surprised to learn that not all states require high school students to take a financial literacy course before graduation?  As your State Treasurer, I have made financial literacy a priority of this office. I also recognize that good financial education needs to start in the home. The habits that we teach our children, both good and bad, will be repeated. April is financial literacy month, so the Office of State Treasurer is raising awareness about the importance of financial education.

Teaching our youth sound financial practices at an early age is very important. There are many fun ways to start habits early on and as children get older they will be set up for financial success.  Our office has partnered with the VISA and EverFi to introduce financial concepts to our youth in and out of the classroom. Using these tools comes at no cost to our schools or taxpayers, thanks to partnerships with local business and financial institutions. More information and resources can be found online at www.northdakota.financialfootball.com, www.ndjumpstart.org, and everfi.com.

Is your tax refund burning a hole in your pocket?

By, State Treasurer Kelly Schmidt

Are you one of the 60% that expect to or have received a tax refund this year? As much as it seems like free money to spend on whatever we would like, it is important to tell your money what to do so it doesn’t just disappear. Last year’s average tax refund, according to Yahoo Finance, was roughly $3,000. That is a pretty good chunk of money and can go a long way depending on what you decide to do with it. Keep in mind this is YOUR money, not a gift.  Most financial advisors will tell you that if you are receiving this level of refund or more, you should adjust your W-2 withholding for next year.  Changing your tax withholding will enable you to use those funds throughout the year rather than bank them interest-free with the government.  Some would tell you the only reason to give the government an interest-free loan is if you are not a disciplined saver.  That discussion is for another day.  A few wise things to do with your tax return create an emergency fund, pay off debt, add to your retirement, your child’s education, or invest it!

An important component of being financially stable is having an emergency fund. Most Americans do not have enough money to cover emergency car repairs, home repairs or unexpected medical expenses. Do yourself a favor and stash away some money for emergencies so you won’t have to turn to credit when something comes up.

Once you have that emergency fund taken care of, pay down your debt. It may seem like a huge feat, but when you have a large pool of dollars like your tax return it can really get the ball rolling. Start with the smallest debt first and work your way up. Trust me, it will feel so much better not to have that debt looming over your head.  If you have your emergency fund, and you have no miscellaneous debt, it’s time to look to toward your retirement. Contributing to an IRA will be a lot more rewarding than spending your tax return on something that will be forgotten within a couple of months. You will never regret having money sacked away when you are ready to retire.

Investing your refund is also a smart idea.  As I wrote last month, setting up a 529 college savings plan will help your children or grandchildren go to college. With the rising costs of education, putting your refund towards their higher education is a win-win.  Another way to invest your money is to put it into a high-interest savings account, CDs or bonds. Let your money grow and work for you!  So much better place than an interest-free loan to the government.

While you may not be able to do anything with your 2017 refund, let’s think about 2018 and what we can do better. Is it really in your best interest to plan for a large return? Or, would it be better if your paycheck was a little bit more each month? If you are falling short each month, you may want to consider adjusting your W-2 so that you are withholding the correct amount. You may want that large refund, but you may also avoid overdraft fees, late fees, or credit card interest. Remember, the financial decisions we make today have a direct correlation to the opportunities of tomorrow. 

How will you pay for college?

By, State Treasurer Kelly Schmidt

Having kids in college has given me insight throughout the years as to how important it is to save and plan for their education. Some parents choose to pay for their children’s education completely while others do not have the means to contribute at all, leaving it up to the individual student to seek out grants and loans.  Whatever side of the fence you fall on it is always good to weigh your options and educate yourself. So, if you are a student or a parent trying to configure the financial path to post-high school education, take note, there are many options in the form of 529 savings programs, student grants, scholarships, student loans, and traditional loans.

529 plans, legally known as “qualified tuition plans,” are authorized for section 529 of the Internal Revenue Code, thus the name.  There are several great resources available to help you get more acquainted. 529 plans are sponsored by individual states and North Dakota’s plan offers tax incentives and tax-deferred growth. When your student is ready to head off to college, they can also reap the benefit of a tax-free withdrawal for qualified higher education expenses. More information on the features and benefits of the North Dakota “College SAVE™” can be found on this website https://www.collegesave4u.com .

Grants and Scholarships are often called “gift aid” because they do not typically need to be paid back. This type of aid is usually offered based on academic accomplishments, merit, or an as-needed basis to students who meet the qualifications. To find out if you qualify for this type of aid it is necessary to fill out the FAFSA (Free Application for Federal Student Aid) form.  Here is a link to the Federal Student Aid website: https://fafsa.gov/ .  The sooner you complete your FAFSA, the better.  Deadline dates for the 2018-19 school year can also be found on their website. Filing your FAFSA may seem like a very intimidating process, but the actual form does not take long and the IRS has not offered a linking opportunity to transfer information from site to site.  Remember, there is NO cost to completing the FAFAS.  Something to keep in mind, however, is that federal aid is awarded on a first come first serve basis, so check your state’s deadlines and file as early as possible!

Not everyone will qualify for a grant or a scholarship, but there are still options available to those students in the form of loans. There are federal student loans and private student loans. A great resource to help put your planning on track is https://www.salliemae.com/.  This is where I found some numbers on how American families pay for college. A breakdown of the top 5 are, 35% being paid by grants, 23% paid by parent income and savings, 19% paid by student borrowing, 11% paid by student income and savings and finally 8% is paid by parent borrowing. 

Another important option to consider is that your education could be paid for up to 100 percent if you are a member of the United States Armed Forces. Each branch of the military has its own unique qualifications, the official GI bill website is a great resource. https://benefits.va.gov/gibill/ As a member of a military family, I hold a special place in my heart for our Servicemembers, Veterans, and their families.  This is just one more way we can thank you for your service. 

Ultimately, the goal is always to finish the college journey on time and with little debt.  In our family that means a lot of preplanning to include finances and expectations.  What they expect from us and what we can expect from them.  For our kids includes a full-time summer job to build their savings which they can tap during the school year.  Good grades which provide an opportunity for scholarships, lots of encouragement and always sending them back to campus with a full tank of gas and backseat full of groceries. 

Time to get it in order

By, State Treasurer Kelly Schmidt

January, for me, has always been a time to bring everything back into order again. It is a time for setting financial goals, organizational goals for the home, and travel plans for the upcoming year. Things tend to be a little hectic and scattered throughout the holidays, so it’s time to reign things back in.

Setting financial goals for the new year can include beefing up your emergency fund, preparing for big expenses coming up, and paying down any miscellaneous debt that may have accumulated during the previous year. If you have children at home, get them involved! A good financial education plan needs to start in the home. The behavior we model to them will likely be repeated, so start them a good financial path.

Another thing that we don’t always think about especially in our early years, is devising an estate plan and updating our wills. Schedule a time to speak with an attorney if you haven’t already done so.

My home tends to look a bit out of sorts after the holidays as well, so I usually work room by room and find the things that I no longer need. It’s time to purge the closets and dark corners of things that no longer have a purpose. It always amazes me how long I keep things, things that are just taking up space and cover the items that bring me joy. I know there is a possibility that someone else will have a use for those finds, and I will be happier having more elbow room.

After a recent trip, I’m very thankful to be home safe and sound. I look forward to planning a few trips closer to home to visit with our family and friends. Nothing brings me more joy than the time I get to spend with them.

Wishing you and your family a year filled with health and happiness!

The Holiday Hangover

By, State Treasurer Kelly Schmidt

The hustle, the bustle, the gifts, the food, the lights, the memories ….and another Christmas and New Year is logged in the books.  We start the Christmas season with every intention to keep a budget in place and to keep the spending to a dollar amount that is manageable. Intentions are good, and then the “spirit” of the season starts to take over. The on-line deals are too good to pass up, the 60 percent off at your favorite store is too good of a deal not to grab it now and the “spirit” is stronger at times than the “will” to keep it to a minimum.

We’ve all done this. Then January shows up and the credit card bill(s) arrive and we have a conversation in our head that sounds like this; “I’m not going to do this again!” You can hold that statement and let “your will” be stronger than the “seasonal spirit.” May I suggest you do your very best and pay off the credit card as quickly as you can before you spend more on interest than you did on the gifts?  It doesn’t have to be an easier said than done comment, it is possible. It is.

You have the strength and determination to do it different from this day forward. You do and you can. Retailers have deals all year long …start a process where you buy one gift a month beginning in February. Tuck them away in a place that you remember. (Now that is always the challenge for me, but easier now that I don’t have kids at home snooping around in every corner.) We North Dakotan’s are nice and we have such generous hearts where we love to give presents. It does feel good to see the smiles on the faces of our grandchildren when they get that special gift or even the smiles on the faces of our children when they see you captured the perfect present. 

May I suggest you take a few moments and make a commitment to yourself for 2018, plan a bit more wisely and don’t allow the holiday hangover to be part of your 2019 plan? You can control the spending and have a joyous Christmas and holiday season. Joy is in the heart and with the people you surround yourself with.

Wishing you all a blessed Christmas and a Joyous New Year.

My wish for you this entire holiday season is to be safe, be smart and always trust your gut instincts.