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If You’re Going to Borrow, Do It the Smart Way

Jul 11, 2023

Any time you borrow money, you’re going to pay interest and be subject to certain fees (like late payment penalties). No one wants to give away more of their hard-earned money than necessary, but sometimes a loan is needed. If you’re going to borrow money, follow these steps to do it the smart way. 


Check rates with a local credit union. Because credit unions are not-for-profit institutions, they often offer lower interest rates on loans and/or charge lower fees for services. Of course, if you’re not a member of a local credit union, you will first need to apply for membership. In many cases the benefits of a credit union membership are worthwhile enough that you should keep an account there just in case you ever need a loan. Do remember that in most cases, a higher credit score will be required by a credit union in order to obtain a loan. 


Apply for loans online. Applying for loans online is quick and easy, and allows you to efficiently compare rates, fees, and terms of repayment among multiple lenders. If you have less than stellar credit, you might also find more options this way. However, you might notice that you have less room to negotiate online. 


Use a 0 percent interest credit card. Many credit cards offer introductory periods, with 0 percent interest from 6 to 21 months. These offers can represent a terrific opportunity to finance a purchase without interest, if you know that you can pay off the balance within the specified time period. Of course, you might face very high interest rates if you miss a payment or fail to pay off the card within the introductory period, so make sure to plan carefully when using credit cards as a loan. 


Personal line of credit. A personal line of credit from a bank or credit union works similarly to a credit card, allowing you to continue using credit for a specified period of time. But because this option usually carries a lower interest rate than credit cards, it can be a better option. This type of loan works best for irregular, short-term spending. 


Always do your research. With any lending option, do your research before signing on the bottom line. Check interest rates, fees, and the flexibility of repayment options. And finally, check with the Consumer Financial Protection Bureau to see if an institution has registered complaints. These reviews will help you identify the possibility of unethical lending practices, like hidden fees and penalties. 


And of course, make an appointment with us before making major decisions that impact your long term financial situation. We can help you determine how a decision fits into your overall plan and identify additional options that could benefit you. 

Life Insurance for Different Life Stages: Tailoring Your Policy to Your Needs

16 Apr, 2024
Life insurance isn't one-size-fits-all. Just as your life evolves over time, so too should your insurance coverage. Whether you're starting your career, raising a family, or enjoying retirement, understanding how to tailor your life insurance policy to your current life stage is essential for ensuring adequate protection for you and your loved ones. Starting Out: Young Professionals As a young professional just starting out in your career, life insurance might not be at the top of your priority list. However, this is the ideal time to secure coverage, as premiums are typically lower when you're young and healthy. A term life insurance policy can provide affordable protection for your loved ones in the event of your untimely passing while also allowing flexibility to upgrade to permanent coverage later on. Growing Family: Parents and Homeowners For parents and homeowners, life insurance becomes even more crucial. You want to ensure your family is financially secure and able to maintain their standard of living if something were to happen to you. Consider a combination of term and permanent life insurance to cover immediate expenses, such as mortgage payments and childcare costs, as well as long-term financial needs like college tuition and inheritance planning. Midlife Milestones: Empty Nesters and Career Climbers As your children grow up and become financially independent, your insurance needs may shift. You might choose to adjust your coverage to reflect your changing financial obligations and goals. This could mean reducing coverage amounts or transitioning to a policy with cash value accumulation features, such as whole life insurance, to supplement retirement savings and leave a legacy for your heirs. Retirement: Golden Years and Legacy Planning In retirement, life insurance can still play a valuable role in your financial plan. While your need for income replacement may decrease, you may still want coverage to cover final expenses, estate taxes, or leave a financial legacy for your loved ones. An insurance policy with guaranteed death benefits, such as universal life insurance, can provide peace of mind and help protect your assets for future generations. Review and Adjust Regularly Regardless of your life stage, it's essential to review your life insurance coverage regularly to ensure it continues to meet your needs. Major life events, such as marriage, divorce, birth of a child, or career changes, may warrant updates to your policy. Working with a trusted life insurance broker can help you incorporate these changes into your long-term plans and make informed decisions about your coverage. Life insurance is a vital component of your financial plan at every stage of life. Meet with us now and regularly in the future so that we can help you evaluate and adjust your life insurance policy to ensure that it truly meets your needs.

How to Safeguard Against an IRS Audit

08 Apr, 2024
Receiving a notice from the IRS for an audit can be a nerve-wracking experience. The time, effort, and potential financial consequences make it a situation you'd rather avoid. Fortunately, many audits stem from avoidable errors. Here's how you can avoid the five most common audit triggers and keep your tax returns in the clear. Ensure You Report All Income Income discrepancies are a major red flag for the IRS. While taxes are typically withheld from regular wages, other sources of income, like business earnings or capital gains, may not have taxes automatically deducted. Be vigilant in accurately reporting all sources of income, whether you receive a 1099 form or not. Document and report any non-wage income meticulously to prevent underreporting. Explain Significant Income Fluctuations Significant fluctuations in income from year to year can draw the IRS's attention. If your income varies widely, provide explanations or notes with your tax filings. Whether it's due to changes in business circumstances or other factors, clarifying these fluctuations can help prevent misunderstandings. Document Business Losses Carefully While it's common for businesses to experience losses, chronic or substantial losses can raise eyebrows at the IRS. Keep detailed records of your business finances, especially in the early years. Additionally, if you operate a sole proprietorship, ensure your business activities are distinguishable from hobbies to justify loss deductions. Support Your Deductions Certain deductions, such as large charitable contributions or home office expenses, may attract scrutiny. Be prepared to provide supporting documentation for all deductions claimed on your tax return. Thorough records can help substantiate your deductions and alleviate concerns during an audit. Accurately Value Assets For estate tax returns, undervalued assets are a common trigger for audits. When valuing assets without a public market price, seek multiple appraisals from qualified professionals. Having multiple valuations can strengthen your position and minimize the risk of an audit. Remember, even if you enlist professional help for your taxes, the responsibility for accuracy ultimately lies with you. Review your tax returns carefully before signing them to ensure everything is in order. Understanding the Different Types of Audits IRS audits come in three main varieties, each with its own level of intensity. Correspondence Audit. Conducted through the mail, this audit is often triggered by missing information or minor discrepancies. Office Audit. Requires a visit to an IRS office, typically for more complex tax returns or multiple disputed items. Field Audit. The most comprehensive type, conducted in person at your home or business, involves a thorough examination of your return. Regardless of the type, the IRS will provide a written request for specific documents beforehand. By being proactive and thorough in your tax reporting, you can minimize the risk of an audit and ensure a smoother process if one does occur.
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