Ask OKMM Archives

I like to think I'm pretty good with my money, but I have no willpower when it comes to walking away from something I really want to buy. Please help! (posted November 2, 2022)

The battle between wants and needs can sometimes be a hard one, even for those with a lot of self-control. First, it’s important to know you can shift your mindset and be successful by creating and sticking to a spending plan. Consider these tips the next time you’re tempted to splurge.

Make a list, and check it twice. Make a list every time you go shopping and buy only what’s on it. When you’re tempted to buy something else, flip the paper over and start a new list for your next visit to that store. This practice gives you the opportunity to make sure the item you want fits into your budget.
Sleep on it. When temptation rears its ugly head, give yourself a cooling off period; put the item back and walk away. If the urge to splurge is still haunting you two days later, then consider making the purchase. Adjust your budget as needed to accommodate it.
Ask why. Good days, bad days and boredom can all be spending triggers. Any time an item looks too good to pass up, ask yourself why you want it. Avoid spending money “just because.” Impulse purchases may feel good at the time, but typically lead to regret.
If you really need it, shop around. If you’ve paused to think about what you should do, and you’ve still decided you need the item, consider shopping around to make sure you’re getting the best deal and minimizing the hit to your budget. Consider apps like ShopSavvy and Price.com. They let you compare retailers easily to make sure you’re getting the best price.
Enjoy a sweet treat. Give yourself an allowance. Having the freedom to spend fun money, with no strings attached, eliminates the remorse of an occasional splurge. Spend it all at once or save it up for a bigger treat - the choice is yours, and it’s completely guilt-free.

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I generally stick to my budget; however, I notice when I’m sad or angry I turn to retail for therapy. I feel better in the end, but my bank account doesn’t. Any ideas on what I should do going forward?

Good question! Retail therapy as a coping mechanism, just like anything in life, has its advantages and disadvantages. Money has intrinsic value, so splurging on ourselves gives us a rush of energy and distracts us from what originally upset us. Unfortunately, it also contributes to impulse spending that is often followed by buyer’s remorse and a substantial hit to our budget. Try some of the strategies below the next time you feel the urge to go on a shopping spree following an emotional event.

Know your triggers. Think about the last few times you spent money unexpectedly. Were you bored, upset, elated? When you analyze the “why” before you buy, you may recognize the difference between actually needing an item and simply wanting it – and that might be enough to help you hold the line on your spending plan.

Consider a budget adjustment. If you know you’re going to splurge from time to time, budget for it. Adding a sinking fund to your spending plan may help. Download one of OKMM’s sinking fund envelopes and set a goal for how much you want to allocate each month toward a “splurge fund.” When you want to spend outside of your regular budget, use only the money you’ve set aside in this envelope.

Window shop and calculate savings. Sometimes we just need a change of scenery and the opportunity to browse at leisure. Go ahead and look, but instead of buying, calculate how much you’d pay if you did make the purchase. Then calculate what your bank balance would look like after you bought it. Take it a step further, and transfer that amount into your savings or emergency fund. This way, you’re spending on yourself and saving for yourself simultaneously.

Look, leave, recreate. While window shopping, take note of something that interests you and see if you can recreate it using items you already own. For example, if you’re shopping for clothes and see an outfit you love, visualize the outfit in detail - accessories, shoes, belt, etc. – and shop your closet to see if you can recreate the same look.

Slow down. Delay your purchase for a few days. After three days, weigh the pros and cons and then decide whether or not to make the purchase. Initially, you may have done some emotional shopping to release your feelings; however, with some time and perspective, you may find that you no longer want to spend the money, or spend it at this time.

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I like to keep my children and family active and limit their time indoors watching TV or playing video games, but planning a day of activities can get expensive. How can I find fun activities that don’t ruin my budget? (posted August 25, 2017)

Keeping the family active without breaking the bank is a challenge for many parents. The rising cost of amusement park admission, movie tickets and other activities can leave many families in a financial bind and a “family fun” rut. Take a look at the following options for saving on outings the whole family will enjoy.

Museums are a great option for the whole family. Check out your favorite museum’s website or calendar of events; many offer free or discounted admission days that include story time and craft activities.
Zoos routinely host themed days or offer discounted admission for certain groups like scouts, homeschoolers, military families and others. Look online to see your local zoo’s list of special events and activities.
Hardware stores often host monthly events for children to learn a skill or enjoy a craft project. These hands-on learning activities are generally free and help build confidence and foster creativity.
A picnic in the park may be an oldie, but it’s a goody. Children love to run, jump and climb, so pack a lunch and enjoy the sunshine and free jungle gym entertainment.
Free music performances and community festivals are a great source of family entertainment. Most towns celebrate founder’s days and other cultural events and holidays with parades, festivities, music performances and shows. Browse local newspapers or visit TravelOK.com to find events near you.
Libraries host a wealth of kid and family-friendly events. Activities can include story time, summer reading programs, and themed options like science and technology days, anime drawing instruction, chess for beginners or advanced players, reading to therapy dogs, and much, much more.
Pick-it-yourself farms are a family-friendly treasure in Oklahoma. Children will love picking their own blackberries, blueberries, apples, pecans or other fruits and vegetables. Many of these farms have activities from crafts to seasonal attractions like hayrides and corn mazes. Not only do children get some fresh air, but kids are more likely to try the fresh fruits and vegetables if they pick them.

Check for discount coupons in the classifieds and online before you load the family up for adventure. Sites like Groupon and Living Social offer discounts on a variety of activities or services.

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Many of my friends have been using online ordering with store pickup or delivery to do their grocery shopping. Is this a cost-effective option for saving time on my grocery shopping? (posted April 27, 2017)

Life gets busy and there never seems be enough time to get everything done, especially when it comes to grocery shopping. As with many other life aspects, technology has found a way to streamline this chore. With the number of participating merchants growing, online grocery shopping is gaining popularity and seems to be the new fast way to fill your pantry. Whether you utilize store pickup from local retailers or have your items shipped directly to you through a retail website, many consumers are finding that they’re not only saving time, but money as well.

Finding items. Many of the sites designed for grocery shopping offer filters to simplify your selection process. Instead of browsing through hundreds of items, you have the option to choose brands, types and styles. For example, if you want to buy organic almond milk from one of these websites, you could search by your preferred brand or look for an option to shop by department, such as “dairy,” and shop from there.
Savings benefits. Some retail grocery sites offer instant price comparison, ensuring you get the best deal. Additionally, since you’re shopping with ease from your computer or smartphone instead of perusing aisles, you’re more likely to resist impulse purchases and stay on budget. Another feature that helps you avoid overspending is the running total for items placed in your “cart” – which shows how much you’ve spent so far. Many sites also offer coupons and discount codes for specific items, and if you’re having items shipped directly to your home, you may be offered a coupon for choosing certain delivery options.

Things to keep in mind.

Some online grocers have minimum spending requirements.
Grocers with order pickup options will have you enter your ZIP code in their system to ensure the feature is available in your area. If it is, they’ll automatically assign you a store location. If it isn’t your preferred store, you have the option to select your preferred location at the end of your order. You’ll also be able to select your order pickup time from the available time slots.
In-store pickup may still be required for some items, like electronics.
Payment methods may be limited for many online grocers.

Check out OKMM’s Budgeting Module for more tips on saving and customizing your spending plan.

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When I was growing up, my uncle always told me “there’s no such thing as a free lunch.” I always thought he was a bit pessimistic, but now that I’m older I wonder if his favorite cliché is true. Is there really nothing that’s truly free? (posted November 25, 2015)

Your uncle was onto something…unfortunately, there’s no such thing as a free lunch. While it’s true you may not have to pay dollars for something that’s promoted as free, in reality, you still give up something anytime you make a choice. Imagine for a moment that your favorite restaurant offers free lunch to the first 50 customers through the door. While you could save a buck or two on a yummy chicken sandwich, it still costs you something to enjoy it. You most likely spent energy, fuel and time in your quest to be one of the 50 participants who enjoyed this free treat. Not to mention all the other options you effectively gave up to take the time required to get and enjoy that free meal.

In financial terms, this concept is called opportunity cost. Opportunity cost is what you have to give up in order to get something else. If you choose to work full-time, you may not be able to attend college classes full-time. If you spend twenty dollars at the movie theater, that’s twenty dollars you can’t spend elsewhere. If you choose to go on a ski vacation, then you won’t be relaxing on the beach. Each and every choice we make - financial or otherwise - has an opportunity cost.

Money and time are limited resources. The key to making the most of your choices is learning to weigh the pros and cons of each option. Carefully consider each path and its corresponding consequences, and choose the course that will satisfy you most and give you the best return on your investment. Every choice has a value, so invest your energy in pursuing the outcomes you value most.

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I’m a movie junkie. Besides renting and going to a matinee, how can I get my movie fix without blowing through my relatively small entertainment budget? (posted October 30, 2015)

What a great question. Movies are a favorite pastime for many people, but as you know a trip to the theater isn’t necessarily cheap. While some towns have dollar movie theaters, that’s not an option for everyone. Consider these cost-saving options the next time you want a movie theater experience without the big-budget price tag.

Gift cards. What’s better than seeing a cheap movie? Seeing one that’s free! The next time someone asks you what you’d like for your birthday, request a gift card to your favorite movie theater.
Club offers. A membership to a big box store, like Sam’s Club or Costco, offers nice perks. One such perk is access to movie tickets that are generally a bit less than the box office price. If you’re already a club member, visit the store’s website or talk to a customer service representative about the discounts they offer.
Free screenings. Free movies are great, but seeing a free movie before anyone else does is extra special. Visit websites like Gofobo.com or AdvanceScreenings.com to find free movie previews in your area.
Radio promotions. Movie theaters often partner with radio stations to promote new movies, so listen, call in and win! Beware, though - winning free tickets isn’t a guarantee you’ll see the movie. Promotional tickets are handed out in mass quantities, resulting in overbooked theaters. To improve your chances of getting a seat, get to the theater early.
Daily deals. Websites like LivingSocial.com and Groupon.com often offer deals for movie tickets. If you can’t find a discounted deal for your local theater, search instead for offers at specific ticket outlets like Fandango.com.
Loyalty programs. Ask if your local theater offers a loyalty program. Programs vary, but benefits often include discounted tickets and/or free concession items. Either way, that equals more cash in your pocket.

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I love shopping at my local dollar store, but I've found they don't always offer the best deals or highest quality products. I don't want to waste money; what items are worth buying at my local discount store? (posted March 17, 2015)

Discount retailers like Dollar Tree, Family Dollar and Dollar General are popular with consumers. The wide variety of products, including food, clothing and household supplies often makes these stores an appealing one-stop-shop. Like many retailers, they bank on the impulse buy, hooking consumers with bargains and hoping buyers will pick up additional items while they're there.

To help determine which dollar store items are a good deal, keep the following factors in mind.

Quality. Thoroughly inspect each item you're considering. Is it made from plastic that's thin and likely to break? Is the fabric rough to the touch and prone to shrinking the first time it's washed? Will that toy hold up to the enthusiasm of your energetic 2-year-old? If there's a good chance you'll have to replace the item in a relatively short amount of time, it's probably best to pass it up.
Quantity. Many discount retailers offer name-brand products at seemingly steep discounts. To determine if the price is right, comparison shop and calculate the unit cost before you buy. For example, a name brand box of zip style sandwich bags may cost $1.00, but only contains 13 bags. At another store, you can buy a box that contains 270 bags for $6.88. Purchasing the larger quantity is more cost effective, because each bag costs 2.6 cents - compared to 7.7 cents each at the discount store.
Functionality. Is that soup bowl microwave safe? Can you put those festive dishes in the dishwasher or will you be required to hand wash them? Are the bath towels big enough to wrap around your body? Low prices are great, but only if the item will truly meet your need.

Only you can judge whether or not an item is worth purchasing, but seasoned shoppers have shared the following opinions on what's worth buying at their favorite discount store:

Worth a try: gift bags, craft supplies, greeting cards, seasonal decorations, cleaning supplies, vases and decorative glassware.
Pass it up: electronics, office supplies, batteries, lightbulbs, crayons, tools, children's toys, pots and pans.

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In an effort to save money, I’m considering joining a warehouse club. Is a membership to a store like this worth it, or should I continue shopping at my regular grocery store? (posted Aug. 29, 2014)

Big-box retailers like Sam’s Club and Costco can be great places to score lower-cost deals on grocery items, household products and even bigger ticket items like tires, patio furniture and mattresses. The value of a club membership depends on you - the types of products you buy, how quickly you use them and the amount of storage space you have available.

Before buying a membership, visit your local store to see what it offers. Many retailers host special events that allow non-members a chance to explore the store before making a decision to join. If your store doesn’t offer a preview event, ask a friend or family member who’s already a club member if you can tag along during their next trip. Before your visit, make a list of your commonly purchased items and the prices you typically pay. Remember that big-box stores may not carry the same products you’re used to, so be prepared to review what’s available that’s comparable to items you regularly purchase. It’s a good idea to bring a calculator so you can compare the cost savings to the prices offered where you typically shop. Bigger doesn’t always mean cheaper; calculate the cost per unit to make sure it’s really a better deal. If the potential savings is greater than the cost of membership, joining may benefit your budget.

If you choose to purchase a membership, follow these tips for bulk-shopping success:

Exercise your willpower. Splurging occasionally on bulk snacks and multipacks of ink pens is fine, but if you find yourself regularly buying items you don’t need, you’re not saving money. Do your best to make a list (and stick to it) so you won’t be swayed by all the amazing deals.
Buy things you’ll use before they expire. Bulk portions of fruits, vegetables and meats are a tempting buy, but if you don’t plan carefully, they can spoil before you consume them. If perishable items are too good a deal to pass up, freeze what you can or consider partnering with a friend to split the items so you both benefit from the savings.
Keep storage in mind. Economy-sized packages of laundry detergent, toilet paper and canned goods can save some cash, but they take up valuable space. Plan accordingly so you have room for all the items you bring home.

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Should I buy furniture outright or "rent to own"? (posted Sept. 30, 2011)

Rent-to-own companies offer products like appliances, furniture and electronics. You can either rent the product for a short period of time and return it, or agree to rent the product until you pay enough to own the item.

If you only need an item for a short period of time, rent-to-own might be a viable option. However, if you want to keep the item, buying from a rent-to-own company will usually cost two to five times as much as purchasing the item from a department or appliance store.

Regardless of where you buy a product, it’s important to comparison shop to find the best deal for your money. If the item you’re interested in is something you want but don’t need right away, consider putting the amount you’d have paid a rental company into a savings account. Once you’ve saved enough money, you can make your purchase outright – saving both interest payments and the possibility of making late payments and having the item repossessed.

After comparing your options, if you choose to go through a rent-to-own retailer make sure you ask the right questions.

What is the total cost over the length of the contract?
Who’s responsible if the item breaks or gets damaged?
Will the item I get be new or used?
What happens if my payment is late?
What happens if I miss a payment?
Are there penalties if I cancel the agreement?

Good luck to you and happy shopping!

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Between school, church and community activities, my family is constantly on the go. What are some fast, economical options for feeding my family without resorting to the drive thru? (posted Oct. 28, 2011)

This is a great question and one that I’m sure many can relate to. If you feel like your to-do list is never ending and you rely on fast food restaurants more than you’d like, one of the following tips may be just what you need.

Consider once-a-month-cooking. Set aside one weekend for cooking and enjoy your efforts for an entire month by harnessing the power of your freezer. All it takes is a little research and some meal planning for your kitchen life to become much easier. Save money by making meals with similar ingredients so you can buy in bulk and parcel out what you need. Google ‘once a month cooking’, ‘freezer cooking’ or ‘make ahead meals’ for great tips and recipes.
Embrace your slow cooker. It’s the perfect low-energy, low-effort cooking solution for busy families who want to come home to a hot meal. Casseroles, stews, chilis, veggies and even desserts can be prepared in a slow cooker with minimal effort and easy clean-up.
Build a “go-to” list. Gather your family and brainstorm a list of easy, satisfying meal options that require few ingredients and little prep time. Once you’ve got your “go-to” list nailed down, try to keep the ingredients on hand. Consider making double batches; one for your current meal and one to freeze for later.

For more sanity-saving kitchen ideas, check out these online resources:

EatAtHomeCooks.com is full of quick, easy recipes and over a year’s worth of free menus and complete grocery lists to take the hassle out of your meal planning and shopping.
MealsMatter.org has customized meal planning tools, recipe ideas and expert tips for busy families.

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Is buying 100 percent gas vs. gas-ethanol mix worth it? (posted June 24, 2011)

This is a huge, and sometimes heated, debate among drivers and unfortunately the answer isn’t as simple as yes or no. We did a little digging and here are some things to consider when comparing your fuel options.

What’s the difference for my pocket book?

With gas prices higher than we’d like, the typically lower price of ethanol-blended fuel may be just what your budget needs. However, there’s more than just price to consider before making a decision. Keep reading for other factors that may impact your drive.

Is ethanol good for my car?

The most common ethanol blend, E10 - which is 90 percent gasoline and 10 percent ethanol - is currently blended into over half of America’s gasoline and is approved by every major automaker in the world.
Ethanol-enriched fuel performs much like regular unleaded gasoline and actually surpasses it in key performance categories.
Ethanol-enriched fuel absorbs moisture in a fuel system, helping prevent fuel lines from freezing in the winter. It’s also a solvent and will keep injectors and other components clean.
Certain vehicles called Flex Fuel Vehicles (FFV) are designed to run on E85 – a higher percentage of ethanol. If your vehicle isn’t a FFV you should use nothing higher than a 10 percent ethanol blend. For more information on which fuel is best for you vehicle, check your owner’s manual or ask your mechanic.

Can I use ethanol-blended gas in older vehicles?

All cars built after 1986 can use E10 blends. If you drive an older car and want to use an ethanol blend, an adjustment to a lower air-to-fuel ratio may be necessary. Talk to your manufacturer or mechanic for more details.

Will ethanol blended gas plug fuel filters?

Ethanol won’t plug filters, but it does act as a solvent which will loosen accumulated residue in the engine. It’s the loosened residue that may clog your fuel filter. If your vehicle’s performance seems to suffer after filling up with an ethanol blend, your fuel filter may need to be replaced.

Can I use ethanol-blended gas in small engines like lawn mowers and weed eaters?

Most newer small engines are compatible with ethanol-blended fuel. This type of fuel can also be used in some older small engines, but be sure to consult your owner’s manual before filling up and check your fuel filter on a regular basis.

Will using an ethanol blend affect my gas mileage?

Many factors, such as weather, road conditions and tire inflation, can affect fuel economy. Studies have shown that using E10 fuel doesn’t significantly lower gas mileage; in fact, some drivers report slightly better gas mileage.
If you drive a FFV that’s compatible with E85, fuel mileage may be reduced by as much as 10-20 percent. Many drivers find that this is a fair trade-off because E85 gas is usually significantly cheaper, so it makes up for lost gas mileage.

Is ethanol really better for the environment?

Ethanol is a much cleaner burning fuel than 100 percent gasoline, offering a significant reduction in carbon monoxide and hydrocarbon tailpipe emissions. Research shows that every state that’s switched to ethanol-blended fuel has experienced improved air quality.

Ultimately, since there are no clean cut answers to the question, it most likely comes down to personal preference and how your particular vehicle performs. Consider doing an experiment to see which type of fuel works best with your vehicle. After your next fill-up monitor your car’s performance and fuel mileage, then when you fill up again, choose the other type of fuel, tracking the same performance factors. Compare the results and decide which fuel is best for your vehicle and driving patterns.

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How can I save when dining out in the Oklahoma City area? (posted April 25, 2011)

We’ve all heard it before. Cooking at home and brown bag lunches are friendlier on the pocket book, but let’s face it - sometimes you just want to eat out. The good news is we have some great tips so you don’t have to break the bank to dine out.

The weekly coupon insert in the Sunday paper often includes coupons for restaurants like Sonic, IHOP or Olive Garden, so start clipping and start saving.
Subscribe to your favorite restaurants’ mailing lists and chances are they’ll send you coupons for a free entree or dessert on your birthday.
If your dining party includes little ones, check out MyKidsEatFree.com to find local restaurants offering discounted kiddie cuisine.
Websites like Living Social and Groupon are excellent sources for discount dining deals; just make sure to read the fine print and take advantage of the deal before it expires.
Ordering from the kid’s menu is a classic money saving tip. The portions are usually enough to be filling and the prices won’t empty your wallet. If a kid’s meal isn’t an option, go for an appetizer instead – equally filling, often equally cheap.
Check out KeepItLocalOK.com to purchase a discount card for $10. Not only will you receive great discounts from restaurants and retailers throughout the metro area, you’re also supporting your favorite locally-owned businesses. The card is good for an entire year, which gives you a lot of opportunities to save.
Give your opinion, get something free. Many fast food restaurants offer free menu items for completing phone or online satisfaction surveys. Survey information is usually located on the back of your receipt so give your two cents and earn some tasty treats.

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Everything seems to be getting more expensive lately. Is there any way to stay ahead of rising prices? (posted May 30, 2008)

Every trip to the grocery store or gas station these days seems to carry a fair amount of sticker shock. Inflation - a rise in general pricing, which means your dollar buys less and less over time - is at the heart of this problem. The past ten years have been a period of low inflation by historical standards, with prices rising only an average of 2.75 percent per year. The honeymoon may be over; prices are already about 4 percent higher than this time last year.

Last month, we talked about how to save money on gas. The high cost of gas causes the cost of other things to rise, as well, since the fuel required to transport goods to stores is more expensive. Maybe you’ve noticed the resulting increase in grocery prices, too.

With a little shopping savvy, you can find some relief at checkout the next time you go to the grocery store. Try these tips to ease the pain.

Make (and stick to) a list. Each week, decide what you want to eat for every meal, make a grocery list based on your meal plan, and stick to your list. You’ll end up wasting less food, and you’ll avoid impulse buying. This is by far the most significant way to lower your grocery bill.

Forget the brand. Store-brand groceries are often just as good as the big-name brands, and in some cases, they’re made by the same company! Usually, buying generic products will save you even more than buying name-brand items with coupons.

Flex your neck muscles. Grocers like to put the most expensive items right at eye level, hoping you won’t look up or down to find the better deals. A quick scan of the full aisle can reveal significant savings.

Consider alternatives. Be flexible in your meal planning so you can take advantage of sales. For example, if chicken is unexpectedly on sale, could you substitute it for beef in one (or more) of your meals this week? Also, throw a few less expensive meals in the mix each week, such as spaghetti or soup. You don’t have to eat like you’re in college again, but cheaper meals two or three times per week could slash your food budget and offer an easy alternative after a long workday.

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Why is the cost of gas so high? (posted April 25, 2008)

With prices at the pump soaring, everyone’s pocketbook is feeling the pinch. There are several factors that affect the price of gas. We’ll look at where your money goes when you fill up and provide some tips to help you avoid sticker shock when the pump finally clicks off.

So, why is gas so expensive? Luckily, you don’t need to retake high school economics to understand two simple principles that guide the cost of fuel: supply and demand. As Americans, we consume a lot of gas–178 million gallons daily, to be exact. The more we drive and fly, the more our country’s demand for gas increases, which raises prices.

Supply has an equal effect on price. Oil, the main ingredient of gas, is a limited resource. It must be found, extracted, refined, transported and sold... that’s a lot of work! Throw in a hurricane or war and oil supplies can drop, raising prices.

So, what does your $3-4 per gallon pay for anyway? The biggest part, about 66 percent, is the cost of crude oil. Refining, distribution and marketing make up 19 percent. Uncle Sam takes 12 percent through taxes. Finally, your local gas station gets about 3 percent, allowing them to cover their expenses and turn a small profit.

Now that you know why it takes so much money to keep your gas tank full, here are some tips to help make sure your pockets aren’t on “E”.

Drive less. The best way to lower your gas bill is to drive less. When running errands, try to combine multiple trips into one. Going only a few blocks? Walk or ride your bike for a gas-free, emission-free and healthy trip! Want to split gas cost? Carpool with a friend or coworker.

Take it easy. Speeding may or may not get you an expensive ticket, but it does waste gas. Driving 70 instead of 60 is like spending an extra $.54 per gallon at today’s prices. You’re not Mario Andretti; accelerate slowly and coast to lights.

Shop around. Gas prices vary in every area, so make sure you aren’t overpaying. Check out GasBuddy.com to find low prices in your area. Remember, don’t waste your savings by driving too far to save a few cents per gallon! Going to gas stations across town can eat up your savings, so find the best price that’s close to home.

Take a wrench to it. To keep your car from becoming a gas hog, proper care is the key. Check your tire pressure often and make sure it's up to par with the manufacturer’s recommendation. Got a clogged air filter? It could be choking your engine; replace it with a new one. Refer to your owner’s manual to keep your car in tip-top shape.

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Do you have any good tips for dealing with the high cost of fuel? With skyrocketing gas prices, my budget is really feeling the pinch. (posted May 25, 2007)

First, we salute you for evaluating the impact on your budget! Spending plans only work if we adjust them when needed. The price at the pump is painful, isn’t it? Don't smack the messenger, but you may have to cut your spending in other areas (and limit your driving!) to accommodate the higher cost. Carpooling when you can will save money, but we recognize that it’s not always possible or efficient.

Since a gallon of gas is now priced higher than the average latte, we did a bit of research to help you get the most out of each tank-full. Here’s what we found:

Easy does it. Your daily drive isn’t the Daytona 500. Instead of flooring it from a traffic light, accelerate slowly to avoid wasting gas and straining your vehicle.

Slow down. We often feel late-late-late like the rabbit in Alice in Wonderland, but speeding is a very expensive way to drive (even if you don’t get a ticket!). Driving 65 mph instead of 75 mph can improve your car’s fuel economy by up to 10 percent! Slow down and save money.

Clean out your trunk. Remove golf clubs, boxes of books, and other heavy items from your vehicle. Driving around with an extra 100 pounds of junk in your car can significantly reduce its fuel economy.

Check your tires. Keep your tires properly inflated; this will help improve or sustain your gas mileage and protect your tires from wear and tear.

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My husband thinks it's smarter to buy a new fridge on credit because it will last longer. I would rather buy an inexpensive second-hand fridge for now and upgrade later. What do you think? (posted March 26, 2010)

As much as we might like them to, appliances don't last forever. Without a doubt, there comes a point in every household when you have to pitch the old fridge and get a new one.

When you have to replace your refrigerator, how do you know if it’s better to buy new or used? You consider the pros and cons, and each option offers positive and negative aspects.

Buy Used! Used refrigerators seem like a good choice because they have the lowest upfront cost. Since many homeowners replace appliances when updating a kitchen, there are quality used fridges out there. However, it can be very hard to tell if a used refrigerator is going to pay-off or give you unexpected headaches. Potentially, you could end up spending more on repairs in upcoming years than you did to buy the refrigerator.

If you do purchase a used refrigerator, avoid buying one that has a pre-existing problem. Don't be fooled by the need for “a simple repair”; if there’s a problem now, you can probably count on more problems later. Bottom line, buying a used refrigerator is a risky move, but if you get lucky, it could be the best decision from an economic perspective.

Buy New! This would likely be the most expensive option for you, and that’s certainly a consideration. Nothing is worth spending more than you can afford to pay. If you can handle the cost, however, there are advantages to spending a bit more for better quality. For example, although buying a new refrigerator will require the highest initial investment, ideally it’ll be years before you have to face major repairs. If for some reason there is a defect in the model, your warranty should cover the cost of those repairs and any necessary maintenance. Additionally, there’s a wide range of new refrigerators that are more energy efficient than ever before, which could yield significant savings in utility bills.

Another benefit of buying a new refrigerator is the flexibility to choose a style and model that best meets your family’s needs and fits your home décor. Most people own a fridge for a long time – up to 20 years or more – so it’s important for the functionality to fit your lifestyle.

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During the summer I thought I’d do some home repairs. Is it smarter to do it myself, which would be cheaper but could take longer, or hire someone to do the job, which could be more expensive but done in half the time?(posted June 29, 2012)

Many homeowners are capable of handling routine maintenance and small repair jobs, but when repairs or improvement projects are more complex, it’s important to look at the situation more critically before trying to do-it-yourself (DIY). Before you jump in with a hammer and drill, ask yourself these important questions.

Do you have the skills to do the job correctly? If you’re handy, own the necessary tools and understand all the steps the project requires, DIY may be the more budget-conscious approach. However, if the repairs require purchasing tools or learning new skills there’s a good chance it’ll be more cost-effective to hire a pro. Inviting someone in to fix mistakes isn’t good for your wallet or your ego, so be honest with yourself before taking on a project.

How long will the project take? If time isn’t an issue and the renovations won’t hamper your ability to comfortably use your home, trying DIY may be the way to go. But if repairs are more time-sensitive, like a project that takes your kitchen or only bathroom out of commission for days on end, it may be smarter (and less stressful!) to hire help.

Is the money saved worth the investment of your time? Even if a penny saved and a DIY project well-done are your greatest sources of satisfaction, it’s still worthwhile to talk to a few contractors and get service estimates. You may find that doing the work yourself actually won’t save you much money in the long run.

If you decide that working with a licensed contractor is the best choice, keep these tips in mind.

Ask your family and friends for recommendations.
Check with the Better Business Bureau or services like Angie’s List to see if a potential contractor has received bad reviews or if complaints have been filed.
Ask for references and, if possible, view completed work.
Require a written, signed contract and make sure you fully understand and agree with the terms.
Don’t pay for services up-front. Pay per the signed agreement and only for completed work.

Taking the time to research different cost-saving options can yield great results, helping you save time and money and ultimately, make the best decision for you and your family.

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I know that when talking about ways to save money, one of the first things most people suggest is to cook at home and avoid eating out. But honestly, I’m not a big fan of cooking, so my family eats out a lot. Do you have any tips on ways we can still save money when dining out? (posted Oct. 29, 2010)

I think many people enjoy eating out, I know I do! Living within a budget doesn’t mean you have to spend every night cooking at home. Here are some tips to help you eat out more affordably.

Look for coupons and special deals. Check your local newspaper for up-to-date coupons. There are tons of coupons available for dine-in restaurants and fast food joints. Also be on the lookout for specials that allow kids to eat free or cheap.
Eat earlier. Many restaurants have ‘happy hour’ specials where entrees, appetizers and/or drinks are much more affordable.
Skip the soda. By ordering water rather than your favorite carbonated beverage, you can actually save a lot; a family of 4 that orders water instead of soft drinks could save up to $10 per meal!
Consider fast food. In the past, fast food hasn’t always been the healthiest choice, but many restaurants now offer more nutritious fare. Fast food places can be considerably cheaper than dine-in restaurants, and by spending less on the meal, you may be able to enjoy a movie afterward or eat out again another night.
Skip the extras. Although appetizers and desserts are sometimes the best part of dining out, these extras will also cost you extra money. Instead, consider ordering an appetizer as your meal. You could also consider eating at home and going out for dessert.

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I don’t make a lot of money compared to my friends. They constantly want to go out to eat or participate in expensive activities. I’m afraid that I’m digging myself into a financial hole. What should I do? (posted Dec. 19, 2008)

Enjoying time with friends can be expensive and frustrating, especially if they spend more money on entertainment. Trying to live a luxurious lifestyle on a smaller income can lead to overspending and unhappiness (among other negative consequences). There is good news, though; you can find middle ground without sacrificing your friendship! Here are some tips to stay on course when you’re tempted to overspend with friends.

Tell them about it. Are your friends aware that you can’t keep up without hindering your financial goals? Be honest about your limitations and explain that you’ll need to cut back on expenses. Ask if your group can limit costly outings to once a month or every other month.

Invite your friends outdoors. You don’t have to be a hermit to save money. Suggest a few low-cost options, like hiking, county fairs, picnics, ice skating or outdoor concerts.

Do your homework. Look for events and restaurants that will fit your budget, but also be new and interesting to your pals. Watch for coupons and discounts for additional savings.

Pick and choose. Instead of participating in every activity, choose to join in for the part that’s most meaningful for you. For example, if your friends are headed to dinner and a movie and you want to hang out but spend less, consider meeting them afterward for coffee or dessert. Healthy finances are a priority, so you may have to show up late or leave early sometimes to keep your budget on track.

Who knows, maybe your actions will motivate your friends to take a closer look at their own spending habits!

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My wife is pregnant with our first child, and we’ve already spent loads of money on clothes, blankets, books, etc. I’m worried that once the baby is born, we’ll be broke! Do you have any tips or suggestions to help us save money while getting ready for our little bundle of joy? (posted Oct. 26, 2007)

First of all, congratulations! There’s no doubt that babies bring great joy to their families, but many times they’re accompanied by empty wallets (and plenty of sleepless nights).

It’s estimated that new moms and dads spend $6,200 on their baby during the first year, buying everything from clothes to car seats to cribs to diapers. Fortunately, with a little planning - and a few helpful tips - you can ease the financial burden … but you’re on your own for those 3 a.m. wake-up calls!

Nix the new. Let’s be honest—baby stuff is so stinkin’ cute! Small clothes, tiny socks, itty bitty hats… it’s easy to get carried away when buying for a baby, and small items can add up fast. You may want to consider consignment shops, garage sales or online sites (eBay.com, CraigsList.com, Freecycle.org) for a variety of gently used and wallet-friendly items.

Forget fancy furniture. A crib that meets national safety standards is a must. But, do you really need the matching changing table, bookshelf, armoire and hutch? Sure, they’ll all look fabulous in baby’s room, but are they functional or necessary? Join a mom’s group or talk to friends about what you’ll actually need (and use) in a nursery.

Resist the urge to upgrade. Just because you’re having a baby doesn’t mean you immediately need the bigger home next to the elementary school and park (equipped with swings and monkey bars, of course). And, unless you drive a clown car, you probably have enough room to safely transport your precious cargo.

Discuss day care. If both parents plan to work outside the home after the baby is born, investigate the perks of using an employer-sponsored flexible spending account to pay day care expenses. Generally, you can pay for up to $5,000 in child care expenses a year using these accounts, which set aside money from your paycheck pretax.

Considering making the transition from working professional to stay-at-home parent? Test the waters by banking your paycheck during pregnancy to see if you can pay your bills, meet your savings goals, and still have a little fun on one income. Even if you find that you’ll both need to keep working, you’ll build a nice nest egg to start a college fund for baby!

You don’t have to break the bank to bring up baby. For more baby budgeting tips, visit PracticalMoneySkills.com/baby.

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Should I use all of my savings to purchase a new car with cash, or should I finance some or all of it? (Dec. 30, 2011)

That’s a good question and like most financial situations, there’s no cookie cutter answer. As a general rule, it’s best to remain as debt-free as possible. However, there are pros and cons to using both cash and credit.

If you use cash, you’ll own the car outright and won’t have a monthly payment. You’ll also avoid added expenses in the form of interest fees. However, it’s risky to completely wipe out your savings. In the event of an emergency, you’ll be in a bind and could find yourself having to rely on credit at a higher interest rate.

If you choose to finance, your emergency fund stays intact, but you’ll have the routine expense and hassle of a monthly payment. The car will ultimately cost more due to interest charges and if you’re unable to make your payments down the road, you risk defaulting on the loan and ruining your credit. On the other hand, if you shop for a good interest rate and handle the loan responsibly, timely payments will help boost your credit score.

Thankfully, there are several payment options worth considering. You could:

continue your current saving habits until you’ve saved enough money for the car without depleting your emergency fund.
buy the car with cash and continue saving until you’ve rebuilt your emergency fund.
consider purchasing a less expensive used car with a smaller portion of your savings.
use part of your savings to make a sizable down payment and finance the rest at the lowest possible interest rate.
finance the vehicle and use the money you’ve been putting in savings to make extra loan payments. This strategy will pay the loan off quicker and reduce your overall interest expense. (This option is only recommended if you’ve already established an emergency fund large enough to cover at least 3-6 months’ worth of living expenses.)

To learn more about purchasing a new vehicle, check out our online self-paced learning module Auto Loans 101.

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What is the easiest method to track your spending, especially outside the home? (posted Oct. 27, 2006)

If only our wallets could talk! If they could, we’d truly know where our money goes and how it’s spent. Unfortunately (or fortunately?), that’s not the case. Tracking day-to-day spending takes diligence, but it’s a critical stepping stone to financial happiness and a building block for other important processes, like creating a budget. Keeping track of purchases allows us to curb wasteful spending and direct our money to true needs and priorities.

While the methods below aren’t one-size-fits-all, they are tried and true tips to help plug the leaks. Find the one that fits your lifestyle and stick with it!

Retain receipts. Drop your receipts in a jar or box nightly (after balancing your checkbook, of course) for a month. At the end of the month, tally those slips and list them in assigned categories; you’ll see some obvious spending patterns emerge.
Put pen to paper. Carry a little notebook and write down everything you spend, down to the penny. This captures even the smallest expenses, such as trips to the vending machine and travel tolls, which can add up quickly.
Go green. Take a cue from past generations and use cash whenever possible. While it’s easy to go overboard with debit or credit cards, we have an emotional attachment to dollars. Create envelopes for your expense categories (i.e. groceries, movies, gas, clothing, eating out) and put a pre-set amount of cash in each envelope. When the envelope is empty, you’re done spending. Period. This system not only helps you monitor outflow, but also helps you stick to the plan!
Save with software. Technically inclined? Computer programs like Quicken can help you balance accounts and track expenses electronically. You’ll still need to keep bills and receipts, but these programs compute category spending for you and offer graphs and charts to illustrate where your money goes, among other helpful features. Most programs are relatively inexpensive and user-friendly, too.

Regardless of which tracking method you choose, the key is staying the course long enough to identify spending trends and shift your financial focus to more important goals, like debt reduction or savings.

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Holidays, Vacations and Other Life Events

Last month I got a little carried away in the spirit of the holiday season. I spent way too much, and got myself into debt. How do I fix it and make sure I don't repeat this? (posted January 5, 2024)

The festive season has come and gone, and you might be left with more than just memories — perhaps a lingering holiday debt hangover. If overspending has left you in financial distress, don't fear; there are steps you can take to fix the situation and ensure it doesn't happen again.

Step 1: Face the Numbers. Start by understanding the extent of your debt. Take a close look at what you owe and the associated interest rates. Quick repayment is key to minimizing interest charges. Be cautious of debt consolidation offers, as they often come with fees and high interest rates.

Step 2: Budget and Prioritize Payments. Debt won't disappear. Incorporate monthly debt payments into your spending plan. Aim to pay more than the amount of interest accrued each month to make meaningful progress. If handling multiple debts, consider the debt snowball method. Identify a fixed amount to contribute to debt reduction monthly, directing this extra amount towards the smallest debt. Once cleared, add the freed-up amount to the next smallest debt. Utilize tools like the budget calculator at OklahomaMoneyMatters.org for a realistic spending plan.

Step 3: Reflect and Learn. To prevent future financial pitfalls, reflect on your spending habits. Borrowing to navigate the holidays may offer short-term convenience, but can lead to long-term debt. Learn your limits and plan. Consider strategies for the next holiday season:

Purchase gifts or save money throughout the year to avoid sudden financial strain.
Leverage your talents to craft meaningful gifts in advance.
Re-evaluate your gift-giving approach; sending thoughtful cards may be a more budget-friendly alternative.

Learn from past mistakes, enter the new year wiser, and proactively prepare for the coming holiday season. By adopting these strategies, you can overcome holiday debt and build a more secure financial future.

Every year, I end up spending more than I planned for the holidays and then I struggle financially for the first few months of the new year. How can I stop overspending? (posted November 2, 2023)

As the holiday season approaches, many of us eagerly compile our gift lists and prepare to shop for our loved ones. However, the excitement of giving should be balanced with the responsibility of managing our finances effectively. Overspending this time of year is a common pitfall, but there are strategies to ensure that you stay within your budget and enjoy a financially stress-free holiday season. Here are some valuable tips to help you keep your spending in check.

Make a list and check it twice: Start by listing all the individuals you intend to buy gifts for during the holidays. Next to each name establish a specific budget, determining the maximum amount you’re willing to spend on them. Afterward, brainstorm gift ideas that align with the set budget limits. Having a well-organized list will guide your shopping decisions and prevent impulsive spending.
Leave the cards at home: Instead of relying on credit cards, opt for cash. Paying with cash provides a tangible reminder of your available funds and makes it more challenging to overspend. Consider implementing the envelope system: label envelopes with the names of each recipient and allocate the predetermined amount of cash for their gifts in these envelopes. Once the cash is exhausted, your shopping for that individual is complete. If carrying cash is a concern, explore the option of using pre-paid Visa gift cards, which can help you stay on track without handling large sums of cash.
Leverage Technology: Take advantage of smartphone applications that can assist you in managing your holiday shopping budget. For instance, if you have a smartphone consider downloading apps such as Christmas Gift List which has apps for Apple and Android. It allows you to monitor your purchases, keep track of what's left on your shopping list, and calculate the remaining budget for each person. It even generates a convenient shopping list to streamline your shopping visits and save time.
Avoid the Even Gift Trap: It's important to resist the temptation of striving for gift equality among recipients. The idea that everyone should receive an equal number of presents or gifts of equal cost can lead to unnecessary overspending. Instead, focus on selecting meaningful and thoughtful gifts that cater to each person's preferences and needs. This approach ensures that your gifts carry genuine sentiment without straining your budget.

The holiday season should be a time of joy and generosity, not financial stress and overspending. By diligently following these tips, you can maintain control over your holiday shopping and make the most of your budget while ensuring your loved ones receive heartfelt and meaningful gifts.

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I was just laid off and with the holidays fast approaching, I'm stressed. Money is tight so I can't buy presents for my loved ones this year. What can I do? (posted December 1, 2022)

Art Buchwald once said “the best things in life aren’t things,” and he’s right. When money is tight, focus on gifts that money can’t buy. Consider some of these options:

The gift of time. Visit a loved one(s) you don’t see very often or who can’t get out of the house as much as they’d like. Cook them dinner, watch a movie or find another creative way to keep them company. The gift of your time is worth far more than any trinket or knick-knack.
The gift of service. Nothing says ‘I love you’ like taking on tasks that no one else wants to do, like cleaning out gutters or scrubbing bathtubs. If cleaning isn’t your thing, consider running errands, babysitting or helping with household projects like painting or gardening.
The gift of gratitude. Embrace the written word and send a letter expressing the things you love and admire about someone. As an added keepsake, write it in a journal, on a pretty notepad or store it in a frame.
The gift of creativity. If you’re the artistic type, use your talents to create a one of a kind gift they will love. The options are endless! Create a collage, knit a blanket, sketch an original drawing or write a short story or poem.
The gift of knowledge. If you’re a wonderful cook or seamstress, share your talent. Taking the time to teach someone a new skill is a great way to make memories and spend quality time.
The gift of fun. The holidays should be filled with love and laughter. Consider staging a scavenger hunt by hiding clever, handmade notes and hints around the house and enjoy the show as your friends and family race around to find the next clue.

Remember, when it comes to gift giving, it really is the thought that counts. Here’s to a joyful, stress-free holiday season.

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It's almost spring break and we really wanted to go on a family vacation this year. We are budgeting for a house right now so what can we do as a family to have fun and stay on target with our goals? (posted March 4, 2022)

Money is tight for many families right now, but here's the good news -- there are many inexpensive activities your family can enjoy. To stretch that entertainment dollar, consider these tips.

Do your research. Social media sites such as Facebook are a good source of information about free or low-cost events in your area. Also, check out sites like Eventbrite.com to learn about festivals, museums, film showings, sporting events and other activities in your community.
Hit the library. Check out library-sponsored book readings, clubs, film screenings and lectures. While you're there, check out a book, magazine or even a movie instead of buying one.
Cheer on the home team. Attend a local high school sporting event; they're usually much cheaper than college or professional games, but generate a lot of the same excitement and fan frenzy. Admission rarely costs more than $10 and concession stand fare is typically less expensive (and sales often support school programs, a nice benefit).
Dig for discounts. Many theaters, museums, galleries, zoos and parks offer discounts or free admission on certain days of the week or month. Don't forget to check online event calendars and sites like Groupon.com or LivingSocial.com for deep discounts on great activities in your area.
Get some fresh air. Mother Nature is an excellent source of free or cheap entertainment. Go hiking, fishing or camping for some fun and fresh air. Plan a picnic or try bird-watching in your local park or wilderness preserve. Visit TravelOK.com for a list of great low to no-cost activities around Oklahoma to add some adventures to your stay-cation.

For more information and resources to help you reach your financial goals, check out the Consumers tab at OklahomaMoneyMatters.org.

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My partner proposed over the holidays! We are so excited to start planning our big day but I know weddings can get really expensive if you aren’t careful. How can I have a beautiful wedding without breaking the bank? (posted Feb. 3, 2022)

Congratulations on your engagement! Planning your wedding can be a fun, but also stressful time. It’s smart to be money-savvy; after all, once the party is over, you’ll want to ensure you made smart decisions to kick off married life on the right financial foot. It’s absolutely possible to afford a wedding you’ll love with a little planning and creativity. Consider these tips to help.

Start planning early. The more time you give yourself, the easier it becomes to find bargains and pay for products or services in cash. Paying with cash, instead of using credit, will save you money in the long run because you won’t have to pay additional interest.
Assess what matters. In order to stay on budget, you may have to make some concessions. That said, it’s important to evaluate which elements of your wedding are must-haves. Have you always had your heart set on a certain venue, or does your fiancé want to book a favorite band? If these are your priorities, then it will make it easier to say no to other aspects that aren’t quite as important. This will allow you to shift your spending to elements that really matter for your dream day.
Say yes to the dress. Most brides dream of their perfect wedding dress and affordable options are available. Consider shopping dress sales or even borrowing or purchasing a second-hand dress. Major retailers like David’s Bridal often have sales for their off-the-rack styles while websites like Rent-the-Runway allow you to borrow the perfect dress for a fraction of what you’d pay normally. If you’re crafty, you might even consider finding a gently-used item from a thrift store or an online marketplace and modifying it to match your perfect style.
Choose a nearby location. A wedding venue—whether a destination or not—can easily be one of the largest expenses of the day, so consider having your ceremony close to home, such as in your home or outdoors at a local park or event hall. This will not only reduce travel costs for your guests, but will allow you to direct more funds toward other details.
Ask for help instead of gifts. Consider asking family and friends to gift money or services for your wedding instead of actual presents. Have a cousin who’s a stylist? Ask if they would consider doing your hair for the big day at no cost. Have a super outgoing bestie? Consider asking them to emcee your reception instead of hiring a DJ (bonus, you’re fully in charge of the playlist).
Consider your food and drink options. Catering costs can add up quickly—especially if you plan a large wedding. The good news is, you have options to reduce these costs. Consider heavy hors d’oeuvres or a dessert buffet instead of a full meal. If you’d prefer to feed your crowd a full meal, consider partnering with a local restaurant or culinary school. They’ll likely be much cheaper than a wedding caterer. Most importantly, shop around and don’t take the first quote you get. With more offers, you have more choices and more ability to negotiate with your favorite service provider. If you’re offering a bar, consider providing your own alcohol and hire an independent bartender (or ask a friend), as this will likely be a cheaper option than using the caterer’s staff.
Minimalism is in. The concept of minimalism is trending, and you can benefit financially by working this less-is-more plan into your big day. Opt for a venue with unique landscaping or architecture that provides a beautiful backdrop for your wedding without the need for lots of spending on décor.
Consider gently-used décor. For those décor details you just can’t live without, consider these options. Buy second-hand from thrift stores or online marketplaces, like Facebook Marketplace, Craigslist or apps like Offer Up. If you’re crafty, consider making some or all of it yourself. With a quick google search or apps like Pinterest, the instructions to make the customized décor of your dreams are right at your fingertips.
Make your own invitations. Websites like Canva or Shutterfly make designing wedding invitations simple and inexpensive, while printing them yourself shaves off even more from the cost. Do you have a wedding website? If so, consider e-RSVPs or even e-invites to cut down postage costs.
Pare down your wedding party, and their gifts. Wedding party gifts can be quite expensive. Consider limiting your wedding party to one or two people. You can even ask others you care about to be involved in different ways so they will still feel included even if they won’t be standing next to you on the big day.
Contact local colleges and universities. Have your heart set on a string quartet, or using a photographer or videographer for the big day? Consider working with local college students, who may be eager to build their portfolios. Students might be willing to provide services for low or no cost in exchange for permission to use you as a reference later.

To learn more about building a strong financial foundation as a couple, check out our Love and Money learning module.

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This Christmas, I'm planning to propose to my girlfriend of four years. Unfortunately, we don't have a lot of money, and I'm afraid she’ll be disappointed if I choose a cheap ring. What should I do? (posted Sept. 24, 2020)

First of all…congratulations! Second, don’t worry; there are many options to purchase a nice ring for a reasonable price. It’s never a good idea to go into debt for an engagement ring. It just doesn't make sense; why start your life together with debt? To reduce the cost of an engagement ring, think about these alternatives.

Do your research. If you’re willing to put in the time, you can find a great deal on a ring. Jewelers usually offer seasonal savings around holidays, so even if you only have a short time to search, go to a few stores and shop online to compare price and quality.

Consider an heirloom. Using a family ring as an engagement ring can be very sentimental, not to mention it symbolizes a close family connection. It’s a great way to get a beautiful stone, and in some cases a beautiful ring, at no cost.

Consider pre-owned. Buying a pre-owned engagement ring can be a great solution for couples on a tight budget. People sell wedding jewelry for a variety of reasons. If a divorce or break-up prompts the sell, you could possibly snag a great ring at a super low price.

Choose a different stone. Diamonds may be a girl’s best friend, but there's something to be said for going the nontraditional route. Rings set with colored gemstones are very trendy — and very affordable.

Go faux. Consider delaying the purchase of an expensive ring until you can afford the one you truly want. There’s a wide selection of believable, quality faux diamond rings, such as a high-end cubic zirconia or moissanite stone.

Don’t overlook the metal. You can cut your total cost considerably by selecting a less expensive metal for your engagement ring. Silver, gold and white gold are significantly less expensive than platinum.

These tips can help you save money on an engagement ring, but remember - the value of a ring doesn’t only depend on its price!

To find more information about successful money management, visit OklahomaMoneyMatters.org. You may also want to check out the Love and Money learning module to see how to effectively set financial goals as a couple.

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Halloween is one of my family’s favorite holidays! This year I promised my wife that we’d scale back and keep the cost to a minimum. Do you have any suggestions? (posted Sept. 24, 2010)

Pumpkins, ghosts, and goblins, oh my! Halloween is the third most expensive holiday of the year. However, you don’t have to spend a fortune to enjoy this holiday. Consider these tips to help you stay within your budget.

Develop a plan. Like any event, it’s easy to go overboard on candy, costumes and decorations. Sit down and make a list of all the items you’ll need for the big day – and stick to it. Developing a realistic plan now will help you avoid that Halloween hangover later.
Be creative. One way to save a lot of money is to skip the expensive décor and make your own decorations. This is also a great way to create memorable annual traditions with your children.
Split the cost. If you’re planning a large party, ask friends and family to help out. Encourage them to bring a fun Halloween snack or scary movie. If just passing out candy is your plan this year, buy in bulk and split the bag (and cost) with a friend.
Think ahead. To save money on next year’s festivities, check out local stores on November 1. You can snag great clearance-priced items the day after Halloween and cut your costs for next year’s celebration.

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Help! How do I avoid overspending this holiday season? (posted Nov. 20, 2009)

Have you made your list and checked it twice? ‘Tis the season to shop ‘til we drop in preparation for our friends and family this holiday season. Is your wallet prepared? While it’s easy to go overboard and overspend, it’s important to realize the significance of making a shopping budget and sticking to it. Follow these tips to make sure the holidays don’t zap your cash.

Make a list. Put the names of all the people you’ll be shopping for on paper. Next to their name, write in the amount you’re willing to spend. Then, make a list of potential gifts that fit within that budget.

Leave the cards at home. Instead of paying with plastic, use cash; it’s harder to overspend when you can physically see how low your funds are getting. Turn to the envelope system to stay on budget for each person. Write their names on envelopes and place the amount of money you plan to spend on them in each envelope. Once the money is gone, you’re finished shopping for them. If you’re nervous about carrying around large amounts of cash, consider buying pre-paid Visa gift cards to help you stay on track.

Turn to technology. If you have a Web-based phone, like an iPhone, consider downloading the My Christmas Gift List application. This application allows you to track the gifts you purchased, what you need to buy and how much you have left to spend for each person. In addition, it generates a helpful shopping list to assist you in getting in and out of the mall faster.

Don’t make it even. One of the easiest ways to fall victim to overspending is thinking that gifts need to be made even, meaning everyone should have the same amount of presents to open. This isn’t always realistic.

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As spring approaches, I'm trying to think of new family activities, but money is tight. I'm worried that cutting back may mean sacrificing our fun. Any ideas? (posted Feb. 27, 2009)

Indeed, money’s tight for many families right now. Here’s the good news – there really are inexpensive activities your family can enjoy. To stretch that entertainment dollar, consider these tips.

Do your research. Newspapers and local websites are a good source of information about free or low-cost events in your area. Check out Wimgo.com to learn about festivals, museums, film showings, sports events, and other budget-friendly activities in your community.

Hit the library. Check out library-sponsored book readings, clubs, film screenings and lectures. While you’re there, borrow a book or magazine instead of buying one.

Go team! Attend a local high school sporting event; they’re usually much cheaper than college or professional games, but generate a lot of the same excitement and fan frenzy. Admission rarely costs more than $5 and concession stand fare is typically less expensive (and sales often support school programs, a nice benefit).

Dig for discounts. Many theaters, museums, galleries, zoos and parks offer discounts or free admission on certain days of the week or month. Don’t forget to check online event calendars; tickets for special events or activities may be free with admission!

Head outdoors. Mother Nature is an excellent source of free or cheap entertainment. Go hiking, fishing or camping for some fun and fresh air. Plan a picnic or try bird-watching in your local park or wilderness preserve.

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Summer is always an expensive gift-giving time for me and my family. It seems like invitations to weddings, baby showers, graduations and birthday parties never end from May to August! Can you suggest some tips to help ease the pain of purchasing for others? (posted June 29, 2007)

Oh, the cost of being popular! Shelling out your hard-earned cash to celebrate special occasions with family and friends can sometimes overshadow the joy of the occasion itself, can’t it?

You don’t have to be a Scrooge; meaningful, inexpensive gift options can be yours with a little planning. Here are some tips to help you support your loved ones’ happiness and still have some money left over to fund your own!

Learn to say no. Of course you can’t turn down a wedding or party invitation from your brother or best friend, but a former co-worker whom you rarely speak to may merit a pass. Sending a celebratory note or card—rather than a gift—will usually suffice.

Take advantage of the off-season. Always be on the lookout for thoughtful birthday, graduation, wedding and baby gifts. Spread the cost throughout the year by purchasing these items on sale and stashing them away for a later day, so you don’t have to part with a BIG lump sum of cash during the gift-giving season.

Be creative. Some of the most special gifts are from the heart. Are you crafty? Make some scrapbook templates for your favorite graduate. Love kids? Offer the mom-to-be an afternoon of free baby-sitting. Have a green thumb? Help the birthday girl or boy plant flowers. Give a unique (and cheap!) present by sharing your natural talents.

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Now that Christmas is over I should be relieved, but I know I spent too much money (cash and credit) on gifts and entertainment. I don’t want to go through this again in 2008! What can I do? (posted Dec. 28, 2007)

The holiday season should be a time to relax and reconnect with people we care about, but we usually exhaust and overextend ourselves looking for the perfect gift (and fretting about paying for it!). According to the American Bankers Association, it takes shoppers an average of four months to pay off holiday bills. Why spend one-third of the New Year paying off last year’s goodies?

You can avoid overspending during the holiday season next year – and the inevitable regret that follows – by taking a few simple steps during 2008:

avoid the stress of paying for gifts all at once by purchasing gifts throughout the year or by setting a monthly savings goal. Decide what you’re really willing and able to spend, and build a gift budget within that framework. Plan to spend $300 on holiday gifts next time? Aim to save $25 each month starting Jan. 1 and your Christmas nest egg will be ready by December.
evaluate (and edit) your gift list carefully. If you send gifts to distant relatives you rarely see or exchange gifts with friends just because you’ve always done so, now’s the time to consider a change. Maybe they’d like to tighten their holiday budgets, too, but feel obligated to continue the tradition with you! Break the gifting cycle where it’s unnecessary and feels like a burden.
choose a “cash-only” policy. Shoppers tend to spend more when they pay with credit cards, and less when they use cash.
get creative. Give something homemade or offer your help with a special project. Draw names or chip-in for group gifts to reduce costs.
remember that a greeting card or phone call can be as meaningful as a gift. Connecting with others is what the holidays are really about!

If you found yourself relying on credit cards to make it through the holiday season, don’t beat yourself up! Focus on paying off the debt and planning ahead for next year.

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My wife’s company rewards their employees with bonuses around Christmas time. In the past, we’ve used this money to pay for gifts or to take the family on a holiday vacation, but we’d like to use the money more wisely this year. Any advice? (posted Nov. 30, 2007)

Financial freedom is one of the best gifts you can give yourself and your family! Only you know what your current needs and savings priorities are, so there’s no one-size-fits-all answer. However, we can recommend a few places to stash that extra cash that will keep you jolly all year!

Scrap debt. Put your bonus to work as a “debt warrior,” slashing credit card debt and loans with no mercy. Pick your favorite enemy: debt with the highest interest rate or the highest balance. Either way, you’ll be one step closer to winning the war against debt. For inspiration, check out the “debt snowball" approach described on the Getting Out of Debt page.

Start (or boost) your emergency account. Experts recommend holding three to six months of living expenses in an easy to access savings account. If that amount is intimidating, aim to save at least $1,000 to start. This will cover most minor emergencies, so you don’t have to fall back on credit cards or payday loans when the unexpected happens.

Finance your future. Who doesn’t dream of life after work? No matter how you envision retirement, it’s important to think about how you’ll fund it. Bank your bonuses in a retirement account, like a Roth IRA, and watch your money grow!

Jumpstart your child’s college fund. Higher education is truly the gift that keeps on giving—not to mention, no batteries are required! Contributions to Oklahoma’s 529 College Savings Plan grow tax-free, are state tax deductible up to a certain level, and may be payroll deducted by employers. Visit OK4Saving.org for more information.

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With the holidays fast approaching, I’m feeling stressed. Money is tight so I can’t buy presents for my friends and family like I normally would. I want to share some holiday cheer, but I’m out of ideas. Can you help? (posted Oct. 26, 2012)

Your question reminds me of a quote by Art Buchwald. He said “the best things in life aren’t things,” and he’s absolutely right! This holiday season, instead of stressing over what you can’t afford, focus on the gifts that money can’t buy.

The gift of service. Nothing says ‘I love you’ like taking on tasks that no one else wants to do, like cleaning out gutters or scrubbing bathtubs. If cleaning isn’t your cup of tea, consider running errands, baby-sitting or helping with household projects like painting or shoveling snow.
The gift of gratitude. Embrace the written word and send a letter expressing the things you appreciate and admire about someone. As an added keepsake, write it in a journal or on a pretty notepad.
The gift of creativity. Employ your artistic talents by creating a collage, an original drawing or penning a short story or poem. One-of-a-kind gifts are a great way to express how you feel to your loved ones.
The gift of knowledge. If you’re a wonderful cook or seamstress, share your talent. Taking the time to teach someone a new skill is a great way to bond and to enjoy each other’s company.
The gift of time. Visit a loved one(s) you don’t see very often or who can’t get out of the house as much as they’d like. Cook them dinner, watch a movie or find another creative way to keep them company. The gift of your time is worth far more than any trinket or knick-knack.
The gift of fun. The holidays should be filled with love and laughter. Stage a scavenger hunt by hiding clever, handmade notes and hints around the house and enjoy the show as your friends and family race around to find the next clue.

Remember, when it comes to gift giving, it really is the thought that counts. Here’s to a joyful, stress-free holiday season.

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This summer I'm planning to propose to my girlfriend of four years. Unfortunately, I feel bad because we don't have a lot of money and I'm afraid she won't say yes if I choose a cheap ring. What should I do? (Feb. 26, 2010)

First of all…congratulations! Secondly, there’s no need to feel bad because there are many options to purchase a ring for a reasonable price. You should never go into debt for an engagement ring. It just doesn't make sense; why start your life together with debt? To reduce the cost of an engagement ring, mull over these alternatives.

Do Your Research – If you’re willing to put in the time, you can find a great deal. Jewelers usually offer seasonal savings around holidays, so even if you only have a short time to search, go to a few stores and shop online to compare price and quality.

Consider an Heirloom – Using a family ring as an engagement ring can be very sentimental, not to mention it symbolizes a close family connection. It’s a great way to get a beautiful stone, and in some cases a beautiful ring, at no cost.

Buy it Used – Buying a used engagement ring can be a great solution for couples on a tight budget. People sell wedding jewelry for various reasons. If a divorce or break-up prompts the sell, you could possibly snag a great ring at a super low price.

Choose a different stone – Diamonds may be a girl’s best friend, but there's something to be said for going the nontraditional route. Rings set with colored gemstones are very trendy right now — and very affordable.

Go Faux – Consider delaying the purchase of an expensive ring until you can afford the one you truly want. There’s a wide selection of believable, quality faux diamond rings, such as a high-end cubic zirconia or moissanite stone.

Don’t overlook the metal – You can cut your total cost considerably by selecting cheaper metals for your engagement ring such as silver, gold or white gold. These metals are significantly less expensive when compared to platinum.

These are only a few tips you can use to save money on an engagement ring. Remember, the value of a ring doesn’t only depend on its price!

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Saving / Investing

I just moved to Oklahoma and honestly, the thought of severe weather freaks me out. Is there any way to prepare my family? (posted March 2, 2023)

Whether you’re talking about blizzards, tornadoes or hurricanes, severe weather happens everywhere. Residents who have lived in Oklahoma for a while know how quickly a normal rain storm can turn into something severe. The difference is, they have learned, you can’t control nature but you can be prepared. Consider taking these steps to prepare for severe weather season today:

Make a plan. The worst thing you can do in the middle of a disaster is panic. So, prepare for it while there isn’t one. Create a safety plan and practice it with your whole family so everyone knows what to do. To start creating your plan, being sure to discuss these five questions:

How will we receive emergency alerts and warnings? Remember, electronics may not work.
Where will we go to find shelter?
What is our evacuation route?
Where should we meet if we’re not all together before the disaster occurs?
What is our communication plan?

Designate an out-of-state check-in contact. Many times, during a natural disaster, cell towers can go down and lines may ring busy. If your family is separated during an emergency, you may be more successful calling family or friends long-distance than trying to reach someone within a disaster area when cell phone coverage may be spotty. Visit Ready.gov to download the Family Emergency Communication Plan.

Prepare a Disaster Supply Kit. The supplies you’ll need will often be the hardest to find in the aftermath of a storm or other disaster. It’s a good idea to include at least 3 days’ worth of supplies in your kit. To relieve some of the strain on your bank account, plan to assemble your kit by purchasing/collecting your items over a few weeks’ time. Check out these lists from the Oklahoma Department of Emergency Management and Ready.gov.

Consider the needs of everyone in the household. If disaster strikes, you may have to leave at a moment’s notice and you may not return for a while. Account for the needs of infants, the elderly or disabled members of your household. Round up a ready supply of items necessary for their care, preferably an all in one box or suitcase. Keep medications and first aid equipment in a designated place that can be accessed quickly by an adult in the household. Discuss and practice each person’s responsibilities for assisting others, including pets.

Have an emergency fund. Create an emergency fund—if you don’t already have one—and always consider keeping a small amount of cash on hand. During a disaster, your debit and credit cards may not work when you need to purchase supplies, fuel or food.

Check your insurance coverage. The worst thing to find out after a disaster is that you didn’t have the coverage on your belongings you thought you did. While things are just that—things—rebuilding after a disaster can cause severe financial strain if you aren’t prepared.

When you have a plan, the unknown of a severe weather disaster is a little less scary. So, don’t wait. Start preparing today.

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I’m living paycheck to paycheck. How can I save for emergencies if I can barely pay my bills? (October 25, 2019)

Thanks for your question. First of all, many of us have a wider definition of “emergency” until we learn better. We sometimes think of birthdays, holidays, or blown tires as emergencies, but we can prepare for those things, because birthdays and holidays are the same days each year and tires will eventually wear out. True emergencies, however, are things we cannot plan for - like serious illnesses, natural disasters, or the unexpected loss of a job.
Look at some ways you can create and supplement emergency funds:

Scrutinize your routines. Daily rituals help us through each day and add predictability. If your ritual includes regular trips to your favorite cafe, fast food restaurant, or movie theater, those seemingly small costs can accumulate. For example, if you spend $3.50 every day for your favorite latte, that will add up to about $100 a month. Try socking some of that money away in your emergency fund!
Add to your income. Make the most of the coming season. Many businesses look for employees to supplement the influx of holiday shoppers. Start checking the want ads or perusing shopping centers and apply now. If you’re already employed, consider requesting additional hours for overtime pay if allowed. Put that extra income in your emergency fund.
Funds come in different forms. Think outside the box when you receive cash and gift cards throughout the year. If you receive cash for your birthday, put the money in your emergency fund instead of spending it. If you typically receive gift cards from friends and family, request they come from grocery or retail stores you frequent regularly. There are also mall kiosks and online gift card resellers that offer consumers cash for certain gift cards. Do your research and make sure you aren’t falling for a scam. Most companies do not pay you 100% of the card value. Also, don’t forget to check out the expiration dates on any gift cards received. Regardless of how you intend to use the card, don’t wait until it’s too late.

Saving for an emergency can certainly be harder when you live paycheck to paycheck, but if you look closely at your finances you should be able to find a little cash here and there that can be redirected to your emergency savings.

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The holidays are approaching fast and every year I struggle to balance paying my regular monthly expenses and buying gifts for my loved ones. Recently, I heard about sinking funds. What is a sinking fund and how do I use it? (September 27, 2019)

Sinking funds represent an amount of money you save every month in addition to your emergency or traditional savings. Sinking fund accounts can be used for medical expenses, a down payment for a car, a vacation, back-to-school expenses – or even holiday presents. Sinking funds usually work best for those annual expenses that we know are coming, yet find challenging to cover without earmarked savings. Follow the steps below to establish a sinking fund–or multiple sinking funds–for yourself or your family.

List your sinking fund categories and the amounts you’d like to save. The first step is to decide what you’re saving for. The possibilities are limited only to your imagination, and your budget. A good starting place is to make a list of your annual expenses that can often be budget busters, such as holidays, car registration and birthdays.
Decide how many months you want to save for each category. Any realistic goal has to have a timeline, and a successful sinking fund for purchases is no different. Decide when you need to have the money to make those purchases, and work backward to determine when you need to initiate your sinking fund. The goal can be as close or as far away as you want.
Divide the amount needed by the number of months in your timeline. Once you’ve decided on your timeline, divide the amount of money you will need by the number of months, weeks or paychecks reflected in your timeline. For example, if you want to save $1,000 for a vacation next year, divide $1,000 by 12 months. This means you need to put $84 dollars each month into your sinking fund to meet your goal. If you get paid bi-weekly, you would need to set aside about $39 from each check.
Determine where to store the money. It’s important to find a safe place to keep your sinking funds. There are many options available to you. Apps like You Need a Budget (YNAB) or Mint can keep track of your money and allow you to keep everything in one account. Another option is to open a savings account, separate from your emergency savings, to keep the money out of sight until you’re ready to use it. Finally, if using cash is easier, set up sinking fund envelopes like these from TheBudgetMom.com or ThinkingCloset.com and store them in a safe place until you’re ready to spend.

Now that you have your sinking funds set up, you’re ready to save for your big or small purchases and other anticipated expenses without straining your budget. If the thought of starting a sinking fund for a large purchase feels daunting, try starting small with one or two lower sinking fund goals and build from there. For more budgeting and savings tips, visit the OKMM Consumers tab at OklahomaMoneyMatters.org.

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I often hear that it’s best to have money automatically withdrawn from my paycheck and put into my savings account. Is this the only way to save automatically? (June 30, 2017)

Making saving a regular habit is one of the simplest ways to reach your financial goals. America Saves has compiled a list of five automatic savings opportunities that are often overlooked. These strategies go a step beyond mere automatic transfers from checking to savings. They’re easy, straight-forward ways to save money that most of us don’t use, and they increase your chances of reaching your financial goals faster.

Deposit your tax refund into savings. According to the IRS, the average American’s tax refund is more than $3,100. Don’t let that windfall slip through your fingers. Deposit all, or a large part, of it into your savings account. The IRS allows direct deposits into multiple accounts, such as a checking and savings account, which means you can choose to spend a portion and save the rest. Conveniently, you can also direct deposit all or part of your refund into an Individual Retirement Account (IRA), or use it to purchase up to $5,000 in U.S. Series I Savings Bonds. You can divide your refund using tax preparation software or Form 8888 if you use paper filing.
Maximize bonuses or commissions. If your income includes bonuses or commissions, directly deposit all or part of these funds into your savings. Talk to your employer about any options to deposit the funds into your savings account. If your employer can’t split the funds between accounts, set up automatic transfers from your checking to savings accounts when you get paid. Another alternative is to increase the contributions to your employer-sponsored retirement plan, such as a 401(k), when you receive extra earnings. It’ll help you max out your contributions faster and earn any applicable company match to further boost your savings. Consult with your HR representative or your company’s online retirement plan portal to manage your contributions.
Save your spare change. Banks and credit unions often offer programs that automatically round the amount of purchases up to the next dollar and transfer the spare change from your checking account to your savings account. Usually these programs are free, and provide a fool-proof way to jump-start your savings. You probably won’t miss the spare change in your checking account, but your savings will appreciate the extra boost. Even small amounts saved over time add up.
Use credit card rewards to boost savings. Many popular credit cards offer rewards programs. Sadly, many of these perks go unused, making them less than rewarding. If given the option, choose to receive cash back rewards and add them to your savings. Don’t forget to pay the total balance on your account each month to avoid costly interest fees; otherwise, you’ll spend more on interest than you’ll receive in rewards.
Set your saving rate higher. Many 401(k) plans allow users to opt-in to periodic increases in their saving rates, such as a 1 percent increase in contributions per year. If you prefer to contribute to a regular savings account or other investment vehicle, consider setting a schedule to increase your contributions regularly.

Having the foresight to automate your savings can help you stay ahead financially by beating the temptation to spend. The techniques described above are easy ways to take your savings efforts up a notch. Having the foresight to automate your savings can help you stay ahead financially by beating the temptation to spend. The techniques described above are easy ways to take your savings efforts up a notch. For more information, check out the savings tips and Savings & Banking Learning Module on OKMM’s website.

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I’ve seen the heartbreak and tension that can arise when a loved one passes. How can I be more prepared to make my passing less stressful for my loved ones? (posted August 26, 2016)

Planning for your death may be a difficult topic of conversation for your loved ones, but in reality, having this discussion is an act of love for your family and friends. Navigating funeral planning and taking care of a loved one’s personal affairs while grieving can be incredibly stressful. Luckily, there are simple things you can do that will ease the process for your friends and family after you’ve gone.

Many financial experts recommend having a ‘love’ or ‘legacy’ drawer – a central location where all of your important information can be accessed upon your death. Essentially, it’s a file system that contains your final wishes and important documents - like life insurance policies or your will – and can be located in a safe inside your home or in a safe deposit box at a local financial institution. Your files can be as elaborate or as simple as you wish. Some people outline every detail of their wishes, including songs to be played at the funeral, burial preferences, and even their hand-written obituary. Below are some suggested materials you may want to include.

If you have minor children, list who should care for them in the event of your death. In many instances, it’s fair to assume the other parent would accept the responsibility, but if something were to happen to both of you or if the other parent isn’t actively involved in your child’s life, setting up a guardianship is an important step to consider.
List all insurance policies, including important coverage details and contact information for each.
If you have a will, make sure it’s up to date and includes instructions for your estate and personal belongings. A detailed description of your final wishes can lessen the chance of a squabble over your possessions. If you haven’t already created a will, consider seeking legal and accounting advice to establish one. Going through the process helps ensure all of your affairs are in order and can be easily settled.
Create a list of all your financial accounts, including instructions for who should handle them after you’re gone. Also note any services or subscriptions that should be discontinued.
Make a file containing all your legal documents, such as your Social Security card, birth certificate, marriage license, deeds, and titles.
Include an updated copy of your monthly budget and instructions for how your bills are paid. If you’re the primary money manager in your household, this step can to make it easier for your spouse or children to step in and handle your routine financial transactions.
Outline any specific wishes related to your funeral and burial, such as donations made to a charity in lieu of flowers or including a military or religious ceremony as part of your funeral service.

Although creating a plan for your passing won’t make the grieving process any easier for those who love you, taking these proactive steps can help protect them from handling complicated legal issues during one of the most difficult times of their lives, allowing them to grieve without additional stress.

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I’ve saved $33,000 in an emergency fund and have invested a substantial amount of money in stocks. Is it a good idea to invest a portion of my emergency savings into stocks, a 529 college savings plan and a Roth IRA so it can earn more money?(posted September 26, 2014)

While it’s natural to want your savings to grow, financial experts advise against investing funds that you’ve earmarked for emergencies. Crises typically happen without warning, so the ideal emergency fund should be kept in a non-investment account, easily accessible and separate from other savings accounts (vacation, college, retirement). While it won’t earn the higher returns you hope for, a savings account at an insured bank or credit union is typically the least risky and most convenient location to stash your emergency fund.

If you’re determined to earn higher returns on your emergency fund, these financial tools are considered low-risk options and generally offer a slightly higher return than a standard saving account.

Online-only savings account. Online accounts have become more popular in recent years. Since online-only banks save significantly on overhead costs, they often pass the savings on to customers by offering competitive rates. This type of account offers easy access to funds by linking to an account at your brick-and-mortar bank, and most offer user-friendly apps and online tools that make transferring money relatively simple.
No-penalty certificate of deposit (CD). While opting for a traditional CD offers higher interest rates, the penalty for early withdrawal can make it a less attractive option for housing emergency funds. Some financial institutions offer no-penalty CDs (sometimes called a liquid CD or risk-free CD) that provide a guaranteed rate of return with the flexibility to access your money when you need it without paying a steep penalty.
FDIC-insured money market deposit account (MMDA). This type of account typically requires the user to maintain a higher minimum balance and is a hybrid of a savings account, checking account and money market fund. The number of monthly deposits and withdrawals are limited, but funds can be easily accessed through checks, ATMs and transfers.

There’s a vast selection of financial tools and services available, so shop around to find the product(s) that will best meet your needs. Once your emergency reserve is fully-funded (three to six months’ worth of necessary living expenses), consider working with a reputable financial planner to determine the ideal investment plan to help you meet your financial goals. To learn more about working with a financial planner and find one that specializes in your area of need, visit PlannerSearch.org.

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I know that saving is important, but after taking care of daily expenses and doing my best to save for emergencies, thinking about stashing money for my child’s college education and my retirement is overwhelming. I’m not sure I can cover it all… which savings goal takes priority? (posted April 26, 2013)

This is a question many families are asking. Ideally, we should save for both, but in reality, families juggle multiple priorities. Paychecks can be stretched thin. Here are some things to remember when you’re mapping out your saving strategy.

Saving, even small amounts, really adds up. It’s a common misconception that you must save large chunks of money for your efforts to be worthwhile. If you consistently put a little money toward each savings goal, over time your dedication will pay off. Starting early and saving often – even if each deposit is small - can have more of an impact on your long-term bottom line than starting later and saving more! Sometimes, slow and steady really does win the race.
Windfall money can make a big difference. Decide to stash unexpected funds, like rebates, monetary gifts, or tax refunds, into your savings account. Since you’re used to living without that money on a day-to-day basis, save it to help you reach your goals.
Children can save, too. It’s never too soon to teach children the value of goal-setting and saving. Encourage your child to put a portion of any allowance or gift money s/he receives into a savings account. Creating a healthy savings habit is a money lesson that will set him up for a lifetime of financial success.

If you must choose between saving for retirement and saving for a child’s college education, focus on your retirement. As a parent, it’s natural to want to focus your efforts on your child(ren), but it’s important to remember that while there are many financial aid opportunities to help fund higher education, the same can’t be said for funding your retirement. When a difficult choice has to be made, take care of your retirement needs first.

For more information about grants, scholarships and preparing for college, visit UCanGo2.org. To learn more about investing and how quickly your savings can grow, check out the Rule of 72. Visit the OKMM website, OklahomaMoneyMatters.org, for more helpful information about saving, financial planning and other important consumer topics.

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Which is more important, saving or paying off credit card debt? (posted July 27, 2007)

To answer this question, let’s turn to our good friend, mathematics (please don’t stop reading!). If you’re earning 2 percent interest on your savings and paying 18 percent interest on your credit card debt, you’ve got a 16 percent problem.

If the interest you’re paying on credit card debt is higher than what you’ll earn in a savings account, pay off your debt first. That said, don’t completely neglect your savings! While several factors affect how your money grows, one of the most important elements is time. Simply put, the earlier you start saving, the more you’ll earn through the magic of compound interest. Also, a cushion in your account will keep you from relying on credit cards or payday loans in a crisis.

Here’s the bottom line: it just doesn’t make sense to pay more interest than you can earn. Use the bulk of your extra money to pay off those pesky credit cards, but make sure you contribute something to savings each month, even if it’s only $50. Once the debt is paid, shift those monthly payments to savings. Since you’re already living without the extra money, you won’t miss it!

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Is it better to have all your money in one place? (posted Jan. 26, 2007)

Assuming you’re talking about savings - not disposable income - the old saying “don’t put all your eggs in one basket” holds true. It’s just too risky to invest all of your savings in one company or industry. The idea is to create a blend of assets that provides the most return for your money. Calculated diversity is the key.

Not sure where to start? Most experts recommend a simple investment mix that can be achieved with the following steps.

1. Start an emergency account to cover unexpected expenses that would otherwise find their way onto a credit card. Experts recommend saving 10 percent of your income each month until you have enough money to cover 3 to 6 months of expenses. If 10 percent seems impossible, start at a lower monthly percentage and work your way up. Since an emergency is never planned, put your money somewhere easily accessible, like an interest-bearing savings account or money market account.

2. Whether you’re 25 or 55, retirement should be on your mind. Take advantage of an employer’s 401(k) or other sponsored investment program, especially if they offer matching funds. At minimum, contribute enough to get the full company match - that’s free money!

3. In addition to maximizing your contributions to a matched savings program, make regular contributions to a traditional or Roth IRA. Learn more about these and other investment options and access calculators and other planning tools at CNN's Money site.

4. Got kids? Consider monthly contributions to the Oklahoma College Savings Plan (OCSP), our state’s 529 plan, for each child. Participation in the OCSP offers several savings perks, including an Oklahoma income tax deduction on contributions and tax-free growth and withdrawals. Visit Ok4Saving.org for more information.

In short, you must create a customized savings plan to fit your long-term goals. A certified financial planner can help you strike the right balance.

Emergency Funds

My spouse was furloughed last year. He recently started working again and we want to make sure that we’re more financially prepared if this ever happens again. Where do we start? (posted November 4, 2021)

Financial hardships—like job loss—can and do happen unexpectedly, so it’s important to be prepared to avoid unnecessary stress during an already stressful time. Consider these steps to be ready in case of a financial emergency.

Create a spending plan: The first step to reaching any financial goal is to set up a spending plan. If you don’t have one already, start building a workable budget as soon as possible. Review your income and your fixed and variable expenses, and create categories for each (e.g. housing, utilities, food, transportation, etc.). It’s important that your income can support your spending in all categories while leaving room for savings. You can learn more about setting up a spending plan in OKMM’s learning module on budgeting and build your budget using OKMM’s interactive budget calculator.

Evaluate your spending: Next, take an honest look at your spending. How much are you really spending on non-essentials? Are there items you could you cut out completely or cut down to reduce your outbound cash flow?

Create a bare-bones budget: After you’ve set up a day-to-day budget and evaluated your spending, it’s time to create a version that includes only your essential expenses. This is a budget that reflects only the costs required for daily living, like food and housing, with no extra frills - such as streaming services, dining out, gaming subscriptions or trips to the salon. It’s important to outline your essential expenses before a financial emergency occurs, so you know what can be temporarily, immediately cut to ease some of the financial burden when you’re facing difficult circumstances. This approach can also be used in the short-term to help you shift money to specific priorities, such as a vacation or other large purchases.

Save for emergencies: Once you’ve created your bare-bones budget, start working to save at least six months’ worth of essential expenses as emergency savings. For example, if your bare-bones budget totals $2,000 per month, aim to save $12,000 in your emergency fund ($2,000 x 6). If that amount seems overwhelming, start by setting smaller savings goals—like $500 or $1,000—to reach first. Every saved dollar matters.

No matter your savings goals, you can reach them by making small changes to your everyday habits. To learn more about saving and budgeting for unforeseen costs, check out our resources on oklahomamoneymatters.org.

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I understand now more than ever how important it is for me to set aside money for a “rainy day.” I don’t have a lot of money to start an emergency fund. What’s the best way to get started? (posted June 25, 2020)

We can’t afford not to save for emergencies. Emergencies are circumstances we can’t plan for like natural disasters, major illnesses, and unexpected job loss. Last year’s Charles Schwab Modern Wealth Survey reported that less than half of Americans have an emergency fund. Frankly, having an emergency fund sets you apart from the 59% of Americans who live paycheck-to-paycheck. Consider these steps as you begin building your emergency fund.

Set a target amount to save. It’s recommended that you save at least three to six months of your recurring monthly expenses in an emergency fund. However, don’t let that number intimidate you. It’s okay to start where you are. What’s the smallest unexpected expense you can think of? Is it paying for an unforeseen antibiotic or a broken windshield? Start saving small amounts and work your way up to saving for larger expenses.

Find your extra cash. You have more money than you think. Look through your account deductions for the last few months. Do you see any spending trends you can cut back on? For instance, do you notice several expenses for restaurant meals, music downloads, unnecessary online shopping or unused subscriptions? Calculate how much you spent and limit your spending in those categories. Take that money and use it to set up your emergency fund. It’s also a good idea to commit to add any “windfall” money, like bonuses, tax refunds or birthday gifts, so you can build your fund faster.

Keep your emergency funds secure. It’s important to keep emergency funds where you can access them quickly, but they need to be secure, too. Instead of stashing your money under your mattress, place your funds in an FDIC insured bank or credit union. Both online and brick and mortar banks are competing for your business, so take advantage of this opportunity and find the best interest rate to supplement your savings.

Make saving automatic. With so much going on in our lives, we may inadvertently overlook regular savings. One way to keep your savings on track is to choose an amount every month to automatically transfer into your emergency fund. Financial institutions have made it easier for us to keep up with day-to-day banking with apps and online access to accounts. Set up regular automatic transfers from your checking/debit account to your emergency fund.

It’s important to make a distinction between money in a general savings account and the money you keep in an emergency fund. We recommend opening separate accounts for each to avoid accessing the wrong account in error. For more information on maximizing your savings, go to https://www.oklahomamoneymatters.org/Consumers/Saving.shtml.

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What’s the best way to start an emergency fund? (posted Dec. 29, 2006)

First, congratulations! You’ve recognized the value of taking a very important step to manage credit debt: funding an account to cover unexpected expenses that would otherwise find their way onto a credit card. Although creating an emergency fund takes discipline – and therefore, isn’t easy – the process is simple. Figure out how much you need to save and commit to set aside money each month to reach that goal. Experts recommend saving 10 percent of your income each month until you have enough money to cover three to six months of expenses. If you can’t save 10 percent right now, don't be discouraged; commit to save as much as you can and work your way up to 10 percent. (The key word is "commit." See the pattern here?) As with any savings plan, consistency is the secret to a healthy “rainy day” fund … save a predetermined amount each month and add any “windfall” money, like bonuses, tax refunds or birthday gifts so you can reach your goal faster.

An emergency is never planned, so put the money where you can reach it quickly, such as an interest-bearing savings account or money market account. Building an emergency fund may seem like a daunting task, but it will allow you the freedom to forego credit should something go awry. Now that’s peace of mind!

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Retirement

I completed my college education last year and have since gotten an entry-level position with a great company. With the repayment of my student loans and everyday living expenses, I find myself with limited discretionary income. Is it truly necessary to start saving for retirement at this early stage of my career? (posted October 6, 2023)

When it comes to the matter of saving for retirement, the adage "there's no time like the present" holds true. It is never too early to begin contemplating how you will finance your post-retirement lifestyle. The key lies in starting early and harnessing the power of compound interest, which entails earning interest not only on your initial savings, but also on the interest those savings accrue over time. By doing so, you significantly enhance your prospects of attaining the financial security required during your golden years.

If you are grappling with the challenge of allocating funds for a better future, consider implementing these straightforward strategies:

1. Trim Expenses: While it's essential to enjoy life's little pleasures occasionally, be cautious if indulgent habits are turning into daily rituals. Analyze the long-term impact of such spending patterns on your ability to save. Perhaps opt for brewing your coffee at home instead of frequenting expensive cafes, redirecting the money saved towards your retirement fund. Reassess your weekly spending habits to identify any other costs that have evolved from occasional splurges into regular expenses.

2. Use Credit Carefully:. Treat credit as a tool, not as an additional income source. Using credit to sustain a lifestyle beyond your means will incur more costs than what meets the eye. Unless you can consistently clear your balance each month to evade interest charges, exercise restraint in your credit card usage. Purchase only within your financial means, steer clear of late fees, and avoid costly cash advances. By doing so, you can allocate the money you would otherwise spend on monthly credit card payments to your retirement savings.

3. Limit Dining Out: Reserve dining out for special occasions, as preparing meals at home is typically more cost-effective for most households. By bringing your lunch and cooking dinner more frequently, you can free up funds from each paycheck to contribute to your retirement savings.

4. Preserve Windfall Income: Windfall income, such as tax refunds and gifts, may feel like found money. The temptation to splurge can be strong, but a wiser approach is to channel such windfalls into fortifying your savings. If desired, indulge yourself modestly, but invest the majority of the windfall into your retirement fund.

5. Pay Yourself First: Prioritize savings by allocating money before addressing other financial obligations. One of the most effective methods to achieve this is by establishing automatic savings deposits. Through your financial institution, set up automated deposits to resist the impulse to spend instead of save. Additionally, consider contributing to your employer-sponsored retirement plan, particularly if your employer matches a portion of your contribution. This retirement account deducts funds directly from your gross pay, ensuring you’re not missing the money and delaying taxation until withdrawal during retirement.

With prudent planning and thoughtful decision-making, saving for retirement is feasible even on a limited income. For more insights on money-saving strategies and retirement planning, explore our Retirement Planning tips and tools .

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I'm paying into my company's retirement account. How much should I be contributing and what should I know about saving for retirement? (posted December 18, 2020)

The first thing you should consider is what you want your life to look like after you retire. Although only you will know how much retirement income is enough to maintain that lifestyle, the general rule of thumb is to contribute 10-15% of your current income into a retirement account. Contributing to an employer-sponsored retirement plan, a traditional IRA or a ROTH IRA is the first step every employee should take, and as early in their career as possible. If you have an employer-sponsored account option, your employer’s retirement plan representative should be able to give you more insight on saving to meet your retirement goals. Keep these things in mind when creating your retirement plan.

Opt for employer matching. You can reach your retirement goals faster, and maybe even exceed them, by contributing an amount high enough to qualify for any employer matching funds. Some companies offer matching for employees who pay a set minimum amount. For example, a company may require you to contribute at least 5% of your gross income toward your retirement plan, and match your contributions up to 10%.

Consider inflation. With inflation costs increasing nearly 3% a year, not taking inflation into account as you plan for the future could easily bust your retirement budget. In fact, it’s one of the main reasons many retirees find that their savings aren’t enough to cover their living expenses for the amount of time they expect to be in retirement. Since most people stay in retirement for many years, it’s smart to aim to increase your retirement savings by 6% annually to offset future inflation.

Play catch up, if needed. Since 2015, the number of individuals prematurely withdrawing from their private retirement funds has continued to increase. Surveys show that younger workers are tapping into their retirement accounts sooner than their parents did. Whatever the reason, not reinvesting the borrowed amount could substantially affect your savings projection. Some retirement plans offer options to accelerate savings for employees who may need to increase their overall amount saved before they retire. If that’s not an option, do the math and contribute more until you’ve paid back all prior withdrawals.

Look into earning more income. Few retirees can actually live the life they want on one source of retirement income, even if it’s through their prior employer. Find out what your estimated social security payment looks like, and consider how deductions like Medicare or other garnishments may change your net deposit. If the estimated figure isn’t enough, you may want to consider options to earn additional income, such as self- or part-time employment. If it’s an option, perhaps you could assist your prior employer with special projects or assignments for a fee. You could also base part-time employment on your hobbies; if you love flowers, perhaps you could work for a florist. If you love math, working as a seasonal tax preparer could allow you enough off-season downtime to enjoy retirement fully. Before considering any opportunity, be sure to check your retirement plan for any restrictions related to earned income. Sites like SeniorJobBank.org and AARP.com offer resources on returning to work after retirement. A certified financial planner can help you identify your retirement goals and craft a comprehensive saving strategy to get there.

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How do I know when I’m financially ready to retire? (posted November 30, 2018)

When you envision retirement, what does it look like? Retirement is viewed differently by everyone. Perhaps your idea of retirement is relaxing with family and friends. For some it’s finally being able to travel and explore, and for others it may be the beginning of a second career. Regardless of your view of retirement, you’ll need to be able to fund that vision. Below are steps to consider when determining if you’re ready to retire.

Pay off major debt. Entering retirement while paying down debt isn’t ideal. For financial security, it’s best to pay off all major debt so you don’t have to worry about making ends meet while making a large mortgage, vehicle and/or student loan payment on a fixed income. If you’re nearing retirement age and still have large amounts of debt, develop a debt repayment plan that will help you reach your retirement goals.
Evaluate your savings in the context of your ongoing expenses. Estimate your retirement income based on your various retirement accounts. Many financial service providers offer tools that can help you calculate your anticipated income during retirement. Visit the Social Security Administration’s website and set up a My Social Security account, where you can view your estimated benefits once reaching retirement age. When you have estimated your total income, calculate your fixed and variable expenses during retirement to determine if your retirement proceeds will be enough to cover your costs.
Review health and life insurance options. Be sure to include health care costs in your retirement budgeting. In addition to everyday health care needs, such as doctor visits and prescription costs, you’ll need to plan for long-term care and your final arrangements upon death. The majority of your Social Security benefit is used to cover Medicaid premiums; however, given Medicaid only covers certain expenses, most retirees will need additional coverage. Learn more at Medicaid.gov.

Consider consulting a certified financial planner to review your retirement goals and help you determine if you’re on track to meet them. For more information about retirement planning, visit OKMM’s Retirement Planning section under the consumers tab.

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I graduated from college last year and have begun my professional career in an entry level position. Between paying back my student loans and everyday living expenses, I don’t have a lot of extra cash. Is it really necessary to begin saving for retirement this early in my career? (posted January 27, 2017)

When it comes to saving for retirement, there’s no time like the present. Even if you've just joined the workforce, it's not too early to begin thinking about how you'll finance your lifestyle after you retire. The sooner you begin taking advantage of compound interest - that’s earning interest on your savings plus interest you’ve already earned - the better your chances of achieving the retirement income you’ll need later in life. If you're finding it hard to set aside money for a better future, try these simple strategies.

Perk up your savings. You work hard, and you deserve a treat now and then. However, if your mocha-no-fat-soy-triple-with-extra-foam latte has gone from an occasional luxury to a daily fix, you might want to calculate the long-term impact continuing this practice would have on your saving efforts. Consider using the office coffee pot or buying a nice mug and brewing your own coffee at home, then redirect the money you save to your retirement account. You’ll still get your caffeine fix and when you do visit your favorite barista, it’s a real treat. Review your weekly spending to identify any other costs that have evolved from occasional splurges to routine expenses.
Use credit wisely. Don’t treat credit as a second income. Using credit to live a lifestyle you can’t afford will cost you a lot more than what you see on a price tag. Unless you’re able to avoid paying interest charges by paying off your balance each month, limit your credit card use. Buy only what you can afford and avoid late fees and costly cash advances, so money you would otherwise use to make monthly credit card payments can be invested in your retirement account.
Don’t eat your nest egg. Limit dining out to special occasions. For most families, making meals at home is less expensive overall than eating out. Packing your lunch and cooking your own supper more often frees up dollars each pay period that can be put toward your retirement.
Don’t spend windfall money. Extra income, like tax refunds and gifts, feels like free money. It’s tempting to blow it all, but you’re better served by using that windfall to strengthen your savings. If you must, splurge a little - then invest the rest in your retirement fund.
Pay yourself first. Committing money to saving before paying bills is one of the most effective savings principles you can put into practice; the most effective way to pay yourself first is to set up an automatic savings deposit. Automatic deposits through your financial institution can help you resist the urge to spend instead of save, because you don’t have to physically move the money from one account to another. It’s also a smart choice to contribute to your employer-sponsored retirement plan, especially if they match a portion of your contribution. The money you invest through this type of retirement account is withdrawn directly from your gross pay, which means you won’t miss it (or pay taxes on it until you withdraw funds during retirement).

With careful planning and thoughtful decision-making, saving for retirement is possible on a limited income. For more money saving and retirement strategies, check out our Retirement Planning tips and tools.

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How does Social Security factor in when planning for retirement? I know some people that only live on Social Security income, but I’m not sure that will meet all my needs? (posted October 28, 2016)

It’s important to remember that Social Security is not meant to be a retiree’s sole source of income; it’s intended to supplement your retirement savings and/or pension plan. Being proactive by investing in a retirement plan through your employer or other means throughout your career is crucial to maintaining your quality of life in retirement. You will want to determine when you want to retire or are eligible for retirement, how much you will need for living expenses for the number of years you expect to live in retirement, and contribute funds to your retirement account to ensure your plans will be financially attainable. Speak with a representative in Human Resources or a certified financial planner to be sure you are maximizing your retirement benefits.

Here are some Social Security tips to consider when making your retirement plans.

A My Social Security account allows you access to information about your Social Security benefits. After setting up an account, you can log in to check your earnings record and potential benefits for retirement, disability, Medicare and family/survivor benefits. If you lose your Social Security card, you can request a new one through your account. You also have the options to print out a Social Security statement that details your estimated benefits and a benefit verification letter that states whether or not you’ve ever received benefits.
Social Security Credits are the measurement used by the Social Security administration to determine if you’ve met the working requirements to be eligible to receive Social Security retirement benefits. You’re required to have a minimum of 40 credits to receive these benefits. You can have less than 40 credits to receive disability and survivor benefits, but the longer you work and contribute to Social Security, the more the dollar amount of these benefits increases.
Think about when you want to begin withdrawing your Social Security benefits. When you have an interest bearing retirement account, it may be tempting to take the early withdrawal benefits at age 62 or full benefits at age 65 so you’re not cutting into your retirement fund. Be sure to carefully calculate your monthly income needs and the length of time you’ll likely need to withdraw funds. You may find that it’s better to draw from your retirement savings at first and wait to start receiving Social Security benefits until you qualify for the maximum benefit at age 70. For example, if you were to begin receiving Social Security benefits at age 62, your monthly payment may be around $600. If you wait until age 65, your monthly payment may go up to $900. However, if you were to wait until age 70, you could receive $1,200. That’s double the amount by waiting just eight years to begin receiving payments. Your individual estimated benefits by age can be found on your Social Security Statement.

Planning for your future can feel overwhelming and at times, confusing. To make sure you’re on the right track and maximizing your benefit options, consider developing your plans with the help of a certified financial planner. Find more tips on retirement planning at OklahomaMoneyMatters.org.

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Before having children, I worked full-time and regularly contributed to my employer-sponsored retirement fund. After our first child was born, my husband and I decided it was best for me to stay at home. While I love the flexibility of being home with my children, I’m concerned about our financial future. What are some saving options for stay-at-home parents who want to plan for retirement? (posted July 29, 2016)

Many families opt for one parent to leave the workforce to care for young children. Often, this decision is made as a cost-savings measure, because childcare, transportation costs and other child-related expenses can outweigh the potential benefits of a second income. While this strategy may be the best option for your current situation, you’re right to consider the long-term effect on your financial security. Below are some savings options your family can investigate as you plan for a more secure retirement with less financial worry.

Talk with a certified financial planner to see if it’s best to leave your accumulated retirement savings in your previous employer’s plan, or if you should consider rolling over your savings to an Individual Retirement Account (IRA).
Research the benefits of a spousal IRA. Typically you need to earn an income to contribute to an IRA, but a spousal IRA reaps the same tax benefits while allowing a working spouse to contribute to a non-working spouse’s retirement savings.
Think of yourself as self-employed and routinely contribute a portion of your family’s income toward a retirement savings plan in your name. Even if you can only contribute a small amount to start, consistent saving of any amount will help your nest egg grow over time.
Pay down any debts your family has incurred. Every dollar you earn that’s not dedicated to debt repayment is money that can provide for your financial future and savings goals.

One other thought – it’s a good idea to maintain any certifications or licensures you currently hold. This can help safeguard your employability in case you need to return to the workforce. While we don’t enjoy thinking about worst case scenarios, it’s necessary to plan for unexpected events like an extended illness or job loss.

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Can you explain more about financial planners - what they do, what their rates may be, and how to find a reputable planner (one that won't simply try to sell you more life insurance)? (posted Feb. 23, 2007)

Simply put, financial planners help you manage your resources and achieve your financial goals, like retirement, education and debt management. Professional planners (and price tags!) aren’t one-size-fits-all; services and costs depend on your situation and special needs.

There’s more to choosing a financial planner than opening the yellow pages and saying “eenie, meenie, minie, moe!” You’re trusting someone with information that’s deeply personal - your finances - so you’ll want to be prepared. First, research your own situation and determine your priorities. Planning to retire in 10-15 years? You’ll want a planner to make sure you’re on target to reach your savings goal, and that your money will last. Got little ones you want to send to college? A planner can help you set up a mix of investments that’ll grow as fast as your kids do. Just starting your career? A planner can offer objective advice to help you set long-term savings goals and build a solid foundation for a lifetime of financial success. The Financial Planning Association’s website, FPAnet.org, offers more information about rates, certification and the specific needs financial planners can help you address.

Now that you know your primary financial focus, it’s time to start shopping for a planner! Ask friends and coworkers for referrals. For more options, visit PlannerSearch.org to find local certified financial planners who specialize in your area of need. When you have a few good leads, pick up the phone and ask about credentials, expertise, rates and other information you may want to know before setting an appointment.

Like our bodies and our vehicles, our financial lives need a check-up every now and then. Financial planners can give you guidance, but remember this – ultimately, you are the decision maker. Don’t feel pressured into anything you’re not fully comfortable with, and never hesitate to ask for more information or more time to make a thoughtful choice. It’s your money, and it’s your life. Make the most of both!

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I have a CD that is getting close to maturity. How do I know if I should renew it or cash it in? (posted July 31, 2009)

I applaud you for being proactive! It's important to keep track of when CDs are maturing, so you can explore other options and decide whether you want to reinvest in another CD or cash it in and move your money to another investment vehicle.

For those who many not know, a CD (Certificate of Deposit) is a promissory note issued by a bank. It bears a set maturity date, earns a specified fixed interest rate and can be issued in any denomination. CDs are generally issued by commercial banks and are insured by the FDIC. The term of a CD generally ranges from one month to five years.

Back to your question. Whether the market environment is up or down when a CD matures, it's always a good idea to review all options before making a choice.

Renew?
Most banks will continually renew CDs for you at maturity if you don’t give them alternate instructions. Often, they’ll offer to “renew” and put your money into a new CD with the same term as the previous one. However, the interest rate may be different if CD rates have changed since your initial purchase. Make sure you know the bank’s policy and current rates, and that you give proper instructions if you don’t want the money rolled into a new CD automatically.

Shop around?
Before you choose to renew a CD at your current bank, see what else is out there. Rates are competitive, and the bank knows that you have a variety of choices. Check your newspaper, mail, and other promotional information published by local institutions to compare CD rates and, if the grass is greener, move your money to another institution.

Cash it in?
Are you happy with the return, or are you looking for more income from your investments? CDs offer steady interest earnings and low risk, but they don’t usually offer high returns in comparison with many other types of investments. So, depending on your risk tolerance and savings goals, you might consider cashing a mature CD and investing the money elsewhere.

Here’s the thing - only you can know which option is best for you! Investment decisions must be made in the context of your full financial picture. How do CD’s factor in your family’s overall financial equation? What’s your tolerance for investment risk? What are the tax implications of each choice? How soon will you need to access your money

If you don’t know the answers to these questions, consider meeting with a certified financial planner. A financial planner can help you make the most informed decisions possible based on your specific financial circumstances and goals. To find a local certified financial planner, ask friends for referrals and/or visit PlannerSearch.org.

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Are there any rules of thumb for investing in stocks? (posted Oct. 31, 2008)

Investing of any kind can be confusing and feel overwhelming, even in a strong, stable financial market. Here are a few tips to keep in mind when investing in stocks.

Read up. Before investing, educate yourself about the stock market and companies you’d like to invest in. Do some research online and stay informed about current events.

Go for the long-haul. Stocks are a long-term investment, so don’t panic when the market’s down. If you’re investing for future growth, you’ll have plenty of time to rebound from the lows and ride the highs.

Know your risk level. As with any investment, owning stock involves risk. Before investing, decide how much risk you can handle; a risk tolerance quiz like the one at MSN Money can help you figure it out. Typically, the closer you are to retirement, the more conservative you’ll want to be. Conversely, the younger you are, the more risk you can take on because you’ll have more time to recover from a down market.

Diversify. You’ve heard the saying, “never put all your eggs in one basket.” The same is true with investing. It’s important to diversify your portfolio, which means investing in a variety of industries and products at various risk levels.

Time it right. The key to making a profit is to buy low and sell high. A professional advisor can help you determine when it’s time to cash in or cut your losses.

Remember, it’s your money, so make the most of it! For more information about investing, visit CNN Money’s website or consider taking a local investing course or joining an investment club.

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What’s the difference between a traditional IRA and a Roth IRA? Which is a better investment option?

An IRA, or Individual Retirement Account, is a plan that allows you to contribute a portion of your earned income each year. Currently, the maximum regular contribution per year is $5,000 for an individual and $10,000 for a married couple filing jointly. These limits apply to total annual IRA contributions; in other words, an individual can't contribute $5,000 to a Roth IRA and $5,000 to a traditional IRA in the same year.

While these accounts are similar, the fundamental differences involve the “T” word … taxation. Contributions to a traditional IRA are taken from pretax income, and may be tax deductible in the year they're contributed. Funds in a traditional IRA grow tax-deferred; the money is taxed as ordinary income when you take it out at retirement (if you follow the rules). Eligibility to contribute to a traditional IRA depends on your age, and you’ll pay a penalty for withdrawals prior to age 59 1/2, though there are some exceptions to this rule. You have to begin taking funds from a traditional IRA by April of the year after you reach age 70 1/2, even if you don't need to access the money yet. If you need the tax break now or think you'll be in a lower tax bracket at retirement, a traditional IRA may be the right choice for you.

Contributions to a Roth IRA are taken from post-tax dollars - in other words, you've already paid taxes on the earnings - so unlike a traditional IRA, qualified withdrawals from a Roth IRA are tax free (if you follow the rules). You don't have to begin taking funds from a Roth IRA until you're ready, and there’s no age limit to contributions; eligibility depends on income level. If you expect to be in a higher tax bracket when you reach retirement age, a Roth IRA may be a sound investment.

There's a wealth of free information about IRAs available online. You can start by visiting CNN's Money website, the Motley Fool website or AARP Money Tips site.

Only you can decide what’s right for your budget now and at retirement. A financial advisor can help you explore the implications of these and other options, so you can make informed decisions. No matter which route you take, you’re taking charge of your financial future, and that's something to celebrate!

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Who do you think would accumulate more by age 65?

Contributor A: a person who started saving $1,000 a year at age 21, saved for eight years and then completely stopped.

Contributor B: a person who saved $1,000 a year starting at age 29, and continued saving that amount until age 65. (posted Dec. 21, 2007)

That’s a great question! Generally, the earlier you begin saving and the more money you contribute, the more your money will grow. Using a savings calculator found at MSN Money, we were able to answer your question. Let’s get to it!

Based on the numbers given and assuming an 8 percent interest rate compounded monthly, Contributor B would end up with more money in the bank by age 65 ($200,541) compared to Contributor A ($189,735). However, Contributor A made a much lower total investment ($8,000) when compared to Contributor B ($36,000).

Our advice? Start saving early—and often—and continue to contribute to your retirement plan as long as you can to maximize your retirement savings. To get the most out of your retirement nest egg, consult a licensed financial planner to develop strategies that make sense for you based on your goals.

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I would like to be able to retire someday, but I just can’t seem to save money on a regular basis. How can I ever afford to retire if my monthly spending eats up almost all of my paycheck (or more)? Help! (posted March 28, 2008)

First of all, you’re not alone in this dilemma. In 2006, the average savings rate in the U.S. was -1 percent, meaning millions of people were not only failing to add to their savings, but dipping into existing savings to cover expenses! Kudos to you for thinking in advance about retirement and wanting to make small changes today that will largely impact your future. Here are some tips to help you stash cash for a happy retirement.

First, take a look at your lifestyle. Are you living close to (or above) your means? It’s time to have an honest conversation with yourself; is your spending now sacrificing your security later? There’s nothing wrong with wanting a bigger house or clothes that would make Nicole Kidman jealous, but learning to live within your means is the most important financial lesson for anyone at any income level. Ask yourself this question - can I live with a little less now to have a better life later? Of course you can!

Once you’ve decided security in retirement is a higher priority than keeping up with the Joneses, trim the fat in your cash flow. We all have priorities in life, and our spending reflects them. To make sure your spending supports your priorities, turn to the B-word… budget! Some people view budgets as restrictive, but they’re actually tools to help you get what you want.

Be sure your monthly budget includes regular savings. Aim to save 10 percent of each paycheck, but don’t stress out if that’s unobtainable right now. Put in what you can and increase the amount at every opportunity. The key is making regular savings a habit. Want to know a savings secret? Set up automatic deposit or automatic transfer to your savings account. You can’t spend what you don’t see!

Put windfalls, like birthday money or the upcoming tax rebate, to work for you in a savings or investment account. You’ll be so glad you did. Shiny cars lose value, electronics become obsolete and clothes go out of style, but an investment in a 401 (k) or IRA will be worth much more in the long run.

Transform yourself into a bargain shopper. Saving just $10 per week on something you normally buy (e.g. groceries, fancy coffee) nets over $500 per year! Call your car insurance company to see if you qualify for discounts or a lower rate. If you’ve been a responsible credit card user, ask to have your interest rate lowered. Search eBay, consignment stores or thrift shops to find steals on household items and clothing. Make saving a game and enlist the help of your whole family.

In the end, the biggest factor in your saving success is you! It takes work to make saving a priority, but a sound financial future is well worth the effort.

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Lifestyle

I feel like I'm always forgetting financial deadlines and misplacing important monetary documents. Can you give me some suggestions on how to get my finances organized and keep them on track? (posted August 2, 2023)

It's never a good feeling when you realize you've missed a financial deadline or lost an important document. However, with a little bit of effort and organization, you can avoid these situations. Consider these tips to help you get your finances organized and keep them that way:

Create a Budget: First and foremost, it's essential to create a budget. This will help you keep track of your income and expenses, and ensure that you have enough money for everything you need. Start by listing all your income sources and your regular expenses, such as rent, utilities and groceries. Then, factor in any irregular expenses you might have, such as car repairs or medical bills. With a budget in place, you'll be better equipped to plan for the future financial obligations. You'll also be able to identify any areas where you might be overspending and adjust accordingly. For more tips on setting up a budget, check out our resources on OklahomaMoneyMatters.org.

Establish a Filing System: One of the best ways ot keep track of important documents is to create a filing system. Start by getting a box or a filing cabinet, and separate your documents by category. These categories might include things like bank statements, credit card bills, tax documents, and warranties. Once you have determined your categories, label each folder or envelope so you can easily find what you're looing for.

Digitize it: If you're not a paper person and clutter stresses you out, you might want to consider adding a digital component to your filing system by scanning your documents and saving them to an online storage account.

Set Reminders or Automate: It's easy to forget financial deadlines if you don't have them written down somewhere. To avoid this, create a list of important dates, such as tax deadlines and payment dates for insurance premiums and credit card payments. Then, set reminders for yourself using a calendar app or a reminder program. You can also set up automatic payments for bills to ensure they're paid on time. Just be sure to keep track of your bank balance so you know you have enough money in your account to cover these expenses..

Review Your Finances Regularly: Make it a habit to review your finances regularly. This will help you stay on top of any changes in your income or expenses and adjust your budget as needed. You might also want to review your credit report periodically to ensure there are no errors or fraudulent accounts listed. AnnualCreditReport.com makes this easy by allowing you to have a free credit report from each of the three credit bureaus once every 12 months. Regularly reviewing your finances will also give you a better understanding of where your money is going and where you might be able to cut back.

Consider a Financial Advisor: If you're feeling overwhelmed or unsure about how to get your finances in order, consider working with a financial advisor. They can provide guidance and advice on budgeting, investing and saving for retirement. When choosing a financial advisor, make sure they're licensed and have experience working with clients in situations similar to yours. Consider an organization like the National Association of Personal Financial Advisors to help narrow your search.

Getting your finances organized can seem like an overwhelming task, but it's essential for staying on top of your financial obligations. By taking the time to set up a few simple steps, you can take control of your finances and stay ahead of deadlines. With a little bit of effort and organization, you can avoid the stress and anxiety that comes with forgetting important financial deadlines or losing important documents.

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Every year, I'm determined to fix my finances but then in December, I realize I haven't gotten any closer to reaching my goals. It all seems so overwhelming, and I don't know where to start. Help! (posted January 5, 2023)

A new year offers an opportunity to reflect on where you've been and to make plans for your future goals — whatever those may be. By identifying that you don't know where to start and seeking help, you've already made progress in fixing the situation. Consider these steps to get you closer to those financial goals this year.

Assess where you are: You can't know where you're going until you know where you've been. That said, the first and most important step is to evaluate where you are right now — at this moment. How much debt do you have? Do you have any money saved for an emergency?

Decide where you want to be: Take a moment to visualize where you want to be at the end of this year. What does that look like? Are you completely debt free? Do you have a healthy emergency fund? Are you working toward building wealth?

Be SMART with your goals: Once you have a realistic picture of what success looks like, it's time to be SMART about your goals. SMART goals are:

Specific – Know exactly what you're aiming for.
Measurable – Decide how you'll track your progress.
Achievable – Is your goal realistic? Do you have the skills you need to achieve it? If not, how can you acquire them?
Relevant – Why is this goal important to you? How will you or others benefit in the long run?
Time-bound – A final deadline helps to keep you on track to reach your destination, and incremental deadlines make your goal seem more attainable.

Create a spending plan, and review it regularly: Budgeting the money you have is the most important key to financial success. The amount of money doesn’t matter if you don’t have a plan in place to manage what you have. To learn how to create a budget, check out our budgeting resources at OklahomaMoneyMatters.org.

Establish an emergency fund: The unexpected happens — a car accident, a sick child, an unplanned home repair — and it can derail your financial goals FAST. If possible, it’s best to save three to six months of necessary living expenses in your emergency fund, but in the meantime aim to save at least $1,000 to cover minor bills and repairs. Put your money somewhere easily accessible, like an interest-bearing savings account or money market account.

Pay off debt: Your money can't work for you if it's earning interest for someone else. That's why it's important to pay off debts as quickly as possible. Tricks like the debt snowball method can help you prioritize and speed up your debt payoff journey. Before you know it, you'll have more money to put toward those big goals. If you're overwhelmed and don't know where to start, visit nfcc.org to find a local nonprofit credit counselor who can help you figure out a plan.

Prioritize financial wellness: When creating new financial habits that bring you closer to your goals, your money mindset is as important as your goals and plans. Give yourself some grace for any mistakes you've made in the past and work toward actively changing the bad habits and beliefs that were keeping you stuck.

Save and invest for the future: The key to long-term financial success is to make your money work for you. Consider talking to a certified financial planner to help you access your future needs and create a plan to help you succeed. Visit plannersearch.org to find local certified financial planners who specialize in the areas you feel need improvement. When you have a few good leads, pick up the phone and ask about credentials, expertise, rates and other information you may want to know before setting an appointment.

For more information to help you reach your financial goals, check out the resources on OklahomaMoneyMatters.org.

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My husband and I make decent money, but still struggle with our finances and having enough income to last throughout the month. How do we break the paycheck to paycheck cycle so we can move forward with our financial goals? (posted June 28, 2019)

Financial success hinges on creating and sticking to a budget. A budget, also called a spending plan, allows you to plan your monthly expenses and track where your money goes. To begin crafting a spending plan that really works for you and your family, start by knowing the amount of money you actually have coming in. Income can come from a paycheck, child or spousal support or unexpected cash in the form of gifts, tax returns or rebates. If your monthly income varies because your work hours change or you earn commission, build your budget using your base salary or the average of your last few months’ worth of paychecks. Then determine how much money flows out each month by tallying the bills and expenses you pay each pay period. Don’t forget to include irregular and/or periodic expenses, like insurance premiums or property taxes.

Fixed expenses are easier to track because they stay the same each month—examples include mortgage, car or student loan payments. Variable expenses, like groceries, fuel and entertainment, are trickier to forecast because they change from month to month. Follow these specific steps to develop a realistic spending plan that can help you stop living paycheck to paycheck.

Track your spending. Monitor your variable expenses to make planning easier. Keep your receipts and write down all transactions for one month to get an accurate picture of your spending habits. The key is to capture every single dollar spent – including expenses we often overlook, such as snacks you pick up when getting gas, your morning trip to the specialty coffee shop, etc. Be sure to account for these expenses when crafting your spending plan. You may be surprised to find that with minor adjustments, extra cash can be directed to another area of your budget or savings goals.
Craft a spending plan. Use your financial transactions list to lump expenses into categories. Common categories are “dining out,” “entertainment,” “clothing,” “household maintenance,” “groceries,” etc. Every successful budget includes categories for savings and paying down any debt.

Based on your current spending habits and your goals, assign each category a monthly spending amount. Total those figures, then subtract that total from your projected monthly income. If you’re over budget, refine some of your variable expense categories and try again. After implementing your budget for a month, adjust your categories - or spending - accordingly to better meet your needs. OKMM offers a free online budgeting tool to help you develop and refine your budget.

Establish an emergency savings fund. A financial safety net should be a top priority so unexpected expenses won’t put you in a bind or force you into debt. It’s best to save three to six months of necessary living expenses in your emergency fund, but in the meantime, aim to save at least $1,000 to cover minor bills and repairs. Put your money somewhere easily accessible, like an interest-bearing savings account or money market account.

When you implement your spending plan, you’ll likely find that you have to make adjustments to set the perfect budget for your lifestyle. With time, managing your budget will become more routine, and you’ll grow more excited as you begin meeting your financial goals, such as reducing unnecessary expenses and consumer debt and establishing your emergency fund. Taking control of your personal finances by sticking to a viable budget can help you build wealth through consistent saving and paying off debt, which can in turn improve your credit score, allowing you to qualify for better interest rates on large purchases (home, car). For more helpful information about the budgeting process, visit OklahomaMoneyMatters.org.

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I want to save money, but how do I do that when I’m living paycheck to paycheck? (posted June 24, 2016)

When you’re living paycheck to paycheck, saving money may seem impossible. However, when you take a close look at your income and where it’s going, you may be surprised to find that saving money isn’t such a farfetched goal, after all. Below are some tips for building savings while living on a limited income.

Track your spending. You think you know where your money goes and it seems you should have enough left at the end of the month, but you don’t. Most people are astonished when they begin tracking their spending habits at how quickly small, routine expenses add up. Snacks and drinks at the convenience store, unplanned shopping trips or groceries that weren't on the list are all money leaks. Make note of every dollar you spend for a month and categorize the expenses (household, eating out, entertainment, gifts, etc.). What needs to change?
Substitute instead of sacrifice. When tracking your expenses, you may find a spending habit that’s a financial hang up. For instance, if you love Starbucks coffee so much that you have it every day that habit may cost you approximately $1,800 over the course of one year! Instead of making a daily purchase, consider buying a nice travel mug and brewing your own coffee at home. Then, cut back to one Starbucks visit each week. Limiting your trips through the drive-thru might even help you enjoy the experience more while saving around $1,500 per year. Do you spend each month on books and magazines? Check out free resources at your local library. If you enjoy going to movies and concerts, research free screenings and special events in your community. Allocate the differences in every category to savings.
Prepare a budget. Creating a realistic spending plan is vital. If your budget doesn’t work or it’s too restrictive, you won’t stick to it. To make a livable budget, account for all your expenses - including savings, bills and fun. When trying to save or pay off debt, many people immediately cut out the fun, which is a mistake. In doing so, they’ve immediately sabotaged their spending plan. Having fun is important; if you know that you like going out to dinner or buying new music, simply allocate some funds for it. Deciding how you’ll spend your dollars and following that track allows you to truly enjoy yourself without the guilt or stress of trying to rearrange funds to cover a splurge. If you need help developing a workable spending plan, check out our interactive budgeting tool at OklahomaMoneyMatters.org.
Start an emergency fund. An emergency fund is essential, especially when you’re barely making ends meet. It’s okay to start small; even if you have to begin by saving only five dollars per week, eventually you’ll build a substantial safety net. To keep the process manageable, try setting a small emergency saving goal first. For instance, plan for a routine yet often unexpected expense, such as your medical copay. Once you meet that goal, move on to saving for a larger potential emergency expense, like replacement tires or a new hot water heater. Keep going until you’ve built enough savings to live comfortably for 3-6 months if you were to lose your income. Consistency is the key, so even if you’re also focusing on debt reduction, keep plugging money into your emergency fund until you reach that goal.
Find free money. Don’t leave money on the table! If your employer offers a matched saving program, take advantage of it. Also, make sure you have appropriate retirement and banking options in place. If you’re paying a fee for financial services you don’t use, cancel the service or switch to a financial institution with fewer fees. While you’re at it, take a look at your insurance rates. Make sure you’re getting the best deal on your car and home or rental plans. During your health insurance enrollment period, re-evaluate your needs and choose the best option for you. Review your mortgage rates or bundled utilities and negotiate or shop for better deals. You can also declutter while making some cash. Sell unwanted items at consignment shops, have a garage sale or post your items on “buy, sell or trade” sites. Commit any money earned through these efforts to meeting your saving goals.

Once you’ve identified some ways to save, make savings automatic. Each time you get paid, have money auto-debited from your paycheck and deposited into a savings account. You won’t miss what you don’t see, and before you know it, you’ll have a healthy savings cushion that will give you the financial security required for more peace of mind and less stress.

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I know it’s important to save money; in fact, I’m great at stashing money in my emergency fund. I’d like to take it to the next level by cutting back on day-to-day expenses, but everything I’ve tried is too complicated or time-consuming. I need a system that’s easy to stick to. Can you help? (posted Feb. 26, 2016)

Many people find that money-saving options for routine, every day expenses are easier said than done, especially if they require too many “extra” steps, like organized couponing or driving to a variety of stores to catch the best deals. If a complicated system isn’t for you, consider the following smartphone apps and cash-back programs that reward you for spending behaviors you’re already doing.

Receipt Hog pairs market research with a fun rewards program. Earn virtual coins by shopping the way you always do, then scan receipts to rack up coins that can be redeemed for cash or Amazon.com gift cards. This app amps up the fun by letting you spin the “hog slots” and enter monthly prize drawings for a chance to win cash or extra coins.
Checkout 51 offers rebates on specific food and personal care products. New rebates are available every week and can range from a few cents off for fresh produce or several dollars off for a specific name brand item. Shop at any store and simply scan your receipt to confirm your qualifying purchase. Once you’ve accrued at last $20 in rebates, you can request a check.
Walmart Savings Catcher takes the hassle out of price matching. Instead of keeping track of competitors’ sale prices, simply shop and then scan the bar code on your Walmart receipt within seven days of purchase to automatically compare Walmart’s prices to local competitors’ advertised prices. If a lower price is found, you’ll receive an eGift Card for the difference.
Target’s REDcard works in one of two ways. You can opt for a debit card that’s attached to your existing bank account, or select a Target credit card. Either way, you’ll enjoy 5 percent off every purchase made at Target, receive free shipping on purchases made at Target.com and get an extra 30 days to return items. To get more bang for your savings buck, pair REDcard savings with coupons, the Cartwheel app and Target subscriptions. If you opt for the credit card, remember to spend only what you can afford to repay immediately, or any savings will be lost to interest fees.

The key to making each of these options work to your best advantage is to avoid spending money just to earn rewards and always put the money you save into an interest-earning savings account or apply it to other necessities, which frees up more money for your overall savings plan.

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How do I save money to prepare for having kids? (posted Sept. 26, 2008)

Raising a family can be one of the most gratifying (and expensive!) experiences in your life. However, kids don’t have to turn your finances upside down. With a little planning and goal setting, you can maintain financial security as your family grows.

Prepare for purchases. Sit down and think about how a baby will affect your everyday living expenses. Do you have room in your budget to accommodate child-related expenses or are you already living close to (or above) your means? Sketch out a new budget that includes expenses like diapers and day care, and compare it to your current monthly budget. Do your current income and expenses leave room for baby-related items? Are there areas in your budget you could trim now to comfortably support a family life later?

Set specific saving goals. Having a clearly defined goal helps you stay on course to reach your target and motivates you to save. Aim to save at least 10 percent of each paycheck to build a financial cushion. Some families may want to stash away a specific amount—let’s say $2,000—before having children. Break down this larger goal into smaller monthly achievements. For example, if you hope to conceive in one year, you’ll need to put back around $160 each month (or about $40 per week) to reach your pre-baby savings goal.

Keep that thrifty attitude. Throughout your pregnancy and after the baby arrives, continue to look for additional ways to cut costs. Consider borrowing maternity clothes from a friend, and shop garage sales and consignment stores for baby clothes and nursery items.

There’s no magic formula. As it so often does, successful financial planning lies in adjusting your spending to reflect your priorities. Learn more about budgeting for baby at PracticalMoneySkills.com/baby.

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My family and I would like to take a vacation at some point this summer. We have most of the money already saved, but we’re struggling to come up with the last few bucks. Do you have any tips on ways we can save a little extra money throughout the year to make vacation planning easier next summer? (posted May 28, 2010)

Taking a vacation today has become incredibly expensive. Any spare bucks you can save between now and then will help out a lot. Here’s some ways to help you set aside that little bit extra.

Save your change. Whatever you have left in your pockets at the end of the day, put in a jar. You'd be amazed how quickly that change will add up. Oh and don’t forget to check under those couch cushions. Yep, those crusty nickels and dimes count, as well!
Round up. When recording your written checks or debit transactions in your check register, round up the amount to the next dollar and keep the change. For example, if a trim from your hair stylist costs $22.50, write the check for $22.50, but in your register record the amount as $23.00. At the end of each month, check your register against the bank statement and make necessary adjustments. Depending on your spending patterns, you should have a nice pot of dollars to transfer to the vacation fund.
Pack lunches. Do your kids eat cafeteria food every day? Send them in with sack lunches. When they start to complain (and they will) remind them that this is a contribution to the family vacation fund. Consider packing your own lunch, too. Figure out how much you've saved each month and write a check to your vacation fund.
Have a yard sale. Clean out those closets! You'd be surprised what you have that someone else might be willing to buy. Look through your garage or basement. There has to be some gadget or appliance you no longer have a use for.
Don't buy anything new for six months. Now I'm not talking about basic necessities here; you’ll probably need bread, juice and toilet paper! I’m talking about a new car, re-carpeting the house, or a new wardrobe. Unless you desperately need to make a major purchase, try to hold-off until after the vacation. Decide which is more important to your family.
Plan before you grocery shop. Sit down with the weekly flyers and plan your meals based on what’s on sale. If you do this with coupons, even better! Find a sale and try to match a coupon. By the time you finish, you’ll have a cheaper eating week. Also, by planning ahead, you’ll cut down on that drive-through habit – maybe from $10-$15 at the burger joint to $4-5 at home.

There are plenty of ways to save money and cut costs when the pay-off involves a fun family getaway. Just don’t wait to get started. Make plans to start saving for that wonderful vacation next summer before this summer is over.

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Paying for College

I'm putting money in a savings plan for my daughter's college education, but how do I determine the timeline I should follow and how much I should ultimately save? (posted October 6, 2022)

Like most Americans, you probably want your child to attend college - hopefully, one that you can afford. However, determining how much to save and if you're on the right track might be difficult.

Determine how much to save. A simple way to begin figuring out how much you'll need for college is to multiply your child's age by $2,000 (https://www.fidelity.com/learning-center/personal-finance/college-planning/college-savings-calculator). You're on point if that's half the cost of a four-year college education. Another way is to use a "college calculator." Many of them are available online and allow you to change key indicators to see how they affect amounts. Most calculators assume a savings plan with a steady savings rate, adjusted over time for inflation. These helpful tools show how much you should have saved according to your child's age. You can then change the savings amount to potentially reach your goal.

Know the college costs. Knowing the cost of your child's college is key to reaching your savings goal. Many states have a college cost calculator to see averages for the public, private, on-campus, and off-campus prices. The current 2022-23 estimated costs for Oklahoma colleges and universities is shown below:

*Note: Room and Board costs are based on a student living in a traditional dormitory and a board plan. The costs represent the preferred room and board available on each campus. Many institutions offer a wide variety of room and board plans that may be more or less than the amount reported above.

What percentage will parents pay? Some findings indicate that many parents plan to pay their children's entire college costs. To do this, beginning to save early is the best plan. Savings parents have for college minimize the amount of loans students may need to borrow. Students may have their own savings, plan to apply for scholarships, or have other family members that will donate to their education fund. The college cost calculators have options to adjust for these types of variables.

When and for how long will your child attend college? Most students begin college at 18, and calculators assume they will graduate in four years. The age they start and the number of years it will take them to graduate can vary.

Every family has different college savings goals. Revisit your savings strategy at least once a year to verify if you're on track. You will likely need to adjust the cost of the colleges your child is considering, your contributing ability, and how your investments are performing. Because college cost calculators only provide a starting point, it's always best to have an in-depth college savings and planning talk with a financial advisor.

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My daughter is a junior in high school this year and we’re preparing her for college. We both work and we’re concerned we won’t qualify for enough assistance to cover the educational expenses. What can we do now to help? (posted December 2, 2021)

You’re not alone. Many parents are concerned about paying for college, and often assume that they make too much money to qualify for financial aid programs. Here are some helpful tips.

Fill out the FAFSA anyway. Your daughter should complete the Free Application for Federal Student Aid (FAFSA) as soon as possible after Oct. 1 during her senior year of high school. It’s free to submit and serves as her first step in the financial aid process. The FAFSA determines your family’s eligibility for aid, like federal and state grants, some types of scholarships, work-study opportunities and federal student loans. Most applicants qualify for some type of financial aid.
Most institutions nationwide use FAFSA results to create an aid offer that can help you fund her education. It’s important to complete the FAFSA each year she’ll plan to be in college, even if you think you won’t qualify for aid. Some scholarship programs require a completed FAFSA, as well. If for any reason your financial situation changes during the school year, it’s easier for the college’s financial aid office to help you find additional sources of funding if you already have a FAFSA on file.

You have a few options for filling out the FAFSA – an online application, via the mobile app or using a paper form. The online form or mobile app are recommended, when possible. Those versions offer perks like a 24/7 help feature, built-in safeguards for checking errors, and the ability to bypass questions that don’t apply to your situation. You can also save your work and come back to it later. Visit StudentAid.gov to access the online form or download the myStudentAid app to your smartphone or tablet.

Save what you can. It’s not too late to begin saving money to help your student pay for college. Look at your monthly budget and consider which expenses could temporarily be suspended in order to direct that money into savings, such as a 529 college savings plan, which offers tax benefits on the money you contribute.

Consider concurrent enrollment. Consider signing up for concurrent enrollment. High school juniors and seniors who’ve made good grades throughout school or scored well on the ACT or SAT may be eligible to take credit-earning college courses while still in high school. Depending on available funding, they may even be able to get a tuition waiver to cover some of the cost. Learn more about concurrent enrollment here: https://www.okcollegestart.org/College_Planning/Prepare_for_college/concurrent_enrollment.aspx

Stack up the scholarships. There are billions of dollars in scholarships awarded every year to help with college expenses. You don’t necessarily have to be a merit scholar or an all-state athlete to qualify; scholarships are offered for all types of reasons. Check out sites like UCanGo2.org, OKcollegestart.org, OCCF.org and Unigo.com for scholarship options. Talk to your daughter’s college admission recruiter or financial aid officer about possible campus-based scholarship opportunities, as well. Encourage your daughter to pursue scholarships that require essays – generally, there are fewer applicants for those options - and pay close attention to deadlines and individual scholarship requirements.

Compare colleges. There are many factors to consider when selecting a college or university, including cost of attendance, degree offerings and proximity to home, which can reduce overall living and transportation expenses. For some students, it may make sense to live at home and complete general education courses at a local community college, then transfer to a four-year university. Compare campus features and offerings under the College Planning tab at OKcollegestart.org.

To learn more about saving and budgeting, check out our resources at OklahomaMoneyMatters.org and to learn more about paying for college, check out the information and tools available at UCanGo2.org.

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My teens are starting to prepare for college, but I don’t know how we’ll pay for it. What are some resources to help us save (and pay) for college? (posted January 28, 2021)

While it’s best to begin planning for your child’s postsecondary education as early as possible, all is not lost. It’s always ‘better late than never’ when it comes to saving for the future. Use the following resources to strategize your college funding plan.

Oklahoma’s Promise. If your child is in the eighth, ninth or 10th grade they may be eligible to apply for the Oklahoma’s Promise scholarship program. Oklahoma’s Promise pays tuition at state public colleges and universities, and at least a portion of tuition at an Oklahoma accredited private college or university or for certain programs that meet the requirements to be eligible for federal student financial aid offered at Oklahoma public technology centers. Qualifying students whose parents’ household income is $55,000 or less may apply for this scholarship. Students must apply no later than the annual deadline following their sophomore year of high school – usually on or around June 30 each year - and must adhere to conduct, course, and academic requirements to maintain eligibility for the scholarship.

Oklahoma 529 College Savings Plan. Oklahoma’s 529 College Savings Plan is a state-sponsored, tax-advantaged way to save for your child’s higher education. Enrollment in this program is always available, even if your child is already in college. The 529 Plan offers several benefits, including an Oklahoma tax deduction and a wide selection of investment options, and the funds can be used at thousands of higher education institutions in the U.S. and abroad.

Financial Aid. Regardless of where you are in the process of saving for your child’s education, know there are federal and state funds available to help eligible students cover their college costs. High school seniors should complete the FAFSA (Free Application for Federal Student Aid) in October of their senior year and every year money is needed for college. The FAFSA is sent to any school the student may be interested in attending. Each institution will then provide students with a summary of their eligibility for financial aid, which may include grants, scholarships, work-study programs, and low-cost federal student loans.

OKcollegestart.org. OKcollegestart.org, Oklahoma’s comprehensive college planning portal, offers helpful resources for students from middle school to college, adult learners, parents and educators. Users can compare college attributes and costs, take career assessments, track employment resources, complete and submit an Oklahoma’s Promise scholarship application, and review financial aid information. OKcollegestart.org also offers a searchable database of over 20,000 scholarships.

UCanGo2.org. UCanGo2.org offers a wide selection of materials and tools to help students and families plan, prepare and pay for college. Users will find planning checklists for students from sixth grade through the freshman year of college, detailed financial aid and FAFSA completion resources, and a scholarship database that provides access to awards by deadline and category.

Oklahoma Money Matters. OKMM offers information and resources to educate students, parents, and adult learners about managing personal finances, saving, consumer credit and student loan management. OKMM offers self-paced, online learning modules that address a variety of personal finance topics, including Money Management for College Students, which tackles banking, credit, and living on a college budget. Access OKMM’s online learning modules, consumer podcasts, customizable budget calculator, resource clearinghouse and more at OklahomaMoneyMatters.org.

Your Community. Don’t forget that businesses and organizations in your community may provide funding to assist with higher education expenses. Your city’s chamber of commerce, religious organizations, banks, libraries, local clubs, and other groups may offer scholarship opportunities based on a variety of eligibility criteria. For example, the Oklahoma City Community Foundation (OCCF) is a nonprofit public charity that works with donors to fulfill their charitable goals and create funds that will benefit the community both now and in the future. In 2020, OCCF awarded 800 scholarships to students totaling $2.5 million. Awards that are currently available range from $2,000 to $20,000 and are accessible to students across Oklahoma. To review their current list of available scholarships, visit occf.academicworks.com.

As you navigate the process of planning and paying for a college education, keep in mind that this is an important investment in your student’s future. Studies show that an individual with a bachelor's degree will earn significantly more over a lifetime than those with just a high school diploma. Learn more about our college planning, financial aid, financial literacy, and student loan management programs and services at OCAP.org.

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I just got accepted to the college of my dreams! I applied for financial aid and was told I’d receive an award letter soon. What should I know before accepting any money? (posted July 30, 2020)

Congratulations on furthering your education! Once you’ve applied for financial aid, every college you’ve been accepted to will send you a financial aid offer outlining the type and amount of aid you’re eligible to receive at that school. Colleges use the results of the FAFSA (Free Application for Federal Student Aid) to determine your eligibility for various federal and state aid programs such as grants, scholarships, work-study and federal student loans. Be sure to research the cost of each school you’re interested in so you’ll know how much money you’ll need to cover the educational expenses.

After you’ve submitted your FAFSA, keep an eye out for your aid offer. Most awards are sent electronically, but a few schools may send you a paper copy. The offer will list the cost of your school and the type and amounts of aid they can award to you to attend. Once you’ve decided on a college, review and accept the aid you wish to receive and return the offer to your school. Some schools require students to respond by a specific deadline, so review the information carefully.

Here are some other helpful tips as you consider financial aid options.

Take free money first. Always accept grant and scholarship funds as they’re considered free money, meaning they typically don’t have to be paid back. Visit StudentAid.gov to learn about the different types of grant programs available. Oklahoma also offers funding through the OTAG (Oklahoma Tuition Aid Grant) program, which is available to eligible Oklahoma residents who meet certain requirements. You must complete the FAFSA annually to be considered for any of these financial aid options.

Scholarships are a great source of funding for students because they’re also considered free money. UCanGo2 and OKcollegestart provide numerous scholarship options for students of all ages. Also check out UCanGo2’s Scholarship Success Guide to review other resources for finding (and successfully applying for) college scholarships.

Consider earned money, too. Federal work study is a need-based program which allows students to engage in part-time work to help pay educational expenses. The income earned may be paid directly to the student or applied to their account if a balance is owed. Jobs are available on-campus and sometimes off-campus.

Research loan options, if needed. Some students need a loan to meet college costs that aren’t covered by financial aid and family savings. Student loans can come from federal or private sources. As with all loans, every dollar borrowed must be repaid with interest. When reviewing your financial aid offer, exhaust all free money, earned money and saved money before accepting a student loan. Students should research their loan options. Federal loans provide more repayment flexibility and borrower protection than private loans, but it’s ultimately up to each student to make the decision that’s best for them.

If you must borrow, borrow smart. Financial aid isn’t personal income; it’s strictly offered as a means to help cover college expenses. That includes tuition, fees, books, room and board, and transportation. Some financial aid offers will award more money than is actually needed to cover your costs. Students have the option to accept or decline the various types of aid awarded by their school. Be sure to accept free money first and accept loans only if necessary. Remember to only borrow the amount you need to cover your educational expenses. Check out Ready Set Repay's student loan management guide, Borrow Smart from the Start.

Developing a good relationship with your school’s financial aid office can be very beneficial as you navigate the aid process. Make a list of questions to ask your financial aid counselor, and then make an appointment to ensure dedicated time is given to answer them. Aid officers can provide advice and resources to help make your college experience successful. For additional assistance with financial aid, understanding the FAFSA and learning to manage your money, visit UCanGo2.org, OKcollegestart.org, OklahomaMoneyMatters.org and ReadySetRepay.org.

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My 10-year-old child receives disability payments because of her medical conditions. Are there any particular programs in Oklahoma to help with college or technical school plans and costs for students with disabilities? (posted August 30, 2019)

Good news! There are indeed higher education planning resources and saving options in Oklahoma specifically designed for people with disabilities. You may already know about federal student loans, grants and work-study programs. Starting in the senior year of high school, students must complete a FAFSA (Free Application for Federal Student Aid) annually to apply. There are also many scholarships available to those with disabilities. Below are a few additional resources for you to review.

STABLE accounts. Achieving a Better Life Experience (ABLE) accounts are relatively new and are available to individuals whose disability began before age 26. ABLE accounts allow eligible individuals to save and spend money for a variety of disability related expenses and/or to help maintain or improve their health, independence, or quality of life. Education is specifically listed as a qualifying disability expense. Oklahoma’s version of the ABLE account is called the STABLE account. The specific eligibility criteria, qualified vs. nonqualified disability costs and other important information can be found at www.okstable.org.
529 College Savings Plans. The Oklahoma 529 College Savings Plan allows parents to save money for their child’s college education, and contributors may be eligible for an Oklahoma tax deduction. You can choose your investment options and use the funds for approved expenses at eligible colleges, universities or vocational schools in the U.S. or abroad. The Oklahoma 529 Savings Plan offers funding for certain qualified education expenses for special needs beneficiaries, such as additional enrollment or attendance costs. For more information, visit www.ok4saving.org.
UCanGo2. UCanGo2.org offers a wealth of information on how to plan, prepare and pay for college. Visit the website to view and download college planning publications, guides, and helpful resources to navigate this process. The scholarship section of UCanGo2.org allows students to search for awards by deadline and category. The Scholarships by Category portion offers awards for various groupings such as Special Needs, STEM, LGBTQ and Adult Learners. Remember, there are numerous scholarships available for everyone. Do your research and apply for every option available.
OKcollegestart. The State Regents’ and Oklahoma College Assistance Program’s (OCAP) college planning portal, OKcollegestart.org, is a one-stop-shop for students, parents and educators in Oklahoma. From exploring careers to choosing a college, OKcollegestart has resources designed to help students be successful in high school while they prepare for education after graduation. The Financial Aid 101 page offers students with disabilities specialized information about college admission, financial aid and additional services. For more information, contact a campus disability services office or the Oklahoma Department of Rehabilitation Services.
Organizations. National and regional organizations that serve and advocate for individuals with specific disabilities offer scholarships, guides, legal data and contact information. Many national organizations have regional branches, as well, that offer tools and resources you can use to access scholarships and other forms of financial assistance for college. The Developmental Disabilities Council of Oklahoma helps families navigate services available within Oklahoma. Visit the Developmental Disabilities Council of Oklahoma’s website at OKDDC.ok.gov.

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Why should I monitor my student loans while I’m in school? (posted October 26, 2018)

Student loans are an important tool to help students bridge the financial gap between the cost of college and any family savings, grants and scholarships. However, blindly accepting student loans while you’re in school without monitoring the total amount you’ve borrowed is a huge mistake. A student loan is a serious financial obligation that must be repaid whether you complete your education or withdraw before graduation. Overborrowing can lead to monthly payments that you can’t afford, which will make successful loan repayment a challenge. To avoid overborrowing and down the road, potential late payments or loan default—which will negatively impact your credit and may jeopardize any professional credentials or licensing—it’s wise to be proactive and have a plan in place to manage your loans and future loan repayment BEFORE you borrow.

Limit your loan. When reviewing your financial aid award letter, accept the free money first and then carefully consider federal student loans if you need more to cover your cost of attendance. You don’t have to accept all the financial aid that is offered to you, so take steps to borrow smart from the start by only borrowing what you need to pay college expenses.
Consider your future career and starting salary. It’s a good rule of thumb to borrow no more than the amount that you’re projected to make during your first year after graduating from college. Before you borrow, research the starting salary for your future career based on where you’ll live after graduation. Use Mapping Your Future's Debt/Salary Wizard to help you calculate how much debt you can comfortably repay with your anticipated salary.
Estimate your future loan payments. Use tools like Ready Set Repay’s loan calculator to estimate your future student loan payments based upon the amount you plan to borrow. As you evaluate your borrowing each semester, be sure to check the National Student Loan Data System (NSLDS) to keep track of how much you’ve already borrowed and what you currently owe.
Make interest payments while you’re in school. It’s not required, but it’s a good idea to make interest payments on unsubsidized student loans while you’re in school. Interest-only payments are usually affordable even on a tight budget and they can save you thousands of dollars over the life of your loan. Plus, making on-time payments will help you build a positive credit history. View Ready Set Repay’s interest capitalization poster for more information on the long-term, cost-saving benefits of making interest payments while in college.

Grants and scholarships can help you limit your need for student loans, so continue the scholarship search throughout your college career. There are numerous scholarships available for upperclassmen. Visit UCanGo2.org to search scholarships by deadline or interest. For more information about successful student loan repayment and overcoming repayment challenges, visit ReadSetRepay.org.

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I’ve received my financial aid award letter. What do I do next? (posted June 30, 2017)

Your award letter will list all the types of financial aid you’re eligible to receive. Depending on your eligibility status, you’ll have the option to accept grants, scholarships, work-study and federal student loans. You’ll need to compare your tuition and other school-related expenses to the financial aid you’re offered to determine how much of the funds you actually need to accept. After you’ve figured out exactly how much aid you need, follow the tips below to make the best use of your award package.

Limit borrowing. Just because it’s offered doesn’t mean you have to accept all the money listed on your financial aid award letter. Go for free money first! Grants and scholarships are considered free money because its money you can use to pay for your education that you won't have to pay back. Scholarships are available through many sources, including your college, private organizations, state agencies and the federal government. Be sure to check out local organizations, such as your place of worship and community groups, for local and nationwide scholarships. Check out the scholarship page on UCanGo2.org to search for scholarships by deadline or category.
Review student loan options. Since student loans must be repaid with interest, explore all your borrowing options to find the loan that best meets your need. Federal student loans typically have lower interest rates and better repayment options than private loans. Borrow only what you need to pay school expenses to keep your student debt as low as possible.
Be salary savvy. If you do need to borrow to pay educational expenses, keep your future salary in mind. Make sure the total amount you borrow won’t exceed your expected first-year salary after graduation. ReadySetRepay.org ‘s loan calculator is a great tool to help you estimate your future student loan payment, and it’s a good idea to start thinking about repayment options
Continue to complete the FAFSA. You’ll need to complete the FAFSA as soon as possible after Oct. 1 each year you need financial aid for college. The FAFSA is required for most sources of state aid and some scholarships. Remember, the first letter in FAFSA stands for FREE. Never pay to complete the FAFSA.

Be sure to explore other cost saving measures like comparing tuition rates on OKcollegestart.org, choosing in state instead of out of state schools to avoid paying out of state tuition, completing general education courses at a two year college, or working while in school to pay for tuition and other expenses.

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I want to go back to school to finish my degree, but I’ve been putting it off because I’m not sure that I can afford it. Aside from scholarships and student loans, what are some ways that I can pay for college or reduce the cost of attendance? (posted September 30, 2016)

Many students begin school with the best of intentions, but then life happens. Unfortunately, between events like getting married, having kids or focusing on a career, time has passed and earning your college degree gets lost in the shuffle. By the time you decide to go back to school, you may feel you’ve lost too much time or any advantage you might have had when you were younger. Luckily, it’s not too late; earning your degree is an achievable goal. Below are some college financing options you may want to look into.

File your FAFSA. Regardless of your financial circumstances, complete the Free Application for Federal Student Aid (FAFSA). This form helps determine your eligibility for federal grants, student loans and work-study programs. Completing the FAFSA is the first step in the financial aid process for every family, because many state scholarships require a completed FAFSA and colleges and universities use it to determine institutional financial aid, too. The new filing date is Oct. 1, 2016. Visit StudentAid.gov to begin.
Employer reimbursement. Many employers offer tuition reimbursement programs as an employee benefit. Often these programs have eligibility requirements, like selecting a degree field that relates to your job, maintaining a certain GPA or working for the company for a particular amount of time. It’s worth checking with your Human Resources department to see if it’s an option. If you’re unemployed or thinking of making a career change, add ‘tuition reimbursement program’ to your career search criteria.
Tribal membership benefits. Most Native American tribes offer some sort of educational or college assistance program. Many, but not all, of these programs may require you to agree to work for the tribe for a specific time period upon completion of your degree. If you’re Native American, search your tribe’s website or contact the Bureau of Indian Education for specific details.
Military benefits. Most military branches provide college tuition assistance through several programs, such as Reserve Officer Training Corps (ROTC), grants, scholarships and loan forgiveness programs. Some of these benefits can even be extended to the spouse or children of military service members.
Apprenticeships. Apprenticeships allow a company to pay college or trade school tuition and offer the student a salary. The student must complete a number of field work hours determined by the Department of Labor. To learn more about apprenticeships, visit the US Dept. of Labor website.
In-demand jobs. Some schools and companies offer aid to individuals who pursue fields that are considered “in demand.” Examples include nursing, teaching, STEM (science, technology, engineering, and math) related programs and social work. Explore opportunities for tuition coverage through national programs like Teach for America and the National Institutes of Health. Many hospitals will also cover college and training expenses if the student will contract to work for them for a specific amount of time.
Tuition waivers. Many colleges offer tuition waivers for students who fall within certain income limits or meet other qualifications. Don’t limit your search to certain types of institutions. Some Ivy League schools offer free tuition to students who qualify.

It’s also a good idea to check out Reach Higher, the state system adult degree completion program. Reach Higher offers flexible class options and enrollment periods at eight of Oklahoma’s public regional universities and 14 public community colleges and technical branches. Depending on your career goal and the number of college credit hours you’ve already earned, you can choose an associate degree in enterprise development or a bachelor’s degree in organizational leadership, and many campuses are in the process of adding other degree options.

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My son just graduated from high school and is gearing up for college. I want to make sure he’s as financially savvy as possible. What can we do to better prepare him for his financial future before he starts school in the fall? (posted May 27, 2016)

Sending a child off to college can be both exciting and overwhelming for a parent. To ease a little bit of the chaos, here are some tips to make sure you’re sending off a money-smart child, whether it’s hundreds of miles away or just across town.

Be honest. Sit down and have a conversation about money. Tell him about your first experiences with money- both positive and negative. Money can be a taboo topic in some families, but children can learn valuable lessons from a parent’s financial successes and missteps.
Talk it up. Let him know about the importance of good credit and explain that credit mishaps early in life can follow him for years. You may feel more comfortable knowing your son has a credit card in case of an emergency. If so, help him shop around for the card with the lowest, fixed interest rate and reinforce the need to use it responsibly.
Make an outline. Work with your son to sketch out the educational expenses you’re willing to pay for and what costs you expect him to cover, so both parties have realistic expectations. Talk about who’s responsible for tuition, living expenses, school supplies, transportation, insurance and fun money. Then decide how your contribution will be exchanged. Do you want to pay expenses directly? Will the money be divided monthly in the form of an allowance, or will you provide a lump sum each semester?
Open an account. If you don’t currently have one, you may consider opening a joint checking account. This makes exchanging money easier and helps you monitor your child’s spending. Look for a financial institution with locations in your home town and near his campus.
Enroll in a class. Encourage him to enroll in a personal finance class offered by a local educational program. Learning about budgeting, saving, consumer credit, student loan management, identity theft and other important money management topics will give your child a firm foundation. If there are no classes offered in your area, browse the web for online resources you can walk through together.

Be sure to check out OKMM’s selection of online articles and tools at OklahomaMoneyMatters.org. The OKMM website also features an interactive budgeting calculator, age-appropriate publications, and self-paced learning modules, including Money Management for College Students.

As always, if you have money-saving tips you’d like to share, send us an email at OklahomaMoneyMatters@ocap.org or visit Ask OKMM to submit a personal finance question for a future edition of Financial Friday.

Thanks for participating in Financial Friday. It’s never too late to take control of your financial future!

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Can you shed some light on Oklahoma's 529 College Savings Plan? How does it work? What about fees? What happens to the money if my child decides not to go to college? (posted May 29, 2014)

You're not alone when it comes to wanting to save for college, but not fully understanding your options. In a recent study, Oklahomans were asked their opinion about saving for college and investing in Oklahoma's 529 College Savings Plan (OCSP). Of those polled, 86 percent said it's very important for their child or grandchild to go to college, but only 43 percent are saving to help them get there. This discrepancy may be due in part to confusion about savings options and a tendency to either under- or overestimate the cost of higher education.

To help you craft a more informed savings strategy, let's explore some of the finer details of Oklahoma's 529 Plan.

Who can open an account? There are no income requirements or limitations to participate, so anyone who's at least 18 years old and a U.S. citizen or resident alien can open and contribute to an OCSP account. Being a resident of Oklahoma isn't a requirement, but those living out of state may want to explore their state's college savings plan so they can benefit from any available tax breaks.
What fees are associated with the OCSP? As with most investment accounts, the OCSP does charge account fees, but they're low and paid indirectly out of the assets of your account. The annual fees are asset-based and cover the cost of investment management and administrative services. There are no sales charges, start-up or maintenance fees related to the OCSP. To learn more about the costs associated with an OCSP account, visit the Fees and Expenses page at OK4Saving.org.
How much money can I save in an account? The OCSP offers nine different investment options, giving you the flexibility to invest in one or several options to create the plan that best meets your needs. Each investment option requires an initial deposit of $100 and additional contributions must each be at least $25. Contributions can add up to $300,000 for each beneficiary.
Other than paying for college, are there additional benefits of participating in the OCSP? Those who participate in the OCSP enjoy some tax advantages. Money that's contributed grows tax-free, is state tax deductible up to a certain level -$10,000 per year for individuals or $20,000 for couples filing jointly- and may be payroll deducted by your employer. Any earnings in the account can grow tax-free and withdrawals are federal and Oklahoma income tax-free when used for qualified higher education expenses. Contributions may also reduce the taxable value of your estate due to federal estate and gift tax benefits. To learn more about these benefits and how they could affect you, visit with your tax advisor.
Are there limits on how the money can be used and where my child can go to school? Funds can be used at virtually any private or public university, college or career technology center nationwide and can be used to pay for qualified expenses (including tuition, mandatory fees, books, supplies and equipment required for enrollment or attendance; certain room and board costs and certain expenses for special needs students). Generally, an eligible institution is one that's an accredited, postsecondary institution that offers credit toward an associate's degree, bachelor's degree, graduate level or professional degree, or another recognized postsecondary credential.
What happens to the money if my child chooses not to go to college? If your child (the beneficiary) decides not to pursue higher education, you have the option to assign the account to another eligible beneficiary. The new beneficiary has to be a member of the previous beneficiary's family, otherwise the transfer is treated as a non-qualified withdrawal. Any withdrawal that's considered non-qualified is subject to federal and Oklahoma income taxes and a 10 percent additional federal tax.

To learn more about Oklahoma's 529 College Savings Plan, including investment option performance, how a 529 Plan compares to other investment options and how contributions can affect financial aid, visit ok4saving.org.

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When it comes to paying for college, I imagine I’ll receive scholarships and grants, however, I doubt this will be enough to cover my tuition and fees. I’ve heard about crowdsourcing your tuition. Is this a viable alternative to student loans? (posted March 29, 2013)

Crowdsourcing (in this case, crowdfunding) is growing in popularity as today’s students seek innovative ways to find money to help them pay for higher education. Through sites like StudentDonate.com, and GoFundMe.com, students are harnessing the power of the Internet to bring friends, family and even strangers together for a common goal – to help them pay tuition or pay off student loans through fundraising campaigns.

On sites like these, students create online profiles they hope will entice people to believe in their educational endeavors enough to contribute money to the cause. How much money is collected depends on how persuasive the profile is and how much the student markets it through social media platforms, emails or simply word-of-mouth.

While crowdsourcing is definitely an option, don’t forget these tried and true methods for finding and receiving financial aid.

Complete the Free Application for Federal Student Aid (FAFSA) as soon as possible after Jan. 1 each year you need financial aid. You must complete the FAFSA to qualify for any federal financial aid programs and some state aid programs, too.
Use search engines like FastWeb.com to explore available scholarships. And remember, grants and scholarships aren’t only for freshmen. Eligibility requirements change and new scholarships are added, so keep applying each year you need aid.
Talk to someone in your school’s financial aid office about grants, scholarships and school-specific aid you might qualify for.

If you do need student loans to bridge a financial aid gap, remember to borrow only what you need to pay for school. To learn more about your financial aid options and how to make smart borrowing choices from the start, visit ReadySetRepay.org.

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I think we’re going to need student loans to help pay for college. I've done some research and it looks like federal loans are our daughter’s best option. We’re concerned about taking on too much debt and want her to borrow as little as possible. Should her father and I take out the loans, or is it better for her to incur that debt? (posted Nov. 27, 2013)

It’s wonderful that you’ve researched your daughter’s financial aid options. At Oklahoma Money Matters, we tend to agree with what you’ve concluded. When it comes to choosing between federal and private or “alternative” loan options, we encourage students to maximize their federal student loan options before exploring private loans. That’s because federal student loans tend to have fixed interest rates and more flexible repayment options, like deferments, forbearances, and multiple repayment schedules designed to fit a variety of financial situations.

If she hasn’t already, we encourage your daughter to complete the Free Application for Federal Student Aid (FAFSA). Completing the FAFSA should be your family’s first step in the financial aid process. She must complete the FAFSA to qualify for federal loans, grants and scholarships, as well as some private grant and scholarship programs. Grant and scholarship funds are considered gift aid – aka free money! Encourage your daughter to study hard, make good grades, participate in extracurricular activities and apply for as many grants and scholarships as possible. The more free money she receives, the fewer dollars she’ll need to borrow to pay educational expenses.

Now let’s tackle who should carry the debt. Each and every family handles college funding differently. While we can’t say which solution is ultimately best for your family, we can offer some points for you to consider when making this decision.

Will helping your daughter fund her education put you in a financial bind or prohibit you from saving toward your own retirement? If you answered yes, it’s best to let your daughter incur and manage her own educational debt. This may seem callous, but there are substantial financial aid dollars available to help her pay for college. The same can’t be said for funding your retirement.
Will your daughter make more responsible choices with her financial aid dollars, work harder in class, and value her education more if she’s the one responsible for repaying her student loans? As consumers, we tend to assign greater value to accomplishments and take better care of responsibilities if we work to earn them.
Does your financial assistance have to be in the form of a student loan? If you and your husband decide you’re not in the position to borrow loans on your daughter’s behalf, perhaps you can contribute in other ways. Some families choose to assist with living expenses like car insurance, vehicle maintenance, or rent and utilities, which allows students to use aid dollars to cover tuition, books and other educational expenses.

Whichever route you choose, we encourage you to have an honest conversation with your daughter. Outline expectations and responsibilities on both sides, explaining what you are and aren’t willing to do to help her financially. Having this discussion upfront helps open lines of communication, setting the stage for ongoing discussions and potentially avoiding future conflict. Also, it’s a proactive and supportive step you can take to teach your child to responsibly handle her college debt – and that’s a lesson that will serve her well for the rest of her life.

To learn more about financial aid and federal student loan options, visit ReadySetRepay.org.

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My husband and I recently had a baby and we’d like to start a college savings fund, but we don’t know where to start. What are our options? (posted Sept. 28, 2012)

It’s great that you recognize the importance of saving for your little one’s educational future. Getting a head start is an effective saving strategy because the longer your savings can grow, the easier it is to reduce or eliminate the amount of money your child may need to borrow later to pay for higher education.

Luckily, your family has choices when it comes to selecting a savings vehicle. It’s important to shop around to find the option that will best meet your needs. To get started, check out these options:

Oklahoma’s 529 College Savings Plan. Contributions to this savings plan grow tax-free, are state tax deductible up to a certain level, and may be payroll deducted by your employer. Other perks associated with this type of plan include no income requirement to participate, a choice of investment options, and the option to transfer saved funds to another eligible beneficiary if your child decides not to attend a postsecondary institution. The money saved in a 529 Plan can be used at schools nationwide to pay qualified expenses (tuition, fees, books, and anything else that the school or the IRS deems necessary to attend that institution.) To learn more or enroll, visit Ok4Saving.org.

Coverdell Education Savings Account (ESA). An ESA is a trust or custodial account created to help families pay for elementary, secondary and college education expenses. While contributions aren’t deductible, they do grow tax free until distributed. If used for qualified educational expenses such as tuition, fees, or required books and equipment, then distributed funds are tax-free. With an ESA there are some limitations to consider; the amount you can contribute is determined by your income level, and the funds must be used by the time your child turns 30, or the earnings become taxable and a penalty is applied. Explore SavingForCollege.com to learn more about ESA options.

Gerber Life College Plan. The Gerber Life College Plan offers a different approach, acting as both an insurance policy and a college saving plan. Families who contribute to this savings plan agree to make fixed monthly payments for a set length of time and in return receive a guaranteed cash payout once the account has reached maturity. Another aspect that’s different from both the 529 Plan and the Coverdell ESA is that the funds saved through this method can be used for anything, not just your child’s education. It’s important to note that because this plan is a life insurance policy, the application does ask for health related information, and there may be some exclusions and limitations. Visit GerberLife.com to learn more.

You may also want to check out From Cradle to College, a great publication from UCanGo2 that’s filled with parent-friendly tips and information that proves it’s never too early to prepare your child for a successful future.

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My kids are 12 and 14, and I haven’t really made college savings a priority. How do I start saving money for college at this stage? (posted Sept. 28, 2007)

This is the million dollar question for a lot of parents! Ideally, college savings would begin at birth; however, we recognize that’s not a reality for everyone. If you’re part of the group that’s getting a late start, don’t panic—but don’t keep waiting, either. Start saving now! Here’s a plan of action to help you build a college savings nest egg.

First, figure out how much money your child will need; it’s hard to hit a savings goal if you don’t know what it is. Check out OKcollegestart.org for information about the average cost to attend one of Oklahoma’s many public colleges or universities. While there, encourage your child to create an online account, which allows students to bookmark favorite colleges and build a personal portfolio of grades and applications.

Now that you have a savings goal, there are several ways to build a college fund; shop around to find the plan that’s right for you (check out SavingForCollege.com to get the ball rolling). Two common methods are described below.

Contributions to Oklahoma’s 529 College Savings Plan grow tax-free, are state tax deductible up to a certain level, and may be payroll deducted by employers. Additionally, 529 plans have no income requirements or annual contribution limit, and if a beneficiary decides not to attend a post-secondary institution, contributed funds can be transferred to another eligible beneficiary. Visit Ok4Saving.org for more information.
A Coverdell Education Savings Account (ESA) is another option to consider. An ESA is a trust or custodial account created to fund elementary, secondary and college education expenses. Annual contributions, which grow tax-deferred, are limited to $2,000. Caveats to carefully consider: the amount you can contribute to an ESA is determined by your income level, and the funds must be used by the time the student turns 30, or the earnings become taxable and a penalty is applied.

As a supplement to your savings, encourage your child to apply for as many grants and scholarships as possible. Check out local organizations that sponsor scholarships such as your church and community groups (YMCA, 4-H Club, Kiwanis, Jaycees, Chamber of Commerce, Girl Scouts, Boy Scouts). Remember, scholarships are awarded based on a variety of criteria, including need, merit, residency, family history, skills, hobbies, and athletics. Check out the scholarship search function at OKcollegestart.org to learn more.

Also, don’t forget about the best deal in town - Oklahoma’s Promise, formerly known as OHLAP. If you meet certain income requirements and your child meets certain academic requirements and stays out of trouble, Oklahoma’s Promise will pay tuition at an Oklahoma public two-year college or four-year university. Students must apply in the 8th, 9th or 10th grade, so don’t miss the boat! Get the details at OkPromise.org.

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Budgeting

A friend suggested that creating a personal finance calendar with monthly and yearly tasks would help me stay on top of my finances. Can you explain how they work and how I can create one? (posted Sept. 1, 2023)

Creating a personal finance calendar can be an excellent tool to help you stay in control of your money and improve your financial well-being. Having a plan can assist you in staying on top of your finances by tracking monthly and yearly monetary tasks. This can include paying bills, reviewing your credit report and saving for retirement. Additionally, a personal finance calendar can help you avoid late payments and other - sometimes costly - financial mistakes. By staying organized and keeping track of your financial deadlines, you can avoid late fees and other penalties that may harm your credit score. Regularly reviewing services like insurance or your retirement plan will ensure you're getting the best deals. Creating your own personal finance calendar is simple. Consider these step-by-step guidelines to get started:

Determine your financial tasks: The first step in creating a personal finance calendar is determining the tasks to be incorporated. This can include paying bills, saving for retirement, reviewing your credit report, and tracking spending.

Group your tasks by frequency: Once you've determined your financial tasks, group them by frequency. For example, you might have monthly functions like paying bills and reviewing your budget, as well as a few yearly duties like evaluating your insurance policies and contributing to your retirement account.

Choose a calendar system: Next, choose a plan that works for you. This can include using a physical planner, a digital calendar, or a combination of both. Consider your preferences and lifestyle when choosing a system.

Add your financial tasks to the calendar: Once you've determined your tasks and chosen a system, add your information to the calendar. Remember to include due dates and deadlines to monitor your tasks.

Schedule reminders: Finally, schedule reminders for your financial obligations. This might include setting up alerts on your phone, sending yourself email reminders, or using other types of prompts.

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The price of everything is increasing, and I can’t keep up. My budget is maxed out, and I’m so worried about paying for all my obligations. How do you manage the stress? (posted June 2, 2022)

We all encounter financial challenges from time to time, and the stress can affect every part of our lives — including our health. According to the American Psychological Association, 65% of adults report feeling stressed about money. This is pretty significant, given the fact that stress is linked to so many health issues. Consider these tips to reduce and take control of your financial stress.

Prioritize what’s within your control: You can’t control everything that causes you stress because some things are simply out of your hands — like the cost of groceries or gasoline. Try not to dwell on those things, and focus your energy on what you can fix. For example: if you aren’t already on a bare-bones budget, look at ways to reduce costs like cutting out subscriptions, renegotiating with your utility companies and other service providers, and developing a spending plan if you don’t have one already.

Find ways to earn more: The unfortunate reality is you can only cut back on so many expenses — so if your budget is already stretched to the max, you might consider increasing your income. This can be done in many ways. Try increasing your hours at work or picking up a side hustle — ride shares or delivery services offer flexibility to your schedule, and you can get started quickly. If increasing your hours isn’t an option, consider having a garage sale to get rid of surplus items from your home. Bonus: you get to enjoy a clutter free environment when you’re done. Be creative. Consider your talents. Are you crafty? Are you handy around the house? Consider offering your services for a fee.

Pay essential bills first: If you’re worried about having enough money to cover everything, prioritize the necessities first — food, shelter, transportation, etc. While the prospect of not being able to pay all your bills is stressful, having a plan that shows what you can and will pay may help you feel a bit more in control.

Save money (if you can): If possible, save money. Every dollar you can save is one less dollar you’ll need to put on credit if there’s an emergency. Any money saved can also be used to pay on your bills and help you return to an on-time payment schedule. Consider bartering for services you may have to pay for such as babysitting, cooking, or getting your hair or nails done.

Talk to your lenders: If you have debt and are worried about being unable to make payments, talk to your lender BEFORE you have to miss a payment entirely. Many lenders have options to help borrowers during a crisis but they are only available before the payment is due. Lenders don’t want you to become delinquent so they’re usually more willing to work with you if you’re proactive.

Track your progress: Do the work to find out your exact money situation. While it may seem overwhelming at first, it’s easier to track your progress on things like paying off debt, once you know where you started. Seeing small bits of progress in the right direction can make huge improvements to your mood and emotional health.

Talk to a professional: If you’re completely overwhelmed, consider talking to a financial advisor or — if your stress is debt related — a credit counselor. Speaking to someone who can look at your financial situation objectively and assist you in creating a plan, can help you regain control.

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The weather has gotten colder and I'm noticing my energy bills are getting out of control. What are some tips to save on my energy bills? (posted November 22, 2019)

Fluctuating energy costs can make budgeting hard—especially in extreme weather months. Fortunately, there are several ways to reduce your costs. Consider using some, or all, of these tips to decrease your next energy bill.

Do an energy audit: Many utility companies will conduct an energy audit for free—like this one from OG&E—to find energy leaks in your home and ways you can save. If you aren’t an OG&E customer, you can also find a Home Energy Score Certified Assessor™ who can evaluate your home at homeenergyscore.gov or complete a DIY assessment with the tools found at http://hes.lbl.gov/consumer/.

Weatherize your home: Once you’ve tested your home, close drafts around doors and windows by installing weather stripping and insulating around any exposed HVAC pipes. Consider purchasing window dressings, which help curb the loss of energy through your windows.

Lower the temperature: The U.S. Department of Energy estimates that for every 8 hours the thermostat is lowered by one degree, you’ll save 1% on your energy bill. For example, setting the temperature a few degrees lower—or higher in the summer—while you’re away can save money without sacrificing a more comfortable temperature when you’re home. Consider purchasing a programmable thermostat and you’ll be able to program your daily schedule; some options, like Google Nest, Hive, and ecobee, offer an app you can use to adjust the temperature remotely from your cell phone.

Unplug appliances/electronics: Be sure to unplug countertop appliances and electronics when you aren’t using them. Many devices, like your coffeepot or microwave—even your phone charger—can continue to utilize energy even when they aren’t actively being used.

Make some swaps: Consider changing your light bulbs. Traditional light bulbs use more energy to operate than some alternatives, like LED bulbs. Additionally, you can consider changing to energy-efficient appliances and invest in smart power strips, which prevent electronics from draining energy when not in use.

Consider alternate cooking options: Cooking in the oven or on the stovetop uses a considerable amount of energy and makes your air conditioner work extra-hard in the summer. Minimize these costs by using an alternative energy source for meals that requires less energy, such as a crock pot, pressure cooker or outdoor grill.

Change up your laundry routine: Simple changes in your laundry routine can also make a difference in your energy bills. When possible, air-dry your clothes. If you need to use your dryer, throw in some wool dryer balls; they reduce drying time and save you from continually buying disposable dryer sheets to fight static in your clothes.

Once you’re able to successfully reduce your energy bill, consider redirecting the savings to your emergency fund or earmark the money toward another savings goal.

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I’m lowering some of my expenses to pay off my debt. I’ve cut back on a lot of unnecessary spending to put extra money in my budget, but I can’t get my grocery expenses under control. What tips do you have for spending less? (posted July 26, 2019)

Food costs continue to rise, and left unchecked, can break any budget quickly. For many people, grocery spending is one of the hardest areas in which to stay disciplined when cutting expenses. Before doing anything else, write down every cent you spent on food last month. This includes every time you went for take-out, every stop at the convenience store and every trip to the market. Separate those amounts into categories—eating out, snacks, grocery trips—and calculate the total for each category. Once you see the total amounts on paper, you can decide where cuts can be made.

Try these simple tips to lower your spending:

Plan your meals consistently. Plan the meals you’ll make for your family during the week. Some people develop meal plans for the entire month. Choose the option that works best for your family. The point is to make sure you’re only purchasing what’s necessary to avoid excessive spending on items you won’t use.

Shop the weekly specials. Check out the specials at your local grocery stores and work your meal plan around what’s on sale. Apps like Flipp put all the weekly ads and coupons for your local stores right at your fingertips. This is a fast and easy way to compare prices locally and decide which items to purchase for your family.

Reduce food waste. Many produce items come in large quantities that some families simply can’t use before the expiration date. Combat this by utilizing several recipes that have similar ingredients, which will enable you to actually use all those carrots or fresh herbs before they spoil.

Cook from home/meal prep. Many people get takeout because it’s easier than cooking dinner at home every night. This can be avoided with a little bit of preparation and forethought. Try cutting up vegetables on the weekend or cooking a batch of chicken that can be used throughout the week or frozen. Making dinner at home on a week night is much easier when most of your home-cooked meal is already prepared.

Eat in season. Join your local community-supported agriculture program (CSA) or visit a farmers market. In-season produce usually tastes best and is often cheaper.

Try coupons. Utilize coupons whenever possible. While not everyone has the time or patience to “extreme” coupon, apps like Ibotta or Target’s Cartwheel provide an easy way to save on items you were already planning to buy.

Buy store brands when possible. Many grocery stores offer their own generic versions of processed food. Depending on the item, these options are often cheaper per unit than name brands, and many taste just as good, too.

Go plant-based. Proteins like beef and chicken usually cost more than plant-based alternatives. To reduce your overall grocery bill, consider swapping meat items for a plant-based option instead. Using this method for as little as one meal each week can make a positive impact on your budget.

After a month or two of using these tips, evaluate what worked and what didn’t. Keep making adjustments until you find the approach that works best for your family’s lifestyle. With a little practice, you’ll be able to reduce your grocery spending and direct the savings to meet your larger goals.

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I've been trying to make my budget work for me and my family, but our expenses almost equal our income, with our utilities the largest expense. What can I do that will help give my budget some cushion and me some peace of mind? (posted February 22, 2019)

When your expenses are more than your income, there are two options: increase your income or decrease your expenses. While sometimes finding ways to do both may be necessary, a more immediate fix may be to decrease your variable expenses. Variable expenses are the incidentals that don’t have a set monthly amount, meaning those costs can be controlled by your family’s daily habits. Below are some ways you can cut expenses every month to give you a little breathing room in your spending plan. Small savings add up quickly.

Unplug appliances. Even if an appliance or electronic device isn’t turned on or hooked up to a charger, the outlet will still draw an electrical charge. Try unplugging small appliances, hairstyling tools, lamps and cellphone chargers when not in use.

Change light bulb wattage. Opting for a softer or lower wattage light bulb can help to reduce the amount of electrical pull the light has when switched on.

Invest in a programmable thermostat. Inexpensive thermostats can be purchased at most hardware stores. Seasonally you can program your heat to come on at a lower temperature, or air conditioning to come on at a higher temperature while you’re away from home. This change can have a dramatic effect on your utility bill.

Block out elements. Stabilize your home’s temperature as much as possible by insulating. In some cases, having your home’s insulation inspected may be required. Less expensive fixes involve checking the weather stripping and caulking around doors and windows, and investigating the foundation or roof for areas where animals or birds may have made entries into the attic or crawlspace.

Bundle utilities. Bundling your utilities can generate savings on monthly expenses such as phone service, internet and cable. Check with your provider to learn about deals that may be offered in your area.

Renegotiate services. Contact your current providers for utilities, insurance and other services to ask how your monthly bill can be lowered, or if there are better service plans for which you may qualify. If the provider isn’t willing to lower premiums, consider shopping around for a better deal.

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I’ve set a goal to spend less money this year, but I’m not sure where to start or how to make it work with my budget. How do I move forward? (posted January 25, 2019)

If your goal for 2019 is to spend less money, then you’re not alone. According to the Top 10 New Year’s Resolution List, 32 percent of survey participants listed saving more and spending less as one of their goals this year. Ideas for spending less can be found everywhere from Google to magazine articles to YouTube channels with “No Spend” weekly, monthly and—in extreme cases—yearlong challenges.

An important first step is to track your spending habits, so you can see exactly where your money goes. Lump related expenses into broad categories, such as housing, food, transportation, insurance, entertainment, etc. Once you’ve tracked and categorized your spending (find detailed information and helpful tools on OKMM’s Budgeting module), identify some specific areas in which you could save a little extra money when crafting your new budget.

To help you get there, below are a few ‘frugal innovation’ tips to help you save more and spend less.

Food. Eating out and food waste can be one of the biggest areas of money loss and spending. When grocery shopping, look for coupons for items you regularly use and shop at discount retailers. Plan out your meals and snacks ahead of time, and first shop your own pantry to see what you might already have, then buy only the ingredients you need to prepare the food you’ve planned. If you do eat out, bring a friend and take advantage of two-for-one deals or split an entrée.

Transportation. If it’s an option for you, walk, bike or take advantage of public transportation. If you have to drive, don’t forget to take into account extra costs like tuneups and new tires. Stash a little money away each month so you’ll be able to cover these expenses when they pop up. When filling the gas tank, comparison-shop for the best quality and lowest price. It’s important to stay on top of regular upkeep, like oil changes and tire rotation; following the manufacturer’s recommended maintenance schedule will lengthen the life of your car. It’s also a good idea to shop around occasionally for insurance to ensure you’re getting the best price for the level of coverage you need.

Entertainment. Many people have the best intentions when setting up a budget, but tend to leave out activities like eating out, stops by the convenience store and going to movies. Successful budgeters know that never having a meal out with friends or seeing the latest blockbuster is an unrealistic expectation. Set aside room in your spending plan for these types of expenses, bearing in mind that you will likely need to choose less expensive options like potluck dinner parties or trivia nights more often.

Furnishings. Currently, furnishing your home or apartment inexpensively is on trend. Do it yourself projects (DIYs), thrift store finds, and repurposing are continually explored in today’s media outlets. If you’re looking to update your décor, check out thrift stores, consignment shops, discount or direct sale websites, social media marketplaces, the classifieds and garage sales to get good stuff at a cheap price.

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I’ve attempted making a budget several times. Everything looks good on paper, but I always run short on funds as I get closer to payday. What am I doing wrong? (posted April 27, 2018)

Crafting a budget (also called a spending plan) that works for you is a process; it may take a few attempts to work out all the kinks. If you’re allocating funds towards your home, transportation, savings goals, and other routine expenses, but are still falling short, try monitoring your spending. Track every purchase you make for a week (or preferably a whole month) and categorize them by purpose (e.g. household, dining out, entertainment) to identify your spending habits. You may find that a significant portion of your spending is in areas you didn’t originally include in your budget, such as buying snacks when you stop to get gas, renting movies online, or morning coffee runs. Try some of these tips to fine-tune your spending plan.

Customize your spending. Money management is very personal. Budgets aren’t cookie-cutter, and using someone else’s ideals to determine how you should spend your money won’t work. Your spending plan should reflect your priorities, your lifestyle, and your/your family’s needs.

Look for ways to reduce expenses. You may not have to make drastic changes to your lifestyle to live within your means. Ways to save include unplugging appliances, changing to lower wattage light bulbs, blocking out elements with curtains and weather stripping, bundling utilities, renegotiating insurance premiums or cable services, eliminating unused memberships, canceling subscriptions and sticking to your grocery list. Instead of visiting your favorite barista, consider brewing your coffee at home. This will save you money and when you do buy your favorite coffee treat, it will be more enjoyable. Pack your lunch and snacks to take along to the office to curb unplanned vending machine or fast food splurges. Every dollar counts; small savings add up quickly.

Don’t leave out entertainment. It’s unrealistic to decide you’ll never see a movie, have lunch with friends, take a vacation, or do other similar activities that you enjoy. Determined budgeters have the best intentions when crafting their spending plans, but the reality is, when you leave out the fun, your resolve begins to wane and your plan will typically fail.

Find a method that works for you. The most important step is to find methods for tracking expenses and budgeting your spending that you actually enjoy using; otherwise, you won’t stick to it. Consider budgeting for the week instead of the whole month or aligning your budget to your pay periods. Depending on your personality, you may find that budgeting apps or computer software suit your needs, or you may prefer the old fashioned method of putting pen to paper. There’s no right or wrong approach—if one method isn’t a good fit, try something else until you find the process that works for you.

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I'm not a shopaholic, but I have no willpower when it comes to walking away from something I really want to buy. Please help me keep from wrecking my budget month after month! (posted October 31, 2014)

Ah, yes - the battle between wants and needs can be epic. Thankfully, winning the fight and salvaging your spending plan doesn’t have to be a nightmare. With the desire to improve and a few mental magic tricks, you’ll be well on your way to protecting to your budget.

Make a list, with a twist. Every time you go shopping, make a list and buy only what’s on it. When you’re tempted to buy something else, flip the paper over and start a new list for the next time you’re at the store. This practice gives you the opportunity to make sure the item fits into your budget.

Wait 48 hours. When temptation rears its ugly head, give yourself a cooling off period; put the item back and walk away. If the urge to splurge is still haunting you two days later, then consider making the purchase. Adjust your budget as needed to accommodate it.

Ask why. Good days, bad days and boredom can all be spending triggers. Any time an item looks too good to pass up, ask yourself why you want it. Avoid spending money “just because.” Impulse purchases may feel good at the time, but typically lead to regret.

Enjoy a sweet treat. Give yourself a weekly allowance. Having the freedom to spend fun money, with no strings attached, eliminates the remorse of an occasional splurge. Spend it all at once or save it up for a bigger treat - the choice is yours, and it’s completely guilt-free.

To boost your willpower and tackle temptation, practice these steps until they become financial habits.

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I’ve decided to face my fears and create a personal budget. I’ve heard that a member services representative at my local bank may be able to help. I’m a one-on-one learner and figure this could be a great option for me. Is this a good idea? If so, how do I take advantage of this service? (posted July 27, 2012)

Everyone needs a personal budget, so congratulations on taking this positive step toward managing your finances.

A budget, also known as a spending plan, can help you track and manage your income, savings, debt, and living expenses. Before seeking professional guidance, you’ll need to gather some documentation to make the budgeting process easier.

Income. Gather paystubs, bank statements or deposit slips to help you identify all your sources of income. Don’t forget to include tips, government assistance and gift money – every penny you have to work with counts as income.

Debts. List your debts from smallest to largest. For each, include the creditor’s name, the current balance, minimum monthly payment and due date.

Living expenses. For one month, track all of your spending – that means every single dollar, from vending machine purchases to insurance premiums. Not only will this process help you see your spending patterns, it will make it easier for you to create budget categories and show you where you can cut back, if needed.

Saving goals. Whether you’re in the market to purchase a home, take a family vacation or save for retirement, setting saving goals will help you stay motivated to stick to the budget you create.

Once you’ve gathered the necessary information, call your financial institution and ask to speak with
a customer service representative. Explain the services you’re looking for to see if they can help.
If your bank doesn’t offer the assistance you need, another source of one-on-one help is Consumer Credit Counseling Service of Central Oklahoma. CCCS has 12 locations throughout the state and offers free personalized budgeting sessions. To learn more or to schedule an appointment, call 800.916.4522 (toll free) or visit greenpath.com/cccsok.

While free services are an option, don’t completely rule out hiring a certified financial planner (CFP). A financial planner may be better prepared to address specific, complex financial situations like saving for educational expenses, preparing for marriage or divorce, or handling an unexpected financial windfall. Visit the Financial Planning Association’s website, FPAnet.org, to learn about the specific needs financial planners can help you address. To find a local CFP, visit PlannerSearch.org. When you have a few good leads, pick up the phone and ask about credentials, expertise, rates and other information you may want to know before setting an appointment.

No matter which service provider you choose, a reputable planner or counselor should take the time to talk to you and answer any questions you have, including asking about your financial goals and priorities, and offering objective advice to help you set long-term saving goals and build a solid foundation for a lifetime of financial success.

Don’t forget, we can help, too! Explore our self-paced Budgeting learning module to get a head start on creating the spending plan that’s right for you.

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For many people, getting paid once a month is extremely hard, no matter how much money you make. Where can I find resources to help me save and still have enough money to last through the month? (posted April 27, 2012)

That’s a great question. Finding yourself with more month than money is a struggle many of us can identify with. It takes discipline to budget your money to last four to five weeks, but it is possible!

Consider this alternative to more traditional budgeting methods. You’ll need three bank accounts – one for savings, two for checking. First, decide how much of each paycheck you want to put toward savings and have that automatically sent to your savings account. Next, put the rest of your paycheck into checking account 1. This is the account you’ll use to pay all your monthly fixed expenses, like rent, car payment and utilities.

Divide the money that’s left over after paying your monthly fixed expenses by four and set up a weekly automatic transfer of that amount into checking account 2. Use account 2 for all variable living expenses, like groceries, entertainment, clothes and eating out. The key to making this budget work is to refrain from transferring more money over or using credit cards.

To take this approach to the next level, consider moving to a cash-based system. It’s a proven fact; most of us spend more when using debit or credit cards than we do when paying with cash. After you’ve determined what your weekly allowance for variable expenses will be, grab some envelopes and write the name of each variable expense category in your budget on a separate envelope. Then, place the weekly amount of cash you plan to spend on that category inside. The beauty of this method is that once the cash in each envelope is gone, there's no more spending until the next week! This tactic forces you to spend only the amount you've allotted for each category.

Remember, there are a multitude of budgeting methods and tools available. If this one doesn’t meet your needs, don’t give up! Instead, try a different one until you find the right fit for you and your lifestyle.

Additional resources to help you maximize your finances:

The Freecycle Network – To get clothing, appliances and other household items for a steal, take advantage of this grassroots, nonprofit movement of people getting and giving items for free. Search by your location to see if anyone is giving away something you need. Help your wallet and the planet by keeping good, usable products out of landfills. To sign up and explore the benefits, visit Freecycle.org.

Mint - This free program allows you to pull all your accounts -checking, savings, investments, retirement - into one place so you can see your entire financial picture at a glance. Whether on your phone or on the Web you can set up a budget, track your goals and do more with your money! Visit Mint.com to get started.

SmartyPig – Reach your financial goals quicker with SmartyPig, a free FDIC-insured online savings account. Whether you’re saving for a wedding, vacation or just a rainy day, SmartyPig can help you reach your goal faster and gives you cash-back savings that makes your money go further. Check out SmartyPig.com to learn more.

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How can I keep my budget on track in a tight economy? (posted March 25, 2011)

Thankfully there are a lot of little money-saving steps you can take that can add up in a big way. Of course you can start cooking at home or brewing your own gourmet coffee instead of hitting the drive-thru. Examine your auto or home insurance to make sure you’re getting the best deal. Update your W-4 so only the necessary deductions are taken from your monthly paycheck. Or, you can be more careful about turning off lights when you leave a room. Beyond these simple tips, let’s examine some additional ways to save a dime or two.

When using coupons, only buy the things you regularly purchase or something new you were going to try anyway. Also, use your coupon when items are on sale and frequent stores that double coupons or let you partner a store coupon with a manufacturer’s coupon (hint: Target). All of these strategies will give your coupons more saving power. Visit local coupon blogs like MoneySavingQueen.com or CouponCloset.net to learn how to maximize your coupon use.

Think used instead of new. Freecycle and Craigslist are great online resources for gently-used, free or cheap items like furniture, clothing and children’s items. Not only is it a great way to get the things you need, but it keeps useful items out of landfills, so it’s good for your budget and the environment. Just play it safe when making pick-up arrangements. If possible, meet at a well-lit public place, like your local police station. It’s safer than inviting strangers to your home.

Explore consignment stores, thrift stores, flea markets and garage sales to find gently-used, sometimes new items. Plus, if you enjoy the thrill of the hunt, thrifting can be cheap entertainment.

If you prefer other forms of entertainment, visit Travelok.com to find free family-oriented festivals and events or check out Groupon or Living Social for wonderful discounts on great local services and entertainment like dining, spa treatments and event tickets.

Consider borrowing books and movies from your local library to bring a steady flow of new-to-you items into your home. If your local library offers movie nights, take advantage for some family-friendly fun.

You don’t have to make huge sacrifices to stay on budget. Just take a creative look at your spending and find simple ways to cut back just a little and get a better deal.

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How can I manage my money better without following the typical budget? (posted Jan. 28, 2011)

A well-developed budget helps many people manage their money, but some find it difficult to maintain their monthly spending plan. If that’s you, there’s good news! It’s possible to save and manage your money without following the typical spreadsheet budget. Here’s how.

Go on a spending diet. This can help jumpstart your ability to save money without following a budget. Review your finances to find your money pits and vacuums. Then brainstorm ways to reduce or possibly even eliminate these problems. Of course this doesn’t work on your fixed expenses, just the ones that fluctuate from month to month.

Go with free first. Before purchasing an item or service, see if it’s available for free. Books, music and movies can be borrowed from the library or from friends. Many health insurance companies offer free gym memberships. Even cable television shows can be viewed online. Look for no-cost options before shelling out money.

Focus on one category at a time. Instead of reducing your across-the-board spending by a certain percentage, focus on cutting back in one particular category. Whether it’s eating out, groceries or entertainment, look for ways to scale back. Once you’ve mastered one category, move on to the next.

Pay with cash. It’s a proven fact; most of us spend more when using debit or credit cards versus paying with cash. Consider implementing the classic envelope system. Grab some envelopes and write the name of each category in your spending plan on a separate envelope. Then, place the monthly amount of cash you plan to spend on that category inside. Forget your checks and plastic cards, use these envelopes instead. Once the cash in each envelope is gone, there's no more spending until next month! This tactic forces you spend only the amount you've allotted for groceries, gas, entertainment, clothes, etc. One word of caution-be sure you have a safe place to store your envelopes if you implement this plan. If your cash gets lost or stolen, there's no replacing your money.

Let your bank help. We all know that we can’t spend what we don’t see. For this budget-free method, you'll need three bank accounts: two checking and one savings. First, decide how much of every paycheck you want to put toward savings and have that automatically sent to your savings account.

Via direct deposit, send the rest of your paycheck to checking account No. 1. From this account, you'll pay all monthly fixed expenses, like rent, car payments and utilities.

With the money left over after paying your fixed expenses, divide by four and set up a weekly automatic transfer of that amount to checking account No. 2. Use this account for all variable expenses like groceries, entertainment, clothes and eating out. Refrain from transferring more money over or using credit cards. With this method, you save each month and have an accurate account of your spending money from week to week.

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It seems like every month we have our ducks in a row … then something comes up, like a birthday party, a baby shower or a wedding. Almost every weekend something comes up and at the end of the month our bank account is famished. How do we go about setting a budget or sticking to what we already have? (posted Aug. 29, 2008)

Sounds like you’ve got a case of the gift-giving blues, a common problem in many households this time of the year. When setting up your monthly budget be sure to include a “gift-giving” category, setting aside funds for these types of expenses. No parties this month? Roll the funds to next month’s budget or add them to your savings account for next time! It’s also a good idea to build a “miscellaneous” category into your budget to handle other unexpected costs.

Try these tips to get the most bang for your gift-shopping buck and keep your budget on track.

Shop at discount stores. Stores such as Ross, T.J. Maxx, and Marshalls (among other popular discount chains) are good places to buy brand name items for a lot less. People don’t have to know you didn’t spend a fortune on a gift.

Plan ahead. Typically, wedding invitations are sent out at least a month in advance. This allows a little bit of wiggle room to plan for the upcoming gift purchase. Baby showers are normally set later in the pregnancy, so start your baby gift fund once you receive news from the mother-to-be. In addition, put those lovely once-a-year birthday celebrations on your calendar and set a reminder one month in advance so you have time to save some extra cash. Preparing yourself for these little expenses (that really add up!) is a solid start.

Build a buffer. When balancing your checking account, don’t let yourself reach $0. Instead, designate another amount – $50 or $100 – as your break-even point. This creates a buffer for emergencies and helps keep you from going into the abyss. So, when that surprise birthday party comes up the weekend before payday or that crazy couple you love (but don’t quite understand) runs away to Vegas to get married, you won’t have to turn the cushions over on your couch or vacuum out your car for spare change!

Be creative. Give something homemade or offer your help with special projects. Help the mother-to-be create the baby’s scrapbook templates. Try helping the lovebirds by serving cake or handling the guest book at the wedding. Your time and assistance are worth much more than a lavish gift.

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I’ve heard a lot lately about creating a spending plan, but do I really need one? (posted Nov. 27, 2006)

You bet you do. Spending your money without a plan is like traveling cross-country with no map. Without charting your course in advance, you may reach your final destination, but the journey could be filled with unnecessary twists and turns, dead-ends and road blocks.

Thinking of a budget as a road map to financial happiness - instead of a restrictive, binding “spending diet” - helps us see the big picture. One of the main reasons budgets fail is a negative attitude. Stop your stinkin’ thinkin’ and view your spending plan as a way to reach your financial dreams and goals! Budgets aren’t one-size-fits-all; the structure depends on your spending priorities and saving goals. This means you have control of your money, not the other way around … and that’s the very definition of financial freedom.

Tracking your day-to-day spending is an important part of budgeting. Check out tips to help you stay on top of your spending under the "Spending" section and use those tips to build a workable budget that reflects your true needs and priorities, leaving room to reduce debt and save for the future. Let’s get started!

Make it easy by selecting a “canned” budget worksheet as a model; solid options can be found at Bankrate.com, practicalmoneyskills.com, or goodpayer.com. Using the categories you created when you started tracking your spending, add or delete categories in the worksheet to personalize your spending plan. Be sure to include expenses that don’t occur on a monthly basis, like property taxes and insurance, and add a category for paying yourself FIRST. Saving should be part of your monthly budget, not something you do if money is left over.

Use current pay stubs to calculate your average monthly net income. Add other forms of household income, including interest income, bonuses, child support, etc. Once your average monthly income is determined, assign an amount to each expense category. Try to be as realistic as possible; monitoring your spending will help you determine how much to include in each category. (Don’t forget to keep track of cash transactions and reflect them in the appropriate section!)

Subtract your total monthly expenses from your total monthly income. Have money left over? Dump the extra dough in your savings account or use it to reduce debt. Expenses exceed your income? Review your spending and decide where you can cut back. Then do it.

Stick to your new budget for a couple of months, then evaluate and adjust as needed. Remember, this is a fluid plan – as priorities shift and goals change, your budget should follow.

It’s your life, it’s your money and the budget is your tool. Make it work for you!

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What is the easiest method to track your spending, especially outside the home? (posted Oct. 27, 2006)

If only our wallets could talk! If they could, we’d truly know where our money goes and how it’s spent. Unfortunately (or fortunately?), that’s not the case. Tracking day-to-day spending takes diligence, but it’s a critical stepping stone to financial happiness and a building block for other important processes, like creating a budget. Keeping track of purchases allows us to curb wasteful spending and direct our money to true needs and priorities.

While the methods below aren’t one-size-fits-all, they are tried and true tips to help plug the leaks. Find the one that fits your lifestyle and stick with it!

Retain receipts. Drop your receipts in a jar or box nightly (after balancing your checkbook, of course) for a month. At the end of the month, tally those slips and list them in assigned categories; you’ll see some obvious spending patterns emerge.

Put pen to paper. Carry a little notebook and write down everything you spend, down to the penny. This captures even the smallest expenses, such as trips to the vending machine and travel tolls, which can add up quickly.

Go green. Take a cue from past generations and use cash whenever possible. While it’s easy to go overboard with debit or credit cards, we have an emotional attachment to dollars. Create envelopes for your expense categories (i.e. groceries, movies, gas, clothing, eating out) and put a pre-set amount of cash in each envelope. When the envelope is empty, you’re done spending. Period. This system not only helps you monitor outflow, but also helps you stick to the plan!

Save with software. Technically inclined? Computer programs like Quicken and can help you balance accounts and track expenses electronically. You’ll still need to keep bills and receipts, but these programs compute category spending for you and offer graphs and charts to illustrate where your money goes, among other helpful features. Most programs are relatively inexpensive and user-friendly, too.

Regardless of which tracking method you choose, the key is staying the course long enough to identify spending trends and shift your financial focus to more important goals, like debt reduction or savings.

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It seems like every month we have our ducks in a row … then something comes up, like a birthday party, a baby shower or a wedding. Almost every weekend something comes up and at the end of the month our bank account is famished. How do we go about setting a budget or sticking to what we already have? (posted Aug. 29, 2008)

Sounds like you’ve got a case of the gift-giving blues, a common problem in many households this time of the year. When setting up your monthly budget be sure to include a “gift-giving” category, setting aside funds for these types of expenses. No parties this month? Roll the funds to next month’s budget or add them to your savings account for next time! It’s also a good idea to build a “miscellaneous” category into your budget to handle other unexpected costs.

Try these tips to get the most bang for your gift-shopping buck and keep your budget on track.

Shop at discount stores. Stores such as Ross, T.J. Maxx, and Marshalls (among other popular discount chains) are good places to buy brand name items for a lot less. People don’t have to know you didn’t spend a fortune on a gift.

Plan ahead. Typically, wedding invitations are sent out at least a month in advance. This allows a little bit of wiggle room to plan for the upcoming gift purchase. Baby showers are normally set later in the pregnancy, so start your baby gift fund once you receive news from the mother-to-be. In addition, put those lovely once-a-year birthday celebrations on your calendar and set a reminder one month in advance so you have time to save some extra cash. Preparing yourself for these little expenses (that really add up!) is a solid start.

Build a buffer. When balancing your checking account, don’t let yourself reach $0. Instead, designate another amount – $50 or $100 – as your break-even point. This creates a buffer for emergencies and helps keep you from going into the abyss. So, when that surprise birthday party comes up the weekend before payday or that crazy couple you love (but don’t quite understand) runs away to Vegas to get married, you won’t have to turn the cushions over on your couch or vacuum out your car for spare change!

Be creative. Give something homemade or offer your help with special projects. Help the mother-to-be create the baby’s scrapbook templates. Try helping the lovebirds by serving cake or handling the guest book at the wedding. Your time and assistance are worth much more than a lavish gift.

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Credit

Thank goodness for my tax refund! It allowed me to pay off the last of my credit card debt. Should I now close the account since I no longer have a balance due? (posted April 29, 2021)

Nice work paying off your debt, but the answer to your question isn’t quite as clear-cut as you’d think. There are several factors for you to consider before closing an account, such as your credit score, credit behavior and credit expectations. Review the advice below before ending the relationship with your credit card provider.

Be Credit Conscious. Your credit score is comprised of the following five categories:

Payment History - 35%

Amount Owed - 30%

Length of Credit History - 15%

New Credit - 10%

Types of Credit - 10%

The length of your credit history refers to the average age of your credit line. Given credit history is the third largest category in determining your credit score, closing a credit card account could actually lower your score. Lenders tend to look more favorably on consumers who’ve had standing accounts for a period of time as it’s seen as an indicator of financial stability.

Be Credit Cautious. If you tend to rack up more charges every time you pay down your bill, leaving your credit card open may pose too much of a temptation for you. The total amount of money you owe on a credit card can affect both your credit utilization ratio and your minimum payment due each month. If your amount due is too high to manage and it goes unpaid, both your amount owed and your payment history, which affect your credit score the most, will suffer. Your credit utilization ratio is a measure of your outstanding credit card balance in relation to your credit card limit. Lenders prefer that consumers use 30% or less of their credit limit total on all credit accounts. That means that if you have a credit limit of $1,000, a lender would see credit usage of $300 or more as a potential risk. Higher credit utilization percentages equal lower credit scores. Conversely, retaining an account with a zero balance - if you can avoid running the balance back up – lowers your credit utilization ratio, which improves your credit score.

Your credit report is a snapshot of your credit accounts, balances, and payment history within the last seven years. As such, paying off your credit card will not immediately erase the account from your credit history. However, when the account is finally removed from your credit report, you could see a drop in your credit score reflecting the account closure, because as previously noted, an open line of credit with no balance positively impacts your credit utilization ratio. You can request a free copy of your credit report once every 12 months on AnnualCreditReport.com. You may also want to consider using a credit monitoring app to keep track of your credit score.

Ultimately, the decision to close a credit card account is up to you. If you decide closing your account is the best option, notify the card issuer and shred the card. Afterward, watch your credit report to make sure the account has actually been closed.

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I received a letter offering a pre-screened loan of $1,400. I don’t have the best credit and could really use the money. Is this a good option for me? (posted August 31, 2018)

There are many types of credit available to the public, but pre-screened offers may not be your best option. Below are some things to be aware of when considering a pre-screened offer.

Interest rates. Pre-screened loan offers are typically installment loans, through which the balance is paid out over several months. Installment loans can have extremely high interest rates. Interest rates and fees can make a big difference in how much you’ll pay over the life of a loan, sometimes resulting in total payments that are double what you originally borrowed.

Credit rating. Before you received that letter, the lender conducted a ‘soft credit inquiry’ to see if you qualified for the pre-approval offer. This type of credit check does not impact your credit score. However, if you choose to accept the offer and apply for a loan, the lender will review your credit as part of the application process. Because you authorized the review, it is considered a ‘hard inquiry’ and will usually lower your credit score by a few points. Generally speaking, hard inquiries stay on your credit reports for about two years. Additionally, these types of loans are often considered unfavorable by other potential lenders. Multiple installment loans can be a red flag to lenders that a borrower has trouble managing personal finances and is prone to overextending credit, which can lead to loan default.

Revolving/automatic renewals. Often, these loans will automatically renew at the end of the loan cycle. This process can put borrowers in a precarious financial situation that is difficult to resolve. Be sure to read the fine print to avoid any terms that could trap you into borrowing more money than you intended or paying substantial unexpected fees.

While a pre-qualified loan may seem to be a good option when you’re in need of extra cash for a specific purpose, if you’re in the market for a loan, work with a reputable financial institution. A bank or credit union is a good place to start, because a loan officer can go over your best credit options. If you don’t qualify for a loan, a secured credit card may be a good tool to help you establish a solid credit history. Building an emergency savings fund is the best way to prepare for a financial emergency and reduce your reliance on credit. Check out OKMM’s website for tips on budgeting for emergency situations and developing a positive credit history.

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Payday Loans

: I’m desperate for money and on the brink of financial ruin. I’m considering taking out a payday loan. Any advice? (posted April 24, 2020)

Payday loan companies market themselves as short-term, fast money lenders that typically expect payment in full within two weeks or on the borrower’s payday. They’re convenient, too; in 2019, Next Gen Personal Finance stated there were more payday loan locations than McDonald’s or Starbucks locations. Sounds easy enough, right?

Well, maybe not so easy. The interest rate on payday loans can be incredibly high, in some cases as much as 350%. To break that down, if you borrowed $300 on a payday loan with an interest rate of 350%, you’d pay $1,050 in interest on top of your original $300 loan – which makes your total repayment $1,350. That’s almost four times the amount initially borrowed! Whether you’re trying to cover an emergency expense like car repairs or a hot water tank replacement, or you’re simply trying to pay everyday living expenses like utility bills, a car payment or rent, payday loans are risky and lead many consumers into an ongoing cycle of borrowing. Even though payday loans are touted as a temporary solution, meant to be repaid within one pay cycle, that’s often not the case. The majority of payday loan borrowers continue to roll old debt into new loans, creating a vicious borrowing cycle that’s difficult to break.

If you find yourself in an emergency situation and need money immediately, there may be alternatives that can keep you from getting into the cycle of debt that payday loans can cause.

Negotiate with companies you owe. The first and best thing to do when you’re unable to make a payment is to contact the entity you owe. Ask your utility company, student loan servicer, cell phone provider, and any other company you owe if they offer payment options or if you can temporarily suspend payments. If you must cancel a service altogether, be sure to verify any cancellation terms or fees, as well as the effective date of the cancellation. Always document the time and details of your conversation, as well as with whom you spoke.

Look for local assistance. There may be programs in your area that offer financial help in a crisis. Churches, food banks, local human services agencies and donation centers can provide assistance to alleviate some of your spending, allowing you to allocate extra money to a specific obligation you need to deal with right away. You can also call 2-1-1, a resource that provides easy access to community services that help those in need.

Consider an advance. Depending on where you work, your employer may allow you to take an advance on your paycheck to help with an immediate need. Sharing the details of your difficult financial situation with your boss or HR department may be embarrassing or upsetting, but this option probably comes with low risk and a low cost. Some companies are even using third party vendors that work directly with employees to handle the inquiry for funds, payment, and repayment to keep your request private. Consider a paycheck advance very carefully. Since repayment for this short-term loan will be deducted from your future earnings, if you’re living paycheck to paycheck, an advance could create an ongoing shortfall.

Ultimately, it’s your decision whether or not to take a payday loan. If you do decide to go that route, do all you can to pay the money back in full by the due date. Avoid rolling the amount you owe into a new payday loan, which will only create even more debt at a likely higher interest rate.

This August, Oklahomans will see a specific change in payday lending due to the passage of Senate Bill 720. SB 720 created the Small Lenders Act, requiring specified lenders to acquire a license to provide small loans and adhere to modified restrictions. Even with these new restrictions in place, small loan businesses in Oklahoma can still charge up to a 204% interest rate, won’t have to require the borrower to demonstrate ability to repay a loan before extending credit, and can still declare a borrower in default as early as one day after a missed payment. Read more about SB 720 on the state legislature’s website.
For more information about getting out of debt and to access a personal budgeting tool and other finance resources, visit OKMM’s Consumers page.
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I'm considering taking out a payday loan to help with some extra expenses. I like that these loans are relatively easy to get, but I've heard some really negative things about them. What are my other options? (posted April 29, 2016)

According to nbcnews.com, there are more payday lenders in the U.S. than McDonald’s restaurants. That says a lot - not only about the number of payday loan companies, but also the demand for them. “A large number of Americans are living paycheck to paycheck…they’re one unplanned expense from being in financial distress.” says Greg McBride, Chief Financial Analyst for Bankrate.com

Since you’re considering a payday loan, it’s likely you’ve found yourself in a financial bind. Whether you’re trying to cover an emergency expense like car repairs or a hot water tank replacement, or you’re simply trying to pay everyday living expenses like utility bills, a car payment or rent, payday loans are risky and lead many consumers into an ongoing cycle of borrowing. Interest rates for short-term loans are outrageously high and on-time payday loan payments aren’t reported to credit reporting agencies, while a poor payment history is.

When faced with unexpected expenses, consider these alternatives to payday loans.

Use any saved money you have available. When your situation improves, make a concerted effort to replace your savings. Three to six months’ worth of necessary living expenses is ideal.

Stretch your paycheck temporarily by talking to your service providers about modifying your payment arrangement or negotiating a lower payment amount.

Explore financing options, like credit builder accounts, through a bank or credit union.

Contact local agencies that provide assistance through benevolent fund programs, like Community Action Agency, Salvation Army, United Way, your local food pantry or Consumer Credit Counseling Service of Central Oklahoma, which offers free and low-cost financial management services, including creating a customized spending plan, reducing interest rates, bringing delinquent accounts current, and other debt-management negotiation tools that can help you get a handle on your finances.

If you’ve already borrowed a payday loan, do your best to avoid taking out another one. Consider contacting the payday lender to negotiate a payment plan; this will break the borrowing cycle by dividing the payment into more manageable monthly payments. If you want to pursue that approach, the Consumer Federation of America suggests contacting your bank for information about stop-payment options on the check used to secure the payday loan while you’re working out the payment arrangements. Research your legal obligations before stopping payment; some states consider it a criminal offense to stop payment or close a bank account with pending payments.

Also, be mindful of payday loan debt consolidation scams. Stay away from any agency that requires you to pay an upfront fee to consolidate your loans. It’s better to work with a reputable, nonprofit agency that offers free debt counseling. Focus on building your emergency savings and creating a spending plan you can stick to. With these tools in place, you won’t need to rely on payday loans in the future.

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I’ve taken out several payday loans and I’d really like to break the borrowing cycle, but I’m not sure how. Where should I start? (posted July. 26, 2013)

Whether you turned to short-term, high fee payday loans to deal with an emergency or to simply take care of day-to-day expenses, you’re not alone. The Consumer Financial Protection Bureau (CFPB) reports that the average payday lending consumer takes out 11 payday loans in a 12-month period, sometimes paying more than $781 in fees.

Even though payday loans are touted as a temporary solution, meant to be repaid within one pay cycle, that’s often not the case. The majority of payday loan borrowers continue to roll old debt into new loans, creating a vicious borrowing cycle that’s difficult to end.

While digging your way out of payday loan debt won’t be easy, the effort will be worth it. Here are some steps to consider when creating your repayment plan.

Look at the whole picture. In order to create a repayment plan that works, you’ll need to have a clear understanding of your debt situation. Start by making a list of all your payday loans and their current balances, listing them from smallest to largest.

Borrow smarter. Most likely you won’t be able to break away from your borrowing cycle immediately. Instead, focus on borrowing less money each time you need a loan. Take advantage of community resources, like clothing closets or food pantries, to help you get necessities and free up extra money each pay period so that you can focus on paying down your debt.

Create a budget. Use OKMM’s budget calculator to subtract your expenses from your total income. Cut any expenses you can and commit the leftover dollars to reduce your debt, tackling the loan with the smallest balance first so you see faster progress. If your budget is already stretched to the limit, brainstorm ways to bring in extra income you can apply to the debt.

For one-on-one help with creating a customized budget or debt-management plan, consider talking to a certified, nonprofit credit counselor. Many counselors offer a free analysis of your finances to help you get started. To find a reputable credit counselor in your area, visit the National Foundation for Credit Counseling’s website NFCC.org.

Build an emergency fund. Once you’ve got a handle on your current debt situation and have more money coming in than going out, stash some cash for future unexpected expenses. Aim to save enough money so that you’re prepared when the next emergency strikes. Whether you can save $5 a week or $10 a month, every little bit you can put away will help you get ahead and hopefully, avoid payday loans in the future.

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Credit Cards

My husband and I want to get our daughter a debit card of her own so we can start teaching her about money management. There are so many options that we're a little overwhelmed. How do I pick the best one? (posted May 4, 2023)

In the age of digital cashless payments, it’s become more and more important to have a debit card. Starting early with a debit card can also help you teach your child how to make their own financial decisions, learn how to budget for current and future expenses, how to prioritize savings, and even learn how to fix money mistakes while still having the parental supervision to keep them from real money issues.

If you’re considering getting your child a debit card, here are some things to keep in mind when comparing the options:

Age Restrictions: While there are numerous kid-focused options for learning money management, many cards require that the child is at least 13 years of age. Be sure to read the fine print before signing up.

Parental Controls: Many children’s debit cards have spending controls, and some may offer more than others. When comparing options, consider if they have things like spending alerts, merchant blocking or the ability to lock or unlock the card remotely.

Fees: Some debit cards for children are free, but most have a monthly fee attached for additional features. Be aware of any extra fees that may come with the card — such as overdraft fees, and reload or ATM costs. Just because it’s free, doesn’t mean it’s actually free. Depending on your needs, the useful features may outweigh the monthly costs.

Limits: Be aware of spending and transaction limits on debit cards. Some offer lower limits than others, so make sure to understand the type of spending you expect your teen to do before signing up.

Minimum and Maximum Balances: Since children usually don’t have significant sources of income, accounts that allow kids to maintain a small balance can be a useful thing to consider.

Mobile App: Look for debit cards that have a mobile app associated with them. These will allow your child to monitor their own spending and — depending on the card — may have features to help them budget and save.

Educational Features: Consider if the debit card you’re using has extra educational resources tailored to children. If so, they may assist you as you guide your child on their journey to learning money management.

Extra Features: Many apps offer additional features that provide things like allowance transfers and chore tracking, as well as the ability to split money into separate categories such as spending, savings and charitable giving.

Whichever card you choose in the end, it’s important that you talk to your child about their spending. For more resources on how to teach your kids about money, check out Oklahoma Money Matters’ resources for parents at OklahomaMoneyMatters.org.

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Is it better to use a debit card or a credit card when purchasing items? Or is cash the best option? (posted June 30, 2022)

First, let’s break down the difference between debit and credit cards.

Debit cards can be used in place of cash to make purchases. They allow you to spend using the money currently in your bank account.

Credit cards allow the user to purchase goods or services on credit, which must then be paid back at a later date.

Many of us were taught to use cash instead of credit or debit cards to save on interest charges and fees, but also to be more aware of how much we spend and to reduce exposure to electronic theft. Cash purchases can help you avoid debt, stick to your financial plan, and avoid interest, but cash may not be feasible for large items. Debit cards provide convenience, allow online shopping, and often provide purchase or fraud protection, but banks take the money out of your checking account immediately. Credit cards extend the same protections and help build credit, but they can lead to debt and lower credit scores unless you have a set spending plan and pay off balances each month.

Cash is still necessary. In 2021 the Diary of Consumer Payment Choice found that cash accounted for only 19% of all payments. In 2019 the percentage was much higher at 26%. This statistic is startling to older adults as they use cash transactions more often than younger adults. College students use cash for only 3% of all purchases. Some retailers accept cash only to avoid fees they’re charged on credit card purchases, allowing them to pass the savings on to customers.

Using cash is a popular budgeting option. According to MoneyGeek, the average Oklahoman had $5,271 in credit card debt in 2020. A “cash only” policy can help you avoid credit card debt making it easier to stick to your budget by either using the “envelope” budgeting system or keeping track of how much money is gone from your wallet. Suppose you withdraw $200 from each paycheck for your discretionary spending, and you spend it two weeks before your next paycheck. In that case, you know your available cash is gone until the next pay cycle.

Debit card use is fast approaching that of credit cards. College students use debit cards for about 40% of spending and credit cards for about 49%. Paying with a debit card is similar to using cash and can be a good option for everyday spending. Since debit cards directly connect to the funds in your checking account, some debit cards companies won’t allow you to spend more than you actually have. Using a debit card can be a great compromise between cash and credit.

If you have struggled to pay your bills on time, setting up automatic payments using your debit or credit card is an excellent way to manage recurring expenses.

Credit cards offer both positives and negatives. Credit cards often have protection for purchases and fraudulent charges and can also be a great tool to help raise your credit score. Monthly on-time payments contribute to a positive credit score. Even regular payments on small balances will boost your credit rating. The most significant risk of using credit cards is the high potential for debt. Debt levels can be considerable if you make purchases month after month that you can’t pay off.

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I’m ready to get my own credit card! What should I know before I sign on the dotted line? (posted August 27, 2020)

Credit, by definition, is the ability to borrow money or access goods or services with the understanding they'll be paid later. A credit card is issued by a bank or lending institution and will allow the user to access a line of credit for purchases. Using a credit card wisely can help the user build credit. It’s important that consumers know each company’s policies before deciding to apply for a credit card.
Regardless of how good the offer sounds, do your research. For starters, look for credit cards that offer:

No Annual Fee. Many credit card companies no longer charge annual fees. According to CreditCards.com, there are certain types of credit cards that are more likely to have annual fees than others. Credit card companies charge an annual fee to offset their cost from the rewards and other bonuses they offer. The more valuable the rewards, the more likely there will be an annual fee.

Low, Fixed Interest Rates. Lenders charge interest to their customers for borrowing their money. Simply put, it’s how lenders make money. Financially risky customers will typically be charged more interest than customers with a good credit history. Credit card companies can actually charge different interest rates for different types of transactions. The rates can also vary depending on when the charge was made. Choose cards that have low interest rates that don’t change from month to month. Every credit card company must have a consumer disclosure or user agreement as required by federal law. Review the agreement carefully for details on interest rates and how they are applied. Most agreements can be found on the credit card company’s official website.

Transparency. Creative marketing can make one card look better than another at first glance. Dealing with hidden fees and a lengthy list of credit card terms can be frustrating and a major budget buster. Search the card’s user agreement for clear, written explanations of rules for balance transfers, cash advances, late fees, due dates, and penalties. Reading the fine print is the best way to avoid unexpected charges later on.

Benefits and Rewards. Credit card companies use cash back, balance transfers, and other benefits to incentivize business. Cash back is a popular rewards program that returns to the customer a percentage of the purchases made on the card over a specific period of time. Sometimes cash back is based on certain spending categories (like grocery shopping or traveling). Balance transfers can be a strategy to pay down debt. People typically use balance transfers when they have a high balance on their card and wish to reduce the debt by transferring that balance to a new card with a lower interest rate. Sometimes the lower rate is part of an introductory offer, so be careful to note when that rate will change.

Bottom line, credit card users should carefully review the company’s user agreement before consenting to any service. Visit trusted websites like CreditCards.com and BankRate.com to research helpful credit card information and compare the options.

Remember, credit cards are financial tools that if left unmanaged, can wreak havoc in anyone’s life. The best advice: always make credit card payments on time, and pay in full every month to avoid accrued interest. Late or missed payments can quickly damage your credit rating. If you can’t pay your balance in full, pay as much as you can, create a plan for paying off the remaining balance as quickly as possible, and stick to that plan.

For more information about credit cards and successfully managing your credit, visit OklahomaMoneyMatters.org.

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I charge no more than half the available balance of my credit cards and I pay my minimum balance on time. I did charge a little more than usual on Black Friday to purchase gifts, however. Now my credit score has gone down even though I haven't maxed out all my cards. What's going on? (posted December 27, 2019)

You're already showing discipline by paying your bills on time and not maxing out your credit cards. One reason you’re seeing your credit score decline may be credit utilization. Credit utilization is the ratio of your outstanding credit card balance to your credit card limit. For example, if you have a $100 credit limit and an available balance of $20, then you’ve spent $80. In other words, you've spent or utilized 80% of your available credit limit. Financial educators recommend a maximum 30% credit utilization. This means you should not utilize more than 30% of your credit limit on your charge accounts. Using the same example of a $100 credit limit, charging no more than $30 on the account (for a credit utilization of 30%) will help maintain your credit score or possibly raise it. Credit utilization is the second largest factor in determining your credit score; it makes up 30% of the overall score. Keep your balances low and keep your credit score high by following these tips:

Attack your balances. Focus on paying off any credit card balances. Pay a set amount on all cards or focus on paying one balance down, then moving to the next. Or you may want to attack the card with the highest balance as a starting point. Stick to it and finish strong with the method you choose.

Keep a zero balance. Once you eliminate your balances, try to keep them at zero. A credit utilization ratio of zero is better than one at 30%! Consider that some credit companies will close your account if you have no balance or activity (which can sometimes adversely affect your credit score.) You can, however, make a credit purchase and immediately pay it off at the register to show some record of activity on the card without having a balance.

Card lock. Card locks are typically used for panic moments when you think your card has been stolen, misplaced or compromised. You can also strategically use a card lock to discourage yourself from charging anything to your account. The time it takes to contact your card provider and ask that your account be unlocked for a purchase may be enough to dissuade you from spending the money at all.

Transfer balances. From time to time, credit card companies offer savings with 0% transfer rates. A balance transfer involves moving debt from a high-interest credit card to a new card with a lower interest rate, ideally one with an introductory interest rate of 0% for a set period of time. You’re basically using one card to pay off another. Since you aren’t paying as much in interest, if you pay off the balance in full during the introductory period, you’ll have saved more money and paid the debt off faster.

Balance alerts. Balance alerts are brief notifications from your creditor regarding how much you owe. These alerts warn you about potentially unauthorized charges or late fees assessed on your account. They also notify you of your current balance due, which may curb your interest in making a particular purchase. Many companies offer this feature through mobile apps; however, you could also request alerts by contacting them directly.

Keep in mind, raising your credit score doesn’t happen overnight. Lowering your credit utilization percentage and improving your credit score could take months, or even years. The point is, every positive step you take brings you closer to a healthy credit record.

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What’s a universal default clause? (posted May 25, 2018)

The universal default clause allows credit card companies to regularly review a customer's credit report for the purpose of raising interest rates. The creditors are looking to see if there are any negative changes to your credit report that could classify you as a high-risk borrower. If they find any negative information, such as a missed or late payment on a utility bill, a new, higher interest rate can be applied to your future credit charges.

The best way to avoid triggering the universal default clause is to follow good credit management practices. Below are a few tips to help you steer clear of the universal default clause and keep your overall creditworthiness in good standing.

Read the fine print. If the credit card you’re considering includes a universal default clause, reconsider your options. If you have an alternative credit product available that doesn’t include this clause, it may be the better choice.

Avoid late payments. If your credit card contract includes the universal default clause, be sure to make your payments on time. Late and missed payments have the biggest impact on your credit score, plus they incur late fees and often automatically boost the interest rate you’ll be charged. Consider setting up automatic payments to avoid making a late payment.

Mind your credit limit. Going over your credit limit is a clear indicator of poor credit management. This is a red flag to lenders that you’re at higher risk for default. Craft a spending plan that will help you properly manage your income and expenses so you don’t have to rely on credit to make ends meet.

Reduce your debt. Make a plan to pay off your overall debt. Consider a method that will expedite the process, such as the debt snowball. This will not only improve your lending options, but can have a positive effect on your health by relieving the stress that debt can cause.

Limit credit inquiries. Randomly applying for credit can be a sign to lenders that you may have poor money management skills and a tendency to overextend your income. Carefully consider all your credit options, apply for the credit tool that best meets your needs, and only borrow what’s absolutely necessary.

For more information about effectively managing consumer credit, visit OklahomaMoneyMatters.org.

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When I go to department stores to shop, the clerk always asks me if I want to apply for their store credit card. I heard this can be a bad idea, but if I save 10 percent on my purchase what’s the big deal? (posted Oct. 27, 2017)

It never fails; as you finalize your purchase at the department store, the clerk entices you with the option to save 10 to 15 percent on your purchase by applying for an in-store credit card. What harm can there be in saving some extra money, right? Depending on your credit history, a lot of harm could be done. Before you hand over your information for a credit check, consider the factors below.

Impacts to your credit history. Racking up several new credit inquiries can have a significant, negative impact if you don’t have a long, positive credit history. Randomly applying for credit can be a sign to potential lenders that you may have poor money management skills and a tendency to overextend your budget. Opening a new credit account will lower your score, regardless, but if you’ve only been managing credit for a short time, the impact will be greater than for someone who has a long credit history in good standing.

Higher interest rates. In-store credit cards tend to charge higher interest rates compared to traditional credit cards. If you don’t pay your balance in full, the higher interest owed negates any potential savings at the point of sale or from reward offers.

Lower credit limits. In-store credit cards typically have lower credit limits, which seems like a good thing - unless your total purchase(s) approach the established credit limit. Maxing out any credit card can tip your debt-to-credit ratio, which negatively impacts your credit score. It’s best to use no more than 30 percent of your available credit.

Although incentives for in-store credit cards can be tempting, especially with the holiday shopping season fast approaching, it’s wise to carefully consider all your credit options before applying. Only apply for credit that you truly need.

Instead of relying on credit cards and any related discounts they may offer, it’s far better to shop sales, use coupons and implement a spending plan to help you stick to your budget. For more tips and information on choosing the right credit tools or building a positive credit record, visit OKMM’s Consumers Credit page.

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I’m interested in getting a credit account through American Express that doesn’t have a credit limit —how do accounts like this affect credit scores? (posted Jan. 29, 2016)

Along with some other factors, typical credit scoring methodology compares your available credit limit to how much credit you’re actually using - this is called the credit utilization ratio. Accounts like the ones offered by American Express are referred to as charge accounts, because they don’t have maximum credit limits. Instead of offering a revolving line of credit, allowing users to can carry a balance from month-to-month, they require the borrower to pay the entire bill when it’s due. While this can save the user a lot of money in interest charges, it’s vital that users closely monitor their credit use to ensure they can pay the bill in its entirety - or they risk facing some negative impacts to their credit rating for defaulting on the payment obligation.

Since charge accounts don’t have stated limits, the creditor instead reports the maximum amount that’s been charged to-date. These accounts are also reported as “open” rather than “revolving.” According to NerdWallet.com, when credit reporting agencies see “open” accounts with high limits, they simply omit them when calculating credit utilization ratios. Because of this, the high limit has absolutely no impact on your credit score. However, it’s important to note that how you handle the account can deeply impact your credit rating. Always pay your bill on time and commit to use credit only when absolutely necessary. If you manage credit carefully and consistently, you’ll be well on your way to building and maintaining a positive credit score.

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We have several credit cards with a zero balance; the accounts are in good standing, but we don't need or want them. We've thought about closing the accounts but are worried that will negatively affect our credit rating. What should we do? (posted Nov. 21, 2014)

Some financial experts say that closing accounts is one of the worst things you can do to your credit score. While it's true that closing credit lines can have some negative consequences, such as lowering your ratio of available credit to debt, no one can predict precisely how harmful it'll be. Behaviors affect your credit score in a variety of ways; it all depends on what your score is to begin with, which scoring model is being used and what creditors are looking for in a customer.

Bottom line, nothing impacts your credit rating as significantly as paying on time, every time and keeping balances low. It's important to note that closing accounts can also come with benefits, like lessening the risk of identity theft and reducing the temptation to overspend.

If you choose to close idle accounts, be strategic to minimize the negative impacts.

If you anticipate making a large purchase in the near future, wait to close accounts until after the deal is finalized. Financing for a big-ticket item like a car or home can be derailed by even the slightest change in your financial situation.

Maintain the account that's been open the longest so you can continue to benefit from the positive payment history associated with it.

Take a gradual approach to closing your accounts. Major changes in credit behavior are a red flag to creditors. Instead of closing your accounts all at once, stagger the closings over several months.

Request confirmation in writing that each account has been closed. To be safe, check your credit report within a few months to make sure the account is reported as closed.

Continue to use credit responsibly by making all payments on time and using no more than 50 percent of your available credit limit. In time, you'll recover from any negative impact of closing the unused accounts.

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Is there some hidden risk to transferring my credit card balance to a new card with a lower introductory interest rate? If I don't pay it off before that period is over, does anything prevent me from transferring it yet again to another card with a similar deal? (posted Nov. 21, 2014)

The quick and dirty answer is, yes. The balance transfer game is tricky and one that most consumers lose. According to Wisebread.com, a popular personal finance blog, 54 percent of those who try this strategy fail to eliminate their debt and often find themselves with far higher balances on higher rate cards. This plan is only successful for those who are 100 percent committed to paying off the debt as quickly as possible.

Before you're swayed by a lower, introductory interest rate, remember that balance transfers don't come free. Make sure that the lower rate outweighs the transfer fee. If you take the plunge, avoid accumulating new debt and make a plan to pay off the transferred amount before the introductory period ends. It's a major gamble to bank on the ability to continue transferring debt. Every time you apply for a new credit card, your credit score will suffer. Too many applications and transfers and you might not be able to qualify for a lower interest rate when you truly need access to credit.

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I’m a careful credit card user, and I’ve heard creditors have to follow new rules. What changes have been made to the credit card laws? (posted Aug. 27, 2010)

Credit card law has indeed changed over the past year. As a credit card user, you’ve probably noticed pretty dramatic changes in credit terms, interest rates, and fees, as well as the look of your monthly statement. Those changes are a result of the Credit Card Accountability, Responsibility and Disclosure Act. Below are some of the new protections that’ll impact your plastic.

Credit companies must give you 45 days’ notice before raising interest rates, changing fees or making other significant changes to your account.

Credit card issuers can no longer raise your rates because you missed a payment to another creditor.

You now have a full 21 days to make a payment after a bill is delivered. If your due date falls on a weekend or holiday, you have until the next business day to make an on-time payment.

Rate increases can no longer be applied to existing balances. If rates change, the new rate(s) only apply to new charges.

Promotional interest rates must last at least 60 days.

A penalty rate increase can only be charged if your account is 60 days past due. After six months in good standing, your interest rate must be restored to the previous rate.

Credit companies can no longer charge you for inactivity, such as fees for not using your card within a certain length of time.

To learn more about new credit card rules and how they’ll benefit you, visit federalreserve.gov/creditcard. The CARD Act has certainly improved consumer protections, but your best personal credit protection is always smart credit management.

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Is it really a big deal if I sign up for a store credit card to take advantage of their 10 percent off special? (posted March 30, 2007)

It’s tempting to save an additional percentage off your purchase, isn’t it? Unfortunately, that small initial savings isn’t worth it in the long run; each time you open a new credit account, your credit score may be affected.

There are two types of "hits" to your credit: a soft hit and a hard hit. A soft hit occurs when a utility or telephone company checks your credit before opening a service account. This type of hit doesn't affect your credit score. A hard hit occurs when a credit card or mortgage company reviews your credit in order to provide you a direct credit line. This type of hit can, and often does, affect your credit score in a negative way.

The bottom line is this: if you don't need more credit, don't apply for it. Too much “extra” credit can create a temptation to overspend. Just step away from the credit card!

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I’m paying 22 percent interest on the credit card I got in college and would like a lower rate. What are my options? (posted Dec. 29, 2006)

OUCH! There are a couple of ways to lower that astronomical interest rate, which will save you hundreds or more in finance charges. First, pick up the phone and call your current card company to request a lower rate. If you have a solid payment history, chances are they will honor your request and knock off as many points as possible.

Not sure what to say? Follow this sample script to get the ball rolling:

Hi, my name is Lacy. I'm a good customer, and other credit card companies are offering lower APRs. Unless you can lower the interest rate on my card, I'll have to close my account and switch companies. What can you do for me?

If you can’t make headway with the account representative, ask to speak to a manager or call back later to work with someone else. If you’ve exhausted all avenues with your current creditor, pay off and close your account; cut up the card; and seek companies that offer lower rates. Bankrate’s credit card search engine is a good place to start. Remember to read the fine print; often, lower rates are introductory rates, which means the rate is only good for a short period of time before increasing, sometimes substantially.

If your quest for a lower interest rate is successful, a word of caution - a lower rate is not an open invitation to spend more! A better interest rate is important, but it isn’t a substitute for better decision making. Charge responsibly.

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Credit Reports / Scores

I'm trying to improve my credit history. How long will it take to increase my credit score? (posted August 26, 2021)

Like many financial questions, there’s no simple answer. How long it will take to improve your credit score depends on your current score, your goal and the factors that caused your score to decline.

According to Experian, negative elements remain on your credit report for varying periods of time.

Collections and late payments remain for seven years.

Most public records remain for seven years or more.

Chapter 7 bankruptcies remain for up to 10 years.

Chapter 13 bankruptcies remain for seven years.

Credit inquiries remain for two years.

Fortunately, there are some actions you can take to begin the process of improving your credit record as quickly as possible.

The first step in the credit repair process is checking your credit report and addressing any inaccuracies. Visit AnnualCreditReport.com to request a free annual copy of your credit report from Experian, Equifax and TransUnion. Each report contains instructions on disputing errors. Currently during the COVID-19 pandemic, all three credit bureaus are offering free weekly online credit reports.

Next, since payment history has the biggest impact on your credit score, make it a priority to pay every payment you owe on time, every time. Signing up for autopay on your bills is an easy way to avoid late payments. If you do, be sure you have enough in your bank account to cover each automatic payment when it’s due.

Another important factor is your credit utilization rate, which is a measure of your total credit card balances in relation to your total credit limits. So, if the combined balance on your credit cards is $5,000 and you have $10,000 in credit available, then your credit utilization rate would be 50%, meaning you’re using half of the total credit available to you. The general rule is that your credit utilization rate should not exceed 30%, but many financial experts recommend that you don’t go above 10% if you want an excellent credit score. To help lower your credit utilization rate, you can ask your credit card holders for an increase in your credit limits, but if the additional credit tempts you to spend more, that may not be the best option for you.

Your payment history and credit usage account for 65% of your overall credit score, so making improvements in these two areas can greatly improve your score.

These steps alone won’t instantly repair your credit record, but they will set you on the right path. Remember, creditors often consider more than just the number on a scoring scale. For example, if late payments have been an issue in the past, and you make all payments on time for one year, that may be enough to demonstrate that you’ve changed your negative credit behavior and taken positive steps toward correcting past mistakes. This may influence a creditor’s decision, even if your score hasn’t significantly increased.

In an effort to rebuild your credit, it can be helpful to pay-off a credit card, then make small monthly charges that you continue to pay in full and on-time each month. Using a secured credit card can also help boost your credit score. This type of card is backed by a cash deposit that you pay upfront. You’ll use the secured card like a normal credit card and your on-time payment will help your credit record. Be sure to choose a secured card that reports your credit activity to all three credit bureaus.

Good luck to you! Remember that the damage to your credit record likely didn’t occur overnight, and it won’t be corrected overnight, either. Focus on the positive impacts of a stronger credit score and stay the course to meet your goal. To learn more about successfully managing consumer credit, visit our credit section.

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I’m looking through my credit report and there are a few items that need to be corrected or just removed altogether. How can I get my information corrected as soon as possible? (posted June 24, 2021)

Not only is checking your credit report the most common way identity theft is detected, it’s also one of the quickest ways to potentially raise your credit score, as inaccurate information could be negatively impacting your rating. A credit report shows your credit activity for the past seven years (if you’ve filed for bankruptcy, it will be shown for 10 years). The most common errors found on credit reports typically involve incorrect account numbers, inaccurate credit limits or credit balances, and inaccurate personal information. Personal data shown on your credit report will include a list of names you’ve used, your date of birth, Social Security number and previous addresses.

Thanks to the Fair Credit Reporting Act, every consumer can now dispute errors on their credit report. The three main credit bureaus, Experian, TransUnion and Equifax, allow you to challenge incorrect information online. Follow the steps below to request changes to your credit report.

Write to the credit reporting company. The credit reporting company is the entity providing your credit report, such as a credit bureau or AnnualCreditReport.com. To report any errors, put your dispute in writing; your sensitive credit information is too important (and private!) to leave in a voicemail. Each of the three main credit bureaus now allow you to begin your dispute online, but if you prefer to communicate through postal mail, they provide several templates for you to use.

Carefully outline the error(s). List the inaccurate data points you found and note the correct information, providing the appropriate documentation to support your corrections. Be as clear and thorough as possible, and indicate if the information should be corrected or removed altogether. If you need to mail hardcopy documentation to support your corrections, don’t send originals; send copies that clearly highlight the relevant information. It’s best to send your paperwork through certified mail with a return receipt. That allows you to track the package and have a record of when it was received.

Stay engaged during the review process. Credit bureaus have 45 days to investigate and resolve disputes. However, if you submit additional information while the dispute is ongoing, it could delay the investigation for an additional 15 days. In the meantime, you may contact the furnisher, or company that provided the inaccurate information to the credit bureau, to address the errors. If the furnisher sides in your favor, your credit report will reflect the correction in four to six weeks.

If you lose your dispute, you still have options. You can ask to add a short statement to your credit report about the item in question. The Consumer Financial Protection Bureau will also allow you to file a complaint if you’re dissatisfied with the overall dispute process.

To learn more about successfully managing consumer credit, check out our podcasts, online learning modules, videos and other resources.

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I'm considering buying a car soon and I see a lot of ads that say "bad credit OK." How bad is bad credit? How can bad credit be ok if I'm going to need financing? (posted March 26, 2020)

Many of the ads you’re seeing are meant to entice a specific audience with low credit scores. If you have a low credit score, the seller may finance your car purchase, but the loan will likely have a high interest rate.
Credit scores are a range of numbers created by the Fair Isaac Corporation, or FICO, that lenders use to determine their risk if they lend money to a consumer. Credit scores range from 300 to 850. A score of 300-579 is considered poor credit; 580-669, fair credit; 670-739, good credit; 740-799, very good credit; and 800 or more, exceptional credit. A poor or fair credit score tells the lender your ability to repay is at high risk, while a high credit score implies you are likely to repay successfully. Good credit is vital to your financial health and opens the door to cost savings for you. You’ll have lower interest rates and more offers from which to choose.
How is that number determined? FICO scores are comprised of five categories.
Payment History: The most important factor in determining your credit score is your payment history. It makes up about 35% of the overall score. To strengthen this category, pay your bills on time, every time. A few late payments won’t ruin your score, but an overall good payment history definitely helps you in the long run.
Amount Owed: How much credit you’ve used determines 30% of your credit score. It’s best to follow the rule of 30 with your credit, meaning you should try not to use more than 30% of your credit at any one time. Using less than 10% is even better. For example, if you have a $1,000 credit card limit, aim to carry a balance below $300 on that account. In that example, keeping your balance under $100, or completely paying it off each time you use it, will raise your score even more.
Length of Credit: The length of your credit history affects about 15% of your credit score. Length of credit activity shows creditors how you handle money over time. A longer credit history will always have a positive effect on your FICO score; that’s why consumers are encouraged to retain credit lines once they’re opened, instead of closing them once they’re paid in full.
New Credit: New credit makes up 10% of your overall credit score and refers to accounts you’ve recently opened. While the fact that a lender has given you a new line of credit is a good signal to other lenders, avoid signing up for credit cards you don’t need (even if your favorite store is offering a 25% discount to do so). Lenders see repeatedly adding credit lines as risky credit behavior. New accounts will also lower your average account age, which will have a larger negative effect on your credit score.
Types of Credit: The remaining 10% of your credit score reflects your mix of credit lines. Are your credit lines all for retail businesses, or do you have a mortgage, auto loan, and installment loans? Again, it’s not a good idea to open more lines of credit you don’t need just to vary the types of credit in your credit history; lenders view that behavior as a lack of credit restraint.
Never included in your credit score is your age, gender, race, ethnicity, or even your assets. Keep in mind that Oklahoma insurance companies can use your credit score to determine your premium, and some employers even use credit scores to help determine hiring eligibility. Check out OklahomaMoneyMatters.org for more information about maintaining good credit, credit rehabilitation, and many other financial resources.
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What’s the difference between “hard” and “soft” credit inquiries? (posted April 26, 2019)

A credit inquiry occurs when a lender makes a request to view your credit report or credit score. A credit report is a detailed breakdown of an individual's credit history prepared by a credit bureau, while a credit score is a number assigned to a person that indicates the individual’s capacity to repay a loan. Although credit inquiries make up only 10% of your overall score, authorizing several new credit inquiries in a short period of time can have a negative impact on your credit score. This is especially true if you’ve been managing credit for a short time.

Soft inquiries occur when lenders or other businesses, such as insurance companies, make inquiries as part of their regular account management process or to better market their products. They use soft inquiries to determine if you’re a candidate for a pre-approved offer, like for various types of insurance, credit cards and car loans. Since credit scores are designed to count only inquiries that could truly affect credit risk, soft inquiries won’t negatively impact your score. However, if you would like to limit the amount of pre-approval offers you receive, you can go to OptOutPreScreen.com and choose to be removed from offer lists.

Hard inquiries occur when you’ve applied for credit and the lender must determine your creditworthiness. This type of inquiry is one you’ve authorized, and can remain on your credit report for two years, though credit scoring only assesses the hard inquiries from the last 12 months.

When shopping for new credit, it’s important to do your research on the financial products that are available based on your current credit history and score. This will allow you to determine the best option for you. To learn more about establishing and maintaining a favorable credit history and score, review the credit information under the Consumers tab on the OKMM website.

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I’ve never checked my credit report before. If I already know my credit score, do I need to check my credit report? (posted May 25, 2017)

While a credit score is determined by the information on your credit report, it doesn’t tell your whole credit story. Lenders use your score in conjunction with the information on your report to determine your creditworthiness and your level of reliability when managing your accounts. Information from your report can also affect mortgage rates, credit card approvals, and your ability to rent an apartment or qualify for jobs. More often than not, most people will find some inaccuracy on their credit report that impacts how easily they’ll reach these life milestones. Follow the steps below to request your credit report, and check it for accuracy to ensure it’s a true representation of your credit character.

Download your credit reports. You’re entitled to one free report from each of the three credit reporting bureaus each year. AnnualCreditReport.com is the only website authorized by federal law to provide truly free credit reports from each reporting agency. You’ll have to answer some verification questions and then follow the steps to access your reports. Each report may contain different information, so consider requesting and reviewing all three at once.

Verify your personal information. Be sure that any identifying information listed on your report is accurate. This includes your name (including proper spelling) and any aliases (e.g. maiden name, nickname), Social Security number, current and past addresses, and employment history. Often, the smallest inconsistencies can cause big concerns on your credit report.

Check the trade lines. Trade lines are the accounts that are reported to the credit bureaus. Make sure that any information being reported is accurate. Inaccuracies are common and can stem from a lender accidentally transposing numbers or actual identity theft issues. You’ll want to make sure that any accounts reported on your credit report are accounts you authorized and that the information reported about each account is correct.

Review credit inquiries. Make sure that you recognize any inquires that have been made on your report. Multiple inquiries can signal to a lender that you’re anxious to spend money, experiencing cash flow problems, or that you’re a poor money manager. Note that there are different types of credit inquiries. Hard inquiries are those that you authorize for the purpose of obtaining credit. Soft inquiries are performed by companies that want to offer you services, like pre-approved credit or insurance plans. Soft inquiries are listed on your credit report, but aren’t considered in making decisions about your creditworthiness.

Look for negative information. Any reports of late payments, defaulted loans, bankruptcy, repossessions, judgements, or liens will have a negative impact on your credit report and will affect your ability to make big purchases, such as buying a home. If you find untrue negative information on your credit report, take steps to have that information removed.

Estimate removal dates. Most credit records remain on your credit report for seven years, bankruptcy stays for 10 and defaulted student loans and tax liens remain indefinitely. Take notice of the dates that accounts will be removed or “fall off” your report. Depending on the nature of the account, this will affect your credit rating.

Knowing what information is being reported in your name and ensuring that it’s accurate are the first steps to boosting your creditworthiness and taking control of your finances. If you should find an inaccuracy, don’t panic. Follow the steps provided by each reporting agency on your report to dispute errors and have them removed. For more information about improving your credit, check out OKMM’s Credit resources on the Consumers page.

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I have a few bills that are past due. Some have even been turned over to a collection agency. I’ve been told that this could negatively affect my credit. Is having good credit really important? How can I improve my credit score? (posted March 25, 2016)

A good credit history is a tool that can help you accomplish many of life’s financial goals. Unfortunately, many people don’t realize the importance of good credit until it’s too late. For instance, bad credit can keep you from renting a house or apartment, getting a cellphone, or qualifying for an auto or other personal loan. Poor credit can even keep you from getting a job.

Like trying to raise a low GPA in school, repairing your credit isn’t easy, but with time, hard work and determination, it can be done. Here are some tips to help you get in the habit of making better credit choices.

Understand (and avoid) choices that negatively impact your credit rating. A number of circumstances can cause your credit score to drop, including late or unpaid utility, cellphone, or credit card bills; broken rental agreements; defaulted student loans or personal loans; vehicle repossession; and even overdue library books. All of these negative credit situations - and then some - can be reported to the credit bureaus and result in a lower credit score.

Make a spending plan that works for you. The first step to building a healthy credit score is creating a spending plan, also called a budget. There are many methods you can use to develop a budget and track your spending, such as making an Excel spreadsheet or table, using money management software or using a smartphone app. The best system is the one you’ll actually use and stick to. When making your spending plan, be sure to plan for an emergency by saving a portion of each paycheck. This will be crucial as you rebuild your credit and reduce debt.

Monitor your credit. To measure progress, you need to determine your baseline. At the very least, visit AnnualCreditReport.com to review all three of your credit reports for free. It’s a good idea to do this at least once a year to make sure your reports are free of errors. Reviewing your credit score will cost you a small fee, but you can estimate your score with a free app like the one offered by CreditKarma.com. Many financial institutions and credit card companies now offer a credit tracking benefit, which allows you to view your credit score and simulate scenarios to determine what behaviors might cause your credit score to fluctuate.

Pay off debt. If debt reduction is your goal, the debt snowball is an effective way to quickly pay off debt and gain momentum toward a debt-free lifestyle. To see a debt snowball tutorial, visit the Consumer page at OklahomaMoneyMatters.org.

Keep a low monthly balance. Keeping your current credit usage low can tremendously affect your credit score for the better. If possible, pay your monthly balance in full when the bill is due. If you carry a balance month-to-month, aim to keep the balance below 30 percent of your available credit limit.

Make payments on time. Making late payments can seriously hurt your credit score. Always make your payments on time and try to pay more than the minimum payment amount required. This will reflect a good payment history, boosting your overall credit score.

Be a smart borrower. Never borrow more than you can afford to pay back. Before you sign, do the math and make sure you have a repayment plan in place. Here are some handy calculators to help you make wiser borrowing decisions.

Student Loan Repayment Calculator

Credit Card Minimum Payment Calculators

Auto Loan Calculator

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I’m curious; can an employer get a copy of my credit report without my permission? (posted Jan. 31, 2014)

It’s pretty common practice for a potential employer to perform a background check before making a hiring decision, and this background check often includes a review of your credit report(s). However, thanks to a federal law called the Fair Credit Reporting Act (FCRA) there are strict limits on who’s allowed to access your credit report, the circumstances in which it’s requested, and what’s done with the information. Those seeking access must have a valid need before they’re allowed to see your records. That means your nosy neighbor or ex-roommate can’t take a look into your financial background for the sake of curiosity. However, creditors, insurers, employers, landlords and other stakeholders you do business with can.

The good news is, when it comes to employment, you have to give written permission before someone can access your file. Along with the written consent form, a potential employer should also tell you how your information will be used, and in the event that it’s used to justify an adverse action against you (denial of a job or a promotion, termination, or reassignment) the employer has a legal responsibility to show you the report(s) and tell you how to get your own copy.

To prepare for a job interview and subsequent background check, there are several things you can do.

The Federal Trade Commission (FTC), the folks that enforce the FCRA, suggest ordering copies of your credit reports before applying for a job. This way you can put your best foot forward by disputing any inaccurate, incomplete or unverifiable information listed on your credit report before it’s seen by a potential employer.

If the negative information found on your report is accurate, it can’t be removed through a dispute. If you’re really bothered by your credit past and absolutely don’t want employers digging into it, you always have the right to refuse their request. However, bear in mind that if you deny them access, there’s a good chance your job application will be removed from consideration.

Consider taking proactive measures to turn something negative into a positive. Prepare an explanation for any potentially damaging information the employer might find. Remember, many people make financial mistakes. Being honest and demonstrating that you’ve learned from past slip-ups can be seen as a favorable trait in the eyes of a potential employer.

To learn more about credit reports and how they affect more than your borrowing capability, visit the Money & Credit section at FTC.gov.

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How long does it take to increase my credit score if I’m trying to rebuild my credit? (posted May 25, 2012)

Like many financial questions, this one doesn’t have a simple answer. How long it will take to improve your credit score depends on your current score, your goal and the factors that caused your score to be lower than you’d like.

According to the consumer reporting agency Experian, different negative elements stay on your credit report for certain periods of time.

Delinquent payments remain for seven years.

Most public records stay for seven years.

Bankruptcies stay for seven to 10 years.

Unpaid tax liens can remain for 15 years.

Credit inquiries stay for two years.

The first step in the credit repair process is checking your credit report and addressing any inaccuracies. Visit AnnualCreditReport.com to request your free annual copy of your credit report from Experian, Equifax and TransUnion. Each report contains instructions on disputing errors.

Next, since payment history is 35 percent of the equation when factoring your FICO score, make efforts to pay every payment you owe on time, every time.

These steps alone won’t instantly repair your credit, but they will set you on the right path. Remember, creditors often consider more than just the number on a scoring scale. If you put one year between you and your last late payment or poor credit decision, that may be enough to demonstrate that you’ve changed your negative credit behaviors and taken positive steps toward correcting past mistakes. This may influence a creditor’s decision, even if your score hasn’t significantly increased.

In an effort to rebuild your credit, a credit card may be a useful tool, if you don’t have debt you’re currently making regular payments on. Making small monthly charges that you pay off in full and on time will work toward boosting your credit history. Since fuel is a necessity for many people, a gas card may be a good option for you. If not, consider applying for a secured credit card which can limit how much you charge because you pay an up-front deposit that acts as your credit limit. Keep in mind, secured cards usually include fees and a higher interest rate. They may still be a good option if you can’t otherwise qualify for a credit card.

Good luck to you and remember that most likely your credit damage didn’t occur overnight, so it won’t be corrected overnight, either. Try to stay focused on your goals and continue with your good efforts.

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What are ways to improve a bad credit score?(posted Nov. 28, 2011)

Improving your credit score is a great goal, especially since a poor credit score can stand in the way of lower interest rates, your dream job or the perfect apartment. Take the following steps to help put your best financial foot forward.

Request copies of your credit reports by visiting AnnualCreditReport.com. Each year, you’re entitled to one free credit report from each of the three major credit reporting agencies – TransUnion, Experian and Equifax. By comparing each report side-by-side, you can get a full picture of your credit history.
Review your information closely and make a list of inaccurate items. Make copies of any documents that support your claim and follow the directions on the report(s) for filing a dispute. Keep copies of everything you send to the credit reporting agency and be sure to follow-up if you don’t hear back in a reasonable amount of time.

After errors have been addressed, focus on paying off debt. One of the easiest steps you can take to repair a poor credit score is to start making all payments on time, and in full. Minimum payments may be easier to make, but you’ll pay more in interest charges in the long run.

Avoid maxing out your lines of credit. A good rule of thumb is to use no more than 33 percent of your available credit line.

Limit access to new lines of credit. It’s not worth it to sign up for new credit cards just for the 10 percent discount at the register. Any time you authorize someone to run a credit check, it dings your credit score.

Cleaning up your credit is a process that takes time and determination, but stick with it and it will pay off in the end.
If your debt situation has grown to a point that you feel is beyond your ability to handle alone, contact a reputable credit counseling service that’s affiliated with the National Foundation for Credit Counseling (NFCC.org). If you’re in the Oklahoma City metro area, contact Consumer Credit Counseling Service of Central Oklahoma at 800.364.2227 (toll free) or visit their website at greenpath.com/cccsok.

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I was recently told that applying for a department store card wouldn't affect my credit score. That's different from what I've always been told, so who's right? (posted Aug. 26, 2011)

Your credit score is the number used to determine how likely you are to repay your debts. Many factors come into play when calculating your overall credit score, with credit inquiries accounting for 10 percent of the equation. While 10 percent doesn’t seem like much, inquiries are an important factor to keep in mind, especially if you have few credit accounts or a short credit history.

All credit inquiries fall into one of the following categories. While you’ll see both types listed on your credit report, only one impacts your credit score.

Soft inquiries are those you didn’t initiate. Reviews for pre-approved credit or insurance offers or checks by potential employers fall into this category. These types of inquiries don’t appear to creditors when they review your report and they don’t affect your credit score.

Hard inquiries are placed on your report any time you apply for new credit like a car loan or credit card. These inquiries are reviewed by potential creditors and have an impact on your credit score. Inquiries remain on your credit report for two years, but only those made within the last year count toward the calculation of your credit score.

Too many hard inquiries can negatively impact your credit score; however, not all credit inquiries are treated the same. Lenders typically make allowances for instances of rate-shopping, where it’s good for consumers to comparison shop for the best deals. For example, when shopping for a car or home loan, multiple inquiries are either ignored or counted as one inquiry as long as they fall within a certain window of time, usually 15-45 days.

If you’re in the market for a new line of credit, be a wise consumer. Follow these guidelines to limit the impact to your credit score.

Research credit products to find the one that best fits your need.

When you’re ready to purchase a big-ticket item, like a car or home, rate-shop within a 30-day window of time.

Apply for credit only when you really need it.

Don’t apply for multiple credit cards in a short amount of time.

Don’t apply for credit just to save a percentage at the register.

To learn more about your credit score and how it affects your financial life, visit the Education tab at MyFICO.com.

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How do I check my credit report? (posted May 27, 2011)

Savvy consumers should have an idea of what their credit looks like because whether we like it or not, it’s often how our character is judged. Not only do lenders -- like banks and car dealerships -- check your credit, but so do employers, insurers and landlords.

Each year, you’re entitled to one free credit report from each of the three major credit reporting agencies – TransUnion, Experian and Equifax. Each report will be slightly different because different creditors may report to one agency and not the others. If you’ve never requested your report before, consider pulling all three reports at once so you can see your entire credit record at a glance or if you prefer, spread your requests throughout the year.

Making the Request:

Visit AnnualCreditReport.com, the only federally-authorized source of free credit reports. When going through this site, you won’t be charged to see your credit report. However, if you’re interested, you can view your credit score for a nominal fee.

Once at the site, you’ll choose your state of residence from a drop-down menu. Then you’ll enter your personal indentifying information: name, birth date, Social Security number and address.

Next choose which of the three credit reporting companies you’d like to request your report from. If you’ve previously requested a free report from an agency in the last year, you’ll be prompted to choose a different agency or proceed with your current selection for a fee.

Once you’ve made your choice, you’ll be taken to that credit reporting agency’s website. You’ll be asked security questions based on information found in your report; this is a privacy measure to ensure that you’re the one requesting your information.

It’s a good idea to print a copy of your report for your records. Each agency is different; some will allow you to create a log-in and return to view your report for up to a month while others will only allow online viewing one time.

Things to look for:

Make sure that your personal information is correct. Check that the employers and addresses listed are ones that should be associated with you.

Look for anything that might indicate identity theft -- accounts that you didn’t open or credit inquiries that you didn’t authorize. If you find an account that doesn’t belong to you, place a fraud alert on your report through the credit reporting agency, contact the creditor to close the account, file a local police report and log a complaint with the Federal Trade Commission.

Ensure that your accounts are correctly reported. Sometimes dates will be entered incorrectly or on-time payments are reported as late. If you find inaccurate negative information, file a dispute with the credit reporting agency. They’ll investigate the claim and if warranted they’ll correct the error. It may take several attempts to get corrections made, so stick to it until it’s fixed.

Don’t panic if you find mistakes because it’s pretty common for errors to occur. Whether clerical or malicious, there are steps you can take to correct the issue. Each credit report contains your rights and responsibilities as a borrower, including that agency’s step-by-step instructions on how to file a dispute.

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If I maxed-out my credit card, made a payment late, or went through a debt settlement, what effect would this have on my credit score? (posted Dec. 18, 2009)

For a three-digit number, your credit score packs a big punch. Figuring out how each action would impact your score is difficult. The exact formula of the FICO and other scoring models remains quite complicated, but FICO recently released more information about the effect certain actions may have on your score.

The chart below shows the impact of five common credit mistakes on the score of someone with a current score of 680 or 780. As you can see, the size of the hit depends on your credit score before the mishap occurs.

Credit Score Effects

Effect on a 680 score

Effect on a 780 score

Maxed-out card -10 to -30 -25 to -45

30-day late payment -60 to -80 -90 to -110

Debt Settlement -45 to -65 -105 to -125

Foreclosure -85 to -105 -140 to -160

Bankruptcy -130 to -150 -220 to -240

Source: FICO

Remember, your score considers both positive and negative information in your credit report. While late payments, maxed-out cards, and other actions will lower your score, establishing (or re-establishing) a good track record will help you raise it.

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Since it’s so important to know your FICO score, is it safe to give your personal info to one of those credit companies via the Internet to get your score? Are they really free? (posted Jan. 26, 2007)

Unfortunately, it’s not your FICO score that’s currently offered free of charge. The government requires the three largest consumer reporting agencies (Experian, TransUnion and Equifax) to provide American consumers with a free copy of their credit report - not their credit score - yearly.

Don’t trust every credit-related site; be careful and selective. Recommended websites like myFICO Credit Scores and AnnualCreditReport.com are popular and secure options for obtaining your credit score. You’ll be prompted to enter your Social Security number and other personal information, but these sites guard your privacy through various security protocols.

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Over the years, I have collected many different credit cards. Some of them are store cards (Lowe’s, Target, etc.) and some are Visa and MasterCard accounts. I only have a balance on one card right now. I would like to close some of these accounts, especially store accounts, but I’ve heard that closing accounts can hurt your credit score. But, I’ve also heard that mortgage companies use your total available credit to compute your ability to pay. So, what are the guidelines and pitfalls in closing credit card accounts? (posted Sept. 29, 2006)

This is an excellent question. The answer, like many personal finance solutions, depends on your circumstances. In general, closing credit accounts can lower your credit score, because the score is partially based on your ratio of debt to available credit. Closing accounts reduces the amount of open credit you have access to, but haven’t used; this effectively increases your proportion of credit debt. Let’s say you have two credit cards, each with a $1,000 limit, and carry a $300 balance on one of the cards. As such, your debt to available credit ratio is $300/$2,000 (15 percent). However, if you close the account with no balance, your ratio would increase to $300/$1,000 (30 percent), doubling your debt proportion. Make sense?

When evaluating your creditworthiness, mortgage lenders consider your total available credit in addition to your credit score and other factors. In the eyes of a mortgage company, access to a large amount of available credit can be a liability, because you could get in over your head after the mortgage is approved. Since new debt may jeopardize your ability to make that mortgage payment, you could be labeled a high-risk borrower.

Now that you know the scoop, which is the right move for you? In this case, the answer depends on your short-term plans related to housing. If you know you’ll be in the market for a new home in the next few years, close your newer accounts, but leave the seasoned accounts alone (closing older accounts makes your credit history appear “young,” which can also hurt your score). Conversely, if you plan to stay in your current home for the foreseeable future and you’re trying to improve or repair your credit score, limit new credit debt; make monthly payments on time and pay more than the minimum amount required to reduce your debt as quickly as possible; and keep accounts open as you pay them off.

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Debt Management

I was laid off last year and my credit suffered because of several missed payments and the increasing debt during that time. I've been seeing ads about credit repair companies. Can they actually help fix my credit, or is it a scam? (posted Dec. 1, 2023)

If you're trying to pay off debt and improve your credit score, working with a credit repair service for assistance may be tempting. These companies specialize in enhancing your credit standing by challenging outdated or inaccurate information on your credit reports and, often negotiating with your creditors on your behalf. Credit repair services typically come at a cost, however, and it usually takes several months to see much progress. Reputable credit repair services scrutinize your credit reports for inaccurate information and initiate disputes on your behalf.

Credit repair services can address various errors, including:

• Accounts that do not belong to you.
• Bankruptcy or legal actions that are not associated with you.
• Misspellings that might mix in negative entries for someone with a similar name or prevent positive entries from being reported accurately.
• Negative marks that are too old to be included.
• Debts that cannot be validated or verified.

While reputable credit repair companies offer legitimate services, the industry also has some bad apples. Therefore, it's essential to carefully vet any company you're considering. So, if you choose to hire one, it's necessary to investigate the companies you may want to work with. Consider these tips when deciding if a company is right for you:

What do they provide? Under the Credit Repair Organizations Act, companies offering credit repair services must provide you with a clear breakdown of costs and an estimate of the time it will take to achieve results. Additionally, they must allow you three business days to cancel their services without incurring charges. A reputable company should also guide you in managing your existing credit accounts to prevent further damage. Importantly, trustworthy firms will not make any guarantees or encourage dishonest practices.

What does it cost? Credit repair services usually charge a monthly fee, varying significantly on the service they’re providing. There may also be an initial setup fee to get started. Some companies offer tiered packages with additional services like credit monitoring or access to credit scores at higher pricing levels.

Can I do it myself? Most services a credit repair company offers to do for you, you can do yourself if you know where to begin. It's easy to get started by obtaining your credit reports from the three major credit reporting bureaus — Experian, Equifax, and TransUnion — using AnnualCreditReport.com. You’re entitled to a free report once every 12 months from all three bureaus.

Then, follow these steps:

Dispute any errors on your credit reports with the credit bureaus. Each bureau offers an online dispute process, often the quickest way to address issues.

Identify information that is accurate, but unverifiable. Unsubstantiated information must be removed, though it may be reinstated if verified later. For instance, a debt to a retailer, now out of business, could only be considered verifiable if a collection agency can prove ownership.

Work on improving your payment history. Your payment history is the most influential factor affecting your credit score. Timely payments are essential for a higher score.

Reduce your credit utilization ratio. The credit utilization ratio is the percentage of a borrower’s available credit limit that is currently being used. A lower ratio is better for your credit score.

Whether you opt for self-guided credit repair or hire a company to assist you, it is wise to have a long-term plan for managing and maintaining your credit going forward. Visit the National Federation of Credit Counselors at https://www.nfcc.org/ to find a not-for-profit agency in your area.

For additional information on managing your credit on your finance journey, check out our resources at OklahomaMoneyMatters.org.

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I've been trying to pay off debt and get my finances in order, but I feel like I keep going in circles. How do I stop the cycle? (posted June 2, 2023)

Many people assume that to get out of debt, build wealth, or stop living paycheck to paycheck, you simply need to change your financial habits. While that’s true, to be successful you also need to change your mindset around money.

Our money mindset is largely influenced by our past experiences — whether good or bad. If they were bad, the good news is, with some intentional work you can change those existing money attitudes and habits to help you reach your financial goals. Consider these steps to shift your mindset toward financial success:

Determine your values: First, it’s important that you share any changes in your name, email, address or phone number with the Department of Education, so you don’t miss vital information that could impact your finances. You can update your personal data, as well as find out who will be servicing your loans, by visiting StudentAid.gov.

Take control: The first step to success is to start. You have the ability to change your financial future. Remind yourself that you’re in control and figure out where you are. It can seem scary at first, especially if you have anxiety about your money. Once you know what steps you have to take, the rest is easier. No matter how bad it seems today, it can only get better from here.

Get comfortable with discomfort: Getting your finances in order is going to take some work. It isn’t always going to be fun and you won’t always like it. Just keep doing your best every day and learn from your mistakes.

Don't dwell on your past mistakes: No one’s financial journey has been perfect. Have compassion for yourself and others. Move forward with the knowledge that you learned from those missteps.

Stop keeping up with the Joneses: Let go of comparisons to everyone else. Do what’s right for you. When it comes to fixing your finances and building wealth, it’s your personal journey. No one else’s standards or timeline will work. They will just rob you of the joy you’ll get from making progress.

Let go of limiting beliefs: Internal beliefs like, “This is too hard,” “I can’t do this” or “I’m just not good with money” are some examples of limiting beliefs. They do just that — limit you. You will continue to go in circles if you don’t dig deep to find out where these beliefs came from and take them on. You may even continue to make the same mistakes. Consider journaling or seeking the help of a mental health professional if you’re struggling.

Track your progress: The easiest way to keep your head in the game when things get tough is to see how far you’ve come. Look back on where you were financially when you started this journey and celebrate the steps you’ve made, even if you aren’t to the end goal yet. Utilizing visuals can help keep you motivated and help you combat those negative beliefs when they come up.

Keep moving forward: Everyone will have good and bad days on this journey. Life happens and you may encounter some setbacks from time to time. That’s normal and totally okay. Just remind yourself how far you’ve come and most importantly remember, this is a long-term game — a marathon, not a sprint. You’ll get there eventually.

Get help: No one knows everything about personal finance when they’re first starting out. Use all the resources at your disposal. Need some tips on how to get started? Check out our free resources at OklahomaMoneyMatters.org.

Trying to get out of debt and don’t know where to start? Consider a nonprofit credit counseling service — like GreenPath Financial Wellness or one of the many similar organizations found at the National Foundation for Credit Counseling — to sit down and help you create a game plan.
Looking to build wealth and save for retirement? Consider speaking with a financial planner. You can find some in your area on PlannerSearch.org .

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I graduated from college in 2021. Because of the CARES Act forcing a pause on payments, I haven't had to pay back my student loans yet. What is the best way to get ready for repayment to start? (posted July 7, 2023)

Anyone who currently holds federal student loans should be preparing for payments to restart in October — especially those who graduated between December 2019 and May 2023. There will be no additional extensions. It’s important to be prepared so you aren’t surprised in October when your bill arrives.

Generally, federal student loans provide borrowers a six-month grace period after graduation, leaving school, or dropping below halftime enrollment status before repayment begins. The grace period gives you time to get ready for the repayment process by taking the following steps. Graduates who should have entered repayment during the COVID-19 payment pause will not receive an extended grace period once repayment begins, so consider taking these steps now:

Update your contact information: First, it’s important that you share any changes in your name, email, address or phone number with the Department of Education, so you don’t miss vital information that could impact your finances. You can update your personal data, as well as find out who will be servicing your loans, by visiting StudentAid.gov.

Estimate the payment: Estimate your loan payment and select a payment plan that works for you. Use the loan simulator tool at StudentAid.gov to review your loan balance and choose from several different repayment plans to find the one that best fits your long-term goals. Getting your application in for a new plan now is a smart way to ensure you’re ready with a payment you can afford when the time comes.

Build it into your budget: Now that you’ve estimated your monthly payment and applied for a repayment plan, create a budget that includes your loan payment so you’ll be ready when it actually comes due. If you’re not sure how to set up a spending plan, check out the interactive budget calculator and other helpful resources at OklahomaMoneyMatters.org.

Stash those dollars: Once your budget is updated to reflect your estimated monthly loan payment, consider using your grace period to build an emergency fund. Until it’s actually time to start the repayment process, consider putting that payment amount in savings every month to cover emergencies like a flat tire or medical bill.

Get familiar with your servicer: There have been several changes in companies who are servicing federal student loans since the pause began. It’s important to verify that your servicer hasn’t changed, but if it has, you should get familiar with your new company. Remember, if you won’t be able to make your payment when the pause ends, talk to your servicer now BEFORE it becomes due. They have options to help you stay on track when repayment is difficult.

Confirm your autopay: Last but certainly not least, if you were repaying your loans on autopay before the payment pause began, confirm that your autopay is still in place with your accurate bank account information.

For more resources to help you in your student loan repayment journey, visit our friends at ReadySetRepay.org

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I've been hearing a lot about Public Service Loan Forgiveness. I'm a doctor at a for-profit hospital and was told my employer doesn't qualify. Are there any programs for people in the medical field besides PSLF? (posted April 6, 2023)

That’s a great question. The name "Public Service Loan Forgiveness" can sound a little misleading since it is more dependent on who you work for (a government entity or 501c3 nonprofit) than having a career serving the public in a field like medicine. However, medical professionals who don’t work for one of these entities may not be completely out of luck. There are many other forgiveness programs that may allow them to get some of their debt forgiven. Consider if any of these might benefit your situation:

Dental Loan Repayment Revolving Fund: A revolving fund has been established by the State Department of Health to be designated as the Dental Loan Repayment Revolving Fund for the purpose of repaying dental student loans. Contact the State Department of Health, Dental Health Services at 405.271.5502 for details.

Faculty Loan Repayment Program: The Faculty Loan Repayment Program (FLRP) pays up to $40,000 for a two-year service obligation to eligible health professions faculty members from disadvantaged backgrounds. Participants should also receive matching funds from their employing educational institution. Visit the FLRP website for applications, deadlines and additional information.

Indian Health Service Loan Repayment Program: The Indian Health Service Loan Repayment Program (IHSLRP) pays up to $24,000 per year for two-years of continuous, full-time service at Commissioned Corps, Civil Service and Direct Tribal Hire facilities or in an approved Indian health program. Visit the IHSLRP website for applications, deadlines and additional information.

National Health Service Corps: The National Health Service Corps (NHSC) Loan Repayment Program pays up to $50,000 tax-free, to primary care medical, dental and mental health clinicians in exchange for two years of service at an approved site in a Health Professional Shortage Area. Visit the NHSC website for applications, deadlines and additional information.

Navy Health Professions Loan Repayment Program: The U.S. Navy's Health Professions Loan Repayment Program (HPLRP) provides a maximum yearly loan repayment of $40,000 (minus about 25% federal income taxes). Payment is sent directly to the lending institution. More information is available on the HPLRP website.

Nursing Education Loan Repayment Program: The Nursing Education Loan Repayment Program (NELRP) aims to alleviate the critical shortage of registered nurses in non-profit health care facilities. The program pays 60% of an eligible participant's qualifying education loan balance for two years of service. For an optional third year, participants receive an additional 25% of their original qualifying education loan balance. Visit the NELRP website for applications, deadlines and additional information.

Oklahoma Medical Loan Repayment Program: A loan repayment program for primary care physicians (family medicine, geriatrics, general internal medicine, general pediatrics, obstetrics/gynecology and emergency medicine) that provides financial assistance to physicians in repaying legitimate, documented educational loans. Visit the Physician Manpower Training Commission website to see if you qualify and to learn about other loan assistance programs available.

To learn more about student loan management — including forgiveness programs — check out ReadySetRepay.org. Ready Set Repay, the student loan management initiative of the Oklahoma College Assistance Program, works with student loan borrowers and Oklahoma higher education institutions to help students make smart borrowing decisions, and successfully repay their student loans.

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I’m a teacher at a public school, and I heard that there have been some changes to the Public Service Loan Forgiveness Program that may make it easier for me to get student loan forgiveness. Can you tell me more? (posted August 4, 2022)

The Public Service Loan Forgiveness (PSLF) program first launched in 2007 and was created to reward borrowers who chose careers in public service. This provided a path to federal student loan forgiveness for those eligible borrowers after they’d worked 10 years at a qualifying employer while making 120 qualifying payments. Due to initial misinformation about qualifications, until recently nearly 99% of applicants were denied forgiveness.

In October 2021, the Department of Education issued a limited-time Public Service Loan Forgiveness waiver that changed the qualifications slightly to allow those who had been working in public service, but previously didn’t meet the requirements, the opportunity to get closer to qualifying for—or in some cases, finally receiving—student loan forgiveness.

Who is eligible under the new waiver?

Borrowers who work in government or nonprofit jobs may be able to receive forgiveness for some additional loan programs such as Federal Family Education Loans FFEL), federally-backed loans that were made through private lenders, Perkins loans and other nonstandard federal loans, as well as loans that were on non-income-driven repayment plans, which previously didn’t qualify. Borrowers can also receive credit for previous payments and periods of employment, such as active military duty, that wouldn't have qualified for PSLF in the past, as long as they take action before the deadline.

How to apply:

The PSLF Help Tool found on StudentAid.gov can help you determine if you qualify, or if you require additional steps (like loan consolidation) before applying for the limited waiver. The deadline to apply for the waiver is Oct. 31, 2022, but the sooner you apply, the better. Borrowers with Direct Loans may not have to take any action to have their loans forgiven -- but if you haven’t applied for PSLF yet, it’s a good idea to do that as soon as possible. If you hold FFEL, Perkins loans or other nonstandard types of federal student loans, you'll need to consolidate them into a newer Direct Loan to make them eligible. This process can take several weeks so it’s important to begin as soon as possible to ensure you meet the requirements before the deadline.

How to consolidate your non-Direct federal student loans:

Non-qualifying federal student loans can be consolidated into a Direct Loan at StudentAid.gov. This will combine your existing federal loans into one or two Direct Loans (depending on the loan type) with one interest rate and one monthly payment. By consolidating into a Direct Loan and then applying for the expanded PSLF waiver, your past payments may count toward loan forgiveness — as long as you meet the other requirements.

Federal Student Loan Payment Pause Months Qualify:

The federal student loan payment pause, which began with the Coronavirus Aid, Relief, and Economic Security Act (CARES), which is set to expire on Aug. 31, includes a provision where each of those months will count as a qualifying loan payment as long as you continue to meet the other PSLF requirements—such as qualifying employment and a qualifying repayment plan.

To learn more about PSLF and other student loan forgiveness options, visit the resources available at ReadySetRepay.org and StudentAid.gov.

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I’m graduating from college this month and I borrowed student loans to help cover the expenses. Now I’m going to have to start the repayment process. What’s the best strategy to prepare? (posted May 5, 2022)

Congratulations! Preparing to repay your student loans is an important responsibility whether you’ve just graduated or recently withdrawn from college. It’s smart to be prepared before your payment is due. Generally, federal student loans provide a six-month grace period after you graduate, leave school, or drop below halftime enrollment status before you’re required to begin making payments. The grace period gives you time to get ready for the repayment process by taking the following steps.

Check the MPN: First, make sure to review the terms and conditions outlined on your Master Promissory Note, or MPN, which is the agreement you signed when you accepted your student loan. It’s important that you understand what you, as the borrower, are responsible for during the repayment process.

Complete your exit counseling: Exit counseling is a federal requirement which explains all of your rights and responsibilities as a borrower. You’ll be asked to update your contact information and you’ll learn helpful tips for successful repayment. Be sure to make your exit interview a priority.

Estimate that payment: Estimate your loan payment and select a payment plan that works for you. Use the loan simulator tool at StudentAid.gov to review your loan balance and find the best repayment plan from eight different options that best fits your long-term goals.

Build it into your budget: Now that you’ve estimated your monthly payment, create a spending plan that includes your estimated student loan payment so you’ll be ready when the payment actually comes due. If you’re not sure how to set up a spending plan, check out the interactive budget calculator and other helpful resources at OklahomaMoneyMatters.org.

Stash those dollars: Once your budget is updated to reflect your estimated monthly loan payment, consider using your grace period to build an emergency fund. Until it’s actually time to start the repayment process, consider putting that payment amount in savings every month to cover emergencies like a flat tire or medical bill.

Stay in touch with your loan servicer: It’s important that you share any changes in your name, address, and phone number, as well as your ability to repay the loan with your servicing company. If you can’t make a payment, it’s important that you tell your servicer BEFORE your payment is due. They have options to help you stay on track when repayment is difficult.
For more resources to help you in your student loan repayment journey, visit our friends at ReadySetRepay.org .

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I’m considering a repayment option for my student loans called Public Service Loan Forgiveness. What should I know before signing up?
Public Service Loan Forgiveness (PSLF) is a federal student loan repayment plan that was designed to ease the debt burden of college graduates who work in public service jobs, which typically pay less than similar jobs in the private sector. PSLF forgives any remaining balance on federal direct student loans once you’ve made 120 qualifying monthly payments and meet the qualifications.
The program’s qualifications are very specific, and borrowers are encouraged to keep good records and submit an Employment Certification Form (ECF) on StudentAid.gov as soon as possible to verify their qualifications and to re-certify their employment at least once each year until they have completed the 120 payments. This ensures that borrowers who wish to take advantage of this program can correct any problems that may prevent them from qualifying for PSLF sooner rather than later.

Qualifying employers
Borrowers must be working full-time—at least 30 hours per week for a qualifying employer—in order to take part in the PSLF program. The following organizations meet PSLF guidelines:

Government organizations at any level; federal, state, local or tribal.

Certain not-for-profit organizations that are classified as tax exempt under the 501(c)(3) Internal Revenue Code.

AmeriCorps or Peace Corps volunteers working full-time.

Some non-tax exempt, not-for-profits may qualify if they meet certain requirements. The most common qualifying employers in this category include some private elementary and secondary schools, private colleges and universities, and thousands of other organizations.

See the PSLF main webpage for more information.

Qualifying loans
Any Federal Direct Student Loan qualifies for PSLF. Federal Family Education Loans (FFEL) and Federal Perkins Loans do not qualify unless they’ve been consolidated into a Direct Consolidation Loan. Additionally, private student loans do not qualify for forgiveness under this program.

If you choose to consolidate your loans to qualify for PSLF, be aware that only payments made after the consolidation is approved will count toward PSLF. If you aren’t sure which type of loan you have, check out the Loan Summary page at StudentAid.gov, the Department of Education’s official site for financial aid and student loan information.

Qualifying payments
Once the borrower has made 120 qualifying payments on their student loan balance, the rest of the debt will be forgiven. Each qualifying payment must meet these five criteria:

payment was made after Oct. 1, 2007;

made while on a qualifying repayment program;

must be made in the full amount as shown on the billing statement;

must be on-time—within 15 days of the due date; and

must be made while employed full-time with a qualifying employer.

Your payments do not have to be made consecutively; if your loans are in deferment or forbearance status, and you’ve stopped making payments for a period of time, you can pick up where you left off in the repayment process. You cannot, however, make qualifying payments while you’re enrolled in school, in deferment or forbearance, or in your six-month grace period, since payment is not required in those circumstances.

Qualifying Payment Plans
In addition to meeting the requirements outlined for a qualifying PSLF payment, payments must be made while you’re enrolled in a particular repayment plan. Qualifying repayment plans include income-driven repayment plans such as Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), Income-Based Repayment (IBR) and Income Contingent Repayment (ICR). These are the repayment plans that base your monthly payment on your annual income. Learn more about each repayment plan as you consider the PSLF option.

The Department of Education offers a PSLF Help Tool to guide you through the PSLF eligibility regulations. Before you choose your next step, we encourage you to contact FedLoan Servicing at 1.855.265.4038. They can explain the PSLF option and determine if you meet the qualifications.

To learn more about smart borrowing and successfully managing student loans, visit OCAP’s student loan management website, ReadySetRepay.org.

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I'm familiar with the "debt snowball” repayment method, but lately I’ve been hearing about the "debt avalanche." What’s the difference between the two systems, and which one is best to pay down my debts? (posted Sept. 28, 2018)

When it comes to debt repayment, there’s no right or wrong way to do it. There are numerous methods to choose from and no shortage of financial gurus who will boast that their debt reduction methodology is the best. In reality, the best debt repayment plan is the one that works for you and your financial situation. The first step is to craft a monthly budget that addresses each of your expenses, including all minimum payments for any debts owed. Track your spending habits and then reduce expenses where you can; any funds left over is money that can be used to pay off debt. Once you’ve earmarked some extra funds, try one the following tactics to accelerate your debt repayment efforts.

Debt snowball. List your debts from smallest balance to largest. Each month, put the extra money you’ve budgeted for debt reduction toward your smallest debt. Once that debt is paid, take the entire amount you were contributing to it and add it to the next smallest debt on the list. Keep knocking off debts and then diverting all the freed-up money toward the next debt in line until you are debt-free. For step-by-step guidance on the debt snowball, check out our debt snowball work sheet.

Debt flurry. The debt flurry uses the same theory as the debt snowball, except in smaller doses. In this scenario, you would allocate any extra funds toward your debt, no matter how small the amount. Any funds above what is budgeted to cover monthly expenses is used to chip away at your overall debt. For instance, if you receive a rebate or gift money from a birthday or holiday, instead of dining out or shopping, apply the amount toward your debt.

Debt avalanche. Depending on where you look for information on this topic, descriptions of the “debt avalanche” repayment method vary widely. One viewpoint allocates any large dollar amounts or windfalls toward debt reduction. This can include receiving an inheritance, bonuses, income tax refunds, etc. This strategy knocks off huge chunks of debt at a time, moving your debt payoff date even closer. Another viewpoint encourages users to follow the debt snowball method outlined above, but to begin by paying off the debt with the highest interest rate first. Tackling the highest interest debt first will indeed save you money in interest payments, but there’s a trade-off—it takes much longer to find the victory in completely paying off a debt. Since you’ll have to wait longer to feel the gratification, you’ll need to be diligent to stick with the plan.

To optimize debt reduction, consider utilizing these methods in tandem. For more information on reducing debt, visit OklahomaMoneyMatters.org.

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I’m curious about the Public Service Loan Forgiveness Program; what is it and how do I know if I qualify? (posted March 31, 2017)

The Public Service Loan Forgiveness Program (PSLF) allows for student loan forgiveness for qualifying individuals who are employed by organizations like government entities or nonprofits. Unlike many other loan forgiveness programs, once the loan is forgiven, the remaining balance is not considered income you would have to claim on your taxes.

To be eligible for PSLF, you would need to meet the following three requirements.

Qualifying employment. You must be employed full-time by a public service organization when you apply for the loan forgiveness program and throughout the length of your repayment period. You and your employer will need to fill out the PSLF: Employment Certification Form to verify that your place of employment qualifies.

Qualifying loan. Your student loan must be a Direct Loan. If you have a Federal Family Education Loan Program (FFELP) loan, it will need to be consolidated into a Direct Loan through the U.S Department of Education. If you’re unsure what type of loan(s) you have, access the National Student Loan Data System (NSLDS) to retrieve your federal loan information.

Qualifying monthly payments. Once you’ve met the above requirements, you’ll be required to make 120 qualifying monthly payments. This will take at least 10 years to complete. The PSLF: Employment Certification Form is a good tool that you can submit periodically to the U.S. Department of Education FedLoan Servicing or to your loan holder to ensure you’re staying on track to receive your PSLF. Payments made within an approved repayment plan will count toward the 120 payments, even if you qualify for a $0 monthly payment. Since the payments don’t need to be made consecutively, the program can be “paused” if you decide to go back to school for a master’s or doctoral program (deferment) and then resumed once you finish the degree program. The same is true if you experience economic hardship or military deployment, as long as you complete the proper paperwork and your request is approved.

If you believe you work in an eligible public service field and you have student loan debt, this program is worth checking into. To learn more, see if you qualify and apply, visit the Federal Student Aid website and check out the PSLF Q&A.

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Like many people, I have an auto loan. My goal is to pay it off early so I can pay less interest. I’m not sure what approach I should take, can you help? (posted July 25, 2014)

Assuming you won't be hit with a penalty fee for paying the loan off early, accelerating your payments to shorten the length of your repayment term and pay less in interest is a great goal. Here are three simple, yet effective, approaches to consider.

Round it up. Consider rounding your regularly monthly payment up to the nearest hundred dollar increment. If you financed a $20,000 vehicle at 3 percent interest for 48 months, your monthly payment would be $442.69. If you rounded the payment up to $500, you'd pay the loan off six months sooner and save $144 in interest.

Add one. Another money-saving strategy to consider is paying one extra payment a year. If you have the extra cash on hand you can pay it all at once or you can divide your normal monthly payment by 12 and add that amount to your regular payment.

Make it snow. You may have heard of the debt snowball, but have you heard of the debt "snowflake"? Essentially, by implementing this approach, you're paying as much as you can whenever you can. Shop with coupons? Put the amount you saved toward your car loan. Took advantage of a rebate offer? When the check comes in the mail immediately use it to make an extra loan payment. Find a $50 bill in your birthday card? Lucky you! Now use that money to lower your balance. Little bonus payments can really add up over the life of your loan.

Remember, you don't have to throw large amounts of money at your debt to reap big rewards. Even small amounts, paid consistently, can reduce your interest fees significantly. Use this accelerated payoff calculator to explore how making additional payments to your loan's principal balance can help you reach your financial goal.

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I have nearly $10,000 in credit card debt. I don’t want to file bankruptcy and I’m afraid a debt repayment program will be too expensive. What other options do I have? (posted May 27, 2020)

While $10,000 is a fear-inducing amount of debt for many people, paying it off isn’t an impossible feat. It will take effort, determination and perseverance, but in the end the satisfaction of having a zero balance will be worth it. Below are several payoff strategies to consider.

Self-help. You don’t have to rely on professional assistance to get your debt under control. Keeping debt reduction in mind, use our customizable budget calculator to create a realistic budget. Begin by listing all your sources of income. Then allot money for your fixed expenses – the ones that are the same each time you pay them. Next estimate how much you spend on variable expenses, like groceries, fuel, and entertainment. Aim to ensure that your basic needs are met and then prioritize the rest. Reduce variable expenses as much as possible and allocate the money you’ve saved to your debt reduction goal.

Once your budget is set, list all of your debts in order from smallest to largest and start by tackling your smallest debt first. Accelerate your debt payoff plan by implementing the debt snowball. Details are available in OKMM’s Debt Snow ball Worksheet.

To get more bang from your bucks, consider contacting your creditors to negotiate modified repayment schedules, reduced interest rates, or see if they’ll waive any late fees or penalties you may have incurred.

Debt consolidation. The process of combining the balances on your individual credit cards into one new loan will simplify your payments and make it easier for you to keep track of your debt. Some people consolidate debt through a credit card balance transfer while others choose to take out a home equity line of credit or a personal loan from a bank or credit union. If you choose a loan that requires you to put up your home as collateral, be cautious. If you fail to make your payments as agreed, your home could be in jeopardy.

A debt management plan. A strategic repayment system through which you agree to make monthly payments to a credit counseling agency that redistributes payments to your creditors is known as a debt management plan or DMP. The credit counselor will generally negotiate with creditors on your behalf to lower interest rates and possibly waive certain penalty fees you may have incurred. If you work with a nonprofit counseling agency, the initial counseling session is typically free. The counselor should conduct a thorough review of your financial situation to determine if a DMP is your best course of action. If you choose to participate in a DMP, you’ll most likely have to pay an enrollment fee. These fees are usually affordable if they’re calculated on a sliding scale, taking your income into account. Keep in mind that not all debt management plans are created alike, so shop around and ask questions before committing to a program.

No matter which debt relief method you choose, it’s important to identify the factors that caused you to accrue this debt in the first place. If you don’t take measures to address the root cause, you may find yourself in debt again in the future. For personalized help or to learn more about debt management options, consider making an appointment with a local nonprofit credit counseling service that’s affiliated with the National Foundation for Credit Counseling (NFCC). You may also contact them at 800.388.2227.

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Is a strategic default a good idea, or should it only be considered as a last resort? (posted Nov. 30, 2012)

A strategic default, also known as a voluntary foreclosure, is the decision by a borrower to stop making payments on a debt, despite having the financial ability to continue paying. While there are varying reasons a homeowner might choose this option, this action is usually considered by those who are significantly ‘upside down’ on their mortgage and no longer view the property as a viable investment.

Once a borrower defaults on a home loan, the lender will begin the process of selling the property in an attempt to reclaim what is owed. It’s important to know that depending on the type of agreement made with the lender, the borrower may be held responsible for paying the difference between the balance on the loan and the amount the lender gets from the sale of the home. This scenario leaves the borrower with the debt, damaged credit and no roof overhead.

Much like filing for bankruptcy, strategic default is an extreme step and is generally recommended in only the direst of circumstances. Only you can decide if the financial consequences of a strategic default are worth walking away. Here are some things to consider when weighing your options.

If your payment record is current and you have no foreseeable need to relocate, consider waiting it out. The housing market is starting to recover, which should result in an increased value for your home over time. Plus, with regular on time payments, you’ll eventually reach a tipping point where you’re no longer under water.

A foreclosure remains on your credit report for seven years and can make it very difficult to qualify for new credit in the future. If a lender does extend credit to you, the terms may be very unfavorable.

A strategic default can affect more than just your credit rating and future buying ability. Foreclosures lower the value of neighbor properties and communities, too.

The Mortgage Forgiveness Debt Relief Act of 2007, a federal tax break for short sales and foreclosures, will expire this year - resulting in severe tax penalties for defaulting. Any forgiven loan balance will be reported to the IRS as income.

Lenders are usually willing to work with borrowers who sincerely want to stay on track, and almost any other option is likely a better financial choice. Talk to your lender about renegotiating the terms of your loan, holding a short-sale or trying a deed in lieu of foreclosure (this is when the homeowner deeds their property to the lender in exchange for being forgiven the entire amount of the mortgage. The lender then sells the property to retrieve as much of the unpaid mortgage as possible. For more information about this process, visit HUD.gov).

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What's the difference between good debt and bad debt? (posted July 29, 2011)

Going into debt for items that are disposable or lose value is considered bad debt. For example, if you regularly eat out and charge it to your credit card, charge clothes that you want but don’t need, or buy a new vehicle every two years that loses value as soon as it’s driven off the lot, you’re racking up bad debt. Bad debt happens when we use credit to buy things that create unhealthy financial situations. Clothes, toys and vacations are fun, but they don’t build wealth or earn value over time.

Good debt, on the other hand, gains value, helps builds wealth and adds to our personal well-being. For example, careful borrowing of student loans to help pay for school is a good investment, because a degree provides more job stability and earning potential. The mortgage on your home is another example of good debt. Not only is the equity in your home an asset, but the interest you pay on the loan is tax deductible.

While it’s always a better practice to remain as debt-free as possible, few people can buy a home, car or other big ticket item without using some form of credit. So, before you charge it, ask yourself these questions to decide if using credit is a good risk.

Do I need this item?

Will the value of the item increase or decrease?

How long would it take me to save for this purchase instead of charging it?

Am I willing and able to pay the bill when it’s due?

Is there a cheaper alternative that I’d be just as happy with?

If you decide it’s necessary to charge a purchase, keep these tips in mind for keeping debt under control:

When possible, make a significant down-payment. The more you pay in advance, the less you’ll have to borrow and pay back, with interest.

Pay all your bills in-full and on time. Not only will you save on interest charges, making on-time payments is a great way to maintain a good credit score.

If you can’t pay the full amount, make your own repayment plan. Always pay more than the minimum monthly payment due.

Borrow or charge only what you can afford to repay.

Shop around for the lowest interest rate to get the best deal possible.

If your debt situation has become more than you can comfortably handle, talk to a professional, nonprofit credit counselor at Consumer Credit Counseling Service of Central Oklahoma, 800.364.2227.

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I've heard about the debt snowball method for eliminating my debt. I'd really like to give it a try; can you provide step-by-step instructions? (posted Feb. 25, 2011)

The debt snowball is a highly effective way to quickly pay off debt and gain momentum toward a healthy financial lifestyle.

Before we explain how to create your own snowball, there are three important things you should know.

The success of the debt snowball is contingent upon finding extra money to put toward your debt. In our example, we’ll use $200. Where do you find extra money in your budget? Cut cable television, limit eating out, earn extra income…do what you can to aggressively attack your debt. If you can’t afford $200, start with $50 or $100. To make the snowball work you must find a way to pay extra on your debt.

Don’t worry about interest rates. It makes sense logically to go after the debt with the highest interest rate first because you’d save more money in interest. However, changing behavior often isn’t a logical decision; it’s more of an emotional one. Using the debt snowball, you’ll pay off your lowest-balance debt first, helping you feel a sense of relief and accomplishment almost immediately. Although we aren’t focusing on interest rates, if you feel like your interest rates are too high, call your creditors to see if they’d consider lowering them.

It’s important that you make your minimum payment on every debt you owe. The extra money you set aside to help blast your debt (see number 1) will be added to the minimum payment on the debt listed first. Pay this new amount on this debt only, but continue to pay your minimum on all other accounts.

OK, let’s get started.

The first thing you’re going to do is pull out all your statements and files to locate every account which has a balance. Don’t worry about your mortgage, yet. Focus on credit cards, medical bills, car payments or student loans.

Make a list which includes the creditor’s name, account balance and minimum payment due for all debts. Organize your debt from smallest to largest. Your list may look something like this.

Creditor

Account Balance

Minimum Payment Due

Target

$450

$25

Chase

$1,200

$100

Bank (auto loan)

$9,500

$375

Now, using the extra money you identified—$200, in this example—increase the minimum payment on your lowest debt. Remember, continue to make the minimum payment on all other debt! Here’s what that looks like.

Creditor

Account Balance

Minimum Payment Due

New Minimum Payment

Target

$450

$25

$25 + $200 = $225

Chase

$1,200

$100

---------

Bank (auto loan)

$9,500

$375

---------

So, the first month of your debt snowball you’ll pay Target $225, Chase $100 and your bank $375. After only two months, the Target card will be paid off! How exciting! What do you do next?

With your first debt eliminated, you’ll take the monthly amount you paid on it and add it to the minimum payment of your next lowest debt.

Creditor

Account Balance

Minimum Payment Due

New Minimum Payment

Chase

$1,200

$100

$100 + $225 = $325

Bank (auto loan)

$9,500

$375

---------

So, now you’re paying $325 to Chase. Why $325? Well, your minimum payment is $100 and since the Target account is paid off, you’re going to take the monthly amount you were paying them ($225) and add it to your minimum payment for Chase. Continue to make your minimum payment of $375 to your bank for your auto loan.

As you can see, by paying $325 each month, the Chase account will be eliminated in just a few months, assuming you’ve stopped charging expenses to the account. Once that debt is paid, take the monthly amount paid and add it to your next debt—the auto loan.

Creditor Account Balance Minimum Payment Due New Minimum Payment

Bank (auto loan)

$9,500

$375

$375 + $325 = $700

Now your new car payment is $700, so you’re paying almost double what you previously were! Do you see how you’re able to snowball your payments and eliminate your debt all by finding an extra $200?

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On my way to work, I see several signs advertising the services of credit repair agencies. Is it best to use one of these agencies or can I repair my credit by myself? (posted Aug. 31, 2007)

“Credit problems? No problem!”

“We can erase your bad credit in 10 days — 100 percent guaranteed!”

These days, it seems everyone has seen these signs or heard the commercials advertising the services of credit repair companies. While some of these companies are legitimate, many make promises they just can’t keep. Forget the hype - there’s no quick and easy way to erase bad credit.

While repairing your credit isn’t fast or pretty, the truth is, most folks don’t need outside help to turn things around. You can take the same approach the professionals do to clean up your credit, without shelling out your hard-earned cash. Bankrate.com, a popular money management website, recommends consumers take this five step approach for do-it-yourself credit repair.

Place a credit report order. Find out what each of the top three major consumer reporting agencies—Equifax, TransUnion and Experian—are saying about you. Ordering all three in tandem allows you to review your full credit history. Since creditors don’t have to report to all three agencies, each credit report may differ. The Annual Credit Report Service (877-322-8228, AnnualCreditReport.com) will provide one free copy of your credit report from each agency per year as required by the Fair Credit Reporting Act. Equifax, Experian and TransUnion will provide additional copies of your credit report and your credit score for a small fee. Instructions for ordering your report and addressing any errors are available on the website.

Inspect your reports. Odds are you’ll have at least one error on your report; most people do. consumer reporting agencies generate a report based on information provided by your creditors. They don’t verify the information…that’s your job! Review your information closely and make a list of items you need to dispute and why. If the negative information on your report is accurate, only time will help you change that. Late payments remain on your report for 7 years and bankruptcies remain for 10. If you want more information, Bankrate.com has more details about reading and understanding your credit report.

Tell ‘em about it. Once you’ve identified any errors on your report, it’s now time to dispute them. Your consumer reporting agency should provide you with a dispute form, or you can write a letter. Clearly state the error you’re disputing; you may consider attaching a copy of your credit report with the error highlighted. Be sure to keep copies for your files and document the date you sent the information and/or spoke with someone on the phone. The consumer reporting agency has 30 days from the time they receive the letter to investigate your dispute. Keep in mind that you may have to work with your creditor to fix the mistake. If any changes are made to your credit file as a result of your dispute, the consumer reporting agency will send you a free, updated copy of your credit report.

Knock out debt. Now that your credit history has been cleaned up, it’s time to take a look at your current debt. If you’re having trouble making your payments, be sure to communicate with your creditor or lender. You may be eligible for reduced monthly payments, or you may be able to change due dates to spread out the timing of your monthly bills. It’s also time to look closely at your spending habits. Are you living a lifestyle you can’t really afford? What needs to change? For tips on paying off debt already accrued, visit our Getting Out of Debt page. Paying off debt takes time and dedication; you can do it!

Be positive. You’ve cleaned up your past credit history and taken aim at your current debt. Now it’s time to focus on building a solid credit future!

The bottom line is this: legitimate credit repair companies do exist, but they can’t work magic. In most cases, you can achieve the same result with a do-it-yourself job. If you still want to use the services of a credit repair agency, avoid for-profit companies that make you pay before services are provided. Consider nonprofit credit counseling services, such as Consumer Credit Counseling Service (greenpath.com/counseling/debt-counseling) or the National Foundation for Credit Counseling (NFCC.org), and always visit the Better Business Bureau to investigate company complaints before you enter into a business relationship.

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Which is more important, saving or paying off credit card debt? (posted July 27, 2007)

To answer this question, let’s turn to our good friend, mathematics (please don’t stop reading!). If you’re earning 2 percent interest on your savings and paying 18 percent interest on your credit card debt, you’ve got a 16 percent problem.

If the interest you’re paying on credit card debt is higher than what you’ll earn in a savings account, pay off your debt first. That said, don’t completely neglect your savings! While several factors affect how your money grows, one of the most important elements is time. Simply put, the earlier you start saving, the more you’ll earn through the magic of compound interest. Also, a cushion in your account will keep you from relying on credit cards or payday loans in a crisis.

Here’s the bottom line: it just doesn’t make sense to pay more interest than you can earn. Use the bulk of your extra money to pay off those pesky credit cards, but make sure you contribute something to savings each month, even if it’s only $50. Once the debt is paid, shift those monthly payments to savings. Since you’re already living without the extra money, you won’t miss it!

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I’ve noticed that there are a lot of radio and television commercials advertising various credit and debt counseling services. Are all of these businesses legitimate? How do I tell? (posted Oct. 27, 2006)

It is confusing, isn’t it? We salute you for recognizing that this is an issue, and for seeking help to regain control of your debt! As a good rule of thumb, look for organizations with the following characteristics (adapted from a related article in The Oklahoman):

Tax-exempt status. Visit IRS.gov/eo and click on “Search for Charities” to find out if an organization is tax-exempt.

Accreditation. The most common agency is the Council on Accreditation, which requires operation under strict quality guidelines.

Membership in a national industry organization. The National Foundation for Credit Counseling has been the gold standard since the 1960s.

Better Business Bureau approval. Visit BBB.org to see if complaints have been filed against the company.

Affiliation with the United Way. They’ve been deemed charitable and most likely are active in the community.

A local office. This allows consumers to develop personal relationships with financial experts through face-to-face interaction and customized counseling.

You can learn more by contacting a nonprofit provider, such as Consumer Credit Counseling Service or the National Foundation for Consumer Credit. Bottom line, a trustworthy credit counseling service will be more concerned with helping you get out of debt than in selling you something. You should never feel pressured into a repayment plan or to make a purchase of any kind.

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Often I find myself overwhelmed when it comes to dealing with my debt. The big picture is often frustrating and leaves me unsure of what to do. Can you give me some tips to help me keep it all in perspective? (posted Aug. 25, 2006)

First and foremost, don’t panic. Facing your debt can be overwhelming, but it’s absolutely possible to dig yourself out – even if the hole is deep. I commend you for recognizing that this is an issue you must address!

Step 1: Be honest with yourself. Assuming you’re referring to credit card debt, take control by figuring out how you landed in this position. Are you using credit to support a lifestyle you can’t really afford? If so, evaluating how and why you spend will help you manage your spending in the future (so you don’t find yourself in this position again). A realistic monthly budget will allow you to set healthy parameters.

Step 2: Know where you stand. Do you know how much you owe, and to whom? Pull statements and call creditors to find out exactly what you’re dealing with. Once you have the facts, create an at-a-glance debt chart that shows the total amount owed, interest rate, minimum monthly payment, and monthly payment due date for each account. If you have a card with a high interest rate, ask your creditor for a rate reduction or transfer your balance to a low-rate card (pay attention to the fine print … some cards only offer a low rate for the first few months). Compare credit card interest rates online at BankRate.com.

Step 3: Cease Fire. You can’t pay off your debt if you keep adding to it. Leave your credit cards at home - lock them up, freeze them, whatever works – so they aren’t readily accessible. (Don’t close all your credit accounts, as this can actually hurt your credit score.)

Step 4: Activate your pay-off plan. Select one account and pay as much as you can each month, doubling your payment if possible. Continue to pay the minimum payment on your other accounts. Once the first account is paid off, add that payment to your payment on another account until it’s paid off (keep increasing your payments whenever you can). Continue this process until all accounts have a zero balance. To make more headway, apply all “windfall” funds - birthday money, inheritance, tax refunds - toward your debt.

If you’ve examined your situation and feel that you may need professional help to reclaim your financial power, take the next step and learn more about dealing with excessive credit debt.

Focusing on one account at a time will help you keep “the big picture” in perspective. You’ve already admitted that you need to make a change; that’s the hardest part. You can do this!

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When paying toward debt, what should I attempt to pay off first? The smallest debt or the higher interest rate? (posted Aug. 25, 2006)

There are several schools of thought on this topic. Some experts recommend paying off the card with the highest interest rate first, because that approach will ultimately save you the most money (in interest). While that logic is sound, I disagree. Let me explain.

When you get down to it, the most important factor in debt reduction is commitment, because it takes discipline to change your spending habits … and it takes time, since you can’t pay off thousands of dollars in debt overnight. A sense of accomplishment will help you stay the course, so I recommend starting with the card that carries the smallest balance. Let that success boost your dedication to becoming debt free!

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Consumer Issues

Is life insurance a good investment? I’ve heard that buying life insurance gives peace of mind, but would it be better to save the money instead and earn interest? (Posted September 1, 2022)

For many people, the decision to buy life insurance can be confusing and often leads to more questions. First, it's important to understand all the different types of life insurance. This can help you decide which type to spend your money on. Most people choose either term life or permanent life insurance.

Term: Term life insurance is temporary and covers you for a set term or time period. Term insurance only pays a death benefit if the insured individual dies within the coverage term, as long as the policy is current and premiums are paid on time. If the insured individual is still alive at the end of the term, the premiums paid over time will not be refunded. Term life usually costs less than permanent life insurance, requires a medical exam, and coverage can last 1-20 years. This type of insurance might be a good option if you know the length of time you want to pay for insurance and if you want a larger payout. A disadvantage of term life insurance is once the term you choose is over, all the money you paid is gone, and there is no investment potential. Some term policies allow you to convert to permanent life after a medical exam.

Permanent: Permanent life insurance can cover your entire life if you pay the premiums. Death benefits are guaranteed, which means they will be paid no matter when the covered individual dies. Most permanent policies require a medical exam. Some permanent life insurance policies can be an investment. These policies allow you to accumulate a cash value, which is tax-deferred, with the ability to borrow and invest the money you put in. One advantage of borrowing against the value of permanent life insurance is that you usually avoid fees. You may have hefty penalties if you choose to borrow from savings, however.

Savings Account: If you choose to open a savings account, you can get the benefits of permanent life insurance, such as growing the cash value like you would with a 401K. In most instances, a savings account will earn more interest than a life insurance investment. If you do not anticipate withdrawing the money until retirement, a traditional 401K may be a better option overall for savings growth.

Whatever option you choose, it’s a good idea to talk to a financial advisor about what is best for your situation. To find one in your area, check out the National Association of Personal Financial Advisors website: https://www.napfa.org/.

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I daydream about winning the Powerball lottery. But if I ever were to win, how should I control my finances? (Posted January 6, 2022)

After the initial shock and awe of winning a big cash prize wears off, you’d have to determine what would be best for your personal situation. In Oklahoma, Powerball offers two payout choices - a lump sum payment or annuity payments. Annuity payments are a fixed amount paid over several years.

In order to better understand these options, it may help to explore the anatomy of a jackpot. If the billboard touts a jackpot of $2 million, the cash value of that prize is actually more like $1 million. The advertised amount represents an estimate of the total payments you would receive over 29 years if the cash amount were invested in an annuity for you. Ultimately, if you’re willing to accept smaller payments over time, you’ll receive the full $2 million. And rest assured, if you choose this option and pass away before the final payment is made, the payments would then go to your estate and be distributed to your beneficiaries as directed in your will or as determined through probate proceedings.

If you don’t like the idea of prolonged payments and opt to receive a lump sum, you’ll receive the current cash value of the prize - or approximately $1 million in this scenario, minus taxes. The total payout is obviously less, but opting for the lump sum allows you the freedom to invest the winnings on your own. If you’re confident in your investment strategy and think your plan can earn a better rate of return than the guaranteed rate of the annuity, the lump sum may be the better option.

If any lessons can be learned from past jackpot winners, perhaps the most important is that collecting the money is the easy part; managing a big windfall is where things can get tricky. Did you know that one in three lottery winners experiences some form of financial trouble within five years of winning? If you’re lucky enough to win, don’t become a statistic. Take proactive steps to make your winnings last.

Seek guidance from an attorney or financial planner who specializes in working with clients who’ve suddenly acquired large sums of money.

Avoid making hasty decisions or drastic lifestyle changes. Allow yourself a cooling-off period so you can avoid making decisions you may later regret.

Create a realistic budget and stick to it. Don’t live as if the money is unlimited. If not managed wisely, the money can be spent quickly and once it’s gone, it’s gone.

Just for fun, check out WebMATH.com to calculate your odds of winning. Also, while there’s nothing wrong with playing the lottery, if playing games of chance or gambling is negatively affecting your ability to meet your financial obligations, don’t wait to get help. You can call or text the National Problem Gambling Helpline at 1-800-522-4700 or visit NCPGambling.org to find local resources.

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I recently graduated from college and am ready to join the working world. I've received a couple of job offers, but how do I decide which is the right one? (Posted September 23, 2021)

Congratulations on your graduation! When considering an offer for employment, the annual salary isn’t the only thing to think about. Consider the fringe benefits that are available to you, such as medical, dental or vision insurance, as well as access to a 401(k) or other retirement plans. Perks like this can have a financial value that outweighs higher salaries for positions that don’t offer benefits.

Health Benefits. Health insurance is important for several reasons. Uninsured people receive less medical care and less timely care, they have worse health outcomes, and lack of insurance is a fiscal burden for them and for their families. Questions you’ll want to consider are: what’s the monthly cost of benefits? who’s covered? is there a probationary period before my benefits kick in? are my benefits taxable? what’s the difference between a HMO and a PPO?

Leave Policies. As eager as you are to begin your new job, you’ll eventually want to take some time off. How are holidays, vacation and sick leave handled? Is ‘comp’ or ‘flex’ time available when you’ve worked more than your weekly hours? Does the employer offer telework or a flexible schedule option?

Retirement Benefits. Most college graduates entering the workforce probably aren’t thinking about retirement. However, the earlier you begin saving, the more money you’ll have to live on in retirement. Look into the organization’s retirement plans. Are stock options available? Does the employer match retirement plan contributions? To read more about retirement benefits, visit the Gearing Up for Retirement section on OKMM’s website.

Company culture. An aspect of a job that’s often overlooked is the organizational culture. As much as you want to be the best candidate for a position, you also want the company to be the best fit for you. Consider the working environment, dress code and management style. If volunteerism is important to you, what is the philosophy on community engagement? Does the company support any charitable organizations? Research the company ahead of time and ask questions during your interview to gain more insight.

Additional Benefits. Ask about other perks, such as tuition reimbursement or student loan payoff programs. Ask about promotion and growth opportunities. Are there childcare or health savings plans available? Don’t miss the opportunity to ask the human resources department for more information about additional benefits that may be available to you.

For more information on evaluating a job offer, building a resume and interview tips, visit our Transitioning to Independence Learning Module.

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I just got a new puppy and my friend told me that I should look into pet insurance to help cover vet bills when my dog gets sick. Is this a good idea or a waste of money? (Posted July 29, 2021)

Welcoming a new pet is always an exciting time, and as a new pet parent, there are many expenses to consider. In addition to the day-to-day costs for basic care, should your pet get sick or be injured, an unplanned veterinarian visit can easily cost $700 to $1,000 or more.

Since that kind of unplanned expense can be a budget buster, pet insurance may seem like a great idea to help you handle some of those potential costs. However, there are some things you need to consider before making the investment.

How does it work? As with insurance plans for humans, pet insurance requires you to pay a monthly or yearly fee for a certain amount of coverage for your pet. It generally doesn’t cover the cost of routine visits or vaccines, but it can help in the face of unexpected costs for major illness or injury, diagnostic testing, surgery, rehabilitation or cancer treatment.

What does it cost? There are two main costs to consider when evaluating a pet insurance policy: your premium and your deductible. On average, the monthly premium cost falls between $30 and $40 and usually can be paid monthly, quarterly or annually depending on the plan you choose. Your deductible can range from $100 to $1,000 or more. For most policies, once the deductible is met, the insurance company will reimburse a percentage of your bill.

What does the plan really cover? It’s important to understand exactly what the plan covers and if there are any overall limitations on coverage. Many plans limit the amount you can claim, either annually or over your pet’s lifetime. If your pet suffers from a major medical issue, you could max out your plan’s limit quickly and still end up paying the difference out of pocket.

As with any financial decision, there are positives and negatives to consider before signing on the dotted line. Here’s a summary of the pros and cons.

Pros

You could save money. If your pet ends up with a major medical issue, like cancer, pet insurance can be a budget saver. Coverage can mean the difference between wrecking your finances and giving your fur baby the care they need.

You can choose your vet. There aren’t any in-network or out-of-network provider hassles to deal with, so you can choose the clinic with which you feel most comfortable without worrying if you’ll pay a higher percentage of the cost based on your choice.

Coverage is generally affordable. The monthly premiums and plan deductibles are relatively low and reasonably affordable.

Peace of mind. If your pet ever does get sick or injured, you’ll know that your policy can help you afford the care your pet needs. For many pet parents, that’s the biggest benefit.

Cons

It doesn’t cover everything. It’s important to remember that having pet insurance doesn’t mean the end of vet bills. Most plans do not cover routine visits and screenings, so if you have a really healthy pet, you could actually end up losing money.

You still have to cover the expenses up front. One of the biggest disadvantages of pet insurance is that if an emergency arises, you still have to pay the vet bill up front and then submit it to your insurance company for reimbursement. This leaves you at the mercy of the insurer’s timeline and determination if your pet’s medical expense fits the terms and conditions outlined in your plan.

You’ll probably pay more over time than you realize. As noted, on average, pet insurance policies cost $30-$40 or more every month depending on your deductible. Placing that amount into a high-yield savings account specifically for pet emergencies every month could actually help you save more money in the long run.

Whether you decide to invest in insurance for Fido or not, it’s still a good idea to set up an emergency fund for unexpected expenses insurance won’t cover. To learn more about saving and budgeting for unforeseen costs, check out our resources on oklahomamoneymatters.org.

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How do I determine my net worth? (Posted May 31, 2019)

Knowing your net worth is the best way to tell if you’re winning at your personal financial game. Your net worth provides a snapshot of your financial situation at a particular point in time. While this figure is helpful, it can also provide a “wake-up call” if you are completely off track. Tracking your net worth over time offers a more meaningful view of your finances. When calculated periodically, your net worth can be viewed as a financial tool that allows you to evaluate your current financial health and can help you figure out what you need to do in order to reach your financial goals.

Calculate your assets. Assets are the things you own that have monetary value. This could include your home and/or any land, if you own it outright or if the value is higher than your loan balance; transportation, such as recreational vehicles, all-terrain vehicles or boats, if you own them outright or if the values exceeds any loan balances; bank accounts; and investments. The first step is to determine the cash value of your assets. Sites like Zillow (for estimated home values) and Kelly Blue Book (for estimated vehicle values) offer a quick way to obtain rough estimates.

Calculate your liabilities. Liabilities are on the things for which you owe money. Therefore, your home or a vehicle can be both an asset and a liability if you still owe a balance. To determine your liabilities, calculate the total of all balances owed, including on credit cards, for loans, for mortgages, etc. Typically, you can find the remaining balances listed on your billing statements.

Once you’ve totaled the dollar amounts of both your assets and your liabilities, subtract the total balance of your liabilities from the total value of your assets. The number, whether positive or negative, is your net worth. You can use a net worth calculator on a website, like Personal Capital or NerdWallet.com, an excel spreadsheet, or a handwritten document to calculate this figure. If you want more exact numbers, consider speaking to a certified financial planner.

If you have a negative net worth, don’t panic. You’re not alone! Resolve to identify steps you can take and develop a plan to increase your net worth. The most straightforward way to positively impact your net worth is to pay off your debt. For tips and resources to develop a debt reduction plan, visit OKMM’s Getting Out of Debt section under the Consumers tab of our website.

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What should I consider when selecting a checking account? (Posted June 29, 2018)

Selecting a checking account is like most other financial decisions; what’s best for you depends on your financial needs. A checking account is designed for frequent deposits, including direct deposits of your paycheck, and withdrawals for your daily expenses. While all financial institutions offer accounts to keep your money secure and easy to access, not all accounts are created equally. It’s important to understand your options and shop around for an institution that offers the best deal for you.

Consider your financial needs and goals. Your financial needs and goals determine the type of account you’ll need. While many banks and credit unions offer free accounts, be sure to read the fine print to ensure there are no strings attached to maintain a truly free checking account. Checking accounts can offer interest earnings or charge you fees for the maintenance of the account.

Minimum balances. Some institutions may require you to keep a minimum amount in your account, such as $100. If your balance falls below the minimum amount, the bank will charge a small fee or close your account within a certain time period.

Access to ATMs. If you use an ATM that’s owned by your financial institution, there may be no cost. However, if you use an ATM that isn’t owned by your bank, you may be charged a service fee and your bank may charge an additional fee for using a machine outside the network.

Transfer limits.Having savings accounts linked to your checking account is a good way to easily manage savings goals. However, you should be aware of transfer limits. In some instances you can be charged a fee or have your account closed if you go over the allowable amount or frequency of transfers.

Don’t leave money on the table. Financial institutions offer many other miscellaneous services that may impact your decision to become a customer. Be sure to ask about all the services a company offers before you make your choice.

Long-term savings goals. If your financial goals include buying a home or starting your own business, a good relationship with a bank or credit union can lead to lower interest rates on new loans. These could include general loans, small-business loans, home-equity loans, car loans and home loans.

Short-term savings goals. Some offer special clubs that help you save for gift-giving holidays, build an emergency savings fund, and/or reach other short-term financial goals.

Free credit repair services. Many institutions offer credit repair services to help you improve your credit score and address inaccuracies on your credit report.

Be sure to do your research and shop around for the best fit for you. For more information about choosing financial institutions, visit OKMM’s Savings and Banking learning module on our website.

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What are some tools or apps that can help me become more financially successful? (Posted June 29, 2018)

Financial success means different things to different people. Many see financial success as the freedom to do the things they enjoy; to others, it may mean paying off all of their debt, paying for a child’s college education, or retiring early. Regardless of your view of financial success, the tools below can help you navigate your path to reach your financial goals.

Budgeting tools. Any solid financial plan starts with a budget, also known as a spending plan. The key to crafting a viable budget is finding a method for tracking your spending and saving that you enjoy using, and that meets your financial needs. Thankfully, there are budgeting tools available to fit every money management style. Play around with using traditional pen-to-paper worksheets, a computer software program, or an app such as Mint.com or EveryDollar. While you’re exploring, check out OKMM’s interactive and customizable budget calculator.

Debt pay-off calculators. If you’re serious about getting rid of debt, you’ll need to make a plan. First, identify how much money you can allocate toward debt repayment, then check out tools like Credit Karma’s Debt Repayment Calculator, an app like Unbury.Me, or a popular repayment acceleration strategy like the debt snowball.

Student loan repayment resources. A student loan is a serious obligation, and it must be repaid whether or not you complete your degree or credential. Set yourself up for student loan success by making smart borrowing choices from the start and crafting a student loan repayment plan. The ReadySetRepay.org loan calculator is a great tool for estimating your future loan payment, or compare the amount you’ve borrowed to your estimated future salary with Mapping Your Future’s Debt/Salary Wizard. If you’re unsure how much you’ve borrowed so far, visit the National Student Loan Data System (NSLDS) to review a summary of your federal financial aid information.

Credit score estimators. Your credit score helps determine your credit worthiness, and impacts loan terms, interest rates, insurance premiums, and possibly your ability to get a job or rent a home. Some financial institutions or credit card companies provide free credit scores for their customers. If you don’t have access to a service like this, apps like Credit Karma and Nerd Wallet provide a free snapshot of your credit score. Keep in mind that many factors impact your credit score and there are a variety of scoring models, so it’s best to use these tools to estimate your score and to benchmark your credit activity.

Retirement planning resources. If your employer offers a retirement program, you may have access to an online portal where you can view your contributions and estimate your retirement age and amount of disbursement. Other important tools include investment calculators like Calculator.net’s Roth individual retirement account calculator (IRA) and the My Social Security website, where you can view all your contributions from the time you entered the workforce, review your eligibility status and view your supplemental retirement disbursement estimates based on the age at which you choose to retire.

Be sure to check out our online resource clearinghouse to explore additional money management tools and resources.

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I really enjoy reading Financial Friday. Are there other financial education resources or blogs you’d recommend? (Posted March 30, 2018)

We’re so glad you find value in Financial Friday! Financial blogs can be another great source of innovative financial management strategies and frugal lifestyle tips and tricks. Many people find inspiration through the personal testimonies of others and the fresh perspective their experiences provide. Keeping in mind that what may work for some may not work for all, check out the following financial blogs for money management inspiration.

FunCheapOrFree.com. Jordan Page is the founder of FunCheapOrFree.com and online budgeting program BudgetBootCamp.com. After overcoming financial disaster and paying off $15,000 in credit card debt in only 13 months on a $31,000 salary, she loves proving that you can live well by living frugally. Jordan’s quirky personality and money management tips have been featured on multiple media channels, including the Today Show, Inside Edition, Good Morning America and YOU Magazine. Aside from blogging she is an entrepreneur, self-proclaimed kitchen dancer and busy mom to five children.

MoneySavingMom.com. Written by Crystal Paine, a financially savvy mom and wife, this personal blog follows her penny-pinching daily experiences. It’s dedicated to helping readers find great deals, stretch their hard earned dollars, and live on less than they make so they can save more and give more. With posts like “31 Days to a Better Grocery Budget” and “We Paid Cash,” this is an upbeat and encouraging blog for families.

MoneyUnder30.com. Money Under 30 was founded in 2006 by David Weliver, who dug himself out of more than $80,000 in debt in just three years. The blog’s target audience is young adults who want personal finance information and tips about paying off debt, credit cards, buying a car or home, investing and more.

CreditKarmaBlog.com. You may have heard about Credit Karma for its credit score tracker website/app, but did you know they also have a personal finance blog? The site covers a variety of financial topics and offers free resources stating that its job “…is to give you the tools; the education and the opportunities you need to make real, meaningful financial progress.”

NerdWalletBlog.com. Nerd Wallet was founded in 2009 by Tim Chen and Jacob Gibson. In addition to offering a website/app that can track your credit score and summarize your finances, Nerd Wallet also maintains a blog that offers financial advice, information, tools, and resources to help you make the most of your financial situation. Topics include credit cards, banking, paying for college, mortgages, investing and insurance.

We are not affiliated with the above-mentioned resources and encourage you to conduct your own research before following any blogger’s financial advice. While there are many methods to managing your money, only you can decide what is best for your financial situation.

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There are so many types of insurance. What insurance policies do I really need? (Posted February 22, 2018)

Insurance policies are essential financial tools that help you protect yourself and your assets by providing guaranteed compensation for specific losses, damages, illnesses or death in exchange for premium payments. It’s important to shop around and speak to a professional to ensure you’re getting the best deals and the appropriate coverages to meet your needs. Below are several types of insurance everyone should strongly consider.

Health insurance. Health coverage is currently a mandated insurance. Those who don’t have health insurance face financial penalties and are less likely to receive necessary medical care due to high costs. Individuals with medical coverage are more likely to detect a life threatening health condition and get proper treatment.

Homeowners/Renters insurance. Homeowner’s insurance covers your property in the case of vandalism, fire, and natural disasters and offers financial protection if someone is injured while visiting you or your property. If you’re a renter, the landlord will maintain insurance coverage on their property - but that policy won’t cover your personal belongings. Renters insurance would cover your personal belongings and may even cover the cost of lodging, if needed, due to fire or other damage to the rental property.

Car insurance. If you own or drive a car, you must carry car insurance. Policies offer a range of options from minimum liability to medical coverage to rental car assistance. Coverage options are based on a variety of factors, such as the vehicle you drive, your annual mileage and your age; choose coverage that will provide full financial protection in the event of an accident. Drivers without proper insurance risk losing their driver’s licenses, expensive fines and more.

Life insurance. Consider a life insurance policy to protect loved ones who depend on your income. Upon death, life insurance policies issue lump sum payments that can be used to cover funeral and burial expenses, which will lessen the financial burden on your family. Depending on the terms of your policy, your designated beneficiaries may receive funds that can be used for their care in your absence. This is particularly important for policy holders with minor children.

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What is consumer-driven health care and what are the differences between the programs that are offered? (Posted December 29, 2017)

Consumer-driven health care is a concept that’s designed to combat the rising costs of more traditional health care plans. The idea is that if consumers opt for plans with less expensive monthly premiums, but significantly higher deductibles, they’ll make more conscientious decisions relating to their overall health. Theoretically, because out-of-pocket expenses will likely be much higher and paid up front, consumers would make healthier lifestyle choices such as better nutrition and more physical activity. Ideally, these healthier choices could lead to fewer trips to the doctor and fewer unnecessary medical tests. Since prescription costs are included in out-of-pocket expenses, consumers may choose to shop around for more cost-effective deals or choose generic versions of medication when available.

Consumer driven health care plans are often paired with accounts that can be funded with pretax dollars, such as a health savings account (HSA) or a flexible spending account (FSA). Below are some areas of consideration for each type of account.

Health Savings Account:

The account is funded with pretax dollars up to the IRS limit via payroll deduction. Unused funds rollover at the end of the year with no penalty.

If a pre-tax payroll deduction is not an option through your employer, an HSA can be funded via bank draft, but would be subject to tax.

After the age of 65, funds can be used as retirement income; however, these funds will still be subject to income tax.

Depending on vendor offerings, an HSA can include the same investment options as an individual retirement account (IRA).

When funds are used for qualifying medical expenses, interest or other earnings are tax- and penalty-free.

Consumers must be enrolled in a qualified high deductible health plan (HDHP) to participate.

Flexible Spending Account:

FSA accounts are only available through employment with a participating employer.

The account is funded by pretax dollars up to the IRS limit via payroll deduction.

Although deposits are made during each pay period, the entire contribution amount is available for immediate use after the first deposit has been made.

Funds are considered “use it or lose it.” Depending on the employer option, only a portion of unused funds may be rolled over or eligible for a usage grace period.

It’s important to note that participants must choose between a FSA (through employer offering) or HSA and can only have one per household; however, account funds can be used to cover any member of the family. If participants have an HDHP, they must choose an HSA.

To learn more about health savings and flexible spending accounts, speak with someone on your employer’s human resources team or visit HealthCareInsurance.org and IRS.gov. As with any major financial decision that involves tax benefits and liabilities, it’s a good idea to consult a financial planner or your tax preparer.

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I’ve been hearing a lot about bitcoin. What is it and how is it used? (Posted November 22, 2017)

While bitcoin may seem like a fairly new concept, it’s been around for nearly a decade. Unlike traditional currency—like dollars, yen or euros—it’s not tied to any one regional economy. Instead, bitcoin is a form of cryptocurrency: decentralized digital money that can be spent electronically around the world with no fees or currency exchange, and with a value backed only by a consensus of its users. The use of cryptocurrency can be confusing, but we’ll try to make it a bit easier to understand.

Acquiring bitcoin. Most users buy bitcoin though online marketplaces known as “exchanges.” The idea is similar to exchanging your American dollars for the same value of another traditional currency when you visit a foreign country. Currently, bitcoin can also be earned by “mining,” which involves purchasing specific machines and software that help solve complex mathematical equations and ensure the legitimacy of bitcoin transactions online. Since part of the concept of bitcoin is to eliminate the effects of inflation and deflation, there’s only a specific amount of bitcoin available. Once all existing bitcoin is in circulation, bitcoin consumers will have to trade with other users to acquire bitcoin.

Using bitcoin. Bitcoin is stored in your virtual wallet, which is accessed through a website or a smartphone app. To make a bitcoin purchase, you use your virtual wallet to generate an encrypted key that you send to the vendor to transfer funds from your virtual wallet to theirs. Bitcoin is currently accepted by many online retailers and in some physical retail locations.

Reasons people use bitcoin. Bitcoin offers consumers increased security for online transactions via single-use, encrypted keys that can never be reused by the merchant or a hacker—unlike credit card or bank account numbers. It can also be used for increased privacy since virtual wallets do not have to be tied to a name. Merchants who accept bitcoin may prefer it because they pay no transaction fee or because there is no recourse for an unhappy or dishonest customer to reverse a payment. Some people choose to use bitcoin out of principle; they may favor the concept of a currency not controlled by government and banks, or they may believe that decentralized currency is the next step in an increasingly global economy.

The use of bitcoin and other forms of cryptocurrency is complex and controversial because it’s not regulated by any governing entity or backed by the Federal Reserve. While it hasn’t been officially deemed illegal in the United States as it has in some other countries, it is of interest to law enforcement, the Internal Revenue Service, and other regulatory agencies. Due to bitcoin’s lack of regulation, it’s become the preferred method of payment for cyber fraud and hackers. If you choose to use bitcoin or any other cryptocurrency, exercise extreme caution and do thorough research to protect yourself.

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Every year I make New Year's resolutions to pay off debt and save money, but I always fall short of reaching my goals. Are there any tools I can use to keep me on track? (Posted December 28, 2016)

We live in the age of software, smartphones and now even AI (artificial intelligence) home management systems. When it comes to streamlining tasks and managing goals for business or home, we do often hear the phrase, "there's an app for that." Truly, there are many tools and resources to help you stay on task and meet your financial goals. Below are a few apps and web tools to help you get started.

Productivity apps such as Toodledo, Awesome Note or Google Keep help organize to-do lists and notes, track your habits and create outlines and lists. Find the one that best suits your style in your app store.

Make use of your financial institution's mobile app to monitor useful financial information, like deposits, payments and spending habits.

Mint is useful for easily monitoring all of your accounts. It can track your bank accounts, credit cards, loans and investments. In addition to tracking your spending, it will alert you if you have upcoming bills, categorizes your spending and will notify you if you go over budget.

The Mvelopes app is based on the traditional envelope budgeting system. Use your smartphone to manage your income and expenses, like rent or mortgage, utilities, groceries and entertainment, rather than carrying cash in labeled envelopes.

AnnualCreditReport.com isn't an app, but it can help you meet your debt reduction goals. Every 12 months, you're entitled to one free report from each of the three major credit reporting bureaus. Your credit report includes information that's reported by your creditors, such as your identifying information, credit accounts associated with your Social Security number, credit inquiries and any public records or collections. Check your reports for errors; if you find incorrect information, follow the steps on the report to dispute inaccuracies.

The Debt Payoff Planner can help you develop a debt repayment plan and determine how long it will take you to become debt-free. The planner uses the "debt snowball" strategy, which focuses on paying off individual accounts faster to help you stay focused on your ultimate goal of debt elimination.

Credit Karma provides a free snapshot of your credit score. Pulling from two of the three major credit reporting bureaus, it provides an estimate of your credit score and information explaining how the estimate was made. This tool offers an additional avenue for monitoring your credit throughout the year, too.

Million Dollar Plan is a fun and empowering app. Using your current debt level, savings plan and spending habits, it predicts the date that you may become a millionaire. The app provides encouragement and tips for increasing your savings, spending less on groceries or paying extra toward debt reduction.

In addition to utilizing the right tools, it’s important to make your financial goals as detailed and strategic as possible. Take the time to craft SMART goals - goals that are Specific, Measurable, Attainable or Action Oriented, Relevant and Time Based. For instance, instead of stating that you want to save money this year, list exactly how much money you want to save; define the date by which you'd like to save it; and develop an action plan that outlines the steps you'll take to get there.

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I start every year with the best of intentions. I set a New Year’s resolution and work toward achieving it, for a month or two. After that, I fall off the wagon and go back to my old ways. I want to succeed this year and have a financially fruitful 2015 – help! (Posted December 18, 2014)

You're not alone. Studies show that up to 92 percent of people who set New Year's resolutions fail to reach them. So this year, resolve to stop making financial resolutions. That's right, just say no!

The most common money-related resolutions are eliminating debt and increasing savings, but with goals this broad it's easy to get frustrated and give up. Instead of making empty promises to make large-scale changes, begin practicing realistic habits that you're more likely to continue long after the New Year has come and gone.

How? Break your BIG goal into smaller, short-term steps that will create healthy, long-lasting habits. For example, if your aim is to spend less, work to develop a healthy habit each month that will help you reach your ultimate goal:

In January, focus solely on cutting back on small impulse purchases at the grocery or convenience store.

During February, monitor your vending machine purchases and start buying snack items in bulk to reduce costs.

When March rolls around, bring your lunch from home to cut back on dining out.

In April, look for sources of free entertainment and cancel services you don't use.

Each month, continue making small changes while maintaining the habits you've already put into place. By the end of the year, you'll feel better about how far you've come.

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My recent diagnosis of type 2 diabetes has impacted my lifestyle, especially my finances. Doctor’s appointments, prescriptions, medical supplies, exercising and a modified diet are all essential parts of my treatment plan. Even with insurance, these expenses add up. I know if I don't focus on my health now, the long-term negative impact will be greater. Do you have any tips for managing these health-related expenses without compromising my budget? (Posted April 25, 2014)

It’s been said “without your health, you have nothing,” so kudos to you for making your long-term health and wellness a priority. Implementing drastic lifestyle changes can be overwhelming; however, there are many budget-friendly ways to maintain a healthy lifestyle.

Doctor appointments, prescriptions and supplies. Before each doctor appointment, make a list of all your questions and concerns. You may think you’ll remember everything you want to talk about, but in the fast-paced medical world, it’s easy to let something important slip by. It’s better to go in prepared; otherwise you may forget something and have to make a follow-up appointment, incurring the expenses that go along with it. When talking about prescriptions and supplies, ask your doctor if generic medications are available and appropriate for you. Generic options often have the same effect as name brand medications, but cost significantly less. If a suitable generic isn’t available, ask about samples, cost-effective refill options or subscription services that might be available for necessary medications and medical supplies.

Healthier diet. While it may be tempting to shave dollars off your food budget, investing in healthier foods can do a great deal for your overall well-being. Many experts agree that it’s best to shop the outer aisles of the grocery store, avoiding overly processed items and focusing on whole foods like fresh produce and lean meats. Maximize your food budget by planning your meals around items that are on sale, using coupons, and shopping at stores that offer price matching. And remember, buy only what you can use relatively quickly – spoiled food is a common budget buster.

Exercise. Luckily, this is the cheapest wellness issue to tackle. You can exercise your way to better health, absolutely free. Aerobic exercise (walking, jogging and moderate-to-heavy gardening) and strength training (pushups, sit ups, squats and lunges) are beneficial types of exercise for people living with diabetes. There’s also a wide variety of free exercise videos available on websites like YouTube.com and Self.com.

Don’t let cost concerns prohibit your efforts to work toward a healthier you. For more tips on healthy eating, fitness and living with diabetes, explore the American Diabetes Association’s website, Diabetes.org.

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I’ve been told that playing casino games and purchasing lottery tickets is a great way to earn extra cash, sometimes equivalent to a second income. Is this true? What’s your opinion? (posted Sept. 29, 2006)

Hold the phone! Please remember that casino night and a handful of lottery tickets are options for entertainment, not sources of income. Betting your hard-earned dollars in hopes of earning more is risky business that rarely yields success. Your odds for winning the lottery are about 1 in 12 million … you actually have a significantly better chance of being struck by lightning!

While there’s nothing wrong with calling on Lady Luck every now and then - and supporting Oklahoma education through the lottery - sacrificing your financial goals and obligations isn’t playing responsibly. Remember, few people get rich the easy way, but many people go broke trying.

Afraid you may be in trouble? Learn more about gambling behaviors and resources by visiting the Oklahoma Department of Mental Health and Substance Abuse Services website.

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Can you explain how a health savings account could be better than health insurance? (posted Dec. 28, 2012)

This is a great question with a relatively simple answer. A Health Savings Account (HSA) isn’t better than health insurance … the two go hand-in-hand. In order to participate in an HSA, you must be enrolled in a high-deductible health insurance plan (HDHP) that meets specific federal requirements related to deductibles and out-of-pocket expenses.

An HDHP offers lower monthly premiums with a higher annual deductible and is designed to provide coverage for large medical expenses. If you choose this type of medical coverage, you’d be responsible for your day-to-day health care expenses until your deductible is met. Pairing an HSA with an HDHP allows you to use pretax dollars to offset the cost of qualified medical expenses until you’ve paid enough out-of-pocket to meet your deductible.

Here are some things to consider when deciding whether or not to participate in an HSA.

Contributions can be made by you, your employer or anyone else who’d like to contribute on your behalf. Contributions are tax deductible and the interest that accrues on the money in your account is tax-deferred.

Even though your employer may make contributions to your account, you own the HSA. That means if you lose your job or choose to change jobs, your account will follow you.

Withdrawals from your HSA account are tax-free as long as the funds are used to pay qualifying medical expenses (e.g., contact lenses, braces, acupuncture, bandages, etc.). For a full list, search ‘qualified medical expenses’ at IRS.gov.

If withdrawals are made for non-medical purposes, the funds will be taxed and subject to a 20 percent penalty.

Anyone using HSA funds should keep all of their receipts in case they’re audited.

Unlike a flexible spending account, contributions don’t have to be used in a calendar year. Unspent funds will roll over from year to year.

Any money remaining in your account when you turn 65 can be used for any purpose. If the expense isn’t health related, there will be no penalty fees, only normal income tax.

For more information about HSAs, talk to someone in your Human Resources department.

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Hypothetically, I've won a $2 million Powerball jackpot. What’s the best way to collect payment? What happens if I die before I receive all of the winnings? (posted Feb. 22, 2013)

After the initial shock and awe of winning a big cash prize wears off, you’d have to determine what would be best for your personal situation. In Oklahoma, Powerball offers two payout choices - a lump sum payment or annuity payments. Annuity payments are a fixed amount paid over several years.

In order to better understand these options, it may help to explore the anatomy of a jackpot. If the billboard touts a jackpot of $2 million, the cash value of that prize is actually more like $1 million. While this may seem misleading, the advertised amount represents an estimate of the total payments you would receive over 29 years if the cash amount were invested in an annuity for you. Ultimately, if you’re willing to accept smaller payments over time, you’ll receive the full $2 million. And rest assured, if you choose this option and pass away before the final payment is made, the payments would then go to your estate and be distributed to your beneficiaries as directed in your will or as determined though probate proceedings.

If you don’t like the idea of prolonged payments and opt to receive a lump sum, you’ll receive the current cash value of the prize - in this case, approximately $1 million, minus taxes. In this scenario, the total payout is obviously less, but it allows you the freedom to invest the winnings on your own. If you’re confident in your investment strategy and think your strategy can earn a better rate of return than the guaranteed rate of the annuity, the lump sum may be the better option.

If any lessons can be learned from past jackpot winners, perhaps the most important is that collecting the money is the easy part; managing a big windfall is where things can get tricky. Did you know that one in three lottery winners experiences some form of financial trouble within five years of winning? If you’re lucky enough to win, don’t become a statistic. Take proactive steps to make your winnings last.

Seek guidance from an attorney or financial planner who specializes in working with clients who’ve suddenly acquired large sums of money.

Avoid making hasty decisions or drastic lifestyle changes. Allow yourself a cooling-off period so you can avoid making decisions you may later regret.

Create a realistic budget and stick to it. Don’t live as if the money is unlimited. If not managed wisely, the money can be spent quickly and once it’s gone, it’s gone.

Just for fun, check out WebMATH.com to calculate your odds of winning. One more thing … there’s nothing wrong with playing the lottery; however, if playing games of chance or gambling is negatively affecting your ability to meet your financial obligations, don’t wait to get help. Contact A Chance to Change Foundation at 405.840.9000 or info@chancetochange.org.

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My family is contemplating a change from two incomes to one. What are some things we should consider before taking the plunge? (posted Aug. 31, 2012)

Transitioning from two paychecks to one can be both scary and rewarding. Before one spouse quits a job, it’s important to examine your family’s priorities and values to make sure you can still function the way you’d like while living on a smaller income. The following suggestions will help you decide if this lifestyle change is right for you and your family.

Make sure everyone has a voice. With careful planning, making this transition is doable but not necessarily easy. Be sure that you, your spouse and your children know the sacrifices that may need to be made to comfortably live on one income. Talk about your current situation and your future goals, and discuss how a reduced income may impact them in both positive and negative ways. Some of the perspectives may surprise you.

Examine your budget. You may be able to eliminate some work-related categories from your budget, but more than likely they’ll be replaced with other expenses. For example, if one spouse becomes a stay-at-home parent, then child care may no longer be an expense; however, you may incur additional insurance costs if that spouse was previously covered by a company plan. You’ll also want to factor in potential impacts to expense areas like wardrobe, meals, fuel, car maintenance, parking fees and other career-related expenses.

Determine if you’re willing to make bigger sacrifices. Eating out less often or cutting cable TV may not be enough to make up for lost income. Downsizing your home and automobile may be necessary. Vacations, concerts and other entertainment may also need to go. Making this shift isn’t just a financial change; it’s a lifestyle change. Be prepared for the decisions your family will face, recognizing that it’s best to avoid skimping in the areas of retirement planning and insurance coverage. Know where your priorities fall and decide if your quality of life will be significantly hampered by less income.

Don’t count on credit. Relying on credit can be dangerous with two incomes and even more tempting for families supported by only one salary. To set yourself up for success, avoid using credit to live a lifestyle you can’t afford and instead focus on building an emergency fund to help you cover unexpected expenses. We recommend saving three to six months’ worth of living expenses so that you won’t have to rely on credit cards or payday loans in the event of an emergency.

Forget (keeping up with) the Joneses. Remember that if you decide to make this change, it’s important to avoid comparing yourselves with two-income families. When friends and family members frequently take vacations or upgrade vehicles, it’s easy to feel envious. Instead of focusing on what you aren’t able to do, you’ll need to remind yourselves of the reasons you chose a one-income lifestyle in the first place. Whether the perks outweigh the sacrifices is a question only your family can answer.

As you talk it through with your family, create a pro/con list for each scenario and evaluate the consequences of each. If you’re still undecided after this process, consider a one-income trial period. Put one spouse’s wages into savings and see if your family can realistically live on one paycheck. Not only will this give you a feel for this potential change, it can also help you build your emergency fund. Best of luck as you make this important decision.

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I’ve heard a lot about disaster-proofing your financial documents. What’s the easiest way to accomplish this task and why is it beneficial? (posted June 27, 2008)

Quick, grab all your important documents—Social Security card, birth certificate, insurance, marriage license, credit card statements, wills, property titles … would you be able to gather these items in only a few minutes? If the answer is no, you could benefit from disaster-proofing your pertinent papers. This is a crucial and often overlooked part of the financial planning process.

Follow these tips to ensure your documents are safe from the storm, making it easier for you to get back on your feet if disaster strikes.

Collect important financial and personal papers, and put original documents in plastic covers.

Identify a single location, like a fire-proof box or safe-deposit box, to store these crucial papers. Fire-proof lockboxes can be purchased from a variety of stores and they’re relatively inexpensive. Make at least two copies of the key: one for your home and one for another person, like a trusted friend or family member.

Create certified copies of government-issued documents and store them with trusted family or friends.

Stash some cash with your bank statements in case you can’t access your account. Depending on the level of damage, computer networks and electricity may be down, so having cash on hand is beneficial.

In addition to the steps above, consider completing an emergency financial first aid kit for your family. You can download this comprehensive worksheet and checklist from the Federal Emergency Management Agency (FEMA), Operation Hope and Citizens Corps at Operationhope.org/financial-disaster-recovery.

Taking the time to prepare for an emergency may seem like a daunting task, but if disaster ever strikes, you and your family will have all the paperwork you need to ease the process of getting your life back in order.

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Relationships and Money

My partner and I agree on just about everything, except managing our money. We had completely different financial upbringings. Any advice to help us see eye to eye? (posted February 25, 2021)

It can be hard to talk about money. Most couples don’t disagree that money - and managing it well – is important, but rather about what that means; about how they should spend or save it. Clear communication is key. Carve out a low-stress time and place to discuss your finances and set joint expectations. Start your conversation with some of the talking points below.
Share your money mindset. As a child, your family may have discussed money openly, never talked about it, or fallen somewhere in between. With such variation, it’s hard for any two people to view money the same way. Share with your partner how your family viewed and valued money. Was financial security a recurring issue? Did your parents or guardians have an equal say in how the money was spent? Did they discuss family finances with you? Were you provided an allowance and taught how to use it? Talk about your earning history and how you’ve managed your own income as an adult. Be as open and honest with each other as possible about your goals and fears.

Deal with the debt. Make a list of any debts you both currently have. This may include car payments, student loan payments, credit card debt, and any other obligations for which you’ve made payment arrangements. Talk through how those obligations impact your spending and saving plan. As a couple, you may want to develop a plan of attack to knock out your debt faster; one good option to consider is the debt snowball method.

Conduct a credit check. Review your credit reports together. AnnualCreditReport.com allows users to request a free credit report every 12 months from all three credit bureaus. Check your reports for any errors. Cross reference your list of debts with what’s shown on your credit reports and dispute anything inaccurate. If you want to check your credit scores, consider using a free credit score monitoring service like Credit Karma or Credit Sesame. Remember, there may be slight variances in your credit scores from different sources.

Build a workable budget. Whether you’re going out for lunch or buying a new refrigerator, it helps to be on the same page about how much you want to spend. Budgets aren’t made to restrict you from making purchases, but rather to give you the freedom to spend within your means and within the limits you set as a couple. Commit with your partner to save your bills and receipts for one month, then categorize the expenses into groups – you’ll see spending patterns emerge. Be sure to include dedicated savings (emergency funds, retirement) and costs that don’t occur every month, like insurance premiums, car repairs and birthday or holiday gifts. OKMM offers a free interactive budgeting calculator that allows you to add and customize the items in your spending plan. Then, you can save and print your monthly budget to help you stay on track.

OKMM offers resources to help you manage your money no matter what stage of life (and love) you’re in. Our Love and Money online learning moduleoffers more information to help you craft a spending plan together and protect your individual and shared financial future. View additional tools like our other online learning modules Your Money Matters guides, and more at OklahomaMoneyMatters.org.

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My cousin wants to apply for a loan but needs a co-signer. He’s just starting to get on his feet and I want to support him, but I need to look out for myself, too. I don’t want to damage our relationship. Is co-signing for a loved one advisable? (posted November 19, 2020)

TheBalance.com defines a co-signer as a person who applies for a loan with you and is contractually bound to repay the loan if you don’t. In short, a co-signer guarantees the loan will be repaid. That’s a huge responsibility that could lead to financial and personal hardships. Keep the following in mind as you consider serving as a co-signer.

Co-signing is sharing debt. As a co-signer, you’re agreeing to pay the loan if the primary debtor does not, which means you’ll be putting your income and credit on the line, too. Could you repay the loan if you had to do so?

Co-signing impacts your credit report. Co-signing can impact your credit score in two ways. First, it affects your debt-to-income ratio. When you co-sign for someone, you’re absorbing their loan responsibility and adding it to your debt load - which reduces your available income in relation to your debt. Second, depending on how recently you’ve applied for any other forms of credit, serving as a co-signer could also negatively affect up to 10% of your credit score, because it will be considered a new credit inquiry.

Shared debt impacts relationships. Bringing money to the forefront in any relationship can change it. Relationships can be hard enough to manage without adding new financial stress to the mix. You don’t have to jeopardize your credit record to offer your non-financial support and/or to encourage the requestor to seek information and resources that would help them improve their credit score so a co-signer wouldn’t be necessary.

The lender is asking for a co-signer for a reason; if a lender is uncertain about approving the loan, you’re wise to think very carefully before you agree to co-sign for anyone. Ultimately, it’s up to you whether or not you co-sign. To help you decide, we recommend you carefully consider the same thing any other lender would: likelihood of repayment.

Learn more about consumer credit on our consumer credit page.

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I just got engaged! However, I’ve heard that money problems are one of the biggest causes of divorce. How do I protect my relationship when it comes to finances? (posted March 29, 2019)

Love and money are two things in this world that help us feel secure. What happens when they merge? Well, it can be a seamless transition or a frustrating experience. No matter what stage your relationship is in—living together, engaged, married or divorced—you need to be wise about your resources and protect your assets. Focusing on your financial well-being isn’t setting your relationship up for failure; it’s a smart step for everyone in every phase of life. Many Americans spend hundreds of hours planning a wedding, including what colors to use, who to invite, and what kind of cake to serve, but few plan for their marriage.

Since you’re engaged, let’s focus on steps for prenuptial planning. Consider the following tips to help ensure marital—and financial—bliss.

Determine what money means to you. The way we were raised ultimately influences our thoughts and perceptions. Have an open discussion about how each of you view money. Growing up, did your future husband or wife’s family talk about money, or did they avoid the topic? Is your future spouse a spender or a saver? Use this list of questions to explore each other’s money values.

Discuss your goals and values. The majority of financial plans are based on long-term goals, so it’s important to discuss your values and priorities. For example, does your future spouse want to retire early and travel? Does s/he want to become a stay-at-home parent? Work together to develop a family financial plan that reflects those objectives and put it into practice before you walk down the aisle.

Consider a prenuptial agreement. Establishing a prenuptial agreement doesn’t mean you don’t love or trust your soon-to-be spouse. It’s simply an agreement put into place to protect your personal assets before establishing any marital assets. If you have children from a previous relationship, wealth you’d like to preserve, your own business, and/or family-related financial obligations, you may want to consider requiring a prenuptial agreement to move forward.

Review each other’s credit histories. You can’t begin to build your credit future until you understand your credit past. Talk about the debt you’ve each accumulated and create a plan of action to eliminate it together. Visit AnnualCreditReport.com to order a free copy of your credit report from the three major credit agencies, Experian, Equifax and TransUnion.

Determine where you’ll bank. Find a bank or credit union that’s close to home and possibly close to your job locations, or one with which you have some history. Discuss the advantages and disadvantages of separate or joint checking and savings accounts, then decide what’s best for your situation.

Develop spending guidelines. Limit how much money you can spend without first consulting your partner, especially if you have a joint checking account. Set aside money as each spouse’s weekly or monthly “allowance”— money you can spend freely without compromising your goals. When developing your budget, work with your partner to establish shared guidelines for considering large and small purchases.

Be honest and communicate. Make finances a part of your daily conversation. When it’s hard to stick to the plan, focus on the positive choices you’re making instead of what you might be giving up. Talking about money openly and honestly can help you avoid one of the biggest sources of marital stress.

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A close friend recently asked me to co-sign for a loan. I’m torn; I don’t want to offend my friend, but I’m not sure that taking on the responsibility of co-signing is the best idea. (posted June 30, 2015)

You’re right that co-signing a loan is a big responsibility, and one that shouldn’t be taken lightly. Here’s what you need to know before saying yes or no to signing on the dotted line.

When borrowers need a co-signer to secure a loan, that generally means they’ve been deemed too risky by a financial institution to gain financing on their own. Ask some hard-hitting questions to find out why you’re being asked to co-sign. Is it that your friend doesn’t have an established credit history, or has s/he been irresponsible in using credit in the past? Keep asking questions until you’re satisfied, then weigh the answers carefully.

When you co-sign a loan, you become legally responsible for the debt. If your friend forgoes his or her responsibility to pay, any late or missed payments will be reported on your credit report and can impact your ability to access affordable credit in the future. Since the loan was based in part on your credit rating, the lender will come after you first to try to recoup the remaining balance if your friend stops making payments. If necessary, legal action can be taken against you, including garnishing your wages or placing a lien on your home.

Agreeing to co-sign on a loan could destroy your relationship. Given the potential impact on your own financial life, you may find yourself constantly monitoring your friend’s spending habits or worrying if loan payments are being made – which means your friendship will likely suffer despite your best efforts to help.

Weigh the benefits and risks associated with co-signing. While it can be hard to see your friend struggle – and perhaps even more difficult when it’s a family member, not a friend, who’s asking - your own financial future must be your priority.

If you’ve decided against co-signing but still want to help, consider offering moral support instead of financial support. Help your friend pull free credit reports from AnnualCreditReport.com, so s/he can review and address any negative items in the credit history. Cleaning up errors and addressing past mistakes on a credit report can help borrowers be considered less risky to lenders in the future.

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My husband always wants the newest, coolest gadgets and services. It seems to physically hurt him to watch movies on our perfectly good 5-year-old television because he knows there are better ones just waiting for him at the store. We need to cut back on spending and pay off some debt; how can I make this as painless as possible for the spender of the household? (posted January 30, 2015)

Your relationship is proof that opposites often attract. Here are some things you can do to gain insight into how you both value and spend money, get on the same page and work toward some common goals.

Identify your money personalities. Everyone is hard-wired to view, value and spend money differently. Some people are avid spenders while others are die-hard savers; many people fall somewhere between. To better understand how you each view money, visit TheMoneyCouple.com and take the free Money Personality Profile quiz. Your results will show you your primary money personality and the pros and cons that come along with it. Use this insight to determine your differences and examine how they can be complementary to make your union stronger.

Get a reality check. Sometimes those who live on the spending end of the money management spectrum don't realize the true cost of ongoing debt. To help your husband better understand your financial situation, set a date to review your budget and current debt load. Aim for a time when you're both relaxed and in a good mood. Seeing your financial status in black and white can be powerful, and looking at it with open minds may help you find more common ground.

Set shared goals. Behavior change often requires some positive reinforcement. If the prize at the end of the fight is worth it, almost anyone can buckle down and pinch pennies long enough to pay off debt. Tally up how much of your monthly income is going toward debt payment and then brainstorm other, more enjoyable ways that money could be spent once your debt is paid in full. Focus on things that you would both enjoy so you can work as a team to get there.

Commit to a realistic plan. Once you decide what you'd like to work toward, make a plan to pay down your debt so that you can move forward with more financial freedom. Identify expenses you can easily reduce (like smartphone apps, afternoon sodas or drive-thru trips), then dedicate the money you save to debt reduction. If you have multiple sources of debt, consider implementing the debt snowball to quickly reduce your balances. If there are things your husband simply can't give up, ask him if there are ways he could make substitutions without feeling he's sacrificing too much. If you both do your best to stick to the plan, you can successfully reduce your debt.

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I’m engaged to be married this fall. My fiancé and I were raised with different views regarding money. What can we do to make sure we’re on the same page financially before we tie the knot? (posted March 30, 2007)

The majority of Americans spend hundreds of hours planning a wedding—what colors to use, who to invite, what kind of cake to serve—but seldom plan for their marriage. So, kudos to you for thinking about your financial future as Mr. and Mrs.!

As part of your prenuptial planning, consider the following tips to help ensure marital—and financial—bliss.

Discuss your goals and values. The majority of financial plans are based on long-term goals, so it’s important to discuss your values and priorities. Work together to develop a family financial plan that reflects those objectives, and put it into practice before you say “I do.”

Review each other’s credit histories. You can’t begin to build your credit future until you understand your credit past. Create a plan of action to eliminate debt you’ve both incurred. Visit AnnualCreditReport.com to order a free copy of your credit report from the three major consumer reporting agencies.

Develop spending guidelines. Limit how much money you can spend without first consulting your partner, especially if you have a joint checking account. Set aside money as each spouse’s weekly or monthly “allowance” – money you can spend freely without compromising your goals.

Be honest and communicate. Make finances a part of normal conversation, and when it’s hard to stick to the plan, focus on the positive choices you’re making instead of thinking about what you might be giving up. If you talk about money openly and honestly, you’ll avoid one of the biggest sources of marital stress.

Check out our Love & Money module, too!

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One of my closest friends is constantly in a financial bind and comes to me for help. In the past, I’ve done what I can to help but I’m starting to feel taken advantage of. What can I do to stop this cycle of lending money while keeping my friendship intact? (posted Sept. 27, 2013)

If you type “money and relationships” into a search engine, you’ll get approximately 266 million results ranging from expert advice to rants from miffed roommates. While the details of each article likely cover a wide range of issues, it’s safe to assume each hits a common note - discussing money with those you care about can be touchy.

The desire to help a friend is admirable, but trying to plug someone else’s money leaks is a surefire way to strain a friendship. It won’t necessarily be easy to address this pattern of behavior, but with the right approach you can gently, yet firmly, talk about the situation and set some clear boundaries and expectations.

Find the right time. Choosing the right moment for “the talk” will help set the stage for a more positive outcome. If a natural opening in conversation presents itself, take advantage of it. If the discussion feels organic rather than forced, you’ll both be more comfortable. If the right time doesn’t present itself, wait to talk about sensitive issues when you’re both relaxed. This is a heavy topic that shouldn’t be addressed in a heated moment.

Don’t be wishy washy. Some situations require a straightforward approach so that there’s no uncertainty about the point you’re trying to make. Set a positive tone without sounding judgmental by framing any constructive criticism between two truthful positives and use “I” statements rather than “you” statements. “I” statements are less hostile and allow your friend to see the situation from your perspective – which means your friend is more likely to hear what you have to say without becoming defensive.

Offer support, but not financially. Sometimes money strain is a symptom rather than the root cause of the problem. Instead of continually giving money, see if there are other ways that you can offer support. Let your friend know that in the future, you’re willing to lend a sympathetic ear, brainstorm ways to overcome similar financial issues, or recommend a financial expert who can provide money management counseling, but you won’t be able to lend more money.

Most importantly, remember that it’s OK to say no. Regardless of your reasons, saying no shouldn’t come with feelings of guilt or regret. For additional resources to help you talk to your friends or family about money, visit the online resource clearinghouse at OklahomaMoneyMatters.org.

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My son is being deployed overseas. I'm worried about maintaining his day-to-day bills while he's gone. At the same time, we both would like to make sure he upholds his debt obligations and that he keep his credit afloat. Do you have any suggestions? (Jan. 29, 2010)

Dealing with an overseas deployment can make paying bills on time difficult. However, there are some steps that can help automate his payments and make it easier for him to maintain his credit history.

Step 1: Check out available banking options. He'll want to choose one that allows online bill-pay (preferably for no fee), uses a wide variety of ATMs and has online account access. Many banks offer personalized alerts that send an email or text when balances reach a certain level and for many transactions, including deposits received and checks cleared.

Step 2: Enroll with the bank. Spend some time helping him set up the system for each bill. He'll likely find that some payments can be automated, so that the transit time to the payee is quicker, while other bills will have to be paid by check. That's where a third party - maybe you - could come into play.

Step 3: Discuss the plan of action. He should consider sitting down with you (or whomever will be handling his finances while he's gone) to talk about bills that will be paid automatically and those that can't be paid online. He'll need to be as specific as possible, including contact information for vendors, payment amounts and due dates. He may also want to add you as a custodian for some accounts in the event he needs you to contact a vendor on his behalf.

While all of these steps require some up-front work, ultimately, they'll help him stay on track during his deployment. That will save both of you time in the long run and provide financial peace of mind.

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Identity Theft

I’m concerned about the recent credit bureau breach and all the personal information that was stolen. How can I find out if I was affected and what can I do about it?(posted Sept. 29, 2017)

Social Security numbers, birth dates, addresses, and driver license numbers were stolen from the consumer credit reporting agency Equifax a few months ago, but the public was not made aware until recently. You’re able to check Equifax’s website to see if you were affected by the breach and sign up for a complimentary year of identity theft protection and credit monitoring. If you’re still feeling uneasy and would like to take further precautions to safeguard your information, here are some additional steps you can take.

Request a credit freeze. A credit freeze is the most effective way to prevent anyone from opening new lines of credit in your name. During the credit freeze, creditors are blocked from accessing your credit history to approve new credit applications. You’ll still be able to use your credit cards and check your own credit score, but if you need to open a new line of credit, you would have to unfreeze your account. Credit freeze rules and fees vary by state, and if you choose to request a credit freeze you’ll want to do so with all three major credit reporting bureaus – Equifax, Experian and TransUnion.

Monitor your credit reports. AnnualCreditReport.com allows you to check your report from all three credit bureaus once each year for free. It’s the only website authorized by federal law to provide truly free credit reports from each reporting agency. You’ll have to answer some verification questions and then follow the steps to access your reports. Each report may contain different information, so consider requesting and reviewing all three at once. Follow the instructions on each report to dispute inaccurate information or fraudulent accounts.

Set up alerts. Closely monitor your bank and credit card statements for unauthorized activity. Many financial institutions and credit card companies offer account alerts that can be sent directly to your smartphone via app notifications, text message or email. These services often offer notifications about credit score activity, too.

Change your passwords regularly. When you create passwords for your accounts, consider creating a difficult-to-guess passphrase. Longer passwords are stronger, so make it memorable so you don’t have to write it down. For example, “Mary had a little lamb, its fleece was white as snow.” Take the first letter of each word in the phrase and combine it to make a non-word, “MHALLIFWWAS.” To increase difficulty, add in numbers and other special characters: M4@LL_1FWW@S!. Change the passphrase every 30-60 days to reduce your chances of being hacked.

File your taxes early. Tax fraud is a growing problem, so protect your income tax refund by filing your taxes as early as possible. This is important, because the IRS only allows one tax return per Social Security number per year. According to IRS.gov, signs that you may be a victim of tax-related identity theft include: more than one tax return was filed using your SSN; you owe additional tax, have a refund offset or have had collection actions taken against you for a year you did not file a tax return; IRS records indicate you received wages or other income from an employer you don’t recognize.

Ultimately, you are your best protection against identity theft. Make it a habit to routinely monitor your accounts and check out OKMM’s Consumers page for more identity theft prevention tips.

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I’ve heard stories from friends and family about kids who’ve become victims of identity theft. What can I do to protect my daughter’s personal information?(posted Sept. 25, 2015)

You’re right to be concerned about this area of your child’s life, and it’s essential to take proactive steps to protect her information. When people consider safety measures they often think of car seats, child-proofing and stranger danger. Preventing identity theft is equally important, but many parents aren’t aware of the danger or how to effectively guard against it. Here are some practical steps you can take to guard your child’s identifying information and lower her risk of identity theft.

Secure personal information. Always keep personal paperwork (electronic and hardcopy) that contains sensitive information in a secure location. Store it at home in a fire-proof lock box or in a safe deposit box at a bank or credit union. If you no longer need the paperwork, shred the documents with a cross-cut paper shredder or destroy the electronic files.

Question any requests for information. Avoid providing personal information to people, organizations or companies unless it’s absolutely necessary, you’re confident they’re properly securing it and you know there’s a valid reason to require it. If providing your child’s information is indeed required, ask why it’s needed, how it’s used and how they dispose of it when it’s no longer needed. For safety’s sake, ask if using an alternative identifier is an option. Even something as simple as her birth date, her middle name or your maiden name can be used fraudulently by identity thieves.

Know who has access to her information. Your family’s personal information could be included in phone directories, surveys and forms. Organizations like your child’s school, church, day care or after school programs typically collect personal information for enrollment and/or reporting purposes. The federal Family Educational Rights and Privacy Act, or FERPA, outlines rules that govern how schools handle privacy issues when working with minors. Review your child’s school policy regarding collection, usage and handling of personal information and talk to the organizers of any other programs she participates in to make sure you’re comfortable with their policies and practices.

If you discover that your child’s information has been compromised, report the incident immediately to protect her from further fraudulent activity. Check out the Federal Trade Commission’s Child Identity Theft page for helpful resources, including identity theft warning signs and instructions for reporting fraud and initiating a fraud alert with the major credit bureaus.

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What steps can I take to avoid identity theft?(posted Feb. 24, 2012)

This is a great question because identity theft can affect anyone, at any time. It’s important to be proactive to protect yourself from becoming a victim.

Identity theft takes place when someone uses personal information, such as your Social Security number (SSN) or credit card number, without your permission to commit fraud or other crimes. Here are some "Do’s" and "Don’t" to help you protect yourself from identity theft.

Dos

Keep documents containing personal information in a fireproof lockbox.

Invest in a cross-cut paper shredder to destroy mail and other documents containing personal information.

Monitor your credit report. You can order a free credit report each year at AnnualCreditReport.com. Monitor your kids’ credit as well. For requirements to check activity on your child’s credit report, contact Equifax (800.525.6285), Experian (888.397.3742) and TransUnion (800.680.7289).

Opt out of receiving pre-approved credit offers in the mail. Call 888.567.8688 or visit OptOutPrescreen.com. You will be required to provide your SSN.

Make sure Web addresses start with "https://" rather than "http://" when you are shopping or banking online. The "s" indicates that the site is secure.

Don'ts

Keep your Social Security card in your wallet or purse, and don’t have your SSN printed on your checks.

Throw away mail or documents containing personal information. This includes junk mail!

Give out your SSN or other personal information in email or over the phone if you didn’t initiate the inquiry.

Leave a paper trail. Switch to paperless billing or use online bill pay whenever possible.

Use your pet’s name (spouse’s name, birthday, etc.) as a password. Use a mix of upper and lowercase letters, numbers and special characters to create passwords that are hard to guess.

Put personal information on social networking sites. Make sure your kids understand why it’s important to keep certain things private online.

If you’d like more information about preventing identity theft or if you’d like to know what steps to take if you become a victim, visit IdentityTheft.gov.

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My wallet was stolen and I canceled my credit cards. Is there something else I should do to make sure no one steals my identity? (posted Nov. 21, 2008)

First, condolences to you … losing a wallet can leave you feeling anxious and exposed. Cancelling your credit cards was a good first step to protect your identity, but there are other steps required to keep identity thieves at bay.

Pick up the phone ASAP. You’ve already notified your credit card companies, but don’t forget to contact your bank to cancel your debit card and checks. Also, alert the three major consumer reporting agencies—Experian, Equifax and TransUnion—and ask them to place a fraud alert on your name and Social Security number. If your driver’s license was stolen, contact the Motor Vehicles Bureau to place a stolen card warning in your file.

File a police report. Contact the local police and file a crime report. Be sure to request a copy of the report for your records.

Monitor your accounts. Review your bank and credit card statements for fraudulent charges. Visit AnnualCreditReport.com to request a copy of your credit report. Look closely for accounts opened without your knowledge and other suspicious activity.

Don’t focus exclusively on finances. If you carry usernames, passwords, membership cards, extra car keys or other important items in your wallet, be sure to take special precautions to safeguard your private information in those areas, too.

The key to preventing identity theft is immediate action. Be diligent in your quest to protect your good name. In the future, consider making copies of everything in your wallet, especially both sides of your credit and debit cards and your driver’s license. Never carry your Social Security card in your wallet; keep it safe in a fireproof lock box.

For more information about identity theft prevention, visit the Federal Trade Commission’s website, IdentityTheft.gov.

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Big-ticket Items

Homes

I’ve been seeing advertisements for HELOCs at my bank. What is a HELOC and how can it be used?(posted July 27, 2018)

A HELOC stands for home equity line of credit. Most banks, credit unions or mortgage lenders offer this product to allow customers to borrow up to 85 percent of their home’s assessed value, minus what is owed on the mortgage(s). Compared to a home equity loan, through which you borrow a lump sum representing a portion of the home’s value, a HELOC allows you to make smaller withdrawals against the balance over a set period of time. Below are some things to consider before opting for a HELOC.

A HELOC is a revolving loan. Similar to a credit card, a HELOC can be repaid and then borrowed again. It’s important to research options to find the product that will best meet your needs and craft a budget and repayment plan to avoid getting into a cycle of debt.

A HELOC is a secured loan. Taking out a secured loan means that you’re pledging collateral that can be repossessed by the lending institution if you default on the loan. Since a HELOC is based on the equity in your home, you risk losing your house if you don’t uphold your end of the loan agreement.

A HELOC’s interest rates vary. While interest rates on a home equity loan are fixed, HELOC rates are adjustable, rising and falling with the economy. This means your payments may begin low, but can vary from month to month and may result in a balloon payment at the end of the loan.

Only you can determine if a HELOC is a wise financial option for your situation. Some people use a HELOC to consolidate debt or remodel their home. Others use a HELOC to pay for their child’s college tuition, cover emergency expenses or fund retirement. Using your home as collateral to fund these types of costs can be risky, so evaluate all your options and visit with a certified financial adviser to ensure you’re using the best financial tools available to you.

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My wife and I want to buy our first home. Is there anything we should know to prepare ourselves financially? (posted January 26, 2018)

Buying your first home is a major financial milestone! As a homeowner, you’ll be able to take advantage of some tax breaks by claiming your mortgage interest and property taxes as deductions. Preparing financially for a mortgage can seem like a series of chess moves, and many would-be homeowners make critical mistakes that delay their ability to buy a home. To avoid disruption of your homeownership timeline, follow these guidelines leading up to and throughout the home-buying process.

Avoid big credit moves. Applying for new credit, closing credit accounts, or refinancing a loan may cause your credit score to change drastically, which can greatly impact your approval for financing and/or the interest rate for which you qualify.

Be careful with cash. While a full bank account is nice, large cash deposits can be considered suspicious and are often labeled an unreliable source of income by lenders. During the home-buying process, you’ll be required to provide bank statements and/or other financial documents. If you rely heavily on cash, make sure you can account for and explain any significant chunks of money that flow into and out of your accounts.

Manage your financial responsibilities. Late or missed payments are a red flag to lenders. Missing due dates lowers your credit score and signals that you have a cash flow problem – which can be interpreted as a signal that you will likely mishandle your mortgage debt.

Don’t change jobs. Lenders want to make sure you have a stable income, which is a signal that you will likely be reliable in making your mortgage payments. Changing jobs may reflect a lack of commitment and stability.

Don’t deplete your savings. A healthy down payment is beneficial, but don’t empty your emergency fund for the sake of buying a home. Homeownership often comes with unexpected expenses, so maintain a cushion to help you manage the extra costs. A good rule of thumb is to save three to six months’ worth of necessary living expenses so you won’t have to rely on credit if something unexpected happens.

Check your credit reports. Consider pulling your credit reports to ensure there aren’t any errors or negative marks; either can reduce your creditworthiness. Dispute any inaccuracies and take steps to remedy delinquent accounts before starting the home-buying process. You can request your free credit report from all three credit reporting bureaus once a year through AnnualCreditReport.com.

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I love watching do it yourself (DIY) shows that focus on renovating "fixer upper" homes. Typically, the homeowners have large budgets and opt for high-end upgrades. I want to renovate my home, too, but I'm afraid I won't produce the same results as they do on TV. How can I renovate my home while staying on budget? (posted July 31, 2015)

DIY shows are fun to watch, but getting the same results on your own can be tricky. Luckily, budget friendly renovations are possible. Before you break out a sledgehammer and start knocking down walls, consider these tips.

Have realistic expectations. TV shows take advantage of editing and a full team of trained professionals to make large-scale projects appear to come together in record time, with very little effort. For the average person, home renovations will most likely take more time and effort. If your aim is a new coat of paint and some updated hardware, you can create a fresh look in a relatively short amount of time. If your dream includes a bigger project, like a completely overhauled bathroom or revamped gourmet kitchen, completion could take a while and you may need to prioritize your wish list so you don’t find yourself overwhelmed and over budget.

Evaluate your talents. Do you have the necessary skills and equipment to complete the job? If you happen to be handy with tools and have a natural talent for all things DIY, it could be cost-effective to tackle a home renovation project on your own. But, if the task requires more than elbow grease and a YouTube tutorial, it might be wiser to hire a pro. Ask your friends and family for recommendations or check with the Better Business Bureau to find a reputable contractor or handyman. Require a written contract and make sure you understand (and agree with) the terms before any money changes hands.

Set a budget, and stick to it. Remember, projects with bigger budgets make for better TV. That’s not real life, though, and your situation may not be the same as what you see on the screen. It’s easy to get wrapped up in the excitement of a project and the prospect of having nice, new things, but it’s important to crunch the numbers and set a budget you can easily afford. If you can’t have everything you want right now, prioritize and work toward the goal that will give you the most satisfaction or the most bang for your buck.

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I’m interested in selling my home, but I don’t want to hire a realtor. I know it’s a common practice, I just don't know where to start. What steps should I follow? (posted April 24, 2015)

To cut costs and pocket more profit, some homeowners skip hiring a realtor. Taking the “for sale by owner” route when selling a home is doable, but Bankrate.com cautions sellers that it takes more than a well-worded newspaper ad to sell your property. Here are five things you’ll have to do to take on a DIY home sale.

Know your home’s worth. It’s important to get the price right. If you aim too high, your home won’t sell. If you aim too low, you’ll miss out financially. Set a fair asking price by determining the market value of your home. To do this, compare it with similar properties in your area that have sold within the past six months. To get a true comparison, look for properties that are alike in type, size, age, condition, lot size and style to yours. Movoto.com provides an infographic explaining the process of conducting your own comparative market analysis.

Dedicate effort to marketing your property. Begin by staging your home to highlight its perks and downplay its flaws. Remove clutter and reduce evidence of your personal style so that potential buyers can see themselves in your home. Take photos and craft an inviting description to entice potential buyers to visit for a showing. If necessary, consider hiring a professional photographer to capture your home in its best light. List your property for sale in multiple locations through multiple mediums (“for sale” signs, classified ads, social media, online listing services, etc.) and make yourself readily available when potential buyers ask to see your home

Educate yourself. If you hire a realtor, you’ll rely on them to guide you through the process of selling your home. In the absence of this expertise, it’s necessary to research competing listings, brush up on industry lingo and visit open houses to learn how the professionals market and show properties. It’s also a good idea to review the state laws governing real estate transactions and possibly hire a real estate attorney to review your contract to ensure you’ve met your legal obligations.

Put your emotions aside. You love your antique fixtures and faux paint finishes, but buyers may not share your enthusiasm. Look at your home objectively and do your best to not be offended if potential buyers start nit-picking your style or pointing out flaws during showings

Screen potential buyers. When selling your home, you must be prepared to turn down unacceptable offers or conditions. Asking for a lender’s preapproval letter is a good way to ensure that your buyer is financially qualified to purchase your property. Don’t take your home off the market or sign a contract before you confirm that the purchase can proceed as agreed.

If you choose to forgo working with a realtor, you don’t have to walk through the process completely alone. Companies like ForSaleByOwner.com and HomesByOwner.com help FSBO sellers navigate the process for a fee; to ensure you’re making the best financial move, compare the cost to a realtor’s potential commission fee.

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Our mortgage is almost paid in full. My husband wants to move into a new home and get out of our starter home. What would be more practical in our current economy: economical home improvements on an old home or purchasing a newer home? (posted March 28, 2014)

Choosing between improving your current home and buying a new home can be a challenge. To determine the best solution for you and yours, start by considering the following questions:

Is your current home suitable in terms of size, space and location for your family?

What could be done to improve your current home to make it more suitable, and how much would the improvements cost?

Is your home “market-ready,” or would you have to make improvements to help it sell?

Now that the gears are turning, prepare a side-by-side comparison of improvements needed to make your home more suitable to stay and improvements needed to get the house ready for the market. Do a little research and add cost estimates for each item on the list. How does the total compare to the additional cost of buying a newer/different home that already has the features on the list? This exercise will help you see what approach would be more cost effective in the long run.

If you find you’re leaning toward selling, talk to an experienced realtor to get an idea of what could be done to make your home more marketable. Sometimes all that’s needed is a little fresh paint, but, in other cases, big ticket items are in order. How might that information impact your decision?

If you think that you may be better-off staying put, consider doing some of the improvement projects yourself, if possible, to help save money. Create a budget for the improvements and only take on one project at a time to spread out the spending.

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I’ve been renting for several years and have decided I’d like to own my own home. I’m not sure I can afford a traditional site-built home; are mobile homes a good investment? (posted June 28, 2013)

For many, home ownership is the pinnacle of the “American dream” and luckily there are many housing options available to choose from. In addition to site-built homes, you can also explore a wide array of modular and manufactured homes. When determining which option is the best investment for you, consider the differences between these types of houses, how much home you can reasonably afford, and the financing options available to you.

Both modular and manufactured homes are considered ‘prefab’ houses. These homes are built in climate-controlled factories and then transported to their final location and set in place. While their origins are similar, there are some distinct differences.

Modular homes come in many shapes and sizes: from single-story to multi-story, Victorian to bungalow. Once constructed, the pieces are shipped in block format on flatbed trucks. Upon arrival at the home site, the pieces are placed together - much like a puzzle - and the interior construction is completed. While the layout of a modular home is generally more basic than a site-build home, they’re said to be sturdier because they’re built to withstand being transported. Modular homes are held to the same local, state and regional building standards as traditional site-built homes and are also treated the same by lenders in regards to financing. Another similarity is that they tend to increase in value over time.

Manufactured homes (previously called mobile homes or trailer houses) are always single-story and are available in three sizes: single-wide, double-wide, and triple-wide. They’re built on permanent steel chassis that allows them to be delivered in whole or in sections on their own wheels. Once the home is placed, these wheels are typically hidden by skirting. Manufactured homes conform to construction and safety standards regulated by the U.S. Department of Housing and Urban Development.

When it comes to financing, many manufactured homebuyers take advantage of options available through the home’s retailer. While it’s possible to obtain a long-term mortgage through a bank or credit union, it’s usually contingent upon the home being placed on your own land, on an approved, permanent foundation.

These homes are inspected after initial construction is complete, but structural approval isn’t required once the home is placed at the site. It’s also important to note that generally, the value of manufactured homes tends to decrease over time due to the difficulty of making updates or additions to the home.

To learn more about modular and manufactured homes, visit the National Association of Certified Home Inspectors at NACHI.org. To determine how a new house payment will affect your household budget, use the budget calculator at OklahomaMoneyMatters.org.

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When you’re selling your current home and buying a new one at the same time, should you contract with separate realtors? (posted Jan. 25, 2013)

There’s no single answer to this question. It will most likely depend on how you feel about the realtors in your area and whether or not you think they’ll provide the services you’re looking for.

Here are some points to consider that may help you make your decision.

Ultimately, you’ll want to work with someone who’s knowledgeable about the local real estate market(s). If both homes are in close proximity to each other, you may be able to rely on the expertise of a single agent. However, if you’re moving to the other side of a large city or to a different town, choose one realtor to sell your current home and find another who’s familiar with your new location.

Using the same agent for both purchasing and selling may enable you to negotiate the commission rate. Since one agent will receive commission from both sales, s/he may be willing to lower the fee by a percentage point or two.

A single agent may be able to coordinate simultaneous closings through one title or abstract company, which can make the entire process a bit smoother.

Ask for referrals from friends and family, then schedule interviews with several agents. Before signing a contract, make sure you have a good rapport and that you’re on the same page about important aspects of the process, such as pricing strategy, home staging and marketing the sale.

Some realtors work only as a buying agent or a listing agent, not both. When interviewing potential realtors, be open about your plans for consecutively buying and selling. A reputable agent will be honest about whether or not his or her experience is sufficient to represent you on both sides of the transaction. If it isn’t, maybe s/he can provide a referral.

For more information about buying and selling real estate, explore the Advice page at Realtor.com.

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My wife and I live in an older house. Over the years we’ve been working on updating random odds and ends, but we haven’t done much to the kitchen for the fear of spending a fortune. Do you have any cost saving ideas we can use now while we save money to do what we really want? (posted July 30, 2010)

A total kitchen remodel can be extremely expensive. While you’re waiting to save that last dime, break out your toolbox and try a few of these options.

Dress up old appliances. Buying new appliances right now doesn’t make sense if you’re planning a total kitchen overhaul in the future. What could do the trick for now? Try a fresh coat of white, black or silver appliance paint on your refrigerator and dishwasher. This will give your old appliances a fresh new look.

Estimated cost: $20 to $30 (to cover the fridge)

Replace drawer pulls and knobs. This is one of the fastest, simplest and most inexpensive ways to makeover the look of an outdated kitchen. Take a trip to your local home improvement store to find the latest looks in cabinet hardware. If your budget allows, get more bang for your buck by choosing the style you’d want to use in your larger remodeling project.

Estimated cost: $50 to $100

Update your backsplash. This quick solution is like updating your kitchen’s ‘jewelry’. If the thought of grouting new tile scares you, consider other alternatives, such as peel-n-stick tiles. Once you’re ready to fully remodel your kitchen, these tiles can be removed, repurposed or reused with new adhesive.

Estimated cost: $500 to $600

Make your own countertops. A chipped laminate or dingy tile countertop can really make your kitchen look dated (and dilapidated). If you’re not ready to go for new laminate, granite or composite counters, consider using a polished, colored concrete. Concrete has all the burn and scuff resistance and visual appeal of granite and often costs less.

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With today’s low interest rates, we’ve been thinking about refinancing our home mortgage. What should we consider before making our decision? (posted June 26, 2009)

To “refi” or not to “refi,” that’s the new question! Interest rates may be at an all time low for qualified buyers, but it doesn't make sense to refinance if it’s not a great deal for YOU. Consider these factors before jumping to refinance.

Do you have enough equity? It’s realistic to refinance if you’ve built up at least 10 percent equity in your home. It’s also possible to refinance if your equity is less than 5 percent, but you might get stuck paying cash up front to make up for the difference in equity.

Have you reviewed your credit? When refinancing your home, lenders use the same criteria to evaluate your creditworthiness as they do for a first mortgage. So, make sure your credit score is in tip-top shape. Otherwise, you may not get a low rate or even qualify to refinance.

Have you checked the rates you could qualify for? If they’re not more than 1 percents lower than the rate on your current loan, refinancing may not be worthwhile.

What are your future plans? If you’re thinking of selling in the next three to five years, the amount you save on refinancing your mortgage may not cover the closing fees. The goal is to save money over the long-term.

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I’m planning to sell my home this summer, but I’m worried about the state of the housing market. How can I make my house more appealing –without spending a fortune - so I can sell it quickly and make a healthy profit? (posted July 27, 2007)

You’re right; it’s no longer a seller’s market out there, but don’t throw in the towel just yet! There are plenty of ways to build your home’s value and make it stand out in the neighborhood. Here are some tips to make sure your home is in tip-top shape when buyers come callin’.

Focus on the front. Potential buyers will form a first impression of your home from this vantage point. Be sure your trim is painted and the porch is clean and clutter-free. You may also want to paint your front door and spring for new door hardware.

Work hard in the yard. Trim bushes and shrubs, take care of plants and keep your lawn clipped and edged. Have a small yard? Use curving pathways and flower beds instead of straight lines. Curves trick the eye and make an area look bigger.

Open a can. Painting is one of the least expensive ways to change the look of a home. Experts recommend using a neutral color palette because it allows buyers to better visualize their furniture and décor in your home. Just because you like hot pink walls and turquoise trim doesn’t mean buyers will, and that might just be enough reason for them to walk away.

Get cookin’ in the kitchen. The kitchen is one of the most important rooms (if not the most important room) in any home, but an overhaul can cost thousands. Breathe new life into an old kitchen by painting cabinets, adding new hardware and replacing the backsplash.

Say “yes” to clean and “no” to clutter. Wipe down baseboards, windowsills, faucets, switch plates and anything else that collects dust or grime. Pack up knickknacks, collectibles and extra furniture. While you’re at it, go ahead and pack up one third of the stuff in each room; more space means more profit!

Say goodbye to 1970. Remove outdated wallpaper, shag carpet and anything avocado green. If people refer to your home as “retro,” you need to make some changes before putting it on the market.

Shine a little light on the subject. Get rid of old light fixtures and use a consistent style throughout the house. Consider using accent lighting over photos, wall décor or pictures.

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Vehicles

I’m ready to trade in my current car for a newer one. What can I do to increase my vehicle’s trade-in value so I don't lose money? (posted August 28, 2015)

According to CarsDirect.com, there are four key elements that factor into a car’s trade-in value:

Age – newer vehicles are typically easier to sell.

Make and model – certain vehicles retain value better than others.

Condition – maintenance means a lot; anything that needs repairs will have a lower overall trade-in value.

Mileage – used car buyers generally want a vehicle that looks and feels newer, so cars with higher mileage aren’t as desirable.

Appeal – above all else, trade-in value is determined by how likely it is that the dealer will be able to re-sell your car in a reasonably short amount of time.

Ultimately, you have the most control over number three, the car’s condition. Here are some tips for making sure your vehicle is in tip top trade-in condition.

Get detailed. It’s worth the investment to hire someone to thoroughly wash, wax and clean every nook and cranny of your car. If you prefer to take care of the detailing yourself, look at the car from the dealership’s perspective. Be meticulous, because they’ll look for anything that would cause a potential buyer to hesitate. While you’re at it, it’s a good idea to change the oil and air filter, too.

Fix all visible issues. Address problems that immediately leave a bad impression, like excessive dents and scratches, worn tires, broken taillight covers or a cracked windshield. When people see obvious cosmetic flaws, they immediately make a judgement about how well the vehicle has been maintained and ultimately, how it will perform. Even if everything under the hood is impeccable, the look of the vehicle may break an otherwise good trade-in deal.

Learn its worth. Online research can help you better estimate your car’s trade-in value. Websites like Kelly Blue Book or Edmunds can help you determine a realistic price range for your trade-in negotiations. However, it’s important to realize that what you find online is just a guide; ultimately, trade-in offers are up to the dealer and depend on how profitable they think your vehicle will be and how quickly it can be sold to someone else. If you’re not happy with the trade-in offer you’re given, shop your vehicle around to different dealerships or consider selling it privately. On average, private sales are more profitable.

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My car's check engine light recently came on. How do I find a reliable, low-cost mechanic? (posted May 29, 2015)

Routine maintenance and timely repairs are essential for reducing overall costs and improving the long-term performance of your vehicle. Luckily, there are many options when it comes to quality car care. If your vehicle is under warranty, taking it to your dealership is probably the most cost-effective option. However, if the service you need isn't covered by a warranty, ConsumerReports.org found that consumers tend to report greater satisfaction when working with an independent shop. Consider the following tips to help you find a mechanic you can trust.

Seek references. Personal recommendations from friends, family and fellow car enthusiasts are a great way to find a reputable mechanic. You can also turn to websites like Yelp.com, AngiesList.com or CarTalk.com to search for, and read reviews on, local mechanics and car dealerships.

Check connections. Look for a mechanic who's affiliated with AAA, the National Institute for Automotive Service Excellence or the Automotive Service Association. Links to these groups are no guarantee of top-quality service, but it's a good start. It's also wise to check with the Better Business Bureau, because auto repair shops rank highly on their list of consumer complaints.

Conduct a test run. If possible, test out a local shop's service with a smaller maintenance task, like an oil change or tire rotation. This can help you gauge how well you connect with the staff, the level of customer service and the overall environment before committing to a long-term service relationship.

Ultimately, look for a mechanic who's courteous, readily answers your questions and has proven experience working on the type of vehicle you own. In the meantime, consider visiting an auto parts store like Auto Zone, O'Reilly Auto Parts or Pep Boys for a free check engine diagnostic test.

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When I bought my car, I paid for an extended warranty. Now, a third party company has contacted me claiming my policy might not offer enough coverage. Some resources say third-party warranties are a good deal while others say it's a scam. What do you think, is the added coverage a good investment? (posted June 26, 2014)

According to Consumer Reports the average consumer spends more on an extended warranty than the warranty saves them in repairs. Since you’ve already purchased an extended warranty, chances are you won’t need additional coverage.

Consider this. Since you already have extended coverage, forgo purchasing the third-party warranty and instead, set that money aside each month in a savings account. You won’t have to worry about potentially wasting funds and you’ll have money readily available if uncovered repairs are needed.

If you’re still leaning toward purchasing the added coverage, AutoTrader.com says that warranties provided by third-party providers may not be the best option. Third-party providers may take longer to approve repairs and the warranty may not pay for authorized work to be done at a franchised dealership. Regardless of warranty provider, it’s important to read the contract thoroughly to make sure that the items most likely to fail, break or otherwise wear out are covered.

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Is gap insurance worth the cost? (posted June 26, 2014)

Gap insurance comes in handy if your car is totaled and its cash value is lower than the amount you owe on the loan. Your regular auto insurance only pays what the vehicle was worth before it was damaged, so the value of this type of coverage really depends on how much your car has depreciated and how much you owe on the loan.

You might consider purchasing gap insurance if you:

Lease a vehicle.

Drive more than 15,000 miles per year.

Pay less than 20 percent down when purchasing the vehicle.

Opt for an extended financing term (60 months or more).

Roll the remaining balance of a previous loan into a new car loan.

Purchase a vehicle with a higher than average rate of depreciation.

While it’s up to you to decide if investing in gap coverage is worthwhile, it’s important to know that you don’t have to buy gap insurance at the point of purchase. In fact, it’s typically much cheaper if you shop around and purchase coverage through an insurance company rather than a dealership.

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I’ve been thinking about buying a new car. In the past, I’ve always purchased new, but this time I’m considering a pre-owned vehicle. I’ve seen the commercials for services like Carfax®, but I’m a little wary. Are reports like these reliable? (posted May 31, 2013)

There’s nothing wrong with being cautious; in fact, many experts would say that careful consideration is a sign of a wise consumer. Reports provided by businesses like Carfax® offer vehicle information including accident history, mileage discrepancies, flood or fire damage, and “lemon” status. The general idea behind this type of reporting is to provide as much information as possible so buyers are empowered to make a confident purchasing decision. While this data is gathered from seemingly reliable sources, like police reports, insurance claims, and repair facilities, it’s important to remember that not every individual who has a car accident or other significant incident files a police report or works through an insurance company to make needed repairs.

While reviewing a vehicle history report is a good starting point when evaluating a used car, it’s always a good idea to ask additional questions and do your own research rather than accepting the report at face value. Here are some additional steps to take when shopping for a pre-owned vehicle.

Search for vehicle-related recalls by visiting the National Highway Traffic Safety Administration’s website, NHTSA.gov.

Locate the Vehicle Identification Number (VIN). The VIN can be found in several locations (the driver’s-side of the dashboard near the windshield, the steering column, the driver’s-side wheel well and on the driver’s-side door). Once you’ve located the VIN in several placements on the vehicle, compare the numbers to ensure they all match. If they don’t, the original parts may have been replaced.

If possible, take the car to your own mechanic for inspection. If that’s not feasible, perform a thorough walk-through on your own. If the sellers hassle you about this, they may have something to hide.

Take a test drive. Don’t rush this step; check the dashboard lights, listen for engine noise, test the brakes and pay attention to steering vibration.

If you’d like to learn more about conducting a thorough self-inspection and identifying signs of potential problems, check out Step 6 of Kelly Blue Book’s 10 Steps to Buying a Used Car.

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I want to refinance my car. Is it best to refinance it with the same bank who gave me the loan or my main bank that I use for all my personal things? (posted Sept. 30, 2011)

It’s probably best to start with your regular bank because financial institutions usually avoid refinancing their own loans. Banks and credit unions often run refinancing promotions but they’re geared toward gaining new loan business, not restructuring the loans they already own. However, don’t count your current lender out. If you’re a good customer, it might be worthwhile to ask if they’d be willing to make an allowance in order to keep your business. Even if your current lender is willing to negotiate new loan terms, it’s worthwhile to rate shop to ensure you’re getting the best deal.

In order to truly comparison shop and know who’s offering the best rates, you’ll need to gather all the information on your current loan – pay-off amount, interest rate, number of remaining payments and whether there’s a penalty for paying off your loan early. If there is a pre-payment penalty, you’ll need to determine if the potentially lower interest rate will offset the fee you’ll have to pay.

Once you’ve gathered all the facts, visit with different lenders to get quotes and see if they can beat your current deal. Ask about loan qualifications, interest rates and fees associated with a new loan.

Even though refinancing offers the potential for lower interest rates, more favorable loan terms and lower monthly payments, if refinancing is going to lengthen the life of your loan it may not be worth it in the end. Only consider this as an option if you’re dangerously close to missing payments or defaulting on your loan.

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Should I use all of my savings to purchase a new car with cash, or should I finance some or all of it? (Dec. 30, 2011)

That’s a good question and like most financial situations, there’s no cookie cutter answer. As a general rule, it’s best to remain as debt-free as possible. However, there are pros and cons to using both cash and credit.

If you use cash, you’ll own the car outright and won’t have a monthly payment. You’ll also avoid added expenses in the form of interest fees. However, it’s risky to completely wipe out your savings. In the event of an emergency, you’ll be in a bind and could find yourself having to rely on credit at a higher interest rate.

If you choose to finance, your emergency fund stays intact, but you’ll have the routine expense and hassle of a monthly payment. The car will ultimately cost more due to interest charges and if you’re unable to make your payments down the road, you risk defaulting on the loan and ruining your credit. On the other hand, if you shop for a good interest rate and handle the loan responsibly, timely payments will help boost your credit score.

Thankfully, there are several payment options worth considering. You could:

continue your current saving habits until you’ve saved enough money for the car without depleting your emergency fund.

buy the car with cash and continue saving until you’ve rebuilt your emergency fund.

consider purchasing a less expensive used car with a smaller portion of your savings.

use part of your savings to make a sizable down payment and finance the rest at the lowest possible interest rate.

finance the vehicle and use the money you’ve been putting in savings to make extra loan payments. This strategy will pay the loan off quicker and reduce your overall interest expense. (This option is only recommended if you’ve already established an emergency fund large enough to cover at least 3-6 months’ worth of living expenses.)

To learn more about purchasing a new vehicle, check out our online self-paced learning module Auto Loans 101 or crunch the numbers with this calculator to see if cash or credit is the better buying option for you.

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Kids and Money

I’m allowing my teenager to get a part-time job this summer so she can start paying for some of her own expenses. Besides telling her not to blow all her money in one place, what else should I share with her about managing her first paycheck? (posted May 27, 2021)

Every teenager is excited about their very first payday. For many teens, a job is their first step toward financial independence. Too many teens and young adults enter the work world without an honest conversation about money. Consider the tips below as you prepare to start your teen off on the right financial footing.

Paycheck Pointers. When your child knows her wage per hour and the average number of hours she’ll work per week, show her how to estimate her income. Then, explain the difference between gross wages and net wages. Review the typical tax deductions from every paycheck and explain what those taxes represent. Don’t forget to point out the pay period beginning and ending dates and how those dates usually differ from the date of her paycheck.

Set Good Goals. Before your teen starts working, she needs to think about why earning her own money is important. She’ll need to begin categorizing her spending into three categories: wants, needs and obligations. Then, help her set financial goals for saving, spending and sharing through charitable donations. Encourage her to use our downloadable template for creating S.M.A.R.T goals. S.M.A.R.T. goals are Specific, Measurable, Attainable, Relevant and Time-based, which makes them easier to reach.

Build a Budget. Next, ask your daughter to create a spending plan that reflects those goals. Explain to her early on that it’s her responsibility to budget her income in order to live within her means. Budgeting will make her accountable for her spending choices. Check out our free interactive budget calculator to make developing and maintaining a spending plan simpler and faster.

Bank those Bucks. Actual paychecks have become more and more obsolete since most businesses now require their employees to use direct deposit. If your daughter doesn’t currently have a bank account, encourage her to research local options and find a financial institution that offers the services that best fit her needs. Many banks offer a variety of online tools, discounts, and other programs at little or no cost to support financial health and engage with their customers. Establishing a good banking relationship now can help your teen in the future.

Keep up the Conversation. Building good financial habits requires staying the course and regularly checking your progress. Your daughter may experience some bumps in the road as she achieves more financial independence, so try to schedule a monthly recap to talk through the progress she’s making toward meeting her goals. Share your money management experiences and share ideas to help her refine her budget and update her goals as she prepares for the milestones to come. You may learn from her experiences, too.

Learning to responsibly manage their own money is an essential life skill for every teen, and it’s best to get started sooner rather than later. For more information and resources, check out our Your Money Matters high school guide.

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I’m having a baby in a few months. I’m very happy, but also concerned about the added expenses associated with bringing a new life into the world. What do I need to plan for before he/she arrives? (posted Oct. 28, 2020)

While there are numerous guides for expectant parents, few delve into what parents can expect financially. Babies are priceless, but their needs come with a price tag—including insurance, child care, food, clothing, and toys, just to name a few. In short, there’s a lot to think about.

Better your budget. The U.S. Department of Agriculture’s Expenditures on Children by Family reports that families spend about $12,980 each year for each child. That’s an expense of $233,610 from birth to age 17! Clearly, you may need to make both short-term and long-term adjustments to your spending plan. Oklahoma Money Matters' interactive budget calculator can help you crunch the numbers. If you’re employed, it’s important to think ahead about your job and if you’ll be able to take maternity/paternity leave. Talk to your employer as soon as news of your pregnancy becomes public and plan accordingly. If you’ll be losing some of your income when the baby arrives, build your budget from that reduced income amount so you don’t have to depend on savings to make ends meet.

Investigate insurance needs. This tiny new addition to your family may mean big changes to existing insurance plans. Find out now which insurance forms you’ll need, the documentation required to add your baby to the plan, and how much that may cost. Dependent care flexible spending accounts offered by employers, and some children’s healthcare benefits, may provide savings on childcare and dependent costs. Research carefully how the birth of your baby may impact insurance costs and eligibility.

Resale to the rescue. New parents should be prepared to buy necessary items such as a crib, stroller, car seat and more. Most baby gear can be found gently used at a discount, so don’t feel pressured to buy all new items. Websites, consignment stores, and online marketplaces can also offer price reductions on gently used infant necessities. Local children’s consignment stores sell pre-owned merchandise that won’t bust your budget, and don’t forget to check out garage sales! Many families host garage or yard sales to sell baby clothes and supplies. For any type of equipment you purchase, remember to do your research. Check for recalls and review safety standards on product manufacturer websites and at the Consumer Product Safety Commission, CPSC.gov .

Keep saving. Oklahoma has two specific plans to help you save for your child’s education and future. The Oklahoma 529 College Savings Plan allows families to save and receive tax deductions based on their contributions. The funds from this plan can be used at any accredited university or vocational school and many approved schools abroad, and can be used for certain housing and technology costs, as well. Oklahoma also offers a STABLE account for children who develop a disability before the age of 26. STABLE accounts allow owners to use these funds for education-related expenses, such as tuition, books and supplies, and educational materials, as well as housing, transportation, health and wellness, and other expenses.

Oklahoma Money Matters offers information to help those financially preparing for a child . Our personal finance calculators can also assist with anything from baby costs to reducing debt to retirement planning.

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My financial goals include saving and investing and I’ve learned how to do this on a limited income. However, I struggle to find extra income for giving. It’s important to me to teach my children to give, but there just doesn’t seem to be enough left over. Are there ways that I can do this without cutting into my limited finances? (posted Nov. 23, 2016)

The benefits of giving can be life changing. Most individuals who give feel that they’re the ones who are most impacted by giving. Many parents want to pass on the spirit of philanthropy to their children, but when you’re living on a limited income, finding room in a tight budget for charitable giving may seem almost impossible. Luckily, there are many ways to give back that don’t require monetary donations.

Charitable organizations are almost always in need of volunteers and/or in-kind donations, such as gently-used clothing, household goods or nonperishable items. The best way to teach your children to be givers is model the behavior, just as you would when teaching them to budget and save. Make volunteering more meaningful by serving alongside them and turning it into a family event. Encourage your children to help you find ways to give in your community – they’ll enjoy the social benefits of hands-on learning, and students who volunteer often perform better academically. Below are just a few local and statewide organizations that offer volunteer engagement options for families.

Local public schools can always use a helping hand. Schools offer opportunities for volunteers to help teachers make copies or decorate bulletin boards. Donations of books or classroom supplies are always welcome. Volunteers are often needed to assist with field trips and other school events and activities. Contact your local school’s administration office to learn more about the volunteer process.

The Salvation Army has many opportunities for volunteers, especially during the holiday season. Some of these include bell ringing, the Angel Tree program, disaster relief, senior and family centers and the food pantry. Packing holiday meals before distribution day is a great way for the whole family to get involved.

Junior Achievement offers young people the opportunity to succeed in a global economy. Volunteers are in high demand and are often utilized in school and community organizations for a variety of learning experiences.

The Metro Family Magazine publishes a list of volunteer opportunities for the whole family, ranging from working with children with disabilities to caring for shelter pets to staffing food pantries. The very youngest family member can even get involved by decorating cards and pictures for hospice patients.

NewsOK offers an online guide to giving, donating and volunteering in Oklahoma. The guide lists hundreds of categories and areas of interest to help your family find the perfect volunteer opportunity.

VolunteerMatch.orgacts as a national volunteer search engine. Visit the site to connect with organizations and nonprofits that offer opportunities that meet your personal passion.

Boys & Girls Clubs is an afterschool youth organization dedicated to empowering youth in academics, the arts, health and fitness, leadership and career exploration. In addition to individual monetary donations, there are opportunities to engage by helping members with their homework, reading, guest speaking, and much more. Select Find A Club on the website to locate your nearest club site.

Participating youth in the Big Brothers Big Sisters program are ready and waiting to be matched with a mentor. In addition to monetary donations, there are opportunities to serve in the workplace mentor program, through which students visit and learn from professionals.

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What are some fun ways to teach my middle school students the "good, bad, and ugly" of credit cards?(posted Jan. 27, 2012)

Cheers for infusing a little fun into your lessons! Often, financial education isn’t that exciting, especially for younger students. Luckily there are some great resources available to make personal finance instruction a little more enjoyable. And here’s the best part - these resources are free!

The Federal Reserve Bank of Kansas City offers a credit lesson for students ages 12-15 called "Professor Finance & Fed Boy Meet the Catastrophe Clan." This role play activity introduces students to the world of credit in a funny format while emphasizing the importance of wise financial decision-making. Access the lesson plan by visiting the Fed’s website or download the PDF.

Wells Fargo Bank offers a free financial curriculum for educators called Hands on Banking®. These engaging lessons are fun and align with national and state educational standards for economics, financial literacy, mathematics, and English/language arts, making it easy to integrate them within classroom activities. To learn more, visit handsonbanking.org.

Financial Entertainment, developed by The Doorway to Dreams Fund, offers an innovative way to teach money management through playing online games. The game Celebrity Calamity gives the player a peek into the world of credit by making them the financial manager of three up-and-coming celebrities. To win, keep the celebrities on the right path financially even though they love to spend beyond their means. To learn more and explore other available games, visit financialentertainment.org.

The FINRA Investor Education Foundation offers an interactive tutorial called Avoiding Deceptive Credit Practices, which explains the dangers of doing business with companies that offer a quick fix for debt or credit concerns like payday loans, title loans and credit repair scams. This and other financial games and tutorials can be found at saveandinvest.org.

To explore more games and tools that make financial education fun, search our online resource clearinghouse or visit the National Jump$tart Coalition Clearinghouse.

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My husband and I try to live below our means, make wise decisions with our finances, and explain money concepts to our kids. It really bothers me that my oldest child can't watch a cartoon without seeing at least one commercial that convinces her there’s an item she MUST have. Do you have any tips or resources to help us beat the pull of consumerism? (posted Oct. 25, 2013)

Kids are targeted by advertisements on a routine basis, and it’s a billion dollar business. Even extreme measures, like boycotting the TV and blindfolding the kiddos every time you leave the house, probably won’t work. Instead, consider these three tactics for turning your child’s temptations into teachable moments.

Tell a tale. Not only is reading with your child a great way to relax and bond, it’s also a fun way to teach long-lasting financial lessons. Here are several examples of children’s literature that entertains while teaching money concepts.

The Berenstain Bears Get the Gimmies by Stan and Jan Berenstain demonstrates how Mama and Papa Bear deal with an ugly case of the “gimmies” by teaching their cubs about the family budget and appreciating all the things they already have.

Little Bird by Germano Zullo is a colorful tale of a big-hearted man and a truck full of birds. This simple picture book shares the powerful message that the small things in life are the true treasures.

Too Many Toys by David Shannon introduces children to Spencer, who simply has too many toys. When Spencer’s parents ask him to give some of his goodies away, he struggles, but in the end discovers the most happiness with the simplest of play things.

Stuff by Margie Palatini is a fun story about Edward, who loves his stuff more than anything in the world. When his stuff begins to take over the house, Edward must decide which stuff counts and which is just…stuff.

Embrace commercials. It may seem counter intuitive, but next time your child is sucked in by clever advertisements, use it to your advantage. Instead of finding a distraction or changing the channel, help your daughter identify the clever marketing tricks that make her yell “I want it!” Explain that commercials use tactics like catchy jingles, cartoon or celebrity spokespeople, and misleading messages to convince consumers they need to buy the item being advertised. Make it fun by turning it into a game – ask her to identify as many marketing strategies as possible before the commercial is over.

Craft a plan. If your child is adamant that she must have an item, teach her that it’s ok to have “wants,” but it’s important to identify the ones that mean the most so we can prioritize. Ask your daughter to identify one or two special “wants” and help her map out a strategy for earning enough money to purchase the item(s). After she’s reached her saving goal, ask her to re-consider her potential purchase for 48 hours. You both may be surprised to find that the must-have item she so desperately craved isn’t quite as important to her as it once was.

For more resources to help you teach children about money, explore the Parents section and online resource clearinghouse at OklahomaMoneyMatters.org.

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My 8 year-old has been asking me to give her an allowance. I think it’s a great idea, but what’s the best way to teach her about money management and spending at such a young age? (posted March 30, 2012)

An allowance can be a great tool for teaching your child the do’s and don’ts of money management! The lessons she learns now can have a huge impact on how she’ll budget her money and manage debt in the future. Consider these strategies for imparting some financial wisdom.

Set boundaries and expectations. Based on the amount of your child’s allowance, decide what purchases she’ll be solely responsible for (e.g. snacks at basketball games, toys, gifts for her friends) and which costs you’ll still cover (e.g. lunch money, school supplies, toiletries.).

Encourage saving and giving as well as spending. Consider using the 60:30:10 rule. Allow your child to spend 60 percent of her allowance as long as she saves 30 percent toward long-term goals and gives 10 percent to charity.

Let your child make mistakes. As hard as it is to watch our children make bad choices, sometimes mistakes are the best teaching tools. Even if you know your child will regret the buying decision she’s about to make, let her do it. When she comes to you complaining about her choice and asking for more money, say no and take the opportunity to help her think through why she regrets her decision, the importance of carefully considering a purchase before making it, and what she can do differently next time.

Introduce real-world examples. Next time you go grocery shopping, let your daughter take an active role. Set a goal together, like buying healthy after-school snacks or choosing something nutritious for dinner. Decide on a budget, then let her take control. This exercise provides a great opportunity for her to learn about the cost of feeding a family and explore comparison shopping.

Regardless of the methods you choose, try your best to be consistent and be willing to talk openly and honestly about how you earn and spend money. Your influence and example are the greatest teachers!

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My teenage son landed his first summer job. While I’m extremely proud of him for earning a paycheck, he blew his entire first paycheck in just a couple of days. How do I teach him to manage his paycheck wisely? (posted June 25, 2010)

Summer jobs give teens a new-found freedom and money to spend. Teaching them about money management can be difficult, especially when it’s cash they’ve earned. However, it’s extremely important to help teach your child some solid financial strategies.

Talk about tax. It’s important to explain the difference between gross vs. net income before your teen makes big plans to spend his wages. Try sitting down with him to go over that first pay stub, explaining how and why taxes are taken out.

Take it to the bank. If he doesn’t already have one, help your son open a savings account and a checking account. Be sure to teach him how to write and record checks and how to balance statements.

Share your saving secrets. Saving is an important lesson, so emphasize the value. Help him develop a budget and suggest putting savings first, setting it aside from the rest of his income. He may not be inspired to stash cash for retirement, but he may be swayed to the saving habit with a short-term goal, like buying a plasma TV for his room.

Don’t micromanage. While it can be tempting to swoop in and save the day, allow him to learn his lesson. Let kids have space to make spending decisions, even if they’ll end up with buyer’s remorse. There’s nothing like wasting your own hard earned cash to make you more careful with your money the next time.

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How much allowance should I pay my kids? Should it be tied to chores or not? What should I expect my kids to pay for out of their allowance money (birthday presents for friends, family, Christmas gifts, fun stuff for themselves, etc.)? (posted July 25, 2008)

To give or not to give, that’s the question! Providing an allowance is a decision parents struggle with and there are various opinions on the matter. One approach that works well for many families is starting with a weekly base allowance - about $1 per year of the child’s age - to cover chores the child is responsible for as a contributing member of the family, as well as a list of chores that can be completed for extra cash.

A list for an eight-year-old might look like this:

Weekly Allowance: $8

Everyday chores:

Make the bed

Put dirty clothes in the hamper

Set the table

Feed the dog

Chores for extra money:

Unload dishwasher, 25¢ per occurrence

Fold laundry, 50¢ per load

Dust furniture, 25¢ per occurrence

Vacuum carpet, 25¢ per room

Be specific about each task so your child knows when the job is complete. You may want to display the list of daily and additional chores in your child’s bedroom to serve as a visual reminder. Help your kids develop a weekly chart to keep track of chores they complete. Designate one day of the week as payday, and help your children add up the extra allowance they earned by doing additional chores. Encourage them to set aside a percentage of each week’s earnings for savings and charitable giving.

Now to the fun part…spending! Slowly start to shift spending decisions to your child. Don’t buy toys or clothes on demand; encourage your kids to save their weekly allowance to purchase what they want. It’s easy for them to spend your money, but it’s hard to part with their own! In addition to paying for toys and fun activities, have your child contribute to gifts for friends and family. This practice helps kids understand that sometimes we skip buying what we want so we can do special things for others.

However you decide to handle allowance in your home, try your best to be consistent and be willing to talk openly and honestly about how you earn and spend money. Your influence and example are their greatest teachers!

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My wife is pregnant with our first child, and we’ve already spent loads of money on clothes, blankets, books, etc. I’m worried that once the baby is born, we’ll be broke! Do you have any tips or suggestions to help us save money while getting ready for our little bundle of joy? (posted Oct. 26, 2007)

First of all, congratulations! There’s no doubt that babies bring great joy to their families, but many times they’re accompanied by empty wallets (and plenty of sleepless nights).

It’s estimated that new moms and dads spend $6,200 on their baby during the first year, buying everything from clothes to car seats to cribs to diapers. Fortunately, with a little planning - and a few helpful tips - you can ease the financial burden … but you’re on your own for those 3 a.m. wake-up calls!

Nix the new. Let’s be honest—baby stuff is so stinkin’ cute! Small clothes, tiny socks, itty bitty hats… it’s easy to get carried away when buying for a baby, and small items can add up fast. You may want to consider consignment shops, garage sales or online sites (eBay.com, CraigsList.com, Freecycle.org) for a variety of gently used and wallet-friendly items.

Forget fancy furniture. A crib that meets national safety standards is a must. But, do you really need the matching changing table, bookshelf, armoire and hutch? Sure, they’ll all look fabulous in baby’s room, but are they functional or necessary? Join a mom’s group or talk to friends about what you’ll actually need (and use) in a nursery.

Resist the urge to upgrade. Just because you’re having a baby doesn’t mean you immediately need the bigger home next to the elementary school and park (equipped with swings and monkey bars, of course). And, unless you drive a clown car, you probably have enough room to safely transport your precious cargo.

Discuss day care. If both parents plan to work outside the home after the baby is born, investigate the perks of using an employer-sponsored flexible spending account to pay day care expenses. Generally, you can pay for up to $5,000 in child care expenses a year using these accounts, which set aside money from your paycheck pretax.

Considering making the transition from working professional to stay-at-home parent? Test the waters by banking your paycheck during pregnancy to see if you can pay your bills, meet your savings goals, and still have a little fun on one income. Even if you find that you’ll both need to keep working, you’ll build a nice nest egg to start a college fund for baby!

You don’t have to break the bank to bring up baby. For more baby budgeting tips, visit PracticalMoneySkills.com/baby.

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My children are 6 and 8 and I really want them to learn about money before they get any older. What can I do? (posted April 27, 2007)

What a great question! Obviously, you realize that teaching children to respect money early in life shapes their future spending and saving priorities, which could spare them the stress - and other consequences - of financial mismanagement.

Children are very receptive to money management lessons; the key is to make it relevant by talking about money as it applies to daily life. Below is a list of everyday occurrences that can serve as teaching moments.

Grocery shopping. Many parents dread shopping with their children because they never know what will end up in the basket! Make shopping a learning experience by involving your children in the process before you leave for the store. List the items you need and ask your children to help you clip and sort coupons. At the store, engage your children by asking them to compare prices based on product size, function and brand; discuss how these differences relate to the item’s value. This approach teaches kids the importance of comparison shopping.

Commercials. Instead of changing the channel or muting the television, ask your children to identify the advertised products as either a “want” or a “need.” Discuss the difference. Children may think they need a cellphone or iPod, but food, shelter and clothing are needs that must be met before wants are considered.

Household chores. Make a list of duties your children can do to earn an allowance. Then, slowly begin shifting some spending decisions to them. By making their own decisions with earned resources, they’ll quickly learn the value of a dollar and how to spend it wisely. Talk to them about ways people earn income and how a college degree increases lifetime earning potential.

Family decision-making. We make choices constantly. While some decisions are simple (what to have for dinner, what to do on Friday night) and some are much more complicated (where to vacation, when to buy a new car), every choice we make has financial implications. Discuss the decision-making process as a family and encourage kids to share their perspectives. Through your actions, teach your children to spend, share and save. Make sure they know it’s OK to spend hard-earned money, but it’s also important for families to save for the future and to help others through charitable giving and volunteer service.

Want more ideas for teaching your children about money, no matter their age? Visit the Oklahoma Council on Economic Education’s website, EconIsOK.org, to download a free publication entitled, “How to Raise a Financially Fit Child.”

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Taxes

Tax time is approaching, and I can't wait to get my refund. Recently, a freind told me that getting a large refund isn't a good thing. Can you tell me why? (posted February 2, 2023)

For many people, tax refunds are something to look forward to. Why wouldn’t they be? It’s exciting to imagine all the things you’ll be able to do with that money. As much fun as it is, your friend is right – getting a tax refund isn’t ideal. If you receive a refund, it means you’ve had too much withheld from your paycheck.

That means you’ve essentially given Uncle Sam an interest-free loan on money you could be using every month to pay bills, buy groceries or get closer to your financial goals! Instead of aiming for a refund, a better strategy is to try to break even – ideally, you don’t have to pay the IRS and they don’t have to pay you.

First, figure out how much you should actually be withholding. Grab your last pay stub and explore the IRS withholding calculator to help you determine how much tax should be withheld from your paycheck.

Next, talk to your employer’s HR department as soon as you can to adjust your withholdings by completing a new W-4 form. This one step could mean more money in your pocket every month; that’s like giving yourself a raise.

If you’re like many people who use their annual tax refund to kick-start their savings or pay down debt, it’s important to know there’s a better way to maximize your money. Instead of waiting for the IRS to write you a check at tax time, take full control of your finances by cutting out the middleman. Once you’ve adjusted your withholdings, continue living off the monthly amount you were previously bringing home and put the “extra” to work for you.

If paying down debt is your goal, commit this money to debt reduction by implementing the debt snowball. If padding your emergency fund ranks high on your priority list, consider having this “extra” income automatically deposited into an interest-bearing savings account at a bank or credit union and watch your money grow. This time next year, you’ll have a nice amount saved, plus the interest it’s earned.

For more information about income taxes, tax forms and withholding, visit IRS.gov.

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Every year I panic because I can never seem to find the documents I need to file my taxes. What’s the best way to get organized to make tax season easier?

Keeping tax documents organized and stored safely not only reduces stress during tax time, it also reduces the chances of identity theft. And if you get organized this year, next year will be much easier. Consider these tips to get and stay organized.

Buy an accordion file: As an adult, we typically use more than one document to report our income. Keeping track of all W-2s, 1099s, and other necessary forms from mortgages, investments and other financial institutions can get cumbersome if you aren’t prepared. Consider buying an accordion file and label the individual sections for different tax years (2021, 2022, etc.) then place all tax forms in the corresponding sections as you receive them. Are you more of an environment-friendly kind of person? Consider scanning any pertinent tax documents upon receipt and storing them in a secure digital folder for safe keeping.

Keep a spreadsheet: In order to take advantage of deductions for charitable giving, you must show proof. You’ll likely need a bank record or an official note from the charity acknowledging the amount and date of the contribution. If you give often, consider creating a spreadsheet with the date, gift amount and charity name in case you need to request official documentation of your donation.

Scan and save receipts: If you run a business, you’ll likely accumulate many receipts over a year’s time that may easily get misplaced. If that’s the case, consider purchasing a receipt scanner. This will allow you to keep a digital record of all receipts. Bonus Tip: Keep a spreadsheet or other documentation indicating the reason for each receipt so there’s no guesswork as you’re analyzing them at the end of the year.

Maintain a secure place to keep your file: It’s a good idea to keep your personal tax documents in a secure location with your other important paperwork—like a passport or your Social Security card.

Shred any documents you no longer need: According to the Internal Revenue Service, it’s only necessary to maintain tax records for three years after the initial filing date. To keep your data secure after its expiration date, make sure you properly destroy all related documents using a cross-cut shredder—the same should be done for any old bank statements, credit card offers or mail containing your personal information.

For more information and resources to help you reach your financial goals, check out the Consumers tab at OklahomaMoneyMatters.org.

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I'm expecting a tax refund this year, but I need that money now to pay bills. Someone told me to take out a refund anticipation loan when I file my taxes. Can you tell me more about them?

Tax refund anticipation loans—often called refund advances—may appeal to some filers who count on their refund money to meet immediate financial needs or to make a large purchase. These loans allow filers to borrow up to the full amount of their tax refund. When you accept a refund anticipation loan, your tax refund is sent to your tax preparer - instead of to you - once it’s processed by the Internal Revenue Service (IRS). The tax preparer keeps the loan amount, plus interest, and any remaining balance is given back to the borrower. As with any loan product, consider the pros and cons before committing.

The pros:
Get your money now. If you have all your tax forms ready to file and you need money fast, this can be a quick alternative to get your money sooner.

Many tax preparers don’t require a credit check for a refund anticipation loan. In this scenario, you’re signing over your refund to the tax preparer. The refund itself is considered collateral, so they rarely require a credit check to lend you the money.

The cons:
It's not free. To be eligible, you have to file your taxes with the company offering the loan. That means in addition to the interest on the loan, you'll probably have to pay a filing fee, and most companies tack on loan origination fees, as well.

There is a risk. While most Americans get their tax refunds in a timely manner, if there’s a lien placed against your refund—for debts such as back taxes, child or spousal support, or defaulted student loans— your money could be withheld to fulfill those obligations. This would make you directly responsible for the entire balance of the refund anticipation loan, including the interest.

Interest rates vary. Keep in mind that even though this may be promoted as an advance, ultimately, you’re taking out a loan. Loans like this can have high interest rates, and the faster time frame may not be worth the cost.

Some alternatives that you might consider:
E-file your taxes as soon as possible, and use the direct deposit option. According to the IRS, on average, 90% of individuals who e-file and get their refunds through direct deposit receive them within three weeks. If needed, consider contacting your creditor to discuss a payment arrangement that would allow you to pay the bill when you receive your refund.

Find another option to borrow. If a payment arrangement isn’t an option, consider another possibility. Many credit cards offer a 0% interest rate for a set amount of time. If you take advantage of a low-interest rate window, be sure to make your minimum payments on time while you wait for your refund, and be cautious not to spend more than the amount of your refund. This will allow you to easily pay-off the balance when your refund comes in.

Here are a couple more suggestions for your consideration going forward.
Adjust your withholding for 2020. This year, consider working with your employer to adjust your withholdings so you have the maximum amount of take-home pay to cover living expenses and allow you to save monthly. The goal is to withhold enough to avoid owing additional taxes, but not so much that you qualify for a large refund.

Feed your emergency fund. If you do qualify for a refund, consider putting it in a high-interest savings account. This will provide cash on hand for emergencies so you’re less likely to need to borrow when you’re in a jam.
For additional information on preparing your taxes, check out our resources at https://www.oklahomamoneymatters.org/Consumers/Taxes.shtml.

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I owe state and federal taxes, but don't have the money to pay them by April 15. Should I pay with my credit card to avoid penalties from the Internal Revenue Service and the state tax commission? (posted February 27, 2015)

This tax season, about 25 percent of consumers will find themselves owing Uncle Sam. Thanks to the Taxpayer Relief Act of 1997, credit cards are considered an accepted form of payment, helping tax payers avoid penalty fees for late filing and late payments. While paying with credit can help you meet the filing deadline, the convenience will cost you.

Interest and processing fees. Even though you'll save yourself from government fees, you'll still be responsible for the interest that accrues until the balance is paid off. Depending on how much you owe, your credit card's interest rate and the length of your repayment, your ending balance could be larger than you originally anticipated. In addition to interest charges, you'll also be responsible for the processing costs associated with the credit transaction. With traditional credit card transactions, retailers absorb the processing fees. Unfortunately, the IRS doesn't have the same liberty, so those fees will be passed on to you. This fee is a percentage of your outstanding balance, so depending on the amount of your bill; the processing fee could be pretty substantial.

Credit scores and more. According to FICO, there are five areas considered when calculating your credit score: payment history, amount owed, length of credit history, new credit available and types of credit used. Any time your credit behavior impacts one of these factors, your credit score will fluctuate. If charging your tax debt to a credit card significantly increases your debt-to-income ratio and/or credit utilization ratio, your credit score could suffer. If you're in the market to finance a big-ticket item in the near future, this could make the borrowing process more difficult and/or costly.

Credit cards aren't your only option. You could elect to make monthly payment arrangements with the IRS. Even if you can't pay your balance in full, it's important to file your taxes on time to avoid additional penalties. For additional information that could help ease your tax burden, visit the IRS's "What Ifs" for Struggling Taxpayers page.

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Is there anything I should know about being audited by the IRS? Together, my husband and I make a substantial amount of money. I’ve heard the more money you make, the higher the chance is of being audited. (posted April 30, 2010)

Many taxpayers worry about being audited, but actually, the IRS audits only a small percentage of the millions of tax returns filed each year. If you’re one of those few to be selected, here are some tips to help you prepare.

Get organized. Your first step should be to take a good look at the details of your return to refresh your memory. Once you have a thorough understanding of the contents of your tax return, you'll need to organize your records to support the items questioned by the IRS.

Don’t delay. Be sure to take any action required within the time frame allotted. Otherwise, the dispute could become a final assessment and move to the collections department with no grace period. If you’re not given enough time to adequately respond or prepare, request an extension or postponement.

Consider hiring a pro. While many taxpayers handle audits on their own, if your situation is complicated, you may want to request help from a professional, such as a CPA. Most audits are conducted by mail, with the IRS simply requesting documentation to verify a specific part of the return. If the audit requires an in-person meeting, the review will probably get into greater depth on certain issues. In that scenario, hiring a professional with audit experience might be a smart move.

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I heard that filing my taxes online is better than hiring a tax professional because it provides me with more opportunities for savings and maximizes my refund. Is this true?(posted Jan. 30, 2009)

Maybe. While it’s true that tax preparation software and online services can cost less money than hiring a professional to tackle your taxes, you could be losing out on important deductions a professional would recognize.

To determine the best choice for you, ask yourself some important questions:

Do I understand my tax situation? Before you decide to fly solo, think about your familiarity with your current tax situation and industry lingo. For example, do you know your filing status? Do you know which credits and deductions you’re eligible for? Do you speak the language? If you’re uncomfortable navigating these questions alone, you’ll probably want to hire assistance.

Do I have the time and knowledge to get it right? Filing state and federal tax returns takes time. Do you have the patience to complete the forms yourself? What will you do if you encounter a question or option you don’t understand? When hiring a CPA or other tax professional, you’re not only paying for their time - you’re paying for their knowledge, as well. A pro may be able to quickly identify deductions (or obligations) you might otherwise miss. If you decide to prepare your own returns, educate yourself before starting your forms. Bookmark the IRS website, IRS.gov, as a resource.

Are my taxes complicated? If you started a business last year, had a child, enrolled a child in college, bought or sold a house, or experienced any other major financial event, you may want to consider seeking the aid of a tax professional. Conversely, if your financial situation is simpler or comparable to last year, doing your taxes on your own might be the right fit for you this year.

Here’s the bottom line: the complexity of your financial life really determines the best approach to tax preparation, and you should review your circumstances each year and make the best choice for your current situation. If you do choose to prepare your own taxes, consider consulting with a tax professional, such as a CPA, at least once every three to five years. Visit KnowWhatCounts.org for a helpful listing of CPA’s and services.

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I’ve heard that it’s better to have a mortgage for the tax deduction than to pay off a mortgage early. My husband and I have worked very hard to pay off our mortgage in four years. We took out a 30 year note, but plan to pay off this note in April of this year. I’m concerned about the loss of the tax deduction in coming years. Is this going to hurt us in the long run? (posted Jan. 26, 2007)

If you asked three different financial planners this question, you would probably get three different answers. Several variables determine the best course, such as how long you plan to remain in the home, expected growth (or decline) in property values in your area, and your long-term financial goals, to name a few. While your best move is to discuss your specific situation with an accountant or financial planner, we can offer some information that may be helpful.

Generally, it's always a good idea to minimize your tax liability to the extent legally possible. You want to pay only what you're responsible for - no more and no less. The tricky thing is, like many deductions, a mortgage interest deduction isn’t a "dollar-to-dollar" savings. In other words, if you claim $5,000 per year in mortgage interest, you don’t get to subtract $5,000 directly from your tax liability.

Ultimately, how this decision affects your tax liability depends on the makeup of your tax deductions. If mortgage interest is your biggest deduction, then you may need to earmark some savings specifically for taxes or have additional money withheld from your check to compensate. (A financial professional can help you figure out how much to save. Remember, your goal is to break even... you don’t want to owe Uncle Sam and you don’t want to get a big refund (which is, essentially, a free loan to the IRS). In most cases, even if you have to set aside tax savings or have more money withheld each month, the money you can save in the long run on monthly mortgage payments and interest will more than make up for it.

Here's the bottom line - a home is most folks' largest asset. Assuming that you plan to stay put for the long haul, owning your home outright is an excellent financial position. No monthly mortgage payment will allow you to save much more for retirement and other long-term goals. The more you save and the sooner you save it, the more compound interest you can earn!

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I look forward to receiving a tax refund each year, but my family and friends keep telling me that getting money back is a bad thing. I’m not convinced; how can a refund be a bad thing? Why shouldn’t I look forward to a refund each spring? (posted Feb. 28, 2014)

Aw, tax time. For many people it’s a greatly anticipated season filled with visions of future purchases to be made. And as much fun as it is to imagine all the lovely items you can buy with your refunded money, your friends and family are right – getting a tax refund isn’t ideal. If you receive a refund, it means you’ve had too much withheld from your paycheck. You’ve essentially given Uncle Sam an interest-free loan throughout the year! Instead of aiming for a refund, a better tax strategy is to try to break even – ideally, you don’t pay the IRS and they don’t pay you. To start the process of finding that balance, visit your employer’s HR office ASAP to adjust your withholdings by completing a new W-4 form. This simple step will leave more money in your paycheck; that’s like giving yourself a raise.

If you’re like many people who use their annual tax refund to kick-start their savings or pay down debt, it’s important to know that there’s a better way to maximize your money. Instead of waiting for the IRS to cut you a check at tax time, take full control of your finances by cutting out the middle man. Once you’ve adjusted your withholdings, continue living off the monthly amount you were previously bringing home and put the “extra” to work for you. If paying down debt is your goal, commit this money to debt reduction by implementing the debt snowball. If padding your emergency fund rates high on your priority list, consider having this “extra” income automatically deposited into an interest-bearing savings account at a bank or credit union and watch your savings grow. This time next year you’ll have a nice amount of money saved, plus the interest it’s earned.

For more information about income taxes, tax forms and withholding, visit IRS.gov. While there, explore the IRS withholding calculator to help you determine how much tax should be withheld from your paycheck.

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Credit Score Effects
	Effect on a 680 score	Effect on a 780 score
Maxed-out card	-10 to -30	-25 to -45
30-day late payment	-60 to -80	-90 to -110
Debt Settlement	-45 to -65	-105 to -125
Foreclosure	-85 to -105	-140 to -160
Bankruptcy	-130 to -150	-220 to -240

Creditor	Account Balance	Minimum Payment Due
Target	$450	$25
Chase	$1,200	$100
Bank (auto loan)	$9,500	$375

Oklahoma Money Matters

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