“What is your interest rate?” This is the most frequently asked question in the lending world. Without a doubt, personal experience compounded with all of the social media questions prove the point every single day. Because I take an educator-first mindset, it is imperative to explain why this is only one small piece of a much larger puzzle when comparing lenders.
An interest rate can be manipulated to look better than it actually is by throwing on origination fees, processing fees, underwriting fees and points to lower the rate. All of these things mean you are actually paying to have a lower interest rate. The VA regulations allow for up to one percent of the loan amount to be charged by the lender in addition to reasonable discount points. This one percent is outside of the other fees paid to outside parties such as an appraisal, credit report, title examination, title insurance and more. This flat (up to) one percent is specifically designed to cover the lender’s services.
While the VA may allow up to a one percent fee, that doesn’t mean that it is necessary. Many lenders, including myself, will never charge a veteran a fee for doing a VA loan. It’s just not how we envision taking care of each other looks like. Additionally, many financial institutions that typically do charge this fee will occasionally run promotions that eliminate it for a short window of time. It is important to read the fine print when looking up any advertised interest rates, as many will have a disclaimer such as “Rates quoted above require a 1.00% loan origination fee. The origination fee may be waived for a 0.25% increase in the interest rate”.
The origination or other lender fees like in the above scenario are similar to discount points, but are not tax deductible. This is yet another downside of lender fees. Discount points, however, are a tax deductible fee in exchange for a lower interest rate. One point is equal to one percent of the loan amount, and will reduce the interest rate by .25%. Let’s practice some mortgage math on a scenario I pulled up today from an undisclosed lender’s website:
“VA 30 yr fixed loan – Interest rate as low as 3.625% – discount points 2.00
*Rates quoted above require a 1.00% loan origination fee. The origination fee may be waived for a 0.25% increase in the interest rate”
As the disclaimer states, to not pay an origination fee of 1%, the rate goes up by .25%. Now the rate is at 3.625 +.25 = 3.875 … but we still have those two points to deal with!
2 points *.25 each = .5 increase to rate without paying for them. 3.875 +.5= 4.375
That 3.625 advertised rate comes with so many points and fees that it is actually a TRUE rate of 4.375 – a far cry from what was seen on the surface. In a 0,000 home loan, this would make the difference of 9 each and every month if you chose not to pay any of those fees, OR ,000 upfront, out of pocket in addition to the regular closing costs.
Even if you have a motivated seller offering to pay your closing costs, you have a choice to use that money to pay a lender’s fee or you could use that money to buy down points with a lender that doesn’t charge. That 1% lender’s fee could actually be you saving .25% off of the interest rate elsewhere if the seller’s contributions aren’t already maxed out. This is just one way to make your closing cost contributions work for your bottom line instead of your lender’s. All financial matters are based on trust, and this is likely your largest life purchase, so it’s important to be in the know!
If you received an email advertising a new vaccine for the coronavirus, would you open it? If a doctor called you requesting payment to treat your family member for COVID-19, would you share your information?
While the world is focused on the coronavirus (COVID-19), criminals are taking advantage of the situation.
“We are seeing coronavirus-related phishing attacks and we are seeing them at USAA,” warns Michael Stewart, assistant vice president of information security at USAA. “We are seeing emails advertising alleged coronavirus-related benefits and others from a healthcare perspective.”
Other potential scams include fraudsters pretending to be members of the Centers for Disease Control and Prevention or World Health Organization to obtain personal information or selling fake coronavirus test kits and vaccines that do not exist.
“Fraudsters like to take advantage of these situations,” explains Stewart. “They will leverage the coronavirus and urgency around it to get people to click on things or give up information that they might not otherwise disclose.”
Some additional scams during this pandemic period to be aware of include:
Charity scams: Stay alert of scammers contacting you to donate to fake charities. Research the organization you desire to sponsor to ensure your information is protected.
Product or services scams: Items like hand sanitizers, disinfectants and household cleaning supplies are often offered by scammers who will keep your money. Scammers also offer cures, coronavirus test kits and vaccines that do not exist. Services can range from house cleaning to doctor visits.
Employment scams: Scammers create job ads to lure unemployed consumers to fake jobs. The scammers will wire money or send a fake check to you, asking to send a portion back or use the funds to purchase goods, which are directed back to the scammer
Tips to protect your information include:
Secure your accounts: use multifactor authentication everywhere, especially with banks, phone and email providers. This extra layer of security helps keep you safe.
Stay vigilant: scammers will contact you by phone, email or text offering products, services or humanitarian opportunities. They often pose as credible companies “phishing” for login or personal information Pause to confirm it’s a credible company before proceeding.
Monitor your accounts: stay close to your personal bank accounts, report suspicious behavior and respond to alerts.
Use trusted Wi-Fi networks: as more people transition to work from home, ensuring your Wi-Fi network is password protected is critical to safeguard your information.
Think it’s hard making it month to month in the barracks on just an E-1 pay? Well, the recruits who won America’s earlier wars had to make ends meet with much, much less to draw on. See how much troops made in each conflict, both in their own currency and adjusted for inflation:
Author’s note: The pay structure changed over time. From the Korean War to today, military pay has been relatively consistent across the services and the numbers listed in entries 8-11 reflect the financial realities of an E-1 enlisted servicemember. For earlier conflicts, pay was calculated using the salary of a first-year Army private or a junior infantryman.
1. Revolutionary War
Privates in 1776 earned $6 a month plus a bounty at the end of their service. That pay would equate to $157.58 today, a pretty cheap deal for the poor Continental Congress. Unfortunately for soldiers, Congress couldn’t always make ends meet and so troops often went without their meager pay.
That $8 translates to $136.28 in 2016. The bounties ranged from $528.10 to $2,112.40 for terms of five years to the duration of the war.
3. Mexican-American War
Young infantrymen in their first year of service during the Mexican-American War pocketed $7 per month, according to this Army history. That’s $210.10 in 2016 dollars.
4. Civil War
Union privates in 1863 brought home $13 a month which translates to $237.51 in modern dollars. Confederate privates had it a little worse at $11 a month. The Confederate situation got worse as the war went on since the Confederate States of America established their own currency and it saw rapid inflation as the war situation got worse and worse.
5. Spanish-American War
An undated photo shows soldiers manning a battle signal corps station during the Spanish-American War. Photo: Naval History and Heritage Command
While Army private pay in the Spanish-American War was still $13 like it had been in the Civil War, a period of deflation had strengthened the purchasing power of that monthly salary. In 2016 dollars, it would be worth $356.26.
6. World War I
A private, private second class, or bugler in his first year of service in 1917 was entitled to $30 a month. In exchange for this salary, which would equate to $558.12 today, privates could expect to face the guns of the Germans and other Axis powers.
World War I was the first war where, in addition to their pay, soldiers could receive discounted life insurance as a benefit. The United States Government Life Insurance program was approved by Congress in 1917 and provided an alternative to commercial insurance which either did not pay out in deaths caused by war or charged extremely high premiums for the coverage.
7. World War II
In 1944, privates serving in World War II made $50 a month, or $676.51 in 2016 dollars. It seems like toppling three Fascist dictators would pay better than that, but what do we know.
8. Korean War
The minimum payment for an E-1 in 1952 was $78 a month which would equate to $700.92 in 2016. Most soldiers actually deploying to Korea would have over four months in the Army and so would’ve received a pay bump to at least $83.20, about $747.64 today.
This was in addition to a foreign duty pay of $8 a month along with a small payment for rations when they weren’t provided.
9. Vietnam War
E-1 wages were not increased between 1952 and 1958, so Korean War and Vietnam War troops made the same amount of money at the lower ranks — except inflation over the years drove the real value of the wages down. New soldiers pocketing $78 would have a salary that equates to 642.71 now, while those with over four months of service who pocketed $83.20 were receiving the equivalent of $685.56 in today’s dollars.
10. Persian Gulf War
Grunts who went into Iraq to topple Saddam Hussein were paid the princely sum of $753.90 a month in basic pay, unless they somehow managed to make it to Iraq with less than four months of service. Then they received $697.20.
These amounts would translate in 2016 dollars to $1318.12 and $1,218.98 respectively.
11. War in Afghanistan and the Iraq War
Troops bringing the American flag back to Iraq in 2003 or deploying to Afghanistan in the same time period received just a little more than their Persian Gulf War predecessors, with $1064.70 for soldiers with less than four months of service and $1,150.80 for the seasoned veterans with four months or more under their belts.
In 2016 dollars, those salaries equate to $1377.93 and $1,489.36, a modest increase from the Persian Gulf War.
If someone told you the only way for you to survive the coming recession unscathed would be to start your own business, would you even know where to begin? Would you be able to afford the startup costs on your own? Can you handle the workload that might come with such a venture? For most people, especially veterans, that answer is no. That’s what startup accelerators are for – access to knowledge, access to capital, mentorship, connections, talent – all these things can be acquired through these programs.
Vets have some unique skills and traits that make them natural entrepreneurs. And that’s why a startup accelerator like Bunker Labs has big plans for those who are ready to take the first steps toward entrepreneurship.
When some of the most powerful brands get together for vets, big things happen.
Veterans are an interesting slice of Americans, especially where entrepreneurship is concerned. Time and again, veterans show they have the work ethic and drive it takes to start their own enterprises. Of the 200,000 separating veterans every year, 25 percent of those are interested in starting their own businesses but only 4.5 percent of those 50,000 vets are actually able to pursue their own entrepreneurial vision. The reason is because starting your own business takes knowledge veterans may not have and capital most definitely do not have.
That’s where a veteran-owned business accelerator can come into play. If you don’t know where to begin but you have a great idea, an accelerator like Bunker Labs is a great place to start. Starting a business isn’t obvious – there’s a lot that goes into it that you will just not know. Bunker Labs is a non-profit startup accelerator for the military-veteran community comprised of veteran volunteers with the tools and resources to help their fellow vetrepreneurs start their business.
Bunker Labs has helped create more than 1,000 veteran jobs in the United States and helped raise some million in startup capital. This accelerator captures the ambition and innovation veterans bring to startups and equips them with knowledge, mentorship, and opportunities they might otherwise not have had access to. There are labs online, labs in-residency for vets, and when the ball really gets rolling, a cadre of CEO vetrepreneurs who are taking their work to the next level. Bunker Labs is even a partner with the 2019 Military Influencer Conference, a three-day entrepreneurial workshop which brings together the brightest and most inspiring veteran entrepreneurs to teach and share their lessons learned and best practices.
To get started with Bunker Labs, vets simply have to start with registering for their Launch Labs Online, fill out some quick demographic information and from there you can connect with other new members, find a mentor, engage the Facebook group, and more. After activating your account, you can start taking classes with Bunker Labs right away. The core classes include knowing yourself, knowing your customers, and how to make money. From there, the sky could be the limit.
If you’re interested in starting your own business and don’t know where to begin, the Military Influencer Conferences are the perfect place to start. There, you can network with other veteran entrepreneurs while listening to the best speakers and panels the military-veteran community of entrepreneurs can muster. Visit the Military Influencer Conference website for more information.
It’s time for taxes! Whether you are a single service member living in the barracks, a retired four star spending your days fishing in Hawaii, or a veteran with a family working your way through college, taxes have to be done.
I used to have this elementary school teacher, Mrs. West.
I remember Mrs. West standing in front of our class and telling us with extreme seriousness that only two things in America were guaranteed: eventual death and taxes.
I remember that half of my class got super interested in science in hopes of figuring out how to one day live forever, and the rest of us just kind of groaned and decided that our parents were going to do our taxes forever if the other kids figured out that whole science thing.
And so far those damn science kids still haven’t come through for us, and we still have to pay taxes.
Adulting is hard AF, amiright?
Don’t have a heart attack yet, because there is hope — not for science, they still haven’t come through — but for taxes.
There are a lot of ways and places to get your taxes done for free or almost free, and this is really great because math and I got a divorce in my freshmen year of college and we haven’t spoken since.
1. Volunteer Income Tax Assistance
VITA, is sponsored by the IRS. Most larger military installations have a VITA office on base during tax season. VITA isn’t military specific, but they generally help tax payers who make less than $54,000. Check out VITA, what you need to take with you on a visit, and where their offices are.
This outfit prepares and files taxes for free for active duty service members, National Guard and Reserve, and their spouses; retirees who were honorably discharged and are within 180 days past their discharge date, eligible survivors of active duty, National Guard and Reserve deceased service members, and family members who are in charge of the affairs of eligible service members are also eligible.
Get this, the IRS lets you do your own taxes. For free. Sweet deal? Or worst nightmare. You decide. Either way, the IRS will allow you to download software to do your taxes for free if you make below $64,000, and they’ll give you a free form if you make above $64,000. I guess the folks sitting right on $64,000 are just SOL.
Uber popular TurboTax has a sweet deal right now. You can download their 1040EZ or 1040A for free, and the rest of their products are fairly well discounted. E1 – E5 can get the Deluxe Edition from TurboTax for free (normally $54.99), and E6 and above get a discount on all products. The best thing about TurboTax is if for any reason the IRS comes back and says “You done effed up,” TurboTax will pay you for the IRS penalties.
This service has a great military discount. Currently, its website advertises 50 percent off classic or premium editions. They have free email and phone support, and boast about being 100 percent accurate. They do not, however, guarantee no penalties from the IRS if there is a mistake.
6. H&R Block
These guys have a cool thing for filing online for anywhere from free to $38.49. The program is called H&R Block More Zero (because “Taxes are Lame” and “You Think These Taxes are About You” was apparently taken). H&R Block does offer peace of mind. For a fee. And it really is called “Peace of Mind.”
Here’s how it works: You get your taxes done. You pay an additional fee, and they promise that if you’re audited, they’ll send one of their lawyers to court with you and pay up to $6,000 in fees if they lose. If you don’t pay the extra… no peace of mind for you.
Also, they don’t offer any kind of discount for military.
Pfc. Harley Dennis, of Anderson, who serves with the Missouri National Guard’s 276th Engineer Company in Pierce City, assists Sgt. 1st Class Eric Corcoran to deliver more than 300 Valentine’s Day balloons to area school kids in the southwest Missouri town. (Photo by Staff Sgt. Dennis Chambers/Missouri National Guard)
In our house, Valentine’s Day isn’t really a thing. As a general rule, the Marine isn’t home for the “holiday,” and since there are a lot of holiday’s he spends away, courtesy of the USMC, this is one day we just don’t really concern ourselves with.
But this year we ran into a snag. Their names are Bethany, Zachary, and Christopher — also known as the three youngest members of the Foley Fire Team.
On the edge of the dreaded teenage years, Bethany came home a few days ago armed with a love note from her “boyfriend” (that asshole), and sat down with her younger brothers to plot out “The Best Valentine’s Gift Ever;” it apparently consists of a lot of bacon (they DO take after their mother, after-all), and a seven-hour nap time while they’re at school. Because adulting is hard.
They presented their plan to the Marine, and then waited with bated breath for him to tell them his grand scheme for the Day Of Love.
“I just bought Mom curtains and a new curtain rod. I suppose I could hang them up before she wakes up?”
The two youngest of the fire team promptly ran off to tattle on Daddy. Not buy Mom a “love” gift? He’s practically an abomination to them right now.
While the boys were relaying the horrifying ordeal to me, I wondered how the Marine was going to get out of this one. It’s perfectly fine to explain to the 12-year-old that sometimes Dad just doesn’t really subscribe to romantic things. As a girl she’s going to have to come to terms with the fact that dudes like him really do exist.
But try explaining that to two 8-and 9-year-old boys who are currently at the dining room table gluing pink and red hearts all over their camouflage Valentine boxes because they know that, while they like camo and guns, girls sometimes like hearts. How Daddy doesn’t understand this is totally beyond their capacity.
“Maybe Daddy is planning a surprise and he doesn’t want to ruin it,” I whispered conspiratorially. The boys nodded and agreed that that’s exactly what was happening. It was the only thing that made sense to them.
“You’re going to want to brain storm some last minute ideas, dude,” I told the Marine later.
“Can you do that crowd-sourcing thing you do on your Facebook and I’ll pick something from that?” he asked.
So that’s exactly what I did, and let me say, I was surprised. Not one girl said she wanted flowers, chocolate, jewelry, or even anything expensive or time consuming, and a lot of their gift suggestions included food.
In fact, because I know the Marine isn’t the only one out there who is finding himself in a gift pickle at the last minute, here’s what actual military spouses said they really want for Valentine’s Day, word for word and complete with all their annoying little emoji things:
1. Bacon roses
Because Valentine’s Day just screams “pork,” right?
2. Not celebrating Valentine’s Day at all.
Jeesh, more “romance” in our marriage/dating? We already have enough of that already…
3. Homemade vouchers for cool stuff
How about a movie night, a kiss and makeup session no matter how upset I am, free kisses anytime all day, etc.
4. Stay at home “date”
My husband is hitting up the USO tomorrow during lunch for flowers and cheap chocolate. ?. Yes he told me he wants to do that. He’s ridiculous. Lol. But in seriousness, even a nice walk or living room picnic on the floor. Super cheap, corny, and fun
5. Waffle House
Hands down. If you sneak them like $10, they’ll let you smuggle in wine sometimes (not that I’m speaking from experience or anything).
6. Beach stroll
This year we are going to take a few hours during the day to run to the beach and just put our toes in the sand before kids get home from school.
7. Mom time
Netflix movie, homemade desert, and pjs. 🙂
8. Cheap sushi
We went to Hamazushi last night because it’s very inexpensive (most items are ¥100 a plate), all you can eat, good quality sushi. Plus it’s all served on conveyor belts and ya can’t beat the novelty of that. 😉 Also, [He] started college again and has a lab tonight, so he won’t be home for “actual” Valentine’s date stuff.
9. A cuddle
After being apart—just being together is enough. I know that may sound cheesy, but it’s so the truth. Being preggo and sick, I’m hoping our date will include pj’s and our couch and the latest “this is us” episode.
10. Couch time
We spend all our budget on the kids. We will stay home with popcorn and a movie to celebrate it.
11. Old School necking
In the car…in the driveway!! ??
12. A load of beef … with love
I’ll make him his fave meal at home… meat loaf!
13. Learn something new
We are taking a couples cooking class tomorrow ❤️
14. A full-on pizza and bubbly extravaganza
[He] & I have done the same thing every year since we’ve been together: Heart-shaped homemade pizza (with mini heart pizzas for the puppies) + our favorite prosecco (the same brand from our wedding) and chocolate covered strawberries (sometimes homemade, sometimes from HEB)… and then turning on a cheesy movie or tv show on Netflix.
It started out the first year or two as our “thing” because we really couldn’t afford too much else. But now it’s a special, almost sacred ritual for us. I wouldn’t trade our little cozy tradition for a world-class meal. It’s just too important to me. I should clarify and say “every year he was actually HERE to celebrate.”
15. Some shootin’
Well, we got married Valentine’s day. We celebrate by hanging out and we go to dinner either the day before or the day after (since payday is always afterwards)because it’s always less crowded. This year is our 20th and we both took the day off. We’re having a range and lunch date. Since it’s a work day, lunch isn’t as crowded and definitely cheaper.
So what are you doing for Valentine’s Day?
And if the Marine is reading this, bacon roses are totally appropriate.
Permanent Change of Station has gotten more expensive, and the Department of Defense doesn’t know why. That’s the general findings of a report released by the Government Accountability Office last year.
Military.com reported earlier this week that the Defense Department would begin a review of the system that oversees military moves as a result of the report.
Accounting for inflation, the cost of a PCS was up by 28 percent between 2001 and 2014, capping at around $4 billion that year, or 3.7 percent of the overall military personnel budget.
The study found that “the services have not reported complete and consistent PCS data, thereby limiting the extent to which DoD can identify and evaluate” the current PCS system. It went on to explain that the Pentagon had not maintained required data nor required the services to independently maintain data that would help the DoD in determining how to reduce the cost of PCS.
PCS moves ranged on average from $2,289 to $13,336, with the Air Force spending the most on average per move and the Marine Corps spending the least.
In a review between services, the Marine Corps was most likely to accurately and consistently report PCS data outside of the direct cost of moving, i.e. the cost of temporary storage, lodging expenses, and tour extension incentive payments. The Air Force and the Army were least likely to report the data.
Because of the lack of proper reporting by the services and the DoD, the report found, it is impossible to determine exactly how to address the rising costs of PCS.
In addition to a lack of complete data on the cost of PCS, the report found that the DoD was not able to explain why personnel were not meeting “time-on-station requirements” because it had not required any of the services to maintain that data themselves.
Of the services who could provide any data on time-on-station requirements, the Air Force was most likely to have some data, and the Marine Corps was least likely to have any data.
The Government Accountability Office described four recommendations to improve the issue of rising PCS costs:
Improve the completeness and consistency of PCS data
Complete periodic evaluations of whether the PCS program is efficiently supporting DoD’s requirements for assigning military personnel… [and] identify changes in PCS per-move costs
Improve the completeness and consistency of data on exceptions
Improve the completeness and consistency of data on waivers
The Pentagon agreed most of the recommendations in the report, writing in its response, “We recognize the importance of improving the availability of information needed for effective management of the PCS program.”
What are the most important lessons to teach children about money? It’s a good question to consider, particularly because, thanks to a distinct lack of a broad financial literacy curriculum in schools, it falls on parents to be the ones who instill the core concepts of spending, saving, and handling money in general. While there are certainly lessons all parents should be teaching kids about money, we wondered, what do financial planners, accountants, and others who work in the financial industry teach their kids about money? What concepts are essential and how do they distill them down so they can be understood by, say, a seven-year-old? That’s why we asked a broad array of financial professionals, “What lessons do you teach your kids about money?” The varied responses include everything from envelope systems and understanding wants versus needs to the creation fake debit cards and engineering simple lessons about compound interest. All provide inspiration and instruction on how to help kids get a head start on the road to financial success and serve as a reminder that it’s never too early to begin teaching kids about money.
Try the Sticker Chart Reward System
“We use a sticker chart reward system with our young ones, who are in Kindergarten and second grade. You get a sticker for doing homework, practicing, household chores, and the like. After earning 20 stickers each child then gets to pick out a toy, experience, goodies, etc. of their choosing (up to a $ value). This is a foundational value in our household; to instill that effort and hard work is required to earn many of the ‘wants’ in life. And that it takes time.” — Ronsey Chawla, Financial Advisor at Per Sterling Capital Management.
Incorporate Financial Topics into Everyday Life
“This can be as simple as taking my kids to the bank to open a checking/savings account, involving my two kids — I have a 14-year-old son and 11-year-old daughter — in household budgeting conversations during a trip to the store, or planning for a family vacation. It’s important to share lessons and what you learned from your experiences with money management, with the depth of that conversation being up to your individual family. It’s also a good idea to start them saving early. Developing smart saving habits is the first step to becoming money-wise. Encouraging children to contribute a realistic amount to savings, even if it’s just a month, is an easy way to put them on the right track for future financial success.” —Daniel Cahil, SVP, North Dallas Bank Trust Co.
Trust the Lemonade Stand
“With my own kids, who were four and six at the time, we opened lemonade stands, as cliché as it may be. It teaches them literally the fruits of their labor. The help made the lemonade, with real lemons, at every step, until they have the product ready for market. They learn the lessons of “location, location, location,” understanding that where they set up can make a big difference in the traffic they can expect. Setting up on the corner brings some traffic, but not nearly as much as by a nearby field on a hot day where a bunch of kids are at soccer practice.
When they’re done, they bring their profits back home and count it up. This helps them identify and understand what different coins and paper currency mean. They also have piggy banks that are broken up into four different chambers – save, invest, spend and donate. This helps them understand the different utilities of money, immediate gratification, delayed gratification and being a contribution to others.” — Chet Schwartz, RICP, registered representative with Strategies for Wealth, a Financial Advisor with Park Avenue Securities, and a Financial Representative of Guardian Life Insurance
Teach Them to Save — But Also Enjoy the Rewards
“To clarify, this all starts with being responsible, working hard, and earning some dough. But this particular piece of advice is about what I do with that earned money. When I come into some kind of bonus or non-recurring income, I always, without fail, carve off some small-ish amount of that bonus for me, my wife, and my daughter, and we all go out together and buy something fun for ourselves, something that we would not otherwise have bought because we thought it was frivolous or hard to justify. We save the bulk, but the rule is that we have to spend that smaller allocated amount on something fun, and we have to do it together as a family.
This is important to me because one, if you don’t enjoy some part of your money “now,” you may never get the chance, and two, it gets us out, as a family, doing something that breaks the normal rules of saving and spending. I’m all about saving of course, but I’m also about enjoying the rewards of hard work, and that’s what this is really all about. If you don’t treat yourself well, you sure as heck shouldn’t expect anyone else to.” — Dan Stampf, VP, Personal Capital Cash
Use “Skip Counting”
There’s more than one way to count to 100. You can take the long way, starting with the number one. Or you can also count by twos, tens, twenties, even fifties to get there faster. Learning to “skip count” is an important precursor to developing fluency in calculation, number sense, and the basis for multiplication and division — not to mention counting money. Just pour a bunch of coins on the table and put them into piles by coin type (pennies, nickels, dimes, and quarters). Work with your child to “skip count” using different coins and values, reinforcing what they’ve learned. For example, ask them if they notice any patterns (e.g. while counting by 2s, 5s, and 10s). If “skip counting” is still too complex for your kids, continue practicing by changing the number of coins they are counting. That will encourage your children to figure out another total value.” —Jeremy Quittner, Resident Money Expert Editorial Director, Stash
Put Pocket Money to Good Use
“It’s important to teach your children about saving, and the potential benefits. I think a fun way to do this is with their pocket money. Say you give your child for the weekend. Once its spent, it is gone. But I like to introduce the offer that if, for every change they bring back at the end of each week, that change is matched from my money, and saved until it reaches 0, and they can buy themselves something special. For example, if they bring me change, I put aside for them, and this pot grows until it hits 0. The opportunity here is for the children to really think about what they are spending their money on, while also seeing that saving can result in a better purchase that is actually wanted at the end.” — Andrew Roderick, CEO of Credit Repair Companies
Use The Token Economy with Toddlers
“Make money fun. Toddlers can start to experience a ‘token economy’ by pretending to play in grocery stores or banks: games that can actively involve your child in playing and beginning to understand money. It’s also important to recognize that it may be more constructive to create other activities for older kids, by introducing them to easy-to-read financial books, like this one. Explain to them how your family approaches investing, paying for taxes, and seeking financial advice from an advisor” – Dillon Ferguson, CFP, Head of Product, Zoe Financial
Make the Concept of Prioritization Crucial
“We ask our three kids to do certain activities at home that are outside of their normal chores for which we compensate them with small amounts of money. This way they learn that to make money they need to put extra effort and work hard. They also learn that the money they make at home can be spent on a variety of different things, but we teach them about the concept of prioritization, since money is a scarce resource. Most importantly, we teach them that the best investment they can ever make is their own education, since education leads to better job opportunities and better quality of life.
We opened college savings accounts for all three kids via UNest and our older one is already contributing into her own account. We show her how money grows over time and teach about the concept of investing, compound interest and tax-free growth. In addition, we emphasize that lack of savings can lead to the student debt. Money that is borrowed can be very expensive and the need to pay off student loans would create setbacks in life and delay other important decisions like buying a house or starting a family. Putting a small amount aside each month and investing for education teaches our kids discipline and motivates them to think long-term.” — Ksenia Yudina, CEO and Founder of UNest
Teach them About Coins — And the Four Pillars
“I think that six years old is a good age to start teaching kids about money. A great first objective is teaching them about coins. While that might seem simple, it is not as easy a subject as you might think. Take a step back and think this through: Why is the big nickel worth less than the small dime? I think it’s fun to play games with kids once they understand the value of each coin by having them make different combinations to get to one dollar. 10 dimes. 20 nickels. Four quarters. One-hundred pennies. Fifty pennies and two quarters.
Start with teaching them one of the four pillars of financial literacy: save, spend/budget, invest and charity. For younger children, savings is the easiest as you can simply use a clear jar where they can put loose coins and see them build up. Remember to keep lessons age-appropriate and that developing money-smarts is not an exercise in trying to create the next Warren Buffet. It is about making them feel comfortable talking about money, understanding basic money vocabulary, and eventually starting good habits that will last a lifetime. You want to avoid the firehose method of teaching where you pile on too much information too soon. Rather consider using the drip-drip-drip method that starting them at a young age gives you plenty of time for them to build a great foundation.” — Thomas J. Henske, Partner, Lenox Advisors
Be Open About Your Financial Goals
“When my kids were younger, my wife and I agreed on an aggressive goal to pay off our house in a set number of years. When that goal was reached, we agreed to take the family on a trip to Disney World. We bought a Mickey Mouse puzzle, assembled it, and disassembled it in a way that for each id=”listicle-2646259052″,000 we reduced principal on the loan, we put so many pieces of the puzzle together. It created a visual representation of our progress. We explained our goal to the kids in terms they could understand so they saw the progress and the reward at the end after several years of work. While the kids now understand the financial side of the goal, it is the visual representation of the puzzle they recall most.” — Phil Kernen, CFA | Portfolio Manager, Mitchell Capital
Teach Them About Compound Interest
“As a financial planner and fastidious investor, my kids are being taught about compound interest at a young age. When my five-year-old daughter receives birthday money from our relatives, I show her how putting 25 percent of her money away can give her many more Barbies and dolls in the future. Would you rather buy one Barbie today, or be able to buy five Barbies later, I ask? Even a child can understand that by deferring some instant gratification today, they can enjoy greater luxuries later.” — Thanasi Panagiotakopoulos, Financial Planner, Life Managed
Never Say ‘There is No Money’
“Say instead, money is valuable and needs to be used wisely. Or money is not to be wasted. The reason is that children should not grow up with a limitation mindset but an abundance mindset while learning to be careful with money. Saying ‘there’s is no money,’ tells the child that when they get money in their hands, they can throw it away, and that’s not a good thing.” — Kokab Rahman, author of Author of Accounting for Beginners
Don’t Forget the Power of Delayed Gratification
“My children are 2 and 4 years old currently, and while it’s definitely too early to teach any significant money lessons to the two-year-old (aside from showing him how to put coins in a piggy bank), the four-year-old is another story. I recently tried this simple method of teaching savings and it worked well. Each night, I gave her a quarter for straightening up her toys before bed. She could choose to use a quarter to get a treat from the candy dish, but if she saved five of her quarters, we could do something special that weekend (go to the zoo, a favorite restaurant, etc.). Delayed gratification is such a valuable skill to learn at a young age, and I plan to use more complex ways to incentivize saving as she gets older.” — Matt Frankel, CFP, The Ascent
Turn Financial Mistakes into Teachable Moments
“We don’t pay our kids for daily chores like making their bed, feeding the dogs, or picking up after themselves. But I do pay them for mowing the yard (my 10-year-old) or helping cut firewood (all my children), things that are above and beyond their normal family contributions that they worked hard to attain. It’s also important to let them make mistakes. Recently my 10-year-old wanted to purchase a new movie release for .99, so I let him. The next day he wanted to buy a video game. I said sure pay me and he could buy it. He then realized he spent all his money on the movie. That’s the time to have a good conversation around it. Was it worth it? What could you do differently?” — Joel Hodges, CPA, Intuit, Tax Content Group Manager
Explain The Difference Between Needs and Wants
One of the most important money lessons I’m already teaching my young children is the difference between needs and wants. If she holds up something at a store — say, something from the candy aisle — I’ll ask ‘Do you need that, or do you want that?’ It took a few tries, but she got the hang of it. It can be helpful to set a firm cap on the ‘wants,’ such as one per week, while showing that we always take care of our needs.”— Matt Frankel, CFP, The Ascent
Introduce the idea of Money Early and Often
“At home, we value speaking openly about our financial lives and the value of saving such that our kids learn by example. A great way we teach our 4-year old about money is to have them understand the value of a purchase. The other day my son wanted us to buy him a new game for his iPad. To ‘convince us,’ we had him walk through the value in relation to the actually cost of the game. It’s never too early for your children to understand the cost of things. “- Andres Garcia-Amaya, Founder, Zoe Financial
Enlist the Envelope System
“Kids are never too young to learn how to handle money, one fun way for them to learn about money is to have them separate their allowances on what they want to spend. They can do this by having small envelopes and placing a certain amount from their allowances. This helps them learn about budgeting and the value of money when that certain envelope reaches the goal amount. Children are also allowed to have bank accounts, so it is good for them to have their accounts so that they can start learning to save early. — Leonard Ang, CMO, iProperty Management
Try The “Bank of Dad” Approach
“By the time my daughter started elementary school, she had a few chores each week for which she got a small allowance and she might get the odd bill in an Easter card from her grandparents. Instead of a piggy bank, we went forward looking and with the ubiquity of debit cards, I created ‘The Bank of Dad.’ Using an old hotel key card I made a make-believe Bank of Dad debit card and she opened an ‘account.’
At 12 years old and a long-time Bank of Dad customer, she was definitely ready for a real account. With our bank, the account was connected to a parent’s account so we had visibility into everything. At the start, we sat down and introduced the basics of a budget. We talked about understanding how much she “made,” how everyone needed savings for an emergency/rainy day, and how to also save for something “big” like those fancy new embroidered and bedazzled jeans she just had to have.
Now at 24 years old, my daughter came to me and asked if I could help her fix a spreadsheet she made because she wanted to try and pay off her student loans early, but couldn’t make the formulas work. If there’s anything that makes an accountant parent happier than hearing ‘Hey dad, will you check my spreadsheet?’ Turns out she was very close, but having her do the work and walk me through it, made fixing her error make sense to her and empowered her. — Gregg Gamble, Intuit, Lacerte Tax Content Development Manager
During her research, she found that five components mark successful investors, including those who are rich: a personality for risk, a high-risk preference, confidence in investing, composure, and knowledge regarding investments and investing.
But millionaire investors do one thing differently: They make more effort with the final component.
“They spend time building knowledge and expertise in managing investments,” Stanley Fallaw wrote.
Millionaire investors spend more time planning for future investments
According to her, millionaire investors spend an average of 10.5 hours a month studying and planning for future investments. That’s nearly two hours more than under-accumulators of wealth — defined as those with a net worth less than one-half of their expected net worth based on age and earnings — who spend 8.7 hours a month doing so.
In her study, 55% of millionaires said they believe their investing success is because of their own efforts in studying and becoming educated, rather than advice provided by professionals.
“Their literacy in financial matters means that they are more tolerant of taking investment-related risks,” Stanley Fallaw wrote. “Future outlook and financial knowledge typically relate to taking greater financial risk, so the time they spend in managing and researching investments helps in decision-making.”
Financial literacy is related to financial “success” outcomes more so than cognitive ability, according to Stanley Fallaw. Having the knowledge required to make appropriate financial decisions — along with a long-term and future-oriented outlook, as well as a calm manner — allows millionaires to make better financial decisions, she said.
Millionaires also favor index funds
Millionaire investors also have something in common when it comes to investing strategies: They act simply, according to John, who runs the personal-finance blog ESI Money and retired early at the age of 52 with a million net worth. He interviewed 100 millionaires over the past few years and found that many of them use the same investing strategy: investing in low-cost index funds.
“The high returns and low costs of stock index funds (I personally prefer Vanguard as do many millionaires) are the foundation that many a millionaire’s wealth is built upon,” he wrote in a blog post.
“Index funds are the most straightforward, cheapest, and most likely way to see strong long-term returns,” the former hedge-fund manager Chelsea Brennan, who managed a id=”listicle-2633716796″.3 billion portfolio, previously wrote in a post for Business Insider. “Index mutual funds offer instant diversification and guarantee returns equal to the market — because they are the market.”
Even the billionaire investor Warren Buffett has championed low-cost investing, often recommending Vanguard’s SP 500 index fund for the average investor, Business Insider reported. He previously called index funds “the most sensible equity investment.”
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Career Incentive Pay is another part of the U.S. military’s Special and Incentive pay system and is intended to help the Services address their manning needs by motivating service members to volunteer for specific jobs that otherwise pay them significantly more in the civilian sector.
Each career incentive pay amount is in addition to base pay and other entitlements.
Title 37 U.S. Code, chapter 5, subchapter 1 outlines several types of S&I pay, and sections 301a, 301c, 304, 305a and 320 address incentive pays that are career specific.
1. Aviation Career Incentive
Who: Military pilots
How much: $125 to $840 per month, dependent on number of years serving as an aviator. This lasts the duration of the pilot’s aviation career.
2. Submarine Duty Incentive (SUBPAY)
Who: Navy personnel aboard submarines.
How much: The Secretary of the Navy has the ability to set SUBPAY up to $1,000 per month, but it is currently between $75 and $835 per month.
3. Diving Duty
Who: Service member divers.
How much: $340 for enlisted personnel and $240 for officers per month.
4. Career Sea
Who: Naval officers who’ve been assigned duties above and beyond what might be typical for an officer in the same rank and which are critical to operations.
How much: $50 – $150 per month, dependent on rank. There is a limit on payments made to O-3s to O-6s, and only a certain percentage of personnel in each rank can qualify for the pay.
5. Career Enlisted Flyer
Who: Enlisted personnel on flight crews for the Air Force and Navy.
How much: $150 – $400 depending on years in the aviation field.
The decade-long month of March 2020 brought many swift changes and confusion to the financial industry, especially mortgages. Just a few short weeks ago, mortgage rates dropped to a 50-year all time low. The market was flooded with refinance applications as homeowners across the country were scrambling to capitalize on the opportunity to save up to several hundred dollars of their hard-earned money every month. Refinance applications were pouring in at a pace 168% higher than last year, forecasted to well exceed one trillion dollars. While this sounds great on a consumer level, it’s what happens behind the scenes that caused these rock-bottom rates to disappear almost as fast as they emerged.
At the dawn of the Coronavirus threat in February, many were concerned about what would happen with the economy. In a protective measure, investors began selling stocks in exchange for purchasing government bonds due to their track record for being more stable. The influx of bond purchasing drove up the price which, in turn, affected the mortgage rates. Refinance applications were pouring in at levels that companies simply could not support, and the law of supply and demand kicks in.
Lenders are forced to slightly raise rates to slow down applications until new loans are closed and sold in the secondary market, giving the lenders the money to start the process all over again. Consider it the mortgage market’s own version of “flattening the curve” to give some stability to all working parties behind the scenes taking care of all moving parts required to close these loans.
When coronavirus strengthened its force, economists realized that the impact could be so severe that it could cause a large number of people to not be able to afford their mortgage payments. Unemployment numbers were being predicted to exceed those of the Great Depression and the Great Recession. Companies and people were concerned about liquidity so now stocks and bonds were being offloaded in exchange for cash. This perfect storm meant rates would go even higher.
High mortgage rates in hard economic times are no good at all, and the government knows this all too well. The Federal Reserve swoops in with a bailout, including their promise to buy billions of dollars in mortgage backed securities – daily. This, in theory, should restore confidence in investors to put their money back into the bond market. But, this volatile market means a risk of even more refinances of recently closed loans, before the servicers have a chance to break even on their cost. Rates now have to build in insulation from massive losses servicing is incurring. It is like a roller coaster ride for all involved, but there IS end in sight.
The good news is that all signs point to low rates in the future. The Federal Reserve is going to continue purchasing mortgage backed securities. Mortgage companies are going to close up the deals currently on the books to free more capital to write more loans. The economy struggling to recover will keep rates at affordable levels so we don’t come to a grinding halt. This is great news considering the majority of our active duty families are at a stop-movement. The forced patience will likely pay dividends in the long run in saved interest.
For those of us that don’t like to sit on idle hands, there are steps you can take now. Start interviewing lenders and make sure you find one that is a good fit. Fill out the application and start sending in supporting documents so you can take advantage of low rates as soon as the time is right. We in the real estate and financial sectors are essential workers because “home” is something no one should be without. While all parties involved have modifications in place, rest easy knowing that it WILL get better and we are here to help.
The Veterans Benefits Banking Program (VBBP) is giving Veterans and their families access to greater financial independence, resiliency, and literacy.
VBBP is a partnership between the U.S. Department of Veterans Affairs (VA) Veterans Benefits Administration (VBA) and the Association of Military Banks of America (AMBA). The idea for the program came after a VA analysis revealed a high rate of Veterans were “unbanked,” says Joe Gurney, Senior Advisor of Fiscal Stewardship for the Office of the Under Secretary for Benefits.
“We were seeing an uptick in fraud because hundreds of thousands of Veterans were unbanked, so the Under Secretary actually had me look into this. By unbanked we mean Veterans receiving their VA benefits on a prepaid card or by check. I spent some time doing an analysis about demographics, where they were, who they were, and it turned out there were over 200,000 Veterans who were unbanked,” Gurney said.
Dr. Paul Lawrence, VA Under Secretary for Benefits, charged Gurney with determining courses of action to address the issue. Through his research, he found AMBA — an association of banks operating on military installations. The organizations committed to a joint effort of working with those financial institutions that already “have experience dealing with the unique financial challenges of military members and their families,” retired Air Force Maj. Gen. Steven Lepper, President and CEO of AMBA, said.
A white paper identified key areas affecting today’s Veterans, such as not being able to get a bank account and incurring high fees when cashing checks or using prepaid cards. The VBBP then created a number of common requirements for participating banks and credit unions to join the program, including:
Willing to provide free checking accounts and free access to ATM networks to Veterans who deposit their monthly VA benefits in their account, and
Helping any Veteran become qualified to open a banking account.
Another pillar of the program is a goal of simplifying banking choices by helping eligible Veterans select the right bank and services for themselves and their families. The VBBP website also includes links to resources on topics like fraud protection, identity theft, financial education, and a checklist for opening a bank account.
Lepper adds the VBBP is a work in progress and there are already talks for ways to improve the program.
“Veterans have as many needs as there are Veterans. It’s hard to generalize with anyone, whether they’re military or Veterans. We’re always on the lookout to help make Veterans’ management of their financial resources much more effective and safe,” Lepper, who served 35 years in the Air Force, said.
Gurney says the VBA also looks at trends in the unbanked on a constant basis to identify lessons learned and drive future program enhancements.
“AMBA has setup a constant feedback loop to try to give our Veterans the best experience that we can. For example, we discovered that Veterans want financial education. They want information — especially during COVID – that helps them deal with money, particularly borrowing money. As a result of that feedback, we added financial education to the VBBP website and plan to expand it as we continue improving the program,” Gurney said.
Lepper explains that by giving Veterans access to banking options, it also creates a motivation to save.
“The one benefit you don’t think about immediately when you think about opening a bank account versus receiving your benefits on a prepaid card or by paper check is the ability to save money. If you cash a check or withdraw all the money on your prepaid card; you walk around all month with money in your pocket. With checks and prepaid cards, there’s no motivation to save and no mechanism to save, whereas with a bank account, you do have that ability to save money in a safe and cost-effective way.
“What we’re hoping, as a collateral effect of opening up a bank account or credit union account, is that our Veterans will be able to save money and not live month-to-month on their VA benefits,” Lepper said.
Other features of utilizing a bank or credit union account:
Get access to reasonable loan amounts with advantageous interest rates, and
Thirty four financial institutions are now part of the VBBP. In addition to ensuring Veterans and their families receive benefits safely and reliably, the participating banks and credit unions offer another advantage: accessibility.
A key component of the program is to meet Veterans where they are, whether that be in a large metropolitan area, rural town, or online. By working with financial institutions that have diverse geographical and digital footprints, Veterans can receive streamlined access to information and communication that caters to their needs. Another goal was to create a robust program that is easy to navigate. The VBBP website https://veteransbenefitsbanking.org/ contains a directory that lists participating banks and credit unions, along with direct links to more specific information on products and services.
Since the inception of the program at the end of 2019, VBBP has grown to roughly 1,000 website visitors per week, revealing a growing interest in both financial education and banking options. Now that awareness is growing, Gurney recommends Veterans take that next step of setting up an account so that they no longer have to put themselves at risk by relying on external entities like check cashing companies.
“We really want to urge Veterans during this time, especially with COVID, to consider direct deposit and setting up a bank account so they can have an easier, faster, and safer way to bank,” he said.
Once Veterans have a bank account, they can sign up for direct deposit by either updating their profile on va.gov (and providing their bank account and check routing numbers) OR by calling 1-800-827-1000.
As the partnership moves into its second year, the organizations plan to expand need-based resources that meet Veterans where they are in their financial life cycle.
Any Veteran or beneficiary who receives federal monetary benefits and who wishes to receive their benefit payments electronically can participate in the VBBP. A full list of participating banks and credits unions can be found at https://veteransbenefitsbanking.org/.
The residents alleged they were being intimidated into not fighting the overages, and sources told WATM Navy investigators were looking into the issue.
But according to a Feb. 14 statement from Naval Criminal Investigative Service spokesman Ed Buice, Navy officials closed the inquiry into accusations of over billing “after it became evident the allegations being made were unfounded.”
“No criminal misconduct was discovered,” Buice added in the email statement to WATM.
Buice did not reply to a request for additional comment.
Residents of the San Onofre II neighborhood at Camp Pendleton say they were within the margins for monthly electricity use that would preclude an overage charge.
Military families there pay a lump sum rent that includes a certain amount of energy usage. When they consume less electricity than the allotted amount, they are refunded; when they go over, they receive bills, officials say.
Several residents told WATM that they had seen sudden sharp increases in their electric bills and were threatened with eviction if they didn’t pay up. Many claimed they were rebuffed when they approached base housing officials about the alleged billing problems.
Marine Corps Installations West spokeswoman 1st Lt. Abigail Peterson told WATM in a Feb. 16 email that “all of the official complaints received regarding this situation were addressed and resolved,” adding that Lincoln Military Housing had “implemented a new process to monitor requests to ensure all concerns are addressed in a timely manner.”
“We take feedback very seriously and want to ensure responsible measures are followed to alleviate any issues for our Marines, sailors and their families living here on base,” Peterson said.
Military family advocate Kristine Schellhaas — who originally brought the billing allegations to light — wasn’t satisfied Pendleton’s response, arguing base residents aren’t simply misreading their bills.
“There are systematic flaws with how this program has been implemented,” Schellhaas told WATM. “The facts are that this program needs to get audited.”