5 Financial Tips for Teens

When it comes to economics, many teens’ mouths write checks their knowledge can’t cash.

While 93% of American teens say they know how the economy works, 29% have had no economic schooling, according to a survey of 1,000 U.S. teens ages 13-18 by Wakefield Research on behalf of Junior Achievement and the Charles Koch Foundation. Even in light of their false confidence, teens are aware of the importance of financial education.

Although the study identified numerous gaps in economic and financial knowledge, it also showed teens do know where to look for credible information. Two-thirds (67%) recognize they should use their school as a resource.

“One of the things we hear often is that some textbooks are written too academically for most students to understand the concepts,” said Jack E. Kosakowski, president and CEO of Junior Achievement USA. “Our programs, which work as a complement to the school curriculum, are written from the perspective of today’s teens and use digital content to help bring economic concepts to life for students.”

Beyond the classroom, another 63% of students believe they should use their parents as resources for economics education. Help influence the financial literacy of a teen in your life with these practical money-management tips adapted from the curriculum.

Set goals. Managing your money is more meaningful when you’re doing it with purpose. This might mean budgeting to ensure you have enough money to maintain your auto insurance and keep gas in your car, or you may be saving for a big senior trip. Knowing what you want to achieve with your money can help you plan how you spend it more wisely.

Weigh needs vs. wants. When you begin making your own money, it’s easier to indulge your own wishes and spend money on things you don’t necessarily need. To some extent, that’s not a bad thing; rewarding yourself is fine when you do so within reason. That means not exceeding your available funds, and not forsaking things you truly need, like gas money to get to and from a job or school.

Get a debit card. Most people find that having cash on hand makes it easier to spend. If you use a debit card instead, you’re an extra step away from spending so you have a little more time to consider your purchase. Another benefit of a debit card is it helps track your purchases in real time so you can keep constant tabs on your balance and ensure you don’t overdraft your account.

Start a savings habit. Even if your income doesn’t allow for much, it’s a good idea to get in the habit of setting aside a portion of each check. It may only be $10, but over time each $10 deposit can build your account toward a long-range goal.

Protect your privacy. Teens who’ve grown up in the digital age tend to be less skeptical and cautious about privacy matters than their elder counterparts. It’s important that young people understand the potential impact of failing to protect their privacy when it comes to financial matters, including the possibility that their identities could be stolen and all of their money siphoned away. Teaching kids about security is an essential lesson in economics.

Visit ja.orgfor more tips and information to help raise your teen’s financial literacy. (Family Features)

SOURCE:
Junior Achievement

Unique Ways to Save for Your Retirement (Other Than a 401k)

Saving up for retirement isn’t an easy task. Not only does it cost a lot of money, but it’s not necessarily the most glamorous thing to put your savings toward. Maybe you have your sights set on a new blazer to add to your Fall 2019 wardrobe, or perhaps you’d rather put your hard-earned dollars toward a weekend trip to San Diego. But if you want to eventually enjoy your retirement at its fullest when the time comes, you’ll need to start saving well in advance. But before you make excuses for your company’s lack of a 401k program, remember that there are plenty of other ways you can start building your retirement savings even if you aren’t eligible for an employee-sponsored retirement plan.

If you’re looking for unique ways to save up for your retirement without having a 401k, you’re in the right place. In this article, we’ll discuss 4 creative ways you can start building your savings today.

1) Use your assets wisely

Since your income will likely be limited when you retire, it’s important to use the financial assets that you currently have to your advantage when saving for retirement. If you have property, for example, you might consider leasing it out as you can to bolster your savings. Perhaps you can lease out a section of your home to a tenant or on a vacation rental site for a less permanent solution.

Another way you can use your property as a retirement savings asset is with a reverse mortgage. A reverse mortgage converts the equity you have in your home into cash that you can ultimately fund your retirement. Of course, there are plenty of considerations to make with any major financial decision, so be sure to do your research. This reverse mortgage explained article provides some more helpful insight to determine if this option could work for you.

2) Build your investments

In addition to real estate investments, you may have some other financial assets like stocks, bonds, or CD accounts that could build a great foundation for your retirement savings, even if you don’t have a 401k savings.

If you haven’t developed your financial profile thus far, here are some tips to help you do so:

  • If you are investing as a beginner, use an investment app to help you make and manage your investments.
  • Before liquidating your assets, consider the market and other indicators to decide if it’s really the right time to sell.
  • Don’t invest blindly—consider a number of different industries and investment avenues to choose the best investment method for your current finances and retirement situation.

3) Save up your bonuses

If your hard work’s paid off throughout the year and you’re lucky enough to receive a bonus, you might be tempted to spend it on something to reward yourself now, but saving it for the future could be even more rewarding in the long-run. That’s not to say you can’t treat yourself to a well-deserved treat, but you may want to allocate a certain percentage toward your retirement savings too!

In addition to saving your bonuses, you can also do the same for any tax returns you’re issued at the end of the tax season. Typically these kinds of contributions are larger than those you’d make periodically throughout the year, so they’ll definitely make a sizeable difference.

4) Get a part-time gig

Even if you already know the importance of saving up for retirement, you might feel like it’s impossible to do so when you have rent to make and bills to pay. And although every dollar counts, it might not feel like you’re making enough progress. One consideration you might make is getting a part-time job to fully allocate toward your retirement savings. This way, you’ll accrue a more substantial amount and you can keep your primary income and secondary income separate.

There are plenty of opportunities to make a few extra bucks here and there, even if you don’t have tons of time to spare. Here are a few ideas:

Final thoughts

Saving for retirement without a 401k isn’t always the easiest route, but it’s entirely possible if you follow these tips!

Is Investing in Real Estate a Quick Route to Riches?

If you’re on the hunt for sensible ways to make money and live the lifestyle that you deserve, it might seem like there are very few dependable options. One tactic many people consider is whether real estate is a good strategy for quickly building up wealth. Whether you’re interested in an entrepreneurial house-flipping business or just curious about investing in a real estate project, you’ll want to know how to do it wisely. Before we answer the titular question, we’ve put together a list of pros and cons for you to consider before you take the plunge into real estate.

Pros:

First, we’ll cover a few reasons why investing in real estate might be an enticing option.

  • Real estate investing is a form of passive income (in some cases), so if you’re successful you won’t have to worry about clocking in and out – your check will simply be in the mail from your recent real estate deal, or from tenants renting out your property if you do choose to lease it. This makes property ownership a good option for retirees who are looking to augment their retirement savings with extra cash flow.
  • Real estate is a reasonably steady, long-term investment option. Property values do tend to rise and fall (more on that in the Cons section), but over time, a good amount of real estate appreciates in the long-term. So, this may not be a quick route to riches, but it certainly could be a slow and steady one.
  • It’s widely available in some growing areas. Parts of the country like Colorado, Nevada, and Texas are growing rapidly. However, they also have a lot of land. That means that there’s still plenty of room for your real estate investments to appreciate, making even riskier options like Fort Worth hard money loans actually seem somewhat attractive.
  • Property is actually a tangible asset. Unlike investments in the stock market that serve no purpose before you sell them, property can actually be used. For instance, if you’re flipping a house to resell it, you can still live in it during renovations. Or, if you’re just waiting for property values to increase before selling, you can lease to renters and make some more income that way.

Cons

Now we’ll go over what you should be careful of before you get started investing in real estate.

  • There are a lot of real estate scams. If you don’t do diligent research before investing, you could wind up with a property that rapidly depreciates or isn’t worth anywhere near what you paid for it. Be careful and do diligent research before putting your money toward any real estate investment opportunity.
  • Real estate investing takes time. If you are looking for a way to make money quickly, purchasing a house in hopes that property values will increase could take a decade or more. House flipping might be an easier way to make money more quickly, but this requires significantly more time and investment, as you’ll have to renovate the home well enough to warrant a high asking price.
  • Property management can be a headache if you can’t find good tenants. If you do go the leasing route, it’s important to find tenants who will respect your property and treat it well. The last thing you want on your list of costs is repairs necessary after troublesome tenants move out.
  • A substantial amount of your net worth is tied up in your investment. If you find that you need money quickly, you might be in some trouble. Real estate is difficult to convert into liquid funds fast enough to cover a last-minute need for emergency cash. That’s because you’ll have to sell the property successfully to make your money back. Plus, if you have tenants, you might not be able to just evict them to liquidate in your property, further stalling access to funds.

So, is real estate a quick route to riches? In most cases, real estate is not a way to get rich quickly. That’s because, as with any investment, it can take time to fully appreciate. While flipping houses can be a good way to earn money, it’s not always easy to quickly get rich this way – in many ways, it’s like owning any small business, as the overhead costs are substantial and don’t allow for immediate profits. Let us know whether you’ve had any teachable experiences from real estate investing in the comments below!

Struggling to Understand Your Taxes? Start Here

Trying to understand taxes is like trying to learn a foreign language. We may have a little understanding, but for the most part, we have no clue what’s going on. If you’re like most Americans who don’t fully know how taxes even work, you’re not alone. To help you navigate through tax season and please Uncle Sam, refer to our Understanding Taxes Guide below.

When is the tax filing deadline?

First and foremost, it’s important to know when the last day to file your taxes is. Each year, Tax Day in the United States falls on April 15th, unless the 15th happens to be a weekend or a holiday. In that case, Tax Day will fall on the following business day. It’s important to mark your calendar because if you fail to file or pay your taxes, you can face hefty fines and penalties. These include:

  • Failure to File Penalty: If you fail to file your taxes, you can face a fee that 5 percent of your unpaid taxes, up to 25 percent. After 60 days, you’ll either have to pay $135 or 100 percent of the taxes you owe, whichever is less.
  • Failure to Pay Penalty: If you fail to pay your taxes, you will face a charge of 0.5 percent of your unpaid taxes for each month late, up to 25 percent.
  • Failure to File and Pay Penalty: If you fail to file and pay, your failure to file penalty will be reduced by your failure to pay penalty. Even if you don’t have the money to pay for your taxes by the deadline, it’s important to at least file. This way, you won’t face extra fees, penalties, and interest and will be able to avoid a tax blunder.

How do I pay for my taxes?

Some people may owe taxes to Uncle Sam for a variety of reasons. Some reasons include having too little withheld from their pay, having extra income not subject to withholding (such as money from stocks), and self-employment tax.

If you end up owing a large chunk of change on April 15th, you can always sign up for an IRS payment plan that reduces the threat of increased collection actions. Or, you can apply for a tax extension that will give you 6 more months, until October 15th, to file your taxes.

What documents do I need when filing my taxes?

Another area of taxes many Americans struggle with is collecting all the proper documents that are needed to file taxes. It’s important to keep your finances fresh throughout the year and organize all of your documents, so you don’t end up tearing your house apart looking for your W4 Form or receipts you need for proof for a deduction. Below is a list of all the important paperwork you should have prepared well before Tax Day:

Income Information

○     1099-Misc: Used for self-employment

○     1099-DIV: Used if you received dividends

○     1099-G: Used if you received benefits or money from the government

○     1099-K: Used for transactions made through third-party transactions, like Venmo and PayPal

○     1099-R: Used for distributions from a retirement plan, IRA, pension, etc.

Personal Information

  • Social Security Card or tax ID number
  • Date of birth for you and everyone on your return, including spouses, children, and dependents

Self-Employment Information

  • Mileage records
  • Home office expenses
  • Records for business expenses
  • Receipts for quarterly estimated tax payments

Medical Information

  • Unreimbursed medical expense receipts
  • Health insurance coverage forms filed on Form 1095
  • Social Security Benefits

Life Information

  • Property tax receipts
  • Home improvement invoices or receipts
  • Annual mortgage statement
  • Childcare receipts
  • Contributions to college savings plans
  • Charitable donation receipts
  • Documents related to marriage, divorce, death of a spouse, adoption papers, child custody documents, etc.

As you can tell, being a taxpayer means you’re responsible for keeping track of a lot of documents. The best way to stay organized throughout the year is to make copies of important documents and file them. Or, you can scan and upload them to cloud-based software that will securely store and encrypt your personal documents. It’s always important to ensure you have all the necessary documents to prove your income and deductions so you don’t end up in a tax fraud case, causing you more money and stress.

How do I file my taxes?

Once you have all of your documents needed for proof of income, deductibles, and so forth, it’s time to begin filing. There are three ways you can file:

  1. By yourself: You can file your taxes by completing all necessary forms and mailing them to the IRS or using Free File on their website.
  1. With an accountant: If you want to ensure you file properly, you can consult with an accountant who can do your taxes for you.
  1. Online tax services: Online tax services blend the best of both worlds, allowing you to file your taxes by yourself with the help of tax software that will ensure you have all necessary documents.

Wrapping Up

We get it, trying to understand taxes isn’t easy. However, using this guide during tax season will help you ensure you have all the necessary paperwork to please Uncle Sam. By planning for the future and staying organized throughout the year, you’ll get through tax season with ease.

Keeping Your Finances Fresh Throughout the Year

For many Americans, reaching and maintaining financial stability is a goal that tops their checklists. However, the strategies necessary for achieving that goal can quickly fall by the wayside.

Consider these tips from Bank of America Credit Cards Executive Jason Gaughan that you can put in place to help keep your finances in check throughout the year.

Make Financial Goals More Attainable

The key to achieving financial goals is to make them measurable. Try to focus on achievable outcomes that slowly push you in the right direction financially. For example, if you are planning to make a large purchase, give yourself a specific, short-term goal like saving $50 from a paycheck so you can effectively measure your progress and build toward your purchase over time.

Redeeming your credit card rewards wisely can also help you more seamlessly reach your financial goals. Some cards allow you to redeem cash rewards directly into a checking or savings account or to apply to your credit card balance. In some cases, rewards can also be applied into longer-term investments like 529 accounts for college savings or a retirement fund, letting your everyday spending help fuel your future goals.

“Earning cash back on everyday purchases can provide extra funds to invest, splurge on a family vacation or put a down payment on a new car,” Gaughan said. “Whatever your financial goals are, a rewards card can help you get closer to achieving them.”

Reduce the Number of Credit Cards in Your Wallet

A Bank of America survey found 52% of Americans weigh down their wallets with multiple cards to earn rewards across different categories. By choosing a flexible credit card that allows you to earn benefits across various categories, you can consolidate and eliminate the need to juggle a variety of rewards cards.

One flexible card option is the Bank of America Cash Rewards credit card, which allows you to choose from one of six categories – gas, online shopping, dining, travel, drug stores or home improvement – to earn 3% cash back on purchases each month along with 2% cash back at grocery stores and wholesale clubs, up to $2,500 each quarter. Cardholders also earn 1% cash back on all other purchases. Cards such as this reward all your purchases, especially those in the places where you spend most frequently so you can maximize your cash back.

Cut Unnecessary Spending and Tackle Debts

If you’re dreaming of financial freedom, a budget is one of the first steps toward getting there. Start by reviewing bank and credit card statements from at least the past three months to gain a better understanding of your spending habits and identify areas you could improve. While cutting back on non-essentials is typically a good place to start, this is also an opportunity to identify areas you can get better deals by switching providers for things like car or homeowner’s insurance as well as your cellphone, internet and other home services.

Once you’ve addressed your expenses, consider tackling your debts. To determine which debts need to be prioritized, look at the interest rates and principal costs of each and focus on paying off debts with higher interest rates first. Reducing your debt should take priority over most savings goals.

Discover New Ways to be Rewarded

You may be eligible to enroll in a banking rewards program like Bank of America Preferred Rewards, which gives members access to a variety of everyday banking benefits including credit card rewards bonuses on eligible cards from 25-75%, home and auto loan discounts, free stock trades, ATM fee waivers and more.

Layering your banking rewards program together with airline, hotel, credit card, dining and shopping rewards programs can help boost your financial rewards earnings to the highest level.

Use Digital Banking Tools to Gain Full Visibility Into Your Finances

When using a combination of multiple rewards and savings strategies, it can be hard to keep track of where and how much you’re earning and saving at a given time.

Your bank may offer digital tools that provide assistance and resources to simplify your banking experience. For example, some digital dashboards allow cardholders to track their rewards earnings and redemptions, and discover additional benefits. Those using their bank’s application on their computer or phone can typically manage their rewards, deals and benefits across multiple rewards programs.

Keep Tabs on Your Credit Reports and Scores

A numeric representation of your credit, your credit score signifies to lenders what kind of borrower you are. Because it influences everything from mortgage and auto loan rates to credit card approvals, keeping an eye on where you stand can be important in achieving your financial goals. It’s smart to periodically check your credit score to make sure everything is accurate and know where you stand. You can check your score through the major credit bureaus, and some credit card issuers even allow you to view your score for free through online or mobile banking.

The key to keeping your finances fresh is to create a simple strategy that allows you to push toward your financial goals all year long. By consolidating your wallet, creating realistic goals and budgeting, you can set yourself up for financial success.

Earn Rewards Where You Spend Most

According to the spending analysis of more than 50 million Bank of America credit and debit cardholders, the average cardholder spent $3,174 on groceries, $2,430 on dining, $2,319 on travel and $1,627 on gas last year.

“Regardless of whether your spending priorities change frequently or remain steady, you should consider a flexible card that allows you to earn cash back across multiple categories that align with your spending patterns,” Gaughan said.

Find more solutions at BankofAmerica.com.

SOURCE:
Bank of America

Planning for the Future

Taking inventory of your financial health

Only 28% of Americans are financially healthy, according to the U.S. Financial Health Pulse. Most others will have difficulty reaching long-term financial goals and are more vulnerable to the threat of financial shocks, such as car trouble, unforeseen medical bills or job loss.

Regardless of income or wealth, the road to financial health – how you are able to manage your day-to-day financial life while building for the future – can be a lifelong journey. What you do today can build toward or detract from your long-term resilience and ability to pursue opportunities. Whether you want to take that dream vacation, prepare for retirement or save for college, financial health takes effort to build.

“An overwhelming majority of the country is experiencing financial challenges that have lasting effects on people’s lives, on their ability to weather the inevitable ups and downs and on their chances to pursue their dreams,” said Jennifer Tescher, CEO of the Center for Financial Services Innovation (CFSI), the nation’s authority on consumer financial health. “Each year, CFSI and MetLife Foundation join forces on #FinHealthMatters Day to highlight the importance of financial health, especially for the 180 million people who are financially vulnerable.”

These questions can serve as a starting point to take inventory of your financial health:

  1. Are you spending less than you make? Regardless of your income level, it can be difficult to get ahead if you’re among the 47% of Americans that are spending more than or equal to what they earn, according to the U.S. Financial Health Pulse. The ability to manage cash flow directly affects your ability to build savings and deal with unexpected expenses.
  2. Do you pay your bills on time and in full? Falling behind on bills, including credit card payments, can be a significant hindrance to improving your financial health. If all your bills seem to come due at the same time each month or don’t appropriately align with paydays, consider staggering bills based on their priority level with rent and utilities taking precedence over any less necessary items like cable television or subscription services, which could even be eliminated altogether. The ability to keep up with payments shows how well you’re able to manage cash flow and daily financial obligations.
  3. Do you have sufficient liquid, short-term savings? The ability to draw on savings is important for coping with unexpected expenses such as car repairs or medical bills or a setback such as being laid off from a job. Having six or more months of living expenses in savings is considered financially healthy, but 45% of Americans don’t have enough savings to cover even three months, according to the U.S. Financial Health Pulse. Try setting aside 5-10% of your monthly income to build up both your emergency fund and long-term savings account.
  4. Do you have appropriate insurance coverage? Along with sufficient liquid savings, having appropriate insurance can help you withstand an unexpected expense, such as the death of a loved one or a medical emergency. Shop around for the best rates and coverage on everything from homeowners and car insurance to life and disability policies.
  5. Do you plan ahead for expenses? Planning ahead shows you are future-oriented and proactively managing your financial situation, a behavior that is strongly correlated with financial health. Proper future planning behaviors include using a budget, coding expenses, setting up automatic savings transfers and using financial management apps, among other habits.

For more tips to focus on your future financial health, follow #FinHealthMatters on social media or visit cfsinnovation.org/news/finhealthmattersday. (Family Features)

SOURCE:
Center for Financial Services Innovation

Tax Fraud Cases: What Happened Next?

Written by Colette Cassidy, Contributing Writer for InFluential Magazine

Taxes. Even the mention of the word would nearly cause you to shudder. Most of us don’t enjoy paying them but we obligingly stump up the fees imposed by the authorities so that we don’t become subjected to legal complications. There are those, however, who willingly defy the laws of the land and simply don’t pay their taxes. They can get away with it to an extent but it’s almost certain that, after a while, their misdeeds will be rumbled and the consequences are usually quite severe.

As this infographic from All Finance Tax shows, quite a few people have deliberately committed tax fraud through a variety of methods. Some went for white-collar schemes involving aliases, offshore holdings and fraudulent companies; others simply attempted to claim tax exemptions from personal expenses and bragged openly about their metaphorical raising of two fingers to the taxman.

The list of tax defrauders includes some personalities who were already in the public eye before their misdeeds. Actor Nicolas Cage, for example, ended up owing $13 million to the IRS because of frivolous spending on bizarre novelties such as a private island and two albino king cobras. Having once had a personal fortune of $150 million, he eventually became bankrupt. A few years previously, baseball icon Pete Rose neglected to report earnings from the sale of memorabilia and ended up in jail. While his sentence was brief, the scandal brought a premature end to what been a glittering sporting career and tainted his great name.

Check out the infographic below for other instances of tax fraud and how those culpable were brought to justice.

 

 

Empowering Teens through Smart Spending

Helping teens learn to handle money can be a tricky proposition. Mistakes can quite literally be costly, but there’s really no substitute for hands-on practice when it comes to managing finances.

Children are the ultimate investment, so teach your teen to be a smart spender with these savvy tips:

Start with saving. As a first step, open a savings account for your teen and involve them in the process. Use this opportunity to teach good habits, such as putting away a percentage of every paycheck, creating an emergency fund and setting savings goals for big purchases. Visit the bank together and explore the account options. Many banks offer incentives for high-balance accounts, and while your teen likely won’t qualify, it’s a valuable lesson to see the incentives available to big savers.

Move on to basic checking. Although most banks still refer to their most accessible accounts as “checking” accounts, chances are that your teen is more likely to shop with a debit card or cash rather than checks. Still, knowing how to write a proper check is an important life skill – as are conducting debit transactions and understanding any fees associated with using the account.

Create safe zones. Even after teaching them the fundamentals, letting teens make their own purchasing decisions can be a frightening prospect. Fortunately, if you know where to look, there are options available that offer teens a customizable level of autonomy while still under the oversight of a parent. For example, Amazon introduced a way for teens ages 13-17 to shop using their own, independent login linked to a parent’s account. In addition to product recommendations, order histories and lists tailored specifically to the teen’s shopping history and interests, teens can exercise smart shopping decisions with access to customer reviews and comparison shopping tools.

Parents have the option to review and approve every purchase, or set spending limits that offer teens the freedom to place orders up to a certain dollar amount on their own. In either case, parents receive notifications for every order and shipment. Find more details at Amazon.com/forteens.

Set a budget. Part of smart spending is learning to shop within your means. Whether your teen’s income is from a part-time job, allowance or a combination of the two, building a budget that defines expenses and expectations is essential. Like any budget, it should include all income sources and all expenses he or she is responsible for, including auto maintenance, gasoline, insurance and beyond. Reinforce the importance of saving by including a regular savings allocation. Putting all of these numbers to paper lets your teen see clearly where the money is going and how much is left over for extracurricular spending.

Put safety nets in place. No matter how much planning is done in advance, surprise expenses will inevitably pop up. Teens can prepare for these expenses while also guarding against mistakes and the temptation to over-spend by taking advantage of special services available through banking institutions, such as setting a per-transaction or daily spending limit and investing in overdraft coverage.

Ultimately, money management skills come with time and practice. Creating a safe environment for your teen to practice these life lessons sooner rather than later can pay dividends down the road. (Family Features)

Photo courtesy of Jeannette Kaplun, HispanaGlobal.net.

Think Outside the Bank: How to Get a Business Loan Online

immy Standley, president of Solé Bicycles in Venice Beach, Calif., sought a loan online through Funding Circle to grow his business.

In business, dreams are easy. Finding the money to make them happen, however, can be difficult.

Even established, successful businesses can get turned away for loans at banks. This was the case for Sole Bicycles, a popular maker of stylish and high-performance bikes based in Venice Beach, California.

With the busy summer season approaching, they sought a bank loan to expand inventory. The last thing they expected was to be rejected more than 20 times over the following two years.

“No bank was willing to work with us, and we missed opportunities as a result,” said Sole president Jimmy Standley.

His experience is all too common. According to the Federal Reserve’s latest Small Business Credit Survey, nearly one in two small businesses say they struggle to get the funding they need.

Fortunately, over the past few years a new option has grown to fill that gap. Online lending platforms connect businesses looking to borrow with investors looking to lend. It’s a fundamentally different business model than banks, said Sam Hodges, co-founder of one such platform, Funding Circle.

He explained that because they use technology to connect credit supply directly with demand, places like Funding Circle make it easier and faster for businesses to get affordable loans. Funds come from a community of individual and institutional investors.

“It’s not uncommon for businesses to wait weeks to hear back from banks after applying for a loan – just to be denied,” Hodges said. “Once we have everything we need, we’re able to make a decision in as little as 24 hours.”

Funding Circle was founded because Hodges and his co-founders experienced firsthand how difficult it was to get a loan for their chain of fitness centers.

“After applying dozens of times with traditional lenders only to get offers with outrageous terms or flat out rejected, we realized something needed to change,” he said.

 

Jimmy Standley, president of Solé Bicycles in Venice Beach, Calif., sought a loan online through Funding Circle to grow his business.

Jimmy Standley, president of Solé Bicycles in Venice Beach, Calif., sought a loan online through Funding Circle to grow his business.

When borrowing online, buyer beware

Funding Circle is one of several online lending platforms that have cropped up in recent years. But it’s important to look carefully at what you’re being offered, Hodges said.

He warned that borrowers should beware of lenders who promise approval virtually instantly, without taking the time to learn about how much each applicant can really afford. Loans from these lenders can come with murky terms and upwards of 70 percent annual percentage rates (APRs). Additionally, these lenders may take payments directly out of your sales daily or weekly until the debt is repaid – which could drastically reduce your cash flow.

“Term loans are the better option for established businesses looking to borrow a set amount of money for a specific purpose and pay it back over time,” Hodges said. “These are ordinary Main Street businesses across America simply looking to open a new location, hire more staff, stock up on inventory or refinance debt.”

This includes Standley at Sole Bicycles, who ended up applying for a second Funding Circle loan as his company continued to grow. After shooting his Funding Circle account manager a quick email while waiting in line at the airport for a flight, he had the funds he needed about a week later.

Thinking about applying for a loan? There are five things business lenders typically care about. Read more at www.Made2DoMore.com. (BPT)

Find Medicare Confusing? Start Here

Navigating Medicare can be challenging. In fact, according to a 2017 UnitedHealthcare survey, nearly 40 percent of Medicare beneficiaries find the program confusing. Learning the basics can help you cut through the confusion and make an informed decision about which coverage option may be the right fit for you.

Here’s a quick guide to five important Medicare terms to help prepare for the upcoming open enrollment period. What is open enrollment, you ask? Well, read on.

1. Open Enrollment Period

If you are already enrolled in Medicare and want to make changes to your health plan, you can do so during the annual open enrollment period, which runs from Oct. 15 to Dec. 7. For most people, this is the one opportunity each year to make changes to your Medicare coverage.

Changes made during this year’s open enrollment period take effect on Jan. 1, 2018.

2. Original Medicare

Original Medicare is made up of Part A and Part B and is offered by the federal government. Simply put, Part A helps cover services such as inpatient care at a hospital or a skilled nursing facility. Part B helps cover doctor’s office visits and outpatient physical and occupational therapy services.

According to Dr. Efrem Castillo, Chief Medical Officer for UnitedHealthcare Medicare & Retirement, “Original Medicare generally covers 80 percent of health care costs, leaving you responsible for paying the remaining 20 percent. It also does not have an out-of-pocket maximum, meaning that if you have unexpected health care costs, you could end up with a hefty bill.”

Original Medicare does not cover things like prescription drugs, long-term care, hearing aids and the exams needed for fitting them, or routine dental or vision care.

3. Medicare Advantage

Medicare Advantage plans, also known as Medicare Part C, are offered by private insurance companies. Medicare Advantage plans combine Medicare Parts A and B into one plan (which means you only need to carry one card), and can offer additional benefits such as vision, hearing, dental and even gym memberships. Most plans also provide prescription drug coverage.

In addition to the all-in-one coverage, Medicare Advantage plans also have an annual out-of-pocket maximum, making it easier for you to estimate your health care costs, even when facing an unforeseen health event.

4. Medicare Supplement Insurance (Medigap)

A Medicare Supplement policy is also known as Medigap and is offered by private companies. It can help pay for some things not covered by Original Medicare, such as copays, coinsurance and deductibles. Medigap plans typically have a higher monthly premium but little or no out-of-pocket costs when you access care. However, Medigap plans don’t cover prescription drugs, so you would need to enroll in a separate Part D plan.

5. Medicare Part D

Medicare Part D helps cover prescription drugs. Castillo explains, “You have two options for prescription drug coverage. Either enroll in a standalone Part D plan, or you can get drug coverage through most Medicare Advantage plans.” Make sure that the plan you select covers the prescription medications you need.

To learn more, visit UHCOpenEnrollment.com. (BPT)