Succeeding in life and business is more than facts and figures. Welcome to myThoughts, an ongoing personal diary of my involvement in our local community and the people who are making a difference.
Friday October 24, 2014
Rebuilding Together Community Dollar Serve Multiple Purposes
By Marilyn Lew-Jacobs, CPA, Managing Partner, Jacobs & Company, LLC
Community involvement through dollars and services is vital in maintaining a healthy and prosperous population. We see this demonstrated over and over again when we manage foundations and promote the benefits of charitable planning to our clients.
It is exciting to note that some gifts impact multiple entities. One such example is a gift from the Lee Millman Foundation. This Foundation has partnered with Alzheimer s Community Care and has provided daycare scholarships to deserving financially disadvantaged families caring for individuals with Alzheimer s disease and related disorders.
I was fortunate to be a board member of Rebuilding Together of the Palm Beaches and The Lee Millman Respite Care Foundation when the Riviera Beach Alzheimer s Community Care s Specialized Adult Day Care Center was developing. At that time Rebuilding Together of the Palm Beaches received a $10,000 grant from the Newman s Own Foundation that was earmarked for the elderly. Rebuilding Together of the Palm Beaches Board agreed to donate the funds to repave and landscape the parking lot at the Blue Heron Church of God. These repairs were needed to move forward with the licensure for the Center.
What an example of mutual cooperation and sound stewardship of resources. The funds were transferred and utilized and not one penny was used to offset overhead expenses.
Today, the Riviera Beach Specialized Adult Day Care Center is fully operational serving the patients in its community suffering with Alzheimer s and related disorders everyday because of gifts and caring through community involvement. Many of the center s clients have benefited from Lee Millman scholarships.
Friday December 14, 2012
The New Normal
The financial meltdown has forced many people to re-evaluate their money management strategies and has forced many of us to seriously re-prioritize the importance of a rainy day fund. Many experts suggest having at least three months worth of living expenses available in case of emergencies or job loss. Prudent people should consider ways to improve their savings and add to their emergency fund, with six months worth of expenses as a safer target.
Where do we go from here?
The first step is figuring out where we stand financially; what is our monthly financial situation? It is difficult to know the answer to this question without putting together a basic budget. Of course while tracking all expenses over a month long period is tedious at best, an easy alternative would be to simply start with a bank statement and make some general observations about the balance from month to month. Is the balance increasing or decreasing? If it is decreasing, some difficult decisions will need to be made with regard to spending habits of discretionary income.
Once you have an emergency fund established, consider paying down your debts. If you have multiple credit cards, always try and pay down the one with the highest interest rate and fees first, which not only helps you get out from under your debt faster over time, but also will likely improve your credit score as well.
You should make it a habit to regularly monitor your credit score and credit report. Staying on top of your credit will keep you informed of any irregular activity and can alert you quickly should identity theft occur. Having a good credit score will help you receive the best interest rates and require the least amount of collateral if you do need to finance a new purchase. Credit scores are also used in the determination of insurance policy premiums, rental agreements with landlords, and deposits required with utility companies.
The actual score comes from a formula that is based off of your credit report. The current gold standard in credit scores is from the Fair Isaac Corporation and is called a FICO score; FICO scores range from a low of 300 to a high of 850. In the past, generally people with scores starting at 680 and above would qualify for loans at what would be considered good interest rates. Today banks have tightened their lending standards. Many lenders now require scores upwards of 700 to even qualify for a loan.
According to FICO's website, scores are calculated from five broad categories of data listed below, from most important to least important.
1.Payment History- including on-time payments as well as delinquencies and any other negative judgments
2.Amount Owed- including the proportion of credit used or the utilization rate (typically 30% of maximum limit used is considered good)
3.Length of Credit- including time of various different types of accounts, i.e. mortgage accounts vs. credit card accounts
4.New Credit- number of recent credit inquires, number of new accounts, and proportion of accounts that have been recently opened
5.Types of Credit - variety of different types of credit accounts, mortgages, auto loans, credit cards, and student loans
It is also important to realize that a FICO score is only one piece of the puzzle. Most lenders will also consider income, debt to income ratios, and household budgets in factoring your ability to repay a loan.
As a society, Americans were living too close to the edge financially and making many purchases that they simply could not afford. In hindsight, we can point to buying too large a house, new cars, and other luxury items financed by easy credit. Today conditions have dramatically changed. Banks and even credit card companies are no longer lending as they once did, credit markets have tightened, home foreclosures have affected local economies, and the stock markets have hurt many individual's net worth. It is in this type of uncertain environment that having a financial plan of action has taken on an increased level of importance