Andre Sugars’ Tips For Using Credit Cards And Avoiding Credit Card Debt

Andre Sugars’ Tips For Using Credit Cards And Avoiding Credit Card Debt

Do you remember that old Visa commercial? It had quite a run during sporting events about a decade ago … everything in the restaurant/market is running smoothly — chefs are shipping up meals, customers are moving in an orderly fashion, credit card payments are keeping the line short, and then…

…the main character pulls out his wallet, thumbs for some CASH and ruins everything.

Credit cards are now so woven into the fabric of our society, it's hard to imagine the slower, cash-centered society of yesterday. And with smartphones constantly evolving into new kinds of app-based payment systems on their own, the process is accelerating further.

Money can start to become mere numbers on a computer screen. And that's when things can get really out of control for many South bay families.

So managing all of this — especially the credit card accounts — has become a more essential skill than ever.

Andre Sugars' Tips For Using Credit Cards And Avoiding Credit Card Debt

"To contract new debts is not the way to pay old ones." – George Washington

Let me say off the bat: it is not a bad thing to own multiple credit cards. However, if you possess multiple credit cards that you rarely touch, it's time to pare down. Signing up for in-store credit cards, for instance, to capitalize on savings and rewards is okay if you shop there often.

But please consider credit cards only if you will use them on a regular basis. And then set a budget for each one.

Psychologically, buying things with a credit card is a cinch — all you do is run a piece of plastic through a machine. But before you know it, all that swiping adds up to a heaping amount of debt. In 2018, the average American household possessed an average of $5,700 in credit card debt.

An unfortunate statistic, but something we can take steps toward alleviating if we stick to a regular budget. Here is a list of the best online budgeting tools (but if you use one, make sure you check and update it on a weekly basis):

Whichever option you choose, consider downloading the app to your smartphone (available on all three resources listed). The more you get in the habit of checking your credit card spending, the better handle you will have of your money.

Rewards and Reports

Credit card reward systems have redefined financial strategy for countless Americans over the last decade. Many credit cards offer cash back, discounts or other free rewards in exchange for the amount you swipe. If you are going to swipe a credit card, at least make it count with a certified system.

Lastly, running a regular credit report is essential if you have any credit cards on file. Visit Annual Credit Report to have the three major credit bureaus — Experian, TransUnion and Equifax — run a credit report for you today. A credit report will tell you how many delinquencies you have against your credit (i.e. how late you are to pay credit card pills) and your debt-to-credit ratio.

This is much more than "knowing your score" — which many platforms now provide. It's a way to verify that you don't have extraneous accounts piling up, and that you are also not getting victimized by account or identity theft.

When you adhere to credit card budgets, rewards and reports, you are well on your way to managing the plastic. Because the amount of credit card debt has soared so high over the years, credit cards often receive a bad rap. But, like many facets of adulthood:

"With great power comes great responsibility."

Funny how a little rectangular piece of plastic can have so much power over your life, and that's why you should use it wisely — at your discretion. The benefits of credit card use can be vast: track spending, maintain a credit score or receive cash back.

But if they are causing out of control spending … it's a smart idea to just kill them altogether. Go full-on Dave Ramsey before you find yourself buried.

The main thing is to keep yourself in check, and stay that much closer to wise spending.

Warmly,

 

Andre Sugars

(310) 327-1985

Champion Tax Service

 

Andre Sugars’ Three Keys To Get Out of Debt

Andre Sugars’ Three Keys To Get Out of Debt

The World Series is here, football seasons are in full swing, school is deep in session, and the weather is shifting for sure.

Fall has a way of running along faster than we realize.

It's kind of like our financial picture: things can change REAL fast, and before you know it, we're buried under a pile of something that we'd rather not be under.

So, here's what I'm getting at: If you'd love to get out of debt, raise your hand.

Because I can't physically see you right now, let's just play the percentages and assume you're raising your hand. And by "play the percentages" I mean that, according to a Pew Survey on Debt, at least 80% of Americans are trudging through some sort of debt to their name.

Now, before we go any further, I want to address two forms of "debt reduction" that might come with some setbacks…

  1. Debt Settlement: This method means inviting a third party to negotiate out of standing debt in your name. However, it's deceiving in that you often end up paying more out of pocket than if you had just taken on the debt yourself.
  2. Debt Consolidation: The consolidation method is used by companies that essentially roll all your debt into one lump sum, then charge you at a lower interest rate. And although that seems nice to start with, it actually (usually) just means you'll be in debt for a longer period of time.

So let's look instead at three simpler methods you can use to get out of debt. Of course, nothing worth doing well is going to be a quick fix. But if you start today, you can begin chipping away at debt (read: stress) and get back on track ASAP.

Andre Sugars' Three Keys To Get Out of Debt
"Budgeting has only one rule: do not go over budget." -Leslie Tayn

Let's put things in three easy steps, shall we?

Strategize: List out all debts (ALL DEBTS) and go
It's incredibly hard to chase after goals that aren't clear or concrete.

The first thing I want you to do is list out all the debt you have. Ideally, find a room with a whiteboard and go to town. This is helpful because you can snap a picture afterward.

When you list it all out, make sure you organize the list from the smallest debt you have to the largest. You will use this list as a reference guide throughout the duration of your debt domination. It might seem discouraging to list it all out at once, but view it as giving your enemy a face — now you know who you're fighting; now you can go and win the fight. This will help for when you…

Pay: Make minimum payments on large debt first. Then think small.
Again, with your debt listed out for reference, start with those larger payments and the minimum payments you can start putting toward each piece of debt.

"How do you eat an elephant? One bite at a time."

Now, the smaller pieces of debt that come along — medical bills, short-term bank loans,  etc. — are still very important to pay off. But you can eliminate them in one fell swoop through hard work and dedication. What does that look like exactly? In today's gig economy, picking up a "side hustle" or small job on the side is doable and advantageous for your resume/career. It also is a smart strategy to say, "All the money from this side gig will go toward paying off X debt."

Paying off debt isn't a cake walk, but the sooner you pay it off, the less guilty you feel eating cake.

Persist: Paying off debt should be consistent … until it's gone!
Eating an elephant is no small task. But persistence is IMPERATIVE when it comes to eliminating debt.

In addition, while you are on this quest — please don't get discouraged when other people post pictures or talk about living a debt-free life. Those people crossed their finish line. And good for them! It's an accomplishment worth celebrating. But you have YOUR race to run. And it might take a few extra months or years, but imagine the payoff. That's what I want for you, your friends and family.

Please reach out if you have any further questions on reducing debt. I'd love to help you take the first step. Everyone's story is different — everyone's story is important.

Warmly,

Andre Sugars
(310) 327-1985
Champion Tax Service 

 

Sugars’ Rules of Thumb for Life Insurance

Sugars’ Rules of Thumb for Life Insurance

Autumn is here, and in some parts of the country, apparently that already means snow…

Weather is a close second to "life" in terms of unpredictability.

So I think that means two things:

  1. You should always carry an umbrella.
  2. Your life insurance policy should be clear and up-to-date.

Today, we're going to focus on that second item and how life insurance is CRUCIAL for the good of your family and loved ones.

Think you're set in this area? That's great. But there are still some items to keep in check. Because remember: just like a tax return that hasn't been planned for (ahem), life is unpredictable and I want you prepared for what can happen.

Here's what I mean…

Sugars' Rules of Thumb for Life Insurance

"The future has a way of arriving unannounced." -George F. Will

I often get asked about what level of insurance my clients should carry, so I thought I'd put this to you to keep for reference, and hopefully act upon. Even if you have this thing down pat, feel free to send to someone else you know is in need of some help.

I'm happy to help think this through with clients, or really, anyone who needs some unbiased advice.

For Starters

If you have a spouse and/or kids, please secure life insurance AS SOON AS POSSIBLE. And even if you don't, paying for basic life insurance coverage is a solid budget item to get you in the habit of paying necessary insurance.

Term Life Insurance is the safest bet for starters. This policy will be in force for a certain number of years and will pay out a certain amount if you die during that term.

Note: Some people encourage policies that are versions of a Whole Life policy (a.k.a. universal life, indexed universal life, variable life, etc.). These can be great and, in some cases, very compelling tools. But they are not mandatory for your basic coverage.

The Amount

Now, let's break down what an average policy could look like.

In the breakdown, it's important to consider two primary factors:

  1. The term (length in years you are going to pay and be covered)
  2. The face amount (the amount the policy will pay when you get hit by the proverbial bus)

Let's first look at the amount…

  • Start at $50,000
  • Add enough (in round numbers, to the closest $10,000) to cover any consumer debt, student loans, and mortgage balances.
  • Add $500,000 for each kid you have under ten years old
  • Add $250,000 for each kid you have over ten years old.

The total amount is how much you should have in coverage. If you are married, this is the amount of coverage the spouse with the lower income should carry. The primary or larger income spouse should carry double this amount.

The Term

Next, you want to calculate a reasonable term for your policy.

  • If you have any kids under ten, use a 20-year term.
  • If you are under 40 years old, use a 20-year term.
  • If you are between 40 and 55, use a 15-year term.
  • If you are between 50 and 55, use a 10-year term.
  • If you are over 55, you need to contact a professional, as the rates get way more complicated.

Need a recommendation on which South bay professional to help you put together a policy? Reach out to me — I'd be happy to give you my input. (310) 327-1985

The Legal Documentation

To tack a bow on the life insurance conversation, I want to also address the importance of a will and/or trust.

I HIGHLY RECOMMEND reaching out to a local South bay lawyer soon who can help you file this basic legal documentation.

We will dive a little deeper into wills and trusts in the near future, but I leave you today thinking about the importance of life insurance and how it will eventually impact your friends and family. In the same way, make sure they know the importance of a policy and how it can benefit.

Because in the unpredictability of this roller-coaster life, the least we can do is help one another buckle up.

Warmly,

 

Andre Sugars

(310) 327-1985

Champion Tax Service

 

Champion Tax Service’s Guide to Estate Planning for Digital Assets

Champion Tax Service’s Guide to Estate Planning for Digital Assets

Technology has certainly shifted our society over the last 15 to 20 years — you can see it right here in the South bay area.

So much so, that it's time we discuss estate planning with a technological twist.

Before we get there though, may I offer you this important reminder: the only "magic" we can do on a tax return is a "reaction" to what is being done right now.

What I mean by that is that preparing a tax return is historical reporting. And yes, we're certainly better equipped to find every possible historical deduction than some Joe down the street or a piece of robotic software (however many CPAs might be "on call" to assist the robots) — but we can only respond to what has already occurred.

In other words, if you want to make changes to your tax situation with smart planning, give us a call ((310) 327-1985) or head over to the contact page to shoot me a message and let's talk. Let's get ahead of the game.

Otherwise, we're just cleaning up after the fact.

Now, all that aside, there are a few key pieces when forming an organized estate plan, but here are a few pointers when it comes to your personal, digital assets for the sake of future management and allocation.

Champion Tax Service's Guide to Estate Planning for Digital Assets

"A man who does not plan long ahead will find trouble at his door." -Confucius

This isn't particularly a "fun" topic, but again, this day and age calls for it. If you have a lot of important business and data online (most of us do) let's ensure that nothing is ever lost.

Define "Digital Asset"

Before we go any further, the following could be considered digital assets in your name:

  1. Emails
  2. Social Media Sites
  3. Blogs
  4. Financial Accounts
  5. Music Files
  6. Photographs
  7. Videos
  8. Customer Database
  9. Cryptocurrency

The list goes on, but these are a few common personal online assets.

Taking Inventory

Have you created a will? If so, estate planning for digital assets works similarly in theory.

And a huge component of the planning phase is to get your assets in order. The list provided is a great place to start. Are those items listed organized? Are they saved onto an external hard drive? Do you have them under certain files in your computer? ("The files are in the computer!")

Side: After compiling this list, it's important to decide if you want a fiduciary to disperse and allocate the information accordingly.

In addition to the items on our list, you should list out all of your passwords and security questions. But you probably shouldn't keep those in a Word Document or Google Doc. There are numerous password services that will keep those passwords safe for you. (Although most password managers cost a little cash, your privacy and safety are worth it in the end.)

As for social media, you do not need to leave login information for many social media accounts, according to their policies — simply the username and information for how to contact the company is sufficient. These "deceased user" policies are often buried deep in their "help" sections and can be hard to find.

Here is a list of policies we located for the major companies:

Google

https://support.google.com/accounts/answer/3036546?hl=en&ref_topic=2382809

Facebook

https://www.facebook.com/help/1506822589577997/

Twitter 

https://help.twitter.com/en/rules-and-policies/contact-twitter-about-a-deceased-family-members-account

LinkedIn

https://help.linkedin.com/app/answers/detail/a_id/2842/kw/deceased

Instagram

https://help.instagram.com/151636988358045/

Pinterest

https://help.pinterest.com/en/article/deactivate-or-close-your-account

Yahoo

https://help.yahoo.com/kb/yahoo-account/SLN2021.html

WordPress

https://en.support.wordpress.com/deceased-user/

Take a few moments and familiarize yourself with each site's policies that matter to you.

If you take the time now to record which social media sites you have accounts and what you would like to happen after your death, your family will not have to guess after the fact, try to remember where you had accounts, or try to figure out what you would have wanted. They will see your instructions and know what to do.

Make a Plan and Stick to It

After collecting and listing out your digital assets, it's up to you and the fiduciary to make a plan for the future. Execute this kind of plan within your will, and come to an agreement on asset alignment or destruction in the event of death or disability.

It's important to factor in the terms of use and agreement on your most important accounts (yep, those boxes you check and say you "read").

Winston Churchill once said, "Plans are of little importance, but planning is essential." And although we can't be certain the "plans" of our life, "planning" makes the uncertainty a little more bearable.

Need any help or clarification? Please reach out and give me a call. I'd love to walk you through some necessary, financially-sensitive steps in this information (and digital) age.

 

Warmly,

 

Andre Sugars

(310) 327-1985

Champion Tax Service

 

Andre Sugars’ Four Common Investment Mistakes

Andre Sugars’ Four Common Investment Mistakes

The stock market has caused some alarm as of late. Will investors wake up panicked or encouraged tomorrow? It's hard to say.

But one thing is clear: basing your peace of mind on market signals is no way to live.

That said, I'd love to see my South bay clients be wise about how they are approaching their savings and investment strategies. For some, it's a simple admonition: start investing.

And for others, it's avoiding certain common mistakes. Tolstoy once wrote: "Everyone thinks of changing the world, but no one thinks of changing himself."

Perhaps it's time that we take a look in the mirror — together — and make some changes that would help you better build for the future.

So today let's look at four mistakes you can avoid when it comes to stock market pitfalls.

Andre Sugars' Four Common Investment Mistakes

"Beware the investment activity that produces applause; the great moves are usually greeted by yawns." -Warren Buffett

Before I get to these mistakes, I must hasten to add: every person's situation is different. And without looking at the specifics of your financial picture, it's impossible to make the right recommendation. And some recommendations require specific licenses in order to make them. So, consider this a disclaimer: nothing in this article is intended to be a specific piece of investment advice for your situation.

That said, here are some common mistakes I've seen when people begin financial investments…

1. Eggs in One Basket

You know the expression, but have you divulged in its (tempting) strategy? To research one company and invest in them alone is a mistake. Plain and simple. Especially if you think "but they're doing great lately" is a good enough reason to invest.

This is where diversification (and sectors and asset classes) comes into play, and it's vital to your wealth. The kind of investing you should pursue is another topic for another day.

But for now, please avoid the "all in on one approach". Fretting over which individual stock to buy will only cause stress and limit your chance of investing success.

2. Playing the Compare Game

It's been said to "never count another man's money". And the same goes with investing.

Yes, you can have mentors in this area, but this is ultimately YOUR money and YOUR investment. Stocks are so nuanced (especially when you get into international investments) that comparing your investments to other "seemingly successful" moves is not wise for your own strategy or psyche.

3. You're Too Patient

Waiting for the right time to invest isn't a problem at the beginning … but it does become a problem the longer you wait.

Although the market is volatile, many fret over when to buy or sell. As a result, many sell off their investments when the market is trending downward. But many also end up regretting that decision when the market inevitably rises again.

The key: it's not the time you choose to enter the market — it's the amount of time you're willing to stay in.

4. Neglect

Don't get 20 years down the line only to wonder, "What if I had started investing 20 years ago?" It's one of the reasons investing in something like a 401(k) is so important now. It will only grow with time — which means patience on your part!

If you've never explored various investment strategies, perhaps now is the time to consult somebody who can come alongside you, with wisdom. I would hate for you to just not invest because you don't understand some basic principles of investing. There are many South bay people who would love to help you.

I am definitely one of those people in your corner. Let me know if I can help in any way.

Warmly,

 

Andre Sugars

(310) 327-1985

Champion Tax Service

 

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