Alpha Financial - Justin Klassen

03/16/2021

Thank you all for your love and support. March is the last month of business. It’s been a long deliberated process but we will be closing our doors. Thank you to all our clients and we hope everyone here has learned a thing or two. I wish you all the best in your financial future.

01/27/2021

The importance of you in your household. What happens if your household loses you?

Https://www.alphafinancialpros.com/lioptions

01/26/2021

7 common bank fees explained!

If you’ve ever felt like your bank charged you for something and you didn’t see it coming, this list is for you. Here’s a rundown of seven of the most common fees banks charge—and tips to avoid them.

1. Account maintenance and minimum balance

Many banks charge fees for maintaining checking or savings accounts.

How much? $5 to $25 per month—accounts with more bells and whistles, like rewards accounts, may charge more.

Can you avoid it? Banks often waive their fee if you keep a minimum amount in your account or meet other requirements such as linking checking and savings accounts. Some banks may require a minimum balance and may charge a fee if you drop below it.

2. ATM

Using ATMs that aren’t affiliated with your bank can lead to charges from the ATM provider and your bank.

How much? For a single transaction, you could pay as much as $4 to the ATM provider and $4 to your bank.

Can you avoid it? Many banks offer apps that tell you where to find a fee-free ATM. Or you could withdraw cash in advance when you’re near your bank’s ATM.

3. Overdraft

Overdraft coverage or protection allows purchases to go through—for a fee—even if you don’t have enough funds in your checking account.

How much? About $35, if you’ve signed up for your bank’s overdraft coverage. Your bank may also offer overdraft protection, in which money comes from a linked savings account, credit card, second checking account or line of credit to cover overdrafts. Often this fee is lower than an overdraft coverage fee.

Can you avoid it? Try low-balance alerts to prevent overdrafting.

4. Insufficient funds

When you make a purchase or other transaction that is more than the amount in your checking or savings account, and you haven’t opted into an overdraft program, the bank may decline the charge or return it unpaid.

How much? An insufficient funds or returned-item fee could be $35. Your payee may charge you a fee as well.

Can you avoid it? Try low-balance alerts to notify you when your account is low.

5. Excess transactions

Many banks cap the number of monthly withdrawals you can make from some accounts—usually savings or money market accounts. After a certain number, your bank may charge you.

How much? From $3 to $25 per transaction—the amount may increase with additional transactions.

Can you avoid it? Don’t use your savings account for everyday withdrawals and bill pay—use a checking account instead.

6. Wire transfer

A wire transfer can be the best way to send money fast. However, banks often charge for this service.

How much? It’s not uncommon to pay $20 or more for domestic transfers and $35 or more to send money abroad.

Can you avoid it? For some official transactions, like a loan payoff, a wire may be your best option. If not, try other methods for transfers, using online banking or a person-to-person transfer via your bank’s app.

7. Account closing

Some banks require that you keep your account open for a certain period or face an early-account-closure fee.

How much? Up to $25.

Can you avoid it? Typically you need to keep your account open for 90 to 180 days before closing it to avoid the fee.

Source: https://bettermoneyhabits.bankofamerica.com/en/personal-banking/avoid-bank-fees

01/19/2021

You can get out of debt on your own!

From article: “I paid off $80,000 in credit card debt in about 3 years. It's not easy, but these rules helped me do it”

I think it is fair to say there are a few requirements to permanently ridding yourself of consumer debt.

You must confront your debt by calculating your debt ratio.

Permanently change the behaviors that got you into debt.

You must make enough money to repay the debt.

1. Confront it: How much debt do you have?
Credit cards. Student loans. Auto loans. And anything else. For now, we’ll leave your mortgage out of it.

That’s your number.

Your debt to income ratio

This is a commonly used figure that puts your debt into perspective relative to how much money you earn.

A debt-to-income ratio (DTI) is often calculated different ways. For example, when you apply for a mortgage, the banks calculate your DTI as the percentage of monthly debt payments of your monthly income.


Example 1: You earn $50,000 a year and have $25,000 in debt. Your Debt Ratio = 0.5.

Example 2: You earn $100,000 and have $250,000 in debt. Your Debt Ratio = 2.5.


2. Change the behaviors that got you into debt

Getting out of debt begins by eliminating the reasons you went into debt in the first place. Even winning the lottery won’t solve your problem if you never learn how to spend less than you have.

People get into debt for different reasons. School, job loss, medical bills, or, if you’re like me, stupidity. But why you got into debt doesn’t really matter. What matters is that you don’t let it happen again! Here’s what not to do.

3. Earn enough to get out of debt

If you want to get out of debt by yourself, you need to earn enough money to survive AND enough money to pay down your debts.

Put another way: You need to go from a situation in which you’re spending more than you earn into one where you’re earning more than you spend. And the faster you want to become debt-free, the more you have to earn above and beyond what you spend.

01/12/2021

The number of Americans who have developed and apply a budget is alarmingly low.

One poll puts the number at 32%. That equates to tens of millions of Americans who don’t have a budget. Yikes!

Know Your Balance Sheet:

Companies maintain and review their “balance sheets” regularly. Balance sheets show assets, liabilities, and equity. Business owners probably would not be able run their companies successfully for exceptionally long without knowing this information and tracking it over time.

Pro tip: Why is this important to know? If you are deciding to move to a new house, you need to know how much money will be left over from the sale for the new place. Make sure to speak with a representative of your mortgage company and your realtor to get an idea of how much you might have to put towards the new house from the sale of the old one.

Break Everything Down:

To become efficient at managing your cash flow, start by breaking your spending down into categories. The level of granularity and detail you want to track is up to you. (Note: If you are just starting out budgeting, do not get too caught up in the details. For example, for the “Food” category of your budget, you might want to only concern yourself with your total expense for food, not how much you are spending on macaroni and cheese vs. spaghetti.)

01/06/2021

01/05/2021

Does your budget have more holes than Swiss cheese?

Subscriptions and online services – Many of us have subscriptions for software packages or online services. Remember that deal they offered if you paid for a whole year at once? At renewal time, they may charge you for another year unless you cancel.

Memberships – Gym memberships or dues for clubs may be quarterly or annual charges as well, so they might be missed when building your budget.

Protection plans – From credit monitoring to termite protection plans, there are lots of chances to miss an annual or quarterly expense in this category.

Automatic contributions – Many charities now offer automatic contributions. These can be easy to miss when budgeting.

Things you forgot to cancel – Free trials (that require your payment info) won’t be free forever. It’s easy to miss these as well.

Bank fees – Budgeting mishaps can lead to bank fees if your balance dips. Yet another potential surprise.

Automatic deposits – Saving for your future is a great move. Just be sure to know how much is going to be withdrawn and when, so your budget doesn’t feel the pinch.

Oftentimes, when people first make the commitment to create a budget and stick to it, it can be discouraging if it doesn’t seem to be working as expected right away. Try to keep in mind that your budget is a work in progress that will evolve over time. It probably won’t be perfect from the get-go.

01/04/2021

Well, a few billion things probably separate you and me from Bill Gates, but he has a habit that may have contributed to his success in a big way: Bill Gates is a voracious reader.

He reads about 50 books per year. His reason why: “Reading is still the main way that I both learn new things and test my understanding.”

On his blog gatesnotes, Gates recommended Hillbilly Elegy by J.D. Vance, the personal story of a man who worked his way out of poverty in Appalachian Ohio and Kentucky into Yale Law School – and casts a light on the cultural divide in our nation. Gates wrote,

Melinda and I have been working for several years to learn more about how Americans move up from the lowest rungs of the economic ladder (what experts call mobility from poverty). Even though Hillbilly Elegy doesn’t use a lot of data, I came away with new insights into the multifaceted cultural and family dynamics that contribute to poverty.

We all have stories about our unique financial situations and dreams of where we want to go. And none of us want money – or lack thereof – to hold us back.

What things, ideas, or deeply-ingrained habits might be keeping you in the financial situation you’re in? And what can you do to get past them? I have plenty of ideas and strategies that have the potential to make big changes for you.

01/01/2021

Do you know how much Life Insurance YOU need?

General rule of thumb on this topic are all around. For instance, one “rule” states that the death benefit payout of your life insurance policy should be equal to 7-10 times the amount of your annual income. But this amount alone may not account for other needs your family might face if you suddenly weren’t around anymore…
Paying off any debt you had accrued
Settling final expenses
Continuing mortgage payments (or surprise upkeep costs)
Financing a college education for your kids
Helping a spouse continue on their road to retirement
And these are just a few of the pain points that your family might face without you.

So beyond a baseline of funds necessary for your family to continue with a bit of financial security, how much life insurance you require will be up to you and what your current circumstances allow.
If you’ve had enough of a guesswork, reactionary approach to how you’ll provide for your loved ones in case of an unexpected tragedy, give me a call. We’ll work together to tailor your policy to your needs!

12/29/2020

You might not be aware of this, but during the life insurance underwriting process, the underwriter takes everything on your Motor Vehicle Report (MVR) into account.

Accident reports

Traffic citations

DUI convictions

Vehicular crimes

Driving record points

Just like looking at your health history, occupation, and personal hobbies, an underwriter will examine your driving record as a factor in determining how risky you will be to insure. Even some violations that you might consider to be minor can have drastic consequences for your life insurance application. Any indication of reckless or risky behavior can be a red flag to an underwriter. The more negative activity on your driving record, the worse your insurance classification will be. (And the higher your life insurance rate will likely be.)

Another thing to keep in mind: time plays an important role for your driving history.

Depending on your state, an MVR can feature violations that are 5-7 years old. Some violations will seat you in a lower classification for anywhere from 3-5 years after the fact. So if you’ve changed your ways (and made a personal pledge never to hit that snooze button and speed into the office parking lot again), some insurance companies may take that into account. But finding which one will give the most grace as time passes is key to a potentially lower life insurance rate.

12/28/2020

A full third of Americans believe that winning the lottery is the only way they can retire.

What? Playing a game of chance is the only way they can retire? Do you ever wonder if winning a game – where your odds are 1 in 175,000,000 – is the only way you’ll get to make Hawaiian shirts and flip-flops your everyday uniform?

Bad Idea #1: I shouldn’t save for retirement until I’m debt free. False! Even as you’re working to get out from under debt, it’s important to continue saving for your retirement.

Bad Idea #2: It’s fine to wait until you’re older to save. The truth is, the earlier you start saving, the better. Even 10 years can make a huge difference.

Bad Idea #3: I don’t need life insurance. Negative! Financing a well-tailored life insurance policy is an important part of your financial strategy.

Bad Idea #4: I don’t need an emergency fund. Yes you do! An emergency fund is necessary now and after you retire.

Are you taking a gamble on your retirement with any of these bad ideas?