Tag Archives: budget

School News Network: Reality 101

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Senior Morgan Arnold worked to balance her budget on a lawyer’s income. (School News Network)

By Erin Albanese
School News Network

Senior Kuwann Crawford wasn’t looking to live an extravagant lifestyle on his firefighter’s salary, but he found himself feeling flummoxed when discovering that being able to pay the bills meant living with his parents.

“This is very stressful,” he said, looking for ways to cover the cost of housing, transportation, food, furniture, technology and clothes, before even thinking about having anything left for entertainment or charity.

Kuwann was participating in a simulated budgeting session using an app called Bite of Reality 2 in East Kentwood High School teacher Amy Broekhuizen’s personal finance course.

Junior Breona Goldman considers housing options. (School News Network)

His challenge: create a budget on an income of $1,864 a month (the amount left after deductions from a $2,500 monthly income). He and his classmates chose professions with varying salaries and visited 10 stations with options for how to spend their money. An Audi Q7? A used Ford Focus? Restaurants every night? Cooking at Home? High-tech electronics? A modest Internet package?

Kuwann at first chose to live in a studio apartment for $640 month, drive a used Honda Civic for $459 per month in total transportation costs, and eat at home for $360 a month. He soon found he couldn’t stretch his income to pay for everything else.

“I’m in debt!” he said, after figuring in clothing costs. “I feel like I’m seeing how hard it is to be an adult and realizing all these responsibilities.”

Kuwann circled through the stations twice, begrudgingly agreeing to live with his parents and switch to a used Ford Focus to cut costs. “Figuring out how to manage the money is stressing me out.”

After more finagling, he ended up with $109 at the end of the month, 30 percent of which he put into savings and 70 percent toward the credit card debt the game had assigned him.

Senior Chase Montague found out he needed a ‘side hustle’ to make ends meet. Senior Kuwann Crawford had to readjust his budget several times. (School News Network)

Lessons In Money Management

Ben Harman, a relationship development manager with Arbor Financial Credit Union, offered the simulation as a cornerstone of several sessions he’s led in the class on financial literacy. He said many students don’t know how to buy a car or even what a credit report is, and East Kentwood is unique in offering a personal finance class. The Kalamazoo-based credit union has partnered with other high schools as well.

“The reason it’s important to reach these young people is they haven’t really had a chance to make a ruckus of their credit reports or bank accounts; they probably don’t have many bills,” he said, adding that if he can protect one of them from being taken advantage of losing money he considers himself successful.

East Kentwood’s semester-long personal finance class can be taken as an elective or for a math credit. Topics include taxes, checking and savings, credit cards, loans, credit reports, investing, insurance and budgeting.

Senior Kuwann Crawford works to balance his budget. (School News Network)

“The big takeaway is for them to really understand that a lot of the financial decisions they make now are ones that need to be continued throughout life,” Broekhuizen said. “They don’t have to have that instant gratification of buying it now and getting into debt… You need to get into the habit of saving so you can make those large purchases without going into debt.”

During the simulation, senior Morgan Arnold had a bit more money to work with than Kuwann, with her $4,100 lawyer’s take-home income. She had the most left over  in the class — $1,400 — at the end of the month. “You don’t need to buy a new car to have a nice car,” was one of her tips. “Prioritizing is the biggest thing.”

Senior Chase Montague, however, learned he would need to take on a “side hustle” blogging to live on his journalist’s salary, $1,700 a month after deductions, wasn’t cutting it. 

Senior Deivi Martinez also struggled, deciding against becoming an actor after trying to cover expenses on a $2,100-a-month income.  “I couldn’t afford a nice car and a decent apartment,” he said. Instead, he wants to be an electrician.

For more stories on local schools, visit the School News Network website, schoolnewsnetwork.org.

Are you behind on property tax or mortgage payments?

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By Brenda Long, Michigan State University Extension

Some homeowners are still having financial difficulties even though the foreclosure rate in Michigan has significantly declined in recent years with the economy and employment rates improving. All it can take is one large unexpected expense, unemployment or life change. Fortunately, nearly $19 million in funds are still available for eligible delinquent homeowners to get caught up and keep their home.

Bill Hendrian and I have written previous articles about Michigan’s Hardest Hit Fund program, also known as Step Forward Michigan. This federally funded loan program started in 2010 and is designed to help eligible homeowners who are struggling with their mortgage, condo association fees, and/or property taxes to retain ownership of their primary residence. As of September 2018, nearly 37,000 Michigan households in all 83 counties received more than $39 million in assistance, according to MSHDA.

Currently, this is the only statewide assistance program to get caught up on delinquent property taxes. If homeowners are behind three years, on 2016 taxes, they have started receiving notices from their county treasurers about facing foreclosure if those 2016 taxes are not paid by Mar. 31, 2019. Last year, my experience was that homeowners needed to apply to Step Forward Michigan by January to allow for processing time. Situations are reviewed on a case-by-case basis. Most homeowners who procrastinated or did not apply until February or March were not approved in time for this assistance earlier this year. The lesson learned was to apply this fall if you are facing foreclosure with delinquent 2016 property taxes.

Watch a short video for guidance about the Step Forward Michigan application process. The online application can be completed in three ways:

  • Go to the Step Forward Michigan website and complete the application yourself plus email, fax or mail the signed application and supporting documents to Step Forward Michigan.
  • Call Step Forward Michigan at 866-946-7432 to apply by phone.
  • Michigan State University Extension Housing Counselors or other local housing counselors can help homeowners fill out the online application, submit all the required documents, and follow-up until a decision is made. During the past eight years, thousands of Michigan homeowners who worked with our counselors have received assistance to save their homes from foreclosure.

If approved, up to $30,000 is paid directly to the participating mortgage servicer or county treasurer for application directly to the household’s mortgage loan or property taxes. No interest and no payments are required from the homeowner. As cases are reviewed, a lien is placed on the property for five years and 20 percent of the loan is forgiven per year. At the end of the five years, the loan is forgiven. During the five-year period, if the property is transferred, sold, or is no longer the principal residence, the non-forgivable portion is due.

For further information or to see if you qualify for assistance you can go to Step Forward Michigan for a list of frequently asked questions and access an online application and a list of documents that are required to submit an application.

If you do not qualify for Step Forward Michigan, helpful resources are provided to consider other options available.

Facing foreclosure is a difficult financial situation for homeowners. Fortunately many are getting back on track to become current with their payments and keep their homes and stay living in their communities. Find fact sheets and more information about mortgage and property tax foreclosure at MIMoneyHealth.org.

This article was published by Michigan State University Extension. For more information, visit http://www.msue.msu.edu. To have a digest of information delivered straight to your email inbox, visit http://www.msue.msu.edu/newsletters. To contact an expert in your area, visit http://expert.msue.msu.edu, or call 888-MSUE4MI (888-678-3464).

Getting Married? 8 Tips for Newlyweds on Combining Finances

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By Brenda Long, Michigan State University Extension

 

Getting married? 83 percent of couples fight about money, according to Debt Reduction Services. Making household finances work is one way newlyweds can help make their marriage work.  Both should agree on how to coordinate household accounts and debt by having constructive conversations. Even though this is not the most romantic topic, it will contribute to a happier marriage.

 

Once the honeymoon is over, focus some attention on your shared financial lives. The Building MI Financial Future Financial Toolkit from the Michigan Department of Insurance and Financial Services offers these tips:

  • Request a free copy of your credit reports at annualcreditreport.com. This information tells you about your use, management and payment history of loans and financial obligations. You might also get credit score estimates from FICO. Then you can objectively analyze the strengths and any weaknesses in the reports, including high debt amounts or discipline about making timely payments.
  • List all sources of income and expenses. Using all pay stubs, account statements, monthly bills and debt obligations, disclose everything financial to each other. Then you can make a monthly spending plan for handling monthly expenses and establish a debt prevention and/or elimination plan.
  • Open a joint checking account to pay for household expenses. Pay for all marriage-related bills, including housing, food, necessary clothing, vacation, transportation, cell phones, etc. If neither of you had credit-related problems, both names can be on the account. If one person has poor credit, you may choose to have your account in only one name. Consider automating your household bills payments, plus setting up separate accounts for each of your savings goals.
  • Decide who is going to pay for what.
    • Option 1: Combine incomes and consider all expenses and debts as one.
    • Option 2: Assign certain payments to one or the other. This might depend on who had loan obligations prior to the marriage.
    • Option 3: Pay ongoing expenses based on the percentage of income contributed.
  • Discuss the relationship each of you has with money. Is one of you a saver and one a spender? Talk about the potential consequences and agree on a workable solution.
  • Consider opening a savings account for an “emergency or rainy day fund”. Unplanned emergencies happen.  As a couple, you should have a goal about how much is enough for unexpected expenses or emergencies. In addition, the recommendation is to set aside several months of earned income to prepare for an unplanned loss of future income. Decide together on a monthly amount to save which fits into your budget and is sustainable.
    • Tip: While many couples choose to pursue a joint checking account, this method may not work for all couples. Whether you have a joint account or separate accounts to pay household expenses, the key is to communicate, have a bill payment plan, and pay bills on time.
  • Update your beneficiaries. Check any employer-sponsored retirement plan, IRAs, annuities, and life insurance policies to update the beneficiary information.
  • Take care of your future selves now. Contribute to your employer-sponsored retirement plan and/or IRA. The recommendation is 15 percent of your combined gross pay or the maximum amount allowed by the IRS. This is a great time to talk about your retirement goals that will require financial planning and strategies.  Further, decide on a homeownership plan including thinking about if, where and when to buy a home and its cost. Discuss any education and professional training plans.

The first year of marriage typically includes many lifestyle adjustments. Setting goals and planning to save are best practices to help make your financial hopes and dreams come true. Having a spending plan shows your sense of control and willingness to set aside now for the future.  Discussing and agreeing on financial adjustments should make your financial lives go smoother. Financial planning takes time, patience, and discipline.  Find more information about spending plans, reasons for and ways to save, credit and debt, homeownership, and many other topics at MIMoneyHealth.org.

 

This article was published by Michigan State University Extension. For more information, visit http://www.msue.msu.edu. To have a digest of information delivered straight to your email inbox, visit http://bit.ly/MSUENews. To contact an expert in your area, visit http://expert.msue.msu.edu, or call 888-MSUE4MI (888-678-3464).

No local millage increase with Wyoming’s 2017 budget

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cityhallBy Joanne Bailey-Boorsma
joanne@wktv.org

 

Through planning and controlling costs over the past several years, the City of Wyoming had good news with its 2017 budget: the city is recovering from the economic downturn the state experienced about six years ago.

 

The City of Wyoming, like many Michigan municipalities, faced challenging times when the housing market decline that caused the city’s taxable value to drop. Coupled with the fact that the State of Michigan has diverted state money away from Michigan municipalities since 2002 – about a $2 million lost annually for the City of Wyoming – city officials have worked to provide the same level of services to its residents with less income.

 

And the city has succeed in doing just that, according to City Manager Curtis Holt. The 2017 budget is about $105.4 million, a 4.7 percent increase over last year with no scheduled increases in the local millage and sewer and water rates. In fact, the city’s millage will remain the same as it has been for the past two years at 11.9073 mills.

 

“Compared to similar cities we maintain a very low cost per capita for the services we provide,” City Manager Curtis Holt said. “The leaning of the organization hasn’t stopped service delivery, though. We’re committed to investing in technology and training to continue to provide better service and greater value while ensuring the safety of residents and city employees. This year’s budget reflects our work to maximize every tax dollar we receive.”  

 

In fact, staffing levels have decreased from 2006’s 402 to 345.5, but this does include the addition of five and half new positions to the city including a part-time firefighter program introduced in 2016, which continues to provide significant overtime cost savings, while improving response times and firefighter coverage.

 

Other positive factors impacting the city’s 2017 budget include the state’s 17 percent increase in road funding which will allow the city to spend down some of its reserves in its street funds; the relocation of the Wyoming’s public safety dispatch operations and the refinancing of two water bonds and the anticipated payoff of one water bond.

 

Residents will see an increase in property tax of about 1.97 percent, which is actually less than the 5.6 percent assessed value. The reason for this is that in 1994, Michigan voters approved Proposal A, which is designed to limit the growth in property taxes by the Consumer Price Index (CPI) until ownership in the property is transferred. The CPI is a statistic calculated by the State of Michigan that tracks the cost of living in Michigan.

 

Most property taxes are based on a capped value multiplied by the CPI or 5 percent, whichever is lower which has crimped how quickly Michigan municipalities such as Wyoming can recoup from when property values dropped in 2009. In fact, even with the slight property tax increase, making the city’s taxable value around $2.35 billion, the city’s overall taxable value is still about $338 million below the highs of 2009, when the housing market crashed. This represents a lost of about $1.6 million in revenues to the city, said Deputy Finance Director Rosa Ooms as she presented the council the 2017 budget at a meeting last month.

 

The lost of taxable value also has hit Wyoming’s Downtown Development Authority, whose budget was also approved by the council in May. While the council has adjusted the amount the DDA can capture, the current funding has limited what the authority has been able to do, Holt said.

 

Despite the fact that the city probably will not see its taxable values return to the levels of 2009 for about another 14 years, Wyoming residents will see several improvement projects taking place in the upcoming year such as work at several of the city parks including Palmer, Kelloggsville, Lemery and Pinery along with improvements at the Wyoming Senior Center, the reconstruction and widening of 56th Street from Ivanrest Avenue to Byron Center Avenue and upgrades to the Kent District Library Wyoming branch.

 

Mayor Jack Poll cited the City’s tradition of maintaining its fiscal stability and commended Holt for his work and commitment to balancing the budget. “Our city runs extremely efficiently thanks to the good work done by the city manager and our city employees,” Poll said. “They serve our community admirably while working to maintain a healthy and sustainable financial position.”  

 

For further information, call the City of Wyoming at 530-7272 or click here.