The Allstate Blog » Brendan

Parents: Help Your New Grad Manage That Graduation Gift Money

Brendan — Fri, 14 Jun 2013 16:59:00 +0000

Finally, it's official: After years of studying, sacrificing and possibly incurring student debt, your kid has (finally!) graduated from college. In honor of this milestone, you've organized a party for your new grad. Most of the presents are graduation gift money with the exception of the gift from his new favorite relative, who couldn't make the get-together. He sends a card along saying as an alternative to money, he’s going to pay your kid's cable bill for the next year. As a parent, what advice should you give to your new graduate for what to do with all this money? Chances are, after four years of higher education, your child wants to reward him or herself by purchasing something special. However, it's wise not to spend it all on one luxury item. While there's nothing wrong with a reward, say a new TV, a computer or a vacation, why not take some of the money and put it to work for the future? Here are some tips you can pass along for saving money and making investments: Pay Off Debt It's no secret that a college diploma is expensive. Two-thirds of graduates take out loans, with the average American student's debt topping more than $23,000. Using graduation money to pay off some portion of college loans or credit card debts may be the smartest way for a new grad to celebrate their newfound independence. Secure Transportation They’re probably not going to buy a house fresh out of college, but investing in and maintaining a reliable vehicle is a possibility. Although public transportation is an option in some major metropolitan areas, still nearly 80 percent of Americans drive to work. If your graduate puts money aside to buy a car or keep it in good working shape, then they could be making an investment with huge dividends if they do secure a job requiring a car to commute to work. Save for the Future If investing graduation money is an option, your son or daughter will need to have a financial plan in mind. In other words, you should help them do some research before making a decision that could tie up their money or cause them to lose a good percentage of it to penalties or depreciation. There are numerous investment ideas to choose from. Traditional forms of savings, such as Treasury Bonds and Individual Retirement Accounts (IRAs), may not give them the yield or freedom to access their money that they’d like. And blindly investing in the stock market can be a dangerous game if you (or they) don’t know what they’re doing.

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While opening a mutual fund with an investment company used to require an initial investment of several thousand dollars, today several fund companies in pursuit of younger investors have decreased their initial investment minimum to $1,000. Don’t be afraid to ask for financial advice from a bank or employer if it's offered. Listen to the professionals and then help your son or daughter decide how they want to save. Retirement Plans Chances are, they’ve just finished up classes and have only recently begun interviewing for their first big job, so a retirement plan is probably the farthest thing from their mind. However, it's never too early to start planning. According to Gallup's Annual Economy and Personal Finance survey, workers in the 1990s expected to retire at 60. Today, most workers don't expect to retire until they're 67. If your new grad wants to retire at any age, they're going to need a retirement plan they can count on. Once they’ve landed a job, they should consider putting some of their salary—and even graduation money—into an employer sponsored 401(k), or open their own IRA. Though retirement may seem like a distant dream, help them talk to their (your) tax preparer to find out how much sense it makes to begin putting some pre-tax money aside. You’ll both be one step closer to the golf green of your retirement dreams. How your fully-grown children use, save or invest graduation money can have a positive impact on post-college life. Whether it's paying off student loans, saving for a car or opening a mutual fund, help your son or daughter choose the option with a payoff that fits their foreseeable future.

Renters: Why You Need a Home Inventory [INFOGRAPHIC]

Brendan — Fri, 31 May 2013 08:00:55 +0000

Renters of both apartments and homes have similar concerns regarding safety, security and protecting their stuff. Some disasters can be prevented; others can seem inevitable. Either way, a home inventory can offer all types of renters peace of mind. Our infographic below illustrates some of the benefits and concerns of the renters who participated in our Home Inventory survey. [infographic]

Prepare Your Boat for the Water

Brendan — Thu, 23 May 2013 11:00:22 +0000

Whether you have a small bass boat, a 20-foot day sailor or a comfy cabin cruiser, when summer rolls around and it’s time to get the boat back on the water, you’re going to want to be sure it’s ready to go. Nobody wants a sputtering engine or a dead battery on that first day in the water. To ensure that everything is smooth sailing when you decide to take your craft out of storage, proper boat maintenance is in order. Visual Inspection: If your boat is out of the water, check the hull for any cracks, punctures or holes and get them repaired immediately. A leak in the hull can ruin an afternoon fishing trip faster than a bout of seasickness. Mr. Clean: Wash your boat regularly. If you’re boating in saltwater, then washing after each use is especially important because you want to protect the boat’s finish from the saltwater residue. A boat with a clean hull is going to be more fuel-efficient than a boat that is coated with algae and other sea impurities. Wax On, Wax Off: If you own a fiberglass boat, then the Department of Ecology also suggests that you wax it at least once a year. Waxing will prevent surface dirt buildup and make the boat easier to clean and rinse after using. In many respects, regular boat maintenance is a lot like car maintenance. You’re going to want to check and change the oil, replace the spark plugs, and replace any cracked or damaged hoses. All filters and belts should be checked as well. Safety Precautions: Although some of the upkeep does involve making sure the boat is in good working order, maintaining a boat isn't just about tuning up the engine. It's also about making sure the vessel is equipped with the proper safety gear. According to the U.S. Coast Guard’s Boating Safety Division, operator errors account for 70 percent of boating accidents. In other words, if you’re a novice boater or simply don’t feel completely comfortable behind the wheel, take a boating course. Furthermore, as the operator of the boat, you’re responsible for making sure your vessel has enough life jackets for everyone on board and that all children are wearing them when required. State regulations vary regarding age a situations when children must wear a life jacket, so consult your local governing body for accurate information. You can also check the Reference Guide for Boating Laws for requirements by state for age and type of life jacket required for young passengers. The U.S. Coast Guard stresses the fact that carbon monoxide can hurt or kill you both inside and outside the boat. Blocked exhaust outlets, inadequately ventilated enclosures and even exhaust from other boats can all be potentially dangerous. It’s not only important to know which areas of the boat present a risk, but it's also important to know the symptoms of carbon monoxide poisoning and what you should do if anyone on board is suffering from it. A tranquil day on the water begins with proper boat maintenance and the right safety precautions. However, on a warm summer day there will be other boaters on the water besides you, so having the right insurance coverage is good way to protect your boat (and those aboard it) from the unexpected.

Storm Shelter? Safe Room? Build Your Own Ultimate Secure Shelter [INFOGRAPHIC]

Brendan — Wed, 22 May 2013 17:30:37 +0000

Safety is a significant issue for every homeowner and eliminating unsafe situations inside the home should be a top priority. Proper installation and usage of electrical and gas lines, carbon dioxide and fire alarms, and window and door locks are all important for day-to-day home safety. But what about extreme conditions? Tornadoes, hurricanes, blizzards and even home invasion are all examples of severe situations in which families may benefit from a safe room. What is a safe room? Simply put, a safe room is a secure, reinforced, well-stocked room where individuals can go to avoid the risks and potential dangers that may arise in other parts of a home. But how do you create a safe room in your house? Our infographic provides some ideas: [infographic]

Fuel Your Grill with Man Power [VIDEO]

Brendan — Wed, 22 May 2013 17:15:34 +0000

In Episode 5 of our web series The UnReal Adventures of Ted and Traci, our heroes are enjoying the warm summer weather. Ted fires up his gas grill for a nice outdoor meal, but only after he’s “improved” it. It turns out, jet fuel doesn’t make for great steaks, but Ted's mistake helps illustrate some basics of grill safety. Check out all episodes of this web series (new episodes added weekly): Trailer - The UnReal Adventures of Ted & Traci Episode 1 - Om on the Road Episode 2 - Up in Smoke Episode 3 - Supercharged Episode 4 – Stranded Episode 6 - Staycation Transcript: ‘Grillmeister 7000' Ted: I can’t believe the neighbors got a Grillmeister 7000—that thing costs more than our car. But don’t be jealous, Traci: I’ve been working on something even better. Ted: I made just a few adjustments to our old grill… Now it runs on manpower!! Traci: Manpower, huh? Then what’s in the tank? Ted: Just a little something I like to call JET FUEL! YEAH! Let’s get this baby fired up! Ted: Hurry up, babe! Go get the steaks! Traci: So… Wanna order a pizza? Voiceover: Don’t add fuel to the fire. Connect with me on Google+ or follow me on Twitter

King of the Grill: Serving Up Grill Safety [INFOGRAPHIC]

Brendan — Wed, 22 May 2013 17:00:34 +0000

Throughout the United States, Memorial Day signifies the start of summer. This federal holiday is observed annually to honor American soldiers who gave their lives in defense of this country. One of the grand traditions associated with Memorial Day weekend is cooking food on an outdoor grill, enjoying the weather and spending time with friends and family. Grilling and barbecue can be fun and tasty, but certain safety precautions are a must. The infographic below provides some general grill safety information, grilling tips and common pitfalls to avoid to help ensure a safe holiday weekend. [infographic]

Market Madness [part 2]: Handling the Hassle of an Open House

Brendan — Tue, 21 May 2013 11:00:02 +0000

Last year, my wife and I put our home up for sale. It was our “five-year house” and we were in year 11, with two growing boys and a dog crammed into a home the size of an average two-bedroom apartment. In part 1 of this series, I detailed how we took our first steps in selling our house. The next step was actually showing the house. While we were lucky that most of our showings occurred in good weather during the summer, it was still a tedious process. First, our agent booked showings as soon as our listing hit the Multiple Listing Service and various real estate agent websites. She told us that we should expect a lot of activity and interest within the first two weeks, and then it dissipates from there, with most of the activity essentially expiring after the sixth week. And boy, was she right. We had a flurry of showings the first week, seriously testing our ability to keep our home in "showable condition" with a house full of active boys and an excitable dog. One of the keys to success was the decluttering we initially did, effectively removing most of the non-essentials that often make up the normal mess. The other was the 12-hour prior notification rule we established with our agent. That gave us just enough time to prepare our house -- and our dog -- for guests. One positive from this whole situation is that while we were cleaning and decluttering, it gave us a great opportunity to create a home inventory of all our stuff, which will be helpful when we update our insurance in our new home. Individual showings were fine, as we’d make sure to leave the house for 30 minutes or so, giving the potential buyers enough time to look around. But the next step was a bit more difficult: The Open House.

Open House

Our first open house was planned for the second weekend our home was on the market. But more to the point, we ended up doing five or six open houses during our extended time on the market…that’s where the good fortune of nice weather played an important role. While leaving your home for two to four hours during an open house is a minor inconvenience, doing it a half-dozen times with two kids and a dog during a busy summer full of sports and activities can be disruptive, to say the least. It’s a situation many home sellers may run into, and while going to a kid-friendly restaurant or birthday party center isn’t an option with a dog in tow, we came up with a great solution: On most "open house afternoons," we took the whole family to the local forest preserve park and enjoyed some quality family time in the great outdoors. On rainy days, we kept the dog at home in a secure pet carrier, and took the kids to local museums. Making the best of what can be a difficult aspect of the selling process can help your family handle an extended selling cycle. I can say with confidence that putting a little thought into the time we needed to be away from home during open houses made all the difference in both our morale and our ability to work through a longer-than-expected selling cycle.

Check out parts 3 and 4 of Market Madness in coming weeks for more insight into selling your home.

Financial Protection When You’re Between Jobs

Brendan — Thu, 16 May 2013 11:00:03 +0000

When you’re between jobs—whether due to a layoff or a decision to leave—you may have special financial challenges to consider. Your income is likely less than it was while you were working, but that doesn’t have to mean derailing your retirement goals or foregoing insurance. There are some strategies that can help you keep your retirement savings and insurance coverage working for you, even when you’re not. Retirement Savings When you leave a job (voluntarily or otherwise), you typically have a few options for the 401(k) at your old employer. If the employer allows it, you can leave the funds where they are. Another option is to roll over your 401(k) into an Individual Retirement Account (IRA) so that the money continues working for you in a tax-deferred manner. Liquidating your 401(k) is an option but there may be tax implications and early distribution penalties. It is best to consult your tax professional before making any distribution decisions. To continue contributing to an IRA or 401(k), you need earned income, such as a salary or profits from a small business. Unemployment benefits are not considered earned income by the IRS, so if that’s your only source of income, you would have to temporarily pause contributions to your IRA or 401(k). However, if your spouse has earned income, he or she could potentially bump up retirement contributions to compensate. If you re-enter the job market, you could resume contributions to your own retirement account. If you’re 50 or older, you can also make catch-up contributions to a 401(k). Insurance Depending on the size of the company, employees who are laid off or leave a job voluntarily often have the right to continue their health care coverage for a specified period of time through COBRA. However, health insurance doesn’t cover everything, especially in the case of an accident or serious illness, so a supplemental health insurance policy could help fill coverage gaps such as co-pays, deductibles and non-medical care (transportation to treatment, for instance). Knowing your medical costs would be covered can help provide peace of mind during an uncertain time. Premiums for supplemental health insurance can start as low as $20 per month. Life insurance is another area to consider. If you had a policy through your previous employer, you may want to consider buying an individual policy to ensure that your family would be able to cover their daily expenses if the unthinkable happened. A permanent life insurance policy can accumulate cash value over time so that you might be able to take a loan or withdrawal if needed. Want to know more about your retirement and insurance options? Contact an Allstate personal financial representative to discuss your needs.

Stay in Ship Shape with These Simple Boating Tips

Brendan — Wed, 08 May 2013 11:00:25 +0000

Recreational boating can be fun, but like any activity involving large machinery or vehicles, it can be dangerous if you’re not prepared. In 2011, the US Coast Guard (USCG) reported 4,588 accidents that resulted in 758 deaths and 3,081 injuries. While your odds aren’t terrible—one accident per 2,653 of the 12.2 million registered vessels—the injuries and damages from a serious accident could be staggering. Damaged property in 2011 boating accidents was estimated at $52 million, according to the Recreational Boating Statistics 2011 report from the USCG. The kicker is, by taking simple steps and planning, as well as exercising safe judgement, accidents can be avoided.

The Importance of Training

Unlike a vehicle license, boat licenses are often given after a written exam only, without an operation test. And in some state, the written exam is not required. Just because you have a license doesn’t mean you know how to operate a boat. Fortunately, that’s an easy fix. Depending on how close you are to water, it may be as simple as going to a boat school. If that’s too much of a hassle, there are online courses, as well. Of course, it's a good idea to check with you local regulatory agency to ensure you are in compliance with all licensing requirements. Did you go through a boat safety education program? According to the report, 89 percent of deaths occurred on a boat driven by someone with no instruction. Of the remainder, about five deaths (under 0.01%) happened when the operator had been through a National Association of State Boating Law Administrators (NASBLA) approved course. There is a list of approved courses and organizations here.

Plan: Where Are You Going and When Will You Be Back?

You’ve probably heard of a float plan if you’re a boat owner. If you haven’t, read up. A float plan can expedite rescue in the event that you’re unable to send out a distress signal or if you’re in a small vessel without means of communication. The USCG’s website even has a helpful form you can leave ashore to make sure no detail is forgotten. And, if you’re thinking a float plan is unnecessary if you’re going on a lake or other enclosed body of water, think again: Forty-eight percent of accidents (and 46 percent of fatalities) happened in lakes, ponds, reservoirs, dams and gravel pits.

Weather

It’s common sense to check the weather conditions before heading out on the water. “Red sky in the morning, sailor take warning,” right? Contrary to what you might think, more deaths happened in calm and choppy waters (at most, 2-foot waves) than rougher waves. And according to the USCG's 2011 report, nearly 74 percent of all accidents happened during the day with good visibility; the peak time for accidents is 2:30-4:30 p.m. Regardless of your plans, keep an eye on wind, water and visibility conditions before casting off.

Situational Awareness is Key

The No. 1 contributor to accidents was a distracted operator, followed by poor lookout. Nearly 24 percent of accidents in 2011 could have been avoided by people paying attention. To give you a little more perspective, 22 percent of accidents were boat collisions. Think there might be a connection there? So, while you’re enjoying the day on the water, remember that your inattention could ruin someone else’s day—and yours.

When an Accident Happens, Safety First

We get it. Everyone looks a little ridiculous in a life jacket. Put one on anyway. In 2011, 54.7 percent of people who died drowned without a lifejacket, compared to just 11 percent who drowned with a lifejacket. “But I’m a strong swimmer,” you may say. Well, strong swimmer, if you’re a mile from shore, you would have to swim the equivalent distance of nearly 53 lengths in a 25-meter pool…with a current and waves. “Impossible,” you say. “I’ll wait it out.” You may have to stay afloat for hours until rescue teams arrive. Swallow your pride and pop on a life jacket. The key to your safety on the water is how much effort you put into it. Take a class and get informed. Make a plan and leave a copy with a family member, friend or neighbor. Exercise common sense. Drinking and operating a boat? Bad idea. Speeding? Bad idea. Having a good time while being safe? Great idea.

Get Your Motorcycle Road Ready: Make Your First Ride of the Season a Great One

Brendan — Wed, 01 May 2013 16:56:54 +0000

With daffodils blooming and spring arriving in many parts of the United States, American motorcyclists are getting ready to roll. Before you embark on your first motorcycle ride of the season, whether it’s simply a ride to a barbecue or a two-day road trip, sprucing up your bike will make it shine, but even more important, help to assure your safety before your ride.

Bathe Your Beauty

Start your bike's spring season with a thorough cleaning. Even if you covered your bike and stored it inside during the off-season, dust, bugs or other debris can potentially decrease performance or scratch paint. You want your bike to shine on your first ride. After cleaning your motorcycle, apply a good spray cleaner and polish designed for bikes, and ensure your chrome is shining, as well. Make sure you remove all chrome cleaner deposits from your pipes, because exhaust heat and chrome cleaner residue will leave your pipes cloudy.

Is the Gas Still Good?

Especially when your bike has been in storage for more than a couple of months, it is important to check any fuel that remained in the bike while it was stored. After opening the bike's filler cap, visually ensure that the fuel is clean and its consistency has not changed. If there is any question about the quality of the fuel, drain the fuel tank, fuel lines and carburetor before starting the engine to avoid costly repairs.

Rubber to the Road

Inspect both tires for holes, cracks, misshapen areas or foreign objects. Once you ensure that your tires are in good shape, check air pressure and add air, if needed. If you notice any damage to the tires, transport your bike to a repair location. Do not attempt to ride a bike with questionable tires – a blowout could be devastating.

Greasing the Gears

Even if you changed your bike's oil before putting it in storage, check its level and quality. Consider changing your oil and filter as part of a general service check pre-ride. Most shops complete a general safety inspection with an oil change, and with that behind you, you can ride more securely.

All Revved Up

If you trickle-charged your battery during storage, it should be ready to go. If not, make sure your battery is fully charged and reliable before depending on it for your first ride. Whether charged or not, check your battery for signs of wear and clean off any corrosion.

Once Around the Neighborhood

After completing your inspection, take a test run on your bike. A steady but short ride near your home or storage unit allows fluids to circulate, ensures the battery is holding a charge and alerts you to any unaddressed issues such as a rough idle or other potential problem. Carefully test all your bike's moving parts, fluids and electronics. Make sure everything is topped off, moving smoothly, and working properly. Repair any cracks or leaks, replace burned-out bulbs and lubricate where needed to avoid jams. If the test run goes well, strap on your safety equipment and enjoy the season!