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Advisors Management Group

Mapping Out Your Future with a Financial Plan
Just like a map or a GPS is needed for someone driving a car on a long trip, a financial plan is useful for anyone wondering about their financial future.  A financial plan lets us know if we are heading in the right direction, for example north instead of south.  Much like a long journey, life will have many twists, turns and a few unexpected bumps in the road.  However, with a well-planned route, we can have a clear idea of whether we are heading in the direction of our destination. What is a Financial Plan? A financial plan is a document that evaluates cash flow, assets, goals, and brings the information together in a document that predicts how much money and income you will have in the future. This document will be used to determine if your current strategy will accomplish your goals, or if you need a different one. Who can benefit from a financial plan? Financial plans are useful for people of all ages. A financial plan looks at money that is coming in (wages for most people), assets that you have saved so far, and what you are currently saving. This along with other factors helps to plan a path for your financial future.  This could be saving for a large purchase, paying off debt, or saving for the future (children’s education or retirement).  Financial plans are also helpful for people already in retirement as they can be used to help identify a strategy for creating retirement income, spending down assets, or planning to leave them to heirs. To prepare a financial plan your financial planner will need to gather some information from you. You will likely need to bring the following: Recent paystubs Last year’s tax return Statements for any retirement or investment accounts that you have Information on any pensions that you may have Social Security Statements (get yours at ssa.gov/myaccount ) More complex plans may require information about insurance and/or legal work Your planner will ask some questions to get to know you and find out what is important to you. A good planner will be interested in not just how much money you have, but also in what you would like to accomplish with your money. This conversation along with the data you bring to your appointment will help your planner to craft a financial plan that is specific to your goals. Your planning process will likely consist of several meetings. Costs are generally dependent on the complexity of your plan, and it is even possible that your advisor will provide some basic planning at no cost. Life will continue to change over time, for this reason it is important to revisit your financial plan with your advisor every so often to account for any detours or bumps along the road of life.  Financial plans are working documents that need to be adjusted as circumstances change. You should expect to update your financial plan several times during your working years. Generally, this will be every few years or when a major life change occurs. If you would like to find out more about having your personal financial plan prepared, contact us to set up your no obligation consultation today. Kate Pederson Investment Advisor Representative & Tax Preparer  Kate joined Advisors Management Group in December 2017. Prior to joining the firm, she worked in manufacturing and healthcare during her career as a financial analyst. Advisors Management Group, Inc. is a registered investment adviser whose principal office is located in Wisconsin.   Opinions expressed are those of AMG and are subject to change, not guaranteed, and should not be considered recommendations to buy or sell any security.  Past performance is no guarantee of future returns, and investing involves multiple risks, including, but not limited to, the risk of permanent losses.  Please do not send orders via e-mail as they are not binding and cannot be acted upon.  Please be advised it remains the responsibility of our clients to inform AMG of any changes in their investment objectives and/or financial situation.  This commentary is limited to the dissemination of general information pertaining to AMG’s investment advisory/management services.  Any subsequent, direct communication by AMG  with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides.  A copy of our current written disclosure statement discussing our advisory services and fees continues to remain available for your review upon request.
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27 Nov 2017

Advisors Management Group

Tips for Reducing Your Electric Bill

Electric bills are kind of a mystery. You always remember to turn off the lights before you leave, so why is your bill still sky high? The average household spends about $112 a month on energy bills and prices are steadily rising, according to the Energy Information Administration.  The first step to demystifying your electricity bill, and hopefully reducing it, is to take stock of where you use the most energy.  "Cutting energy waste results in energy savings, but it also translates into money savings," said Kateri Callahan, president of the Alliance to Save Energy, a coalition that promotes energy efficiency. You can find a professional energy auditor to help you assess your home's energy use, potentially for free, through your electric company or the Department of Energy’s website. If you follow their efficiency upgrade recommendations, you could shave 5% to 30% off your energy bill.  Free and Easy Lifestyle Changes Can Add Up Heating/Cooling Heating and cooling takes up the largest chunk of your monthly energy bill, but cutting back doesn't have to mean being uncomfortable. Callahan recommends cleaning your heating, ventilation and air conditioning (HVAC) unit every 30 days to keep the system running efficiently. “If you’ve got clogged or dirty filters, you’re just using more energy to push that air through,” she said. Keeping the blinds open in the winter and closed in the summer can also reduce the burden on your HVAC system, she added. Using a ceiling fan instead of your air conditioner can keep temperatures and costs low in the summer.  These three steps combined can save you anywhere from $62 to $118 per year, Energy Impact Illinois estimates. Water heaters Water heaters are typically large energy consumers and Callahan suggests lowering the temperature on your water heater from the standard 140°F to 120°F. This can reduce water heating costs by 4%-22% annually, according to the Department of Energy. Washing your clothes in cold water can cut costs since about 90% of the electricity consumed by washing machines is used to heat the water. The Environmental Protection Agency estimates that can save the average household up to $40 per year. Air drying your clothes can further reduce energy consumption and save you money.  Appliances A typical American home has 40 products that are constantly drawing power, even if they're not in use. This is responsible for 10% of your electricity use, according to the Lawrence Berkeley National Laboratory. Energy vampires, like your phone charger, computer and coffeemaker, can cost the average household $100 a year, according to the Energy Dept., and should always be unplugged when not in use. “An easy way to do this and make sure it all gets done is to have a power strip,” said Callahan. Power strips make it easy to unplug everything at once, and smart power strips automatically cut power to devices that are in standby mode. If you're diligent, you can cut your standby power consumption by 30%, the Lawrence Berkeley National Laboratory reports.  Discounts Although you probably only interact with your utility company when it's time to pay the bill, Dr. Iain Walker, a scientist at the Lawrence Berkeley National Laboratory, recommends checking its website for savings opportunities. Some utility companies offer rebate programs and off-peak rates which can be up to 30% cheaper, Walker said. "There's a lot of good stuff out there," he said. Customers can capitalize on this by "load shifting," or saving energy-intensive activities until the rates are low.  Long term investments: Bigger savings Behavioral changes do add up, but you have to alter your home to really make a difference in energy consumption, Walker said. Long-term savings come from bigger investments, like getting new windows or proper insulation. If you're planning on upgrading your appliances, many companies and states offer rebates that make it cheaper to purchase energy saving technology, like LED bulbs or Energy Star certified appliances.  "The more you spend, the more you save," he said. Heating/cooling Seal leaks, doors and windows. Homeowners should start by buying cheap caulk and weatherstripping, Callahan says. This can reduce energy use by at 15% to 30% on your heating and cooling costs each year, the Department of Energy estimates. "Those cracks and leaks can be the equivalent of a 3 foot by 3 foot window open all the time," Callahan said. Buy a programmable thermostat. For as little as $20, you can automatically set your thermostat back 7°-10°F for 8 hours a day. Doing so can save up to 10% on your heating and cooling costs, according to the Department of Energy. "That’s a great way to make sure that you’re not wasting energy when no one’s home except the goldfish," she said.  Install or add insulation. Insulation can cut your costs but estimated savings varydepending on your location and fuel type. "There are many utility programs out there that will give you a pretty good rebate if you add insulation to your home," Walker said.  Lighting Both experts recommend switching to LED bulbs, which last much longer and are 90% more efficient than traditional bulbs.  Replacing your five most used lights with Energy Star approved LED bulbs can save you $75 per year.  Appliances "Don't throw out good equipment, but if you’re in the market or the systems are getting old, buy the most efficient items," said Callahan. Energy efficient appliances sometimes cost more upfront, but can save you money in the long run. An Energy Star certified refrigerator, for example, could set you back about $800 or more depending on the size, but the you could save $260 in energy costs in five years. Source: USAToday.com

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26 Oct 2017

Advisors Management Group

IRS: Public-Private Crackdown Slashes Identity Theft, Tax Refund Fraud

An IRS-tax industry crackdown is making progress in the battle against identity theft and tax refund fraud, officials said as they announced plans for additional safeguards in 2018. Fewer federal tax returns linked to identity theft entered the tax system in 2016, and the number of taxpayers who said they'd been victimized also dropped, along with the number of fraudulent refunds issued, the officials said. Updating the results from the public-private effort launched in 2015, officials from the IRS, tax preparation firms, tax preparers and other industry leaders also unveiled plans for broader use of a 16-character security code on W-2 form tax forms and additional safeguards for the 2018 tax-filing season. Among the highlights: The IRS stopped 883,000 tax returns with confirmed links to identity theft in 2016, a 37% drop from the year before. The nation's tax agency also stopped 443,000 potential tax refunds linked to identity theft, a 30% year-over-year decline. Financial institutions stopped 124,000 suspect tax refunds in 2016, half the number detected in 2015. The companies have stopped 127,000 suspicious refunds so far this year, reflecting a handful of cases involving several thousand accounts. The number of taxpayers who told the IRS they had fallen victim to identity theft dropped to roughly 376,000 in 2016, a 46% decline from the year before.   "We've seen the number of identity theft-related tax returns fall by about two-thirds since 2015," IRS Commissioner John Koskinen said in a statement announcing the update. "This dramatic decline helped prevent hundreds of thousands of taxpayers from facing the challenges of dealing with identity theft issues." The declines stem in part from the first-of-its-kind partnership between the IRS, state tax agencies, major tax-preparation companies and other tax industry participants. Spurred by continuing spikes in identity theft and tax refund fraud, the agencies have been sharing information and implementing new electronic safeguards and other measures aimed at thwarting identity thieves. For instance, tax industry representatives have shared dozens of key data points from electronically-filed tax returns that have helped the IRS to identify tax scams and block fraudulent refunds. File photo taken in 2014 shows the Internal Revenue Service headquarters building in Washington, D.C. (Photo: J. David Ake, AP) As the crackdown continues in 2018, all official IRS W-2 forms used to file federal tax returns for the first time will include a verification code box. A 16-character code will appear on approximately 66 million W-2 forms, more than half of all forms issued, Koskinen estimated. Taxpayers who prepare their own tax returns and tax preparers will be urged to enter the code in the verification box if their form includes the 16-character entry. If you search the IRS website for tax forms, you'll get over 900 results. Here are the ones you need to know. Walbert Castillo, Ramon Padilla, Karl Gelles, USA TODAY Additionally, the IRS will ask tax professionals to gather more information about clients who file business tax returns.  The data could include the name and Social Security number of the business representative authorized to sign the tax return, as well as details of any estimated tax payments made before the return was filed. Koskinen's IRS term expires in November, so he won't head the agency for the 2018 tax filing season. During a media conference call, he said Treasury Secretary Steven Mnuchin has been focused on "finding a successor." "We know that cybercriminals are planning for the 2018 tax season, just as we are,"  Koskinen said. "This coming filing season, more than ever, we all need to work diligently and together to combat this common enemy." Source: USAToday.com

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22 Oct 2017

Advisors Management Group

How to Create an Early Holiday Shopping Budget

Taking just a little time now (even just an hour) can save you a lot of stress, money and time later on when you'd rather enjoy the holiday season. If that gets your attention, keep reading for a few easy, important tips to get organized now for a successful shopping season later. Dig out last year's shopping list. In today's digital age, "digging out" last year's shopping list is hopefully as easy as opening a saved file on your computer, tablet or smartphone. Take a look at who you shopped for last year and how much you spent. This can refresh your memory, help create a budget for this year and kick-start your new shopping list. Create a budget. Knowing how much you spent on gifts last year is helpful, but you should also survey this year's financial situation to see how much you can afford to spend. If you have a savings account for holiday shopping, check the balance. Also see what expenses are coming up and make sure you have a cushion for emergencies. When creating a budget for the holidays, give yourself a spending limit for gifts and don't forget to account for entertaining and party hosting, decorations and travel costs. For even more control over your budget, you can narrow down a budget per person on your shopping list. If this is sounding like more lists than you know how to manage, you'll want to check out the next tip. Download a holiday planning app. Technology saves the day again: There are several helpful (and free) apps to help you plan, budget and organize the holiday season. Santa's Bag is a popular iOS app that gives you an easy and colorful platform for budgeting, planning and checking off the items on your list. You can create a total budget amount and an amount per person, and the app will automatically update your budgets when you tell it how much you spent. The app allows you to enter everything from your gift ideas to whether an item has been purchased and even wrapped. For Android users, Christmas Gift List is a similar solution with the ability to track all your shopping, keep an overall and per person budget, and even archive lists so you can check back on previous years. Prioritize your shopping. After you start your list, you might notice there are a few gifts that are more specific than others. Your wife might be hoping for a new cashmere sweater, but your daughter has that specific new smartphone in mind – plus, she'd love it in that hard-to-find color. For gifts that will fly off the shelves early, make a priority to get these first. Of course, waiting for the week of Thanksgiving and Cyber Monday will give you the best chance of finding a deal, but you may want to keep an eye out for savings starting now. Note which gifts on your list need early attention and which ones are more generic or flexible that can wait until later. Subscribe to stores and coupon websites. Now is the perfect time to get on the email lists of the stores where you know you'll do most of your shopping. You'll be first to know when they have flash sales or free shipping days. You can also follow the accounts of your favorite shops on social media for exclusive sales and promotions. Subscribe to coupon and cash back websites and sign up for alerts now, and you'll have all the best deals hitting your inbox directly – the perfect solution when you need an idea for the sibling who has everything. See, that wasn't too hard. Now that you spent a little time getting organized for the holidays, you can go back to enjoying fall. Here's one last tip: Stock up on heavily discounted candy the day after Halloween and use it for delicious holiday dessert recipes next month.  Source: Money.USNews.com

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22 Aug 2017

Advisors Management Group

8 Back to School Financial Tips

According to the Huntington Bank Backpack Index, the cost of school supplies increased 88% from 2007 to 2016, and their recently released 2017 report anticipates increases of 1.0% for elementary and 4.6% for middle schoolers this coming school year. Even so, there are reasons that parents can feel good about back-to-school shopping: 1.  It’s an exciting time of year, and parents can share in their children’s enthusiasm. 2.  It’s a chance to spend time with your kids while teaching them smart shopping habits. 3.  It’s an opportunity for what I call “painless savings:” if you consistently watch your spending on “the small stuff” like school supplies, groceries, and clothing, over time you can significantly increase in your overall savings. To maximize the learning experience, involve your kids in the back-to-school shopping process. Start by reading this article with them. Together, identify your spending goals and decide where you’ll do your shopping. Discuss a strategy for spending on “extra” things that are not on the shopping list. For example, when your child can’t live without a new tablet, even though you think her current one is fine, who gets final say? Here are 8 more tips your family can consider during this back-to-school season: 1.  Visit your local brick and mortar retailers. Stores such as Staples, Office Depot, and Walmart offer competitive bargains versus internet-only retailers. Look for specials and door busters, but try not to let good prices lure you into spending on things you don’t need. Also, don't forget about local discount retailers who have low pricing year-round, such as Dollar Store or Five Below. 2.  Shop during your state’s sales-tax holiday. Many states offer a shopping day or weekend during which they waive state sales tax. On these days, you can avoid state and local taxes, which can approach 10% in some states. 3.  Use store coupons and rewards programs. Before heading to a retailer, check your mailbox for weekly coupons and store websites for printable coupons. Art supply stores such as Michaels often have coupons in the Sunday paper. Or simply download them onto your smart phone. These can mean big savings on your more expensive items. Coupons may even be available to pick up “in store;” so don’t forget to ask once you’re there. You can also sign up for a store loyalty program where you can earn rewards points toward future purchases. 4.  Combine your deals. If you find a great sale at your local retailer, shop during a sales tax exemption period, use some coupons, and earn rewards points, you have just hit the grand slam of savings! If you pay with a credit card that gives you cash back, you can save even more—just don’t let those credit card balances run up and accrue interest charges. 5.  Online shopping is still the biggest timesaver, and we all know time is money. In addition to Amazon, there are other web-based competitors such as Oriental Trading Company and eBay. If your family feels that time is your scarcest resource, searching for deals online may still be your best way to save both time and money. 6.  Consider taking advantage of any pre-packaged, school supplies program offered by your school district. This usually involves paying online for a tailored packet of school supplies that is delivered to the school, ready for use. These programs can offer competitive pricing and save you the time and effort of shopping online or driving to the store. 7.  Buy used textbooks or download digital textbooks. If buying used books makes you cringe because you're concerned about the quality of the retailer, be assured that both Barnes and Noble and Amazon are dominant in this space. But for really deep values, you may want to look at other providers—just do some research on these lesser-known retailers before sending them your money. 8.  The best way to save may be not to spend at all; you may already have on hand some of the things on your shopping list. Look around your house before you shop. I’m a big believer in the power of spending less on the small stuff whenever you can in order to accrue big savings in the long run. I’ve written more about this idea of “painless savings” in Countdown To Financial Freedom. The earlier in life that young people begin to apply this saving strategy, the more they will benefit in terms of the compounding growth potential of the money they are able to save. That is how the back-to-school shopping process can positively influence your children’s financial education and their future net worth. And that is something we can all feel good about! Source: Forbes.com

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