One of his biggest goals? Hiking a portion of the Appalachian Trail (AT) as a way to disconnect, reflect, and prepare for his next chapter after service. But a trip like this doesn’t just happen—it takes thoughtful financial and logistical planning. Here’s how we made it work:

Two Years of Intentional Planning

When we moved to Kentucky from Hawaii two years ago, we knew this would be our final duty station. That’s when my husband began outlining his retirement timeline, carefully saving his leave, and considering how he wanted to transition into post-military life.

As the AT hike became a serious goal, we began discussing the financial aspects. His sisters had hiked a portion of the trail a few years ago and shared valuable insights. From there, we created a checklist of essential gear, food supplies, and tracking equipment. Instead of making large, last-minute purchases, we spread out our expenses over two years, buying items gradually to avoid financial strain.

The Cost of Hiking the Appalachian Trail

According to Google, the average cost for an Appalachian Trail thru-hike ranges from $5,000 to $7,000, including gear, resupply packages, and town expenses. The estimated monthly cost is around $1,000 for food, lodging, and other essentials.

For our trip, we carefully budgeted and planned ahead:

• Gear & Resupply Packages: We spent approximately $4,000 on gear and pre-planned resupply shipments to help manage costs and ensure my husband has the essentials on the trail.
• Town Expenses: We estimate spending around $1,000 on hostel stays, laundry, meals, and transportation (shuttles/Ubers) when my husband stops in towns along the way.

By spreading out these costs over two years, we avoided large financial burdens and ensured my husband could fully enjoy this experience without financial stress.

Aligning the Hike with Retirement Logistics

Once he received his retirement orders, we mapped out key dates—his Change of Responsibility ceremony, VA appointments, potential Career Skills Program (CSP) opportunities, and his official retirement ceremony. All of these factors impacted when he could embark on the trail. Initially, he hoped to hike for 60 days, but after reviewing his commitments, he adjusted his plan to a 35-day trek.

Involving Our Son in the Journey

As we fine-tuned our plans, we realized this experience could be even more meaningful. Our 17-year-old son decided to join his dad for 50 miles of the hike during spring break. We factored this into our financial and travel planning, ensuring I could pick him up at a designated spot while my husband continued his journey.

More Than a Hike—A Financial and Life Transition

For us, this Appalachian Trail journey isn’t just about the hike—it represents a carefully planned transition into retirement. By budgeting for this adventure in advance, aligning it with our financial goals, and ensuring my husband has the time and resources to pursue his dream, we’ve set the stage for an exciting new chapter.

At MainStreet Financial Planning, we believe financial planning isn’t just about numbers—it’s about making dreams achievable. Whether it’s planning for retirement, a big life goal, or a career transition, having a solid financial strategy makes all the difference.

Are you preparing for your next big life adventure? Let’s plan it together.

The post Financial Planning for Life’s Big Adventures: How We Prepared for My Husband’s Appalachian Trail Hike appeared first on MainStreet Financial Planning.

Savings (Short-Term Focus)

When interest rates fall, the returns on savings accounts and other short-term investments like CDs often decrease as well. Here’s how you can prepare:

-Lock in Higher Yields Now: Take advantage of the current high yields on savings accounts, CDs, and money market funds before rates drop. Consider locking in **long-term CDs** now, which may still offer strong returns.

  – Action Step: Prioritize emergency funds in accessible high-yield savings accounts, especially with HYSAs currently offering rates in the 5% range. Aim to secure 6-9 months of expenses for added financial security.

-Reevaluate Online Savings Accounts: Online banks typically offer competitive yields, even when rates are low. Shopping around for the best high-yield savings options is crucial.

  – Action Step: Compare savings rates across banks, and consider using a resource like Bankrate.com to find the best deals on savings accounts and CDs.

Debt Management

While lower interest rates are good news for borrowers, high-interest debt will still weigh heavily on your finances. Managing debt proactively is key.

– Prioritize High-Interest Debt: Even with falling rates, high-interest debt like credit cards will continue to cost you more in the long run.

  – Action Step: Focus on paying off or consolidating high-interest debt through balance transfers or consolidation loans, which can reduce your monthly interest burden.

– Watch for Refinancing Opportunities: With lower rates, you may have the opportunity to refinance loans such as mortgages or car loans.

  – Action Step: Refinance variable-rate debt if it makes financial sense, but don’t forget to calculate the costs involved in the process. For fixed-rate debt like a mortgage, refinancing can be beneficial, especially if you plan to stay in your home for several years.

– Boost Your Credit Score: Improving your credit score now will help you secure better rates when the Federal Reserve starts cutting.

  – Action Step: Focus on making timely payments and lowering your credit card utilization to improve your credit profile and access lower interest rates. For more guidance, check out this Credit Report Cheat Sheet to better understand your credit report and take action. 

Investment Strategies

Falling interest rates can also impact your investment portfolio. Here’s how to position yourself for success:

– Shift Toward Longer-Term Bonds: As rates drop, shorter-term bonds will yield less, so consider shifting toward longer-term bonds for better returns.

 –Action Step: Rebalance your portfolio by moving cash or short-term bonds into medium to long-term bonds, which typically perform better in a low-rate environment.

– Stay the Course on Stocks: Historically, lower rates have supported the stock market, as companies can borrow more cheaply. Stick with your long-term investment strategy.

-Action Step: Continue contributing to retirement accounts like **401(k)s**, and avoid making drastic portfolio changes based on short-term fluctuations

– Take Advantage of Market Opportunities: If the market experiences volatility during the transition to lower rates, look for “buy the dip” opportunities in undervalued stocks.

 -Action Step: Consider using dollar-cost averaging to take advantage of these market dips and build your portfolio over time.

As we prepare for lower interest rates, it’s important to be proactive in how you manage your finances. By locking in high yields on savings now, smartly managing your debt, and adjusting your investment strategy, you can navigate these changes and potentially come out ahead.

The MainStreet Team is happy to assist you in updating your Money Roadmap as well as Rebalancing your portfolio.

The post How to Prepare for Lower Interest Rates appeared first on MainStreet Financial Planning.

What are Uniform Gifts to Minors Act (UGMA) and Uniform Transfers to Minors Act (UTMA) accounts?

• These types of accounts are custodial accounts which allow you to invest on behalf of a minor until they reach the age of majority. The age of majority is usually either 18 or 21, determined by the state of residence of the custodian.
• UTMAs and UGMAs allow financial investments, but UTMAs also allow property such as real estate. UTMAs may be the only option when opening a new account. Vermont and South Carolina residents can only establish new UGMAs.

Why use this type of account?

UTMAs and UGMAs can transfer wealth to a grandchild, of course, but you can also use them as a learning tool to provide financial education. Gifting even a small amount of money to a UTMA or UGMA and passing along your investment knowledge can give your grandchild a gift more valuable than money that will last a lifetime.

How are UTMAs/UGMAs taxed?

This account is owned by the child, so earnings are generally taxed at the child’s assumed lower tax rate instead of the parent’s rate. This is the power of this type of account.

What is the impact on Financial Aid?

Since these are the child’s assets, there is an expectation that more funds of these funds would go toward the child’s education. Saving for College indicates “20 percent of a student’s assets are counted on the FAFSA, 25 percent are counted on the CSS Profile. Any interest, dividends or capital gains reported on the student’s income tax return is also counted as income on the FAFSA and assessed at 50 percent.” Note: This is not tax-advantaged like a 529 plan.

How can you use the funds in a UTMA/UGMA?

This account can be used for anything! Whether these funds are earmarked for your grandchild’s first car, a downpayment on a home or kickstarting their funds for retirement, these assets will continue to be invested for their goals. If the focus is specifically on education, a 529 Plan may be a better choice in some circumstances, however.

What happens when the grandchild turns the age of majority?

While the grandchild is the minor, you will continue to manage and invest in the UTMA/UGMA. After the age of majority, the grandchild takes over ownership of the account, and it becomes their individual account. This is where the knowledge and financial skills they have learned from you help them to become a responsible and informed investor for their future success.

Where Can You Open a UTMA/UGMA Account?

Ready to get started? Here are three reputable custodians where you can open a UTMA/UGMA account today:

1. Vanguard: Known for its low-cost index funds and long-term investment philosophy, Vanguard is a great option if you’re looking to minimize fees while teaching your grandchild about diversified investing. Open a UTMA/UGMA with Vanguard.
2. Schwab: Charles Schwab offers a user-friendly platform with a range of educational resources, making it a good choice for grandparents who want to engage younger family members in managing their investments. Open a UTMA/UGMA with Schwab.
3. Fidelity: With a strong emphasis on financial education and planning tools, Fidelity is ideal for those who want to teach their grandchildren about investing while providing a wide array of investment options. Open a UTMA/UGMA with Fidelity.

Opening a UTMA or UGMA account for your grandchildren is a wonderful way to contribute to their financial future while also passing on essential money management skills.

Interested in other ways to financially support your loved ones? Check out our article on 5 Ways to Give Your Godchild (or Loved One) a Financial Boost

The post The Benefits of Opening an UTMA/UGMA for Your Grandchildren appeared first on MainStreet Financial Planning.

Since 2018, the federal tax code allows 529 plans to be used for up to $10,000 per year to pay for qualified K-12 tuition.  Warning: not all states have adopted this rule, you may not owe taxes on your federal return but watch out for the impact on state taxes!  If you live in one of the states that does not allow for this, you may pay state capital gains taxes, need to repay tax deductions for contributions and pay penalties on withdrawals.

A 529 plan is a great way to save for education because you get tax-free compound growth over many years and in some cases a state tax deduction for contributions. If you start taking distributions earlier for K-12 tuition, you may limit the growth on your savings to fund college.

Just because you can use the 529 plan for K-12 education, it does not mean that you should use it.  It is important to know the rules in the state where you live and the amount of savings you will need to pay for college when deciding whether to use 529 plan funds to pay for private school tuition.

Here are 3 scenarios when it may make sense to use your 529 plan for K-12 tuition.

1. Overfunded 529- If you have more than enough saved for college, then using the 529 plan to fund K-12 tuition makes sense.
2. Capture State Tax Deduction- If your state offers a state tax deduction for contributions to a 529 plan, then run the tuition money through the 529 plan to maximize the tax deduction.
3. Temporary Solution- If you have a disruption in income due to job changes, health issues or other unexpected events, using the 529 plan for tuition can help to keep your child enrolled while your finances stabilize.

Remember to adjust your investments in the 529 plan if you will use funds sooner than college.  It makes sense to move the money you will use over the next three years into a stable value fund option.  That way in the event the stock market goes down, you will not have to sell stocks when they are down and limit recovery opportunities.

My two boys went to private middle & high school.  For the most part my husband and I used cash flow to pay for annual tuition, but there were a couple of years that we pulled from the 529 plan to help.  We accessed these accounts because we knew that we had enough to cover college costs, plus it was a short-term solution.

Private school can be expensive, and you may end up funding this expense for many years.  If your back-to-school finances includes paying for private school, it makes sense to have a plan.   If you need a strategy to fund private school tuition for your K-12 student(s) while saving for college, please reach out.  We consider your cash flow, all assets and tax implications to find a strategy that will put you on track to cover the cost of education for your family!

The post Back-to-School Finances: Should You Use A 529 Plan to Pay for Private K-12 Tuition? appeared first on MainStreet Financial Planning.

529 Plans: The Popular Choice

529 college savings plans offer tax-deferred growth and tax-free withdrawals for qualified education expenses. They also provide potential state tax deductions or credits for contributions. Here’s a closer look at the benefits and drawbacks:

Check out epissode #241 – Which is Better for College Savings? 529 Plans vs. Roth IRAs & Real Estate, where I cover in-depth 529 plans and how you can combine them with Roth IRAs and Real Estate.

Coverdell Education Savings Accounts (ESAs) formerly  Educational IRA

A Coverdell ESA is a tax-advantaged account allowing up to $2,000 per child per year until the child turns 18. Funds can be used for qualified education expenses from elementary school through college.

Benefits:

– Flexibility in Usage: Funds can be used for a wide range of educational expenses, including elementary and secondary education.

– Broader Range of Investment Options: Unlike many 529 plans, Coverdell ESAs allow investments in individual stocks, bonds, and mutual funds, providing more control over investment strategies.

Expenses that can be covered:

• • Tuition
  • Mandatory fees
  • Books and supplies required for enrollment or attendance
  • Computers, equipment and other technology required for enrollment or attendance

Drawbacks:

– No Tax Deduction for Contributions: While the earnings grow tax-free, contributions are not tax-deductible.

– Income Caps: Contributions are limited if your MAGI exceeds $110,000 (individual) or $220,000 (married filing jointly), potentially excluding higher-income families.

-Will be counted on FAFSA-  5.64% of EFC (expected family contribution)

Pre-Paid Tuition Plans- aka 529 plans

Pre-paid tuition plans, a type of 529 plan, allow you to pay future college tuition at today’s rates, potentially leading to significant savings.

Benefits:

– Locks in Tuition Rates: Protects against future tuition increases, offering substantial savings.

– State Guarantees: Many state-sponsored pre-paid tuition plans guarantee the investment, reducing financial risk.

Drawbacks:

– Limited to In-State Colleges: Typically only applies to public colleges in the state offering the plan, which may limit options if your child decides to attend an out-of-state or private college.

– Restricted Usage: Generally covers only tuition and mandatory fees, excluding room, board, and other expenses.

Custodial Accounts

UGMA and UTMA accounts are custodial accounts that provide more flexibility in investment choices and usage.

Benefits:

– Investment Flexibility: Offers a wide range of investment options, including stocks, bonds, mutual funds, and real estate.

– No Usage Restrictions: Funds can be used for any purpose once the child reaches the age of majority (usually 18 or 21).

Drawbacks:

– No Tax Advantages: Earnings are subject to taxes, and contributions are not tax-deductible.

– Impact on Financial Aid: Assets in these accounts are considered the child’s and can reduce financial aid eligibility, as up to 20% of the account balance is counted in the SAI.

Investment Accounts

Taxable brokerage accounts offer the potential for higher returns with investments in low-cost index funds or ETFs.

Benefits:

– Higher Potential Returns: Over the long term, diversified investment portfolios can offer significant growth.

– Flexibility in Usage: Funds are not restricted to education expenses and can be used for any purpose.

Drawbacks:

– Market Risks: Investments are subject to market fluctuations, which can affect the value of the account.

– Taxable Gains and Dividends: Earnings are subject to capital gains taxes and dividends are taxable, which can reduce overall returns.

Making the Right Choice

Choosing between a 529 plan and other college savings options depends on your financial situation, risk tolerance, and long-term goals.

– 529 Plans: Best for families who want a straightforward, tax-advantaged way to save for college.

– Coverdell ESAs: Ideal for those seeking flexibility in using funds for various educational expenses and broader investment options.

– Pre-Paid Tuition Plans: Suitable for families certain their child will attend an in-state public college.

– Custodial Accounts: Good for parents who want flexible investment choices and usage beyond college expenses.

– Investment Accounts: For those willing to take on market risks for potentially higher returns and flexibility in fund usage.

Choosing the right college savings option depends on your family’s unique financial situation and goals. Whether you opt for a 529 plan, Coverdell ESA, pre-paid tuition plan, custodial account, or investment account, each has its own benefits and drawbacks.

Consider what best aligns with your needs and don’t hesitate to seek personalized advice from a financial advisor. By thoughtfully selecting and possibly diversifying your savings strategies, you can confidently support your child’s education and secure your family’s financial future.

Website & Links mentioned:

• Websites Where You Can Open Investment & Custodial Accounts: Vanguard, Fidelity, Charles Schwab.

Podcast Episodes to Check Out:

• #210 – 529 College Savings Plan: Getting Started [Part 1]
• #211 – Maximizing 529 Plans: Tax Benefits and Best Practices (Part2)
• #241- Which is Better for College Savings? 529 Plans vs Roth IRAs vs Real Estate

The post 529 Plans vs. Coverdell ESAs, Prepaid Tuition Plans, Custodial Accounts, and Investment Accounts appeared first on MainStreet Financial Planning.

The post College Planning with Help from Grandparents! appeared first on MainStreet Financial Planning.

1. Plan Early

Planning early is essential for any wedding, but it’s especially important for a destination wedding. Notify your family and friends as soon as possible so they can arrange time off work, update passports, and book travel. Whether you’re getting married within the US at the beach or in the mountains or somewhere outside of the US, like Mexico or Italy, give yourself at least a year to fully plan your destination wedding.

2. Get Some Help

Using a specialist or company that focuses on destination weddings can save you time and stress. They act as a hybrid of a wedding planner and travel agent. My sister’s planning company helped secure the wedding date, coordinate a block of hotel rooms for guests at a group discount, and manage transportation from the airport to the hotel. They also handle any travel or room changes needed, making the process smoother.

3. Choose Off-Season Dates

Opt for an off-season date to save on costs. My sister and her fiancé are getting married at the end of October, which is off-season in Mexico. This choice resulted in lower costs for flights, accommodations, and the wedding venue itself. Off-season weddings can significantly cut expenses while still providing a beautiful setting.

4. Know the Rules

Be aware of any extra fees for bringing your own vendors. If you prefer a specific photographer or officiant over those offered by the resort, there may be additional charges for “outside vendors.” To simplify budgeting and reduce costs, many hotels offer all-inclusive packages that cover the ceremony, reception, food, and drinks.

5. Use Travel Rewards

Leverage travel rewards and cash-back incentives to save money. This can be especially beneficial for a destination wedding, potentially saving you thousands on travel expenses. Use points for flights and accommodations to reduce overall costs.

I have the unique insight of helping my sister plan her wedding, and I’ve seen both the successes and challenges of planning a destination wedding. I hope these tips help you save money if you or a friend or family member decides to plan a destination wedding.

Other resources:

Budgeting for wedding season

Tips to save money on travel

The post 5 Money Saving Tips for a Destination Wedding appeared first on MainStreet Financial Planning.

At MainStreet Financial Planning, every member of our dedicated team is proudly affiliated with the Garrett Planning Network (GPN). This affiliation goes beyond a mere association; it signifies a commitment to providing exceptional service and embracing a unique model of financial planning. Our approach aligns with the five defining characteristics upheld by the Garrett Planning Network that set us apart in the realm of financial planning.

Here is what makes us different:

1. Hourly, Fee-Only Service:

We operate on an hourly or, flat, fee-only basis, ensuring transparency and alignment of interests with our clients. Importantly, we do not accept sales commissions or any compensation beyond what is directly agreed upon with our clients. Clients pay only for the time your advisor actively works with you.

2. No Minimums, Maximum Accessibility:

Unlike traditional financial advisors, being a Garrett Advisor means that we have no income or investment account minimums for hourly engagements. This eliminates barriers, making our services accessible to individuals across different income brackets.

3. No Product Sales, Pure Expertise:

This is probably the most distinctive part of being a Garrett Planning Network advisor. We, as Garrett Advisors, distinguish ourselves by not selling financial products. Instead, we offer our time and expertise to guide clients through their financial journey. This commitment to objectivity ensures that the advice provided is solely focused on the client’s best interests.

4. Tailored Recommendations:

While not selling products, we do offer specific recommendations and opinions on various products and services that may be suitable for a client’s situation. Additionally, we can guide clients on where to obtain these products or services. If requested, we can also assist with plan implementation so whether it is rebalancing your employer’s 401(k) or giving a recommendation for how to invest your ongoing IRA or brokerage account contributions so that they align with your risk tolerance and time horizon, we can help regardless of whether they are held at Schwab, Vanguard, Fidelity, Betterment, etc.

5. Accessible Financial Guidance for All:

This is my favorite quality of being a Garrett Planning Network advisor – with fees structured as flat or on an hourly basis, MainStreet provides accessible options for individuals at every stage of their financial journey. Whether you’re a beginner with a quick question, a middle-income earner seeking ongoing financial assessment, or a do-it-yourself enthusiast in need of direction, Garrett Advisors cater to diverse financial needs. Our team has a wealth (pun intended) of knowledge ranging from:

• Debt payoff plans
• Experience with government employees, including both military and civilian
• Evaluating equity compensation
• Helping small business owners
• Working with individuals who are widowed or divorced.
• Planning for college
• Taking a gap year
• Relocating to another state or country
• Retirement income planning
• And so much more

In embracing the Garrett Planning Network model, clients gain not just financial advice, but a partnership built on trust, transparency, and a commitment to their financial well-being. If you’re intrigued by this innovative approach to financial planning, feel free to reach out with any questions. I say this with the most humility one can communicate in a brief article that our entire team at MainStreet loves what we do, and we are here to guide you every step of the way.

The post Unlocking Accessible Financial Advice The Garrett Planning Network Advantage appeared first on MainStreet Financial Planning.

Clearing the Air: We Are NOT Main Street Financial, the Debt Consolidation Agency

It has come to our notice that some individuals have been receiving robo calls from an entity claiming to be “Main Street Financial” and offering debt consolidation services. We want to make it unequivocally clear that MainStreet Financial Planning, Inc is not associated with this debt consolidation agency in any way.

We are a Financial Planning Firm, that has been around for over 21 years dedicated to providing comprehensive and personalized financial solutions for our clients, including tax planning and preparation, and estate document preparation. We don’t offer any advice or services for debt consolidation.

Please also note that the name of our financial planning firm is spelled differently. It’s “MainStreet” as one word, and not two, like “Main Street”.

If you have been receiving robo-calls from the number with the “855” area code, please be aware that it is not us (MainStreet Financial Planning, Inc) making those calls. We understand the annoyance and frustration that unwanted calls can cause, and we want to assure you that we are actively working to identify and stop this imposter company.

How to Take Action: File a Complaint

If you have fallen victim to these deceptive calls or wish to report them, there are steps you can take to address the situation:

1. Better Business Bureau (BBB): The BBB is an excellent resource for reporting scams and unethical business practices. You can submit a complaint online to share your experience. [BBB Complaint Form]( https://www.bbb.org/file-a-complaint)
2. Federal Trade Commission (FTC): File a complaint with the FTC, providing details about the deceptive calls and any relevant information. [FTC Complaint Form](https://www.ftc.gov/media/71268)
3. National Do Not Call Registry: Register your phone number with the National Do Not Call Registry to reduce the number of unwanted calls you receive. [National Do Not Call Registry](https://www.donotcall.gov/)
4. Your Phone Carrier: Contact your phone carrier and report the robo calls. They may have tools or services to help block or filter unwanted calls.

How to Stop “Main Street Financial” Calls: Take Control

If you are receiving unwanted calls from “Main Street Financial” and want them to stop, here are steps you can take:

1. Ask to be Removed: If you answer a call from “Main Street Financial”, ask them to remove your number from their calling list. Legitimate businesses are required to honor such requests.
2. Do Not Provide Personal Information: Avoid giving any personal or financial information over the phone. Scammers may use this information for fraudulent purposes.
3. Check for Caller ID Blocking: If possible, check if your phone carrier provides services to block calls from specific numbers or activate a call blocking app.
4. Report to the Authorities: File complaints with the Better Business Bureau (BBB) and the Federal Trade Commission (FTC) as mentioned earlier. This contributes to ongoing efforts to identify and stop fraudulent activities.

Remember, you have the right to control who contacts you, and there are resources available to protect you from unwanted calls. We appreciate your vigilance and encourage you to take these steps to ensure your peace of mind.

Our Battle Against Impostors: Impact on MainStreet Financial Planning, Inc

We want to be transparent about the impact this situation is having on our business. MainStreet Financial Planning, Inc. is also receiving calls from unhappy customers who have mistakenly associated us with the deceptive practices of “Main Street Financial.” Rest assured, we share in your frustration and have taken proactive measures to address this issue.

How We Can Help: Comprehensive Financial Planning, Tax Preparation, and Estate Document Services

At MainStreet Financial Planning, Inc., our focus is on helping individuals achieve their financial goals and navigate the complexities of personal finance. While we do not engage in debt consolidation services, we offer a range of services including financial planning, tax planning and preparation, and estate document preparation. We can work with you to develop a personalized plan to get out of debt and secure a brighter financial future.

We understand the importance of trust in financial relationships, and we are committed to maintaining the highest standards of integrity and transparency. If you have any concerns or questions, please do not hesitate to contact us directly.

Thank you for your continued trust and understanding as we work to resolve this issue. Together, we can ensure a safer and more secure financial landscape for everyone.

Sincerely,

MainStreet Financial Planning, Inc.

The post Beware of Impostors: MainStreet Financial Planning, Inc Sets the Record Straight appeared first on MainStreet Financial Planning.

Here is the 8- question test. Answers are at the bottom of the page.

1. Loan payments are based on:

A. APR
B. Interest Rate
C. Length of the Loan
D. B & C only
E. All of the above

2. If the current inflation rate is at 3%…

A. Investments in securities (stock market, mutual funds) adjust to market conditions by 3%.
B. 401k plans adjust to market conditions by 3%
C. My net income needs to increase by 3% to maintain my current lifestyle.
D. My savings need to increase by 3% to maintain my current lifestyle.

3. If you are unable to pay off the entire balance you owe in credit card debt, the best way to pay off the balance is to _____.

A. Pay more than the minimum monthly payments on all your credit cards.
B. Pay off the card with the lowest balance first.
C. Pay the maximum your budget allows on the card with the highest interest rate.
D. Pay the maximum payment on the card with the highest balance.

4. If inflation is at 2%, in what option below are you most likely to lose 2% purchasing power?

A. Stock market
B. Real estate
C. Cash
D. Commodities
E. Bonds
F. All of the above

5. What is risk-based pricing?

A. The cost of the deductible and premium added together.
B. The amount of money the insurance company pays toward your claim and the adjustment to your interest rate made by your lender.
C. Basing your insurance or loan pricing on the risk you pose to the company.
D. All of the above

6. Which of the following categories influences your FICO score?

A. Outstanding debt
B. Payment history
C. Types of credit used
D. A & B only
E. All of the above

7. What four main areas do lenders review to qualify a loan applicant?

A. Credit, cash, education, and income.
B. Equity, credit history, assets, and debt-to-income ratio.
C. Equity, cash on hand, asset report scoring, and debt-to-income ratio
D. Liquidity, credit history, asset report scoring, and debt-to-income ratio

8. The biggest risk of owning long-term bonds for capital preservation is:

A. Falling interest rates
B. Rising interest rates
C. Falling dollar
D. Rising dollar
E. Real estate valuation

The National Financial Educators Council had 3 core objectives in mind: providing resources for financial educators, offering tools for people interested in improving their financial knowledge, and giving the media up-to-date information about the current state of financial literacy. You can take this and other tests at www.financialeducatorscouncil.org.

Answers:
1: D ; 2: C ; 3: C ; 4: C ; 5: C ; 6: E ; 7: B ; 8: B

The post How Would You Do On The Advanced Financial Education Test appeared first on MainStreet Financial Planning.