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California Still Battling the Most Destructive Fire in Its Modern History + How to Minimize Financial Losses Due to Natural Disasters

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Our prayers go out to those in California, family, and friends who are dealing with this natural disaster that is wreaking havoc on the state. The most destructive fire in California’s modern history is still raging in the northern part of the state. At least 29 people have died, and about 6,700 buildings have been destroyed north of Sacramento, where more than 2,000 firefighters are battling the 105,000-acre Camp Fire. A further two people have died in two other large, uncontrolled fires burning in the Malibu and Thousand Oaks communities of Southern California. Overall, 250,000 Californians have been forced from their homes. The reality is that a natural disaster can be a devastating blow to your finances. Thanks to SmartAboutMoney.org, you can use the following checklists to help minimize any additional financial losses:

Protect Your Property

If you are being asked to evacuate the area and authorities allow you to enter your home, be sure to:

Collect your important financial documents along with your valuables. You will need them to file insurance claims, pay bills and take care of family members. Important documents include:

  • Legal certificates
  • Wills
  • Powers of attorney
  • Insurance policies
  • Social Security cards
  • Your checkbook
  • Bank account information

Get a visual. Take pictures and/or video of your damaged property.

Call your insurance agent as soon as possible to find out exactly what to do and what information is required to make a claim. Leave a contact phone number if your home is uninhabitable and you are staying elsewhere.

Separate damaged and undamaged items until a claims adjuster inspects them. Protect your property from further damage by making temporary repairs (such as putting a tarp over a damaged roof).

Save receipts for repairs and temporary lodging to submit to your insurance company. If you are not fully reimbursed for these expenses, they may be tax-deductible.

Keep copies of all correspondence with the insurance company and provide them with a detailed list of damaged property. The claims process will be much easier if you take the time before a natural disaster occurs, to photograph or videotape the contents of your home and list the brands and serial numbers of appliances and electronics equipment.

Look to relief organizations. Contact the American Red Cross. The Red Cross can provide emergency shelter, meals, clothing, medical assistance and referrals to government and nonprofit organizations for additional services.

Work With Your Employer

Disability benefits. If you or a family member is injured, you need to begin the process of applying for any available employee-sponsored disability benefits.

Family Medical Leave Act. You may be able to take advantage of the Family and Medical Leave Act if you are unable to return to work in the near future because you are caring for an injured family member. This law applies to companies with more than 50 employees.

Contact Creditors

As always, paying your bills on time protects your credit rating. But, considering the circumstance, your creditors might be willing to work with you on a delayed payment schedule if necessary.

Prioritize your bills. Keep in mind that insurance policies and mortgage or rent payments are the top priority.

Consider stopping some bills immediately. For example, you can contact your utility, telephone and cable providers to halt services on the property you have vacated. Before cancelling the service though, make sure you ask about termination and reconnection charges.

Seek Available Tax Relief

For victims of natural disasters such as earthquakes, floods and tornadoes, there are federal income tax deductions that may be able to offset some of the financial loss.

Casualty losses are deducted on  Schedule A as an itemized deduction. After the first $100 of loss, which is nondeductible, the remainder of a loss that is not reimbursed by insurance is allowed to the extent that it exceeds 10 percent of a taxpayer’s adjusted gross income (AGI).

If the president declares an area affected by a natural disaster a Federal Disaster Area, there are automatic extensions of the time for filing tax returns and paying taxes, waived penalties for late filing and payment of taxes, and special mailing addresses for faster processing of tax returns from disaster victims.

Under normal circumstances, a casualty loss is deducted on your tax return for the year in which the event occurred. However, in areas which the president has declared to be a Federal Disaster Area, victims have the option of taking their entire loss on their prior year’s tax return. If they have already filed a prior year return, they can file an amended tax return on Form 1040X to get a refund to help pay for disaster-related expenses. The IRS recommends writing “Disaster, (name of city or county and state)” in red ink at the top of the 1040X form. For additional information, consult IRS Publication 584.

Ash Exantus aka Ash Cash is one of the nation’s top personal finance experts. Dubbed as the Financial Motivator, he uses a culturally responsive approach in teaching financial literacy. He is the Head of Financial Education at BankMobile and Editor-in-Chief at Paradigm Money. The views and opinions expressed are those of Ash Cash and not the views of BankMobile and/or its affiliates.

The Daily Digm (News)

Amazon Prime Day Kicks off W/ Competition + How to Kick off the Habit of Paying Full Price

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Ready, set, go! Amazon’s Prime Day starts today and continues through Tuesday, bringing a whole new meaning to retail wars, as Walmart becomes the latest rival to try to get in on the mid-summer online-shopping bonanza. This year marks Amazon’s fifth year of Prime Day, and according to Salesforce’s Rob Garf, the shopping event has prompted “rising shifts” for the entire month of July. Target and eBay have also announced sales of their own. There is definitely competition in these mean retail streets but how do you compete with yourself to save money?

I have a friend who spent time as an intern and then as an assistant buyer at a Fortune 500 specialty brand, and from her experience, she vowed never to pay full price for a pair of jeans again (unless the price is already right of course). Working in the buying department opened her eyes to reality behind retail. For instance, jewelry can be marked up to at least five times its value. As a buyer, you’re the one who actually chooses what looks go into each door. You also have the privilege of watching sales trends and dealing with a lot of retail math. You consider the cost of goods sold, retail price, and yes, the markup.

Markup is when a company produces or purchases a good at one price and then sells the good for a higher price.

Here’s how it works:

Selling price = [(Cost) ÷ (100 – percentage markup)] × 100.

So, a company buys a pair of jeans at wholesale for $60 and needs to sell it at a 60 percent markup. The calculation would be [($60) ÷ (100 – 60)] x 100. This breaks down to ($60 ÷ 40) x 100, resulting in a selling price of $150.

By having a markup on goods, a company is able to earn profits even when goods go on sale. But what does that mean for the consumer? Well, your pricey luxury shoes, shirt, and hand bag aren’t all that expensive. You just paid an absurd amount for it.

This leads me to the premise of this article – start at the sales rack. Being trendy with your finances should come before fashion. See what deals you can get before paying full price. There is nothing more fashionable then extra cash in your money bag.

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The Daily Digm (News)

Another One! U.S. Women’s Soccer Team Wins Again + How to Win in Your Personal Finances

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The U.S. women’s soccer team are the World Cup champions after beating the Netherlands 2-0. It’s the fourth title overall for the Americans, and the first time they have won back-to-back trophies. The team has also launched itself into the gender pay gap debate with its lawsuit against the U.S. Soccer Federation: the women can expect a guaranteed payday of about $250,000 with Sunday’s title, says the New York Times, while the winning team of the men’s World Cup would have received roughly $1.1 million each, per CNBC.

What about in your personal finances? How do you win? The short-term sacrifice of becoming financially focused early on has long term benefits that are totally worth it also. Here are just a few:

Financial Freedom. The definition of financial freedom varies depending on the person, but it boils down to being able to cover life’s necessities, including food, clothing, and housing expenses. Buckling down in your twenties and thirties to focus on laying a financial foundation leads to financial freedom. And the sooner you get there, the better off you’ll be.

Stress Free Living. Most stress is self-imposed and generally centered around money. Some relationships crumble due to tension perceived by finances. The highest liability we encounter is housing. The second and third largest consist of health care and food. While food and medicine are ongoing obligations, owning a home can eliminate a chunk of financial responsibility, freeing up more money to save and invest. Start early when it comes to homeownership. You may miss a few parties, but the peace that comes with owning the home you rest in will be made up for it.

Generational Wealth. Chances are you’re considering starting a family. What better way to honor those you love with an abundant financial future? Each generation should be able to start a notch above the last. Investing five years of your young adulthood can make a 10-year difference in the lives of your unborn children. This sacrifice isn’t only for you but for those to come after you.

More Time. We are not so much looking for more stuff but for more time to enjoy the stuff we already have and the people we can share that stuff with. The reason most look to retirement is to enjoy what they have worked so hard for. The moment you decide to be financially responsible is the moment you begin to enjoy the journey, both the highs and lows of creating wealth. By all means, don’t save the party until the end. Celebrate while you build but remember to never lose focus of the building. 

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Nike AIMS to Get on the Right Side of History + How to Be on the Right Side of Your Legacy

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Nike has pulled a U.S.A-themed sneaker from its range after receiving objections from Colin Kaepernick, The Wall Street Journal reports, citing anonymous sources. The former NFL player reportedly told the company that the early American flag featured on the Air Max 1 USA, created in celebration of July 4, was offensive due to its connection to slavery. Nike also recently stopped selling some products in China after a designer’s support for Hong Kong protests sparked backlash, and reportedly cancelled a sneaker in May following objections.

The flag in particular is the Betsy Ross flag which Wikipedia states: The Betsy Ross flag is an early design of the flag of the United States, attributed to Betsy Ross, using the common motifs of the alternating red-and-white striped field with five-pointed stars in a blue canton. Grace Rogers Cooper noted that the first documented usage of this flag was in 1792.[1] The flag features 13 stars to represent the original 13 colonies with the stars arranged in a circle. The 13 Colonies has a deep connection to Slavery which is where the objection is coming from.

It is good to see that someone is using their influence in the right way, but also this tells you how influence can affect the bottom line. This move is helping Nike create or clean up its legacy.

We are now in graduation season, and for many students, graduating college is an enormous feat that starts the beginning of their legacy. But after you are now free to do as you wish, how do you continue to add to that legacy? Yes, you are going to start a billion dollar business or work as an exec for a fortune 500 company but beyond your title and accolades, what else can you bring to the table? The truth of the matter is that what you do with your money is more important than how much you have. It is said that a good man (or woman) leaves an inheritance for his (or her) children’s children. And even if we don’t have children, leaving an inheritance of wealth on earth for the benefit of others is the truest form of what we call being rich. If one is truly wealthy, he or she freely gives. Making your riches count is found in your legacy. So, while we may not fully understand what our legacy will be when all is said and done, we can aim to leave the following:

Knowledge & Wisdom.

Maya Angelou told Oprah Winfrey that no one truly knows their legacy because they can influence different people differently. No matter your level of education, you have the ability to give a word of wisdom because the wise are those who have experienced life and learn lessons along the way. Never underestimate your ability to encourage another person.

Kindness.

Ellen DeGeneres is synonymous with kindness. At the end of each show, she can be heard saying Be Kind to One Another. The impact that she has had on students, families, young stars, and animals is surely a legacy. Something as simple as kindness, an ability we all have access to because it resides in us, goes a very long way. It literally changes lives.

Money & Assets.

Robert Kiyosaki said money isn’t everything, but it does affect almost everything in our lives that is important. Leaving beyond money and financial assets to your children and their children can put your loved ones ahead 10, 20, and even 50 years. While you are building wealth, keep future generations in mind. Most of our early adulthood is spent paying school loans, discovering our purpose, and laying a financial foundation. Imagine what life would be like if your parents set up twice as much as they did for you financially. You’d most likely be at least five years ahead of where you are.

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