Put Your Money to Work for You

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MEET LINDA DESCANO & ELISABETH LEAMY ! Linda Descano (left) is Managing Director and Global Head of Content & Social at Citi. Elisabeth Leamy (right) is an Emmy-award-winning journalist, speaker and a tireless consumer advocate. Elisabeth and Linda recently answered questions in Connect: Professional Women’s Network about personal finance. Here’s some of their most popular advice.

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Any tips on how to keep long-term savings on track? Automate your savings––but not your spending or investing!––so that you don't think of that money as "yours." It's not! It belongs to your future self. Sign up to have part of your paycheck direct deposited into a savings account or investment vehicle so that you never touch it.

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What tips do you have for sticking to a budget? When it comes to the dreaded B-word (budgeting), here's my tip: think of it as a spending plan that enables you to allocate your money to what matters most versus a penny-pinching exercise that is denying you something. Attitude is everything. For me, it's about me controlling my money and not letting money––or my emotions––control me.

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WAYS TO SAVE LIKE A PRO: •  Aggressively refinance your home mortgage •  Buy a used car instead of new •  Refinance your auto loan at a lower rate. Yes, you can do that! •  Protect and promote your credit score so you get loans at the lowest possible interest rates. •  Request the "Reissue Rate" on title insurance when refinancing. It's a discount of as much as 40%! But often they don't offer it unless you ask. The price is lower because they've already done the title search to make sure your house is really yours.

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How can I balance saving for kids’ college, retirement and home improvements? Have you heard the airplane oxygen mask analogy? The flight attendant always says to secure your own face mask before assisting others. It's the same for retirement versus college. As much as you want to pay for your kids’ college, there are scholarships and low interest loans available to them. It’s actually selfless to save for yourself because that way, your kids won’t be in a situation where they have to save for YOU.

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CREDIT SCORE MAKEOVER: Pay down debt: This is one of the fastest ways to improve your score. If you have savings, use some or all of it to pay down the debt. Pay on time: This may sound like a "duh," but payment history makes up 35% of your FICO credit score. Keep ratios low: You want to be approved for as much credit as possible, but ideally use 30% or less of it. DON'T close accounts: That is credit you have been approved for and it helps your "credit utilization ratio.” Don't ignore small balances: Failing to pay a $25 bill is almost as devastating to your score as failing to pay a $2,500 bill.

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What tips do you have for selecting a financial planner? Look for people with certification, such as Certified Financial Planner Professional. Ask friends and family for referrals. If your objective is managing debt, you may want to work with someone who is a credit counselor or financial coach. If you are focused on investing for the long-term, then a financial planner or adviser may be appropriate. Interview at least 3 financial planners and have them tell you WHAT investments they would suggest for you and WHY.

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IMPROVE YOUR CREDIT: Ask for a higher credit limit: Just don't charge up to your new limit if the goal was to pay off debt. Ask creditors to delete single sins. If you are normally ultra responsible but you made one terrible late payment, ask the creditor if they will delete that from your record. They have that power.

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How do I know if refinancing is right for me? Here's a simple rule of thumb I developed to help people decide whether refinancing is worth it. I call it the RULE of 5s. Refinance IF: • You can get a rate reduction of .5 points or more. • You will add no more than 5 years to the life of your loan. (Preferably you'd use your savings to reduce the years!) • You will recoup your closing costs in 5 years or less, preferably much less.

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WAYS TO SAVE LIKE A PRO: •  Consider buying a dark horse car, a less popular make and model that’s roughly equivalent to a bestselling model for way less money. Edmunds.com uses the example of a Nissan Altima as an alternative to a Toyota Camry, which could save you 20%! •  Become a Guerilla Grocery Shopper, using strategies like price matching, stockpiling and coupon-combining to score huge savings. •  Get a cash back credit card instead of a specialty card with points you never seem to use. I am a fan of the Citi Double Cash card because spending isn't the only way to earn. You get 1% cash back when you make a purchase and another 1% when you PAY for that purchase!

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How should my spouse and I approach money as a married couple? Should one person take the lead? Here's my philosophy: we have mine, yours and our money. Our money is a joint checking for household expenses, which we each contribute to monthly and decide once a year how much we contribute. We also have a joint savings for vacation and emergency expenses.

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ADDITIONAL RESOURCES: Managing debt: https://www.nfcc.org/index.php Choosing a financial planner: http://www.finra.org/investors/smartinvesting/gettingstarted/ selectinginvestmentprofessional/ Saving on groceries: www.couponmom.com

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JOIN THE CONVERSATION! LinkedIn and Citi’s Connect: Professional Women’s Network is an online community with more than 440,000 members that helps women achieve the careers they want and discuss issues relevant to their success. Visit linkedin.com/womenconnect for more information and to join the group for free! For more great tips on personal finance, check out Linda and Elisabeth’s discussion in Connect. PHOTO CREDITS/GETTY IMAGES: 1: Image Source   3: WIN-Initiative 4: Jeffrey Coolidge 6: Colin Anderson 10: Sam Edwards 12: Jetta Productions 13: Martin Poole   ©2015 LinkedIn Corporation. All Rights Reserved.    

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©2014 LinkedIn Corporation. All Rights Reserved. CONNECT: PROFESSIONAL WOMEN’S NETWORK 15

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