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Back to School: Finance 101 – Your Children Money

It’s never too early to talk to your children about money and finances.

Specifically, when was the last time you reviewed your life insurance? 
Life insurance is the safest and most secure way to protect your family and dependents against financial ruin should the family breadwinners die.

Helping Your Children Reach Their Dreams

When was the last time you spoke to your children about money?
About financial planning?

Many families believe that talking about money is taboo. However, if children are raised to fear certain discussions, they may not have the confidence to think and focus clearly on fundamentals to achieve their dreams when the time comes for them to make responsible financial decisions.

Whole life insurance can help give your children a financial head start.
It provides a guaranteed amount of life insurance that also accumulates cash value.

Securing life insurance on your children is a sound strategy to kick start the financial planning your children will appreciate as they enter adulthood. Entering adulthood means having to make tough financial decisions. It’s a right of passage in its own right.

As adults, your children could have the benefit of accessing their policy’s cash value for any reason, including but not limited to:

  • College tuition and expenses
  • Funding a wedding
  • A down payment on a house
  • Starting a business

Never Too Young to Start

Life insurance premiums are based on a number of factors, including a person’s age and health. Premiums are generally lower for children because they are young and healthy. This is one of the basic reasons why this makes sense to help your children structure their own life insurance portfolio.

A Gift They Can’t Outgrow

Children outgrow clothes, toys and other gifts. A whole life policy is different. You can give your children a fully-funded life insurance policy that will provide:

  • Permanent life insurance to one day protect their families.
  • Cash value that can be used to help fund life’s big events.
  • The option to increase their protection as their families grow.

Remember, if you are afraid to discuss money, that will transcend to your children’s belief system too. Give them the gift of financial freedom by way of planning and knowledge.

If you would like to discuss a comprehensive insurance review and any advice that pertains to your kids financial future, please call Jack Carrigg at 617-298-0655 ext 104 or email Jack at

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Recap: Savings Account

“Do not save what is left after spending; instead spend what is left after saving.” ― Warren Buffett

Do you put some of your household’s money into a savings account every month? You would be surprised by how many Americans aren’t ready for a potential significant loss in income. Approximately 7 in 10 Americans would feel the weight of a loss of income in a month or less.

Most financial experts recommend that a person or family have at least three months’ (and up to six months’) worth of expenses in an interest-earning savings account to be ready for unexpected financial hardships. Savings above and beyond that amount should be in a retirement or investment account.

Check out our full blog post with more information, including detailed explanations of ways you could be saving more of your money, including:

  • Instituting a waiting period to avoid impulse purchases.
  • Tracking spending to identify savings opportunities.
  • Cutting back on unnecessary expenses.
  • Taking advantage of free entertainment in Boston.
  • Reducing or eliminating recurring expenses.

One easy place to save money is on your insurance policies! Call Vargas and Vargas Insurance Agency at 617-298-0655 to ask about how you could lower your insurance payments. While we’re chatting, let us recommend a financial advisor to you. With our help, you could be well on your way to bolstering your savings and being ready for any unexpected future expenses.

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Savings Account: Critical for Your Financial Success

Everyone wants to lead a successful life, but that means different things to different people. What does success mean to you? No matter the answer, you will likely need to have some money to get there – even if it’s just to pay for housing and food. In addition to having money to spend, you need to have some money saved… just in case there’s ever a low point in your life where you may need a financial boost.

Let’s face it, you never plan to have financial problems. Thankfully, there are two things that you can do to mitigate your risk. The first, as any Vargas and Vargas Insurance agent will tell you, is to have an up-to-date insurance portfolio. The right insurance can protect your home, your car, and even your health. The second thing that you can do is to have some money saved up for a ‘rainy day.’

Imagine this scenario: the family breadwinner loses their job. How long would you be able to pay your bills while you scrambled to replace the lost income? It is estimated that over 7 in 10 Americans would start to struggle after only one month. In fact, almost half of Americans would notice the deficit in two weeks!

It is recommended that a person have at least three months of expenses saved in case of an emergency. In fact, six months’ worth of expenses is preferred. This will ensure that you are ready for a financial emergency.

Let’s face it – what adult hasn’t ever had a large unforeseen expense (like a car repair or health-related expense)? Sure, most of these will be largely covered by your Massachusetts insurance policies, but you will need to have some money set aside to cover your plan’s deductible.

Consider this also: at what age would you like to retire? Are you saving at a pace that will get you to your goal in time? While it isn’t technically a savings account, a 401k or IRA is a crucial investment for your future and shouldn’t be put off. In fact, it is easy to see when the numbers are crunched that saving a little bit of money early in your life is worth much more than saving a lot later. This is because of the power of compound interest.

Do you feel like you don’t have enough money in your savings account? Here are a few tips to help you save more:

  • Stop making impulse purchases. When you find something that you want, wait at least 24 hours before buying it – you may find that in that time the urge to have it passes and you can put the money into your savings account instead.
  • Track your spending online. Whether you use your bank’s online portal or a safe third-party app, you should be keeping a close eye on your spending and identifying unnecessary expenditures so that similar purchases can be avoided in the future.
  • Identify your biggest area of opportunity. If you want to start saving more of your money, you will need to stop some of your spending. One of the areas where people can easily save is on food and dining. You can save quite a bit of money by buying fresh ingredients and cooking at home rather than going out to eat often.
  • Find free entertainment. Sure, you could spend money on going out, but there are plenty of ways to entertain yourself and your loved ones for free. Look for free events and activities in Boston, or just use something you’ve already bought.
  • Revisit your recurring expenses. Look at your bank account – specifically at your recurring expenses. See if any can be cancelled or parred back. Even your insurance premiums could be lessened. Ask a Vargas and Vargas Insurance agent to find out more.

It’s important to remember, though, that you shouldn’t necessarily have a humongous savings account. While there’s clearly an advantage to having a certain amount of cash available in a liquid form, once you get above a certain amount of savings you should put that money to work for you in investments. If you want some advice on the right threshold for you and your family, or of you have some investing questions, just call Vargas and Vargas Insurance Agency. We can recommend a great financial advisor that will be able to help you.

Are you ready to get yourself on the road to financial readiness? Whether you’re starting from nothing or evaluating your changing financial needs, you’re taking a step in the right direction. If you know of any high school or college students who may not yet realize the importance of having a nest egg, please share this blog post with them. And if you want to ensure that your insurance protection is ready to step in if there is a problem, call Vargas and Vargas Insurance Agency at 617-298-0655 for a free insurance review.

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Recap: Money Talks for College Students

“Many kids come out of college, they have a credit card and a diploma. They don’t know how to buy a house or a car or health insurance or life insurance. They do not know basic microeconomics.” – Jesse Jackson

If you have teenagers that are finishing up high school, or your kids are in the early stages of college, it may be time to sit down and talk to them about money. It’s a necessary evil in life, and the more your kids understand about it the better off they will be to handle life on their own – which is coming up sooner rather than later!

  • Tell them about how important it is to both have a budget and monitor their spending.
  • Encourage them to apply for additional scholarships, and only take out student loans if necessary.
  • Warn them about the dangers of credit cards, and tell them about how credit companies will try to lure them into signing up for cards promising free t-shirts and pizza.
  • Ensure that they see a college education as an investment into their future and that they put their education above all else (it’s easy for students to get diverted away from what’s important!)

If your student needs help with their Boston insurance policies, have them call Vargas and Vargas Insurance Agency at 617-298-0655. We can walk them through the importance of having the right insurance protection and get them a quote on a policy that will protect their valuables without emptying their wallets.

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Money Conversations with Your College Student

Are you the parent to a teenager? If your child in their last few years of high school or already in college, it can be difficult to have them sit down to give important life advice. Some teens want to believe that they know everything that they will need to know, but that is almost never the case.

As a parent, you need to make sure that your child is as prepared as possible for the financial challenges that they may face as an adult. Start this financial education journey by discussing one or more of the following topics with your teen:

The Need for a Budget

When teenagers go to college, they will be tempted to buy a lot of things, especially if it will be their first time living on their own. Remind your kids to always keep an eye on their bank account and tell them about how quickly small purchases can add up. They may be more likely to pay attention to their spending habits if their money is broken into monthly or weekly payouts, which is also good practice for when they start working and depend on paychecks.

Ask them to come up with a rudimentary budget before leaving for college. You can explain to them that it doesn’t have to be perfect, and that it can be adjusted in the future as they learn their own spending habits. A good budget is simply a tool for monitoring where money goes and being aware of increased spending in any given period.

The Impact of Student Loans

If your child needs to apply for student loans, they should understand the impact these loans could have later in their life. While in the short term it seems like a windfall, it is critical that college students understand the consequences of taking out such a large loan. Help your student realize the future impact of these loans by explaining the payoff schedule and showing them the additional interest payments that they will owe to the loan provider above the loan’s principle amount.

The Benefit of Scholarships

Unlike a student loan, a scholarship is a gift to students. Students, however, sometimes resist applying for scholarships because of the lengthy application process – especially if the scholarship requires an essay. Encourage your child to look at the benefits of a scholarship as opposed to a student loan, though, and they may be a little more willing to work for the “free” money available to them. Help them search for applicable scholarship using one of the many aggregators available, such as Fastweb and

The Danger of Credit Cards

When walking around a college campus, students are bombarded with credit card offers. These would typically be easy to ignore, but these dealers know what college students like, and will offer free pizza, t-shirts, and other gifts to those who are willing to sign up. They will say “You don’t even have to use it!” to lure in unsuspecting SWAG-hunters. Thankfully, your child will know better than to sign up for unnecessary credit cards once you explain to them the effect it could have on their credit score, and the future impact of present bad decisions.

The Significance of Personal Finance Knowledge

Nowadays, it seems that students get a high school diploma without learning any relevant life skills. Ask your student about the importance of auto insurance, or the difference between a 401(k) and an IRA – odds are they will have no idea what to say.

Every person that is coming of age deserves to have a basic knowledge of personal finance to increase their chances of success in the ‘real world.’ If you feel that your child is lacking in this area of their education, advise them to take a personal finance class either at college or even online.

The Thought of College as an Investment

Your student should know that going to college is an investment in their education. They shouldn’t make this commitment lightly and need to realize that their classes ought to come first. Also make sure that they know how to optimize their activities in relation to their resume upon graduation – many jobs nowadays are looking for more than a high GPA. They will look for membership to professional organizations, as well as internships and more. Most college students have access to advisors if they wish to discuss the best path toward employability in their future field.

Vargas and Vargas Insurance Agency is also here for all your teenager’s insurance needs as they go to college. This may include updating your home insurance to cover their belongings, or getting them their own renter’s insurance. Also talk to your agent about the best option for your student’s car insurance, as well as if they are eligible for any ‘good student’ discounts.

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Recap: Spending Your Tax Refund

“In this world nothing can be said to be certain, except death and taxes.” – Benjamin Franklin

Tax Day for this year has officially come and gone – are you waiting on a refund? It is estimated that 80% of people receive refunds on their income taxes, so let us ask you this – What are you going to spend your refund money on? If you want your windfall to go to work for you, here are a few ideas on how to spend it:

  • Pay off your existing debts, like your mortgage, car loan, student loans, or credit card balances. Most financial planning experts recommend paying off the one with the highest interest rate first.
  • Make improvements to your Boston area home, whether it’s to put off the cost of routine maintenance, improve your energy efficiency, or starting that DIY project you’ve been eyeing.
  • Invest the money in an emergency fund or a retirement account.
  • Take a vacation with your family to relax or make fun memories.

You could also use your 2018 tax refund to prepare for the unexpected with a Massachusetts life insurance policy. For more information, call our five-star insurance agency at 617-298-0655. We can explain to you the difference between whole and term life insurance, and help you decide which policy is right for you with a free quote. Don’t wait any longer, call now!

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Recap: Credit Score

“No man will make a great leader who wants to do it all himself or get all the credit for doing it.” – Andrew Carnegie

Every person has a few numbers that define them. One of the most important financial numbers in your life is your credit score. This number affects your life in many ways, including whether you will be eligible for car loans and mortgages, and the interest you pay on these loans.

But don’t believe everything that you hear about your credit score. There are many myths floating around, including:

  • Your credit score measures how rich or poor you are
  • It doesn’t matter how much of your available credit that you use
  • Only one person in a relationship has to have good credit
  • You have to carry a balance to have a good score

For more information about what a credit score determines, and how you can raise yours, check out our full blog post from last week. We even gave some tips on how to establish credit for the first time and a few ways that you can improve your credit score.

And remember, at Vargas and Vargas Insurance Agency we can help you with your home insurance once your great credit helps you get approved for a mortgage, or your car insurance if you’re in the market for a new vehicle. Call 617-298-0655 for a free car or home insurance quote.

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How to Spend Your Tax Refund

Tax Day is almost here! Have you submitted your Federal and Massachusetts income taxes yet? If you have, you may have received a tax refund! Whether you receive any money (and, if so, how much you receive) is different for every person, but one thing is always the same: the need to put that refund money to good use.

Sure, some people will look at their tax refund as an unexpected windfall and use it to purchase a luxury item or put it toward a vacation, but it’s just as easy to make that money work for you! Here are just a few ideas on how to use your payout wisely.

Pay off debt. It may seem like a boring way to spend your refund, but paying off debts now will mean spending less in interest in the future. Can’t decide what to pay off? Personal finance professionals recommend focusing on ‘expensive’ debt – that means paying off the debt with the highest interest rate first.

Start an emergency fund. If your debt is already under control, maybe you should put the money into a savings account. It is often recommended that everyone has at least three months’ worth of living expenses put aside for emergencies. It may seem like a lot, but you will be glad to have that money ready to go if you lose your job, have to pay for an expensive car repair, or make a trip to the emergency room. Remember – that’s three (or more) months’ worth of your typical expenses, not income.

Plan for your child’s future. If you have a family, you know how expensive it can be to raise children. You feel like you’re spending a fortune on diapers when they’re infants, and it only gets worse from there. If you have decided to help with your kid’s secondary education (or if you want to buy them a car or contribute to their wedding) you should start saving sooner rather than later. For education savings, look into the benefits of a 529 plan over a traditional savings account.

Protect your family. It’s impossible to know what the future holds for each of us – that’s why it is so important to have the right insurance protection. If you were to unexpectedly pass away, what expenses would you leave for your family? A life insurance policy would help with funeral expenses and other burdens, so talk to your Massachusetts insurance agent about how you can use your tax refund money to set up this policy and protect your loves ones.

Invest in your future. Are you putting money into your retirement accounts? Most people are, but very few people know when they will be able to retire based on their savings projections. One thing is for certain – money put into a savings account early will grow much more than money saved at the last minute. Consider using some of your tax refund to give your retirement accounts a much-deserved boost.

Improve your home. You spend a lot of time in your home, so maybe you should spend some of your tax refund making improvements. There are lots of DIY projects that you can take on in a weekend that will make a huge difference in your home, like planting a garden, installing crown molding, or making an art project to fill a blank space on a wall. You could even just save a portion of your refund for the inevitable repairs and maintenance that comes as a part of homeownership.

It’s also important to remember that your Massachusetts home insurance policy could cover you for certain repairs. If you have any questions about whether your situation is covered, call Vargas and Vargas Insurance Agency!

Pay it forward. Donating a part of your tax refund not only feels great, but if you save your receipt and it could reduce your tax bill for next year! There are even several health benefits associated with donating to charity.

And, there is one more thing that you could use your tax refund for – At the end of the day, if you want to use your tax refund to make memories with your loved ones, that is great too! Where will your next vacation take you? Many young families save for a trip to Disney World, but if you prefer to stay local, there are lots of vacation spots here in the state of Massachusetts, from the Berkshires all the way to Cape Cod!

So, will you follow this advice and put your tax refund money toward one (or more) of these goals? If you want to learn more about the benefits of having a life insurance policy, call 617-298-0655 and speak to a Vargas and Vargas Insurance agent. We can tell you all the ways that this policy will help protect your loved ones, and whether a term or a whole life insurance policy is right for you. We can even give you a free quote, making sure that you get the maximum discounts on your new protection.

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Know More about Your Credit Score

The credit score – a seemingly ‘all-knowing’ number that will determine your eligibility to get a mortgage or rent an apartment, buy a car, start a business, and more. This little number is a huge part of your life, so you need to do what you can to get it as high as possible. But, you may say, “it seems so arbitrary! What can I do to raise it?”

Never fear, dear reader! The professionals here at Vargas and Vargas Insurance Agency are here to demystify the credit score. Here are the details on many of the most-asked credit score issues:

What is a Credit Score?

When making a decision about whether you’re a good candidate for a loan, institutions want some credit history. Rather than sift through your entire history, though, they quantify your past spending. Credit bureaus take many factors and turn it into a number between (generally) 300 and 850. They pass this number on to the institution you’re looking to borrow from so that a decision can be reached.

What affects Your Credit?

The three credit bureaus (Experian, TransUnion, and Equifax) take many things into account when determining your credit score. Each is slightly different and has differing weights, but generally the things that will affect you the most are:

  • Whether you pay your bills on time
  • How much of your available credit is being used.
  • The types of credit you carry.
  • The number of active credit accounts you have open.

Establishing Credit

For young people and those that have not previously taken out a loan or owned a credit card, the question of how to establish credit can feel like a Catch-22. Most places want you to have a credit history before they will extend you any additional credit, so starting out is tricky.

Thankfully, there are a few products available to new borrowers. One is a secured credit card – you may open this line of credit by providing a deposit to back the card, and you can reclaim the deposit when the card is closed. You can also open a traditional credit card with a co-signer that has an established credit history.

Another way that many people establish their credit is with a student loan. There are many types of student loans available, so if this is the route you wish to take, do your homework to find the product that best suits your needs.

Improving Your Credit Score

If you’re looking to buy a car or apply for a mortgage, you may want to improve your credit score. There are several ways to raise your credit score. The quickest is to check all three of your credit reports to ensure that there are no mistakes.

Once you have made sure that your credit reports reflect your financial standing, you can move on to other methods of raising your score. Be warned, though, that it will take some time before you see an improvement. To see your credit score increase, you will need a history of on-time payments with a variety of lines of credit that you have carried for a long time.

Remember also that your credit score will take a small hit when you apply for a new line of credit, so if you want to apply for a mortgage in the near future, ask a financial planner whether you should wait to open a new credit account or purchase a new car.

Myths About Credit Scores

Don’t listen to everything you hear when it comes to your credit score. There are lots of myths floating around that aren’t true! Like these:

  • Your credit score measures how rich or poor you are – People with less income that have established credit and pay their bills on time can have a better score than higher income people with little to no credit and a history of late payments.
  • It doesn’t matter how much of your available credit that you use – Credit utilization is a key factor when determining your score. Often, people with better credit use far less of their available credit than people with low credit.
  • Only one person in a relationship has to have good credit – When you apply for a loan or mortgage with your partner, both of your scores will be analyzed.
  • You have to carry a balance to have a good score – In fact, you can pay off your card(s) in full each month and still have a great score. Paying in full also means that you won’t have to pay any interest!

Does that answer all of your questions about credit scores and how they affect you? If you have more, reach out to us – we can direct you to a professional with the answers.

And if your credit score recently helped you get approved for a home, car, or business loan, call us! We can get you set up with the right insurance policy to protect you. Our quotes and insurance reviews are always free, so you have nothing to lose.

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Saving for a Home Down Payment

Home ownership is the American dream. Many people know that they want to own a home one day, but don’t have a concrete strategy to one day become a homeowner. If you’re one of those people with a goal of buying a home, here are a few tips that you can use to turn your lofty goal into a reality:

  • Determine Your Needs: Calculate your savings goal by finding out the average cost of a home similar to one you would like to buy and figuring a down payment of 15-20%.
  • Consider Investing: If it’s going to be a while before you need your down payment, grow the money you have saved by investing it in a diversified portfolio.
  • Make Budgeting Decisions: The less you spend, the more you can save. Make some sacrifices now in order to put more into your down payment fund – all those little savings will add up!
  • Consider Using Your IRA: For any other expense, tapping into your traditional or Roth IRA is a no-no, but you may be able to take money out of these accounts tax-free for use as a down payment.
  • Put “Found Money” to Work: Whenever extra money comes your way (whether it’s from a weekend job or a birthday gift) put some or all of it toward your future home.

And when it’s finally time to use your down payment and buy your home, remember that Vargas and Vargas Insurance Agency is here to help you with your homeowner’s insurance policy. Just call 617-298-0655 for a free, no-obligation quote.

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