saving http://www.wisebread.com/taxonomy/term/284/all en-US 5 Ways Being Late on Tech Trends Saves You Money http://www.wisebread.com/5-ways-being-late-on-tech-trends-saves-you-money <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-ways-being-late-on-tech-trends-saves-you-money" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/you_have_got_to_meet_me_at_the_sale.jpg" alt="You have got to meet me at the sale!" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Late adopters are not people who hate technology, think trends are evil, and spend their time sitting in candlelit rooms grumbling about the modernization of things that used to matter. Late adopters are a segment of the consumer population who don't feel the need to jump on a new tech or trend as soon as it's available. They wait. They eye before they try. They are also often the last to try, and they save money and get more value out of what they do decide to buy. Here's how you can, too.</p> <h2>1. Skip the newest version</h2> <p>People often think of late adopters in the context of new technology. Late adopters won't be in line for the latest iPhone, or fighting crowds for the newest smart home thermostat. Their willingness to wait means they avoid the premium prices that come with getting the newest thing, now.</p> <p>For example, older versions of the iPhone typically drop in price by $100 when Apple releases the newest version. Late adopters save that $100, at a minimum. Potentially, they can save more by buying a used phone in great condition from someone who can't wait. (See also: <a href="http://www.wisebread.com/5-smart-ways-to-save-on-smartphones?ref=seealso" target="_blank">5 Smart Ways to Save on Smartphones</a>)</p> <h2>2. Save time and data</h2> <p>Late adopters save by avoiding the time and money spent on buying relatively untested tech trends, or gadgets. Tech is a competitive industry; not all that launches will last. Early adopters who sign on for the latest service or product provided by a startup get the thrill of the new. They also get the hassle of the new: keeping up with continual upgrades, dealing with bugs, and having to move (or lose) their data when a service shuts down. (See also: <a href="http://www.wisebread.com/tech-life-8-reasons-why-you-shouldn-t-be-an-early-adopter?ref=seealso" target="_blank">8 Reasons Why You Shouldn't Be an Early Adopter</a>)</p> <h2>3. Avoid premium pricing</h2> <p>The premium pricing concept translates to many industries beyond fashion. If you're set on having the newest designs, as soon as they're released, you'll pay more for it. This &quot;hunger marketing&quot; strategy creates a sense of urgency and scarcity, and many consumers buy into it. Literally.</p> <p>Late adopters avoid price markups by waiting before purchasing. That new fashion trend highlighted on the main display will be in the bargain bin in a few weeks, and the price will drop accordingly. The timeline might be a bit longer, but the same goes for new tech toys.</p> <h2>4. Wait on tech stocks</h2> <p>By waiting, you can benefit financially by avoiding trend-chasing, a common strategy in the stock market. Prices on &quot;trending&quot; stocks increase to a maximum, then fall, sometimes dramatically. If you chase those trends, purchasing as the trend is growing or peaking, you might overpay.</p> <p>Seasonal cycles and holidays in the stock market can favor late adopters, as well. Trading activity, and prices, follow predictable patterns. People who are willing to wait can buy and sell at the best time, rather than taking what they can get right away.</p> <h2>5. Evaluate your true necessities</h2> <p>Turns out, the necessities of life aren't always necessities. If you talk to the sales rep at your nearest baby goods warehouse, you'll get a long list of items that you simply must have. If you talk to a seasoned parent, you'll get a much shorter list: the essentials, and those daily-use items that save a parent's sanity more than a few times.</p> <p>Taking the late adopter approach for a new baby, or for family entertainment, or for your tween's wish list will help you filter it to a shorter, smarter list. Many things seem optimum and exciting when we first hear about them and when our friends all have them. The crystal-clear voice of experience will save you money if you give it enough time.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/annie-mueller">Annie Mueller</a> of <a href="http://www.wisebread.com/5-ways-being-late-on-tech-trends-saves-you-money">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-avoid-buying-electronics-youll-regret">5 Ways to Avoid Buying Electronics You&#039;ll Regret</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-pet-cameras">The 5 Best Pet Cameras</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/frugal-tip-do-not-spend-when-you-are-sad">Frugal Tip: Do Not Spend When You Are Sad</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-smart-alarm-clocks">The 5 Best Smart Alarm Clocks</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-usb-powered-fans">The 5 Best USB-Powered Fans</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Shopping Technology gadgets saving shopping spending tech Wed, 21 Jun 2017 08:31:12 +0000 Annie Mueller 1969595 at http://www.wisebread.com Are Your Emotions Costing You Money? Take This Quiz http://www.wisebread.com/are-your-emotions-costing-you-money-take-this-quiz <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/are-your-emotions-costing-you-money-take-this-quiz" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/pensive_young_woman_holding_empty_wallet_after_shopping.jpg" alt="Pensive young woman holding empty wallet after shopping" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Building a strong financial foundation for you and your family requires discipline. It requires patience. It requires a steady mindset. But even the best of us have found ourselves spending and making financial decisions based on emotions, whether that's retail therapy, or holding off on investing due to <a href="http://www.wisebread.com/how-to-get-over-these-5-scary-things-about-investing?ref=internal" target="_blank">fear of the markets</a>. We've made decisions based on joy or comfort in the short term instead of satisfaction in the long run.</p> <p>Are you letting your emotions control your finances? Answer these questions to find out.</p> <h2>Do you spend money when you feel sad, happy, or stressed?</h2> <p>You had a bad day at work, so you go on a shopping spree for new shoes. You got a promotion, so you celebrate by taking friends out to eat at a fancy restaurant. You spend money as a reaction or antidote to whatever feelings you have at a given moment, and this makes it hard to save money at a healthy rate. You don't need to treat yourself to a costly reward every time you're happy or sad. This is an easy way to fall into a dangerous emotional spending cycle. (See also: <a href="http://www.wisebread.com/the-high-cost-of-the-treat-yourself-mindset?ref=seealso" target="_blank">The High Cost of the &quot;Treat Yourself&quot; Mindset</a>)</p> <h2>Have you held off on investing because you are afraid?</h2> <p>Fear is one of the most powerful emotions we have, and many people have never gotten started with retirement planning and investing because they are intimidated. They may find the whole process of investing to be overwhelming, or they may have a fear of asking a dumb question. Additionally, they may fear that their investments will lose money. In reality, it's best to channel fear into investing more, because not having enough money saved for retirement is a truly scary thought. (See also: <a href="http://www.wisebread.com/3-steps-to-getting-started-in-the-stock-market-with-index-funds?ref=seealso" target="_blank">3 Steps to Getting Started in the Stock Market With Index Funds</a>)</p> <h2>Have you sold investments when you realized they lost value?</h2> <p>We've probably all found ourselves frustrated with certain investments that have tanked, and sold them at a loss. Of course, then we've kicked ourselves when we've seen those same investments rebound in short order. It's not a good practice to be emotional when investing; the most successful investors practice discipline, patience, and steadfastness over the course of many years.</p> <h2>Have you ever bought something out of jealousy?</h2> <p>One of your closest friends just bought a big house in a nice neighborhood. Another just bought a fancy car. It can seem like other people are making out better than you, but this is no excuse to spend irresponsibly. Keeping up with the joneses is a path to financial hardship if you spend simply because you feel left out or jealous.</p> <h2>Do you get excited about getting a tax return?</h2> <p>It's an often ignored fact that if you are getting a tax refund, you've been lending money to the government interest-free all year. Remember: This was your money that you should have had all along. And yet, most people get a rush of excitement from getting a tax return. What's worse, people often treat their tax return like an unexpected windfall, and spend it frivolously. The sound, unemotional approach to taxes is to adjust your withholding so that you don't get a return at all. In fact, even owing a small amount to the IRS is OK as long as you don't pay a penalty. (See also: <a href="http://www.wisebread.com/10-smart-ways-im-spending-my-tax-refund?ref=seealso" target="_blank">10 Smart Ways I'm Spending My Tax Refund</a>)</p> <h2>Have you ever sought a refund anticipation loan or payday loan?</h2> <p>The same psychology that governs the love of tax returns also applies to those who seek money before it's due to them. If you are seeking cash early, you may end up paying exorbitant fees or interest rates. A typical payday loan might have an annual interest rate of 400 percent, according to the Consumer Financial Protection Bureau. (See also: <a href="http://www.wisebread.com/six-horrible-financial-products-you-should-avoid?ref=seealso" target="_blank">Six Horrible Financial Products You Should Avoid</a>)</p> <h2>Are you a habitual gambler?</h2> <p>Let's face it: Gambling can be exciting. It's a rush when you place a bet on some ponies and see your horse cross the finish line first. It's a thrill to see your ball land on your number. But gambling is ultimately an emotion-driven experience, and the excitement of winning can be addicting. Betting on a few hands of blackjack or the occasional football game won't kill you, but it's important to not let your emotions guide your betting habits. There's a long list of fine people who have ruined their financial lives through gambling.</p> <h2>Do you give a lot of money to children and other family members?</h2> <p>There's nothing wrong with being generous to those people who you care about most. But it's important to not let people take advantage of that generosity. Often, the decision to support a family member or friend is done not out of basic selflessness, but a feeling of obligation or guilt. It's important to not let your feeling of obligation to others outweigh your obligation to yourself.</p> <h2>Have you lost a job due to your temper?</h2> <p>Jobs can be frustrating. But if you've ever flown off the handle at work, you may be threatening your income and job security. While it's true that hiring managers look for workers with specific skill sets, they also want to make sure employees are able to get along with their colleagues. Workers who don't interact well with their peers, or respond poorly to criticism, often don't last long.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/are-your-emotions-costing-you-money-take-this-quiz">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-10-biggest-lies-we-tell-ourselves-about-money">The 10 Biggest Lies We Tell Ourselves About Money</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/73-easy-ways-to-save-money-today">73 Easy Ways to Save Money Today</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-meditation-can-make-you-a-money-master">6 Ways Meditation Can Make You a Money Master</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-personal-finance-letter-id-write-to-my-younger-self">The Personal Finance Letter I&#039;d Write to My Younger Self</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/rich-people-spend-350k-to-park-their-cars-heres-how-wed-spend-it-instead">Rich People Spend $350K+ to Park Their Cars — Here&#039;s How We&#039;d Spend it Instead</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance debt emotional spending fear of markets gambling giving money impulse shopping indulging investing overspending saving spending Wed, 21 Jun 2017 08:00:16 +0000 Tim Lemke 1966173 at http://www.wisebread.com 7 Biggest Ways Procrastination Hurts Your Finances http://www.wisebread.com/7-biggest-ways-procrastination-hurts-your-finances <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-biggest-ways-procrastination-hurts-your-finances" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-621987808.jpg" alt="Woman learning biggest ways procrastination hurts her finances" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Remember those days in college when you'd put off studying until the night before a big exam? You'd stay up all night, desperately trying to cram everything in at the last minute. If only you'd taken the time earlier, you'd have walked into your test rested, calm, and most importantly, prepared.</p> <p>Those bad habits can cost you a lot more in real life if you carry them into the way you handle money. Here are seven situations when procrastination really hurts your bottom line.</p> <h2>1. Investing: Your money has less time to grow</h2> <p>It's one of the basic rules of smart investing: Invest as early as you can and for as long as you can. Some of the most successful investors are those who had relatively modest incomes, but started investing young and stayed in the markets for decades. Compounding interest worked in their favor, and they enjoyed a sizable nest egg later in life. Even a delay of five to 10 years can make a significant difference in how much money you have by retirement. Quite simply, the more you procrastinate, the less money you'll have.</p> <h2>2. Saving: You continue to spend more than you earn</h2> <p>You're aware that you're spending more money than you're bringing in, but you tell yourself that you'll start cutting back after the holidays. The holidays come and go, so then you tell yourself you'll start saving after your big spring break trip. After spring break, you promise you'll start after your cousin's wedding in July. There's always some reason to put off saving, but the best time to start tightening your belt is right away. Devising an arbitrary future start date for financial prudence only means you're spending money you shouldn't in the interim.</p> <h2>3. Debt payoff: Your balances balloon</h2> <p>That credit card bill keeps getting bigger, and it comes on top of your student loans and car payments. You're getting crushed by debt, but it's so overwhelming you can't bring yourself to come up with a plan to tackle it. Every moment you wait to address your debt problem is a moment that allows that debt to grow. Devise a repayment strategy now, before your debt ruins you. (See also: <a href="http://www.wisebread.com/5-ways-to-pay-off-high-interest-credit-card-debt?ref=seealso" target="_blank">5 Ways to Pay Off High Interest Credit Card Debt</a>)</p> <h2>4. Taxes: You might make a costly mistake</h2> <p>Tax Day seems so far away, but before you know it, it's the middle of April and you haven't even gotten started. You may think your taxes are simple, but rushing through the process increases your chances of forgetting income, missing out on deductions, or making a silly error.</p> <p>No one says you have to file your taxes immediately at the beginning of the year, but at least give yourself a few weeks to file your return carefully. A rush job could mean you pay too much, or you may end up with penalties due to mistakes.</p> <h2>5. Bills: You miss payment deadlines</h2> <p>There are consequences to paying bills late, usually in the form of fees and interest charges. If you're the type of person who doesn't even open a bill until it's nearly due, you're putting yourself at risk of extra expenses.</p> <p>Late fees and interest aren't merely one-time charges. Miss your payments by enough days and it can hurt your credit score, impacting your ability to borrow. It's best to pay bills right away when you get them &mdash; or put them on autopay &mdash; so they don't threaten your finances further. (See also: <a href="http://www.wisebread.com/5-simple-ways-to-never-make-a-late-credit-card-payment?ref=seealso" target="_blank">5 Simple Ways to Never Make a Late Credit Card Payment</a>)</p> <h2>6. Job applications: You don't get that better-paying position</h2> <p>You found a job that you think you'll like, and it pays considerably more than your current one. But instead of applying right away, you wait. And wait. And wait. Before you know it, the position is filled. This is a total wasted opportunity.</p> <p>Yes, applying for a job, reworking your resume, writing cover letters, and going through interviews are all tedious and time-consuming. But when you're stuck sitting at your current gig, underpaid and unhappy, you'll really be kicking yourself for not putting in the work to get yourself unstuck.</p> <h2>7. Raises and promotions: You miss out for another year</h2> <p>It's hard to know the precise time to <a href="http://www.wisebread.com/5-times-you-should-demand-a-raise" target="_blank">ask for a promotion or a raise</a>. Often, we wait until annual review season, but by then, personnel decisions may already have been made. The best thing is to approach the subject sooner rather than later. Your boss may not be in a position to respond right away, but you've planted the seed so they know your wishes.</p> <p>Besides, simply asking for a raise or promotion may force your employer to look more closely at your work, and hopefully recognize what you bring to the table each day. If you wait too long to ask, you may have to wait for an entire budget cycle to get another shot.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/7-biggest-ways-procrastination-hurts-your-finances">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-money-moves-to-make-the-moment-you-get-a-promotion">8 Money Moves to Make the Moment You Get a Promotion</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-10-biggest-lies-we-tell-ourselves-about-money">The 10 Biggest Lies We Tell Ourselves About Money</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-surprising-ways-the-rich-get-richer">5 Surprising Ways the Rich Get Richer</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-inspiring-people-who-each-paid-off-over-100000-in-debt">5 Inspiring People Who Each Paid Off Over $100,000 in Debt</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-let-outdated-money-advice-endanger-your-money">Don&#039;t Let Outdated Money Advice Endanger Your Money</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance asking for raise bills debt investing jobs last minute procrastination promotions saving taxes Tue, 23 May 2017 08:00:09 +0000 Tim Lemke 1949205 at http://www.wisebread.com 6 Money Moves to Make If Your Net Worth Is Negative http://www.wisebread.com/6-money-moves-to-make-if-your-net-worth-is-negative <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-money-moves-to-make-if-your-net-worth-is-negative" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-546177782.jpg" alt="Woman making money moves when her net worth is negative" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>One of the most illustrative financial figures to know is your total net worth. This is the value of all of your cash and assets, minus your debts. For many people, that figure is below zero.</p> <p>Building a high net worth should be the ultimate goal of anyone seeking financial freedom. If your net worth is less than zero, consider making these moves ASAP. (See also: <a href="http://www.wisebread.com/10-ways-to-increase-your-net-worth-this-year?ref=seealso" target="_blank">10 Ways to Increase Your Net Worth This Year</a>)</p> <h2>1. Reduce your spending</h2> <p>One of the most direct ways to end up with a negative net worth is to spend more than you earn. Cutting unnecessary expenditures is the first step in having a net positive income each month. This can mean some tough choices, like eliminating cable, eating out, and your annual vacation. It may also require more extreme measures, like getting by without a car.</p> <p>You can help yourself by tracking your spending meticulously in a budget so you know where money is going each month. Even if you think you are already living frugally, there's a chance you can find savings just by taking a closer look.</p> <h2>2. Pay off your high-interest debt</h2> <p>If your net worth is negative, it may be partially due to <a href="http://www.wisebread.com/5-ways-to-pay-off-high-interest-credit-card-debt?ref=internal" target="_blank">high interest credit card debt</a> and other loans. Interest can quickly pile up and eventually overwhelm your earnings, putting you in negative net worth territory. Tackling debt starting with the highest interest rate first is called the avalanche method, and this can save you a lot of money on interest payments in the long run. Sometimes, even paying off just one credit card can make a huge difference in your financial situation. (See also: <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=seealso" target="_blank">The Fastest Way to Pay Off $10,000 in Credit Card Debt</a>)</p> <h2>3. Bring in more income</h2> <p>If you're crumbling under a mountain of debt and you don't have enough income to pay off the debt, you must find a way to bring in more money. Start by searching for higher paying jobs or <a href="http://www.wisebread.com/5-times-you-should-demand-a-raise?ref=internal" target="_blank">asking for a raise</a> from your current employer. Consider starting a side hustle, small business, or taking an additional part-time job. It may also be worth exploring income-producing investments, such as dividend stocks or peer-to-peer lending. If you have a maniacal focus on earning more money, you will help yourself move from negative to positive in the net worth department.</p> <h2>4. Invest</h2> <p>Arguably the most important way to build net worth is through investing. If you are able to put even a small amount of your earnings into stocks or index funds that grow, you'll give your financial picture a boost over time. Obviously, investing in the stock market carries risks. But U.S. stocks have consistently risen in value over time, with long-term growth eventually surpassing losses during market crashes. The more you can invest, the better off you'll be, especially if you stay in the market for many years. You won't get rich overnight, but your overall net worth will eventually rise.</p> <h2>5. Set a financial goal</h2> <p>If you had enough money, what would you ultimately want to do with it? Would you want to buy a home? Start a family? Build a hefty retirement account? To increase your net worth, it helps to have a goal to motivate you to save. Ideally, your financial goal should be geared toward building a high net worth, not a one-time purchase like a car. Whether it's a down payment for a home, a comfortable retirement, or saving for college, your dreams can help keep you accountable.</p> <h2>6. Refinance your mortgage</h2> <p>Homeownership can be a great way to build net worth, but it can also be a drain on your finances if you have the wrong kind of mortgage. If your loan term is very long, or if you have a high-interest or interest-only loan, you may not be paying much toward the principal of the loan (or building any equity) for a while. And that could be a serious problem if you're having trouble making payments.</p> <p>If you find yourself in this situation, you may want to consider refinancing to a shorter term or lower interest rate. There's no sin in borrowing to buy a home, but ideally, homeowners should seek a fixed-rate mortgage with a relatively short loan term: 30 years is standard, but a 15-year mortgage offers you the ability to build equity &mdash; and thus your net worth &mdash; at a faster pace. Just be sure you can comfortably make the monthly payments.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/6-money-moves-to-make-if-your-net-worth-is-negative">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-inspiring-people-who-each-paid-off-over-100000-in-debt">5 Inspiring People Who Each Paid Off Over $100,000 in Debt</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-money-moves-to-make-the-moment-you-decide-to-retire">12 Money Moves to Make the Moment You Decide to Retire</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/15-personal-finance-rules-you-should-be-breaking">15 Personal Finance Rules You Should Be Breaking</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-meditation-can-make-you-a-money-master">6 Ways Meditation Can Make You a Money Master</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/refinance-these-4-common-debts-before-year-ends">Refinance These 4 Common Debts Before Year Ends</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management assets goals investing mortgages net worth refinancing saving spending stocks Wed, 10 May 2017 08:00:08 +0000 Tim Lemke 1941242 at http://www.wisebread.com 8 Signs You're Paying Too Much for Your Mortgage http://www.wisebread.com/8-signs-youre-paying-too-much-for-your-mortgage <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-signs-youre-paying-too-much-for-your-mortgage" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-495980844.jpg" alt="Learning signs that you&#039;re paying too much for your mortgage" title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Buying a home can be a great step along the path to financial freedom, but it can also become a burden if you're not careful. A mortgage can be a heavy weight on your finances if you either buy a house you can't afford, or get locked into unfavorable loan terms.</p> <p>Here's how to tell if your mortgage is too expensive.</p> <h2>1. You Are Having Trouble Making Ends Meet</h2> <p>No matter what you do, you feel like you're struggling to get ahead financially. It always seems like there's only a small amount leftover at the end of each month to pay bills or place into savings. It could be that your house is weighing you down. If you're working too hard to get ahead with your money, it may be time to <a href="http://www.wisebread.com/refi-shy-how-to-determine-if-now-is-the-time-to-refinance?ref=internal" target="_blank">refinance your mortgage</a> or move into a less expensive home.</p> <h2>2. It's Eating Up More Than 30% of Your Income</h2> <p>The federal government advises that homeowners should avoid paying more than 30% of their income on housing. The theory behind this number is that for most people, keeping payments below this level will leave them with enough to pay for other non-discretionary spending. Keep in mind that many lenders will approve prospective homeowners for a loan even if their payments would be above that 30% threshold. Lenders will often instead refer to a person's &quot;debt-to-income&quot; ratio, and will lend if that ratio is as high as 43% &mdash; and banks went even higher during the housing bubble.</p> <p>Even if you are comfortably able to make your mortgage payments, it's wise to try and get under the 30% threshold. After all, more money in your pocket means more money to take care of your other financial obligations, invest for the future, or simply enjoy life.</p> <h2>3. Your Interest Rate Is Higher Than Everyone Else's</h2> <p>It's very easy to get a fixed-rate mortgage, make the payments, and not concern yourself with how interest rates are going up and down. But you never want to be locked into a higher rate than necessary. If you bought your home more than a decade ago, chances are your interest rate is higher than what's available now. The rate on a 30-year fixed rate mortgage is a little over 4% right now. If your rate is considerably higher, look to refinance and see what you can save.</p> <h2>4. You Are Barely Making a Dent in the Loan Principal</h2> <p>You've been making mortgage payments for years, but every time you look at your account statement, it seems like the principal balance barely budges. What gives? It's normal to pay mostly interest when you first get a loan, but over time your money should increasingly go toward paying off principal. If you find that you're not paying down the loan as quickly as you want, it could be because your interest rate is too high or your term is too long (or both.)</p> <h2>5. Your Income Has Gone Up</h2> <p>When you bought your house, your interest rate was based at least partially on your household income. But if you've received multiple pay raises since, you might qualify for a lower rate. Or, you may be able to refinance into a shorter loan term, thus saving you money in interest over time.</p> <h2>6. Your Credit Score Has Improved</h2> <p>A mortgage interest rate is also partially based on a homeowner's credit score when they apply for a loan. If your credit score was mediocre back then, there's a chance you got stuck with a high rate. If you've worked hard to be financially responsible ever since, your credit score may be much higher. Thus, you may be able to refinance your mortgage into a lower rate. According to FICO, a person with a credit score of 650 might pay as much as $100 more per month on a $200,000, 30-year fixed loan than someone with a score of 800. That could add up to tens of thousands of dollars over the course of a loan. (See also: <a href="http://www.wisebread.com/7-easy-ways-to-raise-your-credit-score-this-year?ref=seealso" target="_blank">7 Easy Ways to Raise Your Credit Score This Year</a>)</p> <h2>7. Your ARM Just Adjusted</h2> <p>During the housing bubble, many homeowners were lured into adjustable rate mortgages that offered low interest rates initially and then jumped after a certain number of years. (In 2005, these loans made up nearly 40% of the mortgage market.) Many families saw their payments increase sharply and beyond what they could afford. If you currently have an adjustable rate mortgage, make sure you are prepared to make payments once the interest rate adjusts upward. Otherwise, consider refinancing to a fixed mortgage with a low rate.</p> <h2>8. You Are Paying for Mortgage Insurance</h2> <p>Many lenders require borrowers to pay <a href="http://www.wisebread.com/what-is-private-mortgage-insurance-anyway?ref=internal" target="_blank">private mortgage insurance</a> (PMI) if they put less than 20% down on a home. This is to protect the lender if a home ends up in foreclosure. Mortgage insurance essentially adds to your cost of homeownership, often to the tune of hundreds of dollars annually. This requirement goes away once your principal balance drops below 78%. Ideally, you want to avoid paying PMI altogether by putting more than 20% down. This also means you're borrowing less overall and will save money in the long run. But if you can't quite save that much up front, work aggressively toward paying off your loan so you can get rid of the PMI requirement sooner.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/8-signs-youre-paying-too-much-for-your-mortgage">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-biggest-regrets-of-new-homeowners">8 Biggest Regrets of New Homeowners</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-what-to-do-if-you-cant-afford-your-mortgage-payment">Here&#039;s What to Do If You Can&#039;t Afford Your Mortgage Payment</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-tax-deductions-new-homeowners-shouldnt-skip">4 Tax Deductions New Homeowners Shouldn&#039;t Skip</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/do-you-really-need-a-20-percent-down-payment-for-a-house">Do You Really Need a 20 Percent Down Payment for a House?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-qualify-for-a-mortgage-with-a-small-downpayment">5 Ways to Qualify for a Mortgage With a Small Downpayment</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing adjustable rate down payment fixed rate interest loans mortgage pmi private mortgage insurance saving Fri, 10 Mar 2017 10:00:23 +0000 Tim Lemke 1902766 at http://www.wisebread.com 4 Reasons People Don't Retire Early — and How You Can http://www.wisebread.com/4-reasons-people-dont-retire-early-and-how-you-can <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-reasons-people-dont-retire-early-and-how-you-can" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-503452702.jpg" alt="Woman learning reasons people don&#039;t retire early" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Retirement is undeniably a time of drastic change in most people's lives. Typically, people have spent at least four decades in the workplace by the time they accept their gold watch. The average retirement age is 62 to 65, depending on where you live, according to a survey by SmartAsset.</p> <p>While work can provide routine and stability, as the years go by it can also grow to feel burdensome and stale. When to retire is a very personal question, linked to lifestyle and finances. Here are a few of the common reasons people feel they're not ready for retirement. (See also: <a href="http://www.wisebread.com/4-reasons-early-retirement-might-be-financially-risky?ref=seealso" target="_blank">4 Reasons Early Retirement Might be Financially Risky</a>)</p> <h2>Worried About Having Enough Money</h2> <p>It's probably not a surprise that monetary reasons are number one on this list. Having a regular paycheck affords a lot of comfort that can be hard to walk away from.</p> <p>One of the most common reasons most individuals won't consider an early retirement is fear that their savings will be insufficient to provide the lifestyle they've been used to in their working years.</p> <p>However, if you're serious about wanting to retire now, there are ways you can make your savings go further, such as <a href="http://www.wisebread.com/5-american-cities-where-you-can-retire-on-just-social-security?ref=internal" target="_blank">retiring in a cheaper state</a>, or even a foreign country where the cost of living is lower. Also, using the <a href="http://www.wisebread.com/how-to-save-an-extra-109486-a-year?ref=internal" target="_blank">right credit card can save you thousands</a> of dollars a year.</p> <p>Alternatively, the <a href="http://www.wisebread.com/can-you-really-make-a-living-in-the-gig-economy?ref=internal" target="_blank">gig economy</a> affords a lot of ways for people who are officially retired to earn disposable income. For instance, you could <a href="http://www.wisebread.com/this-is-how-you-rent-your-place-on-airbnb-and-succeed?ref=internal" target="_blank">rent out a room on a site like Airbnb</a> to help pad your savings. Just make sure you check out local laws in your area for any restrictions on short-term rentals.</p> <h2>Hesitant to Lose Identity Tied to Work</h2> <p>In the Western world, one of the first questions we ask when meeting someone new is, &quot;What do you do?&quot; The meaning, of course, is what do you do for work. This question is a way of situating someone socioeconomically, understanding their background and education, and gaining a window into their lives.</p> <p>Of course, identity goes beyond what you do for work, and this is an important shift to be conscious of when considering retirement. Many individuals may feel that they are giving up a part of themselves when they decide to stop working.</p> <p>However, there are many other meaningful activities outside of work that have an equally important bearing on identity. These may include hobbies such as artwork, exercise, reading, writing, or travel.</p> <p>While a loss of identity is a common fear for people facing retirement, in reality, retirement can give you the time to explore other creative outlets that you wouldn't have been able to partake in with a busy work schedule.</p> <p>Instead of viewing the end of work as losing part of your identity, try to shift to viewing this as a time to explore different components of who you are. This will make early retirement meaningful, not boring.</p> <h2>Anxious Due to No Concrete Retirement Plan</h2> <p>According to a 2015 survey by the Deloitte Center for Financial Services, only 49% of consumers have a formal retirement plan. The problem of not having a plan for retirement is that it leaves fears and emotions to govern your decisions, as opposed to concrete numbers. Plus, by putting a plan in place, you can see very clearly what steps you need to follow to reach a certain goal, like retiring in five years, for example. (See also: <a href="http://www.wisebread.com/7-retirement-planning-steps-late-starters-must-make?ref=seealso" target="_blank">7 Retirement Planning Steps for Late Starters</a>)</p> <h2>Afraid of Being Bored and Restless</h2> <p>Some people simply put off retirement because they are worried about being bored with all the extra time on their hands once they're not going to the office every day.</p> <p>However, retirement doesn't mean that you have to stop working entirely. Some individuals use this time to move from a decades-long career they've grown tired of to more fulfilling employment, or even their own business.</p> <p>If your new pursuit is something that gives you the chance to vary your work schedule, that can be very stimulating, too. Additionally, some universities offer free classes to those over 65 years of age.</p> <p>You can also take up countless hobbies like yoga, dance, snorkeling, scuba diving, golfing, hiking, or biking. To stimulate the mind, you can throw yourself into an artistic endeavor or learn a new language, the ideal activity for those who choose to retire overseas.</p> <p>Retirement is not just the end of one chapter, but also the beginning of a new one. Often, the biggest roadblocks to retiring are fear-based. It can help to re-evaluate the situation by looking at the facts, instead of just relying on emotions.</p> <p>Of course, the decision to retire is a personal one, and the right age to retire is different for everyone.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/amanda-gokee">Amanda Gokee</a> of <a href="http://www.wisebread.com/4-reasons-people-dont-retire-early-and-how-you-can">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-retirement-planning-steps-late-starters-must-make">7 Retirement Planning Steps Late Starters Must Make</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-keys-to-an-early-retirement">4 Keys to an Early Retirement</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/left-a-job-do-a-rollover">Left a job? Do a rollover.</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-signs-you-arent-saving-enough-for-retirement">10 Signs You Aren&#039;t Saving Enough for Retirement</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-reasons-why-a-roth-ira-may-be-better-than-your-401k">4 Reasons Why a Roth IRA May be Better Than Your 401(k)</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 401k early retirement IRA retirement planning saving Tue, 07 Feb 2017 10:30:37 +0000 Amanda Gokee 1885695 at http://www.wisebread.com How Many of These "Frugal Virtues" Have You Mastered? http://www.wisebread.com/how-many-of-these-frugal-virtues-have-you-mastered <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-many-of-these-frugal-virtues-have-you-mastered" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_smile_thinking_636275722.jpg" alt="Woman mastering several frugal virtues" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>What does it mean to be truly frugal?</p> <p>It's more than just trying to save money. In many ways, being frugal is a lifestyle. It's a virtuous one, too, if you can handle the commitment.</p> <p>To embody a frugal attitude requires you to follow a philosophy based on simplicity, discipline, and an awareness of yourself and the world around you.</p> <p>These are the Frugal Virtues. How many have you mastered?</p> <h2>1. Stifling Instant Gratification</h2> <p>You buy a $5.99 cappuccino because you feel like you need caffeine immediately. You buy a new car because it's shiny and awesome and you just can't wait to have it. You're the first to get the next iPhone, and absolutely must see the next Star Wars sequel on the night it comes out. You're not the type to wait for things. Unfortunately for you, when it comes to spending, patience is a virtue. New products are almost always cheaper if you wait to buy them. And when you wait to buy something, you may realize you don't need the item after all. Spending to satisfy every immediate urge is not part of the path to financial freedom.</p> <h2>2. Seeking Efficiency</h2> <p>To be efficient is to have maximum productivity with the least effort and expense. This concept of efficiency can be applied to a number of areas of personal finance. It could mean driving a car with good fuel mileage, or finding an air conditioning system that gives you the most bang for your buck. It may mean investing your money so that you can generate income with little effort. It could mean spending a small amount of time planning meals for the week, so that you're not wasting time and money later.</p> <h2>3. Looking for Free Stuff</h2> <p>Why pay for something if you can get it for free? One major virtue of frugal people is their ability to find a cost-free option for many items that the rest of us usually pay for. It might be using a coupon for a free meal at a restaurant, checking out books from the library, or grabbing a perfectly good lawn chair that's been placed out in the trash. It means being happy with over-the-air television, and dressing the kids in hand-me-down clothing. Not everything in life can be had for free, but you'd be surprised what you don't need to pay for.</p> <h2>4. Ignoring Advertising</h2> <p>When you watch TV or surf the Internet, you're bombarded with companies trying to get you to part with your money. Marketing folks are experts at manipulating people's emotions, ultimately convincing them that they need a product or service. Frugal people don't get swayed by commercials and banner ads. They don't jump at the latest email promotion or Facebook ad, and they know when something is baloney or not. When they buy things, they are motivated only by their own needs, and aren't swayed by outside influence.</p> <h2>5. Ignoring What's Popular</h2> <p>So everyone you know has a wide selection of clothes from LuLaRoe. They have the newest smartphones. They have awesome sunglasses and eat at the trendiest restaurants. A frugal person ignores this, and avoids making decisions based on what is popular or cool.</p> <h2>6. Avoiding Financial Traps</h2> <p>A financial trap is something that, on the surface, seems like a good deal but is more likely to harm you in the long run. Adjustable rate mortgages, quick payday loans, and even car leases are often considered traps because of their potential to hamstring a person financially if they aren't careful. A frugal person understands the potential pitfalls of every financial decision they make, and stays away from these traps.</p> <h2>7. Embracing the Sharing Economy</h2> <p>Do you and your neighbor both need a high-powered leaf blower? Why not buy one for the two of you and split the cost? Do you have an extra property that you could rent out on Airbnb? Could you save money through a ride-sharing service rather than buying a new car? The sharing economy is based on the notion that we don't need to &quot;own&quot; things as much as have access to them whenever we need them. By reducing what we own, we can save money, clutter, and possibly our sanity.</p> <h2>8. Staying Informed</h2> <p>There are reasons why stock prices go up and down. There are reasons why the cost of goods and services can fluctuate. There are reasons why you're paying more for housing than your parents did. When you understand how markets and the economy work and pay attention to financial news and world events, you're in a position to make smart decisions at every turn. Frugal people know how to read the tea leaves to make the right financial moves. The most frugal people don't just avoid spending; they also make informed choices when it comes to their money.</p> <h2>9. Understanding Value</h2> <p>The concept of value is a bit nebulous, but we've all heard the term &quot;bang for your buck.&quot; In essence, this means getting the most out of every dollar you spend. It doesn't necessarily mean buying the <em>cheapest </em>item every time. Rather, it means avoiding luxury for luxury's sake. And it means taking into account things like overall quality and durability of the items we buy.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/how-many-of-these-frugal-virtues-have-you-mastered">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-thinking-skills-frugal-people-should-master">6 Thinking Skills Frugal People Should Master</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-things-football-teaches-us-about-money">9 Things Football Teaches Us About Money</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/not-the-sort-of-person-who">Not the sort of person who ...</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-ways-life-is-wonderful-when-you-swap-your-car-for-a-bike">9 Ways Life Is Wonderful When You Swap Your Car for a Bike</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-personal-finance-skills-everyone-should-master">12 Personal Finance Skills Everyone Should Master</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Frugal Living advertising advice being frugal financial traps free instant gratification lessons saving sharing economy value virtues Tue, 24 Jan 2017 11:00:11 +0000 Tim Lemke 1871136 at http://www.wisebread.com 8 Ways to Decide if It's a "Fund-Worthy" Emergency http://www.wisebread.com/8-ways-to-decide-if-its-a-fund-worthy-emergency <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-ways-to-decide-if-its-a-fund-worthy-emergency" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/emergency_fund_piggy_bank_605778350.jpg" alt="Deciding if it&#039;s a fund-worthy emergency" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>One crucial component of a sound financial plan is to have a solid emergency fund to protect yourself against unexpected expenses. This fund should cover at least three months' worth of living expenses, and enable you to get through any crisis without too much financial hardship.</p> <p>But how do you to determine when to use your emergency fund? What kinds of expenses qualify as actual &quot;emergencies?&quot; Before you tap into your fund, ask yourself these questions first.</p> <h2>1. Is It a Want or a Need?</h2> <p>This should be common sense, but it's amazing how many people can't discern between something they desire versus something they require. Money to help pay for an important medical procedure is likely a need; it's not a good idea to risk your health just because you don't want to raid your emergency fund. Money to pay the rent or avoid default on a loan would also fall in the &quot;need&quot; category. On the flip side, a new cellphone when your current one is working just fine is probably not what the fund is for. In reality, there are very few needs in life, and they should all generally center on your basic survival.</p> <h2>2. Is It Unexpected?</h2> <p>Christmas is an expensive time. But you have an entire year to prepare for the gift-giving bonanza. A new baby is costly, but you had a nine months to save up and get ready for the new arrival. If you've had time to anticipate an event happening and save accordingly, it's best to avoid dipping into your emergency fund to pay for it. Save your emergency fund for things such as layoffs, broken appliances, medical emergencies, and other things that you truly didn't see coming.</p> <h2>3. Is It Urgent?</h2> <p>A refrigerator that no longer works is something you probably want to replace right away. A car that breaks down is something you'll want to get fixed immediately if you rely on it to get to work. But there are many bad events that aren't &quot;emergencies&quot; in the sense of requiring immediate action.</p> <h2>4. Can You Defer Payments?</h2> <p>Let's say your heat pump is busted and needs to be replaced. Price tag is in the thousands. But it's wintertime, so this seems like an emergency, right? Perhaps, but it's worth finding out if you can pay for the new heat pump in installments, or even avoid paying anything immediately. It may be possible to pay for this pricey item over time and even avoid interest payments. This doesn't get you off the hook in paying for the item, but it may buy you some time to save a little extra or earn extra income so you don't have to raid your emergency fund. Just be sure to read the fine print of any agreement.</p> <h2>5. What Are the Financial Consequences if You Don't Pay?</h2> <p>It's often tempting to use a credit card or loan to borrow funds when an emergency happens. But when you borrow, you're likely to pay interest, so you'll end up paying more in the long run. High-interest credit cards, in particular, can have a severe impact on your overall financial well-being, and payday loans are even worse. There may be times when borrowing may be necessary in order to maintain some cash reserves (you never want to tap out an emergency fund completely), but it's important to look at the broader, long-term impact on your finances. And don't even think about not paying at all, as that could negatively impact your credit score.</p> <h2>6. Are You Legally Obligated to Pay?</h2> <p>If your car breaks down, you may want tap your emergency fund to get it fixed, but no one is requiring you to do so. Things are different, however, when you are faced with a situation where you are required, by law, to pay up. Perhaps it's a tax bill, or a legal judgment against you. In these cases, it's almost always best to pay &mdash; there could fines, or even jail time. If dipping into your emergency fund helps you avoid trouble with the law, it's worth it.</p> <h2>7. Have You Exhausted All Your Saving Options?</h2> <p>Let's say you have a roof that's leaky and in need of big repairs. Before you shell out thousands of dollars to a major contractor, examine first whether you can find money by cutting everyday expenses. It's possible that you could do a small repair now, aggressively save for a few months, then take care of the bigger job. It's amazing how much money you can &quot;find&quot; by taking a knife to your spending.</p> <h2>8. Is the Emergency for Yourself, or Another Person?</h2> <p>There may be times when a friend or loved one comes to you in desperate need of money. You may be tempted to raid your emergency fund to address their problem. This is a very tricky situation, as it's generally in our nature to want to help those close to us. But remember that your emergency fund is designed to address emergencies that might impact you, not other people. It's fine to give loved ones a hand, but it gets dangerous when you put your own financial health at risk to make it happen.</p> <p>This doesn't mean you should be a straight-up coldhearted person, however. If you believe that you may encounter instances when friends or family members will be in need, consider making your emergency fund larger to take that possibility into account. Even better, open a separate sub-account, so that your own emergency fund remains untouched.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/8-ways-to-decide-if-its-a-fund-worthy-emergency">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/15-personal-finance-rules-you-should-be-breaking">15 Personal Finance Rules You Should Be Breaking</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/change-jars-and-8-other-clever-ways-to-build-an-emergency-fund">Change Jars and 8 Other Clever Ways to Build an Emergency Fund</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-money-moves-to-make-the-moment-you-get-a-promotion">8 Money Moves to Make the Moment You Get a Promotion</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/73-easy-ways-to-save-money-today">73 Easy Ways to Save Money Today</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/big-purchases-you-should-make-by-30-40-and-50">Big Purchases You Should Make by 30, 40, and 50</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance appliances budgeting Cars emergencies emergency fund saving unexpected urgent Mon, 28 Nov 2016 11:31:04 +0000 Tim Lemke 1835353 at http://www.wisebread.com The Simple Holiday Budget Anyone Can Follow http://www.wisebread.com/the-simple-holiday-budget-anyone-can-follow <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-simple-holiday-budget-anyone-can-follow" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/piggy_bank_christmas_50816262.jpg" alt="Following a simple holiday budget anyone can follow" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Promised yourself that you'd finally make a solid budgeting plan this holiday season &mdash; and stick to it? We've got your covered with these simple steps anyone can follow to stay in the black when the red and green take over.</p> <h2>1. Set Aside Only the Amount You Can Afford</h2> <p>So many people start the New Year in debt solely because of overspending during the holidays. You don't want that burden on your back. Rather, when planning your budget, allot only an amount you can actually afford, preferably in cash already saved, to the gifts you'd like to buy.</p> <p>&quot;Do not go into debt with holiday spending,&quot; warns consumer expert Kevin Gallegos. &quot;Making that commitment means changing your mindset. It may be telling yourself that giving people what they think they deserve is a mistake. You'll also want to avoid the trap of feeling you must give a gift equal to what someone gave you last year, or creating a perfect ski slope of presents under the tree. Chances are that your family and friends really don't want you to suffer financially in order to give them bigger gifts.&quot;</p> <p>It also stands to reason that they may not have returned the gesture in kind, either. So there's that.</p> <h2>2. Set Limits for Total Holiday Spending</h2> <p>Before you ever leave the house &mdash; or turn on the computer to shop online &mdash; you should establish how much you plan to spend this season and perhaps even on each person on your list. Having a specific number in mind will not only provide a guide as to what your limit is, but it will also help you choose the perfect gift for everyone based on how much money you've assigned to them.</p> <p>Alexis Nido-Russo is the owner of Chicago-based online jewelry store Local Eclectic, and she offers a very specific way on how to break down your holiday budget.</p> <p>&quot;Determine what your total budget for the holidays is, then map out who you have to buy for and assign percentages to each person or category,&quot; she says.</p> <p>For example, if there are six people on your list and your total budget is $1,000, perhaps your percentage breakdown looks something like this:</p> <ul> <li>Husband: 20% or $200</li> <li>Daughter: 30% or $300</li> <li>Mother: 15% or $150</li> <li>Sister: 15% or $150</li> <li>Mother-in-law: 10% or $100</li> <li>Best Friend: 10% or $100</li> </ul> <p>Of course, your specific budget and who appears on the list will vary. You also can shift numbers around if you find the right gift at a lower cost, or you can send that money back to your savings account where it'll better serve you. Also remember to factor in ancillary holiday expenses too, which can absolutely decimate your budget if you're not careful; things like holiday cards and postage, teacher gifts, travel costs, and food and drinks for entertaining.</p> <h2>3. Gather Your Coupons and Discounts</h2> <p>Go through your favorite circulars, emails, and apps to scrounge up all the deals and savings you can &mdash; then start to map out a plan of attack. For example, I'm on the email lists of many of my favorite retailers who send me a seemingly never-ending stream of promotional messages throughout the year, but especially around holiday time. (I recommend <a href="http://www.wisebread.com/this-email-trick-will-save-you-big-on-shopping">creating a dummy email account</a> for this to preserve your sanity, by the way.) Because I'm privy to insider information, I try to schedule my shopping around their biggest sales and pair them with additional saving that I may have from mailers, previous shopping trips, or in my text messages &mdash; all of which are excellent ways to receive additional discounts.</p> <h2>4. Make Cuts to Your Gift-Giving List</h2> <p>In a perfect world, we'd buy presents for everyone we know during the holidays &mdash; but that's just not feasible. So instead of trying to sneak everyone in because you feel obligated to purchase something, stick to those closest to you.</p> <p>&quot;If your shopping list includes more than five people outside of your immediate family, cut down on the number of people on your gift list,&quot; suggests Rachel Namoff, managing partner of Denver-based asset management firm Arapaho Asset Management. &quot;Then, make a homemade gift, like cookies, to give to all the people you snipped from your original gift list. Ensure you spread the holiday cheer without looking like a Scrooge while enjoying a fun activity with the family.&quot;</p> <p>If you still feel like you may be blindsided by a rogue gift for which you have a return gift, there are a few things you can do:</p> <ul> <li>Update your status on social media that details your holiday shopping plan and who's on the list. Remember, there's no shame in being on a budget, especially if money is already tight.</li> </ul> <ul> <li>Contact people directly and let them know that you won't be able to exchange this year if gift giving to one another was established in the past.</li> </ul> <ul> <li>Keep your unwanted gifts in storage to have at the ready so you can provide something in return if you feel so obligated.</li> </ul> <h2>5. Enlist the Help of Budgeting Apps</h2> <p>If you're not particularly financial or budget savvy, you can find help online. In fact, there are plenty of mobile apps that'll keep your holiday budget just a few taps of the finger away so you can access it while in real time while you're shopping. Gallegos recommends apps from Mint or Quicken to simplify the process, but there are plenty of others available &mdash; and we've <a href="http://www.wisebread.com/10-sites-and-apps-to-help-you-track-your-spending-and-stick-to-your-budget">detailed them in abundance here on Wise Bread</a> &mdash; that will track your spending down to the cent.</p> <h2>6. Thoughtful Homemade Gifts Are Cherished and Inexpensive</h2> <p>Namoff suggested baking cookies for those you're trimming from your main list this year, but there's no reason you can't extend this homemade concept to the more important people in your life. I'm admittedly materialistic &mdash; I love my stuff &mdash; but I'm not devoid of sentiment, thus I prefer thoughtful, handmade items over anything store-bought because I know what kind of time and effort goes into a gift like that. (See also: <a href="http://www.wisebread.com/start-now-you-can-make-these-23-delicious-holiday-gifts?ref=seealso">You Can Make These 23 Delicious Holiday Gifts</a>)</p> <p>Another argument for going this route is that most people in your life rarely need anything that they don't already buy themselves. Personally, if I want something, I save for it and buy it; I don't wait to pawn it off on someone else at Christmas. Certainly I have provided a list of items to my family in the past, but those are merely suggestions and nothing that I need. What I need to know is that you care, and the best way to do that is to sit down and think about how to put a smile on my face at holiday time, and you'll get that reaction from me if you spent more time than money on my gift.</p> <h2>7. Stop Waiting Until the Last Minute to Do Your Shopping</h2> <p>They say the early bird gets the worm, and that's completely true at holiday time. While there are plenty of arguments on why Black Friday isn't necessarily the day you'll get the best deals &mdash; there are amazing offers all times of year and even between Thanksgiving and Christmas &mdash; but you will absolutely do yourself a disservice by waiting until Christmas Eve to buy presents.</p> <p>For starters, by then the pickins will be slim, and you're probably going to disappoint your loved ones with your laziness. Secondly, if you're an online shopper, you will often spend an incredible amount of money on shipping charges the last couple days before the big day, and even then you're not guaranteed that it'll arrive on time in some cases. Save yourself the headache, heartbreak, and surcharges by scheduling your shopping at least a couple weeks before the holiday.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/the-simple-holiday-budget-anyone-can-follow">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/save-on-christmas-shopping-with-this-clever-gift-card-strategy">Save on Christmas Shopping With This Clever Gift Card Strategy</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-how-to-monetize-your-unwanted-gifts">How to Get Rid of Your Unwanted Gifts and Make Money Too</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-easy-ways-to-use-technology-to-save-on-christmas-shopping">6 Easy Ways to Use Technology to Save on Christmas Shopping</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/avoid-these-5-common-holiday-budget-pitfalls">Avoid These 5 Common Holiday Budget Pitfalls</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/13-holiday-season-costs-everyone-always-forgets-about">13 Holiday-Season Costs Everyone Always Forgets About</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Shopping apps Christmas coupons discounts gifts Holidays homemade gifts presents saving shopping lists Mon, 21 Nov 2016 11:31:03 +0000 Mikey Rox 1815065 at http://www.wisebread.com 9 Things Football Teaches Us About Money http://www.wisebread.com/9-things-football-teaches-us-about-money <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-things-football-teaches-us-about-money" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/football_player_92992279.jpg" alt="Learning things that football teaches us about money" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>It's the time of year when Saturday and Sunday afternoons are spent rooting for your favorites on the gridiron. American football is King in the fall, and it's common for us to channel the game into life lessons about grit, determination, and teamwork. But football can also teach us a thing or two about handling our money.</p> <p>What can football teach us about personal finance? Here are some key takeaways.</p> <h2>1. Have a Game Plan</h2> <p>A football coach doesn't just show up on Sunday and wing it. He's spent the season devising a system that will give his team the best chance of success. He's scouted his opponent, studied his own players' strengths and weaknesses, and mapped out an approach to victory. This can be applied to any sort of money matter, from tackling a massive pile of debt, to saving for a new home, to investing for retirement. Develop a plan first, then you'll give yourself a greater chance of success.</p> <h2>2. Mix Things Up</h2> <p>A successful football team isn't going to run the ball on every play. It can't pass the ball every time, either. The best teams have a diversified plan of attack, and don't rely too heavily on any one weapon. Your investment philosophy should be similar in nature. Don't rely too heavily on one stock or industry. Because when you rely on one thing, even if it's shown to be successful in the past, you'll eventually get burned. Diversify your portfolio, just like a coach diversifies his playbook.</p> <h2>3. Be Smartly Aggressive</h2> <p>In football, you need to do what it takes to get into the end zone. This means throwing the long pass downfield once in awhile, or even going for it on fourth down. You don't want to be reckless, but it's hard to win a football game if you don't take some risks. Your investment philosophy should reflect this approach. A young person looking to accumulate wealth for retirement should invest largely in stocks, not conservative bonds or cash. Yes, there's some risk involved, but also a lot of evidence to show that you'll come out ahead in the end. Because playing it safe will only get you so far.</p> <h2>4. Be More Conservative Near the Finish</h2> <p>A football team with a big lead can afford to be more cautious as the end of the game approaches. You'll see teams draw up more running plays to eat up the clock and decrease the chances of mistakes. With the clock winding down, it's all about protecting the lead you have rather than taking risks that might blow the game. When investing, think of retirement as the fourth quarter. Once you have a big nest egg saved, shift your investments to more conservative things like bonds or cash. This way, you'll be less likely to lose the wealth you've created for yourself.</p> <h2>5. Field Goals Are Okay</h2> <p>Football games aren't always won with a flurry of touchdowns. Often, it's the field goal kicker that wins the game. We all would like our teams to get seven points on every possession. But that's not realistic. Settling for three points is better than nothing, and can still put you in a position to win. In investing, it's wise to think of your stock portfolio as a field goal kicker, steadily putting points up on the board. Sure, you're going to want some touchdowns mixed in, but it's often the smaller, but more frequent scores that move you to where you want to be.</p> <h2>6. Limit Your Mistakes</h2> <p>It's impossible for a football team to play a perfect game, and it's common to overcome a fumble or interception and still win. But too many blunders will cost you the game. This is true when it comes to finances as well. Did you buy a bad stock that cost you some money? That's okay, just don't make the same mistake again. Did you accumulate some debt? Don't worry, you can get out of the hole if you make the right choices from here on out. Keep your bad decisions to a minimum, and you'll be alright.</p> <h2>7. Sometimes You Will Take a Beating</h2> <p>Finances, just like football, can be brutal. There will be days when your team gets trounced, and your stock portfolio may get pounded in similar fashion. It happens. The key is to get up and keep trying. Resilience and patience are big drivers of success in football, and this can easily be applied to investing, saving, and debt reduction.</p> <h2>8. You Can't Win in One Day</h2> <p>As much as pundits like to refer to certain football games as &quot;must-wins,&quot; the reality is that the NFL plays a 16-game season. Sure there are some games that are more important than others, but it normally doesn't make much sense to dwell on the results of any single game during the season. Likewise, it's silly to panic over one bad day in the stock market, or one bad piece of personal finance news. The only thing that matters is how you finish. If you take the long view and are generally making positive progress, then you'll end up okay, just like in football.</p> <h2>9. Nothing Is for Certain</h2> <p>Pro football is one of the few sports where player salaries are not guaranteed. Any player can be cut and out of a job at any time. A perennial Pro Bowler can lose his starting job to a rookie. This lack of certainty often rears its ugly head in matters of money, also. You may think you have enough money to cover an emergency, but you don't. You assume you'll get a 9% return on a stock, but you lose money instead. This is why it's crucial to live conservatively, plan well, and invest with a long time horizon in mind. Because just when you think you have things all figured out, life happens.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/9-things-football-teaches-us-about-money">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-ways-siri-can-be-your-personal-finance-assistant">9 Ways Siri Can Be Your Personal Finance Assistant</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-money-moves-to-make-the-moment-you-get-a-promotion">8 Money Moves to Make the Moment You Get a Promotion</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-10-biggest-lies-we-tell-ourselves-about-money">The 10 Biggest Lies We Tell Ourselves About Money</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/15-personal-finance-rules-you-should-be-breaking">15 Personal Finance Rules You Should Be Breaking</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-biggest-ways-procrastination-hurts-your-finances">7 Biggest Ways Procrastination Hurts Your Finances</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Frugal Living football investing lessons pigskin planning saving sports strategies Thu, 17 Nov 2016 09:00:09 +0000 Tim Lemke 1834560 at http://www.wisebread.com The Frugal Colonizer's Guide to Getting to Mars http://www.wisebread.com/the-frugal-colonizers-guide-to-getting-to-mars <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-frugal-colonizers-guide-to-getting-to-mars" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/astronaut_mars_office_19963703.jpg" alt="Frugal colonizer trying to get to Mars" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Do you want to take a trip to Mars?</p> <p>For many people, such a journey would be the thrill of a lifetime. But there's no indication that an average person can currently shell out the billions of dollars it would take to get there.</p> <p>However, there are people working every day on the concept of commercial space flight, and it's possible that one day, such interplanetary trips will be financially achievable even for middle class folks. Famed entrepreneur and inventor Elon Musk recently said he'd like to see the price of a Mars trip drop to about $200,000.</p> <p>Of course, that's still a big chunk of change. But with sensible financial planning, it's a plausible figure even for someone who's not filthy rich.</p> <p>Let's take a look at how an Average Joe might be able to accumulate $200,000 for a trip to Mars.</p> <h2>Save and Wait</h2> <p>Elon Musk didn't give an indication of <em>when </em>the $200,000 price tag might be in place. So let's assume that it's far out in the future. This gives you time to begin saving now and accumulate wealth over time. $200,000 isn't an amount that can be saved overnight, but over the course of, say, 25 years, it's achievable. If you put away just $250 per month and invest in the general stock market, earning about 7% per year, you'll have about $200,000 a quarter century from now, assuming inflation remains low.</p> <h2>Save More and Wait Less</h2> <p>So you don't want to wait 25 years? Fine. That means you'll have to find ways to save more and accumulate $200,000 in a shorter span of time. Assuming the typical 7% market return on investments, it will take about $650 a month to reach your goal in 15 years. To do it in 10 years, you'll need to save about $1,200 per month. It's possible to invest more aggressively and earn money faster, but you also run a greater risk of losing money or falling short of your goal.</p> <h2>Go Full Monk</h2> <p>So let's say you have a middle class salary but don't want to wait at all. You make about $50,000 a year, but want to go in the next five years or so. Well, sounds like it's time to practice living on Mars by cutting out just about every luxury in your life. Move in with your parents to save on rent, or downsize into a tiny house. Ditch your car and get a bus pass. Never eat out. For entertainment, go on long hikes and read books from the library. If Mars is your goal, you need to act like you're practically already there by living on the bare necessities.</p> <h2>Sell Your Story</h2> <p>If you can't afford to take the trip on your own, maybe there's someone who will pay you to tell the story of how you got to Mars. Maybe there's a book deal to be had, or a reality television show. Maybe you could start a blog and sell some ads on it. Why spend your own money when someone else can handle the expense?</p> <h2>Fund It on Kickstarter</h2> <p>It's highly doubtful many people will raise money online for your trip to Mars. But if you turn your trip into an unselfish venture, it might generate some donations, perhaps through a platform like Kickstarter or GoFundMe. For example, you might promise to perform certain kinds of scientific research, or raise awareness for a cause.</p> <h2>Get Sponsorships</h2> <p>Many people climb Mount Everest and do other big expeditions with the support of companies who like the exposure. Your trip to Mars may be highly publicized, so you can trade your potential visibility for cash to help pay for the trip. This might mean you have to travel in a spacesuit with GoDaddy or Red Bull on the back, but it will be worth it for a trip to the red planet.</p> <h2>Sell Mars Artifacts</h2> <p>People will pay big bucks for items from Mars. Rocks. Dirt. Jars of red dust. It can all be for sale if you can find a way to bring it back to Earth. Surely, there may be restrictions on what you can take from Mars, but if the Apollo astronauts brought back moon rocks, you could probably get away with snatching a Mars rock or two. Under this scenario, you'd probably need someone to front you the money and agree to be paid back later when you earn cash from your Mars artifacts.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <p>&nbsp;</p> <p style="text-align: center;"><a href="//www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fthe-frugal-colonizers-guide-to-getting-to-mars&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FThe%20Frugal%20Colonizers%20Guide%20to%20Getting%20to%20Mars.jpg&amp;description=The%20Frugal%20Colonizers%20Guide%20to%20Getting%20to%20Mars" data-pin-do="buttonPin" data-pin-config="above" data-pin-color="red" data-pin-height="28"><img src="//assets.pinterest.com/images/pidgets/pinit_fg_en_rect_red_28.png" alt="" /></a> </p> <!-- Please call pinit.js only once per page --><!-- Please call pinit.js only once per page --><script type="text/javascript" async defer src="//assets.pinterest.com/js/pinit.js"></script></p> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/The%20Frugal%20Colonizers%20Guide%20to%20Getting%20to%20Mars.jpg" alt="The Frugal Colonizer's Guide to Getting to Mars" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/the-frugal-colonizers-guide-to-getting-to-mars">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-things-football-teaches-us-about-money">9 Things Football Teaches Us About Money</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-biggest-ways-procrastination-hurts-your-finances">7 Biggest Ways Procrastination Hurts Your Finances</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/if-youre-doing-these-5-things-your-saving-efforts-are-for-nothing">If You&#039;re Doing These 5 Things, Your Saving Efforts Are for Nothing</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-money-lessons-i-learned-selling-office-supplies">8 Money Lessons I Learned Selling Office Supplies</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-is-your-financial-kryptonite-and-how-to-conquer-it">What Is Your Financial Kryptonite (and How to Conquer It)</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Entertainment Travel commercial space flight investing Mars saving trips Mon, 31 Oct 2016 09:00:11 +0000 Tim Lemke 1822946 at http://www.wisebread.com 8 Money Lessons We Can Learn From Baseball http://www.wisebread.com/8-money-lessons-we-can-learn-from-baseball <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-money-lessons-we-can-learn-from-baseball" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/baseball_player_63715703.jpg" alt="Learning money lessons from baseball" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>We're deep into baseball's postseason, and we'll soon be left to fend for ourselves in the long, cold winter. But even in the offseason, the National Pastime can teach us many good lessons, like, the value of working as a team, and how even the best people can fail more often than not.</p> <p>Baseball can teach us about money, too. When you examine the game, you can come away with some lessons that will help you manage your spending and your investments.</p> <p>Consider these truths about the game we love.</p> <h2>1. It's a Long Season</h2> <p>Do you get upset when your baseball team loses a game or two? Do you have trouble with the ups and downs of the season? When you're a fan of team, it's easy to forget that there are a <em>lot </em>of games to be played, and the only thing that matters is where you finish.</p> <p>Your investing approach should reflect a similar reality. Don't get emotional about a stock price being down on any individual day. Like a baseball team, the stock market can slump, but often rebounds. Keep your eyes on your long-term financial goals, and eventually you'll be popping Champagne just like a team that won the title.</p> <h2>2. Homers Are Great, But So Are Singles and Doubles</h2> <p>In baseball, you'd love to have a team that hits a lot of home runs. But you might be just as successful if you have a team that just gets on base and knocks in runs one by one. This is true when it comes to investing. While we'd all like to see that single stock that explodes and makes us rich, the reality is that most of your success will come from small, incremental gains that compound over time.</p> <h2>3. Protect Your Lead</h2> <p>Every good baseball team has a &quot;closer,&quot; or a pitcher who comes in late in the game to get the final outs. When investing, it's also smart to have a plan for protecting your investments when you approach retirement age. As you get older, it's wise to move away from growth stocks and other more volatile investments, and move toward bonds, stable dividend stocks, and cash. This way, your retirement fund will be protected even if there is a big downturn in the stock market.</p> <h2>4. It's Okay to Take a Risk</h2> <p>Sometimes in baseball, you need to try and run for home even though you might be tagged out. If you play too conservatively, you may not win. This is also true for investing. A young person who is investing for the long term will never get rich if they have a conservative portfolio. Most financial advisers recommend investing in mostly stocks when you're young, because the risk is usually outweighed by the potential for higher returns. Sure, you'll get burned sometimes. But more often than not, you'll come out ahead.</p> <h2>5. It's Simpler Than You Think</h2> <p>Baseball has a thick rule book, and it's not easy to master. But at it's core, it's pretty easy to understand. Throw the ball. Hit the ball. Catch the ball. And try to score more than your opponent. Money management and investing are simple things, too, even though they can seem intimidating. Spend less than you earn. Invest as much as you can, in things that mirror the overall performance of the stock market. Get the basics right, and you'll do fine.</p> <h2>6. Think Globally</h2> <p>Baseball may be an American sport, but it's an international game. It's played around the world, from the tropical ball fields of the Caribbean to busy cities like Tokyo. And Major League Baseball teams know that they need to look globally to find the very best talent. Your approach to money and investing should also take on an international approach. Consider investing in emerging markets that offer strong potential for growth. Take a look at currency trading, or even international commodities. There is money to be made if you look outside the United States to build your investment portfolio.</p> <h2>7. Limit Your Mistakes</h2> <p>No one's perfect, either in baseball or with their money. But frequent errors can mean the difference between winning and losing. In baseball, fielders want to catch the ball and throw it accurately. Batters want to avoid swinging at bad pitches. Pitchers want to avoid walking in the winning run.</p> <p>Your finances are just as vulnerable to being hurt by mistakes. Don't buy things you can't afford. Don't invest in things you don't understand. Don't raid retirement funds without understanding the consequences. There are many things you can do wrong to send your financial planning off the rails. With baseball and with your money, it's important to play smart.</p> <h2>8. Look for Value</h2> <p>The best-selling book <a href="http://amzn.to/2dxAyjC">Moneyball</a> by Michael Lewis outlined how the Oakland Athletics were able to field competitive teams despite having a lower payroll than most competitors. The book's core message was that the A's had developed ways to find players that were undervalued by the rest of the league. This desire to find &quot;value&quot; is a key part of money management. When looking to buy something, remember that expensive items aren't always the best. Look for a good combination of quality and price. When looking to purchase stocks, seek out companies that may be undervalued by the marketplace.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/8-money-lessons-we-can-learn-from-baseball">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-times-you-shouldnt-invest-in-stocks">10 Times You Shouldn&#039;t Invest in Stocks</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-dumb-401k-mistakes-smart-people-make">5 Dumb 401(k) Mistakes Smart People Make</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-stocks-your-kids-would-love-to-own">5 Stocks Your Kids Would Love to Own</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-only-8-rules-of-investing-you-need-to-know">The Only 8 Rules of Investing You Need to Know</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-essentials-for-building-a-profitable-portfolio">5 Essentials for Building a Profitable Portfolio</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment analogies baseball money lessons retirement risk saving sports stocks teamwork Fri, 21 Oct 2016 09:01:03 +0000 Tim Lemke 1816943 at http://www.wisebread.com Change Jars and 8 Other Clever Ways to Build an Emergency Fund http://www.wisebread.com/change-jars-and-8-other-clever-ways-to-build-an-emergency-fund <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/change-jars-and-8-other-clever-ways-to-build-an-emergency-fund" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_change_jar_73155135.jpg" alt="Woman finding clever ways to build an emergency fund" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Saving money is not easy. For many Americans, there's not much cash leftover once the bills get paid each month. Building up an emergency fund and saving for retirement is a struggle, but it's not impossible. Sometimes, it just starts with a small step.</p> <p>For example, one way to begin building an emergency fund is to place any coins you accrue into a transparent change jar. Once it's full, deposit it all into the bank. You'll find that you may have more than $100 &mdash; just from your pocket change!</p> <p>There are many other small ways to get started saving, even if it's just a few dollars at a time.</p> <p>Consider taking these small steps to building positive financial habits, and you'll start to see your bank account grow.</p> <h2>1. Track Your Spending &mdash; Every Single Penny</h2> <p>If you are having trouble saving money, you will need to take the first step of figuring out where your money is going. Develop a system to record every purchase. An online service such as Mint can help you track spending and even categorize purchases so you know exactly what you're spending money on. By doing this, you'll be able to find where you can cut costs. Information is power. (See also:<a href="http://www.wisebread.com/start-saving-more-with-this-one-simple-tool?ref=seealso"> Start Saving More With This One, Simple Tool</a>)</p> <h2>2. Reduce Your Spending on a New Category Each Month</h2> <p>Once you've figure out where your money is going, it's time to decide what you can cut. If you've categorized your spending, pick one category and vow to reduce spending from one month to the next. For example, tackle your restaurant spending in January. In February, look for ways to reduce your cellphone bill. In March, cancel your cable television. By year's end, you'll have slashed spending on 12 things, and will be well on your way to saving money.</p> <h2>3. Put Away Any Extra Money You Receive</h2> <p>Did you get a bonus or raise from your company? Don't spend it, but put it in the bank instead. If your expenses are the same, then any new money you get should go directly into savings. This also goes for any prize winnings, unexpected refunds or rebates, or cash found in the pocket of that jacket you haven't worn since last winter. This may be only a few bucks here and there, but it adds up and gets you in the habit of not spending every new dollar you get.</p> <h2>4. Track When You Don't Spend</h2> <p>You might pass five coffee shops every time you walk to work. You stare at candybars and magazines at every supermarket aisle. You're bombarded with targeted Facebook ads and circulars in the mail. It's almost impossible to avoid parting with your money. But what if you made a note of every time you passed by that coffee shop without stopping in for a $4 latté? What if you gave yourself points for every time your willpower won? Eventually, resisting the urge to spend might be an easy habit.</p> <h2>5. Open an Online Savings Account and Set Up Automatic Transfers</h2> <p>You can't spend money if you never have it in your hand to begin with. If you set up an automatic transfer of cash into an online savings account &mdash; preferably one not tied to your ATM card &mdash; you'll be setting aside money before it ends up in your wallet. Start with a modest amount, maybe $25 a month, then see if you can gradually increase that. Before you know it, you'll have a nice sum of money that can serve as your emergency fund.</p> <h2>6. Open Your 401K and Hit the Company Match</h2> <p>If your company offers a retirement plan, there's no good excuse not to take part. Money you contribute is deducted from your taxable income, and it's usually taken directly from your paycheck, so there's no easy way to spend it on silly stuff. Most companies offer to match contributions up to a certain percent. Do your best to contribute up to the match, if possible, and increase your contributions by a percent each year.</p> <h2>7. Pack Your Lunch</h2> <p>This is a tough one for a lot of people. After all, who wants to eat a lame homemade sandwich when they can go out to that new gourmet burrito place with their colleagues? But it's time to get over your fear of the &quot;sad lunch&quot; and recognize that it's a big money saver. Any back-of-the-envelope calculation will reveal that packed lunches can save you hundreds or even thousands of dollars a year. If you're struggling to figure out where you can save money, this is a great place to start.</p> <h2>8. Tweak the Thermostat</h2> <p>We all like to keep our house at the perfect temperature, but we can all get use to things being a degree or two warmer in the summer or slightly cooler in winter. If you're setting the thermostat to 70 in summer, try bumping it up to 72. When it's chilly outside, keep things at 68 or even cooler. And don't forget about tweaking it further when you are not home. The U.S. Department of Energy says you can save as much as <a href="http://energy.gov/energysaver/thermostats">10% on your energy bills</a> just by adjusting the thermostat by seven to 10 degrees for eight hours each day.</p> <h2>9. Use a Credit Card With Cash Back</h2> <p>It's best to use credit cards sparingly when you're looking to save. But if you do use credit cards, making sure you get something in return. Do some research to find the cards with the best rewards. Some offer straight <a href="http://www.wisebread.com/5-best-cash-back-credit-cards?ref=internal">cash back on every purchase</a>. Others offer <a href="http://www.wisebread.com/5-best-credit-cards-that-transfer-points-to-airline-miles?ref=internal">points at airlines</a> or specific retailers. Find the one that best suits you, and watch that money accrue. Even if you get a mere 1% cash back on purchases, that could add up to hundreds of dollars annually. (See also: <a href="http://www.wisebread.com/cash-back-vs-travel-rewards-pick-the-right-credit-card-for-you?ref=internal">Cash Back vs Travel Rewards: Pick the Right Credit Card for You</a>)</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/change-jars-and-8-other-clever-ways-to-build-an-emergency-fund">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-nice-ways-to-tell-your-spendy-friends-youre-staying-on-budget">7 Nice Ways to Tell Your Spendy Friends You&#039;re Staying on Budget</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-types-of-friends-who-are-costing-you-money">10 Types of Friends Who Are Costing You Money</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/47-simple-ways-to-waste-money">47 Simple Ways To Waste Money</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/start-with-recurring-monthly-expenses">Start with recurring monthly expenses</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-ways-to-save-money-when-you-are-unemployed">10 Ways to Save Money When You Are Unemployed</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Budgeting baby steps cash back change jar emergency fund extra money pennies reduce spending saving small steps spending Mon, 17 Oct 2016 10:30:10 +0000 Tim Lemke 1813254 at http://www.wisebread.com 7 Retirement Planning Steps Late Starters Must Make http://www.wisebread.com/7-retirement-planning-steps-late-starters-must-make <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-retirement-planning-steps-late-starters-must-make" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple_saving_retirement_33504544.jpg" alt="Couple making retirement planning steps late" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Most Americans aren't saving enough for retirement &mdash; and worse, many are off to a late start. Since 2011, the annual percentage of U.S. workers with less than $1,000 in savings and investments for retirement has ranged from <a href="https://www.ebri.org/pdf/briefspdf/EBRI_IB_422.Mar16.RCS.pdf">26% to 36%</a>.</p> <p>These low savings levels are taking a toll on nest eggs. One estimate puts the ideal retirement savings for an individual at <a href="http://www.fool.com/investing/general/2015/10/03/the-average-americans-retirement-savings-by-ageand.aspx">age 45 at $162,000</a> and calculates that, in reality, most Americans are about $100,000 short of that goal by the time they reach age 45. Let's review what late-starters should do to give their savings a necessary boost and learn some tips for those who are 15, 10, or five years away from retirement.</p> <h2>15 Years Away From Retirement</h2> <p>Assuming that your target retirement age is 65, you're now 50 years old and are likely to be part of the Generation X. About half of members of Generation X have <a href="http://time.com/money/4258451/retirement-savings-survey/">less than $10,000</a> in retirement savings.</p> <h3>Step 1: Take Advantage of Catch-Up Contributions</h3> <p>Starting at age 50, you're now legally allowed to start making annual catch-up contributions on top of the regular contribution limits to your qualifying retirement accounts. In 2016, individuals age 50 and over could contribute an extra:</p> <ul> <li><a href="https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-catch-up-contributions">$6,000</a> on top of the $18,000 limit to 401K (other than a SIMPLE 401K), 403b, SARSEP, and governmental 457b plans;<br /> &nbsp;</li> <li>$3,000 in catch-up contributions to SIMPLE IRA or SIMPLE 401K plans; and<br /> &nbsp;</li> <li>$1,000 on top of the $5,500 limit to traditional or Roth IRAs.</li> </ul> <p>Additionally, individuals with at least 15 years of employment can make additional contributions to their 403b plans on top of the regular $6,000 in catch-up contributions. For more details, review the <a href="https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-403b-contribution-limits">IRS rules for 403b contribution limits</a>.</p> <h3>Step 2: Chase Lower Investment Fees</h3> <p>When choosing funds for your 401K, you may think that there's little difference between a fund with an annual expense ratio of 0.16% and a fund with one of 0.25%. However, when you're 15 years away from retirement, those differences compound over time. A $30,000 investment would cost $48 per year on the first fund and $75 per year on the second fund.</p> <p>By investing in the fund with the higher annual expense ratio, and assuming that both funds have an annual return of 7%, you would miss out on an extra $703.94 in retirement savings by the time you reach age 65. Not to mention on the additional gains on those moneys that you would have during your retirement years.</p> <p>Several studies have shown that expense ratios are the only reliable predictor of future fund performance. For example, research from rating agency Morningstar has found that <a href="http://news.morningstar.com/articlenet/article.aspx?id=347327">low-cost funds consistently outperform high-cost funds</a>.</p> <h2>10 Years Away From Retirement</h2> <p>At this point, you're now 55 years old and you're supposed to be wiser. Still, about <a href="http://time.com/money/4258451/retirement-savings-survey/">33% of Americans</a> age 55 and over have no retirement savings and 26% have retirement accounts with balances under $50,000. On top of taking advantage of catch-up contributions and chasing lower-cost funds, here are some additional steps to give your retirement strategy a much-needed boost.</p> <h3>Step 3: Consider Cities Where You Can Retire on Just Social Security</h3> <p>It can be a humbling experience to have to tighten your belt after having worked so hard for many decades. If you're going to become part of the <a href="https://www.ebri.org/pdf/briefspdf/EBRI_IB_422.Mar16.RCS.pdf">62% of U.S. retirees</a> that expect Social Security to be a major source of income during retirement, start investigating what U.S. cities are better suited to live on your expected check from the Social Security Administration (SSA).</p> <p>Here are three list of cities to start your search:</p> <ul> <li><a href="http://www.wisebread.com/5-american-cities-where-you-can-retire-on-just-social-security">5 American Cities Where You Can Retire On Just Social Security <p> </a></li> <li><a href="http://www.wisebread.com/4-exciting-affordable-american-cities-to-retire-in">4 Exciting, Affordable American Cities to Retire In <p> </a></li> <li><a href="http://www.wisebread.com/4-more-exciting-affordable-american-cities-to-retire-in">4 More Exciting, Affordable American Cities to Retire In</a></li> </ul> <p>Thinking about your budget during your retirement years is a good idea so you can plan withdrawals from your retirement account, figure out your necessary contributions for the next decade, and figure out ways to rein in expenses.</p> <h3>Step 4: Dial Down Your Investment Risk</h3> <p>Desperate times often call for desperate measures. However, playing part-time stock trader with your retirement funds or allocating more moneys to investment vehicles promising higher returns &mdash; and more risk! &mdash; isn't a good idea. Remember that only <a href="http://us.spindices.com/documents/spiva/spiva-us-mid-year-2014.pdf">20% to 25%</a> of actively managed funds beat their benchmark.</p> <p>Talk with your plan administrator about income investing, which focuses on picking financial vehicles that provide a steady stream of income. While you may think that bonds are your only option, there many other securities to choose from. For example, there are stocks that consistently pay dividends.</p> <h2>5 Years Away From Retirement</h2> <p>It's the final countdown to retirement age and now you're age 60. With a retirement savings benchmark of $260,494, <a href="http://time.com/money/4258451/retirement-savings-survey/">about 74% of Americans</a> are behind on their retirement savings. Here are three additional planning steps.</p> <h3>Step 5: Accumulate Delayed Retirement Credits</h3> <p>It's time to get the most accurate picture of your expected retirement benefit from the SSA. To do this, you can use the <a href="https://www.ssa.gov/OACT/anypia/anypia.html">Social Security Detailed Calculator</a>, which lets you estimate your retirement benefit by accessing your actual earnings record through a secure interface. If you find that monthly benefit check to be too low, one way to boost is delaying your SSA benefit past your full retirement age.</p> <p>Depending on the year that you were born, your full retirement age will fall somewhere between <a href="https://www.ssa.gov/planners/retire/retirechart.html">age 65 and 67</a>. For every year that you delay your retirement benefit past your full retirement age, you can get <a href="https://www.ssa.gov/planners/retire/delayret.html">up to an 8% increase</a> on your total annual benefit. The benefit increase no longer applies when you reach age 70, even if you continue to delay taking benefits.</p> <h3>Step 6: Delay Required Minimum Distributions</h3> <p>Generally, holders of traditional and Roth 401K plans must start taking required minimum distributions (RMDs) once they reach age 70-1/2.&nbsp;</p> <p>However, there is one way to delay RMDs. If you were to take a part-time job offering a retirement plan that allows you to rollover your old 401K plan, then you can continue to contribute to the new plan and delay your first RMD until April 1st of the year after you retire.</p> <p>Keep in mind that:</p> <ul> <li>Your old traditional 401K must go into a new 401K;<br /> &nbsp;</li> <li>Your old Roth 401K must go into a new Roth IRA;<br /> &nbsp;</li> <li>Your new plan must accept rollovers; and<br /> &nbsp;</li> <li>You can't hold more than 5% of the company sponsoring the old plan to be able to do a rollover past age 70-1/2.</li> </ul> <p>Before you attempt a rollover past age 70-1/2, consult the plan administrator of your current retirement plan, the one from your potential new employer, and your tax accountant or financial planner, if you have one. This is one of those times that may warrant <a href="http://www.wisebread.com/who-to-hire-a-financial-planner-or-a-financial-adviser">hiring the right type of financial adviser</a> to prevent any tax penalties.</p> <h3>Step 7: Consider Retiring Abroad</h3> <p>Last but not least, one way to further stretch your nest egg is to retire in a city abroad to live better on a smaller budget, have access to generous tax breaks, and enjoy beautiful locales and ideal weather conditions.</p> <p>Several countries, including Costa Rica, Panama, and Nicaragua, offer retirement programs that provide U.S. retirees several benefits and require a minimum monthly SSA benefit ranging from $600 to $1,000 to qualify. (See also: <a href="http://www.wisebread.com/x-exciting-world-cities-you-can-afford-to-retire-in">4 Exciting World Cities You Can Afford to Retire In</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F7-retirement-planning-steps-late-starters-must-make&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F7%2520Retirement%2520Planning%2520Steps%2520Late%2520Starters%2520Must%2520Make.jpg&amp;description=7%20Retirement%20Planning%20Steps%20Late%20Starters%20Must%20Make"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/7%20Retirement%20Planning%20Steps%20Late%20Starters%20Must%20Make.jpg" alt="7 Retirement Planning Steps Late Starters Must Make" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/7-retirement-planning-steps-late-starters-must-make">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-reasons-people-dont-retire-early-and-how-you-can">4 Reasons People Don&#039;t Retire Early — and How You Can</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-reasons-why-a-roth-ira-may-be-better-than-your-401k">4 Reasons Why a Roth IRA May be Better Than Your 401(k)</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/left-a-job-do-a-rollover">Left a job? Do a rollover.</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-signs-you-arent-saving-enough-for-retirement">10 Signs You Aren&#039;t Saving Enough for Retirement</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-keys-to-an-early-retirement">4 Keys to an Early Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 401k 403b catch contributions IRA retirement planning saving Tue, 04 Oct 2016 10:30:13 +0000 Damian Davila 1805038 at http://www.wisebread.com 9 Smart Money Moves to Make Before the Holiday Season Begins http://www.wisebread.com/9-smart-money-moves-to-make-before-the-holiday-season-begins <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-smart-money-moves-to-make-before-the-holiday-season-begins" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple_christmas_shopping_51383450.jpg" alt="Couple making money moves before the holiday season" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Fall is in full swing, and before you know it you'll be battling the throngs during holiday shopping season.</p> <p>It may be make or break for many retailers, but it can also be challenging for consumers if they don't do a little bit of planning. Making just a handful of minor financial and lifestyle moves before Christmas and other winter holidays hit can save you money and aggravation later.</p> <p>Here are nine tips for getting yourself straightened out before the holiday rush.</p> <h2>1. Push Money Into a Savings Account</h2> <p>If you want to avoid racking up more credit card debt, it will help to have some cash set aside to pay for holiday gifts. Consider using an online savings account and making an automatic transfer from your usual checking account each month until the end of November. Even $100 a month saved between now and Thanksgiving will give you $200 (plus a little bit of interest) to spend.</p> <h2>2. Check the Sales Now</h2> <p>We all know about Black Friday sales, but the reality is that stores place deep discounts on items throughout the year. There's no guarantee that a particular product will be at its cheapest on the day after Thanksgiving or any other day leading up to Christmas. Remember that many stores will roll out Veterans Day and Columbus Day sales, and you may find great deals on clothing at the end of summer when stores are looking to unload inventory and bring in fall and winter items.</p> <h2>3. Pay Off Your Credit Cards</h2> <p>Holiday shopping can be a debt creator. The National Foundation for Credit Counseling reported last year that there is a 25% spike in the number of people seeking help with credit card bills in January and February. If you are already paying the minimums on cards or have high debt, the addition of holiday shopping bills can be crippling.</p> <p>High debt can leave you at risk of maxing out credit limits. At the very least, your <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score?ref=internal">ratio of debt to available credit</a> could rise, thus hurting your credit score. Pay down your current debts now, so that any new debt won't be adding to an existing problem.</p> <h2>4. Find Stores With Layaway</h2> <p>For people who want to avoid credit card debt, layaway can be a great option for holiday shopping. With layaway, you can put an item aside at the store and receive it only when it is totally paid for. Many stores offer layaway months before the holidays, so you can select items now and have them paid off in time. Walmart this year began offering layaway on September 2. Kmart has eight-week and 12-week layaway plans now, and Toys R Us has 90-day layaway contracts. One caveat: Some stores do charge fees for layaway services, so be sure to read the fine print before signing up.</p> <h2>5. Track Down Any Money Owed to You</h2> <p>Have you been diligent about seeking reimbursement for work-related expenses? Have you received all money you've earned from freelance work? Now is the time to assess what outstanding cash is due to you. If money is tight, this could help you afford the gifts you want this holiday season.</p> <h2>6. Max Out Your Retirement Accounts</h2> <p>If you have access to retirement accounts, try to put as much money in them now as you can. You can contribute as much as $18,000 annually into a 401K plan and $5,500 into an IRA. The closer you get to these limits, the better off you'll be in retirement. You have until Tax Day next year to max out these accounts, but it may be best to contribute generously now before holiday expenses hit.</p> <h2>7. Make Sure Your W-4 Is Up to Date</h2> <p>If you work for a company, you probably filled out a W-4 form when you were hired. This form tells the IRS how much in taxes to withhold from your paycheck. But it often needs to be updated, particularly when you have gotten married, added a child to the family, or had a significant change in household income. Now is the time to check your W-4 to see that you aren't paying too much or too little in taxes.</p> <h2>8. Do Some Tax Loss Harvesting</h2> <p>If you sold shares of stock at any point during the year, you may be on the hook for capital gains taxes. But you may be able to avoid a tax bill by selling other shares of stock at a loss. In essence, the loss may outweigh the gains. There's nothing wrong with taking the proceeds from a sale and investing right back into the market, as long as you're not investing in the exact same securities. It might make sense to do some tax loss harvesting now, before the holiday rush hits and you forget.</p> <h2>9. Get Your Cars in for Servicing</h2> <p>Wait, what do your cars have to do with the holiday season? Well, car repairs are often a big source of unexpected expenses. And the last thing you want is hundreds or even thousands of dollars in bills right when you're doing the holiday shopping. Get your car in now, and you'll avoid a hefty expense later. Moreover, you'll be less likely to have the car breakdown in unpleasant, winter weather.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/9-smart-money-moves-to-make-before-the-holiday-season-begins">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-how-to-monetize-your-unwanted-gifts">How to Get Rid of Your Unwanted Gifts and Make Money Too</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-big-list-of-money-saving-coupon-codes-for-halloween-2016">The Big List of Money-Saving Coupon Codes for Halloween 2016</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/14-frugal-christmas-decorating-hacks">14 Frugal Christmas Decorating Hacks</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/a-champion-of-savings-over-spending">A champion of savings over spending</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-simple-holiday-budget-anyone-can-follow">The Simple Holiday Budget Anyone Can Follow</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Frugal Living Shopping Christmas debt Holidays layaway retirement contributions sales saving spending taxes Mon, 03 Oct 2016 09:00:05 +0000 Tim Lemke 1803457 at http://www.wisebread.com