financial planning http://www.wisebread.com/taxonomy/term/3835/all en-US How to Start Saving for Retirement at 40+ http://www.wisebread.com/how-to-start-saving-for-retirement-at-40 <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-start-saving-for-retirement-at-40" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/retirement_fund_jar_000020745280.jpg" alt="Retirement fund you should start adding to over 40" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Perhaps you missed the memo urging you to start saving for retirement in your 20s or 30s. Or, if your situation is anything like mine, you started a family early or didn't find your passion in life until you were in your 30s.</p> <p>Fortunately, it's not too late to start saving for retirement, because you're likely earning more today than you did a decade ago. You should be able to start saving now and still retire with a hefty nest egg. But first, you must take some essential steps.</p> <h2>1. Evaluate Your Savings Potential</h2> <p>Be realistic. Sure, we all wish we could save $5,000 per month, but can you <em>actually </em>achieve this based on your earnings and expenses? Remember, no savings amount is so small that it won't positively impact your goals. Save what you can, even if it's only a few hundred dollars per month. There are always ways to push your savings goals further by <a href="http://www.wisebread.com/the-first-step-to-budgeting">establishing a budget</a>, <a href="http://www.wisebread.com/10-great-home-based-side-business-ideas">creating a side business</a>, <a href="http://www.wisebread.com/this-is-how-you-downsize-your-home-and-start-living-a-better-life">downsizing your life</a>, or all of the above.</p> <h2>2. Set a Financial Goal</h2> <p>How much do you need to retire? Start by taking an assessment of where you are financially and where you need to be. How much money do you need to live comfortably in retirement? Do you anticipate a need for $25,000, $50,000 per year, or maybe more? It may be that you have to postpone your retirement by a few years while you make a few adjustments and implement a quick-fix plan to catch up with your goals.</p> <h2>3. Create a Plan</h2> <p>Any good financial plan should begin with an honest assessment of your goals and the steps you'll take to get there. Try using a <a href="http://www.aarp.org/work/retirement-planning/retirement_calculator.html">retirement calculator</a> to determine how much you'll need to save each month in order to retire by your desired date.</p> <p>You may be surprised by how much money you'll need to save, but don't fear the challenge. Consider working longer, finding a second income, or downsizing your lifestyle to enable progress toward your savings goals.</p> <h2>4. Bias Your Portfolio Towards Stocks</h2> <p>Because stocks offer higher returns than other, less aggressive investments, and you're playing a bit of catch-up, you will want to take on more risk by favoring these over bonds or other more conservative investments. As you grow nearer to retirement, you can take a more conservative investment approach.</p> <h2>5. Max-Out Retirement Accounts and Catch-Up Contributions</h2> <p>Max out your retirement accounts. Take full advantage of employer-sponsored accounts whether your employer offers match contributions, or not. If you don't already have one, open an Individual Retirement Account (IRA) and make the maximum contribution of $5,500. At retirement, given your account has been open at least five years, you can make withdrawals absolutely tax-free.</p> <p>If you're over the age of 50, the government allows you to make <a href="http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics-Catch-Up-Contributions">catch-up contributions</a> to your 401(k) or IRA plans, thus enabling you to save even more tax-deferred money for retirement.</p> <h2>6. Take Your Retirement Savings to New Heights</h2> <p>If you need to boost your savings in order to meet your goals, consider falling back on your business consulting skills, or any other skill you've developed throughout your career, and using it to create a second income. Freelancers, independent contractors, and small business owners can deduct many of their expenses.</p> <p>There's also a retirement savings incentive for being self-employed. The self-employed can set-up retirement accounts that allow both employer and employee contributions. For 2015, annual plan contributions for a SEP-IRA is up to $52,000, SIMPLE IRA is up to $12,500 plus an employer contribution of 3% of income, and the Solo 401(k) is up to $53,000.</p> <p>The IRS allows the self-employed to make contributions to both an IRA and 401(k). That's a lot of savings towards retirement.</p> <p><em>What steps are you taking toward retirement savings after age 40?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/qiana-chavaia">Qiana Chavaia</a> of <a href="http://www.wisebread.com/how-to-start-saving-for-retirement-at-40">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/retirement-accounts-and-money-to-spend">Retirement accounts and money to spend</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-ways-to-boost-your-odds-of-retiring-early">5 Ways to Boost Your Odds of Retiring Early</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-facts-millennials-should-know-about-retirement-planning">5 Facts Millennials Should Know About Retirement Planning</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-reasons-why-your-retirement-cost-calculations-may-be-wrong">8 Reasons Why Your Retirement Cost Calculations May Be Wrong</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-surprising-things-women-should-know-about-retirement-planning">12 Surprising Things Women Should Know About Retirement Planning</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 401(k) budgeting downsizing financial planning IRAs savings stocks Tue, 28 Apr 2015 11:00:29 +0000 Qiana Chavaia 1397574 at http://www.wisebread.com 5 Reasons to Fire Your Financial Adviser Soon http://www.wisebread.com/5-reasons-to-fire-your-financial-adviser-soon <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-reasons-to-fire-your-financial-adviser-soon" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/woman-in-charge.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>As&nbsp;2014 gives way to 2015, you&rsquo;ll likely be reviewing your investment results for the year, and looking ahead to this year and beyond. So here&rsquo;s a question you may want to ask: Should I fire my&nbsp;<a href="http://www.nextavenue.org/article/2012-08/evaluating-your-financial-advisor">financial adviser</a>?<br /> &nbsp;<br /> That may sound like a nutty question, since the stock market has been gangbusters, with a positive year for the sixth year in a row. That performance doesn&rsquo;t necessarily mean your money pro has delivered enough value to justify your keeping him or her, though.<br /> &nbsp;<br /> Below are five questions you&rsquo;ll want to ask to help you determine whether you should give your adviser the heave-ho sooner rather than later. If you answer &ldquo;yes&rdquo; to any of them, it&rsquo;s time to look for a replacement.</p> <p>(<strong>MORE</strong>:&nbsp;<a href="http://www.nextavenue.org/article/2013-10/how-find-financial-advice-you-can-trust">How to Find Financial Advice You Can Trust</a>)<br /> &nbsp;<br /> <strong>Question 1: Did you receive a year-end performance report?&nbsp;</strong><br /> &nbsp;<br /> No report?&nbsp; Fire your adviser.<br /> &nbsp;<br /> Real advisers provide performance reports. Financial&nbsp;<em>salesmen</em>&nbsp;don&rsquo;t. Their sales licenses do not permit them to provide this type of ongoing reporting.<br /> &nbsp;<br /> <strong>Question 2:</strong>&nbsp;&nbsp;<strong>Did your adviser provide a report that disclosed all the expenses deducted from your investment accounts?</strong><br /> &nbsp;<br /> No? Fire your adviser for withholding information from you. You can&rsquo;t trust an adviser who doesn&rsquo;t display full transparency.</p> <p>(<strong>MORE</strong>:&nbsp;<a href="http://www.nextavenue.org/article/2012-08/evaluating-your-financial-advisor">Evaluating Your Financial Adviser</a>)</p> <p><strong>Question 3. At some point, the stock market will have a correction (less than a 15 percent loss and six months of duration) or turn into a bear market (more than a 15 percent loss and six months of duration). Does your adviser have a strategy for minimizing your risk of large losses?</strong><br /> &nbsp;<br /> No plan? Fire the adviser. Select one who can help you preserve your assets during a market that produces negative returns.<br /> &nbsp;<br /> <strong>Question 4: Has your adviser provided a document certifying that he or she is acting in a fiduciary capacity when providing financial advice and services?</strong><br /> &nbsp;<br /> No document? Fire the adviser.</p> <p>(<strong>MORE</strong>:&nbsp;<a href="http://www.nextavenue.org/article/2012-03/when-your-financial-adviser-guessing">When Your Financial Adviser Is Guessing</a>)<br /> &nbsp;<br /> Fiduciaries are held to the highest ethical standards in the financial service industry. They&rsquo;re&nbsp;<em>required</em>&nbsp;to put your financial interests ahead of their own. Non-fiduciaries are salesmen who are held to lower ethical standards that don&rsquo;t require them to put your interests first.<br /> &nbsp;<br /> <strong>Question 5: The financial services industry is riddled with conflicts of interest. Has your adviser provided a written statement saying that his or her advice is free of any potential conflicts of interest that could damage your financial interests?</strong><br /> &nbsp;<br /> Fire any adviser who refuses to provide this statement. You don&rsquo;t have to know what he or she is hiding or why. You just have to know there&rsquo;s the potential to damage you.<br /> &nbsp;<br /> Conflicts of interest are not obvious or easy to detect. In most cases, they&rsquo;re designed to achieve one goal: maximize the revenue of the seller. They are extremely dangerous because Wall Street&rsquo;s marketing experts know how to package toxic products and convince you that they are safe investments. Some banks and insurers sell inferior products with excessive expenses that maximize their revenues, profits, and share prices.<br /> &nbsp;<br /> The most dangerous conflict is from an unscrupulous, but friendly adviser who develops a personal relationship with you. Once trust is established, such advisers can sell customers the financial products that make them and their firms the most money. The most frequent lament from Bernie Madoff&rsquo;s clients was: &ldquo;I thought he was my friend.&rdquo;<br /> &nbsp;<br /> Always remember: the investment of your assets should be based on a&nbsp;<em>business</em>&nbsp;relationship, not a personal relationship. Fire advisers who want to be judged on their relationship skills, not their results and transparency.</p> <div class="field field-type-text field-field-blog-teaser"> <div class="field-items"> <div class="field-item odd"> Many of Bernie Madoff&#039;s clients said &quot;I thought he was my friend.&quot; Find out if your adviser is a friendly, but unscrupulous salesman and not the ethical adviser he should be. </div> </div> </div> <div class="field field-type-text field-field-guestpost-blurb"> <div class="field-label">Guest Post Blurb:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <p><em>Jack Waymire spent 28 years in the financial services industry. He is the founder of </em><a href="http://www.paladinregistry.com/"><em>Paladin Research and Registry</em></a><em>, which provides free tools and information to investors who use financial advisers. Follow him on Twitter </em><a href="https://twitter.com/PaladinRegistry"><em>@PaladinRegistry</em></a><em> or connect with him on </em><a href="https://plus.google.com/+JackWaymire/posts"><em>Google+</em></a><em>.&nbsp;<em style="color: rgb(0, 0, 0); font-family: Arial, Helvetica, sans-serif; font-size: 12.7272720336914px; line-height: 1.5;">Check out more great articles from PBS's </em><a href="http://www.nextavenue.org"><em>Next Avenue</em></a>:</em></p> <ul> <li><a href="http://www.nextavenue.org/article/2014-07/27-ways-trick-yourself-saving-money">27 Ways To Tricking Yourself Into Saving Money</a></li> <li><a href="http://www.nextavenue.org/article/2012-07/biggest-retirement-mistake-boomers-make-and-how-avoid-it">The Biggest Retirement Mistakes Boomers Make</a>&nbsp;</li> <li><a href="http://www.nextavenue.org/article/2014-11/3-retirement-rules-thumb-really-work">3 Retirement Rules of Thumb that Really Work</a></li> </ul> </div> </div> </div> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/next-avenue">Next Avenue</a> of <a href="http://www.wisebread.com/5-reasons-to-fire-your-financial-adviser-soon">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-occasions-when-you-should-definitely-hire-a-financial-advisor">7 Occasions When You Should Definitely Hire a Financial Advisor</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/dont-know-what-annuities-are-you-might-be-missing-out">Don&#039;t Know What Annuities Are? You Might Be Missing Out</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/is-this-hidden-cost-sapping-your-retirement-savings">Is This Hidden Cost Sapping Your Retirement Savings?</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/intimidated-by-retirement-investing-get-professional-help">Intimidated by Retirement Investing? Get Professional Help!</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-boost-your-odds-of-retiring-early">5 Ways to Boost Your Odds of Retiring Early</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Retirement financial adviser financial planning next avenue retirement Fri, 16 Jan 2015 18:00:08 +0000 Next Avenue 1280353 at http://www.wisebread.com 7 Occasions When You Should Definitely Hire a Financial Advisor http://www.wisebread.com/7-occasions-when-you-should-definitely-hire-a-financial-advisor <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-occasions-when-you-should-definitely-hire-a-financial-advisor" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/financial-advisor-153824915-small.jpg" alt="financial advisor" title="financial advisor" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Laying out a few hundred dollars for a financial advisor can seem like money down the drain if everything is going smoothly. (See also: <a href="http://www.wisebread.com/9-signs-you-need-to-fire-your-financial-planner?ref=seealso">9 Signs You Need to Fire Your Financial Planner</a>)</p> <p>Until it isn't. Life's road bumps pop up, and good and bad things that happen can lead to financial problems or opportunities that you weren't prepared for. Here are seven occasions when a financial advisor should be called in to help.</p> <h2>1. Ruinous Debt</h2> <p>We're not talking about having payments for a credit card lapse for a month, but deep debt where you're having difficulty deciding which bills to pay and which to put off each month. This is a case where you don't want to have to pay a financial advisor &mdash; whether it's a one-time fee or percentage of assets that they manage. Instead, go somewhere such as the <a href="https://www.nfcc.org/index.php">National Foundation for Credit Counseling</a> or look for <a href="http://www.usa.gov/topics/money/credit/debt/out-of-control.shtml">local nonprofit agencies for free help</a>. At the very least, get help setting up a budget.</p> <h2>2. Career Change</h2> <p>Hopefully, this is an opportunity to earn more money and therefore put more money aside in a retirement account. A financial advisor can help you pick a retirement account that's right for you.</p> <p>Young people with the potential for increasing their assets who are starting their careers should seek a financial planner, says Eric Roberge, a fee-only certified financial planner in Boston and founder of <a href="http://beyondyourhammock.com/">Beyond Your Hammock</a>. This is especially true for a single person earning at least $75,000 a year or a couple earning $150,000 because they should have more money to invest, Roberge says.</p> <h2>3. Sudden Wealth</h2> <p>An inheritance, insurance payout, lump-sum pension payment, divorce settlement, lottery winning, or any other sudden influx of new money can burn a hole in a pocket, says Mike Sena, a certified financial planner at <a href="http://www.whitestreetadvisors.com/">White Street Advisors</a> in Roswell, GA. It can be tempting to splurge a little &mdash; or a lot. Instead, seek advice on how best to use your windfall now &mdash; and for years to come.</p> <h2>4. Death in the Family</h2> <p>The death of a close relative can be a key time to get financial help. You could face tax implications or need help with estate planning, for example.</p> <p>Roberge had a client who didn't seek his advice after her father died with a $600,000 annuity she inherited, and she took some money out of the annuity. She ended up having to pay a $40,000 tax bill, which Roberge says he could have helped her avoid.</p> <h2>5. Passing on a Family Business</h2> <p>Your parents and grandparents may want you to continue running the family business when they die, but you may not. This is a conversation that a financial advisor can help with early, says <a href="http://charleskochel.com/">Charles Kochel</a>, a wealth advisor for a fee-only Registered Investment Advisor in Arkansas. Kochel specializes in helping farmers transfer the family farm from one generation to the next.</p> <p>&quot;A major concern of a large family farm is legacy planning,&quot; he says. &quot;The issue is usually lack of communication. Multigenerational farmers assume the next generation will want to come back home, after college, and manage the farm or the assumption is that farming may prove too costly.</p> <p>&quot;A series of conversations needs to take place, often emotional and uncomfortable,&quot; Kochel says. &quot;A family meeting and ongoing proactive conversations help monitor the wants and needs of the entire legacy.&quot;</p> <p>The family will likely evolve over the years, and a financial advisor can help systemize the process and create an ongoing conversation that will move the estate planning beyond a one-time event.</p> <h2>6. Big Drop in the Stock Market</h2> <p>If your portfolio includes stocks, a financial advisor can help you come up with a financial plan, and stick to it.</p> <p>&quot;Most people think they can handle their own investments, but when the stock market drops, they start second-guessing their plan,&quot; says Tyler Gray, a financial planner at <a href="http://www.sageoakfinancial.com/">Sage Oak Financial</a> in Tulsa, OK.</p> <p>In 2008-09, for example, &quot;you had a lot of people who pulled out of the market at the worst possible time because they didn't have an advisor to help them stay disciplined,&quot; Gray says. &quot;The worst part is that many of these folks never got back in the market and have missed out on a lot of growth over the last five years.&quot;</p> <h2>7. Growing Family</h2> <p>Whether you're getting married or having children, it's best to have a financial conversation ahead of time, Sena suggests. New couples merging finances or planning for a baby and all of the costs that go into raising a child should have a financial plan.</p> <p>&quot;In general, anyone who is not meeting or exceeding their life and financial goals should work with an advisor,&quot; White says. &quot;Most of us are simply too close to our money to be objective.&quot;</p> <p>For better or worse, major life events can cause people to rethink their lives and plan for the future. Planning for a financial future should be part of many major events in life.</p> <p><em>Have you ever sought advice from a financial planner? What prompted you? Was the advice worthwhile and helpful? Please share in comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/aaron-crowe">Aaron Crowe</a> of <a href="http://www.wisebread.com/7-occasions-when-you-should-definitely-hire-a-financial-advisor">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/intimidated-by-retirement-investing-get-professional-help">Intimidated by Retirement Investing? Get Professional Help!</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-reasons-to-fire-your-financial-adviser-soon">5 Reasons to Fire Your Financial Adviser Soon</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/is-this-hidden-cost-sapping-your-retirement-savings">Is This Hidden Cost Sapping Your Retirement Savings?</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/5-dumb-investments-smart-people-make">5 Dumb Investments Smart People Make</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management Investment Retirement debt financial planner financial planning investing retirement Mon, 03 Nov 2014 13:00:04 +0000 Aaron Crowe 1248279 at http://www.wisebread.com 6 Harmful Money Beliefs That Are Keeping You Poor http://www.wisebread.com/6-harmful-money-beliefs-that-are-keeping-you-poor <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-harmful-money-beliefs-that-are-keeping-you-poor" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/no-savings-496199351-small.jpg" alt="no savings" title="no savings" class="imagecache imagecache-250w" width="250" height="146" /></a> </div> </div> </div> <p>All action begins with thought. Even in our financial lives, how we think about money, the biases we hold about ourselves and money, and the money messages we receive from others influence our financial reality. (See also: <a href="http://www.wisebread.com/5-stupid-things-my-parents-taught-me-about-money?ref=seealso">5 Stupid Things My Parents Taught Me About Money</a>)</p> <p>If you're working to build a brighter financial future, don't let these six common money beliefs sabotage your success.</p> <h2>1. I'm Just Not Good With Money</h2> <p>I wasn't good with sewing, flossing before bed, painting a house, or cooking until I tried each and taught myself the basics. For this belief to hold, a person has to cling to the mistaken idea that learning is impossible. Sure, you may never pose a threat to Suze Orman, but anyone can learn to budget, discipline their spending habits, and gradually take greater control of personal finances. (See also: <a href="http://www.wisebread.com/money-management-in-5-minutes-a-day?ref=seealso">Money Management in 5 Minutes a Day</a>)</p> <h3>Remedy</h3> <p>Shift your thinking away from the powerless &quot;I'm just not good with money&quot; and replace it with the truer and more empowering &quot;I may not have been taught how to manage money well, but I resolve to learn.&quot;</p> <h2>2. I Don't Make Enough Money to Save</h2> <p>In a world of high-prices, razor-thin budgets, and stagnant salaries, it's easy to conclude that saving is a pursuit reserved for other people with fatter paychecks. And though everyone's financial picture is unique, saving starts by making it a priority and embracing the idea of socking away something on a regular basis &mdash; no matter how modest the amount may be. Once you get a little bit of money saved something wonderful happens: Momentum builds and you get a buzz from watching your nest egg grow. It's a quietly powerful force and one you shouldn't deny yourself.</p> <h3>Remedy</h3> <p>Revise this belief by being less attached to the numbers. Instead of a $100.00 a week, could you save $10.00? What figure would be a reasonable starting point that you could build on later? (See also: <a href="http://www.wisebread.com/101-ways-to-save-money-around-the-house?ref=seealso">101 Ways to Save Money Around the House</a>)</p> <h2>3. Creditors Won't Lend Me More Money Than I Can Safely Repay</h2> <p>Sadly, we live in a world where it seems lenders use one part black magic and two parts shameless guesswork (note: black magic proportions are just estimates) to determine how much credit to extend to consumers. Their numbers should in no way inform <em>your</em> spending or override <em>your</em> own good judgment. Sure, lenders aren't in the business of making bad loans (&hellip;ahem&hellip; usually), but their calculations don't factor in your financial goals and important quality of life issues that indebtedness affects.</p> <p>To illustrate the divide between what lenders offer and what's in the best interest of borrowers, here's a story from own experience.</p> <p>In 2004, I applied for a mortgage on my first home. The lender approved me for a mortgage four times the amount I was comfortable with. When I saw those numbers, I laughed out loud. Why? Well, first, I didn't need a four-bedroom house with a swimming pool. And second, I didn't want a mortgage payment so steep that I'd end up chain-smoking over nightly dinners of canned pork and beans. Sure, I could have made the payments every month, but I would have been miserable and constantly stressed.</p> <h3>Remedy</h3> <p>Replace this belief with &quot;Regardless of what a third-party number-cruncher says, I won't borrow more money than I can safely and sanely repay.&quot; Staying true to your own financial reality is the best way to preserve your happiness &mdash; and your good credit score.</p> <h2>4. Credit Card Debt Is Just Part of Life</h2> <p>According to the <a href="http://www.nfcc.org/NewsRoom/FinancialLiteracy/files2013/NFCC_2014FinancialLiteracySurvey_datasheet_and_key_findings_031314%20FINAL.pdf">Consumer Financial Literacy Survey</a> conducted by the Harris Poll in 2014, one in three U.S. adults reported that their household carries over credit card debt from month to month. Though the trend to pay off card balances in full each month is growing, normalizing long-term consumer debt is an insidious part of easy credit. Over the years, unchecked debt erodes people's chances at real financial security by siphoning off significant portions of income through interest, late fees, and other charges. It's financial death by a thousand cuts.</p> <h3>Remedy</h3> <p>Although consumer debt may be unavoidable at times, reject the notion that it's normal operating procedure. When you put high interest credit card debt behind you, you free up the income that can build real wealth over time.</p> <h2>5. Being Frugal Means a Lifetime of Denial</h2> <p>This isn't just one of the biggest <a href="http://www.wisebread.com/7-frugal-myths-debunked">misconceptions about frugality</a>; it's the one folks most often point to as an excuse to continue their spendthrift ways. But healthy frugality is less about denying ourselves everything and more about exercising strategic restraint in order to accomplish specific goals. For example, a frugal person may vacation in the Bahamas every other year because she's driven the same used car for ten years and never carried an auto loan. People who direct their resources mindfully in order to stay out of debt and live richer lives get labeled &quot;frugal&quot; when &quot;focused&quot; might capture the breadth of the lifestyle better.</p> <h3>Remedy</h3> <p>Give up the bias that frugality is synonymous with voluntary poverty. Instead, look for areas in your budget where you can cut back in order to achieve specific ends. Dream big and see how a more a strategic approach to saving and spending can help make frugality fun.</p> <h2>6. Money and Romance Don't Mix</h2> <p>You know what's even less romantic than realistic discussions about money? A break-up from money-related arguments, chronic debt, and endless financial anxiety. Compared to divorce, frank and honest money talk seems absolutely swoon-worthy, doesn't it? Think of it this way: Understanding where you and your partner stand with money, debt, and spending is essential information to determine if you're a good long-term match. Getting on the same page financially helps protect your love affair, build a happier domestic life, and accomplish your goals as a team.</p> <h3>Remedy</h3> <p>If you're hesitant to broach the topic of money with the person you care about, start by reading this article together and then reserve a time to &quot;get naked&quot; about your finances in a non-judgmental, constructive way. Once you've opened up about finances, it'll be easier to find ways to <a href="http://www.wisebread.com/5-painless-ways-to-manage-money-with-your-partner">manage money with your partner</a> proactively.</p> <p>The lesson here is a simple one: Don't accept limiting financial beliefs at face value. Question your own money self-talk and the wisdom behind casual advice that suggests you're powerless to control this important aspect of life. As hokey as it may sound, changing how we think really is the first crucial step in changing our fortunes.</p> <p><em>What harmful beliefs about money do you have? Which old beliefs were the toughest for you to get over?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/kentin-waits">Kentin Waits</a> of <a href="http://www.wisebread.com/6-harmful-money-beliefs-that-are-keeping-you-poor">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-4"> <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-frugal-balance-staying-away-from-financial-extremes">The Frugal Balance: Staying Away from Financial Extremes</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/ow-do-you-deal-with-family-members-who-are-bad-at-managing-money">How Do You Deal With Family Members Who Are Bad At Managing 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/i-am-doing-well-financially-now-what">I Am Doing Well Financially. Now What?</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/adaptation-lessons-learned-from-being-unemployed">Adaptation: Lessons learned from being unemployed</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/financial-tricks-to-master-for-a-happier-life">Financial Tricks to Master for a Happier Life</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Lifestyle financial planning money beliefs money management Fri, 11 Jul 2014 11:00:07 +0000 Kentin Waits 1156978 at http://www.wisebread.com Easy Personal Finance for Lazy People http://www.wisebread.com/easy-personal-finance-for-lazy-people <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/easy-personal-finance-for-lazy-people" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/sleep-75627078.jpg" alt="napping" title="napping" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Establishing good personal finance habits requires education, determination, and a plan. It can be a lot of work. But it doesn't have to be. And laziness definitely isn't (or at least it shouldn't be) an excuse to drop the ball. Personal finance is easy if you approach it with the right frame of mind. (See also: <a href="http://www.wisebread.com/build-a-better-budget-in-5-minutes-flat?ref=seealso">The Five Minute Budget</a>)</p> <p>Let's start!</p> <h2>1. Automate Your Savings</h2> <p>Saving isn't easy for the lazy &mdash; it takes discipline. And if you're not manually depositing money into your savings on a regular basis, automating your savings is one way to build your cash reserve without lifting a finger. Schedule automatic transfers from your checking account to your savings account once or twice a month, preferably a few days after receiving your paycheck. Easy!</p> <h2>2. Sign Up for Online Bill Pay</h2> <p>Paying bills on time might also be a challenge if you're financially lazy. Maybe you procrastinate opening statements or fail to write down due dates, which triggers late payments and added fees. Online bill pay is offered free by most banks; and with this service, you can pay your creditors online through your bank, and even schedule future payments by due date. It's the easiest and most flexible way to manage bills. You don't have to write a check, get stamps, or worry about missed payments. Just make sure you have enough in your account to cover any withdrawals. Easy!</p> <h2>3. Skip the Adjustable Rate Mortgage</h2> <p>An adjustable rate offers a lower interest rate, which can save you money each month. However, the interest rate on an ARM isn't permanent, and a rate adjustment after the first three or five years can trigger a higher mortgage rate and mortgage payment. If you're proactive and watch the market, refinancing to a fixed-rate mortgage before your first rate adjustment might avert higher payments. But if you're lazy with finances, you're better off getting a fixed rate from the start. This way, your rate doesn't change for the duration of your term, and you don't have to think about a new mortgage in the next few years.</p> <p>This strategy also applies to rewards credit cards &mdash; just skip all the craziness around rewards points and spending categories and choose a rewards card that rewards you with cash or statement credits.</p> <h2>4. Budget With an Envelope or Jar</h2> <p>Budgeting is the best way to live within your means. Some people deposit all of their paycheck into a checking account, and then withdraw cash or write checks as needed for household expenses and extras. This can work, but with all your cash in the bank, you'll need to balance your account frequently to keep track of every debit card swipe, check, or ATM withdrawal &mdash; which can become a real hassle. There are apps and spreadsheets to help, but these tools aren't always easier, especially if you're not tech savvy. Or if you're too lazy to open the app or spreadsheet.</p> <p>There is a simpler method. Rather than deposit all of your cash in the bank, keep some of your cash at home in a safe place. <a href="http://www.wisebread.com/a-comprehensive-guide-to-the-envelope-system">Use jars or envelopes</a> to hold cash for various money categories, such as groceries, gas, or entertainment. You're still paying your bills online (see above). This is an easy way to keep control of your other spending.</p> <h2>5. Enroll in Your Employer's 401(k) Plan</h2> <p>Lazy financial habits today have a tremendous impact on your financial future. It's easy to shrug off retirement planning when it seems so far off. And if you're lazy, you probably don't have the desire to meet with financial planners or educate yourself on various options. However, the less you know and the longer you put off saving for retirement, the less you'll have &mdash; and the longer you might have to work.</p> <p>For simple, hands-off retirement planning, enroll in your employer's 401(k) plan once you're eligible. The company deducts a percentage from your paycheck and deposits funds into a retirement savings account. And depending on the company, your employer might match your contributions. It's essentially free money for participating in the plan. Choose an investment option that's based on your <a href="http://www.wisebread.com/using-time-horizons-to-make-smarter-investments">time horizon</a> (that's how long you plan to work or invest) &mdash; most employer 401(k) plans offer these &mdash; and let it grow on autopilot.</p> <h2>6. Ask for a Raise</h2> <p>Whether you need extra cash to pay off credit card debt or buy a house, you might give up on your goals if you don't have the income. Getting a part-time job to supplement your full-time income is one way to earn extra cash. But if you don't want to work any harder than you already do, ask your boss for a raise. Pay increases are based on work performance and skill. So, do your homework and make sure that your salary request is comparable with your experience and education.</p> <h2>7. Get a Whole Life Insurance Policy</h2> <p>Term-life policies are cheaper than whole-life policies, and you'll receive more coverage for your money. But term policies typically end after 10 to 20 years, at which time you'll need to shop for a new policy. If you don't want to think about life insurance in the future, buy a whole or permanent life insurance policy. You'll pay a higher premium with a permanent policy. However, if you purchase this policy when you're young and healthy, you'll receive a lower premium that will never increase.</p> <p><em>What's your best personal finance advice for the lazy. Come on, get off your couch and share in comments!</em></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/easy-personal-finance-for-lazy-people">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-5"> <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-private-financial-information-you-must-share">The Private Financial Information You Must Share</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-frugal-balance-staying-away-from-financial-extremes">The Frugal Balance: Staying Away from Financial Extremes</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-steps-to-a-blissful-matri-money">8 Steps to a Blissful Matri-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/9-signs-you-need-to-fire-your-financial-planner">9 Signs You Need to Fire Your Financial Planner</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/ow-do-you-deal-with-family-members-who-are-bad-at-managing-money">How Do You Deal With Family Members Who Are Bad At Managing Money?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance easy personal finance financial planning money management Wed, 07 May 2014 08:00:25 +0000 Mikey Rox 1138217 at http://www.wisebread.com 5 Painless Ways to Manage Money With Your Partner http://www.wisebread.com/5-painless-ways-to-manage-money-with-your-partner <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-painless-ways-to-manage-money-with-your-partner" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/finances-466002203.jpg" alt="couple finances" title="couple finances" class="imagecache imagecache-250w" width="250" height="171" /></a> </div> </div> </div> <p>Whenever I see a talk show or reality show that deals with finances, I'm always most amazed by the couples.</p> <p><em>&quot;She makes about $60,000 per year ... I think.&quot;</em></p> <p><em>&quot;I know he has credit card debt, I just don't know how much.&quot;</em></p> <p>These are the kinds of things I hear people say about their spouses and their money. When you're sharing bills, a household, and (hopefully) a future, it seems a little insane that so many people aren't on the same page. Or haven't even talked about what page they're on. Not before they were married, not after, and not even when they land in major financial trouble.</p> <p>Not that managing money as a couple is easy. It isn't. That said, there are few key things that couples can do to help get &mdash; and stay &mdash; on the right financial track. Here are the top five. (See also: <a href="http://www.wisebread.com/5-questions-couples-should-ask-in-the-money-talk?ref=seealso">What Couples Should Ask About During the Money Talk</a>)</p> <h2>1. Just Talk About It</h2> <p>You'd think that once someone's seen you naked, bringing up something as mundane as a bank account would be easy. You'd think. According to a poll conducted in 2013 by the National Foundation for Credit Counseling, 68% of couples surveyed held a negative attitude about discussing money with their fiancee. And just 32% of people described a financial conversation as being &quot;productive.&quot;</p> <p>That lack of communication can be bad news for couples. Another poll by the Canadian Broadcasting Corporation found that most married Canadians regretted having not discussed money before they tied the knot. I can only assume most Americans do too, especially since arguing about money is considered one of the <a href="http://www.huffingtonpost.com/2013/07/12/divorce-study_n_3587811.html">top predictors of divorce</a>.</p> <h2>2. Tell the Truth</h2> <p>There's one big &mdash; and rather obvious &mdash; caveat to talking about money with your partner, though: You have to tell the truth. According to a 2011 study, 15% of people who shared finances with a spouse <a href="http://www.nefe.org/press-room/news/admitting-to-financial-deceptions.aspx">kept a secret bank account</a>. The same study found that about 10% of married people lied to their spouse about how much they earned. And a 2012 survey by American Express found that one in 10 people have misrepresented the cost of a purchase to their spouse.</p> <p>Financial falsehood is common because it's oh-so-easy to do. The problem is that without the whole truth, it's impossible to really plan your finances. It might also be impossible to get along. According to a 2005 survey, <a href="http://www.lawyers.com/common/content/print_content.php?articleid=1029924">25% of Americans</a> say it's more important for them to know <em>what their partner's making</em> than <em>who</em> <em>they're making it with</em>. In other words, lying about money is likely to put you in the dog house. (See also: <a href="http://www.wisebread.com/how-to-be-happy-and-married-24-tips-from-a-24-year-old-marriage?ref=seealso">Happy and Married: 24 Tips From a 24-Year-Old Marriage</a>)</p> <h2>3. Have a Plan</h2> <p>Once you've had the big, scary discussion about assets, debts, and earnings with your partner, it's time to move on to another conversation: What you plan to do with all of it. Maybe one of you aims to retire at 40 and is willing to live a Spartan lifestyle to make it work, while the other dreams of retiring later &mdash; but richer. According to a 2013 study, one in three couples <a href="https://www.fidelity.com/static/dcle/welcome/documents/CouplesRetirementStudy.pdf">disagree about the lifestyle</a> they want to lead in retirement. The problem is that if you never come up with a plan to achieve your financial goals, you probably never will. Sometimes that means meeting in the middle. (See also: <a href="http://www.wisebread.com/how-to-talk-about-retirement-with-your-spouse?ref=seealso">How to Talk About Retirement With Your Spouse</a>)</p> <h2>4. Divide, Conquer, Reconvene</h2> <p>One of the great things about being a pair is that you get to divide duties. If you're lucky, you might even find a spouse who likes doing taxes. Your taxes. (It happened to me!) Division of labor is a great way to get things done and even maximize each partner's strengths. There's one big caveat though: You have to reconvene regularly to make sure each knows what the other is up to.</p> <p>And ladies, this one's especially important for you. A 2007 study of <a href="http://link.springer.com/article/10.1007%2Fs11199-007-9243-z">retirement planning among couples</a> found that women are significantly less likely to be involved in it, even among same-sex couples. Leaving it to your spouse &mdash; whether male or female &mdash; can have serious consequences. A 2013 survey of recent widows found that when their partners died, many <a href="https://www.wiserwomen.org/images/imagefiles/Matt%20Greenwald.pdf">women struggled to manage their money</a> on their own. Sixty-one percent had trouble filing their income taxes; 26% had difficulty locating bank accounts and investments; and 23% had trouble locating &mdash; and cashing &mdash; their spouse's life insurance policy.</p> <p>It's fine to divide financial tasks between spouses, just be sure that you both know the basics. That means you should regularly discuss what's being done, how it's being done, and where each can <a href="http://www.wisebread.com/the-private-financial-information-you-must-share">find pertinent financial information</a> when necessary.</p> <h2>5. It Isn't Easy...</h2> <p>Managing money as a couple isn't easy. But then, <em>being</em> a couple isn't always easy. Just as one of you might disagree about the right way to squeeze a tube of toothpaste or replace the toilet paper, you'll probably disagree about the right way to manage your money, too.</p> <p>Actually, the truth is that there is no one right way. You just have to talk it over, argue, adjust, and figure it out as you go along. Come to think of it, that probably goes for the toilet paper and toothpaste too. But you can avoid some major mistakes. (See also: <a href="http://www.wisebread.com/the-7-worst-money-mistakes-married-people-make?ref=seealso">The 7 Worst Money Mistakes Married People Make</a>)</p> <p><em>How do you manage your money with your partner? Please share in comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tara-struyk">Tara Struyk</a> of <a href="http://www.wisebread.com/5-painless-ways-to-manage-money-with-your-partner">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-6"> <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/there-is-no-tomorrow">There is no Tomorrow.</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/meet-meg-favreau-our-senior-editor">Meet Meg Favreau, Our Senior Editor</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-steps-to-a-blissful-matri-money">8 Steps to a Blissful Matri-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/9-signs-you-need-to-fire-your-financial-planner">9 Signs You Need to Fire Your Financial Planner</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/use-the-8020-rule-to-maximize-your-financial-opportunities">Use the 80/20 Rule to Maximize Your Financial Opportunities</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Life Hacks financial planning marriage and money money communication money talk Tue, 06 May 2014 08:00:16 +0000 Tara Struyk 1137924 at http://www.wisebread.com Turn Last Year's Taxes Into This Year's Financial Spring Cleaning http://www.wisebread.com/turn-last-years-taxes-into-this-years-financial-spring-cleaning <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/turn-last-years-taxes-into-this-years-financial-spring-cleaning" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/finances-466009147.jpg" alt="finances" title="finances" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>It's tax time again, the time of year when Americans sift through the pile of papers on or near (and sometimes in) their filing cabinets in search of those elusive tax documents. Where'd the W-2s go? What happened to the 1099 from the bank?</p> <p>It's also the time of year we promise to do a better job sorting and filing for next year's taxes. Make this year the year you keep that promise. Or take it a step further and make tax time an opportunity to look ahead, financially speaking, rather than only look back at last year. After all, you probably have a clearer picture of your current financial situation right after doing your taxes than at any other time.</p> <p>Let's start with the tax documents, and then let's look at what else we can tidy up.</p> <h2>Wrangle Your Tax Documents</h2> <p>All that stuff you spent the day tracking down? Keep it in one place for next year. Include a <a href="http://www.irs.com/articles/tax-form-checklist">checklist</a> so you can keep track of documents as you receive them &mdash; or to know what to go looking for if you haven't. Also include on your checklist some personal info: Names, Dates of Birth, Social Security numbers for you, your spouse or partner, and every dependent you claim. These details will be handy for all sorts of other purposes, too.</p> <h3>Make a Simple Two Folder System for the Key Documents</h3> <p>Make one folder for all of your income documents such as W-2s from employers, 1099s for contract work, for interest income, gambling winnings, income from investment sales, rental income, whatever. Refer to your checklist!</p> <p>Make a second folder for your income adjustments and credits. Mortgage interest is the big one here, but there are lots &mdash; IRA contributions, charitable contributions, education expenses. As you receive receipts and statements for these, just drop them in your folder. Next March or April you'll be ready to go, and probably feeling proud of your sensible filing.</p> <h3>Consider Digital Files</h3> <p>Lots of financial institutions give us the option to receive digital copies of our statements and tax documents &mdash; various 1099s for instance, or the 1098 for interest paid on student loan debt. It's cheaper for them, and it cuts down on paper waste. As you receive these, save them in specific folders on your computer (say, &quot;Income&quot; and &quot;Credits&quot;). They'll be waiting for you at tax time next year.</p> <p>Every year when I'm doing my taxes I have to run out to the garage to take a look at annual car registration fees paid for each of our two cars. This year I've taken snapshots of the renewal documents with my smartphone and uploaded them to Evernote. (I could have just added them to my &quot;Income Adjustments&quot; folder, too.) Next year I won't have to run out to the car. I've done the same with my property tax bills. You can do this for any paper receipts you receive and would like to keep for tax purposes.</p> <p><strong>Note:</strong> Many institutions will charge a fee to access older statements. Check with your bank or lender. If you need to keep copies of these records for your taxes or for retention, be sure to download them and store them safely (whether digitally or as print outs) &mdash; and don't forget to back them up.</p> <h3>Reconsider Your Withholding</h3> <p>Most personal finance gurus advise against too much income withholding. Despite that, on average, <a href="http://money.cnn.com/2012/01/10/pf/taxes/tax_refund/">Americans withhold an extra $3,000</a> in income tax every year &mdash; $250 a month. While it's nice to get a $3000 check every spring, it's not the smartest use of <em>your</em> money. It's not even the smartest way to get a $3000 &quot;bonus&quot; every year.</p> <p>With the details fresh in your mind after finishing your taxes, visit the <a href="http://www.irs.gov/Individuals/IRS-Withholding-Calculator">IRS' Withholding Calculator </a>and figure out how much you should be sending the government out of every paycheck to bring that refund closer to $500. When you ask HR to make the change, also ask that they redirect the same amount into a savings account. You won't notice much, if any, change on your paystub, but you will have a growing savings account &mdash; one that's earning interest.</p> <h2>Create a Basic File System</h2> <p>I've outlined a simple two-folder file system for your taxes above. If you don't already have a file system for the rest of your Important Documents, consider setting one up.</p> <p>In addition to my two tax folders, I keep several folders for my freelance work as a writer and editor (basically income and expense), and for the household I keep folders for:</p> <ul> <li>insurance policies (life, homeowner's, auto, earthquake, flood [beach living!])<br /> &nbsp;</li> <li>home maintenance receipts for repairs and supplies, as well as for major appliances<br /> &nbsp;</li> <li>bills paid<br /> &nbsp;</li> <li>bank and credit card statements (only recently went paperless)<br /> &nbsp;</li> <li>mortgage documents<br /> &nbsp;</li> <li>passports and Other Important Stuff like SS cards, birth certificates, diplomas, etc.</li> </ul> <h2>Start Budgeting</h2> <p>You have all the details on your income. And some of the details on your spending. Why not expend a little more effort <a href="http://www.wisebread.com/build-a-better-budget-in-5-minutes-flat">to create a budget</a>? Most banks now offer robust online tools for tracking spending on credit cards and to monitor income and spending made through checking, and savings accounts. That's a good start. You can take it a step further by using a service such as <a href="https://www.manilla.com/">Manilla</a> to consolidate and monitor all your bills and help you track your spending.</p> <h2>Evaluate Your Retirement Savings</h2> <p>Can you save more? Can you make a contribution now, before you file, and repay your savings or checking account with your refund? You'll get a break on your taxes, and you will have done something nice for your future self.</p> <p>Now is also a good time to rebalance your funding allocation between riskier stocks and safer bonds. Depending on the performance of your portfolio over the last year, gains (or losses) have changed the balance of your investment, most likely toward riskier stocks, which may or may not be in alignment with your investment goals and risk tolerance.</p> <h2>Evaluate Your Debt</h2> <p>If you're like most Americans, you're carrying at least a little credit card debt. Maybe a lot. Do you know how much interest you're paying? Do you have a plan for paying that balance off?</p> <p>Get a handle on those details and start figuring out how to get away from that debt. A good first step is to commit some of your refund to those balances.</p> <h2>Check Your Credit Report</h2> <p>Speaking of credit. You're entitled to one free look at your credit report from each of the three major credit bureaus every year. Don't visit one of those services that advertise on TV with the catchy jingles (they'll try to sell you some other services you may not need). Just go to the only <a href="https://www.annualcreditreport.com/index.action">annual credit report website</a> authorized by <a href="http://www.consumer.ftc.gov/articles/0155-free-credit-reports">federal government</a> to provide consumers with reports from the leading bureaus. Find anything amiss? Learn how to correct <a href="http://www.consumerfinance.gov/askcfpb/313/what-should-i-look-for-in-my-credit-report-what-are-a-few-of-the-common-credit-report-errors.html">credit reporting errors</a>.</p> <p>For more tips on<em> </em>Financial Spring Cleaning, join me and our Senior Editor, Meg Favreau, as well as Kristen Chase of Cool Mom Picks and Marc Karasu of Manilla on <strong>Wednesday, March 26 at 3:30pm ET</strong> for a <a href="https://plus.google.com/events/c3f26hh8k3dsmi44tg54f1ns8lg">Google+ Hangout</a>. The Hangout will answer questions about how to de-clutter and organize your financial life this spring. Whether you&rsquo;re trying to get your financial paperwork in order to prepare your taxes, or want to do some financial spring cleaning in order to simplify your life, the conversation will provide participants with helpful tips, tricks and digital tools to be more productive, get control of your money, and start spring on a fresh financial note.</p> <p><em> </em></p> <p><em><a href="http://r1.fmpub.net/?k1=cmx-metric&amp;k2=289|10&amp;k3=logo&amp;k4=&amp;r=http%3A%2F%2Fwww.citi.com%2Fmobile"><img src="http://vc.cdn.fm/video_conversationalist/system/published/opportunity/8758310/Citi_Logo_125x125.jpg" alt="" /></a></em></p> <p><em>This post is brought to you by Citi. Learn more about the tools Citi offers to help simplify your financial life at <a rel="nofollow" href="http://r1.fmpub.net/?k1=cmx-metric&amp;k2=289%7C10&amp;k3=disclaimer&amp;k4=&amp;r=http%3A%2F%2Fatwww.citi.com%2Fmobile">www.citi.com/mobile</a>.&nbsp;</em></p> <p><em>This content is not provided or commissioned by Citi. Opinions expressed here are author&rsquo;s alone, not those of Citi, and have not been reviewed, approved or otherwise endorsed by Citi.</em></p> <p><img width="0" height="0" src="http://r1.fmpub.net/?k1=cmx-metric&amp;k2=289|10&amp;k3=&amp;k4=&amp;img=true" alt="" /><img width="0" height="0" src="http://ap.lijit.com/www/delivery/retarget.php?p=FMC&amp;add_c87583=1&amp;add_s289=1&amp;add_n101=1" alt="" /><img width="0" height="0" src="http://pixel.mathtag.com/event/img?mt_id=336069&amp;mt_adid=115091&amp;v2=s289&amp;v3=n101&amp;s1=c87583" alt="" /></p> <p>&nbsp;</p> <p>&nbsp;</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/lars-peterson">Lars Peterson</a> of <a href="http://www.wisebread.com/turn-last-years-taxes-into-this-years-financial-spring-cleaning">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-7"> <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/surprise-5-reasons-you-might-not-get-your-tax-refund">Surprise! 5 Reasons You Might Not Get Your Tax Refund</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/what-if-i-skip-my-taxes-this-year">What If I Skip My Taxes This Year?</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/five-easy-steps-to-keeping-track-of-expenses-for-the-self-employed">Five Easy Steps to Keeping Track of Expenses for the Self-Employed</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/how-to-survive-a-tax-audit">How to Survive a Tax Audit</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/irs-delays-start-of-tax-filing-for-some-taxpayers-in-2011">IRS Delays Start of Tax Filing for Some Taxpayers in 2011</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Taxes federal taxes files filing taxes financial planning Tue, 18 Mar 2014 10:24:11 +0000 Lars Peterson 1131591 at http://www.wisebread.com Use the 80/20 Rule to Maximize Your Financial Opportunities http://www.wisebread.com/use-the-8020-rule-to-maximize-your-financial-opportunities <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/use-the-8020-rule-to-maximize-your-financial-opportunities" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/cash-139247069.jpg" alt="counting coins" title="counting coins" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>A number of years ago, when I was working for a big company, we had a team of people working on a project with a fairly simple goal: to keep our customers longer. I knew someone on the team and I remember asking repeatedly &mdash; for over two years &mdash; how things were progressing. The typical reply was, &quot;Oh, this is very complicated. We&#39;re trying to classify every customer and predict when they are likely to leave us. Once we do that we will have to find out why they are likely to leave us. And then&hellip;.&quot; That&#39;s when I usually changed the subject. (See also: <a href="http://www.wisebread.com/7-ways-to-have-a-better-day-at-work?ref=seealso">How to Have a Better Day at Work</a>)</p> <p>Needless to say, the project was never completed. All that time and effort wasted. I suggested to the colleague, &quot;Why don&#39;t you just &#39;80/20&#39; it?&quot; That is, first focus the effort on just the relatively small number of customers who generate the vast majority of profits for the company and deal with the remaining, less-profitable customers later. In fact, for most companies 80% of profits do come from only around 20% of its customers.</p> <h2>The 80/20 Rule in Nature</h2> <p>But the &quot;80/20 Rule&quot; (also known as the &quot;Pareto principle&quot;) doesn&#39;t just apply to customers and profits. The rule, which states that 80% of an outcome is usually determined by only 20% of the inputs, holds true for a surprising number and variety of things:</p> <ul> <li>82.7% of the world&#39;s GDP comes from the richest 20% of the population.</li> <li>About 80% of traffic accidents are caused by 20% of motorists.</li> <li>Most people wear 20% of their clothes 80% of the time.</li> </ul> <p>It doesn&#39;t always work out to exactly 80% and 20%, but the principle is usually a good rule of thumb. In fact, the 80/20 Rule can be applied to the &quot;rule of thumb&quot; &mdash; your thumbs account for 20% of your fingers but do 80% of the work!</p> <p>I like the 80/20 Rule because it can help us manage things more effectively. Things like our finances. (See also: <a href="http://www.wisebread.com/money-management-in-5-minutes-a-day?ref=seealso">Manage Your Money in 5 Minutes a Day</a>)</p> <h2>The 80/20 Rule and Your Money</h2> <p>Focusing on just a few high-impact assets and liabilities, and the cash flow associated with them, can pay handsome dividends. On the other hand, if you spend all or most of your time trying to micromanage hundreds of smaller daily expenditures, all that effort is only impacting about 20% of your overall financial situation. That&#39;s not a very effective use of your time.</p> <p>80% of your household wealth usually comes from only about 20% of your assets.</p> <p>What are some of those high-impact items? For the average U.S. household, two assets &mdash; real estate and retirement accounts &mdash; make up 80.7% of household net worth. So these should certainly be areas to focus on for your wealth creation. (See also: <a href="http://www.wisebread.com/how-to-set-up-an-ira-to-build-wealth?ref=seealso">How to Build Wealth With an IRA</a>)</p> <p>Let&#39;s look at how you can increase the value of real estate property and your retirement accounts. Keep in mind that you can grow them in two ways: by increasing your investment amount or by reducing costs associated with them. We&#39;ll start with real estate.</p> <h2>Ways to Grow Your Real Estate Equity</h2> <p>The easiest way to grow equity in your home is to purchase a home you can afford and maintain. But if you&#39;re already in a home, you have several strategies to boost equity.</p> <h3>Prepay the Mortgage</h3> <p>This is your &quot;biggest bang for the buck&quot; option. You can accomplish it by either refinancing to a shorter term mortgage or by keeping your existing loan and making additional principal payments whenever you can. Refinancing a $200,000 mortgage from a 30-year to a 15-year term can not only save you about $100,000 in interest payments, but it also enables you to pay off the loan years sooner. Owning the asset (your home) sooner increases your net worth, which then frees up substantial cash flow&hellip;no more mortgage payments! (See also: <a href="http://www.wisebread.com/how-to-refinance-your-mortgage?ref=seealso">How to Refinance Your Mortgage</a>)</p> <h3>Appeal Your Tax Assessment</h3> <p>Since 2007 most U.S. home values have dropped considerably, but in some cases appraised values used to determine tax rates haven&#39;t been properly adjusted or they might have other inaccuracies. Filing an appeal requires doing some homework, but it might be worth the effort if it saves you $100 or more per month.</p> <h3>Lower Your Homeowner&#39;s Insurance</h3> <p>It never hurts to review not just the amount you&#39;re paying for homeowner&#39;s insurance but also what is covered. The last thing you need is for your house to be seriously damaged and then learn your insurance won&#39;t cover it. In addition to getting &quot;a-la-carte&quot; quotes be sure to also ask your carrier and competitors about their multiple policy discounts.</p> <h3>Downsize</h3> <p>If you&#39;ve purchased a house that&#39;s bigger than you need with a mortgage that&#39;s much more costly than you can afford, you will experience a condition known as being &quot;house poor.&quot; When the cost of a mortgage + taxes + insurance + maintenance + repairs for this one asset exhausts all or almost all of your cash, it prevents you from taking advantage of other opportunities to move ahead financially, so downsizing to a smaller home might be your best solution. (See also: <a href="http://www.wisebread.com/5-steps-to-take-if-youre-house-poor?ref=seealso">What to Do if You&rsquo;re House Poor</a>)</p> <h3>Move Into an Income-Producer</h3> <p>If owning and managing a multi-family property suits you, it offers a chance to significantly improve your cash flow position &mdash; and to grow your equity faster, because tenants are helping you pay off the mortgage. You might even be able to collect monthly income from a one-family home if your primary residence has separate living space that can be rented. You can rent garages, too.</p> <h2>Ways to Grow Your Retirement Accounts</h2> <p>Again, the strategy here is to maximize your investment both in terms of dollars and investment choices, and to cut associated costs wherever possible.</p> <h3>Maximize Matching Contributions</h3> <p>There&#39;s no better source of savings than free money! That&#39;s what you&#39;re getting if your employer has a 401(k), employee stock, or savings account matching program. So be sure to contribute enough to receive the employer&#39;s maximum match amount. It might not put money in your pocket right now, but winning at the wealth and cash flow game isn&#39;t about immediate gratification.</p> <h3>Invest in Stocks</h3> <p>As Jean Chatzky summarized from a survey for her book <em><a href="http://www.amazon.com/gp/product/0307407144/ref=as_li_ss_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=0307407144&amp;linkCode=as2&amp;tag=wisbre03-20">The Difference</a></em>, the wealthy buy stocks. Says Chatzky: &quot;[F]or the wealthy, sound investing was the number one factor in helping them reach their financial status.&quot; Why? Because over time stock market growth outpaces inflation. (See also: <a href="http://www.wisebread.com/3-steps-to-getting-started-in-the-stock-market-with-index-funds?ref=seealso">How to Get Started in the Stock Market With Index Funds</a>)</p> <h3>Include Dividend-Paying Stocks in Your Portfolio</h3> <p>Some stocks have the advantage of potentially growing in value (stock price) over time plus generating &quot;interest&quot; income in the form of dividends. At a time when CD and savings account interest rates are under 1%, stocks with dividend payments of 2% or 3% might be something for you to consider in your retirement portfolio. Like cash flow from company match accounts it&#39;s often best to save stock dividends for later use. In fact, reinvesting the dividends back into stock can compound the growth.</p> <h3>Keep Your Management Fees Low</h3> <p>Fees you pay that are associated with the management of your investments can, over time, add up to many thousands of dollars and slow your progress on the path to financial independence. These costs include retirement and mutual fund management fees, trading fees, financial advisor fees, and of course taxes. So it pays to manage them wisely. A good place to learn more about this topic is in Ric Edelman&#39;s brief, easy to read book <em><a href="http://www.amazon.com/gp/product/143915290X/ref=as_li_ss_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=143915290X&amp;linkCode=as2&amp;tag=wisbre03-20">Rescue Your Money</a></em>.</p> <p>(Of course, be sure to consult your financial advisor about stock allocation strategies most appropriate for your situation.)</p> <p>Numerous small expenditures do matter, and they shouldn&#39;t be neglected. That&#39;s good budget management. But identifying and optimizing the few assets and liabilities that determine most of your overall financial success &mdash; that&#39;s good financial planning.</p> <p><em>Can you think of any other ways to maximize the value of your retirement savings and real estate? What are your other high-impact assets? Are you taking steps to optimize them?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/keith-whelan">Keith Whelan</a> of <a href="http://www.wisebread.com/use-the-8020-rule-to-maximize-your-financial-opportunities">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-8"> <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-money-mistakes-to-stop-making-by-50">5 Money Mistakes to Stop Making by 50</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-6-biggest-financial-decisions-in-your-20s">The 6 Biggest Financial Decisions in Your 20s</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-financial-obstacles-that-are-especially-tough-for-women">5 Financial Obstacles That Are Especially Tough for Women</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/7-occasions-when-you-should-definitely-hire-a-financial-advisor">7 Occasions When You Should Definitely Hire a Financial Advisor</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/9-signs-you-need-to-fire-your-financial-planner">9 Signs You Need to Fire Your Financial Planner</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance assets financial planning mortgage retirement Thu, 09 Jan 2014 11:36:34 +0000 Keith Whelan 1109329 at http://www.wisebread.com The Private Financial Information You Must Share http://www.wisebread.com/the-private-financial-information-you-must-share <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-private-financial-information-you-must-share" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/couple-4526050-small.jpg" alt="couple whispering" title="couple whispering" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>Recently, my husband and I decided to make some money moves to reduce our taxes and diversify an investment holding. One of the steps required transferring funds from our online brokerage firm to our regular checking account with our credit union. (See also: <a href="http://www.wisebread.com/the-benefits-and-drawbacks-of-credit-unions">Benefits and Drawbacks of Credit Unions</a>)</p> <p>My husband has been managing the day-to-day aspects of our family finances while I have been taking care of longer-term investments. So, he had the log-on information to the checking account while I had the log-on to the brokerage account.</p> <p>It took multiple online sessions as well as phone calls and text messages with my husband in order to share information required to facilitate the transfers between our accounts. This episode made me realize that if you share a financial future with someone, then you should share private financial information, too. I could see how challenging a major transition (such as an extended overseas trip or deployment, emergency situation, incapacitating accident or illness, or death) could be. After all, my husband and I were working together to make a financial move but still found the process challenging. (See also: <a href="http://www.wisebread.com/happily-ever-after-how-to-stay-married-for-29-years-and-counting">How to Stay Married for 29 Years and Counting</a>)</p> <h2>Financial Information to Share</h2> <p>You may think you have a simple financial life. But it&rsquo;s likely that you have more accounts than you realize. And the number grows as you get older and accumulate assets, have children, change jobs, and restructure holdings based on changes in tax laws. &nbsp;&nbsp;</p> <p>One of the most missed items is the paid-up life insurance policy, according to <a href="http://uphelp.org/ask-an-expert/expertanswer?field_expert_uid=400">Tony Steuer, CLU, Life Insurance Analyst, CPFFE, and Director of Financial Wellness for United Policyholders</a>. He also mentions various employer-sponsored plans as often-overlooked assets.</p> <p>Take an inventory of your accounts among these major categories: &nbsp;&nbsp;</p> <p><strong>Personal and Business Accounts With Financial Institutions</strong></p> <ul> <li> <p>Checking accounts</p> </li> <li> <p>Savings accounts</p> </li> <li> <p>CDs</p> </li> <li> <p>Mortgages</p> </li> <li> <p>Debit/credit/charge cards</p> </li> <li> <p>Vehicle loans</p> </li> <li> <p>Brokerage accounts (online and traditional)</p> </li> <li> <p>Mutual fund accounts (not held in brokerage accounts)</p> </li> <li> <p>Safety deposit boxes</p> </li> <li> <p>Annuities</p> </li> <li> <p>529 plan accounts</p> </li> <li> <p>Children&rsquo;s checking, savings, and investment accounts</p> </li> <li> <p>Life insurance policies, including paid-up policies and key person insurance policies</p> </li> <li> <p>Other insurance policies (property and casualty, personal umbrella, disability, long-term care)</p> </li> </ul> <p><strong>Work-Related Financial Accounts With Current and Past Employers</strong></p> <ul> <li> <p>Employer-paid or sponsored insurance policies (life, disability, etc.)</p> </li> <li> <p>Health savings accounts, health reimbursement arrangements, and/or flexible spending accounts</p> </li> <li> <p>Defined benefit plans (pension plans)</p> </li> <li> <p>Defined contribution plans (401k or similar plans)</p> </li> <li> <p>Stock options</p> </li> </ul> <p><strong>Online Accounts for Shopping, Account Management, and/or Bill Payment Purposes</strong></p> <ul> <li> <p>Department store and specialty retailers</p> </li> <li> <p>Cell phone providers</p> </li> <li> <p>Utilities</p> </li> <li> <p>Media and entertainment companies</p> </li> <li> <p>Airline miles and travel rewards programs</p> </li> <li> <p>Tax software and electronic filing programs</p> </li> </ul> <p>For each account, document the name of the financial institution or provider; account or policy number; and contact person such as the account representative, personal banker, or insurance agent. According to <a href="http://www.nolo.com/legal-encyclopedia/access-online-accounts-helping-executor-35013.html">legal site Nolo.com, you will also want to record online access information such as usernames, passwords, PINs, etc.</a></p> <p>Use whatever secure method of capturing these details works for you. For example, I prefer to write down the information on paper, whereas someone else may want to use a more sophisticated set-up involving password-protected spreadsheets or <a href="http://www.principledheart.com/">online services</a>.</p> <p>Finally, an essential piece of information is your financial plan. <a href="http://www.michaelslabic.com/">Financial advisor Michael Slabic, CLU, ChFC</a> tells me that developing and sharing this vision for your future is critical to effectively implementing the plan, particularly in the case of an <a href="http://www.multivu.com/mnr/59530-northwestern-mutual-client-story-a-world-without-reb">unexpected death of a spouse or loved one</a>. (See also: <a href="http://www.wisebread.com/how-to-create-a-financial-5-year-plan">How to Create a 5-Year Financial Plan</a>)</p> <h2>Steps to Sharing Information</h2> <p>Start by deciding what accounts ought to have shared access all the time and make changes to those accounts if needed. Then, determine the best approach to structure and share information about the remaining accounts in ways that protect both you and your family.</p> <p><strong>Share Emergency and Daily Cash Accounts</strong></p> <p><a href="http://thechicagofinancialplanner.com/">Certified financial planner Roger Wohlner</a> emphasizes the need for cash in emergency situations. So, share information that will allow your family to take care of basic financial needs in a crisis. For example, establish and share access to a joint checking account or savings account designated for certain situations. (See also: <a href="http://www.wisebread.com/tips-to-prepare-for-a-health-emergency">How to Prepare for a Health Emergency</a>)</p> <p>In addition, you might work with charge card companies, cell phone companies, and other providers to establish account management rights so that one person can handle urgent problems if the other is unavailable.</p> <p><strong>Share Long-Term Planning Details</strong></p> <p>For longer-term financial planning purposes, share a comprehensive inventory of accounts with information on holdings such as bonds, mutual funds, and individual stocks. In addition, record outstanding debt such as student loans, mortgages, and vehicle loans. Mike tells me that many of his clients keep such a list with their financial plans for easy reference. You can share your account information (such as the name of your financial institution and average balances), yet still retain control of and online access to your accounts.</p> <p><strong>Don&#39;t Let Assets Stay Hidden</strong></p> <p>If there are accounts you&rsquo;d prefer not to discuss right now, such as your company&rsquo;s stock options or a child&rsquo;s 529 plan, you should still find a way to share this information when you are gone. Otherwise, your family may have difficulty tapping your assets. For example, Tony tells me that paid-up life insurance policies, some of the accounts you are most likely to forget you own, often end up as unclaimed property after the policyholder&rsquo;s death.</p> <p>Let your spouse, family member, and/or loved one know where to find your asset list, whether stored in a file cabinet, locked in a safety deposit box, kept in a sealed envelope in your top desk drawer, or documented in an online site.</p> <p>Note that there may be legal ramifications to giving out online access information. For example, sharing passwords for certain accounts may be a violation of the terms of service and federal regulations. In fact, according to an article in the Chicago Tribune, <a href="http://articles.chicagotribune.com/2011-05-26/business/ct-biz-0526-problem-kripke--20110526_1_online-account-online-banking-access">Bank of America refused online banking access to a wife who has power of attorney for her husband</a>. So, consult with your attorney about ways to gain access to funds at the proper time.</p> <p>Though my husband and I share all aspects of our financial lives, other couples and family members may have different arrangements. Set your boundaries before you start giving out information. But don&rsquo;t ignore the need to share information until it&rsquo;s too late.</p> <p><em>Do you share financial information and details with a spouse or partner?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/julie-rains">Julie Rains</a> of <a href="http://www.wisebread.com/the-private-financial-information-you-must-share">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-9"> <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-ways-auto-payments-can-screw-you">7 Ways Auto-Payments Can Screw You</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-frugal-balance-staying-away-from-financial-extremes">The Frugal Balance: Staying Away from Financial Extremes</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/easy-personal-finance-for-lazy-people">Easy Personal Finance for Lazy People</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-microsaving-tools-to-help-you-start-saving-now">5 MicroSaving Tools to Help You Start Saving Now</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/8-steps-to-a-blissful-matri-money">8 Steps to a Blissful Matri-Money</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance banking financial planning money management Tue, 29 Oct 2013 10:00:03 +0000 Julie Rains 1049125 at http://www.wisebread.com To Stay on Financial Track, Perform a Yearly Earnings Review http://www.wisebread.com/to-stay-on-financial-track-perfom-a-yearly-earnings-review <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/to-stay-on-financial-track-perfom-a-yearly-earnings-review" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/5857728038_a70232596a_z.jpg" alt="calculator and cash" title="calculator and cash" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>You probably have an excellent idea of how much money you make, perhaps down to the exact dollar in each paycheck. In your mind's eye, you may think of that number as trending upward each year you gain experience &mdash; with the exception of the times that you spent unemployed, attending college as a full-time student, or taking a family leave of absence.</p> <p>But this imagined trajectory may or may not represent reality. The upward mobility may not be rising as quickly as you had hoped when you bought your house, committed to a car payment, signed on to send your kids to private school, or dreamed about your retirement. Or, you may be making plenty of moneybut your net worth is not increasing as rapidly as your income. (See also:&nbsp;<a href="http://www.wisebread.com/perform-a-credit-card-rewards-annual-review">Perform a Credit Card Rewards Annual&nbsp;Review</a>)</p> <h2>Why You Should Check Your Earnings</h2> <p>Taking a look at your annual earnings gives you the unfiltered truth about where your career and compensation are headed. Although there are more factors in achieving happiness and building wealth than increasing take-home pay, considering your annual earnings over time is a worthwhile endeavor.</p> <p>You may have a spreadsheet detailing your income, spending plan, and assets to measure their progression, stagnation, or decline. If not, you can access annual earnings online at the federal government's <a href="http://ssa.gov/" target="_blank">Social Security Administration (SSA) website</a>. Rod Griffin, director of public education for Experian (a credit reporting company), recommends that you consider adding this habit to your financial routine at least once a year, just as you might <a href="http://www.experian.com/blogs/news/2012/12/14/check-credit-reports/" target="_blank">check your credit report</a>. Here's why:</p> <p><strong>Trends in Earnings Can Guide Decisions About Next Steps Professionally</strong></p> <p>This financial snapshot of your career may prompt you to reconsider direction or give you the impetus to make changes that you have been mulling over. For example, you may decide to pursue a position with another company; <a href="http://www.wisebread.com/earn-more-money-by-demanding-it" target="_blank">negotiate a better salary or hourly rate</a> with your employer; drop a part-time job because its value isn't worth the extra cost of commuting, eating out, etc.; find higher-paying freelance clients; or <a href="http://www.wisebread.com/how-to-make-a-major-career-switch-without-going-back-to-school" target="_blank">switch careers</a>.</p> <p><strong>Verify the Accuracy of Your Records</strong></p> <p>You'll want to check the accuracy of your earnings. A byproduct of verifying accuracy is making sure that no one is tampering with your information. Checking your Social Security info is similar to looking at your credit report each year to note anything unusual and make corrections as quickly as possible. Such habits can help prevent identity theft.</p> <p><strong>Earnings Information Is Needed for Financial Planning Purposes</strong></p> <p>Even if you are happy with your income trends, an earnings report is useful for financial planning. A financial advisor should want to get this information to help you <a href="http://thechicagofinancialplanner.com/2012/07/25/financial-planning-really-does-make-a-difference/" target="_blank">develop a financial plan</a>. At the same time, you can access estimated benefits in retirement, which may be a factor in <a href="http://www.wisebread.com/7-essential-truths-for-a-successful-retirement" target="_blank">determining how much you need to retire</a>.</p> <p>Note that your regular earnings may differ from your Social Security wages for various reasons, including tax-deferred contributions to employer-sponsored <a href="http://www.wisebread.com/choosing-a-retirement-account-whats-available-and-what-s-best-for-you" target="_blank">retirement accounts</a> that lower your taxable wages for federal tax purposes. Mike Piper, CPA and author of &quot;Social Security Made Simple&quot; and the Oblivious Investor blog, explains that <a href="http://www.obliviousinvestor.com/do-401k-and-ira-contributions-reduce-my-social-security-benefits/" target="_blank">pre-tax 401(k) contributions reduce federal income taxes but not Social Security taxes</a>. So, refer to your W-2 (specifically Box 3 &mdash; Social Security wages) and other tax statements when checking your earnings on the SSA website.</p> <p>During your visit, you can also <a href="http://ssa.gov/onlineservices/#a0=5" target="_blank">take care of tasks</a> like these:</p> <ul> <li>Learn how to change your name on your Social Security records and get a new card after getting married</li> <li>Determine estimated Social Security benefits for your surviving children and spouse if something happened to you</li> <li>Change your address if you are currently receiving benefits</li> </ul> <h2>How to Check Your Earnings</h2> <p>To check your earnings, you'll need to set up an online &quot;<a href="http://ssa.gov/myaccount/" target="_blank">my Social Security</a>&quot; account on the SSA website. There are just a few starting requirements. You must:</p> <ul> <li>Be 18 years old or older</li> <li>Have a valid email address and U.S. mailing address</li> <li>Have a Social Security number</li> </ul> <p>When you create the account, you'll need to answer some security questions that Sal Guariano, vice president of government services at Experian, describes as the authentication process. The credit reporting firm developed this process in collaboration with the SSA to make sure that your information is secure.</p> <p>You'll be asked a series of questions to which only you should know the answers. Sal mentions that even if <a href="http://www.wisebread.com/5-things-to-never-keep-in-your-wallet" target="_blank">someone stole your wallet</a>, the thief couldn't extract the answers based on your driver's license and plastic cards.</p> <p>Note, however, if you have placed a <a href="https://www.experian.com/fraud/center.html" target="_blank">fraud alert</a> or a <a href="http://www.experian.com/consumer/security_freeze.html" target="_blank">freeze on your credit report</a>, then you will need to take some extra steps to create an online account. Lift these restrictions temporarily because the SSA works with the credit agency to verify information as part of its security precautions.</p> <p>After you set up your account and log in, viewing your earnings is easy. You can also locate your estimated benefits at full retirement age as well as earlier and later retirement ages. Precisely what will happen in the future with your retirement benefits is not predictable. But seeing what has happened with your earnings in the past can be useful as you plot next steps.</p> <p><em>Have you found that viewing your income and net worth over time is useful? What changes did you make to have a better future?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/julie-rains">Julie Rains</a> of <a href="http://www.wisebread.com/to-stay-on-financial-track-perfom-a-yearly-earnings-review">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-10"> <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-states-with-the-lowest-taxes-for-retirees">7 States With the Lowest Taxes for Retirees</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-reasons-why-your-retirement-cost-calculations-may-be-wrong">8 Reasons Why Your Retirement Cost Calculations May Be Wrong</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-retirement-rules-you-should-be-breaking">6 Retirement 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/follow-these-5-steps-to-full-health-care-coverage-in-retirement">Follow These 5 Steps to Full Health Care Coverage in 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/how-to-start-saving-for-retirement-at-40">How to Start Saving for Retirement at 40+</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Organization Retirement financial planning social security statement of earnings Thu, 14 Mar 2013 10:48:30 +0000 Julie Rains 969765 at http://www.wisebread.com Improving Sales Forecast Accuracy with a PERTy Formula http://www.wisebread.com/small-business/improving-sales-forecast-accuracy-with-a-perty-formula <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="http://www.openforum.com/idea-hub/topics/marketing/article/how-to-improve-sales-forecast-accuracy-with-a-pert-formula-scott-allen" target="_blank">http://www.openforum.com/idea-hub/topics/marketing/article/how-to-improve-sales-...</a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/improving-sales-forecast-accuracy-with-a-perty-formula" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/iStock_000003303376Small.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>If there is just one aspect of strategic sales planning that all companies would love to improve on, it would probably be more accurate sales forecasts. For some, sales forecasting is a little guesswork mixed in with some black magic and a lot of luck. However, for others, it&rsquo;s an involved process predicated on accuracy and continuous improvement.</p> <p>Companies that excel in strategic sales planning do so by constantly raising the bar on their forecast accuracy. They understand that accurate forecasting means accurate inventory counts and accurate cash flow planning. After all, sales drives inventory. Without an accurate sales forecast, firms are left flying blind. And without an accurate cash flow forecast, potential cash shortfalls can be both costly and disruptive.</p> <p>What is it that these businesses do that others don&rsquo;t? More importantly, what can the rest of us learn from the best when it comes to improving sales forecast accuracy?</p> <h3>Sales Targets are NOT Sales Forecasts</h3> <p>The biggest mistake many companies make is trying to reverse-engineer their sales forecasting numbers. They start with how much money they <i>want</i> to make and set sales targets from there, often without any input from the salespeople. They&rsquo;re often trying to get to the numbers they think someone else &ndash; usually investors &ndash; want to see. Or, they may ask the salespeople for their forecasts, but they only ask them for one number.</p> <p>The problem with both of these approaches is that entrepreneurs and salespeople tend to be overly optimistic. That&rsquo;s not necessarily a bad thing &ndash; it comes with the job. It&rsquo;s what allows them to handle repeated rejection or failure and still go to work every day with a positive attitude.</p> <p>Accountants, on the other hand, tend to be pessimists. They&rsquo;re the ones who have to make sure that payroll gets met. They&rsquo;re the ones who have to walk the line between making sure that sufficient inventory is available to meet customer demand, but that costs are controlled by not having dead or stagnant inventory.</p> <p>A more refined approach solicits the input of the sales staff and then balances it with a healthy dose of realism.</p> <h3>Sales Forecasts are Based on Sales Totals to Individual Customers</h3> <p>Every sales forecast starts with the sales professional reviewing business at individual accounts. The sum of these individual accounts then becomes the forecast for the entire territory. But what is the analyst looking for When it comes to sales forecasts, every sales professional essentially asks three questions:</p> <ul> <li>What&rsquo;s the best possible outcome (outcome &quot;A&quot;)</li> <li>What&rsquo;s the most likely outcome (outcome &quot;B&quot;)</li> <li>What&rsquo;s the worst possible outcome (outcome &quot;C&quot;)</li> </ul> <p>These three variables (A, B, C) form the basis of an analytic approach that was initially adopted by the United States Navy in its design of the Polaris submarine. Faced with multiple variables, and a number of critical paths while managing the project, the Navy came up with Project Evaluation &amp; Review Technique (PERT). The principle behind PERT is to use these three aforementioned variables and assign values to each. Next, a calculation is then used to come up with the most accurate estimate possible.</p> <p>PERT analysis calculation = {1(A) + 4(B) +1(C)} / 6</p> <p>Now, you might be asking how PERT can be used to help increase the accuracy of sales forecasts. Simply put, the salesperson assigns a value to each variable. This value is based on the number of units the salesperson believes she can sell to each particular account. Let&rsquo;s assume the salesperson feels the best possible outcome would be to sell this customer 20 units. The most likely outcome would be to sell 15 units, and the worst possible outcome would be to sell 10 units. These values would then be placed inside the PERT calculation.</p> <ul> <li>What&rsquo;s the best possible outcome = A = 20 units</li> <li>What&rsquo;s the most likely outcome = B = 15 units</li> <li>What&rsquo;s the worst possible outcome = C = 10 units</li> </ul> <p>PERT analysis calculation = {1(A) + 4(B) +1(C)} / 6</p> <p>PERT analysis calculation = {1(20) + 4(15) + 1(10)} / 6</p> <p>PERT analysis calculation = {90}/6</p> <p>PERT analysis calculation = 15</p> <p>In this example, the most likely total to be sold to this customer is 15 units. The sales professional could forecast 15 units with some confidence. However, even with this approach there's no guarantee. The PERT calculation may help to narrow down the figure, but it&rsquo;s still incumbent upon the sales staff to close those sales.</p> <p>Most sales forecasting software programs adopt some variant of this approach. They require the salesperson fill in some values for each customer account and then the program comes up with the most likely total to be sold across an entire territory. However, for those businesses that simply can&rsquo;t afford to spend lavishly on forecasting software, PERT works extremely well. The calculation itself is very straightforward and can easily be implemented in any spreadsheet application.</p> <p>You can still set ambitious sales targets if you choose, but setting unattainable goals that people consistently fall short of doesn&rsquo;t really serve anyone well. Now, instead of setting those targets based entirely on the desired outcome, or on overly optimistic projections, you can incorporate truly the best possible estimate into the rest of your projections.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/scott-allen">Scott Allen</a> of <a href="http://www.wisebread.com/small-business/improving-sales-forecast-accuracy-with-a-perty-formula">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-11"> <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/250-tips-for-small-business-owners">250+ Tips for Small Business Owners</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-inspiring-stories-of-normal-people-building-a-thriving-online-store">4 Inspiring Stories of Normal People Building a Thriving Online Store</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/10-things-all-successful-freelancers-do">10 Things All Successful Freelancers Do</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-credit-cards-for-small-businesses">The 5 Best Credit Cards for Small Businesses</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/how-to-start-saving-for-retirement-at-40">How to Start Saving for Retirement at 40+</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Small Business Resource Center financial planning PERT sales forecasting sales planning small business Tue, 15 Mar 2011 21:45:40 +0000 Scott Allen 499396 at http://www.wisebread.com Perform a Credit Card Rewards Annual Review http://www.wisebread.com/perform-a-credit-card-rewards-annual-review <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/perform-a-credit-card-rewards-annual-review" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/2828682635_19abba5a8e_o.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>In my mail this week I received a &ldquo;Rewards Guide&rdquo; from two of my credit card companies. These guides are brightly colored, well-laid out catalogs explaining all of the rewards available to me. I&rsquo;ve never received such a fancy-looking piece of mail from a credit card company before. Maybe it&rsquo;s the fact that more people are turning to debit cards, or credit card companies are fighting over the limited amount of money people are spending these days, but whatever the reason, it was a pleasant surprise to get these catalogs with such helpful information.</p> <p>In looking through the catalogs, I realized that there was a lot I didn&rsquo;t know about my cards. I use three &mdash; an American Express card for travel and product purchases because of their various warranties and protections, a Capital One for travel abroad (no conversion fees) and extended warranties at stores that don&rsquo;t take American Express, and a Chase for everyday purchases like groceries and gas. (If you&rsquo;re wondering what types of rewards your card might offer check out the <a href="http://www.wisebread.com/ultimate-credit-card-perks-checklist-benefits-you-don-t-know-about">Ultimate Guide to Credit Card Rewards</a>.)</p> <p>As part of annual financial planning, it seems that a good plan is to conduct an annual credit card rewards review:</p> <h3>1. Look at Reward-Program Information to Find New or Unnoticed Rewards</h3> <p>Here are some things I learned in browsing the catalogs I received and the actions I will take from learning them:</p> <ul> <li><strong>One of my cards gives an &ldquo;annual bonus&rdquo;</strong> in November, which essentially puts the rewards at 1.25%. My action: Check to see if I got this bonus and how much it is for.<br /> &nbsp;</li> <li><strong>T</strong><strong>here are bonus offers up to 15%</strong>&nbsp;at various stores I frequently shop at for one of my cards. My action: See if these bonus cash-back purchases are only for online or for in-store too. Then make a mental note to use that card when shopping at that store.<br /> &nbsp;</li> <li><strong>One card only gives additional travel bonuses for the first $5,000</strong> spent on travel<strong>.</strong> My Action: Check to see if I went over this limit last year and start using a different card if that is the case.<br /> &nbsp;</li> <li><strong>One card gives me extra bonuses for dining at restaurants</strong> for an additional $25/year.<strong> </strong>My Action: Check to see if last year I would have earned enough in extra bonuses to make this worthwhile. (To check this see #2 below.)</li> </ul> <h3>2. Review Annual Statements to See If You Are Using the Right Cards</h3> <p>Each year my credit card companies send annual statements of how much I spent in various categories. Look through yours to see if you are really spending money on the cards that will give the best benefits in those categories.</p> <h3>3. Consider What, If Anything, You Will Do Differently This Year</h3> <p>If you find that there is a reward with one card that you aren&rsquo;t taking advantage of, or that you are always using a certain card that isn&rsquo;t giving you many rewards, make a conscious mental note and do something differently this year. Maybe that means leaving a useless card at home, or changing your Amazon account to charge to a different card.</p> <p>I don&rsquo;t advocate that you spend an entire day conducting an annual review of your credit card rewards, but the amount of both money and hassle you can save by using the right card and the right time can add up. So take an hour from your day, see how many rewards you are earning, and figure out if you can do anything differently this year.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/elizabeth-lang">Elizabeth Lang</a> of <a href="http://www.wisebread.com/perform-a-credit-card-rewards-annual-review">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-12"> <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/how-to-buy-and-sell-airline-miles">How to Buy and Sell Airline Miles</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-credit-cards-with-airline-companion-tickets-and-3-bad-ones">The 5 Best Credit Cards With Airline Companion Tickets</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/cash-back-vs-travel-rewards-pick-the-right-credit-card-for-you">Cash Back vs Travel Rewards: Pick the Right Credit Card for You</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/credit-card-rewards-programs">Credit Card Rewards Programs</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/how-to-turn-groceries-into-gasoline">How to Turn Groceries Into Gasoline</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards financial planning rewards credit cards rewards programs Tue, 25 Jan 2011 13:00:54 +0000 Elizabeth Lang 470419 at http://www.wisebread.com 4 Essential Financial Tips For Kicking Off Your Career http://www.wisebread.com/4-essential-financial-tips-for-kicking-off-your-career <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-essential-financial-tips-for-kicking-off-your-career" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/graduate.jpg" alt="Happy graduate" title="Happy graduate" class="imagecache imagecache-250w" width="240" height="160" /></a> </div> </div> </div> <p>The time had finally come: I was an adult. Sure, I could vote when I was 18 and buy beer when I turned 21, but this was different &mdash; <em>very </em>different. No more hitting snooze until my 10 a.m. financial management class. It was time to start my career and begin the daily grind.</p> <p>Young adults have a once-in-a-lifetime opportunity to start their careers as well as their financial plans on the right track the first time around. If you have just finished college and are about to embark on your career path, the decisions you make today could have a lasting impact on the rest of your life. Dealing with the many changes taking place at this point in your life may be challenging. However, with a bit of planning, you can begin life's journey on the right foot to achieve all of your career and financial goals.</p> <h2>Establish Your Goals</h2> <p>The first step in achieving financial goals is to actually establish them. Just as you have your sights set for certain achievements in your career, your financial goals should be outlined as well. It is not enough to say you want to have enough money to retire in 30 years; you have to actually develop a plan that will turn your dreams into a reality.</p> <p>I knew that I didn&rsquo;t want to work until I was 65. My goal was to be able to be in the financial position so that if I wanted to retire at the age of 50, I could. But how was I going to do it?</p> <p>First, I knew that I had have a good job that allowed me the chance to increase my income over time.&nbsp; <em>Check.</em></p> <p>Second, I knew that I needed to save...<em>a lot</em>. I made a commitment to get all the free money in my 401(k) that I could and <a href="http://www.goodfinancialcents.com/7-things-to-know-about-roth-ira-rules-for-2010/">max out my Roth IRA</a> each year. <em>Definitely a good start.</em></p> <p>Some of the goals you may be working toward include buying your first home or saving for a special purchase. Whatever your goals, write them down and determine what actions you have to take moving forward to make sure you are heading in the right direction.</p> <h2>Manage Your Debt</h2> <p>Debt is sometimes unavoidable regardless of our best intentions. Following the recent decline in the economy, more people are paying attention to how and where they spend their money. For young adults just starting out, you may feel as if you have a lifetime to <a href="http://www.goodfinancialcents.com/how-to-pay-off-your-credit-cards-debt-fast/">pay off debt</a>, and in some cases, you are correct. If not properly managed, it will take a lifetime to pay off debt, and in the meantime you will have difficulty achieving other financial goals.</p> <p>I easily could have fallen into a feeling of self-entitlement when I got my first job and started making real money. Many of my fellow graduates did by buying new cars and electronics that they had lived without through their college careers. I, on the other hand, continued to live on my college budget and refrained from getting myself deeper into debt.</p> <p>For this reason you should avoid debt whenever possible. If you are starting out in debt as a result of student loans or other debts incurred while in college, make every effort to pay off those debts in the shortest period of time. This will allow you to focus on other short- and long-term goals.</p> <h2>Save and Invest</h2> <p>There are few guarantees in life. However, one thing is certain. Every effort you make to save for future expenses, whether they occur six months down the road or twenty years in the future, will put you one step closer to achieving these goals. It is important to understand savings and investment strategies that will help you reach these goals. When you are just starting out, time is on your side, and this step is not one that should be placed on the back burner. Start saving immediately, and you will discover it becomes a habit that will last a lifetime.</p> <h2>Understand the Importance of Financial Planning</h2> <p>By thinking about the big picture and where you want to be 5, 10, or 30 years down the road, you can develop a financial plan that allows you to work toward those goals. Without a financial plan you are more likely to live in the moment, which undoubtedly results in poor financial choices. The steps you take today will set the pace for the rest of your life, determining your quality of life and long-term financial security.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/jeff-rose">Jeff Rose</a> of <a href="http://www.wisebread.com/4-essential-financial-tips-for-kicking-off-your-career">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-13"> <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/contributing-to-a-roth-versus-paying-down-debt">Contributing to a Roth Versus Paying Down 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/9-signs-you-need-to-fire-your-financial-planner">9 Signs You Need to Fire Your Financial Planner</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/use-the-8020-rule-to-maximize-your-financial-opportunities">Use the 80/20 Rule to Maximize Your Financial Opportunities</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/our-worst-financial-mistakes-and-what-you-can-learn-from-them">Our Worst Financial Mistakes and What You Can Learn From Them</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/financial-iq-test-how-healthy-is-your-financial-plan">Financial IQ Test: How Healthy Is Your Financial Plan?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Career Building 401(k) plans financial planning Roth IRA starting your career Thu, 02 Dec 2010 13:00:10 +0000 Jeff Rose 353434 at http://www.wisebread.com Just Saving More Is Not the Answer http://www.wisebread.com/just-saving-more-is-not-the-answer <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/just-saving-more-is-not-the-answer" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/forest-steps-4.jpg" alt="Forest steps" title="Forest Steps" class="imagecache imagecache-250w" width="250" height="181" /></a> </div> </div> </div> <p>Whenever I write about calculating how much money you need to retire, some people vehemently disagree with the whole idea that there is such a figure. One told me, &quot;The only correct answer is as much as possible!&quot; Well, that's crazy.</p> <p>Now, it's certainly true that many people aren't saving enough. If you've made it to your 30s or 40s and your retirement savings hasn't cracked five figures, then &quot;as much as possible&quot; is a reasonable suggestion for how much of your paycheck to put into your 401(k).</p> <p>But if you're talking about the size of your retirement portfolio, &quot;as much as possible&quot; is a wrong-headed goal.</p> <p>Here's a thought experiment to show that it's wrong: Suppose you're 75 with savings of $10 million, or 85 with savings of $50 million. Would it make your retirement more secure if you dragged yourself to work for one more year and socked away another $20,000? I don't think so.</p> <p>But the theory of &quot;as much as possible&quot; is worse than just wrong. Thinking that way <strong>leads to bad decisions</strong>. You have limited time, energy, and money, so you want to address the risks to a secure retirement as efficiently as possible. How many of these risks would be best addressed by an extra $10,000 in your retirement portfolio?</p> <ul> <li>The market might fall.<br /> &nbsp;</li> <li>The market might stay up, but your investments might fall.<br /> &nbsp;</li> <li>Interest rates might stay low.<br /> &nbsp;</li> <li>Inflation might eat up your savings.<br /> &nbsp;</li> <li>Even if prices in general stay down, the price of things you need (food, medicine, fuel) might surge.<br /> &nbsp;</li> <li>You might overspend.<br /> &nbsp;</li> <li>You could lose everything in a lawsuit or a natural disaster.<br /> &nbsp;</li> <li>You could become disabled, and have to pay people to do things you'd planned to do yourself.<br /> &nbsp;</li> <li>Your pension might go kaput.<br /> &nbsp;</li> <li>The government might change the rules on retirement savings (or taxes, or something else).</li> </ul> <p>If your retirement savings are small, probably the most efficient things you can do are work hard, earn money, live frugally, and save for retirement. (And you should be taking advantage of standard tools like diversification and insurance right along.) But right from the start &mdash; and especially as your retirement portfolio grows &mdash; there are other things to do. Here are some things that might address the above risks more efficiently than just putting the equivalent amount of money aside (or the equivalent amount of time into earning money):</p> <ul> <li><strong>Learn new skills.</strong> In particular, skills that will open up new options for earning money if necessary, but also skills that will allow you to do things yourself, rather than having to pay to have them done.<br /> &nbsp;</li> <li><strong>Grow a garden.</strong> A garden can produce healthy, tasty food very cheaply.<br /> &nbsp;</li> <li><strong>Make friends with your neighbors.</strong> There are a lot of problems where good relations with your neighbors are much more likely to produce a solution than an extra $10k in your investment portfolio.<br /> &nbsp;</li> <li><strong>Build your connections with your family.</strong> Same as with neighbors, only more so.<br /> &nbsp;</li> <li><strong>Insulate your house.</strong> Something that reduces your heating and cooling bill by $100 a year is worth about as much as $2500 in your retirement portfolio. And you can be sure your insulation isn't going to declare bankruptcy.</li> </ul> <p>Yes, you want to save up some money for retirement. But trying to save &quot;as much as you can&quot; will only distract you from the work that really will ensure a secure retirement:</p> <ul> <li>Paying attention to your spending, your portfolio, and the world around you.</li> <li>Building and maintaining your productive capacity.</li> </ul> <p>Although having some savings is nice, real security in retirement will never come from your investment portfolio. Real security comes from your ability to react to changing circumstances.</p> <p>That's the context in which it makes sense to say that some amount of retirement savings is &quot;enough.&quot; It's not that more money wouldn't make you more secure. It's that putting more money into your retirement portfolio wouldn't make you as much more secure as putting the money (or the effort it would take to earn it) someplace else.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/just-saving-more-is-not-the-answer">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-14"> <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/how-much-do-i-need-to-retire-how-much-can-i-spend">How much do I need to retire? How much can I spend?</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-end-of-the-4-rule">The End of the 4% Rule?</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/how-one-woman-retired-at-60-and-traveled-the-world">How One Woman Retired at 60 and Traveled the World</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/how-to-start-saving-for-retirement-at-40">How to Start Saving for Retirement at 40+</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/6-thoughts-everyone-has-their-first-day-of-retirement">6 Thoughts Everyone Has Their First Day of Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement early retirement financial planning retirement planning Thu, 07 Oct 2010 13:00:10 +0000 Philip Brewer 256928 at http://www.wisebread.com Financial IQ Test: How Healthy Is Your Financial Plan? http://www.wisebread.com/financial-iq-test-how-healthy-is-your-financial-plan <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/financial-iq-test-how-healthy-is-your-financial-plan" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/finances-2705770-small.jpg" alt="financial planning" title="financial planning" class="imagecache imagecache-250w" width="250" height="171" /></a> </div> </div> </div> <p>What aspects of personal finance does your financial plan cover? Are you focusing on the right things and bouncing your ideas off somebody knowledgeable and trustworthy? Does your financial plan excite you? (Because it should.) Or do you have a plan at all?</p> <p>Following is a Financial IQ Test to help you determine how healthy your financial plan is. <strong>Simply look at each statement, and answer it with a YES, NO, or NOT SURE.</strong> Keep track of your answers, and we'll see how you score at the end. Then, check out the resource articles below to increase your knowledge base.</p> <h2>Financial IQ Test: How Healthy is your Financial Plan?</h2> <h3>Areas Covered</h3> <p>My financial plan addresses Estate Planning.</p> <p>My financial plan addresses Tax Planning.</p> <p>My financial plan addresses Insurance Planning.</p> <p>My financial plan addresses Retirement Planning.</p> <p>My financial plan addresses Budgeting and Cash Flow.</p> <p>My financial plan addresses Asset Allocation.</p> <p>My financial plan addresses both long-term and short-term savings &ndash; with specific investment goals noted.</p> <p>My financial plan addresses Emergency Funds.</p> <h3>Updating</h3> <p>My financial plan is written down, and updated at least once every three years, or when a significant life change happens.</p> <p>I re-evaluate my goals regularly and change my financial plan if my goals have significantly changed.</p> <p>I have a contingency plan.</p> <h3>Comprehensive Planning</h3> <p>My financial plan focuses on more than just investment returns and portfolio composition.</p> <p>My financial planner is somebody I feel comfortable with, and who I trust.</p> <p>I&rsquo;m not solely focused on goals for the future, and instead have short-term goals that are fulfilling and which keep me motivated and happy.</p> <p>Major life events (and goals) like having a family are taken into account and financially planned for.</p> <p>I understand that I don&rsquo;t need to be a certain age to start financial planning.</p> <p>My plan incorporates a balance between planning for tomorrow and living for today.</p> <p>My financial plan is entirely tailored to me and my needs, and is not a template.</p> <h3>Numbers and Projections</h3> <p>My financial plan takes into account inflation, as well as present and future values of money.</p> <p>My financial plan includes projections of the future values my automatic savings plans.</p> <p>The rates of return used in my financial projections are modest average returns based on a long history of performance and asset allocation standards.</p> <h2>Scoring</h2> <p>Did you keep track of how many times you answered YES, NO, and NOT SURE? Great! Give yourself the following points for each answer:</p> <p><strong>YES = 4 points</strong></p> <p><strong>NO = 0 points</strong></p> <p><strong>NOT SURE = 2 points</strong></p> <h2>Analysis</h2> <h3>Score 0-28: If you have a plan at all, it&rsquo;s not very good.</h3> <p>You&rsquo;ve got to plan for your future (as well as today), because nobody else will do it for you. On a personal note, I &ldquo;retired&rdquo; at the age of 30 because I had a financial plan from the day I started working. My intention was never to retire so young (and in reality I still have to work to keep my full-time travel lifestyle alive), but with my attention to financial fitness and diligent saving, I had the financial freedom to choose some pretty liberating options at a relatively young age. Check out some of the Wise Bread resources below to get started on your own financial plan. Remember, you&rsquo;re not committing to anything and nothing is set in stone with your financial plan; it should evolve with your life.</p> <h3>Score 29-56: Getting there&hellip;</h3> <p>Okay, so you&rsquo;ve probably thought about financial planning, and you may even have a plan of sorts in place, but you&rsquo;re probably missing out on a number of aspects of financial planning that could be very beneficial for you. Don&rsquo;t be afraid to use the services of an expert, and ask lots of questions. Knowledge is power, and being afraid of your finances does nobody any good and you a whole heap of harm. If you don&rsquo;t know what you don&rsquo;t know, then check out the resources below to get started.</p> <h3>Score 57-84: Keep on planning!</h3> <p>You likely have a fairly comprehensive financial plan, and you&rsquo;re on the right track overall. Keep reviewing your plan, and use it as a motivational road map for life &ndash; not just a dull series of meaningless projections. Remember to incorporate things into your financial plan that keep you motivated, and focus on your goals instead of dollar amounts. Knowing how your money will help you live your life and enable your dreams is much more rewarding than focusing on numbers without meaning.</p> <h2>Wise Bread Resources on Financial Planning</h2> <ul> <li><a href="http://www.wisebread.com/do-a-background-check-before-hiring-your-financial-advisor">Do a Background Check Before Hiring Your Financial Advisor</a></li> <li><a href="http://www.wisebread.com/9-signs-you-need-to-fire-your-financial-planner">9 Signs you Need to Fire Your Financial Planner</a></li> <li><a href="http://www.wisebread.com/contingency-plans">Contingency Plans</a></li> <li><a href="http://www.wisebread.com/knowing-when-to-walk-away-financial-planning-for-an-unknown-ending">Knowing When to Walk Away: Financial Planning for an Unknown Ending</a></li> <li><a href="http://www.wisebread.com/can-you-afford-to-have-a-baby">Can you Afford to Have a Baby?</a></li> <li><a href="http://www.wisebread.com/how-to-choose-a-financial-planner-yes-you">How to Choose a Financial Planner: Yes, You!</a></li> <li><a href="http://www.wisebread.com/thrive-your-online-personal-financial-planner">Thrive: Your Online Personal Financial Planner</a></li> <li><a href="http://www.wisebread.com/how-to-save-without-goals">How to Save Without Goals</a></li> <li><a href="http://www.wisebread.com/goal-setting-getting-out-of-debt-once-and-for-all">Goal Setting: Getting Out of Debt Once and For All</a></li> <li><a href="http://www.wisebread.com/the-false-goal-of-maximizing-investment-returns">The False Goal of Maximizing Investment Returns</a></li> <li><a href="http://www.wisebread.com/is-just-leaving-some-slack-better-than-a-plan">Is Just Leaving Some Slack Better than a Plan?</a></li> <li><a href="http://www.wisebread.com/budgeting-projection-of-prophecy">Budgeting: Projection or Prophecy?</a></li> <li><a href="http://www.wisebread.com/asset-allocation-for-all-markets">Asset Allocation for All Markets</a></li> </ul> <h2>Other Financial IQ Tests on Wise Bread</h2> <ul> <li><a href="http://www.wisebread.com/financial-iq-test-how-healthy-is-your-debt-management">How Healthy Is Your Debt Management?</a></li> <li><a href="http://www.wisebread.com/financial-iq-test-how-healthy-are-your-bank-accounts">How Healthy Are Your Bank Accounts?</a></li> <li><a href="http://www.wisebread.com/financial-iq-test-how-healthy-is-your-budget">How Healthy Is Your Budget?</a></li> <li><a href="http://www.wisebread.com/financial-iq-test-how-healthy-is-your-health-care-plan">How Healthy Is Your Health Care Plan?</a></li> <li><a href="http://www.wisebread.com/financial-iq-test-how-healthy-is-your-disability-insurance">How Healthy Is Your Disability Insurance?</a></li> <li><a href="http://www.wisebread.com/financial-iq-test-do-you-have-the-best-auto-insurance-coverage-for-your-needs">Do you Have the Best Auto Insurance Coverage for Your Needs?</a></li> </ul> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/nora-dunn">Nora Dunn</a> of <a href="http://www.wisebread.com/financial-iq-test-how-healthy-is-your-financial-plan">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-15"> <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-signs-you-need-to-fire-your-financial-planner">9 Signs You Need to Fire Your Financial Planner</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/use-the-8020-rule-to-maximize-your-financial-opportunities">Use the 80/20 Rule to Maximize Your Financial Opportunities</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/how-to-save-without-goals">How to Save Without Goals</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/there-is-no-tomorrow">There is no Tomorrow.</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-private-financial-information-you-must-share">The Private Financial Information You Must Share</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance financial iq financial planning Thu, 08 Jul 2010 12:00:20 +0000 Nora Dunn 167526 at http://www.wisebread.com