financial planning http://www.wisebread.com/taxonomy/term/3835/all en-US How to Plan for a Forced Early Retirement http://www.wisebread.com/how-to-plan-for-a-forced-early-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-plan-for-a-forced-early-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/mature_businesswoman_working_in_her_home_office.jpg" alt="Mature Businesswoman Working In Her Home Office" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Every working adult dreams of the day they can retire and take it easy. But for some, retirement is forced upon them sooner than expected. When this happens, a world of financial stress can follow.</p> <p>LIMRA Secure Retirement Institute found that 51 percent of workers retire between ages 61 and 65, while 18 percent retire even earlier than that. It may not have been in your plans to retire so soon, but life doesn't always go accordingly &mdash; things like declining health or caregiving for a loved one can force people to leave the workforce earlier than they anticipated.</p> <p>Retirement experts advise that in the face of this new trend, your retirement plan should include early retirement options and safeguards. Below are six things you can begin doing now to prepare for an unexpected early retirement.</p> <h2>1. Start planning early</h2> <p>Retiring just five years early &mdash; at age 60 versus 65 &mdash; can significantly impact the amount of income you may need to retire comfortably. One common retirement rule of thumb that can help you roughly determine how much you should save is the <em>four percent rule</em>.</p> <p>Financial experts believe you can safely withdraw about $4,000 a year per $100,000 of savings during retirement, and that would last you approximately 33 years. So, if your living expenses are $40,000 a year, you'd need to save $1 million. This simple rule does not account for inflation or other sources of income such as Social Security benefits, but experts believe it&rsquo;s a good baseline for gauging your retirement needs. (See also: <a href="http://www.wisebread.com/4-retirement-rules-of-thumb-that-actually-work?ref=seealso" target="_blank">4 Retirement &quot;Rules of Thumb&quot; That Actually Work</a>)</p> <p>Bumping up what you contribute to your retirement fund, even by just a few dollars a month, along with lowering your cost of living is a great way to prepare yourself and your family in case you have to retire prematurely.</p> <h2>2. Plan for inflation</h2> <p>While the four percent rule is a great place to start, if you know that early retirement is highly likely for you, you need to be more aggressive. Fidelity advises that your goal should be to save at least six times your current annual salary by the time you are 50, and 10 times your income by the time you are 67. If you are not near these targets, it&rsquo;s time to rearrange some things, rein in your spending, and begin aggressively saving.</p> <p>Another pitfall of retirement many people forget to plan for is inflation. Retirement investments have failed to keep pace with our aging population, Social Security cuts, and hedge against the investment risks brought on by the shift from traditional pensions to individual savings.</p> <p>When you retire, the world will be a more expensive place than it was while you were saving. You must understand and plan for the fact that $10 today will not buy the same thing in 2035. (See also: <a href="http://www.wisebread.com/4-ways-to-protect-your-retirement-from-inflation?ref=seealso" target="_blank">4 Ways to Protect Your Retirement From Inflation</a>)</p> <h2>3. Don&rsquo;t take Social Security early</h2> <p>In 2014, LIMRA found that 57 percent of men and 64 percent of women took their Social Security benefits early. But since monthly benefits rise five to eight percent annually between ages 62 and 70, the longer you can wait, the better off you'll be. For example, if your full retirement age is 66, but you begin collecting benefits early at 62, your benefit will be reduced by about 30 percent.</p> <p>In years past, once you hit 65, you were eligible for full Social Security benefits and could retire and receive a monthly check from the government. However, that is no longer the case &mdash; especially for younger workers who must put in more years to reach their full retirement age. Experts agree that you should only take your benefits early if you absolutely need to. Proper planning can prevent this from being your only option. (See also: <a href="http://www.wisebread.com/5-questions-to-ask-before-you-start-claiming-your-social-security-benefits?ref=seealso" target="_blank">5 Questions to Ask Before You Start Claiming Your Social Security Benefits</a>)</p> <h2>4. Consider a partial retirement option</h2> <p>&quot;Partial retirement&quot; simply means keeping a job on a part-time basis as a means to help stretch your retirement savings. By remaining in the workforce for a little while longer, you can defer retirement funds &mdash; such as Social Security, pensions, and even savings &mdash; until you decide to fully retire.</p> <p>Some places, such as government agencies, offer phased retirement plans. These plans allow you to supplement your income by working part time while still contributing to your retirement fund and allowing you to keep a portion of your benefit package. It&rsquo;s important to begin researching these things and understanding your options while you are able bodied. (See also: <a href="http://www.wisebread.com/4-reasons-you-might-have-a-phased-retirement?ref=seealso" target="_blank">4 Reasons You Might Have a &quot;Phased&quot; Retirement</a>)</p> <h2>5. Find a side gig</h2> <p>If your company does not offer a partial or phased retirement option, side gigs are a great way to supplement your income and help tide you over until you reach full retirement age. And while most side gigs don&rsquo;t come with benefits, you do get to set your own hours and work as you are able.</p> <p>Now is the time to look into different side or part time jobs that fit your ability, skill set, and situation. What interests and hobbies do you have that could become profitable? Write them down and research ways you can make money doing those things. You may also want to research jobs you could do from home that are not too physically demanding.</p> <p>Side gigs and part time jobs can also be good for your health. A 2016 Oregon State University study found that those who retire early die sooner than those who work beyond age 65. (See also: <a href="http://www.wisebread.com/9-easy-ways-retirees-can-earn-extra-income?ref=seealso" target="_blank">9 Easy Ways Retirees Can Earn Extra Income</a>)</p> <h2>6. Stick to a budget and pay off debt early</h2> <p>Surviving in retirement is not only dependent on how much you save, but also how much you spend. Most people have to scale back a bit during retirement due to a reduction in income. Scaling back after you retire is a tough thing to do. You have more free time to travel, indulge in hobbies, and spoil the grandkids rotten &mdash; all of which can quickly shrink your nest egg.</p> <p>Start now by creating and sticking to a conservative budget. The extra money you save should go into your retirement fund or toward paying down debt. Scale back on expenses where you can and consider downsizing before it's time to retire for good. Establishing disciplined spending habits now will carry over and benefit you later &mdash; when it really counts.</p> <p>A great way to reduce your overhead and free up some cash is to pay down your debt as quickly as possible and to get rid of your mortgage before you retire. The less debt you have, the more spending money you have. (See also: <a href="http://www.wisebread.com/6-ways-you-can-cut-costs-right-before-you-retire-0?ref=seealso" target="_blank">6 Ways You Can Cut Costs Right Before You Retire</a>)</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/denise-hill">Denise Hill</a> of <a href="http://www.wisebread.com/how-to-plan-for-a-forced-early-retirement">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/4-reasons-you-might-have-a-phased-retirement">4 Reasons You Might Have a &quot;Phased&quot; Retirement</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-roadblocks-to-retirement-and-how-to-clear-them">7 Roadblocks to Retirement (And How to Clear Them)</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-ways-to-handle-a-forced-early-retirement">5 Ways to Handle a Forced Early Retirement</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-questions-to-ask-before-you-start-claiming-your-social-security-benefits">5 Questions to Ask Before You Start Claiming Your Social Security Benefits</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-actions-women-can-take-right-now-to-get-their-retirement-on-track">5 Actions Women Can Take Right Now to Get Their Retirement On Track</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement benefits budgeting early retirement extra income financial planning forced retirement inflation phased retirement saving money social security Mon, 11 Dec 2017 09:30:10 +0000 Denise Hill 2068119 at http://www.wisebread.com 8 Money Moves You Can Make When We Turn the Clocks Back for Fall http://www.wisebread.com/8-money-moves-you-can-make-when-we-turn-the-clocks-back-for-fall <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-money-moves-you-can-make-when-we-turn-the-clocks-back-for-fall" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/happy_business_woman_showing_clock.jpg" alt="Happy business woman showing clock" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>It's nearly the end of Daylight Saving Time, which means we're close to one of my favorite days of the year: the Sunday in autumn when we get an extra hour in the day. As a perpetually busy person, I have a tendency to consider the gift of an extra hour in my weekend to be better than Christmas.</p> <p>Of course, that extra hour is only as valuable as you make it. It can be very easy to fritter away the time on Facebook or on your latest binge-worthy Netflix series &mdash; and I have certainly been guilty of wasting my extra time in years past. That's why this year, I'm going to dedicate my extra hour of Daylight Saving Time to making some smart money moves.</p> <p>Each of the following eight money moves will take you less than an hour, and taking care of one or more of them will help you improve your bottom line without eating into any of your usual time.</p> <h2>1. Set up an automatic transfer to savings</h2> <p>An emergency fund is the cornerstone of good financial health, but it's also the kind of thing that can easily get pushed to the back burner. If you try to find money at the end of the month to put into savings, you'll often discover there's nothing but pocket lint in your checking account, and another month will go by with no deposits into your emergency fund. This is why so many personal finance experts recommend creating an automatic transfer from checking to savings on payday. If you save your money before you have a chance to spend it, then it will actually be there for you in an emergency.</p> <p>During your extra hour this year, log onto your bank's website and set up your automatic recurring transfer online. Even if you can only afford to transfer $20 each paycheck, your recurring transfers will add up over time. While you're setting up the recurring transfer, set it to automatically increase in three months' time, and again in six months' and nine months' time so that you don't have to think about upping your savings rate again until the end of next year's Daylight Saving Time. (See also: <a href="http://www.wisebread.com/where-to-find-emergency-funds-when-you-dont-have-an-emergency-fund?ref=seealso" target="_blank">Where to Find Emergency Funds When You Don't Have an Emergency Fund</a>)</p> <h2>2. Bump up your contribution to retirement</h2> <p>November is when many employers are going through their benefit cycles, so now is a great time to amp up your retirement savings. Increasing your contribution to your 401(k), IRA, or other retirement account is of the sort of thing that you never get around to since you have to get in touch with your HR department or otherwise look up how to do it. But contributing as little as an additional 1 percent of your paycheck to your 401(k) or other retirement savings vehicle will add thousands of dollars to your retirement savings. And if you are not already contributing the amount necessary to meet your employer's matching amount, remember that you are leaving free money on the table. Increase your contribution so you can get your employer's matching contribution. (See also: <a href="http://www.wisebread.com/401k-or-ira-you-need-both?ref=seealso" target="_blank">401(k) or IRA? You Need Both</a>)</p> <h2>3. Adjust your withholding</h2> <p>In 2017, the average American received a federal tax refund of about $2,800 &mdash; which basically meant most Americans sent nearly $3,000 on a field trip to the IRS and received no interest when the money came back. While it's always exciting to receive a big check from Uncle Sam in April, you can do more with your money if you keep it in each paycheck rather than send it off as an interest-free loan to the government.</p> <p>To reduce your tax refund, start with <a href="https://apps.irs.gov/app/withholdingcalculator/" target="_blank">the IRS withholding calculator</a>. This tool will help you determine how many withholding allowances you may take. Your withholding allowances do not determine your tax bill, only how much you pay in taxes per paycheck, so your answers on the calculator can be approximate. Once you have figured out your allowances, request and fill out a W4 form from your employer's HR department.</p> <p>Spending some of your extra hour doing these calculations will result in fatter paychecks as soon as your HR department files the new paperwork. Not bad for less than hour of truly &quot;free&quot; time.</p> <h2>4. Freeze your credit</h2> <p>The Equifax hack served as an important wake-up call on just how vulnerable our financial information can be. You probably looked into ways to protect yourself when Equifax was dominating the news, but it's understandable if you never got around to actually implementing the necessary work to keep your financial information from ending up in the hands of a scammer.</p> <p>One of ways you can protect yourself after such a data breach is to freeze your credit. You will pay a small fee, and then no one &mdash; including you &mdash; can open new credit in your name. The freeze will last indefinitely, so there is no need to remember to renew. The fees range from $5 to $10 per credit bureau, depending on which state you live in. This means you will pay between $15 and $30 to freeze your credit with all three bureaus &mdash; although Equifax has currently waived fees for initiating a credit freeze. In addition, if you have ever been the victim of identity theft, the fee for freezing your credit report is waived.</p> <p>You will need to call the credit reporting companies to place a freeze on your file. Here are the numbers to call:</p> <ul> <li> <p>Equifax: 800-685-1111 (NY residents: 800-349-9960)</p> </li> <li> <p>Experian: 888-397-3742</p> </li> <li> <p>TransUnion: 888-909-8872</p> </li> </ul> <p>Once your credit is frozen, you will have to temporarily lift the freeze if you want to purchase a new car or home or otherwise open up your credit. For instance, if you are leasing a car, you can ask the dealership which credit reporting company they're going to use to access your report, and simply lift the freeze at that company. It takes no more than three days to lift a freeze for this purpose.</p> <p>Spending time on the phone with a credit reporting agency is no one's idea of fun, but using your extra hour to do this means you don't have to carve out time elsewhere in your schedule. (See also: <a href="http://www.wisebread.com/how-to-protect-your-credit-after-the-equifax-breach?ref=seealso" target="_blank">How to Protect Your Credit After the Equifax Breach</a>)</p> <h2>5. Check your credit report</h2> <p>In addition to freezing your credit, don't forget to take a gander at what's on your credit report. You are legally allowed free access to credit reports from TransUnion, Experian, and Equifax once a year, and your extra hour is an excellent time to look them up.</p> <p>To do so, just log onto annualcreditreport.com for access your credit information. Getting your report will take just a few moments &mdash; you just need to fill out one form to request up to three credit reports (one from each agency), pick which agency's report you want to look at, and verify your identity to receive your credit report.</p> <p>While printing out your reports will take next to no time, be sure to use the rest of your hour to go over the reports in detail to make sure there are no errors. (See also: <a href="http://www.wisebread.com/how-to-read-a-credit-report?ref=seealso" target="_blank">How to Read a Credit Report</a>)</p> <h2>6. Set up overdraft alerts</h2> <p>Overdrawing your checking account is one of those easy-to-do mistakes that can cost you big-time. Your bank might offer you &quot;overdraft protection&quot; that allows you to continue to make purchases while you are in the red, but the accompanying overdraft fees can be a serious budget-killer.</p> <p>So while you're enjoying your extra hour, log onto your bank account and sign up for overdraft alerts. With these alerts, you'll get a text or email when your account balance dips below a certain level, keeping you from feeling the sting of overdraft fees.</p> <h2>7. Use up your excess FSA funds at the FSA store</h2> <p>Setting money aside in your flexible spending account is an excellent way to earmark funds for medical and other health costs throughout the year, but FSA money is use-it-or-lose-it, which means that at this point in the year, you might have a hefty amount of money you're in danger of losing.</p> <p>Instead of just giving up money that will be left unused, you can spend some of your remaining FSA dollars at <a href="https://fsastore.com/Default.aspx" target="_blank">fsastore.com</a>, an online marketplace for sunscreen, contact lenses, bandages, and other health-related items that you are allowed to use your FSA money to buy. Of course, you can spend it just as readily at your local pharmacy, too.</p> <h2>8. Update your beneficiaries</h2> <p>Do you know who your beneficiary is for your life insurance and other financial accounts? If you haven't checked the paperwork in a few years, you might find that you have an out-of-date beneficiary listed.</p> <p>For instance, when my sister first started her career, she named me as her life insurance and retirement account beneficiary. Since that time, my sister has gotten married and gave birth to my niece, which means it would be completely inappropriate for me to still be her beneficiary. Because these policies can often last for decades, many people forget to update their beneficiaries even as their lives change.</p> <p>Take your extra hour to look up your life insurance and other financial paperwork to make sure your beneficiaries are up-to-date and you're no longer leaving your life insurance money to that ex you were engaged to 15 years ago.</p> <h2>An extra hour of financial productivity</h2> <p>We all love having an extra hour of the weekend when Daylight Saving Time ends, but you can make that hour even more valuable by using it to make great financial choices. You'll be glad you did.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F8-money-moves-you-can-make-when-we-turn-the-clocks-back-for-fall&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F8%2520Money%2520Moves%2520You%2520Can%2520Make%2520When%2520We%2520Turn%2520the%2520Clocks%2520Back%2520for%2520Fall.jpg&amp;description=8%20Money%20Moves%20You%20Can%20Make%20When%20We%20Turn%20the%20Clocks%20Back%20for%20Fall"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/8%20Money%20Moves%20You%20Can%20Make%20When%20We%20Turn%20the%20Clocks%20Back%20for%20Fall.jpg" alt="8 Money Moves You Can Make When We Turn the Clocks Back for Fall" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/emily-guy-birken">Emily Guy Birken</a> of <a href="http://www.wisebread.com/8-money-moves-you-can-make-when-we-turn-the-clocks-back-for-fall">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/7-strategies-for-paying-off-debt-when-living-on-a-variable-income">7 Strategies for Paying Off Debt When Living on a Variable Income</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-budget-overhaul-tricks-for-the-recently-unemployed">5 Budget Overhaul Tricks for the Recently Unemployed</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/flashback-friday-the-76-best-life-lessons-you-should-learn-by-30">Flashback Friday: The 76 Best Life Lessons You Should Learn by 30</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/flashback-friday-the-95-best-ways-to-get-fit-for-free">Flashback Friday: The 95 Best Ways to Get Fit for Free</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/start-saving-more-with-this-one-simple-tool">Start Saving More With This One, Simple Tool</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting budget daylight savings extra hour fall back financial planning money moves saving money Mon, 23 Oct 2017 08:00:08 +0000 Emily Guy Birken 2037741 at http://www.wisebread.com 6 Financial Steps to Take When Your Aging Parents Move In http://www.wisebread.com/6-financial-steps-to-take-when-your-aging-parents-move-in <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-financial-steps-to-take-when-your-aging-parents-move-in" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-636953946.jpg" alt="Man making financial steps after aging parent moves in" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Long-term elderly care can be prohibitively expensive. Fortunately, there's a long, worldwide history of having a multigenerational household, and moving your aging parents in with you can provide multiple benefits. You know your parents will receive the care and attention they need, and you gain precious time with them.</p> <p>Making this transition can be complex, though. If you've decided to bring your aging parents to live with you, consider these smart money moves to simplify and support the process. (See also: <a href="http://www.wisebread.com/a-simple-guide-to-planning-for-a-loved-ones-long-term-care?ref=seealso" target="_blank">A Simple Guide to Planning For a Loved One's Long-Term Care</a>)</p> <h2>1. Organize their finances</h2> <p>Since bringing your parents into your home affects your finances, too, you need to have some honest discussions with them about their financial resources, and yours. You need to know what they can handle financially, and what you'll need to take on. Getting their financial information in order is an important first step, so you can assess the combined financial picture together and plan accordingly.</p> <p>Since financial matters are often stressful, these discussions can be the most delicate part of the transition. Discuss with your parents the importance of simplifying and organizing their finances. Work with your parents to locate and organize all important financial information. Consider purchasing a fireproof safe or renting a safety deposit box for the most important financial and legal documents.</p> <h2>2. Plan for their finances</h2> <p>Once you have all the financial information at hand, you'll need to sit down with your parents to make some decisions. It's often a good idea to set up a meeting with a financial adviser to discuss creating a will and making a plan for how to handle illiquid assets, investments, and any liquid wealth in the most beneficial way possible for your parents.</p> <p>You also need to discuss options for helping your parents handle their finances in the event that they are not able to do so independently. You (or another adult child) may need to be included as a primary holder on their accounts. (See also: <a href="http://www.wisebread.com/6-things-youll-encounter-when-taking-over-a-loved-ones-finances?ref=seealso" target="_blank">6 Things You'll Encounter When Taking Over a Loved One's Finances</a>)</p> <p>Finally, examine the costs and expenses of having your parents move in with you. First consider the initial modifications and supplies needed to set your parents up with comfort and accessibility in your home. Then estimate how much your parents' ongoing monthly living expenses will be, and work together with your parents on the best plan for covering these expenses.</p> <h2>3. Create an independent living space</h2> <p>If both of your parents are moving in with you and at least one of them is still functioning moderately well, they may be able to handle a little more space and separation from you. On the other hand, if your parents need assistance with their daily needs and/or medical care, you'll want to be nearby.</p> <p>For parents who want more independence, consider the &quot;granny pod&quot; trend. This is a small but separate structure, often placed in the backyard. It can be a tiny home, guest cottage, small prefabricated home, or a converted workshop or garage. The separate building helps you all maintain some privacy and space, but still keeps you close and connected.</p> <p>If your parents will be in your main house with you, there are many cost-effective options for creating a usable living space for them.</p> <ul> <li>Convert an unused room. An empty dining or living room can become a spacious bedroom.<br /> &nbsp;</li> <li>Close in an outdoor space. That patio, deck, or porch may already have the structural elements in place.<br /> &nbsp;</li> <li>Use the basement. Transform the empty downstairs of your home into a suite for your parents (just be sure that accessibility isn't an issue).<br /> &nbsp;</li> <li>Change your configuration. Perhaps you'll give up your master bed and bath for your parents, but convert the basement into your own luxurious suite.</li> </ul> <p>While some changes may be costly upfront, any improvements and updates you make to your home can add to its long-term value. Keep good records so you can validate the increased value of your house if you decide to sell in the future.</p> <h2>4. Consider accessibility needs</h2> <p>There are several accessibility and safety needs to consider with your aging parents. Will they need a wheelchair ramp for getting in and out of the house? If they will be using stairs, are there adequate, sturdy handrails? (These are an important safety feature for anyone, not just aging parents!) Talk with your parents' medical provider about any other special safety or accessibility concerns.</p> <h2>5. Investigate financing options</h2> <p>Once you know what your parents need, investigate options for financing it. Your parents' insurance may foot all or part of the bill for necessary home modifications for safety or medical reasons. Medicaid and Medicare generally don't cover home modifications, but may provide needed in-home equipment. The Department of Veterans Affairs also covers some home-modification needs.</p> <p>Beyond insurance, there are some state programs that <a href="https://www.payingforseniorcare.com/home-modifications/state-assistance-programs.html" target="_blank">provide financial assistance</a> for elder-care home modifications and there are grant and loan programs from the Department of Agriculture, as well as from the Department of Housing and Urban Development and the Federal Housing Authority. Finally, many local nonprofit groups provide financial assistance or volunteer labor to help with home modifications for seniors.</p> <p>If you do have to fork out your own money, you may at least get some relief from the IRS, as some home improvements qualify for tax deductions.</p> <h2>6. Establish a caregiver agreement</h2> <p>If your aging parents will need help with daily activities or will require in-home medical care, consider establishing a <a href="https://www.caregiver.org/personal-care-agreements" target="_blank">formal caregiver agreement</a>. A formal agreement can help you continue to personally afford your parents' care, especially if you need to forego other employment to provide that care.</p> <p>Without this agreement, it's more difficult to qualify for tax deductions, and your parents may find their Social Security payment lowered. With an agreement, you can set out the formal cost of your care in terms of a fair-market rent and the hourly rate of a caregiver. This protects both you and your parents from a financial loss you don't need to incur.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F6-financial-steps-to-take-when-your-aging-parents-move-in&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F6%2520Financial%2520Steps%2520to%2520Take%2520When%2520Your%2520Aging%2520Parents%2520Move%2520In.jpg&amp;description=6%20Financial%20Steps%20to%20Take%20When%20Your%20Aging%20Parents%20Move%20In"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/6%20Financial%20Steps%20to%20Take%20When%20Your%20Aging%20Parents%20Move%20In.jpg" alt="6 Financial Steps to Take When Your Aging Parents Move In" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/annie-mueller">Annie Mueller</a> of <a href="http://www.wisebread.com/6-financial-steps-to-take-when-your-aging-parents-move-in">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/a-simple-guide-to-planning-for-a-loved-ones-long-term-care">A Simple Guide to Planning For a Loved One&#039;s Long-Term Care</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/11-money-habits-that-make-you-look-financially-immature">11 Money Habits That Make You Look Financially Immature</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-details-your-financial-adviser-may-be-ignoring">5 Details Your Financial Adviser May Be Ignoring</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/what-to-do-when-you-suspect-a-scam">What to Do When You Suspect a Scam</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-manage-a-family-members-finances-long-distance">How to Manage a Family Member&#039;s Finances Long Distance</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance aging caregiver elderly financial planning home modifications long term care moving in parents remodels Thu, 10 Aug 2017 08:00:07 +0000 Annie Mueller 1999089 at http://www.wisebread.com 7 Strategies for Paying Off Debt When Living on a Variable Income http://www.wisebread.com/7-strategies-for-paying-off-debt-when-living-on-a-variable-income <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-strategies-for-paying-off-debt-when-living-on-a-variable-income" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-516427450.jpg" alt="Woman paying off debt on variable income" title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Paying off debt can be a challenge even if you have a steady paycheck. When your income is variable, it's even harder. These strategies can help you take care of your financial obligations even when your salary isn't stable.</p> <h2>1. Set a budget from your baseline</h2> <p>Take a look at your earning potential and set a baseline. Base it on what you can expect to earn even in a worst-case scenario month. For example, if you're in sales and you earn a base salary plus commission, your baseline is your base salary. If you're a freelancer with several contracted clients and fluctuating income from other projects, your baseline is what you earn from the ongoing contracts.</p> <p>From your baseline, build a budget that covers the minimum payments you need to make every month. If more money comes in, you can split it among savings and paying down debt. (See also: <a href="http://www.wisebread.com/the-smart-way-to-budget-on-a-freelance-income?ref=seealso" target="_blank">The Smart Way to Budget on a Freelance Income</a>)</p> <h2>2. Reduce your expenses and bills</h2> <p>Be very detailed in your baseline budget. Your recurring bills are the starting point; your actual spending is just as important. You need to know, for example, if you spend $100 on books every month, or if your grocery bill is $200 more than you think it is. Once you're aware of all your bills and expenses, look for ways to reduce them. You don't need to reduce them all; keep the expenses that give you the greatest payback in satisfaction and minimize the costs that don't add much to your quality of life.</p> <p>If you're paying off more than one debt, debt consolidation might be key to reducing multiple high-interest payments into one monthly payment. Explore your options to determine if you can lower your debt interest and payments and close that gap.</p> <h2>3. Build up your gap savings</h2> <p>When you have a high-earnings month, send a percentage into a savings account and let it accumulate over time. When needed, you can use it to fill in the gap when your baseline earnings aren't quite enough.</p> <h2>4. Pick up a side hustle</h2> <p>Another strategy for closing the baseline gap is to pick up a steady side job. There are many kinds of side hustles and part-time jobs you can consider; it's most helpful, in this case, if you find one that will give you a predictable amount of earnings every month. That way, you can add it to your baseline so that there's no longer a gap between what you'll make and what you need to make.</p> <p>When you get that big commission or finally get paid for the last project, it's tempting to splurge and enjoy the high times. A little splurging is good for morale, but the key to surviving and thriving on a variable income is making the most of the big paydays.</p> <h2>5. Follow a savings plan</h2> <p>You may not be able to add to your savings during the lean times. But when your earnings spike, save a good percentage of it. Put a plan in place before you get the big payday. You might decide, for example, that anything over your baseline gets divided into three categories: 30 percent for savings, 30 percent for debt payments, and 30 percent for expenses that have been on hold. That leaves you 10 percent for splurge money.</p> <h2>6. Follow a debt reduction plan</h2> <p>If you use the plan above, or one similar to it, you'll know that a set percentage of your earnings over baseline go to reducing your debt. It's good practice to pay off the debt with the highest interest rate first, otherwise known as the <a href="http://www.wisebread.com/snowballs-or-avalanches-which-debt-reduction-strategy-is-best-for-you?ref=internal" target="_blank">avalanche method</a>. You can also negotiate with creditors if you have a good chunk of the debt ready to pay. Some creditors will reduce your total amount owed if you're able to pay off most of it in cash, right away.</p> <h2>7. Maximize your savings</h2> <p>Finally, don't let a variable income keep you from being smart about how you save. While it feels good to have cash at the ready, it's a smarter long-term strategy to put your savings into high-earning investments. Build up a decent <a href="http://www.wisebread.com/a-step-by-step-guide-to-creating-your-emergency-fund?ref=internal" target="_blank">emergency fund</a> so you can handle a crisis and close that baseline gap as needed. Put any savings beyond the emergency fund into longer term investments with a higher yield, so you make the most out of your income, variable or not.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F7-strategies-for-paying-off-debt-when-living-on-a-variable-income&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F7%2520Strategies%2520for%2520Paying%2520Off%2520Debt%2520When%2520Living%2520on%2520a%2520Variable%2520Income.jpg&amp;description=7%20Strategies%20for%20Paying%20Off%20Debt%20When%20Living%20on%20a%20Variable%20Income"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/7%20Strategies%20for%20Paying%20Off%20Debt%20When%20Living%20on%20a%20Variable%20Income_0.jpg" alt="7 Strategies for Paying Off Debt When Living on a Variable Income" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/annie-mueller">Annie Mueller</a> of <a href="http://www.wisebread.com/7-strategies-for-paying-off-debt-when-living-on-a-variable-income">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/how-to-budget-consistently-without-a-steady-paycheck">How to Budget Consistently Without a Steady Paycheck</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/6-moves-every-first-year-freelancer-should-make">6 Moves Every First Year Freelancer Should Make</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-money-moves-you-can-make-when-we-turn-the-clocks-back-for-fall">8 Money Moves You Can Make When We Turn the Clocks Back for Fall</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-to-avoid-vacation-debt">6 Ways to Avoid Vacation 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-signs-its-time-to-close-your-business">5 Signs It&#039;s Time to Close Your Business</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Debt Management Entrepreneurship debt payments emergency fund financial planning freelance saving money self employed side gigs variable income Wed, 02 Aug 2017 08:00:09 +0000 Annie Mueller 1990975 at http://www.wisebread.com The Financial Basics Every New Grad Should Know http://www.wisebread.com/the-financial-basics-every-new-grad-should-know <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-financial-basics-every-new-grad-should-know" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/thoughtful_graduate_student_woman_looking_at_light_bulb.jpg" alt="Thoughtful graduate student woman looking at light bulb" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you're a recent college grad, congratulations. As you settle into your first job, you'll probably have more money flowing through your life than ever before.</p> <p>Take a minute to think of your financial potential. Let's say your starting salary is $45,000. If you're 21 years old, earn a 3 percent raise each year, and work until you're 70, you will have made nearly $5 million by the time you retire! (To use your actual salary and change other assumptions, use <a href="https://www.calcxml.com/calculators/ins07" target="_blank">this lifetime earnings calculator</a>.)</p> <p>Here are seven ideas for making the most of your financial potential.</p> <h2>Plan to succeed</h2> <p>To be intentional about your use of money, you need a plan. That's right, you need a budget &mdash; or as I prefer to call it, a cash flow plan. Today, free tools such as Mint.com make the process relatively painless.</p> <p>There are three key activities involved in using a budget: planning, tracking, and adjusting. First, figure out how much of your income you need to allocate to housing, food, clothing, and all the rest of your expenses. Your income will determine how much you have for discretionary spending on, say, entertainment.</p> <p>Then, keep track of your expenses. You can jot them in a notebook or spreadsheet, or link a tool like Mint to your checking account and credit cards, so it can do much of the tracking for you.</p> <p>Don't be discouraged if you don't hit your numbers each and every month. Your assumptions may have been unrealistic. Plus, your goals and circumstances will change, so the amounts you allocate for various categories will need to be adjusted over time as well.</p> <h2>Put some away</h2> <p>The key to building wealth is to set aside a portion of every dollar you earn for saving and investing. There are two separate types of savings that are important.</p> <p>First, there's an emergency fund. In life, stuff happens. An important way to avoid going into debt for that stuff is to have some money set aside in savings. Financial advisers often recommend your emergency fund have enough to cover three to six months' worth of essential living expenses.</p> <p>But when you're just starting out, you probably have relatively few breakable moving parts in your life. For example, renting an apartment is less financially risky than owning a home. If that's you, having three months' worth of expenses in savings is probably enough.</p> <p>The second type of savings is for periodic expenses. These are expenses that occur every year, but not every month &mdash; things like a semiannual car insurance premium, end-of-year holiday gifts, or a vacation. Take the annual total of each of these items, divide by 12, and then put that much in savings each month. That way, when the expense comes due, you'll have the money already set aside.</p> <h2>Invest for your future</h2> <p>A little bit of money invested each month for a long time and at a decent rate of return will eventually turn into a lot of money you can use for retirement. Using our earlier assumptions (age 21, starting salary of $45,000, and a 3 percent annual raise), if you invest 10 percent of your salary (a good target) and generate an average annual return of 7 percent, by the time you're 70, you will have built a retirement nest egg of $2.7 million!</p> <p>Bottom line? If your employer offers a workplace retirement plan, such as a 401(k), sign up as soon as possible. And don't miss out on any matching money.</p> <h2>Keep your biggest expense under control</h2> <p>Aim to spend no more than 25 percent of your monthly gross income on housing &mdash; even better if you can keep it to no more than 20 percent. If you own, that's the combination of your mortgage, insurance, and property taxes. If you rent, that's the combination of your rent, insurance, and utilities.</p> <p>Keeping your housing costs within that range will give you the margin you need to save, invest, and enjoy financial peace of mind.</p> <h2>Avoid a car payment</h2> <p>Vehicles depreciate in value quickly, so avoid financing them. If you can't pay cash right away, see if you can go without a car, at least while you save up for one. That may be viable if you live in a city with good public transportation. If not, get the least expensive used car that's highly rated by Consumer Reports.</p> <p>You're not looking for something flashy. You're looking for a car you can pay off quickly and keep for a long time. By the time you need to replace it, the combination of your savings and the value you'll still be able to get when trading in your current car should enable you to afford a nicer car.</p> <h2>Choose your bank or credit union carefully</h2> <p>Too often, people choose where to open a checking account based on which bank has the best promotion. Once you go to the trouble of setting up online bill-pay with your utilities, insurance providers, and others, the hassle factor involved in changing banks goes up a lot. So, choose carefully.</p> <p>If you use an ATM frequently, you'll want a bank with lots of ATM locations. And you'll probably want a bank that doesn't charge a fee for a low balance.</p> <h2>Get a credit card</h2> <p>Having a credit card in your own name will help you start building a credit score, which is beneficial for everything from getting a job to paying the least for insurance. (See also: <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score?ref=seealso" target="_blank">How to Use Credit Cards to Improve Your Credit Score</a>)</p> <p>If you don't have a credit card already, see if you could get one through your bank. If not, a retailer may be more willing to approve you &mdash; but retail cards are notorious for having high interest rates, so make sure you pay off your bills quickly. If you still have trouble, look into getting a <a href="http://www.wisebread.com/the-5-best-secured-credit-cards" target="_blank">secured card</a>. With a secured card, you'll have to put down a deposit, which will usually be equal to your credit limit.</p> <p>Just be sure to be responsible. That means using your credit card only for preplanned, budgeted expenses, recording any charges in your budget right away, and paying the balance on time and in full each month.</p> <p>If you take the steps and build the habits described above, you'll give yourself the best possible chance of making the most of your financial potential.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fthe-financial-basics-every-new-grad-should-know&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FThe%2520Financial%2520Basics%2520Every%2520New%2520Grad%2520Should%2520Know.jpg&amp;description=The%20Financial%20Basics%20Every%20New%20Grad%20Should%20Know"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/The%20Financial%20Basics%20Every%20New%20Grad%20Should%20Know.jpg" alt="The Financial Basics Every New Grad Should Know" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/matt-bell">Matt Bell</a> of <a href="http://www.wisebread.com/the-financial-basics-every-new-grad-should-know">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/the-12-month-get-richer-plan">The 12-Month Get-Richer Plan</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-money-conversations-parents-should-have-with-their-adult-kids">7 Money Conversations Parents Should Have With Their Adult Kids</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-financial-resolutions-you-can-conquer-before-new-years">10 Financial Resolutions You Can Conquer Before New Year&#039;s</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/is-paying-off-your-mortgage-early-costing-you-money">Is Paying Off Your Mortgage Early Costing You Money?</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-online-forums-thatll-help-you-reach-your-financial-goals">9 Online Forums That&#039;ll Help You Reach Your Financial Goals</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance advice budgeting college graduates expenses financial planning grads investing money management retirement saving money tips Fri, 21 Jul 2017 08:00:11 +0000 Matt Bell 1988263 at http://www.wisebread.com 8 Questions Financial Advisers Hear Most Often http://www.wisebread.com/8-questions-financial-advisers-hear-most-often <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-questions-financial-advisers-hear-most-often" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/business_communication_connection_people_concept.jpg" alt="Business Communication Connection People Concept" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>No one goes to a financial adviser if they already know everything there is to know about retirement planning and investing. So most people will, logically, come armed with a variety of questions when they meet with an adviser, especially if it is for the first time.</p> <p>Financial advisers say they hear many of the same questions repeatedly from clients looking to build their retirement savings or live large in retirement. Most of the questions center around the ability of clients to retire, or the information needed to build wealth in the hopes of retiring comfortably.</p> <p>This list of common questions for financial advisers was compiled with the help of Greg Hammer of Hammer Financial Group in Northwest Indiana, and Willie Schuette, financial coach with JL Smith Group in Ohio.</p> <h2>1. &quot;Can I retire?&quot;</h2> <p>This is really the ultimate question posed to most financial advisers. Clients want to know if they can afford to stop working. And if not now, when?</p> <p>A financial adviser will help you determine how much money you have and how much more you'll need, based on your life expectancy and retirement plans. Both Hammer and Schuette said they often have to break the news to clients that they need to keep working, but that's better than telling them after they&rsquo;ve retired that their money is likely to run out.</p> <h2>2. &quot;Can you help me avoid paying taxes?&quot;</h2> <p>The Internal Revenue Service can take a chunk out of your earnings, and often leave you with less cash than you originally planned. Financial advisers say they get a lot of questions about how to avoid a big tax hit, especially from retirees looking to preserve every dollar they have.</p> <p>Advisers field many questions about Roth IRAs, which allow investors to invest money and withdraw it tax-free upon retirement. Many investors turn to financial advisers for advice on the tax implications of converting traditional IRAs into Roth IRAs. There are also a multitude of other tax questions relating to municipal bonds, inheritance taxes, and tax deductions.</p> <h2>3. &quot;How can I preserve my money?&quot;</h2> <p>Financial advisers say clients are generally aware that they need to invest more conservatively as they get older to protect against market downturns, but aren't quite sure how. What's the right investment mix based on their age, their money saved, and retirement date? What's the best way to go about shifting away from stocks to cash and bonds?</p> <p>Hammer and Schuette say they get questions like this all the time, and are happy to walk clients through the best approach to keeping their retirement nest eggs secure.</p> <h2>4. &quot;When should I collect Social Security?&quot;</h2> <p>Retirees can begin collecting Social Security benefits as early as age 62, but will get larger monthly payments the longer they wait. Financial advisers will usually work with retirees to develop income sources that will allow them to delay collecting Social Security. But both Hammer and Schuette said their recommendations depend on the individual client's circumstances and financial needs. (See also: <a href="http://www.wisebread.com/5-sobering-facts-about-social-security-you-shouldnt-panic-over?ref=seealso" target="_blank">5 Sobering Facts About Social Security You Shouldn't Panic Over</a>)</p> <h2>5. &quot;What's the deal with health care?&quot;</h2> <p>With Congress working to repeal and replace the Affordable Care Act, many clients are wondering how their health care may be affected. Financial advisers have received this question from retirees who are not old enough to collect Medicare, as well as younger clients who don't get insurance through an employer. Advisers say they will walk clients through the cost of health care and the proper plans, as well as assist with setting up things like <a href="http://www.wisebread.com/how-an-hsa-saves-you-money" target="_blank">health savings accounts</a> and emergency funds.</p> <h2>6. &quot;I know I need life insurance, but what kind? And how much?&quot;</h2> <p>Financial advisers say clients usually know they need some sort of life insurance to protect their families, but are often bewildered by the offerings. There's whole and term life insurance, and policies with varying sizes, lengths, and premiums. An adviser can help find the right kind of insurance for each person and their unique situation. (See also: <a href="http://www.wisebread.com/why-your-group-life-insurance-is-not-enough?ref=seealso" target="_blank">Why Your Group Life Insurance Is Not Enough</a>)</p> <h2>7. &quot;My spouse just died. What do I do?&quot;</h2> <p>Many people feel confident in their financial planning, until something changes in their life that throws things out of whack. A loss of a spouse or other major change cannot only be challenging emotionally, but it can drastically change a person's financial needs. There may be a sudden loss of income when a spouse dies, and there are endless concerns about taxes, life insurance, and even real estate.</p> <h2>8. &quot;How do I take care of my heirs?&quot;</h2> <p>For most people, the main financial goal is amassing enough wealth to last their full retirement, and there's not much consideration for the next generation. After all, saving for your own several decades of life after retirement is hard enough.</p> <p>But Hammer and Schuette say there is a segment of clients seeking the best approach to passing wealth onto to their children and other relatives. Financial advisers say that in these cases, the conversation centers not only on amassing wealth, but taking into account things like inheritance taxes, and performing full, in-depth estate planning.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/8-questions-financial-advisers-hear-most-often">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/how-to-plan-for-a-forced-early-retirement">How to Plan for a Forced Early Retirement</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-retirement-struggles-nobody-talks-about-and-how-to-beat-them">5 Retirement Struggles Nobody Talks About — And How to Beat Them</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/9-things-to-know-before-retiring-abroad">9 Things to Know Before Retiring Abroad</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/if-youre-lucky-enough-to-receive-a-pension-here-are-6-things-you-need-to-do">If You&#039;re Lucky Enough to Receive a Pension, Here Are 6 Things You Need to Do</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-things-your-financial-planner-isnt-telling-you-about-retirement">5 Things Your Financial Planner Isn&#039;t Telling You About Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Retirement estate planning financial advisers financial planning health care life insurance questions saving money social security taxes Fri, 02 Jun 2017 08:00:10 +0000 Tim Lemke 1957430 at http://www.wisebread.com 11 Secrets You Need to Tell Your Financial Adviser http://www.wisebread.com/11-secrets-you-need-to-tell-your-financial-adviser <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/11-secrets-you-need-to-tell-your-financial-adviser" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-165869622.jpg" alt="Couple sharing secrets they need to tell their financial adviser" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>So you've made an appointment to sit down with a financial adviser and formulate a plan for your future. Are you prepared to talk about your full money situation? In order to truly help you, your financial adviser needs to look at the big picture. That means there can be no major money secrets.</p> <p>Financial advisers will often begin each session by asking a lot of questions that may seem personal. But they'd be negligent if they didn't. In fact, it's their fiduciary duty to learn as much about you as they can in order to advise you properly.</p> <p>Here's a list of secrets you'll need to share with your financial planner if you want the best advice.</p> <h2>1. All of your debt</h2> <p>When you're being crushed under a mountain of debt, you may not want to talk about it. But a financial adviser is perhaps the best person to discuss it with. Your adviser can't craft a sound financial plan for you if they're unaware that a good chunk of your income is going to pay off debt. If you let them know about your full debt situation, however, they may be able to assist you in climbing out of the hole and onto the path toward financial freedom.</p> <h2>2. Any job loss</h2> <p>It's not always easy to admit you are out of work. But a financial adviser can't help you properly if you don't provide a full picture of your income situation. If you're out of work now, let your adviser know. If you were out of work for a long stretch in the past, let them know that as well. Financial advisers can also help you navigate what to do when your income has been cut, as well as advise you on what to do with old 401(k) accounts and pension money. (See also: <a href="http://www.wisebread.com/if-youre-lucky-enough-to-receive-a-pension-here-are-6-things-you-need-to-do?ref=seealso" target="_blank">If You're Lucky Enough to Receive a Pension, Here Are 6 Things You Need to Do</a>)</p> <h2>3. Family members you support</h2> <p>Do you pay child support? Do you regularly send money to your brother up in Buffalo? Do you have an elderly parent living with you? Your financial adviser will want to know about any money you spend to support other people, even if it's only occasionally or informally. These are expenses that have an impact on your overall financial picture, and are not the kinds of costs that you can easily eliminate.</p> <h2>4. Sizable gifts</h2> <p>You're fortunate enough to be given $25,000 from your generous Uncle Steve, but you feel like it's really not something you want people to know about. After all, who might come knocking on your door now that you have this extra cash on hand? That's understandable, but it's important to tell your financial adviser, because they can offer advice on what to do with the new funds. An unexpected influx of cash, even if it's just a one-time gift, can have a ripple effect on your overall saving strategy.</p> <h2>5. Tax troubles</h2> <p>Have you been diligent about paying your taxes? If not, this is something you'll want to tell your adviser. This goes for late taxes, tax liens on properties, and past audits. The longer you wait to take care of tax problems, the more you may end up paying in penalties and fees. Your financial adviser can help you clean up your tax issues, and will be in a better position to help you plan your future.</p> <h2>6. The status of your marriage</h2> <p>If you're meeting with an adviser, it helps to let them know if you're about to get married, or if your marriage is about to end. Marriage and divorce have all kinds of financial implications on everything from income to taxes to planning for retirement.</p> <h2>7. Your vices</h2> <p>Gambling. Alcoholism. A shopping addiction. We all have our bad habits, but it's important to be aware of those vices that impact your finances. Are you at risk of incurring debt due to a major gambling binge? Is alcohol preventing you from landing steady work? Your financial adviser can't accurately assess your finances if they don't know the situation.</p> <p>According to Doug Amis, a CFP with Cardinal Retirement Planning in Cary, NC, even casual marijuana use is something clients should disclose to planners, because many life insurance companies still test for it.</p> <h2>8. Anything that your kids need to know</h2> <p>Hans Scheil, CEO and owner of Cardinal Retirement Planning, says that his most challenging clients are those who have kept important information from family members. This secrecy can create difficulty in later years, when facing important estate decisions.</p> <p>&quot;What happens with people now is that they develop dementia, or some sort of chronic illness, and they end up needing care,&quot; Scheil said. &quot;This is when all of the family scandals come out.&quot;</p> <p>Scheil says it's important to anticipate what your children and grandchildren may need to know about your estate to avoid strife down the road.</p> <h2>9. Charitable giving</h2> <p>It may seem odd to think of this as something you'd hide, but financial advisers say they've met with clients who have quietly been giving to a cause that their spouse or other loved ones might not agree with. Your donations to charity may not seem like anyone's business, but they can impact your overall savings if you give a substantial amount. A financial adviser can also walk you through getting tax deductions for your charitable donations.</p> <h2>10. Your own lack of financial knowledge</h2> <p>Are you the type who doesn't know an IRA from an IPA? Are you mystified by mutual funds and baffled by bonds? It's OK, your financial adviser is not there to judge you and will likely be more annoyed by any attempt to bluff your way through a meeting. Financial advisers can help you understand the ins and outs of investing and estate planning, so it's useless to pretend to know more than you do.</p> <h2>11. All of your side hustles</h2> <p>When your financial adviser asks you about your income, they want to hear about everything. Not just your day job, but your side work giving piano lessons, your freelance writing, your pottery sales, and even your gambling winnings. You may be hiding this income because you don't want to pay taxes. But your adviser needs to know about this extra income, or else any financial plan they create will be flawed. Moreover, your financial adviser can often give you advice on how to turn a quiet side hustle into a legitimate, profitable business.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/11-secrets-you-need-to-tell-your-financial-adviser">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/how-to-manage-your-money-during-a-spousal-separation">How to Manage Your Money During a Spousal Separation</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/how-to-protect-yourself-financially-during-a-divorce-or-separation">How to Protect Yourself Financially During a Divorce or Separation</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-myths-about-divorce-and-money-debunked">4 Myths About Divorce and Money, Debunked</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/could-a-divorce-improve-your-finances">Could a Divorce Improve Your Finances?</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/bad-credit-it-might-cost-you-your-marriage">Bad Credit? It Might Cost You Your Marriage</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance debt divorce financial advisers financial planning gambling honesty job loss marriage Secrets taxes Tue, 28 Mar 2017 10:01:05 +0000 Tim Lemke 1915280 at http://www.wisebread.com 9 Costly Mistakes DIY Investors Make http://www.wisebread.com/9-costly-mistakes-diy-investors-make <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-costly-mistakes-diy-investors-make" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_ripping_paper_69469761.jpg" alt="Man making costly mistakes DIY investors make" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>With the right approach and education, it's possible for people to handle their own investments. But it's also easy to make mistakes that could cost you large sums of money in the long run.</p> <p>If you're a do-it-yourselfer, ask yourself whether you're making any of these mistakes below. If so, it may be worth seeking professional advice from a certified financial planner.</p> <h2>1. Trading Without Considering Fees and Taxes</h2> <p>For many investors, it's fun to trade stocks. The actual buying and selling can be a bit of a rush, especially when things are going well. But all of that activity can come with a cost, in the form of transaction fees and capital gains taxes. If you are finding that the returns on your portfolio seem a bit lackluster, it may be because you're investing without taking these costs into account. More experienced investors and financial advisers understand how to avoid extra fees and maximize returns as a result.</p> <h2>2. Getting Emotional</h2> <p>Investing your own money can sometimes be hard on the psyche. You may go through stretches where you see your portfolio shrink. Stocks that you personally selected may not always perform the way you predicted. Markets can be volatile, and not everyone can stomach it. If you find yourself getting stressed out by the investing process or buying and selling based on emotion, you may want to consider having a financial adviser take over the reigns.</p> <h2>3. Not Investing Enough</h2> <p>When you invest on your own, you may only be guessing as to how much you need to save. And it's common for investors to feel a little skittish and invest too little if the market is down. A financial adviser may be more tuned into the appropriate level of risk an investor can take on, and will usually advise a more aggressive approach for someone far out from retirement.</p> <h2>4. Not Diversifying Enough</h2> <p>Most do-it-yourselfers understand the basics of diversification, and will invest in index funds that track the S&amp;P 500 or broader stock markets. And that's perfectly fine. But often, these funds are heavily weighted toward larger companies or certain industries. If you are investing only in basic index funds, you may not have good exposure to international markets or smaller companies, for example. There may be entire industries that will be underrepresented in your portfolio.</p> <p>To achieve true diversification, you can have an S&amp;P Index fund as a base, but should also look for funds and stocks that fill in the gaps.</p> <h2>5. Failing to Rebalance</h2> <p>You may think you're creating a diverse portfolio based on the investments you've selected. But have you checked the balances recently? Over time, portfolios can get out of whack if certain investments are performing better than others. For example, you may think you're investing in 50% large cap, 25% small cap, and 25% mid cap stocks. Until one day, you check your account and realize that small cap stocks make up 40% of the portfolio. Financial advisers will recommend when to rebalance, and offer advice on how to avoid taxes in the process.</p> <h2>6. Trying to Beat the Market</h2> <p>Some investors insist on doing things themselves, because they believe they are expert stock pickers and can beat the performance of the overall stock market. In most cases, they are wrong. Numerous studies have shown that even professional investment managers can't beat the market on a regular basis, and that most investors would be best off with a portfolio of index funds.</p> <h2>7. Falling in Love With Shiny New Things</h2> <p>Do-it-yourselfers can become enamored with whatever the hot stock is at the moment. They go for name brands and flash rather than looking closely at a balance sheet. They also tend to go with what's familiar, rather than doing some research and finding investments that are less well known but of sound quality.</p> <h2>8. Having No Backup Plan</h2> <p>If you are an older DIY investor, do you have a plan for what happens to your investments if you are incapacitated? Are you sharing your investment accounts with your spouse or other loved ones? Many DIY investors are too stubborn to seek help from anyone, and thus run into problems when they are no longer in a position to manage things themselves. It's fine to handle your own investments if you're confident enough to do so, but it's wise to have a plan for how things will be dealt with if you're no longer in charge.</p> <h2>9. Becoming Too Consumed</h2> <p>Realistically, the average person can handle their own investments while checking in only periodically each week. A properly balanced portfolio does not need a lot of maintenance. But investing can be like an addiction to some people, and it's possible to spend hours a day buying and selling and becoming obsessed with the movement of the markets. If you're finding that your investing is having a negative impact on your relationships and other aspects of your life, it may be best to back off and let someone else handle things.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/9-costly-mistakes-diy-investors-make">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-signs-youre-a-helicopter-investor-and-how-to-stop">8 Signs You&#039;re a &quot;Helicopter Investor&quot; (And How to Stop)</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/how-too-much-investment-diversity-can-cost-you">How Too Much Investment Diversity Can Cost You</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-the-risk-averse-can-get-into-the-stock-market">How the Risk Averse Can Get Into the Stock Market</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/think-outside-the-index-when-you-rebalance-your-investment-portfolio">Think Outside the Index When You Rebalance Your Investment Portfolio</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-3-rules-every-mediocre-investor-must-know">The 3 Rules Every Mediocre Investor Must Know</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment beat the market diversification DIY emotional investing fees financial advisers financial planning portfolio rebalancing stock market taxes Wed, 05 Oct 2016 10:30:08 +0000 Tim Lemke 1805247 at http://www.wisebread.com The 7 Most Important Financial Moments of Your Life http://www.wisebread.com/the-7-most-important-financial-moments-of-your-life <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-7-most-important-financial-moments-of-your-life" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/parents_new_baby_000061550566.jpg" alt="Parents learning the most important financial moments of their life" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>We all have turning points in our life. They are moments when it seems like our future rests on what happens next. Perhaps it's when we met our spouse, or decided on what college to attend.</p> <p>There are a number of moments like these that could have major impacts on our finances, depending on how we react and whether we are prepared. Consider these seven key moments or decisions and how they affect your financial future.</p> <h2>1. You Get Your First Credit Card</h2> <p>Right around the time you graduated high school, you probably got solicitations for credit cards in the mail. If you went to college, credit card companies may have stopped by your dorm or had a booth set up on campus. Credit card companies wanted you when you were young, and once they got you, they wouldn't let go. (See also: <a href="http://www.wisebread.com/the-5-best-credit-cards-for-college-students?utm_source=wisebread&amp;utm_medium=seealso&amp;utm_campaign=article">Best Credit Cards for College Students</a>)</p> <p>For those who haven't gotten a credit card yet, there's a lot you <a href="http://www.wisebread.com/ask-these-7-questions-to-help-choose-the-perfect-credit-card?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">need to know before signing up</a>. Yes, you will want to get a credit card or two in order to <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">build a credit history</a>. But learn to use them with caution. Do your own research and find the credit card that is best for you. (Look for the <a href="http://www.wisebread.com/the-best-low-interest-rate-credit-cards?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">lowest interest rates</a> and the <a href="http://www.wisebread.com/5-best-cash-back-credit-cards?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">best rewards</a>.) When you use a credit card, pay your balance in full each time. Get an understanding of how high interest on credit card debt can pile up. If you start off with bad credit card habits, you may enter a debt spiral that will be hard to escape from, and it may have a ripple effect on every aspect of your financial life.</p> <h2>2. You Move Out</h2> <p>Everyone reaches a point in their life when they can no longer mooch off Mom and Dad. If you're lucky, your folks have been letting you shack up in their basement and raid their fridge even after you've long been able to support yourself. But at a certain point, it's time to leave the nest. This is when budgeting and watching your expenses becomes key. It's also a time when you may find that your ambitions are bigger than your finances can allow. Can you really afford that apartment in the city? Are you really planning to go clubbing and eating out with your friends every weekend?</p> <p>It's tempting when you go out on your own to want to live it up, but this is a time when young people often find themselves in financial pickles. Learn to budget, spend sensibly, and understand that it's possible to live the fun, single life without going into debt.</p> <h2>3. You Get Your First Salaried Job</h2> <p>It was a great feeling to get that first paycheck as a teenager, but an even bigger moment was when you landed your first job that you consider part of your &quot;career.&quot; This is the type of job that pays a salary rather than a living wage, and may even offer benefits like a 401K plan.</p> <p>These first big jobs are when you start to actually think hard about where your money is going. You'll want to pay attention to your tax withholding to avoid paying too little or too much tax. You'll want to set a certain amount aside to pay down debt. Once that's taken care of, you'll want to invest. And don't forget about health and life insurance. A big job often means some big financial decisions. Are you ready?</p> <h2>4. You Have Your First Big Emergency</h2> <p>Maybe it's a serious illness. Maybe you totaled your car. Or maybe your heat furnace blew out unexpectedly. Whatever it is, it's going to cost you some money. Did you plan for this? Do you have an emergency fund of three to six months' worth of expenses? It's moments like these that test your financial discipline. Those that come through relatively unscathed are much better off in the long run. And even if you're not prepared this time, you learned enough to be prepared for the next emergency, which may be coming sooner than you think.</p> <h2>5. Your Child Is Born</h2> <p>So you have a new bundle of joy in the house. Wonderful news, and congrats! Are you financially prepared for this? Because kids aren't free. It costs <em>at least</em> $11,000 annually to raise a child in the United States, according to the USDA, and that total could be much higher depending on where you live and any child care costs. Having a child also may impact your investment choices. The good news is that there are tax credits for having children &mdash; but the bad news is that they hardly offset the added expenses.</p> <p>Having a child is an amazing, life-altering event. Just be prepared for how those kids impact your finances.</p> <h2>6. You Decide to Buy a Home</h2> <p>Buying a home is one of the most exciting, but stressful decisions you will ever make. Before taking this plunge, there are a number of big financial questions you'll want to answer. How much money do you have saved for a down payment? How much money will you need to borrow? What's the interest rate and terms of the loan? These are key pieces of information that will impact how much you end up spending in housing each month. You'll get some nice tax breaks when you buy a home, but ideally, you want to spend no more than about one-third of your household income on housing. Otherwise, you may find yourself without enough cash to build an emergency fund, invest, or spend on other necessities.</p> <h2>7. It's Time to Retire</h2> <p>It's the moment of truth. All of the hard work, the saving, the investing. Do you have enough money to last another 20, 30, or even 40 years? Are your investments protected in case of a big market downturn? Do you have a plan for when you might not be able to care for yourself any longer?</p> <p>This is a critical moment in your financial life, but it should be one that is free of drama if you made the right financial choices along the way.</p> <p><em>Any key financial life moments we've overlooked? Tell us about them in comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/the-7-most-important-financial-moments-of-your-life">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/dont-start-a-family-before-reaching-these-5-money-goals">Don&#039;t Start a Family Before Reaching These 5 Money Goals</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-financial-decisions-youll-never-regret">8 Financial Decisions You&#039;ll Never Regret</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/money-a-mess-try-this-personal-finance-starter-kit">Money a Mess? Try This Personal Finance Starter Kit</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-financial-basics-every-new-grad-should-know">The Financial Basics Every New Grad Should Know</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-critical-money-mistakes-people-make-in-their-40s">7 Critical Money Mistakes People Make in Their 40s</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance adulthood buying a house emergency funds family financial planning mortgages retirement Thu, 23 Jun 2016 10:30:04 +0000 Tim Lemke 1736532 at http://www.wisebread.com 7 Lessons About Money I Learned After Having Twins http://www.wisebread.com/7-lessons-about-money-i-learned-after-having-twins <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-lessons-about-money-i-learned-after-having-twins" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/young_twin_girls_000010839496.jpg" alt="Learning money lessons after having twins" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>When I first found out that my wife and I were having twins, I figured that raising our boys would be expensive. Learning that the U.S. Department of Agriculture (USDA) estimated that middle-income parents would spend an <a href="http://www.cnpp.usda.gov/sites/default/files/expenditures_on_children_by_families/CRC2013InfoGraphic.pdf">average $25,880</a> on twins in their first year really shocked me.</p> <p>The USDA estimated that U.S. families could spend from $353,100 to $815,640, depending on the family&rsquo;s income level, to raise twins born in 2013 through high school. These estimates didn&rsquo;t even include college tuition!</p> <p>The good news is that there are plenty of ways to bring down the estimated costs of raising twins. Here are the seven lessons about money I learned after having twins.</p> <h2>1. Don&rsquo;t Buy Everything</h2> <p>&ldquo;Two of everything!&rdquo; is one of the first things that people tell me once they find out that I have twins. In theory, having twins should double your expenses. In reality, it doesn&rsquo;t. More than one parent of multiples advised me not to buy everything and they were 100% right. You can do just fine with only one of many items, including baby bathtub and pack-and-play.</p> <p>Even more, there are so many baby items marketed to parents that you can do without, such as the <a href="http://amzn.to/1Xe2RBD">Baby Brezza Formula Pro One Step Food Maker</a> retailing for $150. While you always want to give your babies the very best, keep in mind that sometimes less is more. You already have a long list of must-buy-two items, including car seats and cribs (you can get away with just one only for so long!), so don&rsquo;t hesitate to cut down on non-essentials.</p> <h3>Money Lesson</h3> <p><a href="http://www.wisebread.com/the-5-best-pieces-of-financial-wisdom-from-warren-buffett">Warren Buffett</a> said it best: &ldquo;If you buy things you do not need, soon you will have to sell things you need.&rdquo; Splurging should be the exception and not the rule.</p> <h2>2. Look for Niche Discounts</h2> <p>Somedays you may feel that you&rsquo;re the only parent of twins in your neighborhood. The reality is that the U.S. twin birth rate was <a href="http://www.cdc.gov/nchs/data/nvsr/nvsr64/nvsr64_12.pdf">33.9 per 1,000 births</a> in 2014, up from 33.7 per 1,000 births in 2013. As more parents have twins, more businesses are extending special discounts to those parents.</p> <ul> <li>Babies R Us extends a 10% discount when you purchase two of the same item on the same in-store visit. Qualifying items include baby furniture, car seats, strollers, high chairs, and gates.<br /> &nbsp;</li> <li>Pampers offers a <a href="http://news.pampers.com/faq-item/do-you-have-pampers-multiple-birth-offer">one-time set of coupons</a> to parents of twins and multiples by mailing your name and address along with the hospital discharge copies to: Pampers Multiple Birth Offer, The Procter &amp; Gamble Company, P.O. Box 599, Cincinnati, OH 45201 or by calling 1-800-726-7377.<br /> &nbsp;</li> <li>Luvs Diapers also offers a one-time set of coupons as well and you can write to the same mailing address as above with attention to &ldquo;Luvs Multiples Birth Program&rdquo; or call 1-888-665-3257.</li> </ul> <h3>Money Lesson</h3> <p>Businesses seek ways to attract customers from different niches. There may very well be a discount out there for you, but it may require you to do some extra leg work, such as calling the company or mailing a letter.</p> <h2>3. Buy Life Insurance</h2> <p>Now that you are a parent, buying life insurance is one of the <a href="http://www.wisebread.com/make-these-7-money-moves-now-or-youll-regret-it-in-20-years">money moves to make</a> or you&rsquo;ll regret it 20 years from now. Right now is the cheapest rate that you&rsquo;ll ever be able to get life insurance, so you&rsquo;re better off locking into it now than waiting several years.</p> <p>If you&rsquo;re the main or sole breadwinner of your household, provide financial security to your dependents in case you&rsquo;re no longer there for them. Could your spouse tackle the monthly mortgage payments, car payments, and living expenses without you at all? Nobody likes to think about their own mortality, but things are very different now.</p> <h3>Money Lesson</h3> <p>Life insurance is the foundation of financial planning to help protect your family against life&rsquo;s pitfalls.</p> <h2>4. Start or Build Up Your Emergency Fund</h2> <p>With twins, I have learned how essential it is to have a cushion to lessen the blow of many surprise costs &mdash; such as certain vitamins and medicines not covered by health insurance, or changing to a more expensive baby formula due to sensitive digestive systems. Only 38% of Americans can pay unexpected expenses, such as $1,000 for an emergency room visit or $500 for a car repair, from savings. Achieving the right balance between interest rate and liquidity is often possible with a high-yield online savings account, which provide interest rates ranging between 0.75% and 1.25%. Make sure to read the fine print on access to funds to avoid surprises.</p> <h3>Money Lesson</h3> <p>Having a rainy day fund is essential to keep your monthly budget on track, so start (or build up!) yours today.</p> <h2>5. Adjust Your Withholding</h2> <p>Of course, since I&rsquo;m asking you to start paying for life insurance and putting money away in a savings account, I do need to give you a way to come up with those extra monies! The easiest one is to revisit how much you&rsquo;re currently withholding every month for taxes. In 2014, the IRS doled an <a href="https://www.irs.gov/uac/Newsroom/2014-Refunds-Ahead-of-Last-Year">average of $3,096</a> in tax refunds.</p> <p>Unless you got a refund entirely based on tax credits, you&rsquo;re withholding too much in taxes. Using the $3,096 average, you could have an extra $258 every month. Now that you have dependents, you may qualify for several exemptions and tax credits, including the <a href="https://www.irs.gov/Individuals/Child-Tax-Credit">Child Tax Credit</a> and the <a href="https://www.irs.gov/Individuals/Child-and-Dependent-Care-Information">Child and Dependent Care Credit</a>, to effectively reduce your tax bill.</p> <p>Remember that a refund is money that just sits in Uncle Sam&rsquo;s pocket making you 0% interest!</p> <h3>Money Lesson</h3> <p>Use the <a href="https://www.irs.gov/Individuals/IRS-Withholding-Calculator">IRS Withholding Calculator</a> or talk with your accountant to find out how much you should withhold every month. Then, accordingly adjust your W-4 with your employer.</p> <h2>6. Open a Traditional or Roth IRA</h2> <p>While the 401K is the most popular type of retirement account, the Roth offers much more flexibility when it comes to <a href="http://www.wisebread.com/7-penalty-free-ways-to-withdraw-money-from-your-retirement-account">taking distributions before age 59 1/2</a>. As a parent of twins, having my retirement account as a last-resort fund that I could tap into without IRS penalty to help my sons is very important.</p> <p>For example, I could take up to a $10,000 distribution to help them to pay for their first home. As long as I don&rsquo;t go over that total limit, I can split the distribution as I see fit and can take one in separate years. Another penalty-free withdrawal from an IRA I can take is to cover qualified higher education expenses, including tuition, fees, books, supplies, and equipment required for the enrollment or attendance of my sons at an eligible educational institution.</p> <p>Bonus: Using an IRA, you can save an extra $5,500, or $6,500 if you're age 50 or older, in 2015 and 2016 for retirement.</p> <h3>Money Lesson</h3> <p>Saving in an IRA allows you to take early distributions without penalty for qualifying purposes.</p> <h2>7. Start Saving for Your Kids</h2> <p>Another great Buffet-ism is &quot;Someone&rsquo;s sitting in the shade today because someone planted a tree a long time ago.&quot; Imagine if you had an extra 18 years to save for college or retirement, wouldn&rsquo;t that be awesome? That&rsquo;s exactly the lesson that my wife&rsquo;s and my own parents passed on to us the moment they found out we were having twins. (See also: <a href="http://www.wisebread.com/8-money-moves-to-make-when-you-find-out-youre-pregnant?ref=seealso">8 Money Moves to Make When You Find Out You're Pregnant</a>)</p> <p>A little bit goes a long way. Even saving $100 every year for 10 years is much better than starting to save $1,000 10 years from now:</p> <ul> <li>With a 0.5% annual rate of return, you would end up with $1,025.57.<br /> &nbsp;</li> <li>With a 1% annual rate of return, you would end up with $1,051.88.<br /> &nbsp;</li> <li>With a 2.5% annual rate of return, you would end up with $1,135.45.<br /> &nbsp;</li> <li>With a 4.5% annual rate of return, you would end up with $1,258.57.<br /> &nbsp;</li> <li>With a 7% annual rate of return, you would end up with $1,443.48.</li> </ul> <p>When thinking about saving for your kids, especially for education-related expenses, evaluate all options, including custodial IRA accounts and 529 plans. Many of these type of accounts provide full or partial income tax deductions. (See also: <a href="http://www.wisebread.com/the-9-best-state-529-college-savings-plans?ref=seealso">The 9 Best State 529 College Savings Plans</a>)</p> <h3>Money Lesson</h3> <p>Leverage the power of interest compounding over a long period of time and give your children a head start on saving for education or retirement.</p> <p><em>What money lessons did you learn with the arrival of your baby?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/7-lessons-about-money-i-learned-after-having-twins">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/7-money-conversations-parents-should-have-with-their-adult-kids">7 Money Conversations Parents Should Have With Their Adult Kids</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-frugal-winter-activities-to-keep-kids-busy-during-holiday-break">9 Frugal Winter Activities to Keep Kids Busy During Holiday Break</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/dont-start-a-family-before-reaching-these-5-money-goals">Don&#039;t Start a Family Before Reaching These 5 Money 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/8-frugal-living-skills-i-wish-my-parents-would-have-taught-me">8 Frugal Living Skills I Wish My Parents Would Have Taught Me</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-family-money-matters-your-kids-dont-need-to-know">9 Family Money Matters Your Kids Don&#039;t Need to Know</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Frugal Living Family babies financial planning kids life insurance multiples retirement twins Wed, 17 Feb 2016 11:30:04 +0000 Damian Davila 1654792 at http://www.wisebread.com 8 Steps to Budget Mastery in 20 Minutes a Month http://www.wisebread.com/8-steps-to-budget-mastery-in-20-minutes-a-month <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-steps-to-budget-mastery-in-20-minutes-a-month" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_holding_calculator_000011141410.jpg" alt="Woman learning steps to master her budget in 20 minutes a month" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The word &quot;budget&quot; strikes fear and panic in many. No one likes to think about them, let alone talk about them. The truth of the matter is that most budgets fail, and they fail badly, because most <a href="http://www.wisebread.com/6-sneaky-ways-you-cheat-on-your-budget">budgets lie</a>. Yes, that's right &mdash; they lie. A budget can represent whatever numbers you put in it. If you forget to add a bunch of expenses in each month, then it makes sense that you would be over budget month after month after month</p> <p>In order to break this silly cycle of money mayhem, here is an easy eight-step system you can use to master your budget in only 20 minutes a month. Open up a spreadsheet and let's get started!</p> <h2>1. Create a Second Column</h2> <p>Not to be redundant, but we've got to first start with the budget. Why most budgets fail is because they only have one column, the budgeted column. We've already gone over why this doesn't work. Instead, upgrade your budget to a two-column layout for success. Your first column is the &quot;What I Think I Will Spend&quot; column, and the second column is the &quot;What I Actually Spent&quot; column. Basically, you create two mirror columns to accurately display what is going on in your budget for a given month.</p> <h2>2. Fill in &quot;What I Think&quot;</h2> <p>The &quot;What I Think&quot; column should be the easiest column to complete and shouldn't take you more than a couple of minutes at most. This column represents all of your budgeted items. It's an approximation of what you think you will spend during the month. Most of the numbers should be easy to access from your normal monthly expenses. Don't labor over this column too much, but make sure that you attempt to accurately itemize each income and expense item.</p> <h2>3. End of Month</h2> <p>The end of the month is where things start to get a bit more analytical (but don't let that scare you). At the end of each month, print off your most recent bank or credit card statements in which you've incurred your expenses for the month. This is the easiest step in the eight-step process, but it's critical to analyzing what went on during the month.</p> <h2>4. Add It Up</h2> <p>Once you're armed and ready with your statements (and receipts, for cash spending), get out a handy calculator and some highlighters. Color-code your statements for budget expense items like groceries, eating out, gas, clothing, utilities, phone, and so on. Then go through the list and highlight each item in each category. This makes it easy to add it all up when you are finished. There's nothing yet to analyze in this step, you are simply categorizing for step six. This will take you the longest out of all the steps, so allow 10 minutes to conquer your statements. Once you do this process for a month or two, it should be very easy to go through your statements in five minutes or less. Practice makes perfect.</p> <h2>5. &quot;What I Spent&quot;</h2> <p>Now it's time to fill in the second column, &quot;What I Spent.&quot; Simply take the numbers from your statements and input them into the budget template. If you notice that you've left off a category on your budget, add it and put it in bold so it can jog your memory next month. Each month has its own twists and turns, so it's common that you might leave out a category by accident.</p> <h2>6. Compare the Columns</h2> <p>You've done the heavy lifting now, and are almost through your 20 minutes this month. Take a look at your budget and compare the two columns. Are there any areas that surprise you? Did you come in under or over budget, and why? What about those missing categories, are they essential to include going forward? You see the power is in comparing these two columns. It gives you a chance to evaluate your budget from estimation in the beginning of the month, to an absolute at the end of the month.</p> <h2>7. The Envelope Trick</h2> <p>If you have a category that is always your Achilles' heel, and month after month you are overspending, then it might be time to kick it old school. For instance, let's say eating out is always an area you overspend in. If you've budgeted $200 for the month in your first column, then at the beginning of the month you can withdrawal that $200 in cash, and stick it in an envelope. For the entire month, every time you eat out, you must dip into this envelope. Once the money is gone, your eating-out budget is gone. While this might seem harsh, it's an old school way to force you to stay within budget. At the end of the day though, none of these steps will work unless you put effort in and are committed to mastering your budget.</p> <h2>8. Reward Yourself</h2> <p>We all love a good reward, and you should pat yourself on the back if you've completed these steps for the month. No matter the outcome, you've taken small moves that will lead to big changes in your cash flow. Pick a dollar amount that you are comfortable with at the beginning of the month, and set a goal for yourself. Maybe you want to treat yourself to an extra cupcake at the end of the month, or go to that concert that you are dying to see. Whatever it is, give yourself a pat on the back, but not for too long &mdash; next month is coming quickly and it will be time to restart the 20-minute system.</p> <p><em>What's your budgeting system?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/shannah-game">Shannah Game</a> of <a href="http://www.wisebread.com/8-steps-to-budget-mastery-in-20-minutes-a-month">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/if-youre-doing-these-5-things-your-saving-efforts-are-for-nothing">If You&#039;re Doing These 5 Things, Your Saving Efforts Are for Nothing</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/too-broke-to-be-frugal">Too broke to be frugal?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/47-simple-ways-to-waste-money">47 Simple Ways To Waste Money</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-problems-you-cant-solve-with-money">9 Problems You Can&#039;t Solve With Money</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-smart-things-to-do-with-your-settlement-money">8 Smart Things to Do With Your Settlement Money</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance budget financial planning monthly budgets spending Wed, 21 Oct 2015 13:16:44 +0000 Shannah Game 1593640 at http://www.wisebread.com 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="http://wisebread.killeracesmedia.netdna-cdn.com/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-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/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/how-to-plan-for-a-forced-early-retirement">How to Plan for a Forced Early Retirement</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-roadblocks-to-retirement-and-how-to-clear-them">7 Roadblocks to Retirement (And How to Clear Them)</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-steps-to-starting-a-retirement-plan-in-your-30s">8 Steps to Starting a Retirement Plan in Your 30s</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/choosing-a-retirement-account-whats-available-and-what-s-best-for-you">Choosing a Retirement Account: What&#039;s Available, and What’s Best for You?</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="http://wisebread.killeracesmedia.netdna-cdn.com/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-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/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/how-to-tell-if-your-401k-is-a-good-or-a-bad-one">How to Tell if Your 401K Is a Good or a Bad One</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-questions-financial-advisers-hear-most-often">8 Questions Financial Advisers Hear Most Often</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/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-5 views-row-odd views-row-last"> <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> </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="http://wisebread.killeracesmedia.netdna-cdn.com/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-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/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/how-to-tell-if-your-401k-is-a-good-or-a-bad-one">How to Tell if Your 401K Is a Good or a Bad One</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-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-4 views-row-even"> <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-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-meeting-the-2018-401k-contribution-limits-will-brighten-your-future">6 Ways Meeting the 2018 401(k) Contribution Limits Will Brighten Your Future</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="http://wisebread.killeracesmedia.netdna-cdn.com/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-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/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/has-cash-become-more-trouble-than-its-worth">Has Cash Become More Trouble Than It&#039;s Worth?</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-financial-basics-every-new-grad-should-know">The Financial Basics Every New Grad Should Know</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/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