investments http://www.wisebread.com/taxonomy/term/3930/all en-US How an HSA Could Help Your Retirement http://www.wisebread.com/how-an-hsa-could-help-your-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-an-hsa-could-help-your-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/hsa_theme_with_stethoscope_and_a_piggy_bank.jpg" alt="HSA theme with stethoscope and a piggy bank" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you're worried about medical expenses during your retirement, you're not alone. According to the latest Retirement Confidence Survey from the Employee Benefit Research Institute, 45 percent of American workers don't feel confident that they will have enough money to take care of their medical expenses when they retire.</p> <p>The good news is that you may be able to do something on top of socking away money into your 401(k) or IRA to plan ahead for your medical bills during retirement. Let's review what a health savings account (HSA) is and how it can help your retirement planning. (See also: <a href="http://www.wisebread.com/how-an-hsa-saves-you-money?ref=seealso" target="_blank">How an HSA Saves You Money</a>)</p> <h2>What is an HSA?</h2> <p>An HSA is a tax-advantaged medical savings account available only to people who are enrolled in high-deductible health plans (HDHPs). An HDHP is health insurance that has a lower monthly premium, but a high deductible. A deductible is the amount you must pay out of pocket for medical expenses before your health insurance kicks in.</p> <p>An HSA helps you pay for qualified medical expenses such as doctors' visits and prescriptions that are not reimbursed by your HDHP. The beauty of an HSA is that you can contribute to it with pretax dollars by setting aside a portion of every paycheck, allowing you to reduce your taxable income. Depending on where you set up your HSA, you may be able to invest the money in mutual funds or other investments to help the funds grow faster. Whatever money you don't use during the year rolls over into the following year, meaning you could have a nice amount built up by the time you retire.</p> <p>For your insurance plan to qualify as an HDHP &mdash; one that allows you to use an HSA &mdash; the HDHP must have a deductible of at least $1,300 for self-coverage or $2,600 for family coverage (as of May 2017). You can only use the money in the account for qualified medical expenses, and if you withdraw money from your HSA to use for other purposes before you reach age 65, you'll have to pay a 20 percent tax penalty.</p> <p>To qualify for an employer-sponsored HSA, you can't be listed as a dependent on somebody else's tax return or enrolled in Medicare.</p> <h2>How an HSA can help your retirement</h2> <p>Here's how an HSA can give your nest egg a boost during your retirement years.</p> <h3>1. Avoid taxes on approved medical expenses</h3> <p>Without an HSA, if you took out $1,000 from your 401(k) to cover a medical bill during retirement, you'd pay applicable income taxes on the money you withdrew. And if you were to retire before age 59 &frac12;, you would pay an additional 10 percent penalty tax for that 401(k) withdrawal. With an HSA, however, you never pay taxes when using funds for approved medical expenses.</p> <h3>2. Avoid the early withdrawal penalty on nonmedical distributions after age 65</h3> <p>The longer you hold an HSA, the more flexibility you'll gain to use your funds. Once you reach age 65, you can withdraw money from the account for <em>nonmedical</em> expenses without triggering that 20 percent tax penalty. Note that you'll still pay income tax on the distribution.</p> <h3>3. Gain access to more investment options</h3> <p>If your employer-sponsored retirement account gives you access to only a few investment options, an HSA may be a way to broaden your options for retirement investments. While some HSA providers limit investment options to an FDIC-insured savings account, many others offer the option to put money in a separate HSA investment account with several fund options, including mutual funds and low-cost index funds. (See also: <a href="http://www.wisebread.com/why-warren-buffett-says-you-should-invest-in-index-funds?ref=seealso" target="_blank">Why Warren Buffett Says You Should Invest in Index Funds</a>)</p> <h3>4. Increase annual contribution limits for your retirement savings</h3> <p>In 2017, a single tax filer can save up to $18,000 in a 401(k) and up to $5,500 in a Roth IRA (with catch-up contributions for those 50 and older of $6,000 and $1,000, respectively). With an HSA, that same tax filer can save up to an additional $3,400 to cover medical expenses during retirement, with a $1,000 per year catch-up contribution allowed for those aged 55 and over.</p> <h2>Take a look at HSAs</h2> <p>If you don't have a good employer-sponsored health plan, you could give your retirement plan a much-needed boost with an HSA, assuming you're eligible for one. The premiums on an HDHP can be higher than those of other health plans, so it's important to take a look at all of your alternatives. Since there are many considerations to keep track of, including taxes, medical expenses, and investment decisions, consider seeking the advice of a professional. (See also: <a href="http://www.wisebread.com/who-to-hire-a-financial-planner-or-a-financial-adviser?ref=seealso" target="_blank">Who to Hire: A Financial Planner or a Financial Adviser?</a>)</p> <p>The health insurance decisions you make now could help you have a more comfortable retirement.</p> <p><em>[Editor's Note: An earlier version of this article noted that withdrawals after age 65 for nonmedical expenses are tax free. This is incorrect, and the article has been corrected to reflect that.]</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/how-an-hsa-could-help-your-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-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/4-ways-couples-are-shortchanging-their-retirement-savings">4 Ways Couples Are Shortchanging Their Retirement Savings</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-almost-anyone-can-afford-to-retire-in-mexico">How Almost Anyone Can Afford to Retire in Mexico</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/11-surprising-things-your-hsa-will-cover">11 Surprising Things Your HSA Will Cover</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-an-hsa-saves-you-money">How an HSA Saves 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/7-ways-retirement-planning-changes-when-youre-single">7 Ways Retirement Planning Changes When You&#039;re Single</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement distributions expenses health care health savings account HSA investments medical costs pretax dollars Wed, 21 Jun 2017 09:01:05 +0000 Damian Davila 1969193 at http://www.wisebread.com The Pros and Cons of Keeping All Your Accounts in One Bank http://www.wisebread.com/the-pros-and-cons-of-keeping-all-your-accounts-in-one-bank <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-pros-and-cons-of-keeping-all-your-accounts-in-one-bank" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/banking_business_account_finance_economy_concept.jpg" alt="Banking Business Account Finance Economy Concept" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Checking, savings, business, CD, money market, cash reserve, investment &mdash; with so many accounts available to U.S. consumers, should you keep them with a single financial institution? Let's review the pros and cons of keeping all your accounts in one place.</p> <h2>Pros of keeping all your accounts in one place</h2> <p>Here are some reasons why it makes sense to consolidate your accounts.</p> <h3>1. FDIC covers up to $250,000 for each eligible account</h3> <p>The Federal Deposit Insurance Corporation (FDIC) provides coverage of <a href="https://www.fdic.gov/deposit/deposits/faq.html" target="_blank">up to $250,000</a> per eligible account at the same insured financial institution. Covered accounts include checking and savings accounts, money market deposit accounts (MMDAs), and certificates of deposit (CDs).</p> <p>So, as long as each one of your qualifying accounts has a balance under $250,000, it's OK to keep those accounts together at the same financial institution. For example, if you were to have $100,000 each in a CD, checking account, and savings account at the same FDIC-covered bank, you would still be insured. Even though the accounts together equal $300,000, each account has less than $250,000, and the coverage would still apply.</p> <p>To find out if your deposits are insured by the FDIC, use the FDIC's <a href="http://www5.fdic.gov/edie/" target="_blank">Electronic Deposit Insurance Estimator</a> (EDIE).</p> <p>When you add accounts to your portfolio with the same bank, just remember that the FDIC warns consumers that non-deposit investment products, such as mutual funds, annuities, life insurance policies, and stocks and bonds are not insured by the FDIC.</p> <p>Are you a credit union member?</p> <ul> <li> <p>Federally chartered credit unions and those with headquarters in Arkansas, Delaware, South Dakota, Wyoming, or the District of Columbia are insured by up to $250,000 by the National Credit Union Administration (NCUA).</p> </li> <li> <p>State-chartered credit unions may be covered by a state-sponsored or private insurance, so contact your credit union representative for more details about potential insurance of deposits.</p> </li> </ul> <h3>2. Quicker coverage of bounced checks</h3> <p>Having more than one account at the same bank may help you to quickly cover a check or automatic debit or credit transaction with insufficient funds.</p> <p>Some banks may give you a quick heads up early in the morning that an incoming transaction won't clear due to a low balance, giving you time to make a quick deposit. In the event that you have a savings and checking account with the same financial institution, you could quickly cover the cash crunch by transferring funds from the savings to the checking account over the phone or online. (See also: <a href="http://www.wisebread.com/how-to-fix-your-finances-after-missing-a-payment?ref=seealso" target="_blank">How to Fix Your Finances After Missing a Payment</a>)</p> <p>Doing a quick transaction to cover that mistake could prevent the bank from applying overdraft or insufficient funds fees.</p> <h3>3. Access to higher savings interest rates and lower account fees</h3> <p>When you hold a large total of deposits within the same institution, very often you can qualify for better savings rates and reduced account fees. Find out from your financial institution whether or not they offer benefits for consolidating your accounts.</p> <p>Similarly, holding a larger total balance across several investment accounts, such as an IRA or individual investment account, may grant you some breaks on investment fees. Generally, with at least $100,000 in investable assets in the same institution, you should get lower charges on future applicable fees, such as front-end or back-end loads.</p> <p>If you don't meet the necessary thresholds to access better rates and lower fees, ask your financial institution if they'll accept a signed letter of intent to meet those thresholds by a specific date.</p> <h3>4. More personalized service</h3> <p>Maintaining a wide variety of products with the same bank allows the bank to have a better understanding of your financial history, overview of spending habits, and ability to pay back loans. When a financial institution has a more comprehensive view of your finances, then it can help you optimize your finances with more suitable products. For example, keeping several deposit accounts may help you qualify for a personal line of credit with an interest rate lower than that of a credit card.</p> <h2>Cons of keeping all your accounts in one place</h2> <p>Now let's take a look at the disadvantages of consolidating all your accounts under the same roof.</p> <h3>1. Missing out on potentially better deals</h3> <p>By turning your back on other financial institutions, you may develop a case of &quot;financial myopia&quot; in which you don't think about shopping around for better banking options. Sticking to your same brick-and-mortar branch may cause you to miss out on the better annual percentage yield (APY) that online savings accounts often offer.</p> <p>According to the FDIC, as of June 12, 2017, the <a href="https://www.fdic.gov/regulations/resources/rates/" target="_blank">average rate for a deposit account</a> with a balance under $100,000 was 0.06 percent. On the same day, you could find online savings accounts paying a savings rate of up to 1.25 percent for an account of similar size.</p> <h3>2. Potential of losing FDIC coverage</h3> <p>The FDIC coverage limit is $250,000 for each qualifying account. High-earners may run out of options in the same financial institution for opening eligible accounts and risk having a portion of their deposits without FDIC coverage.</p> <h3>3. Higher chance of loss in case of identity theft</h3> <p>Keeping all your eggs in one basket may work against you if a fraudster gets a hold of one of your accounts or cards. Getting access to just one account may grant them access to all of your money! This is particularly true when connecting two or more accounts so that one account covers another when a balance is running too low.</p> <p>If malicious hackers were to get a hold of the password for your bank's online portal, then they would have hit a major jackpot accessing all of your accounts. By spreading your funds across more financial institutions, you lower the chances of a cybercriminal accessing your funds. Of course, this is as long as you don't use the same password for all online portals. (See also: <a href="http://www.wisebread.com/3-sneaky-ways-identity-thieves-can-access-your-data?ref=seealso" target="_blank">3 Sneaky Ways Identity Thieves Can Access Your Data</a>)</p> <h2>The bottom line: Talk with your banker today</h2> <p>If you're thinking about opening more accounts with your current savings institution, it's a great time to sit with a representative and go over your available options. Armed with that information, you'll be in a better position to shop around for better banking options and make a more informed decision.</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/the-pros-and-cons-of-keeping-all-your-accounts-in-one-bank">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/this-post-really-suk-kuks-examining-islamic-finance">This Post Really Suk-kuks: Examining Islamic Finance</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/are-you-paying-these-6-unfair-banking-fees">Are You Paying These 6 Unfair Banking Fees?</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/12-places-to-keep-your-money-safe-and-growing">12 Places to Keep Your Money Safe — And Growing</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/banks-still-offering-free-checking-and-great-interest-rates">Banks Still Offering Free Checking and Savings with Great Interest Rates</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-smart-ways-to-use-old-savings-bonds">6 Smart Ways to Use Old Savings Bonds</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Banking accounts CDs checking Comparison shopping FDIC financial institutions investments pros and cons rates savings Fri, 16 Jun 2017 08:30:10 +0000 Damian Davila 1963762 at http://www.wisebread.com Does Your Net Worth Even Matter? http://www.wisebread.com/does-your-net-worth-even-matter <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/does-your-net-worth-even-matter" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-672689634.jpg" alt="Woman wondering if her net worth even matters" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Do you know your net worth? That's how much is left after subtracting your liabilities from the total value of your cash and assets.</p> <p>At first glance, figuring out how much you're worth may seem pointless. You're probably not going to bump Warren Buffett or Bill Gates from their spots on any &quot;World's Wealthiest People&quot; list anytime soon. But no matter how much you earn, knowing your net worth is important.</p> <p>Here are three reasons why monitoring your net worth can help you manage money better. (See also: <a href="http://www.wisebread.com/10-ways-to-increase-your-net-worth-this-year?ref=seealso" target="_blank">10 Ways to Increase Your Net Worth This Year</a>)</p> <h2>1. Your net worth doesn't lie</h2> <p>In our culture, it's easy to convince ourselves that we're doing better with money than we actually are. We can finance nice cars, pay for the latest fashions with plastic, and even &quot;buy&quot; a more expensive home than we can realistically afford. But our net worth tells it like it is, and that can be a very helpful financial wake-up call.</p> <p>In the personal finance classic, <a href="http://amzn.to/2qjAM5i" target="_blank">The Millionaire Next Door</a>, authors Thomas Stanley and William Danko draw an important distinction between people who look wealthy but aren't (they call them &quot;Big Hat, No Cattle&quot;), and those who don't look wealthy but are (where the title of their book came from). If you're going to build wealth, it's far better to be in the latter group.</p> <p>The concept of being unassumingly wealthy is also known as &quot;<a href="http://www.wisebread.com/5-reasons-stealth-wealth-is-the-best-wealth" target="_blank">stealth wealth</a>,&quot; and it's a lifestyle worth striving for. People with &quot;stealth wealth&quot; maintain a high net worth by avoiding dumping their cash into shallow, depreciative purchases. Their modest approach to money management allows them to achieve such dreams as early retirement, entrepreneurship, traveling the world, and more.</p> <p>After calculating your net worth, ask yourself: Do I look wealthier than I am, or am I wealthier than I look?</p> <h2>2. Your net worth shows whether you're making progress</h2> <p>To be sure, there are other ways to define your life and determine whether you're moving forward or backward. Tallying your net worth each year, however, and monitoring the trend that develops can be very helpful. If you're going to build a nest egg large enough to support your family in your later years, you need that trend to be moving in an upward direction.</p> <p>Earning more each year and increasing your standard of living may make you feel like you're getting ahead, but an increase in your net worth will show if you actually are.</p> <p>Of course, there will be occasional down years. The recession of 2007 to 2009 erased a lot of wealth, but those who didn't panic eventually recovered &mdash; and then some.</p> <h2>3. Your net worth helps you pinpoint financial issues</h2> <p>Each time you calculate your net worth (a natural time to do so is at the end of each year), don't just retain the bottom line number. Keep the components.</p> <p>On the asset side, track the value of your home (Zillow will give you an estimate), your retirement savings, other savings, the value of your car(s), and other assets. Then look at changes within each asset.</p> <p>With our household's retirement accounts, I don't just record the balance. I also record how much we contributed each year and how much our investments earned. How much we contribute is much more under our control than the returns we earn. I want to at least make sure we're doing our part. The earnings side is important as well. If you see year after year of meager returns, it's probably time to re-evaluate your investing process.</p> <p>On the liabilities side, track how much you owe on your house and other debts, such as vehicle and student loans. This annual exercise will provide a helpful reminder to perhaps put more focus on getting out of debt or make sure you're on track to be mortgage-free at least by the time you retire.</p> <h2>The big picture</h2> <p>To a great degree, net worth is an &quot;internal&quot; metric. It's mostly about how you're doing now compared to how you were doing last year and the year before.</p> <p>If you'd like more context, <em>The Millionaire Next Door</em> has an interesting way of defining &quot;wealthy.&quot; Whereas many people think of someone who has a net worth of $1 million or more as wealthy, Stanley and Danko's definition created more of a level playing field for people across the spectra of age and income: multiply your age times your annual pretax household income, divide by 10, and then subtract any inherited wealth. That, they said, is what your net worth should be.</p> <p>If you have significantly more than that, you have a low-consumption, high-wealth-building lifestyle and you're considered wealthy for someone of your age and income. If your net worth is significantly less than that, you're probably consuming too much of your income and investing too little. (See also: <a href="http://www.wisebread.com/6-money-moves-to-make-if-your-net-worth-is-negative?ref=seealso" target="_blank">6 Money Moves to Make If Your Net Worth Is Negative</a>)</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/does-your-net-worth-even-matter">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/how-high-is-your-score-on-the-most-important-measure-of-wealth">How High Is Your Score on the Most Important Measure of Wealth?</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/are-your-assets-costing-you-too-much">Are Your Assets Costing You Too Much?</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/these-13-numbers-are-the-keys-to-understanding-your-finances">These 13 Numbers Are the Keys to Understanding Your Finances</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-quiet-millionaire-parts-4-5-building-your-net-worth">The Quiet Millionaire: Parts 4 &amp; 5 - Building Your Net Worth</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-celebrities-with-shockingly-low-net-worths">6 Celebrities With Shockingly Low Net Worths</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance assets cash debts income investments liabilities metric net worth saving money wealth Wed, 17 May 2017 08:00:11 +0000 Matt Bell 1947498 at http://www.wisebread.com Start Planning Now for When Your Target-Date Fund Ends http://www.wisebread.com/start-planning-now-for-when-your-target-date-fund-ends <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/start-planning-now-for-when-your-target-date-fund-ends" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-174631043.jpg" alt="Start planning now for when your target date fund ends" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>There's a reason why so many people invest their retirement savings in target-date mutual funds offered within their 401(k). These funds are designed to be simple: Your money is automatically invested in a mix of stocks, bonds, and other asset types based on your age and the year you plan to retire.</p> <p>As you get closer to your target date (the year you expect to hit retirement), the managers of your target-date fund gradually ramp down your risk &mdash; moving more of your dollars away from high-risk, growth-oriented investments like stocks, and focusing instead on safer, more conservative investments like bonds or cash. This &quot;set it and forget it&quot; approach allows you to easily stash money away for retirement without constantly rebalancing the fund yourself.</p> <p>The goal is to have the right asset mix when your target-date fund hits its target. But this leads to the big question: What do you do when your target-date fund finally does reach this endpoint?</p> <h2>Reaching the target date</h2> <p>According to the Investment Company Institute, the target date isn't a date when investors should automatically cash out their entire target-date fund. It's simply an estimate of when investors will retire, and therefore stop making new investments in the fund. Most target-date funds can be kept open beyond the target date.</p> <p>What happens when the fund reaches that target date depends on whether the fund is guided by one of two basic investing approaches.</p> <p>If a target-date fund has what is known as a &quot;to&quot; glide path, the fund manager will stop adjusting the fund's asset mix once it hits the target date. In this scenario, your investment mix will remain in place until you cash out the fund.</p> <p>There's also the &quot;through&quot; glide path. In this approach, the fund manager will continue to adjust the fund's mix of investments even as the target date comes and goes.</p> <p>It's important to remember that target-date funds offer no guarantees. Your fund manager will rework your asset mix as your target date approaches to minimize your investment risk. But no manager can guarantee any set amount of dollars by this date.</p> <h2>What can you do when your target date arrives?</h2> <p>When your target-date fund hits its target date, you have three basic choices of what to do with your money.</p> <h3>1. Do nothing</h3> <p>First, you can essentially choose to do nothing. You can instead leave your money in your target-date fund after you retire. You won't be able to make new contributions to the fund, of course, but as with all 401(k) investments, your target-date fund will continue to grow on a tax-deferred basis. This will remain the case until you begin making withdrawals from the fund. You are required to begin taking your minimum withdrawals from your 401(k) by age 70 &frac12; at the latest.</p> <h3>2. Roll over funds into an IRA</h3> <p>If you want to be more hands-on with your investments, you can instead roll over the target-date fund, and any other investments in your 401(k), into an IRA. If you roll the money into a traditional IRA, you can continue to make contributions until you hit the year in which you turn 70 &frac12;. If you roll your 401(k) funds into a Roth IRA, you can continue making contributions as long as you are earning income. If you are not working, though, and not earning income, you can't contribute to a Roth no matter your age.</p> <h3>3. Cash out your fund</h3> <p>Finally, you can cash out your 401(k) (and the target-date fund within it) once you stop working for the employer who offered it to you. If you rollover your 401(k) into an IRA, you won't have to pay taxes. But if you cash out, you will owe income tax on the amount you withdraw from the plan. If you cash out before you turn 59 &frac12;, you'll have to pay income taxes and a 10 percent penalty.</p> <p>The best option of the three depends on how much time you want to spend focusing on your investments. If you prefer to let others manage your investment, the &quot;do-nothing&quot; approach might be your best move. If you'd rather have more control, on the other hand, rolling over your target-date fund into an IRA is probably the better choice.</p> <p>If you need liquid cash immediately, cashing out your fund might be necessary &mdash; but the tax hit you'll take often makes this the least attractive option.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/start-planning-now-for-when-your-target-date-fund-ends">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/what-you-need-to-know-about-the-easiest-way-to-save-for-retirement">What You Need to Know About the Easiest Way to Save for 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/how-to-save-for-retirement-when-you-are-unemployed">How to Save for Retirement When You Are 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/the-3-rules-every-mediocre-investor-must-know">The 3 Rules Every Mediocre Investor Must Know</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-make-sure-you-dont-run-out-of-money-in-retirement">How to Make Sure You Don&#039;t Run Out of Money in Retirement</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-most-important-thing-youre-probably-not-doing-with-your-portfolio">The Most Important Thing You&#039;re Probably Not Doing With Your Portfolio</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement assets bonds investments mutual funds rebalancing rollover stocks target date funds Fri, 12 May 2017 08:30:12 +0000 Dan Rafter 1942910 at http://www.wisebread.com How Single Parents Can Juggle Retirement Savings, Too http://www.wisebread.com/how-single-parents-can-juggle-retirement-savings-too <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-single-parents-can-juggle-retirement-savings-too" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-541585308.jpg" alt="Single parent learning how to juggle retirement savings" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Being a single parent is hard work. It's also expensive, with the U.S. Department of Agriculture recently reporting that the estimated cost of raising a child from birth through age 17 is $233,610. That comes out to nearly $14,000 a year.</p> <p>If you're a single parent with one income, paying for your children's clothing, food, education, and activities might not only be consuming most of your money, but most of your time, too. At the end of another long day, you might think that it's simply too difficult to plan or save for your own retirement.</p> <p>Fortunately, this isn't true. Yes, saving for retirement will be more challenging for single parents. But it can be done, and the steps to start saving and investing for retirement aren't overly difficult.</p> <p>Here are five moves single parents should make today to prepare for their future retirement.</p> <h2>1. Make a budget</h2> <p>Nothing is more important than <a href="http://www.wisebread.com/build-your-first-budget-in-5-easy-steps" target="_blank">creating a household budget</a>, and making one is simpler than you think. Once you have a budget, you'll be able to figure out how much money you can allocate to retirement savings each month.</p> <p>First, write down how much money you bring into your household every month. Next, list how much you spend. Start with your fixed expenses, which includes everything from your monthly mortgage payment to your insurance costs. Then, calculate an average cost for expenses that fluctuate. These can include utility bills, transportation, clothing, groceries, and entertainment. Don't forget to include intermittent expenses, such as haircuts and car maintenance bills, which you might think of in annual terms &mdash; find the average so you can estimate a monthly amount. Once you have these figures, you'll know how much wiggle room is left each month to put toward your retirement.</p> <p>Compiling a budget can also help you make positive changes to your overall spending habits. Maybe you'll find that you're spending more money than you're bringing in. You might then make a few small adjustments &mdash; such as eating out less, <a href="http://www.wisebread.com/3-tv-must-haves-once-you-cut-the-cable-cord" target="_blank">cutting the cable cord</a>, or dropping a gym membership &mdash; that will free up money each month.</p> <h2>2. Start small and build an emergency fund</h2> <p>After making a budget, set aside at least some of your leftover money in the month to build an emergency fund. You'll use this fund to pay for any unexpected financial emergencies (such as a broken water heater) with cash instead of charging repairs to a credit card. The key to saving for retirement as a single parent is to avoid building debt, and nothing can derail your savings goals faster than <a href="http://www.wisebread.com/5-ways-to-pay-off-high-interest-credit-card-debt" target="_blank">high interest credit card debt</a>. By having that emergency fund, you'll be far less likely to add big bills to your credit cards.</p> <p>You might not have much money to devote to an emergency fund. That's OK. Even if you can only save $50 a month, do it. By the end of a year, you'll have $600. That may not be a huge amount, but it's a start. Your ultimate goal should be to build an emergency fund that can cover daily living expenses for three to six months. (See also: <a href="http://www.wisebread.com/change-jars-and-8-other-clever-ways-to-build-an-emergency-fund?ref=seealso" target="_blank">Change Jars and 8 Other Clever Ways to Build an Emergency Fund</a>)</p> <h2>3. Save in tax-advantaged investment vehicles</h2> <p>As a single parent, it's important to keep as many of your dollars in your household as possible. Tax-advantaged savings vehicles can help you do this.</p> <p>If your employer offers a 401(k) plan, take advantage of it. Contributions to your 401(k) are made with pretax dollars from each paycheck. This means that when you file your taxes for the year, the IRS will treat your income as smaller than it actually was. This will help lower your tax burden each year while simultaneously growing your retirement.</p> <p>You can also invest in a traditional IRA if you don't have access to a 401(k). Contributions to a traditional IRA are also made with pretax dollars, which again, will lower your taxable income.</p> <h2>4. Prioritize retirement over college savings</h2> <p>Like most parents, you probably want to give your child as much financial help as you can to get them into a good college. But too many parents save for their children's education while skimping on building their own retirement fund. This is a mistake.</p> <p>Remember, your kids have options when it comes to their education. They can attend a community college or less-expensive university, seek financial aid, or work their way through school. They might not be able to attend their dream school, but that doesn't mean they can't get a solid college education.</p> <p>You won't have as many options when it's time to leave the working world. You certainly don't want a retirement in which you're struggling to pay your bills, so you need to avoid the impulse to prioritize your child's college fund over your own retirement savings. (See also: <a href="http://www.wisebread.com/why-saving-too-much-money-for-a-college-fund-is-a-bad-idea?ref=seealso" target="_blank">Why Saving Too Much Money for a College Fund Is a Bad Idea</a>)</p> <h2>5. Resist the temptation to overspend</h2> <p>As a single parent, it can be tempting to overspend on gifts and expensive vacations in an effort to make up for whatever challenges you and your children face. The problem is, this kind of emotional overspending can wreck your monthly budget. And when money gets tight, it's your retirement savings that often suffers.</p> <p>It's OK to treat your children, of course. But make sure these little rewards don't come at the expense of building a retirement fund.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/how-single-parents-can-juggle-retirement-savings-too">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/are-you-ruining-your-retirement-by-spoiling-your-kids">Are You Ruining Your Retirement by Spoiling Your 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/6-fast-ways-to-restock-an-emergency-fund-after-an-emergency">6 Fast Ways to Restock an Emergency Fund After an Emergency</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-fun-games-that-teach-your-kids-about-money">6 Fun Games That Teach Your Kids About Money</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-personal-finance-skills-everyone-should-master">12 Personal Finance Skills Everyone Should Master</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-tell-youve-become-a-financial-grownup">How to Tell You&#039;ve Become a Financial Grownup</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Family Retirement budgeting children college costs emergency funds investments overspending saving money single parents tax advantaged Fri, 28 Apr 2017 18:43:15 +0000 Dan Rafter 1935491 at http://www.wisebread.com 7 Things Financial Advisers Wish You Knew About Retirement http://www.wisebread.com/7-things-financial-advisers-wish-you-knew-about-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-things-financial-advisers-wish-you-knew-about-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/men_tablet_work_579235928.jpg" alt="Men learning what financial advisers wish they knew about retirement" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Wish you had a crystal ball for retirement planning? Most of us do, and for good reason. Even if you're sure you'll have <a href="http://www.wisebread.com/how-much-money-will-you-need-to-retire?ref=internal">enough money to retire</a>, there are no guarantees until you get there. If your nest egg runs short, it will be far too late for a do-over.</p> <p>This is where a financial adviser can help. A financial adviser will know if you're heavy on risk, not diversified enough, failing to maximize tax advantages, or simply not saving enough. They will also make sure to take into account your lifestyle and preferences to ensure you're on the right path to your ideal retirement, and not just following a cookie cutter plan that's not going to be the right fit.</p> <p>We asked financial advisers for some of the most important ideas they wish their clients understood when it comes to money, retirement, and the future.</p> <h2>1. Social Security will be around in some form</h2> <p>]Andrew McFadden, a financial adviser for physicians, says many clients refuse to accept that Social Security will still be around when they retire. This is especially true if they are part of Gen X or Gen Y, he says, since they are decades away from receiving benefits.</p> <p>However short on funds we may be, the Social Security Administration projects the ability to pay around 75 percent of current benefits after the fund is depleted in 2034. This is a key detail, notes McFadden, since many people hear Social Security is going bankrupt and refuse to acknowledge any benefits in their own retirement planning.</p> <p>&quot;It's not all roses, but that's still a far cry from those bankruptcy rumors,&quot; says McFadden. &quot;So lower your expectations, but don't get rid of them altogether.&quot;</p> <h2>2. It's ok to &quot;live a little&quot; while you save for retirement</h2> <p>Russ Thornton, founder of Wealthcare for Women, says too many future retirees sacrifice living now for their &quot;pie in the sky&quot; dream of retirement. Unfortunately, tomorrow isn't promised, and many people never get to live out the dreams they plan all along.</p> <p>&quot;So many people assume they can't really live until they're retired and not working full-time,&quot; says Thornton. &quot;Nothing could be further from the truth. Find ways to experience aspects of your dream life now, whether you're in your 30s, 40s, or 50s.&quot;</p> <p>With a solid savings and retirement plan, you should be able to do both &mdash; save and invest adequately, and try some new experiences that make life adventurous and satisfying now.</p> <p>&quot;Don't accept the deferred life plan,&quot; he says. That future you dream about and plan for may never come.</p> <h2>3. The 4 percent rule isn't perfect for everybody</h2> <p>Born in the 90s, the 4 percent rule stated retirees could stretch their funds by withdrawing 4 percent per year. The catch was, a good portion of those investments had to remain in equities to make this work.</p> <p>The 4 percent rule lost traction between 2000 and 2010 when the market closed lower than where it started 10 years before, says Bellevue, WA financial adviser Josh Brein. As many retirement accounts suffered during this time, it was shown that the 4 percent rule doesn't always work for everybody.</p> <p>It doesn't mean the rule should be thrown out completely though, nor should it still be followed like gospel. In fact, in 2015, two-third of retirees following the 4 percent rule had double the amount of their starting principal after a 30-year stretch. These retirees could have benefited from taking out more than the limited 4 percent, which could have meant an extra vacation each year, or another luxury that they were indeed able to afford.</p> <p>There's absolutely no denying the importance of making your retirement dollars last. But, after a lifetime of working and saving, you also deserve to enjoy those dollars to their full capability.</p> <p>Bottom line, take time to re-evaluate your drawdown strategy every few years and make adjustments as necessary. While you don't want to go broke in retirement &mdash; you also don't want to miss out on all the incredible things this time in your life has to offer.</p> <h2>4. Retirement looks different for everyone</h2> <p>Minnesota financial adviser Jamie Pomeroy says he wishes people would abandon their preconceived notions on what retirement should look like. He blames the financial industry in part for perpetuating the idea that certain retirement planning accounts and products work for everyone. &quot;They don't,&quot; he says.</p> <p>&quot;Some enjoy retiring to the beach, some take mini-retirements before reaching a retirement age, some work part-time in retirement, and some just want to spend time with their grandkids,&quot; he says. &quot;The concept of retirement is dynamic, ever-changing, and defined very differently by lots of different people.&quot;</p> <p>To find the right retirement path and plan for your own life, you should sit down and decide what you really, truly want. Once you know what you want, you can craft a realistic plan to get there.</p> <h2>5. Investment returns aren't as important as you think</h2> <p>According to North Dakota financial adviser Benjamin Brandt, too many people focus too much energy on their investment returns &mdash; mostly because they are an immediate and tangible way to gauge the success or failure of our financial plans.</p> <p>Investment returns should only be judged in the proper scope of a long-term financial plan, and &quot;over decades,&quot; he says.</p> <p>In the meantime, our behavior can make a huge impact when it comes to reaching your retirement goals. By <a href="http://www.wisebread.com/4-quirky-ways-to-spend-less-and-kick-start-saving?ref=internal">spending less and saving more</a>, for example, we can avoid debt and potentially invest more money over the long haul. Those moves can help us retire earlier whether the market performs the way we hope or not.</p> <h2>6. Small changes add up</h2> <p>When it comes to retirement planning, many people feel overwhelmed right away. For example, some people may realize they need $1 million or more to retire and give up before they start.</p> <p>Financial adviser Jeff Rose of Good Financial Cents says this could change if everyone realized how small changes &mdash; and small amounts of savings &mdash; add up drastically over time.</p> <p>&quot;Someone who invests just $200 per month for 30 years and earns 7 percent would have more than $218,000 in the end,&quot; says Rose. &quot;Now imagine both spouses are saving, or that they boost their investments incrementally over the years.&quot;</p> <p>As Rose points out, a couple who invests $500 per month combined and earns 7 percent would have more than $566,000 after 30 years.</p> <p>Looking for ways to save money and invest more will obviously make this number surge. If you boost your contributions each time you get a raise, for example, you'll have considerably more for retirement. Remember even the smallest contributions can greatly add up over the years.</p> <h2>7. Don't forget about long-term care</h2> <p>Joseph Carbone, founder and wealth adviser of Focus Planning Group, says many future retirees are missing one key piece of the puzzle, and that piece could cost them dearly.</p> <p>&quot;I wish many of my clients understood the biggest hurdle from passing wealth on to their heirs is long-term care costs,&quot; says Carbone. &quot;Whether it is home health care, assisted living, or the dreaded nursing home. It is real and it is scary.&quot;</p> <p>According to Carbone, most people have no idea how much long-term care costs and fail to plan as a result. &quot;Even though the average stay is only 2.7 years in a nursing home, the total cost for those 2.7 years could be well over $400,000,&quot; he says</p> <p>To help in this respect, Carbone and his associates suggest working with an attorney who specializes in elder law. With a few smart money moves, families can prepare for the real possibility of using a nursing home at some point. (See also: <a href="http://www.wisebread.com/is-long-term-care-insurance-worth-it?ref=seealso">Is Long Term Care Insurance Worth It?</a>)</p> <h2>One more thing advisers wish you knew</h2> <p>While financial advisers don't know everything, their years of experience make them painfully aware of what lies ahead for those of us who fail to plan. And, if there's one thing financial planners can agree on, it's this: The sooner we all start planning, the better off we'll be.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/holly-johnson">Holly Johnson</a> of <a href="http://www.wisebread.com/7-things-financial-advisers-wish-you-knew-about-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-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-enjoy-retirement-if-you-havent-saved-enough">How to Enjoy Retirement If You Haven&#039;t Saved Enough</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-expensive-mistakes-of-the-newly-retired">9 Expensive Mistakes of the Newly Retired</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/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/3-ways-more-money-in-retirement-might-cost-you">3 Ways More Money in Retirement Might Cost You</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement 4 percent rule advice contributions financial advisers investments long term care planning social security Wed, 05 Apr 2017 08:30:15 +0000 Holly Johnson 1921765 at http://www.wisebread.com Most Popular Ways Americans Spend Their Tax Refunds http://www.wisebread.com/most-popular-ways-americans-spend-their-tax-refunds <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/most-popular-ways-americans-spend-their-tax-refunds" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-492675012.jpg" alt="Here are the most popular ways Americans spend their refunds" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>According to the IRS, the <a href="https://www.irs.gov/uac/newsroom/filing-season-statistics-for-week-ending-feb-26-2016" target="_blank">average tax refund in 2016</a> was $3,053. While we here at Wise Bread generally advise against giving the government a free loan all year, there's no arguing that a tax refund can go to good financial use. But how, exactly do most Americans spend their newfound chunk of change?</p> <h2>What do most people spend on?</h2> <p>Fortunately, the majority of people use their tax refund to pay down debt, save, or invest. In a poll conducted by GoBankingRates, 41 percent of people deposited the money into their savings account and 38 percent used it to pay off debt.</p> <p>More than half of millennials plan to use their refunds for savings and debt repayment. This is a major change from previous years, when the tendency for this age group was to spend on splurge purchases (clothes, video games, new shoes, etc.). Gen Xers are the second group behind millennials most likely to use their refund for debt repayment, and younger Gen Xers (35&ndash;44) are the second most likely behind boomers to fund a vacation. While baby boomers age 65+ are less likely to receive a refund, they are currently more likely to spend it on a vacation or splurge purchase than other generations. Despite more boomers spending on themselves, 42 percent still allocate their refund to savings.</p> <h2>Smart ways to use your refund</h2> <p>If you're getting a tax refund this year, you might be tempted to splurge. While there's nothing wrong with treating yourself once in awhile, your money would be better spent in these smart ways.</p> <h3>Boost your emergency fund</h3> <p>You should have three to six months' worth of expenses saved for a <a href="http://www.wisebread.com/a-step-by-step-guide-to-creating-your-emergency-fund?ref=internal" target="_blank">financial emergency</a>. If your savings account could use some padding, this is the perfect time to save without feeling the burn. Your future self will be grateful for your savviness. (See also: <a href="http://www.wisebread.com/50-smart-things-to-do-with-your-tax-refund?ref=seealso" target="_blank">50 Smart Things to Do With Your Tax Refund</a>)</p> <h3>Pay down debt</h3> <p>According to a GoBankingRates survey, the top source of financial stress for Americans is paying off debt. Fortunately, your tax refund can help ease that stress. Consider using the money to make an extra mortgage or student loan payment, or help tackle your <a href="http://www.wisebread.com/5-ways-to-pay-off-high-interest-credit-card-debt?ref=seealso" target="_blank">high-interest credit card debt</a>. (See also: <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=seealso" target="_blank">Fastest Way to Pay off $10K in Credit Card Debt</a>)</p> <h3>Invest it</h3> <p>If you already have an emergency fund to fall back on, then consider using your refund to pad your retirement accounts or other investments. You can also begin diversifying your portfolio to mitigate risk and potentially increase your returns.</p> <h3>Invest in yourself</h3> <p>If you've considered taking classes, focusing on your hobbies, getting in shape, or starting a small business, then it might be worth using your refund to fund these ventures. By investing in yourself, you'll continue benefiting from the refund over time.</p> <h3>Make small home improvements</h3> <p>Have you been putting of small fixes around the house? It's time to tackle them now before they turn into a bigger problem. Simple upgrades are not expensive, and can result in a higher resale value and future tax benefits. (See also: <a href="http://www.wisebread.com/10-cool-diy-home-improvements-for-20-or-less?ref=seealso" target="_blank">10 Cool DIY Home Improvements for $20 or Less</a>)</p> <h3>Donate it</h3> <p>If you're feeling financially secure in your own life, consider paying the funds forward. Donating your refund to a worthwhile charity ensures that the money is going to great use. It can also reduce your taxable income for the next tax season. (See also: <a href="http://www.wisebread.com/can-i-write-it-off-as-charity?ref=seealso" target="_blank">Can I Write It Off as Charity?</a>)</p> <h3>Treat it like a paycheck</h3> <p>Figure out how much of your paycheck you allocate to certain expenses each month (food, mortgage, gas, etc.) and treat your tax refund the same. Don't forget to include any debt payments. Just like a typical paycheck, you might even have a small amount leftover to use for something fun.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/andrea-cannon">Andrea Cannon</a> of <a href="http://www.wisebread.com/most-popular-ways-americans-spend-their-tax-refunds">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/beware-these-6-phony-irs-calls-and-emails">Beware These 6 Phony IRS Calls and Emails</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-times-splurging-on-experiences-is-a-bad-idea">5 Times Splurging on Experiences Is a Bad Idea</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-great-places-to-get-free-tax-advice">6 Great Places to Get Free Tax Advice</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/35-bizarre-things-you-can-be-taxed-on">35 Bizarre Things You Can Be Taxed On</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-personal-finance-skills-everyone-should-master">12 Personal Finance Skills Everyone Should Master</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Taxes debt repayment investments IRS saving money spending habits splurges tax refunds Mon, 03 Apr 2017 08:30:18 +0000 Andrea Cannon 1917304 at http://www.wisebread.com Are Timeshares Ever Worth the Investment? http://www.wisebread.com/are-timeshares-ever-worth-the-investment <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/are-timeshares-ever-worth-the-investment" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-487001458.jpg" alt="Couple learning if timeshares are ever worth the investment" title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Despite scams and hard sales tactics that have tarnished the reputation of timeshares, the American Resort Development Association says sales are rising &mdash; and timeshares are attracting increasingly younger buyers. The average age of today's timeshare owner is 39.</p> <p>According to MarketWatch, the <a href="http://www.marketwatch.com/story/6-things-to-know-before-you-buy-a-timeshare-2015-02-17" target="_blank">average price of a timeshare</a> is $16,000, putting them within financial reach for many consumers. But is buying a timeshare a good investment?</p> <h2>What are timeshares?</h2> <p>The general idea of a timeshare is that a group of people have the right to use a vacation property and they split up the year among them. Usually each timeshare owner gets one week a year.</p> <p>A true timeshare is deeded. You own a specific unit of the property, and you can use that at a designated time every year. You may own it for the rest of your life, for a given number of years, or until you sell it.</p> <p>Another arrangement is called &quot;right to use,&quot; in which you lease a unit on the property from a developer for a certain amount of time over a set number of years (generally 10 to 50 years). You may get a specific unit for either a fixed or floating amount of time. With the floating option, you can pick a week within a certain season of the year, and you have to reserve it in advance on a first-come, first-served basis. A third option that's popular with major resort chains such as Marriott and Hilton is a points club. You buy an allotment of points and can use them for stays at different properties around the world.</p> <p>The cost of a timeshare depends on the location and the property. In addition to buying the timeshare, you'll be responsible for annual maintenance fees and sometimes property taxes. Maintenance fees will likely increase over time.</p> <h2>Benefits of timeshares</h2> <p>The main feature that makes timeshares attractive to some people is predictability; you get a set place to vacation every year. Once you purchase a timeshare, you are guaranteed to have a week (or weeks) at the location where you bought it.</p> <p>An overcrowded market also means you may be able to get a good deal by <a href="http://www.wisebread.com/save-thousands-by-buying-a-timeshare-on-the-secondary-market?ref=internal" target="_blank">purchasing a used timeshare</a> from a current owner. You can find timeshares for sale on the secondary market on sites like <a href="http://tug2.com/timeshare-marketplace.aspx" target="_blank">Timeshare Users Group</a> or <a href="http://www.redweek.com/" target="_blank">RedWeek</a>.</p> <p>In addition, you may find a timeshare more comfortable than a traditional hotel. For instance, many timeshares include a kitchen or kitchenette, which you won't find in most hotel rooms. They may have multiple bedrooms and separate living areas, making them more like an apartment or villa than a hotel.</p> <p>Points clubs and floating timeshares give you the most options, but even a fixed property may offer some flexibility. You may be able to swap with other owners, or rent it to outsiders. Some properties have online portals that facilitate these types of exchanges. Websites such as RedWeek allow you to sell weeks you don't plan on using.</p> <h2>Drawbacks of timeshares</h2> <p>One big disadvantage of a timeshare is that it may limit your vacation choices. To get the most value from your purchase, you need to use the timeshare every year. But if you're tied to one destination, this could get boring.</p> <p>You can get around that by swapping or renting the unit, but it takes some work and you often have to plan months in advance. If you don't like administrative tasks, this could end up feeling like a burden. (See also: <a href="http://www.wisebread.com/10-surprising-ways-to-save-money-on-hotels?ref=seealso" target="_blank">Surprising Ways to Save Money on Hotels</a>)</p> <p>Furthermore, it's almost a given that you will resell a timeshare unit for less than what you paid, because so many people are selling these types of units. The Federal Trade Commission clearly states on its website that &quot;the value of these options is in their <a href="https://www.consumer.ftc.gov/articles/0073-timeshares-and-vacation-plans" target="_blank">use as vacation destinations</a>, not as investments.&quot;</p> <h2>Buy and sell cautiously</h2> <p>When purchasing a timeshare, it's very important that you know what you are buying. Timeshares are often sold using high-pressure sales tactics. As with any major purchase, take the time you need to do research before you buy, and ask lots of questions about what's included and the costs.</p> <p>Often you'll see promotions promising rewards such as a free trip in exchange for attending a timeshare sales pitch, but be ready for relentlessly pushy sales tactics. In an interview with MarketWatch, former timeshare sales rep Dana Micallef warned that salespeople are trained to &quot;Dress it up (as an investment) and promise them [the] world that they can resell it, when the chances of selling it are slim to none.&quot;</p> <p>I attended one of these presentations in Puerto Vallarta when my aunt, a timeshare owner, let me use a free week she couldn't use. I sat through an exhausting three-hour meeting in exchange for one lousy breakfast.</p> <p>This excruciating meal aside, the rest of my stay in the timeshare was enjoyable. I loved having a kitchen &mdash; we definitely saved money by cooking some of our own meals. I also used the resort's amenities such as the tennis court, multiple pools, and gym, which helped make the experience memorable. (See also: <a href="http://www.wisebread.com/6-easy-ways-to-get-free-travel?ref=seealso" target="_blank">6 Easy Ways to Get Free Travel</a>)</p> <p>Be very cautious if you are buying a unit that is not yet completed. Don't make a payment until construction is finished, because you may get ripped off. The FTC recommends that you place the money in an escrow account at a local bank until the property is ready. It also advises putting a &quot;nonperformance&quot; provision in the sales contract stipulating that you'll get your money back if the developer goes bust or defaults before your unit is finished.</p> <p>If you buy a timeshare and later want to sell it, you'll need to be careful, too. Scammers have been known to target timeshare owners, promising them they've got a buyer but demanding you pay filing fees and closing costs first. The buyer never emerges, and then you can't get your money back.</p> <p>If you still want to buy a timeshare knowing all this, make sure you view it as a vacation purchase and not an investment. Shop around before committing your future vacation stays, especially if it's for one particular location.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <p>&nbsp;</p> <div align="center"><a href="//www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fare-timeshares-ever-worth-the-investment&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FAre%20Timeshares%20Ever%20Worth%20the%20Investment-.jpg&amp;description=Are%20Timeshares%20Ever%20Worth%20the%20Investment%3F" data-pin-do="buttonPin" data-pin-config="above" data-pin-color="red" data-pin-height="28"><img src="//assets.pinterest.com/images/pidgets/pinit_fg_en_rect_red_28.png" alt="" /></a> </p> <!-- Please call pinit.js only once per page --><!-- Please call pinit.js only once per page --><script type="text/javascript" async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <div align="center">&nbsp;</div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Are%20Timeshares%20Ever%20Worth%20the%20Investment-.jpg" alt="Are Timeshares Ever Worth the Investment?" 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/amanda-gokee">Amanda Gokee</a> of <a href="http://www.wisebread.com/are-timeshares-ever-worth-the-investment">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/amazing-destinations-you-can-go-to-with-rewards-points-and-miles">Amazing Destinations You Can Go to With Rewards Points and Miles</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-airline-rewards-programs-for-trips-to-europe">The Best Airline Rewards Programs for Trips to Europe</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/which-credit-card-should-you-use-to-get-free-hotel-stays">Which Credit Card Should You Use to Get Free Hotel Stays?</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/once-in-a-lifetime-experiences-ive-earned-with-credit-card-rewards">Once-In-A-Lifetime Experiences I&#039;ve Earned With Credit Card Rewards</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-airline-miles-secrets-only-frequent-flyers-know">5 Airline Miles Secrets Only Frequent Flyers Know</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Travel investments points property resale value suites timeshares vacation villas Thu, 23 Mar 2017 09:30:31 +0000 Amanda Gokee 1913750 at http://www.wisebread.com 8 Smart Money Moves to Make in the New Year http://www.wisebread.com/8-smart-money-moves-to-make-in-the-new-year <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-smart-money-moves-to-make-in-the-new-year" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/piggy_bank_savings_545348368.jpg" alt="Piggy bank for making smart money moves in the new year" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Maybe your New Year's resolution is to budget more consistently, save more, or spend less. Maybe it's investing a portion of your disposable income wisely. Whatever your financial objectives are, setting money-minded goals is important to ensure a more prosperous 2017 and beyond. Here are a few ways to build and improve upon the foundation you've already laid.</p> <h2>1. Enlist Professional Help</h2> <p>Guess what? Everybody gets themselves into a financial pickle every now and then &mdash; myself included &mdash; and it's not the end of the world. Don't beat yourself up about it. You can fix this.</p> <p>If you overdid it during the holidays (or even all of last year), identify your missteps so you don't repeat them in the future, and you can formulate a plan of resolve. If finances aren't your forte (though you should make them your forte ASAP), consider consulting an expert.</p> <h2>2. Learn to Cook</h2> <p>I know a staggering number of people who can't cook. Like, if they tried to sauté a few shrimp, you'd probably walk away from the dinner table with hepatitis. I don't understand it &mdash; which is why I harp on those who avoid the kitchen to get in there and learn. Refusing to prepare yourself fresh, delicious meals is just plain lazy.</p> <p>The other problem with not being able to cook is that the alternative is expensive and very unhealthy. For starters, you're at the mercy of the microwave or what's already prepared at takeouts and restaurants &mdash; and more times than not, that food is loaded with fats and sodium. Second, you're paying about three-to-one for ready-to-eat dishes (unless you're buying the worst of the worst from the freezer section) versus what you could make in your own home using store-bought ingredients.</p> <p>Cooking shows on the Food Network and recipes off the Internet taught me a lot of kitchen basics (like how to make sure a chicken breast is thoroughly cooked so I don't poison myself). A friend of mine recently hired a cook from Craigslist to come into his home once a week to help him learn how to prepare standard meals, like pork chops, veggies, and rice. There are plenty of resources available to help you learn how to cook, too. Find them, graduate to adulthood by making your own dinner, and then count all the cash you're saving. Your mama will be so proud.</p> <h2>3. Cut the Fat From Your Expenses</h2> <p>Along with cutting the fat from your diet, you also should look for ways to trim it from your budget. End memberships and subscriptions you don't use, and call your service providers to renegotiate your deals. I shaved $15 per month off my mobile phone bill last year by calling to update my 12-year-old plan. Also, investigate your bank accounts for erroneous fees; you may be paying for something on a recurring basis that you totally forgot about. Commit to shopping less, and saving more when you do need or want to spend. I don't buy anything without a coupon or discount code. Positive personal finance is a way of life.</p> <h2>4. Increase Your Retirement Savings</h2> <p>If there's extra money in your budget at the end of the month, spend it on your future by increasing your retirement savings. If your employer matches 401K contributions, you should at least be maxing them out. If you don't have an employer-sponsored plan, look into a Roth IRA as an alternative.</p> <h2>5. Consider a Balance Transfer</h2> <p>If you're underwater on your credit cards, consolidating that debt onto a <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards?ref=internal" target="_blank">card that allows balance transfers</a> could save you a decent chunk of change. Just make sure you check the fees and pay it off during the promotional period, otherwise interest can revert much higher, making repayment even more expensive. (See also: <a href="http://www.wisebread.com/which-balance-transfer-credit-card-is-the-best-for-you?ref=seealso" target="_blank">Which Balance Transfer Credit Card Is Best for You?</a>)</p> <h2>6. Lower Your Investment Fees</h2> <p>If your finances are already fairly on track, there are still ways you can put more money back into your bank account &mdash; like lowering your investment fees if you play the stock market.</p> <p>Take a closer look at your portfolio, and re-evaluate to see how you can restructure so fees aren't costing you significant amounts in the long run. Now might also be a good time to <a href="http://www.wisebread.com/3-steps-to-getting-started-in-the-stock-market-with-index-funds?ref=internal">consider investing in index funds</a>, the benefits of which include broader market exposure, low operating expenses, and low portfolio turnover.</p> <h2>7. Research How the Trump Administration Will Affect Your Finances</h2> <p>Things are going to change, perhaps significantly, once Trump takes office. The new tax code overhaul alone could affect your finances one way or another. But there are other effects to consider, like rising interest rates, which may reduce the pool of potential buyers of a home sale if you're planning to sell in the near future. The repeal of Obamacare may also alter your budget, depending on what health care alternatives you have. Nonetheless, I recommend researching how the new administration's fiscal plans will trickle down to your own pocket. Hopefully you'll come out ahead, but you should prepare yourself, either way.</p> <h2>8. Just Say No</h2> <p>Make 2017 the year that less is more. Buy fewer retail items, dine out less frequently, limit your alcohol consumption, and learn how to say no to recreational activities that aren't in your budget. You don't have to do or have it all to feel satisfied. Rather, you'll start to experience satisfaction in other ways, like not living paycheck to paycheck because of frivolous spending. You deserve better; give it to yourself.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/8-smart-money-moves-to-make-in-the-new-year">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/12-personal-finance-skills-everyone-should-master">12 Personal Finance Skills Everyone Should Master</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/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-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-money-moves-to-make-before-the-leaves-change">10 Money Moves to Make Before the Leaves Change</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/not-the-sort-of-person-who">Not the sort of person who ...</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-best-money-management-tips-from-john-oliver">7 Best Money Management Tips From John Oliver</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Frugal Living advice balance transfers budgeting fees financial help investments learning to cook New Year resolutions retirement Mon, 16 Jan 2017 10:00:10 +0000 Mikey Rox 1873728 at http://www.wisebread.com How to Give Your Finances a Year-End Review http://www.wisebread.com/how-to-give-your-finances-a-year-end-review <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-give-your-finances-a-year-end-review" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple_paying_bills_168362659_0.jpg" alt="Couple giving their finances a year-end review" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>As one year ends and another begins, it's a natural time for reflection &mdash; financial and otherwise. Here are some suggestions for evaluating your financial progress in 2016, with the hopes of planning an even better 2017.</p> <h2>Net Worth</h2> <p>This is your financial big picture and it makes for a great starting point. In essence, the net worth calculation asks, &quot;How much are you worth?&quot; And the more important question for our purposes: Has your net worth increased or decreased over the past year?</p> <p>Assets minus liabilities (debts) equals your net worth. Calculate the value of all your assets (home, vehicles, retirement accounts, savings, investments, belongings, etc.) minus any liabilities or debt (mortgage balance owed, car note balance, student loans, credit card debt, medical bills, etc.). The difference between your assets and liabilities is your net worth.</p> <p>If you did this exercise last year, how has your net worth changed over the last 12 months? And what contributed to the changes?</p> <h2>Cash Flow</h2> <p>When it comes to using a budget, there are various tools &mdash; from a paper and pencil budget to the <a href="http://www.wisebread.com/a-comprehensive-guide-to-the-envelope-system">envelope system</a>, and from software to online tools. When trying to motivate people to use a budget for the first time, I often say that the best budget tool is the one you'll actually use. However, for the purpose of a year-end analysis, there's nothing like an electronic tool, whether that means budget software or an online service such as <a href="https://www.mint.com/">Mint.</a></p> <p>For your cash flow analysis, start with the big picture &mdash; total income versus total expenses. Did you live within your means this year?</p> <p>Then do a category-by-category analysis. If you overspent in a certain category, was your budgeted amount unrealistic, or do you simply need to do a better job of managing your spending in that category?</p> <p>Use what you learn from this analysis in crafting your 2017 budget.</p> <h2>Experiential Net Worth</h2> <p>Traditional net worth statements have one big shortcoming, though &mdash; failing to account for investments you've made in positive experiences. <em>Experiential </em>net worth includes things like charitable donations, investments in your or your child's education, or even a memorable family vacation.</p> <p>Sure, these are expenses. However, research shows that spending money on positive experiences tends to make us happier than material things, so it's appropriate to recognize the experiences we <em>invest</em> in each year.</p> <p>To analyze your experiential net worth, focus on some of the ways you've spent money in the past year that led to some of your most positive experiences. This doesn't need to be a highly detailed account. If you gave to charity, for example, you might just list the organization(s) that you donated to as your experience, and maybe include a few details about the organization or how much money you contributed.</p> <p>Keeping tabs on your experiential investments can help you be strategic in planning future spending.</p> <h2>Emotional Net Worth</h2> <p>Emotional net worth is an assessment of how you <em>feel</em> about your current financial situation. While highly subjective, it can still help you analyze your overall financial wellbeing. Are you stressed about debt &mdash; and if so, how much? Do you feel you're making positive progress toward financial goals?</p> <p>Give your emotional net worth an overall rating. Next, jot down some ideas that could help you improve in this area, such as debt reduction, better communication about money with your spouse, or building an emergency fund.</p> <p>Now, take a good look at your year-end financial review. Are you content with what you see? Imagine it's this time next year. What changes will you need to make in 2017 to end up where you want to be?</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/how-to-give-your-finances-a-year-end-review">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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/12-personal-finance-skills-everyone-should-master">12 Personal Finance Skills Everyone Should Master</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/does-your-net-worth-even-matter">Does Your Net Worth Even Matter?</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/plan-for-your-wants">Plan for your wants</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-smart-money-moves-to-make-in-the-new-year">8 Smart Money Moves to Make in the New Year</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/its-10-pm-do-you-know-where-your-net-worth-is">It&#039;s 10 pm: Do You Know Where Your Net Worth Is?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance analyzing budgeting cash flow experiences financial review investments net worth year end review Tue, 03 Jan 2017 10:00:12 +0000 Matt Bell 1865739 at http://www.wisebread.com 7 Last-Minute Ways to Cut Your 2016 Tax Bill http://www.wisebread.com/7-last-minute-ways-to-cut-your-2016-tax-bill <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-last-minute-ways-to-cut-your-2016-tax-bill" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/tax_time_clock_170171888.jpg" alt="Finding last-minute ways to cut your tax bill" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Before you know it another tax season will be upon us. Do your wallet a favor and score all the deductions you can with these last-minute ways to reduce your bill in 2016.</p> <h2>1. Investment Account Balancing</h2> <p>Year-end investment account balancing is a no-brainer. If you have a taxable investment account, you should review your transactions for the year to see if you're in a net capital gain situation. If you are &mdash; says Jacob Dayan, co-founder of tax-relief service Community Tax &mdash; find some losing positions that will offset the gains and liquidate them by the last business day of December.</p> <p>&quot;If you wish to remain invested in these assets long-term, you can buy them back after 30 days,&quot; he adds. &quot;Note that this strategy also works in reverse, with one difference. If you sell a net-gain position, you don't have to wait 30 days to buy it back. In either case, if you have positions involving multiple purchases over time, identify the specific assets you want to liquidate by purchase transaction to give you the greatest tax benefit.&quot;</p> <h2>2. Charitable Donations</h2> <p>'Tis the season to give unto others &mdash; if only for the tax breaks. You have until the end of the year to make charitable donations that will count toward your 2016 contributions for tax purposes.</p> <p>&quot;All charitable donations made to qualifying organizations before December 31 will count toward your 2016 deduction, as long as you itemize your deductions,&quot; says Pennsylvania-based certified public accountant William Ray. &quot;Deductions are generally limited to 50% of your adjusted gross income, although additional restrictions may apply for those in higher income brackets. You may also deduct the current fair market value &mdash; not your original cost &mdash; of noncash contributions made to qualifying organizations. Certain noncash contributions may require additional support or an appraisal, so you should review <a href="https://www.irs.gov/pub/irs-pdf/p526.pdf">IRS Publication 526</a> before claiming noncash contributions.&quot;</p> <p>It's also important to track your volunteer time.</p> <p>Ray adds, &quot;Although you cannot make a deduction for your time, you may claim a deduction for any mileage driven using your personal vehicle ($0.14 per mile) and any out of pocket expenses that are not reimbursed. As is the case with any deduction, documentation and support should always be maintained for all contributions.&quot;</p> <p>Financial planner Andy Yadro details another option for end-of-year giving.</p> <p>&quot;Consider contributing to a donor-advised fund,&quot; he suggests. &quot;You get an immediate tax benefit and your money can be invested with potential to grow. This is a great last minute option for someone who wants to make a donation, but hasn't decided which charity it should go to.&quot;</p> <h2>3. Max Out Retirement Contributions</h2> <p>Were you fortunate enough to get a holiday bonus? Use it to top of your tax-deferred retirement accounts such as an IRA. Even better, kick in a few extra dollars from your regular paycheck. You'll boost your savings while reducing your taxable income. However, be aware of the contribution limits for both types of retirement account.</p> <p>&quot;If you or your spouse are not covered by a retirement plan through your employer, you're both eligible to contribute up to $5,500 each to an IRA ($6,500 if you are over age 50),&quot; Ray says. &quot;You may be eligible to make a contribution, even if you are covered by a retirement plan through your employer, depending on your income.&quot;</p> <p>You also have until April 15, 2017, to make this contribution and still have it count toward your 2016 taxes. However, it's highly recommended that you do not file your tax return until you make the contribution. If you claim the deduction but cannot pay, you'll need to file an amended tax return by April 15, 2017, or pay penalties and interest.</p> <h2>4. Pay Your State or Local Income Tax Bill Early</h2> <p>If you itemize deductions, you can claim a deduction for state income taxes paid during the calendar year. This includes any amounts paid for your 2015 tax liability that were paid in calendar year 2016.</p> <p>&quot;If you consistently owe taxes on your state or local tax returns, paying them early can result in immediate federal tax savings,&quot; Ray explains. &quot;States and localities allow you to make estimated tax payments or prepayments at any time during the year. If you make a payment before December 31, 2016, that payment can be deducted on your 2016 federal tax return. But be careful of overpaying. If you overpay and receive a state or local income tax refund, you will need to claim that as income on your 2017 federal tax return.&quot;</p> <h2>5. Make January's Mortgage Payment in December</h2> <p>One of the joys of homeownership is taking advantage of the various tax breaks the government provides. The biggest of these is the mortgage interest deduction. If you can spare the extra cash, consider making your January 2017 mortgage payment before the end of the year. You'll be able to deduct the mortgage interest on your 2016 tax form. Don't get greedy here, though. Tax law generally prohibits taking annual deductions on &quot;prepaid interest,&quot; so you won't be able to pay February's mortgage bill and claim that for 2016, too. For more on the tax advantages of homeownership, see the <a href="http://www.taxpolicycenter.org/briefing-book/what-are-tax-benefits-homeownership">Tax Policy Center's analysis</a>. (See also: <a href="http://www.wisebread.com/4-tax-deductions-new-homeowners-shouldnt-skip?ref=seealso">4 Tax Deductions New Home Owners Shouldn't Skip</a>)</p> <h2>6. Review Your Health Coverage</h2> <p>If you're covered by a high-deductible health plan, you may qualify for a Health Savings Account (HSA) and contribute $3,350 ($6,750 for a family) to the plan &mdash; all of it tax-deductible.</p> <p>&quot;Many employers now offer high-deductible health plans, meaning employees often have to pay thousands toward a deductible before their health coverage kicks in,&quot; Ray says.</p> <p>To offset this cost, you may qualify for an HSA.</p> <p>&quot;An HSA is basically a 'retirement account for health care' and is becoming more common each year,&quot; Ray continues. &quot;The HSA allows you to contribute to an investment account that can grow tax free over time, while receiving a deduction on your tax return. You even receive a deduction if you don't itemize. The account can then be used to cover qualifying medical costs. Unlike a Flexible Spending Account (FSA), an HSA is 'your money' and can grow over time, rather than being forfeited at the end of the year.&quot;</p> <p>Check with your employer to see if your plan qualifies for an HSA. (See also: <a href="http://www.wisebread.com/11-surprising-things-your-hsa-will-cover?ref=seealso">11 Surprising Things Your HSA Will Cover</a>)</p> <h2>7. Prepay Real Estate Tax</h2> <p>If you foresee a changing income situation, supplement next year's loss with a right-now gain. Yadro suggests prepaying your real estate taxes and taking the deduction now.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/7-last-minute-ways-to-cut-your-2016-tax-bill">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/can-i-write-it-off-as-charity">Can I Write It Off as Charity?</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/cleaning-out-for-a-cause-make-a-noncash-tax-deductible-donation">Cleaning Out for a Cause: Make a Noncash Tax-Deductible Donation</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/charitable-giving-get-a-receipt">Charitable giving - get a receipt</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/you-should-make-these-11-easy-donations-before-time-runs-out">You Should Make These 11 Easy Donations Before Time Runs 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/how-an-hsa-could-help-your-retirement">How an HSA Could Help Your Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Taxes charitable deductions charity HSA income tax investments last minute deductions mortgages real estate retirement contributions tax bill tax deductions Mon, 26 Dec 2016 10:30:23 +0000 Mikey Rox 1860478 at http://www.wisebread.com 13 Financial Gifts to Give Yourself This Holiday Season http://www.wisebread.com/13-financial-gifts-to-give-yourself-this-holiday-season <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/13-financial-gifts-to-give-yourself-this-holiday-season" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_wrapped_gift_77878153.jpg" alt="Woman giving financial gifts to herself this holiday season" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The holiday shopping season is around the corner. And while the average holiday shopper will dole out more than $800 for gifts, about half will also spend an average of $132 on non-gift items for themselves. Hey &mdash; there's nothing wrong with treating yourself, especially when discounts are steep and shopping centers are extra cheery.</p> <p>But, you might want to consider putting that buck thirty toward something more substantial, such as your fiscal health. Read on for our guide to the top financial gifts you should consider giving yourself this holiday season. We promise, there will be no buyers remorse involved.</p> <h2>1. Boost Your Retirement Fund Contribution</h2> <p>The best time to start investing is now. Case in point: If you start maxing out your IRA contributions at age 25, you will have saved $1.6 million by the time you're 70. But if you were to start at 35, you'd save about half that sum. So whatever the form of your retirement savings, be it IRA, 401K, or 403(b), consider boosting your contribution this holiday season. Even a 1% increase can go a long way to making your golden years more comfortable.</p> <h2>2. Pay Down Your Debt</h2> <p>When it comes to personal debt, even $100 can make a sizable dent. Without a doubt, every little bit counts. Use a <a href="https://www.calcxml.com/calculators/how-long-will-it-take-to-pay-off-my-credit-card">minimum payment calculator</a> to determine just how long it will take your to pay down your credit card debt &mdash; and precisely how much mileage that $100 can get you.</p> <h2>3. Reassess Your Investments</h2> <p>How are your investments faring? Are you on track to meet your earnings expectations? Or do you have too much riskily tied up in a single company's stock? Gift yourself an hour spent reassessing your investments. Rid yourself of risk you can't shoulder and sour gambles.</p> <h2>4. Invest in Professional Advice</h2> <p>In the Internet age, getting good investment advice is easy and affordable. <a href="https://www.wealthfront.com">Wealthfront</a>, which boasts a stable of world-class financial experts that excels in making small money grow, offers free accounts totaling $10,000 or less. And you can open an account with <a href="https://www.betterment.com/">Betterment</a> even if you have no money.</p> <h2>5. Deposit an Extra $100 Into Your Savings Account</h2> <p>It's simple enough: Rather than buy yourself a couple of new sweaters, take that holiday cash and stow it away as savings. And if you think $100 won't make much difference, think again: If you were to sack away an extra $100 quarterly for the next 10 years, you've have an extra $4,000 in your savings account. That's more than the average down payment for a new car.</p> <h2>6. Boost Your Emergency Fund</h2> <p>It's smart to have funds stowed away for the kinds of emergencies life sometimes throws at us. Natural disaster. Illness. Job loss. If you've got an emergency fund, consider funneling some more funds into it. And if you don't, consider setting one up, even if you inaugurate it with a modest $100 investment. It's far better to be prepared than dumbstruck by a bad set of circumstances.</p> <h2>7. Draft a Financial Plan</h2> <p>A third of Americans have taken no steps <a href="https://www.northwesternmutual.com/about-us/studies/planning-and-progress-2015-study">toward financial planning</a>. If you don't have a plan, invest a day to join yourself among the ranks of the minority of Americans who do. It can be as simple as stating your financial priorities and then mapping out what you need to do to achieve them. Yes, it's drudge work. But you stand to benefit greatly by slogging through.</p> <h2>8. Purchase a Book on Finance</h2> <p>Whether it's the stock market or saving for retirement or paying down debt, most of us have a weak spot in our financial literacy. Why not help yourself close that gap by purchasing a book on your weakest link? For inspiration, check out our list of <a href="http://www.wisebread.com/the-8-classic-personal-finance-books-you-must-read">classic personal finance books</a>.</p> <h2>9. Write a Will</h2> <p>The hardest part about will-writing is getting yourself to actually sit down and write it. No one wants to rationalize their own death by taking time out of their life to plan for it. Nonetheless, it's an important tool that can help to ensure that your property and wishes are carried out according to your liking when you're no longer around to dictate. If your finances are uncomplicated, consider creating an online will, which is perhaps the quickest and easiest way to complete the process.</p> <h2>10. Review Your Credit Score</h2> <p>It costs nothing to check your credit score, but the price of ignoring it can be huge. Your credit score determines critical stuff such as your insurance premium rate and your ability to get a loan. If you're unfamiliar with your credit score, it's probably a good idea to take a pause and get acquainted with it &mdash; and then commit to reviewing it annually. (Be on the lookout for any errors, which could be preventing you from getting lower rates).</p> <h2>11. Donate to Charity</h2> <p>It pays to help others in need. Not only can making a charitable donation give you the feel-good fuzzies, it can also <a href="https://www.irs.gov/uac/eight-tips-for-deducting-charitable-contributions">lower your tax bill</a>. Just remember to keep good records.</p> <h2>12. Cash in on Your Credit Card Rewards</h2> <p>Airline miles, hotel rewards, and cash are just a few of the amazing incentives available to those who swipe responsibly. But if you don't use 'em, you lose 'em, so take a moment to assess what rewards you've got, when they expire, and whether now's a good time to cash in. (See also: <a href="http://www.wisebread.com/cash-back-vs-travel-rewards-pick-the-right-credit-card-for-you?ref=internal">Cash Back vs Travel Rewards: Pick the Right Credit Card for You</a>)</p> <h2>13. Review Your Account Statements</h2> <p>Remember all those account statements you've been filing away? Now's the time to actually read and analyze the charges. A bogus charge is a tried and true sign of identity theft, so it'll serve you well to review all your statements thoroughly. Painstaking though it may be, giving your financial records a good read affords you the opportunity to correct any improper service fees that may have been mistakenly docked from your account. If you find a faulty charge, you can get reimbursed from your bank or credit card company. If you don't, then you can rest assured that all is in order. Think of it as a game with no chance to lose.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/brittany-lyte">Brittany Lyte</a> of <a href="http://www.wisebread.com/13-financial-gifts-to-give-yourself-this-holiday-season">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/6-signs-youre-making-all-the-right-money-moves">6 Signs You&#039;re Making All the Right Money Moves</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-critical-money-mistakes-people-make-in-their-40s">7 Critical Money Mistakes People Make in Their 40s</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-moments-that-should-be-on-everyones-bucket-list">8 Money Moments That Should Be On Everyone&#039;s Bucket List</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/save-on-christmas-shopping-with-this-clever-gift-card-strategy">Save on Christmas Shopping With This Clever Gift Card Strategy</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/many-happy-returns-5-tips-for-getting-what-you-really-want-this-holiday">Many Happy Returns: 5 Tips for Getting What You Really Want This Holiday</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance bills charity Christmas emergency funds estate planning gifts Holidays investments paying debt saving money Mon, 07 Nov 2016 09:00:08 +0000 Brittany Lyte 1827215 at http://www.wisebread.com 13 Money Goals You Can Still Reach by 2017 http://www.wisebread.com/13-money-goals-you-can-still-reach-by-2017 <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/13-money-goals-you-can-still-reach-by-2017" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/money_2016_78370695.jpg" alt="Finding money goals you can still reach by 2017" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>We've passed the halfway point of 2016, and maybe you're down on yourself because you haven't achieved some of your annual financial goals. Life can sometimes derail our money-saving plans &mdash; and that can make you feel like a failure. But the year isn't over yet. So chin up, buttercup! It's never too late to give your money a makeover, like with these 13 money goals that are still attainable by 2017.</p> <h2>1. Increase Your Emergency Fund</h2> <p>Whether you want to increase your fund by $500 or $1,000, there's still time to build your bank account.</p> <p>Ideally, you should have about three to six months' of income in reserves. If you're not in a position to save this much, aim for an emergency fund sufficient to help you get through most unexpected expenses, like a home or car repair. You'll have to make a few sacrifices, such as spending less on entertainment or shopping less, but with five months left in the year, you can hit this goal by saving $100 to $200 a month.</p> <h2>2. Start Planning for Retirement</h2> <p>Your retirement account isn't going to grow itself. The older we get, the more important it is to plan for the future. If you haven't started saving for retirement yet, now's the time to get serious. Talk to your employer about enrolling in the company's 401K plan. If this isn't an option, open an Individual Retirement Account (IRA) through your bank or with the help of a financial adviser.</p> <h2>3. Increase Retirement Contributions</h2> <p>Then again, maybe you're already saving for retirement, but feel now's the time to increase your contribution. Whether you're currently contributing 2% or 5% of your income to a retirement account, set a goal of increasing your contribution by at least 1% before the end of the year.</p> <h2>4. Reduce Expenses</h2> <p>It's easier to attain money goals when you reduce expenses and free up cash. For the next four to five months, eliminate or reduce at least one expense a month. This can include downgrading your cable package or getting rid of cable altogether (it's a common trend these days), using coupons to lower your grocery bill, or riding your bike or carpooling to work a few days a week to save on transportation costs. The savings add up quickly, and before you know it you'll have a bigger bank account.</p> <h2>5. Create a Second Income Stream</h2> <p>Our income isn't always enough to meet our money goals. Rather than complain about your situation, think creatively about ways to increase your income. Working a side hustle a few days a week can generate money to build your savings account, pay off debt, or start saving for retirement.</p> <p>If you're an expert in your field, offer consulting on the side. Or if you have excellent writing skills, look into <a href="http://www.wisebread.com/22-websites-that-will-pay-you-to-write-for-them?ref=internal">freelance writing opportunities</a> and share your knowledge. Don't think your second income stream has to be glamorous, either. If you don't mind odd jobs or getting your hands dirty, you can make extra money around the neighborhood cleaning houses, doing handyman work, or cutting grass.</p> <h2>6. Give Up a Costly Habit</h2> <p>Bad habits are expensive.</p> <p>Before the end of the year, make a concerted effort to eliminate at least one bad habit. This includes things like drinking too much alcohol and smoking, as well as habits that aren't as dangerous to your health but detrimental to your finances. Do you have a routine of stopping for coffee and breakfast every morning on the way to work? If you can eliminate this $5 daily purchase from your budget, you'll save about $25 a week, or $100 a month.</p> <h2>7. Simplify Your Life</h2> <p>Less can be more. If you're tired of clutter or feel the stuff you own takes too much of your time and energy, set a goal to simplify and unload a few possessions. Selling off items can put extra cash in your pocket, plus you can save money on storage fees and free up space in your house, garage, attic, or basement.</p> <h2>8. Give to Charity</h2> <p>It's not too late to make a charitable donation and give back. While you're simplifying and decluttering your life, consider donating a few items to your favorite organization. You'll not only help someone in need, you can write off charitable donations on your tax return and lower your tax bill.</p> <h2>9. Purchase Life Insurance</h2> <p>Life insurance is necessary for everyone, but especially for people with children and other dependents who rely on their income. A policy can cover the cost of a funeral and burial, plus pay off any expenses you leave behind, such as a mortgage and credit cards.</p> <p>There are no hard-and-fast rules regarding the amount of coverage to purchase, but some money experts recommend a policy that's eight to 10 times your income. If you already have a policy, review your coverage to make sure it's adequate for your needs. If you don't have a policy, it's time to get one.</p> <h2>10. Budget Your Money</h2> <p>If you overspend every month and can't get ahead, the problem could be poor budgeting. The truth is, attaining many of your money goals by 2017 will require an airtight budget. You have to know what's coming in and what's going out before you can come up with a plan for your personal finances. Now's the time to put pen to paper and review your income and expenses to determine a reasonable amount to spend in various spending categories, such as food, transportation, entertainment, shopping, etc.</p> <h2>11. Say No to Credit Card Debt</h2> <p>Credit cards are simple and convenient, but they're also a source of pain and suffering if you let balances grow out of control. Before the end of the year, come up with a plan to pay off or pay down at least one credit card. Don't stop until you're debt free. (See also: <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt?utm_source=wisebread&amp;utm_medium=seealso&amp;utm_campaign=seealso">How to Get Rid of Interest on Your Credit Card Debt</a>)</p> <p>You can achieve this goal by paying more than your minimums every month. Or negotiate a <a href="http://www.wisebread.com/the-best-low-interest-rate-credit-cards?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">lower interest rate</a> with your creditors so that more of monthly payments go toward reducing the principal. Since the amounts we owe make up 30% of our credit scores, paying off credit cards also <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">increases your credit score</a>.</p> <h2>12. Automate Your Finances</h2> <p>Paying bills on time also contributes to a higher credit score. Forgetting a due date and paying late can result in late fees, and when bills arrive 30 or more days past due, your credit score suffers. To avoid these situations, automate your finances. Set up automatic bill payments between your bank and creditors and you'll never miss another due date.</p> <h2>13. Check Your Credit Report</h2> <p>Everyone should check their credit reports at least once a year and dispute erroneous information. If it's been more than 12 months since you last reviewed your reports, visit&nbsp;<a href="http://annualcreditreport.com">AnnualCreditReport.com</a> today and get a free copy of your reports from each of the three bureaus. Credit report mistakes and fraudulent activity can drive down your FICO score and trigger credit rejections and higher interest rates on loans and credit cards &mdash; and when you're charged higher interest rates, you pay more for credit.</p> <p><em>What are some of your money goals that you'd like to reach by the end of the year? How do you plan to meet those goals? Let's discuss in the comments below.</em></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%2F13-money-goals-you-can-still-reach-by-2017&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F13%2520Money%2520Goals%2520You%2520Can%2520Still%2520Reach%2520by%25202017.jpg&amp;description=13%20Money%20Goals%20You%20Can%20Still%20Reach%20by%202017"></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/u5180/13%20Money%20Goals%20You%20Can%20Still%20Reach%20by%202017.jpg" alt="13 Money Goals You Can Still Reach by 2017" 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/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/13-money-goals-you-can-still-reach-by-2017">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/8-financial-decisions-youll-never-regret">8 Financial Decisions You&#039;ll Never Regret</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-personal-finance-resolutions-anyone-can-master">8 Personal Finance Resolutions Anyone Can Master</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-moments-that-should-be-on-everyones-bucket-list">8 Money Moments That Should Be On Everyone&#039;s Bucket List</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-financial-reasons-2016-needs-to-be-over-asap">7 Financial Reasons 2016 Needs to Be Over ASAP</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/13-financial-gifts-to-give-yourself-this-holiday-season">13 Financial Gifts to Give Yourself This Holiday Season</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance 2016 2017 bad habits clutter credit reports donating emergency funds goals investments nest egg retirement savings simplifying Fri, 12 Aug 2016 09:00:08 +0000 Mikey Rox 1770701 at http://www.wisebread.com Who to Hire: A Financial Planner or a Financial Adviser? http://www.wisebread.com/who-to-hire-a-financial-planner-or-a-financial-adviser <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/who-to-hire-a-financial-planner-or-a-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/employees_meeting_work_53155048.jpg" alt="Couple deciding whether to hire a financial planner or adviser" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Armed with Internet access and a DIY attitude, many Americans tackle all kinds of projects on their own to avoid paying a professional. When it comes to managing an investment portfolio, creating a detailed estate plan, or handling the sale of several stock holdings, most of us are better off hiring a financial professional. (See also: <a href="http://www.wisebread.com/4-times-you-should-splurge-and-hire-a-pro?ref=seealso">4 Times You Should Splurge and Hire a Pro</a>)</p> <p>Financial literacy varies across generations. For example, only 24 percent of Millennials and 38% of Gen-Xers in the U.S. are able to answer four out of five <a href="https://www.finra.org/sites/default/files/14_0100%201_IEF_Research%20Report_CEA_3%206%2014%20%28FINAL%29_0_0.pdf">financial quiz questions correctly</a>. While the titles <em>financial adviser</em> and <em>financial planner</em> are often used interchangeably, they're not the same! Let's review the difference between a financial adviser and a financial planner, how you can decide which professional you need.</p> <h2>What Is a Financial Adviser?</h2> <p>In simple terms, a financial adviser helps you manage your money. Since most of the time this means managing your investments, a financial adviser has to complete the <a href="http://www.finra.org/industry/series65">Investment Adviser Law Examination</a> (better known as the Series 65 exam) to legally practice the profession.</p> <p>A financial adviser is a broad title within the financial services industry. To specialize in a field, a professional often completes additional certifications. According to the National Association of Personal Financial Advisers (NAPFA), there are <a href="http://www.napfa.org/UserFiles/File/ConsumerServices/2015%20Pursuit%20of%20a%20Financial%20Advisor%20Field%20Guide%20-%20v2015.pdf">more than 100 professional designations</a> within the industry. Here are three examples of financial advisers:</p> <ul> <li><a href="https://www.niccp.com">Certified College Planning Specialist</a> (CCPS): Presents strategies to finance a college education.<br /> &nbsp;</li> <li><a href="https://www.institutedfa.com/">Certified Divorce Financial Analyst</a> (CDFA): Provides specialized accounting, financial, and legal advice in the field of pre-divorce financial planning.<br /> &nbsp;</li> <li><a href="http://icfs.com/certified_income_specialist">Certified Income Specialist</a> (CIS): Seeks to optimize income from retirement accounts.</li> </ul> <h2>What Is a Financial Planner?</h2> <p>A financial planner is a certified professional uniquely qualified to help individuals pull all their finances together, solve financial problems, and make a plan to achieve their financial goals. This particular type of financial adviser is proficient in the areas of financial planning, taxes, insurance, estate planning, and retirement planning.</p> <p>The most popular credential among financial planners is the <a href="http://www.cfp.net">Certified Financial Planner</a> (CFP), which is a rigorous seven-hour long exam only available a couple times throughout the year. Only individuals who have completed college or university-level coursework in major personal financial planning areas qualify to take the CFP exam. In order to retain CFP status, a professional must also complete continuing education requirements each year.</p> <p>Depending on the work history and preferred area of expertise of the financial planner, he may hold additional designations, such as Chartered Financial Analyst (CFA) and Chartered Financial Consultant (CHFC).</p> <h2>How to Decide What Professional You Need</h2> <p>The main reason why these two titles can be confusing is that every financial planner is also a type of financial adviser, but not every financial adviser is a financial planner. Here are two useful rules to decide which professional to hire.</p> <h3>1. Define the Scope of Your Project</h3> <p>Just like you wouldn't hire an engineer to fix your clogged toilet, you shouldn't hire a full-fledged financial planner to just to buy a couple of bonds. The general rule of thumb is that you should seek the professional who holds the appropriate expertise and qualifications of the services that you require.</p> <p>Consider two scenarios:</p> <ul> <li>A financial adviser focusing on investment management may not be the best match for a client looking for comprehensive estate planning services. A CFP would be more appropriate in this case so that she can structure your finances to meet your financial planning goals.<br /> &nbsp;</li> <li>If you're just trying to decide between several 529 college saving plans, then a CFP may not be necessary and a financial adviser would do.</li> </ul> <h3>2. Decide Whether or Not You Require Fiduciary Duty</h3> <p>Another key criterion to decide between a financial adviser and a financial planner is <em>fiduciary duty</em>. While all financial planners with a CFP designation are legally bound to put their client's interests before their own, not all financial advisers are.</p> <p>Commission-based financial advisers may receive an incentive or kickback for pushing certain products, such as life insurance packages or mutual funds. Check with your prospective financial professional as to whether or not he receives ongoing income from any recommendations or how his fees may affect the success of attaining your financial goals.</p> <p>Fortunately, starting April 10, 2017 <em>all </em>financial advisers handling retirement accounts will be <a href="https://www.dol.gov/ebsa/newsroom/fs-conflict-of-interest.html">required to serve as fiduciaries</a>. Until then, make sure to check for fiduciary duty.</p> <h2>Tips When Choosing a Financial Adviser or Financial Planner</h2> <p>Before you sign a contract, do your homework and determine whether or not your potential financial adviser or financial planner is the most suitable for you.</p> <h3>1. Ask for Credentials and Affiliations</h3> <p>While some salespersons and representatives from insurance and investment companies may appear to provide financial advice and financial planning services, they may have compensation agreements that encourage them to suggest certain investments. Make sure to inquire about the credentials of any financial professional.</p> <h3>2. Verify Credentials and Affiliations</h3> <p>Virtually all governing bodies providing certifications provide a searchable database to look up members. For example, through the <a href="http://www.letsmakeaplan.org/?utm_source=LMAP&amp;utm_medium=header&amp;utm_content=homepage&amp;utm_campaign=header">CFP Board's member database</a> I can see that there are only five CFPs servicing my ZIP code. So, anybody else claiming to be a &quot;financial planner&quot; is lying. Besides confirming credentials, look for any disciplinary action posted on the database. If the professional didn't disclose them in advance, that's a red flag.</p> <h3>3. Review Client Eligibility Requirements</h3> <p>Some financial professionals require you to own a minimum of investable assets. For example, one of the CFPs in my ZIP code requires at least $500,000 in investable assets and another, $2.5 million!</p> <h3>4. Consider Pay Structure</h3> <p>Before entering a contractual relationship with a financial adviser or planner, request a detailed disclosure of all applicable fees. The objective is to spot potential conflicts of interest. Pay close attention to minimum fees for rendered services, commissions from investment products or securities trading, and referral fees from other professionals, such as accountants, insurance agents, and mortgage brokers. (See also: <a href="http://www.wisebread.com/4-sneaky-investment-fees-to-watch-for?ref=seealso">4 Sneaky Investment Fees to Watch For</a>)</p> <h3>5. Ask About Continuity Planning</h3> <p>In other words, &quot;Who would handle my finances if you were to be hit by a bus tomorrow?&quot; After investing so much time in finding the right professional, you don't want to find out that she's retiring next year. Also, inquire if you'll be working with the same financial adviser at all times. If you'll be working with another associate than the one you're interviewing right away or within a few months, request to meet that associate before signing a contract.</p> <h3>6. Inquire If You're the &quot;Typical Client&quot;</h3> <p>You'll get the most out of your financial adviser or financial planner when he's more used to clients at your asset level and financial objective. Working with a &quot;superstar&quot; financial adviser may sound amazing, but may cause a lot of anxiety if you keep being pushed for financial transactions outside your risk tolerance.</p> <h2>The Bottom Line</h2> <p>When deciding on whether to hire a financial planner or financial adviser, ask as many questions as you need to find out if the prospective financial professional is right for you. Finding out as much as possible in advance will allow you to minimize any surprises.</p> <p><em>Have you hired or sought to hire a financial planner or adviser?</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/who-to-hire-a-financial-planner-or-a-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-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/12-personal-finance-skills-everyone-should-master">12 Personal Finance Skills Everyone Should Master</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-how-much-youd-have-today-if-youd-bought-bitcoins-a-few-years-ago">Here&#039;s How Much You&#039;d Have Today if You&#039;d Bought Bitcoins a Few Years Ago</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-smart-ways-to-use-old-savings-bonds">6 Smart Ways to Use Old Savings Bonds</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-and-why-to-buy-life-insurance">How (and Why) to Buy Life Insurance</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-signs-you-need-to-fire-your-financial-planner">9 Signs You Need to Fire Your Financial Planner</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance financial adviser financial literacy financial planner getting help hiring investments NAPFA professionals Mon, 01 Aug 2016 09:30:34 +0000 Damian Davila 1762105 at http://www.wisebread.com 12 Personal Finance Skills Everyone Should Master http://www.wisebread.com/12-personal-finance-skills-everyone-should-master <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/12-personal-finance-skills-everyone-should-master" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/little_girl_dad_000071538069.jpg" alt="Little girl learning personal finance skills everyone should master" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>I was happy to see that my son signed up to take a personal finance class in high school next year. I think mastering basic personal finance skills is one of the most important things you can do to improve your happiness and quality of life. But you're a full-fledged adult. If you haven't already, the earlier you start developing and using personal finance skills, the more time you have to reap the benefits.</p> <p>Here is my list of personal finance skills every frugal person should master.</p> <h2>1. Budgeting</h2> <p>Setting and following a budget is probably the most basic personal finance skill, yet only about one-third of people actually have a detailed budget. I went for years without an accurate budget, using my checking account balance as a rough gauge of how much money I had available to spend. Eventually, I realized this was a terrible way to run my personal finances. A detailed budget is necessary to get a handle on where your money is going and to start deciding where you <em>want </em>your money to go &mdash; instead of just watching it go away!</p> <p>Writing out a list of all of your income and expenses is only the first step toward becoming skilled at budgeting. You need to monitor spending and work to stay on track every month. Sometimes unexpected expenses will pop up, and it takes skill to find ways to spend less in other areas to recover and stay on budget.</p> <p>You can get a real budget started by looking at your bank statements and credit card bills from last month and adding up spending by category. I used colored highlighters to mark up my spending into categories such as food, clothing, pets, entertainment, transportation, housing, utilities, etc.</p> <p>Food expenses are especially challenging for me, since food cost varies so much depending on what you decide to eat. In my household, we use a money envelope as a tool to help us stay on our food budget. Every payday, I take out cash for the budgeted amount for food spending, both groceries and dining out. All food spending comes out of the money envelope, so we always know how much is left to spend on food.</p> <h2>2. Negotiation</h2> <p>Negotiation is a key skill to master to get the best deal when buying or selling something, or even getting the best salary and benefits when accepting a job offer. Most people do not like to negotiate. It is easiest to pay the asking price, or accept the amount offered from a buyer or employer. But if you become skilled at negotiation, you can end up with lots more dollars in your pocket instead of in the other guy's pocket!</p> <p>Here are some skills that <a href="http://www.wisebread.com/the-7-laws-of-negotiation">successful negotiators master</a>:</p> <ul> <li><strong>Be willing to walk</strong>. Successful negotiators are willing to walk away if they can't get a good deal. Willingness to walk away gives you the confidence to ask for what you really want and drive a hard bargain. Often, you'll learn things in deals that don't work out that help you get a better deal in the future.<br /> &nbsp;</li> <li><strong>Be reasonable.</strong> Good negotiators understand the market value of what they are negotiating and can understand the deal from the other party's perspective. If you seek an unreasonable deal, you are likely wasting everyone's time and won't end up with anything.<br /> &nbsp;</li> <li><strong>Be perceptive</strong>. They pick up clues from the other party to determine what kind of offer they would accept and use this information to negotiate the best deal possible.</li> </ul> <h2>3. Separating Needs vs. Wants</h2> <p>Do I need a new computer? My kids say that I do. I am using the same computer they used to play games on way back when George W. Bush was in office. I sometimes use my cellphone to look things up while my computer slowly loads a webpage. But I don't need new computer. I can still get everything done with my old computer, including paying bills, updating my budget spreadsheet, and even writing books and articles for extra income.</p> <p>Separating needs from wants is a key personal finance skill. There is almost no limit to bigger, better, and newer stuff that you could decide to buy. The best way to make spending decisions is to become disciplined at distinguishing needs from wants.</p> <p>I like to think about the consequences of not buying something as a tool to distinguish needs from wants. For example, if I don't buy the new shoes I am considering, will I not be able to go to work? Will I miss events for my kids because I don't have any shoes that are acceptable to wear? Will I not be able to exercise safely? At some point new shoes can become a need, but if your old shoes are still doing everything you need your shoes to do, then new shoes are a want.</p> <h2>4. Driving Down Interest Rates</h2> <p>A lot of people carry debt &mdash; the total credit card debt for Americans is set to hit $1 trillion dollars this year. Of course, your best move is to <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">pay off debt as quickly as possible</a> to reduce your interest payments and to free up your money to invest or pursue other opportunities. But while you are paying off debt, it is worth putting in some effort to keep your interest rates as low as possible.</p> <p>The average credit card interest rate is nearly 15%. If you have credit card debt and don't keep an eye on the interest rate, you could easily end up paying 15% or more. Shopping around can almost always result in a better deal. If you have a good credit rating, you can likely find <a href="http://www.wisebread.com/which-balance-transfer-credit-card-is-the-best-for-you?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">a balance transfer offer</a> that will allow you to pay a balance transfer fee of about 3% and 0% interest for a year or more. (See also: <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards?utm_source=wisebread&amp;utm_medium=seealso&amp;utm_campaign=article">Best 0% APR Balance Transfer Credit Cards</a>)</p> <p>I count maintaining favorable interest rates as a personal finance skill because you have to keep track of interest rates on your accounts and continuously find <a href="http://www.wisebread.com/is-a-balance-transfer-offer-a-good-deal?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">good deals on balance transfers</a>. This skill can save you thousands of dollars per year on interest.</p> <h2>5. Continuous Investment</h2> <p>People who are financially successful do more than reduce spending and save money. They take the next step and invest money that they free up through smart spending decisions.</p> <p>This investment mentality is what allows the small amount of money you avoid spending to grow into real wealth that can change your lifestyle and allow you the freedom to pursue your interests. Regular saving over time adds up &mdash; even with small investment amounts.</p> <p>Continuous investment requires discipline to keep investing money for the future rather than spending it now. Savvy investors assess what kind of investments to buy and manage their investment portfolio based on economic trends and the performance of their investments.</p> <p>The most important factor in being a successful investor is to make regular investments over the long term and let your wealth grow.</p> <h2>6. Bargain Hunting</h2> <p>Frugal people are known for having good bargain hunting skills. Making a purchase is a challenge to find the way to spend the least amount of money to get what is needed. Bargain hunting usually involves using coupons and shopping around to find the best price.</p> <p>Sometimes buying a used item rather than a new item is the best bargain &mdash; you can save 50% or more buying used instead of new. Items such as tools or vehicles that are useful for years make good used purchases, but technology products often become obsolete so fast that buying new can be the best deal.</p> <p>Buying at the right time can be a key to finding bargains. I am always shocked at how cheap winter clothes and coats sell for in March at clearance sales. I bought most of my winter clothes for 90% off! Keep an eye out for bargains at store closing sales and clearance sales for items you know you will use later.</p> <p>An important part of bargain hunting is deciding on the best item to buy. If you can figure out the least expensive item that meets your needs, and then find the best price on that item, you are on your way to mastering bargain hunting skills.</p> <h2>7. Reuse</h2> <p>There is an old saying &quot;Waste not, want not&quot; that summarizes the personal finance skill of reuse well. If you don't waste anything, you will have plenty and not want for anything. I recently got into a conversation with my father about the oldest clothing item that we are still wearing. I mentioned that I still wear a lot of my 20-year-old clothes I got back in college. My father mentioned that he was currently wearing a shirt that is nearly 40 years old!</p> <p>Reusing things that most people would throw away is a key skill to save money and live well with less. When I was younger, I would always prefer to have new clothes rather than wear old clothes. Now I find comfort from the familiarity of wearing clothes with lots of memories attached to them. It seems like older stuff was constructed better than newer items, anyway.</p> <p>I think a lot of people are in the habit of throwing old things away just because they are old. Learn to keep reusing items until they no longer work, and then use them for something else. When my t-shirts start wearing out, I get sunburned through the holes in the fabric. Is it time to throw the shirt away? No! I use it for a rag.</p> <h2>8. Food Preparation</h2> <p>It is amazing how much restaurant food, fast food, and prepared food items from the grocery store people are buying these days. It does take some planning and work to prepare your own food at home, but you can save a ton of money and eat healthier, too.</p> <p>In addition to having basic cooking skills and equipment, having a plan is key to mastering the skill of preparing your own food at home. I know it works best at my house when we make a list of meals and the buy groceries with these meals in mind. Sometimes we even write on the calendar what is for dinner to avoid not coming up with something and ending up with expensive restaurant food.</p> <h2>9. Do It Yourself (DIY)</h2> <p>It seems like everyone that comes to my house to do something charges about $60 to $100 per hour. I try to minimize paying people to come over and try to take care of maintenance and repairs myself instead to save money. I learned to do basic plumbing repairs and installation, including sweating copper pipes with a torch. I can do basic electrical wiring and repairs. Some people in my neighborhood have landscaping companies take care of mowing and weed control, but not me. The more things you can do for yourself, the more money you can save.</p> <p>Develop skills to do work for yourself instead of paying others to do it for you. You'll save money and get a great feeling of satisfaction when you can do the work yourself.</p> <h2>10. Saying No</h2> <p>Saying &quot;no&quot; is often the key to saving time and money. Would you like to subscribe to a magazine you don't want in order to help your neighbor's kid meet a fundraising goal? How about &quot;no.&quot; Would you like to volunteer to drive 20 miles each way to participate in a committee meeting on your day off? Again, &quot;no&quot; works well here. There are times when you might want to contribute your time and money to a worthy cause, but there are many times you feel pressured into taking on something you don't really want to do.</p> <p>Learning to say &quot;no&quot; and not feel bad about it can save you a lot of time, money, and aggravation.</p> <h2>11. Efficiency</h2> <p>Efficiency is the skill of doing as much as possible with the least amount of resources. Efficiency can mean making a single trip to do all of your shopping instead of taking multiple trips. Efficiency can mean driving a smaller vehicle that costs less and uses less fuel every day.</p> <p>Often, efficiency keeps paying back over time. For example, the efficient choice to live in a smaller house results in a lower mortgage payment and lower utility bills year after year.</p> <p>Energy savings is another example of efficiency in action. I spent a few hours and a few dollars to upgrade most of my light bulbs to LED. Due to this efficiency, I save money every month since lighting my house now costs almost nothing.</p> <p>Another form of efficiency is simply having less stuff. Do you really need eight different kinds of cleaning products under your kitchen sink? Having less stuff not only costs less, but less stuff takes less space as well. With fewer things around, it is easier to keep things organized and find what you need.</p> <h2>12. Contentment</h2> <p>I am sure that you can live with less, but can you be happy with less?</p> <p>Contentment is living with a positive attitude and being satisfied for all of the things you have instead of wishing that you had blingy stuff. I drive an 11-year-old car that runs well. It even has leather seats and all wheel drive. What more do I need?</p> <p>People might not get a sense of status from the vehicle I drive, but I am clearly beyond worrying about that. Part of being content with what you have is to stop caring about what other people think. People who know me respect my work and my accomplishments, and I am not really concerned about what strangers think about my car.</p> <p>Contentment means setting your own standard for happiness. This can be difficult to achieve as you look at the photos of expensive vacations, recreational vehicles, and new cars that your friends post on Facebook. It is hard not to want expensive stuff when it seems like everyone else is buying it.</p> <p>But the problem with pursuing happiness by buying expensive stuff is that there is always something else you'll need to buy in order to be happy. As soon as you get back from vacation, it is time to start thinking about where to go for the next one. After your new car isn't the newest on the block anymore, the excitement is gone. Buying happiness is like chasing a mirage. You can't really reach happiness through buying things, but you can spend a lot of money trying!</p> <p>Contentment is about finding happiness in the life you have right now, not the life you could have if only you had more money.</p> <p><em>Which personal finance skills would you master to improve your life the most?</em></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%2F12-personal-finance-skills-everyone-should-master&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F12%2520Personal%2520Finance%2520Skills%2520Everyone%2520Should%2520Master.jpg&amp;description=12%20Personal%20Finance%20Skills%20Everyone%20Should%20Master"></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/u5180/12%20Personal%20Finance%20Skills%20Everyone%20Should%20Master.jpg" alt="12 Personal Finance Skills Everyone Should Master" 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/dr-penny-pincher">Dr Penny Pincher</a> of <a href="http://www.wisebread.com/12-personal-finance-skills-everyone-should-master">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-smart-money-moves-to-make-in-the-new-year">8 Smart Money Moves to Make in the New Year</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-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-3 views-row-odd"> <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-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-take-one-vacation-day-and-save-thousands">How to Take One Vacation Day and Save Thousands</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-brilliant-tips-from-smart-mom-rich-mom">4 Brilliant Tips From &quot;Smart Mom, Rich Mom&quot;</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Frugal Living advice budgeting investments needs negotiating saving money skills wants wisdom Wed, 15 Jun 2016 10:30:07 +0000 Dr Penny Pincher 1731280 at http://www.wisebread.com