financial independence http://www.wisebread.com/taxonomy/term/8801/all en-US 5 Things That Could Wreck an Early Retirement http://www.wisebread.com/5-things-that-could-wreck-an-early-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-things-that-could-wreck-an-early-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/one_gold_and_two_ordinary_eggs_in_the_hay_nest.jpg" alt="One gold and two ordinary eggs in the hay nest" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The Financial Independence/Retire Early (FIRE) movement is hot right now. People working toward FIRE are hoping to retire in their 40s and, in some cases, even their 30s. And while the focus of FIRE is to produce financial freedom and not ascribe to a strict definition of the term &quot;retired,&quot; it is a tantalizing goal many find worth chasing.</p> <p>However, if not properly planned, early retirement can be more of a burden than freedom. The earlier you retire, the longer your money has to last. Your life mitigation plan also has to be more solid and thorough than those who retire at the standard age. Below are some things that could derail your finances if you retire early. (See also: <a href="http://www.wisebread.com/8-things-millennials-can-do-right-now-for-an-early-retirement?ref=seealso" target="_blank">8 Things Millennials Can Do Right Now for an Early Retirement</a>)</p> <h2>1. Health crisis</h2> <p>Proper diet, adequate amounts of exercise, and regular doctor visits are the trifecta of good health. However, genetics and fate are the dynamic duo that can override your diligent efforts of maintaining good health. Failing to properly plan for a health crisis leaves the door gaping open for financial hardship during early retirement.</p> <p>According to a Fidelity analysis, the average couple retiring at traditional retirement age (65) can expect to spend $275,000 on health care during their retirement years. If you retire at 45, you have an additional 20 years' worth of potential expenses for which to plan. You have to factor this additional cost into your overall retirement number.</p> <p>Financial experts strongly advise that you keep health insurance coverage during retirement to help offset the cost of a serious illness or injury. There are coverage options available through private companies &mdash; which can be pricey. You should also explore Affordable Care Act (ACA) special coverage options. The ACA provides income-based premium subsidies which are based on your modified adjusted gross income during retirement. In addition to keeping health insurance, you must also ensure that you've adequately accounted for out of pocket health costs when determining how much you need during retirement.</p> <h2>2. Failing to live on a budget</h2> <p>One of the biggest myths many retirees fall prey to is the notion that you'll spend less money during retirement. The truth is it is rare that your cost of living will decrease as dramatically as you think it might. This is why living by a strict budget is financial life or death for the early retiree. (See also: <a href="http://www.wisebread.com/9-unexpected-expenses-for-retirees-and-how-to-manage-them?ref=seealso" target="_blank">9 Unexpected Expenses for Retirees &mdash; And How to Manage Them</a>)</p> <p>Getting older also comes with hidden expenses. You spend more time engaging in leisurely activities &mdash; which usually comes with a cost. You outsource chores as you age. And of course, health care expenses increase with age. Budgeting and tracking expenses isn't just for working folks. Living frugally, budgeting, and strategic spending are habits that should follow you to your grave.</p> <p>If you find that you are burning through your retirement funds quicker than expected, make sure you readjust immediately. This means you may have to scale back or even cancel some of the leisure activities and find ways to cut day-to-day spending. If an unexpected expense arises which consumes a large chunk of your funds, you may have to consider getting a side gig, working part-time, or rejoining the work force for a few years to replace the loss. You must proactively budget and track your funds to ensure they last. (See also: <a href="http://www.wisebread.com/how-much-can-you-afford-to-spend-in-retirement?ref=seealso" target="_blank">How Much Can You Afford to Spend in Retirement?</a>)</p> <h2>3. Inflation</h2> <p>Piggybacking on point two is failure to properly plan for and adjust for inflation. As you age, your dollar loses its elasticity. Your fixed cost of living expenses are slowly going to creep up over time. Retiring early means you have to deal with that creep a lot longer.</p> <p>Your retirement budget and planning should include a yearly (or at least every two years) cost of living increase. Think about the things you do regularly and plan to spend more on those things as time goes on. Your medication, transportation, food, and clothing are going to cost more and failing to adjust your budget to accommodate the increase can prove to be a costly mistake long-term. (See also: <a href="http://www.wisebread.com/4-ways-to-protect-your-retirement-from-inflation?ref=seealso" target="_blank">4 Ways to Protect Your Retirement From Inflation</a>)</p> <h2>4. Becoming a caregiver</h2> <p>Boomerang children, caring for the grands, and providing for aging parents are some of the unexpected ways you can find yourself burning through your retirement funds. One of the primary purposes for chasing financial freedom &mdash; at least for me &mdash; is to be in a position to help others. Helping becomes a problem when a person's need exceeds your capacity.</p> <p>This is even more true for those retiring early. You really have to be careful to ensure that your money lasts past your life span. If you have children and grandchildren, try to plan for things you know you want to assist with. Do you want to give your children a down payment on their first home? Pay for the grandkids to attend private school or even college? Provide long term-care for aging parents? Whatever you think you may want to do, set money aside for that purpose and don't touch it.</p> <p>It is strongly advisable that you establish a &quot;friends and family fund.&quot; This is money that you set aside specifically to help a loved one out of a financial jam. It can pay for health care, funeral expenses, the added cost of caring for your kids, grandkids, parents, or all of them. Most importantly, it can help offset the heightened cost of living that occurs when loved ones come to live with you for an extended period of time. It's better to live on less in order to set money aside for &quot;just in case&quot; in lieu of trying to adjust when life happens. (See also: <a href="http://www.wisebread.com/how-to-save-for-retirement-while-caring-for-kids-and-parents?ref=seealso" target="_blank">How to Save for Retirement While Caring for Kids and Parents</a>)</p> <h2>5. Incurring debt after retiring</h2> <p>One of the biggest mistakes you can make is to carry debt into retirement. Retiring with no debt can be a bit tougher when you retire early, but it should be your goal. You don't want to waste your precious resources making years of interest payments. You should aggressively work to eliminate all debt before retiring. You could even opt for a partial retirement and work part-time or get a side gig just to pay off your debt. (See also: <a href="http://www.wisebread.com/6-great-retirement-jobs?ref=seealso" target="_blank">6 Great Retirement Jobs</a>)</p> <p>It's also ill-advised to incur new debt while retired. If you need to make home improvements, buy another car, or make another major purchase, try to do it with cash &mdash; and even then, proceed with caution. If you must use credit for any reason, make a deal with yourself to find some other means to finance the purchase. That may mean going back to work temporarily until the debt is paid.</p> <p>You also should avoid taking on debt to help friends and family. Steer clear of co-signing &mdash; always &mdash; but especially during retirement when funds are limited. Helping friends and family members is one thing, but using debt to do it is a bad idea. If you can't afford to give it, you can't afford to lend it. In other words, if you need to be paid back, you really can't afford to loan the money. Consider gifting a portion of the money to the asker in lieu of lending them the whole amount. That way, they are not indebted to you, you haven't financially endangered yourself, and you provide assistance while simultaneously preserving the relationship. (See also: <a href="http://www.wisebread.com/what-to-do-if-youre-retiring-with-debt?ref=seealso" target="_blank">What to Do If You're Retiring With Debt</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F5-things-that-could-wreck-an-early-retirement&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Things%2520That%2520Could%2520Wreck%2520an%2520Early%2520Retirement.jpg&amp;description=5%20Things%20That%20Could%20Wreck%20an%20Early%20Retirement"></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/u5180/5%20Things%20That%20Could%20Wreck%20an%20Early%20Retirement.jpg" alt="5 Things That Could Wreck an Early Retirement" 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/denise-hill">Denise Hill</a> of <a href="http://www.wisebread.com/5-things-that-could-wreck-an-early-retirement">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-plan-for-a-forced-early-retirement">How to Plan for a Forced Early Retirement</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-save-for-retirement-while-caring-for-kids-and-parents">How to Save for Retirement While Caring for Kids and Parents</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-signs-youre-financially-ready-to-start-a-family">7 Signs You&#039;re Financially Ready to Start a Family</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/its-so-simple-6-steps-to-a-stable-retirement">It&#039;s So Simple: 6 Steps to a Stable 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/5-retirement-struggles-nobody-talks-about-and-how-to-beat-them">5 Retirement Struggles Nobody Talks About — And How to Beat Them</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement budgeting caregiving debt early retirement financial independence health care inflation sandwich generation Wed, 30 May 2018 09:00:24 +0000 Denise Hill 2144959 at http://www.wisebread.com 4 Things Teens Can Do Now to Prepare for Financial Independence http://www.wisebread.com/4-things-teens-can-do-now-to-prepare-for-financial-independence <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-things-teens-can-do-now-to-prepare-for-financial-independence" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/young_business_woman_holding_money_dollar_bills.jpg" alt="Young business woman holding money dollar bills" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>In the past couple months, it's become abundantly clear that today's teens are tenacious and enterprising. Add in the fact that they are &quot;digital natives&quot; and have a firm grasp on social media and technology, and it seems as if there is very little teens cannot do if they put their minds to it.</p> <p>Unfortunately, there is one area where teens feel a little less optimistic: Money.</p> <p>According a 2013 survey by Junior Achievement, an organization dedicated to teaching kids about money, 25 percent of teens believe they will not be able to support themselves without the help of parents until they are between the ages of 25 and 27. In addition, only 59 percent of teens feel confident that they will be able to support themselves between the ages of 18 and 24.</p> <p>Some of this pessimism about future financial independence is a natural reaction to the relatively high unemployment rate among teens. But teens, with a little judicious help from Mom and Dad, can set themselves up for financial independence down the road. Here are a few things that every teen can do to prepare for financial independence in adulthood.</p> <h2>1. Set financial goals</h2> <p>One of the best ways to learn how to handle finances is through financial goal setting. Parents can help teens set realistic financial goals, such as saving up for a coveted iPhone, making a contribution to a college fund, or paying for the class trip. Teens can learn how empowering it is to create a written plan for achieving their financial goals and find ways to earn or save money toward those goals.</p> <p>Parents can help foster this ability by asking teens to pay for wanted purchases on their own, while showing them how to create and follow through on a plan. (See also: <a href="http://www.wisebread.com/how-to-help-your-kid-build-their-first-budget?ref=seealso" target="_blank">How to Help Your Kid Build Their First Budget</a>)</p> <h2>2. Track spending</h2> <p>One of the biggest stumbling blocks in achieving financial independence is ignorance of where the money goes. Without financial awareness, it's very easy to spend your way through a great deal of money without ever realizing how much is slipping through your fingers. This is why it's important for teens to learn the habit of tracking their finances now.</p> <p>There are several ways that parents can help to encourage their teens to track their spending.</p> <ul> <ul> <li> <p>Make your teen's allowance conditional on tracking. According to former Vice President Nelson Rockefeller, this was how the famously wealthy family handled allowances: &quot;All of us had to keep a record of where our money went. We were required to give 10 percent to charity, save 10 percent, and then account for how we spent or saved the other 80 percent.&quot;</p> </li> </ul> </ul> <ul> <li> <p>Make tracking a family affair. It's much easier to encourage your kids to join in on something they already see you do than ask them to start doing something that seems foreign to them. Include them in money tracking and find a way to make a game of it among the family. For instance, you could have a contest to see who can get their weekly or monthly tracking done first &mdash; which will have the added benefit of encouraging all of you to track your spending as it happens.</p> </li> </ul> <ul> <li> <p>Let them embrace financial technology. There are a number of apps and computer programs out there that will help your teen track money on the very device they are generally glued to. The best options for teens are systems like Mvelopes and YNAB, which both allow for manual tracking of cash transactions. Not only will manual tracking help get teens in the habit of always tracking their spending, but even young teens who depend solely on cash can use them.</p> </li> </ul> <p>(See also: <a href="http://www.wisebread.com/21-things-you-should-make-your-kids-pay-for?ref=seealso" target="_blank">21 Things You Should Make Your Kids Pay For</a>)</p> <h2>3. Open a Roth IRA</h2> <p>Any teen who has earned income &mdash; that is, who has earned money from a job &mdash; can contribute to a Roth IRA. The contribution limit is $5,500 per year, or the maximum amount the contributor earned from a job &mdash; whichever amount is lower. For instance, a teen who earns $2,500 per year flipping hamburgers on weekends can only contribute up to $2,500 into their IRA or Roth IRA.</p> <p>Getting started on a retirement account in your teens can make an enormous difference in your ability to retire. The magic of compound interest has more time to work if you start in your teens. In addition, getting in the habit of paying yourself (and your retirement account) first is an important aspect of achieving financial independence as an adult.</p> <p>Since few teens will be interested in setting aside every single paycheck for a Roth IRA, parents can encourage their teens to put money in the IRA by offering to match anything they set aside.</p> <h2>4. Start investing</h2> <p>While getting teens into the habit of putting money into retirement accounts is incredibly important, it's also vital for them to feel comfortable with investing in general. This will not only help them make smart decisions with the investments in their retirement accounts, but it is also an important way to build wealth.</p> <p>There are several ways to help your teens get involved in investing.</p> <ul> <li> <p>Encourage them to buy individual stocks that they find interesting. The stock market offers teens a chance to own a piece of the companies whose products they use every day. This makes investing feel more personal, and gives teens the opportunity to learn how their favorite brands are faring.</p> </li> </ul> <ul> <li> <p>Ask them to defend their purchases before they make them. Financial professional Lawrence Sprung told U.S. News &amp; World Report that he asked his 11-year-old son to defend his request to buy a particular stock. The article explains: &quot;When his 11-year-old son declared that he wanted to invest in Walt Disney Co, Sprung asked him to prove his case. His son noted how Disney was unrolling a new <em>Star Wars </em>enterprise, enlarging and redeveloping some of its parks, and that people from all over the world would head to Disney's parks whether the economy was good or bad.&quot;</p> </li> </ul> <ul> <li> <p>Create a teen-run family investment account to help your kids understand the importance of diversifying. Hold regular meetings to discuss how the holdings are doing and go over investment strategies. This will help teens feel perfectly at home with the ins and outs of investing.</p> </li> </ul> <p>(See also: <a href="http://www.wisebread.com/10-investing-lessons-you-must-teach-your-kids?ref=seealso" target="_blank">10 Investing Lessons You Must Teach Your Kids</a>)</p> <h2>Make financial upkeep a habit</h2> <p>Teens can do a great deal to prepare for financial independence while still under their parents' roof. By getting into the habit of good money management &mdash; including setting goals, tracking spending, saving for the future, and investing &mdash; teens can be sure that they will reach financial independence and avoid the possibility of living in Mom's basement.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F4-things-teens-can-do-now-to-prepare-for-financial-independence&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F4%2520Things%2520Teens%2520Can%2520Do%2520Now%2520to%2520Prepare%2520for%2520Financial%2520Independence.jpg&amp;description=4%20Things%20Teens%20Can%20Do%20Now%20to%20Prepare%20for%20Financial%20Independence"></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/u5180/4%20Things%20Teens%20Can%20Do%20Now%20to%20Prepare%20for%20Financial%20Independence.jpg" alt="4 Things Teens Can Do Now to Prepare for Financial Independence" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/emily-guy-birken">Emily Guy Birken</a> of <a href="http://www.wisebread.com/4-things-teens-can-do-now-to-prepare-for-financial-independence">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-money-moves-for-the-newly-independent">8 Money Moves for the Newly Independent</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-ways-to-build-your-financial-self-esteem">8 Ways to Build Your Financial Self Esteem</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-financial-gifts-to-give-your-kids-this-year">6 Smart Financial Gifts to Give Your Kids This Year</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-use-the-holidays-to-teach-kids-about-money">How to Use the Holidays to Teach Kids About 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/how-to-help-your-adult-children-become-financially-independent">How to Help Your Adult Children Become Financially Independent</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance financial independence financial literacy investing kids Roth IRA teens tracking Tue, 03 Apr 2018 08:00:06 +0000 Emily Guy Birken 2122919 at http://www.wisebread.com How to Help Your Adult Children Become Financially Independent http://www.wisebread.com/how-to-help-your-adult-children-become-financially-independent <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-help-your-adult-children-become-financially-independent" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/girl_with_her_dreams.jpg" alt="Girl with her dreams" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Are your adult children still living at home? Are you sending checks to your post-college sons or daughters to help them pay their student loans, car payments, or cellphone bills? If so, you have adult kids who haven't yet become financially independent.</p> <p>It isn't uncommon for parents to help their grown children with money matters. The problem is how quickly this can stunt a young adult's financial independence. If you've been supporting your adult kids financially, you may need to make some lifestyle changes to help your children break away from the comfort of your bank account. (See also: <a href="http://www.wisebread.com/how-to-raise-your-kids-to-be-financially-independent?ref=seealso" target="_blank">How to Raise Your Kids to Be Financially Independent</a>)</p> <h2>1. Don't bottle up your feelings</h2> <p>Are you frustrated that your adult children eat your food, throw their dirty laundry in your hamper, and fall asleep on your couch in the middle of the day? Express yourself.</p> <p>You aren't required to help your adult children financially or provide them a free place to stay, and it's understandable if this is making you unhappy. Make it clear that this is only a temporary situation. And while changes aren't likely to happen overnight, a conversation will get the ball rolling. Sit down with your kids and form a plan for how they are going to move toward financial independence over the next three months. (See also: <a href="http://www.wisebread.com/7-money-conversations-parents-should-have-with-their-adult-kids?ref=seealso" target="_blank">7 Money Conversations Parents Should Have With Their Adult Kids</a>)</p> <h2>2. Change the expectations</h2> <p>Forming that plan also means setting the right expectations. Explain that your adult children need to do something to earn your largesse. If you are providing them with a free place to live, for instance, make it clear to them that they must do their own laundry, chip in for buying groceries, pay at least some rent, and help with other household chores.</p> <h2>3. Teach them about budgeting</h2> <p>The quickest way to financial independence is to learn how to spend money wisely. Your adult children won't be able to do this if they don't know how to create a household budget.</p> <p>Help them create a list of monthly expenses; ones that don't fluctuate, those that do, and those that are discretionary. Next, have them list their monthly income. This will show your kid how much money they have coming in, and how much is going out. They can better figure out how much to stash away in savings or spend on rent, if they are ready to move out.</p> <p>With a budget guiding them, it is far less likely that your adult children will run into the financial trouble that might land them back on your doorstep. (See also: <a href="http://www.wisebread.com/how-to-help-your-kid-build-their-first-budget?ref=seealso" target="_blank">How to Help Your Kid Build Their First Budget</a>)</p> <h2>4. Help them learn how to use a credit card</h2> <p>A strong credit score is essential. Lenders use this number to determine if you can get a loan or credit card, and at what interest rate. Your adult children will need to establish their own credit history to build strong credit scores. And a higher credit score will help them become financially independent.</p> <p>The problem many young adults face is that they haven't built up enough of a credit history to have a strong credit score. In some cases, they may not have a credit score yet at all. You can help your kids build a credit score by teaching them how to properly use a credit card.</p> <p>The key is for your kids to pay their credit card bills on time and in full every month. As a parent, you can teach your adult children how important using credit wisely can be to becoming financially independent. (See also: <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score?ref=seealso" target="_blank">How to Use Credit Cards to Improve Your Credit Score</a>)</p> <h2>5. Teach them about wants and needs</h2> <p>Your adult children might want the latest iPhone. But they don't necessarily need it. Teach your children the difference between spending on necessities &mdash; food, rent, transportation to and from work &mdash; and on toys such as high-tech smartphones, the latest laptops, and expensive clothes.</p> <p>If your children are relying on you for financial assistance, they shouldn't be buying the most expensive new electronics and fashions on the market. Make sure your children know that your financial support isn't intended to fund their more frivolous purchases. (See also: <a href="http://www.wisebread.com/4-things-you-should-make-your-adult-child-pay-for?ref=seealso" target="_blank">4 Things You Should Make Your Adult Child Pay For</a>)</p> <h2>6. Set limits</h2> <p>If you want you kids to only spend the money you give them on necessities like rent and transportation, make this clear. Determine how much they will need to spend on items such as monthly train passes, rent, or groceries. Only give them the financial assistance they need to pay for these items.</p> <p>If your adult children want to spend on other items such as entertainment or electronics, they'll have to earn that money on their own.</p> <h2>7. Work up an end date</h2> <p>Finally, set a date with your adult kids for when your financial assistance will come to an end. Helping an adult child financially shouldn't be a lifelong commitment on your part. You might decide, for instance, to give your children six months to find a place to live and a job that pays enough to cover the rent.</p> <p>Your end date might not actually be tied to a date. Maybe instead, you'll determine that your financial assistance will end once your children find that higher-paying job they need.</p> <p>However you set it up, make it clear that your financial help does have a time limit. Without one, your kids might not be motivated to move on from your monetary support.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fhow-to-help-your-adult-children-become-financially-independent&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHow%2520to%2520Help%2520Your%2520Adult%2520Children%2520Become%2520Financially%2520Independent.jpg&amp;description=How%20to%20Help%20Your%20Adult%20Children%20Become%20Financially%20Independent"></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/How%20to%20Help%20Your%20Adult%20Children%20Become%20Financially%20Independent.jpg" alt="How to Help Your Adult Children Become Financially Independent" 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/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/how-to-help-your-adult-children-become-financially-independent">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-things-you-should-make-your-adult-child-pay-for">4 Things You Should Make Your Adult Child Pay For</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-money-lessons-kids-can-learn-from-the-tooth-fairy">7 Money Lessons Kids Can Learn From the Tooth Fairy</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-money-conversations-parents-should-have-with-their-adult-kids">7 Money Conversations Parents Should Have With Their Adult Kids</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-money-moves-to-make-before-moving-out-on-your-own">5 Money Moves to Make Before Moving Out on Your Own</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-use-the-holidays-to-teach-kids-about-money">How to Use the Holidays to Teach Kids About Money</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Family adult children bills budgeting communication financial independence kids money lessons responsibility student loans young adults Mon, 12 Feb 2018 09:30:06 +0000 Dan Rafter 2097696 at http://www.wisebread.com 5 Reasons a Big Paycheck Is Not Worth Staying in a Job You Hate http://www.wisebread.com/5-reasons-a-big-paycheck-is-not-worth-staying-in-a-job-you-hate <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-reasons-a-big-paycheck-is-not-worth-staying-in-a-job-you-hate" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-510231594.jpg" alt="a paycheck isn&#039;t worth a job you hate" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p><span style="font-weight: 400;">Life is a journey filled with conundrums. An unwritten rule of thumb is that in order to gain something, you have to give up something. And the place this truism is experienced the most is in the area of finances.</span></p> <p><span style="font-weight: 400;">One of the biggest dilemmas people face at some point in life is should you sacrifice quality of life and personal happiness for money? And if so, for how long?</span></p> <p><span style="font-weight: 400;">Working a job you hate to gain financial independence is a sacrifice worth considering. However, before you sell your soul and doom yourself to a life of misery for the almighty dollar, here are a few reasons that choosing a paycheck over passion may not be worth it.</span></p> <h2>1. &nbsp;Purpose trumps paper</h2> <p><span style="font-weight: 400;">Millennials are thought to be idealistic dream chasers. McGraw-Hill Education conducted a 2014 study called </span><em><span style="font-weight: 400;">The Grad Gap</span></em><span style="font-weight: 400;">, and found that 73 percent of graduating college students value finding a job that allows them to do what they love over a job that pays well. They also found that 45 percent of students prefer a job that benefits society over a job that pays a high salary.</span></p> <p><span style="font-weight: 400;">And while millennials may be starry-eyed idealists, they may be onto something when it comes to living a fulfilled life. Having a purpose not steeped in materialism is the key to true prosperity. Financial independence is a noble goal, but the sum total of your life has to be about more than being able to retire comfortably. Who did you help? How did you make the world better? If you died penniless but profoundly impacted the lives of those around you, would you count your life a success or a failure? Financial independence is important, but is it the most important thing?</span></p> <h2>2. &nbsp;Money can't buy happiness</h2> <p><span style="font-weight: 400;">&quot;Money can't buy happiness.&quot; So cliché, yet so true. Meaningful work helps to motivate, challenge, and fulfill you more than money does. According to renowned psychologist Frederick Herzberg &mdash; author of </span><em><span style="font-weight: 400;">The Motivation to Work</span></em><span style="font-weight: 400;"> &mdash; people seek gratification based on higher-level psychological needs such as achievement, recognition, responsibility, advancement, and the nature of the work itself. Things such as pay raises, working conditions, and job security are secondary.</span></p> <p><span style="font-weight: 400;">Once you have enough money and all of your needs and some of your wants are met, an incremental pay increase loses its motivational force. Loving what you do (or at least not hating it) is what makes you happy. Working a job you loathe and perpetually chasing the dollar will make you far unhappier than wearing secondhand clothes and driving a hooptie. (See also: </span><a href="http://www.wisebread.com/4-money-lessons-you-can-learn-from-the-joneses?ref=seealso" target="_blank"><span style="font-weight: 400;">4 Money Lessons You Can Learn From the Joneses</span></a><span style="font-weight: 400;">)</span></p> <h2>3. &nbsp;Earning a high wage is not the only path to financial independence</h2> <p><span style="font-weight: 400;">A misconception connected to the dilemma of staying in or quitting a dreadful job is that you can't maintain financial freedom if you take a pay cut. That simply isn't true. Earning a high wage will get to your goal quicker, but at what cost?</span></p> <p><span style="font-weight: 400;">Financial independence isn't gained or sustained by earning a good wage. What if you lose your job, encounter an expensive health crisis, or have to provide long-term care for a friend or family member? Your ability to become and remain financially independent is determined by your ability to use what you have wisely. It's linked to your capacity to live frugally, cut costs, and use creativity and ingenuity to solve financial challenges. Your financial independence lies in your aptitude for working smarter, not harder. </span></p> <h2>4. &nbsp;Your mental health is affected</h2> <p><span style="font-weight: 400;">Going to a job you hate, day in and day out, slowly transforms you into a different person. Your mental health suffers. Countless studies show that workplace stress can lead to depression and anxiety. A 2011 BMJ Publishing Group study even found that being unemployed can be better for your mental health than having a job you hate.</span></p> <p><span style="font-weight: 400;">Staying in a negative environment saps your strength, drive, and ambition. And all that negativity affects your relationships. It can lead you to lash out and mistreat your loved ones, or it can cause you to withdraw. You miss important moments and find yourself riddled with guilt because even when you are physically present, you are emotionally absent.</span></p> <p><span style="font-weight: 400;">A bad job is akin to being in a toxic relationship. If your best friend were in a relationship where they were being taken advantage of, mistreated, and unappreciated, you would encourage them to value themselves and leave. That advice is apropos for you in a terrible job, too. </span><span style="font-weight: 400;">(See also: </span><a href="http://www.wisebread.com/8-signs-you-should-quit-your-job?ref=seealso" target="_blank"><span style="font-weight: 400;">8 Signs You Should Quit Your Job</span></a><span style="font-weight: 400;">)</span></p> <h2>5. &nbsp;It can kill you</h2> <p><span style="font-weight: 400;">Staying in a job you hate drastically diminishes your health. Research shows that continuous amounts of stress can compromise your immune system and make you more susceptible to cancer, Type 2 diabetes, heart disease, and stroke. High-stress work environments also cause sleep deprivation, weight gain, brain fog, and can exacerbate mental illness.</span></p> <p><span style="font-weight: 400;">In a 2015 study, a research team from Harvard Business School and Stanford University measured harmful workplace conditions' influence on life expectancy. The study found that stressful workplaces make it more likely for workers to die earlier than those in jobs they love. The study found that working a stressful job that you hate can shave years off your life. Let that sink in: Is higher pay worth a shorter life?</span></p> <h2>Develop an exit strategy and quit</h2> <p><span style="font-weight: 400;">If you hate your job, feel stressed, depressed, and grossly unhappy, it's time to act. Develop an exit plan. Set a date to quit and begin working toward that goal. Get more training, find an internship, and begin networking with people in the industry where you desire to work. As you begin your career search, you should also start scaling back financially and lower your cost of living. </span></p> <p><span style="font-weight: 400;">Save as much money as possible while aggressively paying down any consumer debt you have. Be willing to accept less pay and work a side gig to help cover the loss. Be intentional about changing your work situation, and see it through. Your wellbeing depends on it.</span></p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F5-reasons-a-big-paycheck-is-not-worth-staying-in-a-job-you-hate&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Reasons%2520a%2520Big%2520Paycheck%2520Is%2520Not%2520Worth%2520Staying%2520in%2520a%2520Job%2520You%2520Hate.jpg&amp;description=5%20Reasons%20a%20Big%20Paycheck%20Is%20Not%20Worth%20Staying%20in%20a%20Job%20You%20Hate"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><span style="font-weight: 400;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/5%20Reasons%20a%20Big%20Paycheck%20Is%20Not%20Worth%20Staying%20in%20a%20Job%20You%20Hate.jpg" alt="5 Reasons a Big Paycheck Is Not Worth Staying in a Job You Hate" width="250" height="374" /></span></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/denise-hill">Denise Hill</a> of <a href="http://www.wisebread.com/5-reasons-a-big-paycheck-is-not-worth-staying-in-a-job-you-hate">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-signs-your-work-life-balance-is-off">9 Signs Your Work-Life Balance Is Off</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/13-hacks-to-avoid-burnout-at-work">13 Hacks to Avoid Burnout at Work</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-signs-you-should-quit-your-job">8 Signs You Should Quit Your Job</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-reasons-its-never-too-late-for-a-career-change">6 Reasons It&#039;s Never Too Late for a Career Change</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/your-stressful-job-may-be-making-you-healthier">Your Stressful Job May Be… Making You Healthier?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Career and Income bad jobs burnout financial independence happiness Health mental health quitting stress unhappy Fri, 09 Feb 2018 09:30:09 +0000 Denise Hill 2101408 at http://www.wisebread.com 4 Things You Should Make Your Adult Child Pay For http://www.wisebread.com/4-things-you-should-make-your-adult-child-pay-for <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-things-you-should-make-your-adult-child-pay-for" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/young_daughter_and_mid_age_mother_daydreaming.jpg" alt="Young daughter and mid age mother daydreaming" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The USDA estimates that a child born in 2015 will cost their parents $233,610 by their 18th birthday. This staggering number is based on two-income, middle-class households and accounts for shelter, food, and other child-related expenses. It does not include college.</p> <p>Parents expecting a clean break at age 18 might be in for another costly surprise. NerdWallet recently commissioned a study which found that 80 percent of parents with adult children are chipping in with financial support. This support could be costing them up to $227,000 in retirement savings.</p> <p>Parents are paying for big-ticket items like tuition and student loans, as well as routine bills like cellphone payments and car insurance. To pay or not to pay? That is an ongoing question. Before deciding whether or not to take on an expense for your adult child, you should consider two questions.</p> <h2>Can you afford it?</h2> <p>First, can you afford the cost? Think not only of the monthly payment, but the entire financial obligation. If you have to take on debt to support your adult child's lifestyle, chances are you can't afford to help. Let your cash guide your decision.</p> <h2>Are you really helping?</h2> <p>Next, will paying their bills actually help your child? Covering an adult child's living expenses can teach a destructive lesson. Parents should consider whether the financial support is helping or hindering their child's growth. There may be other, long-lasting ways to support your kid that don't stunt their independence or zero out your savings.</p> <h2>What they should pay for</h2> <p>As a parent, I know there is an undeniable drive to take care of our children and smooth the rough patches. I imagine that never goes away. But, we must balance our desire to help our kids with the necessity of teaching them financial independence and maintaining our own financial security. We can help strike that match by making our adult kids pay for the following things. (See also: <a href="http://www.wisebread.com/are-you-ruining-your-retirement-by-spoiling-your-kids?ref=seealso" target="_blank">Are You Ruining Your Retirement by Spoiling Your Kids?</a>)</p> <h3>Cellphones and service</h3> <p>Paying for an adult child's cellphone bill will cost you $1,200 in lost retirement savings in just one year, according to the NerdWallet study. Bump that up to five years, and you're missing out on over $5,300 in savings.</p> <p>A cellphone business model is a perfect tool to help your young adults learn responsibility and understand the consequences of missing a payment. Not only will the service become unavailable, but their friends will know they didn't pay their bill. Avoiding public shame can be a huge motivator.</p> <h3>Rent and housing expenses</h3> <p>If adult children cannot afford to pay their living expenses, parents should step back. Suggest they find a roommate, move to a less expensive location, or move in with family. Sometimes life throws a curveball, and a move back home with parents is necessary.</p> <p>Paying for ongoing living expenses only allows adult children to avoid facing their financial realities, and it will seriously dent your retirement savings. One year of support alone will cost you over $16,000. If this trend continues, you could miss out on more than $75,000 over five years. Help your child stand on their own two feet and keep your retirement plan on track.</p> <h3>Direct PLUS loans (and other student loans)</h3> <p>A Direct PLUS loan is an unsubsidized loan for the parents of dependent students. Taking out one of these loans to help fund your child's expensive college tuition and expenses is a bad idea.</p> <p>If you've exhausted all funding sources and still need to rely on a PLUS loan, it's time for your child to consider a more affordable education alternative. Direct PLUS loans are not awarded based on the borrower's ability to repay. Parents can easily find themselves overwhelmed with large bills exactly when they need to be more focused on saving for retirement.</p> <p>A 2015 study by the University of Southern California and the University of South Carolina found that parents borrow an average $21,000 for their children's college education, and more than 200,000 people are still paying these loans past retirement age. According to NerdWallet, helping adult children repay student loans costs parents $80,000 in savings. It's time to pass that bill on to your child.</p> <h3>Credit card payments</h3> <p>If young adults are racking up excessive credit card debt, their parents may be tempted to swoop in, pay off some of those high-interest balances, and give their kids a fresh start.</p> <p>Not so fast.</p> <p>Paying this bill robs your child of the valuable lessons learned in digging themselves out of a financial hole. Whether they are forced to file bankruptcy and rebuild their credit, or make the sacrifices necessary to pay back the borrowed funds, that experience forces them to confront their irresponsible choices and contend with the related discomfort. Pain leaves lasting reminders.</p> <p>Adults with parents who rescue them from the pain of poor decisions have no incentive to think through the consequences of their actions.</p> <p>Adult children need our love, support, and encouragement. They don't need us to prop up their lifestyle or mute the consequences when they make unwise decisions. By not providing financial support indefinitely into adulthood, you're doing what's best for you both &mdash; now and in the future. (See also: <a href="http://www.wisebread.com/7-money-conversations-parents-should-have-with-their-adult-kids?ref=seealso" target="_blank">7 Money Conversations Parents Should Have With Their Adult Kids</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F4-things-you-should-make-your-adult-child-pay-for&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F4%2520Things%2520You%2520Should%2520Make%2520Your%2520Adult%2520Child%2520Pay%2520For.jpg&amp;description=4%20Things%20You%20Should%20Make%20Your%20Adult%20Child%20Pay%20For"></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/u5180/4%20Things%20You%20Should%20Make%20Your%20Adult%20Child%20Pay%20For.jpg" alt="4 Things You Should Make Your Adult Child Pay For" 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/toni-husbands">Toni Husbands</a> of <a href="http://www.wisebread.com/4-things-you-should-make-your-adult-child-pay-for">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-14"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-help-your-adult-children-become-financially-independent">How to Help Your Adult Children Become Financially Independent</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-reasons-youre-still-struggling-to-pay-bills">6 Reasons You&#039;re Still Struggling to Pay Bills</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-a-new-marriage-can-survive-student-loan-debt">How a New Marriage Can Survive Student Loan Debt</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-keep-student-loans-from-wrecking-your-retirement">How to Keep Student Loans From Wrecking Your 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/what-to-do-if-youre-retiring-with-debt">What to Do If You&#039;re Retiring With Debt</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Family adult children bills cellphones credit card debt financial independence financial support parents retirement savings student loans Thu, 25 Jan 2018 09:30:10 +0000 Toni Husbands 2087457 at http://www.wisebread.com 8 Money Moves for the Newly Independent http://www.wisebread.com/8-money-moves-for-the-newly-independent <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-money-moves-for-the-newly-independent" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/singing_in_the_living_room.jpg" alt="Singing in the living room" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You're done with college. You have a job. Your mom is hinting that she wants to turn your bedroom into a space for scrapbooking. It's time to set out on your own.</p> <p>This is an exciting but scary time: You'll have a rent payment and other bills to pay now, and you need to start saving for the future. Now that you've fled the nest, there are some key money tasks that you should tackle. Do these, and you'll be well on your way to financial independence.</p> <h2>1. Start building that emergency fund</h2> <p>Young people living at home aren't too concerned with emergencies wiping out their savings. But once you are out on your own, you are more vulnerable to events that can throw you for a financial loop. Your car might break down and require thousands of dollars in repairs. You may have a medical emergency that's not entirely covered by insurance. You may even find yourself without a job but with bills to pay. This is why it's hugely important to begin putting money aside to cover unexpected events.</p> <p>Start by working to accumulate three months' worth of living expenses, and then shoot for six. Don't invest this money; you need to be able to access it quickly if there's an emergency. Having this cash on hand could be the difference between continuing to live on your own and crawling back to the Parental Chateau. (See also: <a href="http://www.wisebread.com/7-easy-ways-to-build-an-emergency-fund-from-0?ref=seealso" target="_blank">7 Easy Ways to Build an Emergency Fund From $0</a>)</p> <h2>2. Shop around for bank interest rates</h2> <p>Before you went out on your own, you probably didn't think much about banks. You may have put your money in the same place as your parents, or the bank closest to your house. Now it's time to do a little homework to make sure your savings account is doing more than just holding your money.</p> <p>Interest rates are still low these days, but you can bump up your passive income by shopping around for the best rate. If you are willing to have some money tied up for a while, consider putting some money into certificates of deposit, which offer higher rates.</p> <h2>3. Learn to budget</h2> <p>Being on your own means you have to actually pay attention to your income and spending. This is especially true for young people who may have student loans and aren't earning a lot (yet). It's imperative that you spend less than you earn, and this means paying close attention to your expenses.</p> <p>You should begin by tracking your expenses each month so you have a good idea of where your money is going. Then, create small budgets for various key categories like groceries, gas, and rent. Your budgets for entertainment and frivolous expenses should be as small as possible. You may be free from Mom and Dad, but you aren't truly financially independent until you're avoiding debt and saving money at a good clip. (See also: <a href="http://www.wisebread.com/build-your-first-budget-in-5-easy-steps?ref=seealso" target="_blank">Build Your First Budget in 5 Easy Steps</a>)</p> <h2>4. Examine your credit card situation</h2> <p>You may have opened a credit card or two when in college, and perhaps you accumulated some debt. You never stressed about it when you were living at home, and Mom and Dad may have even helped you pay the bills. But now you are on your own, so it's time to get a handle on things. Take a look at how many credit cards you have and their interest rates. If you have piled up some debt, assess which cards carry the largest balances.</p> <p>You don't necessarily want to close out cards, since that can hurt your credit score. But stop using ones with high interest rates and little other benefit. Come up with a plan to reduce your debt by tackling the highest interest cards first.</p> <p>Moving forward, you'll want to get in the habit of using credit cards responsibly, avoiding debt, and hopefully earning some rewards along the way. Once you are in the habit of paying off your bill in full every month, examine which cards offer the best benefits, such as cash back or points you can redeem for merchandise retailers or air travel. (See also: <a href="http://www.wisebread.com/avoid-these-6-mistakes-newbies-make-with-their-first-credit-cards?ref=seealso" target="_blank">Avoid These 6 Mistakes Newbies Make With Their First Credit Cards</a>)</p> <h2>5. Make sure you are properly insured</h2> <p>It's common for young people to remain on their parents' health care plans, but at a certain point you need to get insurance of your own. You also need to obtain things like auto insurance, plus renter's or homeowners insurance. If you have a spouse or dependents, you should look into life insurance as well. This requires some research and discipline so you can find plans that are reasonably priced but also provide an appropriate level of coverage.</p> <p>If you are employed, you may be able to get subsidized health insurance from your employer. (Be sure to pay attention to the open enrollment dates.) Those without insurance through their job can get it through the marketplace exchanges set up in accordance with the Affordable Care Act.</p> <p>Choosing to go without health or auto insurance could subject you to penalties from the federal or state government. But more importantly, you place yourself at risk of financial disaster if a bad event takes place. Purchasing proper insurance plans is a key component of sound financial planning.</p> <h2>6. Take advantage of your employer's retirement plan</h2> <p>If you have a full-time job, there's a good chance your company will help you save for retirement by offering a 401(k) or similar plan. These plans allow you to place a portion of your salary into a wide range of mutual funds and other investments, and your employer may match a certain portion of those contributions. Plus, any money you contribute is deducted from your taxable income, so you save money. There is very little downside to opening an account right away, and you should do your best to at least get the full amount of the company match. The earlier you start, the more time your money has to grow.</p> <h2>7. Open a Roth IRA</h2> <p>Even if you take advantage of your employer's retirement plan, it's a good idea to open a separate individual retirement account that offers different tax advantages. With a Roth IRA, you can invest up to $5,500 annually in just about anything you want, and the gains on those investments can be withdrawn tax-free when you retire. A Roth IRA is available to anyone with earned income, so it's a great way to save for retirement if you are self-employed or don't get an employer-sponsored retirement plan. (See also: <a href="http://www.wisebread.com/5-retirement-accounts-you-dont-need-a-ton-of-money-to-open?ref=seealso" target="_blank">5 Retirement Accounts You Don't Need a Ton of Money to Open</a>)</p> <h2>8. Educate yourself about taxes</h2> <p>Guess what? Being financially independent also means you get to do your taxes! The IRS will always get a cut of your money, and it's important to understand how that will impact your take-home pay.</p> <p>If you are employed full-time, you will likely have taxes taken out of your paycheck, but you need to adjust your withholding so that you're not stuck with a large tax bill or refund. If you are self-employed, you will need to plan to pay taxes on your income, and it may require you to pay taxes quarterly. Perhaps most importantly, you must learn all about the various tax deductions and credits that may be available to you.</p> <p>If your taxes get too complicated, you can always pay someone to do them for you. But remember that there's a cost to going that route, and handing off your taxes to a professional doesn't mean you should remain ignorant as to what's going on. (See also: <a href="http://www.wisebread.com/8-tax-return-mistakes-even-smart-people-make?ref=seealso" target="_blank">8 Tax Return Mistakes Even Smart People Make</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F8-money-moves-for-the-newly-independent&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F8%2520Money%2520Moves%2520for%2520the%2520Newly%2520Independent%2520%25281%2529.jpg&amp;description=8%20Money%20Moves%20for%20the%20Newly%20Independent"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/8%20Money%20Moves%20for%20the%20Newly%20Independent%20%281%29.jpg" alt="8 Money Moves for the Newly Independent" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/8-money-moves-for-the-newly-independent">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/9-money-moves-youre-never-too-old-to-make">9 Money Moves You&#039;re Never Too Old to Make</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-money-moves-to-make-before-moving-out-on-your-own">5 Money Moves to Make Before Moving Out on Your Own</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-financial-mistakes-you-need-to-stop-making-by-30">5 Financial Mistakes You Need to Stop Making by 30</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-reasons-to-cut-millennials-some-slack-about-their-money">10 Reasons to Cut Millennials Some Slack About Their 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/4-signs-your-emergency-fund-is-too-big">4 Signs Your Emergency Fund Is Too Big</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance banks budgeting emergency funds financial independence insurance interest rates investing millennials retirement young adults Fri, 15 Dec 2017 10:00:06 +0000 Tim Lemke 2068610 at http://www.wisebread.com 6 Simple Money Milestones Anyone Can Hit http://www.wisebread.com/6-simple-money-milestones-anyone-can-hit <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-simple-money-milestones-anyone-can-hit" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_piggy_bank_599767404.jpg" alt="Woman hitting money milestones" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Achieving financial freedom is really about setting big goals and going after them. But these goals can sometimes seem overwhelming. Saving enough for retirement, a new home, or a college degree is a big task. Eliminating debt can also feel impossible.</p> <p>That's why it helps to set smaller, more manageable goals and work from there. You won't save all of your retirement nest egg or pay off all of your credit cards tomorrow, but there are steps you can take to build your confidence and get you on your way. Here are some achievable financial milestones that you can go after.</p> <h2>1. Open a retirement account</h2> <p>Just <em>open</em> the account. You don't even have to invest more than the minimum: Simply take that first step and open your 401(k) or individual retirement account. By checking this off your list, you have removed a big mental hurdle from investing, and you may even begin getting matching contributions from your employer even if you are not contributing much yourself.</p> <p>With the accounts open, you'll be able to begin putting more sizable chunks of money aside and buying stocks and mutual funds when you feel you are ready. But if your accounts aren't open to begin with, you might talk yourself out of getting started. (See also: <a href="http://www.wisebread.com/5-retirement-accounts-you-dont-need-a-ton-of-money-to-open?ref=seealso" target="_blank">5 Retirement Accounts You Don't Need a Ton of Money to Open</a>)</p> <h2>2. Be independent</h2> <p>Do you still rely on your parents or other friends and family for financial help? Do they assist you with rent payments, credit card bills, and other expenses? Getting help from others isn't a bad thing, but there comes a time when a young person must learn how to maintain financial independence.</p> <p>This means being able to live on your own, pay your bills, and avoid debt without seeking &quot;loans&quot; from the Bank of Mom and Dad. This is not always easy, especially in an era when many young people have student loan debt &mdash; but this should be a goal for anyone in their 20s. (See also: <a href="http://www.wisebread.com/11-money-habits-that-make-you-look-financially-immature?ref=seealso" target="_blank">11 Money Habits That Make You Look Financially Immature</a>)</p> <h2>3. Reduce your credit card debt</h2> <p>Ideally, you want to pay off the whole credit card balance as soon as possible. But for some of us, we just want to keep the balance from growing. Sometimes, we're stuck in a spiral of making minimum payments, while interest charges are adding to the debt. You may not be able to get rid of your credit card balance overnight, but you can take a big step toward that goal by simply reducing the balance the next time your bill is due.</p> <p>This will mean paying substantially more than the minimum required to make a real dent into the principal. If you can do this once, you'll prove to yourself it's possible to reduce your debt burden and eventually get rid of it entirely. (See also: <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=seealso" target="_blank">The Fastest Way to Pay Off $10,000 in Credit Card Debt</a>)</p> <h2>4. Get your credit score over 700</h2> <p>Many people have trouble getting ahead financially because they are saddled with a bad credit score. A low credit score makes it hard to get favorable rates on loans, and can lead to a spiral of debt that's hard to escape. The good news is that you can fix your credit score over time by making the right financial choices, and your bad finances of the past don't have to burden you forever.</p> <p>A credit score of 700 is considered &quot;good&quot; by most credit bureaus. To get there, you need to pay your bills on time and try to pay off all balances in full. If you have missed payments, get current as soon as possible. You don't want to close your credit cards after paying them off, as this can lower your percentage of available credit and ding your credit score. But you should avoid the temptation to open new cards, as that only increases your potential for adding debt. Your credit score may take time to rise, but hitting 700 is achievable if you make the right moves. (See also: <a href="http://www.wisebread.com/5-ways-to-improve-your-credit-score-fast?ref=seealso" target="_blank">5 Ways to Improve Your Credit Score Fast</a>)</p> <h2>5. Earn $1,000 in passive income</h2> <p>One of the great ways to give yourself some financial breathing room is to get revenue from sources that don't require a lot of work. This could mean purchasing dividend stocks, in which companies pay out portions of their earnings each quarter to shareholders. It might mean buying and renting out properties, licensing your creative works, or building a website that generates some ad revenue. Passive income may require some work and expense up front, but could provide you with a solid amount of extra cash without extra effort over time.</p> <p>Try to earn a spare $1,000 in the next year. Then try and boost that figure. Before you know it, proceeds from these passive sources could be a significant total of your overall income. (See also: <a href="http://www.wisebread.com/5-ways-to-make-passive-income-online?ref=seealso" target="_blank">5 Ways to Make Passive Income Online</a>)</p> <h2>6. Save $100 in a month</h2> <p>When your income is barely covering your living expenses, it may seem impossible to save even a few bucks a month, let alone $100. But most people should be able to hit that $100 milestone by taking a good look at their spending.</p> <p>Begin by tracking your spending in a detailed way, making a note of where every dollar goes. Then categorize your spending. You might have a category for eating out, and another for gas or kids' activities. By examining your spending this way, you will likely find areas where you can cut costs. You may have to make some hard choices, but they will be worthwhile. A few dollars here and there can add up to $100 or more. And $100 a month can add up to thousands of dollars over time.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F6-simple-money-milestones-anyone-can-hit&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F6%2520Simple%2520Money%2520Milestones%2520Anyone%2520Can%2520Hit.jpg&amp;description=6%20Simple%20Money%20Milestones%20Anyone%20Can%20Hit"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/6%20Simple%20Money%20Milestones%20Anyone%20Can%20Hit.jpg" alt="6 Simple Money Milestones Anyone Can Hit" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/6-simple-money-milestones-anyone-can-hit">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-putting-off-these-9-adult-money-moves">Are You Putting Off These 9 Adult 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/dont-start-a-family-before-reaching-these-5-money-goals">Don&#039;t Start a Family Before Reaching These 5 Money Goals</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-your-emotions-costing-you-money-take-this-quiz">Are Your Emotions Costing You Money? Take This Quiz</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-things-to-do-right-now-to-boost-your-600-credit-score">5 Things to Do Right Now to Boost Your 600 Credit Score</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-ways-to-increase-your-net-worth-this-year">10 Ways to Increase Your Net Worth This Year</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance credit score debt financial independence goals money milestones passive income retirement saving Wed, 15 Nov 2017 10:00:06 +0000 Tim Lemke 2054445 at http://www.wisebread.com The One Personal Finance Skill You Must Master Before All the Others http://www.wisebread.com/the-one-personal-finance-skill-you-must-master-before-all-the-others <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-one-personal-finance-skill-you-must-master-before-all-the-others" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_happy_working_102244905.jpg" alt="Woman mastering personal finance skill before all others" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Recently, I detailed <a href="http://www.wisebread.com/12-personal-finance-skills-everyone-should-master">12 personal finance skills to master</a> to improve your happiness and quality of life.</p> <p>Mastering this set of skills will put you on the road to financial independence, but it's hard to master 12 things all at once. If you are looking to get your finances on track quickly, what is the first personal finance skill you should master?</p> <p>Start with budgeting.</p> <h2>What a Budget Can Do for You</h2> <p>A detailed budget holds the answer to one of the most important questions about your personal finances: &quot;Where is all the money going?&quot; When you understand where your money is going, you can find opportunities to better utilize your money to meet your goals instead of letting it slip away on things that are not important to you.</p> <p>And a budget can be a great motivational tool. For example, if you learn from your budget that you are coming up $100 short each month, you can be motivated to solve the problem. Having a specific goal and measurement of progress toward the goal helps you take effective action. Without a budget, you may have a general feeling that you don't have enough money, but this can be hard to turn into tangible results.</p> <p>&quot;Can I afford this?&quot; is another question that a budget will answer. With detailed knowledge of how much money is coming in and how much you need to cover bills and expenses, your budget will show whether you can handle taking on a new expense.</p> <p>Looking at the bigger picture, your budget tells you if you are heading in the right direction, or if your financial situation is a sinking ship and you need to make some changes. Without a budget, it may not be clear whether you are moving up, down, or sideways. But most people don't have a budget...</p> <h2>Why Most People Don't Budget</h2> <p>Clearly there are significant benefits from having a detailed budget, but Gallup's annual Economy and Personal Finance survey shows that only 32% of American households have a <a href="http://www.gallup.com/poll/162872/one-three-americans-prepare-detailed-household-budget.aspx">written or computerized budget</a> for monthly expenses. If having a budget is so useful, why do so few people actually do it?</p> <ul> <li>Some people have no idea how to prepare a budget.<br /> &nbsp;</li> <li>It takes too much work to quantify expenses and keep the budget up-to-date.<br /> &nbsp;</li> <li>Some people are afraid to know much they are spending. They don't want to change their spending habits, so they avoid facing the numbers.</li> </ul> <p>All of these reasons contributed to me not having a budget for years. I had plenty of other tasks on my list of things to do, and putting together a budget never made its way to the top of my list. Plus, I liked buying whatever I felt like buying and didn't want a budget to get in the way of being able to spend money however I wanted.</p> <p>I finally realized that I didn't really know where my money was going, and this was preventing me from reaching financial independence. Preparing a budget was my first effective step to getting my finances on track.</p> <h2>How to Start an Effective Budget Today</h2> <p>Getting started budgeting is easier than you think &mdash; the hardest part is deciding to do it.</p> <h3>Step 1. Where Is All Your Money Going?</h3> <p>The first step in budgeting effectively is to assess your current cash flow situation, figuring out exactly how much income you have and breaking down your spending by cost category. This may seem like a lot of work, but this will give you insight into where all of your money is really going. You may be shocked. (See also: <a href="http://www.wisebread.com/start-saving-more-with-this-one-simple-tool?ref=seealso">Start Saving More With a Spending Book</a>)</p> <p>First, total up all of your income during the month. Look at your pay stubs, or check your direct deposits from your bank account statement.</p> <p>Then, figure out your expenses. You will need to keep track of the cash that you spend as well as bill payments from your checking account and spending with credit cards. When I started my budget, I used colored highlighters to mark credit card statements and bank statements to sort the spending into categories such as food, clothing, pets, entertainment, transportation, housing, utilities, etc. I put these numbers into a spreadsheet along with my income, and I had my first budget. Or, you can try budgeting tools like <a href="https://www.mint.com/">Mint</a> or <a href="https://www.youneedabudget.com/">You Need a Budget</a>.</p> <h3>Step 2. Where Do You Want Your Money to Go?</h3> <p>After you know the good, the bad, and the ugly about where all your money is going, you might want to make some adjustments. I found that overall spending was too high, especially spending on food, car payments, and fuel.</p> <p>We started using a <a href="http://www.wisebread.com/a-comprehensive-guide-to-the-envelope-system">money envelope</a> to pay for all food to help control this expense category. On payday, I put cash for food in an envelope. When the envelope is empty, we know we have spent all we have available, so we wait for the next envelope to spend more on food. We also sold our most expensive vehicle and replaced it with a less expensive one that uses less gas, saving hundreds of dollars each month. Without a budget, I would not have been motivated to make these changes and get my finances on a better track. (See also: <a href="http://www.wisebread.com/build-a-better-budget-in-5-minutes-flat?ref=seealso">Build a Better Budget in 5 Minutes Flat</a>)</p> <p>For your budget to be effective, you need to monitor expenses and make updates to your budget as they change each month. In other words, making a budget is not a one-time exercise. Keep track of the budgeted amount for expense categories and how much you are actually spending every month. As you understand your spending and work to control your expenses, you will be able to create budget items such as &quot;emergency fund&quot; and &quot;retirement fund&quot; and consistently have money to fund your future.</p> <p>Wherever your life takes you on the road to personal finance mastery, it won't take you there if you don't master this skill first.</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/the-one-personal-finance-skill-you-must-master-before-all-the-others">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-manage-your-money-no-budgeting-required">How to Manage Your Money — No Budgeting Required</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-budgeting-skills-everyone-should-master">11 Budgeting Skills Everyone Should 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/is-an-all-cash-diet-right-for-you">Is an All-Cash Diet Right for You?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/financial-iq-test-how-healthy-is-your-budget">FINANCIAL IQ TEST: How Healthy Is Your Budget?</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/37-savings-changes-you-can-make-today">37 Savings Changes You Can Make Today</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Budgeting cash flow expenses financial independence mint money management skills Wed, 02 Nov 2016 09:00:10 +0000 Dr Penny Pincher 1825228 at http://www.wisebread.com You Don't Need a Retirement Plan — You Need a Financial Independence Plan http://www.wisebread.com/you-dont-need-a-retirement-plan-you-need-a-financial-independence-plan <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/you-dont-need-a-retirement-plan-you-need-a-financial-independence-plan" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/saving_retirement_fund_000088359337.jpg" alt="Learning the alternative to retirement" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>In the golden age of a &quot;job for life,&quot; and when defined benefit pensions were the standard, all you had to do was tough it out to hit the jackpot. A mere 40 years of employment, and you struck lucky in your golden years.</p> <p>Whether the idea of working in the same place for a lifetime fills you with nostalgia or horror, the reality is that those days are long gone.</p> <p>Without a steady employer doing the hard work for us, traditional notions of retirement planning do not work. The alternative, it seems, is the ostrich approach, with 48% of working age Americans saying they have never even tried to calculate the amount of savings they might need for a comfortable retirement. Ignorance might be bliss in the moment, but it's no genius long term plan. So what's the better option?</p> <h2>What Went Wrong With Retirement?</h2> <p>The Employee Benefit Research Institute (EBRI) found, in their 2016 survey measuring retirement confidence, that nearly one in five American workers (19%) were <a href="https://www.ebri.org/pdf/surveys/rcs/2016/PR1157.RCS.22Mar16.pdf">not at all confident</a> in their ability to finance a comfortable retirement. For these workers, options are limited &mdash; spend less now, work for longer, and be prepared to compromise more on the lifestyle they expect in later years. Not a happy picture.</p> <p>To add insult to injury, working longer is not actually a viable option for many of us. The EBRI reported a large gap between expectations and outcome, with a massive 37% of people saying they expect to work past the age of 65, compared to the more modest reality of only 15% of retirees in 2016 who were older than 65. This is often because options to continue working later in life become limited, with layoffs and declining physical health ending working lives without regard to the size of one's pension pot.</p> <p>So with working until you drop off the agenda, what can we do to improve the prospects of having a happy, and financially secure retirement?</p> <h2>Start Thinking Personal Financial Independence</h2> <p>Ironically, part of the solution might actually be to stop thinking about retirement, and replace that thought with one of &quot;personal financial independence.&quot;</p> <p>Retirement today has changed as much as working life has, meaning there is no longer a cookie cutter approach to retirement planning that can be relied upon. The answer instead is to get educated about your household finances, with a focus on achieving personal financial independence &mdash; for life, not just for your later years. Getting clued up about your money is the only way to do that.</p> <h2>Start Creating It</h2> <p>Pull your head out of the sand, and get a realistic grip on what savings you have &mdash; and what you will need to finance your retirement.</p> <h3>Do the Math</h3> <p>Work out what you will want to <a href="http://www.wisebread.com/how-much-can-you-afford-to-spend-in-retirement">spend in retirement</a>. Tools are out there to help, like this <a href="http://money.cnn.com/calculator/retirement/retirement-need/">retirement calculator</a>, which helps you calculate what you might need to save to achieve a desired financial return in future. If you don't have an idea of your goal, then planning is a whole lot more difficult.</p> <h3>Optimize What You Have</h3> <p>If you have money in 401K plans, then you're in a strong position already. But don't just assume that it's being managed in your best interests. <a href="http://americasbest401k.com/fee-checker/">Check out the fees</a>, which vary wildly and through a compounding effect can whittle away your savings at an alarming speed. Once you can safely withdraw from your 401K without incurring penalties, you will be able to choose to take a lump sum if you wish, to help you achieve the magic 4% number described below.</p> <h3>Understand the 4% Rule</h3> <p>A common premise of modern retirement planning calculations is the &quot;4% rule&quot; which assumes that you can live happily on the growth of a savings pot, without significantly denting the principle, so long as you withdraw no more than 4% per year. This principle, put forward by Bill Bengen in 1994, has <a href="http://www.forbes.com/sites/robertberger/2015/05/20/how-much-do-you-really-need-to-retire/#90464644939a">come under some scrutiny</a> due to our current turbulent times &mdash; but as a starting point is still considered a sound measure.</p> <p>Here's how it works.</p> <p>Start with the amount of money you think you will need to finance your retirement lifestyle. Multiply this by 25 to get the amount of savings you need to have to make that number a reality if the 4% rule is applied.</p> <p>Then sit down, because in all likelihood that number is going to be scary.</p> <p>If you calculated that you would like a household income of $40,000, then the sums say you need a pot of a cool million. How hard this really is to achieve depends on your current position. If you're just setting out and don't plan to retire for 40 years, you will need to save something like $640 a month (shared out among the earning members of the household &mdash; so half that if you're in a couple), assuming a <em>modest </em>5% return on your investment. If you plan to retire a lot sooner, or do not not have existing savings or 401K plans, this number might be more daunting.</p> <p>If the savings you need to achieve financial independence feel unrealistic, then it's time to start thinking of the levers you have to close the gap. Earn and save more, or plan to spend less, perhaps through lifestyle adjustments or by taking <a href="http://www.wisebread.com/5-incredible-places-to-retire-abroad-that-anyone-can-afford">advantage of geographic differences</a> in things like cost and quality of living. Or, plan to manage your retirement as a gradual wind down, continuing to be economically active after your usual retirement age, but in a flexible role. Considering these options now, rather than being pushed into them at the point you wish to quit working, is far more likely to have a happy ending.</p> <p>The new world of planning for later life brings with it more choices, but also more questions to mull over and decisions to make. Instead of facing these questions, too many of us are ignoring the issue. Experience shows that working longer (or windfalls, or a fairy godmother) is unlikely to be the answer. Getting clued up about your money <em>now</em> is the only way to give yourself a shot at the golden years you deserve.</p> <p><em>What do you think? What is the optimum way to plan for your retirement now?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/claire-millard">Claire Millard</a> of <a href="http://www.wisebread.com/you-dont-need-a-retirement-plan-you-need-a-financial-independence-plan">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-signs-its-time-to-retire">8 Signs It&#039;s Time to Retire</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/these-5-expenses-will-probably-cost-you-a-lot-less-in-retirement">These 5 Expenses Will Probably Cost You a Lot Less in Retirement</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-you-can-cut-costs-right-before-you-retire-0">6 Ways You Can Cut Costs Right Before You Retire</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/stop-believing-these-5-myths-about-iras">Stop Believing These 5 Myths About IRAs</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-things-that-could-wreck-an-early-retirement">5 Things That Could Wreck an Early Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement calculator careers financial independence jobs saving money working Mon, 25 Apr 2016 09:30:29 +0000 Claire Millard 1693265 at http://www.wisebread.com 5 Reasons to Keep Your Money Separated After Marriage http://www.wisebread.com/5-reasons-to-keep-your-money-separated-after-marriage <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-reasons-to-keep-your-money-separated-after-marriage" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/wedding_married_couple_000059191426.jpg" alt="Couple learning reasons to keep money separate after marriage" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Money may not be the root of <em>all</em> evil &mdash; but it's the clincher in a great many relationships gone haywire. Research shows that arguing about money is by far the top predictor of divorce. &quot;It's not children, sex, in-laws, or anything else. It's money &mdash; for both men and women,&quot; says Sonya Britt, an assistant professor at Kansas State University who <a href="https://www.k-state.edu/media/newsreleases/jul13/predictingdivorce71113.html">conducted a study</a> of 4,500 couples about the interplay between financial arguments and relationship satisfaction.</p> <p>We all have deeply ingrained beliefs about how money should be spent, when it's appropriate to splurge, and how much we should have stowed away in savings. And it can be difficult to the point of deal-breaking to try and mesh our own attitudes about money with another person's financial beliefs, which very well may differ drastically from our own. That's why a large number of financial advisers urge couples to remain financially independent.</p> <p>Read on for our roundup of the top reasons why it pays to keep money matters separate in your relationship. (See also:&nbsp;<a href="http://www.wisebread.com/6-ways-regular-budget-meetings-might-save-your-marriage?ref=seealso" target="_blank">6 Ways Regular Budget Meetings Might Save Your Marriage</a>)</p> <h2>1. You'll Avoid a Power Imbalance</h2> <p>Merging finances means there's no more &quot;yours&quot; and &quot;mine&quot; in the money department. The divisions blur and it all goes into the same piggy bank. But what if your partner earns much more than you, and now you're suddenly living a lifestyle you can afford only with your partner's assist? What if the opposite is true, and you're subsidizing your partner's income with your own earnings? When your relationship is healthy and sparkling, you might not be bothered by either of these scenarios. But what about in the wake of a blowout fight?</p> <p>Or let's say you're the breadwinner in the relationship and you subsidize a good chunk of your partner's lifestyle because he or she isn't earning enough to keep up. Then, suddenly, you lose your job and your partner's income isn't enough to pick up the slack. Would you feel resentful? How would you cope with that? This is the kind of financial imbalance that has a tendency to instigate the fights that ultimately tear couples apart. Luckily, you can avoid them by keeping your financials separate from your sweetie's.</p> <h2>2. We're More Accustomed to Financial Independence Than Ever</h2> <p>Young adults are <a href="http://www.census.gov/hhes/families/data/marital.html">delaying marriage longer than ever</a> before. The average age of people at their first marriage in the U.S. today is about 27, which means many people rack up six or more years of complete financial independence before saying their vows. The money habits we develop during our years as single adults become so deeply ingrained in us that it's difficult to shift them in an attempt to mesh with the financial habits of our partner.</p> <p>And, unfortunately, finding common ground on financial matters is not necessarily something that gets better with practice. When asked how much they will need to save to maintain their current lifestyle in retirement, for example, nearly <a href="https://www.fidelity.com/about-fidelity/individual-investing/fidelity-couples-study">half of all couples are in disagreement</a> about the amount needed. This level of disagreement is highest, however, among those who are closest to retirement.</p> <h2>3. It Promotes Healthy Spending Habits</h2> <p>Financially independent couples tend to practice better discipline when it comes to paying off their own debts. And that makes for a healthy relationship. When one partner starts to feel like their partner's pockets are deep enough to offset the burden of their own financial risks, they sometimes become irresponsible in their spending and saving habits. And that can create the kind of friction that could start a fiery argument later on down the road.</p> <h2>4. It Balances the Burden of Money Stress</h2> <p>When one partner becomes the sole organizer of a couple's fiscal matters, he or she runs the risk of becoming overwhelmed by the responsibility &mdash; and that can throw an entire relationship off balance. But when both partners take charge of their separate finances and contribute to mutual expenses fairly, any money stress that arises is shared, making it much more manageable to find relief as a team.</p> <h2>5. A Breakup Won't Mean Financial Chaos</h2> <p>When you maintain financial independence, you avoid the risk of your personal financial situation falling apart just because your relationship did. Paying your fair share in a relationship also makes for a cleaner emotional break if you one day decide to split. When one partner consistently treats the other to dinners and vacations, or pays the majority of the bills, resentment is bound to brew during a breakup. The partner who paid more might even feel entitled to reimbursement.</p> <p><em>Separate or apart &mdash; how do you manage money with your partner? </em></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/5-reasons-to-keep-your-money-separated-after-marriage">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/3-simple-ways-to-split-bills-with-your-spouse">3 Simple Ways to Split Bills With Your Spouse</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/3-reasons-taking-a-loan-for-your-wedding-is-a-bad-idea">3 Reasons Taking a Loan For Your Wedding 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/5-money-conversations-every-couple-should-have">5 Money Conversations Every Couple Should Have</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/4-money-fights-married-couples-have-and-how-to-avoid-them">4 Money Fights Married Couples Have (And How to Avoid Them)</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/47-simple-ways-to-waste-money">47 Simple Ways To Waste Money</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Lifestyle couples financial independence marriage power imbalances sharing money spending Wed, 20 Apr 2016 09:30:21 +0000 Brittany Lyte 1690618 at http://www.wisebread.com Do You Know Your Retirement "Number"? http://www.wisebread.com/do-you-know-your-retirement-number <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/do-you-know-your-retirement-number" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/cash-3571500-small.jpg" alt="cash" title="cash" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>Have you ever seen the TV commercials with people strolling through town or the neighborhood carrying their retirement number? The numbers vary from person to person, but the general range seems to be between $1 million and $2 million. The implied message: &quot;Shame on you if you don't know your 'number'!&quot; (And of course, &quot;Contact us so we can help you figure it out.&quot;) (See also: <a target="_blank" href="http://www.wisebread.com/financial-independence-is-more-than-just-a-number?wbref=readmore-1">Financial Independence Is More Than Just a Number</a>)</p> <p>I like the ads because they focus our attention on a measurable retirement goal. But <a target="_blank" href="http://www.wisebread.com/11-ways-to-prep-for-guerrilla-retirement">what exactly is the goal</a>, and what role does this &quot;number&quot; play?</p> <h2>Assets? What Assets?</h2> <p>The number in the ads might represent total assets (the combined value of your house, savings and retirement accounts, and other things of value). Or perhaps it refers to only your investable assets (just the savings and retirement accounts, not the house). Still another possibility is that it represents your net worth (your total assets minus your total liabilities, or debts). Hmmm.</p> <h2>High Net Worth Is No Guarantee of Financial Independence</h2> <p>If I were to guess, I'd say it represents your net worth. But here's the problem &mdash; net worth is a measure of your wealth. That's an important measure, but your ultimate goal is really financial independence, and that's measured by monthly income, or cash flow. Let's look at an example to illustrate.</p> <p>Assume your household has a net worth of $1 million. Congratulations, you're a millionaire! Surely that's enough to retire on, right? Maybe&hellip;or maybe not. It depends on the composition of your net worth.</p> <p>If, for example you have $2 million in assets but $1 million in liabilities (mortgage, auto, education, and other debt), your net worth is still $1 million. But the cost of carrying so much debt might be, say, $6,000 per month. Despite being a millionaire, can you afford to give up your job and still cover a negative monthly cash flow of $6,000? And we haven't even addressed your other monthly cash flow needs to cover food, clothing, transportation, energy, health care, and other living expenses.</p> <h2>Cash Flow Is King</h2> <p>This example is a little extreme, but it illustrates a very real point: Your ultimate goal &mdash; your retirement &quot;number&quot; &mdash; should be measured not by wealth <a target="_blank" href="http://www.wisebread.com/shrinking-your-cash-flow-period-to-create-a-better-budget">but by cash flow</a>. Yes, your wealth contributes to your cash flow, but it's a means towards the end and not the end itself. And as illustrated by the example, there is bad wealth (which generates negative cash flow) as well as good wealth (which creates positive monthly cash flow).</p> <p>Let's try another example, one that moves us in a more favorable direction. Your household has $1 million in assets and no liabilities. Great &mdash; no negative cash flow from loans. But your house is valued at $600,000 and your total retirement savings is $400,000. If you invest the $400,000 in an account that generates 6% annual interest, that's $24,000 per year or $2,000 per month in positive cash flow. Ah, but the house. While it's mortgage-free, the insurance and property taxes create a regular stream of negative cash flow. And then there are still those nasty cash outlays for living expenses.</p> <p>OK, you've made some progress but haven't yet reached the promised land of financial independence. So let's give it one more try.</p> <p>You have no debts, $500,000 in retirement savings, a primary residence valued at $250,000, and a two-family property also worth $250,000 that generates net positive cash flow of $1,200 per month. Now let's see where you land. Positive cash flow from retirement savings (at 6% return) = $30,000/year or $2,500/month. And if you apply $700 of the $1,200 monthly cash flow from your rental property to pay taxes and insurance on your primary residence, you net a positive $500/month from that &quot;good&quot; rental property asset.</p> <p>So now you've managed to clear $3,000/month even after the monthly carrying cost of your real estate. If that's enough to cover your monthly living expenses, then you're on your way to financial independence. Add in social security and other supplemental sources of monthly income and you might even have a cushion to cover occasional lump sum purchases and unexpected expenses. Nice going!</p> <p>As with <a target="_blank" href="http://www.wisebread.com/5-steps-toward-financial-independence">any good plan</a>, a retirement plan starts with a clearly defined goal. After all, without one, how do you measure your progress or success? Unfortunately, this part of the retirement planning process is often lacking. Yes, accumulating wealth plays an important role, but it's a supporting role, and it's not the ultimate goal. The ultimate goal is financial independence, and that's measured by a different &quot;number&quot; &mdash; monthly cash flow.</p> <p><em>Do you have a retirement planning goal? What &quot;number&quot; do you use?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/keith-whelan">Keith Whelan</a> of <a href="http://www.wisebread.com/do-you-know-your-retirement-number">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-things-that-could-wreck-an-early-retirement">5 Things That Could Wreck an Early Retirement</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-one-personal-finance-skill-you-must-master-before-all-the-others">The One Personal Finance Skill You Must Master Before All the Others</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/just-saving-isnt-enough-how-cash-flow-allocation-helps-you-retire">Just Saving Isn&#039;t Enough: How Cash Flow Allocation Helps You Retire</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/financial-independence-is-more-than-just-a-number">Financial Independence Is More Than Just a Number</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/you-dont-need-a-retirement-plan-you-need-a-financial-independence-plan">You Don&#039;t Need a Retirement Plan — You Need a Financial Independence Plan</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement cash flow financial independence retirement goal Fri, 12 Jul 2013 10:24:33 +0000 Keith Whelan 980370 at http://www.wisebread.com Happy (Financial) Independence Day http://www.wisebread.com/happy-financial-independence-day <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/happy-financial-independence-day" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/3721680792_ec2031169f_z.jpg" alt="woman waving flag" title="woman waving flag" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>Today, let&rsquo;s take a vow to be financially independent.</p> <p>I&rsquo;m posting this on the Fourth of July &mdash; Independence Day here in the United States &mdash; but this works any day. Whether you need to work to become financially independent or just want to maintain the independence you&rsquo;ve already gained, today, let's set some goals. (See also: <a href="http://www.wisebread.com/how-to-save-without-goals">How to&nbsp;Save Without Goals</a>)</p> <p>Here are mine:</p> <ul> <li>To never financially rely on my parents, my friends, or most certainly, a credit card. <br /> &nbsp;</li> <li>To be able to make the truly important decisions in life &mdash; about things like family, where I live, and the work I do &mdash; based on my desires, not the sorry state of my finances. <br /> &nbsp;</li> <li>To not be in debt. <br /> &nbsp;</li> <li>To be able to use money as a tool to create wonderful experiences &mdash; but know that it's far from the only tool necessary. <br /> &nbsp;</li> <li>To not worry about what would happen to me if I'm faced with a financial emergency.</li> </ul> <p>Some of these goals I&rsquo;ve achieved. Some of them I'm still working at (curse you, student loans).</p> <p>Of course, in order to actually achieve big-picture goals, you'll need to make smaller, more manageable goals.</p> <p>But...for many of us, today is a holiday &mdash; a time for that all-important relaxation (especially if you're one of those people who has been passing around this recent <a href="http://opinionator.blogs.nytimes.com/2012/06/30/the-busy-trap/">New York&nbsp;Times op ed about being busy</a>). Take the rest of the day off, if you can.</p> <p>When you come back tomorrow, you can better define and break down your goals with the help of these articles:</p> <p><strong>Defining Your Goals</strong></p> <ul> <li><a href="http://www.wisebread.com/defining-what-financial-success-means-to-you">Defining What Financial Success Means to You </a></li> <li><a href="http://www.wisebread.com/financial-independence-is-more-than-just-a-number">Financial Independence Is More Than&nbsp;Just a Number</a></li> <li><a href="http://www.wisebread.com/feeling-stuck-100-ways-to-change-your-life">Feeling Stuck? 100 Ways to Change Your Life</a></li> <li><a href="http://www.wisebread.com/goal-setting-defined-and-deconstructed">Goal Setting, Defined and Deconstructed</a></li> <li><a href="http://www.wisebread.com/deciding-what-you-want-out-of-retirement">Deciding What You Want Out of Retirement</a></li> <li><a href="http://www.wisebread.com/how-much-money-will-you-need-to-retire">How Much Money Will You Need to Retire?</a></li> </ul> <p><strong>Taking Action</strong></p> <ul> <li><a href="http://www.wisebread.com/5-steps-toward-financial-independence">5 Steps to Financial Independence</a></li> <li><a href="http://www.wisebread.com/how-to-start-fighting-debt-today">Start Fighting Debt &mdash; Today</a></li> <li><a href="http://www.wisebread.com/25-frugal-changes-you-can-make-today">25 Frugal Changes You Can Make Today</a></li> <li><a href="http://www.wisebread.com/37-savings-changes-you-can-make-today">37 Savings Changes You Can Make Today</a></li> <li><a href="http://www.wisebread.com/the-first-step-to-budgeting">The First Step to Budgeting</a></li> <li><a href="http://www.wisebread.com/8-tips-for-improving-or-starting-a-budget">8 Tips for Improving or Starting a Budget</a></li> </ul> <p>Don't see an article for the action you want to take listed here? Just search our site using the field in the top right.</p> <p>Happy Independence Day, everyone &mdash; national, financial, or whatever else you might be celebrating.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/meg-favreau">Meg Favreau</a> of <a href="http://www.wisebread.com/happy-financial-independence-day">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-things-you-should-make-your-adult-child-pay-for">4 Things You Should Make Your Adult Child Pay For</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-reasons-a-big-paycheck-is-not-worth-staying-in-a-job-you-hate">5 Reasons a Big Paycheck Is Not Worth Staying in a Job You Hate</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-minute-finance-create-financial-goals">5-Minute Finance: Create Financial Goals</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-steps-toward-financial-independence">5 Steps Toward Financial Independence</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-one-personal-finance-skill-you-must-master-before-all-the-others">The One Personal Finance Skill You Must Master Before All the Others</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance financial goals financial independence Independence Day Wed, 04 Jul 2012 10:36:09 +0000 Meg Favreau 938632 at http://www.wisebread.com 5 Financial Steps to Take After Graduating From College http://www.wisebread.com/5-financial-steps-to-take-after-graduating-from-college <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-financial-steps-to-take-after-graduating-from-college" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000015644037Small.jpg" alt="Graduates" title="Graduates" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>Graduating from college can be awesome, exciting, and a huge relief. But when it comes to the current job market and student debt, however, graduating from college can also feel pretty darn daunting.</p> <p>But don&rsquo;t worry! With a little bit of planning, you can be in control of your finances post-graduation &mdash; and set yourself up nicely for the years to come. Here are five steps you should take to conquer your finances.</p> <h3>1. Create a Budget</h3> <p>If you don&rsquo;t already have one, I strongly recommend that you create a budget. Sure, you can probably get by without one &mdash; but that&rsquo;s also how you end up at the end of the month with no money in your account, wondering where it all went.</p> <p>To make it easy on yourself, consider using one of the many free budgeting tools available online. These tools can securely pull in information from your various bank accounts and loans, allowing you to easily create budgets, track your spending, and set financial goals all in one place. If you haven&rsquo;t supported yourself in the past, it might be surprising how quickly your new paycheck gets spent &mdash; especially since, according to a <a href="http://www.usatoday.com/money/perfi/basics/story/2012-04-01/first-job-managing-your-finances/53932710/1">USA Today article</a>, &ldquo;most young people don&rsquo;t realize they&rsquo;re actually taking home about $75 of their paycheck once taxes, Social Security and 401(k) contributions are factored in.&rdquo; A budget helps you ensure you have all the money for the necessities &mdash; and helps you set-aside cash for some fun stuff, too.</p> <h3>2. Understand and Reexamine Your Insurance Policies</h3> <p>While you were still a student, your insurance &mdash; including health, car, life, and renter&rsquo;s insurance &mdash; may have been covered by your parents or your school. But after graduating, it&rsquo;s likely that you&rsquo;ll be responsible for these policies &ndash; and the costs can, quite honestly, be a little startling.</p> <p>The first step in your research should be to find out from your parents or school what levels of coverage you had. Then, armed with that information, you can begin researching new policies for each of the following types of insurance.</p> <p><strong>Health Insurance</strong></p> <p>Hopefully you&rsquo;ll be able to find a job with health coverage. The unfortunate fact, though, is that this is becoming less and less likely. If you were on your parents&rsquo; policy while in college, you may be able to stay on it for a few more years. Have a conversation with them about it, and if you&rsquo;re able to, offer to pay any associated fees for your care.&nbsp;Doing this will likely be cheaper than getting your own policy.</p> <p>If you do not have the option of employer- or parent-based coverage, do consider getting at least a basic insurance plan. Medical debt from an emergency can cost thousands and thousands of dollars; a basic policy helps protect you from going into wild, crushing debt.&nbsp;You can start your search online or with a health insurance agent. Before you do so, round up all of your medical records (these are good to have around anyway); applying for insurance as an individual requires that you answer several questions about your medical history so the insurance company can determine your risk level and decide what to charge you. Other factors that can adjust your rate include age and habits.</p> <p><strong>Car Insurance</strong></p> <p>The cost of car insurance can vary drastically depending on where you live, the type of car you drive, and factors including your age, your driving record, and even your grades in school. When applying for a policy on your own, speak with a customer service representative &mdash; they can often tell you about discounts that aren&rsquo;t always available through their website.</p> <p><strong>Renter&rsquo;s Insurance</strong></p> <p>If you&rsquo;re renting your first house or apartment, strongly consider getting renter&rsquo;s insurance. Policies are inexpensive, depending on your level of coverage, and they&rsquo;ll help replace your stuff in the advent of something terrible happening, like a burglary or fire. Depending on the policy, you might even be covered if your stuff is stolen somewhere else, like out of your car or while you&rsquo;re traveling.</p> <p><strong>Life Insurance</strong></p> <p>There is a very good chance that you don&rsquo;t currently have a life insurance policy. Typically associated with older folks and people with families, life insurance pays out a sum to your family or loved ones upon your death. Here&rsquo;s what the Illinois Department of Insurance has to say about college students and life insurance:</p> <p>If you are a young college student with no dependents, life insurance is not as important as it will be when you get older and are married and/or have children. For most college students, the only reason to buy life insurance is to cover funeral expenses and debts, if there are any. Your parents may already have a life insurance policy on you that will cover these expenses. If not, you should be able to purchase a term life insurance policy for a small premium.</p> <p>If you are married, and/or have children or elderly parents who are dependent on you, the need for life insurance is much greater. Still, you should be able to purchase a term life insurance policy that will provide benefits to pay your debts and provide your dependents with some financial security.</p> <p>That said, even if you do not currently have family members who are dependent on you, it can be a good idea to shop for a life insurance policy now. The primary reason is simple frugality &mdash; the younger and healthier you are when you sign up for a policy, <a href="http://www.wmur.com/Money-Matters-Insuring-A-New-Marriage/-/9858568/11834068/-/10mr9uyz/-/index.html">the cheaper your rate will be</a> &mdash; and you&rsquo;re able to lock those rates in. (See also: <a href="http://www.genworth.com/content/products/lifeinsurance/how_much_life_insurance_do_i_need/life_insurance_calculator.html">Life Insurance Calculator: How Much Insurance Do I Need?</a>)</p> <p>Another major reason for purchasing life insurance is the aforementioned debt. If you have any debts at the time of your death, life insurance can cover or help cover them &mdash; instead of passing them on to your already grieving loved ones.</p> <h3>3. Start Saving Immediately</h3> <p>I&rsquo;ll admit, this Wall Street Journal article on <a href="http://online.wsj.com/article/SB10001424052702304432704577348052844503384.html?mod=WSJ_FamilyFinance_MoreHeadlines">why you need to start saving now</a> is kind of depressing &mdash; &ldquo;two-thirds of students will graduate with debt that averages $25,250 in student loans and more than $4,000 in credit-card debt.&rdquo; But the same article also points out something very important &mdash; that compound interest is a powerful thing, and the earlier you start saving, the most you can take advantage of it: &ldquo;If you save $10 a day at age 25, you&rsquo;ll have more than $1 million by age 65, assuming an 8% annual rate of return. If you start at age 35, you&rsquo;ll have $445,000. At age 45, you&rsquo;ll only have $180,000.&rdquo;</p> <p>If you have a job that provides a 401(k) retirement plan, take advantage of it. Not only will you not miss the money (since it&rsquo;s automatically deducted from your pay before the check before it hits your hands), but most employers offer matching contributions after you&rsquo;ve been with the company for a certain amount of time. At that point, if you don&rsquo;t contribute to your 401(k), you are turning down free money.</p> <p>Don&rsquo;t worry if you don&rsquo;t have a 401(k) plan, though, there are still several great saving options &mdash; like Roth IRAs.</p> <h3>4. Talk to Your Parents About Their Finances</h3> <p>It&rsquo;s not always a fun chat, but this is a good time to have a discussion with your parents to help better understand their financial situation and your role in the family's financial future. Questions you might want to discuss include: Are they ready for retirement? Do they expect you to support them in their retirement? If you borrowed money from them for college, can you pay them back?</p> <p>One thing that you should be sure to discuss with your parents, even though it can be uncomfortable, is expectations &ndash; yours and theirs &ndash; if they get sick or need long-term care.</p> <p>If they don&rsquo;t already have one, encourage your parents to create a living will &mdash; this document determines who will make medical decisions for them if they are unfit, and it also outlines things such as whether or not they want to be kept on life support.</p> <p>It can also be helpful to discuss long-term care for your parents. Earlier this year, USA Today reported how <a href="http://www.usatoday.com/money/perfi/basics/story/2012-03-25/caring-for-an-elderly-parent-financially/53775004/1">caring for elderly parents catches many unprepared</a>. Sudden strokes, heart attacks, and other illnesses and accidents &mdash; while we don&rsquo;t like to think about them &mdash; can have consequences beyond just health. Whether it requires a stay in a nursing home, hiring an at-home caretaker, or taking time off from your job to care for your parents, long-term care can be monstrously expensive &mdash; according to the USA Today article, &ldquo;The median cost of a year in a private room at a nursing home in 2011 was $77,745&hellip;And only those who have spent most of their assets can qualify for Medicaid to pay for the nursing home.&rdquo;</p> <p>Long-term care insurance, however, can help cover the costs of services for this kind of day-to-day care. And once you buy it, long-term care insurance is locked in &mdash; the policy can&rsquo;t be canceled by the insurance company, no matter what happens health-wise.</p> <h3>5. Have Fun</h3> <p>I know that sounds like one of those stupid suggestions that everyone ends articles like this with. But I am very, very serious about having fun. While this is possibly one of the most financially tender times in your life, it&rsquo;s also a time when you probably have a lot of freedom and flexibility. Plan and make room in your budget for things like travel, culture, or even just trying new foods with friends. Remember, money can buy happiness &mdash; if what you&rsquo;re buying is an experience. With a little bit of planning and balance, you can experience life <em>and</em> save for your future.</p> <p><strong>Are you a current college student with concerns about entering the working world? Or do you have advice for college graduates? Leave your thoughts in the comments. </strong></p> <p><i>This article was made possible by the support and inspiration of&nbsp;<a href="http://www.genworth.com/content/products/home_ownership.html" target="_blank">Genworth Financial</a>, a S&amp;P 500 insurance&nbsp;company with more than $100 billion in assets</i><em>. Check out Genworth's website for more information on their <a href="http://www.genworth.com/content/products/lifeinsurance.html">life insurance</a>&nbsp;and <a href="http://www.genworth.com/content/products/long_term_care.html">long-term care insurance</a>&nbsp;products.</em></p> <p><a href="http://www.genworth.com/content/products/lifeinsurance/how_much_life_insurance_do_i_need.html"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u4/genworth-life-insurance.jpg" width="605" height="454" alt="" /></a></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/meg-favreau">Meg Favreau</a> of <a href="http://www.wisebread.com/5-financial-steps-to-take-after-graduating-from-college">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/4-risky-life-decisions-that-millionaires-made-but-you-shouldnt">4 Risky Life Decisions That Millionaires Made — But You Shouldn&#039;t</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/47-simple-ways-to-waste-money">47 Simple Ways To Waste Money</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-ways-grown-ups-can-make-new-friends-without-going-broke">7 Ways Grown-Ups Can Make New Friends Without Going Broke</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-free-to-be-poor">Not free to be poor</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-travel-full-time-for-17000-a-year-or-less">How to Travel Full-Time for $17,000 a Year (or Less!)</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Insurance Lifestyle financial independence life insurance long term care insurance recent graduates Fri, 22 Jun 2012 10:36:12 +0000 Meg Favreau 935292 at http://www.wisebread.com Financial Independence Is More Than Just a Number http://www.wisebread.com/financial-independence-is-more-than-just-a-number <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/financial-independence-is-more-than-just-a-number" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/140387211_22aab0f9b4_z.jpg" alt="numbers" title="numbers" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>When do you think you've made it to the land of financial freedom?</p> <p>Financial independence was a goal of mine when I started MoneyNing.com in 2007. Back then, I thought of the goal as a number. &quot;When I have a million dollars in the bank, I'd be all set...&quot; (See also: <a href="http://www.wisebread.com/5-steps-toward-financial-independence" title="5 Steps Toward Financial Independence">5 Steps Toward Financial Independence</a>)</p> <p>Then I started writing, thinking, and talking about money matters on a daily basis, and that number changed. Sometimes, all the glamorous advertisements and a few impulse purchases would prompt me to increase this number. Other times, I would be reminded that material happiness is just temporary relief and I would lower the number.</p> <p>It slowly occurred to me that financial independence isn't merely hitting a number, but being in the right state of mind. Some people can't retire until they have $12 million in retirement funds, while others can live on $300,000. The difference has nothing to do with the ability to <a href="http://couponshoebox.com/">find coupons</a>, but it has everything to do with their expectations.</p> <p>The funny thing is that I probably know more happy people who don't have oodles of money than satisfied, wealthy people. This may sound counter-intuitive, but the more money people have, the more money they seem to need. Of course, the money is not for survival purposes; they want more because they compare. Wealthy people are <a href="http://www.wisebread.com/biggest-money-saving-tip-move-far-away-from-the-joneses" title="Biggest Money Saving Tip: Move Far Away from the Joneses">exposed to more luxury</a>, and they subsequently want more. They see ultra expensive <em>stuff</em>, and they want everything.</p> <p>Every company is out there trying to get more sales. No matter how much money you have, you won't have enough to buy everything out there. If you keep chasing, you will always need to run. You cannot win.</p> <h2>What Is Financial Independence</h2> <p>It is very easy to look at our assets and see if we can meet a certain retirement number that a financial article would cite, but honestly, who cares what someone else's number is?</p> <p>If you have $1 million in retirement funds right now, have your house paid off and have expenses of less than $1,000 a month, why does it matter that someone else thinks they need $3 million to retire?</p> <p>On the other hand, if your expenses are $20,000 a month and you have $3 million, of course you can't retire yet. You need way more than what you have. And you know what? I bet the other guy with $1 million is happier than you, too.</p> <h2>It's All Based on You</h2> <p>Financial independence is not needing to base your living decisions on financial constraints. You can achieve freedom with more money or less spending. Which road you decide to take is entirely up to you.</p> <p>Just realize that once you reach a certain level of income, keeping your spending in check is a much easier way to keep up.</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%2Fquarterlife-crisis-what-is-it&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FWhat%2520Does%2520Financial%2520Independence%2520Mean%2520To%2520You.jpg&amp;description=Quarterlife%20Crisis!%20What%20is%20It%3F"></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/What%20Does%20Financial%20Independence%20Mean%20To%20You.jpg" alt="What Does Financial Independence Mean To You" 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/david-ning">David Ning</a> of <a href="http://www.wisebread.com/financial-independence-is-more-than-just-a-number">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-win-the-lottery-without-paying-a-penny-for-the-ticket">How to Win the Lottery Without Paying a Penny for the Ticket</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-is-keeping-you-from-a-life-of-financial-independence">What is keeping you from a life of financial independence?</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/im-financially-free-now-what">I&#039;m Financially Free. Now What?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/does-money-really-buy-happiness">Does Money Really Buy Happiness?</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-right-way-to-withdraw-money-from-your-retirement-accounts-during-retirement">The Right Way to Withdraw Money From Your Retirement Accounts During Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Lifestyle Personal Development Retirement behavior financial freedom financial independence income money philosophy Tue, 21 Sep 2010 13:00:11 +0000 David Ning 242657 at http://www.wisebread.com 5 Steps Toward Financial Independence http://www.wisebread.com/5-steps-toward-financial-independence <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-steps-toward-financial-independence" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/independence.jpg" alt="Independence" title="Independence" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>Whether you&rsquo;re a brand new grad or regrouping after a layoff or other financial difficulties, you may find that it&rsquo;s more difficult than you&rsquo;d imagined to wean yourself from any monetary help you&rsquo;ve been getting. Though most of the process is straightforward, it&rsquo;s always good to remember what it takes to achieve financial independence.</p> <h2>1. Get a Job</h2> <p>While finding a job in your niche or industry is great, any job is better than none at all. With job markets still sluggish, getting your foot in the door anywhere will help you towards your financial goals. Once you&rsquo;re in, it doesn&rsquo;t mean you have to stay. Getting a job that will hold you over, though, may mean the difference between making it on your own and moving back in with the folds.</p> <h2>2. Know Your Expenses</h2> <p>It&rsquo;s easy to get overwhelmed with the different types of expenses you have, particularly if you aren&rsquo;t used to paying them yourself. While writing a check here and there will get the bills paid, you&rsquo;re more likely to achieve financial independence if you&rsquo;re intimately familiar with your expenses.</p> <p>Knowing approximately how much you pay each month in certain categories will also help you find any problems. If your electric bill suddenly skyrockets, you&rsquo;ll know you need to investigate to find the source of the extra charges.</p> <h2>3. Commit to Saving</h2> <p>Being financially independent doesn&rsquo;t only mean paying your own way now, but making preparations to do so in the future. Plan ahead as soon as you have some extra money, and it will go far towards ensuring your financial independence even if something bad happens, like you lose your job or face a large, unexpected bill.</p> <p>Put your savings away after your regular expenses are paid and before you buy anything else. This will help your savings grow and make sure that you stay committed to it in the long term.</p> <h2>4. Prioritize Essentials</h2> <p>Make sure you know how much money you&rsquo;ll need each month, and categorize your expenses. Determine which ones are necessary, which are high priority, and which ones you can eliminate if you need to. This will help you know what to pay first, as well as how much money you need to make to achieve your goals.</p> <p>Prioritizing your expenses also gives you a good idea of how much you need to make each month. If your expenses are high, consider lowering them by finding roommates or changing your lifestyle for a few months, until you can get more income.</p> <h2>5. Give Yourself a Deadline</h2> <p>Decide when it&rsquo;s realistic for you to achieve your financial goals and make that your deadline. Once you have that in mind, you&rsquo;ll know how long you have to find a job, find a place to live, and figure out your personal budget.</p> <p>Deadlines provide fantastic motivation. With one in place, you&rsquo;ll be more likely to follow through on your intentions and to do so in good time. Of course, your deadline isn&rsquo;t absolute. If something falls through or your situation changes, you can always move it back. But don&rsquo;t move it unnecessarily, because then it isn&rsquo;t a deadline at all.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/sarah-winfrey">Sarah Winfrey</a> of <a href="http://www.wisebread.com/5-steps-toward-financial-independence">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/4-things-you-should-make-your-adult-child-pay-for">4 Things You Should Make Your Adult Child Pay For</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-reasons-a-big-paycheck-is-not-worth-staying-in-a-job-you-hate">5 Reasons a Big Paycheck Is Not Worth Staying in a Job You Hate</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-one-personal-finance-skill-you-must-master-before-all-the-others">The One Personal Finance Skill You Must Master Before All the Others</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-money-moves-for-the-newly-independent">8 Money Moves for the Newly Independent</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-things-teens-can-do-now-to-prepare-for-financial-independence">4 Things Teens Can Do Now to Prepare for Financial Independence</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance financial independence Thu, 01 Jul 2010 12:00:05 +0000 Sarah Winfrey 159726 at http://www.wisebread.com