emergency funds https://www.wisebread.com/taxonomy/term/20120/all en-US How to Use T-bills to Safely Boost Your Emergency Fund https://www.wisebread.com/how-to-use-t-bills-to-safely-boost-your-emergency-fund <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-use-t-bills-to-safely-boost-your-emergency-fund" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/american_dollar_and_stop_watch.jpg" alt="American dollar and stop watch" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You know you need an emergency fund filled with six to 12 months' worth of daily living expenses. You also know that you need to keep this fund in a safe place that gives you easy access to your money.</p> <p>The problem? Traditional savings accounts &mdash; the most obvious place to stash emergency fund dollars &mdash; pay so little interest. Your money will sit in a savings account <em>safely</em>, but it won't earn you anything, either. This is where T-bills, or Treasury bills, can help.</p> <p>T-bills are short-term investment vehicles backed by the Treasury Department of the U.S. government. They're safe, they generate greater returns than traditional saving accounts, and because they are short-term investments, you can get at your money quickly.</p> <p>As a result, T-bills can be an excellent way to boost the money in your emergency fund. (See also: <a href="http://www.wisebread.com/how-to-earn-money-with-your-emergency-fund?ref=seealso" target="_blank">How to Earn Money With Your Emergency Fund</a>)</p> <h2>The basics of Treasury bills</h2> <p>T-bills are provided by the Treasury Department and are offered in short terms ranging from a few days to a maximum of 52 weeks. If you invest in a four-week T-bill, you'll gain access to that money after 28 days. This is good for an emergency fund: You never want your emergency fund dollars tied up in long-term investments that you can't access quickly.</p> <p>You can buy T-bills by logging onto <a href="https://www.treasurydirect.gov/" target="_blank">TreasuryDirect.gov</a> or by working with a bank or broker. You make money by buying T-bills at less than face or &quot;par&quot; value. You might, for instance, buy a 13-week T-bill with a face value of $1,000 for $995.20. After the bill matures in 13 weeks, you'd get back $1,000. You'll have made $4.80 in 13 weeks, which is an annual interest rate of 1.9 percent (the rate as of June 20, 2018). It doesn't seem like a lot, but try getting that from your bank.</p> <p>You don't have to spend a fortune to invest in T-bills. TreasuryDirect sells T-bills in denominations of just $100. Of course, you'll generally see greater returns by making larger investments. But T-bills do provide a way for people with lesser amounts of cash to invest in a safe, government-backed investment vehicle.</p> <p>An important thing to note is that you will have to consider the interest you earn from T-bills as income. This income is subject to federal income tax. You won't, however, have to pay state or local income tax on this income.</p> <h2>Buying T-bills</h2> <p>You can buy T-bills through TreasuryDirect in four-week, 13-week, 26-week, or 52-week terms. You can also buy cash-management bills that come with even shorter terms of often just a few days.</p> <p>T-bills are sold at auction, and you can either place a noncompetitive or competitive bid. All T-bills, except 52-week versions and cash-management bills, are auctioned every week. It is here that the discount rate is determined for each bill.</p> <p>The 52-week T-bill is auctioned every four weeks, while cash-management bills are not auctioned on a regular schedule. You'll have to check TreasuryDirect to determine when these bills are up for auction.</p> <p>With a noncompetitive bid, you accept the rate for your T-bills that has already been determined at auction. You can submit a noncompetitive bid on your own, and you are guaranteed to receive the bill you want.</p> <p>Banks, brokers, or larger investors typically submit competitive bids since it's a more complicated process. Competitive bids might be rejected if the rate you choose is higher than the discount rate set at the auction.</p> <h2>Why T-bills are good for emergency funds</h2> <p>T-bills work well as a way to boost your emergency fund because of their combination of being safe and having short terms. They are backed by the federal government, so your money will be protected.</p> <p>They also come with a guaranteed return of <em>at least</em> your principal investment. When you invest in a T-bill, you know exactly what you are going to get back. If you're building an emergency fund, that's a critical benefit.</p> <p>To keep your emergency fund easy to access, don't invest all of it in a short term T-bill &mdash; leave enough in regular savings to cover the likeliest emergencies. If you invest in four week T-bills, the rest of your emergency is never more than 28 days away. You'll have to decide the right mix for you.</p> <p>From an investment standpoint, you'd earn a higher return investing in the stock market &mdash; but the stock market comes with risk, which is detrimental to an emergency fund. Sure, you might make more money, but you might lose more, too. You don't want to take risks like that with money you need in case of a financial emergency.</p> <p>Certificates of deposit are another relatively safe investment, but still not a great place to stash emergency fund dollars. They usually come with longer terms, with the most valuable CDs requiring you to keep your money in them for a year or more. With T-bills, you can invest for the short-term &mdash; as little as four weeks.</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=https%3A%2F%2Fwww.wisebread.com%2Fhow-to-use-t-bills-to-safely-boost-your-emergency-fund&amp;media=https%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHow%2520to%2520Use%2520T-bills%2520to%2520Safely%2520Boost%2520Your%2520Emergency%2520Fund.jpg&amp;description=How%20to%20Use%20T-bills%20to%20Safely%20Boost%20Your%20Emergency%20Fund"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/How%20to%20Use%20T-bills%20to%20Safely%20Boost%20Your%20Emergency%20Fund.jpg" alt="How to Use T-bills to Safely Boost Your Emergency Fund" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="https://www.wisebread.com/how-to-use-t-bills-to-safely-boost-your-emergency-fund">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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="https://www.wisebread.com/what-is-student-loan-forbearance-anyway">What Is Student Loan Forbearance, Anyway?</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="https://www.wisebread.com/5-money-moves-to-make-before-you-move-in-together">5 Money Moves to Make Before You Move in Together</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="https://www.wisebread.com/7-easy-ways-to-build-an-emergency-fund-from-0">7 Easy Ways to Build an Emergency Fund From $0</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="https://www.wisebread.com/how-to-earn-money-with-your-emergency-fund">How to Earn Money With Your Emergency Fund</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="https://www.wisebread.com/6-signs-youre-making-all-the-right-money-moves">6 Signs You&#039;re Making All the Right Money Moves</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance emergency funds federal government interest investment return t-bills treasury bills Wed, 27 Jun 2018 08:30:16 +0000 Dan Rafter 2151242 at https://www.wisebread.com 5 Money Moves to Make Before You Move in Together https://www.wisebread.com/5-money-moves-to-make-before-you-move-in-together <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-money-moves-to-make-before-you-move-in-together" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/young_couple_moving_in_new_home.jpg" alt="Young couple moving in new home" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Moving in with your significant other is an important moment in your relationship, and it can feel awkward to worry about anything so concrete as finances when you both have stars in your eyes. But money has a way of causing tension in even the closest relationships if you don't spell out expectations before you've signed a lease or a mortgage contract together.</p> <p>In addition to the potential strain money can put on your relationship, it's also important to remember that cohabiting couples can have an even greater need to protect themselves financially than married couples do, since there is less legal protection available for unmarried couples who split up after living together.</p> <p>Though it may seem unromantic, make sure you and your soon-to-be live-in boo follow these money moves before you call the moving trucks.</p> <h2>1. Talk about finances</h2> <p>You may assume that you and your partner each make about the same amount of money and have similar attitudes toward finance. But until you are living together and your joint household depends on each of your finances, you can't really know for sure.</p> <p>That's why the first and most important step in making sure your new living situation is blissful rather than stressful is to talk openly about your finances together. Discuss how much money you each make; how much each of you are used to spending for housing, utilities, and other living expenses; and how much you spend each month on individual expenses, like student loans, car loans, gifts to family, work-related expenses, and the like.</p> <p>This may sound like the world's most awkward conversation (just ahead of when your parents gave you &quot;the talk&quot;), but a little discomfort now will save you a great deal of relationship strife in the future. That's because you can discuss fundamental disagreements about how to spend money when you're not in the midst of a financial issue or problem.</p> <p>For instance, if you know ahead of time that your sweetheart sends $400 per month to help her younger brother in college, it will not come as a nasty surprise when that is the reason she gives for not being able to afford half the cost of a new dryer to replace the broken old one. You will know just how strongly she values giving financial help to family, and you can talk about how that will affect your financial choices as a live-in couple before it becomes a reality. (See also: <a href="http://www.wisebread.com/5-money-conversations-every-couple-should-have?ref=seealso" target="_blank">5 Money Conversations Every Couple Should Have</a>)</p> <h2>2. Set a budget you can both afford</h2> <p>Beyond the initial conversation about your income, expectations, and financial philosophy, it's important to work together to set a budget that's affordable for you both. This is especially vital if there is a big income disparity between you, since the higher-earning partner may assume they can afford a more expensive place than the lower-earner is comfortable with.</p> <p>Couples with an income imbalance may be tempted to simply let the higher earner pick up the financial slack, but there are two big problems with this plan. First, it can come with a big helping of resentment to have the income imbalance reflected in housing costs, since the higher earner may resent paying more while the lower earner may feel beholden.</p> <p>In addition, nothing is guaranteed, including employment. Setting a budget that is completely outside the means of the lower earning partner could turn a potential job loss into a huge financial crisis. (See also: <a href="http://www.wisebread.com/4-ways-an-income-gap-can-strain-your-relationship?ref=seealso" target="_blank">4 Ways an Income Gap Can Strain Your Relationship</a>)</p> <p>When you are setting your joint budget, talk about how much rent or mortgage you can each afford, as well as how you will split up the cost of utilities so that you can each easily afford your portion of the housing costs. While it's perfectly OK not to split everything 50/50, it's a good idea to draw up a budget that either partner could handle for at least a month or two in a pinch. (See also: <a href="http://www.wisebread.com/3-simple-ways-to-split-bills-with-your-spouse?ref=seealso" target="_blank">3 Simple Ways to Split Bills With Your Spouse</a>)</p> <h2>3. Put both your names on the lease</h2> <p>If either partner is not represented on the formal housing document, that opens you up to some big potential problems.</p> <p>For instance, let's say Brian and Jeff move in together to an apartment just in Jeff's name. If they were to break up, Jeff would have a better claim on staying in the apartment they have both called home because his name is on the lease.</p> <p>Alternatively, if Brian decides to pack up and leave, Jeff is left holding the bag (and paying the rent solo), and he will have no legal recourse. With Brian's name on the lease, they are both responsible for continuing to pay rent.</p> <h2>4. Put your arrangement in writing</h2> <p>A running gag on <em>The Big Bang Theory</em> is the overly-complex roommate agreement that the socially inept Sheldon drew up with Leonard before they moved in together. While most of Sheldon's quirks should not be attempted at home, this is one that bears imitation, though it doesn't need to be as complicated as Sheldon made it. Writing out the specific financial expectations of each partner can protect you both.</p> <p>What should you include in the agreement? It should detail how much you will each pay for rent, which partner will pay for which household expenses, when bills will be paid, and any other arrangements for sharing your space.</p> <p>A written agreement is especially important if one partner owns a house that the other partner is moving into. Without both names on the title, the non-homeowning partner is vulnerable should the relationship go south, or if the homeowner were to pass away. In either case, that partner could be evicted at another's whim because there was only one name on the title. Alternatively, if the homeowner is unable to pay the mortgage because of job loss or disability, the other partner would have no obligation to pay it.</p> <p>A legal, written agreement between partners can make sure that you both have financial protection in regards to your joint home.</p> <h2>5. Keep separate emergency funds</h2> <p>Having a financial cushion available to leave a bad situation is an important part of financial health. Knowing you have the money to leave an abusive job, a dangerously maintained apartment, or a toxic relationship gives you the freedom to set important emotional boundaries and keep yourself from being walked all over.</p> <p>When you're talking about moving in with your significant other, you may feel like this relationship could never become a bad situation &mdash; but there's a reason why it's called an &quot;emergency&quot; fund. Relationships can sour and people can wait to show their true colors, so it's always prudent to make sure you each have the funds to take care of yourself if you have a relationship emergency. (See also: <a href="http://www.wisebread.com/5-minute-finance-start-an-emergency-fund?ref=seealso" target="_blank">5-Minute Finance: Start an Emergency Fund</a>)</p> <h2>Spelling out expectations is the path to happy cohabitation</h2> <p>It's easy to get caught up in the fun part of planning out your move with your beloved. After all, talking about money, leases, legal agreements, and the like is not exactly romantic. But talking to each other about your financial expectations before you are unpacking boxes means you are walking into your new living situation with eyes open, and you will not get stuck in a situation that makes you uncomfortable.</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-money-moves-to-make-before-you-move-in-together&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Money%2520Moves%2520to%2520Make%2520Before%2520You%2520Move%2520in%2520Together.jpg&amp;description=5%20Money%20Moves%20to%20Make%20Before%20You%20Move%20in%20Together"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/5%20Money%20Moves%20to%20Make%20Before%20You%20Move%20in%20Together.jpg" alt="5 Money Moves to Make Before You Move in Together" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/emily-guy-birken">Emily Guy Birken</a> of <a href="https://www.wisebread.com/5-money-moves-to-make-before-you-move-in-together">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="https://www.wisebread.com/5-tips-on-what-to-do-before-moving-in-together">5 Tips on What to Do Before Moving in Together</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="https://www.wisebread.com/6-things-to-never-do-when-sharing-finances">6 Things to Never Do When Sharing Finances</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/where-to-find-emergency-funds-when-you-dont-have-an-emergency-fund">Where to Find Emergency Funds When You Don&#039;t Have an Emergency Fund</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="https://www.wisebread.com/5-personal-finance-tasks-that-arent-as-hard-as-you-think">5 Personal Finance Tasks That Aren&#039;t as Hard as You Think</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="https://www.wisebread.com/6-fast-ways-to-restock-an-emergency-fund-after-an-emergency">6 Fast Ways to Restock an Emergency Fund After an Emergency</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Real Estate and Housing budgeting cohabitation couples emergency funds homeownership leases living together moving in together relationships sharing finances significant other Tue, 05 Jun 2018 08:30:31 +0000 Emily Guy Birken 2145221 at https://www.wisebread.com How to Build an Emergency Fund By the End of Summer https://www.wisebread.com/how-to-build-an-emergency-fund-by-the-end-of-summer <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-build-an-emergency-fund-by-the-end-of-summer" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/girl_holding_in_hand_a_lot_of_money.jpg" alt="Girl holding in hand a lot of money" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Everyone needs an emergency fund to cover life's what-ifs. Without one, a sudden home repair, job loss, or health crisis could leave you facing debt and desperation.</p> <p>It's often touted that a solid emergency fund should have at least six months' worth of daily living expenses in it &mdash; but the truth is that goal amount is relative to each individual's circumstances. If you have a mortgage and kids, you'll need a lot more in your emergency fund than, say, a 20-something entry-level professional who shares a rental with roommates.</p> <p>If you don't yet have this safety fund, don't worry. You can build up the bucks in just 90 days.</p> <h2>Open a new savings account at a different bank</h2> <p>The problem with having your savings account attached to your checking account is that it's too easy to transfer money over when the latter runs low. This makes it hard to grow an emergency fund substantially. To avoid this temptation, open a new savings account at a bank different from the one where all your other accounts live (preferably while there's a promotion going on, like $XX free dollars when you open the account), so you can't easily access that money. Out of sight, out of mind works with very little effort in this case. (See also: <a href="http://www.wisebread.com/5-minute-finance-start-an-emergency-fund?ref=seealso" target="_blank">5-Minute Finance: Start an Emergency Fund</a>)</p> <h2>Put away the plastic and cut out nonnecessities</h2> <p>One of the biggest deterrents to making progress on savings goals is having plastic in your pocket at all times. Nip the temptation in the bud by removing all credit cards from your wallet (except for maybe an emergency card &mdash; which should be used for emergencies only!), hiding them someplace secure in the house, and living on a cash-only budget for the summer months while you build your emergency fund.</p> <p>While you're at it, cut the extra fat from your budget, including subscription services, excessive drinking and dining out, paid activities, and expensive travel. You can still do plenty of fun things in moderation, but you also should be looking for savings and discounts whenever you're indulging. This is an everyday habit I practice, and it'll start to come naturally to you as well once you see how much money you can save with very little effort. (See also: <a href="http://www.wisebread.com/are-you-spending-too-much-on-normal-expenses?ref=seealso" target="_blank">Are You Spending Too Much on &quot;Normal&quot; Expenses?</a>)</p> <h2>Side hustle your way to big money</h2> <p>I'm a single, nearly-divorced guy with no dependents other than my dog. I own a media consulting business, which serves as my primary income, but I also work four separate side hustles regularly (plus a couple mini ones) because I want more for my life than to &quot;just get by.&quot;</p> <p>To make extra money for my emergency fund, I open my home up to vacationers via Airbnb, shop and deliver customers' grocery through Instacart, pick up and drop off passengers with Uber and Lyft, and sit people's pets with the help of Rover.com. Combined, the income I earn from these gigs &mdash; which fit perfectly into my schedule &mdash; averages out to about $60,000 annually, about half of which I make during the summer months due to travelers and vacationers. By itself, that's a decent full salary for anyone to live off, but if you manage your time and money well enough, it can exist solely as your savings. (See also: <a href="http://www.wisebread.com/9-summer-side-gigs-for-grown-ups?ref=seealso" target="_blank">9 Summer Side Gigs for Grown-Ups</a>)</p> <h2>Search your insurance policies for savings</h2> <p>Whenever I'm searching for extra savings, one of the first places I look is my monthly bills. Maybe there's an error I missed, or maybe there's a way I can manipulate the service I'm paying for in a way that will keep more cash in my pocket. Like my insurance policies, for instance.</p> <p>Dan Green of personal finance site Growella suggests examining these policies for deductibles, specifically your auto and renters' policies.</p> <p>&quot;If you have $1,000 saved, raise your deductibles to $1,000,&quot; he advises. &quot;This will get you an immediate discount on your bills, which you can use to boost your savings.&quot;</p> <h2>Set aside any cash you receive</h2> <p>I often receive cash tips during my Instacart shifts and sometimes on Uber and Lyft runs, and every dollar of that goes into an envelope at the end of the day. In fact, since January I've saved over $600 in cash tips alone. But I also stash away any other cash I receive; like for my birthday or holidays; lottery winnings; store refunds; yard sales; friends paying me back; and competition winnings, like the end-of-year payout from my bowling league. It adds up pretty quickly if you're consistently sending all cash you receive to your emergency fund.</p> <h2>Set up an automatic monthly transfer</h2> <p>Building an emergency fund in just 90 days is a tall order, but you'll make bounds toward that goal by setting up automatic weekly or biweekly transfers &mdash; essentially a direct deposit from you to you &mdash; scheduled for the days you get paid.</p> <p>&quot;If you start with $25, that's $100 per month, or $300 by the end of the summer,&quot; says certified financial planner Tony Drake, CEO and founder of Drake &amp; Associates in Waukesha, Wisconsin, but I recommend going bigger than that if you can reasonably afford it &mdash; maybe $50 a week &mdash; to hit the ground running on June 1.</p> <h2>Earmark your seasonal job paycheck for your emergency fund</h2> <p>If you're taking on a seasonal job for &quot;extra&quot; money, send most of it (at least 75 percent) to your emergency fund. Have fun with the rest; it is summer, after all.</p> <h2>Shop in-season foods while eating lighter and less</h2> <p>My grocery bills drop dramatically in the summer because I eat less &mdash; hot weather suppresses my appetite &mdash; but I also try to stick to the cheapest and healthiest in-season foods at the supermarket. I also take advantage of free food opportunities, like happy hours that offer free snacks; parties and get-togethers at friends' houses; art gallery receptions and other free food-available events; and my local garden, which offers free produce to residents. Whatever you would have spent that day by swapping in these alternatives, send that amount to your emergency fund. (See also: <a href="http://www.wisebread.com/5-off-season-foods-that-are-destroying-your-grocery-budget?ref=seealso" target="_blank">5 Offseason Foods That Are Destroying Your Grocery Budget</a>)</p> <h2>Turn saving into a competition with someone you know</h2> <p>I'm nothing if not competitive, and I'm always up for a challenge. If that sounds like you, raise the stakes by inviting someone to participate in a savings race with you. First one to $X, 000 wins.</p> <h2>Renegotiate your cellphone, cable, and internet contracts</h2> <p>I call my providers once a year to see if there are any new discounts or promotions for which I qualify. I generally have luck across the board since cell, cable, and internet plans are in constant flux. Most recently I took advantage of the partnership Uber has with AT&amp;T, and I'm currently saving 22 percent off my monthly bill. Whatever you manage to shave off can go directly into your growing emergency fund.</p> <h2>Gather your junk and sell it</h2> <p>Spend a Saturday going through your house to identify anything you don't need anymore. Plan a yard sale or use online resources like Facebook Marketplace, eBay, Craigslist, and LetGo to get rid of what you don't need for extra money toward your fund. I do this at least twice a year and I routinely make a few hundred dollars on unwanted furniture, old electronics, and more. I've also started selling my used, good-condition clothing on Swap.com, which has so far netted me $483. (See also: <a href="http://www.wisebread.com/12-garage-sale-items-that-sell-like-hotcakes?ref=seealso" target="_blank">12 Garage Sale Items That Sell Like Hotcakes</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%2Fhow-to-build-an-emergency-fund-by-the-end-of-summer&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHow%2520to%2520Build%2520an%2520Emergency%2520Fund%2520By%2520the%2520End%2520of%2520Summer.jpg&amp;description=How%20to%20Build%20an%20Emergency%20Fund%20By%20the%20End%20of%20Summer"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/How%20to%20Build%20an%20Emergency%20Fund%20By%20the%20End%20of%20Summer.jpg" alt="How to Build an Emergency Fund By the End of Summer" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="https://www.wisebread.com/how-to-build-an-emergency-fund-by-the-end-of-summer">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="https://www.wisebread.com/how-to-improve-your-finances-using-social-media">How to Improve Your Finances Using Social Media</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="https://www.wisebread.com/8-money-moments-that-should-be-on-everyones-bucket-list">8 Money Moments That Should Be On Everyone&#039;s Bucket List</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/25-money-saving-strategies-that-are-actually-hurting-you">25 Money-Saving Strategies That Are Actually Hurting 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="https://www.wisebread.com/6-fast-ways-to-restock-an-emergency-fund-after-an-emergency">6 Fast Ways to Restock an Emergency Fund After an Emergency</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/10-money-goals-you-should-set-for-the-holidays">10 Money Goals You Should Set for the Holidays</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance cash challenge competition cutting costs emergency funds saving money selling shopping side gigs Tue, 29 May 2018 08:00:19 +0000 Mikey Rox 2142708 at https://www.wisebread.com 5 Money Moves to Make Before Adopting a Dog https://www.wisebread.com/5-money-moves-to-make-before-adopting-a-dog <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-money-moves-to-make-before-adopting-a-dog" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/we_are_having_so_much_fun_away_from_the_city.jpg" alt="We are having so much fun away from the city" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>There's nothing better than coming home to a wiggling dog. Their soft fur, wet noses, and boundless enthusiasm can brighten even the dreariest of days.</p> <p>However, bringing home a furry friend can be expensive. The ASPCA estimates that owning a small dog costs over $1,400 in just the first year, while large dog owners are looking at a figure above $2,000. And those amounts only cover the basics. Extras like emergency vet bills or specialized training can cause your costs to skyrocket.</p> <p>Because of the serious expense of owning a dog, it's important to not bring a pet home impulsively. Preparing for a new pet means you need to spend some time getting ready for his arrival. And that includes some important first steps. (See also: <a href="http://www.wisebread.com/5-pet-costs-you-dont-see-coming?ref=seealso" target="_blank">5 Pet Costs You Don't See Coming</a>)</p> <h2>1. Build an emergency fund</h2> <p>Unfortunately, dogs can be prone to accidents and illnesses. If they gobble a sock &mdash; which is oddly common &mdash; or eat something they shouldn't, you could end up with a four-figure vet bill. In fact, PetPlan, a pet insurance company, reported in 2017 that unexpected veterinary care typically costs between $750 and $1,600, though higher bills are also common.</p> <p>If you're not prepared for an unexpected vet bill this high, you might be faced with a tough decision if something bad happens. To prevent that from occurring, start building an emergency fund for your pet's care before you even bring them home. That way, if there is an accident, you'll be able to handle it. (See also: <a href="http://www.wisebread.com/how-to-prep-your-finances-for-an-emergency-vet-visit?ref=seealso" target="_blank">How to Prep Your Finances for an Emergency Vet Visit</a>)</p> <h2>2. Create a budget for the necessities</h2> <p>When you think about what it costs to own a dog, you probably think of basics like food and flea and tick prevention. But there are many other expenses to keep in mind, including:</p> <ul> <li> <p><strong>Spaying or neutering:</strong>&nbsp;Spaying or neutering prevents overpopulation and can even help with your dog's behavior.</p> </li> <li> <p><strong>Dog crate or bed:</strong>&nbsp;When your dog is new to your home, a designated crate or bed can help soothe him and be useful during housebreaking.</p> </li> <li> <p><strong>Leash and collar:</strong>&nbsp;You'll need a strong leash and collar to walk your dog safely.</p> </li> <li> <p><strong>County dog license and tags:</strong> Some areas require you to get a license for your dog. Usually, the dog has to wear the license at all times.</p> </li> <li> <p><strong>Food and water bowls:</strong> Designated bowls make it easier to keep your home clean.</p> </li> <li> <p><strong>Routine shots and exams:</strong>&nbsp;At a minimum, your dog will need rabies, parvovirus, and distemper vaccines.</p> </li> <li> <p><strong>Grooming:</strong> Grooming is more important than just making your dog pretty. It also keeps their skin in good condition, and can help you catch illnesses and problems before they get worse.</p> </li> <li> <p><strong>Treats and toys:</strong> Treats and toys are essential to teach your dog and to help him burn off energy.</p> </li> <li> <p><strong>Training:</strong> If you're not an experienced dog owner, dog training can be invaluable. Ensuring your dog will obey you and develop good manners is an important part of pet ownership.</p> </li> </ul> <p>Some of these items can cost a lot more than you expect, especially if you plan to get a larger dog. For example, spaying or neutering your dog could cost as much as $600. By knowing how much money you'll need ahead of time, you can better manage your paycheck and budget accordingly. (See also: <a href="http://www.wisebread.com/6-pet-expenses-you-should-never-skip?ref=seealso" target="_blank">6 Pet Expenses You Should Never Skip</a>)</p> <h2>3. Buy secondhand where possible</h2> <p>When making your budget, you'll likely look at the prices for new items. However, you can save a lot of money by shopping for secondhand stuff. Especially if you're getting a young dog who will outgrow things quickly, buying used items or asking friends and family for their old things can help you save big.</p> <p>For example, a new hard-sided crate can cost over $100 at big-name pet stores. But if you shop on Craigslist or find someone who is getting rid of one, you could spend as little as $10, and they're often as good as new. Just be sure to wash and disinfect any secondhand items thoroughly, and make sure there are no cracks or damage.</p> <h2>4. Research pet insurance</h2> <p>Pet insurance can be a smart investment. If your dog has a serious injury or illness, it can be a literal lifesaver. It's a good idea to shop around while your dog is still young since puppies and young dogs typically qualify for lower premiums than older ones. Premiums can vary, but most pet owners can expect to pay between $30 and $50 per month. If you're not sure where to start, check out the <a href="https://www.caninejournal.com/pet-insurance-comparison/" target="_blank">Canine Journal</a> for reviews of the top pet insurers. (See also: <a href="http://www.wisebread.com/7-things-you-need-to-know-about-pet-insurance?ref=seealso" target="_blank">7 Things You Need to Know About Pet Insurance</a>)</p> <h2>5. Identify discount pet supply stores</h2> <p>When it comes to dog food, treats, and toys, you might think your only option is the local pet store. However, you can often get better deals at farm supply stores or online discount retailers. Sites like Chewy even often discounts if you sign up for automatic shipments, helping you save on food and other supplies. Plus, you get the added benefit of not having to lug heavy bags of dog food home from the store. (See also: <a href="http://www.wisebread.com/5-unexpected-dog-costs-you-should-prepare-for-now?ref=seealso" target="_blank">5 Unexpected Dog Costs You Should Prepare for Now</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-money-moves-to-make-before-adopting-a-dog&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Money%2520Moves%2520to%2520Make%2520Before%2520Adopting%2520a%2520Dog.jpg&amp;description=5%20Money%20Moves%20to%20Make%20Before%20Adopting%20a%20Dog"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/5%20Money%20Moves%20to%20Make%20Before%20Adopting%20a%20Dog.jpg" alt="5 Money Moves to Make Before Adopting a Dog" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/kat-tretina">Kat Tretina</a> of <a href="https://www.wisebread.com/5-money-moves-to-make-before-adopting-a-dog">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-9"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/3-ways-your-dog-is-ruining-your-credit-score">3 Ways Your Dog Is Ruining Your Credit Score</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="https://www.wisebread.com/8-ways-to-lower-your-vet-bills">8 Ways to Lower Your Vet 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="https://www.wisebread.com/7-things-you-need-to-know-about-pet-insurance">7 Things You Need to Know About Pet Insurance</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="https://www.wisebread.com/7-personal-finance-tips-for-animal-lovers">7 Personal Finance Tips for Animal Lovers</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="https://www.wisebread.com/5-money-moves-to-make-before-you-move-in-together">5 Money Moves to Make Before You Move in Together</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Lifestyle budgeting dog adoption dogs emergency funds pet insurance pets vet bills Wed, 23 May 2018 08:00:28 +0000 Kat Tretina 2141992 at https://www.wisebread.com 9 Smart Financial Gifts to Give New Grads Besides Cash https://www.wisebread.com/9-smart-financial-gifts-to-give-new-grads-besides-cash <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-smart-financial-gifts-to-give-new-grads-besides-cash" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/brunette_caucasian_grad_girl_is_smiling.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Do new grads want cash? Yes &mdash; all day long. But you and I both know what new grads will do with it. Instead of setting them up for failure by handing over a hot wad of Benjis that'll burn holes in their pockets, steer them toward success with these financially valuable, money-inspired gifts.</p> <h2>1. Skill-based classes</h2> <p>I knew the basics of cooking and cleaning when I graduated college (I could scrub a toilet and do my own laundry, at least), but there were plenty of skills I lacked &mdash; like home improvements, vehicle maintenance, and, yes, money management. And while I had people around to help with many of those inconveniences, I was still kind of a disaster for the first few &mdash; OK, six &mdash; years on my own.</p> <p>If someone had gifted me a help-yourself class or two, however, not only would I have been better prepared to enter the &quot;real world&quot; more confidently, but I could have capitalized on those skills to earn side income (because that's the real thing I'm great at). That would have come in handy when I was eating pizza bagels for every meal.</p> <h2>2. Starter emergency fund</h2> <p>New grads won't have the kind of emergencies that older adults do, but even the smallest crisis can turn into a major financial burden for someone just starting out. Lend a helping hand by setting up an emergency fund in their name at your bank (not theirs) so they're unlikely to drain it for early-20s nonsense.</p> <p>Put aside $500 to $1,000 to start and add money as you see fit, or let the grad know that they can transfer money into the account when they have a little extra to spare. Their own contributions will provide even more padding when the going gets tough. (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>3. Website domain</h2> <p>Most college grads &mdash; heck, even high-schoolers &mdash; are tech savvy, but they may not have thought to secure their name as an internet domain for future use. I love this idea because while it's not a tangible gift, it is a gift that can spark inspiration. If someone handed me a website domain and told me to run with it, I'd at least ponder the possibilities, and that's all some people need to go full steam ahead. (See also: <a href="http://www.wisebread.com/8-surprising-ways-a-personal-website-can-improve-your-life?ref=seealso" target="_blank">8 Surprising Ways a Personal Website Can Improve Your Life</a>)</p> <h2>4. Loyalty points</h2> <p>If you've racked up loyalty points and want to save money on grad gifts, look into gifting these transferable rewards.</p> <p>&quot;Loyalty points are a great money gift to give new grads instead of cash,&quot; says U.S. Travel Association spokesperson Laura Holmberg. &quot;Loyalty points allow them to cash in for unique travel experiences at the time and destination of their choice &mdash; maybe for a post-grad getaway, or to put toward that first vacation once they're in the 'real world.'&quot;</p> <h2>5. Big-idea books</h2> <p>New grads might not want to crack open a book right away, but gifting self-help books that lie in waiting until they're ready will be worth every penny once they pick them up and implement the actionable advice.</p> <p>Some of my favorites include author-entrepreneur David Pike's <a href="https://amzn.to/2Idas6q" target="_blank">The New Startup</a> and <a href="https://amzn.to/2rH7zj5" target="_blank">The Startup Playbook</a> by Rajat Bhargava and Will Herman (both are perfect for grads trying to figure out what they want to do with their work life), as well as David Carlson's <a href="https://amzn.to/2Iigvm9" target="_blank">Hustle Away Debt</a> (because there will be a lot of debt to hustle away). (See also: <a href="http://www.wisebread.com/the-8-classic-personal-finance-books-you-must-read?ref=seealso" target="_blank">The 8 Classic Personal Finance Books You Must Read</a>)</p> <h2>6. Gift cards for life's necessities</h2> <p>Gift cards are a safe and popular gift to give, but when buying for new grads, think practical instead of frivolous. They might not appreciate $50 to a supermarket in the moment, but there will come a time they'll recognize that gift card as perhaps the most thoughtful and useful of the bunch. Other sensible gift card ideas include cards for gas, a new interview suit, work supplies, and home essentials.</p> <h2>7. Student loan payment</h2> <p>Many college grads start life with student debt looming over their heads, and you can help alleviate that burden somewhat by providing a few initial payments as a gift.</p> <p>&quot;Sit down with them and go through the process of helping them make a payment toward their student loans or contribute installments to their budget to help them on a monthly basis for a few months after they graduate,&quot; suggests Alayna Pehrson, financial blogger for BestCompany.com. &quot;Overall, student loans can feel like a major weight to many fresh college graduates, so this gift could really go a long way for your grad.&quot; (See also: <a href="http://www.wisebread.com/15-ways-to-pay-back-student-loans-faster?ref=seealso" target="_blank">15 Ways to Pay Back Student Loans Faster</a>)</p> <h2>8. Investment starter capital</h2> <p>Broke college graduates don't think much about making investments right out of school when they're peering down a dark tunnel of 10 to 20 years of student loan payments. As such, this is a great opportunity for you to take the lead where investing is concerned.</p> <p>&quot;You can do this by giving them money to invest and starting them out with a well-known investing app like Acorns,&quot; Pehrson says. &quot;Again, going through it with them step-by-step can ensure that they actually invest that money.&quot;</p> <p>Take some time to explain how investing works, too. It's scary for a lot of people, but knowing what to do, why, and when will help new grads wrap their head around why it's important to keep this option open as a lifelong financial tactic.</p> <h2>9. Roth IRA</h2> <p>Retirement is the farthest thing from a new grad's mind, but you and I both know the earlier you start saving for that glorious day, the better. And in terms of the ROI, a Roth IRA is near the top of the list of best grad gifts.</p> <p>Consider this: A max contribution of $5,500 in the starter account you set up for the grad at age 21 will mature to a staggering $71,000 by age 65, assuming 6 percent interest &mdash; and that's with no further contributions. Given that 13 percent of Americans have $0 saved for retirement, according to a 2018 GOBankingRates survey, your generous gift puts them well ahead of the curve before life even begins. (See also: <a href="http://www.wisebread.com/6-reasons-every-millennial-needs-a-roth-ira?ref=seealso" target="_blank">6 Reasons Every Millennial Needs a Roth IRA</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%2F9-smart-financial-gifts-to-give-new-grads-besides-cash&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F9%2520Smart%2520Financial%2520Gifts%2520to%2520Give%2520New%2520Grads%2520Besides%2520Cash.jpg&amp;description=9%20Smart%20Financial%20Gifts%20to%20Give%20New%20Grads%20Besides%20Cash"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/9%20Smart%20Financial%20Gifts%20to%20Give%20New%20Grads%20Besides%20Cash.jpg" alt="9 Smart Financial Gifts to Give New Grads Besides Cash" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="https://www.wisebread.com/9-smart-financial-gifts-to-give-new-grads-besides-cash">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="https://www.wisebread.com/7-money-moves-every-new-college-student-should-make">7 Money Moves Every New College Student Should 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="https://www.wisebread.com/5-money-moves-to-make-the-moment-you-graduate">5 Money Moves to Make the Moment You Graduate</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="https://www.wisebread.com/4-ways-to-make-the-most-of-your-student-loan-grace-period">4 Ways to Make the Most of Your Student Loan Grace Period</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="https://www.wisebread.com/8-money-moments-that-should-be-on-everyones-bucket-list">8 Money Moments That Should Be On Everyone&#039;s Bucket List</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/6-good-financial-deeds-that-can-backfire">6 Good Financial Deeds that Can Backfire</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance books cash classes college emergency funds gifts graduates loyalty points Roth IRA student loans Tue, 22 May 2018 08:30:42 +0000 Mikey Rox 2142432 at https://www.wisebread.com 4 Smart Things You Should Do With Your First Real Paycheck https://www.wisebread.com/4-smart-things-you-should-do-with-your-first-real-paycheck <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-smart-things-you-should-do-with-your-first-real-paycheck" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/successful_businesswoman_showing_cheque.jpg" alt="Successful Businesswoman Showing Check" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You've finally landed your first real job. And with that, comes your first real paycheck. This is a monumental occasion and should be celebrated. But what should you do? Should you blow all of your funds on an expensive and wild weekend? Should you buy a new wardrobe? Or should you just pay your bills and save the rest?</p> <p>The answer to this question depends on your overall financial plan, your budget, and your surplus once you've met all of your obligations. An important thing to do once you receive that first check (preferably before) is to establish a plan. It's OK to splurge a little and celebrate the fact that you are officially a taxpaying, adulting member of society. However, it's critical that you use this first paycheck to jump-start your journey to financial independence.</p> <p>Here are some important money moves you should make with your first real paycheck.</p> <h2>Let your money breathe</h2> <p>This sounds ridiculous, I know. But one of the biggest challenges people with newfound wealth face is getting used to having money.</p> <p>One of the most important things to remember is that your thoughts, beliefs, and attitudes about money directly influence how you spend it. When you're not used to having it, it's easy to spend a small windfall immediately. And often, you overspend. You have to give yourself time to acclimate to having money. Paradigm shifts take time. Allowing your checking and savings account to remain full can be difficult.</p> <p>If possible, allow the money to sit for a while. Pay your bills and let what's left breathe. Buy only what you absolutely need, at least at first. You don't have to go out to eat, buy new clothes, or cop a new ride just because you're earning steady money. Begin conditioning your mind to enjoy seeing a positive checking and savings balance. And vow to keep the trend going.</p> <h2>Create a budget</h2> <p>The most important thing to do with that first paycheck is to create a budget before you spend a dime. Once you see exactly what you're working with, establish a spending and savings plan by creating a <a href="http://www.wisebread.com/making-every-penny-count-with-a-zero-based-budget?ref=internal" target="_blank">zero-based-budget</a>. You want to give every dollar a purpose. There's no such thing as leftover money or a surplus. Every dollar is accounted for, and if you do find a way to save a buck, that buck goes to savings.</p> <p>Creating a budget is a great way to set a good financial habit moving forward. It's like establishing a healthy diet, but with finances. It helps you determine correct portion sizes and helps you guard against overextending yourself and becoming house poor. It allows you to see where every dollar is going. It also helps you to better track your spending and find ways to save during lean times. (See also: <a href="http://www.wisebread.com/how-to-budget-when-youre-no-longer-broke?ref=seealso" target="_blank">How to Budget When You're No Longer Broke</a>)</p> <p>When you receive your first paycheck, make a list of all of your regular monthly bills, debts, and necessary expenses along with the due dates, in order of importance. This not only helps you see what needs to be paid and when, but it also helps you establish payment priorities in case there ever is a shortfall.</p> <p>There are multiple budgeting, bill pay, and tracking apps that can help you streamline your finances. But the most important thing is getting it all written down &mdash; in some form &mdash; and having a plan. Taking the time to organize your finances and create a budget with your first paycheck sets you on the path to good financial stewardship. (See also: <a href="http://www.wisebread.com/these-5-apps-will-help-you-finally-organize-your-money?ref=seealso" target="_blank">These 5 Apps Will Help You Finally Organize Your Money</a>)</p> <h2>Establish a solid savings plan</h2> <p>After you've listed and prioritized your bills and expenses, it's important that you add savings to the budget and move it to the top of the list. It should be ahead of everything. Your budget shows you how much you owe and how much you have left after the necessities are paid &mdash; which allows you to determine how much you should save each month. The old financial advice, &quot;Pay yourself first&quot; is still very true and should begin with your first paycheck.</p> <p>Start by establishing how much you can afford to save and lock in that number. If possible, set up an automatic transfer so that as soon as your paycheck is deposited into your bank account, your savings amount is automatically transferred to another dedicated savings account. That way you never see the funds. You won't miss what you never see.</p> <p>Part of savings involves establishing your retirement and emergency fund. Traditionally, an emergency fund is three to six months' worth of daily living expenses, but can be more or less depending on your particular circumstances. This fund should only be used in real emergencies, like an urgent medical bill or a job loss. (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> <p>If you work for a company that offers a workplace retirement plan, use your first paycheck to establish how much you'd like to contribute. You should contribute <em>something</em>, even if it's a small amount at first. If you are self-employed, freelancing, or work for a startup that doesn't have a workplace retirement plan option, look into setting up an IRA through your banking institution or other reputable financial management firm. You may need to save up a minimum amount to open an IRA, but you can use a portion of your paycheck as the first step toward saving that amount. (See also: <a href="http://www.wisebread.com/11-basic-questions-about-retirement-saving-everyone-should-ask?ref=seealso" target="_blank">11 Basic Questions About Retirement Saving Everyone Should Ask</a>)</p> <h2>Set financial goals</h2> <p>After you've gotten your budget in place and saving money is at the top of the list, it's time to set some financial goals. Setting financial goals is important for a variety of reasons. It helps you stick to a realistic budget. It puts something concrete out in front of you and challenges you to go get it. It gives you a purpose for earning, saving, and spending money. Even if you don't reach your goal, you still make progress and move forward. Setting financial goals allows you to view money as a tool that will help you live an independent life.</p> <p>Financial goal setting is pivotal to becoming and remaining financially independent. You should set immediate, short-term goals (less than six months), some intermediate goals (up to three years), and some long-term goals. Write down legitimate things you want to do with your money and determine the steps you need to take to reach each goal. Make sure your goals fit the SMART frame work (Specific, Measurable, Achieveable, Realistic, and Time-bound) and fit your lifestyle and unique situation. (See also: <a href="http://www.wisebread.com/5-minute-finance-create-financial-goals?ref=seealso" target="_blank">5-Minute Finance: Create Financial Goals</a>)</p> <p>Your first few goals should be to live by your budget, maintain a healthy emergency fund, and kickoff your retirement savings. From there, make other goals that will help keep you on track, such as eliminating debt or paying cash for your next car or vacation.</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-smart-things-you-should-do-with-your-first-real-paycheck&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F4%2520Smart%2520Things%2520You%2520Should%2520Do%2520With%2520Your%2520First%2520Real%2520Paycheck.jpg&amp;description=4%20Smart%20Things%20You%20Should%20Do%20With%20Your%20First%20Real%20Paycheck"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/4%20Smart%20Things%20You%20Should%20Do%20With%20Your%20First%20Real%20Paycheck.jpg" alt="4 Smart Things You Should Do With Your First Real Paycheck" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/denise-hill">Denise Hill</a> of <a href="https://www.wisebread.com/4-smart-things-you-should-do-with-your-first-real-paycheck">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="https://www.wisebread.com/6-reasons-why-financial-planning-isnt-just-for-the-wealthy">6 Reasons Why Financial Planning Isn&#039;t Just for the Wealthy</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="https://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="https://www.wisebread.com/money-a-mess-try-this-personal-finance-starter-kit">Money a Mess? Try This Personal Finance Starter Kit</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/8-financial-decisions-youll-never-regret">8 Financial Decisions You&#039;ll Never Regret</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/8-money-moves-for-the-newly-independent">8 Money Moves for the Newly Independent</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance budgeting emergency funds first paycheck goals retirement savings windfall Tue, 22 May 2018 08:00:37 +0000 Denise Hill 2142436 at https://www.wisebread.com 8 Money Mistakes at 20 That Will Land You in Debt by 30 https://www.wisebread.com/8-money-mistakes-at-20-that-will-land-you-in-debt-by-30 <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-money-mistakes-at-20-that-will-land-you-in-debt-by-30" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/man_looking_at_wallet_with_money_dollars_flying_away.jpg" alt="Man looking at wallet with money dollars flying away" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Few mistakes are more difficult to erase than money mistakes. The errors of youth have a way of haunting us long after we've changed our ways and become models of responsible personal finance. If you're in your 20s, look ahead and make life easier for your 30-something self. Here are eight money mistakes at 20 that will land you in debt by 30.</p> <h2>1. Amassing huge student loans</h2> <p>According to Student Loan Hero, today's average student loan borrower will graduate owing $37,172. What makes student loan debt particularly dangerous? First, most loans have variable interest rates. When rates increase, so do your payments (try budgeting around that). Second, student loan debt can't be discharged in bankruptcy. If you default, the government can garnish your wages, take your tax refund, and even dip into your Social Security payments in retirement. (See also: <a href="http://www.wisebread.com/what-really-happens-when-you-dont-pay-your-student-loans?ref=seealso" target="_blank">What Really Happens When You Don't Pay Your Student Loans</a>)</p> <h2>2. Carrying credit card debt</h2> <p>With high interest rates, late payment penalties, and other fees, a modest credit card balance can quickly become a major problem. People who overspend in their 20s can easily rack up huge debt loads by their 30s &mdash; a situation that forces many to delay homeownership, toil away at jobs they dislike, and live with constant financial stress. Avoid the drama of consumer debt. Adopt a strict policy of paying off your credit balances in full each month. (See also: <a href="http://www.wisebread.com/the-fastest-method-to-eliminate-credit-card-debt?ref=seealso" target="_blank">The Fastest Method to Eliminate Credit Card Debt</a>)</p> <h2>3. Ignoring your credit score</h2> <p>Your FICO score is your GPA of adulthood. That magic number affects everything from loan eligibility and interest rates to employment opportunities. Since rebuilding a low credit score can take years, you can't afford to ignore it. Just imagine getting stuck with a higher mortgage rate at 35 because you were late with a few car payments at 27. Not good. (See also: <a href="http://www.wisebread.com/how-to-rebuild-your-credit-in-8-simple-steps?ref=seealso" target="_blank">How to Rebuild Your Credit in 8 Simple Steps</a>)</p> <h2>4. Splurging on a new car</h2> <p>Countless 20-somethings are tempted to buy a new car as soon as they land their first real job. But with steep prices, rapid depreciation, and higher insurance premiums, buying new is seldom a smart financial move. This single bad investment can strain your budget for years and leave little money to establish an emergency fund or aggressively pay down student debt. (See also: <a href="http://www.wisebread.com/3-reasons-why-you-should-never-buy-a-new-car?ref=seealso" target="_blank">3 Reasons Why You Should Never Buy a New Car</a>)</p> <h2>5. Not talking finances with your significant other</h2> <p>Ready for an important love lesson? Talking about money won't kill your romance, but the stress of overwhelming debt just might. Before you commit, share your full financial picture (warts and all). Talk about income, debt, bad money habits you're trying to overcome, and your personal financial goals. It'll not only bring you closer as a couple, it'll empower you to work as a team. (See also: <a href="http://www.wisebread.com/5-money-conversations-every-couple-should-have?ref=seealso" target="_blank">5 Money Conversations Every Couple Should Have</a>)</p> <h2>6. Overspending for your wedding</h2> <p>According to a study conducted by The Knot, the average cost of a wedding in the United States hit a whopping $35,329 in 2016. And while new unions are always a cause for celebration, the price tag for these elaborate events often forces young couples to assume more debt at a time when paying off student loans, saving for a home, and funding retirement accounts should be top priorities. With interest, wedding bills can easily become money monsters that devour budgets for years. (See also: <a href="http://www.wisebread.com/3-reasons-taking-a-loan-for-your-wedding-is-a-bad-idea?ref=seealso" target="_blank">3 Reasons Taking a Loan For Your Wedding Is a Bad Idea</a>)</p> <h2>7. Not building an emergency fund</h2> <p>Ah, the optimism of youth! Twenty-somethings often don't realize that a layoff, uninsured medical expense, or unexpected home repair can spell financial disaster. Without an emergency fund to cover at least six months' worth of living expenses, they risk being forced into high-interest credit card debt &mdash; a decision that can launch a long-term cycle of debt. (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>8. Going without health insurance</h2> <p>We all feel invincible when we're in our 20s, but accidents and unexpected health issues can throw our lives off course at any moment. Without insurance, medical bills can quickly reach staggering amounts (in fact, medical expenses are the most common cause of personal bankruptcy in the United States). Protect your most important asset &mdash; <em>yourself</em>. (See also: <a href="http://www.wisebread.com/the-one-question-you-need-to-answer-to-choose-the-best-health-care-plan?ref=seealso" target="_blank">The One Question You Need to Answer to Choose the Best Health Care Plan</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-mistakes-at-20-that-will-land-you-in-debt-by-30&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F8%2520Money%2520Mistakes%2520at%252020%2520That%2520Will%2520Land%2520You%2520in%2520Debt%2520by%252030.jpg&amp;description=8%20Money%20Mistakes%20at%2020%20That%20Will%20Land%20You%20in%20Debt%20by%2030"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/8%20Money%20Mistakes%20at%2020%20That%20Will%20Land%20You%20in%20Debt%20by%2030.jpg" alt="8 Money Mistakes at 20 That Will Land You in Debt by 30" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/kentin-waits">Kentin Waits</a> of <a href="https://www.wisebread.com/8-money-mistakes-at-20-that-will-land-you-in-debt-by-30">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="https://www.wisebread.com/its-never-too-late-to-fix-these-5-money-mistakes-from-your-past">It&#039;s Never Too Late to Fix These 5 Money Mistakes From Your Past</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="https://www.wisebread.com/how-new-grads-can-protect-their-credit">How New Grads Can Protect Their Credit</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="https://www.wisebread.com/6-signs-youre-making-all-the-right-money-moves">6 Signs You&#039;re Making All the Right Money Moves</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/9-smart-financial-gifts-to-give-new-grads-besides-cash">9 Smart Financial Gifts to Give New Grads Besides Cash</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="https://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> </ul> </div> </div> </div> </div><br/></br> Personal Finance 20s 30s credit and debt credit score emergency funds health insurance money mistakes overspending student loans weddings Mon, 14 May 2018 08:01:14 +0000 Kentin Waits 2136566 at https://www.wisebread.com 5 Personal Finance Tasks That Aren't as Hard as You Think https://www.wisebread.com/5-personal-finance-tasks-that-arent-as-hard-as-you-think <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-personal-finance-tasks-that-arent-as-hard-as-you-think" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/happy_man_paying_bills_on_his_laptop.jpg" alt="Happy man paying bills on his laptop" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The thought of making a budget or preparing your own taxes makes you want to collapse on the couch and binge watch your favorite TV show. It's understandable: Most people don't consider personal finance to be a fun way to pass an afternoon.</p> <p>But the truth is, most personal finance tasks aren't nearly as difficult or time-consuming as you think they are. And if you muster up the courage to finally take them on, you can generate a nice financial boost for yourself.</p> <p>These personal finance tasks aren't as tricky as you think. Give them a go. You'll feel a lot less guilty when you waste three hours streaming old episodes of <em>Battlestar Galactica</em>.</p> <h2>1. Writing a household budget</h2> <p>Drafting a budget is the first step toward making good financial choices. The problem? Making a budget sounds dull and difficult.</p> <p>The good news, though, is that it doesn't take nearly as much time or effort as many people assume it does. Simply list your monthly expenses that never change &mdash; everything from your mortgage or rent payment, to your car payment and insurance costs. Next, list those costs that change each month &mdash; such as your utility bill, transportation costs, and grocery spending. Put down an estimate for how much you think you'll spend on these items every month.</p> <p>From there, list the expenses that are more discretionary, such as eating out or going to the movies. Create a maximum spend for these items each month.</p> <p>Finally, list the money that comes into your household from salaries, overtime, bonuses, settlements, investments, and any other source that pays out each month. Compare your expenses to your income. Now you know how much leeway you have in your monthly budget and how much you can devote to savings. Best of all? Doing this doesn't have to take more than an hour. (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>2. Building an emergency fund</h2> <p>Financial experts recommend that you have six months' to a year's worth of daily living expenses saved in an emergency fund. That way, if you face an unexpected financial emergency &mdash; anything from a $1,000 car repair bill to a job loss &mdash; you'll have money set aside and won't have to resort to credit cards.</p> <p>Building such a large emergency fund sounds intimidating. But if you take it in small steps, you'll find that building this fund isn't nearly as hard as you think.</p> <p>Start with whatever you can spare each month. If you can only devote $100 a month to your emergency fund, start with that. After a year, you'll have $1,200 saved. If you can save $200 a month, you'll have $2,400 at the end of a year.</p> <p>The key is to continue depositing whatever you can in your emergency fund. If you do, you'll be surprised at how quickly it grows. (See also: <a href="http://www.wisebread.com/5-minute-finance-start-an-emergency-fund?ref=seealso" target="_blank">5-Minute Finance: Start an Emergency Fund</a>)</p> <h2>3. Making a will</h2> <p>Drafting a will not only sounds complicated, it's also not much fun to think about. No one wants to consider their own death. But if you own property and assets, you absolutely need a will to make sure those assets are passed on to your loved ones according to your wishes after you die.</p> <p>How to do it? Start by titling a blank document with the words &quot;Last will and testament.&quot; Then, state your name and write that you are of sound mind and legal age (this is usually 18).</p> <p>Name the executor of your will &mdash; the person who will carry out what your will states after you die &mdash; and name a legal guardian to take care of your children if you should pass away.</p> <p>Your will should include the names of any beneficiaries, the people whom you want to inherit your assets. Usually, this will be your children or spouse. But you can also name friends, charities, other relatives, or organizations.</p> <p>Finally, list your assets and whom they should go to. This can include your home, your savings, your car, or any other possessions.</p> <p>Sign the will in front of at least two witnesses. Check with your state; in some, your witnesses can't be beneficiaries. Write down these witnesses' names and addresses. Make sure they sign your will, too. (See also: <a href="http://www.wisebread.com/heres-what-happens-if-you-dont-leave-a-will?ref=seealso" target="_blank">Here's What Happens If You Don't Leave a Will</a>)</p> <h2>4. Paying your taxes</h2> <p>It can be tempting to hire an accountant or tax pro to do your taxes for you. The truth, though, is that most of us can do our taxes on our own.</p> <p>Taxes for most people aren't overly complicated. Things only get messy if you rely heavily on freelance income, write off part of your home as an office, or have plenty of deductions that you want to claim. Most taxpayers don't fall into that category. They can file their taxes on their own, especially with the help of easy-to-follow tax preparation software.</p> <p>So before you spend $600, $700, or more on a professional tax filer, consider doing this on your own. It'll usually take you less than an afternoon. (See also: <a href="http://www.wisebread.com/12-things-you-should-know-about-the-new-tax-law?ref=seealso" target="_blank">12 Things You Should Know About the New Tax Law</a>)</p> <h2>5. Changing your bank</h2> <p>Your bank just closed the only ATM and branch near you. Its online banking function is sluggish and frequently offline. You're ready to make a change &mdash; but you don't want the hassle of closing accounts and opening new ones. Here's the good news: Changing your bank doesn't have to be a hassle.</p> <p>You will have to do the research, of course. You'll have to find a new bank that has branches and ATMs close by. You might even decide to go with an online-only bank. Once you've analyzed your choices and selected a new bank, it's time to open an account. You might be able to do this online, but some banks require you to visit their office in-person. You'll usually need to make a deposit to start your new account.</p> <p>Once your account is open, you can transfer money from your old bank &mdash; hopefully you can do this online &mdash; into your new account. But don't close your old account too early: You want to make sure that any checks you've written recently have been cashed before you close that account.</p> <p>You'll also want to change all your automatic payments before closing your old bank account so that the payments are withdrawn from your new account. Many people have everything from their mortgage payments to their auto loan payments set up as automatic deductions from their checking accounts. Make sure you've switched all of these before closing your old account. And if your paychecks are direct-deposited to your old bank account, you'll have to make that switch, too.</p> <p>Finally, if you rely on online payment systems such as PayPal, be sure to connect these services to your new bank. If you're lucky, you should be able to set up a new bank account, make these switches, and close your old account mostly from your computer. (See also: <a href="http://www.wisebread.com/switch-to-a-better-bank-in-5-easy-steps?ref=seealso" target="_blank">Switch to a Better Bank in 5 Easy Steps</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-personal-finance-tasks-that-arent-as-hard-as-you-think&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Personal%2520Finance%2520Tasks%2520That%2520Aren%2527t%2520as%2520Hard%2520as%2520You%2520Think_0.jpg&amp;description=5%20Personal%20Finance%20Tasks%20That%20Aren't%20as%20Hard%20as%20You%20Think"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/5%20Personal%20Finance%20Tasks%20That%20Aren%27t%20as%20Hard%20as%20You%20Think_0.jpg" alt="5 Personal Finance Tasks That Aren't as Hard as You Think" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="https://www.wisebread.com/5-personal-finance-tasks-that-arent-as-hard-as-you-think">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="https://www.wisebread.com/money-a-mess-try-this-personal-finance-starter-kit">Money a Mess? Try This Personal Finance Starter Kit</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/7-easy-ways-to-build-an-emergency-fund-from-0">7 Easy Ways to Build an Emergency Fund From $0</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="https://www.wisebread.com/8-money-moments-that-should-be-on-everyones-bucket-list">8 Money Moments That Should Be On Everyone&#039;s Bucket List</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/where-to-find-emergency-funds-when-you-dont-have-an-emergency-fund">Where to Find Emergency Funds When You Don&#039;t Have an Emergency Fund</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="https://www.wisebread.com/6-fast-ways-to-restock-an-emergency-fund-after-an-emergency">6 Fast Ways to Restock an Emergency Fund After an Emergency</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance banking budgeting changing banks emergency funds estate planning last will and testament saving money taxes Thu, 10 May 2018 09:00:11 +0000 Dan Rafter 2134241 at https://www.wisebread.com 9 Money Moves You're Never Too Old to Make https://www.wisebread.com/9-money-moves-youre-never-too-old-to-make <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-money-moves-youre-never-too-old-to-make" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/old_man_smile_to_you.jpg" alt="Old man smile to you" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>We often assume as we get older that money matters become more simple, and in many cases, this is true. You may be done worrying about saving for the future, and may be free of many of the expenses you had when you were younger. But this doesn't mean you're too old to make financial decisions that will still benefit you.</p> <p>There are many money moves that you made when you were younger that still apply. Not all of these actions below will make sense for everyone. But age, by itself, shouldn't rule them out.</p> <h2>1. Buying a home</h2> <p>You may think that by a certain age, it makes no sense to purchase a home because you may not live long enough to pay it off in full. But there are some great financial advantages to homeownership, even for older people.</p> <p>For one thing, if you want your retirement nest egg to last, you are better off putting money into something that builds equity and may increase in value. That's money that can be used in the future for your long-term care, or passed on to your heirs. Some older citizens even fund their retirement using a reverse mortgage, which allows you to draw equity from your home to pay expenses.</p> <p>Additionally, when you own a home, you can make adjustments to the design and features to accommodate any health needs. For example, you could install a chairlift or add a bedroom on a lower floor so you won't have to go up steps. These are things you may not be able to do if you live in a rental property. (See also: <a href="http://www.wisebread.com/5-benefits-of-carrying-a-mortgage-into-retirement?ref=seealso" target="_blank">5 Benefits of Carrying a Mortgage Into Retirement</a>)</p> <h2>2. Getting life insurance</h2> <p>Many older people don't bother with life insurance past a certain age, because the premiums do get more costly. But there are many cases where it makes sense.</p> <p>If you are still working and your spouse relies on that income, term life insurance can come in handy. You may also have some debt &mdash; mortgage debt, for example &mdash; and want to ensure there is enough money to pay it off if you pass away. Guaranteed Universal Life policies can be good for seniors who want to ensure there's money to pay for final expenses or estate taxes.</p> <p>There are many different insurance products; be sure to closely examine the costs and benefits of each to see if they make sense for your situation. (See also: <a href="http://www.wisebread.com/5-kinds-of-insurance-every-retiree-should-consider?ref=seealso" target="_blank">5 Kinds of Insurance Every Retiree Should Consider</a>)</p> <h2>3. Shopping for health insurance</h2> <p>We assume that older Americans are simply covered by Medicare and that there's nothing more they need to know. But the reality is that Medicare doesn't cover everything, and it's often important to get supplemental insurance to protect yourself.</p> <p>You are never too old to shop around to find the lowest premiums and out-of-pocket expenses. No matter your age, it's smart to re-evaluate your insurance periodically to ensure you have the right coverage at the right cost. This is especially true if your health situation changes. (See also: <a href="http://www.wisebread.com/how-to-make-sense-of-the-different-parts-of-medicare?ref=seealso" target="_blank">How to Make Sense of the Different Parts of Medicare</a>)</p> <h2>4. Investing</h2> <p>If you are retired, you may be of the mindset that you already have all the money you need to live comfortably. But are you sure this is true? People are living longer these days, and you can spend as much time in retirement as you did working. Thus, it may be necessary to continue to accumulate money as you get older.</p> <p>Even if you think stocks are not right for you at this stage of your life, continuing to buy bonds, real estate, and other investments can help bolster your nest egg and ensure that you can cover all of your life expenses as you age. (See also: <a href="http://www.wisebread.com/7-reasons-to-invest-in-stocks-past-age-50?ref=seealso" target="_blank">7 Reasons to Invest in Stocks Past Age 50</a>)</p> <h2>5. Rebalancing your portfolio</h2> <p>At a certain age, you may feel like your investments don't need much baby-sitting. If you've shifted to a lot of fixed-income investments, it may be true that your portfolio doesn't need much maintenance. But that doesn't mean you should ignore it.</p> <p>Even the oldest investors need to check in to see if they are on track to hit their savings goals. All investment portfolios can get out of whack if they are not monitored properly. An older investor may find, for example, that stocks make up too much of a percentage of their portfolio and represent a risk if the market goes down. (See also: <a href="http://www.wisebread.com/think-outside-the-index-when-you-rebalance-your-investment-portfolio?ref=seealso" target="_blank">Think Outside the Index When You Rebalance Your Investment Portfolio</a>)</p> <h2>6. Building an emergency fund</h2> <p>You may have accumulated enough money to retire on, but did you take into account the cost of a new roof for your home? Did you count on thousands of dollars in unreimbursed medical expenses? It helps to have a separate account to cover these types of expenses, separate from the money you use to cover everyday costs.</p> <p>If you are no longer working, you may still be able to fund your emergency account through income from stock dividends, interest, or capital gains. Just be sure you're not tapping into money you may need in the future for living expenses. (See also: <a href="http://www.wisebread.com/yes-you-still-need-an-emergency-fund-in-retirement?ref=seealso" target="_blank">Yes, You Still Need an Emergency Fund in Retirement</a>)</p> <h2>7. Crafting a will</h2> <p>You are certainly never too old to outline your final wishes. If you haven't done this yet, don't delay. A will offers family members guidance on how you want to spend your last days, freeing them from making difficult choices. You can assign an executor to help carry out your wishes, and a clearly written will can help avoid fights over how to divide your assets. Many families have been broken apart due to spats regarding their inheritance.</p> <p>It helps to have a will in place while you are still relatively young, but it's never too late to change a will as long as you are of sound mind. If you have a will already, it may be worth reviewing it periodically to make sure the information is accurate and up to date. (See also: <a href="http://www.wisebread.com/6-times-you-need-to-update-your-will?ref=seealso" target="_blank">6 Times You Need to Update Your Will</a>)</p> <h2>8. Saving for college</h2> <p>You can go back to school at any age. But you can also save money for your children, grandchildren, or anyone else who you'd like to see get a degree.</p> <p>Most states offer college investment plans, known as 529 plans, that allow you to invest money for the purposes of education. You can designate a beneficiary of the funds and that money can be withdrawn tax-free as long as the money is used for qualifying education expenses. Depending on where you live, your contributions may also be tax deductible. The new tax law allows these funds to be used for K-12 schooling as well. (See also: <a href="http://www.wisebread.com/the-9-best-state-529-college-savings-plans?ref=seealso" target="_blank">The 9 Best State 529 College Savings Plans</a>)</p> <h2>9. Starting a business</h2> <p>If you have skills and knowledge built up over a long life, why not make it work for you? Who says retirement has to involve sitting at home and doing crossword puzzles? Maybe you can start a quilting business. Perhaps you can launch a new career investing in real estate. Heck, you can build your own tech startup. At this point in your life you probably have the money, time, and experience to give it a go.</p> <p>If you have your wits about you, you're never too old to start a new venture. Obviously, you need to be realistic about how much time and energy you want to devote to a new company, and you should avoid putting your retirement savings at risk. It's also important to have a clear succession plan in place to ensure the organization will keep running after you are gone. (See also: <a href="http://www.wisebread.com/5-questions-retirees-should-ask-before-starting-a-small-business?ref=seealso" target="_blank">5 Questions Retirees Should Ask Before Starting a Small Business</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/9%20Money%20Moves%20You%27re%20Never%20too%20Old%20to%20Make.jpg" alt="9 Money Moves You're Never too Old to Make" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="https://www.wisebread.com/9-money-moves-youre-never-too-old-to-make">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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="https://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="https://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-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/5-money-moves-to-make-when-its-too-hot-to-go-outside">5 Money Moves to Make When It&#039;s Too Hot to Go Outside</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="https://www.wisebread.com/15-smart-things-you-can-do-with-your-finances-even-if-youre-broke">15 Smart Things You Can Do With Your Finances, Even if You&#039;re Broke</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="https://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 aging college savings emergency funds estate planning homeownership insurance investing money moves retirement small businesses wills Wed, 09 May 2018 09:00:13 +0000 Tim Lemke 2137657 at https://www.wisebread.com 5 Money Moves to Make Even If You Don't Plan to Buy a House https://www.wisebread.com/5-money-moves-to-make-even-if-you-dont-plan-to-buy-a-house <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-money-moves-to-make-even-if-you-dont-plan-to-buy-a-house" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/young_couple_moving_in_into_new_apartment.jpg" alt="Young couple moving in into new apartment" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You know that owning a home and making a mortgage payment each month is a big financial commitment. You know, too, that having a solid credit score is a must if you want to be approved for that mortgage loan.</p> <p>But what if you never plan on owning a home? What if you plan on renting forever? You don't need to worry about maintaining strong credit and building a high credit score, right? Wrong. Even if you never plan on making the jump from renting to owning, there are still several money moves you need to make to ensure a happy financial future.</p> <h2>1. Pay your bills on time each month</h2> <p>Paying a credit card bill 30 days or more past due will send your credit score tumbling by 100 points or more. You might not think that matters if you never plan on taking out a mortgage and buying a home. But it does.</p> <p>Other lenders rely on your credit score to determine how likely it is that you'll make your monthly payments. They also use that score to determine how high of an interest rate to charge you if they do approve you for a loan.</p> <p>This means that lenders will look at your credit score when you apply for a loan to buy a car. They'll look at it if you need to take out a personal loan. And when you're applying for credit cards, you'll need strong credit to qualify for cards with the best rewards programs and interest rates. (See also: <a href="http://www.wisebread.com/pay-these-6-bills-first-when-money-is-tight?ref=seealso" target="_blank">Pay These 6 Bills First When Money Is Tight</a>)</p> <h2>2. Keep your credit card debt low</h2> <p>Consumers applying for mortgages know that having too much credit card debt can hurt their application. But even if you're not planning to own a home, it makes good financial sense not to carry a balance on your cards each month.</p> <p>Credit card debt comes with high interest rates. If you don't pay off your balance at the end of each billing period, credit card debt can grow quickly. If you're not careful, those minimum monthly payments can become a huge financial burden.</p> <p>High amounts of credit card debt can also lower your credit score. Only charge what you can afford to pay off in full when your credit card bill comes due. And if you do have outstanding credit card debt, use whatever extra money you have each month to pay it down. (See also: <a href="http://www.wisebread.com/the-fastest-method-to-eliminate-credit-card-debt?ref=seealso" target="_blank">The Fastest Method to Eliminate Credit Card Debt</a>)</p> <h2>3. Show landlords how financially responsible you are</h2> <p>You might think it doesn't matter that you missed two auto loan payments or that you skipped over a medical bill that's now in collections. But even if you don't need to prove to mortgage lenders that you're a good financial risk, you will need to prove it to apartment landlords. You have to live somewhere, right?</p> <p>When you apply for an apartment, the odds are high that your landlord will run a credit check to determine if you're likely to pay your rent on time each month. You'll have to consent to have such a check performed. If you refuse, don't bet on getting that apartment.</p> <p>The credit check will show negative financial moves such as late payments on recurring loans and credit cards, accounts that are in collections, car repossessions, and recent bankruptcies. It will also show how much you owe on your credit cards and other loans. You'll need to pay your bills on time, keep debts out of collections, and keep your debt levels low if you expect to qualify for the better apartments in your city. (See also: <a href="http://www.wisebread.com/10-questions-landlords-cant-ask?ref=seealso" target="_blank">10 Questions Landlords Can't Ask</a>)</p> <h2>4. Build an emergency fund</h2> <p>Homeowners know how important an emergency fund is. They draw on these funds to cover such unexpected emergencies as a burst water heater, dying furnace, or leaky roof. By having money saved in such a fund, they can cover these home repairs without resorting to putting the costs on their credit cards.</p> <p>But you should build your own emergency fund even if you never plan on owning. Even without a home, you will face big and unexpected bills. What if your car's transmission goes out? What if you lose your job? If you don't have an emergency fund of cash savings, how will you pay for these charges without running up credit card debt?</p> <p>Experts recommend saving six to 12 months' worth of daily living expenses in an emergency fund. That might sound intimidating, but if you take it slowly by depositing whatever you can &mdash; even if it's only $100 a month &mdash; you can gradually build up a significant emergency fund. (See also: <a href="http://www.wisebread.com/5-minute-finance-start-an-emergency-fund?ref=seealso" target="_blank">5-Minute Finance: Start an Emergency Fund</a>)</p> <h2>5. Save for retirement</h2> <p>Retirement is closer than you think. You need to steadily save for the days when you'll no longer be working. This is especially important if you never plan to own a home. Homeowners often receive a nice chunk of cash when they sell their homes and downsize to a smaller residence. If you plan on renting forever, you won't have that opportunity.</p> <p>Instead, you need to start saving for retirement as soon as you begin working. If your company offers a 401(k) plan, sign up. Explore other retirement options such as IRAs, too. (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 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-money-moves-to-make-even-if-you-dont-plan-to-buy-a-house&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Money%2520Moves%2520to%2520Make%2520Even%2520If%2520You%2520Don%2527t%2520Plan%2520to%2520Buy%2520a%2520House.jpg&amp;description=5%20Money%20Moves%20to%20Make%20Even%20If%20You%20Don't%20Plan%20to%20Buy%20a%20House"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/5%20Money%20Moves%20to%20Make%20Even%20If%20You%20Don%27t%20Plan%20to%20Buy%20a%20House.jpg" alt="5 Money Moves to Make Even If You Don't Plan to Buy a House" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="https://www.wisebread.com/5-money-moves-to-make-even-if-you-dont-plan-to-buy-a-house">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="https://www.wisebread.com/6-signs-youre-making-all-the-right-money-moves">6 Signs You&#039;re Making All the Right Money Moves</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://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="https://www.wisebread.com/7-ways-to-rent-an-apartment-with-bad-credit">7 Ways to Rent An Apartment With Bad Credit</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="https://www.wisebread.com/money-a-mess-try-this-personal-finance-starter-kit">Money a Mess? Try This Personal Finance Starter Kit</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="https://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> </ul> </div> </div> </div> </div><br/></br> Personal Finance apartments credit card debt credit history emergency funds landlords money moves paying bills renting retirement Thu, 03 May 2018 08:30:11 +0000 Dan Rafter 2134242 at https://www.wisebread.com 10 Signs You're No Longer a Personal Finance Rookie https://www.wisebread.com/10-signs-youre-no-longer-a-personal-finance-rookie <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/10-signs-youre-no-longer-a-personal-finance-rookie" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/young_woman_with_a_piggy_bank_2.jpg" alt="Young woman with a piggy bank" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>How are you doing with your money? Is your checking account flourishing? Do you have a well-stocked savings account, a growing 401(k), and an emergency fund ready to save you from life's unexpected money mishaps? That's great news. These are all signs you're out of the minor leagues and are now a major player in the world of personal finance. Here are a few more.</p> <h2>1. You're not panic-checking your financial accounts</h2> <p>When you are in full control of your finances, you know where your money is going, when it's coming in, and you have a pretty good idea of all your balances at all times. You keep track of your spending and you see the numbers you expect to see when you log into your bank or credit card account.</p> <p>This is a far cry from the days when checking your accounts was like a horrible game show moment ('Let's see if there's any money behind door Number 1!'). You may not even notice this good habit anymore, but you can feel good knowing those panicky peeks at your balances are over.</p> <h2>2. You never get a huge tax refund (but you don't owe anything, either)</h2> <p>A massive tax refund is not a smart way to manage your money. By overpaying your taxes, you are giving the government an interest-free loan all year while you miss out on investment opportunities and the benefits of compound interest. Finance rookies overpay their taxes because a refund feels like a windfall. The fact of the matter is that money should have been in your paycheck all along.</p> <p>No one wants to owe money at tax time, but if you <a href="http://www.wisebread.com/are-you-withholding-the-right-amount-of-taxes-from-your-paycheck?ref=internal" target="_blank">calculate your withholdings correctly</a>, you should come out as close to $0 as possible. That means you're taking advantage of every cent you earn throughout the year.</p> <h2>3. You have almost no monthly debt</h2> <p>Most of us are going to carry at least some debt for a chunk of our lives; after all, it's difficult to pay for a home with cold, hard cash. But excessive monthly debts mean that your finances are not as shipshape as they could be.</p> <p>It's better to buy a car in cash, upfront, than it is to pay a lease or car payment. Credit card debt that lingers for years is a huge drain on your finances. Other loans or monthly debts almost always carry interest, and that means you're continuously throwing money away. If you're living with little to no monthly debt, you have financial freedom; and that means you're no rookie. (See also: <a href="http://www.wisebread.com/the-fastest-method-to-eliminate-credit-card-debt?ref=seealso" target="_blank">The Fastest Method to Eliminate Credit Card Debt</a>)</p> <h2>4. Your credit score is doing really well</h2> <p>When was the last time you checked out your credit score? It's a good idea to do it once a month, because erroneous things can creep up. Now, take a look and see where you are on the credit rating scale.</p> <p>If you're above 700, it means you're doing great. Above 750, you're doing even better. And if you are in that magic 800+ category, you are considered by all credit agencies to be one of the best customers around. This means you have low debt, you pay everything on time, and you have accounts that date back many years. This is all evidence that you are definitely not a finance rookie. Congrats! (See also: <a href="http://www.wisebread.com/5-ways-life-is-amazing-with-an-800-credit-score?ref=seealso" target="_blank">5 Ways Life Is Amazing With an 800 Credit Score</a>)</p> <h2>5. You're automatically putting money away</h2> <p>Saving money when you can is great, and you should always try and <a href="http://www.wisebread.com/7-reasons-you-really-need-to-pay-yourself-first-seriously?ref=internal" target="_blank">pay yourself first</a>. However, if you have automated this system, you have taken a much bigger step toward financial freedom.</p> <p>By automating payments to savings accounts, retirement accounts, and an emergency fund, you have prioritized your future. Now, saving isn't just something you do if there is money left over at the end of the month. Instead, saving comes first, and you budget with what's left. It's tougher to do it this way, and it often requires discipline. But it's the best way to go about it. (See also: <a href="http://www.wisebread.com/5-ways-to-automate-your-finances?ref=seealso" target="_blank">5 Ways to Automate Your Finances</a>)</p> <h2>6. You're not living paycheck to paycheck</h2> <p>This is a tough one. The sad state of affairs is that as many as 78 percent of Americans are currently living paycheck to paycheck, according to a poll by CareerBuilder. Wages have stagnated, and the cost of living has risen dramatically compared to income. However, a chunk of that 78 percent are living this way due to a lack of budgeting, discipline, and overwhelming debt. Even people earning over $100,000 a year are living like this, and that's just unacceptable.</p> <p>If you don't live above your means, don't try and keep up with the Joneses, and don't make rash decisions with your money, you should be able to escape this paycheck to paycheck existence. It's not only bad for your finances, but extremely bad for your health and mental wellbeing. (See also: <a href="http://www.wisebread.com/how-to-escape-the-paycheck-to-paycheck-cycle?ref=seealso" target="_blank">How to Escape the Paycheck-to-Paycheck Cycle</a>)</p> <h2>7. You have an emergency fund</h2> <p>An emergency fund is just that; a stash of money that can be used for a crisis, such as losing your job, unexpected home repairs, medical care, and even emergency travel. Ideally, this fund should cover at least six months' worth of daily living expenses for you and your family &mdash; even more if you have a high-paying job or unique living expenses such as a medical condition.</p> <p>Socking away a few months' worth of expenses can be daunting, but if you at least have a few thousand dollars put away, you're off to a great start and doing better than the majority of the population. You'll thank yourself when a financial speed bump comes along. (See also: <a href="http://www.wisebread.com/5-minute-finance-start-an-emergency-fund?ref=seealso" target="_blank">5-Minute Finance: Start an Emergency Fund</a>)</p> <h2>8. You pay all your bills on time</h2> <p>Have you ever seen people play fast and loose with their bills? They will choose to pay some one month, and others the next. But sooner or later, everyone has to pay the piper. Utilities will get shut off, debt collectors will call, and credit scores will tumble. And, it often costs even more money to put things right. If you pay all your bills on time, every month, you're doing a fantastic job with your finances.</p> <h2>9. You don't make impulse purchases</h2> <p>It takes willpower to shed the 'personal finance rookie' title, and if you are no longer throwing money at purchases without thinking, you have moved beyond that role.</p> <p>Impulse buying should not be confused with taking advantage of a sale on a needed item or even an occasional treat. If you carefully consider the purchase and decide it is one you need or deserve, that's great. The problem arises when you see a 75 percent off sticker and automatically grab the item regardless of whether or not you would ever actually use or need it. In that case, you didn't 'save' 75 percent &hellip; you wasted money on the remaining 25 percent. (See also: <a href="http://www.wisebread.com/7-effortless-ways-to-prevent-budget-busting-impulse-buys?ref=seealso" target="_blank">7 Effortless Ways to Prevent Budget-Busting Impulse Buys</a>)</p> <h2>10. You have a monthly budget and stick to it</h2> <p>Perhaps the most important item on the list is a monthly budget. In fact, if you adhere to a monthly budget, most of the other habits on this list will follow naturally.</p> <p>A monthly budget is the linchpin of financial stability. It tells you exactly what money is coming in, what is going out, where it's being spent, and what you can expect to see when you look in your different accounts. By sticking to a monthly budget, you have fewer financial surprises. Even if you're not yet at the point where you can save, you are at least managing the money you have, and that will lead to financial freedom down the road. (See also: <a href="http://www.wisebread.com/stop-using-these-5-excuses-not-to-budget?ref=seealso" target="_blank">Stop Using These 5 Excuses Not to Budget</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%2F10-signs-youre-no-longer-a-personal-finance-rookie&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F10%2520Signs%2520You%2527re%2520No%2520Longer%2520a%2520Personal%2520Finance%2520Rookie.jpg&amp;description=10%20Signs%20You're%20No%20Longer%20a%20Personal%20Finance%20Rookie"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/10%20Signs%20You%27re%20No%20Longer%20a%20Personal%20Finance%20Rookie.jpg" alt="10 Signs You're No Longer a Personal Finance Rookie" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/paul-michael">Paul Michael</a> of <a href="https://www.wisebread.com/10-signs-youre-no-longer-a-personal-finance-rookie">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="https://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-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/5-money-moves-to-make-before-applying-for-a-credit-card">5 Money Moves to Make Before Applying For a Credit Card</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="https://www.wisebread.com/6-signs-youre-making-all-the-right-money-moves">6 Signs You&#039;re Making All the Right Money Moves</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/your-good-credit-doesnt-mean-you-have-good-money-habits">Your Good Credit Doesn&#039;t Mean You Have Good Money Habits</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="https://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> </ul> </div> </div> </div> </div><br/></br> Personal Finance automated budgeting credit score debt emergency funds impulse buys paying bills signs tax refunds Wed, 02 May 2018 08:00:10 +0000 Paul Michael 2132024 at https://www.wisebread.com 10 Money Rules Every Working Adult Should Know https://www.wisebread.com/10-money-rules-every-working-adult-should-know <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/10-money-rules-every-working-adult-should-know" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/woman_putting_money_in_a_piggy_bank_0.jpg" alt="Woman putting money in a piggy bank" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The media, money gurus, investment firms &mdash; they all have a way of making the world of personal finance seem hopelessly complex. We've all seen otherwise competent, capable adults go crossed-eyed when the topic of money management comes up. But don't be intimidated by the talking heads and conflicting advice. The most valuable rules are usually the simplest to understand. Here are the money rules every working adult should know.</p> <h2>1. Understand your income and expenditures</h2> <p>Knowing exactly how much money you have coming in every month &mdash; and where it all goes &mdash; is the foundation of good personal finance. It's the first step in creating a realistic budget, identifying money habits that are dragging you down, and avoiding dangerous credit missteps.</p> <h2>2. Create a budget (and stick to it)</h2> <p>Budgets are financial fences we create for ourselves. Without them, it's far too easy to wander off (overspend), panic (abuse credit), and get lost (end up deep in debt).</p> <p>Build a budget that addresses your needs today and helps you prepare for tomorrow by following the 50/30/20 rule: Devote 50 percent of your income to necessities like housing and utilities; 30 percent for wants such as travel, entertainment, or dining out; and 20 percent to financial goals like paying off debt and saving;. (See also: <a href="http://www.wisebread.com/stop-using-these-5-excuses-not-to-budget?ref=seealso" target="_blank">Stop Using These 5 Excuses Not to Budget</a>)</p> <h2>3. Establish goals</h2> <p>Goals give shape to the sacrifices we make and the effort we put into managing our money wisely. Set realistic and measurable financial goals for yourself. Do you want to <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=internal" target="_blank">pay off your credit cards</a> within six months? Save enough for a down-payment on a home within five years? Retire by 60? Track your progress and reward yourself for incremental successes.</p> <h2>4. Live below your means</h2> <p>Spending less than you make is a total power move. Why? Because it leaves you with a surplus &mdash; seed money for every financial goal you have. However modest it may be, that surplus ensures that you're moving forward and not just treading water financially. (See also: <a href="http://www.wisebread.com/5-dreams-you-wont-achieve-unless-you-live-below-your-means?ref=seealso" target="_blank">5 Dreams You Won't Achieve Unless You Live Below Your Means</a>)</p> <h2>5. Save aggressively</h2> <p>Once you understand the power of living below your means, you can get strategic about saving. Turn <a href="http://www.wisebread.com/try-these-6-money-saving-challenges-now?ref=internal" target="_blank">saving money into a challenge</a>. Can you get closer to (or move beyond) the standard budgetary rule of saving 20 percent of your income? Challenge yourself to reduce your overhead, earn extra cash, and save more.</p> <h2>6. Pay attention to the small stuff</h2> <p>Many budgets die from a thousand tiny cuts. Though the costs seem negligible at the time, all those morning lattes, lunches out, and ATM fees can really add up. Respect both the dollars and the dimes of your budget. In other words, sweat the small stuff.</p> <h2>7. Maximize your 401(k) match</h2> <p>If you're fortunate enough to work for an employer who matches a percentage of your 401(k) contributions, make the most of it. Contribute to the match limit (and beyond, if you can). Though it may take a few years to fully vest in those funds, every matching dollar is free money. (See also: <a href="http://www.wisebread.com/7-things-you-should-know-about-your-401k-match?ref=seealso" target="_blank">7 Things You Should Know About Your 401(k) Match</a>)</p> <h2>8. Prepare for the &quot;what-if&quot; moments</h2> <p>Life is seldom a smooth road. Economic bubbles burst. Layoffs happen. People get sick. Weather these financial storms by <a href="http://www.wisebread.com/7-easy-ways-to-build-an-emergency-fund-from-0" target="_blank">building an emergency fund</a>. Not sure how much to save? Start with this rule of thumb: Squirrel away enough cash to cover your minimum household expenses for at least six months.</p> <h2>9. Never buy a new car</h2> <p>Financially-speaking, buying a new car is a losing proposition. New vehicles can depreciate up to 20 percent or more each year for the first five years. And buyers who finance their purchase face an even bleaker equation: Based on 2018 figures from Edmunds, the APR of a new car loan currently averages 5.2 percent &mdash; <em>for an item that's rapidly losing value</em>. It just doesn't make sense. (See also: <a href="http://www.wisebread.com/3-reasons-why-you-should-never-buy-a-new-car?ref=seealso" target="_blank">3 Reasons Why You Should Never Buy a New Car</a>)</p> <h2>10. Protect your loved ones</h2> <p>Estate planning is a fundamental part of smart personal finance. Protect those who are dependent on your income by purchasing a life insurance policy. Though the guidelines vary based on other income sources, family size, and financial obligations, the general rule of thumb is this: The life insurance death benefit should equal seven to 10 times your annual salary. (See also: <a href="http://www.wisebread.com/term-vs-whole-life-insurance-heres-how-to-choose?ref=seealso" target="_blank">Term vs Whole Life Insurance: Here's How to Choose</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%2F10-money-rules-every-working-adult-should-know&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F10%2520Money%2520Rules%2520Every%2520Working%2520Adult%2520Should%2520Know.jpg&amp;description=10%20Money%20Rules%20Every%20Working%20Adult%20Should%20Know"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/10%20Money%20Rules%20Every%20Working%20Adult%20Should%20Know.jpg" alt="10 Money Rules Every Working Adult Should Know" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/kentin-waits">Kentin Waits</a> of <a href="https://www.wisebread.com/10-money-rules-every-working-adult-should-know">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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="https://www.wisebread.com/money-a-mess-try-this-personal-finance-starter-kit">Money a Mess? Try This Personal Finance Starter Kit</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/7-critical-money-mistakes-people-make-in-their-40s">7 Critical Money Mistakes People Make in Their 40s</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/8-personal-finance-resolutions-anyone-can-master">8 Personal Finance Resolutions Anyone Can Master</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://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-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="https://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> </ul> </div> </div> </div> </div><br/></br> Personal Finance budgeting car loans emergency funds life insurance live within your means money rules retirement rules of thumb saving money Wed, 18 Apr 2018 08:00:07 +0000 Kentin Waits 2129299 at https://www.wisebread.com How to Budget During a Crisis https://www.wisebread.com/how-to-budget-during-a-crisis <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-budget-during-a-crisis" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/working_at_home_3.jpg" alt="Working at home" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>When circumstances are normal, budgeting really isn't that difficult. For the most part, you can predict your expenses, income, and your day-to-day activities with relative ease. But what happens when an emergency comes up and threatens to ruin everything, including your finances?</p> <p>Maybe you or a spouse lost a job, or a major medical situation is costing you a lot of time, concern, and money. How can you continue to budget when your circumstances aren't regular?</p> <h2>Remain calm</h2> <p>After a crisis, dread and fear can quickly set in. You may even be afraid to open the mail for fear of yet another bill. It can feel like the world is collapsing in on you, and rational thought goes out the window. Through all of the stress, remember that this crisis is temporary; you can and will get through this in due time.</p> <p>Panic might be your natural reaction, but it isn't helpful in moving forward. Acknowledge your feelings, but try to remain as calm and levelheaded as possible.</p> <h2>Prioritize expenses</h2> <p>What bills do you need to pay immediately? Many types of debt, including your mortgage, auto loan, and credit cards won't be <em>officially </em>reported as late until they are more than 30 days past due. Are there bills that are approaching or past that time frame? Do you have enough income to cover all that you owe?</p> <p>If you aren't sure that you can pay all your bills, you have a couple of options. The worst thing you can do is to simply stop paying. That will only get you further behind and you risk racking up a mountain of overdraft and late fees, not to mention the potential blow to your credit.</p> <p>One option is to call the company behind each of your debts, explain your situation, and ask if you can get an extension or work with them to develop a payment plan. You will need to go back to your bills and prioritize them with any updated information and due dates. Pay the most urgent bills first. (See also: <a href="http://www.wisebread.com/pay-these-6-bills-first-when-money-is-tight?ref=seealso" target="_blank">Pay These 6 Bills First When Money Is Tight</a>)</p> <p>If you still are coming up short, you will need to find a way to drastically cut your costs. Are there bills you can lower or cut out entirely? Start with the unnecessary expenses. Things like entertainment and dining out should come to a halt. Canceling subscription services such as magazines, gym memberships, and cable can put hundreds back in your pocket. Next, see what necessities you can lower. Find ways to shave dollars off your costs for gas, groceries, utilities, and more until your crisis has been dealt with. (See also: <a href="http://www.wisebread.com/are-you-spending-too-much-on-normal-expenses?ref=seealso" target="_blank">Are You Spending Too Much on &quot;Normal&quot; Expenses?</a>)</p> <h2>Check in with your finances daily</h2> <p>Until your financial situation is under control, make it a point to check in with your money every day. Review all of your bank accounts, credit card balances, bills, budget, and know when your income is available. It's easy to get distracted and disorganized during a crisis, and that will only make your money matters worse. Overdraft or late fees can quickly pile up if you aren't diligent.</p> <h2>Know what to avoid</h2> <p>In a crisis, you may not know where to turn. By far, the worst resources you can turn to are credit cards or payday loans.</p> <p>Credit card debt is very easy to get into. Getting <em>out</em> of credit card debt can take you years, especially on the heels of a financial crisis. Using <a href="http://www.wisebread.com/how-to-use-a-credit-card-for-an-emergency-without-drowning-in-debt?ref=internal" target="_blank">credit cards during an emergency</a> should be a last-resort option when you have no other choice. Prioritize repaying that debt ASAP once your crisis has been handled.</p> <p>Payday lenders, meanwhile, deliberately target people in desperate situations. Believing they have no alternatives, people turn to these loans and rack up staggering amounts of debt at exorbitant interest rates. This practice of <a href="http://www.wisebread.com/how-to-protect-yourself-from-predatory-lending?ref=internal" target="_blank">predatory lending</a> leaves many people worse off than they were before. Avoid using these types of services at all costs.</p> <h2>Create a plan to protect your finances in the future</h2> <p>Digging yourself out of a financial hole will take time, but with persistence and smart money moves, it is absolutely possible. Once you are back on your feet, it's time to take action to ensure the next financial crisis doesn't land you back in the same hole.</p> <p>Start by prioritizing <a href="http://www.wisebread.com/7-easy-ways-to-build-an-emergency-fund-from-0?ref=internal" target="_blank">building an emergency fund</a> so that you are protected to weather another financial storm. Many experts recommend saving between three and six months' worth of everyday living expenses in this fund. With that cushion in place, another job loss, medical emergency, or other major financial blow won't be as devastating. (See also: <a href="http://www.wisebread.com/5-ways-to-boost-your-financial-resilience?ref=seealso" target="_blank">5 Ways to Boost Your Financial Resilience</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%2Fhow-to-budget-during-a-crisis&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHow%2520to%2520Budget%2520During%2520a%2520Crisis.jpg&amp;description=How%20to%20Budget%20During%20a%20Crisis"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/How%20to%20Budget%20During%20a%20Crisis.jpg" alt="How to Budget During a Crisis" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/rachel-slifka">Rachel Slifka</a> of <a href="https://www.wisebread.com/how-to-budget-during-a-crisis">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="https://www.wisebread.com/what-to-do-when-youve-blown-your-budget-for-the-month">What to Do When You&#039;ve Blown Your Budget for the Month</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="https://www.wisebread.com/5-ways-to-boost-your-financial-resilience">5 Ways to Boost Your Financial Resilience</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="https://www.wisebread.com/these-5-apps-will-help-you-finally-organize-your-money">These 5 Apps Will Help You Finally Organize Your Money</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/how-to-budget-when-you-rely-on-cash-tips">How to Budget When You Rely on Cash Tips</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="https://www.wisebread.com/how-to-keep-a-personal-problem-from-hurting-your-career">How to Keep a Personal Problem From Hurting Your Career</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Crisis cutting costs emergency emergency funds late payments payday loans paying bills priorities stress Tue, 17 Apr 2018 08:00:07 +0000 Rachel Slifka 2128156 at https://www.wisebread.com 4 Signs Your Emergency Fund Is Too Big https://www.wisebread.com/4-signs-your-emergency-fund-is-too-big <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-signs-your-emergency-fund-is-too-big" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/huge_savings_in_the_piggy_bank.jpg" alt="Huge savings in the piggy bank" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Financial experts have long advocated for the emergency fund: savings set aside to pay for life's unexpected emergencies. This financial cushion can also help cover your daily living expenses should you lose your job. But is it possible to save <em>too much </em>money in an emergency fund?</p> <p>Yes, if you could be using that extra money to invest, pay off high-interest debt, or boost your retirement savings.</p> <p>Here are a few signs that your emergency fund is too big, and that the money in it &mdash; at least some of it &mdash; would be better used elsewhere.</p> <h2>1. You have more than enough emergency savings to live off</h2> <p>Financial experts have long recommended having three to six months' worth of daily living expenses covered in an emergency fund. However, this is a general guideline, and you should tailor the specific amount to your unique life circumstances.</p> <p>If you're a high earner with a specialized job, for example, you may need a larger emergency savings. If you suddenly lost your job, it may take you longer to find a new position in your field, and your loss of income may be significant. Single people should also consider saving more. With only one source of income coming in, there is much less wiggle room in the budget to withstand a job loss or other financial emergency.</p> <p>Regardless of how much is in it, your emergency fund should have enough money so that you can pay your mortgage, car payment, phone bill, utilities, and any other daily expenses during a crisis without resorting to credit cards.</p> <p>To calculate if your emergency fund is too big, you'll first need a monthly budget that lists all of your expenses. Multiply that figure by six, or 12 if your situation calls for a larger emergency savings. If you have more than enough saved to live off for six months to a year, you can stop building the fund. Your additional dollars would better serve you elsewhere. (See also: <a href="http://www.wisebread.com/is-your-emergency-fund-costing-you-money?ref=seealso" target="_blank">Is Your Emergency Fund Costing You Money?</a>)</p> <h2>2. You're behind on your retirement savings</h2> <p>You might think having too much money in your emergency fund is far from a problem. But it could be if you are stowing money in an emergency fund at the expense of depositing it in a 401(k), IRA, or other retirement savings vehicle.</p> <p>You're supposed to save emergency fund dollars in a safe place. That usually means a savings account. The problem is, even the most generous savings accounts pay interest at just 1 percent, if not lower. The money you have in a savings account will grow much slower than it would invested in an IRA or mutual fund.</p> <p>Those extra thousands of dollars sitting in your emergency fund could instead be helping to build your nest egg. If you're behind on retirement savings, it might be time to take a closer look at your emergency fund. If you have more than the recommended amount of savings in it, start moving some of that money into retirement savings. (See also: <a href="http://www.wisebread.com/7-retirement-planning-steps-late-starters-must-make?ref=seealso" target="_blank">7 Retirement Planning Steps Late Starters Must Make</a>)</p> <h2>3. You're struggling with credit card debt</h2> <p>High-interest credit card debt is the worst kind of debt to have. It's not unusual for cards to come with interest rates of 17 percent or higher.</p> <p>If you carry a balance on your cards each month, and if you're only able to make minimum monthly payments, check in with your emergency fund. Any extra dollars in that fund beyond the recommended amount could instead be used to pay down your credit card debt faster. (See also: <a href="http://www.wisebread.com/the-fastest-method-to-eliminate-credit-card-debt?ref=seealso" target="_blank">The Fastest Method to Eliminate Credit Card Debt</a>)</p> <h2>4. You're a two-income household</h2> <p>Do both you and your spouse or live-in partner work full-time? You might not need as large of an emergency fund. If you lose your job, your household will still receive an injection of cash from your partner's salary.</p> <p>If you do have that extra salary, you might consider an emergency fund that has fewer months' worth of daily living expenses. Your partner's salary can act as a cushion while you use the dollars that you would have placed in your emergency fund to instead pay down credit card debt, boost your retirement savings, or invest. (See also: <a href="http://www.wisebread.com/5-minute-finance-start-an-emergency-fund?ref=seealso" target="_blank">5-Minute Finance: Start an Emergency Fund</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-signs-your-emergency-fund-is-too-big&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F4%2520Signs%2520Your%2520Emergency%2520Fund%2520Is%2520Too%2520Big.jpg&amp;description=4%20Signs%20Your%20Emergency%20Fund%20Is%20Too%20Big"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/4%20Signs%20Your%20Emergency%20Fund%20Is%20Too%20Big.jpg" alt="4 Signs Your Emergency Fund Is Too Big" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="https://www.wisebread.com/4-signs-your-emergency-fund-is-too-big">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="https://www.wisebread.com/the-financial-basics-every-new-grad-should-know">The Financial Basics Every New Grad Should Know</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://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="https://www.wisebread.com/money-a-mess-try-this-personal-finance-starter-kit">Money a Mess? Try This Personal Finance Starter Kit</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/8-financial-decisions-youll-never-regret">8 Financial Decisions You&#039;ll Never Regret</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/saving-goals-for-every-age">Saving Goals for Every Age</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance debt repayment emergency funds investing retirement saving money too big two incomes Fri, 13 Apr 2018 09:00:06 +0000 Dan Rafter 2128968 at https://www.wisebread.com Interest Rates Are Rising: Here's Where to Keep Your Cash https://www.wisebread.com/interest-rates-are-rising-heres-where-to-keep-your-cash <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/interest-rates-are-rising-heres-where-to-keep-your-cash" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/beautiful_black_woman_portrait_0.jpg" alt="Beautiful black woman portrait" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>These past 10 years, interest rates have been so low it just about didn't matter what you did with your cash. There was a certain convenience to that &mdash; you didn't have to move money back and forth between checking and higher-rate accounts, because they paid almost the same. As a bonus, you didn't have to track money market returns to be sure the rate your account paid was still competitive, because they all paid just a fraction over 0 percent.</p> <p>That has changed. The Fed has already started raising interest rates, and will probably raise rates another three-quarters of a percentage point this year. Already, rates are high enough that it makes a difference where you hold your cash, and that difference is starting to get significant. (See also: <a href="http://www.wisebread.com/how-to-benefit-from-rising-interest-rates?ref=seealso" target="_blank">How to Benefit From Rising Interest Rates</a>)</p> <p>Let's take a look at where you should be holding your money, as well as a few reasons why you need cash on hand.</p> <h2>What cash to hold</h2> <p>There are four main reasons to hold cash: liquidity balances, planned expenses, temporary holdings, and an emergency fund. The size of your temporary holdings may vary quite a bit from time to time, but the others have pretty specific parameters that it's worth being clear about.</p> <h3>Liquidity balances</h3> <p>Your income arrives in chunks that don't precisely match the due dates of your bills. Liquidity balances are the cash you keep on hand to smooth that out, so that you can pay each bill when it's due. Sizing the cash demands of your liquidity balances is easy: It's the total of all the bills that might come due between income payments. Once you know this amount, you can set it aside for when you need it.</p> <h3>Planned expenses</h3> <p>Everybody has some expenses that are not regular monthly bills, but are nevertheless known in advance. Some of these <em>are</em> regular, they're just not monthly: tax payments, insurance premiums, tuition payments, etc. Others are irregular, such as discretionary payments on things like home improvements, airfare for your vacation, buying a boat, etc. Regular or irregular, if there's a near-term payment to make, it's good money management to hold some cash to pay it.</p> <h3>Temporary investments</h3> <p>Sometimes you have cash that you've decided to invest, but that you aren't ready to invest <em>yet</em>. Maybe you don't know exactly where the money should go until the next time you rebalance your portfolio. Maybe you expect market conditions to improve. Maybe you're accumulating money to meet the minimum balance of some fund. Whatever the reason, until you're ready to invest, you're holding the money as cash. (See also: <a href="http://www.wisebread.com/how-the-risk-averse-can-get-into-the-stock-market?ref=seealso" target="_blank">How the Risk Averse Can Get Into the Stock Market</a>)</p> <h3>Emergencies</h3> <p>Your emergency fund is cash set aside to handle a financial crisis &mdash; a job loss, a medical bill, a home repair, etc. Having the money on hand means that you won't have to turn to credit cards or other forms of debt to get through your emergency. Experts often recommend an emergency cushion of three to six months' worth of daily living expenses. Your unique situation &mdash; such as an expensive medical condition or a high-paying job that would be difficult to replace &mdash; may call for a larger fund. (See also: <a href="http://www.wisebread.com/5-minute-finance-start-an-emergency-fund?ref=seealso" target="_blank">5-Minute Finance: Start an Emergency Fund</a>)</p> <h2>Where to hold your cash</h2> <p>In the U.S., we have a complex history of rules related to ceilings on the rates banks can pay, special exceptions to those rules, and free-market efforts to get around those rules. There are a lot of different kinds of institutions that hold cash and a lot of different kinds of accounts available at one or another of those institutions.</p> <p>Whatever sort of institution you choose, you still need to figure out what sorts of accounts to use for your cash. Here are the usual suspects.</p> <h3>Checking accounts</h3> <p>For most people, a checking account is their main gateway into the banking system. Their paycheck is direct deposited into their checking account, and most of their bills are paid out of their checking account.</p> <p>Back in the 1980s and 1990s, banks had to pay reasonably competitive interest rates to pull in money to support their (highly profitable) lending. That became less and less true in the early 21st century, until the financial crisis put an end to it. At the moment, checking accounts pay so little interest that you might as well just ignore it.</p> <p>That doesn't mean you shouldn't have a checking account &mdash; it's just no longer where you should hold your liquidity balances or your cash to cover planned expenses, until just a day or two before you need to make a payment. (See also: <a href="http://www.wisebread.com/9-common-mistakes-youre-making-with-your-checking-account?ref=seealso" target="_blank">9 Common Mistakes You're Making With Your Checking Account</a>)</p> <h3>Reloadable debit cards</h3> <p>These are a relatively new invention, created for people who don't need (or can't manage) an ordinary checking account. As the name suggests, it functions as a debit card. There is usually some limited ATM access and some sort of bill-paying feature.</p> <p>Once little more than fee-generating boondoggle for the banks, rule changes made them pretty fair for consumers a few years ago. Since these new rules went into effect, a reloadable debit card had been a reasonable place to hold your cash balances when rates were low, but now that interest rates are going up they're only reasonable for people whose circumstances make a bank account impractical.</p> <h3>Savings accounts</h3> <p>It used to be that you opened a savings account even before you opened a checking account. Now an ordinary savings account is almost pointless. At least at my bank, a savings account pays the same minuscule rate as a checking account, so I might just as well leave my excess cash in my checking account.</p> <p>When you think about savings accounts nowadays, though, you're usually not thinking about a savings account at your local bank. You're thinking about an internet savings account. (See also: <a href="http://www.wisebread.com/6-important-things-to-look-for-in-a-savings-account?ref=seealso" target="_blank">6 Important Things to Look for in a Savings Account</a>)</p> <h3>Internet savings accounts</h3> <p>These are just ordinary savings accounts, except they're at a bank that's willing to pay up to get your money, and that offers a convenient web interface for moving money to and from your checking account. The money moves by ACH transfer, typically in two or three days. This is quick enough to make these accounts very useful as a place to hold your cash.</p> <p>Unlike a lot of other kinds of financial accounts (where the terms and conditions vary in complex ways), the terms and conditions of internet savings accounts tend to be relatively standard, making it easy for savers to compare one account to another and pick the one that offers the best deal. (See also: <a href="http://www.wisebread.com/5-best-online-savings-accounts?ref=seealso" target="_blank">5 Best Online Savings Accounts</a>)</p> <h3>Money market funds</h3> <p>Money funds are a legacy of 1970s interest rate regulations. They pool money from shareholders, invest it in short-term securities, and share the return. Because they just share whatever return they get, returns go up quickly when interest rates rise. (Unlike savings and money market accounts, where banks that already have your money won't raise rates until they have to.)</p> <p>Although very safe, investments in a money market fund are not guaranteed. In fact, one money market fund lost enough money during the financial crisis that it was unable to make investors whole. That prompted major players in the money market to simultaneously all try to get out of assets with even the slightest risk. Basically, that was the financial crisis.</p> <h3>Money market accounts</h3> <p>Created in the early 1980s as a carefully carved-out exception to interest rate regulations, money market accounts were created in a way that didn't cannibalize on checking or savings accounts (basically, they only allowed six withdrawals per month and only three of those could be by check). They had advantages over a money market fund: They paid an announced rate (instead of just whatever the fund could earn in the market), they were guaranteed to pay off at 100 cents on the dollar, and they had FDIC insurance. That's all still true. (See also: <a href="http://www.wisebread.com/money-market-accounts-ideal-for-emergency-funds?ref=seealso" target="_blank">Money Market Accounts: Ideal for Emergency Funds</a>)</p> <h3>Other possibilities</h3> <p>There are a lot of other places you might hold cash for the short term: Demand note accounts (basically an IOU from a major financial corporation packaged up like an internet savings account), cash management accounts (a money fund or money market account wrapped up inside a brokerage account), CDs, and Treasury bills.</p> <h2>Bottom line</h2> <p>It no longer makes good sense to just keep your money in your checking account &mdash; the simplest version of cash management. Now that you can earn a return that's more than a fraction above zero, the time has come to manage your cash more actively.</p> <h3>Simple, but not too simple</h3> <p>The easiest version of active management is just to shift most of your liquidity balances, near-term planned expenses, and temporary investments into some sort of higher-yield account.</p> <p>Just do this: When your paycheck (or any other money) arrives in your checking account, transfer most of it to your higher-yield account. Two or three days before your bills need to be paid, transfer the necessary amount of money back to your checking account.</p> <h3>Not so simple</h3> <p>If you're into this sort of thing, you can get as fancy as you want.</p> <p>If your finances are sufficiently under control, you can skip the step of having your income enter via your checking account only to be transferred to your higher-yield account. Instead, you can arrange to have your direct deposit go straight into your high-yield account. That gets you earning your higher yield a couple of days earlier, and potentially cuts the number of transfers you need to make in half.</p> <p>Especially for expenses with due dates that are well-known but further off than this month, it may make sense to do something with CDs or Treasury bills.</p> <p>It may be more convenient to keep your temporary investments closer to where the investments are going to be held &mdash; perhaps in a money market fund in the same family as the other mutual funds you hold, or one with your brokerage firm.</p> <p>The possibilities are endless. But the time for just leaving your money idle in your checking account has ended.</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%2Finterest-rates-are-rising-heres-where-to-keep-your-cash&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FInterest%2520Rates%2520Are%2520Rising_%2520Here%2527s%2520Where%2520to%2520Keep%2520Your%2520Cash.jpg&amp;description=Interest%20Rates%20Are%20Rising%3A%20Here's%20Where%20to%20Keep%20Your%20Cash"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/Interest%20Rates%20Are%20Rising_%20Here%27s%20Where%20to%20Keep%20Your%20Cash.jpg" alt="Interest Rates Are Rising: Here's Where to Keep Your Cash" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="https://www.wisebread.com/interest-rates-are-rising-heres-where-to-keep-your-cash">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="https://www.wisebread.com/switch-to-a-better-bank-in-5-easy-steps">Switch to a Better Bank in 5 Easy Steps</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="https://www.wisebread.com/6-important-things-to-look-for-in-a-savings-account">6 Important Things to Look for in a Savings Account</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="https://www.wisebread.com/8-things-to-consider-before-switching-to-an-online-only-bank">8 Things to Consider Before Switching to an Online-Only Bank</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="https://www.wisebread.com/6-reasons-to-love-your-bank">6 Reasons to Love Your Bank</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="https://www.wisebread.com/how-to-earn-money-with-your-emergency-fund">How to Earn Money With Your Emergency Fund</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Banking balances cash checking accounts debit cards emergency funds interest rates internet savings accounts money market accounts savings accounts Wed, 11 Apr 2018 08:30:05 +0000 Philip Brewer 2129647 at https://www.wisebread.com