All posts tagged money

4 Peices of Money Advice From a Financial Planner Himself

Let’s be honest, we are all looking for ways to be smarter with our money, and whether we admit to it or not, we could all use a few professional tips. Whether you have heard these tips before or not, it is a great refresher to go back and analyze your money practices to double check that you’re setting yourself up for success in the future.  View the tips below from, Alan Moore, M.S., CFP fee-only financial planner, and co-founder of the XY Planning Network.

1) Pay yourself first.

This is a really important concept. When you get a paycheck, you save a portion of that money before you even pay your bills. You make this automatic, and you can set up automatic payments either through HR or bank drafts. Money is automatically being saved for all of your various financial goals — and that’s what it means to pay yourself first.

 

2) Track your spending.

I’m not a big fan of traditional budgeting, but tracking your spending is huge because it gives you insight into where the money’s going. If, at the end of the month, you can’t say where all of your money is going, then you can’t know how you can make adjustments.

© alexskopje

© alexskopje

My advice is pick up a free app like mint.com. Or you can use the envelope method — or you can just use an Excel spreadsheet and keep up with all your receipts. Whatever works for you is fine, as long as you’re tracking your spending by some system. Know where your money is going, because that’s how you’re going to take control of your spending in the long run.

 

3) Avoid debt at all costs.

I get very tired of hearing this conversation around good debt, bad debt; whether or not the debt is tax deductible and you should take out a mortgage simply because you can deduct on your taxes. All of that is absolute crap! It is not true. That is used to sell you on taking on debt.

You can live your life with no debt. You will be happier and you’ll be financially healthier than anyone that you know taking on debt.

 

4) Live for today, but also save for tomorrow.

As financial planners, we tend to focus on tomorrow. We’re always talking about retirement and what’s coming in the future, but I think it’s really important that we also focus on today and what’s at hand.

Take the opportunity to enjoy your life. Take the vacations and have the experiences of the time with family and do the things that make you truly happy. You can balance this with the priority of putting some money away, too, so that one day you’ll have enough money to reach financial independence.


 

Read more tips from the original source here: http://www.businessinsider.com/best-money-advice-financial-planner-2015-12

How To Handle Your Money From a New Job

After countless interviews, patiently waiting, and anxiously negotiating, you finally landed that new job! Many of us get caught up in the emotions of success and satisfactory emotions after the acceptance, but there is one more factor to analyze; how this transition will affect your finances. Thankfully, experts have established what to do with your money when you start your new job:

1. Make sure you understand your new compensation package.

Job seekers tend to focus just on salary, says Cameron Laker, CEO and cofounder of human resources and recruitment firm Mindfield. But before you start your new job, you should sit down and review all the ways in which your finances will be changing.

2. Adjust your budget.

If you’re taking a lower-paying job to join an exciting new startup or follow your passion, you’ll need to carefully consider how you’re going to scale back. If you’re going to be making more money, you’ll have to plan ahead in order to avoid lifestyle creep.

3. Decide what to do with your former workplace’s 401(k).

If your former employer offered a 401(k) plan to save for retirement, you’ll have several options: keeping it as-is, rolling it over (industry jargon for moving it) into your new 401(k), or rolling it into an IRA.

For most people, he says, rolling over retirement accounts into an IRA is “the path of least resistance.” Usually, it will offer lower-cost investments than their new 401(k).

4. Change over your insurance.

In many cases, you won’t be able to start using your new health insurance plan until you’ve worked at the company for thirty days. During the transition period, you’ll want to enroll in COBRA to keep your old coverage going, Oliver says. That can be expensive, since you’ll be taking over the costs that were once covered by your employer, but it’s still worth the peace of mind that comes from knowing that you’re prepared in case of emergency.

Once you’ve given your notice, your company has 14 days to give you the option to receive COBRA coverage. If you say yes, your coverage will begin on the day after your benefits would normally end.

5. Understand how vesting works.

Does your new employer offer vesting that will allow you to earn equity over time? If so, you’ll want to figure out exactly how that works. Generally, companies will grant you options from the start, but they only become yours as they vest over time. Likewise, you may be given stock, but the company will retain the right to repurchase it if you leave, unless it has fully vested.


Read more: http://www.businessinsider.com/what-to-do-with-your-money-when-you-change-jobs-2015-7#ixzz3fo9v559c

A Quick Beginner’s Guide To Finance and Savings

Mortgage rates, 401(k), IRA, credit scores, yikes! So many questions with so many scenarios. Even with a college degree, these concepts that force us into adulthood can seem puzzling. THANK GOODNESS for Mathew Zeitlin, Buzzfeed News Reporter, for simplifying these concepts and giving advice for grabbing adulthood by the horns!

 

 

What is the difference between a 401(k) and an IRA? Is one better than the other?

The main difference between a 401(k) and an IRA is who administers it. Your employer can run a 401(k) plan that you choose to sign up for, while an IRA is managed individually.

With 401(k) plans, you can contribute up to $17,500 in pre-tax income to your 401(k) and your employer can match your contributions. This is as close to free money as you can get and is by far the best deal in personal finance. Income on a 401(k) is pre-tax, meaning that for what you contribute up to the limit, your income for tax purposes goes down.

IRAs, on the other hand, have nothing to do with your employer. You have to sign up for one yourself through a bank or brokerage. Traditional IRAs have a similar tax advantage to 401(k) plans, but a lower contribution limit ($5,500).

 

So, how exactly does a credit score work?

There are five main factors to your credit score.

1)The first is payment history, which is a record of whether or not you’re paying your debts on time.

2)The second largest component is how much you owe, or “credit utilization.” Large balances, at or near your credit limit, hurt your credit score.

3)The third is how long you’ve had credit.

4)There’s also what’s known as the credit mix, which accounts for only 10% of the score.

5)And finally there’s “new credit,” which is a little more vague, but it’s basically bad to open a bunch of different lines of credit in a short time period.


 

Original Source:http://www.buzzfeed.com/matthewzeitlin/what-every-millennial-needs-to-know-about-saving-and-finance#.es6xgWeVe

Top 3 Credit Card Habits Every Twenty-Something Must Have!

A lot of times, habits are formed unconsciously and easily but take maximum effort to break. However, these habits are crucial to learn early on so bad practices don’t get in the way and you can reap the benefits of them in the future; because credit card debt is way overrated…

Educate Yourself

Credit isn’t the sort of thing you want to experiment with until you get it right — it’s a lot easier to kill your credit health than it is to fix it. You only get one chance to build your credit history from scratch, so before you begin, it’s important to get educated on the basics, like what factors go into your credit score and how to read your credit report.

Pay Your Bills On Time

Making timely payments is one of the best ways for consumers to build credit. Since your credit score is meant to measure how likely you are to repay debts in a timely manner, your on-time payment percentage is often one of the most highly-weighted factors used to calculate your score. Just one late payment could hurt your credit health for years.

Build An Emergency Fund

According to a February Bankrate survey, 21% of 18 to 29 year olds have more credit card debt than they have in their emergency fund. This is problematic because emergencies do happen. If you don’t have any money saved up and get into an accident or need emergency service done on your car, your inability to pay those bills could wreck havoc on your credit

 

Read more at: http://money.usnews.com/money/blogs/my-money/2015/03/26/5-smart-credit-habits-to-start-in-your-20s#ixzz3dZLrCsbc

This Is What Separates The Rich vs. Middle Class…

The differences between the rich and the middle class are extremely vast when it comes to the way the rich act and think. Stigmas are easily formed that the rich are crooks, have an unfair advantage in life or that they’re just plain lucky; but generally speaking, these are far from true. They are High Performing people who have formed their environments to set them up to live their Ultimate Life. Here are three simple facts that separates them from being middle class:

1)  The Wealthy Are Comfortable Being Uncomfortable

Most people just want to be comfortable. Physical, psychological, and emotional comfort is the primary goal of the middle-class mindset. The wealthy, on the other hand, learn early on that becoming a millionaire isn’t easy, and the need for comfort can be devastating. They learn to be comfortable while operating in a state of ongoing uncertainty.

 

2) The Wealthy Dream About The Future

The wealthy are future-oriented and optimistic about what lies ahead. They appreciate and learn from the past while living in the present and dreaming of the future. Self-made millionaires get rich because they’re willing to bet on themselves and project their dreams, goals, and ideas into an unknown future. Much of their planning time is spent clarifying goals that won’t be realized for years, yet they patiently and painstakingly plan and dream of what their future will look and feel like.

 

3) The Wealthy Carefully Monitor Their Associations

Like attracts like, yet the wealthy are often criticized for having a closed inner circle that is almost impossible to break into unless you are rich. Successful people generally agree that consciousness is contagious, and that exposure to people who are more successful has the potential to expand your thinking and catapult your income. We become like the people we associate with, and that’s why winners are attracted to winners.

In other segments of society this is accepted, but the rich have always been lambasted for their predisposition to engage the company of people with similar financial success. Millionaires think differently from the middle class about money and there’s much to be gained by being in their presence.

Set a goal to double the amount of time you spend with people who are richer than you. Who knows, it might just make you rich.

 


 

Read more from, Steve Siebold, the author of “How Rich People Think” and a self-made multi-millionaire who has interviewed 1,200 of the world’s wealthiest people during the past 30 years here