Americans aged 34 years and younger have an average of less than $5,000 in their savings account.
For those that save money, it does not leave much room for emergency expenses and preparing for retirement. How much should you be saving if you want to be best prepared for life?
With Americans 13.8 trillion dollars in debt, trying to learn how to be smart with money is a wise move.
Debt can make you feel like your life is going downhill, but when you learn how to manage your money and get financially smart, it is possible to achieve your goals. Continue reading this article to learn how to have the best financial year you’ve ever had.
Getting a good rate on car insurance can be really tricky. You have to fill out a bunch of online forms to get a quote. Then you need to compare all the plans and their coverage. By the time you finally choose a plan, you never want to think about your car insurance rates again.
So, there’s nothing worse than when you log in to pay your bill only to find out that your car insurance rate has gone up. If you’re angrily asking yourself, “Why did my car insurance go up?” here are some possible answers.
The Roth IRA was created in 1997 and since has grown in popularity as a retirement savings vehicle, outside of employer-sponsored plans.
In this article, we’re going to discuss the characteristics of a Roth IRA and how it can be effectively used by teens for retirement savings.
Since the children opening the account will be minors, the Roth IRA will be opened as a Custodial account.
The custodian (often a parent, grandparent, or guardian) will open the account for the benefit of the minor.
As the custodian, you are in control of the account until the minor reaches “the age of majority (18 or 21 depending on which state you reside). I live in Wisconsin. The age of majority is 18.
*The custodian can’t withdraw, remove, or transfer funds from the account under any circumstances.
Once of age, the child is able to do as they wish with the funds. With the correct guidance, these funds can accumulate and compound over several decades.
Adults can contribute by “matching” the teen’s earned income. The teen has to have earned income in order to open the account and make contributions.
For example, your teen earns $5,000 during the year. Theoretically, they could contribute all of it to their Roth. To encourage their money-saving habits and to show them the benefit, you tell them to save $2,500 and you match with an additional $2,500.
This provides an immediate reward/incentive to the teen and also helps illustrate how most employer-sponsored plans function.
Not only is this great for saving money, but it also instills the habit of saving. In my opinion, that’s even more important.
Additionally, if the minor can’t make a contribution (didn’t make enough, etc.) the custodian can still make contributions on their behalf.
For a more detailed list, click this link.
With regard to other custodial accounts, the Roth IRA is best for retirement savings. In terms of college savings, the 529 and the Coverdell ESA are far superior. If you’re looking for simplicity and flexibility, an UTMA/UGMA account will be your best bet.
Below is a brief explanation of each, followed by links to more detailed articles previously written.
If you’re looking for an effective way to help your kids save for retirement, the Roth IRA is a great way to go. Please advise, that the child needs to have earned income in order to make contributions.
The internet has changed every aspect of our society in the past ten years from the way we interact with our friends to the way we hail a taxi. Our entire lives can now be handled from the palm of our hand.
So what can we expect from 2020? We already know that 5G is rolling out and that will make the internet on our mobile phones even faster and better. But the one aspect of our lives that is about to change for good is the way we bank.
Every year, more than 80 million Americans take out personal loans. They do it to consolidate credit cards, pay for emergency car repairs, catch up with medical bills, and more.
Do you think that you might be able to benefit from taking out a personal loan? If so, you should take the time to learn about the different personal loan requirements.
If you want to start earning Bitcoin, you first need to open a Bitcoin wallet, which is used to send, receive and store your currency. There are several ways to make money on Bitcoin, with which you should definitely get aware with those who decided to make money in this way. Each of the methods is proven and can be successfully used to generate good income. Simply you can visit the site immediate-bitcoins.com and earn money. [Read more…]
Years ago, it was hard to be sure you were getting the best deal on a product or service, as you had to get individual quotes from multiple providers yourself.
Today, you can buy almost anything through price comparison websites, but that still doesn’t mean you’re getting the best deal or seeing everything the market has to offer.
Foreclosure is imminent when you fail to pay your mortgage. The lender can use this legal mean to repose your house when you don’t pay them. If this happens, you lose your home. And if your house doesn’t worth enough to cover the mortgage, the lender will pursue a deficiency judgement. And when this happens, you not only lose your house, you also have to pay them an additional amount. And the worst part is that foreclosure and a deficiency judgement impact your credit score. So, the smartest solution is to find a way to avoid foreclosure.
If you need guidance, this article can prove helpful.
A New Year often brings lofty goals. I want to get in shape or I want to get that promotion, but how often are our yearly goals about our finances?
In this post, we’re going to talk about some of the things you can do to set yourself up for financial success this year.
For the vast majority of people, credit cards hurt more than they help. If you’re financially responsible and pay off your balance right away, they’re an extraordinary tool. For everyone else, credit cards often come with financial pain.
Don’t close your credit card (more on that in this post, here). Take it/them out of your wallet and delete them from your “payment options” on Amazon and/or any other online retailers you frequently visit.
The easiest way to avoid temptation is to take it away. Avoid using your credit card(s) this year.
Before you spend a single dollar, set some money aside for yourself.
What you do with that savings will vary. Everyone should have an emergency fund. Ideally, 3-6 months’ worth of expenses.
At the very least, have $1,000 set aside for emergencies, and then build up from there.
Once the emergency fund is set, start building an account for short-medium term goals. A new car or a down payment, are two examples of short-medium term goals.
Last, but not least, you need to save for retirement. This should be its own line item on your budget (more on that below), but it’s something that requires intentional savings each month.
Your saving methodology, or how you save, deserves it’s own section because often times, we save after we spend.
We need to flip that around. You need to save BEFORE you spend. When you budget (make a spending plan), there are several line items.
What you pay, in order, should be necessities, savings, and then excess spending.
Additionally, your savings rate shouldn’t stay stagnant. It should constantly be adjusted. At the very least, on an annual basis.
Run the numbers. Do the math and figure out if you can spare another percentage of your salary, or another $5/month.
There’s no better way to improve your year than to improve yourself!
Put healthy habits into practice. Read, exercise, meditate, hang out with friends, go for a walk. The list is endless.
Some of those activities have compounding benefits. Walking is great exercise and is also meditative.
“An investment in knowledge pays the best interest” – Benjamin Franklin
Figure out where all of your money is going. I typically look back three months, but Holiday shopping is there, so that will distort your spending a little.
If you can, audit October, November, and December, and remove any item that isn’t normal (i.e. gifts/presents).
Once you have a good grasp on how much you’re spending and where you can develop a budget.
My term for budget, as the word “budget” has negative connotations tied to it. Using your spending audit, create a spending plan.
Once you have these items listed (debits and credits, respectively) compare the two. The resulting number should be positive. Make adjustments accordingly.
A financial plan isn’t something that’s set in stone. It’s a living organism that’s constantly changing.
If there’s one thing that’s been proven (time and again) it’s that helping other people makes you feel good. However, the reason for being generous shouldn’t be the dopamine rush that follows, it’s to help someone/something that needs it.
Whether that’s a stranger at the store or a cause that you strongly identify with, do what’s right. Live to serve.
Start saving now! December sneaks up quickly, and before you know it, you’re spending hundreds of dollars on things you didn’t budget for.
Save a little bit each day, week, or month. Whatever you’re comfortable. I encourage you to figure out what you think you’ll need for the Holidays and break it down.
Discern what is manageable for you and put it into practice.
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