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When Is It Okay For A Spouse to Quit a Job?

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Spouse to Quit a Job

As a couple, having a sound financial future is usually a goal. That’s why it can be really difficult to determine how to respond if one spouse wants to quit their job somewhat unexpectedly. If they don’t have another position lined up – or don’t plan on finding something new – you may wonder if their quitting is actually alright or if it’s unreasonable. Regretfully, the situation isn’t always cut and dry. So it’s critical to remember there are times when quitting is wise. Here’s a look at when it’s okay for a spouse to quit a job.

When It’s Okay for a Spouse to Quit a Job

The Workplace Is Dangerous

If there is one time when quitting a job without talking to a spouse first is definitively okay, it is if the workplace is unnecessarily dangerous. While companies should do their part to protect their workforce from harm. Some don’t do this well. Some may order employees to cut corners in a manner that needlessly puts them in harm’s way. Others may forgo maintenance. Thus, increasing the odds of dangerous mechanical failures that could harm an operator.

If your spouse is in a risky role and their employer keeps putting their safety on the line because it refuses to follow tried-and-true protocols or regulatory mandates. Exiting immediately could be essential. Otherwise, your spouse could end up catastrophically injured. Which is something that comes at a far higher cost than losing a paycheck.

There’s a Health Issue

Similar to the point above, if a job is causing or aggravating a serious health issue – or preventing your spouse from taking proper steps to care for a condition – quitting might be a necessity. There are scenarios where a person’s job can have a major impact on their health, either purely based on the nature of the role or the environment in which they do the work. In those cases, the only remedy is usually to leave. If they don’t, they may continue to deteriorate, potentially irreversibly so.

If a job is causing significant mental health damage, that’s also a justifiable reason to leave. For instance, if there’s toxic management, bullying, or similar conditions leading to severe depression or anxiety. Quitting might be the best way to get re-centered and on the road to recovery.

A person’s health isn’t something they should have to sacrifice in the name of a paycheck, particularly if the situation is getting severe rapidly. That’s why, in those scenarios, quitting is often okay.

Burnout Is a Problem

In many cases, burnout is a far bigger burden than people expect. There are both mental and physical side effects to burnout, leaving a person pretty miserable. That’s why, if burnout is the issue, quitting might not be a bad choice.

However, quitting over burnout without taking some key steps could be irresponsible. For example, if your spouse is burned out because they’re bored at work, ideally, they should speak with their manager. They may be able to take on additional duties that keep them engaged, effectively solving the issue.

The same is true if they’re overworked. At times, a meeting with their manager to discuss the situation could lead to changes, allowing them to conquer their burnout.

But not all sources of burnout are easily solved. First, managers can refuse to make any changes, making the problem inescapable without quitting. Second, if the burnout is related to the field or industry being a bad fit, leaving the role may be a must. Finally, if burnout is tied to the workplace, such as an aspect of the culture, heading for the exit is potentially essential.

Since burnout isn’t typically catastrophic, it may be preferable that your spouse find a new job before leaving. However, if the impact of burnout is severe, a quicker exit could make sense.

An Ethical or Legal Issue Arises

There are times when a person may be cruising along at work, only to witness an incident that makes staying problematic. For example, seeing a higher-up make an unethical choice could put an employee in a bind. The same goes for signs of illegal activity.

Even if your spouse isn’t directly involved, remaining in a workplace where an ethical or legal issue could rear its ugly head isn’t always wise. As a result, they may need to quit without any notice, mainly as a means of protecting themselves from a potentially risky situation.

A Multitude of Other Reasons

The examples above outline some extreme situations that most would agree make quitting – even spontaneously – primarily justifiable. However, they, by all means, aren’t the only ones.

Every person’s workplace and job are different, so your spouse’s could come with challenges not outlined above. Additionally, every person is unique, so what’s tolerable to one person may be a dealbreaker for another.

While quitting is a big decision that impacts all members of a household, spouses can’t necessarily force their partner to keep a job. Trying to do so usually only brings negativity and resentment to the relationship. The same goes for chastising a spouse who’s already quit, as that’s a reactive approach that won’t help you both find solutions to any challenges the choice creates.

How to Navigate a Spouse Quitting Their Job

If your spouse quits their job unexpectedly, you’re free to ask why they made that decision. You may discover that there were issues or challenges you weren’t initially aware of, making their quick exit completely justifiable. However, even if that isn’t the case, take in what they share and avoid being outwardly judgmental. Instead, shift gears to become solution-oriented.

Review your budget with your spouse to determine how losing that income impacts your finance. See if you need to cut back and, if so, what you should change. After you pare down, see if tapping your emergency fund is a requirement or if you can proceed while leaving your savings intact.

After that, speak with your spouse about their career plans. Find out if they intend to launch a job search, acquire new skills to make a career change possible, or have other ideas for how they’ll proceed. Determine if there are steps you can take to support their transition, as that may help them move forward with greater ease.

Work Together On A Solution

If your spouse isn’t sure about their professional future, work together to find a reasonable solution during the interim. For example, they may be able to secure a part-time job to help make ends meet while they use the rest of the time they would usually spend working if they were full-time to explore various options.

Ideally, you want to work together to figure out what comes next. That way, you can get back on the same page, allowing you to make progress as a team. Often, that can do a lot when it comes to repairing any potential damage to the relationship, making it easier to remain future-oriented and move forward.

Can you think of any other times with it’s okay for a spouse to quit a job? Has your spouse had to quit their job unexpectedly, and you’d like to offer advice to others in the same boat? Share your thoughts in the comments below.

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Five Financial Questions Women Should Ask About

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It’s no secret that women face unique financial challenges. From the gender pay gap, to managing household finances, it can be tough for us to make informed decisions about our money. To empower ourselves and make sure we’re on the right track financially, we need to ask the right questions. Here are some of the most important ones.

What Insurance Should I Have?

Insurance is a big (and often surprising) topic for women: we live longer, are more likely to experience a disability that impacts our earnings, and are more likely to support children or elders. We have a stronger need for a safety net.

As a high-level guide: max out any employer-sponsored coverage (like through your job) and then get an individual policy for the remainder of your need, as your budget accommodates.

Life Insurance

Life insurance is a tax-free gift you give the next generation, and term life insurance is inexpensive. Buy what you can afford, on the private market or through your employer.

Disability Insurance

Disability insurance is so important for women – it will replace a portion of your income if you can’t work, and you want to target 60% and 70%. Especially if you are a single mom or supporting family. To achieve this target, you will probably need a private policy in addition to any coverage from your employer (if available).

Long-Term Care Insurance

And finally, if you’re approaching retirement, long-term care insurance is important if you want to make sure you don’t have to spend all of your savings on health care in retirement. It can be very expensive, so don’t purchase this til you’re older and approaching the need for it.

These are just general guidelines – there’s no one right answer when it comes to insurance. It’s important to talk to an expert (like a financial planner) about what kind of coverage makes sense for you given your unique circumstances.

What is the Best Way to Budget?

There’s no one right way to budget your money – find the method that works best for you and stick with it! Consistency is much more important than perfection.

The Envelope Method

Some people use the “envelope system” where you put a certain amount of cash into an envelope for each category (like groceries, entertainment, and transportation). That’s all you get for that category for the month. This is great if you have to be very careful and want to stay away from credit cards entirely. It’s also a great system if you like using a physical planner over software/apps.

Budgeting Apps

If you prefer using technology to manage your finances, there are a number of great budgeting apps out there that can help you track your spending and set goals. Some popular options include Mint, You Need a Budget (YNAB), and EveryDollar.

Spreadsheet Budgeting

For those who like having more control over their budget (and who are comfortable with Excel or Google Sheets), creating a budget in spreadsheet form can be a great option. This method gives you a lot of flexibility to track your spending in the way that makes the most sense for you.

Pay Yourself First

One of the best ways to make sure you’re saving enough money is to “pay yourself first.” This means that as soon as you get paid, you put some money into savings before you spend any of it. This can be difficult at first, but if you make it automatic (i.e., set up a direct deposit from your paycheck into your savings account), it will become easier over time.

What is the best way to save money?

Again, there is no one right answer to this question – it depends on your goals and financial situation. But the upshot is that you can build an emergency fund or improve your generational wealth. Here are some general tips that can help you get started:

Increase Your Income

It can be very challenging, but to save money, you need to bring in more money than you spend. You can lower your costs and watch your spending, but you can also increase your income through a side hustle, a raise at work, or a promotion. You could sell extra things around your house. You don’t need to make a huge commitment – even small improvements in your earnings can make a big difference.

Automate Your Savings

Set up automatic transfers from your checking account to your savings account so that you’re automatically putting away money each month. This is a great way to make sure you’re always saving something, even if you don’t have a lot of extra money.

Join a Savings Challenge

A savings challenge is a great way to encourage you to save more money and get some community support. There are all kinds of challenges out there (like the 52-week challenge, where you save $52 in week one, $51 in week two, and so on), but the important thing is that you find one that works for you and stick with it. Dasha Kennedy at the Broke Black Girl runs a great year-long savings challenge to help women save $1000.

How Much Do Women Need to Save For Retirement?

As much as you can.

Women retire disadvantaged: we generally receive lower social security benefits due to lower earnings. We also tend to live longer (which means more years in retirement), and we’re more likely to experience a period of disability. All of this points to the need to have a larger retirement nest egg.

Target 20% Savings

Controversial opinion: I encourage all women to target 20% of pre-tax household income for savings. That is a lot. But most of us are playing catch up, and starting from lower earnings. Build up to it by increasing your savings rate little by little, and remember that even small amounts add up over time.

Invest Your Savings

You want to make sure your money is working hard for you, and one of the best ways to do that is to invest it. Investing can be intimidating, but on average, female investors outperform by 1% because we are less likely to panic. 1% is what professional investment advisors charge. Set up auto investment, choose low fee index funds and increase your contribution little by little. Like saving, successful investing is about consistency and patience.

What Biggest Money Mistake Should Women Avoid?

The biggest mistake you can make is to hand your finances off to a partner and ignore them. Women are socialized to do this (and it’s changing, slowly) but we pay for it. If you are widowed or experience divorce, you will be adding a terrifying and steep learning curve to a personal crisis.

Additionally, and I say this as Chief Financial Officer of our family, financial decisions will be better with your input! Even though I do this for a living, my husband often has great insight and our decisions benefit from his involvement. Don’t discount your ability or perspective, especially given that women are better investors.

What Should You Do With a Sudden Large Sum of Money

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sudden large sum of money

A sudden windfall is a boon, giving you a quick financial boost you may not have expected. However, figuring out what to do with a large sum of money that arrives quickly isn’t always easy. There are numerous potential pathways, and figuring out which is best may be tricky. If you’re wondering what you should do with a sudden large sum of money, here are some options that are worth considering.

Stop and Breathe Before Spending a Dime

Before you do anything else, pause for a moment and breathe. A sudden windfall may come from an emotionally challenging situation, such as the death of a loved one that resulted in an inheritance, a lawsuit award or settlement after a traumatic event, or selling a business you molded over the course of years. In any of those cases, what you’re feeling now may not align with your state once the dust settles.

Since that’s the case, you want to stop and breathe before spending any of the money. That can prevent you from making emotional decisions, allowing you to wait until you can think logically about what to do with the windfall.

Speak with a Tax Professional

Another critical initial step after receiving a large sum of money is to speak with a tax professional. Depending on the source of the cash, the total amount, and other details, there could be tax implications that you need to prepare to navigate. If you don’t find out about them now, there’s a chance that you’ll spend money you should have held back for an upcoming tax payment.

Usually, a single appointment with a tax professional can ensure you understand what the windfall means from a tax perspective. Additionally, they can discuss the potential implications of using the money for specific purposes, allowing you to learn more about how decisions may impact your tax liability.

Create or Boost Your Emergency Fund

If you either don’t have an emergency fund or the one you have isn’t large enough to cover at least three months of living expenses, consider using the money to boost your emergency fund. That gives you a critical financial safety net, ensuring that an unexpected financial hardship doesn’t derail your life.

You may even want to go as far as six months of living expenses. Again, it’s a buffer against the unknown, allowing you to have a resource you can tap down the line should the need arise.

Pay Off High-Interest Debt

If you already have a solid emergency fund, consider making high-interest debt your primary target. Along with costing you money, carrying large quantities of high-interest debt – usually in the form of credit cards – can harm your credit score.

By paying it down as much as possible, you reduce a financial burden while improving your credit report. That makes it a win-win, particularly if you have financial goals that often come with new debt, such as buying a home.

Bolster Your Retirement Savings

Another smart step to take is to bolster your retirement savings if you don’t have much set aside. Even if you have access to a 401(k) at work, you can typically open an IRA. With an IRA, you can send some of the windfall – up to the annual contribution limit – to that account. Then, you’re going the extra mile to secure your financial future.

Just make sure to research contribution limits or speak with a retirement professional who can give you those details. That way, you can maximize your savings while doing things correctly.

Make a Down Payment on a Home

If you’ve dreamed of home ownership and can reasonably afford a mortgage, but don’t have a down payment available, consider using some of that sudden large sum of money for a substantial down payment. As long as you put at least 20 percent down, you can avoid PMI. By going beyond that, you reduce your monthly payment and increase the amount of equity, both of which work in your favor.

Just make sure you don’t purchase more house than you can afford, both from a monthly payment and from a tax and maintenance perspective. The windfall may make more expensive homes seem more plausible on the surface. However, you need to keep the long-term picture in mind, particularly if the money you’ve recently acquired won’t necessarily last long.

Pay Off Your House

If you already have a home, paying off the mortgage is a smart move. It eliminates a major monthly payment from your budget while also allowing you to avoid further interest. Plus, owning your home outright can make it easier to sell later, should the need arise.

Even if you can’t pay off your house, paying down the debt is a good idea. It lets you reduce the amount of interest you’ll pay and shorten the total repayment period, allowing you to clear the mortgage faster than you would otherwise. Plus, if you need to reduce the monthly payment, you could do so with a refinance, something that’s easier to pull off when the amount you owe is far below the fair market value.

Open a Brokerage Account and Invest

For those who tackled everything above and still have money left (or don’t want to buy a home), opening a brokerage account and investing could be a wise decision. It creates opportunities for your money to grow without the restrictions associated with retirement accounts.

In some cases, you can tap a financial adviser through your bank or credit union, allowing you to get advice for free. Otherwise, consider finding one on your own, opting for a non-commission adviser whenever possible.

Then, focus on assets that come with low fees and built-in diversification. Both mutual funds and ETFs can be great starting points. Look for ones that align with your goals and risk tolerance, allowing you to reduce risk while ensuring your money has a chance to grow.

Have a Little Bit of Fun

When you end up with a sudden large sum of money, give yourself permission to have a little bit of fun. Just make sure you do it responsibly. For example, depending on the amount of money, you might want to designate 1 to 10 percent as cash you can spend on something you’d enjoy.

Usually, it’s best to look at your broader financial picture first. Then, you can determine what percentage is reasonable based on your other goals and how committing to the points above would benefit you. That allows you to choose an amount that won’t feel irresponsible, all while giving you a bit of freedom.

Do you have any other tips that can help someone with a sudden large sum of money make wise financial choices? Have you ever ended up with a windfall and want to share your experience? Share your thoughts in the comments below.

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Investments for Your Home, Self, and Loved Ones

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It’s important to invest in the things that have the most value in your life, as the results are often worth the time and effort that was spent. Here are three investments you can make for your home, yourself, and your loved ones.

Seek HealthCare When Necessary

Good health is an important investment for everyone, so ensure to keep yours and your family’s in the best state at all times. You can do this by going for regular checkups and ensuring that you never miss a scheduled appointment. Ensure that you’re up-to-date on all the necessary vaccinations as well, so that you don’t miss out on improved immunity. When your children come of age, start taking them for regular checkups both at the dentist and general health practitioner.

In the United States, more than four million people wear braces, with 25% of them being adults. This is an example of one treatment you or a family member may need. Never hesitate to seek treatment as soon as you’re aware that it’s necessary. This goes for you and your family, as everyone is affected in one way or another when one person in the family is unwell. With this in mind, work towards good health in unity and enjoy spending more time together in good health.

Maintain Your Home’s Systems

Your home, which is likely your biggest investment as far as your finances are concerned, should be well taken care of at all times. Be sure to maintain all the electrical appliances so they run efficiently and serve you for a long time. When you do this, you will get more service out of your appliances and systems, making this a worthwhile investment. You can take on the basic ones such as changing air and furnace filters yourself while leaving the more technical and complicated ones to professionals.

Things like septic tanks, which need to be cleaned once every three to five years, will be better left to an expert to handle. This is because they will have the right tools and know-how to deal with them and you may not. Electrical issues are another project which you must never attempt to take on yourself. Avoid risky situations but make sure that you have all your home’s systems working as well as they should.

Celebrate Those You Love

Finally, celebrate the special people in your life at every opportunity you get. For instance, you should celebrate your mom and all other moms you know on Mother’s Day. To keep things simple, get flowers, on which $1.9 billion is spent every year on this holiday. You could pair the flowers you get her with a personalized gift that will have a special meaning for her. You could even gift her with a service if this is something you feel that you can do. From helping her with chores around the house to babysitting, the list of things you can do is endless.

For the other special people in your life, remember to celebrate anniversaries, birthdays, and other special days with them. Everyone loves being remembered and acknowledged on their special day. Even if you cannot spend a lot on gifts and parties, it’s the thought that counts at the end of the day. Show up and this in itself will create an amazing impression. Consider planning an experience if you don’t have the money for a material gift. Whenever you’re among loved ones, be present so that you can fully enjoy this time spent with them, and them as well.

These three investments are the main ones you can make for your family, yourself, and your home and finances in general. Keep them in mind and you will find that your life is a lot more fulfilling than it was before.

How to Transfer Assets to Children Before Death

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If you are a parent, you already know it’s important to plan for your children in case something happens to you. One way to do this is by transferring assets to them before you die and in your estate planning. This can be done in a number of ways, and each has its benefits. In this blog post, we will discuss the different options available to you and how each can help protect your children’s future.

Remember: Generational Wealth building isn’t just for parents: grandparents, aunties, and uncles can change the shape of the entire next generation.

Work with A Family Law Attorney and a Tax Planner

family law attorney

There are many different ways to transfer assets to your children, and almost all of them require a lawyer and have tax implications. It is important to consult with an attorney as well as a tax planner, both to choose the transfer structure that is right for you and also to ensure that the documents are compliant with Federal and State property and tax law.

Draw Up a Will

One way to transfer assets to your children before death is through a will. A will is a legal document that outlines how you would like your assets to be distributed after you die. A will doesn’t actually transfer ownership of your assets until after you die, but it can be used to specify exactly who should receive what.

If you have a will, it is important to keep it up-to-date as your life and circumstances change. You should also review it regularly with a family law attorney to make sure it still meets your needs.

One important note: a will is great for establishing your wishes for the distribution of your assets are followed, but it will not keep your estate out of probate. Probate is the legal process of distributing a person’s assets after they die, via the courts in your state. It can be time-consuming and expensive, if you have substantial or complex assets, so many people choose a trust.

Create and Move Assets Into A Trust

will and trust documents

A trust is an arrangement in which one person (the trustee) holds and manages property for another person (the beneficiary). It’s a critical part of estate planning. Transferring assets into a trust can help avoid probate because the trustee can distribute the assets according to your wishes without having to go through the court system.

Moving assets into a trust that can be managed by a trustee will give your children access to the assets when they reach a certain age while ensuring that the assets are managed responsibly.

One common type of trust is a living trust, which is created during your lifetime. You can name yourself the trustee, which gives you control over the assets during your lifetime. Then, when you die, the trust remains in force and the beneficiary can receive the assets without having to go through probate. You can even trigger the execution of your trust before you pass away.

This is a good option if you want to maintain control over the assets during your lifetime, but also want to avoid probate.

Name Beneficiaries on Financial Accounts and Insurance Policies

name beneficiaries

Most financial accounts and life insurance policies allow you to name a beneficiary. This means that the account or policy will be transferred to the named beneficiary upon your death, without having to go through probate. Having updated beneficiaries is the cheapest and easiest way to transfer assets such as retirement accounts, bank accounts, and life insurance policies.

It is important to review your beneficiaries regularly and update them as needed, especially after major life events such as marriage, divorce, birth, or death. This can be especially important for single parents and blended families.

Transfer Assets During Your Lifetime

Another way to transfer assets to your children before death is through a gift or by selling the asset to them for less than its fair market value.

The upside of this option is that you are still around to help them manage the asset. The downside is that lifetime transfers have serious tax implications that vary depending on the value of the asset and your state’s laws.

Gift Assets to Your Children

You can give $16,000 per year, per child (or any other recipient) without needing to file any tax forms or pay any tax. If you are married, you and your spouse can each give $16,000, for a total of $30,000 per child. More importantly, the current (2022) Federal gift tax lifetime limit is $12.06 million per person, and you can also double it if married. While it would require you to file a form, gifts of any size can be given to your children without owing any gift tax, as long as the total amount gifted during your lifetime does not exceed the $12.06 million limit.

Sell Assets to Your Children for Less Than Their Fair Market Value

sell assets to children

You can also sell assets to your children for less than their fair market value. This is The most advanced move, absolutely requires a competent lawyer and tax planner, and is generally most appropriate for family businesses. Generally, this involves a contract in which you sell the asset to your children for an agreed-upon price that is less than the fair market value.

There are a few different ways to transfer assets to your children before death. The most common ways are through a trust, naming beneficiaries on financial accounts and insurance policies, or transferring the assets during your lifetime.

Each method has its benefits and drawbacks, so it is important to discuss your options with a family law attorney and tax professional to choose the option that best suits your family.

Should You Ever Use A Car Dealer’s In-House Financing?

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car dealer's in-house financing

Dealerships that offer in-house financing – also called “buy-here, pay-here” dealers – may seem like an attractive option. They let you handle your vehicle purchase and financing at a single place, often dealing with just one or two people along the way. But are they actually a good solution? Or is a car dealer’s in-house financing always a bad deal? If you’re asking questions like that, here’s what you need to know.

Pros and Cons of Buy-Here, Pay-Here Car Financing

The Benefits of Car Dealer In-House Financing

In-house financing at a car dealership does come with some benefits. First, it’s incredibly convenient, allowing you to handle all of your purchase needs in one location. Along with squaring away your financing, the dealer can bundle in the rest of the transaction, ensuring the car price, trade-in, and all other factors are part of one straightforward equation.

Second, in-house financing can usually let you handle everything in a single day. There typically aren’t many steps between you and driving away in a new-to-you vehicle. If you need a car fast, that could make this option more attractive.

Finally, you may have an easier time qualifying for in-house financing if you don’t have good credit. Many of these arrangements are designed with those with lower credit scores in mind. Since that’s the case, it may be a more viable approach if you’re in poor credit territory.

The Drawbacks of Car Dealer In-House Financing

While car dealer in-house financing does come with some benefits, there are plenty of drawbacks, too. The biggest one is usually the interest rate, which may be far higher than you would get if you worked with a bank, credit union, or another traditional lender. As a result, you could effectively overpay for the car, which isn’t ideal.

Another drawback is that the loan terms are typically pretty strict. Missing a payment by even just one day may trigger penalty interest rates or repossession, depending on the nature of the lending agreement.

Finally, many car dealerships that offer in-house financing sell strictly older cars, many of which may not be in great repair. There are laws protecting you from serious safety defects, failures to disclose major accidents, major breakdowns beyond a reasonable level, and similar issues. However, there isn’t protection against faster-than-expected wear and tear issues or similar problems that may lead to repair costs. As a result, the car may end up costing you a lot more than you planned right away.

Should You Ever Use a Car Dealer’s In-House Financing?

Generally speaking, the drawbacks of in-house financing outweigh the potential benefits. If you have access to traditional financing, you’ll typically end up paying less in interest by going that route. Plus, the terms may be a bit more flexible, allowing you to avoid costly penalty interest rates or repossessions if you make a minor misstep.

However, if your credit is poor enough that you can’t qualify for anything else, it is a pathway to a vehicle. Just be aware of the contract terms and ensure you make timely payments. Otherwise, you may trigger penalties or repossession.

Additionally, if you’re looking at older used cars, assume that you’ll have some repair bills on the horizon. If possible, have the vehicle inspected by a reputable repair shop before purchasing. That way, you can estimate what you might need to spend in the coming weeks or months. Then, you can use that information to ensure you have enough set aside or can take it to the dealer to potentially negotiate in some repairs or get a lower price.

Do you think it’s ever a good idea to use a car dealer’s in-house financing? Have you used in-house financing and want to tell others about your experience? Share your thoughts in the comments below.

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Eight Ways To Counter Inflation

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Counter Inflation

While it’s a problem that has been around for centuries, there are ways to counter inflation. It can be difficult to fight against, but with the right tools and strategies, you can overcome it. In this blog post, we will discuss nine ways that you can counter inflation and protect your hard-earned money. Keep reading to learn more!

What Is Inflation and How Does It Affect Your Money?

Inflation is the sustained increase in the prices of goods and services. This means that, over time, your money will buy less and less. Inflation can be caused by a variety of factors, including economic growth, supply and demand imbalances, and central bank policies.

People experience inflation at the gas pump, at the grocery store, and when they pay their utility bills.

Inflation is often described as a “hidden tax” because it erodes the purchasing power of your money. For a lot of people, inflation is confusing especially since we haven’t had a lot of it in the last 30 years.

The History of Inflation

In 1921, the U.S. Bureau of Labor Statistics (BLS) began publishing a national consumer price index (CPI), including estimates of the CPI back to 1913. This uses real information about what families spent money on (and how much they spent) across different geographies in the United States. Today, the data focuses on urban consumers.

In the United States, inflation has averaged about 2.36% per year from 2000 to 2020. Pretty close to the Federal Reserve target of 2%.

However, there have been high inflation spikes in the past. After World War II, when price controls were removed, the G.I.s came home and increased consumer demand, spiking prices up over 20%. The Korean war sent inflation to nearly 10%. And the Oil shocks of the ’70s sent prices up nearly 15% in two major spikes.

Today, many people are experiencing high inflation for the first time.

How Can You Protect Your Money From Inflation?

There are a few things that you can do to help protect your money from inflation.

  • Real estate is a great hedge against inflation. When prices go up, the value of real estate usually goes up as well. This is because people still need a place to live, and they will pay more for housing when the cost of other goods and services rises.
  • Invest in assets that will increase in value as inflation rises. This includes things like stocks, real estate, and precious metals.
  • Another way to protect against inflation is to ensure your income is protected if you currently depend on it, through disability insurance. This is especially true for single-income households.
  • You can also hedge against inflation by investing in Treasury Inflation-Protected Securities (TIPS). These are bonds issued by the government that provide you with protection against inflation. Series I bonds allow investors to ride inflation. These bonds are marked to inflation, and issued by the U.S. government. They provide investors with a stream of income that increases along with inflation. They can be purchased through Treasury Direct and have some penalties if you sell them early.

Ways To Counter Inflation Strategically

Inflation can be a scary thing, but there are ways that you can protect your money from it.

First, try to reduce the variable interest rate debt that you have. This is not the time to pay down low fixed interest rate mortgages. Instead, focus on reducing the balance of any credit card debt or adjustable-rate loans that you have.

Second, reduce spending on high inflation items. Gas, for instance, is up 40% in 2022. Similarly, home furnishings and appliances are up over 10%. Rethinking how you spend on high-impact items can help reduce the overall impact of inflation on your budget.

Third, don’t forget to include and possibly increase inflation in your financial planning. When you are estimating how much money you will need in retirement, be sure to use an inflation-adjusted number, and review that number annually.

Finally, try to stay informed about what is happening with inflation. This will help you make the best decisions for your money.

Final Thoughts

Inflation can rattle even the most steely investor, but there are ways that you can protect your money. A time of high inflation is a time to be conservative and watchful.

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Apply For These Jobs To Secure Your Financial Future

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what is job security

Most people want a solid financial future. Often, the best way to go about it is to pursue a career that offers high wages and ample job security. The problem is that not everyone knows which fields or professions bring that to the table. If you’re trying to figure out which jobs provide you with a reliable, comfortable financial future, here’s what you need to know.

What Is Job Security?

Before digging into the jobs that are financially strong, it’s important to understand what job security entails. Generally speaking, careers that offer job security ensure you have little worry when it comes to accessing opportunities or getting “cut” after being hired. Typically, as long as you meet or exceed performance expectations, the odds that you won’t be able to find reliable, long-term employment are incredibly slim.

Job security typically means choosing careers that do well on two fronts. First, you want to concentrate on positions that are in demand today. Second, you need to narrow down your options by focusing on fields where the number of opportunities is expected to rise over time, not decline.

In most cases, if you follow those two tenets, you’ll identify roles that offer job security. After that, it’s choosing an option that provides solid wages and key benefits, such as retirement plans. That way, you can ensure your financial future.

Careers That Offer Job and Financial Security

Nursing

Nursing positions at practically any level offer ample job security today. There simply aren’t enough nurses to go around, making it easy for those with the right credentials to find opportunities.

Plus, nurse salaries are typically competitive, and those working full-time often have access to generous benefits packages. Since that’s the case, this career brings financial security to the table, too.

One benefit of this career is that you can often choose to keep moving forward into higher-level positions. While you may need additional education, the boost to earnings often makes it worthwhile. Plus, some employers offer tuition assistance to employees, allowing you to move up without dealing with cumbersome student loans.

Information Technology

There are several information technology (IT) positions that offer solid job and financial security. Demand for software developers has long been on the rise. The same goes for artificial intelligence (AI) and machine learning specialists, cloud administrators, data analysts, cybersecurity specialists, and many more.

Additionally, IT managers are also widely sought. Since that’s the case, those working in these careers not only do well as individual contributors, but they can typically work their way up into management.

Engineering

When it comes to stable jobs with solid wages and room for growth, engineering professions are typically on that list. There are plenty of specialties within the broader field with potential, including mechanical, chemical, robotics, biomedical, electrical, mining, alternative energy, and civil engineering. Plus, it’s possible to find jobs in a range of sectors, giving you more access to opportunities.

Since competition for skilled engineers is fierce, pay rates are mainly rising. Additionally, a comprehensive benefits package is usually part of the equation, giving you more financial security.

Accounting and Finance

For anyone that wants job security, a strong financial future, and the skills needed to make wise money decisions throughout a lifetime, a career in accounting or finance could be a solid choice. Generally speaking, demand for these skills is trending upward. Plus, it’s a set of capabilities that will stand the test of time, limiting future risk.

In many cases, jobs in these fields also come with robust benefits packages. However, accountants may also be able to freelance – particularly if they focus on tax preparation or small business bookkeeping, accounts payable, and accounts receivable. That could create more potential pathways for success, which is beneficial.

Can you think of any other jobs that can help people secure their financial futures with greater ease? Do you work in one of the careers above? What is job security for you? Share your thoughts in the comments below.

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Tips to Save Money on Home Repairs and Renovations

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It’s understandable to be concerned about your finances as a homeowner undertaking renovations and home repairs. Have a look at the tips below to get some ideas about how you can save money while getting the best quality of work done.

Seek Advice From Architects and Other Professionals

The most helpful tip that could help you make some savings is to seek the advice of professionals like architects where necessary. This is important to do for extensive projects and potentially sensitive ones such as knocking walls down and moving fixtures. When you do this, you will know how to proceed in the best way and avoid potentially disastrous outcomes that may end up costing you more time and money than you would even spend on consultations. With master bathroom remodels costing an average of $11,700, according to Houzz, you may be able to budget better when you know the prices for everything and don’t have to spend extra money remedying mistakes.

Do Your Own Demolition

If any part of your project involves deletion, it’s a good idea to take it on yourself. Simply make sure that you have the right tools and safety gear and then get wrecking! As a precaution, you should avoid trying to demolish anything that may put you at risk of getting electrocuted or causing structural damage to the house. As long as you’re in the clear for both of these cases, you will save some money doing it yourself.

Reuse and Recycle

Another way in which you can save money on home repairs and renovations is to reuse and recycle the materials and fixtures you use. Source for those that have been used lightly from stores that offer such and you will be able to make amazing savings. If you go down this road, however, keep in mind that many contractors on the market may not be willing to work with used goods. This is because they’re not willing to assume liability in case something goes wrong. With this in mind, choose carefully the project that you will be able to take on so you don’t end up biting off more than you can chew. For example, if you are going to be working on your roof, using coatings can add a whole 25 years to a roof’s service life and reduce the roofing materials that get discarded and end up in the landfill.

Shop Around Widely

Don’t settle for the first contractor you come across, instead, shop around to find a good one. This should be one that will offer you a good discount and will offer you the service you need. Make sure that they’re experienced and have amazing reviews so that you don’t compromise on quality. Know what a reasonable price range is so that you don’t have the wrong expectations and set yourself up for a disappointment.

Schedule Your Project for the Right Time

Finally, you should schedule your project for the right time of year. Premium or peak seasons are Christmas, when kids go back to school, and in the height of summer. If you can plan for your project at some other time, you will have an easier time finding contractors and have deliveries done faster. Overall, it will be easier to negotiate for discounts from the professionals you approach to work on it. With the National Air Duct Cleaners Association recommending that people should have their air ducts cleaned once every three to five years, you can look for duct cleaners in the low seasons as well. Just after the new year is an amazing low season you should take advantage of.

Use these tips to keep track of your finances and get the most out of any home renovations and repairs you work on.

Is It Ever a Good Idea To Move Back In With Your Parents To Pay Off Debt?

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move back in with your parents

When you’re battling debt, finding a way out isn’t always easy. In some cases, that may make you wonder if heading back to your parent’s home is a smart move. After all, it’ll likely help you reduce your expenses dramatically. However, it can also create challenges. If you’re considering it, here’s a look at whether there’s ever a good reason to move back in with your parents to pay off debt.

The Benefits of Moving Back in with Your Parents to Pay Off Debt

Generally speaking, the benefits of moving back in with our parents to pay off debt are reasonably clear. First, you’ll usually get a chance to save money. Even if you’re paying rent, covering part of the utilities, and handling your own food and insurance, you’ll likely pay less than if you lived on your own. That gives you more cash to send to your debts.

Second, you may get some much-needed emotional support. That’s particularly true if you’re cutting out all extraneous spending to make debt repayment faster. By being with your parents, you’ll get opportunities to socialize. Plus, you may get a few perks – like access to entertainment – that you otherwise couldn’t afford, making a tough situation a bit easier to navigate.

Finally, it may give your parents a bit of a financial boost, too. For example, if you’re paying rent, they’re spending less on their housing costs. That could let them conquer some debt, set more money aside for the future, or otherwise get financial ahead.

The Drawbacks of Moving Back in with Your Parents to Pay Off Debt

When it comes to drawbacks, the strain it can put on your relationship is one of the biggest. While moving back in for a short time may be fine, an extended stay may lead to frustration. Your parents may have looked forward to an empty nest, or you may feel restricted by their rules. In either case, things can get uncomfortable quickly.

There’s also a chance they’ll feel taken advantage of, particularly if there’s any spending on your part that they find questionable. For instance, you might view a night out as a way to relax, while they think that money should go to your debt so that you can move out faster.

If you’re not paying rent or covering your expenses, moving in means you’re also placing a financial hardship on your parents potentially. Unless their income level is high, covering your costs could represent a significant strain on their budget. If so, that may lead to resentment, as well as long-term financial trouble for them.

Is It Ever a Good Idea to Move Back in with Your Parents to Pay Off Debt?

Generally speaking, there are good reasons to move back in with parents to pay off debts. However, you need to weigh the drawbacks, too. That way, you can ultimately make the best long-term choice.

Do you think there’s ever a good reason to move back in with your parents to pay off debt? Why or why not? Did you decide to move back in with your parents to conquer a debt issue? Do you feel that was the right choice in hindsight? Share your thoughts in the comments below.

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