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How to manage your finances with peace of mind and being happy 

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The long months of lockdown and restrictions have triggered a strong desire for freedom in people’s minds, pushing them more and more towards completely new activities to be enjoyed to the full, with gusto and fun, without any kind of limitation. This is not an entirely unexpected reaction: if one of the most venerable principles of physics is still valid – to every action there is an equal and opposite reaction -, after months and months of draconian restrictions and measures that even affected people’s freedom of movement (even in their own neighbourhoods, effectively confining them to their homes), each individual, faced with the timid reopening that each country began to grant, inevitably felt a strong desire for freedom, manifesting it also through the selection of new activities and pastimes capable of triggering a strong feeling of freedom, personal redemption and, ultimately, rebirth.  [Read more…]

Student Loans – Do you have too much?

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I had this question posed to me and I thought it was interesting, I also think I have a different response than most people would, so let’s talk about it. Do you have too much borrowed for student loans? Does a dollar amount define the answer? Or is it situational?

Current student loan debt dilemma

To illustrate what the current student loan debt landscape looks like, I’d like to show some statistics.

  • Since 1970, the average student loan debt has increased by 2,807%. After adjusting for inflation, the average student loan debt has increased 317%.
  • The current average student loan balance is $37,113.
  • Total student loan debt is currently $1.75 trillion and grows 6 times faster than the national economy.
  • Those aged 25-34 are most likely to hold student loan debt, but people aged 35-49 hold the greatest proportion of debt – $600 billion.
  • Over 25% of borrowers owe more than $100,000

Student loan debt is a problem. I do believe it’s a manageable problem though. At least, it’s manageable going forward. Which brings me to my next point and the answer to the proposed question.

Situational answers

Here’s my no answer, answer. It depends. Some students will borrow over $100,000, but they could go to school to become a doctor, dentists, lawyers, or engineers.

Another question to ask is what school are you going to? Is it necessary for you to go to a big school that costs $50,000 per year? I think in most instances, probably not.

I think those are the two biggest questions that help answer the “how much too much” question. What are you going to school for and what school are you going to?

I think that the push to go to college to get an education is cyclical. Obviously, there are professions where it is very much needed, but there are others where that’s arguable. I also think that there’s been a lot of innovation done in the educational space that has provided legitimate alternatives to your typical college education. As with most things, however, only time will tell.

What are your post-graduation plans?

Do you anticipate you’ll earn a lot of money? Does your profession have a track record for medium to high earning potential? That is definitely a factor to consider. You could have your sights set on going to college already, but answering those two questions will help you decide what type of university to go to (online, state-run, private, etc.).

Mathematical answer

There’s a percentage answer, there’s not really a dollar amount answer because it’s relative to your income. Lenders, specifically, want to see your debt to income ratio below 43%. So if your projected income to debt ratio is above that number, then you need to think about alternatives.

How much is the average starting salary in your industry for your position? If it’s $50,000 per year, that’s where you start. How much student loans will you have when you graduate? Using the national average, it’s $37,113.

Breaking it down. Your monthly gross income is $4,166.67. You plan to pay off your student loans in 10 years and your interest rate on that debt is 8%, so your monthly payment is $450.28. Your debt to income ratio is roughly 11%.

If you’re looking for a home to purchase, the proposed mortgage will get added to that monthly student loan payment to help calculate your new debt to income ratio, so pay attention to that as well.

Related reading:

How do you pay for college?

Student loan repayment guide

Is it a good idea to pay off student loan debt quickly?

Simple solutions for repaying student loan debt

The pros and cons of refinancing your student loan debt

Disclaimer:

**Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com

6 Pros And Cons Of Payroll Business Loans

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Typically, employees can be considered valuable assets to your company. They play an integral role in the growth and success of your business operations. As such, they deserve to get compensated for all the work they’ve done for your organization. This means regularly paying them their salaries, wages, and other statutory benefits. When you fail to pay your employees their compensation, your business may be in huge trouble.   [Read more…]

First Time Applying for a Mortgage? 6 Expert Tips to Boost Your Chances 

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Your home is one of the biggest financial investments you’ll ever make in your lifetime. If you’re like most people, you’ll need the help of a mortgage to make it happen. Mortgages are viewed as the default way to finance a house, but that doesn’t guarantee that you’ll qualify for the one you want, especially if you’re a first-time homebuyer. The entire process can be daunting and overwhelming as there are tons of steps involved, and anyone new in the real estate market may not know all the best practices. So, how do you make yourself more attractive in the eyes of your lender? Read more to learn six expert tips to boost your chances. [Read more…]

How to Increase Your Net Worth

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Your net worth is a benchmark for your financial success. Notice that I said financial success and not just success. That was intentional because money doesn’t define your success. Money can afford you freedom, but I believe real success doesn’t involve money. That was free of charge, now let’s talk about how to increase your net worth.

What is net worth?

Net worth is assets minus liabilities. How much wealth do you have after you subtract what you owe versus what you have? It’s typically used to gauge your progress in your financial life. If you have debt, then when you pay it down, your net worth goes up. The same happens when you increase your savings.

How to increase your assets

Honestly, the only way to increase your assets is to save money. At least, that’s where it all starts. The more you save, the more you have to work with.

How do you save money? Decrease your expenses and/or make more money. That’s what it comes down to. Figure out what’s important – in terms of your budget and spending. Everything else that doesn’t fit on that list needs to either be removed or reduced.

Once you have money saved, then you can put it to work. Invest it in securities or assets that have a chance to increase in value. What kinds of things have a chance to increase in value? Stocks, bonds, mutual funds, ETFs, precious metals, real estate, certificates of deposit (CDs), and cryptocurrency/NFTs (though I would tread carefully here).

Growing your assets will help you increase your net worth.

How to decrease your liabilities

Pay down your debts. That’s it. Obviously, it’s more challenging than that. Ideally, what you’d want to do is pay down your debts before you focus on the saving aspect of it. If you have debts with high-interest rates, like credit cards, those should be your first priority.

We’ve gone into detail about the repayment methods before so we’ll only touch on them briefly, but what’s important is decreasing your expenses so you can make larger, more regular payments towards your debts.

The next step is developing a repayment strategy. The two we’ve talked about before are the debt avalanche and the debt snowball. The debt avalanche – you pay the debt with the highest interest rate off first before moving to the next one. The debt snowball – you pay the debt with the smallest balance off before moving on to the next one.

Paying down your debts will really help you increase your net worth.

Is there a net worth number you should hit?

At the end of the day, your net worth number is really a reflection of what you’ve saved for retirement. Ideally, you will not have any debts, including your mortgage. So there’s no math that needs to be done. What are your assets? Primary home, any rental properties, and then your retirement savings, with primary home and retirement savings being the two most common for everyone.

So the question becomes, how much should you save for retirement? Thankfully, we’ve created a guide for you to help answer that question (see below).

Related reading:

How much do I need to save for retirement?

Diving Deep Into Debt

3 ways to responsibly save money

Gig economy financial security

Johnny Depp Net Worth

Disclaimer:

**Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com

Top 7 Benefits of Applying Accountants Pre-employment Tests

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A job market is a tough place these days. With so many unemployed people looking to get hired and employers looking to hire, new hiring tools have been implemented.

One of those tools is the pre-employment skills assessment tests that employers use. The purpose of these tests is to evaluate an applicant’s skills and knowledge as they show potential for the profession. [Read more…]

Is Selling Your Home the Best Choice?

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Selling a home is the biggest decision one will ever make. Considering that a home is the most valuable possession you could ever have, selling it is not easy. However, some situations, such as moving, may necessitate you to sell your home fast. However, selling a house has to be done right; this will guarantee you good money and a better lifestyle. However, selling the house at the wrong time may put you at risk and more trouble in future years. Therefore before selling a house, it is essential to factor in the market conditions to guide you on the best time to sell a house. However, market conditions are not the only things you need to factor in;  [Read more…]

Save Money on Your Mortgage by Negotiating These Fees

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After all the haggling you do to get the best price on your home, and all the work you put into your credit to get the best interest rate, it can be disappointing to realize that closing on a home comes with thousands of dollars in bank and legal fees. You need to pay for multiple inspections, an appraisal, attorneys’ fees, title insurance – and that’s just the tip of the iceberg. [Read more…]

What’s a Thrift Savings Plan?

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A thrift savings plan is a retirement plan available to federal employees and members of the uniformed services. 

Real quick…Uniformed services are bodies of people in the employment of a state who wear a distinct uniform that differentiates them from the general public. Their purpose is to maintain the peace, security, safety, and health of the public they serve.

Back to it. A thrift savings plan is a defined contribution plan, like a 401k, that offers federal employees the same benefits as people who work in the private sector.

In this article, we learn about what a thrift savings plan is, as well as the rules and regulations.

What is it?

As mentioned in the introduction, a thrift savings plan (TSP) is a defined contribution retirement plan for federal employees.

A TSP includes deferred contributions from employees and can include matching contributions from the federal agencies. The employee also has the option of contributing pre-tax to a Traditional TSP, or post-tax to a Roth TSP.

If applicable, you can rollover a previous 401k or IRA into a TSP, and vice versa if you retire or move back into the private sector.

Investing

Currently, Blackrock is providing the investment products used in the Federal TSP. The investment options include:

  • The Government Securities Investment (G) Fund
  • The Fixed-Income Index Investment (F) Fund
  • The Common-Stock Index Investment (C) Fund
  • The Small-Capitalization Stock Index Investment (S) Fund
  • The International-Stock Index Investment (I) Fund
  • Specific lifecycle (L) funds designed to include a mix of securities held in each of the other five individual funds

Rules and Regulations

Not only is it a retirement plan, but it’s also a government-sponsored retirement plan. Obviously, there are going to be some regulations that accompany it.

The TSP contribution limit for 2022 is $20,500. The government has a sliding scale match, starting at 1% and topping out at 5%. The match is available even if you don’t contribute, though it is at the 1% base amount. It’s a percentage for a percentage match. If you contribute 2%, the match is 2%. If you contribute 5%, the match is 5%.

Fees are considerably lower with TSPs, usually .05%. Like IRAs, TSPs also have required minimum distributions that must start at 72. IRAs have an early withdrawal penalty of 10% if you pull money before 59 ½ years of age. TSPs will waive that 10% penalty if you retire at 55 or older.

Related reading:

Business Retirement Plan Guide

Ways to Increase Your Wealth

Retirement Costs to Consider

Disclaimer:

**Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com

Here’s What Homes Cost in 5 States Around The Country in 2022

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cost of homes

In the United States, the median home value comes in at $320,662. While most wouldn’t consider that cheap, it isn’t anywhere near what you may have to pay in some parts of the country. However, that doesn’t mean there aren’t areas where paying that amount would only happen with a luxury-style home, as the average for the state is actually far lower. In the end, where you buy a home makes a big difference when it comes to pricing. If you’re wondering how much, here’s a look at what homes cost in five states around the country.

1. Iowa

When it comes to lower-cost housing, Iowa is one of the least expensive places to buy a home. Even though home values have risen by 12.2 percent within the past year, the cost of a house is much lower than many would expect. In Iowa, the average home value comes in at $178,608, putting it more than $142,000 below the national average.

2. Texas

Texas has also seen home values rise quickly in the past year. Overall, the year-over-year change is a startling 21.6 percent, leading many to assume that prices in the area would be hard to manage.

In reality, the average home value in Texas is $276,048. That’s still more than $44,000 under the national average, making the properties seem downright affordable by comparison.

3. New York

While real estate in New York City is notoriously expensive, that doesn’t mean home values are out of control in the rest of the state. In fact, even with home values rising 13.7 percent over the past year, New York isn’t as high cost as you might expect.

The average home value in New York sits at $374,717. While that’s still about $54,000 above the national average, it’s likely isn’t as high as you’d expect.

4. California

In the land of higher-cost real estate, California firmly has a position near the top. Typically, the state is sitting just one place behind the highest cost state (if you don’t count the District of Columbia).

Certain cities are notoriously pricy, such as San Francisco, which comes in with an average home value above $1.5 million. However, not all areas have those kinds of price tags, so the state average is fortunately far below that amount.

Still, California home values have risen by 20.1 percent in the past year, causing the average home value to come in at $734,612. That’s $413,950 above the national average.

5. Hawaii

If you’re wondering which state has the highest housing prices, look no further than Hawaii. It usually tops the charts when it comes to real estate purchase costs, outpacing every other state in the nation.

The average home value in Hawaii is a shocking $821,263. That’s more than half a million above the national average. In fact, you could have four average-value Iowa homes or two average-value New York homes for that amount with a notable amount of room to spare.

Are you surprised by how different the cost of homes is in each of the states above? Have housing prices encouraged you to relocate to another state to make homeownership more affordable? Share your thoughts in the comments below.

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