IRS has a few new changes that you need to know about for retirement plan savings contributions. For the most part, your contribution levels have slightly increased, allowing you to contribute more to these plans. But you do want to be aware of your limits because making a higher contribution can cost you at tax time. These limits are for 2018 and don’t have any effect on your 2017 contributions.

Here are the highlights of these changes for 2018:

* Contribution limits for employees participating in 401(k) plans and individuals participating in the government’s Thrift Savings Plan have been increased from $18,000 to $18,500. While this isn’t a huge increase, it means a little more money to your retirement savings plan, which is always a plus.

* You are able to deduct traditional IRA contributions if you meet certain conditions. And if you have a retirement plan at work, the deduction may be reduced or phased out until it is eliminated, depending on your filing status and income. These are the new elimination and phase out ranges:

• If you’re single, your phase out range has been increased and ranges from $63K to $73K.
• If you’re married, your phase out range has also been increased and ranges from $101K to $121K
• If you do not have a workplace retirement plan but you’re married, the deduction is phased out if your combined income is between $189K and $199K.
• And if you’re married but filing separately and you have a workplace retirement plan, the phase out range isn’t affected by the annual cost-of-living adjustment and remains the same, $0 to $10K.

* The phase out range for contributions to a Roth IRA is $120K to $135K for singles or heads of household. And for married couples filing jointly it’s now $189K to $199K. If you’re married but filing separately, you are not subject to cost-of-living increases here either. All of these ranges are either increased or remained the same.

* As for Retirement Savings Contribution Credits (also known as Saver’s Credit), the income limit for low/moderate income level workers is $63K for married couples who are filing jointly. Heads of household filers income limit is now $47,250 and singles income limit is $31,500. These are all an increase.

There are also a few limitations that have remained unchanged:

* Annual contributions to an IRA stayed the same at $5,500. If you’re over 50, the additional catch-up contribution is not subject to an annual cost-of-living increase and remains at $1K.

* For 401(k), Thrift Savings Plan, and other work-related savings plans, the catch-up contribution for employees over 50 also remains the same at $6K.

If you’re not sure how these changes affect you, talk to a tax specialist to ensure you won’t be penalized later. These changes now allow you to make higher contributions to your retirement plan savings without paying penalties. The increase in contribution levels is due to an annual cost-of-living increase so you should see similar contribution level increases each year. Take advantage of these new limitations to make the most of your retirement savings.

Today, most students graduating from college find themselves burdened by significant debt. According to a recent study, the average student has around $30,000 in debt. If you’ve just left college, this amount is huge considering that your career is at its infant stages.

The situation is much worse for students who can’t enter into their specific career field leaving them with limited options to service the student loan accrued. Unlike in the past when refinancing was mainly used towards mortgage and auto-loans, today graduates can easily refinance student loans. Besides reducing the interest rates significantly, this method can also be effective in lowering the monthly payments.

What is refinancing?

Basically, refinancing is when a lender pays off your current debt at once and they give you a new loan. Typically, the new loan comes with better interest rates. This leads to significant savings or a more favorable payment schedule. For instance, a student loan can have interest rates of about 12%. But after refinancing, it can go down to even 3%. However, the interest rates are greatly determined by your qualifications as well as the lender.

When you get a refinancing deal with lower interests, it means the amounts added to the loan principal per month. But if you are getting your loan refinanced so that you can get a longer repayment period, it means you’ll end up paying more money compared to what you’d have paid if the duration was shorter.

Are you eligible?

Despite the fact that this refinancing is a brilliant move, not everyone will qualify to make the move. Most lenders are keen to look at your employment status as well as your income. In addition, the debt should be coming from recognized universities and colleges. At the same time, you’ll come across just right loans lenders who only approve graduates from specific.

Most lenders are impressed by graduates who have a good credit history without past missed payments. This assures the lender that you are reliable and they’ll quickly approve your loan if you have a stable income. While most lenders will approve your application if your credit score is over 600, you’d get a better deal in terms of interest when your credit score is higher.

However, you may still qualify even when your earnings or credit score are above average. All you need to do is have a co-signer who is credit worthy. You can ask one of your friends or family member to co-sign the loan with you.

Requirements for refinancing

After evaluating your situation, it’s likely that you’ll decide in favor of refinancing. But before you go out there to find a lender, you need to prepare a few things in advance.

Have a recent copy of your tax returns to prove your income as well as total liabilities.

Check your credit score at the moment to know how much you’ll be paying in interests. If you have no idea what your score is, you can easily check on Experian or Transunion.

If it is below average, you need to have a co-signer in advance. Find a friend or relative who is willing to co-sign your loan.

What are the loan terms?

When you start hunting for the most appropriate refinancing deal, it’s obvious you’ll come across several offers. Different lenders have varied interest rates as well as repayment periods. Depending on your preferences, you can choose to repay the loan in five, ten or even twenty years.

Ideally, paying the borrowed money in a short time is a wise decision but it is not always a viable financial option. Therefore, you can choose to clear the loan over an extended period, which means you’ll have a lighter monthly burden. If your earnings grow when you’re still servicing your loan, you can decide to increase the payment amount to clear the debt sooner.

Most lenders will also give you the option to choose between a variable and a fixed interest rate. Basically, variable interest rates can go as low as 2%. However, they tend to fluctuate as time goes and makes budgeting quite a challenge. While a fixed interest rate seems higher, it stays the same over the entire lifetime of the loan. This makes budgeting easier since you can predict how much you’ll be paying.

Conclusion

Making a decision to refinance your student loan can be a strategic move towards saving a significant amount of money. However, the decision requires substantial forethought as well as financial planning if you want to get all the benefits.

But before you make a decision, evaluate all the benefits of the student loan. Normally, federal loans come with attractive benefits which are not available with other sources of credit and you’d lose them if you refinance the loan.

If you are sure your financial status makes refinancing a viable option, you need to spend some time creating a specific plan that will help you to spend the money wisely.

Earlier this year, the Financial Conduct Authority (FCA) announced 29th August 2019 as the final date that consumers can make a payment protection insurance (PPI) claim. The promotion of the PPI deadline began in August, with a £42 million campaign.

PPI was mis-sold to thousands of customers in the UK during the 1990s and early-2000s. The insurance was sold with mortgages, loans, overdrafts, credit cards, store cards and catalogue cards. The banks have paid out astronomical amounts of money to consumers for their wrong-doings. Nearly £28 billion has already been paid to customers.

Companies offering PPI claims with the lowest fees have been helping people reclaim their money for years. With the deadline looming, now is the time to contact your bank or a trustworthy PPI claims company to make a claim. But, does this mean the PPI scandal is finally coming to an end?

Has the PPI Deadline Increased the Number of Claims?

The most recent statistics indicate that since the deadline was announced, people have taken note and acted upon it. Nearly 10,000 people have called the FCA’s PPI helpline and, during September this year, the PPI deadline website received 12,500 visitors a day.

The Financial Ombudsman (FOS) reported 8000 more complaints about PPI between July and September than between April and June. The FCA hasn’t announced how much money the banks have repaid since the deadline promotion, but it is likely that we will see a sharp increase in money paid out to match the surge in claims.

Will it All be Over After the PPI Deadline?

After the PPI deadline, there will be no more cold calls or texts from PPI claims companies. Nor will we see or hear Arnold Schwarzenegger’s robotic head telling us to “do it now!” We’ll finally begin to hear the end of the PPI scandal.

However, for those making a claim, it might not quite be over by August 2019. If a consumer decides to refer the case to the FOS, this could take up to two years to be resolved.

As well as dealing with the backlog of complaints, the FOS will continue to resolve PPI complaints long after the PPI deadline. This is because PPI policies are still being sold. Anybody who currently has a PPI policy can make a PPI claim after the deadline if they feel it was mis-sold to them. There is no doubt that the banks have changed how they sell PPI. But, if a consumer wants to make a claim, the option is still there after August 2019.

Have the Banks Learnt Their Lesson?

The banks have paid out huge sums of money both to consumers and fines for mis-sold PPI. They have no doubt learnt from their mistakes. Yet, many critics are dubious and feel that another PPI scandal will emerge. For example, Barclays have been involved in numerous scandals over the past ten years, being fined by both the UK and US.

Banks all over the world are dealing with scandals. Wells Fargo in the USA created accounts without customers’ consent. Other banks had large, competitive bonuses attached for selling the most products.

These scandals certainly make us question the ethics of banks. Unfortunately, using their services is inevitable for those of us who earn a living and want to save some money in a safe and secure way. But, can we trust that it’s safe and secure? Should we worry every time we’re offered a new product? We can only hope that the long-awaited PPI deadline makes banks think twice before misselling any other products to consumers.

Almost all of you, at least once, would have considered starting your own business.

The idea of starting a business could pop up in your mind when you get a job and finally realise that you want more control over your work and home life. Not to mention, you could start fantasising about launching your business after hearing about the “multi-billionaires” who are out there in the world.

No matter what your motivation is, if you’re thinking of launching a business, then an ideal time to do it is during your 20s and 30s. Below we have mentioned a few reasons for you should look to start your business in your 20s and 30s.

• Long Term Potential Return

Let’s assume that you’ve successfully built your business; it is lucrative, stable and you’re sitting pretty whilst it produces a good 6 figure salary. Now assume that it can run for an indefinite period and you really enjoy your work. Wouldn’t you wish to reap the associated benefits over a longer period of time?

Of course, this is an optimistic situation, but it’s definitely attainable; although it often takes multiple tries to develop a triumphant business. The bottom line here is: the more time you spend on the burgeoning idea, the better long term returns you’re likely to receive.

• Risk taking Capabilities

Not every enterprise is going to go down the path of success. But, whatever age you are, it’s imperative for you to be practical and realistic. When you start a business, in most cases you’ll need up-front investment, in terms of both time as well as money. Not to mention, you’ll be putting up with considerable risk, with your current or ‘backup’ career as well as your finances.

In the initial stages of your business, you’re likely to face some cash flow issues, but in such situations you can always opt for cash flow finance in order to stabilise the inflow and outflow of cash.

As it happens in financial markets, the younger you are the better you’ll be able to bear the risk; also, you’ll have fewer responsibilities and commitments on your shoulders, and adequate time to make up any losses incurred.

• Energy and Inspiration

It certainly takes a lot of effort and hard work to run a successful business. Do not forget that! Although, it isn’t written in stone, the general thumb of rule is that youngsters have more energy and enthusiasm when compared to their elders.

Perhaps, you will be a youthful spirit for the next few decades, but the reality is, you don’t really know for sure. Now, what seems like a “solid idea” might turn out to be a “no way” idea in the next 10 years. Likewise, the work you’ll be doing now might become something you’d avoid at all costs in the future. As every year comes to an end, the energy and enthusiasm you have may gradually decline.

• Flexibility

Youngsters are often more flexible; they’ve been exposed to the rules and norms of professional world for a shorter period of time and are less likely to be committed to those ingrained ideals. Another reason is the “unique technological era”; companies these days face a lot of technological disruption day in and day out, and the best way for a firm to survive is to become accustomed to and incorporate these technologies.

When you’re in your 20s and 30s, you’d have a better opportunity to recognise and integrate technologies swiftly. But, as you get older, the rate of progress of these technologies would increase. Thus, you must start your business whilst you’re lively.

• Early Lessons from Failure

Let’s say during your 20s, you begin your business and in the worst-case scenario; life hits you right in the face and your business goes through heavy loss and potential failure.

However, you have ample time to make up for the loss. Furthermore, the next time you start something you’ll know more, because you have learnt from your past failures. In addition to this, you would’ve developed a more mature mindset.

• Millions of Ideas

We tend to curse the current scenarios, culture, media, existing problems with technology, etc. But, which age group judges and acts accordingly? Without any doubt, it’s the youth as the oldies are busy with their job that they don’t really like, yet consider it to be “safe enough”.

Likewise, the innovative ideas that one gets when they’re young, is plentiful as and they are usually high on creativity and imagination.

• Successive Entrepreneurship

Most of the entrepreneurs who’re completely in love with entrepreneurship tend to start numerous businesses and become a serial business owner. It is as if they were destined to become entrepreneurs. Not to mention, every new firm they start is much better than the previous one; all thanks to their past experience, founders’, broader perspective and increasing contacts.

When you begin your business during your 20s and 30s, you’re likely to set up more amount of time to begin more companies. Basically, you’re trying to maximise the experience you’ve gained so far and mounting the number of companies you could start.

The bottom line is none of the above mentioned reasons mean that you can start your business only in your 20s and 30s; or if you’re in or over 40s you’ve missed the opportunity. On the other hand, older entrepreneurs have more experience and are capable enough to build an effective business.

However, with the unique blend of advantages that you have got can make this stage of life a strategic time to start your own business. Also, when the thought of entrepreneurship enters your mind in 20s and 30s, do not write it off. Instead, do some research, look at your ideas and make the most of your youth. No matter how things turn out to be, you will surely be glad that you decided to start early!

Buying your first car can feel a lot like a rite of passage for some, and rightly so. That being said, you’ve got to move carefully and with much consideration when it comes to buys as major as an automobile. Learn about car loans for first-time buyers and some of the most common pitfalls to look out for.

Establish a Budget

One of the first things you’ll want to do is establish a budget that includes a monthly car payment. When you have an idea of how much money you’ll have leftover after taking care of your other financial obligations, you’ll know how much of a monthly car payment you can easily afford without risking missed payments or living from paycheck to paycheck.

Get Preapproved

Preapproval lets you know how much you’ll likely be able to borrow with your current credit score. Getting preapproved also lets you know what lenders see when they run a credit check to see how much they can let you borrow, which can take a lot of stress out of the car-buying process. You can get preapproved through a bank or credit union, or even an online lender.

Save Up For Your Down Payment

Just because you’re preapproved for a $20,000 car loan doesn’t mean you have to (or that you should) accept all $20,000. Do yourself a huge favor and save up as much as you can for your down payment so you don’t have to borrow as much to take care of the rest of the cost of the car you’ve got in mind. A good rule of thumb is to save up at least 20 percent of the total cost of the car you’ve got in mind, but some dealerships will accept less. That being said, save up as much as possible to keep from having to pay more in interest on a bigger loan.

Check Your Credit Report

Your credit score is one of your biggest advantages when it comes to buying a car, which you likely already know. When you decide you’re going to buy a car for the first time, go ahead and order a free credit report. Look over it to see if there are any discrepancies or either inaccurate or outdated information that needs to be cleared up. Again, this is information lenders will see when they pull your credit, so you might as well know what they’re going to see.

Don’t Forget About Insurance

While you’re figuring out the budget for your car payment, make sure you don’t forget about those monthly insurance premiums. Know that you have more sway over the overall cost of insurance than you might think. For instance, less expensive cars, those with lots of safety features and models with a low repair cost often result in less-expensive insurance. Your driving record, where you’ll park your car at night and whether you choose to bundle policies also impact overall cost. Before you buy, be sure to talk with your insurance provider to get a solid idea of how much you’ll likely have to pay in premiums for the car you’re thinking of buying.

Improve Your Credit

While you’re looking over your credit report, don’t forget about your credit score. Even if you already have a solid score, it never hurts to do what you can to raise it a few points. Pay your bills on time, pay down your current cards as much as you can before applying for financing and refrain from opening up any new lines of credit in the months leading up to buying a car so you don’t risk dinging your credit score.

Research the Price of the Car You’re Considering

While some fees and extra costs are common with cars, you should still know the current price for the car you’re thinking of getting. This information lets you know whether the dealership is gouging you on the price, in which case you might want to think about taking your business elsewhere. Know that some fees can be skipped or negotiated, such as dealer preparation fees, credit life insurance, disability insurance and fabric protection. Read over the final contract carefully to make sure fees aren’t being sneaked in.

Take your time and shop smart when buying a car for the first time. Be sure to ask for additional advice from friends and family members who have bought a car before.

Maybe you just landed a summer job, or you have already started saving up for college. As a responsible young adult you are on the cusp of transitioning into the real world — with real financial implications. Unfortunately, personal finances have not become a required subject in most schools and students are left to figure out finances on their own, which can be quite difficult. You may not be prepared to deal with finances as yet. But this probably is the best time to start learning about them, as it will cultivate a sound basis for a lifetime of smart financial planning and can go a long way towards creating the future of your dreams.

1) Put a price tag on money

So you have come into some money now. Before you go spending or thinking about saving/investing it, you have to quantify it in a way that shows you the actual value of money. One of the best ways to do this is to express it in terms of man-hours. How much do you make per hour? If you have been making $8 an hour and you have been thinking about getting a new laptop, stop to think about the cost in terms of your employed hours. If you are planning on getting a $1000 laptop, for example, that would cost you 125 hours, or 15 days working an 8-hour shift. And that is not taking into account other competing expenditures like food, gas, etc. Think about the objective value of the money and the trade-offs required in a particular purchase and then make your decision.

2) Have an emergency fund in place

An emergency fund is a separate savings fund that you stash up to access in case of emergencies. Emergency situations can creep up on you when you are least expecting it and could put you in a really sticky situation. Be it a flat tire or a health issue, it’s prudent to have an accessible fund to dip into when you are in a fix to help you be prepared for the unexpected. A good estimate of the account size is having three to six months’ salary saved up. It is important that you really keep this account separate and out-of-reach from your basic savings account, and be disciplined about it.  And don’t forget to replenish it once you have used it for an emergency.

3) Credit card management

Keep in mind that you are going to be paying from your future earnings for the purchases you make with your credit card today. Be vigilant about what you purchase with the credit card and try to pay in cash whenever possible. It could be easy to lose track of things if you use your credit card at every retail outlet. If you do use credit, make sure you pay your bill in full at the end of each month. If you want to earn the reward points on your credit card and build a good credit history, use it wisely. Purchase a few basic subscriptions that you would be buying anyway with your credit card, and set it up for automatic renewal. Use other means for your routine purchases. This will help keep up a good credit score, while keeping your expenditures on a tight leash.

4) Budgeting the smart way

You can find use your smartphone for your budgeting needs. There are scores of apps that will allow you to categorize your savings and expenditures and will project to you visually where your money should go, as well as how that’s working out for you. If you want to go old-school, you can employ the tried-and-true “Envelope Method” — you simply allot the planned weekly amounts for the various expenses like food, rent, gas, etc and put them separate sealed envelopes. Open the envelopes at the start of the week and only use the money for its designated purpose. Be disciplined about it. This will get you in the hands-on habit of allocating money and sticking to it.

5) Invest wisely

This is one area where spending is encouraged, because what you spend on investment may come back to you with rich dividends if you take the time to research and invest wisely. Ask around and decide on a low-cost mutual fund to invest in. You can hire professional help here, but keep in mind the costs can be on the higher end. This could be a great time to start following finance-related news and get into the groove for investing. You may just find out that you have a knack for selecting good options. Even making a safe bet could double as a money-saving opportunity, as well have a good payout at the end

Being wise enough to sacrifice impulse spending and indulgences in the present moment to save for a rainy day could truly spell your success at a future date. These money habits are both qualitative and quantitative in that you are not only saving and investing, but you are also cultivating the mindset of an analytical, successful person from the get-go. Your ability to plan, articulate and make intelligent choices with your money could go a long way in forming a bright future where you are living your dreams.

To some, the stock market is basically a foreign language. There are certainly a few unique terms and phrases that you won’t hear anywhere else. It is key to have a sound understanding of the essential stock terms before you start trading. Educate yourself on these six essential stock terms before you begin to trade.

Bear Market

A bear market means that investors expect stocks prices to fall. Market specialists can usually predict bear markets with some accuracy, but the severity of the decline is harder to pinpoint. Some will sell off stocks before the market falls if possible, while others will ride out the low points. It really depends on if you’re pursuing a long-term or short-term investment strategy. When a bear market drives down stock prices, many investors will take the opportunity to buy up stocks while they are low.

Bull Market

Image via Flickr by Sam Valadi

A bull market is the exact opposite of a bear market. Bull market conditions arise when investors expect stock prices to rise. Usually, buyers will try to pick up stocks before a bear market takes full effect. Selling stocks at the height of a bull market allows sellers to get the highest return possible.

Market Order

A market order is a simple way to buy or sell a stock at its current price. It is hardly ever a good idea to use market orders because you will hardly ever get the best value.

Limit Order

Limit orders are a smarter way to buy or sell stocks because they enable you to set a price limit. For instance, if you are looking to buy a stock, you can set a price that you are willing to buy at. Once the stock price dips that low, your order will be automatically executed.

Fill or Kill

You place a fill or kill order when you want your order filled immediately or not at all. Basically, you want it all or nothing at all. For instance, you could place a fill or kill order for 200 shares of a stock at a certain price. If all 200 shares are not available at that price, the order is killed and nothing is purchased.

Good ‘Til Cancelled Order

When you execute a limit order, you can make it a good ’til cancelled order. This means that the offer to buy or sell the specified stock once it reaches a certain point will remain on the table until it is executed or until you cancel it. You have the option of setting a time limit when executing a limit order. For instance, you can buy XYZ stock once it reaches a certain price at any time within the following 48 hours. With a good ’til cancelled order, you don’t have to fill out and repeat your limit order. It is a great method if you have a large portfolio and don’t have the time to be constantly refreshing expired limit orders.

The more you delve into the stock market, the more advanced terms you will learn.