Tag: Mindful Money

 

75 Personal Finance Tips on How to Save Money in 2019 and Be Wealthy

Ready to take charge of your finances for 2019?

Diving into the waters of personal finance can be exciting, but also overwhelming. There are so many personal finance blogs to read and personal finance tips to discover. It can be easy to get lost in the information and hard to find the nuggets of wisdom you really need. That’s why we’ve rounded up 75 personal finance tips for you to navigate your finances in all areas: from saving to spending, earning and investing, and of course budgeting (it’s not as scary as it sounds).

Read on to get the best personal finance tips:

How to Save Money

1. Open up a high interest savings account.

2. Set up automatic withdrawals from your checking to your saving account after payday.

3. Save at least 10 percent of your income, more if possible. If that’s not possible, save a minimum of one percent.

4. Have a rainy day fund that has one to two month’s worth of expenses saved up.

5. Have a longer-term emergency fund of three to six month’s worth of expenses.

6. Negotiate your Internet, phone and cable bills to lower your costs.

7. Save money by paying premiums annually instead of month to month.

8. Use any windfalls of cash from a tax refund, birthday gift, or work raise to pad your savings account.

9. Batch cook your meals on the weekend so you’re prepared for the week ahead.

10. Always use leftovers after going out to eat.

11. Have food staples like beans, rice, soup and frozen pizza to avoid “food emergencies” after a long day of work.

12. Download Ibotta to save money on groceries and get cash back.

13. Create targeted savings goals for everything you want to save for, including travel, emergencies, pet expenses and home renovations.

14. Consider walking, biking, or taking the bus to save money on transportation.

15. When it’s time to fill up your gas tank, check out GasBuddy first for the best deals.

16. Focus on quality when it comes to new purchases, so you won’t end up replacing that item every few months.

17. Focus on lowering expenses on housing, transportation and food to create bigger wins.

How to Curb Spending

18. Track every cent you spend for 30 days to get a wake-up call on where your money is actually going.

19. To avoid over-spending on food, don’t go to the grocery store hungry.

20. Always check your receipts for any errors or overcharges.

21. Use personal finance apps that save you money when shopping like EBates or Honey.

22. If you have good credit and are a responsible borrower, get a cash-back credit card.

23. Take out a specific amount of cash for your discretionary spending and stick to that amount each week.

24. Pay off your credit card on time and in full every month.

25. Spend on items and experiences that truly bring value to your life — things that make you happier, make your life easier, etc.

26. Splurge, within reason, on something that you really want.

27. Know your spending triggers, like exhaustion or stress, that encourage you to spend more on things you don’t necessarily need (like retail therapy, eating out, etc.)

28. When making a big purchase, check out several options and compare the prices and packages to ensure you’re getting the best deal.

29. Spend on life insurance now to protect you and your family down the line.

30. Do a spending audit and look for expenses that you can cut completely or somehow lower.

31. Check your insurance premiums and deductibles on home, rental, health and car insurance. Make any changes that can help you avoid overpaying.

32. Understand what all of your insurance really covers and see if there are any gaps that need to be covered.

33. Cut back or eliminate spending on vices like alcohol, cigarettes, or any other substances.

34. Avoid spending traps like the lottery, MLM schemes and more…because you don’t really need flat tummy tea or essential oils.

35. Get receipts for any tax-deductible donations to charities and write them off on your taxes.

36. Avoid impulse purchases by holding off for 48 hours to see if you really want it.

37. Calculate each purchase as hours worked for a different perspective — i.e. that one happy hour will cost me two hours of work.

38. Focus on paying off high-interest debt first to save money on interest (aka the Debt Avalanche method).

39. Review interest rates on all home loans, credit cards, personal loans etc. and know how much it will add to the cost of the loan.

40. Make biweekly student loan payments instead of one monthly payment to save money, as interest accrues daily.

41. When in doubt or distress, talk to your loan servicer or lender and never miss a payment because of hardship.

How to Budget

42. Make sure your income exceeds your expenses.

43. Understand the difference between “wants” and “needs” and budget accordingly.

44. Create a realistic budget based on your current income and expenses. Take into account debt repayment, saving and splurging.

45. Add a miscellaneous category with a $100 buffer for the random and unexpected things that may come up during the month. (Parking ticket anyone?)

46. Track your expenses to stay aligned with your budget, as this is the only way you’ll know if you go over budget or not.

47. Use personal finance apps like Mint or Tiller to help you budget.

48. Have a money date with yourself and/or spouse every week to check in on your finances, track progress on your goals and stay accountable.

49. Check your credit report each year at AnnualCreditReport, as any errors on your credit can affect your interest rates.

50. Read one of the best personal finance books on budgeting, “All Your Worth: The Ultimate Lifetime Money Plan” by Elizabeth Warren to understand the 50-30-20 rule.

51. Practice and start saying “no” to things that don’t align with your values or your budget.

52. Cultivate a sense of gratitude for what you already have to help you curb the desire to have more of the things you don’t have.

53. Check out NextDoor or Craigslist first before buying furniture or other items for your home to save money or get items for free.

54. Switch to a bank account with no hidden fees: no minimums, monthly maintenance fees or overdraft charges (Hint: Chime has all that and more)

How to Earn More Money

55. Check GlassDoor and Payscale to make sure you’re getting paid what you’re worth for your job in your area.

56. Negotiate a raise at work and use that extra money to fund your financial goals, without any lifestyle inflation.

57. Use direct deposit so your funds come to you faster (Pro tip: Chime has a get paid early function!)

58. Review your tax withholding to see if you’re saving too much and giving Uncle Sam a loan from your hard-earned dough.

59. Create another stream of income with a side hustle that focuses on your expertise or passion, like pet sitting, graphic design, writing, tutoring, etc.

60. Rent out your car, parking spot, garage, spare room and more using AirBnB, PaveMint, GetAround and more.

61. Sell the items in your home that you no longer use; donate the rest.

How to Grow Your Money

62. Play the long game and don’t focus on selling stocks with every little change in the market.

63. Understand your risk tolerance based on your current lifestyle and expenses.

64. Have a grasp on investing terms and understand how they work.

65. Know what you’re investing in and have a strategy to get the returns you want.

66. Find a low-cost brokerage with minimal fees.

67. Contribute to a 401(k) and get a match, if eligible.

68. Invest in either a Traditional IRA or a Roth IRA.

69. Set aside and put money in your retirement vehicles every month through automatic transfer.

70. Invest in yourself by taking a class, getting a certificate, etc.

71. Update your investments as your life changes and your risk tolerance changes, such as having kids, getting divorced, etc.

72. Read personal finance books on investing like “The Intelligent Investor” by Benjamin Graham.

73. Take notes from bonafide investor Warren Buffet and invest in low-cost index funds.

74. Protect your financial future and family by creating a will for free using Tomorrow or Fabric.

75. Find the right asset allocation for you to drive your investing strategy.

The Bottom Line

Personal finance can be simple but not easy – at the same time. It’s all about implementing a plan and taking action.

If you want to change your financial life in 2019 (or at any time!), just start where you are with what you have. Don’t compare your journey to anyone else’s. Read personal finance blogs, personal finance books, listen to personal finance podcasts and connect with ideas that ignite your passion for finance. Though it can seem like it’s all about the money, it’s really about affording the life you want and buying your freedom and time.

 

9 Ways to Make the Most out of Payday

There’s no day like payday … to start overhauling your financial life! Said very few people. Ever. But a paycheck is actually a great reminder of all the little money things you should do — or stay on top of — in order to maintain solid financial health.

Here are nine ways to maximize your next payday.

1. Scrutinize your tax withholding

Big changes to the tax code went into effect on Jan. 1, 2018 — and, per a recent report from the U.S. Treasury, there’s a chance your employer isn’t taking enough money (known as “withholding” in tax jargon) out of your checks to pay Uncle Sam. If that’s the case, you could face a big tax bill at the end of the year.

Fortunately, there’s still time to avoid owing way more than you can pay in April. The Internal Revenue Service has a calculator that tells you how much you should withhold from each check, based on the current tax code and information on your paycheck. Head over to its website to see if you need to fill out a new W-4, the form instructing your employer how to much to withhold each pay period. Here are a few other ways to avoid an year-end tax crisis.

2. Tackle high-interest debt

High interest credit card debt, in particular, does big damage to your financial health, so if you’re carrying tons of it, put as much money as you can toward your balance with the highest annual percentate rate ASAP. Be sure to make the minimums on all your other accounts, though. Once you’ve paid that balance, move to the one with the next highest APR. If you’re really floundering, check out our full explainer on getting out of credit card debt faster.

3. Pay yourself first(ish)

That’s code for saving a chunk of the check that just hit your bank account before arranging, say, a big night out. As a general goal, aim to save at least 20% of your paycheck. Keep yourself on task by sending some money straight into savings via auto-deposit.

4. Redraft your budget

If you’re having trouble with tasks two and three, review your budget. You can often “find” some extra dollars by auditing your financial statements for clear money-wasters, like old subscriptions you’re no longer using, or big spending hikes that’ll indicate where you can pare back (All. Those. Rideshares.). Also, consider renegotiating a long-term service contract. Certain providers, like cable, cell phone and utility companies and auto insurers, change prices all the time and you may be paying more now than you were as a new customer. See if you can score a better price by asking for one … or shopping around.

Once you’ve made adjustments, redraft your budget. We’ve got a simple spreadsheet that can help.

5. Up your 401(k) contributions

Payday is a great reminder to save more for retirement. If your employer offers a 401(k), aim to max it out. In 2018, the IRS allows you put up to $18,500 (or $24,500 if you’re 50 years or older) into that account. If that’s a stretch, aim to at least meet your employer’s match. And if that’s a stretch, try increasing your contributions by 1%. It’ll make a difference, thanks to compound interest.

6. Protect your income

As we’ve said before, you can’t bank money if you don’t make money. Disability insurance is designed to protect payday specifically. It covers your income in the event you become too ill or injured to work. Consider applying for a policy, even if you get some disability insurance through work. Those long-term policies are generally pretty slim. We can help you compare and buy disability insurance to get adequate protection.

7. Update your beneficiaries

If you have some life insurance, disability insurance, a 401(k) and other benefits through work, check who will get any money associated with those accounts, should something unfortunate happen. Many people set and forget their employer-sponsored benefits, but your financial situation or lifestyle may have changed since you started your job. Make sure your accounts reflect any of these changes. For instance, if you got married, you might want to make your spouse your beneficiary in lieu of a sibling.

8. Set up an separate emergency savings account

Everyone should aim to have three-to-six months of expenses socked away for a rainy day. One secret for actually getting there? Open an online savings account. These accounts generally tout higher annual percentage yields (APYs) and are more difficult to draw from — meaning you’ll be less inclined to tap that money for non-emergencies.

9. Check your credit

Your credit plays a big role in every aspect of your life — from getting a mortgage to renting an apartment or securing lower insurance premiums. You want to know where you stand and check for signs of fraud throughout the year. You can do so by pulling your credit reports for free every 12 months via AnnualCreditReport.com and checking your credit scores for free more frequently via certain credit card issuers or credit education sites.

Don’t like what you see? There are ways to improve your credit in 30 days or less.


This article originally appeared on Policygenius.com.

 

Budget for Vices: What Percent of Your Income Do You Spend on Vices?

Do you budget for vices? A recent study found that households earning less than $30,000 per year spend 13% of their income on things like lottery tickets, prepared drinks, and restaurants. The same low-income families spend an average of 4x as much on lottery tickets as households bringing in $75,000 or more in annual income. Spending on vices can be fine from time to time, but only if your budget for vices and can make them work with your more important personal finance goals.

How much people spend in financial vices

My first job after college was as a bank branch manager. I remember a few specific cases of people coming in after winding up with hundreds of dollars in overdraft fees, asking for relief. One woman came in, statements in hand, very upset about her overdrafts that happened at the grocery store and gas station. Groceries and gas are two areas that most reasonable budgets include, and I waived a large portion of her fees.

Another customer came in, a middle-aged man, angry about his fees. In addition to rudeness and blaming the bank for his money woes, this particular person spent a lot of money at casinos, liquor stores, and tobacco shops. His overdrafts all took place at casino ATMs and on alcohol purchases. Let’s just say I was a bit less forgiving in this situation.

While it is easy to blame others for financial woes, it is important to first look in the mirror. No one made that man put his ATM card in the machine to withdraw cash at a casino. And his life would probably be better if he drank a little less. But those are life choices. You can spend your money however you want. What’s important is that you budget to spend how you want so you don’t end up in a worse situation for spending on vices.

A September 2018 study from Bankrate found that 38% of Americans dine out at least 3 times per week, 25% buy prepared drinks at least 3 times per week, and 10% buy lottery tickets at least 3 times per week.

Budget for vicesvia Bankrate

Building a budget for vices

The average American spends just under $3,000 per year on luxuries. That is $250 per month. Depending on your income, a $250 per month budget on fun purchases, luxuries, and vices could be just fine. But you certainly don’t want to spend money in these areas if you can’t afford it.

If you have high credit card balances or stress about money on a regular basis, it may be time for a budgeting reality check. You may even find that a budgeting process that includes a budget for vices is easier than you realized. A budget isn’t something that holds you back from spending, it gives you a financial blueprint to make the right spending choices for your needs and long-term goals.

If you have high-cost consumer debt or want to turn around a bad financial situation, the first place to go is your budget. You can absolutely include a budget for vices if it makes sense, but you need to start with the most important things: mortgage/rent, groceries, transportation, and savings. Once those priorities are covered, you can add in lines for additional categories.

When you finish your budget, every dollar that you earn should have a job. Put them to work first for thing things that make your life better and put your budget for vices at the very bottom of the priority list. Keep in mind that the average family needs to save at minimum 10% to 15% of their total income to maintain the same lifestyle in retirement.

The lottery is not a retirement plan

During college, a friend joked that his long-term financial plan was to win the PowerBall. But the odds of bringing home one of those massive jackpots is around 1 in 175 million. You are more likely to become an Academy Award winning movie star, die in a plane crash, get killed by a vending machine, get attacked by a shark, get elected President of the United States, have identical quadruplets, win an Olympic gold medal, get struck by lightning, or get hit by a part of a plane falling from the sky. In other words: probably not happening.

Don’t waste your time “investing” in an unlikely lottery win or other vice. Instead, put those dollars to use in a way that will give you a better long-run result. You’ll be glad you did.


This article originally appeared on Due.com.

 

The Rise of the Holiday Side Hustle

It’s autumn and you know what that means? Time to increase your budget as the holidays get closer. Before you know it Thanksgiving will be here and then, of course, there’s Christmas.

Holidays are not cheap and you may have to start stashing more money into your savings account – starting right now.

While creating a budget for holiday spending will help you build up a cash reserve, there’s yet another key way to generate extra money: Get a side hustle. Indeed, holiday season side hustling is the new “in” thing.

Want to learn more about how a side hustle can help you pay for your holiday expenses and achieve your money goals? Read on to learn more.

How Popular is the Holiday Side Hustle?

Holiday temporary jobs are nothing new. Many families need to increase their income as this time of year approaches. Taking on a part-time weekend or evening job to help out is a common solution. During the fall season, side hustles tend to pick up, especially when it comes to flexible gigs like driving for a ride service, walking dogs or mystery shopping.

In 2017, about 44 million Americans reported that they had a side hustle or second job during the holidays, and that number is increasing every year. In fact, by 2020, about 43% of the U.S. workforce will be freelancers.

So, how can a side hustle during the holidays help you? Take a look:

  • You’ll Have More Cash Flow

Eighty-one percent of people who side hustle do so to earn more money and the average monthly income from a side hustle is about $686. While there are many side hustles that can be done around the holidays, including working retail or selling items online, the best side hustle for you is a gig you enjoy that helps you earn extra cash.

  • You’ll Have Financial Security

With nearly four in 10 Americans side hustling, it’s safe to say that secondary sources of income are going to continue growing. In fact, Gen Xers and Millennials are leading the pack with more than seven out of 10 of them side hustling. The reason? A side gig offers financial security, especially around the holidays when expenses start rising.

In recent years, some companies have even resorted to layoffs during the holiday season, sometimes just a few weeks before or after Thanksgiving and Christmas. With the fear and anticipation of not being fully secure in 9-to-5 jobs, Americans are now ramping up their side hustles.

Indeed, by taking on a second gig over the holiday season, this gives you an opportunity to save more money, readily pay for holiday gifts, and not worry about whether you’ll have enough cash to pay your bills on time.

  • You Can Avoid Accumulating Debt

Did you know that the average American will rack up about $1,000 or more during the holidays? In the age of instant gratification and expensive technology, more people are turning to credit cards and personal loans  just to have enough money to buy Christmas presents.

However, if you have a side hustle, you can avoid this debt trap. Budgeting and saving can only do so much, especially when the average household has over $5,000 in credit card debt. So, maybe this is the year you should try out that side hustle you’ve been considering. It sure beats staring at an exorbitant credit card bill come January.

  • You Can Put Your Skills to Use

Regardless of what type of side hustle you choose, try to find something you’re good at.

For example, are you a skilled handyman? Maybe you can pick up some side gigs fixing things for your neighbors or assembling furniture. Or, are you a talented graphic artist? Maybe you can take on some clients on the side and help them redesign their logos or brochures.

By doing something you love, your side hustle will help you in more ways than one: You’ll have renewed job satisfaction and you’ll earn enough dough to buy your holiday gifts without stressing about how you’ll pay for them.

Should you join the hype?

With side hustles offering the freedom and the ability to earn extra cash, it comes as no surprise that they are becoming increasingly common.

Starting a side hustle to earn extra dough is a great idea any time of the year, but especially leading up to the holiday season. Are you ready to do the holiday side hustle and start saving more money today?

 

How To Get Paid Two Days Early Than Others

Doesn’t everybody get tired of waiting for days for their paychecks? Or getting frustrated when they are late paying the bills because of delayed paychecks? If so, how do the words ‘get paid up to 2 days faster’ sound?!

It’s safe to say that most employees don’t like the feeling of waiting too long for their hard-earned money to come in. Sometimes paychecks are even lost in the mail or stolen. It only adds to their waiting time if the employer has to replace the paycheck, adding to frustration. So how could hardworking employees avoid this? Get paid fast and early, that’s how.

Direct deposit is a solution to cut the waiting time for a paycheck. These are some of the reasons why a direct deposit is better than a regular paycheck:

  1. It is faster. Once the employer deposits the pay of the employees, it will be electronically transferred immediately to their bank accounts.
  2. It is convenient. Employees who choose to use this method do not need to wait for their paychecks to come in the mail, then get in line at the bank to deposit it. With early direct deposit, the money is already cleared and ready to withdraw.
  3. It is accessible and efficient. People can access and control their accounts with the use of their mobile banking apps whenever and wherever they are.
  4. It is safe. People do not have to worry about paychecks getting lost. Every transaction is electronically-generated.
  5. It’s basically free with many bank accounts.

Everyone should be reminded that to take advantage  of the direct deposit feature, one should have a bank account. Before opening an account, the consumer should also think about the different banking fees. Major banks impose different rates for these fees. For those consumers who do not have extra money to pay for them, they could just open an account with Chime, an online banking account. Chime does not charge monthly fees and there are no hidden charges, so it’s a great alternative to traditional banks.

How does direct deposit work exactly?

When the Federal Reserve accepts the payroll submitted by the employer, it notifies the banks regarding employee salary. It is then up to the banks whether to release it earlier or exactly on payday. Most major banks wait for the actual payday but Chime is one of the fastest banking accounts, making the deposit of pay up to 2 days faster.

This is possible because of Chime’s Early Direct Deposit feature. If a payday falls on a Friday, employees with a Chime account usually receive their pay on Wednesday.  Account holders can make saving more money possible with the Automatic Savings program which allows users to automatically transfer 10% of their paycheck to their savings account every time they get paid.

Consumers should seriously consider receiving pay through direct deposit. Overall, it is convenient, safe, and fast; especially for Chime account holders who get paid faster with their account than others who bank elsewhere.

 

Paycheck to Paycheck Budgeting

If you find yourself living paycheck to paycheck, you’re not alone. Even with unemployment at its lowest level in more than a decade, 78 percent of American workers say they are living from one paycheck to the next.

If you’ve found yourself in this situation, you know just how difficult this can be. Not only can your debt continue to pile up, but worrying about paying your bills can take an emotional toll on you and the people you care about.

Here’s the good news: no matter what your income is, breaking free from the constant paycheck to paycheck cycle is possible, especially if you commit to it and create a solid budget.

Let’s take a look at how you can set up a budget to help you meet your financial obligations – and maybe even save money, too.

Understand how much you’re spending each month

When creating a budget, it’s important that you start at the beginning by taking a good hard look your expenses. Why? Because understanding exactly how much you spend each month is crucial if you live paycheck to paycheck. By doing this, you’ll get a better picture of where your cash is going and how you can make changes to your overall cash flow.

To get started, begin tracking every expense for a month. To help you get going, you may want to check out one of any number of budgeting apps, including Mint and You Need A Budget. However, if you are a more hands-on person, you may prefer to keep tabs on your spending via an Excel document.

Better yet, if you have a Chime bank account, you can take advantage of numerous automated features. For example, each time you make a transaction with your Chime debit card, you can receive a notification. Then, at the end of the day, you can enter the transactions into your spreadsheet or app of choice. How you end up tracking your spending doesn’t really matter. What matters is that you take the time to do this so you can monitor where each penny is going throughout the entire month.

The results may surprise you.

How much income are you bringing in?

Once you’ve listed out your expenses, it’s time to move onto your income.

If you are a salaried employee, this is going to be pretty simple. You probably already know how much after-tax income you take home each month. However, if you are a freelance worker or have an hourly job with varying hours, it’s going to be a bit more difficult.

So, try to go back through the past six to 12 months and find out what your average income was during this period. You can do this by looking at your bank account or perhaps any accounting app you may use for your side hustle.

Once you determine how much you earn in an average month, you’ll use this figure in your budget.

Start analyzing your financial information

Now that you’ve listed out your expenses and calculated your income, it’s time to dig deeper into the numbers.

Start by subtracting your expenses from your income. This will give you your net income. Is the resultant figure close to zero or lower than you expected? If so, it’s time to get to work by cutting down on your spending to give yourself a little breathing room. So how do you do this?

You can begin by taking a closer look at the expenses you listed out. It may even help to group your monthly costs into categories, like groceries, restaurants, clothing, gas stations, etc. This will help you see whether there is one particular area where you spend more money than you should. From here you can highlight potential areas where you can save money. Do you still have a cable plan with all the premium channels? Are you going out to dinner multiple times a week? Maybe you can cut back here or elsewhere.

The key here is to identify troublesome areas and make changes. If you’re not ready to cut the cord entirely on cable, for example, maybe you can cancel the premium channels. Or, if you eat out everyday at work, maybe you can start by bringing your lunch to work three days a week. Find places you can trim your spending. You’ll be shocked at how much money you can free up.

Start hustling to boost your income

Once you’ve identified the expenses you can eliminate, the next objective is to increase your income. You may be able to take on extra hours at your day job or pick up a second job in the evenings or over the weekends.

With the growing popularity of the gig economy, you may also want to consider starting a side hustle. If you have a reliable car, for example, you can drive for Uber or Lyft. If you love to write, try your hand freelance writing. You get the point.

Allow your budget to guide you in the right direction

By creating a budget, curbing your spending, and increasing your income, you’re giving yourself a way to break the paycheck to paycheck lifestyle. Just remember: this isn’t something you do once and then forget about. You need to constantly monitor your spending throughout the month and develop sounds financial habits.

Eliminating the paycheck to paycheck lifestyle isn’t hard to do, but it takes work. With diligence, perseverance and commitment, you’ll be on your way to living within your budget without worrying about when your next payday will arrive.

 

9 Financial Empowerment Tips for the Newly Single

Ending a long-term relationship can be a complicated affair. Not only do you have to learn how to be single all over again, you’ve got to tackle all life’s various responsibilities on your own. Taking ownership of your finances as a newly single person can be especially challenging.

“Suddenly finding yourself divorced or single can be overwhelming, particularly if you’ve relied on a dual income and your partner to handle the finances,” Leah Hadley, certified divorce financial analyst and senior financial adviser at Great Lakes Investment Management, says. “You’re in a new place in life, and you’ll probably have a new perspective on what your life and retirement will look like.”

With careful planning and an eye on the details, you can take charge of your money. Here are nine financial empowerment tips for the newly single.

1. Take inventory

First, you should complete a thorough inventory of your finances. This review should include:

  • Accounts: Make a list of each financial account in your name, whether you share it with your ex or not. This includes bank accounts, credit cards, retirement and investment funds and any other accounts that contain liquid assets.
  • Property: Next, list your other assets: cars, your home and valuable property.
  • Cash flow: You need a thorough understanding of your monthly cash flow. Take note of your monthly income and your outgoing expenses, including bills, child support and savings, with the understanding that you may need to adjust your budget.
  • Monthly bills: As you total your monthly expenses, make sure you know what bills you’re still expected to pay post-breakup, and keep track of the due dates so you don’t miss a payment.

“After one has a working understanding of their cash flow, debts and savings, one can develop a strategic plan to work toward increasing savings (personal and investments), decreasing debts and working toward their future goals,” said Margaret M. Koosa, CEO at The Alchemists, Your Wealth Concierge.

2. Create a budget

Now that you know your income and expenses, you can put together a realistic monthly budget. This simple spreadsheet can help.

Account for necessities such as rent, bills and groceries, then prioritize savings. Recreational and discretionary spending should come last. Your budget may be more conservative than you’re used to, but having one and sticking to it will help keep you in good financial health.

3. Split your accounts

During a divorce, splitting up joint accounts is sometimes a legal affair. But when possible, work with your ex to shut down credit cards, bank accounts and utilities. Work on opening up accounts in your name. You may need to establish your own health insurance coverage, utilities and even Netflix account.

4. Understand your divorce decree

If you’re going through a legal separation, your divorce decree will influence how you restructure your finances. For instance, you might have to account for child support or alimony payments in your new budget. Some divorce settlements also mandate an ex-spouse maintain or buy life insurance with the other as their beneficiary. That way, your ex and your shared dependents are protected from the loss of income in the event of your death. Be sure you understand what your settlement requires to set yourself up for financial success.

5. Update beneficiaries

If your divorce decree permits (or you weren’t legally married) and you no longer want your ex as the beneficiary on any of your financial accounts, update that information immediately.

“Newly single people should update their beneficiaries on all of their insurances, financial accounts, estate documents (will, power of attorneys, healthcare proxy, trust), etc. to reflect their post-divorce intentions.”

Keep in mind, there are situations where you might want to keep an ex on a certain account. We mentioned life insurance above, but the same rules generally apply to disability insurance, which protects your income — and your ability to pay child support or alimony — in the event you become too ill or injured to work. Learn more about updating your insurance policies specifically post-divorce.

6. Review tax implications

If you previously filed taxes as a married couple, your tax situation may change dramatically. Filing as a single person might be beneficial, especially if you previously were a dual-income family. But there are many wrinkles, such as if you sold a home or have kids. Review the tax implications of your separation carefully and look into whether you should change the amount of money your employer sets aside from your paycheck for Uncle Sam during the year.

The Internal Revenue Service has a calculator that tells you how much to have withheld from each check based on your filing status, number of dependents and income. Use it as a starting point — and make sure you are extra-diligent at tax time.

7. Reassess your retirement

Because your financial outlook may be very different as a single person, evaluate how you’re preparing for retirement. Without your partner, you may need to adjust your retirement savings to make sure you have enough money in your golden years. It’s never a bad idea to increase your retirement savings for better financial security, especially since there are easy ways to do so in five minutes or less.

8. Check your credit

Divorces and breakups can be hard on your credit. Closing old accounts, applying for new credit cards or loans, and liquidating assets can have major implications for your creditworthiness. Check your credit report periodically to look for unpaid bills that got lost in the shuffle and old accounts you forgot to close. You may even want to make sure your ex isn’t opening accounts in your name.

You can pull your credit reports from the big three credit bureaus for free every 12 months at AnnualCreditReport.com. There are numerous websites and credit card issuers that let your monitor your credit score at no charge every month, too.

After the dust settles, you should be able to build strong credit by practicing good financial and debt management habits.

9. Hire a professional

If navigating the waters of personal finance as a newly single person is too overwhelming, you might want to enlist professional help.

“The day-to-day expenses might be overwhelming at first, but thinking ahead is also important,” Hadley says. “Develop a strong partnership with a trusted financial adviser. Knowing that you have someone in your corner who can explain the short and long-term implications of your financial decisions can be a huge asset.”


This article originally appeared on Policygenius.com.

 

10 Years After the Financial Crisis – How Fintech Is Helping

“Too big to fail.” If reading that brings a little bit of red to your eyes, you’re not alone.

Though originally popularized in the 1980s during the bailout of Continental Illinois National Bank, this phrase once again became common parlance during the 2008 financial crisis. According to the Federal Reserve Bank of Cleveland, this saying became synonymous with the unwillingness of regulators to close a large troubled bank because they believed the short-term costs of a bank failure were too high.

So, it’s no surprise that nearly half (49 percent) of Americans still have negative associations with the term “too big to fail,” according to a recent Chime survey. The generations who had the strongest negative connotations included boomers (55 percent), many of whom lost their retirement savings in 2008, and millennials (50 percent), who graduated to a nonexistent job market.

In the decade since that phrase was splashed across newspapers and discussed at every dinner table, the United States has slowly clawed its way back from the financial crisis. This brings up the question: Has anything really changed?

How banks are doing

Following the Great Recession, the American people bailed out banks, investors, and shareholders. The Federal Reserve slashed interest rates and pumped trillions of dollars into the American economy.

Ten years later, the same big banks are still at the top of the game: JP Morgan, Bank of America, Wells Fargo, Citibank, and US Bank. Across the U.S., banks had record profits of $56 billion in the first quarter of 2018. Although CEOs earn less than before, they’re still killing it. The stock market has sustained one of its longest bull runs in history, with the S&P 500 growing more than 300 percent since the crisis.

“This is not an industry that has examined itself and remade itself in the wake of the crisis,” stated Phil Angelides, chairman of the Financial Crisis Inquiry Commission, in The Wall Street Journal.

That’s despite Dodd-Frank, a 2010 bill that aimed to protect consumers by placing more controls on banks, including their lending requirements. While the bill did result in increased accountability and oversight, the current administration has begun to roll back some of its provisions. Even if the remainder of the consumer protections stay intact, the WSJ points out that many of the regulators have backgrounds in the very industry they’re supposed to be monitoring.

In other words, banks are doing well, executives and stocks are flying high…but how about the American people?

How Americans are doing

Every year since 2013, the Federal Reserve Board has asked 12,000 adults about their financial lives for the Survey of Household Economics and Decisionmaking (SHED).

According to the 2017 report, only 7 percent of adults say it’s “difficult to get by financially” —  about half the number who said so in 2013. And nearly three-quarters say they’re either “living comfortably” (33 percent) or “doing okay” (40 percent).

Although things have improved, that doesn’t mean everything is OK. Here’s a deeper look at the numbers.

Unemployment and income

Unemployment has dropped to 3.9 percent, lower than it was before the recession. Even the “real” unemployment rate — which includes people who’ve stopped looking for work and people working part-time because they haven’t found full-time opportunities — is only 7.4 percent.

Not counted in that percentage, though, are the people who aren’t looking for work because they can’t find childcare, are addicted to opiates, or are turned off by low wages. Of the Americans who are employed, more than one-fifth (23.3 percent) are in jobs where the median wages fall below the federal poverty line, reports the WSJ. Nearly 40 percent of adults, according to SHED, have family incomes of less than $40,000. Overall, the WSJ says median household income has only risen 5.3 percent since 2008.

Chime’s survey underscores this: 54 percent of Americans are living paycheck-to-paycheck.

More people, SHED learned, are working on the side, too: 31 percent of adults engaged in gig work in 2017, up from 28 percent in 2016.

Wealth and inequality

Chime’s survey asked people how the recession had affected their financial habits. This is what we found:

  • 72 percent became more inclined to save money
  • 62 percent feel their savings are “in a better place” compared to 10 years ago

Despite these promising signs, the wealth gap continues to grow. One report by the Federal Reserve Bank of St. Louis went so far as to say millennials may become a “lost generation” for wealth accumulation.

“Wealth in 2016 of the median family headed by someone born in the 1980s remained 34 percent below the level we predicted based on the experience of earlier generations at the same age,” stated the report.

Those with exposure to the stock market — just half of the American population — have bounded ahead, while everyone else has been left behind. In the New York Times, Nelson D. Schwartz reports the “proportion of family income from wages” has fallen from 70 percent to just under 61 percent. The rest, he says, is largely from investments.

“The people who possess tradable assets, especially stocks, have enjoyed a recovery that Americans dependent on savings or income from their weekly paycheck have yet to see,” wrote Schwartz in the New York Times. “Ten years after the financial crisis, getting ahead by going to work every day seems quaint, akin to using the phone book to find a number or renting a video at Blockbuster.”

When the recession hit, Americans lost $16 trillion in net worth. Today, the wealth of the median American household is still 34 percent lower than it was in 2007, according to the New York Times. Why? Because for families without large investments, their wealth was wrapped up in home value.

Housing

Although housing prices have fully recovered — with the average house price 1 percent higher than the peak in 2006 — there aren’t as many homeowners as there were before the recession.

In what The Penny Hoarder calls “The American Nightmare,” 9 million people lost their homes during the housing crash. According to CNN, the overall homeownership rate dropped from 69.4 percent in 2004 to 63.1 percent in 2016. And, of the Americans who rent, nearly half of them are cost-burdened, according to Harvard University. This means they spend more than 30 percent of their income on rent.

Debt and savings

Debt also remains a common struggle. In fact, Chime’s survey found that 65 percent of Americans have some sort of debt, with 40 percent carrying more than $10,000 and 14 percent carrying more than $50,000.

Here are some staggering stats:

  • Student debt, in particular, has crippled millennials. Today’s students graduate with nearly $40,000 of loans, according to Student Loan Hero.
  • When faced with an unexpected expense of $400, 40 percent of adults can’t pay for it, reports SHED. While that figure has decreased from 50 percent in 2013, it still isn’t good.
  • Twenty percent of Americans are behind on their debt payments, according to SHED; a slight increase from 18 percent in 2015.

In addition, SHED found 22 percent of adults expected to forgo payment on some of their bills in November or December 2017 — mostly credit cards. (That may be why 64 percent of the people we surveyed prefer debit cards over credit cards.)

When it comes to retirement, the picture is also bleak. SHED reports less than two-fifths of non-retired adults think their retirement savings are on track. One-fourth have no retirement savings or pension whatsoever.

The rise of fintech

Though the traditional financial industry may not have learned much from the Great Recession, entrepreneurs did.

They immediately saw a need for a new breed of financial businesses. They realized banking and financial services should no longer be exclusive, confusing and predatorial. Instead, entrepreneurs thought financial institutions should be helpful, transparent and free.

So, in the years after the crash, fintech companies started sprouting up left and right.

While the streak of new companies began to slow in 2015 — perhaps, Deloitte posits, because other technologies like bots and blockchain have attracted entrepreneurs — investments into fintech are still robust.

In 2017, according to SHED:

  • 62 percent of adults auto-paid some bills
  • 52 percent received electronic account alerts
  • 46 percent used automatic saving

And, when it comes to mobile banking, those customers are more satisfied. Fifty-nine percent of the millennials we surveyed would recommend their online or mobile bank to a friend. Of those who used national banks, only 22 percent would do the same.

How fintech is helping

Although the financial crisis has had a lasting impact on Americans, it’s also created a landscape in which fintech can thrive.

So, if there’s been one benefit of the Great Recession, it’s the growth of new financial companies that value transparency and put consumers first.

New fintech startups are indeed helping today’s consumers close tomorrow’s wealth gap. For example, Chime offers comprehensive, modern banking with zero fees. With services like Early Direct Deposit, you can avoid predatory payday lenders. And, with automatic savings features, you can build your emergency fund without thinking about it.

In other words: we’ve got your back as you achieve your financial goals.

 

Budgeting for Your Next Career Move

Changing jobs is rarely a smooth transition. Perhaps you accepted a better opportunity, or maybe you have found yourself in-between jobs. Whatever the case, a new job may require a lifestyle change and possible financial shift.

Not only are you having to get used to a new schedule, job responsibilities, and new co-workers, but you have to consider your financial situation. And, before you start that new gig, you may have to stretch your budget a little – at least temporarily. This is why proper financial planning is so important when it comes to reaching your savings goals and paying your bills.

The good news: the financial stress of switching jobs is usually just a short-term inconvenience. Here are some tips to help you make a smooth financial transition into your next job.

Ask about your new pay schedule

Every employer handles payroll differently, which can make it incredibly confusing for you as the employee.

After you leave a company, it’s possible that you will receive a payout for paid time off or severance. Remember – that amount of money can help tide you over while you’re waiting for your first paycheck from your next employer.

While you’re making your cash last until your next paycheck, make sure you ask your new employer about the pay schedule. Some employers pay employees every week, while others pay just once a month. Not only that, but some employers pay up-to-date, meaning you can get your first paycheck sooner. Other employers take an additional pay period to process your paycheck, so you are paid for previous time worked. Talk about confusing.

The best thing you can do is ask your human resources department when your first paycheck will hit your bank account. And if you’re paid by the hour, be sure to ask how many hours you can expect to see on that paycheck – this way you’ll know what you’re looking at. And, here’s a pro tip: if you have a Chime bank account, you’ll get paid two days early. No more waiting for your electronic payment to come through or waiting on a check to be delivered in the mail. Instead, your hard-earned money is available right away. No more waiting.

Don’t forget about insurance payments

For anyone currently covered under an employer-sponsored health insurance plan, you will want to pay close attention.

Once you leave an employer, they will terminate your health benefits, usually at the end of the month. After that, you should receive a notice in the mail called Continuation of Health Coverage, otherwise known as COBRA.

COBRA exists to ensure you don’t let your insurance lapse while you’re between jobs. The law allows individuals to stay on COBRA for up to 18 months, so it provides quite a bit of wiggle room in the event you need it. The drawback is that COBRA comes with a steep cost. In most cases, transitioning employees can expect to pay the entire health premium out-of-pocket, plus a small administration fee on top of that.

If your previous employer contributed a substantial amount to your health premiums, then you may be shocked to discover the price you have to pay while on COBRA. Depending on your location, insurance plan, and how many dependents are on your plan, this can quickly cost anywhere from $500 to $1,500 or more per month. Ouch!

The best thing you can do is is prepare for the cost and consider your long-term options. If either you or your spouse can find a job that offers partial company-paid premiums, this can help offset some of the cost of insurance.

Pay attention to your 401(k)

If you participated in your employer’s 401(k) or other type of retirement plan, then don’t forget to create a plan for those funds once you leave your job.

While you may want to dip into this money to tide you over, this isn’t a wise idea as there are major consequences for cashing out your 401(k) early. Not only are you depriving your future self of the funds you worked hard to save, but the government imposes strict penalties on anyone who withdraws money early. In fact, the Internal Revenue Service charges a 10 percent penalty for withdrawing cash from a 401(k) before you reach retirement age (with a few exceptions). Not only that, but you will have to pay income taxes on any cash you take out of your account.

In most cases, however, you will have to eventually move your money out of your previous employer’s plan – preferably into another type of retirement plan. The new plan can either be part of your new employer’s 401(k) retirement plan, or you can roll it into a self-directed retirement plan.

Budget for new work expenses

Don’t forget about the little expenses that come up about when you switch jobs. These can add up – big time.

For starters, consider the types of supplies and attire you may need for your new gig. Will you need new clothes due to a change in dress code? What about new tools or technologies?

And if your new job is further away, you’ll need to budget in the additional transportation costs as well. Speaking of cars, don’t forget to ask your employer about mileage reimbursement. While some companies don’t provide a reimbursement for miles driven on your personal vehicle, you may be able to claim a deduction come tax time. To find out if your eligible for mileage deductions, it’s advisable to speak to a tax professional.

Ensure a smooth transition

While it can certainly cause a significant amount of stress, making a career move can change your life for the better. With proper financial planning, you can ensure a smooth transition into your next job.

 

Are Millennials Losing Money to Bad Investments? The Data Says Yes.

Bad investments happen all the time. But when you think about bad investments, your mind likely goes right to the stock market where a lousy stock pick can lead an investment value to $0. Investments come in all forms, including a savings account or other cash-based asset class. But this is a big mistake! In an era where savings accounts offer poor returns, you may need to put a little more risk in your portfolio to avoid a bad investment. Follow along to learn why cash is a bad long-term investment, who is the worst offender, and what you can do to turn things around.

When cash joins the bad investments category

Cash is the most stable and secure option to store your assets, so what makes it a bad investment? With cash, the value of your holdings does not grow at a rapid rate. While your cash may grow when stashed in a bank account, the interest rates are terrible compared to other investments. As of this writing, just a few savings accounts offer over 2% annually, according to Bankrate. That is $20 for every $1,000 you have saved. But while the number of dollars in your accounts grows, the value of your account shrinks!

For July 2018, the annualized inflation rate was 2.9%. If you were earning 2% interest in savings, your account would lose just under 1% per year at this rate. For example, let’s say you have $1,000 saved at 2%. At the end of the year with simple interest, you would have $1,020. But the value of that slowly decreases over the year. Due to inflation, even with the $20 interest, your money would be worth $990 at the end of the year in terms of the dollars you started out with.

Because of the increase in the cost of groceries, movies, gas, and everything else across the economy as measured by the Consumer Price Index (CPI), you have less money than you started with if you invest in a savings account.

Who is investing the most in cash?

In the July 2018 Financial Security Report from Bankrate, 30% of Millennials said they think cash is the best place to invest funds they won’t need for ten or more years. This is entirely wrong, for the reasons explained above. Over time, Millennials and everyone else who put too much of their funds in cash will end up losing.

Of course, some cash makes sense. You should keep a cash emergency fund and any short-term savings, like a car fund or home down payment, in cash. But if you won’t need the cash for at least ten years, you can confidently invest in better performing assets knowing you have years ahead to recover if the markets take a turn for the worst.

Most Americans understand this vital concept. 32% responded that the stock market is the best place for a 10+ year investment. Fortunately, most recognize the risks of cryptocurrencies, and only 2% suggested that’s the best long-term investment. But cash came in second place with 24%, and the favorite for Millennials. Gen X, Baby Boomers, and the Silent Generation all knew better saying the stock market is the best place to invest long-term.

Best alternatives to cash investments

Millennials follow the trend of all Americans with poor savings rates. A 2016 Federal Reserve study found the average Millennials held just $2,600 in median savings. While that is more than you need for a $400 emergency, it is far from financial security. To help boost savings overall, make sure to participate in an employer-sponsored investment plan like a 401(k) if you have access.

For the self-employed, look to automatic deposits in an IRA or another self-employed investment vehicle. While Social Security appears to be safe and stable today, it is essential to save and invest on your own just in case those dollars shrink or dry up before you hit your target retirement age.

Most investment advisors suggest saving at least 10% to 15% of your gross income for retirement to ensure you maintain the same standard of living when you reach your golden years.

Focus on long-term goals for investment success

If you worry too much about little swings in the stock market, you could lose out on well over a million dollars in investment gains over the course of your career. While coming into careers during the Great Recession put the fear of investment losses in real estate and stocks into many Millennials, completely avoiding lucrative investments is the wrong choice.

Learn about how important investment classes work and structure your portfolio to follow along. In the worst case, pour your investments into a professionally managed target date retirement fund so you know your money is handled with your best interests in mind. But don’t put it all in cash. That is an expensive mistake every Millennial should avoid.

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