The Essential for Financial Health

Why is it that a few four-letter words have given thousands of perfectly good four-letter words such a bad rap? It doesn’t seem fair does it? I took it upon myself to give them a break. Make a habit of putting these eight words into use, and your finances will be stronger than ever. They won’t offend anybody. You can even say them in front of your parents. How great is that?

Why eight? Well, I was reading an article about how we can be pretty hardheaded when it comes to making changes. The author suggested sometimes we need to get hit over the head with a (figurative) two-by-four to get a message. Multiply two by four and you get eight.

Essential Four-Letter Words

  1. Plan: It’s time to outgrow impulse spending. If you’ve got some exciting goals, and I hope you do, planning before spending will make those goals happen sooner. Whether it’s clothes, groceries or basic household matter, make a list before you head out to spend. You’ll get everything you need and you’ll be less likely

These Ten Habits Will Help You Reach A Financial Freedom

Achieving financial freedom is a dream for most people, but few make the dream become reality. The following are 10 key habits that help pave the way.

1. Set Life Goals

A general desire for “financial freedom” is too vague of a goal. What does it mean to you? Write down how much you should have in your bank account, what the lifestyle entails and at what age this should be achieved. The more specific your goals, the higher the likelihood of achieving them. Then, count backwards to the current age and establish financial mileposts at regular intervals. Write it all down neatly, and put the goal sheet at the very beginning of your financial binder.

2. Make a Budget

Making a monthly household budget, and sticking to it, is the best way to ensure all bills are paid and savings are on track. It is also a monthly routine that reinforces your goals and bolsters resolve against the temptation to splurge.

3. Pay Off Credit Cards in Full

Credit cards and similar high-interest consumer

News Is Investing $25 a Month Worth It

Any time you move money from your checking account to another account, whether it’s an individual retirement account (IRA), investing in stocks, mutual funds or savings account, you’re making an important step toward a financially secure future.

But what if you only have $25 a month to invest? Can you still secure your financial future? Or is it better to put it into a savings account until it’s large enough to counteract fees? This article will explain how to the evaluate fees involved in small investments.

How to Translate Fees Into a Percentage of a $25 Investment

Saving $25 a month will total $300 in a year, not including any interest. A $40 fee on an investment account equals more than 13.33% of your investment. Thus, this $25 investment would have to earn more than $40 in a year just for you to break even. This means that if the fee was taken out at year’s end, you would have to earn a 27% return on your money to break even. Why 27% instead of 13%? The

Tips Save More Money to Reduce Financial Stress

I’ve long held the position that even though we live in one of the wealthiest, most financially blessed countries ever, as a society, we also live a life of serious financial stress. I often joke that it’s probably less stressful to live in the rainforests of South America, hunting and gathering, than to live in our modern, tech-savvy society, paycheck to paycheck. A lot of this stress stems from the fact that, as a society, we just don’t save money very well. According to a past Marketwatch article, almost 69% of Americans have less than $1000 saved. That is an astonishing amount of us that are basically one paycheck away from homelessness, or at least raiding our retirement funds in case of an emergency.

Why Americans Have a Hard Time Saving Money

There is a plethora of reasons behind our insufficient savings habits, such as a lack of discipline and making bad financial decisions. Maybe, it is simply that good jobs and hourly rates just don’t exist anymore for the lower and middle class (which I would argue as a legitimate factor). We can even rationalize that the value of the dollar doesn’t go as far as

Info Buying a Car? Read This Financial Advice First

A few years ago when my son was in college, I gave him my old car to drive. Now, four years later, my son has a job and an apartment and uses this same old car to commute. The car is still reliable, but does need a little maintenance, and my son is thinking about buying a new car. He’s asking my advice, so I thought I’d share my advice with everyone. Buying a car is one of the priciest purchases you can make, so it’s definitely a subject that requires some financial advice.

Choosing the right car is very subjective. There are practical, emotional and aesthetical needs. Some people only care about a car as transportation. For some, a car needs to be comfortable. For others a car needs to project the buyer’s personality or be beautiful to look at. For still others, a car is the manifestation of sophisticated technology and needs to look and go fast. I think of a car as transportation, but I also want to be comfortable while I’m being transported. My son wants the car to fit his transportation needs and be fun to drive. When my wife bought her

The Common Budgeting Challenges to Overcome

The word “budget” has been known to make people cringe, cry and bury their heads in the sand, but budgeting challenges don’t have to keep you from getting the job done. Budgets are just a set of guidelines to help you manage your money. (Budgeting Basics will help you get started.) Once you set up your system, budgeting isn’t even that much work. If yours isn’t working for you, then scrap it and start again. But don’t be stopped before you start by challenges that you can easily overcome.

Budgeting Challenges

1. The All-or-Nothing Mentality

Many people are turned off by budgeting because most advice about creating one requires tracking every penny spent for three months. That is a lot of saving receipts and tracking, especially if you aren’t using an automatic system. The point of a budget is to get a picture of your expenses and plan for your financial goals – in other words, it is a tool for you and you alone – and if tracking every penny is a roadblock to get you started, cut yourself some slack. Perfect is definitely the enemy of good.

Having a general idea of

Ways to Create a Successful Budget

Financial planning revolves around what is in our control. For example, we can’t control stock market returns, tax rates, or unexpected events, but we can plan to mitigate these risks through diversification, tax planning, and insurance. Of all the areas in financial planning, we probably have the highest degree of control over our income, expenses, and savings, making it extremely important to create a workable budget.

Here are some of the best ways you can create a budget you can actually stick to.

First, Know Your Resources

No matter how you are paid (hourly, salary, commission), it is important to make a projection of your take-home income each month to compare to your budgeted expenses. Your budgeted expenses should never exceed your income. If you are paid less than monthly, it’s important to know how long that income is expected to last, and to have a plan to spread out your resources accordingly.

No two budgets look the same. You can look online for budget templates, but none will contain the categories and level of detail that fit your needs. However, creating these three basic categories will get your budget off to a great start.

This Key Tips for Budgeting Your Money

It’s almost a truism that budgeting is a critical step for anyone looking to get serious about money management. After all, you have to know where your money is going in order to make plans for the future. But if you haven’t ever tracked your spending, how do you get started?

Here are three tips that will help you set up a budget and start managing your money.

1. Determine Wants Versus Needs

The first step towards creating a budget is determining which expenses are wants and which are needs. Housing, utilities, groceries, transportation, clothing and childcare are generally considered necessities; entertainment, travel and dining out are thought of as “wants,” or what are known as discretionary expenses. That being said, there often is some gray area between a want and a need: You may need a car to get to work if carpooling or public transit is not an option, for example, but a flashy sports car may be a want. Everyone must buy clothes, but designer clothes are not requirements. If you can afford or have already purchased a luxury version of your necessary expenses, remember that downgrading is always an option if

The Financial Planning

While everybody’s financial situation is different, there are some options and strategies that can be used by all to get on the right financial path.

Financial Fundamentals

Develop a budget and stick with it: When making a budget it is important to develop a realistic one and stick with it. You need to decide how much you can afford to spend and what you should be saving each month. To be financially independent, it is important to start making wise choices early on in order to develop a habit of staying within your budget.

Figure out your credit score: Do you know what your credit score is and how much it can affect you in various areas of your life? How do you build credit in a responsible way to make sure there are no surprises down the road? There are ways for you to check your credit score. Visit one of the three reporting agencies for more information.

Money Saving Tips

Employee benefits: What benefits do you currently have and what benefits are offered at your job? Are you contributing enough to your retirement plan to get the full employer match? What other

Make Better Budget

Can you have perfect abs in just six minutes a day? It’s hard to say for sure, but you can have a solid budget in six months. One of the challenges with proper budgeting is that it has to become habitual in order to be effective. You can survive without knowing how to budget if you manage to keep more money coming in rather than flowing out or have credit cards to cover the gap, but this won’t last forever. People often resort to budgeting after they’ve already been dealing with expenses and income in a back-of-the-envelope kind of way.

Emergency Fund

The crux of this six-month plan is the emergency fund. In general, traditional budgeting starts with tracking expenses, eliminating debt and, once the budget is balanced, building an emergency fund. To speed up the process, we are going to start by building a partial emergency fund. Ideally, everyone should have a minimum of a few months’ wages sitting in a liquid account for any unpleasant surprises. This emergency fund acts as a buffer as the rest of the budget is put in place, and should replace the use of credit cards for emergency situations.

Tips Improve Your Financial Health

Your financial well-being is equally important to the traditional “new body, new you” goals that are rampant after the holiday season. Whether you’ve overindulged in food or spent a bit more than intended for gift giving, it’s natural—and healthy—to seek suggestions on how to scale back on the excess. Perhaps you’re headed for retirement and desire to focus on increased savings for the post-work years. Or home buying is slated as your prime objective.

By now the onslaught of New Year’s resolution posts has died down, and all prominent voices in the financial industry have levied their “financial fitness for the new year” advice. Rather than sifting through an endless stream of data on the matter, I’ve curated the top tips for improving your financial health in 2017. The following is applicable for all generations:Boomer, Generation X, Millennial and everyone in between.

Pay Off Credit Cards or Consumer Debt

It’s true that debt can be leveraged to help when you’re in a financial bind—car troubles, sudden health related emergencies and so forth. However, the interest rates are an additional expenditure that slows the process of stashing cash in other, more lucrative places.

Rather than paying

Top Six of Mindless Money Wasters

Despite the benefits of putting some money away, most people take a passing interest in actually doing it. If you’d like to make regular saving a part of your life, read on to find out how to conquer the first step: finding that extra money.

You can begin by paying attention to these top money wasting activities.

Convenience Stores

Many people don’t think about the markup they pay for convenience store items. Here’s a hint: it’s huge. This is because, unlike grocery stores, convenience stores don’t purchase food in large quantities, and also because they make you pay more for the convenience they provide. So, unless it’s an emergency situation, avoid shopping at convenience stores.

The premium you pay for convenience is not worth the assumed convenience you get. For example, a bottle of Coke at a convenience store might cost you around two dollars, while you can go to Amazon and buy a 12-pack for $16. If you tend to pull over for a drink, buy a 12-pack and keep it in your car. If you visit convenience stores often, the annual savings of cutting out these visits can

Info Frivolous Spending Cost

Have you ever stood behind someone in line at the convenience store and watched them pay hard-earned money for a lottery ticket? Or walked through a busy casino, with people at the machines literally giving their money to the house all in the name of a little fun? Or what about watching someone inhale their future retirement through the ashes of a nasty smoking habit?

When I see these things, it gets me thinking about what it actually costs me to spend money on frivolous things. I’m not immune, of course. For me, it’s not usually gambling or cigarettes, it’s usually fast food because I am too busy to pack a lunch that day. Or sometimes I’m just dropping a few dollars on a snack that I don’t really need, just to have something to munch on. (For related reading, see: 5 Things the Wealthy Can Teach Us About Money.)

I’m not saying these things don’t bring a little bit of happiness in the moment that we buy them, but at what cost? So, being the finance nerd that I am, I pulled out a calculator and got to work to find out.

We All Only Have so Much Time

First things first. We

This Bizarre Airline Rules

If you’ve never heard of a “contract of carriage,” you’re not alone. It’s a legalese-filled document that states what airlines will and won’t do for passengers, plus rules for your behavior, refund information and much, much more. These regulations are not all that easy to find but they are tucked away somewhere on airline websites (look for the fine print at the bottom of the site). They’re worth a read because some of the information included is a bit bizarre.

Many airlines have similar rules; we cherry-picked from a bunch of U.S. carriers to present the following examples:

1. No emotional-support service ferrets, please.

United is very clear that service animals are welcome on their flights but they don’t get their own seat, and they may not pose what airline calls unavoidable safety concerns. But not all creatures make the cut. United will not accept “snakes, other reptiles, ferrets, rodents and spiders as Service Animals.”

But say you’re boarding with a service monkey – and this is no joke. These creatures, particularly capuchins, are said to be very helpful and United allows them onboard (as long as they fit under your seat). But don’t

Steps of Budgeting for Young Families to Follow

Are you parents that struggle month to month to stick to a budget? Are you stressed about being able to pay the bills even though your income is good? Are you wondering if there is a better way? There is and it starts with a philosophy. Here are the five steps to that philosophy of budgeting for young families.

Budget Step 1: Understand What You Need to Live On

Calculate how much money you need to live on. Your necessities include your utilities, rent or mortgage payment, groceries and gas for your car. For us it also includes diapers for the one-year-old and my wife’s new lighting equipment for her videography business. I think you get the picture. Write down how much you need by looking over your past expenses. Then add these up and see where you are. The total number may be smaller than you think, which will give you a more flexible budget.

Budget Step 2: Treat Savings As a Needed Expense

I encourage you to treat savings as a needed expense in your budget. My wife and I use this thinking and it has helped us make sure we are building

The Most Common Financial Mistakes

Here we’ll take a look at seven of the most common financial mistakes that often lead people to major economic hardship. Even if you’re already facing financial difficulties, steering clear of these mistakes could be the key to survival.

Mistake No. 1: Excessive/Frivolous Spending

Great fortunes are often lost one dollar at a time. It may not seem like a big deal when you pick up that double-mocha cappuccino, stop for a pack of cigarettes, have dinner out or order that pay-per-view movie, but every little item adds up. Just $25 per week spent on dining out costs you $1,300 per year, which could go toward an extra mortgage payment or a number of extra car payments. If you’re enduring financial hardship, avoiding this mistake really matters – after all, if you’re only a few dollars away from foreclosure or bankruptcy, every dollar will count more than ever. (For more insight, see Squeeze a Greenback Out of Your Latte.)

Mistake No. 2: Never-Ending Payments

Ask yourself if you really need items that keep you paying for every month, year after year. Things like cable television, subscription radio and video games, cell phones and pagers

This Money-Saving Cruise Ship Tips

Cruise! Just that one little word conjures up images of a luxurious vacation complete with fine dining, exciting nightlife, interesting ports of call, a room of your own – and a single, all-inclusive price. At face value, cruises are tough to beat. But many people, once they step onto the deck, forget how hard they searched for a bargain fare before booking the trip. Suddenly feeling like they have endless credit and bottomless wallets, they flag down every passing waiter to purchase the drink of the day in a souvenir cup, and they buy their suntan lotion on board instead of at a discount store.

Unfortunately, the party ends with a six-page bill tucked under their door at the end of the trip. The all-inclusive bargain has suddenly become very expensive. If you’re looking to save money on your next cruise, here are some tips that will help.

Research and Plan in Advance

On the day you decide that a cruise is in your future, start putting money in the bank to save for the trip. While just about everyone searches the internet to find a bargain vacation, far too many people pay for their

Now Saving Money for Big Life Changes

In part one of this article, we looked at saving money – how you can financially plan and prepare for a wedding and for buying your first home. In this next part, we will take a close look at two more life-changing events that require savings: having children and preparing for retirement.

1. Saving for a Growing Family

Our first child is still a few weeks old so I can’t really speak to the day to day expenses, but I’ve been told there will be a lot of diapers. In fact, the stats I looked up told me anywhere from about 4,000 to about 10,000. Rather than recommend how couples should save for having a baby, I can suggest carrying enough life insurance for your spouse to take care of the kid(s) if something happens to you.

My general rule is to plan on about $100,000 of coverage for each child if you are not intending to pay for college. If you are, and you want life insurance to cover that, you’ll need to add about $200,000 for a public university 18 years from now or $400,000 for a private school at some point in the future.

These Benefits of Doing a 30-Day Financial Detox

“If I can live for a dollar a day—at least from a food cost standpoint—it’s pretty easy to earn $30 dollars in a month, so I’ll probably be ok.”

–Elon Musk

Long before Elon Musk became a billionaire, he was a college grad with big dreams, just trying to find a way to survive. He figured that he could live pretty cheaply with just the bare essentials, and by doing that he could forego getting a job, at least initially. Instead, he wanted to devote all of his time and passion toward his business. Obviously, it all paid off eventually, because when he sold his stake in PayPal a few years later, he pocketed a cool $165 million.

Hearing Musk’s story recently inspired me. No, not to live on oranges and hotdogs for a month like he did, but to re-evaluate everything I spend money on. I wanted to know how much it really took me to live and how much “fluff” had built up over time into my monthly spending. Now, as a general rule, I like to think of myself as having it together financially, more or less. I am a financial planner, after all, right? But like the

The Millennials Will Be Still Be Working

For the longest time, 65 has been the standard retirement age. Not everyone retires at that time, but enough to make it the average. But for Millennials, 65 is going to be early retirement – very early retirement.

Recent research indicates that Millennials may have to work until 75 to fund their nest egg. Here we’ll break down of those findings, and what can be done about it.

Why Millennials Will Have to Work Longer

Unlike any other previous generation, Millennials face an onslaught of financial challenges. Student loans, rising rents and lower starting salaries point towards a depressing fact – the average Millennial will struggle to fund their retirement. The Great Recession has also made recent graduates wary of investing in the stock market, even though that’s where their money can grow the fastest.

Not convinced? A study by NerdWallet found that Millennials will have to work until age 75 to fund their retirement, compared to current seniors who only have to work until 62. That’s just one piece of research in