Tag: finances

Investment Ideas: Are You Making the Most of YOUR Savings?

The Scenario

Tim is a young professional in his early 20’s. Tim has been working at his first real job for a little over a year. He has been saving as much money in his 401(k) as allowed. The bulk of his 401(k) is in company stock.

Tim lives in an apartment and would like to purchase a house in the near future. He currently doesn’t have any money saved for a down payment.

He has one credit card at 17% interest with a significant balance, but only pays the minimum each month. He hasn’t purchased anything on the credit card for quite some time.

Analysis

It’s great that Tim is really socking away the money in his 401(k). Investing now for his retirement will give those funds many years of tax-deferred growth. However, there are some details in his financial picture that could prevent him from attaining both his short-term and long-term goals.

Suggestions that could put Tim in a better financial position:

1. Diversify his 401(k) investments. With the bulk of his portfolio in company stock, it’s too easy to lose it all should something catastrophic happen to his company. There are plenty of companies out there that sold at one time for $100+ per share that now sell for less than $0.05 per share.

‣ To minimize risk, money in a 401(k) should be spread around between several of the different available options. A little company stock is fine, but it should be less than 5% of the portfolio.
2. Save for a house. Tim could consider putting a little less into his 401(k) and putting the extra money into either a money market account or bonds until he has enough for the down payment. It’s not advisable to take a loan out of your 401(k) if it can be avoided.
3. Address his credit card balance ASAP. Even though Tim hasn’t been charging any more on his credit card, it will still take a good 30 years to pay it off if he continues making only the minimum payments.

‣ Depending on how large his debt payments are compared to his income, it might come into play negatively when he tries to qualify for a mortgage.

‣ Once Tim pays off the credit card, he could also put the money he was using for this debt payment toward his down payment on his house.
‣ Plus, paying off that credit card balance is akin to making 17% on his money.

Congratulations to Tim for saving money aggressively and consistently! Simply re-allocating some of his resources with these suggestions can set him up nicely for attaining his goals.

FURTHER READING:
Tips for Paying Off Credit Card Deb

How to Save Over $100 on Your Food Bill Every Month

Schedule an Appointment with Yourself for a Financial Checkup

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March Financial Calendar

1-31 National Nutrition Month. Spearheaded by the National Dietetic Association, National Nutrition Month was established to remind people to eat nutritionally and develop healthy exercise habits. During March, concentrate on your nutritional intake and level of physical activity. Your good health = more money in the bank.

1 The first quarter of the year ends the 31st of this month. Maybe it’s time to take a look at your earnings so far this year. Are you meeting your mark? Think creatively about what you can do to increase your income every quarter this year.
2 Read Across America Day/Dr. Seuss’ Birthday. Dr. Seuss books serve as encouragements to read for a lot of kids every year. Why not donate a large stack of Dr. Seuss books to a local nursery school, grade school or foster care program? You’ll feel so wonderful to know you’re giving the gift of reading to children, plus your donation is tax deductible, which means you’ll benefit, too at the end of the year!
11 Daylight Saving Time Begins. Although you’ll lose an hour when you set your clocks forward one hour at 2 a.m., ultimately you’ll save money by using less energy for lighting. After all, when Daylight Saving Time begins, you save daylight!
15 Business taxes are due today for many people who run their own business. This is also a good day to start gathering your paperwork for April 15th.
17 St. Patricks’ Day. Who doesn’t love to celebrate the patron saint, St. Patrick, of Ireland? Have fun with your friends and family and don’t forget to wear green. Speaking of the color green, put an extra $50 away this week in honor of St. Patrick.

20 First Day of Spring. With the amount of daylight and night-time nearly even today, you might say it’s a day of balance. Take a look at your stock portfolio to ensure it’s balanced in terms of growth stocks and stable CDs.
22 World Water Day. This day in March is designated by the United Nations to increase the world’s understanding of the importance of water to the lives of all people. Do you do everything you can to conserve water in your home and office? Take shorter showers and teach your kids to do the same. You’ll not only conserve water, you’ll also save on your water bills.
31 Review monthly grocery expenditures. Gather your grocery store cash register receipts for this month. How much did you spend for the month? Plan to reduce your monthly total by 10% next month.

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Finance Calendar for December

1-31 Universal Human Rights Month. The month of December is designated as Human Rights Month – a time to acknowledge the importance of human rights throughout the world. Celebrate your freedoms in this country, including the freedom to build and keep your assets as your own.
1 If you’re retired, the deadline for withdrawing the minimum annual mandatory payments from your retirement funds is the 31st of this month. Review now what you’ve already withdrawn to ensure you’ve taken what’s required.
5 Now’s the time to donate dollars to your favorite charities. Doing so will win you a big tax deduction for the year.
7 National Pearl Harbor Remembrance Day. Take time to acknowledge soldiers who fought during World War II by donating to your local veterans’ groups or charities.
10 Watch your last-minute holiday buying. This is the time of year that you might start to overspend. Rather than continue to buy more gifts, make the decision to decrease or stop the holiday debts.
17 Wright Brothers Day. Do you remember Orville and Wilbur Wright? They made their first flight on this day many years ago. Acknowledge their ingenuity by purchasing a savings bond for each of your children today.
19 Buy a new computer. Score huge savings on a new computer – up to 50% off at many retailers during this month. So, if it’s time to replace yours, check out prices as the holidays approach to find your best deal.
21 Hanukkah. Begins an 8 day celebration that commemorates the rededication of the Second Temple in Jerusalem. Even though you’ll be gathering with family and friends, you can stay in your budget with planning and discipline.
25 Christmas Day. Enjoy the exchange of gifts during this time. Starting tomorrow, vow to set aside at least $10 per week all year to avoid holiday budget stresses next Christmas.
31 New Years’ Eve. Take some time today to make your New Years’ resolutions. Plan a budget for next year. Set a target amount to have in the bank by this time next year.

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Zero Debt: The Ultimate Guide to Financial Freedom

Do you lose sleep over your credit card debt? If so, then Zero Debt: The Ultimate Guide to Financial Freedom is the book to help you get back to your debt-free life.

This book, which Dr. Phil himself has mentioned on his show, is one of the best books for clear, practical advice, and a proven plan that you can put into action right away.

In Zero Debt, you will discover:

* How to get annoying creditors off your back

* Insider secrets to reducing interest rates or eliminating credit card late fees

* Your legal rights, and what bill collectors can and can’t do under the law

* The best strategies to clean up your credit report or fix errors in your credit file

* How to make lifestyle changes that will save you money for decades to come

What makes Lynnette Khalfani the perfect candidate for writing this book is that she was over $100,000 in credit card debt herself and got herself out of it in only three years.

Khalfani has written valuable step-by-step instructions on how to get out of a financial pothole, even if it seems far too deep to ever get out of. You will not only dig yourself out with the help of this book, you will be able to start laying a foundation for future financial security, and even wealth.

The instructions are simple and easy to follow, an important thing when we are so busy, and the financial crisis is so pressing. These reasons alone makes Zero Debt a book you’ll really want to have in your library.

Zero Debt: The Ultimate Guide to Financial Freedom focuses on not only how to get out of debt, but on how to have money for the future, especially for retirement. With the state of the economy is today, this book is timely for anyone who is in any amount of debt, and needs to start planning fast on how to get out of it.

Zero Debt: The Ultimate Guide to Financial Freedom

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Personal Finance for Dummies

If you are stuck trying to figure out your personal finances, or even how to create a budget, then consider getting a copy of Personal Finance for Dummies. This book offers sound and practical advice for those who want to get control over their financial lives.

The author, Eric Tyson, lays out a solid framework for anyone interested in getting and maintaining control of their own financial situation.

Tyson breaks down into layman’s terms the most complex concepts of finance and investing, allowing the average person to get control of their financial lives.

Here is a little of what you will find in the book:

* Assessing your financial fitness and setting goals

* Ways to reduce your spending

* Building wealth and wise investing

* Protecting what you’ve got with insurance

* Working with financial planners

* Survival guide for ten major life changes that will have a big impact on your finances

With Personal Finance for Dummies, a reader will not only be able to educate him/herself concerning money, but will also have instilled in them the confidence that a financial situation can be corrected or controlled personally.

This book provides excellent advice on how to save money and how to set your saving and spending priorities. It has an extensive view of tax advantages and disadvantages through various approaches to finance.

Tyson gives the reader detailed examples which helps provide an easy to implement way to maximize the tax benefits that the government allows. He also encourages wise financial decisions in all areas of personal finance.

Personal Finance for Dummies is a great resource for anyone who needs help getting off on the right financial foot, or the one who has lost their footing and needs some help getting back up on their feet once more.


Personal Finance for Dummies

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17 ways to shrink your daily expenses 2

Part 2.

6-Always  make a grocery list before heading out.

Do this before you go into the store and then do your best to stick to it. You’d be surprised by how much you buy on impulse.

Having one master list of all your most important items listed in the order in which they appear in the store and then copying and circling what you need  will help keep your expenditure down, and alos stop you from straying into aisle full of unnecessary and often expensive temptations.

 

7-Eat food that’s in season.

This may seem like a no-brainer, but in these days of world markets and produce shipped from such faraway places as Costa Rica, buying in-season is more important than ever. Apples, pears, even strawberries are all much cheaper when they are in season.

If you have a large quantity, share it out with friends and family, or preserve it.

If you still want to buy produce that’s out of season, consider frozen fruits and veggies,”sometimes they’re more reasonably priced.

 

8-Shop at local markets or farm trucks.

Because they don’t have to deal with shipping costs, chances are you’ll find better prices on produce,”and fresher food!  If you buy in bulk, share it out with friends and family,or preserve it.

 

9-Avoid last-minute stops at mini-markets.

While these places are convenient, the prices for most items there are also higher than at larger stores.

 

10-Buy store brands.

Store brands can often save you 30 to 40% over name brands. And often, they are produced by the same factory anyway.

 

11-Don’t go grocery shopping when you’re hungry.

Everything looks good then, and your budget goes completely out the window.

 

Continued in Part 3.

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The Sink or Swim Money Program: The 6 Step Plan for Teaching your Teens Financial Responsibility

With increasingly high debt becoming a bigger problems in families every year, it is more important than ever that parents teach their children to be financially responsible.

Given the current economic crisis, with no end in sight at the moment, you can’t start acting too soon to tackle your family’s debt, and actually not only get out of debt, but start building wealth for the future.

While every child is different, and some can learn to be responsible with money at a younger age, parents should definitely make sure to teach their teens how to handle money before they are in college or out on their own.

In The Sink or Swim Money Program, John E. Whitcomb takes parents through a 6 step plan for teaching teens how to be financially responsible.

In Mr. Whitcomb’s book, he takes a humorous look at teaching kids the value of money and making them responsible for their own money and purchases.

Here are a few of the ideas his book focuses on:

* Calculating a budget

* Work out a contract between you and your teen

* How to plan ahead

With this system, the main point is that the teens are given a set amount of money that is to cover their basic needs, that you would normally pay, such as food, clothing and other necessities. It is a trial and error method, where the kids are given free rein on their money, and will quickly learn what they can and cannot do with it.

In addition to the lessons on spending, the book deals with planning for larger expenses, such as college, cars and insurance.

It also includes sections on checking accounts, credit cards and tips on saving and earning extra money, with lesson plans and sample contracts.

If you’re concerned about your own finances, you will benefit from this book as well. If your in good shape but concerned about the current economic crisis, this book will be a good tune up for your situation. If you are in good shape but want to do better in the future for you and your whole family, you and your teen can go over the book together to help work toward that goal.

And best of all, you will also be working toward you teen achieving financial independence, and a secure future for him or herself, and succeeding generations.

The Sink or Swim Money Program: The 6 Step Plan for Teaching your Teens Financial Responsibility

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