What Happens To Your 401(k) When You Get Laid Off?

What Happens To Your 401(k) When You Get Laid Off?

There is nothing pleasant about getting fired or laid off. It leaves you with much uncertainty about the future — and rightfully so, as this means a temporary halt in income. But although you are no longer earning, your 401(k) is not in danger.

So, what happens to your 401(k) when you get fired or laid off? Your 401(k) is safe even after a job layoff. You are entitled to the funds you contributed to the account and any earnings they generated.

Read on to understand what you can do and what your termination means for your investment.

What Is a 401(k) and How Does It Benefit Employees?

A 401(k) is a profit-sharing retirement saving plan some U.S. employers offer. It lets you contribute a portion of your pre-tax income to a tax-advantaged investment account. You can invest these contributions in mutual funds, stocks and bonds. Most 401(k) plans have a minimum of three choices for investment, while others offer up to twelve.

The main benefit of a 401(k) is that the money you contribute is not taxed until withdrawal when you retire. This factor helps your savings grow faster over time. Besides your contribution, some employers make matching contributions to your 401(k), where they put a percentage of your contributions to your account.

Does A 401(K) Have Limitations?

Some limitations and rules are associated with your 401(k). For example, annual contribution limits exist, and there may be restrictions on when and how you can withdraw your money. These limits vary from year to year. The IRS recently released the newest contribution limit for 2023 to $22,500, an increase of $6,500.

Moreover, fees and expenses may be associated with managing the account, which varies depending on the plan. Examples include plan administration fees, investment fees, individual service fees, loads or commissions and management fees, among others.

What Happens To Your 401(k) When You Get Fired?

If your employer terminates your job, your 401(k) plan account stays yours. In addition to your contributions, you also have a right to your employer contributions or matching ones, as long as those funds are vested.

What can you do with your 401(k) after termination? Multiple options for accessing and working with your 401(k) are available to you.

To continue reading, please go to the original article here:

https://www.gobankingrates.com/retirement/401k/what-happens-to-401k-when-you-get-fired/?utm_term=incontent_link_2&utm_campaign=1222763&utm_source=yahoo.com&utm_content=4&utm_medium=rss

How to Protect Assets From Stepchildren

How to Protect Assets From Stepchildren

Mark Henricks Wed, April 26, 2023

Parents in second marriages may want to leave assets to their own children while ensuring that stepchildren do not inherit. When stepchildren inherit, it can create resentment leading to legal disputes that can cost the estate significantly in delay and attorney fees. By taking specific estate planning steps, however, you can effectively protect assets from stepchildren. A financial advisor can inform you about your options when planning an estate involving stepchildren.

Stepchild Concerns

Estate planning is nearly always worthwhile but can be extra important when you have stepchildren. If a stepchild inherits some of your assets, your own children may feel they have been cheated of their rightful inheritance. To protect their interests, children and other heirs may contest awards to stepchildren. Court cases from these efforts can delay settlement for years while legal fees reduce the size of the estate.

Your children are recognized as heirs to your estate even in the absence of a will or other document naming them as beneficiaries. Stepchildren do not have the same rights. In most cases, they do not inherit from a deceased stepparent’s estate unless specifically listed as beneficiaries in estate planning documents.

However, stepchildren still may receive assets from your estate if your spouse dies after you and leaves assets to their children. Preventing stepchildren from ever receiving assets from your estate can be done, but requires definite action to exclude them as beneficiaries.

Protective Measures

If your partner from a second or later marriage dies first, you usually don’t have to do anything to prevent stepchildren from receiving assets you control. Even after an intestate death that occurs without a valid will, stepchildren are typically not recognized as having any right to assets in the estate. However, a few states do grant stepchildren some rights of inheritance. If you live in one of these jurisdictions or just want to be sure, you can take protective measures.

If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.

Using a Will

A will can be used to name specific people, including stepchildren and exclude them from receiving benefits from the estate. Simply leaving the names of any stepchildren out of the last will and testament is likely to be enough to keep them from acquiring any of your assets after your death. To be certain, you can designate by name stepchildren and anyone else you don’t want to get any assets when you die.

Trusts

To continue reading, please go to the original article here:

https://finance.yahoo.com/news/protect-assets-stepchildren-130020299.html

Hard Data That Confidence In The Dollar Is Cracking

Hard Data That Confidence In The Dollar Is Cracking

April 25, 2023  By Simon Black – Sovereign Man.com

It is becoming increasingly clear that the world is losing faith in the United States dollar... and rapidly turning to alternatives. And that’s a huge deal for the United States.

For nearly eight decades, the US economy and US government have enjoyed the unparalleled benefits of the dollar being the world’s reserve currency.

This means that nearly every government, central bank, commercial bank, and large corporation in the world holds at least some US dollars. Foreign companies use the dollar to trade with one another. Foreign governments and corporations often issue bonds in US dollars.

And most of the world’s major commodities, including oil, are priced and traded in US dollars.

The dollar’s dominance is so ridiculous that even when Airbus— a European aircraft manufacturer— sells jets to Air France, that transaction is settled in US dollars.

This has been an enormous benefit to the United States; every other country in the world that engages in international trade and commerce HAS to hold US dollars... which means that foreign institutions end up parking vast sums of money in the US financial system.

And that money creates additional capital that gets put to work to grow the US economy.

Think about that again: rather than invest their own money to grow their own economies, foreign governments and institutions are essentially forced to invest a big part of their savings for the exclusive benefit of the US economy... simply because they need access to the world’s reserve currency.

A lot of that money ends up in the hands of the US federal government; in fact, foreigners own roughly $7.5 trillion of US government bonds... which has been an absurdly good benefit for the Treasury Department.

Whenever the federal government has come up with some stupid, expensive idea... like paying people to stay home and NOT work... foreigners have always helped pay for it by buying more US government bonds— again, simply because they need to own US dollars.

But as I wrote to subscribers as far back as August of 2015, the dollar’s reserve currency dominance “is by no means written in stone. The US dollar is not the first global reserve currency, and it won’t be the last.”

Throughout history there have been many reserve currencies, from the ancient Greek drachma to the gold solidus of the Byzantine empire, the Venetian gold ducat, the Spanish real de ocho, to the British pound. No reserve currency lasts forever.

History shows that a reserve currency is displaced whenever the rest of the world loses confidence; this typically happens when the government’s finances deteriorate severely.

Back in 2015 I warned that America’s finances were also deteriorating, which posed a risk to the dollar’s dominance: “The US government is insolvent. Its major institutions and pension funds are insolvent. The central bank is borderline insolvent.”

That assertion is even more true today. In fact I would remove the qualifier “borderline” when describing the central bank; the Federal Reserve is, according to its own calculations, totally insolvent.

And the rest of the world is really starting to take notice. The French in particular have been complaining for years about the US dollar, and just recently the French President has been urging Europeans to seek financial independence from the United States.

Leaders from countries including Saudi Arabia, the UAE, Malaysia, Brazil, and India have all recently expressed openness, or even desire, to move beyond the US dollar in international trade.

Saudi Arabia is flirting with the idea of selling oil in Chinese yuan, and just a few weeks ago the first Liquified Natural Gas (LNG) contract in Chinese yuan was transacted.

These are just anecdotes, of course. But there’s a lot of hard data showing that the dollar’s reserve status is waning.

According to the Society for Worldwide Interbank Financial Telecommunication, or SWIFT, the U.S. dollar is currently used to settle about 40% of international trade.

That’s still a lot. But even as recently as 2014, SWIFT reported the dollar was used for 52% of global trade.

Dollar reserves held by foreign governments are also declining.

According to the International Monetary Fund, the US dollar now accounts for 58.4% of foreign reserves held by central banks around the world, compared to roughly 70% in the late 90s.

Foreign central banks also seem to dump their US dollars in exchange for a more traditional store of value; that’s why central banks around the world bought more gold in 2022 than they have since 1950.

This is all hard data showing that the world’s discontent with the US dollar has finally translated into action. And it suggests that the US dollar’s loss of global reserve status is only a question of when, not if.

Again, this is a huge deal for America.

The only reason the US government has been able to get away with a $31.5 trillion national debt, multi-trillion dollar deficits “that cost nothing”, and all the other insane government dysfunction, is because the dollar is the world’s reserve currency.

What do you think would happen if the government of Bulgaria ran a massive deficit every single year... or if the President of South Korea shook hands with thin air?

Their currencies would probably plummet and their bond markets collapse.

Just last year, in fact, we saw the British pound go into freefall, the bond market plummet, and the Prime Minister forced to resign, simply because investors did not like her economic plan.

But the US government has been able to do whatever it wants... for decades... simply because they have the reserve currency.

You’d think that the federal government would do everything in its power to protect such an extraordinary privilege.

But instead they seem to be going out of their way to destroy it. It’s pure insanity.

Even now, with the country weeks away from defaulting on the national debt, the President of the United States still refuses to negotiate a single penny in spending cuts in order to raise the debt ceiling.

Foreigners are watching this mess... and they’re not impressed. And this is yet another reason why they’re moving so quickly to reduce their dependency on the dollar.

Frankly this might be a good thing. The US government is like a spoiled, hard partying rich kid who has squandered the fortune that his great grandfather worked so hard to build.

Maybe the kid needs to go broke and have his fancy cars repossessed in order to (hopefully) relearn the value of money, responsibility, and conservative financial management.

It’s important to remember, in fact, that the United States became the most powerful economy in the world BEFORE the dollar became the global reserve currency. Same with the UK and British pound before.

So it’s possible that losing some of the dollar’s reserve status might just be the spark that the US government needs to get its act together. Only time will tell.

To your freedom, Simon Black, Founder  Sovereign Man

https://www.sovereignman.com/trends/hard-data-that-confidence-in-the-dollar-is-cracking-147023/

The Best Way To Invest An Inheritance and Protect Your Newfound Wealth

The Best Way To Invest An Inheritance and Protect Your Newfound Wealth

Charlotte Gifford   Tue, April 25, 2023   The Telegraph

Receiving a lump sum inheritance can be life-changing. But when it comes to deciding what you should do with a sudden windfall it is easy to feel overwhelmed by the range of options at your fingertips.

Undoubtedly one of the worst things you could do – besides spending it all at once in a mad frenzy – is put the money in your current account. This will leave your inheritance at the mercy of inflation. If inflation is on average 2 per cent, then in terms of purchasing power a £100,000 lump sum would be worth just £50,000 in 25 years.

Taking a proactive approach to growing your inheritance is crucial. Here, Telegraph Money tells you what you need to know about investing to get the most out of your newfound wealth.

First Things First

Make sure you have a rainy day fund

This should be a sum of money to cover an unexpected expense. It is generally advised that you keep enough for three to six months’ expenditure.

However, this isn’t an excuse to leave thousands of pounds languishing in your current account. Put the money in a savings account paying a competitive rate.

Pay Off Your Debts

This includes overdrafts, credit cards and loans. The high interest rate on these debts will probably eat your wealth faster than the rate of your investment return will grow it.

Does this mean you should also pay off your mortgage or, if you have it, your student debt? That depends.

Emma Watson of the wealth manager Rathbones said clearing student debt can be a sensible thing to do, especially if your loan has a relatively high interest rate (like those taken out since 2012). Workers on "Plan 2" loans will be charged a maximum interest rate of 6.9 per cent. The debt is repaid at a rate of 9 per cent on everything over the earnings threshold of £27,295.

However, because the monthly repayments are based on your earnings, the cost is probably only worth it for very high earners. Bear in mind the debt is wiped after 30 years regardless.

With mortgage rates going up, Ms Watson said the argument for paying off your mortgage first is stronger than it has been in the past.

“However, the principle of look before you leap applies as, if your mortgage is on a fixed term, there may be penalties applying to free yourself from it,” she said.

Protect Yourself

Promises of sky-high returns are telltale signs of an investment scam. Only put your money with a provider regulated by the Financial Conduct Authority.

Be wary of saving more than £85,000 with one institution – only sums up to this limit are protected under the Financial Services Compensation Scheme, in the unlikely event the company goes bust.

Should I invest it all in one go or in smaller increments?

Another thing to consider is whether you should invest the sum all at once, or in dribs and drabs.

You may have heard that drip-feeding the cash into investments will help to avoid the impact of market peaks and troughs.

To continue reading, please go to the original article here:

https://www.yahoo.com/news/best-way-invest-inheritance-most-050000112.html

How to Ease Your Kids Into Estate Planning

How to Ease Your Kids Into Estate Planning

Elizabeth Ayoola  Mon, April 24, 2023 NerdWallet

When parents talk with their kids at the dinner table, estate planning probably doesn’t come up. But considering we aren’t immortal, it should.

It’s worth having age-appropriate conversations to introduce children to the idea of estate planning. As children grow older, parents can provide more specifics about their plans and eventually assist their children in developing their own plans as adults.

Stay ahead of the market

Run them through your estate plan

If you have an estate plan in place, consider running your children through it so they have an idea of what’s included in one. Camelia Ruffin, an estate planning attorney and founder of The Ruffin Firm in Douglasville, Georgia, suggests parents do a very basic outline, which includes telling children what each document is and what it’s used for.

Talking through your estate plan also gives your children a chance to know important information such as who you’ve chosen as estate executive or administrator — the person who manages your estate after you die — and who has power of attorney for financial and health care decisions. If your children will be executors, that’s more reason to talk them through the plan.

Parents with underage kids may want to share information about who will take care of them if something happens prematurely. Ruffin says children should know whom to turn to and what the next steps are so they’re prepared.

“Parents either get really sick or die and they still have teenagers who don't know if it's going to be a grandparent, uncle, godparent or a family friend that's going to help guide them.”

 She adds, “It's very important for parents to talk to kids about money management budgets, what is set aside for them, and how to make sure money lasts them as long as possible and not to run through it.”

Adult children should know where important estate documents are such as the original will, trust, power of attorney, health care directive, and list of accounts and login information.

Estate planning isn’t just financial, it can also be an emotional affair. Coming to terms with mortality as a child or parent can be challenging, but remember it’s a way to care for yourself and your loved ones, says Nataki Appolon, an estate planning and business attorney at Warren & Warren Appolon in Huntington, New York.

“Estate-planning is self-care. You don't have all that anxiety around ‘God forbid something happens.’ ”

Explain the importance of an estate plan of their own

To continue reading, please go to the original article here:

https://www.yahoo.com/finance/news/ease-kids-estate-planning-200015659.html

We’re Done With “Gradually”. We’ve Now Reached The “Suddenly” Part

We’re Done With “Gradually”. We’ve Now Reached The “Suddenly” Part

April 24, 2023  By Simon Black – Sovereign Man.com

By the summer of 1563, all of Britain had plunged into chaos over religion and the Reformation. King Henry VIII broke away from the Catholic church back in the 1530s, sparking a near civil war within the kingdom. Protestants killed Catholics, Catholics killed protestants, and extreme social tensions lasted for decades.

Universities were at the heart of this conflict; rather than focus on real subjects like science and mathematics, students and professors became radical social activists and turned their schools into ideological echo chambers. Sound familiar?

One of the few students who actually wanted to learn was a Scottish teenager named John Napier; Napier had been enrolled at the University of St. Andrews at the time, but he quickly realized that he would never learn a damn thing in that environment. So he dropped out… and started traveling in search of a real education.

No one quite knows exactly where he went or what he did. But when he returned to Scotland eight years later as a young man, Napier had become an intellectual giant.

You might not have ever heard of him, but John Napier was truly one of the great minds of his era. And modern science owes a tremendous debt to his work… in particular his development of logarithms.

If it’s been a few years since you studied math (or ‘maths’ for my British friends), logarithms are the inverse of exponential functions.

Simple example: we know that 102 (or 10 squared) = 10 x 10 = 100. So, the number 10 raised to the power of 2 equals 100.

The inverse of that is to say that the ‘base 10’ logarithm of 100 = 2. Or in mathematical terms, 100 log10 = 2

Napier devised an entire system of logarithms. And this was actually a tremendous leap forward in mathematics, because logarithms made it so much easier for scientists and researchers to calculate solutions to complex problems.

One of the many important applications to come out of Napier’s work is the concept of ‘logarithmic decay,’ which models many real world phenomena.

The idea behind logarithmic decay is that something declines very, very slowly at first.

But, over a long period of time, the rate of decline becomes faster… and faster… and faster.

If you look at it on a graph, logarithmic decay basically looks like a horizontal line that almost imperceptibly arcs gently downwards. But eventually the arc downward becomes steeper and steeper until it’s practically a vertical line down.

Image     https://cdn.sovereignman.com/wp-content/uploads/2023/04/Screenshot-from-2023-04-24-11-33-13-1024x336.png

Logarithmic decay is like how Hemingway famously described going bankrupt in The Sun Also Rises-- “Gradually, then suddenly.”

In fact logarithmic decay is a great way to describe social and financial decline. Even the rise and fall of superpowers are often logarithmic in scale. The Kingdom of France in the 1700s infamously fell gradually… then suddenly.

We can see the same logarithmic decay in the West today, and specifically the United States.

The deterioration of government finances has been gradual, then sudden. Social conflict, censorship, and the decline in basic civility has been gradual, then sudden. Even the loss of confidence in the US dollar has been gradual… and is poised to be sudden.

Back in 2009 when I started Sovereign Man, I spoke a lot about ideas that were highly controversial at the time.

I suggested that Social Security’s trust funds would run out of money. That the US government would eventually be buried by its gargantuan national debt. That the US dollar would eventually lose its international reserve dominance. That inflation and social conflict would rise.

The main thesis, quite simply, was that the US was in decline. And whenever I spoke at events, I used to talk about logarithmic decay, saying:

“As a civilization in decline, you never really know quite where you are on the curve. You could be way over here on the horizontal line, at the very beginning of the decline… or you could be standing on the precipice about to hit the vertical slide down.”

Well, now we have a much better idea of where we are on that logarithmic decay curve. Because these ideas about the national debt, inflation, social security, social conflict, etc. are no longer theories. Nor are they even remotely controversial.

Just last week, US Speaker of the House Kevin McCarthy said in a speech that “America’s debt is a ticking time bomb”. Social Security’s looming insolvency is now openly discussed in Washington and regularly reported in the Wall Street Journal.

We’ve all seen with our own eyes (and even experienced) inflation, social divisions, and censorship.

And as for the dollar, we continue to see a multitude of cracks in its dominance. Most notably, Saudi Arabia is considering a plan to sell oil not just in US dollars, but also in Chinese yuan.

Plus the international development bank of the BRICS nations (Brazil, Russia, India, China, and South Africa) announced earlier this month that they will start moving away from the dollar.

Is it any surprise? The US government is weeks away from defaulting on its national debt over the latest debt ceiling debacle. And yet the guy who shakes hands with thin air refuses to negotiate a single penny in spending cuts to help reduce trillions of dollars in future deficit spending.

The whole world is watching in utter disbelief at the astonishing level of incompetence that has infected the highest levels of America’s once hallowed institutions, including news media, big business, and the government itself.

America-- and the West by extension-- really are on the precipice of that logarithmic decay curve… the part where the horizontal line becomes a vertical line down.

It has taken years… even decades to reach this point, gradually. We’re now at the “suddenly” part.

Now, it’s important to note that the outcome is far from inevitable. Plenty of declining superpowers in the past have pulled themselves out of a tailspin, at least temporarily.

Aurelian’s reforms helped re-establish Rome’s dominance in the late 200s after nearly a century of chaos. The declining Ottoman Empire recovered substantially during the Tanzimat period in the 1800s. King Charles III of Spain made many successful reforms to revive his crumbling empire in the 1700s.

There are many historical precedents for recovery, so all is not lost. But at the moment there is little evidence to suggest any major change on the horizon.

I’m not saying this to be alarmist. Quite the contrary, in fact. Because one of the key pillars of our thinking here at Sovereign Man is that, despite the ineptitude of our governments, we as individuals have the tools, power, and freedom to solve these problems for ourselves… and even prosper doing so.

Simple example: Social Security’s trust funds will run out of money within a decade, and this will be a huge problem for literally tens of millions of people who depend on the progam.

However there are numerous tools available to solve this problem; a more robust and powerful retirement structure like a self-directed, solo 401(k) plan, for example, allows you to set aside up to $73,500 per year for your retirement.

Similarly, if you expect a government with deteriorating finances to raise taxes (which they almost always do), you can take completely legal steps to reduce what you owe.

If you anticipate inflation continuing, you can arrange your investments to capitalize on the surge in real assets, like minerals, energy, and productive technology.

You can also take steps to diversify geographically, even internationally, to reduce risks to your family’s freedom.

These solutions barely scratch the surface of the plentiful options at your disposal. All it takes is a sensible understanding of the problem… plus the willingness to take action.

And rational, informed action is always a better option than despair.

To your freedom,  Simon Black, Founder   Sovereign Man

https://www.sovereignman.com/trends/were-done-with-gradually-weve-now-reached-the-suddenly-part-146899/

The Worst Money Advice That Keeps Going Around

The Worst Money Advice That Keeps Going Around, According to Experts

Andrew Lisa  Mon, April 24, 2023 GoBankingRates

Some of the most popular money advice is as unreliable as it is common. From social media drivel to well-intentioned counsel from industry professionals, money misinformation can come from anywhere.

Sometimes it's bad investment advice. Other times, it's misguided suggestions about saving, spending, borrowing or building credit. No matter the subject, all misleading money guidance has one thing in common -- it never helps the person on the receiving end.

GOBankingRates asked a variety of experts to share the unsound financial advice they would most like to see go away. Their answers span all topics and categories, but they come to the same conclusion -- a lot of what you've been hearing about managing your finances is wrong.

Avoid the following bad money advice at all costs.

Carry a Balance To Improve Your Credit Score

You can improve your credit score by using credit cards responsibly, and the first rule of responsible credit card use is to pay your balance in full every month to avoid compounding finance charges. Some people, however, make the mistake of believing that you have to carry a revolving balance in order to reap the benefits -- which is exactly what you don't want to do.

"My boss proudly explained to me that she carries a credit card balance and pays interest on it in order to increase her credit score," said Martin Lassen, founder and CEO of GrammarHow. "She received this recommendation from her mortgage broker. It was suggested that she keep the balance between 40% and 50% of her credit limit. It's the worst financial advice I have ever received."

You Have Plenty of Time To Worry About Retirement

Credit card debt is so troublesome because of the snowball effect of compound interest. When you're saving instead of spending, however, compounding works in your favor by converting small contributions into a big retirement nest egg -- but only if you give it time to work its magic.

"When I was young, one of my friends advised me to stop worrying about retirement," said James Crawford, co-founder of Deal Drop. "He said I would have plenty of time to think about it later."

It's hardly unusual. People often hear that they should put off retirement planning to invest in something more immediate like a business. That's bad advice that will force them to save much more as their timeline grows shorter.

"It takes a long time for your money to increase," said Crawford. "You'll need to save less money over time if you get started early."

Invest In Actively Managed Funds

 To continue reading, please go to the original article here:

https://finance.yahoo.com/news/worst-money-advice-keeps-going-110016373.html

Understanding Wants and Needs to Improve Your Finances

Understanding Wants and Needs to Improve Your Finances

Financial Pilgrimage

Whenever you open up a news site, go shopping or fill the gas in your car, it can remind you of how expensive everything is. Financial experts remind us to tighten our belts and watch our spending as the cost of living rises. If we’re not careful, we may be unable to afford to pay for our necessary expenses, let alone extras.

But, for many folks, drawing the line between what is necessary and what is nice to have is challenging. In other words, it can be challenging to differentiate needs from wants.

Understanding Wants and Needs

In the simplest terms, a need is something you require to live and function, while a want improves the quality of your life and that you enjoy having. Viewing wants and needs by this definition may seem easy to break down. You may think that needs would be the same for everyone and include things like food and shelter, and while it does on a fundamental level, it is more nuanced than this.

Examples of wants and needs often differ among individuals and families. You can attribute the differences to various factors like where you live and access to services.

Let’s look at a few examples.

Everyone would consider transportation a basic need. You need transportation to get to work, get your kids to school and run errands. However, if you live somewhere that has reliable public transport, you probably don’t need a car. Similarly, if where you live everything is within walking distance and it is safe to walk, you can go without a car. However, if there is no public transport or it’s unreliable or unsafe, and you live somewhere where it’s impossible to walk to where you need to go, you will need to buy a car.

So, you’ve established that a car is a need and that you will use it often. You will use it to go to work, take your kids to school and sporting events, and for all your other errands. So, what car do you get? You can get the cheapest car possible because you need to get from A to B, but an affordable car can come with problems.

It may not be safe as it has fewer safety features, and if you’re using it to transport your kids, this is a significant risk. Cheap vehicles may also come with other issues and may need lots of repairs costing you more in the long run. Lastly, if you have a big family, you probably need a big car to accommodate everyone. In this case, a more expensive vehicle is necessary for your life.

On the other hand, a cheaper car might suit your needs if you are a single person who only requires a vehicle to drive a short distance to work and won’t use it much.

If you’re struggling to establish whether something is a want or need, ask yourself if it’s possible to live and function without it. For example, can the need be met less expensively if you need it to live? Then think about what your life would be like without it.

The Best Way to Budget

 To continue reading, please go to the original article here:

https://financialpilgrimage.com/understanding-wants-and-needs/

11 Mottos to Live By

11 Mottos to Live By

Marjorie Kondrack  |  Apr 21, 2023 HumbleDollar

LIVING BENEATH OUR means is one of the best habits to develop if we want a secure retirement. Like many others, I learned this sort of thrift from my parents and grandparents, who lived through the Great Depression and, by necessity, had to avoid waste.

Not only did our forebearers survive the Great Depression, but also the Second World War came right on its heels. These were years of conserving materials—such as metal, rubber, paper and food—to support the war effort.

My mother saved a food ration book from the war that still had some stamps in it. When she shopped, she had to hand the grocer stamps when buying meat, sugar, butter, cooking oil and canned goods. The number of stamps handed over depended on the scarcity of the item purchased. For instance, if bacon was 35 cents a pound, you might have to give the grocer seven stamps.

Once the stamps were used up for the month, people couldn’t buy any more of that food until new stamps were issued the following month. I wonder how many young people today know that, in this land of abundance, food was once rationed, and that thrift in itself can be a source of remarkable household revenue.

Mom also saved a booklet from the war years that gives information about saving or conserving just about everything—food, clothing, house furnishings, appliances, utilities, cars, even insurance. People found artful ways to scrimp on just about everything. Nothing was wasted.

We could all benefit from the advice in this little booklet. Here are 10 of the more memorable passages that appeared at the bottom of the booklet’s pages:

Willful waste makes woeful want.

te nothing. Hoard nothing. Use everything.

Spend what you must and save what you can.

He that eats and saves sets the table twice.

Waste nothing. Hoard nothing. Use everything.

Spend what you must and save what you can.

He that eats and saves sets the table twice.

 To continue reading, please go to the original article here:

https://humbledollar.com/2023/04/11-mottos-to-live-by/

Class Worth Taking

Class Worth Taking

Greg Spears  |  Apr 20, 2023 HumbleDollar

LESS THAN HALF of Americans—46%—have tried to calculate how much they need to save to live comfortably in retirement, according to a 2022 survey by the Employee Benefit Research Institute. I often meet extremely bright people—doctors, residents, PhD students and professors—who say with a sheepish smile that they don’t understand the intricacies of their retirement plans.

For some, this lack of understanding is a choice. People who sense they haven’t saved enough, or any money at all, may not want to know where they stand financially. But arguably these and most other Americans have also been shortchanged. Personal finance is not a standard offering in the general education curriculum in the U.S. Last year, when I asked the students in my college economics class how many had previously taken a personal finance course, only one student out of 21 raised a hand.

This vacuum is worrying because so much rides on successfully budgeting, saving, investing and other financial decisions. Next Gen Personal Finance is a nonprofit group trying to fill that void. Its goal is to make sure every student who graduates high school has completed at least one personal finance class.

Thanks partly to the group’s lobbying, six states added a personal finance requirement for high school graduation in 2022. That brings to 18 the number of states that mandate personal finance study. Only 24% of U.S. public high school students currently receive finance education. That’s projected to rise to 40% thanks to the six additional states that just mandated a state-wide personal finance curriculum—Florida, Georgia, Kansas, Michigan, New Hampshire and South Carolina.

In the 32 states and the District of Columbia that lack a mandate, an average of just one student in 10 will take a personal finance class before graduating. In some cases, the local school district mandates a personal finance course. Most of the time, however, a money class is offered as an elective, folded into another subject like math—or it’s simply not offered at all.

To help build a personal finance curriculum, Next Gen provides school districts with free course materials and teacher training. Some 77,000 educators have been trained to teach a money curriculum, and around 20,000 more join annually, according to Tim Ranzetta, an entrepreneur from Palo Alto, California, who is Next Gen’s co-founder and chief financial backer.

Next Gen’s financial education curriculum is comprehensive. How to use credit cards. How to invest. Budgeting, taxes and insurance. And, perhaps most pertinent to high schoolers, how to afford college without sinking into a pit of debt.

“It’s about behavior change,” Ranzetta said in a telephone interview from California. After taking the class, he said, students “open up savings accounts. Set up Roth IRAs. Make better decisions on student loans.” Their knowledge can also be passed on to parents in a ripple effect. “Kids are taking this home to their families. Parents are signing up for IRAs after their son comes home” from class, Ranzetta added.

The absence of financial education is particularly acute among lower-income students. In school districts where 75% of students or more qualify for free or reduced-cost lunch, less than 5% of children are required to take a personal finance class to graduate, according to Next Gen’s research. These districts often lack the resources to add a new subject, Ranzetta said.

To continue reading, please go to the original article here:

https://humbledollar.com/2023/04/class-worth-taking/ 

When in Rome

When in Rome

Dennis Friedman  |  Apr 21, 2023  HumbleDollar

My wife and i visited Italy this year. We flew to Venice, where we stayed three days, and then hopped a train to Florence, where we spent the next five days. After that, we rented a car for three days and toured the Tuscany countryside, before catching a train to Rome for our final six days.  I learned a lot about Italy, but I also learned some things about myself. Here are 11 takeaways from our trip:

1. Going home was one of my favorite parts. Before I retired, I thought I’d spend months on the road, and maybe even live overseas for a while. But after two or three weeks of traveling, I’m ready to go home.

I miss my home, friends and routine when I’m away for a while. I don’t see how people, no matter how much time they spend traveling, can sell their house and not have a place to go home to. I wouldn’t feel safe and secure.

2. If I’m going to travel and see everything I want to see, I better do it now. While we were in Florence, my wife and I climbed to the top of the dome that covers the Cathedral of Santa Maria del Fiore, also known as the Duomo. It was 463 steps to the top, and the passage is sometimes steep. There are many towers in Italy with breath-taking views that also involve climbing many steps.

I can’t see us being fit enough in our 80s to do things like that. Our 70s might be the last chance to travel without physical limitations.

3. Travel is not cheap. We have two more major trips planned this year. Funding these trips means drawing down our investment portfolio.

I don’t know if I’d have felt comfortable spending this much money on travel if I didn’t have a financial advisor giving me the thumbs up. That reassurance allows us to spend without fear that we’ll run out of money.

4. I wrote in another article about having only one credit card in our later years—how it would simplify our finances and make them easier to manage. I was wrong. We should have at least two credit cards.

My wife and I paid for almost everything in Italy by using credit cards. While dining at a restaurant in a small town in Tuscany, our credit card was rejected. We tried three times with no luck. I checked my Citi Mobile app and it was temporarily shut down for maintenance. Maybe that was the reason for the rejection.

Luckily, I brought another card with me—because we didn’t have enough euros to pay for the dinner. That’s another lesson I learned: Make sure you have enough local currency for emergencies, because you might not be able to charge everything to a credit card. For instance, we stayed at a hotel in a small town where we were required to pay part of the bill—the city taxes portion—in euros.

5. How to manage the exchange rate can be tricky.

To continue reading, please go to the original article here:

https://humbledollar.com/2023/04/when-in-rome-2/