15 Money Truths Your Successful Friends Won’t Tell You

15 Money Truths Your Successful Friends Won’t Tell You

Dan Ketchum   Fri, Jun 16, 2023,

Are you tired of working the same job you've sworn to quit countless times? You might be stuck in a rut -- and your more successful friends have noticed. You might envy their Saturday morning hikes and large retirement accounts, but it might simply be a result of not approaching problems or opportunities like they do.

If you're wondering what your successful friends are thinking about the way you manage work and money, take a seat because here is what they're not telling you.

You Need To Budget

You know that friend you're always hitting up for money? Well, that friend thinks you'd really benefit from a budget. Fortunately, making one just takes a little commitment.

"Find an app or system that works well for you, such as Mint, You Need A Budget or just an Excel spreadsheet," said Kate Holmes, a certified financial planner and Belmore Financial founder. "Import the last few months of all checking, debit and credit card transactions, and see where things are at. You'll likely be surprised by some of the category totals."

Holmes encourages you to consider how much happiness each budget item brings you, as means of tracking down unnecessary expenses. Here's a breakdown she recommends:

50% of your take-home pay for food, housing and necessities

30% for discretionary spending

20% for paying off debt and building savings

You Don't Save Enough

Bad news for those dreaming of retirement: Most of us won't be retiring in style if we rely solely on Social Security benefits. In 2023, the average monthly Social Security check is just $1,751 for retirees. So, what can you do to prevent tarnished golden years?

Utilize your workplace retirement plan and take advantage of your employer's matching program, said consumer finance expert Kevin Gallegos, vice president of Phoenix operations for Freedom Financial Network. Gallegos recommends saving 10% to 15% of your gross pay for retirement. If you can't swing that, just start with what's manageable for you.

You Have Too Much Credit Card Debt

The financially savvy see credit cards as a convenience, not a debit account. A GOBankingRates survey found that 50% of Americans have credit card debt. If you carry a high balance month to month and have high interest rates, you're paying a premium for the same purchases your debt-free friends make.

Dodge debt and avoid using credit cards except in emergencies. "Few, if any, investments will return as much," Gallegos said. "Having no credit card debt provides a financial cushion itself." If you're having trouble doing this, you can consider some ways to avoid or get out of credit card debt.

You Don't Invest

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https://finance.yahoo.com/news/15-money-truths-successful-friends-130126236.html

Case Closed & Lessons Learned

Case Closed & Lessons Learned

Robert C. Port  |  Mar 8, 2023

EVERYTHING I KNOW about managing money I learned in court. As part of my legal practice, I represent people involved in disputes over money or property. These can include claims against financial advisors for alleged misconduct, contested wills and trust disputes, and family members at odds over a family business.

These disputes can teach us important personal finance lessons. Here are four lessons—learned the hard way—from four cases my firm handled. All are based on an actual case, though names and details are changed to protect the litigants’ privacy.

Case No. 1: Life insurance goes to the ex-spouse. Jane and John’s divorce was bitter. Even after their divorce was final, Jane had to go back to court asking that John be held in contempt for failing to pay child support. Imagine, then, Jane’s surprise when 15 years later she received a letter from a life insurance company expressing its condolences on John’s death—and enclosing the forms necessary to claim his $1 million policy.

Jane was listed as the beneficiary of John’s life insurance policy, which the insurance company was obligated to follow under state law. John’s widow promptly sued to try to prevent Jane from getting the payment. Still, the court awarded the $1 million policy proceeds to Jane, along with a small bank account, for which Jane was also listed as a joint owner at John’s death.

Lesson learned: If you’re contemplating divorce, identify all financial assets which have a survivorship or beneficiary designation. These can include life insurance, and bank, brokerage, and retirement accounts. Discuss with your divorce attorney how they should be addressed.

In some states, a divorce automatically prevents an ex-spouse from being the beneficiary of a life insurance policy or receiving the financial accounts of an ex-spouse. In others states, however, the divorce decree must specifically disclaim all future rights. If it doesn’t, the law treats written beneficiary directives that are in effect at death as the deceased’s final wishes for where assets should go—even if it’s to the ex-spouse.

Case No. 2: A widow is sold unsuitable annuities and life insurance.

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

https://humbledollar.com/2023/03/case-closed-2/

Forced To Retire Early? 4 Steps To Secure Your Finances

Forced To Retire Early? 4 Steps To Secure Your Finances

Yaёl Bizouati-Kennedy   Wed, Jun 14, 2023,

While many workers look forward to the day they retire, others who are forced into early retirement — whether because of layoffs, health or other reasons — don’t have the same experience. Most important, they don’t have the same financial cushion to fall back on.

Increasing Iife expectancy and low levels of retirement planning might further complicate the matter.

While the sudden lack in income takes an obvious and enormous toll on these workers, experts outlined several steps to take in that case, which can help alleviate the financial stress and allow for a less arduous and more enjoyable retirement.

Take a Financial Inventory

The first step is to get a benchmark assessment of where your finances are and project what your income and expenses will be so you can put a plan in motion, said Bobbi Rebell, founder of Financial Wellness Strategies and author of “Launching Financial Grownups: Live Your Richest Life by Helping Your (Almost) Adult Kids Be Everyday Money Smart.”

“Don’t forget to calculate retirement savings along with savings and investments that may or may not be labeled as retirement vehicles,” Rebell added. “Note which funds you can access with and without paying taxes and penalties, depending on your age and any other relevant criteria.”

Work With a Financial Advisor To Re-Evaluate Your Retirement Planning

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

https://finance.yahoo.com/news/forced-retire-early-4-steps-120046904.html

6 Causes of Financial Problems and How You Can Solve Them

6 Causes of Financial Problems and How You Can Solve Them

Nicole Spector  

So many Americans are trapped in debt and underfunded for retirement that one has to ask, “What is going on? Why are so many of us in such financial trouble?”

A lot of it isn’t our fault and is beyond our control, but we do need to get to the root of the money problems that we can control. So, it’s important to understand the causes of financial problems. What are they and how do they manifest? More importantly, how can we solve them?

Let’s figure it out.

Financial Illiteracy

Financial literacy is gravely lacking in our society, and it’s causing big trouble in our financial lives.

“Remaining in the dark about certain financial factors will eventually lead you to be more exposed to countless financial problems,” said Clint Proctor, editor-in-chief of Investor Junkie.

It may not be your fault that you lack financial literacy, but it is your responsibility to resolve it. You might want to hire a financial advisor for intensive one-on-one help, but you can also check out a growing list of books and podcasts to learn more.

Having a Negative Mindset

Seeing the world through rose-colored glasses won’t solely guide you to financial success, but the reverse mindset can outright hurt you.

“Behind a lot of common financial issues is a disabling money mindset,” said Kelley Holland, a financial empowerment coach. “This can manifest as negative self-talk, like, ‘I’m hopeless with money’ or ‘I’ll never be able to retire.’ It can also show up as avoidance: Not opening bills that arrive, failing to track spending, or missing payment deadlines.”

There are a few ways to tackle a negative money mindset including to challenge your beliefs and recognize your own strengths and past achievements.

“Consider whether your belief is accurate — or whether you really have strengths or experiences you can draw on to take charge of your finances,” Holland said. “For example, if you have had success adopting a fitness regimen, you can think about the reminders and motivators you drew on to make that happen.”

Getting Bad Advice From So-Called ‘Experts’

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

https://finance.yahoo.com/news/6-causes-financial-problems-solve-200052276.html

6 Tips For Finding The Right Financial Advisor

6 Tips For Finding The Right Financial Advisor

James Royal  Wed, Jun 14, 2023,

If you’re not an expert in money matters, choosing a financial advisor to manage your money life can be a tough decision. It’s almost impossible to know every financial arena well because they can be so specialized. Estate planning is completely different from picking the right investments, for example. Managing a portfolio is different from crafting a monthly budget.  If you’re looking for the basics – someone to invest your money, make smart decisions and build a financial plan – one good option could be a robo-advisor.

A top robo-advisor, such as Betterment or Wealthfront, can help you do all of these things based on your goals and risk tolerance, and charge you a modest fee, too. You can get started in minutes online and it’s excellent for building a portfolio.

However, if you’re looking for more advanced advice, say, for estate planning, you’ll want a human advisor. Here’s what you should look for when choosing a human financial advisor, why you need a fiduciary and the traits you should demand to find the right one for your situation.

What to look for in a financial advisor

Finding the right financial advisor can take a lot of weight off your shoulders, but giving someone access to one of the most sensitive parts of your life can be emotionally challenging.

As you hunt for a financial advisor, you’re actually hiring an expert to work for you. It’s a job interview, so it’s important to pay close attention to all the answers the advisor gives. And watch out for the “advisor” that a financial company provides to you for free. These advisors are usually riddled with conflicts of interest – they’re more salespeople than advisors. That’s why it’s critical that you have an advisor who works only in your best interest.

If you’re looking for an advisor who can truly provide real value to you, it’s important to research a number of potential options, not simply pick the first name that advertises to you.

“Speak to friends and family to see who they would recommend and why,” says Bill Van Sant, managing director at Girard, a wealth management firm in the Philadelphia area.

“Ultimately, you need to feel confident in the advisor’s competency, objectivity, and their responsiveness to your needs,” says Van Sant. “The advisor-client relationship, like many relationships, is built on trust and communication, so doing the proper due diligence in choosing an advisor should provide long-term benefits and peace of mind for all parties.”

Here are six tips to help you choose a trustworthy financial advisor you can rely on.

1. Find a real fiduciary

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

https://finance.yahoo.com/news/choose-financial-advisor-6-tips-203650563.html

5 Ways To Achieve Lifelong Financial Wellness

5 Ways To Achieve Lifelong Financial Wellness

Karen Bennett  Tue, Jun 13, 2023, BankRate

Problems such as lingering high inflation, increased borrowing rates and the threat of a recession have many Americans worried about their finances. In fact, more than half (52 percent) say money has a negative impact on their mental health, according to Bankrate’s financial wellness survey.

Financial wellness is the ability to manage your money in a healthy way, which involves living within your means, setting financial goals and taking the necessary steps to meet them. Financial wellness can enable you to weather things like a job loss or an unplanned large expense. It provides the peace of mind that leads to reduced stress, a healthier mindset and better sleep.

Here we’ll go over why financial wellness is so important and then share some simple ways you can become more financially healthy.

Benefits of practicing financial wellness

Covering unplanned expenses

Money in a savings account can help you cover expenses that can arise suddenly — such as a car repair or an emergency room visit — without having to go into debt. However, only 43 percent of U.S. adults would pay for an unexpected expense from their savings, Bankrate’s latest emergency savings report found. Experts recommend having an emergency fund that can cover at least three months’ worth of living expenses. A high-yield savings account provides easy access to your money, making it a good place for your emergency fund.

Bouncing back after a job loss

When you have a healthy nest egg in a savings account, you’ll be able to weather a sudden job loss or decrease in income more easily. Having several months’ worth of living expenses gives you more freedom to conduct a thorough job search instead of feeling the need to take the first job opportunity that comes your way.

Having a high credit score

Paying your bills on time and not carrying high debt contributes to a good credit score. Those with a high credit score often receive lower interest rates on credit cards, higher credit card limits, lower mortgage interest rates and lower insurance premiums.

Reducing your need to borrow

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

https://finance.yahoo.com/news/5-ways-achieve-lifelong-financial-160610504.html

What Does It Take To Be Rich

What Does It Take To Be Rich

Americans were asked what it takes to be rich. Here's what they said.

Aimee Picchi    Tue, Jun 13, 2023,

Americans have a specific number in mind about how much it takes to be perceived as wealthy, and it's a sizable chunk of change: an average of $2.2 million in assets.

That may seem like a pie-in-the-sky number, especially given that the median net worth of the typical family stood at about $122,000 in 2019, according to the most recent data from the Federal Reserve's Survey of Consumer Finances.

Yet the $2.2 million figure reflects a dip from a recent peak in 2020, when Americans said they'd need $2.6 million to be considered rich, according Charles Schwab. For seven consecutive years, the financial services firm has surveyed people about their views on wealth. This year's survey polled 1,000 Americans between 21 and 75 years old about their views on money.

Important yardstick

Wealth can be an important yardstick because families with greater resources can tap their assets to buy a home, start a business, invest or help their children go to college — all steps that can, in turn, lead to more financial security. But the pandemic may have caused some Americans to reassess their views on money, with the result that some may have lowered their threshold for being rich, said Rob Williams, managing director at the Schwab Center for Financial Research.

"My interpretation is that we are looking at what money will do for us a little bit more in terms of lifestyle rather than dollar amount," Williams said. "We have all been through a lot of stress, and money is important, but increasingly, it's about what money can do for us."

The survey respondents were also more likely to say experiences and relationships made them feel wealthier than actual money. For instance, about 7 in 10 said having a healthy work-life balance made them feel richer than maximizing their earnings.

About half of those surveyed said they already felt wealthy, even though their average net worth is about $560,000, or about one-quarter of what the respondents said marks the threshold for being rich in America. That gap may seem like a "paradox," but people are often aspirational when they think about wealth, Williams noted.

"There is a disconnect, and that is part of being human," he said.

Retirement gap

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

https://finance.yahoo.com/news/americans-were-asked-takes-rich-130100967.html

Why You Should Have More Than One Savings Account Right Now

Why You Should Have More Than One Savings Account Right Now

By MICHAEL BROMBERG Published June 13, 2023

One of the many consequences of the Federal Reserve's aggressive series of interest rate hikes since March 2022 has been a sharp increase in the yield you can earn in your savings deposits. Today, the top high-yield savings accounts pay an annual percentage yield (APY) of 5% or more, while rates on the top money market accounts are as high as 5.25%.

If you currently have a single account that does not match these payouts, it may be time to consider opening a new one or a secondary account—even if that means turning to a new bank or credit union.

Benefits of Multiple Savings Accounts

The current high-rate environment represents an ideal opportunity to reevaluate your savings plan. If you've been stashing your savings deposits in the same account for at least a few years, it's worth checking that the current APY you're earning is competitive with today's top rates.

Opening multiple accounts could be one way to ensure that you're maximizing the potential of your savings by earning the top yield. The flexibility of having more than one account can also help you manage fluctuations in interest rates, which could be important when the Fed eventually pauses its hikes and rates begin to move lower.

In addition, by splitting your savings into more than one account, you boost the amount that can be covered by the Federal Deposit Insurance Corporation (FDIC). The FDIC guarantees your deposits up to $250,000 per individual per institution, so opening several accounts can multiply the deposits that you're entitled to have insured.

Holding your savings in multiple accounts can also be a way to help you stay on track to meet specific goals. For instance, if you're saving for a down payment on a house, you could open an account where you set aside money specifically for that purpose. This could help you avoid the temptation of spending these funds on other things.

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

https://www.investopedia.com/why-have-multiple-savings-accounts-now-7510818?utm_campaign=quote-yahoo&utm_source=yahoo&utm_medium=referral

Top 10 Most Common Financial Mistakes

Top 10 Most Common Financial Mistakes

By EMILY NORRIS

Here we'll take a look at some 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.

1. Excessive and 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 or 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 credit card or auto payment or several extra 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.

2. Never-Ending Payments

Ask yourself if you really need items that keep you paying every month, year after year. Things like cable television, music services, or high-end gym memberships can force you to pay unceasingly but leave you owning nothing. When money is tight, or you just want to save more, creating a leaner lifestyle can go a long way to fattening your savings and cushioning yourself from financial hardship.

3. Living on Borrowed Money

Using credit cards to buy essentials has become somewhat commonplace. But even if an ever-increasing number of consumers are willing to pay double-digit interest rates on gasoline, groceries, and a host of other items that are gone long before the bill is paid in full, it's not wise financial advice to do so. Credit card interest rates make the price of the charged items a great deal more expensive. In some cases, using credit can also mean you'll spend more than you earn.

4. Buying a New Car

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

https://www.investopedia.com/personal-finance/most-common-financial-mistakes/

What Happens to Your Bank Account After Death?

What Happens to Your Bank Account After Death?

Investopedia   Tue, June 13, 2023 By RAE HARTLEY BECK

After you die, several things can happen to your bank account, depending on your account type, how you’ve set up your account before your passing, and whether you’ve set up a will or trust.

Learn the common ways you can set up your account to make things as simple as possible after your passing and what will happen if you don’t set up anything beforehand.

Name Bank Account Beneficiaries

The easiest way to pass your bank account on to your heirs after your passing is to make sure you name payable-on-death (POD) or transfer-on-death (TOD) beneficiaries on your accounts. This ensures that they will not have to go through probate, which can take months. If you want money to go to your survivors in the simplest, quickest, and least stressful way possible, then you want to avoid probate as much as possible.

Once you have named a payable-on-death beneficiary, they will not have direct access to your money until you pass. You retain the ability to change the named payable-on-death beneficiary at any time. This option is frequently referred to as a “poor man’s trust” since it essentially acts as a trust that easily transfers money to the person you designate.

Additionally, you don’t have to set up a costly trust through a lawyer and potentially pay fees anytime you want to make changes.

If you have listed someone as a POD beneficiary on your account, then after your passing, all they will need to do to access the funds in the accounts is show a valid government ID and a copy of your death certificate.

 It is common practice for a bank to freeze an account upon notification of the account holder's death to prevent fraud. Therefore, it's important to have a payable on death (POD) beneficiary designated to ensure your money can be accessed by your loved ones if you pass away.

Have a Will

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

https://www.investopedia.com/what-happens-to-your-bank-account-after-death-5217555?utm_campaign=quote-yahoo&utm_source=yahoo&utm_medium=referral  

What Do Grown Children Really Owe Their Loving Parents?

What Do Grown Children Really Owe Their Loving Parents?

by Patrick A. Coleman Updated: May 23, 2023 Originally Published: Jan. 29, 2019

Children once owed parents labor and a legacy. Today, intergenerational debt is harder (and more emotionally taxing) to calculate.

Wondering what we owe our parents, whether emotionally or financially, is a modern philosophical luxury. Historically, children provided an early return on investment, working family farms, picking up industrial jobs, or, at the minimum, helping to raise other children. But much is given and little is expected from most children raised in 21st-century America.

For the most part, we do not ask kids to marry into alliances or assume titles or even, sadly, take over family businesses. This likely constitutes progress, but it confuses the ledger. Where the calculation of what was owed used to be a fairly simple, pay-it-forward list of social norms, modern arithmetic has become complicated, specifically for grown children, who are expected to live independent lives but also to demonstrate some fealty to their forebears.

With more independence and fewer expectations, what we owe our parents or our children’s grandparents is now calculated in man-hours and long-term investments. Do we owe them a call? Do we owe them Thanksgiving? Do we owe them weekends? Do we owe them end of life care? Do we owe them financial support? Do we owe them grandchildren?

Or do we owe them nothing?

The answers to this endless litany of questions seem to arise ad hoc, influenced by different ethnic, economic, and interpersonal experiences. We all find our own way. But, now, researchers and psychologists seem to have found some consistency in how people arrive at their answers that speak to a broader, emerging understanding of what is owed. Americans seem to believe that parents, by dint of being parents, deserve a relationship.

The question often becomes what kind of relationship. Modern philosophers have attempted to solve the conundrum by classifying four theories of what they call filial obligation: Debt Theory, Friendship Theory, Gratitude Theory and Special Goods Theory.

Debt Theory posits a simple if sometimes emotionally fraught transaction where children provide caring for parents only to the extent that they were cared for as a child. Friendship Theory suggests adult children only owe parents the same amount of care that they would owe a very good and close friend.

Gratitude Theory suggests that children care for parents because they are motivated by gratitude for selfless and benevolent child-rearing. Finally, Special Goods Theory suggests that children are obligated to offer only what they can uniquely offer — love or specific care in most cases — in direct exchange for what the parent has or currently offers (think: inheritance), but unlike in Debt Theory, this transaction is constant and open-ended.

Modern arithmetic has become complicated, specifically for grown children, who are expected to live independent lives but also to demonstrate some fealty to their forebears.

At the heart of all of these theories of familial obligation is some kind of emotional relationship. Whether it’s a feeling of closeness or obligation, this implies that these are not straight economic transactions. Transactions and economic reasoning may underpin parent-child relationships, but logic doesn’t crowd out emotion.

An interesting way to consider how emotional and economic reason can tangle is provided by the empirical economists Gary Becker and Nigel Tomes who created an economic model of wealth transmission based on the idea of capital investment.

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

https://www.fatherly.com/life/what-grown-children-owe-parents-friendship-and-phone-call