How To Rebound From a Bad Financial Year

How To Rebound From a Bad Financial Year in 2020

By Andrew Lisa May 17, 2021

Follow these steps to improve your financial health.

Many Americans toasted the end of 2020 and woke up in 2021 realizing that while the end is in sight, we still have a long way to go to conquer the pandemic and right the economy. You may be one of the millions of Americans who lost their jobs, closed a business, faced unexpected expenses or experienced some other major loss due to COVID-19. The first thing to know is this: You are not alone.

Even more comforting, you still have the power to achieve financial freedom despite the setbacks of last year. With a little effort, you can shore up your budget, reduce your expenses and manage your financial recovery. The following short list of actions you can take right now will help you improve your financial health this year.

Listen To the Experts

One of the easiest steps to take costs nothing but time and could save you a lot of money in the long run: Take advice from people who know what they’re talking about. Personal finance podcasts like “Afford Anything,” “Women & Money,” “Brown Ambition” and “Future Rich” put some of the world’s foremost experts on the subject within your reach — and it costs nothing to listen. Likewise for YouTube channels like “Wealth Hacker” and “BeatTheBush” — and those are just a few.

Do some research, ask your Facebook friends what they like and subscribe to a few shows. Make your time pay by spending it listening to experts who specialize in solving the exact kinds of problems you’re experiencing.

Confront the Reality

It’s natural for people who are behind on their finances to block it all out because it feels too overwhelming to deal with — natural, but unhelpful. Only by staring the beast in the eye can you begin to create a strategy on how to defeat it.

Consider an app like Mint, which unifies your entire financial life under one site. That includes your income, credit cards, subscriptions, bank accounts, loans, investments, retirement accounts and all the rest. You’ll get a clear picture of what’s coming in, what’s going out, which debts are most dire, which expenses are costing you the most and what changes need to be made. Conquering the crucial psychological barrier of confronting the situation is the first step to changing it.

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

https://www.gobankingrates.com/saving-money/budgeting/how-to-rebound-from-a-bad-financial-year-in-2020/

Tips To Keep Your Finances in Order Without Sacrificing What You Want

Tips To Keep Your Finances in Order Without Sacrificing What You Want

Cameron Huddleston   Last updated: Oct. 25, 2021

If you’re trying to live on a budget, you might not feel like you can have the things you want. But you don’t have to resign yourself to living a bare-bones existence if your budget is tight — it’s possible to live on a budget and get some of the stuff you want.

Create a Budget That Prioritizes Needs

If your income is limited, make sure it covers your needs first. “Food, shelter, clothing and utilities are needs,” said Donna Freedman, author of “Your Playbook For Tough Times. “The rest is just a series of wants.”

Creating a budget can help. List the expenses you have to pay to survive. Add them up, and then subtract them from your income. If there’s not much left over, you might have to make some sacrifices. Don’t think of cutting out wants to cover needs as deprivation, though — think of it as a smart use of available funds, Freedman said.

Build an Emergency Fund

If you’re living on a budget, you might not think you can afford to set aside money each month in an emergency fund. But would you be able to afford an unexpected cost without savings?

“The thing that keeps you out of debt is to find room in your budget to grow your savings,” McClary said. You won’t be able to build your savings quickly, but if you can stash away a little each month, you can fall back on your emergency fund rather than go into debt when something unexpected happens.

Tackle Your Debt in Smart Ways

When you’re struggling with debt, you don’t want to just keep paying the minimum balance on what you owe. However, you may not be able to afford much larger payments, so you should look at other smart ways to tackle your debt. A personal loan could consolidate that debt into one set regular monthly payment.

Take Advantage of Tax Breaks

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

https://finance.yahoo.com/news/tips-keep-finances-order-without-220012304.html

How To Set Up An Estate Plan

How To Set Up An Estate Plan

Georgina Tzanetos   Tue, October 26, 2021, 10:07 AM·7 min read

Thinking about estate plans usually evokes an image of a wealthy family summoning their family lawyer to make sure their summer homes pass through to the children while evading taxes. Modern estate planning though is much more about organizing your financial assets to make sure they are protected from new problems, such as outside business ventures or a potential divorce — or even a pandemic. According to a new survey from Edward Jones, a third of Americans say the pandemic has triggered conversations with their family about end-of-life plans.

An estate plan is a contract that is put in place to disperse and dispose of a person’s assets upon their death or selected time of transfer for the assets. This can include wills, trusts, powers of attorney, probates and more. It is up to the individual who created the estate plan to determine who the beneficiaries of their estate will be.

Earl Rubinoff of The Rubinoff Group says to focus on these two important points:

The name of the person you want to take care of and be the guardian of your children.

The name of the person you want to take care of your money. This is essential since you want to appoint a trustee that you can trust and who you think has sound judgment. In addition, you need to name a competent successor trustee, in case your initial trustee is disappointing, gets ill, resigns, or dies.”

An important rule of thumb before walking into an estate planning meeting is to never sit at a table where there is not BOTH a licensed financial advisor and estate planning attorney present. Each of these professionals has a different specialty which is crucial in making an appropriate plan.

A financial advisor or CFP can ensure your assets are put into accounts that are easily transferable to your beneficiaries — or not, depending on what your goals are. For example, let’s say you prefer to liquidate your annuities while you are alive versus transferring them to your children. A financial advisor would then construct the distributions to be both immediate and liquid, going directly into bonds or other low-risk investments and increasing the amount of the distribution.

Had an annuity been set up as they usually are, investments might be put into target funds to last the duration of both your life and then perhaps for some years thereafter. The important thing here is that a target fund with even a 10-year horizon is invested far differently than a fund whose goal is to liquidate in the next 2-3 years.

Michael Fischer, director and wealth advisor at Round Table Wealth Management says if you currently are working with a financial advisor, they should be able to give you a basic understanding of what the role of a will or trust would have in your estate plan.

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

https://finance.yahoo.com/news/set-estate-plan-140713156.html

16 Simple Things That People Say Helped Them Feel Less Worried About Money

16 Simple Things That People Say Helped Them Feel Less Worried About Money

Tue, October 26, 2021, 12:16 PM

Learning to work through the feelings that come up around money can be *quite* the journey. So when a redditor asked the folks at r/PersonalFinance for their tips on dealing with money anxiety, the responses that came in showed a really interesting range of ideas, both financial and psychological.

Here are some of the top comments:

1."Coming from a frugal but financially stable background, what helped me was budgeting and an adequate emergency fund. Once you understand what your life costs, and you have three, six, nine, 12 months or whatever of living expenses saved up, it helps not to worry about the future. If I lose my job, my house, get divorced, whatever, I know I can make it work." —u/meggers26

An emergency fund is pretty much exactly what it sounds like: a savings account you can draw on in case of an unexpected bill or loss of income. Personal finance experts often suggest saving three to six months of your basic living expenses in your e-fund.

If you haven't started saving yet and that sounds like a lot of money, don't be discouraged. Start with smaller goals — can you save $5 a week until you reach $100? How about $200 next? Track your progress along the way, save at least a little bit every week, and keep setting new goals as you reach your old ones.

2."Figure out what is causing the fear and address that. For me, it's worrying that another 2008 is going to happen. So I both have a one-year emergency fund saved and I am working on getting in to management in my company. That way, I'm far less likely to be laid off. I already moved to a section of my company that was not hit very hard by 2008, so that helped a bit."  —u/tkdyo

3."I formed a zero-based budget and created savings categories for enough things that only true emergencies feel like an emergency, and there is a fund for that too. r/YNAB completely changed my relationship with money."   —u/nofilternolimits

FYI, a zero-based budget is one that assigns a "job" to every dollar you bring home during the month, with a goal of spending, saving, or investing every last penny.

Never made a budget before? It doesn't have to be painful or restrictive. Check out what one BuzzFeeder learned when she made her first budget ever with help from a financial planner.

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

https://www.yahoo.com/lifestyle/people-talking-deal-money-anxiety-161602171.html

Nothing Happens Without a Plan

Nothing Happens Without a Plan

200-Level (Intermediate) | Retirement Planning

Updated  October 15, 2021

October is Financial Planning Month. Of course, it’s also Adopt a Shelter Dog Month, Breast Cancer Awareness Month, Domestic Violence Awareness Month, Global Diversity Awareness Month, National Bullying Prevention Month, Estate & Gift Planning Awareness Month, and more.  There’s plenty of awareness, appreciation, and support-worthy causes to recognize and celebrate this month.

But since Financial Planning is one topic highlighted this month, there’s no time like the present to do something vital for you and your future.  Rarely anything happens without a plan. Even your daily to-do list is essentially a plan. If something isn’t on that list, the chances of it getting done go down dramatically.

So your financial security certainly isn’t going to happen without your attention.

But I’m Going To Start Saving For Retirement When…

Boosting your savings rate probably won’t happen because it made your list of New Year’s resolutions. Nor will it be at the top of your “to-do” list when you land a big raise.

The chance of increasing your retirement contributions becoming a priority when the kids are out of daycare or college isn’t as high as you’d like to believe.

Maybe the money you thought you’d save at key times in your life went toward debt payments or inflating your lifestyle. While those aren’t necessarily bad things, there’s a really good chance saving more for retirement won’t happen unless you make a plan to make it happen.

Financial planners know plenty of people in their 60’s who have just gotten started on their financial plans. They’ve saved a bit along the way because they knew they were supposed to. But they never followed a long-term strategy.

As a result, they have not saved enough to support the retirement lifestyle they want to enjoy after leaving work. And in the majority of cases, they’re already mentally ready to leave their jobs.

Not Saving Enough

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

https://womenwhomoney.com/financial-planning-for-retirement/

How and Where To Spend Wisely as the Economy Recovers From the Pandemic

How and Where To Spend Wisely as the Economy Recovers From the Pandemic

Rob Poindexter   Thu, October 21, 2021

The pandemic has taken a massive toll on the economy, which has negatively affected individuals and small businesses alike.  As the economy is recovering from the setback, you might be wondering what, why, and how to make wise decisions when it comes to spending on necessities.

Here’s how you can spend or splurge wisely during the economy’s recovery period.

Know the Difference Between Your Wants and Needs

Distinguishing the difference between wants and needs can be difficult for many people, but if you can successfully prioritize your needs over you wants, you may be able to pay off debt more quickly and efficiently.

While splurging a little can be no problem, buying an expensive new watch or designer shoes can wait. Always make sure that your necessities are paid for, and only start thinking of spending on your wants after you've paid your bills and put money into savings.  When in doubt, don't make impulsive purchases. Instead, think about whether that money can be put to better use for your future.

Keep Track of Your Spending

Whether you’re a beginner or an expert at keeping your personal finances in check, it's always a good idea to keep track of your spending. Whether it’s a pack of gum or a bottle of water, knowing how much you spend daily is the key to successful financial planning. You'll be surprised at how quickly small and unnoticeable expenses can build up -- especially if you use a credit card.

To know and understand your financial needs, first, you need to take time and observe your weekly and monthly spending habits. Though it's tough, you need to go through your monthly credit card statements and view the charges. It may be hard at first, but taking some time to track your finances regularly will be a paving stone to your financial success.

Try using cash when running day-to-day errands. You will be more cautious of spending when you physically see your money being spent.

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

https://finance.yahoo.com/news/where-spend-wisely-economy-recovers-134825783.html

5 Signs You’re Saving Too Much

5 Signs You’re Saving Too Much

Cynthia Measom   Thu, October 21, 2021

For many people, saving too little is the problem. However, for others, it’s the exact opposite because they are saving too much. Too much of anything can be dangerous, including stashing excess cash in a savings account or under a mattress.

But how do know if you’re putting too much cash toward savings? To help, consider these five signs that indicate your savings balance is out of control and learn how you can start being smarter with your money.

Why Is It Bad To Have Too Much Excess Cash?

“Cash is king except when rates earned on cash are low and the cost of goods you pay for are rising,” said Michele Lee Fine, RICP, founder and CEO of Cornerstone Wealth Advisory. “The world around you is getting more expensive, but your saved capital remains flat.

Being in ‘too much excess cash’ has a cost called opportunity cost. You may be wealthy today sitting on a lot of cash, but as your cash balances remain level, they are not outpacing inflation and actually losing value. Inflation is a stealth tax, and if your savings don’t earn more than the inflation rate, your savings and its purchasing power is actually diminishing.”

Chris Kampitsis, from The SKG Team at Barnum Financial Group, agrees:

“If you keep all of your nest egg in conservative cash — it is near certain that it will lose some spending power every single year,” he said. “Think of the cost of a mid-sized sedan now versus thirty years ago. If you kept that cash in the bank the last thirty years, would you still be able to afford the same car?”

But people who are hoarding cash also need to think about why they feel the need to sustain this behavior. “What is this really about?” said Lisa M. Dieter, CFP(r), founder and wealth advisor, EmberHouse. “Do you need the cash to feel secure? Do you feel unworthy of bigger-ticket expenditures? What is in your money history that could explain the need for so much cash?”

Now that you know that having too much excess cash can be to your financial detriment, here are five signs you are saving too much.

You’ve Become Too Frugal

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

https://finance.yahoo.com/news/5-signs-saving-too-much-201154479.html

13 Simple Ideas To Stretch Your Money And Beat High Inflation

13 Simple Ideas To Stretch Your Money And Beat High Inflation

Ethan Rotberg  Tue, October 19, 2021

The pandemic has sparked shortages of goods and workers that have pushed inflation to its highest levels in decades. But you've already seen what that looks like, if you recently bought groceries, gassed up your car or went shopping for furniture or a new TV.  Prices are surging, and don't look for relief anytime soon. Various forecasts anticipate that stiff inflation will hang around into the new year.

One strategy for fighting back against rising prices is to take advantage of some simple ways to make and save more money in your daily life. 

Here are 13 ideas on how to effectively give yourself a raise — and kick inflation to the curb.

1. Cut The Cost Of Your Debt

High-interest debt from credit cards and personal loans can be a major drain on your bank balance, especially if you’re making only the minimum payments each month.

To break free from your debt ASAP, you might take out a debt consolidation loan. You’ll trade in all of your current balances — on credit cards, loans, everything — for a single monthly payment at a lower interest rate.

You can borrow money with no collateral at rates as low as 5.95%. Depending on how much interest you’re currently paying on your debts, consolidating them could save you thousands of dollars and help you become debt-free years sooner.

2. Hunt Down Your Long-Lost Money

You do know where all your money is, right?

Actually, people move on and forget all about money in old accounts all the time. It's so common that Americans currently have more than $40 billion in unclaimed funds waiting for them.

Is any of that yours? Search MissingMoney.com, which will show if you left any money in an old checking or savings account, or if you’re entitled to unclaimed life insurance policies from relatives who have passed away. (You'll want to be much more careful when you buy your own life insurance policy.)

You also should check with the IRS to see if there are any tax refunds you're missing. You can amend your previous tax returns for up to three years if you were eligible for a refund but neglected to claim it.

3. Refinance To A Cheaper Student Loan

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

https://finance.yahoo.com/news/13-simple-ideas-stretch-money-181500161.html

The Biggest Money Mistake You’re Probably Making

Finance Pro Rachel Cruze Shares the Biggest Money Mistake You’re Probably Making

Rob Poindexter   Mon, October 18, 2021, 3:00 PM·3 min read

Rachel Cruze is a personal finance expert and the author of “Know Yourself, Know Your Money.” She is also the host of “The Rachel Cruze Show,” where she shares practical tips to save more money, get out of debt quickly and make progress toward your financial goals.

Recognized by GOBankingRates as one of Money’s Most Influential, here she shares why she believes having a budget is the key to financial freedom, why taking on debt is the biggest money mistake you can make and how to get out of debt ASAP.

What is the best thing you did to improve your own financial wellness?

A budget is one of the best things I’ve ever done with my money, and now my husband and I budget together every month. A budget is simply a plan for your money — and you need to have a plan for your money! I used to think a budget limited my freedom when it came to my money, but it gives you freedom because it gives you permission to spend.

I recommend a zero-based budget. This is where your income minus expenses equal zero. You’re telling every single dollar where to go. If 2020 has taught us anything, it’s that we need to be intentional with every dollar we have coming in. A budget will also help you and your spouse get on the same page with your finances. It forces you to talk about how you’re spending your money, your financial goals and your dreams. Money is the tool that will help you achieve those dreams, and the budget is how you steer the ship. I love using the free budgeting app EveryDollar.

What are some simple strategies or tools anyone can use to make sure they are allocating their money smartly?

A lot of people get overwhelmed with their money because they’re trying to do too many things at once. You’re trying to get out of debt, save, invest… the list goes on! Take one thing at a time. I recommend following Dave Ramsey’s Seven Baby Steps. If you have debt, your first priority is getting out of debt.

Start by building a starter emergency fund of $1,000. This gives you a safety net as you’re working your way out of debt. Then, work your way out of debt using the debt snowball [method]. List all your debts smallest to largest, regardless of interest rate. Make minimum payments on everything, except for the smallest debt.

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

https://finance.yahoo.com/news/finance-pro-rachel-cruze-shares-190003244.html

Where Do Millionaires Keep Their Money?

Where Do Millionaires Keep Their Money?

Rosemary Carlson   Mon, October 18, 2021

Where do millionaires keep their money? High net worth individuals put money into different classifications of financial and real assets, including stocks, mutual funds, retirement accounts and real estate. Most of the 20.27 million millionaires in the U.S. did not inherit their money; only about 20% inherited their money.

More than two-thirds of all millionaires are entrepreneurs. Here are some of the places the genuinely rich keep their money.  Whether you’re a millionaire or not, a financial advisor can help you take significant steps toward achieving your goals.

Cash and Cash Equivalents

Many, and perhaps most, millionaires are frugal. If they spent their money, they would not have any to increase wealth. They spend on necessities and some luxuries, but they save and expect their entire families to do the same. Many millionaires keep a lot of their money in cash or highly liquid cash equivalents.

They establish an emergency account before ever starting to invest. Millionaires bank differently than the rest of us. Any bank accounts they have are handled by a private banker who probably also manages their wealth. There is no standing in line at the teller’s window.

Studies indicate that millionaires may have, on average, as much as 25% of their money in cash. This is to offset any market downturns and to have cash available as insurance for their portfolio. Cash equivalents, financial instruments that are almost as liquid as cash. are popular investments for millionaires. Examples of cash equivalents are money market mutual funds, certificates of deposit, commercial paper and Treasury bills.

Some millionaires keep their cash in Treasury bills that they keep rolling over and reinvesting. They liquidate them when they need the cash. Treasury bills are short-term notes issued by the U.S government to raise money. Treasury bills are usually purchased at a discount. When you sell them, the difference between the face value and selling price is your profit. Warren Buffett, CEO of Berkshire Hathaway, has a portfolio full of money market accounts and Treasury bills.

Millionaires also have zero-balance accounts with private banks. They leave their money in cash and cash equivalents and they write checks on their zero-balance account. At the end of the business day, the private bank, as custodian of their various accounts, sells off enough liquid assets to settle up for that day. Millionaires don’t worry about FDIC insurance. Their money is held in their name and not the name of the custodial private bank.

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

https://finance.yahoo.com/news/where-millionaires-keep-money-201959651.html

25 Secrets Elon Musk and Every Other Rich Person Knows

25 Secrets Elon Musk and Every Other Rich Person Knows

Gabrielle Olya    Sun, October 17,

If it seems like the rich know something about money that the rest of us don't, it's probably because they do. There must be some reason the richest 1% of people now hold more than 40% of the world's wealth, according to the Credit Suisse Global Wealth Report. Maybe the rich have certain secrets to accumulating wealth -- but that doesn't mean what they know has to remain a mystery. Learn about strategies that you can use so you can build your own wealth, too.

Spending Must Align With Goals

One of the keys to being rich is having goals, said Michael Kay, president of Financial Life Focus and author of "The Feel Rich Project."

"(The rich) know what they care about," he said. "Maybe it's passing wealth to another generation, maybe it's attaining a particular lifestyle. They are mindful of not wasting resources on things that have no value."

According to Kay, the wealthy tend to spend money only on things they care about. The rest of us can learn from this by setting our own goals and then monitoring our spending to see if it aligns with those goals.

Don’t Waste Money To Impress Others

Most rich people don't spend their time and money trying to impress others, Kay said. "They are not in a race. They know they have made it, so their attention is not on what others think." In fact, many wealthy individuals wouldn't have become rich if they had spent their hard-earned money buying things to keep up with others, he added.

Authors Thomas Stanley and William Danko said much the same thing in their 1996 best-seller, "The Millionaire Next Door: The Surprising Secrets of America's Wealthy," writing that a couple of key secrets of the country's richest people are living below their means and rejecting big-spending lifestyles.

Spending money to appear rich before you actually are rich is a surefire way to sabotage your wealth-building goals. So, forget about the Joneses and focus on what matters: accumulating wealth in the coming years.

Have Plenty of Liquidity

The rich make sure they have sufficient liquidity, or cash, to cover their short-term needs. They maintain an emergency fund so "they don't have to disrupt their life for an unexpected occurrence," Kay said.

The fact that rich people have money set aside for a rainy day isn't solely a function of their wealth. They have cash reserves because they are disciplined enough to save.

Everyone should aim to build an emergency fund with enough cash to cover six to nine months worth of expenses, Kay said. However, you don't have to set that much aside all at once. You just need to be working toward that goal with every paycheck. With that in mind, arrange to have a set amount automatically transferred from your checking account to savings each month.

"Like anything else, it's a goal," Kay said. "It only makes you a failure if you're not working on it."

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

https://finance.yahoo.com/news/25-secrets-elon-musk-every-230154184.html