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| Paying Yourself First |
Do your financial goals seem out of reach?
The key is to pay yourself first!
Set aside a portion of your paycheck before you receive it. You don't miss what you can't see! Take advantage of automatic payroll deduction plans such as your company's 401k or other similar retirement plans.
If you receive a raise or unexpected windfall, pretend you didn't and save the money instead.
Save for a purpose. Long term goals keep you financially organized. Perhaps the goal is a home or a child's education. Then you've got a reason to put the money away.
How do you do that? Lighten up on "little luxuries". A daily stop for gourmet coffee can add up to $1,000 over a year's time. Save your spare pocket change. It adds up too! And after you repay a loan, keep making payments to your savings account instead of the bank.
You can learn more about managing money by taking a free money school class.
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| Driving Down Debt |
Most of us spend a day's pay per week or more repaying loans and credit cards. Too much debt keeps our dreams out of reach: a home . . . A college education . . . A comfortable retirement.
Here are some tips for smarter borrowing:
1. Borrow as little as possible. Make the largest down payment you can afford.
2. Shop for credit just like other purchases. Look for the best interest rates, annual fees, service fees, and grace periods.
3. Consider a home equity loan to pay off loans with higher interest rates.
4. Try adding the monthly payment from a repaid debt to a remaining one, starting with the highest interest-rate debt first.
5. Separate borrowing decisions from buying decisions. Financing a purchase through a retailer can be more expensive than a bank loan.
6. Pay off the credit card each month or at least pay more than the minimum monthly payment.
Don't let debt keep your dreams on hold.
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| Saving for College |
By the time today's toddler is ready for college, the cost of a four-year public education will be more than $100,000. Double that amount for a private school.
Got sticker shock? There are several college savings tools available today.
State-sponsored savings plans such as Delaware's College Investment Plan allow your contributions to a portfolio of mutual to grow tax-free. When they are withdrawn for educational purposes, they are taxed at the student's rate.
To learn more about Delaware's plan, call fidelity investments at 1-800-544-1655 or www.fidelity.com/delaware
Other options are investing in a Traditional or Education IRA, using pre-tax money borrowed from your 401k or similar plan or investing in stocks or mutual funds on a child's behalf under the uniform gift to minors act.
Investigate the pros and cons of each saving strategy before you invest. But don't expect financial aid to fill the gap.
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| Choosing a Financial Advisor |
There are good reasons to seek help from a financial planner. Maybe you're confused by all of the options when it comes to planning for retirement, saving for your children's education or reaching another financial goal.
Asking questions up front can ensure that you and your needs are matched with the right financial professional. Questions such as:
1. Are they licensed? As what and for how long? There are real differences between certified financial planners, broker-dealers, and other professionals.
2. What services do they offer and do they sell financial products for a specific company?
3. How are they compensated? On a fee basis? By commission? As a percentage of assets?
4. What is their approach and investment style?
5. What services do they offer? Can they sell you mutual funds, stocks and bonds as well as insurance products?
6. Will they give you references?
Your financial future depends on the answers to these questions.
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| Women and Investing |
Women can be dangerously unprepared for retirement for several reasons: first, they tend to outlive men. The average woman is widowed at 56.
Women drop in and out of the workforce to have children and still tend to earn less than men. Only one in five women receives a corporate pension.
Get a grip on how much you really need to achieve a comfortable retirement. The shock often jump-starts women and men to start saving more aggressively.
Investigate what your employer offers in the way of a 401k or other tax-deferred saving plan. If one isn't offered, start an IRA. With an automatic deduction, you're less likely to spend that money on something else.
Educate yourself. Take a free Money School class. There are scores of magazines, books and web sites geared toward women and money . . . Such as oxygen's " ka-ching.com."
Empower yourself to achieve financial well-being for you and your family.
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| Tax-Deferred Savings |
We know that savings accounts and investments earn interest. But how do you make your money grow even faster? By taking advantage of tax-deferred savings plans where you work.
If you work for a business, that plan is usually a 401k. If you're in the education or non-profit world, it's a 403b. If you work for government, it's a 457.
It's a great deal: your contribution lowers your gross income, so your tax bill is lower.
If you were investing post-tax, it would cost you more to invest the same amount, so your investing power increases.
And your savings grow faster because you don't have to pay taxes on any earnings until you retire.
These plans usually offer professionally managed stock and bond mutual funds. So you don't have to be a financial whiz to reap the long-term rewards of investing in the market.
Often an employer will match part or all of your contribution, so it's an offer you can't afford to refuse.
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| Investing Basics |
If you are not an investor, you may think the stock market is too scary and complicated, with wild swings up and down.
But history tells us otherwise. The average annual return of stocks since 1926 has been almost 12 percent . . . More than twice the return for long-term bonds over the same period.
You definitely want returns that outpace the Rate of inflation, which has averaged about 4 percent a year.
This fact doesn't mean you should put all your money in one risky internet stock. But it does mean you should consider regular investments in stock mutual funds.
Such a portfolio contains the stock of several or even hundreds of different companies . . . Spreading out the risk if one company has a bad spell.
If you invest a fixed amount of money regularly in a company savings plan or IRA, you can even benefit when the market goes down and the price of your investment drops. Because you are able to buy more shares for your money.
Get in . . . Stay in . . . And you'll win.
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| Raising Financially Responsible Kids |
How do you raise children who are financially responsible?
Treat your whole world as your classroom, whether you're paying your bills . . . Leaving a tip in a restaurant . . . Or standing at the ATM.
Your child learns about money by watching you. If you are an impulse shopper, your child will be an impulse shopper.
As parents, you know the importance of "the three R's" - reading, 'riting and 'rithmetic. But experts who specialize in money matters for children generally agree on the need to teach them "the three S's:"
First, saving. Help them put some of their money aside for the future. Give them shares of stock in a company that caters to young investors.
Second, spending wisely. Show them how to live within their means and be educated consumers. Use gift certificates to teach them financial decision-making.
And finally, sharing. Show them how to be charitable.
You can help your children be smart with their money. There are lots of ideas on web sites such as www.kidsbank.com.
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| Estate Planning: 9 Tough Questions |
Estate planning is one of the most important parts of your financial plan. Have you decided how your loved ones will be cared for after you're gone?
Here are nine important questions you should ask yourself when planning your estate:
1. Is your will and/or trust up to date?
2. Do you have any hidden assets or liabilities that you should make someone aware of?
3. Does anyone know where you keep your important financial documents and the key to your safe-deposit box?
4. Have you named someone to handle your affairs if you become incapacitated?
5. Do you have a living will and a medical power of attorney?
6. Do you have sufficient medical insurance?
7. Do you have or need long-term care insurance?
8. Have you made your funeral arrangements?
9. Will your estate owe taxes, and will money be available to pay them?
Answer these questions, and you will save your loved ones additional heartache.
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| Financial Tools on the Web |
What's the best way to learn how to get out of debt . . . Start investing . . . Or save for retirement?
While books and magazines on these subjects abound, the Internet can be a very user-friendly and interactive way to learn.
If you visit quicken-dot-com or the sites of major investment companies such as Fidelity and Vanguard, you will find an assortment of easy-to-use tools. They can help you calculate how much to save for your kids' college . . . Determine the right mix of investments for you . . . And figure out how much you will need for retirement.
Plug in different amounts, rates of return and time horizons, and you can watch how money grows.
These sites can introduce you to mutual funds, Retirement savings plans and other money concepts. They can help you start to develop a financial plan.
There are sites just for women, such as ka-ching.com . . . And for African Americans, such as the money section of BET.com.
While there may be no such thing in finance as a free lunch, there is plenty of free information.
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