Financial Tips for Recent College Grads

If you have recently graduated from college, then there is a good chance that you are probably feeling one of two ways. If you’re like most people, then you may be worried about your future and how you are going to pay off any loans or other debts that you may have incurred in the pursuit of a college education. Or, if you’re a more optimistic person, you may be excited about the future. No matter how you may be feeling, however, the fact remains that, if you’re like most recent college grads, you have a long road ahead of you, and you need to be prepared to tackle it well, financially speaking. Fortunately, though, you can accomplish this goal by following a few simple tips.  

Have a Plan

The first and most important tip to follow, regardless of how you are feeling, is to have a financial “plan of action” ready to go. If you don’t have goals in place for how you are going to pay down debt and/or get ready for the future, then you’re leaving everything up to chance, and that’s definitely not a smart way to enter the rest of your life.

So, instead of “playing it by ear,” take steps now to make reasonable financial goals for yourself, both in the short-term and the long-term. And, don’t stop there! Come up with a specific action plan of how you plan to reach those goals. A financial advisor can be a great help to you when it comes to making realistic plans and for planning for any unexpected events that could potentially send all your good planning off the rails!

Save Away!

When you are just getting started in life, there are few things more important than saving money. After all, if any of those unexpected events mentioned above happen, you need to have something that you can fall back on. So, take steps to start saving a reasonable amount each month; a financial advisor can help you to get set up on a doable savings plan no matter what your current situation. If you can, you may even want to get your savings automatically withdrawn from your account each month so that saving just happens, without you having to think about it.

The bottom line is that if you can follow these simple tips and seek out the help of a qualified financial adviser, there is nothing that can stop your financial future from being bright!

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The Sweetness of Charitable Giving

Donating to charity is always a nice thing to do. After all, you’ve worked hard to get to where you are, and it feels good to be in a position where you’re able to give a little something back. Before you write that check or hand over that stack of bills, however, you need to speak with your financial advisor.

Financial advisors are knowledgeable about the smart ways to give financially, while still protecting yourself and your investments and while benefitting in the process. Just a sampling of the things your financial advisor can explain to you include:

1. The Importance of Giving the Right Way: Donating by credit card and cash, while common, are the least tax-efficient giving options!
2. How to Avoid Capital Gains Taxes: Capital gains taxes can typically be avoided when publicly traded securities are donated after they have been held for a year.
3. Asset Identification: Your advisor can help you to find unneeded assets that make great donations…and that net you something in the process.
4. Smart Company Stock Donation: A knowledgeable financial advisor can also help you with donating privately held company stock when you sell your business, enabling you to give back and avoid capital gains taxes in the process.
5. Set Up a Giving Plan: If “giving back” is truly important to you, your advisor can set you up on a livable plan so that you can give both now and in retirement.
6. Manage Giving Amounts: Your advisor can look at your finances and determine if you’re giving too much, if you could be giving more, and/or help you find your “ideal donation” amount.
7. Easier Donating: Financial professionals can also explain different options for simpler giving, such as donor-advised funds.
8. Determining Charity Legitimacy: Finally, financial advisors can help you to make sure the charity you’re giving to is legitimate and worthwhile; sadly, there are a lot of scams out there.

As you can see, giving is a little more complex than it might seem, but with the right financial advisor, you can make giving a wonderful, positive experience that will benefit both you and the organizations or persons you donate to. So, before you donate anything, sit down and have a conversation with your advisor!

Lets Stop Your Worst Money Habits

No one is perfect all the time. We all waste money here and there or choose less-than-ideal savings or investment strategies from time to time. Bad habits, when engaged in regularly, can result in a ruined credit score, big-time debt, and stress; some habits are even worse about causing these consequences than others. And, while you should certainly try to avoid ALL bad habits, the very worst ones, which we’ll discuss below, are major no-nos.  

Bad Habit #1: Being Reward-Obsessed

Many credit cards these days offer rewards for each purchase you make. Unfortunately, however, some people take the whole “reward” thing too far and will spend more than they planned just to earn rewards or points. Obviously, this can cause some serious budgeting problems in the long-run and, even if your rewards come with savings, can lead to a greater amount of debt than you bargained for. Instead of letting yourself get obsessed with rewards and into a spending frenzy, try using your card just for regular, monthly payments. T his way, you’ll spend the same amount each month and also be guaranteed to still rack up rewards. You’ll even have the benefit of knowing how many rewards you can expect.

Bad Habit #2: Debt Cycling

One bad habit that many people are guilty of is regularly cycling their debt. These people never really do anything to actually get rid of their debt for good. Instead, they just consolidate it, transfer it to new cards, or engage in other “debt swapping” methods. If this sounds like you, break the cycle and the cycling by developing a livable budget and then sticking to it. Make sure that, within this budget, you make some room to pay off your debt a little at a time.

Bad Habit #3: Ignoring Your Debt

A lot of people get overwhelmed by their debt and all the money they owe. And, instead of actually making good efforts to pay off those debts, they just try to put them out of their minds. Like all problems in life, ignoring your debt won’t make it go away. Suck it up and make an effort to pay something on your bills each time they come due. Even if you can’t manage the full amount, just paying a little each time will pay off majorly in the long run.

So there you have it- three big, bad habits to avoid. Steer clear of these and other traps, and you should see a huge improvement in your financial situation.

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Why You Need a Financial Advisor

If you are someone who is looking to maximize his wealth and minimize his debts, then you absolutely need a financial advisor. While these professionals often get a bad rep thanks to a few bad eggs and while it is true that some of them are not as trustworthy as they might present themselves to be, there are a lot of good financial advisors out there. And, believe it or not, you could actually benefit from their services in a variety of ways.

No Knee-Jerk Reactions

Undoubtedly, your goal is to create long-term wealth for yourself and your family. It’s important for you to understand, however, that long-term wealth is almost always the result of concentrated, well-planned decisions. It is not the result of knee-jerk reactions and panicking.

When you try to navigate your wealth yourself, it’s only natural that you would “freak out” from time to time. Whether you make the decision to sell at the wrong time, withdraw your investments in a moment of panic, or anything in between, these aren’t usually good decisions. A skilled financial advisor can help you to see past the panic, to make decisions that will benefit you in the long-run- not just immediately, and show you how to get through the present crisis without ruining your future.

Think Through Decisions  

When it comes to financial matters, you will often be called upon to make some pretty tough decisions. Should you give up on that stock when it goes through a bad period, or should you keep pushing through? Should you change up your retirement planning strategy or stick with what you’ve got?

Whatever the decision may be, the chances are that the stakes are high. Do you, as a non-expert, really want to make all these big choices? It’s so much better, any time you’re facing a monetary decision that could have a long-term impact on your life, to have professional advice working for you.

A good financial advisor is like a friend (with a lot of relevant knowledge) you can call on in your time of need. Without one, you’re just leaning on your own faulty understanding of financial matters and taking major risks every time you make a judgment call.

Have Someone In-the-Know

Death isn’t something that anyone likes to think about. Unfortunately, it happens to all of us, sooner or later. Ideally, as depressing as it may sound, you will have planned for your own demise with a will. Whether you have or have not taken that step when the time comes, it just plain makes sense to have someone on your side who is familiar with your finances and your wishes.

Having a financial advisor who understands your assets and what you want to do with them can give you great peace of mind in life and in death, and that, no matter how you slice it, is invaluable. 

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Getting Real About Retirement

A lot of people are curious about when they will actually retire. They want to know a number, an age that they can look forward to. Unfortunately, however, there’s no one “number” that’s accurate for everyone. When a person can retire is highly dependent upon how much money he or she has saved and the level of comfort and income the person requires to live out his older years. Plus, you also

have to keep in mind that many people are choosing to work longer, believing that it helps them to stay healthy, active, and engaged in their lives.

With that said, the “standard” age for retirement is around 65. However, as a result of the recession and a trend toward poor financial planning, average Americans have been retiring well beyond that age in recent years. In fact, a survey conducted by SunAmerica Financial Group reveals that the average person in today’s world won’t retire until the age of 69!

While some people hate the thought of working through most of their 60s, others embrace the idea. No matter how you feel about it, know that waiting does have some benefits. For one, it allows you to have a longer “planning period” for your retirement, which can be useful if you need to catch up in terms of savings. Those who retire later in life also have more years to contribute to their retirement accounts. Waiting can increase social security benefits as well.

Even if you’re planning on being one of those “late life” retirees, however, that doesn’t mean you can slack off on financial planning. To begin with, even though you may think you’ll retire later in life, that’s not always within your control. You could lose your job and have a hard time finding a new one due to your age, or you could fall ill or have to care for a sick spouse.  With so many uncertainties and possibilities, you can’t really just take your chances. You have to save and invest adequately so that, no matter what happens, you’ll be able to make it.

By all means, set a goal for when you want to retire, but don’t build your savings and investment plan solely based on the age at which you’ll retire. A good financial advisor can help you to come up with a foolproof retirement plan that works for you and that will continue to work for you, no matter what life throws your way.

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Easy Tips for Increased Wealth

More money. It’s something all of us want but that few of us know how to get. While there are all kinds of strategies out there for keeping more money in your pocket, you really don’t have to do anything big and major in order to see an increase in your funds. Just doing a few simple things can increase your wealth without majorly altering your lifestyle.   

Buy Stocks

A lot of people think that the stock market and how it works is beyond them, that it’s something only rich or very financially knowledgeable people bother with, but that’s not true at all. Stocks are something that all people should be investing in since they often warrant big returns. You don’t have to make huge investments in the stock market either; simply putting $5 or $10 into a major company or another business that performs well is enough to get you started. For best results, seek to invest in practically foolproof stocks, like stocks offered by big name companies. And, if you’re still feeling a little wary about navigating the stock market yourself, find a qualified financial or investment advisor and ask for some pointers and advice.

Cut Out Credit Card Debt

Constantly trying to “catch up” on credit card payments is one of the easiest ways to find yourself constantly broke. If you’ve gotten in over your head with credit card debt, it’s time to take action. Whether you talk to your credit card provider to work out a new plan, take out a loan to pay off your debt, or just pay as much as you can, a little at a time, the sooner you banish big credit card debt, the sooner you’ll notice increased cash flow.

Take Advantage of Insurance Discounts

Did you know that most insurance companies offer a wide range of discounts for those who qualify? Car insurance companies, for example, often hand over discounts for things like having more than one type of insurance through the same provider, not getting into any accidents within a set time period, or even pursuing an education and making good grades. Unfortunately, a lot of people miss out on insurance discounts because they don’t know about them. If you could stand to save on insurance (and who couldn’t?), talk to your insurance provider about discount options and make sure you take advantage of the ones for which you qualify.

Obviously, there are a lot of different ways to bring more money into your life. Take advantage of these options and keep your eyes peeled for other ways to save more and spend less. You’d be surprised at how many wonderful options there are for increasing your wealth.

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Dealing with Financial Changes

Everyone goes through changes in life, and the fact of the matter is that some of those changes- like getting married or having a child- can have an impact on a person’s finances. Since there’s no way to keep change from happening, the best thing you can do is to be aware of life events that are likely to bring about financial changes and then to handle those changes in a responsible and well-thought out way. Having a financial advisor can really help during those times of transition, as can following a

few simple tips.

Get Your Priorities Straight

When your life and finances change, your priorities often do too. When you have a child, for example, saving for that vacation may become a lot less important than saving for your child’s future college fund. It’s natural and healthy for priorities to change. Just make sure you sit down and figure out how your finances are impacted by changing priorities and how you can adapt your finances to suit those priorities without neglecting any one financial area.

The “balancing act” of figuring out how to pay attention to all financial goals and responsibilities while clearly deciding what’s most important isn’t easy. It’s for that reason that having a financial advisor can be so very helpful.

Adjust Your Budget

When your financial needs and priorities change, your saving and spending habits should too. Anytime you go through a major change in your life, it’s time to sit down and reassess your budget. If you’re suddenly saving up to buy a home, for example, it might be time to cut off the cable for awhile or stop going out to dinner so often. The sooner you realize that your budget should change according to your needs and the more willing you are to make those changes, the easier it will be to reach your goals.

Set Small Goals

Finally, it’s important to realize that when you set too-large goals, you set yourself up for failure. Your goal might be to buy a new car by the end of the year, for example, but that’s a pretty daunting goal and doesn’t give any indication of how you might reach it. By setting smaller goals, such as saving a few hundred dollars toward the car each month, you set yourself up for success. In fact, that’s what all of these tips will do- set you up for success no matter what changes life happens to throw your way.

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Changes for 2015

Tax law doesn’t always stay the same from one year to the next. So, as can be expected, there are a few changes happening in 2015. Many of these changes can mean good things for you providing you are aware of them, understand if and how they relate to you, and do what you need to do so that these changes go over smoothly.   

The myRA

A brand new type of retirement fund is coming in 2015. It’s known as the myRA and comes with one pretty amazing feature: it will never lose its value! People can pay into their myRA accounts, which can be opened for as little as $25, by automatic payroll deductions. The best part is that myRA funds are contingent upon a person’s job, so even if you end up starting a new job, you can still keep your myRA. However, there are income limitations, with those in higher income brackets typically not being eligible to open a myRA. Check with your financial advisor to see if you are eligible to open a myRA and if doing so would be beneficial for you.

A Spike in Contribution Limits

Have you ever wished that you could contribute more money to your retirement account? Well, guess what- now you can. Contribution limits have been significantly raised for several different types of retirement accounts, including:

l  401(k)s

l  457 plans

l  Thrift Savings plans

Some restrictions do apply, however, so speak with your financial advisor about what these higher contribution limits might mean for you. Also, bear in mind that IRA contribution limits are not affected by these new regulations though IRA income limits are rising.

In terms of changes among other types of retirement accounts, Roth IRAs will have higher income cut-offs in the coming year.

Saver’s Credit Threshold Increased

Since their inception, saver’s credits of up to $2000 have been offered for those who meet certain income restrictions and who contribute to an IRA or 401(k). The good news is that some people who previously made too much to qualify for a saver’s credit may find themselves eligible this year, since the credit threshold has increased by up to $1000. 

It’s easy to see that there are lots of positive changes on the horizon in 2015; make sure you make the most of them!

Your Guide to Getting Retirement Ready

According to the United States Department of Labor, fewer than half of all Americans are aware of how much they’ll need for retirement. When you consider that the average American spends as much as 20 years in retirement, that’s pretty scary.

Obviously, that’s where you need to start- by figuring out how much you will need to retire. Take your current living expenses and add a little extra for inflation and possible new expenses, such as medications. While you can come up with a fairly good “guesstimate” on your own, a retirement planning professional can help you with calculating a more accurate figure of how much you’d need for a comfortable retirement.

Either way, you’ll likely be surprised at the figure facing you, and that should provide plenty of motivation for you to spring into action and start saving. That- saving money- is really the first step toward preparing for retirement.

Non-Stagnant Saving

If you’re smart with your money, then you’re already putting a small percentage of your paycheck in your savings account each month. Word to the wise- if you’re not doing that, you should start!

The key, however, is not to get stagnant with your savings. Strive to increase the amount you save each month, even if it’s just by a dollar or two. Also, make sure you increase your savings amount each time you get a pay raise or come into extra money. Again, a retirement savings professional can be a vital tool for determining how much you should be saving and the progress you’re making toward your retirement savings goals.

Get on a Budget

The number of people who spend without a plan in mind is staggering. If you’re just spending your money as you wish and hoping against hope that everything evens out, then you’re not approaching spending correctly.

Work with a financial planner to develop a budget for each month. The budget should include how much you have to spend on bills, how much you have for “fun” purchases, and how much you are putting into savings accounts and other “future funds.” Then, stick to that budget!

The bottom line is that you have to see the big picture. When it comes to spending money, you can’t just approach a month as a month. It’s more than that- it’s a period of time during which you are inadvertently making decisions about your future. If you spend frivolously now, you’ll pay for it later, but if you budget your money and keep the big picture in mind, you’ll eventually reap the benefits.

Invest

While budgeting your money and making sure you put funds in your savings account each month is a good start, it’s simply not enough. You also need to be utilizing some type of investment strategy. Whether it’s a 401(k), a Roth IRA, or anything in between, you should be building some type of investment portfolio.

For best results, work with your financial advisor to find investment options that have low fees, taxes, and penalties. After all, you want your investments to work for, not against you.

If you can follow these basic tips, then there’s no reason you can’t enjoy a happy, comfortable retirement.

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