New article posted at "Everything Finance"
Everything Finance
New article posted at "Everything Finance" |
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How Long Should You Keep Old Documents? Posted: 02 Mar 2014 11:04 PM PST
You see, three years ago, when I had two children born just 17 months apart, my previous organizational skills disappeared. Because I was in survival mode, rather than filing my paperwork, I stacked it in the corner, intending to get to it when things settled down. Well, life never quite settled down, and now, three years later, the “pile” has grown into multiple piles. Apparently, I’m in good company. According to Consumers Report, “Unfortunately, only 40 percent of Americans think they can find a document at a moment’s notice, and only 49 percent can do so with a little looking.” The idea of filing all that paperwork is overwhelming. Besides, how much of that paperwork do I really have to keep, and how much can I shred? If you haven’t gone completely digital yet with your important paperwork and you have your own pile of paperwork to file or files that are overflowing with paperwork from five or ten years ago, here’s what you need to know. Documents To Dispose of ImmediatelySome documents you can dispose of in less than a year. Credit card billsAs soon as you pay, you can shred the bill. There’s no need to keep them unless you need the statements for tax purposes. Bank statementsKeep these until you reconcile your checkbook and other accounts. Then you can shred them. However, make sure to keep the year end statement for tax purposes. Insurance policiesOnce you get a new insurance policy for the year or six months, whatever the case may be, you can shred the old ones. Documents to Hold for Seven YearsTax returnsKeep federal and state tax returns for seven years along with the documentation you need for proof that your records and filings are accurate. However, I like to keep tax returns just to see how our income is increasing over the years. Documents to Keep ForeverMost life planning documents should be kept indefinitely. Life insuranceKeep your term life insurance policy until the term expires. If you have whole life, you’ll want to keep the policy indefinitely. Pension documentsAny pension documents from current or former employers should be kept indefinitely. Personal retirement accountsKeep the year end records for your Roth IRA and other retirement accounts indefinitely. The monthly statements can be shredded when you get the next monthly statement. Will and trust documentsYour will and trust should be kept indefinitely. The executor of your affairs should know where the document is kept so he can get to it easily should you unexpectedly pass away. In addition, keep loan documents until the loan is paid off. Also keep documents like a vehicle’s title until you plan to sell the vehicle. Now that I know what I can toss (which I’m guessing is most of my stack of paperwork), I’m not dreading organizing my paperwork as much. (For more details, see a comprehensive list of what to keep and toss at Consumers Report.) Do you keep on top of your paperwork, or do you have a “pile” like I do?
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Everything Finance
- How To Actually Agree on Finances With Your Spouse
- Money-Smart: Famous Personal Finance Rumours Debunked
- How We Got Through Debt In Our Marriage
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How To Actually Agree on Finances With Your Spouse Posted: 06 Mar 2014 09:17 PM PST
However, there is one topic that we haven’t fought about in all the 8+ years we’ve been together, and that topic is money, Maybe it’s because we got married young and joined our bank accounts at the young ages of 22 and 25. Maybe it’s because we have a decent budgeting system. Maybe it’s because we got into credit card debt and out of it together. Either way, it just seems to work, and here’s why I think we’ve made it this far without too much strife: 1. We Have Regular Family MeetingsAbout twice a month, I meet with my husband and tell him the state of our finances. Some day, I hope that we can be both be actively involved in running things, but with the way his current schedule works, it just makes sense for me to do it and not him. Plus I’m better at it but you didn’t hear that from me. Still, he has a right to know how much money we have in our accounts, how we’re doing, and where we need to cut back. He doesn’t spend a lot of money at all, so sometimes I even gently remind him that he can buy a cookbook or something if he wants to. 2. Understand Your Spouse’s TendenciesEven though my husband rarely spends money, he is not as much of a planner as I am when it comes to expenses. And, that’s okay. It’s just something I had to get used to. He might go four months without even touching his fun money and then tell me he is in need of a new pair of running shoes. Now normally, that’s not a problem, but for purchases $100 and over, I like to think about them and plan for them ahead of time. I have learned over the past few years that I just need to put a little bit away for him every month because sure enough there’s an espresso machine or new shirts for his work or something that will come up after a long period of no spending. I hate to tell him no when he works so hard, so this has turned out to be the best compromise. 3. Let The Other Person WinWhen it comes to finances, the two of us are usually in pretty solid agreement. However, sometimes I want to pay things down too aggressively, and he’ll occasionally put a stop to the madness. Instead of acting like I am the finance blogger and I own the We also like to consult each other if we’re going to spend over $50, we both text in our expenses to an online program, and we both know the state of our loans and income. Ultimately, I think constant communication is key. It’s worked for us; hopefully it works for you! How do you avoid money arguments with your spouse? |
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Money-Smart: Famous Personal Finance Rumours Debunked Posted: 06 Mar 2014 01:54 PM PST
According to several personal finance experts, there are many statements that are cent percent correct. For example, a penny saved is a penny earned. However, as far as money is concerned, then everything isn’t that black and white as most of the people consider it to be. As a result of these money myths, people get into various financial tight spot and fall prey to different misconceptions related to money, saving and investing. For that reason, here are few money myths that have been dispelled for your own good. Myth No.1: The more you save, the more will be your savings Fact: If you believe that scrimping to save dollars and hoarding them in a savings account will make you rich, then you’re wrong. The key to wealth is in earning. Sadly, if your annual income is around $55,000, then it is next-to-impossible to save a large amount of money for your retirement , even though you’re contributing every single penny towards your savings account. Basically, you’ll have to look at the bigger picture. In other words, instead of tracking your expenses all the time, you should try and make more money since inadequate income is the root cause for all financial evils. So, to have a larger and better nest egg, you’ll have to devote your time and effort towards solving your financial woes and stop wasting your time by trading it for dollars. Actually, a lot of middle-class families suffer due to financial crisis not because of over-spending, but because of lack of proper income. Here, there’s no need for you to do away with your lattes. Rather, you may switch jobs for higher pay. Or better still, you can ask your young adult children to work and contribute to the household income. Myth No.2: Diversify your investments for better returns Fact: You must be knowing about having your investment portfolio diversified. This helps into spread the risk around your investments over several asset classes. Through this steps you’ll be able to protect your financial stability, even if one of your investment tanks since you’ll have other investments filling up the void created by that lost one. As per the experts, many people, unfortunately, don’t have sufficient money to do such a kind of diversification and even if they somehow did, then that may not be the most suitable option for them. hence, when planning to diversify your portfolio, it is necessary for you to first understand the basic nuances of the financial tools and only then should you invest your money into them. Basically, Wall Street loves to propagate this kind of misconceptions as beliefs like these would continue to provide them with business. Myth No.3: It is best to use cash and debit cards for payments Fact: Yes, its true that using cash and debit cards for payments is always a good idea since it prevents you from spending excessively. However, solely relying on these two modes of payment will keep you from enjoying all those freebies that the credit card companies provide to their customers. The fact is that you may qualify for a host of rewards through the use of credit cards. The key to use a credit card is to be diligent enough to spend on items that you can actually afford. What is more important here is that you should pay back all the balances on every card within the month of the purchase. So, with proper, disciplined credit usage, you can rack up more savings in the form of low credit card interest as compared to the returns sourced from any of those conventional savings or checking account. Myth No.4: Credit card debt repayment is advisable before saving for the golden days Fact: Finally, this decision must be made on the basis of total outstanding balances you owe and the type of loan they are. Most of the young professionals and at times, even older ones get confused whether or not they should pay off consumer debts such as student loans, credit cards and so on, before actually putting in their money towards their employer-sponsored retirement plans like 401(k). Is there anything wrong in paying off your debts, prior to investing in the 401(k)’s? The answer here would be is that if your employer provides you benefits that matches your contribution, then you’ll probably miss those benefits. This would happen because you chose debt repayment over retirement savings. Here you’re losing out on potential growth of the interests on your 401(k). Therefore, the best alternative here would be to build a retirement nest egg, even if it takes you a bit longer to become debt-free. Myth No.5: Each and every dollar should be put onto your savings account Fact: It might appear to you that regularly putting a sizable amount of money out of your paycheck onto your savings account will put you ahead of the game. However, this money-saving trick might backfire as you could be charged with bank fees. The Federal Reserve of New York regulates how different kinds of bank accounts needs to be categorized. One of the specifications listed by it that has a direct effect on the consumers is the monthly withdrawal limit imposed on money market and savings account. As of now, the Federal Reserve would allow only six withdrawals on any given month from certain accounts and that you’re liable to pay a bank fee for withdrawing money from them beyond that. A typical bank fee would be around $10 that could be enough to cut down your overall interest earnings. This, basically, implies that withdrawing money from your own savings account such as checking account and transferring funds from it whenever you feel like has become quite a risky affair. Keeping these additional charges in mind, you might be better off with having a reasonable balance in a checking account, as that would allow you to withdraw money unlimited number of times, depending upon your needs. The remaining balance may and possibly should be saved in an interest-incurring account. |
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How We Got Through Debt In Our Marriage Posted: 06 Mar 2014 09:18 AM PST
But here we are, almost four years since we’ve been married, and we’ve paid off all our debt and are making double what we were making when we first got married. If you’re struggling in your relationship because of the financial toll, this post is for you. I wanted to share the tips I wish someone would have given me back when all our arguments seemed to be about finances. Have a Game PlanA few months after we were married and we actually got serious about paying our debt, my husband and I calculated all our cumulative debt and realized we were $45,000 in debt! It was a total shock and the number seemed insurmountable. We were making a pittance, living in a shack, and saving up for my husband’s upcoming four-month leave for work to attend a fire academy. And now here we were with more debt to pay off. So we made a game plan. We decided to work as a team to pay off as much as we could. We created a budget, I started working on the side, and we just promised each other we’d do as much as we could to get out of debt as fast as we could. Having a set number each month that we would contribute to debt, helped us come up with our estimated “payoff debt”—the official date we would be debt free. Originally, we thought it wouldn’t be til 2015 at some point. And we beat that number by a whole year. See Yourself as a TeamAfter you create your game plan, realize that you’re both on the same team. It’s you two against the debt. Not you two against each other. Too often, my husband and I would have arguments about money. I wanted to pay off debt as much as possible and my husband felt suffocated by how stringent I would be with expenses. We were playing on opposing teams. It took us a while to really find our groove. I had to loosen up a little bit and not get mad over every $3 purchase. And my husband had to make a more concentrated effort to not have a $3 purchase every day (mostly on Starbucks or eating out). It really was a process to find a balance. The Game Doesn’t Last ForeverWhile we were in debt, it was so hard for us to see the light at the end of the tunnel. We were paying off debt, but we would also have a lot of setbacks, like unexpected car repairs or hospital bills. Each setback would drive me crazy. But somehow—we got through it, and we still managed to pay off our debt a whole year earlier than expected. I can’t stress enough that you focus on the future and know that paying off debt won’t be forever. It is a temporary hindrance. 2014 is the first year that my husband and I are saving up for our future rather than paying for our past—and it is the best feeling in the world. Know that you will get through this difficult period too. |
Everything Finance
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Taking Financial Advice Is Like Using a Garmin Posted: 09 Mar 2014 11:26 PM PDT
For the first time, we used a Garmin, which my uncle lent to us. While we were navigating the busy Arlington streets, the Garmin, while a useful device, also proved frustrating. Every time we missed a street, the Garmin would say, “Recalculating.” At times, we felt like we were driving around in circles as we tried to get back on course and had to hear “recalculating” over and over. We often doubted the Garmin but kept following it. In the end, we’re still not sure if the Garmin saved us time or made us go out of our way to find what we were looking for. The Garmin was useful, but it was only a tool. We still had to rely on other maps and our own intuition and common sense to ultimately reach our destination.. The whole experience reminded me of people who follow different financial gurus’ advice. There are many financial experts out there who give conflicting advice. Dave Ramsey advocates that you shouldn’t save for retirement until you’re debt free. Debt reduction should come at the cost of everything else. Only after you’ve paid down debt can you start to create a three to six month emergency fund and eventually contribute to your retirement. Other financial advisors recommend that you start as young as possible when saving for retirement. Then you can take advantage of the power of compounding interest. Of course, debt repayment is still important, but if you have very low interest rates on a vehicle loan and/or your home loan, an expert may recommend that you pay these down on schedule so you can earn more through investments. This advice is completely contrary to Dave Ramsey’s. Blindly following one or more financial gurus’ advice can leave you feeling as we did when we used the Garmin–confused and feeling like we were going around in circles. There’s nothing worse than reaching the age of 40 or 50 and realizing you haven’t saved as much for retirement yet as you would like because you’ve spent years paying down debt. Financial gurus and their advice are like a Garmin. They are a resource–a tool–to help you get where you’re going. However, you can’t blindly trust in them completely. You must also be knowledgeable yourself. You need to take the time to do your own research so you have a general idea of where you want to go and how to get there. While you can and should consider advice from financial experts, only you can make decisions that are best for your situation. There is not a one-size-fits-all formula for finances, despite what Dave Ramsey and other financial experts want you to think. Do you follow one financial guru’s advice to the exclusion of others, or do you make your own decisions about finances based on your personal situation? |
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Three Ways to Rebuild Your Credit Score Fast Posted: 09 Mar 2014 12:23 PM PDT
1. Find the Right Secured Credit CardCredit cards got you into debt in the first place, so why would you want to sign up for another one? It is true that irresponsible use of credit cards can lead to many financial problems. However, when you have poor credit, a secured credit card is the fastest way to build your credit up again. Most secured credit cards require you to have a security deposit, costs an annual fee, and have higher APRs. The point is to find a secured credit card that has the best fee and is tied to other well-established cards. Most credit card companies want you to fix your credit score quickly so that you can get another credit card with a higher limit and pay them even more. However, you can use this to your advantage by just sticking with the secured card until your credit score is back up in the good area. Capital One and Wells Fargo both have reputable secured cards. The point is to use your secured card monthly, keeping your purchases to about $200-400. Then you will want to pay off your amount each month, to avoid paying interest and to establish a good standing with the credit card company. 2. Get a Detailed Report of Your Credit ScoreMy husband had a hard time getting approved for many lines of credit, which was strange since he hadn’t done anything to give himself a poor credit score. However, due to his employment, he had a thorough background check. The investigator on his case came back to him and asked why he had two bankruptcies and other big hits on his credit score when he was so young. Those big hits were actually his father’s, but the credit monitoring companies linked my husband to them because he has the same initials as his father. Did you catch that -same initials, not same name, birthday, or even social security number. It was such a careless mistake that it is very possible that you could have a simple but costly mistake on your report too. 3. Focus on Tax Debts FirstIf you have unsettled debt with the IRS that resulted in a lien, that is the first matter to conquer. As soon as you pay off that tax or set up a payment plan with the IRS, you can then request for the lien to be taken off your credit score. This should boost your score by many points. These three tips will help you to rebuild your credit fast. However, do know that credit scores do not go up overnight. If you follow these tips, you should expect an improved credit score within a month, and a much better rating in a year. |
Everything Finance
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How to Stay Motivated to Save Money Posted: 10 Mar 2014 06:37 AM PDT
Saving money is a practice that most people have, at one time or another, taken part in. Saving is crucial, whether you are trying to achieve financial responsibility and financial freedom or just planning a lavish vacation. Many people find, though, that saving money can be particularly difficult. A key factor in success when it comes to cutting back and pinching pennies is your motivation. Here are some tricks and tips for staying focused and motivated to save money. Be Visual When you’re saving toward a particular goal, it can help to put a visual representation of that goal in a place you’re frequently looking. If you’re saving for vacation, put a picture of your desired destination on the fridge or on your computer desktop. If you’re saving up for a consumer product, such as a set of golf clubs or a car, make a picture of that product the background of your cellphone. A frequent glimpse of your goal serves as a visual reminder as to why you are making these sacrifices: to reach your bigger, better goal. On the other hand, if your goal is financial freedom and stability, images that represent that could include your dream home and dream car as well as free time activities you enjoy doing. You could also illustrate your goal of a certain amount of money in your savings account or a certain investment you’d like to make, along with your progress. Creating a visual representation of your savings can be cathartic, helping you handle the stress of saving. Don’t Do It Alone Find someone — a friend, family member or coworker — who is also looking to save money. Saving money on your own is tough, but sharing the struggle with someone else can ease the burden. What’s more, a “savings friend” is one you can go on shopping trips with, making frugal shopping easier. The same concept can be applied to meals, too. If you’re with another person who is also saving, you can make responsible decisions that won’t break the bank. Make Intermittent Goals and Challenges Starting slow and making intermittent goals for yourself can help get the ball rolling when you’re initiating your self-designed money-saving program. Not only will the challenge of meeting a series of small goals make your efforts to save more exciting, but a small treat that doesn’t break the bank after you meet your goal is a nice reward. For example, you can treat yourself to one drink and a nice meal with friends on a weekend if you bring your lunch to work for two weeks straight. The savings from two weeks worth of saving will outweigh the cost of one nice meal. While you are striving toward your savings goal, remember, there will be setbacks. Don’t be too hard on yourself — it can be counterproductive! Life happens; just accept it and keep moving toward your goals. |
Everything Finance
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Will the rise of digital currency create a new kind of economic expert? Posted: 11 Mar 2014 12:50 PM PDT Will the rise of digital currency create a new kind of economic expert? is a post originally published on: Everything Finance - Everything Finance - Its all about Money!
Whether you are in favour of cryptocurrencies or not, the truth is that by the end of the year, the financial system as we know it, is likely to be changed forever. 4X Currency are investigating whether the rise of the virtual currency could lead a very different set of people to become the new giants of the financial world. The only issue is that cryptocurrencies are extremely volatile and many have predicted the downfall of some of the market leaders, including Bitcoin. Despite this, experts predict that any fall will still serve to lay the ground for future currencies. Alec Ross, a key player in Barack Obama’s 2009 Presidential Campaign said at the World Business Forum that, ‘the digital currencies out there right now, I think of these as like Lycos, Infoseek, Webcrawler, Altavista – all these old search engines that were around in the ’90s but don’t exist today.’ Alongside the new wave of alternative currencies, it is predicted that there will also be a new and illuminating wave of experts, who will have largely followed alternative currencies since their earliest conceptions. Although less than a year old, in February Dogecoin became the world’s third most valuable (mineable) cyptocurrency, rising by $40 million in a 48 hour period – serving as the greatest increase in history to date. Rising Dogecoin investor and expert, Ben Doerberg spoke to Dazed Digital where he said: ‘The only thing that makes money worth anything is that people will accept it. ‘Dogecoin is the only crypocurrency that is welcoming and accessible for new people. I don’t think it overplays Bitcoin, but if there’s room for two or three currencies, dogecoin could easily be the currency for gaming or families with kids. I can see kids getting their allowance in dogecoin in the future.’ Though it may be a little pre-emptive to consider Dogecoin as the childhood allowance of the future, there is certainly no telling where it might go, especially if the leading tenor of Bitcoin is to be cut short. For now however, likely due to its heritage, Dogecoin is largely seen as a currency for buying computer games from software distribution platform, Steam, and is described by many as a currency that will struggle to outlive its reputation for flippancy. |
