Confidence Wealth & Insurance Solutions 3 Comments

Rich Habits for Women: 4 Secrets of the Ultra Wealthy

“Never spend your money before you have earned it.”
-Thomas Jefferson

You Can’t Retire Off Shoes and Handbags

Women are bombarded with ways to improve their lives. From talk shows and magazines to social media and best-selling books. The advice women get usually revolves around looking better, losing weight and being in style.

  • We are told how to reduce calories, how to dress better, how to get a flatter stomach and longer eyelashes – but we are almost never told how to get financially independent.

For every article on saving money, there are 100 on how to curl your hair or apply eyeliner.

What’s Sexier: Money in the Bank or a Mountain of Credit Card Bills?

The thinking is that financial responsibility isn’t very sexy. Who wants to read an article about interest rates? But, what people don’t think about is that money is only sexy when you have it – borrowed money, like credit card debt is the opposite of attractive.

The goal is to be financially secure and independent.

Image from Better Decorating Bible

 

“I wanted to be an independent woman, a woman who could pay for her bills, a woman who could run her own life – and I became that woman.”
-Diane von Furstenberg

 

The lesson here is don’t let billboards and commercials convince you that you need one more kitchen gadget or body wash to feel good about yourself. Or that you need to borrow money to fake a lifestyle you can’t afford. Money in the bank is one of the best feelings in the world… just ask anyone who doesn’t have it.

Less Lipstick, More Benjamins

We wanted to add to the conversation about women owning their money – because it’s more important than losing 5 pounds. Don’t get distracted by all of the ads for miracle serums and the latest hair product; these are all designed to do one thing: separate you from your hard-earned money. Don’t be tricked!

 

For women to be financially independent, they have to be aware of slick advertising that preys on vulnerabilities. Instead of a drawer full of lipstick, you should having a savings account full of money!

Dodge the Debt Trap

Your goals should be to leap across those murky debt moats – the ones filled with high-interest loans, credit cards and second mortgages. Women should enjoy a comfortable lifestyle after they retire, not one riddled with bills and phone calls from collectors. The stuff you buy today is not worth the anxiety you will feel tomorrow. 

Make Sure You Find a Reliable, Experienced Advisor

“Trust me—most investors who lose money due to bad or risky investments do not have the Securities and Exchange Commission (SEC) knocking on their door to help. There is no one holding a bouquet of roses waiting to give them a big rescue kiss and return their life savings in the form of a check.”
-Crystal Oculee, “Money Confidence”

After saving money, downsizing and creating a smart budget that works FOR you, not against you – it’s time to lock in a great financial advisor. Not an average advisor, a GREAT one. Don’t trust your savings to just anyone. Make sure you get an advisor who is certified and comes with top recommendations. And never be afraid to ask questions – it’s your money, you are 100% responsible for its well-being.

Now… are you ready to get wealthy?

FOUR HABITS – OF THE ULTRA RICH – THAT YOU CAN PRACTICE TODAY

  • 1. SAVE, SAVE, AND SAVE SOME MORE!

    View All

    Back To Slide Show

    “Beware of little expenses. A small leak will sink a great ship.”
    -Benjamin Franklin

    Starting today, deduct at least 10 percent of every paycheck and put that into savings. If you value financial security, then you have to prove it with your budget. People who spend hundreds on clothes every month, but have no savings, DO NOT value financial security. So change your habit and change your life.

  • 2. INVEST WISELY

    View All

    “If you aren’t thinking about owning a stock for ten years, don’t even think about owning it for ten minutes.”
    -Warren Buffett

    When you invest in a 401k in your 20s, 30s and 40s, you have to commit to this investment for the long haul. Make sure your funds are allocated properly, but don’t sweat small shifts in the market. Selling or getting out because you panicked is almost always a bad move.

  • 3. TAKE ACTION

    View All

    “Inaction breeds doubt and fear. Action breeds confidence and courage. If you want to conquer fear, do not sit home and think about it. Go out and get busy.”
    -Dale Carnegie

    In money terms this means being proactive with your paycheck. Look at your check like it’s a superpower that will enable you to retire comfortably, afford any emergencies and eliminate money stress from your life.

    Don’t rely on your spouse or financial advisor to do all the retirement heavy lifting. Get involved in your investments. Ask questions. And make sure you meet with your advisor at least once a year to ensure you’re on the right path to financial freedom.

  • 4. TENACITY

    View All

    “Do not be embarrassed by your failures, learn from them and start again.”
    -Richard Branson

    So, you made mistakes. You got into debt. You claimed bankruptcy. That was in the past. Today, you’re going to make smart choices to climb out of each and every financial hole you are in. Yes, it will be hard… but IT WILL BE WORTH IT! Make small steps toward a big goal, before you know it you will be debt-free with smart investments and lots of money in your savings account.

    Part of being tenacious and overcoming past missteps, is sacrifice. This might mean getting a second job (or one that pays more), investing in your education – so that you can get a higher-paying job, downsizing (trade in an expensive car for one that costs less) and cutting out the extras (instead of getting weekly manicures, use that to pay off a credit card).

  • TAKEAWAY

    View All

    Remember ladies, shifting your priorities can be tough at first. But once you start, you will feel so much more powerful and in control. These are habits that work – so start shopping in your closet and depositing money into your savings.

 

1http://www.theatlantic.com/magazine/archive/2016/05/my-secret-shame/476415/
2http://www.theatlantic.com/magazine/archive/2016/05/my-secret-shame/476415/

Confidence Wealth & Insurance Solutions No Comments

6 Ways To Spend Your Paycheck… If You Want to Get Ahead

For millions of Americans, payday is the day when they can finally catch their breath. They’re able to pay off late bills. They deposit just enough money into their checking accounts to avoid going into the red. They pay their electric bill days after the electricity has already been shut off.

Being financially fragile, a term used to describe people who live paycheck-to-paycheck, is something that affects people of all backgrounds. From engineers and nurses to small business owners and retail workers, the group of financially strapped adults is wide and diverse.

According to a 2015 report by Bankrate, only 38 percent of Americans can afford a $500 car repair or $1000 medical bill with money they have saved.1

Not only are people cash poor, but they have a diminishing net worth, as well.

The Russell Sage Foundation reported that in 2003 the net worth of the typical household, adjusting for inflation, was $87,992.

By 2013, the net worth plummeted 38 percent to just $54,500 for each household. That is a severe drop.2

One immediate thing you can do to change the flow of money coming in versus going out is to downsize. From your house to your cable bill, take a magnifying glass to every one of your expenses.

Here Are 6 Ways To Divvy Up Your Paycheck That Will Put You Ahead Of The Game

  • 1. 35% FOR HOUSING

    View All

    Back To Slide Show

    Your housing portion includes bills associated with housing – so your electric and water bills would have to fit into this piece of the paycheck pie. Of course, the smaller your house the lower your electric bill. If you have energy efficient appliances and additions, like solar panels and electric heaters, you will reduce your utility bill even further. So, if your monthly paycheck is $4000 you don’t want to spend any more than $1400 per month on rent, electric, and water.

  • 2. 15% FOR FOOD

    View All

    Food can go a long way – as long as you buy the right kind. Pasta, rice, beans and frozen veggies are all examples of inexpensive but nutritious, energy-rich foods. Again, assuming you bring in $4000 per month, you’re looking at a monthly food bill limit of $600. If you eat out a lot, you’ll definitely rip through this amount more quickly than if you prepare meals at home.

  • 3. 15% FOR TRANSPORTATION

    View All

    Combine your car payment, auto insurance and gas and it should not exceed $600 per month. If you have an expensive car or a gas burner, then you might want to trade it in for something cheaper and more efficient.

  • 4. 15% FOR SAVINGS

    View All

    For many people, savings is something they will do tomorrow. But tomorrow can easily turn into 10 years if you’re not careful. It’s much wiser to sacrifice a luxury now and save money, then indulge today and pay for it later.

  • 5. 10% FOR DEBT REPAYMENT

    View All

    Get rid of all of those high-interest loans first then work on the low-interest ones. The goal is to be debt-free and credit rich.

  • 6. 10% FOR DISCRETIONARY EXPENSES

    View All

    This is your fun money! Here’s where you pay for your Netflix, cell phone, new shoes and concert tickets. Of course, you can always borrow from your food, transportation or housing allotments – but don’t skimp on savings or debt reductions.

  • YOU CAN DO IT!

    View All

    If you can follow this paycheck formula, then you will move out of that financially fragile group in not time. Don’t despair – there are many people in your shoes. Managing money is like dieting or studying for an exam. It takes a big goal and a little discipline but, after a few weeks, it will feel like second nature – and you will feel like the weight of the world has been lifted off your shoulders.

1http://www.theatlantic.com/magazine/archive/2016/05/my-secret-shame/476415/
2http://www.theatlantic.com/magazine/archive/2016/05/my-secret-shame/476415/

Confidence Wealth & Insurance Solutions No Comments

Tax Season Starts This Week: Don’t Forget These 5 Tax Deductions

5 Essential Money-Saving Tips for Your Tax Returns

Monday, January 23rd, marked the official start of tax season. It was the first day tax returns could be filed. For millions of Americans, this can be a stressful time because A) either they’re unsure of how to fill out the often complicated forms or B) they have a hunch they’ll be writing Uncle Sam a big check when that tax bill comes.

For other people, this could be a nice windfall. A 2016 report by Turbo Tax states that 45 million taxpayers claimed $1.2 trillion in itemized deductions on their 1040s, while those who just claimed the standard deductions accounted for about $747 billion.1

A standard deduction is basically whether you file as head of household, married filing jointly, married filing separately and single. You can also claim extra standard deductions for age (65 or older) and blindness.2

If you qualify for a piece of that 1.2 trillion-deduction pie, it can make a big difference on how much you end up owing. So before you sit down to do your taxes or hand them over to your accountant cousin, be sure to review these deductions!

PRO TIP: Remember the money you save now, can be invested into a great pre-tax retirement fund for later.

 

1.) Dependents (Other than Children)

Depending on a few qualifying factors, the following people can be claimed as dependents: parents, grandparents, stepchildren, in laws, foster children, cousins and boyfriends or girlfriends.3

2.) Moving for a New Job

If you relocated more than 50 miles from your home because of work, you can deduct this from your taxes. You are allowed to deduct “reasonable moving expenses,” but not food. This mean you are 100% responsible for all of those road-trip diner meals.4

3.) Charitable Contributions

Did you clean out your closet last year and donate shoes, electronics and other items? If so, don’t forget to deduct it! Every bit counts – even the ingredients in a soup or dessert you made for a shelter or other such charitable organizations.5

4.) Mortgage Interest Payments

Homeowners get to write off their interest – so if you paid interest on a mortgage in 2016, you can claim that as a deduction.6

5.) Energy Efficient Improvements

This is your last chance to cash in on being Earth-friendly, as 2016 is the cutoff for claiming energy-saving home improvements on your returns. The max amount you can claim – in total, over the course of all your returns, is $500 based on 10 percent of the purchase price.7

This is just the tip of the iceberg when it comes to itemized deductions. For example, if you work from home and use a room exclusively for your work, you can take a home office deduction for that “work” room.

You still have a few months to submit your taxes, so be sure to take your time to understand all of the itemized deductions available to you. While it might seem like a chore now, you will definitely be glad you got it right when Uncle Sam sends you his bill.

 

 

1https://turbotax.intuit.com/tax-tools/tax-tips/Tax-Deductions-and-Credits/The-10-Most-Overlooked-Tax-Deductions/INF12062.html
2https://www.irs.com/articles/understanding-standard-deduction
3https://www.irs.gov/publications/p17/ch03.html#en_US_2016_publink1000170962
4https://www.irs.gov/taxtopics/tc455.html
5ttps://turbotax.intuit.com/tax-tools/tax-tips/Tax-Deductions-and-Credits/The-10-Most-Overlooked-Tax-Deductions/INF12062.html
6https://www.irs.gov/publications/p936/ar02.html
7http://www.kiplinger.com/slideshow/taxes/T054-S001-overlooked-tax-deductions/index.html

Confidence Wealth & Insurance Solutions 1 Comment

Job Change Checklist

With the new year comes new opportunities. Are you changing jobs? If so, here’s a checklist to help you for a smooth transition!

General information Yes No N/A
1. Has relevant personal information been gathered?
• Names, ages
• Children and other dependents		 ▢ ▢ ▢
2. Has financial situation been assessed?
• Income
• Expenses
• Assets
• Liabilities		 ▢ ▢ ▢
Employee benefits Yes No N/A
1. Has a benefits package been discussed with the new employer? ▢ ▢ ▢
2. If yes, are there restrictions or a waiting period for all benefits? ▢ ▢ ▢
3. Is health insurance offered? ▢ ▢ ▢
4. Are short- and long-term disability offered? ▢ ▢ ▢
5. Is a Section 125 or flexible spending account offered? ▢ ▢ ▢
6. Is dental insurance offered? ▢ ▢ ▢
7. Is vision insurance offered? ▢ ▢ ▢
8. Is life insurance offered? ▢ ▢ ▢
9. Is a retirement plan offered? ▢ ▢ ▢
10. Is adoption assistance offered? ▢ ▢ ▢
11. Is long-term care insurance offered? ▢ ▢ ▢
12. Other insurance? ▢ ▢ ▢
13. Has vacation/time off been reviewed? ▢ ▢ ▢
Financial picture Yes No N/A
1. Has annual compensation been determined? ▢ ▢ ▢
2. If married, will spouse work outside the home? ▢ ▢ ▢
3. If there are children, will day care be necessary? ▢ ▢ ▢
4. Will living expenses be affected? ▢ ▢ ▢
Money management Yes No N/A
1. Has budget been updated to reflect changes in income and expenses?
• Housing costs
• Transportation costs
• Food, clothing, and other household expenses
• Health-care expenses
• Life and disability insurance premiums
• Child-care costs		 ▢ ▢ ▢
2. Has an emergency fund been established? ▢ ▢ ▢
Housing situation Yes No N/A
1. Is relocation an issue? ▢ ▢ ▢
2. Is there a home that needs to be sold? ▢ ▢ ▢
3. Is a home purchase planned? ▢ ▢ ▢
4. Have the advantages and disadvantages of buying a home versus renting a home been discussed? ▢ ▢ ▢
5. Have other expenses been reviewed?
• Mortgage origination fees
• Real estate agent fees
• Attorney fees
• Moving expenses
• Potential increase in real estate taxes
• Cost of living in new location		 ▢ ▢ ▢
6. Will the new employer pay all relocation expenses? ▢ ▢ ▢
Insurance planning Yes No N/A
1. Is a current health insurance plan in place? ▢ ▢ ▢
2. Has spouse's coverage been evaluated? ▢ ▢ ▢
3. Will COBRA be needed during the job transition period? ▢ ▢ ▢
4. Is an individual (non-employer-sponsored) life insurance policy in place? ▢ ▢ ▢
5. Does life insurance need to be upgraded? ▢ ▢ ▢
6. Does automobile insurance need to be purchased/upgraded? ▢ ▢ ▢
7. Does homeowners/renters insurance need to be purchased/upgraded? ▢ ▢ ▢
8. Does disability income insurance need to be purchased/upgraded? ▢ ▢ ▢
9. Does personal liability insurance need to be purchased/upgraded? ▢ ▢ ▢
10. Does long-term care insurance need to be purchased/upgraded? ▢ ▢ ▢
11. Are beneficiary designations up-to-date? ▢ ▢ ▢
Investment planning Yes No N/A
1. Has liquidity need changed? ▢ ▢ ▢
2. Has risk tolerance been determined? ▢ ▢ ▢
3. Have investment goals been considered/prioritized? ▢ ▢ ▢
4. Has size/frequency of investments been determined? ▢ ▢ ▢
5. Has current asset allocation been reviewed?
• Stocks
• Bonds
• Mutual funds
• Annuities
• Real estate
• Art/collectibles		 ▢ ▢ ▢
6. Will job change affect existing employee stock options? ▢ ▢ ▢
Retirement planning Yes No N/A
1. Is a retirement plan available?
• Employer-sponsored retirement plan
• Beneficiary designation updated		 ▢ ▢ ▢
2. If a 401(k) is offered, will the employer match employee contributions? ▢ ▢ ▢
3. Are IRAs being effectively utilized? ▢ ▢ ▢
4. Will all available plans be funded? ▢ ▢ ▢
Tax planning Yes No N/A
1. Will withholding change? ▢ ▢ ▢
2. Is the maximum tax advantage of employee benefits realized? ▢ ▢ ▢
3. Will child care be needed? ▢ ▢ ▢
4. Will there be a home office? ▢ ▢ ▢
5. Have home office deductions been discussed? ▢ ▢ ▢
6. Is there self-employment income? ▢ ▢ ▢
Important Disclosure
Confidence Wealth & Insurance Solutions No Comments

[Financial Friday] Quiz: Which Birthdays Are Financial Milestones?

When it comes to your finances, some birthdays are more important than others. Take this quiz to see if you can identify the ages that might trigger financial changes.

Which Birthdays Are Financial Milestones

Questions

1. Eligibility for Medicare coverage begins at what age?

a. 62
b. 65
c. 66

2. A child can stay on a parent’s health insurance plan until what age?

a. 18
b. 21
c. 26

3. At this age, individuals who are making contributions to a traditional or Roth IRA or an employer-sponsored retirement plan can begin making “catch-up” contributions.

a. 50
b. 55
c. 60
d. 66

4. This age is most often associated with drops in auto insurance premiums.

a. 18
b. 25
c. 40
d. 50

5. Individuals who have contributed enough to Social Security to qualify for retirement benefits become eligible to begin collecting reduced benefits starting at what age?

a. 62
b. 65
c. 66
d. 70

6. To obtain a credit card, applicants under this age must demonstrate an independent ability to make account payments or have a cosigner.

a. 16
b. 18
c. 21

Answers

1. b. 65. Medicare eligibility begins at age 65, although people with certain conditions or disabilities may be able to enroll at a younger age. You’ll be automatically enrolled in Medicare when you turn 65 if you’re already receiving Social Security benefits, or you can sign up on your own if you meet eligibility requirements.

2. c. 26. Under the Affordable Care Act, a child may retain his or her status as a dependent on a parent’s health insurance plan until age 26. If your child is covered by your employer-based plan, coverage will typically end during the month of your child’s 26th birthday. Check with the plan or your employer to find out exactly when coverage ends.

3. a. 50. If you’re 50 or older, you may be able to make contributions to your IRA or employer-sponsored retirement plan above the normal contribution limit. These “catch-up” contributions are designed to help you make up a retirement savings shortfall by bumping up the amount you can save in the years leading up to retirement. If you participate in an employer-sponsored retirement plan, check plan rules–not all plans allow catch-up contributions.

4. b. 25. By age 25, drivers generally see their premiums decrease because, statistically, drivers younger than this age have higher accident rates. Gaining experience and maintaining a clean driving record should lead to lower premiums over time. However, there’s no age when auto insurance rates automatically drop because rates are based on many factors, including type of vehicle and claims history, and vary by state and insurer; each individual’s situation is unique.

5. a. 62. You can begin receiving Social Security retirement benefits as early as age 62. However, your benefits will be reduced by as much as 30% below what you would have received if you had waited until your full retirement age (66 to 67, depending on your year of birth).

6. c. 21. As a result of the Credit Card Act of 2009, credit card companies cannot issue cards to those under age 21 unless they can show proof that they can repay the debt themselves or unless someone age 21 or older with the ability to make payments cosigns the credit card agreement.

Important Disclosure