All Articles Tagged "financial planning"
As more and more women bring home the bacon (and the whole pig) across America, managing personal finances is a hot topic. Ladies, long gone are the days of waiting for your “real” life to begin once you find a mate! Good riddance! Just because you’re living solo, doesn’t mean that you can’t achieve your dreams now. How? Scrap the status quo plan of the future and expand on there here-and-now.
Studies Find That U.S. Workers Will Never Retire, African Americans Ought To Change Their Investing Habits
Studies have said this before, but it’s worth saying it again because it’s so important.
Americans are so financially pressed that they’re pretty sure they’ll never be able to retire. The latest numbers come from the Employee Benefit Research Institute, which found that fewer than 57 percent of US workers have $25,000 saved. And 28 percent, sadly but perhaps realistically, said they don’t expect to be able to retire comfortably. So it’s off to work forever and forever.
While this is happening, people are living their retired lives longer. The Wall Street Journal looks to numbers from the Society of Actuaries, which finds that a man who makes it to 65 years old should expect to live just over 20 years more. and a woman that age, nearly an additional 23 years. That’s a lot of living and little money.
Back in January, ABC News took a closer look specifically at black investors. The pressures affecting African Americans are exacerbated by high employment rates, a large wage gap, and a lack of wealth accumulation. Most striking here is the recommendation that blacks need to better make their money for them by investing in the stock market. Findings that they cite show that more blacks think investments in the home, like improvements, are a better investment than the stock market.
“Investors should remember that the stock market has averaged about 10 percent per year over the long-term. Those with longer time horizons need to learn how to balance risk and return,” the article says. In other words, African Americans say they’re conservative investors and it may be hurting them. Particularly when you consider the insane winning streak that the market has been on over the past couple of weeks.
The article also says blacks are more likely to ignore their retirement fund in favor of saving for their children’s education. And we’re more likely to have lots of money tied up in insurance products rather than investments.
Are you a conservative investor? Is it something you think you’ll change any time soon?
How are your finances looking? Have you been sticking to the goals you set at the beginning of the year, or do you find yourself putting it off for the next month? We have all made promises to save a little more and spend a little less, but life can happen, making plans fall to the wayside. Thankfully there are smartphone apps that hold us accountable. Here are ten to keep you on the road to financial freedom.
The basics of financial planning are pretty simple. Spend less than you make, save for the future, and make smart investment choices. Still, once our wallet gets to a certain level of fatness (or deteriorates into shambles) we often feel the need to turn to an expert for advice.
Unfortunately, a good financial advisor can be hard to come by. Most of the time they aren’t trying to waste their precious billable hours on folks making less than six figures. Plus, it can feel hypocritical to fork over thousands of dollars for advice that you could be using to improve your financial standing.
Cue the internet to the rescue! Just like the travel industry and tax preparation services before it, financial advice is being streamlined by technology. Instead of a human advisor charging up to $150 an hour to ask you hundreds of questions about your financial standing, monetary goals, and openness to risk in order to develop a unique plan, a computer program does the job for a flat rate.
Web alternatives can be easier to use than going to a person. Many allow you to electronically pull information from your financial institutions, saving you the chore of compiling the information manually. An action plan is then generated specifically for you, based on the principles financial advisors follow. Some services, like NestWise, will follow up via e-mail or video chat with a human being for an additional fee.
For some people, visiting a firm may still be ideal. In his defense of financial advisors for Forbes, Mike Alfred refers to top advisors as “a quarterback in their client’s financial life [to] help coordinate estate planning, tax planning, insurance coverage, as well as providing a comprehensive process to help the client understand their funding needs and life goals.”
But, that logic is based on the theory that everyone’s financial situation is unique, and requires a plan specific to her financial position. The truth is, most of us are in the same boat. We eat out too much. We need to pay off debt. We’re saving for retirement or a big purchase.
If your finances have quirks that the average person doesn’t deal with, by all means turn to a professional for their opinion. But, if you’re an Average Jill looking to manage her money better, the web may be an effective, cost-friendly alternative. Here are a few options to consider, depending on the level of guidance you need to whip your wallet into shape:
Basic budgeting sites are perfect if you need help managing your money day-to-day. These free sites give you tools to track what you’re spending, what you’re saving, and how your investments are doing. Most will automatically pull your financial information from all your accounts into one place.
If you want the full financial advisor experience, without that pesky human being charging you by the hour, there are a few options available to you. These services are not free, but they are substantially lower compared to traditional planners’ prices. For an additional fee, you can speak with a person via chat or e-mail to talk through your financial plan.
C. Cleveland is a freelance writer and content strategist in New York City, perfecting living the fierce life at The Red Read. She is at your service on Twitter (@CleveInTheCity) and Facebook (/MyReadIsRed).
In these turbulent economic times, it’s not enough just to have a job. A steady stream of income today could soon disappear. And if an emergency arises — a medical need, a car accident, a child that suddenly needs a new pair of glasses — you could find yourself stretched agonizingly thin.
On Black Enterprise, Jennifer Streaks outlines what it takes to have a financial back-up plan that will truly sustain you if you need it. “A financial back-up plan does not include withdrawing funds from your 401k (leaves you vulnerable later in life and typically if you withdraw those funds for anything other than retirement, you may be required to pay those funds back or face tax liability on that amount),” the article says, “or credit cards (creates debt for you to repay).”
So what does this plan include? Click through to BlackEnterprise.com to find out.
A new study by Northwestern Mutual Life Insurance found that African-American college graduates say they are much more serious about reaching financial goals than previous generations.
According to the survey, a large majority (70 percent) of 18-to-34-year-old African American college graduates described themselves as either “disciplined” or “highly disciplined” financial planners. Only 47 percent of those aged 35 and older consider the same. But while young blacks say they are good planners, few of them (only 9 percent) actually have plans in place to financially prepare to live to age 95. Overall, four in 10 African-American college graduates (41 percent) felt financially prepared to live to age 75 while about one in four (27 percent) were prepared to live to age 95. At last check, US life expectancy is about 78 years old for men and women.
And it seems black men are thinking about finances than women, who are focused on lifestyle issues. Male African-American college graduates (52 percent) were more likely to have a financial plan in place to meet their financial goals than women (35 percent). Instead, more women graduates reported having plans in place to meet their spiritual, physical fitness and family life goals. The report states that 58 percent had a plan in place for their spiritual life compared to 43 percent having a plan in place for their financial life.
Do you think young people are more financially responsible than past generations?
Still dream of retiring early, but just don’t know how you are going to swing it? Well, it can still be possible with some key planning.
CNN offers various retirement calculators on its “Money” page allowing you to figure out just when your can retire and how much money you need to save, among other components. Among the tips:
• Have a withdrawal strategy. “Knowing how much money should be withdrawn from your retirement savings each year is a critical factor in building a retirement plan. Withdraw too much and you are likely to outlive your assets; take too little and you may unnecessarily sacrifice your standard of living, especially in the early years of retirement,” explained Dean Urbanski, vice president of BMO Harris Financial Advisors, Inc., in a press release.
• Make sure you have enough money. US News reports, “There are still a few people who enjoy a generous, fully-guaranteed defined-benefit pension that kicks in after 20 or 25 years of service. This might be enough by itself to enable you to retire. And some highly-paid professionals in the private sector might have built up a substantial retirement nest egg that will be enough to last for the rest of their lives.” But just having the money isn’t enough. The article suggests it will take “diligent saving and proficient money-management skills to accumulate enough to retire early.”
• Keep your health insurance. Figure out a way to maintain your medical insurance, advises US News.
• Be mindful of asset allocation. “As individuals seek increased income upon entering retirement, they often shift their holdings more toward bonds and cash. This may or may not be a good move, as there are other key investment considerations beyond having a need for income,” stated Urbanski. “Confer with your financial advisor to determine the appropriate allocation for your needs, investment objective, risk profile and timeframe.”
Good information to chew on as we head into the weekend.
Death is never a subject many people like to think about. But there are several financial steps you need to take to prepare for the inevitable.
According to a new Forbes article, “7 Money Musts Before You Die,” there are key things to do to make sure your family not only inherits your fortune but also understands the family´s financial situation.
Here’s what Forbes suggests:
1. Make sure you have adequate life insurance.
2. Update beneficiaries on retirement accounts, annuities and life insurance policies.
3. Research whether you can add beneficiaries to your other assets, such as bank and investment accounts.
4. Draft a will.
5. Consider creating a trust. This is an option to take especially if you have a complex financial or family situation.
6. Try to involve your spouse in family finances.
7. Make a record of where everything is.
Besides these steps there are others things to do, according to Investopedia like take stock of what you own, make a list of your debts, the organizations you belong to and charities you support.
You should also make a list of all your social media passwords, so your family can close your email, Factbook, Twitter and other online accounts, a modern issue that tends to get overlooked.
People have always used payday loans for emergency situations, but these days an emergency may require more than a quick fix. MSNBC reports that almost seven in 10 people are using these short-term, high fee loans for everyday expenses such as food, rent and utilities. As a result, the popularity of payday loans appears to be on the rise.
The findings were published in a recently released report by Pew Center on the States. According to the report, payday loans are usually loans of $100 to $500. Lenders charge about $15 for each $100 borrowed over a two-week period.
“Of course there’s recurring use for this product,” Amy Cantu, spokeswoman for the Community Financial Services Association of America, a trade group for payday lenders, said to MSNBC. “It’s often the best option for millions of Americans that are looking to manage their financial obligations.”
The high fee rates of payday loans combined with their use for everyday needs transforms the loan into a high-interest credit line that leaves users in debt for months. The average user takes out $375 a year and spends $520 in interest. Although over half of payday users are white, females between 25 and 44 years old, African Americans are more likely to use payday loans than any other minority group. Most people that use payday loans don’t have a four-year college degree. In addition, parents are more likely to use payday loans, especially if the household income is less than $50,000 a year.
In the past five years, about 5.5 percent of American adults have used payday loans, and in 2010 12 million people used them.
Despite what the lenders may say, Pat Seamon, the senior director with the National Endowment for Financial Education, says that payday loans are one of the most expensive ways to borrow money. She advises that low-income families should avoid them at all cost, and instead create an emergency fund of as little $500. Although this is much less than the recommended six to nine months recommended by most financial specialists, she believes it’s an approachable goal for these families and a better system than payday loans.
You bond with your partner over drinks, over a weekend getaway, over buying a home together, and all of these things require money. In some sense, money can buy you love because it can buy you the stability and the opportunities under which you can get to know each other and become closer. Having enough money also fends off many fights. But, the reality is, money comes and goes, and you don’t want your relationship to go with it. So, think and talk about these things, before you hit tough times.