Monthly Archives: October 2018

Tips Improving Your Finances for Life

There is no way to avoid dealing with money and finances these days. Therefore you should try to learn as much as possible to help you make good financial decisions and to increase your confidence about money. When you make a budget, it should be realistic regarding your income and spending habits. Be sure to include all of your income such as alimony, child support, rental income, or any other. Always use your net income not your gross earnings in these calculations. Once you have the numbers, you can consider how to adjust your spending to stay within your income range. To maintain your budget never exceed your incoming cash flow.

The next step is to total up your expenses, and you should make a list of all monthly expenses. Your list should document each and every expense that you have whether it expense, spontaneous or just a one time expense. Remember that this list needs to have a complete breakdown of your costs. Be sure to add in expenses that you have from restaurant dinners and fast food as well as grocery bills. Reduce expenses linked to your cars, such as gas and insurance. If you have payments that you make quarterly or less frequently, divide them up to reflect a monthly payment. Make sure you include incidental expenses, for instance, baby sitters or storage unit rentals. Try to have the most accurate list possible.

Now that you have a good idea of your income and expenditures, you can start planning a new budget. Look at each expenditure on your list, and decide what you could do without. If you normally buy coffee from a cafe, calculate how much money you would save on a weekly basis if you bought it from McDonald’s instead, or made it at home. Exactly what and how much you are willing to compromise is completely up to you. The first step is identifying expenses that are not necessary so you can use the money for something else. If your utility bills are rising, you may want to upgrade your appliances to save some money. Upgrading to well-fitted double-glazed windows, for example, can reduce your heating bill dramatically. Besides you can repair any leaky pipes and only run the dishwasher with a full load.

Swap old, inefficient appliances for those that use less energy. Although doing so may cost you some money upfront, over the long-term you will save a fair penny on your utility bills. Unplug the appliances you do not need. In time you will notice significant savings in your energy consumption. You can make a significant decrease in your heating and cooling bills by improving your insulation, as well as the roof above it. Insulation or roofing issues can be very costly, as maintaining a regular temperature in the home can be expensive. If you invest in the upgrades, it will save you a lot of money in the long run.

Financial Considerations for High-Income

If you find yourself in the camp of high-income, high-debt professionals, consider the following four steps to manage your finances, pay down your obligations and pave the way to a confident financial future.

1. Spend wisely

The income you earn today may seem staggering compared to what you were accustomed to in the years before receiving your degree. Before you increase your spending, it’s important to take a step back and consider how to tackle multiple financial goals at once. Start by earmarking part of each paycheck for your future goals. Knowing you have dedicated savings for future purchases like a new home or sending your kids to college can help you have confidence in your everyday finances – including an occasional splurge. However, until you have your other debts paid off or dramatically reduced, it may not be prudent to take on a large mortgage or a loan for an expensive vehicle.

2. Manage your debt effectively

Keep up on student debt and if you can, consider accelerating your payments. Paying extra will not help you eliminate the debt sooner, but will reduce the total amount you pay in interest. Refinancing the debt to ease your monthly payment schedule may be an option, but given your likely cash flow, it may not be necessary. If you have accrued other debts such as car loans or credit card borrowing, repay them as quickly as possible. Make it a priority to reduce the impact that debt has on your monthly budget.

3. Start saving for retirement

A good rule of thumb for any young professional is to try to save 10 percent (and more, if possible) of their income in accounts designed to build wealth for the long run. While the idea of retirement may seem a lifetime away, starting to accumulate money in a retirement account as soon as possible can be especially effective. Those who begin saving for retirement in their 20s or early 30s can most effectively leverage the power of compounding interest. At this age, you have time on your side and the ability for your investments to grow over the decades to come.

4. Keep it all in perspective

You’ve worked hard to get where you are, and earning a big paycheck is a justifiable reward. Your professional and financial journey is just beginning, so treat your financial life as a marathon, not a sprint. At the very least, focus on living within your means. To the extent you are able, try to live even more modestly with the goal of paying down debts as quickly as possible. You never know what the future holds and what opportunities may arise. Your income level could change, either by your own choice or due to unavoidable circumstances. Take advantage of your good fortune today to strengthen your financial future.

Tips To Get The Best Deal On A Car Loan

As a car buyer, you may want to make sure that you can afford the loan. The car should be something that you can easily afford, and it should also meet your budget. This will keep you out of trouble in most cases.

1. Check your credit reports

First of all, you should get your credit report from the three agencies: TransUnion, Equifax and Experian. Actually, you should check the three of them since you have no idea which one your desired lender is going to use. Moreover, this will also give you enough time to correct your mistakes. Aside from this, you should check your credit rating because your credit rating will be used to set the rate of interest. If you have good credit rating, you will be able to get a loan at a considerably lower rate of interest and vice versa.

2. Shop around

We suggest that you shop around when looking for the best deal. In the same way, you should look for the best deal as far as applying for a loan is concerned. The majority of people don’t do it. Most of them don’t do their homework before going to a dealer. According to the Center for Responsible Lending, 80% car buyers make their financing decision at the dealership. Probably it is the convenience or the attraction of the ads offering low rates of interest. Keep in mind that you can get the lowest rate of interest only if you have very good credit scores. If you want to get started, we suggest that you get in touch with community banks and credit unions. Usually, they offer the lowest rates of interest on car loans.

3. The shortest loan

Since the prices of cars have gone up, the car loans are being granted on higher interest rates so that the total amount of the car could be paid in lowest monthly installments. So, nowadays, you can finance your car for up to 9 years. The monthly payments will come down with an increase in the number of installments. Here is the catch: if you choose a higher rate of interest and you decide to make payments for, say, 5 years, you will be paying more for the car in the long run than if you had chosen a shorter payment period. So, you should choose a shorter period for payments as this will help you get out of the loan faster.

 

Benefits of Donating IRA Distributions

One tax-efficient way to make charitable contributions is through a Qualified Charitable Distribution (QCD). A QCD is directing your IRA custodian to make a direct transfer of funds from your traditional IRA to a qualified charity. The amount transferred from your IRA as a QCD is not included in your taxable income.

Multiple tax benefits

Making a direct distribution to a qualified charity from your IRA is an option limited to those who have reached age 70-1/2. An individual can direct up to $100,000 tax-free per year from their traditional IRAs (for a married couple, the $100,000 annual limit applies to each spouse, for a total of $200,000). The distribution must come from an individual IRA or rollover IRA. The option is not available for workplace retirement plans or an active SEP or SIMPLE IRA.

The QCD approach creates a variety of potential tax benefits, including:

  1. Avoiding limits on charitable contributions. The qualified charitable distribution allows you to direct up to $100,000 to be paid directly by the custodian, regardless of your adjusted gross income (AGI) in a given tax year.
  2. Using a standard deduction. Because the QCD excludes income from the IRA distribution, it frees up the standard deduction to offset other taxable income.
  3. Retaining the full benefit of itemized deductions and personal exemptions. If you make a charitable contribution, a QCD allows you to avoid having to take a large IRA donation as income because you are donating it. Therefore, you won’t inflate your income to higher levels that could impact your ability to itemize deductions and personal exemptions. In 2017, that threshold begins at $261,500 for a single tax filer and $313,800 for a married couple filing a joint return.
  4. Other tax benefits. Keeping your income lower through direct distributions from IRAs to charities also may help you:
  • Reduce taxes you might have to pay on a portion of your Social Security benefits;
  •  Avoid paying higher Medicare Part B premiums;
  • Potentially limit state income taxes;
  • Claim other deductions (medical expenses or miscellaneous itemized deductions) that can only be declared when your expenses exceed a percentage of your adjusted gross income.

Reasons for Budgeting

The practical information from doing budgeting causes the mind to consider or take a closer look at how our money is being used. Another word, is this item necessary? Or Do I really need to get that done right now? Maybe I should wait a little longer on that one. Or you might remember, something like, I have an old one of those in the garage, it that works just fine. I think I will pull it out next week and clean it up. Some other information may help us to see a history or a pattern of our expenses. This information may cause us to make an adjustment for the better or consider a more reasonable path. The working budget can open these doors to us. I heard a statement on TV one day that said information is power. So weekly, monthly and sometimes daily budgeting is a real benefit.

If you are married, the excuse that my wife or husband manages the money can be a detrimental. The whole family unit will suffer behind that kind of thinking. Budgets are for everyone. As for as the mental awareness of the budgeting, it’s just that, being aware of how much money is coming into our households. There is perhaps no better way to do this than to write it down. Society, has just got away from the ideal of putting pen to paper, for some reason. There are definitely many benefits to physically writing something down. One area were I found this extremely help is in making a budget. There is something about the mental activity of doing basic math that exercises our minds. It draws in our focus on what we are doing.

This awareness ties into the many areas or categories for creating a budget. What happens with budgeting sometimes is that we are unaware of or miss some needed categories. Which can throw our budget off a little or a lot depending on how much was missed or left out. This is another reason for creating a solid, hands on budget. Your awareness of budgeting will only continue to increase if you continue to hammer at it and review it with frequent and regular intervals.

Learn Couponing

Couponing can be a lot of fun too whether you are doing it with someone or you are going solo. What an experience it is when you are at the register listening to every beep bringing down your total as your coupons are applied reducing the retail price of your goods. All of your time, effort, and hard work is paying off as they play your favorite beep song in subtraction mode. Equipped only with the fundamentals you too can realize a great deal of savings. Couponing in the beginning is a lot of work, because your couponing skill is new and has not yet become habit. Learning couponing can pay off big however if you stay the course. For example, think about when you were learning to walk. It wasn’t easy but you stayed with it. How about when you learned how to cook, the amount of work it was in the beginning. But after you mastered the basics, you could almost cook in your sleep.

So you want to know how to get started grocery couponing? Couponing like any skill requires knowledge. Grocery couponing can be frustrating, and almost impossible if you don’t equip yourself with the fundamentals first. Well the first step is to commit to the necessary work that will be required in learning how to grocery coupon. No one whether they be extreme couponers or not, was born knowing. They paid a price to know what they know. Too many people think you shouldn’t have to work at learning how to grocery coupon. They think perhaps that this is a skill that should come natural. Well if you clip out a grocery coupon now and then and that’s the beginning and ending of you grocery couponing, then I guess that would come natural.

However, if you want to do some stretch your budget kind of couponing, you will need to acquire some knowledge to do that. You will need to know more than just how to operate a pair of scissors. After you have the basis under you belt, then is up to you how far you want to take this new skill. Just like with cooking or any other skill there is always something new with couponing. The more you learn the more you save. You decide how much you want to coupon. It’s different for everyone.