Family finances can be tricky! I would know. I have a bunch of lovable relatives (my nuclear family) who believe we are somehow made of money. Despite having a strict family budget, some members of my beautiful family still try to find sneaky ways to spend more than is allocated to them at any given time.

Of course, budgeting isn’t all about sucking the fun out of everyone’s existence and putting family life on hold. You want people to live a quality life, and you want them to enjoy that life, and that requires some spending money.

But how can you balance the two? Provide your family with a desirable quality of life while still ensuring that your family’s finances are secure for the future.

Strategies for Managing Your Family Finances

The financial security game is a multi-tiered, multi-faceted, and multi-player game. You can’t… I should say you shouldn’t do it alone. You need the entire family pulling in the same direction.

Let’s assume that, like me, you’ve done everything necessary to streamline your spending. By that, I mean you have created a weekly, monthly, and even annual budget, or you’ve taken the time to go through my Financial Reboot Course to give yourself an excellent chance to reign in your finances.

That’s just one level, facet, or player in the game. Now, you need a secondary layer of strategies to ensure that you are not just budgeting to keep living paycheck to paycheck. You don’t want your family’s financial security to go down the drain.

That’s where these strategies come into play.

Create an Emergency Fund

Let’s talk personal finances— $1,219.40—that’s how much American households have in terms of emergency funds on average. That’s nowhere near enough! The ideal scenario is that your emergency fund should look to cover at least six months of all your monthly household expenses should you suddenly lose your income.

This is where your monthly budget comes into play. Do you see that total figure? It should be 6x that, and then you have your minimum emergency fund figure. Minimum!

I cannot stress this enough: You absolutely need an emergency fund, and some careful financial planning wouldn’t hurt either.

And no, the emergency fund isn’t the money you dip into when you are thinking of going out for dinner over the weekend, and you are short on cash. This is the kind of money that will hold you over when something unexpected happens. Emergencies constitute things like:

• Job loss
• Medical emergencies
• Accidents
• Unplanned large purchases (necessary large purchases)
• Natural disaster expenses

You absolutely need to have this money set aside somewhere it can be easily accessed but also not within your day-to-day reach. What I have found to work is that if I can access my emergency fund within 24-48 hours, it is ideal both in terms of easy accessibility and liquidity as well as inconvenient enough that I don’t get tempted to dip into it for something it really shouldn’t be used for.

As Ryan Derousseau, a financial planner at United Financial Planning Group, says, “Rarely would I advise someone to have less than three months in an emergency fund, but there are many cases where I would advise more…If you know you make imprudent decisions whenever money feels a little tighter, then it’s time to up the emergency fund.”

Truth be told, though, this can be difficult to do, especially when you think about it as a whole: 6x your monthly budget set aside? Who has that kind of money? The best approach I have found to work is to set aside a small amount at the beginning.

Make it automatic and let it go into a separate account. Start small; trust me, you will go bigger once you see the amount growing. And by then, saving will have become part of your regular routine, and you won’t bat an eye.

Look Into Life Insurance

Do you have a life insurance policy? If not, you need to get one. They are not a waste of money. Life insurance will come in handy should anything happen to you or your spouse.

Depending on the type of life insurance you get, the cover can help with:

• College savings and tuition
• Last rites and estate planning
• Outstanding obligations, such as house payments
• Replace lost household income

This is one of the most reliable ways to make sure that your future family financial situation is, at the very least, not totally disrupted by your demise.

The problem is that the world of life insurance is vast, and not every policy is going to be ideal for you. Therefore, it’s important to do your research as you pick and choose. Here are some that I have found beneficial, or at least ideal for my family and me.

• Health insurance: This is a must; should someone get critically ill, mountains of medical bills can bury you very quickly.
• Accidental death and disability cover: This comes in handy should you get into an accident that causes disability and takes away your ability to earn at the same level as before the accident. It can also cover some of those massive medical bills that tend to come with accidents.
• Term life insurance: These insurance benefits can help with household income replacement, debt coverage, educational expenses, funeral and final expenses, and estate planning. It is also generally more affordable and flexible than other types of life insurance.

Make Long-Term Investments

Once you have your emergency fund and life insurance set up, you essentially have a financial foundation upon which your family can survive in case of an emergency. You should strive to keep those funds growing gradually, just to pad that foundation better.

Now, it’s time to look into making sure the family isn’t just surviving but also thriving. And that’s where long-term investments come into play. There are a myriad of long-term investment options available, but I think these are some of the most important:

• Retirement investment plan
• Education fund
• Wealth growth

That last one is tricky because we all have different goals, but essentially, it should be geared towards growing your wealth and, if possible, creating generational wealth, or at the very least, looking to give your kids and grandkids a better head start.

Here are some of my favorite long-term investment options.

Real Estate

This isn’t as passive as most people would think; it takes a lot of research and a lot of work in the beginning. But once you get into thegroove, you will find yourself buying up houses faster than you could have ever imagined.

Rental or sale incomes are a wonderful way to keep the family coffers full. Plus, you constantly have some kind of equity, which is perfect when you need a loan for other business opportunities.

Stocks and Bonds

Smart Investing Through Index Funds

While picking individual stocks might seem exciting and potentially lucrative, decades of financial research show this approach typically leads to underperformance for most investors. Even professional fund managers, with their extensive resources and expertise, rarely beat the market consistently over long periods. The most reliable way to build long-term wealth is through low-cost index funds that track broad market indices like the S&P 500.

Index investing works because it harnesses the overall growth of the economy while minimizing costs and risks. Instead of trying to outsmart the market by picking winners—a strategy that typically fails—index investors own small pieces of every major company. This approach provides broad diversification and eliminates the common pitfalls of individual stock picking: emotional decision-making, insufficient diversification, high trading costs, and the near-impossible task of consistently identifying winning stocks before the market recognizes their potential.

The evidence is compelling: studies consistently show that 80-90% of active managers underperform their benchmark indices over periods of 15 years or more. This underperformance is largely due to higher fees and trading costs but also stems from the fundamental difficulty of consistently making better predictions than the collective wisdom of all market participants. When you include the time and emotional energy spent researching and monitoring individual stocks, the case for simple, low-cost index investing becomes even stronger. The goal isn’t to beat the market—it’s to capture market returns reliably through disciplined, low-cost investing while avoiding the costly mistakes that plague individual stock pickers.

Real Estate Investment Trusts (REITs)

If you aren’t really excited about all the research that is involved with real estate investing, then take a short cut through Real Estate Investment Trusts (REITs). This is where you choose a profitable real estate management company and buy some shares so that when they make money, you make money. Let them do all that researching and buying up properties.

Summary

Honestly, managing and growing family finances can be fun if you can get the whole family involved. Have everyone think and row in the same direction. Although it will be difficult to do with teenagers, once you instill a culture of financial prudence in them, they will often make the right financial choices.

I know you can use many other strategies to ensure that your household finances are solid going into the future. These are just some that I use, and what I have found is that once you get started in this world, you will discover more and better opportunities along the way. So, get started!

The post Managing Family Finances: Tips and Strategies for a Better Financial Future appeared first on Penny Pinchin' Mom.

It is tax season!

You know the goal is not to get much of a refund.

However, a refund is always better than paying in!

But when that money shows in your account don’t go and blow it on what you want!  Make some smart moves with your refund.

Pay off debt

If you have debt then that means you should not have fun with any extra money. Nope. Every penny that you earn (beyond your regular income) should be used to pay off your debt.

While some experts will claim to pay the bill with the highest interest rate, I recommend paying the lowest balances first.  The reason is you see results.

If you are getting $2,000 back and owe $500, $1500 and $2500, pay off two of your bills. Now,  you’ve got one payment and can roll all three monthly payments into one and pay that largest bill off more quickly.

You see progress in moving from three debts to one and that alone can be enough to keep you motivated.

Build your emergency fund

Experts used to say that your emergency fund should be three months of income for a family.  After watching many struggle through the last recession, I recommend it be six-nine months instead!

I get that is a LOT of money to save up, but your tax refund can be the perfect way to build up your savings.  But don’t put it in your regular savings account. You don’t want to be tempted to spend it.

Set up a new account at your bank. Deposit your refund into the account that is for emergencies only. Don’t touch it.

Now you’ve got money earmarked for your emergencies and should never touch it unless absolutely necessary.

Invest in your future

It is fun to spend money now but if your retirement accounts have taken a beating (or if they are non-existent) it is time to make that investment.

Visit with a financial expert and set up an IRA or other type of retirement savings account and invest that money.  That $1,000 you fund today will be worth much more when it is time to cash it in.

Make upgrades

Look around your house for appliances or vehicles that may need to soon be replaced. When you catch a sale, make the investment now. Don’t wait for it to break down completely.

If you do wait, you may be forced to pay full price and your money won’t go as far. Being proactive and replacing what needs to be when the price is right is a smart money move.

Make home improvements

Look around the house to see what needs to be repaired or updated. Is the paint starting to peel on the trim? Is the carpet wearing out?

Your house is an investment you’ve made so you need to take care of it. Peeling paint can lead to dry rot. Old carpet could lead to more stains, odors or even damage to the subfloor (which could cost you even more).

Take care of your house so when the time comes to sell, it is in great shape so you can get top dollar.

Do something for yourself

There is nothing wrong with making an investment in your well-being. In fact, it could be a very smart move.

When you feel better about yourself and give yourself the opportunity to get or do things you don’t normally, it changes your perspective.  You get the chance to focus on you and that is a GOOD thing.

Splurge on that handbag. Go out to dinner. Set up that spa day. Just don’t go too overboard.

Spend it as a family

You can also get the family to weigh in what you can do with your refund. You may have no debt; an emergency fund and retirement looks great. That means you can do something fun!

Talk with the kids about what to do with the refund.  It may be a vacation or adventure.  It may mean buying a basketball hoop or bikes for everyone.

Work together to determine the best way to use the money.

A tax refund is your money. Use it wisely.

The post Smart Moves to Make with Your Tax Refund appeared first on Penny Pinchin' Mom.

When you get married, you join your lives together.  That means not only your household but your finances too.  Couples need to not only create and use a budget, but they also need to be on the same page when it comes to saving and investing.  One simple way to do both is by using the Twine app.

You want need to save and invest your money.  That is how you plan for the unexpected and save for your future.  Whether your goals are to pay for college for your kids, travel the world or open your own business you have to save money.

And, if you are in a relationship, that means your partner needs to be on board too!  You could both try to clear your schedules and find a time that works for you to travel to a traditional investment broker.  But that’s so “20th century.”

These days we are connected to our devices for just about everything. So, it just makes sense that you can save and invest the same way.  But you don’t want to just search for apps in the app store. Nope. You need to make sure you use a partner you can trust.

Like Twine from John Hancock.

Quick Twine Summary

• Built-in savings and investing features to help you reach your financial goals
• The only savings and investing app created specifically with couples in mind
• Free to use for savings cash accounts; higher annual investment fees than some alternatives
• $5 promotion to help you reach your first savings goal!

Twine App Review

What is Twine?

Twine is a program from John Hancock.  They realized that people needed to find a better way to save money.  Something that was easy.  And, a way to do it as a couple.

John Hancock is headquartered in Boston, MA.  Founded in 1862, it is one of the most well-established insurance companies in America.

How does Twine work?

First, download the app.  Then, set up your profile and connect your account.  Twine will give you several options for your savings goals.  Select one of those or create your own (you are in control).

Once you do that, you’ll establish your recurring savings deposit.  You may want to set back $50 a week for your vacation or $100 a week for your new car.  Whatever it is you want to save for, Twine helps you achieve it.

Once the account is established, you will invite your partner or spouse to be included.  They too will download the app, connect their account (if not the same one) and can establish savings goals.

The great thing is that you are in control.  You can start, stop and change your savings options any time you need to.

How much do you earn from Twine?

The return on your investment depends upon your risk factor.  You can choose from conservative, moderate or aggressive savings portfolios.  You are in control.

You can also set up a savings cash account.  The earnings here are only 1.05% APY (variable rate).  Now, you won’t get rich this way, but something is better than nothing, right?

How much do you need start using Twine?

If you plan on jumping in with the cash savings account, you can start with as little as $5.  If you plan to utilize the investment feature, you will have to invest at least $100.

How much does Twine cost?

You can use it for free.  If you opt to save in the cash account only, then there are zero fees from Twine.  Nothing. Nada. Zilch.

However, if you decide you want to invest in one of their portfolios, you will pay 0.6% annually.  I know this is a bit higher as other firms charge as little as 0.25%, making Twine twice as expensive.

But, again, if you use it for the even just the cash savings feature, it can help you reach your savings goals — for free!!

Pros & Cons of Twine

There are several benefits to using Twine.

• It is the first app of its kind that is geared towards couples.  You can work with your partner to reach shared financial goals – while still maintaining separate accounts.
• Your deposits are FDIC and SIPC insured  – so no worries there.
• The app gives you tips and recommendations of things you can to do help you reach your savings goals more quickly.
• The cash savings account pays more than your typical savings or checking account – making you more money.
• There is an option to invest (only if you want to) and you can track those investments anywhere in the world.
• The app is very user-friendly and fun to use.

And of course, with every good thing about a company, there are usually a few bad things you need to know too.

• The app is only available through iOS.  That means Android users can’t access it at this time. There is a web version you can use that has most of the same features.
• The investment fees are a bit steeper, making the investment feature one to think twice about.

Is it Twine safe to use?

Your money is protected under FDIC, up to $250,000.  You also have the SIPC protection (which covers broker failure), up to $500,000.

Considering it is partnered with John Hancock should give you peace of mind that they do have your safety and security in mind.

Should you use Twine?

Twine is great for short-term goals such as a vacation or that new car.  However, if you are looking to save long-term, you will want to check out other options.

On the flip side, the ability for couples to save or invest for shared financial goals is a huge plus.  You normally have to set up different accounts for each method.  But, with Twine, there is just one account and you save together to reach your goals.

Honestly? Only use it for the cash savings feature.  It is just too costly otherwise. You could check out other sites such as Ally or The Motley Fool for better (and more affordable) investing options.

The post Twine Review: A Simple Way to Build Your Savings And Investments appeared first on Penny Pinchin' Mom.

Retirement is usually a daunting transition for most people. Many would admit that the anxiety retirement carries stems from them simply not knowing how to prepare for this life-changing event.

In fact, only 27% of the baby boomers that Harris Poll surveyed claim to be “very prepared” financially for retirement. Others who aren’t as prepared most likely think so due to healthcare costs in retirement. According to The Motley Fool, nearly 30% of the boomers they surveyed believe their savings will be enough for healthcare expenses in retirement.

After these baby boomers closed in on retirement age, they realized a surprising fact – Medicare isn’t free. That’s likely the majority of baby boomers believe to not have enough saved for healthcare in retirement.

Expecting Medicare will be free is one of the biggest retirement mistakes you can make. Continue reading to find out how you can avoid this mistake and other mistakes so that you can be better prepared for your golden years.

Costs of Medicare

Throughout our working years, we have Medicare and Social Security taxes deducted from our checks. These Medicare deductions are only paying for your hospital coverage through Medicare Part A.

You shouldn’t think of this as bad news. Medicare Part A has the most expensive monthly premium, so earning a premium-free Part A is a big deal.

Medicare Part B, however, is not premium-free.

In 2019, Medicare Part B runs $135.50 per month for most people. However, if your income of greater than $85,000 as an individual, your Part B monthly premium will be increased. It’s important to estimate what your Part B premium will be based on your income so that you can be sure you have set enough aside for the costs of your healthcare in retirement.

If you didn’t know that some people pay more, you could find out after you have signed up that your premium is double or even triple what other people pay. Surprises like this one can cause you to use up your savings a lot faster than you had originally expected.

Another similar mistake people make is underestimating the amount of out-of-pocket costs you can experience with Medicare. They are significant so many people need to purchase additional coverage to take care of these expenses.

Costs of Medigap

Because there is no cap to what you can spend out-of-pocket with Original Medicare, many people elect to have a Medigap plan in addition to their Part A and B coverage. Medigap plan premiums are based on many factors such as age, location, and carrier. In some states, popular plans run about $100 to $150 for new Medicare beneficiaries while in others they may cost $250/month+.

Keep in mind that this will be a premium you pay in addition to your Part B premium. If you weren’t prepared for this extra premium, you may not be able to afford this type of Medicare plan, which could leave you responsible for paying Medicare deductibles and coinsurance out-of-pocket.

Many baby boomers admit that they will rely solely on their monthly Social Security checks as their income. Since the average Social Security check is only around $1400/month, making this mistake could create problems when trying to pay for your Medicare parts and plans. Those premiums can eat up 10% or more of your Social Security check.

Save for Healthcare Costs in Retirement by Enrolling in an HSA

An HSA is a health savings account. This type of account was created so people could save money that could later be used for qualified medical expenses, such as insurance premiums. To enroll in an HSA, you simply need to first have a qualified high-deductible health insurance policy.

Once you are enrolled in a qualifying health plan and have set up your health savings account, you can start contributing money to it. If you are an individual, you can contribute up to $3,500 a year. If you have family members on your health policy with you, you can contribute up to $7,000 a year. For those who are at least 55 years old, they can contribute up to $1,000 extra each year.

As you can see, HSA contributions can add up to a substantial amount of savings. For example, if you enroll in an HSA and start contributing the family amount at age 30, by the time you are Medicare age, you could potentially have saved $255,000 ($7,000 x 25 years + $8,000 x 10 years). This doesn’t count the interest you would also earn over those years.

Of course, you may need to dip into this account prior to Medicare for medical expenses, but you get the point; an HSA is a great way to save for healthcare expenses in retirement.

Fall Back Option

If retirement is just around the corner for you and you feel you won’t be able to live on your Social Security income and your savings, pick up a side hustle.

Baby boomers are starting part-time, work-from-home jobs all the time now. Find a hobby you enjoy that you can also make money while doing and start earning some extra income.

Danielle K Roberts is the co-founder of Boomer Benefits where she and her team help baby boomers navigate their Medicare insurance options. She is a member of the Forbes Finance Council and writes frequently about Medicare, retirement and personal finance.

The post How to Avoid These Big Retirement Mistakes appeared first on Penny Pinchin' Mom.

It seems as soon as our children are born, we’re planning for their future. Without being able to see eighteen years ahead, how can we know for sure what we’re up against and save accordingly? In this series, we’re going to break down saving for college one phase of life at a time.

THE SMART WAYS TO SAVE FOR COLLEGE

Ask the right questions.

But your child hasn’t even settled on a favorite color, much less a life path. It leaves a lot of parents wondering where to start. Don’t worry—you’re not picking in-state or out-of-state, or declaring a major just yet. To start the conversation about college before school enrollment age, you just need to establish a direction based on your expectations.

Is college an expectation that both parents have for your child?

 Are the parents covering it all?

 Will the children help pay for some or all?

 Will you need loans?

These questions can be difficult to navigate because the options are as varied as the students that will eventually use the funds. College Planning Services can act as a great starting point to guide your conversations about the future. You can equip yourself with the tools to determine if you’re going to be saving to send your child on a fully funded trip to an ivy league school, or if you’re willing to sponsor their way through a four-year education with the promise that they’ll pay their own room and board.

The offering of every college is unique, but that doesn’t make it impossible to know what neighborhood of price tags you’re aiming for. Using resources like university comparisons or cost calculators, you can narrow down your bottom line with criteria like your current household income and the state you currently live in.

None of the decisions you make now will seal your child’s educational fate, but starting from somewhere will help you feel secure that when the time comes for the decision to be made, you’ll be able to give them the flexibility to not be held back by the price.

Set up the right accounts.

A piggy bank, while an adorable addition to any nursery, isn’t going to give you the return on investment that will make a dent in your child’s college savings when the time comes. A 529 or College Savings Account, however, will. 529 Plans and Education Savings Accounts are both geared specifically towards your child’s financial future.

A 529 Plan 

Is earmarked for education

While withdrawal on a 529 is possible under certain conditions, this account is designed for education only. Savings from a 529 plan can be applied to tuition, textbooks and school supplies at any accredited higher education institution in the US. Money can also be used for student housing, room and board

Grows through contributions

In addition to the primary donors (the parents, most likely), other family members, godparents or even exceptionally generous neighbors can all add money to a 529; either regularly or for special occasions like birthdays or holidays. As the account grows, the primary donors can change their contribution easily.

Belongs to the donor

The money contributed belongs to the donor, not the beneficiary, until the time of payout for the education. This is helpful in the case that your child applies for federal aid once they come of age.

Poses potential tax benefits

The distributions for your child’s school costs are tax exempt. Plus, a lot of states will grant benefits to the account donors on state income tax. The assets grown aren’t counted in the gross estate for estate tax.

Applies to everyone

Nearly everyone is eligible for a 529 Savings Plan, because there aren’t income or age restrictions on the accounts. However, you’ll reap the greatest payoff by starting one when your kids are young and haven’t started school yet.

An Education Savings Account (ESA) 

Is earmarked for education

Just like the 529, savings from an ESA plan can be applied to education from primary school through college or vocational schooling.

Can accept more investment options

529 Plans have a limited number of investment options, but ESAs follow the rules of IRAs, which mean they can allow stocks, bonds and mutual funds.

Poses potential tax benefits

The tax benefits are nearly identical to that of a 529, meaning contributions and distributions are tax-exempt and there’s a potential for income tax breaks.

Belongs to the donor

Both a 529 and an ESA belong to the donor, and beneficiaries can be added or changed with no penalty.

 Has more restrictions

There are also more caveats attached to an ESA than to a 529. You can contribute up for $14,000 a year into a 529 but only $2,000 into an ESA. The money also must be used by the time the beneficiary turns 30, or you risk penalty

SETTING UP A COLLEGE SAVINGS ACCOUNT

Every savings option has its own benefits and risks to the account holder, so while it’s great to do your own research, it’s also smart to seek out the advice of a certified professional who can look at your specific and unique financial situation. They can help you set up the right account type for your needs.

Save the “right” way.

Remember, the only “wrong” way to save for college is to not save at all. And while even then, there are still aid options (which we’ll cover in a later in this series), the most surefire way to secure funding for the future is to create it yourself.

The College and Career Planning team at CommunityAmerica Credit Union is a 2018 National Parenting Products Award winner. In addition to college planning help, CommunityAmerica provides a full suite of financial products, including checking, savings, mortgages and a variety of loan products to meet consumer and business needs. As a not-for-profit financial institution, CommunityAmerica offers highly competitive rates on deposits, loans, and fewer, lower or no fees at all. For more information, visit https://collegeroadmap.communityamerica.com/.

The post Options for Saving for College – No Matter How Old Your Kids Are appeared first on Penny Pinchin' Mom.

You don’t have to have a ton of money to start investing. There are lots of great ways to invest small amounts of money – anything from $5 to $100 – and start seeing big returns.

Investing your money is one of the best ways to set yourself up for long-term financial success. If you’re ready to start making your money work for you, here are nine ways you can invest $100 or less.

HOW TO START INVESTING

Start a side hustle

A side hustle can lead to great things – paying off debt, achieving your financial goals, and developing a strong sense of passion! Using $100 to start a side hustle may be one of the best investments you make. $100 can allow you to buy materials, equipment, or tools to help you make the most of your talents to make money on the side.

Tons of people find that their side hustle not only gives them more financial security, but also makes them happier!

Pay down your credit card

Paying off your debt may not sound like investing, but it can be a great strategy for creating long-term financial success. The quicker you pay off your debt, the quicker you’ll become debt-free and free up extra income to make other investments.

Making extra payments whenever you can – even if it’s just an extra $100 – can add up quickly, so you don’t have to continue to be a slave to debt.

Invest in your 401(k) or Roth IRA

The sooner you start saving for retirement, the better off you’ll be in the long run. That’s because if you start investing early, your money can grow over time thanks to compounding interest. The best and easiest way to invest for retirement is through your 401(k) or IRA.

Many employers allow you to invest a portion of your paycheck directly to your retirement account, making this method of investing nearly effortless. Just set up a contribution, and watch your money grow! Plus, when the money’s coming straight out of your paycheck instead of out of your bank account, you probably won’t even miss it.

Micro-Investments

If you’re scraping around for spare change each month, you can still start investing. Innovative companies have popped up that allow customers to invest tiny amounts. Acorns is an app that allows you to round up any purchase you make to the nearest dollar, and then they invest the difference. So, if you buy that avocado toast for $6.49, Acorns rounds up to $7 and invests the extra $0.51 for you. It makes investing effortless. Think of it as a modern-day change jar.

Other apps, like Stash, allow you to make micro-investments starting at $5, without charging you a transaction fee. You can get an extra $5 when a friend you refer signs up, so if you’re a trend-setter within your friend group, you can literally cash in!

Try a Robo-advisor

Robo-advisors have become incredibly popular for anyone wanting a more hands-off approach to investing. They allow you to get started with less money than most brokerage firms. Plus, they’re designed to invest your money in a portfolio that’s customized for your specific needs.

For example, Betterment matches you to a customized portfolio and automatically adjusts your investments just like a broker would as the market changes. Because Betterment uses robo-advising instead of human brokers, their costs are low, meaning they get to pass on the savings to their customers. Thanks to this innovative technology, there’s no better time to start investing than now!

Start a Business

If you have even the slightest bit of an entrepreneurial spirit, you should absolutely invest a bit of money to harness that passion. Whether that means starting a blog, establishing yourself as a freelance consultant, or launching an Etsy shop, $100 can go a long way.

Starting (or growing!) your business can help you create more long-term profitability. Investing or reinvesting in your business is the perfect example of the old adage that you have to spend money to make money.

Also see: Do Itchy Left Palms Mean Lottery Luck?

Invest in Yourself

Investing in yourself can provide returns for years to come. If you can spend a little extra money (and time) developing valuable talents and skills, you can greatly increase your income – which is always a good investment!

Depending on your field, taking an online class or getting a certification can help you achieve more throughout your career. Talk to your boss to see if there are skills you can develop to become eligible for a promotion. Then chase down any opportunity you can to develop those skills. Your future self will thank you.

Open a Savings Account

Although a savings account doesn’t exactly promise large returns, it can still be a valuable tool for ensuring financial security. A savings account is a necessary part of anyone’s financial portfolio. Even though your money may not grow quickly, a savings account keeps your money available to you on short notice.

So if you want to save for a vacation, a down payment for a home, or anything in between, a savings account is the perfect choice. Even if you already have a savings account, having multiple savings accounts may allow you to achieve multiple savings goals faster!

Peer-to-Peer Lending

If you’ve already got a strong emergency fund and your retirement savings is doing well, then peer-to-peer lending is a great way to increase the diversity of your financial portfolio. Peer-to-peer lending sites like Prosper give you a place to invest in others starting with as little as $25.

They take care of screening loan applicants, and you’ll get money each month as borrowers pay back the money you (and others) loaned. Think of it as a GoFundMe, but with a return on your investment.

By Lucy Oake, a staff writer at One Smart Dollar.

The post 9 Ways To Start Investing with $100 or Less appeared first on Penny Pinchin' Mom.

Starting a family is one of the best decisions that any person can ever make, but it doesn’t necessarily mean that everything is going to be a bed of roses. In fact, a lot of young couples don’t realize the importance of managing personal finances. As a result, they end up either unable to buy things for themselves, or drowning in a sea of debt.

Why Do Young Families Struggle with Finances?

The truth is that many of us buy things that we really don’t need. You may have read stories of some individuals who became bankrupt after uncontrollable spending on unnecessary things.

Consequently, being unable to have self-control may somehow be linked to a psychological disturbance, which in reality may turn people into shopping addicts. Buying unnecessary things without careful planning may become for them a way of diverting their negative emotions into something that can mask these thoughts and make them do something that would make them feel good about themselves.

As for others, they simply don’t have enough knowledge to understand the concepts of wise purchasing, depreciating value, and correct investments.

Learning from Business Finance

While managing personal finances may not be as complicated as that of managing a business, you can actually learn a lot from business financial advice. After all, it’s important to know how to properly manage the money that comes in every month.

Some of the things that young families – and any other person for that matter – should learn from businesses include the following:

Risk Management and Assessment

No matter how big or small business has been established, company owners should know how to identify, measure and control the existing risks, the possibility of their occurrence, and their economic impact.

On their part, young families need to implement actions to manage the causes and effects of risks. Such an assessment should be done especially when greater uncertainties are anticipated, wherein there is a need to enhance risk management.

Cash Flow

Business owners need to determine the company’s financial capacity and to know how efficiently its resources are being utilized. By knowing these things, they can generate additional income for future investments. The same is true with private individuals and families.

Ratio of Profitability

This refers to the operational efficiency of a business.  This information helps businesses identify inefficient areas that may require modification, and helps in measuring the profit relationships with sales, total assets, and net worth. In a family perspective, we need to know how to grow our money by spending it in value-adding products and services.

Best Books on Personal Finance and Money, for Young Families

Managing your finances and be able to know how to control unnecessary expenditure can be made easier and more effectively by receiving advice on financial management. Additionally, there are various books that talk about financial growth and control, which you can use as great sources of information and inspiration.

Listed below are some of the best books to understand finance that can help young families in managing and controlling their finances.

“I Will Teach You To Be Rich” by Ramit Sethi

This book encourages its readers to follow a 6-week personal financial program utilizing a practical approach that is based on effective banking, saving, budgeting and investing.

“Rich Habits: The Daily Success Habits Of Wealthy Individuals” by Thomas Corley

This amazing resource has taken its author five years to study what both rich and poor people do. What Corley found out is that starting a good habit at a young age can make a striking difference in the lives of people in the future. Starting young means having to embrace several opportunities that can distinguish persevering individuals from those who just want overnight success.

“The Millionaire Next Door” by Thomas J. Stanley and William D. Danko

This incredible book teaches you how to spend less than you actually earn, avoid spending on unimportant things, and maximize and diversify your investments. It’s a truly must-read book that can put anyone financially independent and free.

“You’re So Money: Live Rich Even When You’re Not” by Farnoosh Torabi

Anyone can live within their means and be happy and fulfilled. You only need to learn how to prioritize expenses, know when and what to splurge on, and realize the things that you can save up for.

“Why Didn’t They Teach Me This in School? 99 Personal Money Management Principles to Live By” by Cary Siegal

The author originally intended this book to teach his own children about how to better manage their money. But eventually, he was able to come up with a lot of sound advice that would encourage more people in enhancing their financial management skills.

“Financially Fearless: The LearnVest Program For Taking Control Of Your Money” by Alexa Von Tobel

The LearnVest Program teaches people in the workforce how to properly budget the monthly salary in order to fulfill all obligations and still have some money left to splurge on something that brings them happiness. The tips in the book also talk about how to save a little more money for future use.

This book is not your conventional financial management book that focuses on a lot of financial or technical jargon. The witty author wrote this book in a way that would highly encourage young individuals to start early and start right.

“Thinking, Fast and Slow” by Daniel Kahneman

When we talk about managing our finances, this involves a number of decisions that need to be made. This book allows readers to understand what drives them to arrive at a particular decision.

These books can already do wonders to inspire young individuals on how they can properly manage their finances and become worry-free of getting stuck in debt, particularly when individuals may face uncertainties such as changing careers or welcoming more children in the family. Nevertheless, being able to gain financial control allows you to avoid further financial losses which could tremendously affect your quality of life.

By following the tips above and reading up on these finance books, you may discover new and highly effective strategies to properly budget the money that you have.

The post The Best Personal Finance Books for Young Families appeared first on Penny Pinchin' Mom.

For many of us, our 30s are a dynamic time in life. During these busy years, jobs turn into careers and relationships are solidified by marriage or transformed by children.  Most people are also in their mid-30s when they purchase their first home.  While these are all expensive items, one thing you should not overlook is saving for retirement.

Retirement seems a long way off when you are 30, but is much closer when you turn 39.  The sooner you start saving and investing for your golden years, the more money you will have when the time comes. And, if you work it right, you may even be able to start your retirement earlier than expected.

Thirty-three percent of people ages 30 to 49 years old don’t have a retirement account. YIKES!! If you’re within this one-third of people, and in your 30s, you need to make retirement savings a priority.

If you aren’t in your 30s, these articles can help with retirement planning:

• Retirement In Your 20s: What To Do NOW To Get On the Right Savings Path
• Saving for Retirement in Your 40s
• In Your 50s? There is Still Time to Save for Retirement
• Why It’s Not Too Late to Save for Retirement in Your 60s

STRATEGIES TO SAVE FOR RETIREMENT IN YOUR 30s

Invest in your 401(k)

If your company offers retirement savings through a 401(k), start by discussing your options with someone in human resources. They can get you set up with a plan that works well with your income and goals.

If you currently contribute to your company’s plan, make sure you are making the maximum contribution that they may match.  For example, if they match 25% of what you contribute, up to 4% of your contributions, that is FREE MONEY!  Make sure your contribution is 4% as they will give you 1% for free – for a total 5% contribution.

As you get a raise, continue to increase your contribution by 1% annually.  You will not miss the money and will be on target for achieving your savings goals.

Open an IRA

Another retirement vehicle to consider is an IRA.  An Individual Retirement Account (IRA) is an easy way to add more money to your retirement savings.  You can contribute up to $5,500 (subject to age and income limitations) and the contributions may be tax deductible (see your CPA).

Visit with a Financial Planner

Financial Planners are a must when you have investments and are saving for retirement.  They analyze and help ensure you are on the right path to achieving your financial goals.  They don’t usually charge for their services (if you invest with them) and can tailor a plan just for you.

Don’t change jobs

Sometimes it is tempting to change jobs because it looks better.  But, keep in mind that you will need to start over with service requirements and contributions to a retirement plan.  The company may also have a plan that is not nearly as robust as the one through your current employer, making you miss out on additional savings.

Diversify your investments

As you get older, the level of risk you can, or are willing to take, changes.  You can be much more aggressive in your 20s and early 30s, but as you approach your 40s, you may want to make adjustments.  Ask your investment or financial advisor about changes you should make each year.

FINANCIAL GOALS IN YOUR 30s

In addition to saving for retirement, there are goals you may want to achieve and financial rules you should follow once you hit your 30s.

Budget

Make sure you have a written budget you follow every month.  You should account for every penny you make — in essence giving every penny a job.  Don’t forget to include items such as additional retirement and emergency fund savings accounts.

Watch your Credit Report and Score

Each year, check your credit report for free at AnnualCreditReport (this is the free site mandated by the government and the only one you should use).  Check for errors such as items that should have been discharged, accounts you did not open and other issues so you can submit them for correction.

You should also know your credit score.  You can use a free site such as Credit Sesame to check your credit score, but keep in mind it is your vantage score (so not your true score – but it is pretty accurate). If you want to know your actual credit score, MyFico.com offers this and access to your credit reports from all agencies for a reasonable fee.

Save at least six months of income

Experts have always said you should save three months of your income in case of an emergency.  However, if we learned anything during the last recession, that isn’t quite enough. If you are single, work on saving at least six months of income and if you have a family, aim for nine.    You can increase your savings in many ways, such as eating out less, selling items and even getting a second job.

Have a will and health care directives

It is something none of us wants to think about, but it is important to not only have a will, but also health care directives as well.  For around $70 – $90 you can create one at LegalZoom. However, if your situatio is more complex, or you are not comfortable creating one yourself, it is important to reach out to an attorney who specializes in estate planning.

Check your life insurance

If you have kids, you need life insurance.  And, it is also wise to purchase policies on them as well.  If something happens to any of you, funeral expenses alone can be a financial burden.  Then, if there are medical expenses you need to pay for on top of burial costs, it can cause a lot of financial strain for your loved ones.

Invest Time, Too

A 2014 survey conducted by Charles Schwab, found that only 11 percent of workers spent five hours or more assessing their 401(k) investment options. This is far less time than how long many of us spend researching a new car or a vacation! If the idea of investments and the terminology attached overwhelms, you might consider taking a course.  It might be good to think about hiring someone to help.

A trained professional can ensure you are meeting your retirement goals. When you work with a financial planner, he or she will help you establish an account and assist with diversification – an important element to successful investment. A good financial planner can be invaluable when your accounts, and family, grow.

Steady As You Grow

Once children enter the picture, so do a host of excuses about why retirement saving is impossible. While it’s important to provide every avenue of support for your little ones, you must do so responsibly. For instance, starting a state-sponsored 529-college plan for your children is a great way to save for college expenses but it’s important to remember that they can always get a loan for school – you can’t for retirement.

What is your key takeaway for saving if you are in your 30s? Start putting more money away for retirement. While saving 10-15 percent of your income for retirement might be difficult, it will feel so good when you are comfortably retiring in your 60s.

The post How to Plan for Retirement When You are In Your 30s appeared first on Penny Pinchin' Mom.

If you ask most people the first they do on payday and they will usually say pay rent, buy food or put gas in my car. But, that is not what they should do.  There is one thing that needs to happen before you do anything else.

I have a question for you.  What is the first thing you do when you get your paycheck on payday?  For some of you, the first thing you think you need to do is to pay the bills which are due.

What would you think if I told you that was wrong?

The very first thing you must do on every single payday has nothing to do with spending your money. In fact, it is just the opposite.

FIRST THING TO DO WHEN YOU GET YOUR PAYCHECK

When you get paid, the first thing you must always do is pay yourself. That’s it.  In fact, if you do this, you will find that you can save more money than you probably ever even realize.

While this is simple in theory, it is shocking that it is not what people do.

Look back at that first question.  Are you one of those people who pay everyone else first and save “only” if you have money left over?  You aren’t alone.

I’m not saying you should not pay your bills. Not at all.  What I am recommending is to change the way you look at money and save what you need to first and pay your bills afterward.

WHY THIS IS SO IMPORTANT

You might be thinking about saving money for a bill that is due annually or an upcoming trip.  But, you need to also save for potential emergencies and also for your own retirement.

If you don’t start saving now, what will you do when your car breaks down?  Do you think that you will be able to live on social security when you retire?  What about paying the annual taxes due on your property?  How will you pay for these items? Without proper savings, you may have to rack up debt just to cover these expenses.

By putting your savings first, you are taking care of yourself.  After all, no one else is going to do it for you.

WHAT DOES IT REALLY MEAN TO PAY YOURSELF FIRST?

It is a simple as putting money into your savings account on payday. In fact, when listing your bills due for each pay period, the very first one you list needs to be your savings account.

If you are bad about remembering to do this, you can automate this through your bank.  Create an automated transfer that happens on every payday.  That way, the money left in your account is what you have to pay the remainder of your bills – as you’ve already taken care of yourself.

SHOULD I PAY MY DEBTS FIRST WITH MY PAY CHECK?

If you have debt, it is, of course, important to make sure you have at least $1,000 in the bank before you begin to pay them down.  Once you’ve reached that goal, pay yourself first can move to “pay the debt first.”  That helps ensure that you are tackling your debt with a vengeance.

Once your debt is paid off, then you get to truly pay yourself first!

Read More:  Tips & Ideas To Quickly Boost Your Emergency Fund

I CAN’T AFFORD TO SAVE MONEY, CAN I?

I understand if you are struggling to pay your bills.  However, if you look carefully at your budget, you may find some ways you can cut back.

Paying yourself first needs to be a priority.  If that means cutting back on unnecessary expenses, then you need to do that.

In life, we have our wants and we have needs.  You can see this in your budget.  Look at the items you need to live and those you could survive without.

Saving money is not a want.  It is a need. If you look at our free budget form, you’ll see savings is the very first item listed.  That is not just a coincidence.  It was designed that way as it is the very first bill you should pay out of every paycheck.

The next time payday arrives, remember to save some for yourself before you give to others.

The post The One Thing You Must Do Every Single Payday appeared first on Penny Pinchin' Mom.

It is never too late to save for retirement. But, you may think what about retirement savings in your 60s.  Is it too late for me? While it may seem like time to save is running out, it’s really just an excuse.

You or a loved one may might be in theapproximately 14 percent of people older than 65 years old who don’t have a retirement account.  If so, there are things you need to do now in order to retire with a little peace of mind and money in the bank.

There is so much more to know about retirement and these articles might help!

• Seven Different Types of Retirement Accounts
• Your Wake Up Call!  Saving for Retirement

A Long Term Look

Once you retire, money stops coming in and only goes out.  There is no way to avoid that.  It is absolutely imperative that you create (if you don’t have one already) and adjust your financial plan for retirement. This means taking a hard look at spending habits.

Gather as much financial information as you possibly can on anything you spend money on – everything from grocery store receipts to monthly gas bills. Budget apps such as EveryDollar, Quicken or Mint can help you track spending.

Once you’ve established what you’re currently living on, it’s time to think about the future. Ask yourself, how much do you plan to live on? Does that total include trips to visit grandchildren or paying off a mortgage? Another thing you can’t ignore — how much do you need for medical bills? If you have a preexisting condition, this will need to be higher, so keep that mind.

Once you understand everything you are spending, start cutting your budget as much as possible.  Have cable? It might be the time to cut the cord.  Are you assisting your children with their bills? Stop that. You need to be saving as much money as possible. How much exactly?  Aim for as much as 50 percent of your monthly income. Yes, we know that is a lot, but it is necessary.

A Health Savings Account (HSA) can help out immensely in retirement since there are tax-advantages to having one. Similar to an IRA, you can withdraw money for non-medical expenses (note: funds will be taxed as income) after age 65.

A Plan In Action

As you decide what the future holds and how you’ll achieve this, it’s worth remembering that the easy answers to your retirement concerns aren’t always the best resolutions. For instance, reverse mortgages may seem like a good idea but there’s more to them than initially meets the eye. They can often do more harm than good since the equity is merely a portion of your home’s worth. Also, reverse mortgages typically come with high fees and upfront costs.

Of course, you may be wondering about other sources of potential post-retirement income – namely, Social Security. Renowned financial expert Dave Ramsey advises people to act as if Social Security doesn’t exist when they’re planning for retirement so that it’s arrival is more of a bonus. However, if you know that these payments will be crucial, it’s best to wait until at least age 70 so you can maximize those payments.

Lastly, if your savings are between nothing and not nearly enough, consult immediately with a financial advisor. They will help you cut expenses and start saving at the levels you need to retirement comfortably, and often with a tried-and-tested plan. A good financial advisor can also help you diversify any investments that you or a spouse carries or give you a technique for properly maxing your saving options.

With retirement so close, action is the key word. If you’re proactive about not only putting money away, but also curbing your spending and making financial changes, you can start making plans for life after work.

No matter how old you are, it is never too old to be saving for retirement. For more advice on navigating financials or saving for retirement, click here for friendly advice from the CommunityAmerica Credit Union Savin’ Mavens.

The post Retirement in Your 60s: It Still Is NOT Too Late! appeared first on Penny Pinchin' Mom.

Half a decade is something that should absolutely be celebrated. But if you don’t have enough, or anything, put away into a retirement account, you may need to put the champagne back on ice.

Look at your savings.  If they are not where they should be, it is time to start saving.  There is still time to change your habits so you can face the future from a comfortable financial position.

There is so much more to know about retirement and these articles might help!

• Seven Different Types of Retirement Accounts
• Your Wake Up Call!  Saving for Retirement

Increase The Odds

According to Consumer Affairs, 26% of people between ages 50 to 64 years old don’t even have a retirement account, much less money put away for ‘life after work’.   According to investment brokerage company Fidelity, the average person needs to have approximately 8 times their ending salary put away “to help increase the odds that you won’t outlive your savings during 25 years in retirement.”

It’s important to factor in budget items including scenarios such as health care, emergencies and house payments. You will need to estimate how much you can expect to live on comfortably in retirement.  There are a variety of tools available for establishing this number.

For example, AARP has several resources, ranging from practical advice columns to an online retirement calculator.

Expert Assistance

Another valuable resource is a financial advisor, who can help you manage your current income in a way that allows you start saving for the future.  You should be saving 15-20% of your current salary.  Check to see if your company offers a match on their 401(k) plan. If they do – sign up and take advantage of it.  If you have an IRA, plan to deposit the entire $5,500 yearly total and the extra $1,000 catch-up contribution.

Even if you have some funds saved, it is wise to visit with a financial advisor.  He or she can help you take a more conservative approach to your investments. If your financial advisor is pushing you towards risky investments, it might be time to look for a new advisor. This is the time to make sure your money is secure.

Debt Removal

Your 50s is also the time to pay down and remove any debt that you or your spouse may be carrying. Credit cards, student loans, cars, even mortgages – try to pay these off as quickly and reasonably as possible. Not only are interest charges taking a bite out of your paychecks, having these things paid off means you’re in full ownership, too. When you remove the debt, make an effort to put those same monthly payments amounts into your retirement savings. After all, you’d gotten used to not having the money anyways, right?

Social Expectations

If you’re planning to rely heavily on Social Security, you will need to proactive about your expectations. The earliest you can start receiving partial social security benefits is age 62, with full benefits available after age 65. There are positives and negatives to taking benefits early or late and your decision about when to retire is not one to make lightly. The Social Security Administration website is a great resource for questions ranging from planning and preparation to documentation and benefits.

With so many options and pathways to choose from, planning for retirement in your 50s can feel overwhelming. However, if you start heavily saving money, you should be able to approach retirement with far more confidence.

The post Retirement In Your 50s: Tips to Save appeared first on Penny Pinchin' Mom.

Your 40s are a busy time.  There are quite a variety of expenses to consider. For many people, funds aren’t just for raising children.  For some, helping aging parents with financial assistance may also come into play.  And of course, there is also debt and mortgages.

It may seem like your accounts are being pulled in several different directions.  While that may be true, it is equally, if not more, important that you are moving money into a retirement savings account as well.

Believe it or not, around 1/3 of people ages 30-49 have no retirement account. If you fall into this group, then you have to start thinking even further ahead.

There is so much more to know about retirement, and these articles might help!

• Seven Different Types of Retirement Accounts
• Your Wake Up Call!  Saving for Retirement

SAVING FOR RETIREMENT IN YOUR 40s

Most people hit their peak earnings during their 40s. Don’t get caught up in thinking that means it is time to buy that dream home. After all, what goes up, must come down.  If you’re presently struggling to live within your means, imagine how you’ll feel when you’re facing life without a steady paycheck.

What kind of costs can you expect at or after 40? The truth is that health care costs will continue rising as you age because you will likely need more care. There are two sure-fire ways to delay spending time in doctors’ offices and taking more medication – diet and exercise. I know, these are not fun.  But, numerous studies have shown time and time again that taking care of yourself helps ward off conditions that come with aging.

Mid-life is also when many think about purchasing or upping life insurance for themselves or family members. It can be a matter of dollars each month and is something to look into. None of us believe the unexpected will happen.  However, it is best to always be prepared, just in case it does.

TIME FOR A LIFESTYLE CHANGE

If your retirement savings are minimal or do not yet exist, it is time to consider a lifestyle change.  Scratch that.  You need to strongly consider a lifestyle change.

Many families are joining what’s being called the tiny house movement. Downsizing is key, but moving into a 500 square foot home is not.  It is more about reducing your unnecessary expenses than anything else.  You may need to scale back on items such as cable or leisure expenses.  It is also crucial that you do what you can to pay off your debt.

TIME TO PLAY CATCH UP

Increase your retirement savings to cover any lost wages you will have later in life.  If you are not sure how much you will need for retirement, use a savings calculator.  Make sure the one you use includes factor such as your age, income, and estimated inflation.  In your 40s, you should be saving anywhere between 12 – 15% of each paycheck.

One way to do this is to sign up for your employer’s 401(k) plan.  If they have a matching contribution, make sure you contribute whatever amounts are needed to get the maximum contribution.  For instance, if they match you 25% on the first 4%, you fund to your account, put in 4%.  They will give you 1% on top of this.  That is instantly 5% towards retirement with little effort.

But, don’t stop there, make sure you max out the contributions you can make to all retirement accounts including both IRAs and your employer’s plan. It is not too late, but you are going to need to save even more.

MAKE SURE YOU ARE PREPARED

As you get older, there will be more insurance needs. Make sure you have the right healthy, life and automobile insurance you will need should something happen.  One event and you could find yourself facing bankruptcy.

Take time to visit with your financial planner and insurance agents to make sure you have adequate coverage for these life events.  There would be nothing worse than your retirement savings being taken away because of one car accident.

IT IS NOT ABOUT YOUR KIDS OR YOUR PARENTS

You may feel like your retirement savings should be put on the back burner when you have immediate financial concerns at home. Many of today’s 40-year-olds are in what is called the ‘sandwich generation’.  They are in between caring for their children and their parents. While it can be daunting, the best approach to sensible retirement saving is a pragmatic one.

Hopefully, you or your spouse’s parents have put money aside for retirement. If they didn’t or lost funds due to an emergency, you will need to work together as a family to cut expenses and find ways to provide for their needs. Help get your parents’ paperwork in order, and you’ll have a clear picture of what to expect.

Your kids will likely need help with expenses before, during and after college. The best way you can help them out? Teach them some self-sustaining habits, such as cooking, necessary car maintenance, simple sewing or even gardening. Remember, they can always get a loan for their education, and you cannot do the same for retirement.

With all the choices you make and the busy activities of your 40s, use this momentum to move your retirement savings forward. Doing so makes the next 40 years something to look forward to, not fear.

The post Saving for Retirement in Your 40s appeared first on Penny Pinchin' Mom.

You want to started investing but aren’t sure what steps to take.  No worries.  Let me walk you through the basics and you’ll soon be on your way.

Before we start, you should know that the stock market offers a great way to grow your wealth. However, with the reward of earning 5%, 8%, or even 12% per year on your investments comes with the risk of losing money.

That means the value of your investments may drop one year.  It may also take several years to recover from that loss.  If you aren’t ready for the risks, then investing is not for you.

Think about These Issues Before You Start Investing

Investors are urged to invest for long term gain.  This is due to changes in the market (those gains and losses you will see).

If you will not need your money for a minimum of 5 – 7 years, then you are the perfect candidate for investing. The between now and when you need your money is called the time horizon. For example, if you are investing toward buying a small cabin on the lake in 15 years, then your time horizon is 15 years.  However, if your child will be heading off to college in 4 years, your time horizon would be 4 years.

Your time horizon is not the only thing you should know.  Ask yourself a few other questions as well:

• Am I investing for retirement, education, or another purpose?
• How much do I have to invest, and is that money available in a lump sum, a regular monthly amount, or both?
• Am I wanting to spend my time managing these investments?
• How much money do I want to spend in investment fees?
• What amount of fluctuation from the U.S. stock market performance am I willing to accept?

Your responses will guide your investing decisions, not only for the types of investments but also the brokerage firm you choose.

Consider Investing for Retirement with Low-Cost Index Funds

Let’s say you are investing for retirement, have an initial investment of $3,000. The plan is to add $100 each month to your account.  You goal is to spend little time managing your investment.   In addition, you would like to closely match U.S. stock performance (either the S&P 500 or the entire market).  What should you do?

You can open an IRA with an online brokerage firm such as E*Trade, Fidelity, Schwab, TD Ameritrade, or Vanguard. To get started investing, you will need to fund your account.  Funding is how the money moves from your account to your investment accounts.

In most cases, funding is arranged by setting up a link between your checking account and the brokerage account, and making transfers. The initial process can take a few days but after the connection is established, you can move funds to purchase shares of stocks, mutual funds, or ETFs.

Next, purchase either commission-free, market-index exchange-traded funds (ETFs) or no-load, no-transaction-fee market-index mutual funds. For example, you can buy shares in Vanguard Total Stock Market Index Fund Investor Shares (VTSMX) for a minimum initial investment of $3,000 and additional investments of at least $1.  You will want to make sure you sign up for paperless statements so you can get the $20 account fee waived.

Or, you could purchase shares in commission-free Schwab U.S. Broad Market ETF (SCHB) for $1,000 (or any multiple of its market price, which is about $50 at this writing); and make additional minimum purchases that equal the fund’s share price.

Buy Individual Stocks If You Are Comfortable with Greater Risk

Alternatively, you may be interested in growing your wealth more aggressively and are willing to accept risks (and losses) associated with potentially greater rewards. You have plenty of time to spend evaluating and selecting individual stocks plus you don’t mind paying transaction fees associated with the purchase and sale of stocks (or sector or specialty mutual funds or ETFs).

Again, you could open a regular brokerage account with any of the online brokerage firms.  You might look at investing with Acorns, E*Trade, Schwab, or Fidelity. Keep in mind that each on-line firm has minimum investment thresholds that you will need to meet. You could choose stocks on your own or find ones using screening tools available on each firm’s website.

After determining what you’d like to buy and the approximate quantity, you’ll want to set a price to indicate how much you are willing to pay for shares and then place your order. Fees to place orders typically run about $9.99 or less.

Decide Whether Innovative Brokerage Firms Are Right for You

You might also consider investing with a newer firm, such as Betterment, Motif Investing, or Loyal3; these companies all have unique approaches to serving customers that may or may not meet your needs.

Betterment makes investment decisions on your behalf and charges an account management fee rather than individual transaction fees; you may like this approach if you don’t have time to invest on your own. Motif Investing offers fee-free investing through its Horizon Motifs, which are comprised primarily of market index ETFs, along with its specialty motifs that trade for a flat $9.95 fee. Loyal3 has a totally fee-free platform in which you can buy shares (or even fractional shares) of certain stocks with an investment of as little as $10.

If you are ready, now is the time to get started in investing, regardless of whether the market is up or down today. The sooner you start, the more your money can grow.

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When it comes to retirement, the sooner you start saving, the better. It’s an undeniable truth that the younger a person is when they begin putting away money for retirement, the easier it is to create a sizable, sustainable nest egg for the post-work years.

It’s not always easy and life can get in the way.  However, setting financial goals and sticking to them – no matter what age you are – will ensure that the end of your career is something to look forward to, not dread.

Face The Facts

The average age of retirement has risen in the last decade, from 63 in 2002 to age 66, and these numbers are expected to continue rising. Financial concerns are at the top of the list of reasons for this change. Thirty-three percent of homeowners aged 30-59 years old have stated that they won’t have enough money to retire until age 70.

For some, retirement isn’t even something they’re considering. In fact, a 2011 AARP study found that 40 percent of Baby Boomers plan to work “until they drop.”

With the unknown future of Social Security and the needs of an aging population to address, taking steps to ensure that you (and often times, your partner) will be financially stable is an investment you must make. Not only will it give you peace of mind, these savings can sustain you no matter what happens. Because, for many, it’s not only how much, it’s what the savings are for in retirement.

Covering The Bases

It’s not easy to guess what costs you’ll need to cover, but without a doubt, retirement savings are used for more than just daily living. Health care costs are a major expense. A study by Fidelity found that “a 65-year old couple retiring this year will need an average a total of $220,000 (in today’s dollars) to cover medical expenses throughout retirement.”

Add those kind of big numbers to expenses such as mortgages or existing debt and adding to an HSA or IRA looks more appealing every year. However, according to the U.S. Department of Labor, fewer than half of Americans have calculated how much they need to save for retirement.

Reality Doesn’t Have to be Intimidating

This six-part series will cover methods for retirement saving for every decade of a working person’s life. We’ll also examine the perceived roadblocks (or – ahem, excuses) that come up throughout life. Stayed tuned for tried-and-true information and methods for navigating your way to financial success that can serve you until your golden years.

We know this is scary. We know it might be hard. But we know, together, we can make this happen. How can we be so sure? We’ve done it for hundreds of our members already. So consider this your retirement wake up call.

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Learning how to invest can be challenging – especially when you know nothing about the stock market. I asked an expert for help and he shared these tips for investing for beginners.

We all want the best for our families, we want them to be happy, healthy and experience as much life as possible.  Part of providing your family with the best possible life is by saving for the future.  It is because of this that you are ready to start investing.

One problem though since you don’t want to lose your hard-earned money.  If you are new to investing, you are not sure where to invest so it is available when you need it.   And, you may be confused about where to even start investing!  First let’s take a look at what exactly you should consider for your first investments, then let’s take a look at how you can get started investing today!

BEGINNER INVESTING TIPS

What Investments Should I Consider?

When you first start investing there seems like so many options that are available for your money; stocks, bonds, real estate, commodities, and cash.  However, there really are only a couple investments that make sense when you are first starting to invest.

When you are first starting you should focus on stocks and bonds.   This combination will smooth out the ups and downs of the market enough that you won’t want to jump out of the market and create a loss. At the same time, you won’t be taking unnecessary risks from commodities.

Adding other asset classes such as commodities is not necessary for diversification until you have a larger nest egg and have a better understanding of investing.  You can do more research and get additional help from sites such as The Motley Fool, which share expert information about investing.

Should I Buy Individual Stocks and Bonds or Mutual Funds?

The key to not having to say “I lost it all in the tech bubble” or any other bubble is to make sure that you have invested in many different stocks and bonds.  When you are only in a couple of stocks or bonds you don’t have a diversified portfolio.  Therefore, you can end up losing a lot if your one or two stocks are a bad choice.

The best way to overcome this lack of diversity is by using mutual funds.  A mutual fund invests in multiple stocks and/or bonds giving you instant diversification.  Plus with mutual funds you don’t have to spend as much time managing your investments, so you can build saving for your family while actually getting to enjoy time with them.

What Types of Mutual Funds Should I Buy?

When you start investing you will want a mix of stocks and bonds, this is call asset allocation (Asset allocation chart for you to pick your mix).  You can achieve this mix in a few different ways.  They include:

• Investing in a Target Date Fund – these are designed to give you a good asset allocation specific for the timeframe that you have left to invest.  You select the year you want to retire and it adjusts the allocation as you get older.  The drawback with these funds is that they are all very different in their approaches and many contain investments you might not want to invest in.  You need to look at each one in detail to see what they include.
• You could split your available funds to invest in a stock fund and a bond fund.  Let’s say you have $100.  You might put $25 into a bond fund and $75 into a stock fund.  Placing these investments into index funds will track the market.  That way, you can gain a wide range of different investments without needing to worry about selecting the right manager.  For example, you could select a Total market index which invests in small, medium and large companies plus a bond index funds.  This will give you both diversification and a good asset allocation.
• Begin your investing in a 401K.  This will allow you to put smaller amounts of money into funds because there are no minimums just percentages of salary and an allocation.  Plus it is easy to get started – just call HR!

Where to Go to Start an Investment Account

If you are not using your 401(k) you can reach out to a local broker or open an account online yourself.  Some sites to use include Vanguard or Fidelity, who each carry a full line of target date funds or index funds.

Once you have selected the right company then you typically can sign up using their online applications, or you can download the forms online and then send them in.  Once you fill out the forms and get the funds sent in you are up and running with investing!

Extra FYI:

• If you want more help with selecting your investments most brokerage companies have someone who can help.  Just give them a call!
• When looking at index funds the most important thing to look at is fees.  The fees will eat away your investment, so the lower the better.  With index funds, you want to be below .5%, and even that is high.
• Many firms will waive the initial deposit if you set up automatic monthly investments.  This is where they take a set amount out of your account each month to go into the investment.  Just call and ask if they do this!

Congratulations, you just started taking care of your family in one more way by investing in your future!

Andrea Travillian runs Take A Smart Step a site dedicated to personal development, including personal finance, health, career and relationships. 

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There is a lot to learning to invest.  We’ve got three not so obvious things to know about investing listed here for you.

Investing can be scary. In fact, the number one reason people don’t invest doesn’t have to do with education, but fear. Almost everyone agrees you should invest. You see “market recaps” on the nightly news before dinner. You know you should be doing it… but you’re not. You’ve saved, scrimped, and built a nice little nest egg, and you know you should be doing more with it.

This fear…it comes from the thought that other people know more; or I might lose my money; or I don’t have time to do the work required; or I don’t know where to start.

But it’s easier than that – and here’s three things that aren’t very obvious, but will help you pave the path to investing success. Investing isn’t a “once and done” thing – it’s a journey, so let’s get started.

Make Investing Painless By Automating It

The best way to force yourself to start investing (while also making it super-easy) is to just automate the process.

For most Americans, you have access to a 401k or 403b through your employer. Take advantage of these plans. You can set it up to automatically take a small percentage of your paycheck and invest it. Plus, many employers offer matching contributions – that’s free money!

If your employer doesn’t offer a 401k, you can still automate your investing. You can setup an investing account to automatically invest a certain amount each week/bi-weekly/month, based on your preference. Some of the more popular options for this include Sharebuilder or Betterment.

The great thing about automating your investing is that you never have to worry about it again, and you have peace of mind that you’re building wealth for your future.

Don’t Pay More Than You Need To

The next not-so-obvious tactic to help you get started investing and overcome your fear is to never pay more than you need to.

Investing has a bad reputation as being a fee-sucking adventure. You have to pay advisors, you have to pay other commissions, you have account fees, and then you have fees on the actual investments you choose.

I’m here to tell you that, for most of you, you don’t need any of that stuff. If you use the services mentioned above (Sharebuilder and Betterment), they are both low cost and low fee options to get started.

If you want to have more control and do a little bit yourself, you can save even more by choosing a discount brokerage like Fidelity, Scottrade, or Acorns.

The important thing to remember here is that fees eat away your profits. The higher fees you pay, the less money you’ll earn. So your goal should always be to find the company with low fees that matches what you’re looking for.

Time Is Your Best Friend

One of my favorite quotes in life is “The best time to plant a tree was 25 years ago. The second best time is today.” The premise is that if you want to have a full-grown tree, you should have planted it a long time ago. But, if you didn’t do that, there is no better time to start than right now.

The same is true for investing. The longer you invest for, the more money you’ll have – it’s pretty simply math. But don’t kick yourself if you didn’t start investing when you were 22 years old. Just get started now.

Millennial have a very unique advantage when it comes to investing – time. If you’re 40 or 50, you can’t go back to your 20s and start again. But millennials have this time on their side, so the more money they invest, the bigger their nest egg will grow as they approach retirement.

What’s Holding You Back?

Now that you know a little bit more about investing, including some less obvious tactics, what’s holding you back? Don’t let fear prevent you from living a rich life. Share your story with me in the comments!

This is a guest post by Robert Farrington, founder of The College Investor. He is America’s Millennial Money Expert, and he helps millennials and young adults build wealth in their 20s.

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Choosing stocks is kind of like picking out a great outfit.  Selecting a great outfit is like choosing a great stock. You may be thinking “Candice, are you sure about that?” Yes, I am sure!

Although there are probably hundreds of questions you could ask yourself before choosing a stock to invest in, today I will be going over a few things I consider before deciding if I will invest my money into a company. Investing doesn’t have to be boring.

If you think about it, you’re already an investor. Every day you decide to buy things. When you go grocery shopping, I know the brand may not be a factor for you and you may just be looking for the best deal, but start paying attention to the brands that you’re using in your everyday life.

Each time you purchase anything you are helping a company grow its profits. Once you’ve made your list of companies go to Google and start to do some research on the companies you’ve listed.

Other helpful articles:

• How To Start Investing
• Seven Different Types of Retirement Accounts
• Three Not So Obvious Things to Know About Investing

TIPS TO SELECT THE RIGHT STOCK

What does the company do?

If you are looking for earrings to wear to a holiday party, you want to make sure you are shopping at the right stores that sell earrings. Many companies offer a wide range of products and services.

Figuring out all the company has to offer is helpful because you can see where the company’s profits are coming from. Every company must submit a report of their company’s yearly and quarterly performance. This report is called a 10k and 10q report.

Diversify your closet

Just like you need to diversify your closet, you also need to diversify your stocks. You wouldn’t wear the same outfit that you would wear to the gym that you would wear to your office holiday party. That is why you need to have a variety of outfits to choose from for different occasions.

You need to buy different stocks from different industries in case something goes wrong in one industry.

If I only choose to invest in fashion then if something goes from the fashion industry and I only have money invested in fashion stocks, then I would lose a lot of money. However, I have one company devoted to fashion, another company that sells snacks, and another company that sells oil than I would be better off.

When you hear the term diversify people usually refer to it as “not putting all your eggs in one basket.”

Is it worth the price?

I’m don’t know about you, but I love a good deal. The first section I go to in a store is the sale section. Just like you want to be sure you’re getting a great deal on your clothes, you want to be sure you’re paying a good price for your stocks.

To figure out if you are paying a good price for a stock you need to figure out the company’s price earnings ratio (P/e). According to beginnersinvest.com “Simply put, the p/e ratio is the price an investor is paying for $1 of a company’s earnings or profit. In other words, if a company is reporting basic or diluted earnings per share of $2 and the stock is selling for $20 per share, the p/e ratio is 10 ($20 per share divided by $2 earnings per share = 10 p/e).

Confused yet? No need to be. Most stock-quote systems such as Yahoo! Finance will automatically figure the price-to-earnings ratio for you.” A P/E is used when comparing different stock prices.

Each industry will have a different P/E range that is high to low. “On the surface, a $50 stock may seem more expensive than a $20 stock.  But, if the $50 stock earns $5 a share while the $20 stock earns only $1, using the P/E ratio, you will be able to see that the $20 stock is twice as expensive as the $50 stock. ”

Staying away from trends

I’m not a fashion expert, but you want to be sure that while you’re shopping, you are choosing statement pieces for your wardrobe. Statement pieces tend to last longer and are generally excellent quality. You want to stay away from clothes that are trendy or clothes that will fade and won’t last long.

Clothes that fade or rip after one-time use or wash are a waste. You need classic and timeless clothing. The same is true when deciding which stocks to invest in.

I try to avoid trendy stocks. These stocks are like one hit wonder songs. You know the groups who came out with one song, and then years later you wonder what happened to them. It’s the same thing when it comes to stocks.

If it’s a new and trending stock, don’t invest in it.

If it seems like a fad and the company hasn’t been around for very long. Remember you only want to put your money into great solid businesses that have been around for a while.  A brand that you trust.

Does the company offer dividends?

When you buy a stock, you are buying a tiny piece of a business called a share. Once you buy a share, you now own a piece of the company. Which means if the company grows, so do you. A dividend is a payment made by a company or corporation to its shareholders.

If you invest in stocks that have dividends the company will pay you quarterly. (Usually every three months) That’s right the company will pay you for being an investor in their company. Keep in mind that not all stocks pay dividends. The companies that do pay dividends, the more shares you own of a company, the more you will be paid in dividends.

There are other questions that people consider when investing, but these are a few questions that I ask myself. I encourage you to do your own research on each company before you start investing in it.

About the author:  Candice Maire has a passion for helping people take control of their finances.  She enjoys long walks to the bank, eating dark chocolate, working out and reading personal finance books. Her motto is mind, body, soul and bank account are better. Check out her e-book to learn more!

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