Do I Need Life Insurance?

It might be uncomfortable to think about the need for life insurance, but it’s an important part of your family’s financial strategy.

It helps protect your family during the grieving process, gives them time to figure out their next steps, and can provide income to cover normal bills, your mortgage, and other unforeseen expenses.

Here are some guidelines to help you figure out how much is enough to help keep your family’s future safe.

Who needs life insurance? A good rule of thumb is that you should get life insurance if you have financial dependents. That can range from children to spouses to retired parents. It’s worth remembering that you might provide financial support to loved ones in unexpected ways. A stay-at-home parent, for instance, may cover childcare or education costs. Be sure to take careful consideration when deciding who should get coverage!

What does life insurance cover? Life insurance can be used to cover a variety of unexpected expenses. Funeral costs or debts can potentially be financial and emotional strains, as can the loss of a steady income and employer-provided benefits. Think of life insurance as a buffer in these situations. It can give you a line of defense from financial concerns while you process your loss and plan for the future.

How much life insurance do you need? Everyone’s situation is different, so consider who would be financially impacted in your absence and what their needs would be.

If you’re single with no children, you may only need enough insurance to cover funeral costs and pay off any debts.

If you’re married with children, consider how long it might take your spouse to get back on their feet and be able to support your family, how much childcare and living expenses might be, and how much your children would need to attend college and start a life of their own. A rule of thumb is to purchase 10 times as much life insurance as income you would make in a year. For instance, you would probably buy a $500,000 life insurance policy if you make $50,000 a year. (Note: Be sure to talk with a qualified and licensed life insurance professional before you make any decisions.)

An older person with no kids at home may want to leave behind an inheritance for their children and grandchildren, or ensure that their spouse is cared for in their golden years.

A business owner will need a solid strategy for what would happen to the business in the event of their death, as well as enough life insurance to help ensure that employees are paid and the business can either be transferred or closed with costs covered.

Life insurance may not be anyone’s favorite topic, but it can be a lifeline to your family in the event that you are taken from them too soon. With a well thought out life insurance policy for you and your situation, you can rest knowing that your family’s future has been prepared for.

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Bills, bills, mortgage payment, another bill, maybe some coupons for things you never buy, and of course, more bills.

There seems to be an endless stream of envelopes from companies all demanding payment for their products and services. It feels like you have a choice of what you want to do with your money ONLY after all the bills have been paid – if there’s anything left over, that is.

More times than not it might seem like there’s more ‘month’ than ‘dollar.’ Not to rub salt in the wound, but may I ask how much you’re saving each month? $100? $50? Nothing? You may have made a plan and come up with a rock-solid budget in the past, but let’s get real. One month’s expenditures can be very different than another’s. Birthdays, holidays, last-minute things the kids need for school, a spontaneous weekend getaway, replacing that 12-year-old dishwasher that doesn’t sound exactly right, etc., can make saving a fixed amount each month a challenge. Some months you may actually be able to save something, and some months you can’t. The result is that setting funds aside each month becomes an uncertainty.

Although this situation might appear at first benign (i.e. it’s just the way things are), the impact of this uncertainty can have far-reaching negative consequences.

Here’s why: If you don’t know how much you can save each month, then you don’t know how much you can save each year. If you don’t know how much you can save each year, then you don’t know how much you’ll have put away 2, 5, 10, or 20 years from now. Will you have enough saved for retirement?

If you have a goal in mind like buying a home in 10 years or retiring at 65, then you also need a realistic plan that will help you get there. Truth is, most of us don’t have a wealthy relative who might unexpectedly leave us an inheritance we never knew existed!

But you might be surprised by much you can save if you put your mind to it. And you might want to do that… but how do you do that?

The secret is to “pay yourself first.” The first “bill” you pay each month is to yourself. Shifting your focus each month to a “pay yourself first” mentality is subtle, but it can potentially be life changing. Let’s say for example you make $3,000 per month after taxes. You would put aside $300 (10%) right off the bat, leaving you $2,700 for the rest of your bills. This tactic makes saving $300 per month a certainty. The answer to how much you would be saving each month would always be: “At least $300.” If you stash this in an interest-bearing account, imagine how high this can grow over time if you continue to contribute that $300.

That’s exciting! But at this point you might be thinking, “I can’t afford to save 10% of my income every month because the leftovers aren’t enough for me to live my lifestyle.” If that’s the case, rather than reducing the amount you save, it might be worthwhile to consider if it’s the lifestyle you can’t afford.

Ultimately, paying yourself first means you’re making your future financial goals a priority, and that’s a bill worth paying.

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There’s no doubt that credit card debt is a huge financial burden for many Americans.

On average, each household that has revolving credit card debt owes $7,104 (1). It might be tempting to see those numbers and decide to throw out your credit cards entirely. After all, why hang on to a source of temptation when you could make do with cash or a debit card? However, keeping a credit card around has some serious benefits that you should consider before you decide to free yourself from plastic’s grasp.

You might have bigger debts to deal with On average, credit card debt is low compared to auto loans ($27,934), student loans ($46,679), and mortgages ($192,618) (2). Simply put, you might be dealing with debts that cost you a lot more than your credit card. That leaves you with a few options. You can either start with paying down your biggest debts (a debt avalanche) or get the smaller ones out of the way and move up (a debt snowball). That means you’ll either tackle credit card debt first or wait while you deal with a mortgage payment or student loans. Figure out where to start and see where your credit card fits in!

Ditching credit cards can lower your credit score Credit utilization and availability play a big role in determining your credit score (3). The less credit you use and the more you have available, the better your score will likely be. Closing down a credit card account may drastically lower the amount of credit you have available, which then could reduce your score. Even freezing your card in a block of ice can have negative effects; credit card companies will sometimes lower your available credit or just close the account if they see inactivity for too long (4). This may not be the end of the world if you have another line of credit (like a mortgage) but it’s typically better for your credit score to keep a credit card around and only use it for smaller purchases.

It’s often wiser to limit credit card usage than to ditch them entirely. Figure out which debts are costing you the most, and focus your efforts on paying them down before you cut up your cards. While you’re at it, try limiting your credit card usage to a few small monthly purchases to protect your credit score and free up some extra funds to work on your other debts.

Need help coming up with a strategy? Give me a call and we can get started on your journey toward financial freedom!

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Everybody needs a budget.

But that doesn’t stop “budget” from being an intimidating word to many people. Some folks may think it means scrimping on everything and never going out for a night on the town. It doesn’t! Budgeting simply means that you know where your money is going and you have a way to track it.

The aim with budgeting is to be aware of your spending, plan for your expenses1, and make sure you have enough saved to pursue your goals.

Without a budget, it can be easy for expenses to climb beyond your ability to pay for them. You break out the plastic and before you know it you’ve spent fifty bucks on drinks and appetizers with the gang after work. These habits might leave you with a lot of accumulated debt. Plus, without a budget, you may not be saving for a rainy day, vacation, or your retirement. A budget allows you to enact a strategy to help pursue your goals. But what if you’ve never had a budget? Where should you start? Here’s a quick step-by-step guide on how to get your budgeting habit off the ground!

Track your expenses every day. Start by tracking your expenses. Write down everything you buy, including memberships, online streaming services, and subscriptions. It’s not complicated to do with popular mobile and web applications. You can also buy a small notebook to keep track of each purchase. Even if it’s a small pack of gum from the gas station or a quick coffee at the corner shop, jot it down. Keep track of the big stuff too, like your rent and bill payments.

Add up expenses every week and develop categories. Once you’ve collected enough data, it’s time to figure out where exactly your paycheck is going. Start with adding up your expenses every week. How much are you spending? What are you spending money on? As you add your spending up, start developing categories. The goal is to organize all your expenses so you can see what you’re spending money on. For example, if you eat out a few times per week, group those expenses under a category called “Eating Out”. Get as general or as specific as you wish. Maybe throwing all your food purchases into one bucket is all you need, or you may want to break it down by location - grocery store, big box store, restaurants, etc.

Create a monthly list of expenses. Once you’ve recorded your expenses for a full month, it’s time to create a monthly list. Now you might also have more clarity on how you want to set up your categories. Next, total each category for the month.

Adjust your spending as necessary. Compare your total expenses with your income. There are two possible outcomes. You may be spending within your income or spending outside your income. If you’re spending within your income, create a category for savings if you don’t have one. It’s a good idea to create a separate savings category for large future purchases too, like a home or a vacation. If you find you’re spending too much, you may need to cut back spending in some categories. The beauty of a budget is that once you see how much you’re spending, and on what, you’ll be able to strategize where you need to cut back.

Keep going. Once you develop the habit of budgeting, it should become part of your routine. You can look forward to working on your savings and developing a retirement strategy, but don’t forget to budget in a little fun too!

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Debit cards are convenient.

Just swipe and go. Even more so for their mobile phone equivalents. We like fast, we like easy, and we like a good sale. But are we actually spending more by not using cash like we did in the good old days?

When using plastic, the reality of the expense doesn’t sink in until the statement arrives. And even then it may not carry the same weight. After all, you only need to make the minimum payment, right? With cash, we’re more cautious – and that’s not a bad thing.

Try an experiment for a week: pay only with cash. When you pay with cash, the expense feels real – even when it might be relatively small. Hopefully, you’ll get a sense that you’re parting with something of value in exchange for something else. You might start to ask yourself things like “Do I need this new comforter set that’s on sale – a really good sale – or, do I just want this new comforter set because it’s really cute (and it’s on sale)?” You might find yourself paying more attention to how much things cost when making purchases, and weighing that against your budget.

If you find that you have money left over at the end of the week (and you probably will because who likes to see nothing when they open their wallet), put the cash aside in an envelope and give it a label. You can call it anything you want, like “Movie Night,” for example.

As the weeks go on, you’re likely to amass a respectable amount of cash in your “rewards” fund. You might even be dreaming about what to do with that money now. You can buy something special. You can save it. The choice is yours. Well done on saving your hard-earned cash.

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Credit cards aren’t free money

— that should go without saying, but millions of Americans don’t seem to have received that memo. Americans now owe a record $1.04 trillion in credit card debt (1). If you’re not careful, credit card debt could hurt your credit score, wipe out your savings, and completely alter your personal financial landscape.

So: debt, debit, both, or neither? Before you apply for that next piece of plastic, here’s what you need to watch out for.

Low interest rates. Credit card companies spend a lot of money on marketing to try to get you hooked on an offer. Often you hear or read that a company will tout an offer with a low or zero percent APR (Annual Percentage Rate). This is called a “teaser rate.”

Sounds amazing, right? But here’s the problem: This is a feature that may only last for 6–12 months. Ask yourself if the real interest rate will be worth it. Credit card companies make a profit via credit card interest. If they were to offer zero percent interest indefinitely, then they wouldn’t make any money.

Make sure you read the fine print to determine whether the card’s interest rate will be affordable after the teaser rate period expires.

Fixed vs. variable interest rates. Credit cards will operate on either a fixed interest rate or a variable interest rate (2). A fixed interest rate will generally stay the same from month to month. A variable interest rate, by contrast, is tied to an index (fancy word for interest rate) that moves with the economy. Normally the interest rate is set to be a few percentage points higher than the index.

The big difference here is that while a fixed rate may change, the credit card company is required to inform its customers when this happens. While a variable APR may start out with a lower interest rate, it’s not uncommon for these rates to fluctuate. What’s more, the credit card company isn’t required to tell you about a variable rate change at all (3)!

Low interest rates are usually reserved for individuals who have great credit with a long credit history. So, if you’ve never owned a credit card (or you are recovering from a negative credit history) this could be a red flag.

Of course, you could avoid these pitfalls altogether if you pay off your credit card balance before the statement date. Whatever the interest rate, be sure you’re applying for a credit card that’s affordable for you to pay off if you miss the payoff due date.

High credit limits. While large lines of credit are usually reserved for those with a good credit history, a new cardholder might still receive an offer for up to a $10,000 credit limit.

If this happens to you, beware. While it may seem like the offer conveys a great deal of trust in your ability to pay your bill, be honest with yourself. You may not be able to recover from the staggering size of your credit card debt if you can’t pay off your balance each month.

If you already have a card with a limit that feels too high, it may be in your interest to request that the company lower your card’s limit.

Late fees. So you’re late paying your credit card bill. Late payments not only have the potential to hurt your credit score, but some credit cards may also assess a penalty APR if you haven’t paid your bill on time.

Penalty APRs are incredibly high, usually topping out at 29.99% (4). The solution here is simple: pay your bill on time or you might find self paying ridiculous interest rates!

Balance transfer fees. It’s not uncommon for a cardholder to transfer one card’s balance to another card, otherwise known as a balance transfer. This can be an effective way to pay off your debt while sidestepping interest, but only if you do so before the card’s effective rate kicks in. And, even if a card offers zero interest on balance transfers, you still may have to pay a fee for doing so.

Whatever type of credit card you choose, the only person responsible for its pros and cons is you. But if you’re thrifty and pay attention to the bottom line, you can help make that credit card work for your credit score and not against it.

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It’s your lucky day and you’re flush with cash.

Maybe you just got a bonus at work, or a tax refund, or won that scratch-off lottery ticket.

Hold up. Don’t spend it all just yet. There are some great ways you can put that windfall to work for you before it disappears during a spontaneous shopping spree.

1. Pay off those credit cards. This may not seem like quite as much fun as the Paris vacation you were daydreaming about – but paying down debt is like finding money every single month. Every $100 you pay in interest equals about $130 you’d have to earn when you consider taxes. Paying down debt is the fastest way to give yourself a monthly raise if you come into some unexpected cash.

2. Save it. Experts recommend that you have enough savings to cover at least 3 to 6 months of expenses. This is the perfect opportunity to break away from the statistics and get prepared. Consider a high-yield checking account that allows easy access to your savings.

3. Put it in the college fund. If you have kids, this is a great time to contribute to the college fund or to start one if you haven’t already. Tuition can range from around $10,000 for in-state public schools to nearly $35,000 for private schools (1). And that’s not counting books and boarding! It’s never too early to give your kids a head start!

4. Invest in yourself. This might be the perfect chance to finish off those last few credits for a degree or to earn that certification you’ve been wanting but couldn’t justify spending money to complete. If you choose carefully, the right degree or certification can open doors in your career, potentially enhancing your earning power and helping you break out of the holding pattern.

5. Take a vacation. Maybe it’s a trip to Paris or maybe it’s someplace else you’ve always wanted to go. If all the above are in good shape, go ahead and treat yourself. You deserve it!

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It’s never a bad idea to prepare for a financial emergency.

Unexpected expenses, market fluctuations, or a sudden job loss could leave you financially vulnerable. Here are some tips to help you get ready for your bank account’s rainy days!

Know the difference between a rainy day fund and an emergency fund … but have both! People often use the terms interchangeably, but there are some big differences between a rainy day fund and an emergency fund. A rainy day fund is typically designed to cover a relatively small unexpected cost, like a car repair or minor medical bills. Emergency funds are supposed to help cover expenses that might accumulate during a long period of unemployment or if you experience serious health complications. Both funds are important for preparing for your financial future—it’s never too early to start building them.

Tackle your debt now. Just because you can manage your debt now doesn’t mean you’ll be able to in the future. Prioritizing debt reduction, especially if you have student loans or credit card debit, can go a long way toward helping you prepare for an unexpected financial emergency. It never hurts to come up with a budget that includes paying down debt and to set a date for when you want to be debt-free!

Learn skills to bolster your employability. One of the worst things that can blindside you is unemployment. That’s why taking steps now to help with a potential future job search can be so important. Look into free online educational resources and classes, and investigate certifications. Those can go a long way towards diversifying your skillset (and can look great on a resume).

None of these tips will do you much good unless you get the ball rolling on them now. The best time to prepare for an emergency is before the shock and stress set in!

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Nearly one quarter of Americans and almost half of Canadians have no emergency savings, according to a recent report. (1&2)

Without an emergency fund, you can imagine that an unexpected expense could send your budget into a tailspin. That’s why building an emergency fund is so important. You CAN do this!

4 tips to building your emergency fund

Where to keep your emergency fund Keeping money in the cookie jar might not be the best plan. Mattresses don’t really work so well either. But you also don’t want your emergency fund “co-mingled” with the money in your normal checking or savings account. The goal is to keep your emergency fund separate, clearly defined, and easily accessible. Setting up a designated, high-yield savings account is a good option that can provide quick access to your money while keeping it separate from your main bank accounts.

Set a monthly goal for savings Set a monthly goal for your emergency fund savings, but also make sure you keep your savings goal realistic. If you choose an overly ambitious goal, you may be less likely to reach that goal consistently, which might make the process of building your emergency fund a frustrating experience. (Your emergency fund is supposed to help reduce stress, not increase it!) It’s okay to start by putting aside a small amount until you have a better understanding of how much you can really “afford” to save each month. Also, once you have your high-yield savings account set up, you can automatically transfer funds to your savings account every time you get paid. One less thing to worry about!

Spare change can add up quickly The convenience of debit and credit cards means that we use less cash these days – but if and when you do pay with cash, take the change and put it aside. When you have enough change to be meaningful, maybe $20 to $30, deposit that into your emergency fund. Look into ways of automating your savings to make putting away money seamless and hassle free!

Get to know your budget Making and keeping a budget may not always be the most enjoyable pastime. But once you get it set up and stick to it for a few months, you’ll get some insight into where your money is going, and how better to keep a handle on it! Hopefully that will motivate you to keep going, and keep working towards your larger goals. When you first get started, dig out your bank statements and write down recurring expenses, or types of expenses that occur frequently. Odds are pretty good that you’ll find some expenses that aren’t strictly necessary. Look for ways to moderate your spending on frills without taking all the fun out of life. By moderating your expenses and eliminating the truly wasteful indulgences, you’ll probably find money to spare each month and you’ll be well on your way to building your emergency fund.

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It’s no secret that life is full of surprises. Surprises that can cost money.

Sometimes, a lot of money. They have the potential to throw a monkey wrench into your savings strategy, especially if you have to resort to using credit to get through an emergency. In many households, a budget covers everyday spending, including clothes, eating out, groceries, utilities, electronics, online games, and a myriad of odds and ends we need.

Sometimes, though, there may be something on the horizon that you want to purchase (like that all-inclusive trip to Cancun for your second honeymoon), or something you may need to purchase (like that 10-years-overdue bathroom remodel).

How do you get there if you have a budget for the everyday things you need, you’re setting aside money in your emergency fund, and you’re saving for retirement?

Make a goal. The way to get there is to make a plan. Let’s say you’ve got a teenager who’s going to be driving soon. Maybe you’d like to purchase a new (to him) car for his 16th birthday. You’ve done the math and decided you can put $3,000 towards the best vehicle you can find for the price (at least it will get him to his job and around town, right?). You have 1 year to save but the planning starts now.

There are 52 weeks in a year, which makes the math simple. As an estimate, you’ll need to put aside about $60 per week. (The actual number is $57.69 – $3,000 divided by 52). If you get paid weekly, put this amount aside before you buy that $6 latte or spend the $10 for extra lives in that new phone game. The last thing you want to do is create debt with small things piling up, while you’re trying to save for something bigger.

Make your savings goal realistic. You might surprise yourself by how much you can save when you have a goal in mind. Saving isn’t a magic trick, however, it’s based on discipline and math. There may be goals that seem out of reach – at least in the short-term – so you may have to adjust your goal. Let’s say you decide you want to spend a little more on the car, maybe $4,000, since your son has been working hard and making good grades. You’ve crunched the numbers but all you can really spare is the original $60 per week. You’d need to find only another $17 per week to make the more expensive car happen. If you don’t want to add to your debt, you might need to put that purchase off unless you can find a way to raise more money, like having a garage sale or picking up some overtime hours.

Hide the money from yourself. It might sound silly but it works. Money “saved” in your regular savings or checking account may be in harm’s way. Unless you’re extremely careful, it’s almost guaranteed to disappear – but not like what happens in a magic show, where the magician can always bring the volunteer back. Instead, find a safe place for your savings – a place where it can’t be spent “accidentally”, whether it’s a cookie jar or a special savings account you open specifically to fund your goal.

Pay yourself first. When you get paid, fund your savings account set up for your goal purchase first. After you’ve put this money aside, go ahead and pay some bills and buy yourself that latte if you really want to, although you may have to get by with a small rather than an extra large.

Saving up instead of piling on more credit card debt may be a much less costly way (by avoiding credit card interest) to enjoy the things you want, even if it means you’ll have to wait a bit.

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Should parents give their children an allowance?

It’s a surprisingly difficult question to answer. Teaching your kids how to handle money is important. But how you go about giving them cash can set precedents that last a lifetime. Here are a few different takes on giving your kids money.

Not giving your kids money. There’s a lot to not love about this system at a glance, especially if you’re the kid. It seems like a way to simultaneously prevent your children from having fun and learn nothing about handling money. But it has some silver linings. Not paying your kids to do chores can be a way to teach them about the value of work without tying it to a monetary reward. That’s an important life lesson that can be applied to volunteer work and responsibilities with their future family. You also may be on a tight budget and handing out an allowance is just not part of your financial strategy right now.

Giving your kids an allowance (no work required). This is a system where you give your kids a set amount of money each week or month. This is a straightforward way to get your kids some cash that they can spend, save, and use to learn about money.

But just giving your kids an allowance without requiring something in return, like doing chores, has some potential drawbacks. Most people will eventually have to get a job so they can earn money. Giving cash to your kids without tying it in some way to work may create a sense of entitlement that simply isn’t realistic.

Paying your kids commission. In this system, you pay your kids as they complete tasks. You would set up a job posting with different payments for different chores. Pay your kids when they’ve completed the work. If they get the job done quickly with a good attitude and some extra flourish? Give them a raise! It’s a great way of rewarding excellence and teaching children the monetary value of their time and hard work.

But this system also has flaws. Some of the most rewarding work we do can be for family or friends, or to serve our communities—with no reward other than appreciation and pride in a job well done. Giving the impression that one should only put in hard work or help out with the family for cash isn’t something every parent is comfortable with.

Fortunately, there are many ways to combine each of these systems. You could have non-paying chores that are duties simply because the kids are members of the family and then extra paid jobs. Or maybe offer a base allowance to teach your kids about saving, giving, and spending, and then paid chores added on. These systems can evolve over time as your kids grow. Let the needs of your family and what you want to instill in your children guide you.

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Plenty of people move back in with their parents.

Data found that 37% of Californians and close to 1.9 million people in Canada between 18 and 64 live with their parents (1 & 2). That might not sound ideal, but is it really that bad? Here are some pros and cons to consider before deciding to move back home.

Pros Living with your parents isn’t necessarily the end of the world. For starters, it might be cheaper than renting an apartment or buying a house, depending on the deal your parents offer you. Negotiating rent with your mom is typically easier than wrangling with a landlord! On that note, at home you’ll be surrounded by people who love you. That can be a serious boost to your mental health and give you some footing for your next move. And you can’t forget that free food is awesome. (If that’s part of the deal!)

Cons But moving back in might not necessarily be all rainbows and sunshine. It can be incredibly demoralizing for many people. We tend to estimate our self-worth and how much we’ve accomplished by our independence from our parents. It’s easy to see living with our parents as a step back. Plus, it can encourage laziness. Not having to hustle for food and rent can remove a sense of urgency from your work. Nothing motivates you quite like the imminent threat of bankruptcy!

If you have to move back in with your parents, do it with a plan. Maybe you give yourself six months at home to get your business off the ground. Your goal might be more long-term like caring for a parent. Just remember to take it in stride and don’t let it derail your life!

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Dealing with finances is a big part of any committed relationship and one that can affect many aspects of your life together.

The good news is, you don’t need a perfect relationship or perfect finances to have productive conversations with your partner about money, so here are some tips for handling those tricky conversations like a pro!

Be respectful. Respect should be the basis for any conversation with your significant other, but especially when dealing with potentially touchy issues like money. Be mindful to keep your tone neutral and try not to heap blame on your partner for any issues. Remember that you’re here to solve problems together.

Take responsibility. It’s perfectly normal if one person in a couple handles the finances more than the other. Just be sure to take responsibility for the decisions that you make and remember that it affects both people. You might want to establish a monthly money meeting to make sure you’re both on the same page and in the loop. Hint: Make it fun! Maybe order in, or enjoy a steak dinner while you chat.

Take a team approach. Instead of saying to your partner, “you need to do this or that,” try to frame things in a way that lets your partner know you see yourself on the same team as they are. Saying “we need to take a look at our combined spending habits” will probably be better received than “you need to stop spending so much money.”

Be positive. It can be tempting to feel defeated and hopeless that things will never get better if you’re trying to move a mountain. But this kind of thinking can be contagious and negativity may further poison your finances and your relationship. Try to focus on what you can both do to make things better and what small steps to take to get where you want to be, rather than focusing on past mistakes and problems.

Don’t ignore the negative. It’s important to stay positive, but it’s also important to face and conquer the specific problems. It gives you and your partner focused issues to work on and will help you make a game plan. Speaking of which…

Set common goals, and work toward them together. Whether it’s saving for a big vacation, your child’s college fund, getting out of debt, or making a big purchase like a car, money management and budgeting may be easier if you are both working toward a common purpose with a shared reward. Figure out your shared goals and then make a plan to accomplish them!

Accept that your partner may have a different background and approach to money. We all have our strengths, weaknesses, and different perspectives. Just because yours differs from your partner’s doesn’t mean either of you are wrong. Chances are you make allowances and balance each other out in other areas of your relationship, and you can do the same with money if you try to see things from your partner’s point of view.

Discussing and managing your finances together can be a great opportunity for growth in a relationship. Go into it with a positive attitude, respect for your partner, and a sense of your common values and priorities. Having an open, honest, and trust-based approach to money in a relationship may be challenging, but it is definitely worth it.

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Graduating from college is a big deal.

It represents a transition from student to adult for millions of people. But leaving university and joining the workforce can be intimidating. Looking for a job, paying bills, commuting, and living independently are often uncharted territory for recent grads.

Here are a few tips for fresh graduates trying to get on their feet financially.

Figure out what you want <br> It’s one thing to leave college with an idea of what career you want to pursue. It’s something else entirely to ask yourself what kind of life you want. It’s one of those big issues that can be difficult even to wrap your head around!

However, it’s something that’s important to grapple with. It will help you answer questions like “What kind of lifestyle do I want to live” and “how much will it cost to do the things I want?” You might even find that you don’t really need some of the things that you thought were necessities, and that happiness comes from places you might not have expected.

Come up with a budget <br> Let’s say you’ve got a ballpark idea of your financial and lifestyle goals. It’s time to come up with a strategy. There are plenty of resources on starting a budget on this blog and the internet on the whole, but the barebones of budgeting are pretty simple. First, figure out how much you make, how much you have to spend, how much you actually spend, then subtract your total spending from how much you make. Get a positive number? Awesome! Use that leftover cash to start saving for retirement (it’s never too early!) or build up an emergency fund. Negative number? Look for places in your unnecessary spending to cut back and maybe consider a side hustle to make more money.

Looking at your spending habits can be difficult. But owning up to mistakes you might be making and coming up with a solid strategy can be far easier than the agony that spending blindly may bring. That’s why starting a budget is a post-graduation must!

Meet with a financial professional <br> Find a qualified and licensed financial professional and schedule an appointment. Don’t let the idea of meeting with a professional intimidate you. Afterall, you trust your health, car, and legal representation to properly trained experts. Why wouldn’t you do the same with your financial future?

Being scared of starting a new chapter of life is natural. There are a lot of new experiences and unknowns to deal with that come along with leaving the familiarity of college. But the best way to overcome fear is to face it head on. These tips are a great way to start taking control of your future!

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Credit cards aren’t free money — that should go without saying, but millions of Americans don’t seem to have received that memo.

Americans now owe a record $1.04 trillion in credit card debt.¹ If you’re not careful, credit card debt could hurt your credit score, wipe out your savings, and completely alter your personal financial landscape.

So: debt, debit, both, or neither? Before you apply for that next piece of plastic, here’s what you need to watch out for.

Low interest rates <br> Credit card companies spend a lot of money on marketing to try to get you hooked on an offer. Often you hear or read that a company will tout an offer with a low or zero percent APR (Annual Percentage Rate). This is called a “teaser rate.”

Sounds amazing, right? But here’s the problem: This is a feature that may only last for 6–12 months. Ask yourself if the real interest rate will be worth it. Credit card companies make a profit via credit card interest. If they were to offer zero percent interest indefinitely, then they wouldn’t make any money.

Make sure you read the fine print to determine whether the card’s interest rate will be affordable after the teaser rate period expires.

Fixed vs. variable interest rates <br> Credit cards will operate on either a fixed interest rate or a variable interest rate.² A fixed interest rate will generally stay the same from month to month. A variable interest rate, by contrast, is tied to an index (fancy word for interest rate) that moves with the economy. Normally the interest rate is set to be a few percentage points higher than the index.

The big difference here is that while a fixed rate may change, the credit card company is required to inform its customers when this happens. While a variable APR may start out with a lower interest rate, it’s not uncommon for these rates to fluctuate. What’s more, the credit card company isn’t required to tell you about a variable rate change at all!³

Low interest rates are usually reserved for individuals who have great credit with a long credit history. So, if you’ve never owned a credit card (or you are recovering from a negative credit history) this could be a red flag.

Of course, you could avoid these pitfalls altogether if you pay off your credit card balance before the statement date. Whatever the interest rate, be sure you’re applying for a credit card that’s affordable for you to pay off if you miss the payoff due date.

High credit limits <br> While large lines of credit are usually reserved for those with a good credit history, a new cardholder might still receive an offer for up to a $10,000 credit limit.

If this happens to you, beware. While it may seem like the offer conveys a great deal of trust in your ability to pay your bill, be honest with yourself. You may not be able to recover from the staggering size of your credit card debt if you can’t pay off your balance each month.

If you already have a card with a limit that feels too high, it may be in your interest to request that the company lower your card’s limit.

Late fees <br> So you’re late paying your credit card bill. Late payments not only have the potential to hurt your credit score, but some credit cards may also assess a penalty APR if you haven’t paid your bill on time.

Penalty APRs are incredibly high, usually topping out at 29.99%.⁴ The solution here is simple: pay your bill on time or you might find self paying ridiculous interest rates!

Balance transfer fees <br> It’s not uncommon for a cardholder to transfer one card’s balance to another card, otherwise known as a balance transfer. This can be an effective way to pay off your debt while sidestepping interest, but only if you do so before the card’s effective rate kicks in. And, even if a card offers zero interest on balance transfers, you still may have to pay a fee for doing so.

Whatever type of credit card you choose, the only person responsible for its pros and cons is you. But if you’re thrifty and pay attention to the bottom line, you can help make that credit card work for your credit score and not against it.

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A financial strategy is many things.

It’s not just a budget. In fact, a solid financial strategy is not entirely based on numbers at all. Rather, it’s a roadmap for your family’s financial future. It’s a journey on which you’ll need to consider daily needs as well as big-picture items. Having a strategy makes it possible to set aside money now for future goals, and help ensure your family is both comfortable in the present and prepared in the future.

Financial Strategy, Big Picture <br> A good financial strategy covers pretty much everything related to your family’s finances. In addition to a snapshot of your current income, assets, and debt, a strategy should include your savings and goals, a time frame for paying down debt, retirement savings targets, ways to cover taxes and insurance, and in all likelihood some form of end-of-life preparations. How much of your strategy is devoted to each will depend on your age, marital or family status, whether you own your home, and other factors.

Financial Preparation, Financial Independence <br> How do these items factor into your daily budget? Well, having a financial strategy doesn’t necessarily mean sticking to an oppressive budget. In fact, it may actually provide you with more “freedom” to spend. If you’re allocating the right amount of money each month toward both regular and retirement savings, and staying aware of how much you have to spend in any given time frame, you may find you have less daily stress over your dollars and feel better about buying the things you need (and some of the things you want).

Remember Your Goals <br> It can also be helpful to keep the purpose of your hard-earned money in mind. For example, a basic financial strategy may include the amount of savings you need each month to retire at a certain age, but with your family’s lifestyle and circumstances in mind. It might be a little easier to skip dinner out and cook at home instead when you know the reward may eventually be a dinner out in Paris!

Always Meet with a Financial Professional <br> There are many schools of thought as to the best ways to save and invest. Some financial professionals may recommend paying off all debt (except your home mortgage) before saving anything. Others recommend that clients pay off debt while simultaneously saving for retirement, devoting a certain percentage of income to each until the debt is gone and retirement savings can be increased. If you’re just getting started, meet with a qualified and licensed financial professional who can help you figure out which option is for you.

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We have an odd relationship with splurging.

Many of us treat it like a guilty pleasure and almost take a little pride in our extravagant purchases, even seeing it as “self-care”. But there’s also a part of us that knows we’re not being wise when we senselessly spend money.

So how do we resolve that tension between having fun and making good decisions? Here are a few ideas to help you splurge responsibly!

Budget in advance <br> “Responsible splurging” might seem like a contradiction, but the key to enjoying yourself once in a while and staying on track with your financial strategy is budgeting. Maintaining a budget gives you the power to see where your money is going and if you can afford to make a big/last-minute/frivolous purchase. And when you decide that you’re going to take the plunge, a budget is your compass for how much you can spend now, or if you need to wait a little longer and save a little more.

Beware of impulse purchasing <br> The opposite of budgeting for a splurge is impulse buying. We’ve all been there; you’re scrolling through your favorite shopping site and you see it. That thing you didn’t know you always wanted—and it’s on sale. Just a few clicks and it could be yours!

Tempting as impulse buying might be, especially when there’s a good deal, it’s often better to pause and review your finances before adding those cute shoes to your cart. Check your budget, remember your goals, and then see if that purchase is something you can really afford!

Do your research <br> Have you ever spent your hard-earned money on a dream item, even if you budgeted for it, only to have it break or malfunction after a few weeks? Even worse, it might have been something as significant as a car that you wound up trying to keep alive with thousands of dollars in maintenance and repairs!

That’s why research is so important. It’s not a guarantee that your purchase will last longer, but it can help narrow your options and reduce the chance of wasting your money.

Responsible splurging is possible. Just make sure you’re financially prepared and well-researched before making those purchases!

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Life insurance can be confusing.

It sometimes feels like an endless jumble of big words and cryptic abbreviations. Add on top of that how stressful talking about the loss of a loved one can be and you’ve got a topic that can seem unapproachable.

It just so happens to be incredibly important.

Life insurance is an essential line of defense for your family in the case of tragedy. It can give them the time and resources they need to grieve and make a plan for the future. But where should you begin? Here’s a quick guide to weighing and understanding your life insurance options.

Term Life Insurance <br> This option provides coverage for a specified term or period of time (10, 20 to 30 years). It’s just pure life insurance and typically your premiums are lower the younger you are.

Universal Life Insurance (ULI) <br> Universal life insurance is a relatively new insurance product that combines permanent insurance coverage with additional features. If the (ULI) is funded sufficiently, it may provide coverage for the duration of your life and depending on how you’ve structured your policy, there can potentially be a cash value. Keep in mind that if you decide to take out loans or withdrawals there may be fees associated with it.* Be sure to meet with an agent to discuss the specifics of a ULI policy.

Whole Life Insurance <br> These policies include a standard death benefit coverage, and with cash value guaranteed on all premiums paid during an insured’s lifetime.** Critical illness riders may also be offered as part of a whole life insurance policy.

Finding the right life insurance policy can be difficult. Call me, and we can review your options to find Whole Life Insurance that’s a perfect fit for you and your family!

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Dealing with debt can be scary.

Paying off your mortgage, car, and student loans can sometimes seem so impossible that you might not even look at the total you owe. You just keep making payments because that’s all you might think you can do. However, there is a way out! Here are 4 tips to help:

Make a Budget <br> Many people have a complex budget that tracks every penny that comes in and goes out. They may even make charts or graphs that show the ratio of coffee made at home to coffee purchased at a coffee shop. But it doesn’t have to be that complicated, especially if you’re new at this “budget thing”. Start by splitting all of your spending into two categories: necessary and optional. Rent, the electric bill, and food are all examples of necessary spending, while something like a vacation or buying a third pair of black boots (even if they’re on sale) might be optional. Figure out ways that you can cut back on your optional spending, and devote the leftover money to paying down your debt. It might mean staying in on the weekends or not buying that flashy new electronic gadget you’ve been eyeing. But reducing how much you owe will be better long-term.

Negotiate a Settlement <br> Creditors often negotiate with customers. After all, it stands to reason that they’d rather get a partial payment than nothing at all! But be warned; settling an account can potentially damage your credit score. Negotiating with creditors is often a last resort, not an initial strategy.

Debt Consolidation <br> Interest-bearing debt obligations may be negotiable. Contact a consolidation specialist for refinancing installment agreements. This debt management solution helps reduce the risk of multiple accounts becoming overdue. When fully paid, a clean credit record with an extra loan in excellent standing may be the reward if all payments are made on time.

Get a side gig <br> You might be in a position to work evenings or weekends to make extra cash to put towards your debt. There are a myriad of options—rideshare driving, food delivery, pet sitting, you name it! Or you might have a hobby that you could turn into a part-time business.

If you feel overwhelmed by debt, then let’s talk. We can discuss strategies that will help move you from feeling helpless to having financial control.

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We’ve all probably heard someone talk on social media about their “hustle” or “side gig.”

It’s in style; and it makes sense—and cents? Gigs are now just a click or tap away on most of our devices, and a little extra money never hurts! Here are a few things to consider when starting up a side hustle.

What are your side hustle goals? <br> We typically think of a side hustle as being an easy way to score a little extra cash. But they can sometimes be gateways into bigger things. Do you have skills that you’d like to develop into a full time career? A passion that you can turn into a business? Or do you just need some serious additional income to pay down debt? These considerations can help you determine how much time and money you invest into your gig and what gigs to pursue.

What are your marketable skills? <br> Some gigs don’t require many skills beyond a serviceable car and a driver’s license. But others can be great outlets for your hobbies and skills. Love writing? Start freelancing on your weekends. Got massive gains from hours at the gym and love the outdoors? Start doing moving jobs in your spare time. You might be surprised by the demand for your passions!

Keep it reasonable <br> Burnout is no joke. Some people thrive on 80 hour work weeks between jobs and side hustles, but don’t feel pressured to bite off more than you can chew. Consider how much you’re willing to commit to your gigs and don’t exceed that limit.

One great thing about side hustles is their flexibility. You choose your level of commitment, you find the work, and your success can depend on how much you put in. Consider your goals and inventory your skills to get there—and start hustling!

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