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Three Questions To Test Your Personal Finance IQ

writing on a checkDo you believe you have a high personal finance IQ? Well, if so you can consider yourself to be both smart and well informed. The COUNTRY Financial Security Index found that most Americans just don’t know much when it comes to personal finance. When people were asked about financial facts, this survey found that they would need to devote more time learning about finances if they want to get a decent grade on their report cards.

Here are three of the questions that were asked in this survey. See if you can answer all three correctly. If so, we’ll give you an A on the test.

1. What’s the percentage of your income you should spend on housing?

If you answered 30%, go to the head of the class. Most experts say that you should stick to about this amount so that you don’t become overextended and end up as what’s referred to as “house rich and cash poor.”

Unfortunately, just one in three or 31% of the people that took this test answered the question correctly. That means 69% of us are unaware as to how much we should spend on housing and the impact it has on our financial future. If you didn’t know the answer to this question, don’t despair. You can talk to a real estate agent to get the information you need to buy what will probably be your biggest investment – your housing – to make sure you’re not buying too much. The downside of devoting too much of your income to buying a house is that you may not then have enough money left for retirement and personal savings.

Here’s a video where a mortgage professional explains how she would calculate how much a person could afford to spend on housing including factors such as the down payment.

2. Will you have enough money to retire and live your same lifestyle if you save 10% of your income annually?

The answer to this question is probably not. A comprehensive retirement plan is like a three-legged stool. It’s based on three things – contributions from your employer (in the form of a pension or 401(k)), personal savings, and Social Security. If you are the beneficiary of a really generous employer program and live a modest lifestyle, then saving 10% of your income might be enough. But this is generally not the case for most of us.

How did Americans do on this question? Forty-four percent either agreed that saving 10% a year would lead to a comfortable retirement or were not sure whether it would or not. Men (30%) answered yes more than women (18%).

Also, 43% of those surveyed said that saving for their kid’s college education was more critical than their own retirement savings. And only 30% of Americans were able to tell the differences between a traditional and Roth IRA. Thirty-two percent answered incorrectly and another 30% just weren’t sure.

Why is saving for retirement more important than for your child’s education? The simple fact is that you can borrow for college but not for your retirement. As a general rule, saving for retirement should come first. However, Americans often put a priority on education expenses.

3. Is it better to have less money taken out your paycheck for taxes throughout the year or to get a large tax refund?

The majority (59%) of those surveyed got this question right. It‘s better financially to have less money withheld for taxes. You might think it’s great to get a large refund check in April or May but this is a very costly way to save. This is due to the interest you lose throughout the year plus the things you could have done with the extra money you would get on each paycheck. The good news is that 59% of Americans got the question right; the bad news is that 41% got it wrong. And this is still an important number. In addition, even fewer Gen Y people (46%) said it was better to have fewer taxes withheld. Twenty-six percent were either ensure as to how much they should have in emergency savings or guessed a number that was much less than what’s recommended, which is four to six months of living expenses.

What you don’t know is costing you money

You can be a genius, a rocket scientist or a nuclear physicist but if you don’t know about personal finance, it’s very likely costing you a significant amount of money. If you want to have a secure future, it’s important to improve your financial literacy. You will find it much easier to achieve both your short and long-term financial goals if you know how to prioritize your savings and your spending.

Speaking of saving

If you don’t think that saving money is vitally important to a good financial future, you could take a lesson from Jay Leno who just retired from hosting the Tonight Show. Jay was interviewed recently by Jerry Seinfeld and asked about his secret to making sure that he always had enough money in the bank. It was simple. Jay said just don’t spend it. When he hosted the Tonight Show, Jay earned more than $30 million.

And he saved every penny of it.

So how’s Jay living?

Jay does standup comedy nonstop, week in and week out – even while he was hosting the Tonight Show. Combining that money with his endorsements meant that Jay made about a cool $15-$20 million a year. This is the money he used to live, eat and amass his incredible collection of motorcycles, cars trucks and airplanes. And he’s been doing this since he was a kid. In fact he always had two jobs. He would live off the income from one and bank his salary from the other. This not only ensured that he had money put away just in case but it also instilled in him the lifelong habit of saving that he follows to this very day. For that matter, Jay will likely keep his Tonight Show money stashed away as he is still touring full-time as a comedian.

It’s not just for multimillionaires

Jay’s savings habits are not just for multimillionaires. You could do the same thing. We know it’s tough to find one job let alone two. But it’s doable. You can then do as Jay has done and that’s use the money from one of your jobs to pay your bills, buy groceries and just plain live your life, while you stick the income from the other job in the bank and forget that it’s even there. You might be shocked at how quickly this can add up.
Here’s an example. If you got a second, part-time job for 20 hours a week at $10 an hour, that’s about $150 after taxes that you could stash away every week. This means that after taxes you would have about $7800 saved in a year. Having $7800 in a savings account would be an incredible safety net given the fact that almost anything can happen at any time. But even more importantly, you’d be doubling that $7800 every year at that job or a comparable one.

If you can’t work a second job

We understand that not everyone can take on a second job. Your current job may be so time-consuming or stressful that there’s just not enough of you left over to work another 20 hours a week. But even at that there’s ways to make money and stick it away into savings. One of the best is freelancing on the Internet. There are a huge number of websites that will pay money for various services such as editing, blogging, creative writing or acting as a virtual assistant. Regardless of what you’re an expert in, you should be able to find a site that will pay for your help. And you could do this all at home since its online – in a coffee shop – or any place you can access the Internet.

Rent out a room

If you have an extra room in your house that you’re not using or an insulated basement you could rent it out and bring in several hundred dollars a month. Of course, you’ll want to make sure that the person to whom you are renting is reliable and will pay the rent every month.

But whether it’s through a second job, freelancing on the Internet or renting out a room, if you save 100% of that income it will be easy and more productive than you might imagine. Of course, you may not be able to amass a stable of expensive automobiles like Leno but you should be able to live comfortably, knowing that there is food on the table your expenses are paid and that extra work will keep you and your family secure for many years to come.

Money Concerns In Your 60s: Getting Ready For Retirement

business man looking tiredReaching your 60s will involve another set of money concerns that you have to deal with. Just like your 20s differ from your 30s, your priorities will change once you reach the age of 60 and above. Obviously, your primary concern will involve your retirement. In most cases, the thing that has pre-retirees worried is how to keep the retirement fund from retiring before them.

Your retirement may or may not be the best time of your life. That will really depend on how well you prepared for it. When you are in your 60s, you will realize that you are already at the homestretch and that time and money will both be very crucial. You can to carefully consider how you will spend your time and money so that you can maximize your preparations for your retirement.

Statistics show that a lot of Americans have botched their retirement funds and are not as prepared as they should be. In fact, StatisticBrain.com compiled data that revealed how the average savings of those 50 years and above have less than $44,000 in their accounts. With the rising cost of living, the incredibly high healthcare costs and the still fragile economy, this amount is not enough. The same website revealed that the average medical treatments of a couple that is 65 years and above is $215,000 – that is for a span of 20 years.

Considering the amount of finances that you have to spend when you retire, you know that your retirement fund is one of the most important money concerns that you need to face in your 60s.

7 important financial tasks when you reach your 60s

Given that data, it is evident that you need to arrange your finances so you can have a good retirement. The great thing about this age is that you are typically at the peak of your earning capabilities because of your expertise. Not only that, most of your expenses should have been paid off by now. That will free up a huge amount to be used as your disposable income. Before you decide to use all that extra money to buy a new car or something extravagant yet unnecessary, here are 7 financial tasks that you need to accomplish in your 60s.

  1. Look at your credit situation. First of all, you want to consider any debt that you still have to pay off. In most cases, your mortgage should have been paid completely by now, unless you have refinanced it in the past. But if not, your main debt may be on your credit cards. You have to complete your payments before you retire. While your priority right now is to save for your retirement fund, you need to seriously address your debts first. It is difficult to save for retirement while drowning in debt but it will even be more difficult if you carry your debts in retirement.

  2. Get an estimate of your Social Security Benefit. According to Statistic Brain, 35% of those who are 65 years and above are solely relying on their Social Security Benefits. If this is where you are headed because you failed to save up for a separate retirement fund, you need to know just how much you will be receiving. A snapshot of statistics from the SSA.gov revealed that the average monthly benefit that is received by an individual is at $1,184.76. If this is your plan, you should know that this will not be enough for you. You can explore the website to get an actual computation of the benefit that you will receive. But the chances of you getting an amount that is a lot higher than this average is not likely to happen. Get the estimate of your Social Security benefit to determine how much you still need to raise.

  3. Review your retirement plan. If your money concerns at this point revolve around your retirement, then part of your tasks will be to review your plans. In case you do not have one, this is something that you have to create. But if you do have one already, check your 401(k) (or the retirement plan alternative) to see how much money you can expect to receive from it every month.

  4. Create a new budget for your retirement life. While you do not have to follow it yet, you may want to draft the budget plan that you will be using when you retire. This is a great way for you to gauge how much money you will need on a monthly basis. You can foresee any money concerns that you will encounter once you are fully reliant on your retirement fund. Here is a video from National Debt Relief that will provide you with tips on how you can set up a realistic budget that will suit your specific retirement lifestyle needs.

  5. Decide how you will take your retirement money. Another concern that you have is to decide on is how you will withdraw your money. Will you get a lumpsum amount or will you have it mailed to you on a monthly basis like a paycheck? Or you can have it sent to you every year. There are options for you to choose from and each of them have their own tax implications. Make sure you know your choices well.

  6. Check your medical insurance. Your health care expenses will take up a big part of your money concerns once you retire so you need to prepared the funds for that. You may want to check out any medical insurance that you can get. There is also Medicare that you can see if you are already eligible for. That way, you know if you need to get a private coverage for your specific health care needs.

  7. Plan how you will leave your assets behind. While we do not want to think about it, you need to be prepared to leave your assets to your loved ones when you pass away. This is an important preparation that you need to look into to ensure that your spouse and children will be taken cared of when you are gone. Talk to a lawyer or a financial advisor about your options.

What to do if the amount in your retirement fund is a major money issue?

The 7 financial tasks that we just talked about will help deal with the money concerns surrounding your retirement fund. But in case you are sure that your funds will not be enough, here are three things that you can look into.

  • Catch up on your contributions. The IRA allowed consumers that are 50 years and older to increase their retirement funds by maximizing the catch up limits. For those contributing to 401(k) plans, they can contribute up to $23,000 on their funds. For the IRA plans, Up to $6,500 can be contributed every year.

  • Extremely downsize your lifestyle. If your funds will not be enough to support your lifestyle, then one of the obvious things that you need to do is to downsize your lifestyle. You can live in a smaller home or move to a state that has a lower cost of living. You can even go as far as to move to another country. According to an article published on Forbes.com, the top three retirement destinations are Panama, Ecuador and Malaysia. They are considered the top spots because of the low cost of living, weather, health care, real estate costs and the overall retirement infrastructure.

  • Work while in retirement. Lastly, if you really think that your money will not last without any monthly contributions, you may want to consider setting up a business or keeping yourself employed so you can continue to earn. Of course, you need to know the important facts about working in retirement first. Understand the tax implications and the option that you have in case you want to continue to be employed.

Make sure to consider all the money concerns in your 60s so that you will not have a hard time in your retirement.

Money Concerns In Your 50s: Spring Cleaning Your Finances

happy manEntering your 50s may not be as exciting as it would be in your younger years but you know that you still have a lot to offer into this world. It is a time when you finally feel the years on your physical body yet you have never felt more alive with the memories and experiences that life have given you over the years.

When you reach this decade, you know that your retirement is fast approaching. That means you need to be aware of what to do during your pre-retirement years. You still have a lot of money concerns to deal with and now is the time to make sure that they will not ruin your retirement.

Financial issues you need to clean up in your 50s

By the time you are in your 50s, a lot of things have already happened in your life. If your age is right along this decade, you are most likely a part of the Baby Boomer generation. You have a lot of financial successes and mishaps under your belt. You should have gone through a couple of debts, loans, profits and investments. All of these should have given you a lot of insight about your personal finances. And along with that, are some financial clutter that you need to clean up.

One of the strategies for a good retirement is to make sure that you deal with the money concerns that you will encounter in your 50s. Time is running out for you to deal with them so you have to start acting on them now.

Given that, we have compiled 5 financial issues that you need to clean up before your 50s are up. That way, your road towards retirement will not be as bad as it could have been.

  • Give your kids their financial independence. Believe it or not, some Baby Boomers are still caught up with the financial problems of their kids. In most cases, they are doing this even when their kids already have a family of their own. As soon as your kids are working you need to let them go. It is not just to keep your money for retirement. It is also to teach them financial independence. That way, they can learn to rely on themselves when a financial crisis strikes. Even if your child is still in college, you need to start allowing them to make their own financial decisions. If they need money, you can help them out if you wish – but not at the expense of your retirement. That way, you can be sure that you will not be a financial burden to them after retirement.

  • Pay off your debt obligations. If you plan on retiring when you are 65 years old, that leaves you with 15 years or less to pay off your debts. This is one of the serious money concerns that you need to take care of. Otherwise, your debt payments can weigh heavily on your retirement fund. Do not let this happen. There are debt relief programs like debt consolidation or debt settlement that can get your out of debt in 5 years or less. If you still have that lengthy mortgage obligation, make sure you can meet the payments every month. In case you have more room in your budget, you can try to arrange with the lender a higher monthly contribution and a shorter payment term.

  • Improve your credit score. At this point in time, you should have a long list of credit history already. For some, you may even have a bankruptcy entry in there. Your 50s is a great time for you to improve your credit score. You want to make sure that you can erase the mistakes that you made in the past.

  • Downsize your expenses. Given that most of the kids have moved out by now, it may be a great time to think about downsizing. We love to buy things in the past and that should have accumulated into a significant amount of clutter. Get rid of these and see if you can opt to move into a smaller home. Sell your bigger home and buy a smaller one. That can help decrease your monthly utility bills. You can also consider where you can save on your monthly payments.

  • Think about your financial goals. The last of your money concerns that may need spring cleaning is your financial goals. See the progress of your goals and see if your financial strategies need tweaking. Or maybe there are goals that you need to give up on at this point. Review all of them and see how you can revise them to suit your current financial situation and aspirations.

Redefining your source of income

Another thing that you may want to look into is your source of income. This is an important part of your life because of the preparation that you need to make in your retirement. But while there is still a need to have a career, it may not be as pressing as when you were in your younger years.

Now that the big expenses are over, with the exception of your retirement, it may be time to slow down or take a risk to pursue your own business. According to an article published on USAToday.com, 76% of the people who left the workforce last year are over the age of 55. This is a statistic coming from the Labor Department. There are probably a lot of reasons why this is so. If could be because they want an early retirement or something negative like being forced to retire by their employers. Making way for a younger workforce is sometimes a necessary move for some companies.

For other pre-retirees, the decision is made so that they can pursue their own business. USNews.com revealed that Baby Boomers have all the potential to be great entrepreneurs. According to the statistics they got from the Ewing Marion Kauffman Foundation, 23.4% of entrepreneurs back in 2012 are between the age of 55 to 64 years. The article admits that this growth in entrepreneurship for those in their 50s and 60s is caused by the recent economic collapse. But it seems to be working just fine for everyone. The article provided some reasons why this age group can be great entrepreneurs and here are two of the important ones.

  • You can afford to be risky. At least, this is true if your retirement fund is already secure and you are right on track with your plans. Now that the kids are out of the house, you only have to fend for yourself and your spouse. You can take on a few more risks now.

  • You have years of expertise and experience behind you. With age comes wisdom and that is because of what you have gained with the years of work you have gone through. It is impossible that you did not pick up anything useful that will make you a great entrepreneur. It is time to put that to good use so that anything that you can earn will go only to your pocket.

While it may be scary to venture out on your own, the potential to earn a lot when you have your own business is there. Include this as one of your money concerns. You can opt to work on a hobby or something similar. Try it because you may never get another chance to do it. Besides, you want to improve your earning potential so you do not have to work in your retirement.

Important questions to ask in when you are in your 50s

MoneyNews.com provided some interesting statistics about people who are working beyond their retirement. From 11.5% in the 1990s, 18.5% of 65 years old and above are still part of the work force. That is a huge increase in the past 20 years. You do not want to be a part of this statistic so you should try to make sure that everything is in order while you are still in your 50s. Take care of your money concerns before it is too late.

As you go through your last decade before retirement, you may want to ask yourself a couple of questions that will set you up for a good future when you retire.

  • What is the status of my retirement plans? If you do not have enough money, you need to work double time to make sure that you will have sufficient funds.

  • Are any of my financial goals still realistic? Smart money management begins with setting goals but there are instances when these goals have to be reviewed and revised. As you enter your 50s, make sure you do this task.

  • How much assets have I acquired? If you have none, that is alright. You could work hard to acquire assets but try not to take on more debts to do so. If you have them, make sure that you prepare the documents that will determine who will get them in case you pass away.

  • What are the tax implications on my finances? Some people have no idea about the tax implications of senior – especially when it comes to their retirement funds. You need to learn about this because even as early as your 50s, you may have additional tax breaks that can increase your net income.

All of these money concerns will have to seriously considered once you reach your 50s. Do not fret if you still do not have sufficient retirement funds. You still have time for that but it will be a bit harder to reach your goals. But you need to start working on it now.

Money Concerns In Your 40s: Growing Your Personal Net Worth

In two previous articles, we have gone through the money concerns that people in their 20s and 30s have. Now, let us go further a decade by discussing your financial issues once you reach the age of 40.

A study done by Bankrate.com about the income gap in the country mentioned that the prime earning years for most people happen in their 30s and 40s. According to the article, this is the time when people can set themselves up to have a good position of wealth in the future. Your 20s is a time of exploration about the career that you will have. Your 30s is a time for you to start building up a name for yourself. That leaves your 40s as a time when you have both experience and expertise on your resume. That means you should be in a stable financial situation right now. That places you in a perfect position to grow your personal net worth.

That is what we will concentrate on this article. Since it is the Gen Xers that are are in their 40s at the date of this article, we will be referring to their financial situation from time to time.

Three financial issues to take care of in your 40s

We all know that our money concerns vary as we age but what does that mean for those in their 40s? That means you need to take care of three important financial issues in your life.

Financial Issue 1: Paying off your debts

First of all, you want to make sure that your debts are under control. It is important to note that debt freedom is not necessarily a prerequisite to financial success but you have to keep your debt amount within your capabilities to pay it off.

When the recession happened, the Gen Xers had a lot of trouble because they were in the midst of several debts. As we’ve mentioned, they are at a point in their life when they are in their prime earning years. That makes them quite confident about taking on credit to invest on a home, a business or to simply provide for the entertainment needs of their family. As the economic collapse pushed a lot of people out of their jobs, this left a lot of people in their 40s with so much debt to their name.

Unlike those in their 30s, people aged 40 and above will have a harder time to look for a job. They will be overqualified for some positions or under qualified in some. That can be a problem. Since the economy is doing great at this point, you need to take advantage of that and seriously pay down your debts. Money concerns about debt should always be a part of your priority. You have to take care of your home loans and car loans. If you still have student loans, make sure this is paid off. And if you have credit card debts, you need to pay that and keep the balance down.

Here is a video from National Debt Relief that will teach you an option to help you pay off your multiple credit accounts.

Financial Issue 2: Increasing your savings

Money concerns in your 40s also include your savings. You need to check out just how much you have saved at this point. Does your emergency fund have enough money in it? If not, you need to concentrate on that too. It may be best to pay the minimum of your debts for now so you can put the maximum extra money that you have in your emergency fund.

Ideally, you want to be able to save 20% of your income. If you cannot do this, find a way to end your 40s with this saving percentage. You either have to lower your expenses or increase your income.

As you build up your savings, you should also learn how to define what is an emergency or not. This is to protect your emergency fund from being used on unnecessary things. Try to control yourself from doing that.

Financial Issue 3: Investing for the future

The third financial concern that you need to work on is investing for your future. Of course, the first thing that comes to mind if your retirement. According to a study published on Fidelity.com, the retirement readiness of Americans, especially Gen Xers leaves a lot of room for improvement. The data revealed that 43% of Gen Xers only put aside 6% of their income towards retirement. Although the Millennials have the highest since 51% only save the same percentage, they have more time to improve their retirement contributions. The same is not true for those in their 40s. They do not have enough time to save up in time unless they contribute a bigger percentage towards their retirement.

If you haven’t started on your retirement fund yet, you need to sit down and think about it. Do not start in your 50s because that only spells trouble. The high cost of living and the rising healthcare costs will really give you a huge sum to save up for.

12 habits that will help you increase your net worth in your 40s

Apart from the three money concerns that we just discussed, there are other habits that you need to work on in your 40s. These will really help you increase your net worth as you get older.

According to a study done by Pew Charitable Trusts on May 2013, the Gen Xers took the hardest hit when the recession happened. The data found on PewStates.org mentioned that Gen Xers lost 45% of their personal wealth when the economic collapse happened. That amounted to an average of $33,000.

family with teenage daughterIf you are in your 40s now, the chances of you being a part of this statistic is high. To help you recover, you need to start paying attention to your net worth. Start by calculating how much you are worth right now. If you have a home, make sure you only calculate the equity and not the whole value of the property. At least, this is true if you still have mortgage payments to make.

Once you have done that, you are encouraged to work on these 12 habits to grow your wealth and also take care of other money concerns in your life.

  1. Check your financial goal progress. Any financial goal that you have setup in the past should be reviewed once you reach this decade. If they are already fulfilled, then you may want to set up new ones.

  2. Know your financial personality. At this point, you should have acquired a lot of experiences related to your spending and saving habits. For instance, are you a budget person or a spender? Utilize this knowledge so you can grab the right opportunities as they pass by and avoid the pitfalls as you see them.

  3. Re-evaluate your budget. As you grow older, your priorities change and your goals will adjust accordingly. Budgeting converts your life goals into a reality so make sure you know how to use this tool.

  4. Put your expenses in order. Since you are already working on your budget, you may want to check out your expenses. Maybe there are those that you can give up already. Even your financial responsibilities grow more complex as you age so keep an eye on this.

  5. Monitor your credit score. There is no excuse if you still do not know what a credit score is at this point in your life. Go figure it out and make sure you learn how to keep your credit score high.

  6. Review your investments. Time to be a bit more cautious and smart about your investments. Learn how to rebalance your portfolio and make sure your funds are still diversified.

  7. Keep an eye out for your parents and children’s financial situation. For your parents, make sure they are on track when it comes to their retirement. For your kids, check out their college fund and help them save up for it.

  8. Understand your taxes. You should also learn how to maximize your taxes. There are tax breaks for people providing for homes with both elderly and children in it. Be aware of these because it can help increase your net income.

  9. Assess your career and compensation. Are you getting paid what you are worth? If not, then you need to consider your options to get a higher pay. It could mean talking to your boss to ask for a raise or shifting careers.

  10. Take care of your health. It is also important that you start thinking about your health too. Do not abuse your body because you are not getting any younger.

  11. Get insured. Life insurance can be cheap but only if you get it early. Since you are probably married now and living with kids, you need to consider protecting them too. This way, they will not be left financially incapacitated in the event that something happens to you.

  12. Talk to a lawyer about your will. Some people may think that this is still too early but you really never know. Get your documents and asset in order and draw up your will. That should help take care of your family too once you are gone.

All of these money concerns in your 40s is a great way for you to build up your wealth as you approach retirement. It is not really the pursuit of material things but the fulfillment that comes with seeing what you have accumulated so far in your life.

Four and A Half Simple Steps Towards Getting A Financial Education

Smiling couple with laptop

There are studies showing that millionaires spend an average of 8.4 hours a month planning and managing their finances. Would you like to be a millionaire? Are you spending eight or more hours a month managing your finances? The mistake many people make is just not devoting enough time to their personal finances. What you should do is set up a recurring date on your calendar for your Money Date. That means allocating about one hour or so a week, which certainly isn’t very much when you consider how important your finances are. When you have your Money Date you should update your family budget, review any expenses you have that are upcoming and pay your bills though you should, of course, automate as many of them as you can. Finally, be sure to review your checking and savings accounts for accuracy and discuss any other financial matters that are pressing.

You could actually make your Money Date fun. You might dance, light candles, listen to music or do whatever it is that would make personal finances fun for you. The reason for this is that the more fun it is, the more likely it is that you will continue to have Money Dates and consistency is what’s critical.

2. Spend 20 minutes a week reading about personal finance

Most experts say that it would be a mistake for you to try to learn all about personal finance at once. Instead, you should break up your learning into palatable chunks. As an example this, allow 20 minutes a week (in addition to your Money Date) to read about personal finance. Just choose just one topic a week and read about it until you understand it thoroughly and then move on to something else. For example, if you would like to learn more about managing credit card debt, you might get the book “The Total Money Makeover” by Dave Ramsey. Among other things, this book will teach you what Dave calls the “snowball” technique for paying off debt. This is where you organize your debts from the one with the lowest balance down to the one with the highest. You then do everything possible to pay off that credit card with the lowest balance while continuing to make the minimum payments on your other debts. Once you have that first debt paid off, you will have extra money to pay off the debt with the second lowest balance. In addition, Dave’s book will also teach you how to save money and create a budget. If you work your way through this book in small chunks, you’ll master at least one thing about personal finance a week.

3. Find a mentor

As you begin to learn about topics such as saving, spending, credit, debt, retirement strategies, investing and so forth, choose people you admire and think of as smart money managers to be your mentors. While there is a lot of financial talk out there, most of what your family members and friends tell you about money is probably wrong. Instead, talk to your mentors and other entrepreneurs that you know that are successful in handling their finances. Be sure to ask them about both their successes and failures.

You can actually learn from the mistakes of others. In turn, this can help you avoid a lot of financial mishaps. Do keep in mind that discussing money can be a sensitive thing for many people. This means you should start small and then try to work your way up into more in-depth conversations. And always thank people for their advice.

4. Test out strategies

Most successful business people learned that the best way to determine if a business idea will work or not is to test it out. When it comes to your personal finances, you should follow the same philosophy. The fact is that some financial strategies work better for some people than others. Think about budgeting as an example. There are dozens if not hundreds of different ways to budget your monthly your expenses and income but you really won’t know what works best for you until you give it a try. You might attempt some different budgeting systems and then discover, as have many people, that the best solution would be a spreadsheet you custom design yourself – based on your needs, your income and your life style.

5. The one-half step

I titled this article “4 1/2 Steps Towards Getting A Financial Education” because there is actually a fifth step but I realize it’s not for everyone. It’s to hire a Certified Financial Planner. A Certified Financial Planner could not only mentor you but he or she would also help you stay on track on your financial journey. Regardless of where you stand financially, it takes dedication and commitment and continued financial education to succeed. If you can afford a Certified Financial Planner and if you believe that he or she could help you better understand personal finance and remain on track in terms of your commitment and dedication, then this could make sense for you. However, if you’re just starting out on your financial journey and you don’t have much money, then you might be better off following the first four simple steps towards a financial education and holding off on hiring a Certified Financial Planner for a few years.

A new free tool called Manilla

A free tool that could help you on your financial journey is Manilla. It would make it easier for you to manage your  bills and other accounts on your mobile, tablet and desktop called Manilla. It’s from the Hearst Company and is free. It’s a secure digital mailbox service where you store all your financial documents. Manilla even includes a Bill Share tool that could help you during next year’s tax season, as it will eliminate the need to gather and organize all of your documents before the April 15 deadline.

Kiplinger’s recently named Manilla to its Personal Finance’s 2013 Best of Everything List. Also, CNBC had it on its list of the 10 best financial apps for 2014. The way it works is that you add all your financial documents to Manilla. It then gives you one secure access point to all your household accounts and services. You can use it to manage and share your household bills, travel programs, entertainment, financial and brokerage, magazine subscriptions and healthcare accounts so that you will always know your balances and due dates. In short Manilla can simplify and organize your financial life. Manilla’s features are even available on the go as there are iOS and android mobile apps available for it that have been rated four stars by its users. This means that you only need one password to get an organized view of all your account information, emails and text reminders to pay bills, check out expiring subscriptions and manage daily deals. Plus, it offers an unlimited amount of storage along with easy document retrieval.

Here courtesy of National Debt Relief is a brief video that explains more about Manilla’s features and benefits …

 

Money Concerns In Your 30s: Managing Your Financial Goals And Investments

young family smilingWhen you get older, your money concerns will change according to how you develop in life. In most cases, it gets more complicated as we get older. In a previous post, we have discussed the financial issues that people in their 20s have to go through. Now, let us focus on the next decade – your 30s.

An article published on Forbes.com revealed how most of your decisions during this decade will have serious implications in your 50s. The latter is the time when retirement is a little more than a decade away. We all know that money concerns in retirement is vital. If you want to keep yourself from feeling too stressed during the years leading to your retirement, you may want to consider the decisions that you will make in your 30s.

As you enter your 30s, you will realize that planning for major financial decisions will be quite prominent in this decade. They are not similar to what you encountered in your 20s. In most cases, your decisions will not only affect yourself, but also the family that you have started or will soon be starting with your significant other.

What financial changes happen in your 30s?

The money concerns that you will have in your 30s are closely linked to the changes that will happen in your life. To better discuss them, let us define the 3 financial changes that typically happen when you reach this decade.

  • Getting married and having kids. While these are primarily emotional decisions, these are also life milestones that should consider your personal finances. You need to make sure that you are compatible financially with the person you are marrying. If one of you is secretly bringing debt into the marriage, that can cause problems. Having kids is also a huge financial decisions. Childbirth and childcare cost a lot of money and you need to be financially prepared for it to be a responsible parent. These are the life changes that will affect the money concerns in your 30s.

  • Establishing a stable career. Another area in your life that can affect your finances is your career. When you are in your 30s, the chances of you having a stable career is quite high. This is also the time when you can go through a tough job mishap and still bounce back. You are relatively young so building a stable career for yourself is very important in your 30s. The time of testing the waters should be left in your 20s. Make a choice and stick to it so you can start working on your future more consistently.

  • Making big investments. Lastly, reaching your 30s mean you are starting to make big investments. If you are about to get married or you are just married, you will be thinking about a permanent home. That is a big purchase that you need to be prepared for. If you have a stable career, these investments can happen in your 30s.

Do not think that decisions about your money should be done lightly. Approach these changes with care because there are seemingly simple financial decisions that can change your life significantly.

The financial plight of the Gen Xers and Millennials

At present, Americans in their 30s are shared by two generations: the youngest of Generation X and the eldest of the Millennials.

In some way, society and the current economical conditions will define how you will deal with the money concerns that you will encounter in your life. It can also shape how you will make financial decisions. Given that, let us take a look at the money habits that these two generations have and how it can affect their respective financial situations.

Generation X

Gen Xers who are still in their thirties are the youngest of this generation. They are the ones born between the early 1960’s and early 1980’s. This is the Post World War 2 generation so you can expect that they grew up in better conditions than their parents. According to the data found on Wikipedia.org this generation are financial risk takers. They have the entrepreneurial spirit that gave rise to a lot of small and medium businesses in the United States. Although this generation made less than what their parents did when they were the same age (especially the men), they have the confidence that their parents did not have. The decline in earning for men is also attributed to the fact that women have strongly entered the workforce to become second (or even primary) earners for the family.

Millennials

On the other hand, the oldest of the Millennials who just entered the workforce had to deal with an economic collapse. This made them a bit more timid compared to their predecessors. The page on Millennials from Wikipedia.org mentioned that this generation is also called the Peter Pan or boomerang generation. Their lack of confidence in their financial situation results in the delay in a lot of life events. This includes moving out of their parents, getting married, etc. What they experienced during the 2007-2008 economic collapse contributed to this drastic change. This is beginning to be a concern because the financial decisions of Millennials can set a trend for the younger members of their generation. It has to be dealt with so it will not stunt the growth of t recovering economy.

Regardless of the generation that you belong to, it can be expected that your 30s play an important role in the kind of life that you will live in the future. The difference in approach of the two generations paint extremes when it comes to dealing with money concerns. The Gen X are risk takers and that can make them more confident about taking on too much debt. Millennials perch on the other side of the scale for their timid nature when it comes to investing. Both have to ease up on the overconfidence and the lack of it. That is how they can maximize the opportunities that will come their way in their 30s.

Tips to make wise decisions regarding your financial issues

Making wise decisions when it comes to your money concerns is easier said than done. That is true. However, you should not be afraid to make them at all. You can make mistakes but why dwell on that possibility. While they can be great learning experiences, you should try to avoid them. Here are some of our suggestions when you are trying to make financial decisions.

  • Remove your fear of debt. According to a recent study by PewSocialTrends.org, Millennials are the first generation to really have high levels of debt. A lot of them had to deal with poverty and unemployment. This makes them timid when it comes to debt. While there are debts that can destroy you, there are those that can help. You need to educate yourself about the debts that has the potential to do you good. Once you do, it should be easy for you to remove your doubts and fears about debt.

  • Monitor your financial situation. You will feel more at ease with your money concerns if you can stay on top of it. That is why monitoring your personal finances through a budget is the best way to avoid mistakes. When you know what goes on with your money, any new concern can be dealt with accordingly.

  • Know what you want for the future. Your 30s may seem like a long time before you retire. But do not be fooled by the 30 year gap. A lot can happen in between and if you haven’t started yet, you need to seriously consider your retirement plans. You can contribute a small amount to your retirement fund and still have enough to live a comfortable life. Although it will not be as low as when you started in your 20s, it is definitely smaller than when you decide to start in our 40s or 50s.

  • Set up goals. Having financial goals is a great way for you to give your financial decisions some direction. As soon as you have identified what you want for your future, try to build your financial goals around that.

  • Do not delay your savings. If you reached your 30s without an emergency fund and you are not in a financial crisis, you have been very lucky. Do not test your luck any further by building up your emergency fund right now. You should also start saving for investments like the down payment of your home. Saving can literally save your life so make sure you have this financial safety net in place.

  • Protect yourself and your family. Insurances have their uses and for someone who has a family relying on them, this is a necessity. You want to make sure that any incident will not leave you or your family crippled.

All of these money concerns in your 30s can be a way for you to secure your future. If you deal with them correctly, you should be able to manage your goals and investments well. That should paint a bright financial future for yourself.

Money Concerns In Your 20s: Setting Up Your Finances Right From The Start

young woman looking tiredMoney concerns in your 20s may seem like a trivial thing since you have just gotten out of school. But considering the current financial situation in the country, you may want to start being serious about your finances early on. Most people are looking for financial tips for new graduates because they are eager to set up their finances in such a way that will help them avoid the mistakes that their elders made. Millennials, or at least those who are still in their 20s have seen how their parents and grandparents struggled with their personal finances. That experience definitely left a mark and is influencing how people in their 20s are reacting towards financial situations.

According to an article published on Investopedia.com, the spending habits of young adults are influenced by their friends, social media and the latest recession. Different studies reveal that they are inclined to follow the financial habits of their friends and they rely heavily on what goes on in their social media networks. The Great Recession significantly reduced the appeal of credit cards for the young adults – after seeing how it nearly drove their parents and grandparents under.

Whether this is true for you or not (assuming you are in your 20s), you need to put your prejudices aside and figure out how you will set up your finances today. You need to start it right so that your momentum in building up your wealth will not be hampered by mistakes that could have been avoided early on.

Typically, your money concerns can be divided into two: your debts and your financial goals.

Dealing with your debts out of college

Let us start with your debts. Being in your 20s, you know that one of your major concerns right now is your student loans. The really bad news about student loan debt is simple – it keeps on increasing. Chances are, you graduated with a lot of them in your name.

If that is the case, you need to know that dealing with your debt as early as possible is the best course to follow. By prioritizing this, you are lowering the interest amount that your debt is accruing. It can also help you setup your finances so that you do not have to pass up on financial opportunities because of your debts.

According to an article published on TIME.com the student loans debt that is now more than $1 trillion is starting to hurt the economy. Not only is it keeping students from making personal investments, it is also causing the government some serious budget cuts on other programs. That is so they can divert funds to help save the delinquent student loans borrowers.

Given that effect, you know that other money concerns is not as great as your responsibility to pay off your debt. This is true even for those that you have incurred in the past like credit card debt or other personal loans.

So how do you do that? Here are some tips for you.

  • List how much you really owe. Make a list of the debts that you owe – from student loans, credit card debts and other accounts that you have opened in the past. Give the details of each debt: the lender, interest rate, current balance and monthly payments. This will help you categorize which of them requires your attention the most. Ideally, you want to concentrate on those with the highest interest.

  • Calculate your payment capabilities. If you already have a job, you need to calculate your income to figure out how much you can afford to contribute towards your debts every month. That way, you can figure out how you will set up your budget. If you do not have a job yet and the 6-month grace period for your student loans is up, you need to research how your unemployment can be used to delay your billing.

  • Create a budget plan. When you have your income, you should list your expenses and make sure that you have enough money to send towards your debts. If it is not enough, your choices are to earn more or cut back on your expenses.

  • Research on the different debt solutions you can use. There are various debt relief programs that you can use to help make your debt payments more organized. You can use debt consolidation programs to simplify the payment process that you have to go through. Research the processes that you can choose from and figure which is most suitable for your specific financial requirement.

Financial goals that you can set up in your 20s

Apart from getting out of debt, you still have other money concerns to take care of. We have consolidated them into your financial goals. What you have to realize is that as you get older, your priorities will change and so will your financial goals. So you need to be careful about how you focus on each one because while you are working on them, they might not be relevant anymore.

But just to get your started, here are some of the money concerns that you can work on in your 20s.

  • Build up your emergency fund. As important as getting out of debt is, you need to work on your emergency fund too. That way, you do not have to put yourself further in debt in case the unexpected happens. You can start with $1,000 as your rainy day fund and just put more money as you go along.

  • Contribute towards your retirement. You also have to start thinking about retirement – yes even as early as now. If you do not want to wait until you’re 80s to retire, you should start saving up for your future. The thing about starting early is you can make small contributions and you can still reach your target.

  • Raising your credit score. This is an important task for you to work on early in your career. This is not just about having debt, it is more of how you will behave towards your debts. You need to learn how to pay off your credit obligations properly. That is primarily, how you will raise your credit score. To give you some tips, here is a video from National Debt Relief that has some tips on how you can improve your credit score.

  • Establishing your career. This is not really a financial goal but it is still important because it will allow you to reach your targets. In fact, most people in their 20s are usually focused on this. Figure out what you want to do and if it can finance the type of lifestyle that you want to have.

  • Acquiring possessions. According to the MarketPlace.org, student loans, after reaching $1.1 trillion, is starting to affect the ability of young adults to make investments – like buying houses for instance. It ties up around $1,000 per year and any payment made towards interest is actually a lost investment. So as difficult as this may be because of your debts, you need to look into ways to acquire possessions. Do not let your debts keep you from doing that.

The great thing about working on your money concerns as early as when you are in your 20s is you get to have the time to make mistakes. Not that you would not be careful of course. You will still take your time to consider your options but the thing is, you can afford to make risks at this point. So know your options and start working on your finances as early as possible.

In case you need help with your student loans, National Debt Relief recently released their federal student loan product. This is a consultation service wherein they evaluate borrowers in terms of their financial, employment and student loan conditions. They will recommend the right program that you can avail and will even help you with the paperworks. This service will only cost you a one time flat fee that will be placed in an escrow account. National Debt Relief will only withdraw this amount when you are satisfied with the paperwork that was done on your behalf. If you do not get into a program, then the company will not get paid. There will be no maintenance fee or any upfront fees in the service. Find out more about this by clicking this link: http://www.studentloandebtconsolidation.com/.

6 Ways To Help Your Parents Find Retirement Security

smiling coupleIf you have a parent who is or about to enter retirement, you may want to consider giving them money management tips for retired individuals. You want to make sure that they have retirement security – especially when it comes to their finances. With a limited retirement fund and a higher cost of living, our parents are bound to have a challenging road ahead of them. Add to that the medical costs that have significantly risen in the past couple of years.

Considering all of these, we have to help our parents prepare for a not-so-ideal retirement. It is not only to help them stretch their retirement fund, but also to assist them in protecting their assets. According to the National Council on Aging, financial scams that are specifically against seniors is now considered as the crime of the century – at least, the 21st century. The data from NCOA.org revealed that 90% of the abuse that elders get are from people that they know – even family members.

This is a sad statistic that you should try to avoid. Help your parents achieve retirement security by protecting them from people who want to scam them out of their money.

Statistics show that retirement for boomers is not so secure

Even without the scamming statistic, things are not as great as it should be for the baby boomers. In a compilation of statistics found on Financial-Planning.com, the following data is revealed.

  • 46% of workers have less than $10,000 for retirement while 29% will have less than $1,000. (Employee Benefit Research Institute)

  • Americans are short by $6.6 trillion on what they require to have a comfortable retirement. (Center for Retirement Research in Boston College)

  • 1 out of 6 senior Americans are living in poverty. (US Census Bureau)

  • 40% of baby boomers expect that they will work all throughout retirement. (American Association of Retired Persons)

  • 56% of retirees have an outstanding balance when they retire. (CESI Debt Solutions)

  • In the next 5 years, the revenues in the health and medical industry will have an increase of 5% annually that will amount to $865.8 billion. This will mean a huge deficit in the budgets of a lot of retirees who need medical help because of old age.

To date, the total beneficiaries of the Social Security is almost at 42 million. This is according to the data provided by SSA.gov. It also revealed that the average amount that they receive every month is at $1,184.76. If this is the only money that they receive, this will not be enough to help them build retirement security.

Since their money will not be enough, you can expect that retired individuals will be working while in retirement. In fact, data from Census.gov revealed that in 2014, the expected workers from the retired communities will be as follows:

  • 26.9% of 66-74 year old retirees

  • 9.6% of 75 years and older

  • 19.7% of 65 years and above (average)

6 ways you can help set up your parents to a secure retirement

If you want to keep your parents from having to work just so they can have retirement security, you need to sit down and talk to them about some strategies for a good retirement.

Here are 6 ways that you can help your parents with their finances.

  1. Tell them about financial scams. As mentioned earlier, there are malicious individuals who target seniors specifically for their retirement money. You can imagine how tempting they are. They have all of this money in their hands and it is like ripe for the picking – at least, that is what scammers think. Make sure you teach them about these scams. How they should be careful about any offer that will involve them paying or giving off their financial information to others. This is especially true if your parents are showing signs of dementia, or their mental illness. Teach them how to recognize a scam from the not.

  2. Help them sell the things they do not need. This is to help them de-clutter their lives and get rid of the material possessions that are no longer necessary. If you want them to have retirement security, you need to help them increase their money. That can be done by selling off the stuff that they just have lying around.

  3. Look over their service contracts. These include phone, Internet, cable and other contract that your parents subscribe to. Check if you can arrange to have these contracts changed so your parents do not have to pay so much every month. Some service providers offer a discount for any qualified retirees and seniors.

  4. Educate them of any discount that they are entitled to. This includes any product or service that they usually avail. That way, they can still enjoy the things that they used to without spending too much. You can also encourage them to join memberships that will help them get access to discounts that is appropriate for their age.

  5. Teach them about the ins and outs of technology. Some of our elderly are hesitant to use gadgets because they find it confusing. Have the patience to teach them so that they can benefit from the convenience that technology brings. Introduce them to apps and other programs that will help make things easier for them to monitor their funds, investments, etc.

  6. Ensure that they are getting the benefits that they deserve. There are so many financial aid provided for seniors – Social Security, Retirement plans, Medicare, etc. Make sure that they are availing of these benefits because it will help relieve them of the retirement stress that comes with limited finances.

It is also important that you always check on your parents every now and then. Even with everything that you have set up for them, their loneliness can lead them to trust the wrong person. But if you always talk to them, they will trust only you.

Tips to help reduce their expenses to stretch their retirement fund

Another thing that you can help your parent with is in downsizing their lifestyle so their retirement fund can last. The most effective way that they can achieve retirement security is when they have enough funds that is sure to outlast them. You may have to help them change into a frugal lifestyle so their money can be spent only on what is important.

Here are some tips that you can help them reduce their expenses.

  • Help them move to a smaller home. This will lower their monthly household expenses. Not only that, if they can even earn profit from the sale of their bigger home.

  • Discuss the possibility of moving in a state or country that has a lower cost of living. This is an option for the more adventurous retirees. See if they are open to this idea and help them in making the move.

  • Setup means of communication that will not cost as much. Remember that communicating with your parents is important. This will keep them from feeling isolated. Make sure it will be cost friendly for them too.

All of these are meant to help your retired or retiring parent achieve retirement security. All it takes is some time, effort and patience. It is your turn to do them favors so you can help set them up for a comfortable retirement.

Analyzing The Consumer Debt Problem Of Americans

debt split in halfIf you are having problems with debt, there is help available for you. But before you concentrate on getting yourself out of debt, you also need to consider the reasons that got you there in the first place. The consumer debt problem in the country is not decreasing. It did for a while, but now it is going up once more.

That is something that you may want to research on. Why is it that after everything that we have been through in the last recession, why are we still incurring debt? Haven’t we learned our lesson yet? Are we really driving ourselves up the wall again and setting up our future for another credit problem?

In an article published on the NYTimes.com, it is reported that American households added $241 billion worth of debts in the last quarter of 2013. After lowering their debt levels, consumers are back to borrowing money – again. According to the title of the article, this is an “ambiguous omen” for the country.

Important statistics about the American debt scenario

The latest report from The Federal Reserve Bank of New York revealed the details of the growth in the consumer debt problem. The NewYorkFed.org revealed that the change in the debt are as follows:

  • Mortgage debt is $152 billion

  • Student debt is $53 billion

  • Auto loan debt $18 billion

  • Credit card debt $11 billion

Only the HELOC declined by $6 billion. The rest went up significantly.

According to the report, this is the highest increase from one quarter to the other since Q3 of 2007. That is before the recession happened. Are we setting up ourselves for another financial meltdown? Let us hope not.

Although the debt level is rising, the delinquency is holding steady at 5%. It means consumers are trying their best to stick to their payments.

In a separate infographic from The Credit Examiner, it revealed that the average debt of consumers in 2012 are as follows:

  • $149,782 in mortgage debts

  • $34,703 in student loans

  • $15,328 in credit card debt

TheCreditEaminer.com revealed that the average consumer debt problem was $199,813 in 2012. And it is reported that the amount is higher in 2013. How can we expect to completely solve the debt problem in the country if we keep in increasing our debts?

Why is our debt continuing to grow?

That is actually a good question – why do we keep on increasing our debt level – thus increasing our consumer debt problem? In an article that we published earlier, we discussed a study that revealed how 1 out of 3 Americans still lose sleep over money problems. If debt is so bad that we lose sleep over it, why can’t we just live without it?

It is somehow connected with how we are encouraged to increase consumer spending. It reaches a point wherein we are forced to spend beyond our means already. We are given easy access to credit just to support spending that we cannot afford. That is how we are tricked into making our consumer debt problem worse.

But why is there so much concern about consumer spending anyway? We think that these three reasons are to blame.

  • Economy-driven. We are a consumerist society. In fact, it is a known fact that 70% of the US economy is driven by consumer spending. Our economy is built in such a way that it thrives in how much we spend – not how much we produce. Even if we have a high production rate, if no one buys them, that will not mean anything in our economy. Overall, the businesses thrive if we spend our money on them. So we work for these companies so we can buy the products that businesses produce. What we spend is what the business owners use to pay us our wages so we can buy some more. It is a cycle that moves because of consumer spending.

  • Measurement of an improving economy. In connection with the first reason, our consumer debt problem is made worse because we use our spending as a measurement of our economic success. According to the New York Times link that we mentioned at the beginning of this article, the willingness to borrow money to spend is an indication that households are confident about their personal economic conditions. The NYTimes.com article quoted an expert that said “In a steady state you would expect, in nominal terms, household debt to grow.” That simply means if we want our economy to be steady, we need to expect that our debt will really grow.

  • Cultural thing. As sad as it may sound, Americans are culturally inclined to spend. If they want something, they spend on it instead of finding ways to work on it themselves. Some of us blame credit card debt on the purchasing tool itself. But if you think about it, the problem is not the card, but how we use it. An article published on CNBC.com revealed that other countries does not react to credit cards in the same way as we do. France, Germany and other countries in Europe do not have as much credit card debt as we have – and they have more savings than we do too. We all have access to the same purchasing tools but Americans are culturally inclined to be in debt just to get the things that we want. We do not prioritize savings as much as we should and the lack of emergency fund actually leaves us in a more vulnerable position in the future. One emergency that is beyond our budget can put us in debt.

You need to consider these factors as important influences to our current consumer debt problem. Obviously, something has to change and relying on the government to influence us to change is not possible. We need to look into our own homes and start making small changes here and there to make sure that our debt level will not reach a point that will lead into another financial crisis.

What will it take to change the debt situation of consumers

There are many ways to improve your finances but it all begins with your ability to change your mindset. It is tough to change habits that we have grown accustomed to but there is no shortcut to it. We have to work hard to make sure that our debt situation will not get any worse.

With that, here are 5 things that you can do to help make the necessary changes that will solve our consumer debt problem.

  • Ignore the calls to spend if you do not need to buy anything. Since our economy is geared towards spending, you can expect that everything around you will encourage you to buy something. These include advertisements, peers, neighbors and even your own family. Keep in mind that if you do not need it, do not spend on it.

  • Understand your current financial situation – at all times. One way to help you control your spending is when you know your financial capabilities. If you live on a budget, you can quickly decide if you can afford something or not.

  • Stop using your material possessions as a measurement of your success. At this point in time, looking into the qualities of the modest millionaire is a good idea. You need to stop using your possessions as the measurement of how financially successful you are. You do not need to show off. Just be modest and be content in knowing that you are financially secure today and in your future.

  • Educate yourself on how to properly grow your personal net worth. Not only should you know your finances, you should also understand how you can grow it. Learn about investments so you can put your money where it can grow.

  • Find out your options to get out of debt. Since we already have the consumer debt problem, we naturally have to find out how to get out of debt. Fortunately for you, there are so many options before you. You just have to find the specific debt solution that fits your needs. To help you, here is a video from National Debt Relief that will help you find trustworthy debt relief companies to aid you in getting debt freedom.

15 Questions You Absolutely Should Ask A Real Estate Agent

What To Do During Your Pre-Retirement YearsIf you might be selling your home, step back, take a deep breath and think about what you’re doing. Your home is most likely your most important asset. If you’re going to sell your home, you need to do it right. And doing it right means having the right real estate agent. Experts in this area say that it’s critical that you have a good rapport and comfortable feeling with your real estate agent. This is because you will be required to divulge some very personal information about your wish list, timelines and finances. Selling your home will likely take time and if you don’t get along with the realtor or don’t like his or her style, it won’t be an enjoyable process.

Obviously you need to know the terms of your contract and how to get out of it if that becomes necessary. Beyond this here are 15 questions you should ask a prospective real estate agent before signing on the dotted line.

1. Do you have a broker’s license or real estate sales license? Are you a Realtor™?

Your state issues licenses for sales agents and brokers. However, to get a broker’s license means more education and testing. And Realtors™ are real estate agents that are associated with the National Association of Realtors. They subscribe to a high code of ethics and must meet continuing education requirements. So you should have that real estate agent explain which license he or she holds and what it means. It’s important to choose someone that’s taking his or her profession seriously. These various licenses don’t speak to a person’s abilities but do show that they have pursued extra education.

2. Do you work part-time or full-time?

The way the housing market is today requires a lot of time from the pros. This means it’s important that you find a real estate salesperson that has the time required to do home searches and help you sell your house. Your real estate agent really needs to be involved on a daily basis and it’s important to have someone that is willing to focus full-time on real estate.

3. Do you work for a big company or a boutique brokerage?

You could ask about the real estate agent’s office in terms of its size, production and market share. If the market is hot, real estate agents at a large company may have access to properties that haven’t yet been listed which could give you an inside track on them. But boutique brokerages have their advantages. For example, you might find agents who specialize in a specific neighborhood and will give you more attention.

4. How long have you been in the business?

Experience can be very valuable when it comes to making deals with other real estate agents. However, this doesn’t mean you should necessarily write off less experienced agents. Newer real estate agents can be more aggressive and work harder for you as they want to build their reputations. While experience generally wins out, don’t just discount a new person who might be really top notch.

5. Can I talk with your three most recent clients?

If you talk to former clients, this can give you a really great understanding of the agent’s style. You might also ask if the agent’s clients are generally from repeat business or referrals. If it’s from repeat business this is a sign that the agent’s clients have felt good about the experiences they had with him or her.

6. If you have a team, who will I work with?

While you could really like the person that you initially meet, it’s good to make sure that he or she is the one that will be working with you throughout the process. Many agents – especially in hot markets – have teams. Some of these teams can be effective. But as a general rule the process goes more smoothly if you work with just one person – and that should be the agent you initially contacted.

7. What will I get for the money?

Ask the agent about those factors that will be important in your decision. This could be the quality of neighborhood schools, your commute and those other things that would help you understand where you should and shouldn’t buy. What you want is a real estate agent that can provide good market advice vs. just selling you.

8. Is this a good time to buy or sell?

A good real estate agent should be able to give you insight as to the market. He or she should be able to tell you whether now is a good time to sell or whether you should wait. Make sure that your agent is thinking about both sides of the transaction and your best interests – and not just his or her commission.

9. Which neighborhoods are you familiar with?

An agent who specializes in a neighborhood that interests you will have a competitive advantage and will know what are called the comps in your area or what comparable homes sold for. This information is critical in pricing your house correctly.

10. What will be my biggest problems?

You want your real estate agent to give you an honest assessment of what to expect. For example, there could be issues having to do with repairs and inspections. You need to know about your agent’s problem-solving skills as roughly 90% of the sale is about problem solving and not selling.

11. What do you use in the way of technology?

Time is money is especially true in the current real estate market. If your agent has a tablet with electronic signing capability this can be important. This helps submit an offer very quickly and can be critical in a hot real estate market. A good rule of thumb is that your agent should have as much or better technology than you have. Long gone are the days of big stacks of paper.

12. How do you negotiate?stack of cash

You should know how your agent would deal with multiple offers on your house. This is especially important if there is a record amount of low inventory in certain areas.

13. How do you price houses?

A good real estate agent will be able to price your house so that it sells quickly. You might ask him or her about the difference between the listing prices of houses they sold and what they actually sold for.

14. How many listings do you have and what is your mix of buyers and sellers?

Most real estate agents work with both sellers and buyers. A real estate agent who works a mix of these can think with both mindsets. This can help during a negotiation. While an agent that has many clients may not be able to devote the same amount of personal attention to you, it can be helpful if he or she has many listings. He or she will get a lot of traffic and in many instances could redirect a possible buyer to your house.

15. Is your license in good standing?

Your state may have a system online that would allow you to check the status of your agent’s license and whether or not there have been any lawsuits or complaints. As an alternative, you could call the agent’s office manager to make sure that he or she has a license that’s in good standing.

Finally, make sure you ask the age-old question of “what questions have I forgotten to ask you that I need to know the answers?” You might be surprised at the answer