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3 Tips That May Not Be The Best Financial Advice For You

couple with a financial expertWhile there is a financial advice for every generation, there is still a need for you to consider if these tips are really applicable to you. There is no one size fits all financial management. You need to understand which of them should be implemented in your life based on your specific financial situation.

There are a lot of gurus out there who are truthfully, sincere about helping you improve your financial standing. But before you apply their teachings in your life, make sure you understand what is at stake first. It is not enough that you keep on implementing what you hear. You need to filter out what will benefit you the most.

3 financial tips that are not always good for you

There are certain financial tips that when you first hear about them, you would want to implement them immediately. But before you do that, please make sure that it is an advice that you will really benefit from. If not, you can lose more money because of it.

Here are three financial advices that you need to consider carefully before you commit to them.

Financial advice 1: Automate your bills payments

There are financial advisers who tell consumers to automate their payments so it will never go to default. This makes a lot of sense if you think about it. You do not have to worry about making deadlines and keeping up with all the money that you have to send out every month. You do not have to juggle with due dates and all the details that come with making payments each month. Best of all, you do not have to worry about late payments.

But according to, a pitfall of automating your payments is you will get lazy. The convenience that makes this mode of payment appealing can also be its downfall. You can easily lose track of all your payments. Since you are no longer thinking about them every month, you could think that your financial obligations are not as demanding as you thought it was. That could make opening new accounts more tempting.

You can also miss out on any machine related mistakes that could have caused you to pay more than what your should. Or it can cause you to pay less which will end up making you incur late penalty fees. Not only that, you can be in danger of overdrafting on your account. That is something that you do not want to happen.

Unless you are sure that you can control your spending and you can keep track of your payment, you may want to rethink following this financial advice.

Financial advice 2: Using credit cards for their rewards.

We have heard this advice before – if you will take a credit card, make sure you can benefit from the rewards. Some people are only interested in applying for the card because of the rewards and discounts they will get immediately. According to the data provided by, the initial rewards and bonuses of credit cards are 10% more in the first quarter of 2014 as compared to the same period in 2013. This can be very tempting to grab since the points and miles-based rewards are considered to be at an all time high when it comes to value.

But even if that is true, you need to exert caution. These cards will only be beneficial if it fits your spending lifestyle. If not, then do not avail of it. They will only be a temptation to increase your purchase.

Financial advice 3: Do not touch your emergency fund.

There is an interesting article from that discussed why an emergency fund is a bad idea. According to the article, it is overly prudent to create an emergency fund. If you understand the risk and your other options, you will realize that there are better places to put your money than to let it sleep in your bank account.

At least, this is true if you are after financial wealth.

If you do the math, a person who lives on $30,000 a year will have to save up at least $22,500 to have enough emergency funds. But think about it. The average interest on your savings account is a mere $1-2%. That only translates to $225 to $450 growth. Even the ones with the highest yields of 3.5% will give you less than $790 of annual growth.

Now if you put that money on an investment that will earn you 15%, then it will earn you a whopping $3,375 per year. Don’t you think the need for an emergency fund is not too smart at this point? Just think about it.

You can probably set aside 3 months worth emergency funds and put the rest in an investment that you can liquidate easily should the need arises. That is how you setup your money to work for you.

How to filter the money advices you get

In truth, there is no such thing as a bad financial advice. Even putting yourself in debt is a good advice – but again, it has to depend on your unique situation. We were all told to eliminate debt but there are benefits to being in debt. Things like having the opportunity to raise your credit score is one. It can also help put money in your pocket – if you use it correctly.

The key is to know how you will filter out the advices that will have a good effect on your financial life and those that will not. Here are 5 tips that should help you decide what advice you can follow and what you need to forget about.

  • Have a clear idea of your financial goal. If you do not have one, then go think of a goal. It will not only give your financial habits direction, it will also help motivate you to improve your financial situation. If you have financial goals, you simply have to determine if the financial advice that you are getting will bring you closer to it. If not, then you can choose not to follow.
  • Know your financial behavior and situation. If you are also aware of your current financial standing, it will be easy for you to determine if an advice will be good for you or not. It is also vital for you to understand your own personal behavior to see if it will bring you closer to your goal or not.
  • Keep your financial education updated. Financial literacy is an important aspect of financial growth. It is also give you the foundation to choose the advices that you will follow. So make sure you are updated not just on the concepts, but the latest news about the financial situation around you. That way, you can know if a certain financial advice is still relevant based on the current economic conditions in the country. Someone might be telling you something that used to be effective in the past but not under the present economy.

In the end, having a clear picture of what you want, what you are capable of and what is realistic will help you make smart choices about your money. Keep in mind that a certain plan may work well with someone but it does not necessarily mean it will do the same for you. Think about that before you really choose to follow a financial advice.

Important Financial Tips During Divorce

couple talking to a professionalAnyone who have been divorced at one point in their lives can attest to the need for financial tips while going through the process. This is a bitter time for any couple and in most cases, you will be battling to get as much of the conjugal properties and ownership that you once shared.

The divorce statistics in our country is not something to be proud of. According to the 2011 statistics in the site, out of a population of 250,392,781 million (15 years and above) in the country, 11% are divorced. The highest percentage of the divorced are during the age of 55 to 64 years old for men (16.4%) and women (20%). In most cases, the divorce rate is said to be half of the marriage rate annually. That means for even two marriages each year, one couple is filing for divorce.

Apart from the obvious emotional and psychological effects of a marital separation, you also need to know the implications that it will have on both of your personal finances. In fact, this is usually the reason why divorce proceedings last so long. It is true that divorce ruins credit – specifically your credit report. You are more in danger especially when your spouse racked up a lot of debt while you were together.

Money is the leading cause of divorce

There are many reasons why couples end up in divorce. However, the most prominent of them all involves money. It seems that getting financial tips could have served the couple better while they were still married. It may have helped save their relationship had they sought financial advice.

Based on an article in, it is said that financial disagreements play a big role in the downfall of a couple’s relationship. The study was conducted in 2009 by Jeffrey Dew (Utah State University). His study revealed that:

  • Couples who disagreed about money once a week have a 30% higher chances of getting a divorce as compared to couple who disagree only a few times a month.

  • Couples who disagree about money less than once every month has a 30% to 40% increase in the chance of filing for divorce.

  • Among the financial disagreements include debt, spending habits and high costs of living.

Most of the time, couples bring in debt into their marriage. The two common debts are student loans and credit card debt. A lot of people are hesitant to discuss money matters with their partners before marriage and that raises a lot of realizations when they are already together. Things like who will pay for what debt, how to budget their household finances, who will make the financial decisions – these are all important topics that needs to be talked over by any couple. Those who fail to communicate this usually end up feeling bitter, resentful and prone to blaming each other for any financial difficulty that could arise.

Financial aspects in your life that is at risk in divorce

While you may be reeling from the shock of your failed marriage, you need to clear your head to find some financial tips that will keep your spouse from taking your money. There are various financial risks that is involved in your divorce and that has to be something that you need to work on now. Believe it or not, you may still be in danger of being affected by your ex-spouse when they get in trouble with their finances. A property that went to you after the divorce may still be subject to repossession if you fail to protect yourself.

Here are two of the important financial implications that can change when you get a divorce.


When you get married, you get to have a lot of tax credits – especially when you are the breadwinner in the family. That will change when you file for divorce. One of the things that you need to find out is who will claim their child on their tax return. There are specifications like the support and the living arrangements that will determine who will get this tax break between the couple.

Not only that, any property that the couple will decide to sell and split between them may be viewed by the IRS as a taxable income. You need to be careful about these decisions. Transferring a property may not be taxable but if it will be part of a settlement – it may be tax accountable in the future. For instance, if one of the properties given to your ex-spouse is sold in the future, you will also be taxed on the profit of that sale. This is true even if you had no participation in the transaction because the IRS views you are a joint owner – since you purchased it jointly. Make sure you clear this up so you can disassociate yourself entirely to avoid negative implications in the future.

Division of property/assets

The last of the two financial tips will involve the accumulated properties and assets while the two of you were married. In most cases, the division of the property will depend on the value of the item. If the two of you cannot agree to divide what you own, the easiest course of action will be to sell it and divide the proceeds between the two of you. That division will be according to the percentage that will be agreed upon. While this is easy, remember that this will be taxable as an income.

If you want to avoid being taxed, the best course to follow is to take your pick among your properties and assets. In doing so, you need to consider how that property or asset will be valued in the future. For instance, choose an asset that will grow in value over time instead of one that will depreciate.

What should you do when you separate from your spouse

Divorce with debt becomes all the more complicated so you really need to read a lot of financial tips to help settle your financial difficulties as you say goodbye to your marriage. Given that, here are some of the things that you need to take care of immediately when you know that you will be going through a divorce.

  • Get legal advice. This is the first thing that you have to do. Look for someone who can professional provide you with legal advice about how you should proceed. Among the things that you need to discuss are the state laws and the implications on your children, property and assets.

  • Open a separate account. The most difficult part of a divorce is separating what is both under your names. It is best to just remove your money from your joint account and open one under your name alone. Make sure to check with your lawyer to ensure that your actions will not be held against you in court. If you both have credit cards under that joint account, it is time to cancel that to avoid your ex-spouse racking in debt that you may be held liable for.

  • Update important documents. We are talking about any beneficiaries that you have or something similar. You can remove your spouse there and just include the name of your children.

  • Child support. It is also important, especially for women, to file to child support to ensure that their husbands will follow through with their financial support. This is not always inclusive of divorce proceedings so make sure you discuss this with your legal counsel.

These financial tips are all generic and may or may not apply to you so it is really best to get your own legal counsel to tell you the right course of action in your divorce. You should also do your own research to ensure that you will know what to expect. There are free legal information on sites like that you can go to so take time to learn what you can about divorce.

Financial Advice For Every Generation: From Baby Boomers, Gen X To Millennials

man with a lot of worriesDebt clearly manifests itself regardless of your age in life. Its probably accurate to say that credit will always be a part of the financial structure in our society. The mere presence and importance being put upon credit scores means we have to take on debt all the time. We are encourages to get our scores high enough to open up more financial opportunities.

It is sad to know that we get to be in debt in as young as our college years. Even before we have the ability to pay off our dues, we have to deal with student loans that will help us get the job to pay it off. We need to carry all sorts of debts up until our retirement – which some of us have seriously compromised because of credit.

But who exactly is greatly affected by debt and is in dire need to receive some sound financial advice? created an infographic as of October 2011 and it revealed the following information about the credit situation per generation.

  • Baby boomers have a total debt of $101,951.

  • Generation X have a total debt of $111,121.

  • Millennials have a total debt of $34,765.

Of course, this data was back in 2011 and two years after, there must be some sort of improvement already – or not. The difference between the Baby boomers and the Gen X are not so far off but the Millennials have a way lower debt than their two elders. But needless to say, the rising student debt in the past few years should have bumped their credit obligations are little higher at present.

Obviously, all three generations are in need of debt help but the financial advice for each of them will vary. We all have various priorities and goals as we grow older so it is probably just right to categorize our financial tips to them.

Money tips for the retired or retiring Baby Boomers

The Baby Boomers include people who are born after World War II – 1946-1964. was bold enough to call this group as the generation debt. According to them, the baby boomers were the first generation to enter retirement with debt. These debts are mostly mortgage and credit card debts.

If you are part of the baby boomer generation, you obviously do not like to retire with debt. If you haven’t retired yet, you only have a few years before retiring. Improving your personal finances may be difficult to accomplish. You are not only saddled with limited income, you also have to deal with the limited time that you have.

Given that, here is a list of financial advice that we have for baby boomers (especially during their pre-retirement years).

  • Prioritize saving up for your retirement. While you may dislike being in debt during retirement, you need to prioritize building up your retirement fund. You can continue to pay your debts but make sure that your retirement fund is given financial attention too.

  • Look up debt relief programs that will help you pay for your debts in a short span of time. These include debt consolidation and debt settlement programs. They can get you out of debt in 5 years or less. Just make sure you analyze your finances carefully to see which program you can afford to pay off. Options like reverse mortgage can also be considered.

  • Stop using your credit cards. Demos also reported that the credit card debt of baby boomers average at $9,283 – a big difference from the $2,982 average of Millennials. You need to stop acquiring debt if you really want to retire without it.

  • Find sources of retirement income. If you still have a lot of debts, you may have no choice but to continue working. You probably do not need a full time work, but there are options to work part time to help you meet your financial needs.

  • Know the benefits that you can avail. Retired individuals usually have to deal with medical expenses and other health related issues and sometimes, this is a major financial burden. Fortunately, there are benefits coming from the government and other organizations. You may want to research about them so you can get financial assistance when you need it.

The Generation X financial condition

Next are the Generation X. These are the people born from the early 1960’s to the early 1980’s. Sometimes, people call this generation as the sandwich generation – having to take care of the baby boomers and the millennials at the same time.

The Experian infographic shows that they have the biggest debt average – $111,121. Most of the debt is actually tied up to their homes. After the crash of 2008, a lot of them probably had to give up their homes or sacrifice a lot of keep it. They also have credit card debts to deal with.

While these people still have a decade or so before retirement, it is understandable if they are currently prioritizing their debt payments. But do not make the mistake of using your 401(k) to pay your debts. While it may seem logical, it is not the right financial advice at this point in your life. You need to start thinking about your retirement – especially if you are among the oldest of this generation.

So here are a few tips that we have for you.

  • Seriously pay down your debts. You still have time to work on your debts so you need to work on it now. Think about the things that you can live without and choose to make the sacrifice so you have the money to get rid of your debt obligations. Use the many debt relief programs that can help you make better progress on your payments.

  • Make wiser spending choices. This is very important. If you haven’t bought your house, you can do so if you feel that you are financially ready and capable to shoulder the long payment scheme. But make sure that you choose the home that is just right for your needs and not based on what will make you look like a financial success. Even if you are approved of a million dollar home loan, do not get it if you can live comfortably on a $500,000 home.

  • Start saving up for your child’s college education. We all hear stories about the student loan problems and if you can afford to set aside money for it, do so. Teach your child how to save up for it too. That way, they get to be more responsible with money.

  • If you haven’t started it yet, save up for your retirement. This is very important. You still have time and it is only right that you save up for your retirement. That way, you do not have to work until your drop.

Financial lessons for Millennials

Last of the generations that we will provide financial advice to is the Millennials. These are the people who were born between the early 1980’s up to the early 2000’s. They are also known as the Generation Y.

In a lot of headlines, Millennials are getting praise for their financial choices. Despite the rising student debt that is crippling most of them, they have made better, although conservative, financial decisions. But despite that, here is another list of financial advice that we hope this generation can heed.

  • It’s okay to use credit cards. Reports have been surfacing that Millennials are skipping credit card accounts because they do not want to end up like their elders. That is understandable but they are not really addressing the problem. Instead of being afraid of debt, they might want to learn financial management to help keep themselves from abusing this purchasing tool. This is one of the easiest way to build up your credit score.

  • Build up credit history. Since we’ve mentioned it already, it really helps to build up your credit history. Unless you can save up hundreds of thousands to buy your home in cash, you will need to apply for a loan someday. You want to be able to get a low interest on that future loan. So right now, deal with your student loan debt, use your credit cards wisely and pay your dues on time.

  • Start saving up for retirement. Ideally, you should visualize the type of life that you want but it is not necessary. It may be a long way off but you should start saving up for your retirement already. That way, you don’t have to contribute a big amount.

  • Be wise with your financial choices. You have a long way to go in terms of your spending – buying cars, your first home, paying for your wedding, etc. Just be wise about all of the financial aspects of your life events.

  • Invest your money. Being a young investor is something that you should seriously consider. Letting your money grow from different baskets is a great way to work on your financial security. That way, you do not have to tie yourself to your job if you do not want to.

Try not to be too judgmental of credit because when used wisely, it can help you grow your personal financial standing. Work on developing the right financial habits so you can avoid the mistakes that your parents and grandparents made.

Financial Tips From Dave Ramsey: The 7 Baby Steps To Financial Peace

credit card getting counselingA lot of people know the value of getting financial tips from experts. There are several reliable sources online that you can look into for help. Being financially literate is important because you need to manage your money wisely. This is the only way that you can make smart decisions and keep yourself from making mistakes that will land you in a compromising position.

Actually, the problem is not really about getting the financial literacy that will help you manage your money. The challenge is in filtering the information that you will find to choose the one that you will follow. One thing that you can do is to look for the financial expert that will suit your needs. For instance, if you are in debt, you want to make sure that you get financial tips from someone who is an authority in debt.

Going along the line of that example, let us focus on one expert that is quite vocal about his tips to get out of debt – Dave Ramsey.

7 baby steps to achieve financial peace from Dave Ramsey

The main premise of Dave Ramsey’s teaching is about how you can get out of debt. Not only will he teach you to solve your credit problems, he will also give you advice about how you can set yourself up to avoid debt in the future.

Here are the 7 baby steps that he promotes from his website,

  1. Put aside $1,000 in your emergency fund. First things first, Dave Ramsey wants you to put a thousand dollars in your emergency fund. Even before you can do anything else, make sure that you have this amount stashed away for unexpected situations. It is never clear how an emergency will happen so you might want to be ready for it as soon as you can. This will keep you from incurring more debt as you try to get rid of your current.

  2. Use the debt snowball. The next step is to pay all your debts through the Snowball method. This is when you list your debts according to priority – with the lowest balance on top. The whole point is to pay the minimum for all the debts and any extra will be sent to the first debt. That will help you pay it faster. Once paid, you rollover the amount to the next priority. You continue this until all debts are paid off. Ramsey believes in this because it allows the consumer to experience early success in their debts. That will motivate them to completely pay off the other debts.

  3. Boost your emergency fund to cover 3-6 months of expenses. The ideal emergency fund for Dave Ramsey is 3-6 months worth of expenses. Once steps 1 and 2 are done, you are encouraged to add money into your emergency fund.

  4. Put 15% of your household income and invest in Roth IRAs and pre-tax retirement. At this point, Ramsey believes that most of your debts should be paid off and you have a healthy emergency fund. If you have debts, it is only on your home – since it will take quite some time to finish paying that debt off. Now is the time to build your wealth. The two places that you are encouraged to invest in is your Roth IRA and retirement fund.

  5. Build up your kids college fund. This can be done simultaneously with the 15% investment. Start putting aside money for the college fund of your child – to keep both of you from getting loans in the future. Ramsey suggests that parents choose a savings option that will earn them 12% interest on their account. This will put them ahead of the 4% inflation rate. He suggests that you consider Education Savings Accounts or the 529 plans.

  6. Aim to pay your mortgage faster. The next baby step is to pay your home loan faster. Any extra money you have must be put into your mortgage payments. This is probably the last debt that you have at the moment so try to concentrate on this now.

  7. Grow your wealth and give. Lastly, Dave Ramsey encourages consumers to build their wealth and give some of it to charity. This is how he believes you will really enjoy your life and feel fulfilled.

What we think of Dave Ramsey’s financial advice

So what do we think about Dave Ramsey’s financial tips? Here are some of our thoughts.

  • We agree that building up your emergency fund is a great first step but we think that while you are building it up, you have to keep paying your dues. That is how you can ensure that your debts will not worsen.

  • Relative to the emergency fund is the 3-6 months worth of expenses. This may come up short – especially with the length of average unemployment and the high cost of medical expenses.

  • Another comment that we have involves the debt snowball. No doubt this is an effective solution for debt. However, this is only great for those who can afford to pay more than the minimum payment requirement of their debts. If the consumer cannot afford it, they have other options like debt settlement or debt consolidation.

  • Paying off the mortgage faster is a great advice but is only applicable for people who do not have prepayment penalties on their loan.

  • We also want to add that you should protect your family beyond what your emergency fund can provide. That means investing in insurances and knowing your benefits from the government. These will also help you in times of emergencies.

All in all, we conclude that Dave Ramsey’s 7 baby steps is a great way to achieve financial peace. However, you may want to alter it a bit to suit your specific financial situation. With all experts, you must always use your head and gut instincts to determine if you should follow and advice strictly or you should get bits and pieces here and there.

Unsolicited Financial Advice For Furloughed Workers

man in a dollar chainWith all the commotion going on with the government shutdown, we’d like to take some time to give some unsolicited financial advice for the furloughed workers that were sent home. This, once again, is a testament of how fragile our comfortable lives are. Even government employees can be sent home without pay and the same is true for private employees.

So what can you do if this happens to you? It is difficult to be financially underwater and unemployed but sometimes, things happen that will drive you under. How can you survive such an event in your life?

5 financial tips to help those temporarily laid off

If you are one of the furloughed government employees, we have a list of financial advice that we hope can help you during this tough financial time.

  1. Review your savings. This is the first thing that you should do. Try to see how much money you have and how long it will last you. You will be relying on this savings to finance the needs of your family while you are not working. It is important that you try to stretch this as long as possible because you are not really sure how long you will be out of work.

  2. Create a frugal budget. If you know how much money you have, it is time for you to create a frugal budget. This is something that will allow you to stretch the money that you have for as long as it is possible. Your frugal budget means you will be spending only on the bare basic necessities. And even those expenses will be filtered to see which you can do on your own so you spend even less money on it.

  3. Know your benefits. Another financial advice that is important is to know your benefits. You can find out what assistance you can get through the website. If you are unemployed, we suggest that you look into the Employment/Career development assistance page or the Living assistance page. See if you qualify for these benefits and get help from the government. The help usually comes in financial form or if you require food assistance, some give out groceries too. If you can get these for free, then you can use your savings on something else.

  4. Be mindful of every expense. If you are spending your savings, be very careful where you spend it on – even for the most basic of necessities. For instance, if you use bread, instead of buying it, why not make it from scratch? It usually comes out cheaper. And if you have a garden, you can try growing your own produce.

  5. Look for other sources of income. The last financial advice is to find a way to earn money. While cutting back on expenses is good, it will only sustain you for a limited time. But if you find another source of income, then that can support some of your expenses. Anything is possible when you want to earn more. You can get an online job and get paid for projects you accomplish. This can even be for people who live in different countries. If you have an extra room, have it rented for the additional income. You can do as much as you can to add to your savings so you do not exhaust it before you can be reinstated – or until you find another stable job.

What to do if you have debts and you lose your work?

One of the biggest dilemmas of people who got laid off is their debts. If you have some debts to your name, that will bring you additional worries. You need a budget and action plan to help pay off your debts with very limited resources. Here are some additional financial advice that is specific for your debt problems.

  • Call your creditors immediately. If you get wind that you will be furloughed, call your creditors and lenders immediately. Tell them of the situation even before you have to default because of lack of funds. You can ask them to suspend your account so you will not be given late penalties. This cannot stop the interest from accruing though. If it is a more permanent unemployment, you may want to negotiate with your creditors for a payment plan that you can afford.

  • Research your debt relief options. Whether you need a simple debt consolidation or debt reduction, you need to find out all the options that you have. This is to help you make a smart choice when it comes to your payment options. If you are already going through a debt relief program, you may want to change it. If you are going through debt consolidation, you may be better off switching to debt settlement to help you get a debt reduction.

  • Stop acquiring more debts. Of course, part of your efforts is to stop accumulating more debts. Although it may be tempting to use your credit cards to purchase food and groceries – try to curb that temptation. Look for food benefits that will help give your family the nutrition that they need without putting you in debt for it.

This is probably a tough time for you and some financial advice will really get through. Just make sure that you will always be smart about your financial decisions from now on. And while you want to wallow in self-pity and despair – don’t. Your family needs you to come up with a way to get back your job.

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