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8 Ways to Save Money on Date Night

Whether you’re cozying up on the couch together with a bottle of wine or headed out to the trendy restaurant everyone’s talking about, date night is an essential part of most relationships.

“Date nights are important because they give new couples a chance to get to know each other and established couples a chance to have fun or blow off some steam after a rough week,” says Holly Shaftel, a relationship expert and certified dating coach. “Penciling in a regular date can ensure that you make time for each other when your jobs and other aspects of your life might keep you busy.”

Finding ways to spend less on date night can be easy if you're willing to be creative.

There’s just one small snag. Or, maybe it’s a big one. Date nights can get expensive. According to financial news website 24/7 Wall St., the cost of an average date consisting of two dinners, a bottle of wine and two movie tickets is about $102.

When you’re focused on improving your finances as a couple, finding ways to spend less on date night is a no-brainer. But you may be wondering: How can we save money on date night and still get that much-needed break from the daily grind?

There are plenty of ways to save money on date night by bringing just a little creativity into the mix. Here are eight suggestions to try:

1. Share common interests on the cheap

When Shaftel and her boyfriend were in the early stages of their relationship, they learned they were both active in sports. They were able to plan their date nights around low-cost (and sometimes free) sports activities, like hitting the driving range or playing tennis at their local park.

One way to save money on date night is to explore outdoor activities.

If you’re trying to find ways to spend less on date night, you can plan your own free or low-cost date nights around your and your partner’s shared interests. If you’re both avid readers, for example, even a simple afternoon browsing your local library’s shelves or a cool independent bookstore can make for a memorable time. If you’re both adventurous, check into your local sporting goods stores for organized hikes, stargazing outings or mountaineering workshops. They often post a schedule of events that are free, low-cost or discounted for members.

2. Create a low-budget date night bucket list

Dustyn Ferguson, a personal finance blogger at Dime Will Tell, suggests using the “bucket list” approach to find the best ways to save money on date night. To gather ideas, make it a game. At your next group gathering, ask guests to write down a fun, low-budget date night idea. The host then gets to read and keep all of the suggestions. When Ferguson and his girlfriend did this at a friend’s party, they submitted camping on the beach, which didn’t cost a dime.

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The cost of an average date consisting of two dinners, a bottle of wine and two movie tickets is about $102.

– Financial news website 24/7 Wall St.

To make your own date night bucket list with the best ways to save money on date night, sit down with your partner and come up with free or cheap activities that you normally wouldn’t think to do. Spur ideas by making it a challenge—for instance, who can come up with the most ideas of dates you can do from the couch? According to the blog Marriage Laboratory, these “couch dates” are no-cost, low-energy things you can do together after a busy week (besides watching TV). A few good ones to get your list started: utilize fun apps (apps for lip sync battles are a real thing), grab a pencil or watercolors for an artistic endeavor or work on a puzzle. If you’re looking for even more ways to spend less on date night, take the question to social media and see what turns up.

3. Alternate paid date nights with free ones

If you’re looking for ways to spend less on date night, don’t focus on cutting costs on every single date. Instead, make half of your dates spending-free. “Go out for a nice dinner one week, and the next, go for a drive and bring a picnic,” says Bethany Palmer, a financial advisor who authors the finance blog The Money Couple, along with her husband Scott.

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4. Have a date—and get stuff done

Getting stuff done around the house or yard may not sound all that romantic, but it can be one of the best ways to save money on date night when you’re trying to be budget-conscious. And, tackling your to-do list—like cleaning out the garage or raking leaves—can be much more enjoyable when you and your partner take it on together.

5. Search for off-the-wall spots

If dinner and a movie is your status quo, mix it up with some new ideas for low-cost ways to save money on date night. That might include fun things to do without spending money, like heading to your local farmer’s market, checking out free festivals or concerts in your area, geocaching—outdoor treasure hunting—around your hometown, heading to a free wine tasting or taking a free DIY class at your neighborhood arts and crafts store.

“Staying creative allows you to remain flexible and not bound to simply doing the same thing over and over,” Ferguson says.

6. Leverage coupons and deals

When researching the best ways to save money on date night, don’t overlook coupon and discount sites, where you can get deals on everything from food, retail and travel. These can be a great resource for finding deep discounts on activities you may not try otherwise. That’s how Palmer and her husband ended up on a date night where they played a game that combined lacrosse and bumper cars.

Turn to coupons and money-saving apps for fun ways to save money on date night.

There are also a ton of apps on the market that can help you find ways to save money on date night. For instance, you can find apps that offer discounts at restaurants, apps that let you purchase movie theater gift cards at a reduced price and apps that help you earn cash rewards when shopping for wine or groceries if you’re planning a date night at home.

7. Join restaurant loyalty programs

If you’re a frugal foodie and have a favorite bar or restaurant where you like to spend date nights, sign up for its rewards program and newsletter as a way to spend less on date night. You could earn points toward free drinks and food through the rewards program and get access to coupons or other discounts through your inbox. Have new restaurants on your bucket list? Sign up for their rewards programs and newsletters, too. If you’re able to score a deal, it might be time to move that date up. Pronto.

8. Make a date night out of budgeting for date night

When the well runs dry, one of the best ways to save money on date night may not be the most exciting—but it is the easiest: Devote one of your dates to a budgeting session and brainstorm ideas. Make sure to set an overall budget for what you want to spend on your dates, either weekly or monthly. Having a number and concrete plan will help you stick to your date night budget.

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“Staying creative allows you to remain flexible and not bound to simply doing the same thing over and over.”

– Dustyn Ferguson, personal finance blogger at Dime Will Tell

Ferguson says he and his girlfriend use two different numbers to create their date night budget: how much disposable income they have left after paying their monthly expenses and the number of date nights they want to have each month.

“You can decide how much money you can spend per date by dividing the total amount you can allocate to dates by the amount of dates you plan to go on,” Ferguson says. You may also decide you want to allot more to special occasions and less to regular get-togethers.

Put your date night savings toward shared goals

Once you’ve put these creative ways to save money on date night into practice, think about what you want to do with the cash you’re saving. Consider putting the money in a special savings account for a joint purpose you both agree on, such as planning a dream vacation, paying down debt or buying a home. Working as a team toward a common objective can get you excited about the future and make these budget-friendly date nights feel even more rewarding.

The post 8 Ways to Save Money on Date Night appeared first on Discover Bank – Banking Topics Blog.

Source: discover.com



7 Money Steps to Take Before 2021

With the end of the year rapidly approaching, it’s a good time to take stock of your financial situation as you head into 2021. 2020 has been a strange year, and a difficult year for many people. With many people’s health and/or economic livelihoods affected by COVID-19, many people’s situation looks very different than it did back in January. As we head into a new year, here are a few things that you can do to improve your finances before the end of 2020.

#1 Put at least $1000 into an emergency fund

If you don’t have an emergency fund set up to handle unexpected expenses, that is a good first step to putting yourself on a solid financial footing. $1000 may not be enough to handle every possible thing that could go wrong, but it can be enough to handle your car breaking down or an unexpected home expense. If you don’t have at least a minimal emergency fund in place, make a plan for how you can start one before the end of the year.

#2 Fully fund your retirement accounts

401k, IRAs, and other retirement accounts have an annual contribution limit that caps the amount that you’re able to contribute each year. Before the end of the year, set aside some time to go through each of your accounts that have an annual contribution limit. Decide for which of those accounts it makes sense to fund before the end of the year.

#3 Consider donating to charity

With the increased standard deduction available in recent tax years, not as many people itemize their deductions. But if you do itemize your deductions, then remember that your charitable contribution may be tax-deductible. If you make that charitable contribution before the end of the year, you may be able to deduct it in this tax year — otherwise, you’ll have to wait an entire year before you’re able to deduct it.

READ MORE: 5 Best Credit Cards When You Make Charitable Donations

If you’ve already made charitable contributions in 2020, make sure that you have them documented and ready to include on your tax return.

#4 Make sure you have a financial security plan in place

Still, using the same username and password on every internet site? It may be time to get a financial security plan in place. With data breaches always a possibility now’s as good a time as any to take some steps to minimize your risk in case of a data breach or a hacker accessing your financial information. One thing that you can do before the end of the year is to set up a password manager to put some variety into your passwords. Another thing is to set up two-factor authentication (2FA) on your important financial accounts.

#5 Review your credit report

Each year you are entitled to a free three-bureau credit report once a year from annualcreditreport.com, and the end of the year can be a good time to do that. If you already have a Mint account, you have access to your credit score at any time, but reviewing your actual credit report can make a big difference to your credit report. Between 10 and 21 percent of people have errors on their credit report, and clearing up incorrect or inaccurate information can raise your credit score.

#6 Use up any money in your FSA

Flexible spending accounts can be a great way to save money on health expenses. An FSA is typically set up through your employer and allows you to make pre-tax contributions. Any money that you contribute to your FSA is not subject to tax, and you can use that money to get reimbursed for many different types of health expenses. The only downside is that most FSA plans are use-it or lose-it plans. So any money that is left in the FSA at the end of the year is forfeited. Check the details of your plan, and make sure that you use all the money in your FSA before the end of the year.

#7 Set your financial goals for 2021

Finally, the end of the year can be a great time to set up your financial goals for 2021. You don’t have to wait until January to start up a new resolution. Meet and talk with your spouse, family, or trusted friends and advisors. Decide where you want to be in one year, in five years and beyond, and start taking the steps to get yourself there.

The post 7 Money Steps to Take Before 2021 appeared first on MintLife Blog.

Source: mint.intuit.com



Money Audit: Should We Hold on to Our Rental Properties?

This week’s Mint audit helps out a couple, Pasquale, 46, and Jillian, 39, who are starting a new life together after each experiencing divorce. Both work in software sales earning roughly the same income. When combined, their earnings average $450,000 a year.

The New Jersey couple shares a new mortgage and a savings account. They recently purchased a home together and pool a fraction of their incomes together into a joint account to pay for shared expenses such as the home loan, property taxes and utilities.

Pasquale and Jillian also arrived at the relationship owning their own properties. Pasquale has held onto his townhome in a nearby town that he bought after his divorce. He rents it out, earning a nice $500 monthly profit. Jillian also has a home in Florida, which she rents out. She more or less breaks even every month.

They would like advice related to managing their rental properties (should they sell them?), possibly buying a vacation home in the $250,000 to $350,000 range and, for Pasquale, saving up to help send his two daughters (ages 13 and 17) to college. They’re also wondering if they’re saving “enough” for retirement.

They had lots of good questions, and after an hour on the phone and a review of their finances, I was able to fit together some of their puzzle pieces.

First, here’s a break down of some their finances:

Retirement Savings

  • Pasquale: Contributes 5% to 401(k) and has about $500,000 in it. He also invests 15% in company’s ESPP (Employee Stock Purchase Plan)
  • Jillian: Contributes 5% to a 401(k) plus employer’s match, totaling 10%. She has about $200,000 saved. She also invests 11% in her company’s ESPP.
  • If they were to both cash out their ESPPs today, they’d have about $250,000 in gains, which are subject to income tax.

Child Support Payments

  • Pasquale: $4,000 per month

Debt (Credit Cards and Student Loans)

  • Pasquale: $18,000 in student loans
  • Jillian: $40,000 in student loans

Real Estate Holdings

  • Each of their individual properties has about $80,000 in equity.

 

Here are my top 3 recommendations:

Max Out the 401(k)s

The couple is doing fairly well with their retirement savings, but I think they are too exposed to their ESPPs. They contribute more to their ESPPs than their 401(k)s, which is very risky, considering an ESPP puts all your money in a single stock. A 401(k) is far more diversified.

They may benefit from reallocating some of those dollars back into their company 401(k). In doing so, I recommend they both aim to max out their 401(k)s, which also means a bigger tax deduction. This year’s maximum contribution is $18,500.

Transfer Some ESPP Earnings to College Savings

Every six months, each receives the chance to cash out some or all of the money in their ESPP. I recommend striking at the next opportunity to reduce their exposure to a market downfall and help pay for future college expenses. Taking 20 or 30 percent off the table and placing the dollars into a safer haven like a CD creates less risk.

For Pasquale, specifically, I’d look into selling some of his shares at the next opportunity and placing it into a plain vanilla savings account to cover at least the first two years of his daughter’s education. His daughter will choose a school soon and expects to receive some grants and scholarships to reduce the cost. At that point Pasquale can better estimate how much to withdraw from the stock plan.

For his youngest daughter, it’s not too late for Pasquale to open a 529-college savings account. That money can later be used for higher education costs without being subject to taxes. Investing $500 a month in a 529 starting today could help to afford at least the first year or two of school, depending on where she lands. Pasquale may even consider using some of the ESPP gains to fund the new 529 for daughter #2, if his eldest doesn’t need it.

Sell Rentals to Purchase a New Second Home

How emotionally tied are they to their individual properties? Pasquale said he could take it or leave it. The $500 cash flow is nice, but he’s open to selling it. Jillian, however, would be sad to part ways with the Florida home. While its rental income is just enough to cover the carrying costs, she likes the idea of keeping it. She’s always wanted to have a house by the water.

But I propose a scenario: What if they sold both rental properties and pooled the equity ($160,000) to afford a new second home that they’d both own? They’re eyeing a cabin near the Poconos in Pennsylvania. The estimated cost for a home that suits them is between $250,000 and $300,000. A 50% down payment on a $300,000 home would mean that their monthly mortgage would be roughly $700 per month, given today’s average interest rate of about 4.50% (or possibly higher for second homes.)

From selling the two properties they achieve their goal of affording a second home. Located in a popular resort area, they can also rent it out from time to time for more than $700 a week. Renting the place for just 8 or 10 weeks out of the year would probably cover the annual mortgage.

From there, any extra cash flow could be used to save more for retirement, travel, college, or whatever they wish.

 

Farnoosh Torabi is America’s leading personal finance authority hooked on helping Americans live their richest, happiest lives. From her early days reporting for Money Magazine to now hosting a primetime series on CNBC and writing monthly for O, The Oprah Magazine, she’s become our favorite go-to money expert and friend.

The post Money Audit: Should We Hold on to Our Rental Properties? appeared first on MintLife Blog.

Source: mint.intuit.com



Everything You Need to Know About Budgeting As a Freelancer

Could logging in to your computer from a deluxe treehouse off the coast of Belize be the future of work? Maybe. For many, the word freelance means flexibility, meaningful tasks and better work-life balance. Who doesn’t want to create their own hours, love what they do and work from wherever they want? Freelancing can provide all of that—but that freedom can vanish quickly if you don’t handle your expenses correctly.

“A lot of the time, you don’t know about these expenses until you are in the trenches,” says freelance copywriter Alyssa Goulet, “and that can wreak havoc on your financial situation.”

Nearly 57 million people in the U.S. freelanced, or were self-employed, in 2019, according to Upwork, a global freelancing platform. Freelancing is also increasingly becoming a long-term career choice, with the percentage of freelancers who freelance full-time increasing from 17 percent in 2014 to 28 percent in 2019, according to Upwork. But for all its virtues, the cost of being freelance can carry some serious sticker shock.

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“There are many hats you have to wear and expenses you have to take on, but for that you’re gaining a lot of opportunity and flexibility in your life.”

– Alyssa Goulet, freelance copywriter

Most people who freelance for the first time don’t realize that everything—from taxes to office supplies to setting up retirement plans—is on them. So, before you can sustain yourself through self-employment, you need to answer a very important question: “Are you financially ready to freelance?”

What you’ll find is that budgeting as a freelancer can be entirely manageable if you plan for the following key costs. Let’s start with one of the most perplexing—taxes:

1. Taxes: New rules when working on your own

First things first: Don’t try to be a hero. When determining how to budget as a freelancer and how to manage your taxes as a freelancer, you’ll want to consult with a financial adviser or tax professional for guidance. A tax expert can help you figure out what makes sense for your personal and business situation.

For instance, just like a regular employee, you will owe federal income taxes, as well as Social Security and Medicare taxes. When you’re employed at a regular job, you and your employer each pay half of these taxes from your income, according to the IRS. But when you’re self-employed (earning more than $400 a year in net income), you’re expected to file and pay these expenses yourself, the IRS says. And if you think you will owe more than $1,000 in taxes for a given year, you may need to file estimated quarterly taxes, the IRS also says.

That can feel like a heavy hit when you’re not used to planning for these costs. “If you’ve been on a salary, you don’t think about taxes really. You think about the take-home pay. With freelance, everything is take-home pay,” says Susan Lee, CFP®, tax preparer and founder of FreelanceTaxation.com.

When learning how to budget as a freelancer it’s necessary to estimate your income and expenses before setting aside savings for tax payments.

When you’re starting to budget as a freelancer and determining how often you will need to file, Lee recommends doing a “dummy return,” which is an estimation of your self-employment income and expenses for the year. You can come up with this number by looking at past assignments, industry standards and future projections for your work, which freelancer Goulet finds valuable.

“Since I don’t have a salary or a fixed number of hours worked per month, I determine the tax bracket I’m most likely to fall into by taking my projected monthly income and multiplying it by 12,” Goulet says. “If I experience a big income jump because of a new contract, I redo that calculation.”

After you estimate your income, learning how to budget as a freelancer means working to determine how much to set aside for your tax payments. Lee, for example, recommends saving about 25 percent of your income for paying your income tax and self-employment tax (which funds your Medicare and Social Security). But once you subtract your business expenses from your freelance income, you may not have to pay that entire amount, according to Lee. Deductible expenses can include the mileage you use to get from one appointment to another, office supplies and maintenance and fees for a coworking space, according to Lee. The income left over will be your taxable income.

Pro Tip:

To set aside the taxes you will need to pay, adjust your estimates often and always round up. “Let’s say in one month a freelancer determines she would owe $1,400 in tax. I’d put away $1,500,” Goulet says.

2. Business expenses: Get a handle on two big areas

The truth is, the cost of being freelance varies from person to person. Some freelancers are happy to work from their kitchen tables, while others need a dedicated workspace. Your freelance costs also change as you add new tools to your business arsenal. Here are two categories you’ll always need to account for when budgeting as a freelancer:

Your workspace

Joining a coworking space gets you out of the house and allows you to establish the camaraderie you may miss when you work alone. When you’re calculating the cost of being freelance, note that coworking spaces may charge membership dues ranging from $20 for a day pass to hundreds of dollars a month for a dedicated desk or private office. While coworking spaces are all the rage, you can still rent a traditional office for several hundred dollars a month or more, but this fee usually doesn’t include community aspects or other membership perks.

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If you want to avoid office rent or dues as costs of being freelance but don’t want the kitchen table to pull double-duty as your workspace, you might convert another room in your home into an office. But you’ll still need to outfit the space with all of your work essentials. Freelance copywriter and content strategist Amy Hardison retrofitted part of her house into a simple office. “I got a standing desk, a keyboard, one of those adjustable stands for my computer and a squishy mat to stand on so my feet don’t hurt,” Hardison says.

Pro Tip:

Start with the absolute necessities. When Hardison first launched her freelance career, she purchased a laptop for $299. She worked out of a coworking space and used its office supplies before creating her own workspace at home.

Digital tools

There are a range of digital tools, including business and accounting software, that can help with the majority of your business functions. A big benefit is the time they can save you that is better spent marketing to clients or producing great work.

The software can also help you avoid financial lapses as you’re managing the costs of being freelance. Hardison’s freelance business had ramped up to a point where a manual process was costing her money, so using an invoicing software became a no-brainer. “I was sending people attached document invoices for a while and keeping track of them in a spreadsheet,” Hardison says. “And then I lost a few of them and I just thought, ‘Oh, my God, I can’t be losing things. This is my income!’”

As you manage the cost of being freelance, consider digital tools and accounting services to keep track of invoices, payments and income.

Digital business and software tools can help manage scheduling, web hosting, accounting, audio/video conference and other functions. When you’re determining how to budget as a freelancer, note that the costs for these services depend largely on your needs. For instance, several invoicing platforms offer options for as low as $9 per month, though the cost increases the more clients you add to your account. Accounting services also scale up based on the features you want and how many clients you’re tracking, but you can find reputable platforms for as little as $5 a month.

Pro Tip:

When you sign up for a service, start with the “freemium” version, in which the first tier of service is always free, Hardison says. Once you have enough clients to warrant the expense, upgrade to the paid level with the lowest cost. Gradually adding services will keep your expenses proportionate to your income.

3. Health insurance: Harnessing an inevitable cost

Budgeting for healthcare costs can be one of the biggest hurdles to self-employment and successfully learning how to budget as a freelancer. In the first half of the 2020 open enrollment period, the average monthly premium under the Affordable Care Act (ACA) for those who do not receive federal subsidies—or a reduced premium based on income—was $456 for individuals and $1,134 for families, according to eHealth, a private online marketplace for health insurance.

“Buying insurance is really protecting against that catastrophic event that is not likely to happen. But if it does, it could throw everything else in your plan into a complete tailspin,” says Stephen Gunter, CFP®, at Bridgeworth Financial.

Budgeting as a freelancer allows you to select a healthcare plan that best suits your employment status, income and relationship status.

A good place to start when budgeting as a freelancer is knowing what healthcare costs you should budget for. Your premium—which is how much you pay each month to have your insurance—is a key cost. Note that the plans with the lowest premiums aren’t always the most affordable. For instance, if you choose a high-deductible policy you may pay less in premiums, but if you have a claim, you may pay more at the time you or your covered family member’s health situation arises.

When you are budgeting as a freelancer, the ACA healthcare marketplace is one place to look for a plan. Here are a few other options:

  • Spouse or domestic partner’s plan: If your spouse or domestic partner has health insurance through his/her employer, you may be able to get coverage under their plan.
  • COBRA: If you recently left your full-time job for self-employment, you may be able to convert your employer’s group plan into an individual COBRA plan. Note that this type of plan comes with a high expense and coverage limit of 18 months.
  • Organizations for freelancers: Search online for organizations that promote the interests of independent workers. Depending on your specific situation, you may find options for health insurance plans that fit your needs.

Pro Tip:

Speak with an insurance adviser who can help you figure out which plans are best for your health needs and your budget. An adviser may be willing to do a free consultation, allowing you to gather important information before making a financial commitment.

4. Retirement savings: Learn to “set it and forget it”

Part of learning how to budget as a freelancer is thinking long term, which includes saving for retirement. That may seem daunting when you’re wrangling new business expenses, but Gunter says saving for the future is a big part of budgeting as a freelancer.

“It’s kind of the miracle of compound interest. The sooner we can get it invested, the sooner we can get it saving,” Gunter says.

He suggests going into autopilot and setting aside whatever you would have contributed to an employer’s 401(k) plan. One way to do this might be setting up an automatic transfer to your savings or retirement account. “So, if you would have put in 3 percent [of your income] each month, commit to saving that 3 percent on your own,” Gunter says. The Discover IRA Certificate of Deposit (IRA CD) could be a good fit for helping you enjoy guaranteed returns in retirement by contributing after-tax (Roth IRA CD) or pre-tax (traditional IRA CD) dollars from your income now.

Pro Tip:

Prioritize retirement savings every month, not just when you feel flush. “Saying, ‘I’ll save whatever is left over’ isn’t a savings plan, because whatever is left over at the end of the month is usually zero,” Gunter says.

5. Continually update your rates

One of the best things you can do for yourself in learning how to budget as a freelancer is build your costs into what you charge. “As I’ve discovered more business expenses, I definitely take those into account as I’m determining what my rates are,” Goulet says. She notes that freelancers sometimes feel guilty for building business costs into their rates, especially when they’re worried about the fees they charge to begin with. But working the costs of being freelance into your rates is essential to building a thriving freelance career. You should annually evaluate the rates you charge.

Because your expenses will change over time, it’s wise to do quarterly and yearly check-ins to assess your income and costs and see if there are processes you can automate to save time and money.

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“A lot of the time, you don’t know about these expenses until you are in the trenches, and that can wreak havoc on your financial situation.”

– Alyssa Goulet, freelance copywriter

Have confidence in your freelance career

Accounting for the various costs of being freelance makes for a more successful and sustainable freelance career. It also helps ensure that those who are self-employed achieve financial stability in their personal lives and their businesses.

“There are many hats you have to wear and expenses you have to take on,” Goulet says. “But for that, you’re gaining a lot of opportunity and flexibility in your life.”

The post Everything You Need to Know About Budgeting As a Freelancer appeared first on Discover Bank – Banking Topics Blog.

Source: discover.com



Money Moves to Make in Your 20s, 30s, and 40s

Reaching your twenties is an exciting milestone for most as it means you’ve officially entered adulthood. Along with that milestone comes new responsibilities and worries that we didn’t picture when our teenage selves dreamed of turning 21. We imagined our college graduation, moving into our first apartment, and launching our new career. That vision didn’t include dealing with student loan debt, taking on a low paying entry-level job, or having to confront that despite spending 4 years in college, you’re still unsure how the world of personal finance actually works.

It’s easy to dismiss it all because well you’re a 20 something, and you’ll have plenty of time to play catch up. The reality is that each decade plays an important role in our future financial health. Take the time now to learn about your money and follow the money moves outlined below to put yourself on a path of lifelong financial success and eventual freedom.

Money Moves to Make in Your 20’s:

Learn How To Budget

Building a budget doesn’t have to be overly complicated or time-consuming. It’s actually the first step in putting yourself in control of your finances because it means you know where your money goes each month. The good news is that there are lots of apps and online tools that can make the process a breeze. Consider a system like Mint that will connect to your accounts and automatically categorize your spending for you. The right budgeting tool is simply the one you’ll stick with long term.

Pay Off Debt

Debt isn’t all bad. It may be the reason you were able to earn your degree, and a mortgage may help you one day buy a home. It can also quickly overrun your life if you aren’t careful. Now’s the perfect time before life gets more hectic with family commitments to buckle down and tackle any loans or credit card balances so you can be debt-free going into your 30’s.

Build a Cash Cushion

The financial downturn caused by the pandemic has reminded the whole world of the importance of having an emergency fund. We don’t know what life is going to throw at us and having a cushion can help you navigate the uncertain times. Though it’s not all about having a secret stash of cash to deal with the bad news of life (medical bills, car repair, layoff), it can also be about having the cash to seize an exciting opportunity. Having savings gives you the freedom and security to deal with whatever life brings your way – good or bad.

Understand Credit

Your credit score can dictate so much of your life. That little number can play a big role in the home you buy, the car you drive, and even the job you hold as some employers (especially in the finance world) will pull your credit. It’s important that you check your credit report and score (also available through Mint), learn how it’s calculated, and work to improve it.

Money Moves to Make in Your 30’s:

Invest For Retirement

Now that you’ve spent your 20’s building the foundation for your financial life, it’s time to make sure you’re also tackling the big picture goals like saving and investing for retirement. I typically recommend that clients save 10% to 15% of their annual income towards retirement. That may seem like an insurmountable goal, but starting small by saving even 1 to 3% of your salary can make a big difference in the future. Also, make sure to take advantage of any matching contributions that your employer may provide in your retirement plan. If, for example, they offer to match contributions up to 6%, I would try hard to work towards contributing at least 6%.

Buying Your First Home

Buying your first home is a top goal for many, but it also seems to be getting increasingly more difficult especially if you live in a major city. The most important steps you can take is to improve your credit score, pay down high-interest debt, and be aggressive about saving for a down payment. Saving 20% down will help you qualify for the best loan terms and interest rate, but there are still home loans available even if you aren’t able to save that much. Just be realistic with your budget and what you can afford. Don’t let a lender or real estate agent determine what payment will fit into your budget.

Be Covered Under These Must-Have Insurances

You’ve spent the last several years building your savings and growing your family. It’s now crucial that you have the proper insurance coverage in place to protect your assets and your loved ones. Life and disability insurance are top of the list. Life insurance doesn’t have to be expensive or complex. Get a quote for term-life that will last a set number of years and protect your partner and children during those crucial years that they depend on you. Disability insurance protects your income if you become sick or injured and are unable to work. Your earning ability is one of your biggest assets during this time, and you should protect it. This coverage may be offered through your employer, or you can request a quote for an individual policy.

Invest in Self-Care and Well Being

Mental health is part of self-care and wealth. Most people don’t talk about how financial stress and worry affect their overall health. When you can take care of yourself on all levels, you will feel healthier and wealthier, and happier. But it is not easy. It takes work, effort, awareness, and consciousness to learn how to detach the value in your bank account or financial account from your self-worth and value as a human being. When you feel emotional about your money, investments, or the stock market, learn ways to process them and take care of yourself by hiring licensed professionals and experts to help you.

Money Moves to Make in Your 40’s:

Revisit Your College Savings Goal

As your kids get older and prepare to enter their own journey into adulthood, paying for college is likely a major goal on your list. Consider opening a 529 plan (if you haven’t already) to save for their education. 529 plans offer tax advantages when it comes to saving for college. There are lots of online resources that can help you understand and pick the right plan for you. Visit https://www.savingforcollege.com. This is also a great time to make sure you’re talking to your kids about money. Give them the benefit of a financial education that you may not have had.

Get Aggressive with Retirement Planning

Your 40’s likely mark peak earning years. You’ll want to take advantage of your higher earnings to maximize your retirement savings especially if you weren’t able to save as much in your 20’s and 30’s. Revisit your retirement plan to crunch the numbers so you’ll be clear on what you need to save to reach your goal.

Build More Wealth

You’ve arrived at mid-life probably feeling younger than you are and wondering how the heck that big 4-0 got on your birthday cake. We typically associate being 20 with being free, but I think we’ve got it wrong. There is something incredibly freeing about the wisdom and self-assurance that comes with getting older. You’ve proved yourself. People see you as an adult. Your kids are getting older and your finances are more settled. Now’s the time to kick it up to the next level. Look for ways to build additional wealth. This may mean tapping into your entrepreneurial side to launch the business you’ve dreamed of or buying real estate to increase passive income. Now’s also a great time to find a trusted financial advisor who can help guide your next steps and help you plan the best ways to build your wealth.

Revisit Your Insurance Coverage

Insurance was crucial before, but it’s time to revisit your coverage and make sure you’re protected especially if you decide to launch a business or buy additional real estate. This is also where a financial advisor can help you analyze your coverage needs and find the policies that will work for you.

Consider Estate Planning

Estate planning (think wills, trusts, power of attorney) isn’t the most fun / exciting topic. It involves imagining your gone and creating a plan for the loved ones you leave behind. It is also often overlooked by adults in their younger years. It’s easy to assume estate planning is something the wealthy need to do. It really comes down to whether you want to decide how your life savings will be managed or if you want a court to decide. It’s also crucial for parents with children who are minors to select a guardian and have those uncomfortable conversations with their family members about who would care for the children if the worst were to happen. It’s also a good time to visit this topic with your own aging parents and make sure they have the proper documents and plans in place.

 

Whether you’re in your 20’s, 30’s or 40’s, it can be easy to put off planning your finances especially in the middle of a pandemic. Most of us are busy, and it’s easy to tell yourself that you’ll have time to work on a goal in the future. Commit to setting aside one hour each week or even each month to have a money date and review your finances. Don’t let yourself reach a milestone birthday (30, 40) and regret not being farther ahead. Follow these money moves now to seize control of your financial future.

The post Money Moves to Make in Your 20s, 30s, and 40s appeared first on MintLife Blog.

Source: mint.intuit.com




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