Personal Finance Blog

Tips And Stories To Help You With Managing Money

Investment Trends For Personal Finance In 2016

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Investment Trends For 2016
Investment Trends For 2016

What’s happening in the world matters to your personal finances. The larger socioeconomic trends filter down to your own pocketbook whether or not you want them to. Following are current trends that may affect your finances over the next five years, according to the experts:

Interest income will continue to be dismal.

Cash and savings accounts are being affected by global debt, aging populations and low energy prices. Countries have lowered interest rates they pay on short-term notes, in some cases paying negative interest rates. That means the lenders have to pay a fee to own debt securities. The results trickle down to the individual. To offset, the experts advise that you modestly increase your allocation to global stocks and real estate.

Too much information can swamp you.

Technology makes an excess of data available through blogs, social media and emails. With so many options and relatively easy access to competitive products, analysis paralysis can cloud decisions. Turn off the “cookies” feature in your browser and avoid an overabundance of ads.

The costs of investing will continue to drop.

In the investing world, where so many factors are beyond the control of individuals, it is smart to lower expenses in hopes of increasing returns. But cost isn’t the only factor. Consistent savings, investment diversification and comfort with volatility are also to be considered. The experts say that instead of focusing solely on low fees, you should create an investment strategy that aligns with your goals.

Life insurance costs are going up.

Insurance companies earning less on their portfolios may opt for premium increases for whole and term life policies. The companies make their money on premium income and investment performance and they share the pain with customers when things are not going well for them. To counter, you might consider buying term insurance for the longest time span that makes sense to you. Term life, unlike whole life and other so-called permanent policies, has no cash component and usually expires after a set number of years, so it usually is cheaper. If you want permanent life insurance, look at a variably policy from a lower-cost but reliable provider. You then take a moderate risk over a longer time and grow the policy’s investment.

An Expert Shares Money Management Secrets

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Managing Money
Anna Serguina
Anna Sergunina of Nerd Wallet has learned how to manage money effectively and she is willing to share. Here are her tips on how to keep a tight control on your personal finances:

Managing Money

Many people accumulate debt because they want things they can’t really afford. But debt also happens when we don’t understand the flow of our income and expenses. We can’t accurately estimate how much money we have available to spend. Sergunina developed a “money flow” system to help her family track spending. Here’s how it works:

Set up two free checking accounts.

One to pay fixes expenses such as mortgage or rent, car payments, utility bills, etc., and one to pay variable expenses such as groceries, gas, clothing, etc.

Create a high-yield online savings account.

This is your emergency fund to handle life’s curve balls such as medical bills, loss of job or other income reduction, major repairs and so forth.

Plan ahead for big-ticket purchases.

The Serguninas agreed to use their one joint credit card for such things as airline tickets and hotel stays. They still have separate credit cards, an essential in maintaining a good credit score. Closing cards could hurt your credit rating.

Create a budget.

To determine how much you will need in your “fixed expenses” checking account be sure to include all the items that come around regularly, including ongoing household expenses, insurances, health care premiums, cable, Internet and phones, membership fees, debt payment, and savings. (Making savings part of the “must pays” helps you avoid putting it off.)

List the variables.

Such as groceries and eating out, gas, clothing, personal services, medical co-pays, entertainment.

When your paychecks arrive, divide the money into the two accounts.

Have the savings deposited automatically. Most fixed-cost bills can be paid automatically as well. That eliminates the need for a debit card. A cushion of several hundred dollars can be maintained to take care of the unexpected expenses or bills that arrive before the paycheck does. With the second account, take care of the variables, remembering to stop when the money is gone. No new shoes if the tank is empty.

Link your “curve ball” savings.

Link to both checking accounts so you can make a quick withdrawal if necessary.

This systematic approach to money management makes tracking less cumbersome, Sergunina says. It eliminates the need for constantly checking account balances and gives you a better “big picture” view of your spending.

Identity Theft Hits 15 Million U.S. Residents

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Identity theft is a more rampant than ever.
15 million United States residents have their identities used fraudulently each year.
Identity theft hits 15 million residents. It seems that no matter what steps people take today to protect their identity against fraud, those who do the fraud have a quick way to get around them.

Jean Chatsky, an American financial journalist, author and motivational speaker, has made a list of the most recent methods identity thieves use to deprive you of your identity. Read them and then act accordingly to be sure you aren’t the next victim.

Approximately 15 million United States residents have their identities used fraudulently each year with financial losses totaling upwards of $50 billion.

Identity Theft Through E-Mail

The conman sends you a message saying it is from a retailer, the U.S. Postal Service or other common deliverer regarding a package that can’t be delivered. The message includes a fake email address that you are supposed to use to resolve the problem. It asks for details about your identity. Or it may ask you to fill out a form and take it to your post office. That download may install malware onto your computer that feeds more information to the bad guys.

Email Attachments

Never click on a link or attachment you receive in an email unless you know the sender. If, in fact, you have a delivery that couldn’t be made, you will receive written notice on your door or in the mailbox from the sender. Contact the shipper.

Smishing

Smishing is a new coined word that is first cousin to phishing. But instead of trying to get you to take their bait via email, the fraudsters use text messages. Usually it involves a message about a great deal, a deep discount. To take advantage of the “bargain,” you divulge your personal information, and set your self up to become a victim. Don’t pay attention to any text from someone you are not familiar with. Legitimate deals come directly from the company. Sometimes they come as a text, but you have to sign up to receive them.

Social Media Messages

The crooks pay attention to your social media messages to figure out how to steal your identity. If you post on Facebook or Twitter that you just had a great experience at a restaurant or retailer, they may call, text or email you pretending to be from the business with whom you were pleased. They may tell you your credit card didn’t go through and ask for the information. Then they have the means to set up a false account in your name. Bye-bye security.

Bogus Charities

Using fake addresses and websites to appeal to you to support a “good cause,” they weasel pertinent information from you. These scams often follow a highly-publicized disaster to take advantage or your empathy for those who have been negatively affected. Hurricane Katrina spawned thousands of fake “charities.” If you want to support good works, give via well-known and reputable websites. Or write a check. If you are solicited by email or text, never click on a link. Consider making your donation to a large, well-recognized entity such as Red Cross, Doctors Without Borders or others that you know to be bona fide organizations.

The people who would use electronics means to cheat you make it a full-time job. Stay informed so you’re always a step ahead of them.

Job Hunting Tips For 2016

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Job Hunting Tips
Are you looking for a job?

When you are looking for a job, consider job-looking your job. Make it a serious full time objective. Here are some job hunting tips anyone can use.

Job Hunting – Lacking motivation?

Enlist a friend to keep you moving. Have him/her check with you regularly and be ready with a list of things you have done since the last checkup. Job hunting can be demoralizing.

Start with a written outline of short-term and long-term goals.

What is it you are looking for specifically? Getting a resume into the hands of two prospective employers every day while the search is on is a good short-term goal, for instance.

Develop healthy habits.

Get up early and be ready to begin the job of job-searching. Job hunting can be done in the morning. Follow up immediately on any leads, making notes on contacts for later reference. Make a to-do list before retiring as a guide to the next day’s activities.

Looking For A Job?

Explore all options.

Research the opportunities for the job you are seeking, including the expected pay range. If necessary, consider additional education or specialized training to make you more eligible for the job you want. Try Monster.com for additional online job hunting.

Expect to be disappointed a time or two before you succeed.

A rejection is hard, but keep it in perspective. Employers sometimes have very definite requirements. If you don’t meet them, it isn’t a reflection on you as an individual. Learn from the rejections. Adjust the focus of your resume if it seems would-be hirers are reacting to a particular element in your outline. Honestly, of course. Don’t ever pad the resume or allow the impression that you have more capability than you do. On the other hand, let the employer know you are willing to learn if necessary.

Take care of yourself.

Just as you would if you were working rather than looking for work. Eat right. Get plenty of rest. Plan regular physical exercise to help you deal with stress and strong emotions concerning job hunting.

Focus on the positive.

Be sure to enlist the help of friends, family, former co-workers and even acquaintances who might be helpful in your search. The majority of job placements arise out of effective networking with people you know.

Debt-Free People Have Positive Attributes

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The bondage of living in debt adds more stress to our lives.
The bondage of living in debt adds more stress to our lives.
You probably have noticed it among your friends and acquaintances: Some families can pay off $40,000 in debt in two years while others who have much larger incomes can’t seem to make a dent in their indebtedness.

What makes the obvious difference is how they spend their money. They have different priorities.

People who make a conscious decision to corral their personal finances and keep them under control have some characteristics that others do not, financial experts say. They list seven of these traits as:

Being wise.

Those who decide they are through with debt, approach the problem as if it’s a pernicious skin disease that they must get rid of. Now. They make it a priority.

Being patient.

They can walk past sales and other temptations without a qualm because they know that in the long run, they will be better off. Impulse buying is the impatient downfall that defeats debt eradication.

Being confident.

People who are getting out of debt don’t pay attention to friends or relatives who comment on the lifestyle changes they are making. Start out the process with this in mind and stay confident in your decision to stick it out. You’ll achieve the financial peace of mind you are seeking.

Being goal-driven.

Determining to get out of debt is a goal in itself. But it requires more, short-term goals that will aid the process. Proceeding without definite plans could lead to frustration and stymie your objectives. Choose which of your debts you plan to attack first and stick with the agenda.

Being responsible.

Becoming financially mature doesn’t depend on the calendar. If you continue at age 50 to treat money as you did at age 20, you may never get out of debt. Responsibility means getting out of debt as quickly as possible and avoiding it in the future. Being out of debt doesn’t mean you can now spend foolishly. It means putting your debt-free money into saving for huge expenses such as college and assuring your retirement by investing your money wisely.

Refusing to be materialistic.

Attitudes toward money matter immensely. How much importance you put on STUFF will guide your use of money whether you have a lot or a little. There’s an old saying: “You can’t take it with you” that has become such an old, old saying because it is true.

Being willing to make sacrifices.

Eating out and paying big prices for entertainment might have to go by the board while you get out of debt. But these drastic budget cuts are temporary. When debt is in the past, you can start adding these items back into the budget. You may find you can cut back, however, and not miss them. Bottom line: If you are determined to be debt-free you will make the necessary sacrifices. You’ll take the actions that lead to financial peace.