Showing posts with label financial habits. Show all posts
Showing posts with label financial habits. Show all posts

Wednesday, February 12, 2020

4 Financial Habits to Learn When Managing Your 401K

Your 401K is an essential financial asset, one that can be expected to play a key role in ensuring a more comfortable and secure retirement. Failing to manage your 401K effectively can prove to be nothing less than a complete disaster. Developing the right financial management habits may help you to avoid the more costly mistakes, missteps or miscalculations that could end up threatening your retirement plans.

Details Count for a Lot

Ensuring a successful retirement takes careful planning and careful planning means paying attention to the details. An inadequate or incomplete understanding of your plan, its benefits and the stipulations and requirements that may be involved could lead to no end of potential trouble. When it comes to managing your 401K account, it always pays to read the fine prints.

Take Full Advantage of Matching Funds

Matching funds are the reason why a 401K is such an effective retirement vehicle. The more money placed into a 401K account, the greater the potential long-term returns. 

Taking advantage of the matching funds that employers are willing to offer helps to ensure that the account is able to mature more quickly. A 401K that is underfunded may struggle to perform and could leave you unable to achieve your long-term financial goals.

Resources to Educate Plan Participants

Financial planning can be a complex process, one that is often inaccessible to those who lack the proper training, education or assistance. Working with an accountant, seeking out a 401k advisor or taking advantage of any educational resources that employers or plan providers may offer could be an important step. 

Possessing the knowledge and insight needed to make wiser financial decisions could end up making a world of difference.

Diversify for Greater Security

Placing all of your eggs into one basket can be a serious misstep. Diversity is often the key to crafting a more robust investment portfolio. Finding ways to put you 401K to better use or supplementing your retirement funds with other investment strategies and opportunities is often a smart move.

Your future is not an issue that should be left to chance. When it comes to saving for retirement, ensuring that your 401K is being managed effectively is an issue of tremendous importance. 

Getting an early start, understanding the details of your plan and taking full advantage of any matching funds that may be offered can all go a long way towards ensuring that you are able to enjoy the most secure and comfortable retirement possible.

Tuesday, October 29, 2019

3 Financial Habits That Set You Up for Success

It is incredible to consider how many people either do not have a savings account or do not use one. It seems that most people rely solely on their checking accounts. There are many reasons why this is a bad idea. Savings accounts are designed to help you better manage your finances. 

They also end up paying much more interest, on average, than checking accounts do. When you have money that you do not need to spend right away, it is typically better to sock it away in your savings than it is to put it in your checking account where you might be tempted to spend it. Here are three reasons why you should always deposit money into your savings account.

Emergencies Are Always A Possibility

While things might be going great today, there is always the possibility of an emergency on the horizon. When you need money in a hurry, it is much better to use the cash in a savings account than it is to borrow the money. 

When you have a savings account that contains money for a rainy day, you will never have to worry about how you are going to account for an emergency ever again. This is a great, liberating feeling to have.

If you can, open a Health Savings Account. Having a pre-tax HSA will allow you to have a savings account that can only be used for medical visits and supplies. This will keep temptation out of dipping into the savings account for other uses. It will also help ease any feeling of financial guilt that comes with human nature when you go to the doctor. 

This way, you know the co-pay is not coming from your checking account, and you can worry about getting your family medical care without worrying about the financial aspect. Many employers will do an HSA match amount that can become a very valuable benefit.

Save for A Long Term Goal

If you want to do something in the future, it helps to begin saving for it today. Perhaps you want to take a cruise for your 25th wedding anniversary. Begin saving now and earmark it for that trip. Then, you will have the money when the times come to take a trip of a lifetime.

Financial success comes in many forms. Investing your savings in a way that you can multiply your money. There are success stories of ordinary families that learned how to get rich in the military, for example. Saving $500 a paycheck when you get a new job or raise can lead to $12,000 in yearly savings. This is a way you can get out of debt instead of increasing your spending habits. That home deposit, the new business idea doesn’t seem so out of the ordinary anymore.

Get Ready for A House Deposit

You might not be ready with the money today to buy a house, but you hope to at some point. Real estate is a great investment. However, you will need a deposit to put down on a new home to qualify for a great rate on your mortgage. The more money you can save towards this deposit, the lower your monthly payments will be in the end. You will also reduce the amount you pay towards interest over the term of the loan.

If you can buy it, then buy a home. Getting in the habit of looking ahead is something you can do even if you are stuck renting at the moment. Talk to a real estate agent, a loan officer before you are ready. Get in the habit of knowing where you want to go and what work you need to do to get there. Nothing will magically appear on your lap. Plan for success.

These are just three of the many functions of a savings account. This allows you to have a focused means of saving money that you will need at some point in the future. It helps to minimize the temptation of spending money today that you really need for the future. The way to best accomplish this is to make regular deposits into your savings account so that money will be there when you need it.

Friday, February 19, 2016

Financial Matters: How to Help your Loved Ones

Financial burdens can strike unannounced. Everyone suffers from financial troubles at one time or another. Your close family and distant relatives may encounter financial problems that are too much to overcome alone. 

Whether your loved one experiences an unexpected and expensive medical bill or is exhibiting worrying financial habits, helping them get to the right direction can secure their financial future. Here are four ways you can achieve that and much more. 

Know When to Come in

One important thing to remember is that when a loved one is going through a financial crisis, that it is a very sensitive subject. They may be too prideful or too afraid to say that they have a money problem and to ask for help. 

When it comes to family, most people don't want their loved ones getting involved in their financial problems. After all, it's a matter that you'd want to keep privately. Knowing when to come in and provide financial aid is important to maximizing the impact of your actions. 

If your loved one looks capable enough to manage the situation that has befallen them, give them time to fix it before intervening, but make yourself readily available to them should they come to you for help. 

Help Them Invest

Investing isn't something that you normally talk about with family members at a dinner table. However, it is financially savvy to collaborate with loved ones about possible investment vehicles that can grow their retirement funds. 

Advise against parking their free cash in a savings account and even in fixed deposits since they tend to yield the lowest interest rates. Instead, go for higher-yielding assets like stocks and currencies. Be careful giving this kind of advice to your loved ones. You will need to know exactly what their financial situation is in order to give them this advice. 

If they do not have enough money to make adequate investments, then they should be encouraged to save their money for a period of time before making such a step. Investments can be risky. If the investment fails, it could hinder your loved ones finances even more. It may be better to refer them to a professional as they can properly advise them how to invest their money wisely. 

Be Efficient

If you're going to lend money to a loved one who is in financial trouble, at least make the process as efficient as possible. Wasting time and money in delivering the cash yourself only amplifies the free cash you are losing. 

Use financial services like to send money online to loved ones in the U.S., Mexico, and Brazil. The rates are cheaper and using the online platform saves you time and gas money from having to march to your bank to send payments. 

Tweak Their Lifestyle

If spending habits are slowly chipping away their retirement nest, you can help your loved ones by making subtle changes to their lifestyle. 

For example, if they are subscribed to magazines every month, you can advise them to cancel on these subscriptions especially if the materials aren't being used or isn't of intellectual or financial value. Teach them how to use coupons and when best to buy certain times like toiletries and food.

Having a financial adviser on board is also a great way to help your loved ones overcome financial difficulties. They can help your loved ones manage their money in the most efficient manner. In the end, however, it takes a solid familiar bond to actually improve the quality of living of your loved ones through smarter financial choices and decisions.

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