How to get your financial house in order by age 30 (USA Today- Money)

Author: Anne Godlasky, @annieisi, USA TODAY5:38 p.m. EDT May 16, 2013

New wrinkles. Pressure to procreate. And what have you checked off your bucket list lately?

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Turning 30 can be stressful, even before thinking about personal financial goals and how to achieve them.

Adults 34 and younger grade themselves worse than any other age group in their personal finance knowledge, with 48% giving themselves a C or lower, according to a survey by the National Foundation for Credit Counseling. Financial planners say that needs to change. Millennials have a lot to do to get their house in order.

“I think every birthday you check your credit score and your weight, and one should be going up, and one should be coming down,” says Jean Chatzky, 48, a personal finance expert whose Money School webinars launched last month. “People around 30 are under more pressures than any prior generation,” she says, citing “tremendous” student loan debt, “stagnant” wages, the burst housing bubble and the burden of retirement and health care costs moving increasingly from employers to individuals.

In fact, the average net worth of those under 40 in 2010 was 7% below that of people in the same age range in 1983, the Urban Institute reported in March.

“Thirty today isn’t what 30 was a few decades ago. It could mean single and 30, or married with children,” says Megan Rindskopf, 26, a certified financial planner with ClearView Wealth Management in Charlotte. “I think the biggest issue for people in this age range is knowing how best to deal with competing priorities. A lot of people are living paycheck to paycheck. This is kind of the age where you feel you need to grow up.”

WHAT FINANCIAL GOALS SHOULD MILLENNIALS SET?

A good benchmark is to have one year’s salary saved in retirement accounts, such as a 401(k), by age 30, says David Weliver, 32, who created the financial advice websiteMoney Under 30 after recovering from his own problems with debt. Weliver calls the goal “income-based, so it’s not comparing a kindergarten teacher and a Wall Street banker.”

Financial experts recommend saving 10% to 15% of every paycheck to retirement and savings accounts.

However, saving newbies shouldn’t start with 10%, some advise.

“It’s like going on a crash diet — if you go too high, it’s too painful and too likely to fail,” Chatzky says. “Once you manage to set aside 2% for three to six months, then notch it up another 2%. … I’ve never seen a budget where I can’t find some wiggle room.”

As you save money, here are steps to take:

1. Meet obligations. Pay your rent and minimum loan amounts on time to avoid charges and fees.

2. Build an emergency fund. If you have nothing, start with $500-$1,500 to avoid overdrafting your checking account, says Weliver, then grow that buffer into a savings worth three to six months’ salary, to support you in case you lose your job.

3. Pay into 401(k) up to company match. If you don’t do this, “you’re missing out on free money,” Rindskopf says. If your company doesn’t match your 401(k) contributions, Weliver still recommends donating 3- to 5%.

4. Pay off credit card debt. “The biggest payoff is going to come from two things — capturing any matching [401(k)] dollars and paying back credit card debt,” because it is high interest, says Chatzky.

5. Increase savings. Once you’ve paid off debt, built an emergency fund and started saving for retirement, “look at shorter term goals and figure out how much you’ll need in two to five years,” such as paying for a wedding, car or down payment on a house, Weliver says. “You don’t want to put everything in retirement if you don’t have enough to pay for the things you’ll need.”

6. Buy life insurance. “I absolutely recommend it if you’re starting a family or if you have a spouse who depends on you to pay the bills,” says Rindskopf. “Do a little research before you jump in and buy a policy.”

7. Increase 401(k) contributions to 10%, even if it’s beyond company match, Weliver says.

8. Pay off student loans on schedule. Student loans are “tax-deductible and the interest rate is generally low,” says Chatzky.

9. Open tax-advantaged accounts. “If you’ve maxed out [other savings], but you still have money to put aside, look at other tax advantaged accounts you can open. If you have a child, look at the 529” to save for their college education, Chatzky says.

10. Invest. If you’ve done all of this, increased your retirement and your savings and still have money to spare, you may consider investing in taxable brokerage accounts.

THE GENERATION OF ADJUSTED EXPECTATIONS

Chatzky, a mother of two teens, 18 and 16, says many young adults will need to “choose a smaller lifestyle than earlier generations.”

“It’s very demoralizing to think that the next generation won’t have a shot at doing as well as their parents did,” she says.

Weliver agrees that his generation has a different standard of living.

“We need to lower our expectations,” he says. “Retirement age may be 70. … That just may be the reality of our generation.”

With 32% of those 18-34 saying they put nothing toward retirement, according to the National Foundation for Credit Counseling, even a later retirement date requires getting serious about personal finances as soon as possible.

“When you turn 30, it’s a really good time to make a five-year plan for your finances. Your 20s are notoriously uncertain — you may be moving, in and out of relationships and different jobs — so it’s hard to stick to a five-year plan because things change so quickly,” Weliver says. “By the time you’re 30, things may slow down a bit and there may be a natural progression in terms of savings and salary.”

Follow Anne Godlasky on Twitter @annieisi

How to get your financial house in order by age 30

Majority of Americans Live Paycheck to Paycheck

PR Newswire: news distribution, targeting and monitoring

SAN ANTONIO, Sept. 20 /PRNewswire/ — More than two-thirds of Americans live paycheck to paycheck, according to results released today from a survey by the American Payroll Association.

The “Getting Paid In America” annual survey asked respondents how difficult it would be to meet their current financial obligations if their paychecks were delayed for a week. More than 22,500 of the more than 31,000 respondents, 72 percent, said they would find it somewhat or very difficult to meet their financial obligations if their paychecks were delayed.  This is up one percent over the 2009 result of 71 percent.

“This result reinforces the notion that Americans are still struggling in this current economy,” said Dan Maddux, executive director of the American Payroll Association. “Employees should use free payroll-related benefits such as direct deposit, 401(k) plans and Flexible Spending Accounts to ease savings, reduce tax burden and maximize paychecks.”

Thankfully people feel confident that their paycheck will always be accurate.  The survey showed 89 percent of Americans are very or somewhat certain the amount of their paychecks is correct each payday.

Increasingly complex tax laws and benefit structures make paycheck calculation a challenging task.  The high percentage of employees satisfied with their paycheck accuracy is a testament to the payroll professionals who calculate paychecks each pay period.

“Automated technology solutions make managing payroll easier to ensure checks are accurate and get out on time,” said Joyce O’Donnell Maroney, managing director, Workforce Institute, Kronos Incorporated.

The “Getting Paid In America” survey was held in conjunction with APA’s annual public awareness campaign, National Payroll Week (NPW), held annually the week of Labor Day. More than 31,000 employees responded to the survey, providing insight into how workers are paid in America. For complete results, visit www.nationalpayrollweek.com.

Established in 1982, the American Payroll Association is the nation’s leader in payroll education, publications, and training. The nonprofit association conducts more than 300 payroll training conferences and seminars across the country each year and publishes a complete library of resource texts and newsletters. Every year, nearly 20,000 professionals attend APA training sessions. Representing more than 23,000 members, APA is the industry’s highly respected and collective voice in Washington, D.C.  Visit APA online at www.americanpayroll.org

The Richest Man in Babylon – Audio

The Richest Man in Babylon is a Life Changing Novel using Parables set in Ancient Babylon to discuss Financial Progression and How to Acquire Riches. A Must Read for Success!

I read this book for the first time in 1988, while studying business administration at Southern New Hampshire University on a military campus. I must admit it was difficult for me to visualize the parables as applicable to me.  However, in 2008, 20 years later I purchased a copy of the book at a thrift store. I reacquainted myself with the parables realizing they were very applicable. Today, I live by the teachings of the parables. I am financially free.

Enjoy,

Felix A. Montelara

Author & Host Potencial Millonario and Author of Bulletproof Finances (Future Release 2014)

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IRS Simplifies Home Office Deduction

Change Should Cut Paperwork for Small Businesses.

Source: http://on.wsj.com/1f29FQp

By: TOM HERMAN
There’s good news for some taxpayers who qualify for a home-office deduction: This year’s federal income-tax forms include an optional—and simpler—new method to claim it.In the past, you had to fill out a lengthy form and master complex instructions that discouraged some people even from trying.

Under the optional new method, you can claim “$5 per square foot of space that meets the definition of a qualified home office up to a maximum of 300 square feet,” says Mark Luscombe, principal tax analyst at CCH, a Wolters Kluwer WTKWY -0.63% unit that sells tax and other business information and software.

Thus, the maximum amount that can be deducted using this method is $1,500. CCH offers this example: Suppose your home office measures 18 feet by 15 feet, for a total of 270 square feet. Multiply that by $5. Your total home-office deduction would be $1,350.100_4240

This new option “saves time compared with the other home-office tax deduction calculation of figuring related expenses and how they may apply over the course of the year to a home office,” CCH says.

The simplified deduction “would replace items that you had to allocate between personal use and business use, such as utilities and property insurance,” Mr. Luscombe says, “but it would not replace deductions totally related to the business, such as supplies.”

You can also continue to take allowable home-related itemized deductions—such as mortgage interest or real-estate taxes—on Schedule A, the Internal Revenue Service says. The change, a rare move toward simplification by the IRS, could help many people who work at home.

An estimated 3.3 million filers claimed deductions for business use of a home for the 2011 tax year, according to an IRS spokesman.

But the new method isn’t a smart idea for everyone. Taxpayers “might be better off using the old-fashioned way” if their home-office deductions exceed the $1,500 limit, Mr. Luscombe says.

This new option does not change the eligibility criteria for taking the deduction.

As a general rule, you must use the home office exclusively and regularly for work. For qualifications and other fine print, see IRS Publication 587.

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19 Things Your Suburban Millionaire Neighbor Won’t Tell You

Although having a million bucks isn’t as impressive as it once was, it’s still nothing to sneeze at.

In fact, CNBC reports that in 2013 there were 13.2 million millionaires in the United States alone.

That’s a lot of people, people.  And the odds are one or two of them are living near you.

Heck, one of them might even be your neighbor. In fact, the odds are very good that it is your neighbor.

But, Len, you don’t know my neighbor. That guy doesn’t look anything like a millionaire.

Well, guess what?  Your suburban millionaire neighbor called (oh yeah, we go way back) and the two of us had a nice little chat.

Here’s a few things he shared with me — but apparently doesn’t want to tell you. (No offense, I’m sure.)

1. He always spends less than he earns. In fact his mantra is, over the long run, you’re better off if you strive to be anonymously rich rather than deceptively poor.

2. He knows that patience is a virtue. The odds are you won’t become a millionaire overnight.  If you’re like him, your wealth will be accumulated gradually by diligently saving your money over multiple decades.

3.  When you go to his modest three-bed two-bath house, you’re going to be drinking Folgers instead of Starbucks. And if you need a lift, well, you’re going to get a ride in his ten-year-old economy sedan. And if you think that makes him cheap, ask him if he cares. (He doesn’t.)

4. He pays off his credit cards in full every month. He’s smart enough to understand that if he can’t afford to pay cash for something, then he can’t afford it.

5. He realized early on that money does not buy happiness. If you’re looking for nirvana, you need to focus on attaining financial freedom.

6. He never forgets that financial freedom is a state of mind that comes from being debt free. Best of all, it can be attained regardless of your income level.

7. He knows that getting a second job not only increases the size of your bank account quicker but it also keeps you busy — and being busy makes it difficult to spend what you already have.

8. He understands that money is like a toddler; it is incapable of managing itself. After all, you can’t expect your money to grow and mature as it should without some form of credible money management.

9. He’s a big believer in paying yourself first. Paying yourself first is an essential tenet of personal finance and a great way to build your savings and instill financial discipline.100_4248

10. Although it’s possible to get rich if you spend your life making a living doing something you don’t enjoy, he wonders why you do. Life is too short.

11.  He knows that failing to plan is the same as planning to fail. He also knows that the few millionaires that reached that milestone without a plan got there only because of dumb luck. It’s not enough to simply declare that you want to be financially free.

12. When it came time to set his savings goals, he wasn’t afraid to think big. Financial success demands that you have a vision that is significantly larger than you can currently deliver upon.

13. Over time, he found out that hard work can often help make up for a lot of financial mistakes — and you will make financial mistakes.

14. He realizes that stuff happens, that’s why you’re a fool if you don’t insure yourself against risk. Remember that the potential for bankruptcy is always just around the corner and can be triggered from multiple sources: the death of the family’s key bread winner, divorce, or disability that leads to a loss of work.

15. He understands that time is an ally of the young. He was fortunate enough to begin saving in his twenties so he could take maximum advantage of the power of compounding interest on his nest egg.

16. He knows that you can’t spend what you don’t see. You should use automatic paycheck deductions to build up your retirement and other savings accounts.  As your salary increases you can painlessly increase the size of those deductions.

17. Even though he has a job that he loves, he doesn’t have to work anymore because everything he owns is paid for — and has been for years.

18. He’s not impressed that you drive an over-priced luxury car and live in a McMansion that’s two sizes too big for your family of four.

19. After six months of asking, he finally quit waiting for you to return his pruning shears. He broke down and bought himself a new pair last month.  There’s no hard feelings though; he can afford it.

Source: Dollarbits.com

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Top 10 Solar Areas in the US

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You might expect the no.1 solar area in America to be a city like San Franciso or maybe San Diego. According to One Block Off the Grid, it isn’t one of the largest metro areas though, it’s Fresno, CA with a strong lead at 182 watts per capita, or…

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The Passive House Revolution

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Is Money Creating Anxiety & Separating You From God?

It is often too easy to let the cares of the world consume our day.  We become entangled in ropes of anxiety, and the more we struggle, the more tied up we become.  This can happen to anyone, young or old, rich or poor, male or female.  The source of the anxiety will differ among people, but the results are the same: distraction, frustration, nervousness, loss of focus, and loss of motivation. Anxiety is a form of temptation.  It is a way of making us lose focus on what needs to be done.  There are many forms that temptation can take.  It is anything that takes our mind and spirit away from God.  When Jesus said, “No one can serve two masters,” he meant many things.  One interpretation is that he meant that you cannot serve anything else if you want to truly serve God.  This means that if anything consumes an unhealthy amount of your time, then it separates you from God.  If worry and anxiety consume you, then they have become a wall between you and God.  They will cause you to be unsuccessful, frustrated, and depressed.  As we contemplate these things, let’s remember Matthew 6: 21-34.  This is where Jesus gives us advice about how to approach our worries.  According to Matthew, Jesus said, “So do not worry, saying, ‘What shall we eat?’ or ‘What shall we drink?’ or ‘What shall we wear?’ 32 For the pagans run after all these things, and your heavenly Father knows that you need them. 33 But seek first his kingdom and his righteousness, and all these things will be given to you as well. 34 Therefore do not worry about tomorrow, for tomorrow will worry about itself. Each day has enough trouble of its own.”  Therefore, when we find ourselves in the clutches of anxiety, let’s do our best to turn our worries over to God.  We must try to break down the walls that separate us from Him, and in so doing we will strengthen ourselves on our way to financial freedom.

 

Matthew 6: 31-34

31 So do not worry, saying, ‘What shall we eat?’ or ‘What shall we drink?’ or ‘What shall we wear?’ 32 For the pagans run after all these things, and your heavenly Father knows that you need them. 33 But seek first his kingdom and his righteousness, and all these things will be given to you as well. 34 Therefore do not worry about tomorrow, for tomorrow will worry about itself. Each day has enough trouble of its own.”

 

 

5 Proven Strategies to Reduce Income and Estate Taxes and Boost IRA, 401k and Other Retirement Income

5 Proven Strategies to Reduce Income and Estate Taxes and Boost IRA, 401k and Other Retirement Income (via PRWeb)

The Creators of Wealth with No Regrets Barry H Spencer and Scott Noble are holding a free special briefing for IRA, 401k and other retirement asset owners looking for way to create more retirement income now. Barry H Spencer As the co-founder of a family…

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