Budgeting Archives - Hanover Mortgages

February 24, 2021

How to Save $5,000 This Year with the 52-Week Money Challenge

This post originally appeared in the Financially Independent Millennial.

The views and opinions expressed in this article are those of the author only and are not endorsed by Credit.com.

Do you want to save $5,000 this year? If so, look no further. In this article, I go over my 52-week money challenge that you can start today. Then, at the end of each tip, I’ll give you the potential savings (a year) where applicable.

No one likes to throw money away, and you and I know that saving isn’t an easy task! You might know when your paycheck will hit your bank account. And that’s a great start! But, if you don’t know where your money gets spent, there are likely places you can save. Indeed, you’re more than likely to have spent on unnecessary items. And sometimes, you may not even realize you’re spending so much. For example, when buying “stuff” cheap items and paying for subscriptions, the costs add up.

Related Read: How to Avoid Emotional Spending

2021 is another year, and it’s time to start a new challenge. Take the 52-week money challenge, and I bet you can save $5,000 before the end of the year. What would saving $5,000 mean to you? Would you use it to pay off a credit card, your car, or how about a vacation?

There are many things you can do with $5,000. Saving is not an easy task, but with these tips, it’s possible. So, let’s dig in and explore how to save $5,000 this year with my 52-week money challenge:

Planning to Save $5,000 In A Year

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In this section, we’ll look at all the ways you can plan your $5,000 savings this year. Further, there’ll be ways you can save on your monthly expenses.

Create a Budget

If you’re going to save any money this year, the first thing you’ll need is a budget. If you have one, that’s great. But if not, you need it now! A budget helps you spend your money and live within your means. It allows you to create a monthly income surplus and deposit them in your savings account.

Let’s face it, saving $5,000 in 52 weeks isn’t easy. But, a budget will help separate your cash flow into categories. Then, you’ll build a monthly income surplus. And in no time, you’ll achieve your goal. Creating a budget is a simple task. But it’s essential to stick to your budget.

I recommend starting by going back three months and recording those daily expenses. When you look at your spending, you can locate the areas you spend too much. If you identify such areas you spend much, you can adjust your spending. That’s one way to achieve your $5,000 savings goal.

Additionally, tracking your spending is beneficial. It helps you be more careful about the amount you spend, knowing that you have to record all the details.

Increase Your Insurance Deductible

One way to save money is to lower your spending. An easy way to save $5000 this year is to increase your insurance deductibles. For example, consider your home and auto insurance deductibles.

A recent study reported that homeowner’s insurance premiums hover around $1,200 a year. If you bump up your deductible, for example, from $500 to $1,000, you could save as much as 25% on your premiums. Remember, a higher deductible means the insurer will have a lower risk, and as a result, offer you a lower premium.

If you consider this strategy, speak with your insurance agent. They will tell you how much you’ll save after increasing the deductible.

Indeed, you can also use this option for auto insurance. A study reported that you could save up to $30 per month after increasing the deductibles, from $250 to $1,000.

Potential Savings: $600 a year.

Cancel Your Unused Gym Membership

A gym is one place that you have to pay for membership. But, after you’ve committed yourself for some time, you now realize your visits are slowing. If so, it’s time to cancel the membership. Why pay membership fees for something you don’t use. So, canceling an unused membership is a useful option to add more money to your savings basket.

For example, depending on your location, a gym membership’s monthly cost could be as high as $50/mo. Various studies report that as much as 70% of the members don’t use their membership. Indeed, paying for unused memberships drains your budget.

Now, you might feel that canceling the gym membership means that you are giving up on your body. If so, consider various other ways to get fit: you can run, walk or ride a bicycle. Besides, there are many YouTube Exercise Videos that you can follow along. Additionally, if you prefer strengthening training, free fitness apps like Fitbod can help.

Potential savings: $500 a year

Cancel Unnecessary Subscription Services

A study reported that you might spend $200+ on monthly subscriptions. Think video streaming, photo editing apps, and more.

The money you pay for these subscriptions may seem minimal, but it adds up. $20/mo for one, $50/mo for a subscription box, and so on. Spend the time and review all your subscriptions and identify those you will cut.

Some subscriptions have alternatives, which are free or low cost. For example, you may subscribe to Audible for $20/mo, an audiobook service. Audible may be popular, but there are free alternatives.

Potential Savings: $2400 a year.

Reduce Your Food Waste

Food waste costs money and negatively impacts the environment. On average, US households throw away as much as $1,800 a year worth of food. Indeed, food waste is terrible for your budget.

Related Read: Grocery Shopping On a Budget

Reducing food waste isn’t something that will happen overnight. There are a few proven tricks that may help you with your journey. If you need to reduce food waste, consider using a shopping list, and start planning your weekly meals.

Potential savings: $1,800 a year.

Cut Commuting Costs

Another easy way to save $5000 this year is to cut commuting costs. If you go to work for five days a week, commuting by car adds up.

A recent study by Citi suggested daily commuting can cost you $10/day and over $2,600 in a year. For example, you can carpool with one person, which helps you split the cost in half.

It may be a hassle to find a person you can carpool with. You can start by asking your neighbors traveling to a similar route or co-workers. But using this method could help get you to your $5,000 savings goal.

Potential Savings: $1,300 a year.

Related Read: 14 Frugal Living Tips You Can Implement Today

Save on Bank Account Fees

A recent study by the CFPB indicated that Americans spend, on average, $250 a year on banking fees. And 75% of it is NSF charges! Indeed, this is a completely unnecessary waste of money.

Switch to a free checking account, and keep at least 2-3 months of your monthly expenses to void NSF fees.

Potential Savings: $250 a year.

Finding extra money helps you save. One creative way to save $5,000 this year is to consider credit card offers. There are many options for credit cards with the best rewards programs. You could earn rewards like cash back on certain purchases, airline miles, hotel and loyalty points, etc. Browse through these offers to find which one works best for you.

Lastly, remember to never carry a high balance on a credit card and pay it off in full each month

Potential Savings: $1,000 a year.

Sell Items You No Longer Use

No doubt, you have stuff you don’t need to use at home or the office anymore. So, such things might seem like junk, but I bet some will have value among them.

The quickest way you can make extra money is to gather up all the items you no longer need and sell them. And, if you have enough stuff, you can host a yard sale and get rid of them fast.

A yard sale is an excellent way to get rid of your items within a day or two. If you have more valuable items, they will likely fetch more money online. For example, you might consider Facebook marketplace or Craigslist. I like Craigslist due to its wider audience.

Potential savings: $1,000

Save Money on Entertainment

If there’s one thing many people spend a lot of money on, it’s entertainment. That said, cutting back on entertainment expenses is an excellent option to save $5,000 this year.

Look at your budget and see the amount you spend on entertainment. It includes sporting events, movies, concerts, meals with friends, and trips to the bar. All these expenses can add up fast.

But that doesn’t mean you shouldn’t spend on entertainment. Doing the things you love helps you live a balanced lifestyle. There are easy ways to cut back on entertainment expenses without sacrificing your fun.

Look for cheap or free things to do. Another option is looking for a new hobby that you know will not cost you much money. Give yourself a fair limit on the amount you can use for entertainment.

Potential Savings: $2,000 a year.

Start a Side Hustle

As you reduce expenses, it’s also essential to look at other ways to make money. Consider one of many side-hustles out there, and I’m sure you’ll find a good fit.

Here are a few side-hustles you can choose from to get to your $5,000 savings goal.

Taking online surveys – This is among the best options to make extra money across the world. It isn’t a lucrative option, but the best thing is that it is flexible. You don’t sacrifice most of your time because even while watching TV, you can take surveys. Many survey sites offer you signup bonuses. These include Survey Junkie, Inbox Dollars, Swagbucks, MyPoints, among others.

Flea Market Flipping – Selling things you don’t like may become your side hustle. It can help to earn money through buying and reselling. The best place to purchase items is at thrift stores, flea markets, and yard sales and resell them at higher prices. Some of the things you can buy include wood furniture and paint them to get a new look. Such furniture you can sell at a nice profit on Craigslist.

Freelancing – There are various professional services you can offer. For example, you could become someone’s virtual assistant. Or, even write content for websites and blogs like The Financially Independent Millennial! Other freelancing options include web development, web design, graphic design, social media marketing, photography, and more.

Dog Walking And Pet Sitting – Dog walking or pet sitting are among the easiest side hustles you can do. And you’ll earn extra income, and make a lot of money. Indeed, pet owners do love their pets and spend a lot of money on them. And, this side hustle does not need you to have special skills.

Drive for DoorDash – Doordash offers an excellent way to make good money. Offering delivery services is a great chance to earn extra money with flexibility. This option allows you to set your free hours and make money fast.

Related Read: Best Side Hustles To Start in 2021

Final Thoughts on How to Save $5,000 This Year

In this article, we covered some different ways to boost your savings. Ask yourself, “is today the right time to start your 52-week money challenge?” Indeed, if you were to follow each of these tips, you could save yourself over $10,000 a year. Go ahead and reduce spending with these tips. And at the end of the challenge, I have no doubt you’ll save $5,000 this year. But remember, you don’t have to deprive yourself! Cut your spending from various activities, and your savings will add up with time.

Source: credit.com

February 19, 2021

Why Financial Productivity Begins with a Positive Mindset

The following is a guest post by Orion Talmay, of Orion’s Method.

Dealing with finances can be stressful and leave you feeling overwhelmed. It’s all too easy to ignore mounting debts or believe you’ll never save up a significant amount of money. But taking control of your life and changing the way you think can make a huge difference. We take a look at why financial productivity begins with a positive mindset.

The Impact of a Positive Mindset on Financial Productivity

Whether you want to work your way out of debt or save up to buy a house, with the right mindset and some hard work, those financial goals are possible. However, you have to start by getting out of a negative thought cycle—if you believe there’s no point trying, then you’ll never achieve them. Therefore, you might be tempted to make choices that make your financial position worse.

Even with a positive mindset, you won’t achieve your goals overnight. But it’ll put you on the right track to take more control over your finances.

How to Achieve a Positive Mindset

Achieving a positive mindset can be difficult, but you can adopt some proven techniques that’ll help you:

Take care of yourself
Know where you stand
Set achievable goals
Make small changes
Try to see the positive

Take Care of Yourself

If you’re struggling with a negative mindset, you might slip into bad habits throughout your life, not just when dealing with your finances. Learn to take care of yourself and prioritize your own well-being.

Start with the basics—make sure you’re exercising regularly, eating a balanced diet, and getting enough sleep. These might seem obvious, but a bad routine leaves you tired, stressed, and unhealthy, which all have a big impact on your mind.

Treat yourself well, and get into a good routine that helps you stay in control. You’ll see an improvement in your physical and mental health, which puts you in a better position to make informed financial decisions.

Know Where You Stand

It’s tempting to bury your head in the sand when it comes to finances. However, not knowing exactly where you stand will add to your stress.

Open those bills and credit card statements you’ve been ignoring. Check your bank balance, work out your incoming and outgoings. Get a clear picture of your current financial situation and understand what bills and repayments you need to make and when they’re due.

It might be hard to start with but it’ll improve your mindset and put you in a better position to get on top of your money.

Set Yourself Achievable Goals

It’s easy to feel negative if you can’t see a way out of your current situation. So, once you know exactly where you are, come up with some realistic targets that you can achieve within a certain time frame.

For example, if you want to save up for something, set a savings goal and decide how much you can realistically put aside each month, and how long it’ll take to reach your target.

The important thing with your goals is to make sure you’re sticking to them. If you put money towards debt or savings but you don’t have enough left to cover the rest of your bills, you’ll be tempted to borrow money from somewhere else.

Make Small Changes

Don’t try to overhaul everything in your life all at once. Make small, manageable changes that you’ll actually stick to and that will help you feel more positive. There are some really simple money moves that’ll make a noticeable difference. Start by looking at all your subscriptions and recurring payments—consider canceling the ones that you don’t use or can live without.

If you buy your lunch during work every day, get into the habit of making it at home. Make small switches to your grocery choices, and try to stop buying things that you end up throwing out. Cut down on impulse buys—for nonessential purchases, make yourself wait a couple of weeks to consider whether you really want or need it.

Try to make one or two small changes each week that you can follow through on. It’ll improve your mindset if you can stick with these habits long-term, rather than trying to do everything at once and feeling like you’ve failed when you slip up.

Try to See the Positive

Often easier said than done, but try to get out of the cycle of negative thoughts. Revisit your goals each day to remind yourself what you’re trying to achieve and what you should be focusing on.

When you have a negative thought, where something seems impossible or too difficult, stop and think about ways around it. Don’t get stuck on things that can’t or won’t happen and focus on solutions, workarounds, or breaking it down into smaller steps to get through it. If you struggle to focus on the positives, meditation can help you to manage your thoughts and give you more perspective.

Why a Positive Mindset Matters

Everyone feels unmotivated and disenfranchised from time to time. It happens to the best of us. However, if you really dig deep and find what’s causing your low energy, you’ll be better equipped to find the root and weed it out. Try to channel your energy into more productive outlets, and make changes whenever they take a toll on your mental state. That’s the key that’ll enable your long-term success.

Having a positive mindset is the foundation for taking control of your money and becoming more financially stable. Setting yourself goals, addressing bad habits, and learning how to get a handle on your thought processes will help you to manage your finances and put you in a better position with all aspects of your life.

Source: credit.com

February 18, 2021

How to Get Back on Track With Your Financial Goals

Many people start off new financial goals with the turn of a new year, but sticking to a new goal (financial or otherwise) can be challenging. If you have already fallen behind on some of your financial goals, take heart in knowing that you’re not alone. It’s not uncommon for it to take several tries to finally master a new habit. So if you’re looking to get back on track with your financial goals, here are a few suggestions.

Take a minute to evaluate where you’re at

First, take a minute to evaluate where you’re at. Where did you start, and where you’re going. Emotionally, you might feel like you’ve been a complete failure with your financial goals, but if you sit down to evaluate, you might not find that you’re not quite as bad off as you’ve feared.

The best time to evaluate things is when you’re able to sit down and think dispassionately about the situation and truly give an unbiased opinion of where you’re at with your financial goals. In the heat of the moment (whether good or bad), you’re not likely to give yourself an accurate depiction. Instead, take some time to evaluate when you’re calmer.

Pay attention to where your money is going

If you’re not sure what you’re spending your money on, that could be the first problem to address. Remember that a budget is just a tool that helps you stop spending money on things that aren’t important to you so that you still have money left to spend on the things that ARE important to you. A tool like Mint can help you to track where your money is going.

If you’re sharing bills with a partner or roommates, make sure that you and your partner are on the same page as far as who is paying for what. Good communication is key here to make sure that all the bills get paid and everyone feels that the arrangement is fair.

Adjust your budget and set new goals

After you have a good idea of where your money is going, it’s time to evaluate your existing goals. If you feel like you’re a bit off track of the financial goals you set earlier, there’s no better time than today to adjust things and get into a more realistic place. Don’t feel like you’ve “failed” if you aren’t quite where you want to be. Instead, use the time to set yourself back into a better place.

By now, you’ve probably found a few things that you thought would be good that haven’t worked out exactly as you hoped. But you’ve also probably identified a few things that ARE working great. Use the “Stop, Start, Continue” pattern to figure out the things that you should:

Stop doing that you are currently doing
Start doing that you aren’t doing
Continue doing because they’re going well

Identifying those areas will help you right the ship and get back on track with your financial goals.

Set up accountability

Another important step in getting back on track is to set up some accountability. Accountability can work in a variety of different ways, depending on your specific personal situation. If you are in a healthy relationship, it’s a great idea to talk about your money with your spouse or partner. For those on the same page financially speaking, the two of you can help support each other. If money is something that is a bit of a struggle to talk about in your relationship, there are still ways to work through financial disagreements.

If you’re single or not in a place where you share finances with your partner, one option can be to find an accountability partner. Try and find a trusted friend or family member who is also looking for some accountability, that can be a great way to help both of you. If not, the most important thing is to write down your goals, financial or otherwise. Goals are much more difficult to accomplish if you try to keep them in your head.

Don’t fall off the wagon if you make one mistake

The last tip to help get you back on track with your financial goals is to just know that it’s okay to slip up, and it’s okay to make mistakes. Too many people make one mistake and then blow up the whole plan. If you’ve struggled with money your whole life, it’s not realistic to expect to change your habits overnight, or even over the course of weeks or months. If you go over your budget in a particular month, look at the bigger picture and celebrate your successes. That just might give you the energy and excitement to keep moving forward into even bigger successes.

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Source: mint.intuit.com

February 16, 2021

Get The Better Budget Guide & Workbook for just $14.99!

This post may contain affiliate links. Read my disclosure policy here.

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Simple strategies for creating a budget you can actually stick to
Step-by-step instructions customized to your specific needs
Easy-to-follow assignments that put theory into practice
Lessons on tracking your expenses, learning to say no (so you can say yes later), saving for the future, and figuring out how to prioritize it all
Exercises to avoid budget meltdowns, improve communication, and clarify your goals

You’ll also receive a workbook with assignments to help you work through the guide at your own pace. When you’re done going through the workbook, you’ll have a budget that actually works and you can stick to!

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Source: moneysavingmom.com

February 14, 2021

Dear Penny: Do I Freeze My Eggs for $8K if I Haven’t Met Mr. Right?

Dear Penny,
Be open about your goals. Specify on your profile that you want kids. Don’t invest your time on someone hoping that he’ll eventually come around on this. There is no middle ground on having children.
I understand why it makes you nervous to spend a substantial part of your savings here. So often, we think of our savings as falling in two buckets: an emergency fund and retirement, without consideration for all of life’s other needs. But investing part to build a family someday is a perfectly legitimate use of your savings. As long as you’re willing to invest the time, this is money well spent.
Get the Penny Hoarder Daily
-Suddenly Single

Dear Single,
I’m a 37-year-old female who wants kids. Just after the holidays, I ended a six-year relationship with a man I loved dearly because he decided he didn’t want children. I’m one of four kids and the only one without children. I adore my niece and nephews and always wanted a family, but he was unsure. We were both busy with our careers. I kept thinking he’d eventually come around.
I don’t want you settling for any guy who comes along. But we don’t get an unlimited number of dealbreakers when we choose a partner. Invest in the guys whose goals align with yours. Swipe left on any man who’s upfront about not wanting kids on his profile. Same goes for all the guys who say they want kids someday but are looking for something casual.
Source: thepennyhoarder.com
Now I’m thinking of freezing my eggs to buy myself some extra time in hopes of still having one or two children. It would cost me about ,000. This would be about a third of the money in my savings account. I’m not emotionally ready to start dating yet. I’m also concerned about dating in the middle of a pandemic, knowing it will probably be several months until I’m able to be vaccinated.
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to AskPenny@thepennyhoarder.com.
That may sound like a lot. But I’m not telling you to commit three entire evenings a month to a four-course dinner and a movie. I’m asking for three cups of coffee, three glasses of wine or three walks around the park.
Everything I’m about to say is based on a few assumptions: that you’ve consulted with a doctor you trust, that they’ve told you that egg freezing is a viable option for you and that you’ve confirmed the ,000 price tag.
I’m now working from home permanently and don’t have a ton of opportunities to meet new people. When I get back into dating, I’m guessing it will be on a dating app, which I’m already dreading. I don’t want to settle for just anyone. Is it wise to use a substantial part of my savings if I can buy myself more time to find a partner?
But I want you to think of your ,000 as only part of your investment.. You have a goal here, which is to meet a partner and have children with them. The pandemic, obviously complicates that. You’ve accepted that this will cost you money. But you’ll also need to invest time and legitimate effort to meet someone once you’ve gotten your COVID-19 vaccines. And quite honestly, that may be harder, at first, than parting with your ,000.
Let’s set some measurable goals, even if that doesn’t exactly sound romantic It usually isn’t that hard for women to find a date on the apps. So I want you to aim for three dates per month once you can safely do so. These dates can be with three different guys or all with the same guy.
Related Posts

Ready to stop worrying about money?

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If all this is true, yes, go ahead and spend ,000 to freeze your eggs. This absolutely counts as an investment in your future, just one that won’t come with a monetary payout. There’s no guarantee that you’ll get the returns you’re after, but then again, there are no guarantees in investing.

February 12, 2021

How to Manage Your Finances if Youâre in the Sandwich Generation

While you don’t have to share every detail of your financial picture with your adult children, it’s OK to share with them where you are financially. Even if you can afford it, resist the urge to give them a handout.
If your employer doesn’t offer a retirement plan such as a 401(k) or 403(b), you should set up a retirement fund such as a Traditional IRA or Roth IRA for yourself. In fact, it’s a good idea to fund an IRA in addition to your employer-sponsored plan.
Set up three small containers or mason jars and together, label them “Save,” “Spend,” and “Give.” Talk to your kids about the different buckets of money and encourage them to participate in the discussion.

Develop and Implement a Strategy

If your employer offers a company-sponsored retirement plan such as a 401(k), you should take full advantage of any company match. Otherwise you’re leaving free money on the table. Keep in mind that you need to stay with that employer for a certain amount of time to access or retain those benefits — and carefully consider those benefits once you leave.
The conversation can be specific, such as how to allocate extra birthday money or how they want to allocate their allowance. Or it can be a family discussion of how extra funds are spent as a family at the end of each month.

For the Employed

Need inspiration? Pick up a classic career guidance book, “What Color is My Parachute?”
Consider that Americans need to create a retirement paycheck that will last 30 years or more, and for most, Social Security benefits won’t be enough. Building a retirement nest egg now is the most important goal for many people, so it’s a good place to start. Other goals, such as college savings for children or buying a house, can be secondary.
Considering a job change or updating your skills for a career change? Not sure where to start?
Privacy Policy
It’s never too early (or late!) to talk to your kids about money.
If you’re self-employed, or work for a small company with limited benefits offerings, it’s important that you set enough aside on your own in a qualified retirement plan that’s appropriate for you, such as a SEP IRA or Individual 401(k).

For the Self-Employed

Maximizing your career outlook and benefits, as well as making a career change to improve your economic footing, is a big step and it’s important to ask for help.
Ready to stop worrying about money?
If you are enrolled in a high deductible health plan, you also can take advantage of a Health Savings Account. And if you are looking for ways to simplify your life, consider outsourcing your HR-type services to a professional employer organization, or PEO.

Diversify Your Income Stream

If your employer offers a Health Savings Account, consider socking away funds toward your near- and long-term health care costs. When used for qualified health care expenses, HSAs offer a tremendous triple-tax free benefit, and can be carried with you if you leave your current employer. Plus, some employers even offer a match — that’s more free money for you and your family.
You may find that you are delightfully surprised at how conversations can evolve when kids take an active role in understanding where their dollars go, no matter the age. Don’t be afraid to include younger kids – even preschoolers understand this concept on some level.

For Single Parents

The views expressed represent the opinion of Sophia Goode and not that of Jaffe Tilchin Investment Partners. These views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment or tax advice and is not intended as an endorsement of any specific investment or tax strategy.
Source: thepennyhoarder.com

For Job Changers/ Career Seekers

Hone your teenagers’ strengths and help them build skills that empower them to make money in the future.
For example, consider enrolling your animal-loving teens in a dog obedience training academy for dog trainers. Does your teen like computers? Maybe they can teach their older neighbors how to use a computer for an hourly rate.
It’s worth remembering: When parents are retired comfortably, their children will thank them for not coming to them for money.

Talk to Your Kids About Money

Research the U.S. Bureau of Labor Statistics Occupational Outlook Handbook.

12 & Under

If you are single, it’s important to reach out to other family members or seek out community resources and networking groups for support.
If you haven’t already, begin by talking with your family. If you have multiple goals, keep in mind it’s OK to focus on one at a time.
At my firm, we hear from clients who want to dip into their retirement funds to pay for lavish expenses for their children. While understandable, it’s a financial mistake that could take decades or more to recover from.

Teens

Sophia Goode is an Investment Advisor Representative at Jaffe Tilchin Wealth Management and a contributor to The Penny Hoarder. She specializes in financial planning for women and business owners, and those navigating life transitions.
It’s worth exploring all the perks available to you, such as Dependent Care Flexible Spending Accounts (FSAs), which provide tax advantages for daycare expenses, or pet insurance, which can be an affordable way to manage hefty emergency vet bills.
The sandwich generation is usually defined as adults in their 40s and 50s who find themselves sandwiched between taking care of aging parents and younger children. It’s not uncommon for Americans in this group to be providing financial support to both an aging parent and a child.

Young adults

It’s important to be open and honest with your parents, and if needed, to set boundaries.
As much as the client wanted to be there to support her mother financially and emotionally, after several discussions, we encouraged her to have a frank talk with her mother about the financial implication of retiring early, and we agreed it made sense to encourage the mother to keep working.

Pro Tip
You may have heard about diversifying your investments, but have you considered diversifying your income stream? Consider if one spouse is in a stable yet lower-paying corporate job with good benefits, does it make sense for the other spouse to become self-employed in exchange for potentially higher income?

If you work for a large employer, make sure you are maximizing your health and retirement benefits.
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Three generations look out at the water while holding hands. — Getty Images

Talk to Your Parents and Set Boundaries

Saving for financial goals such as retirement and buying a house is hard enough. The so-called “sandwich generation” has the added struggle of trying to manage priorities: caring for aging parents while saving for their own goals.
Some solutions are much less complex: Consider a basic checklist to help parents live more comfortable lives. Does mom need a hearing aid? Should your parents invest in an ID-theft protection service? Do your parents need a medical alert system? These are simple, effective ways to provide peace of mind and increase quality of life for both of you.
We had a client come to us about her mother, who had little savings and wanted to retire early and move in with her daughter. The mother had not considered the financial burden she was creating for herself or for her adult daughter.
Gone are the days when you can rely on your employer to secure your retirement. The responsibility is on you to save, so it’s important to not delay, even if you start small. For example, a 21-year-old who commits to maximizing his or her Roth IRA each year assuming a 6% rate of return would wind up with more than .5 million by age 66.
Jaffe Tilchin Investment Partners is a Registered Investment Advisor. Certain representatives of Jaffe Tilchin Investment Partners are also Registered Representatives offering securities through APW Capital, Inc., Member FINRA/SIPC. 100 Enterprise Drive, Suite 504, Rockaway, NJ 07866 (800)637-3211.

Tips and Resources to Hit Your Savings Goals

Consider or review your life insurance and burial expenses. Term insurance, or even pre-paying for burial costs, are relatively inexpensive ways to protect your family when you die, and can provide you peace of mind.
Shop out your auto and home insurance periodically. Call your insurance companies to see if you are properly protected, and if you qualify for any discounts. Many auto insurance companies have reduced their premium rates due to people driving less during the COVID-19 pandemic.
Consider umbrella liability insurance. If you have a trampoline or pool on your property, or if you or a family member is sued for negligence, umbrella insurance premiums are relatively inexpensive and can protect you or your family member.
Lost treasure? One in 10 Americans have unclaimed property in the form of uncashed checks, security deposits, overpayments, and more. Find your state and check if you have money owed to you: https://unclaimed.org/search/
Veteran benefits. If you or a family member has served in the military, you may qualify for educational opportunities or discounts on insurance. Subscribe to the latest benefits updates through military.com/benefits.
Resources for Business Owners. The Small Business Administration offers numerous programs and resources, and recently launched a free learning platform to support women entrepreneurs as well as an Emerging Leaders Initiative to accelerate growth of high-potential small businesses in underserved cities.
College savings. The average rate of inflation for college tuition is about 8% per year. Consider setting up a small college savings account and ask family and friends to contribute for birthdays and holidays. Set up monthly contributions so you can contribute before it hits your bank account. Visit www.savingforcollege.com for rankings, articles and calculators. For financial aid information and resources, check out https://studentaid.gov/.
The SECURE Act. Passed in December 2019, this law was designed to make retirement easier and more accessible for many Americans. Many gig workers who previously weren’t allowed to participate in retirement plans, for example, can now participate. Here’s how you might benefit.
The second wave of the Paycheck Protection Act (PPP) is here. See resources and how to secure funding at sba.gov/ppp.
The Coronavirus Aid, Relief and Economic Security Act was passed to provide relief and economic assistance to workers, families and business owners. You may be able to take advantage of temporary student loan forgiveness to lessen the impact. Find more personal finance resources.

It’s also a good idea to consider diversifying your industries. Questions to ask: Does it make sense to have one person work in a different field or take on a different role, based on economic demand of jobs? Can one of you take on a second job?
I gave the woman some talking points as well as some statistics to help guide her in the discussion. While difficult, it was ultimately the right thing to do.
It’s important not to dip into your nest egg to help with student loans, fancy cars or go overboard on a big wedding. <!–

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As a financial adviser, I’ve helped clients navigate an array of life situations that are challenging to juggle all at once. Here are some steps you can take to prioritize and manage competing goals, find helpful resources and work to secure your own future.

February 11, 2021

Making Finances a Family Affair

As a child, money really doesn’t hold the same value as it does in our adulthood. Children only think about money and finances in general when it relates to something they want or think they need – often tangible items like clothes, shoes, or that shiny new toy.

Maybe we had the same ideals during our adolescence until life showed us differently. No matter how we were raised or how finances specifically were (or were not) talked about, it’s important we leverage what we know now and create an environment where the entire family can benefit – no matter the age.

Have open and honest conversations

In many households, the topic of money was completely off-limits to children and categorized as an “adult” conversation. While we all understand that kids should in fact – be kids, that doesn’t necessarily mean we should withhold them from these conversations.

Finances can be tailored for all age groups and frankly, you would be surprised how quickly they’re able to pick up information. For example, if there are mistakes you’d like to prevent your child from making (or at least generate awareness), use real-life experiences to help paint the picture for them.

What are some patterns or behaviors you fell into in your younger years? What would you tell your younger self if you had the ability to? Use these questions to generate a list of things to talk about as the situation allows. They may not be able to grasp things fully, but they will have the background knowledge you provided to help generate better decision-making skills as it relates to finances.

Every moment is teachable

Since children don’t have the responsibility of paying bills, they’re typically oblivious to the consequences (good or bad) of things. If your little ones have a hard time remembering to turn off lights when they’re not in use or turn the water off when brushing their teeth – bring it to their attention. Explain to them that utility bills are not free and every little bit helps. While it’s not about being a drill sergeant and patrolling their every move, it’s certainly about creating children that are aware and mindful.

If you all are in the grocery store and they want to pick every single cereal in the aisle, you can easily explain why it’s important to select a couple of boxes versus ten. As much as growing children eat, they don’t need ten different boxes of sugary cereal. This is the opportunity to go into depth about food being readily available when the boxes selected run low. Also, food in fact does go bad if not eaten in a time period which creates more waste – on top of wasting money!

Discuss the importance of saving early and often

From the piggy bank days, we understand why it’s so important to save. Emergencies happen, unexpected occurrences are a part of life, and having multiple nest eggs to fall back on creates a sense of financial peace. Open a savings account for each child and talk about why it’s important to save.

Many banks have checking and savings accounts tailored for minors. If they receive an allowance, have a hobby that generates some income. If they are old enough to seek employment, make sure you all are discussing their own personal finance goals weekly.

Keeping this at the forefront of their minds may be annoying to them, but children require positive reinforcement. Repetition is key and they will thank you later for all of the valuable information you provided. Saving doesn’t have to be painted as this laborious, boring topic. Understand, children will make mistakes – but didn’t we all?!

Create an environment that helps them build a money mindset

The power of analysis and critical thinking are some of the most influential skills to have and put to good use. Creating a safe space for your children to ask questions, make good choices, make not-so-good ones and learn from them is the most fulfilling thing we can do as adults to help mold their impressionable and sharp minds. How many of us were reactive versus proactive about money? No matter where you fell or fall today on the spectrum – we can use everyday happenings to help them understand the future is just as important as the present.

Let’s say your child wants to buy something. The first step would be to ask them questions like, “How much is this item? Why do you want this item? What can this item do for you? Do you want to save up so you can purchase it?” Allow them to think these answers through; this helps them process the value of obtaining the product. Next is the saving process. This physically helps them show the “waiting period” – the time you identify an item and the actual time period it takes to acquire the funds to purchase. Sometimes, during this process, they may identify something else they’d like or completely scrap the product altogether. During this waiting period, you can also ask questions like – “Will you have money left over after this item is bought? Has anything changed about what you’d like to buy?” These critical skills are important and will help shape their ability to be sure in their decisions or pivot. Finally, the thing they’ve been waiting for – buying time! This is the gratification period where they’re able to see their ability to save and the outcome of their hard work.

Be the change you wish to see

All of the examples previously mentioned not only help our children, but they help us too. Removing finances from the taboo list now creates a new audience – our kids. They become our overseers, to help challenge us on our own financial decisions. This is a win-win for everyone involved. When it comes to family outings, vacations, or any planned functions – incorporate the children in these exercises. Money can indeed be a family affair and a constant teaching lesson for everyone!

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February 11, 2021

Zero-Based Budgeting 101

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Putting your money to work is one of the best ways to maximize your financial potential. Whether you make six figures a year or minimum wage, every dollar you bring in is an opportunity to make more.

But strategically allocating your finances is about more than just funneling money into your investment accounts. It’s also the best way to plan and save for the things that are most important to you, like a vacation to Bali or a down payment on a new home.

Zero-based budgeting is one of the most popular ways to do this. Read on to find out if this strategy is right for you.

What is Zero-Based Budgeting?

Zero-based budgeting, also known as zero-sum budgeting, centers around the principle that every dollar in your budget should be categorized. At the end of the month, a zero-based budgeting system lets you know where 100% of your income went.

The difference between a regular budget and a zero-based budget is that a traditional budget allows leftover money to sit in your checking account. A zero-based budget would require that you move those extra funds to savings, debt payoff, or some other goal. If productivity, efficiency, and structure are important to you, then this system might be just what you’re looking for.

Money coach Nick True of Mapped Out Money and his wife Hanna have been using a zero-based budget for seven years. Using this budget has forced them to spend their money in a way that more closely reflects their goals.

“A zero-based budget has helped us be efficient with our money and consciously spend it in a way that aligns with our values,” he said.

How to Create a Zero-Based Budget

Start by making a list of all the categories where you spend money every month. These may include:

Housing
Transportation
Debt including student loans, credit cards, and personal loans
Savings
Groceries
Utilities and internet
Health insurance and medical expenses
Childcare
Entertainment
Subscriptions and memberships
Personal care
Pets
Gifts and charity

Then, decide how much you want to allocate for each specific category. Use your monthly credit card and bank statements to estimate a realistic figure.

One feature of zero-based budgeting is that you use last month’s income to determine how much you can spend. This way, you’re only using money that’s already in your bank account and not relying on a future paycheck. That’s why zero-based budgeting is particularly helpful for consumers with a variable income.

Once you’ve written everything out, subtract the expenses from the income. On conditions that your expenses exceed your income, you’ll have to revise the budget to cut costs.

If you have money left over, you need to assign it to a category. If you don’t, you’re more likely to spend it on something non-essential instead of putting it toward a long-term goal. This is the essence of zero-based budgeting.

How to Implement a Zero-Based Budget

After you’ve created a budget, you have to start tracking and categorizing your expenses. It’s best to do this every day, or at least once a week because it can get overwhelming if you wait any longer. Find a routine and schedule that’s easy for you to stick to.

If you keep overspending in a certain category, stop and consider if you need to increase the amount in that category – or find ways to remove the temptation.

You should also remember that a zero-based budget is not static and that you should change the budget when necessary. If Christmas is coming up, for instance, you may want to allocate more money in the gifts category.

How Does it Compare to Other Budgeting Methods?

A zero-based budgeting system may require more maintenance and diligence than other types of budgets. Because you have to give each dollar a job, that means you also have to track each dollar that you spend. This can be time-consuming and frustrating.

If you have an unexpected expense in a zero-based budget, you’ll have to revise your budget or use your savings.

“For example, I recently had to take my cat to the vet, and the bill was more than I currently had sitting in my pets category,” True said. “So I moved money from clothing and dining out over to the pets category to cover it for the month.”

Because you have to classify each transaction, zero-based budgeting forces you to confront how much you actually spend. If you keep overspending on take-out or random Amazon purchases, your budget will tell you. You can’t hide your spending habits from a zero-based budgeting system.

Other Budgeting Systems

If a zero-based budget sounds too confusing or difficult to set up, here are some simpler alternatives:

50/30/20 Budget

The 50/30/20 budgeting method, developed by Senator Elizabeth Warren, is a simple budgeting system that works well for beginners.

The method involves dividing your monthly income into three categories: 50% toward needs, 30% toward wants, and 20% toward saving/debt payoff. When you make a transaction, you’ll classify the item as a need, want or saving/debt payoff.

The 50/30/20 system is easy to use because there are so few categories, leaving room for personalization and improvisation. It’s a good choice for someone who wants to budget regularly but finds zero-based budgeting too involved or too restrictive.

Cash Envelope

The cash envelope system involves using physical cash to pay for all eligible expenses. You decide how much to spend and withdraw the cash from your bank account, then you divide it into envelopes labeled with the category name.

For example, if you’ve allotted $500 to groceries, you would withdraw $500 in cash and put it in an envelope marked “groceries.” That $500 is supposed to last you the rest of the month. If you spend it before the month is over and still need groceries, you’ll have to take money from other categories, dip into your savings or find a way to earn more money.

This system is great for people who prefer a more analog approach, or for anyone who needs a little extra help to avoid overspending on certain categories.

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Category: Budgeting

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