Budgeting Archives - Hanover Mortgages

May 5, 2021

Managing Your Money, Together

To learn more about how our Minters are achieving their financial goals, we reached out to everyday Mint users, just like you, to hear their stories. Whether it’s paying off student loans, or working toward buying a home, we’re so inspired by the dedication this community has shown in working toward your goals and dreams.

One of the Minters we connected with is Jordan. He shared with us how he’s used Mint to reach a number of his financial goals. Check out his #EmpowerMint story:

My wife and I have been interested in getting out of debt ever since the day we took on student loans. With the desire to pay those loans off, we strived to learn more about budgeting and personal finance.

As we grew in our journey, there were many financial things we questioned that felt ‘normal.’ We heard so many messages that emphasized the need to have the newest toys to be happy, that having debt is normal, and that most people live paycheck to paycheck. We realized that we didn’t feel comfortable with any of that, and that we found satisfaction in being content with what we have.

Knowing that money issues were often a problem area for couples, my wife and I started using Mint shortly after we got married in 2010 to ensure transparency and partnership from the beginning. We found Mint to be a terrific tool for us to have a complete picture of our financial situation. During this time, I was working full-time and my wife was finishing up her last year in nursing school. Mint was an immediate help in keeping track of where our money was going and in starting budget discussions that have proved to be invaluable in our marriage. It also helped initiate discussions on both near-term and long-term goals, which have been so key in helping us plan both strategically and aspirationally.

As time went on, Mint was instrumental in helping us achieve so many of our goals including:

Paying off student loans

Paying for grad school with cash

Preparing for kids

Starting a 529

Saving for a down payment

Buying a home

Our current goal is to complete our 15-year mortgage in under 5 years. A combination of Mint, aggressive savings, overtime shifts, and side hustles have helped put us in a position to achieve this goal within the next 12 months. Once that goal is complete, we’re excited to have a little fun and celebrate this accomplishment, and then prepare for the next chapter in our financial journey.

In addition to this goal, we also have various net worth milestones we would like to achieve in the next 1-, 5-, and 10-year periods. We are very excited about the concept of financial independence, and would like to be in a position where we have the opportunity to focus our attention on things outside of work, such as further investing in our family and causes that are important to us. With Mint, we can see how the choices we’re making are helping move us closer to achieving these goals.

Today, we check Mint on a daily basis in order to stay on top of our expenses and monitor for any fraudulent activity. Years ago, Mint helped me identify a fraudulent charge almost immediately, enabling me to notify our bank and get the issue resolved. Reviewing our expenses enables us to stay within our budget, catch fraudulent activity, and follow the ‘every dollar’ budgeting rules that have been so helpful for us. In addition, linking our accounts has automated what would otherwise be a very manual and time-intensive process.

I have also loved using the trends feature to have full visibility into exactly how our money is being spent and to help ensure we’re always partnering as we work towards our financial goals, rather than feeling like one person is pulling the other along. We can budget with transparency and not feel any need to hide transactions for personal expenses and rewards or small splurges.

The trends feature has also allowed us to get a sense of what our typical spending has been in different categories. We periodically review our budget, and being able to easily see our historical spending in different categories has helped us set realistic targets, as well as track our progress when we are attempting to change habits. Lastly, being able to see changes in our net worth over the years has been inspiring, as we have been able to see in real-time how decisions to save or forego immediate gratification can have long-term benefits.

Beyond that, we have found a great deal of joy in doing things ourselves, whether it is cooking meals for the week, doing our own car maintenance, or trying to fix something ourselves before calling someone. Additionally, the satisfaction has compounded as we’ve seen that making these choices has helped us not only learn new things, but also in achieving our goals.

Knowing what we know now, we’re really excited to pass these values on to our kids, and we’re happy to discuss them with anyone who asks. Additionally, I can see a ‘life’ after work that involves volunteering in some form in the personal finance field, whether that is teaching folks about budgeting or just encouraging them in their financial journey.

Learn more about security

Source: mint.intuit.com

May 5, 2021

How to Make a Retirement Budget So You Donât Outlive Your Savings

You’ve spent decades in the workforce earning a living, your schedule dictated by the demands of the job. All the while, you’ve been steadily adding to your savings so that one day you could get to this point. Retirement.

Now, there’s no alarm to wake you up in the mornings and no boss to answer to. You can finally get around to crossing items off your bucket list — or simply have the opportunity to catch a midweek matinee movie.

The world is your oyster.

Life may feel more relaxed and carefree, but that doesn’t mean you no longer have financial responsibilities. In fact, now’s the time you might need to be even more diligent about budgeting your money.

Living on What You Have Saved

When you say goodbye to your 9-to-5, you also say goodbye to your regular paycheck. You’ll rely on Social Security benefits, the money in your retirement accounts and any additional income, like a pension, to cover your expenses.

Sticking to a budget is vital so your retirement savings last. That money you’ve squirreled away in your working years has to stretch for decades. Remember, life on a fixed income means there are no bonuses, overtime or promotions to increase your cash flow.

How Much Should You Have Saved?

If you’re already retired or nearing retirement age, hopefully you’ve done the math to determine whether you’ll have enough money to keep you afloat.

One popular rule of thumb is to have 25 times your average annual expenses saved up. But how much money you need in retirement depends on many factors, like your age, where you live and the type of retirement you want to enjoy.

If you want to retire at 60, rent a highrise in New York City and travel every couple of months, you’ll need considerably more money than a retiree who leaves the workforce at 70, lives in a paid-off home in rural North Dakota and just stays home and knits.

There are also a lot of unknowns in retirement — like what medical conditions you could develop and exactly how many years you’ll need your money to stretch.

That’s why it’s important to have robust retirement savings and be cognizant of your spending in your golden years.

How to Make the Most of Your Nest Egg

To make your savings last, you’ve got to be prudent about how much you withdraw each year.

“The gold standard has always been 4%, but new research has revealed a different number,” said Chuck Czajka, a certified estate planner and owner of Macro Money Concepts in Stuart, Florida.

He said withdrawing 3% a year instead gives you a 90% success rate to last through a 25-year retirement.

Keep in mind, once you’ve determined how much you can withdraw per year, you’ll want to divide that amount by 12 to come up with how much to withdraw each month. Czajka recommends withdrawing money from your retirement accounts on a monthly basis rather than taking out all you’d need for a whole year.

Meeting with a financial adviser can help you come up with a personalized plan to fit your individual situation.

“As people approach retirement, they should work with a retirement professional to determine their expected retirement income,” said Lisa Bamburg, a registered investment adviser and owner of Insurance Advantage in Jacksonville, Arkansas.

Two grandmothers dress in funky classes and brightly colored shirts. — Getty Images

Factoring in Income Beyond Your Savings

In addition to the money you’ve saved in your 401(k), individual retirement account (IRA) or other investment accounts, a portion of your retirement income will come from Social Security benefits.

You can start collecting Social Security benefits as early as age 62, but you’ll receive less money per month than if you waited until full retirement age — 66 or 67, depending on when you were born.

If you delay claiming Social Security benefits past your full retirement age, you’ll receive even more each month. However, there’s no additional increase once you’ve reached age 70.

Pro Tip

This calculator from the Social Security Administration gives you a rough idea of your retirement benefits. This retirement estimator is more accurate but requires plugging in your personal info.

In addition to Social Security, you might have other sources of retirement income, like money from a pension plan or an annuity.

A report from the National Institute on Retirement Security found that many retirees don’t have a great diversity in their retirement income, though more income sources provide for a more secure retirement.

The report found less than 7% of older Americans have retirement income that’s made up of a combination of Social Security, a pension plan and a retirement contribution plan like a 401(k). About 40% rely on Social Security alone.

“Social Security benefits typically are not the equivalent of what it takes for most people to maintain their standard of living,” Bamburg said.

The Social Security Administration states its retirement benefits only replace about 40% of earnings for people with average wages — more for low-income workers and less for those in higher income brackets.

How to Create a Retirement Budget

Once you determine what your retirement income will be, it’s time to make your retirement budget.

If you’ve already been budgeting, you’re off to a great start, though your new budget will likely differ from that of your working days.

Take Stock of Your Essential Expenses

First you’ve got to get an overall look at your current spending. If you don’t already have a budget or track your spending, pull out the past several months of bank or credit card statements. Dig up old receipts if you tend to pay in cash.

Reviewing the past three months will help you find what you spend on average, but an even deeper dive — looking at the last six to 12 months — will give you a more accurate picture and will reveal things like your annual car insurance bill and holiday spending.

Group your spending into categories to get a good picture of where your money’s going. You’ll have fixed expenses, like your mortgage, where the cost stays the same each month. Other expenses, like groceries or utilities, will vary. For those, you should calculate your average monthly spend.

Account for Changes

After leaving the workforce, you’ll probably notice some differences in your spending. You’ll no longer have to pay for downtown parking near the office, dry cleaning your suits or pricey lunches with coworkers. Your monthly retirement contributions will be a thing of the past.

However, not everything will be budget cuts. You’ll have to account for new retirement expenses, like health care premiums your employer previously covered. If you’re 65, you can get health insurance through Medicare, but it’s likely you’ll have increased out-of-pocket medical costs as you age.

And of course, now that you have an influx in free time, you can pursue the things you’ve always wanted to do — which means more new expenses.

A group of retired women have fun. — Getty Images

Make Room for Fun in Your Retirement Budget

A big part of retirement planning is determining what type of lifestyle you want to have when you’re no longer at work 40 hours a week.

Do you want to travel? Spend more time with your grandkids? Explore a new hobby? After you’ve covered your essential expenses, how you spend what’s left in your budget is totally up to you.

Don’t forget to include run-of-the-mill discretionary expenses, like cable, magazine subscriptions and dining out. It won’t all be cruise ships and Broadway plays.

If you’re married, be sure to share your vision for retirement with your partner, so you’re both on the same page about how you’ll spend your time and money.

Adjusting Expectations to Reality

As you create your monthly budget, you may discover you don’t have nearly as much money as you thought you’d have in retirement. That doesn’t mean you have to live out the rest of your life kicking yourself for not saving more. You have a few options to get by.

Take another look at your living expenses. Are there any ways you can cut costs? Slash your food spending with these tips to save money on groceries. Consider downsizing to a smaller home.

When it comes to your discretionary spending, look for ways to enjoy a more frugal retirement. Take advantage of senior discounts. Check out free activities at your local community center. Find ways to save money on traveling.

Although retirement means leaving your working days behind, you may find it necessary to pick up a side gig or part-time job to supplement your income. Seek out opportunities that match your interests so it doesn’t feel like work.

Don’t forget to enjoy this new stage of life. You worked hard — you deserve it.

Nicole Dow is a senior writer at The Penny Hoarder.

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Source: thepennyhoarder.com

May 1, 2021

How to Budget for Insurance

The cost of insurance can be a big hit to your personal bottom line. That’s especially true when you consider all the types of coverage you may need to pay for, including auto, health, and life insurance plans. Here are some tips for how to budget for insurance without compromising your lifestyle.

Steps for Budgeting for Insurance

In addition to being legally required in many instances, insurance is often a good investment for your wallet and your peace of mind. The expense of insurance can actually save you money in the long run.

Budgeting for insurance may seem complicated, but it really comes down to two simple actions: First, decide what type of insurance you need. Then, start budgeting for it. Here are five steps for incorporating insurance into your personal finances.

1. Decide how much insurance you need

For each type of insurance you decide to get, you’ll need to decide how much coverage to buy. When it comes to insurance, cost shouldn’t be the only factor in your purchase decision. Instead, think critically about how much coverage you need. If you’re not sure how much insurance or what type to get, consider talking with an insurance agent for advice.

Do you need your homeowner’s insurance to include liability in case someone else is injured on your property? Is term life or whole life insurance better for your situation? Who needs to be covered by your auto insurance?

2. Get quotes from agents or online

Once you know what type of insurance you want and how much coverage you need, get some quotes. Shop around and get quotes from multiple companies. Remember to compare the coverage and not just the premium price—you might find that you’re getting a much better value when paying only a little more a month with one company over another.

3. Find out what the payment schedule is

Discuss the payment schedule before you agree to an insurance policy. It’s common for auto insurance companies to offer a significant discount if you can pay for six months of insurance at a time, for example. Here are some common pay schedule options for various types of coverage.

Home Insurance: Paid annually or biannually, often out of escrow if you have a current mortgage
Car insurance: Paid every six months or monthly
Life insurance: Paid monthly
Health insurance: Paid monthly or via pretax deductions from your paycheck if the coverage is through your employer

Understanding the payment schedule will help you budget for insurance more effectively.

4. Set aside enough money monthly

However you plan to pay for insurance, break the amount down into a monthly budgeted amount. For example, if your home insurance is $900 every six months, set aside $150 every month. It’s much easier to budget for $150 than it is to come up with $900 all at once.

5. “Pay” the bill monthly

If you do pay monthly, go ahead and budget so that you can pay your insurance bill at least a week before it’s due. That leaves you plenty of wiggle room if something ever comes up.

If you don’t pay monthly, act like you do. Move the monthly budgeted amount into a savings account and don’t touch it. Act like it’s not there so you’re not tempted to use it on something else and risk not having the money when the bill comes due.

How to Budget for Different Types of Insurance

Trying to include a large insurance expense in an already tight budget can be difficult. Here are some tips for making various types of insurance potentially more affordable so they are easier to budget for.

Car Insurance

The average American pays around $2,388 per year on auto insurance. But your actual expense can vary widely depending on your age, state of residence, type of car, credit score, and many other factors. Here are some tips for saving money on car insurance.

Increase your deductible. You may need to shell out a bit more in the event of an accident, but you can save a lot of money on your premiums.
Ask about discounts if you’re married, have multiple cars, are buying different types of insurance from the same company, or are a good driver. Some insurance companies also offer discounts for students with good grades.
Lower your liability amounts. This can reduce premiums, but you should ensure that it’s a good move for you financially overall.

Health Insurance

According to numbers from the Kaiser Family Foundation in 2018, the average amount people were contributing to their employer-sponsored health care plans each year was $1,186 for single coverage. You don’t have to pay that much for health insurance, though. Some ways you can save on this expense, especially if you’re purchasing as an individual through the marketplace, include:

Buy a plan with a higher deductible.
Enter all your income data into the marketplace application form to see if you qualify for subsidies or credits.
Apply for Medicaid if you’re eligible.

Life Insurance

The cost of life insurance depends heavily on your age, the type of insurance, and how much you’re purchasing. If you’re young, you might want to buy a whole-life policy that you can pay for now and still have when you’re older. If you’re older, you may want to opt for term life insurance, which is cheaper than other types.

Homeowner’s or Renter’s Insurance

One of the reasons insurance costs might be lower is because the company sees you as less of a risk. Homeowner’s and renter’s insurance may be cheaper for those that invest in security measures such as home security systems.

The Bottom Line on How to Budget for Insurance

You can get discounts and great deals on insurance if you’re willing to do your research. But, in most cases, insurance may still be a sizeable expense. Planning ahead and budgeting every month for these expenses is one of the best ways to ensure you can afford the coverage you need.

And since your insurance costs are sometimes impacted by your credit score, make sure you’re keeping up on all your other bills and reviewing your credit reports regularly.

DISCLAIMER. The information provided in this article does not, and is not intended to be, legal, financial or credit advice; instead, it is for general informational purposes only.

Source: credit.com

April 28, 2021

Hereâs Our Best Advice on Teaching Kids About Money

As parents, it can be overwhelming to think about everything we need to teach our kids — whether it’s showing them how to cross the street safely, introducing them to the alphabet or teaching them to ride a bike.

But unfortunately, money still seems to be a taboo educational topic — even among families.

A survey conducted by The Penny Hoarder found that among those who didn’t talk about money management at home, almost a third earn less than $50,000. But for those who did talk about money, just 18% earn less than $50,000 a year.

And 40% of people who did not discuss finances growing up currently have no savings at all. That figure drops by more than half among those who did receive early financial education at home.

And unfortunately, kids often don’t get to learn money management topics in school, either. Only 21 states require personal finance education in order to graduate high school, according to the Council for Economic Education.

That leaves it up to parents when it comes to teaching kids about money. Discovering how much you know about money — you can test your own knowledge with this handy financial literacy quiz — is an important first step.

But don’t put off teaching your child about finances until you think you have all the answers.

Fortunately, even if you aren’t a financial whiz, we’re here to help so you can look like the expert — at least in your kids’ eyes.

5 Ways to Teach Kids About Money

Teaching your kids about money lessons is essential for raising adults who are comfortable talking about and handling their money

By following these tips, you can create a solid financial foundation for your kids (and you might learn a thing or two along the way).

1. Talk About Family Finances

We’re not suggesting that you study your financial spreadsheets with your kids for a family fun night, but your children can’t get comfortable talking about money until they know you’re comfortable talking about it.

By setting up a consistent family budget meeting — you don’t have to call it that if the b-word scares/bores everyone — your gang can get in the habit of discussing topics like how much money it takes to keep your household functioning and why it’s important to plan for big purchases.

If kids get the opportunity to give their input — and no, they don’t get the deciding vote, even if they outnumber you — it will empower them to take responsibility for how the household spends its money.

It can start with something simple like: We have $50 extra spending money this month. Would you rather go to a drive-in theater or save the money so that next month we could go on a camping trip?

2. Show Them Why Saving Pays

Your child’s method of saving will evolve as they get older, but teaching the basic value of setting aside money will help them avoid the temptation to make an impulse buy each time they have money in their hands.

Use Real Dollars and Coins

Using physical cash and coins is great for helping younger children understand the concept, as it allows them to see how their nickels and dimes (and dollars) can really add up.

You can start out by teaching kids to budget their money — consider using one piggy bank for savings, another for spending and a third for giving.

Open a Bank Account

When they’re ready, you can take the next step by opening a bank account for your child. Many banks have accounts specifically for minors if their parents also bank there, which can help your children save on fees that banks may charge for regular accounts.

Pro Tip

If your child values something more than money — like screen time — use that to help reinforce the savings concept. Give them an “allowance” of minutes that they can work to earn more of.

By bringing them along to a physical location to open their bank account, you’ll help your kids become more comfortable dealing with financial tools and institutions. That way, banks won’t seem as intimidating when your kids open their own accounts as adults.

Teach Them About Compound Interest

Additionally, use their savings accounts as an opportunity to teach kids about compound interest — a basic financial concept that explains how your money can grow by earning interest on the interest.

If the numbers on the account don’t pile up fast enough to impart the lesson (or you need a little more help understanding the concept), check out this video about how compound interest works — it uses candy to teach the concept in a much more appetizing way.

3. Let Them Learn the Value of Their Money

Getting your children to value their money can give them a head start on money management skills.

It starts with understanding where the money comes from (the ATM doesn’t count).

Whether you pay them an allowance, they receive money as gifts from relatives or they’re making their own money (yes, even a lemonade stand business counts), your children will better understand how much a dollar is worth if they learn how to budget their money early on.

Pro Tip

If you have a teen who’s thinking about bigger purchases like a car or college tuition, let them use their summer break to make extra money — check out these ideas for jobs for teens.

Accounting for each dollar allows a child to learn decision-making skills that will prepare them for later in life when they’re parcelling out their paycheck.

Ask them questions like: Is it worth doing an extra chore to have their pick in the candy aisle at the grocery store? By giving them the power to make that decision, your children will be able to apply the same money concepts when deciding as an adult whether it’s worth working an extra shift to buy those new shoes or taking on a side gig to pay to build an emergency fund.

4. Don’t Let Investing Be Only for the Rich

Your kids don’t need to become the next Warren Buffett to learn the value of investing. And they don’t need to be rich to start (and neither do you).

No matter what their age, kids can learn about growing wealth by investing a small portion of their money. We recommend starting with a very small amount since there is, of course, a risk that their investment could lose value. It’s a tough lesson, but one that’s easier to accept if your child lost a week’s allowance rather than a lifetime savings.

And investing doesn’t require a large cash outlay to start, especially if you work with a brokerage that allows you to open a custodial account and invest in fractional shares.

For just a few dollars, your kids can pick a couple of companies that make their favorite toys or movies, then check the stock price each week to see how their investment is faring.

If your family is the competitive type, let every member invest in a different stock and see whose stock grew the most at the end of a year.

5. Don’t Make Debt a Four-Letter Word

You want to protect your kids from all the bad things, so if you don’t talk about debt, they won’t end up in it, right?

Maybe. But probably not. Giving them the tools to understand debt is a better way to avoid bad debt and responsibly handle the good debt that they’ll face in their lifetime.

A woman goes her finances with her child. — Getty Images

Differentiate Good Debt vs. Bad Debt

So how can you teach kids the difference between bad and good debt? Remember these two factors:

What’s the interest rate?
What’s the value of the item they’re going into debt for?

As a general rule, if you’re borrowing money at a higher rate than you can earn by investing, that’s bad. The S&P 500 has a historical average annual rate of 7%, so that’s typically the benchmark experts use for deciding how much of a return you could expert on an investment.

For example, if a credit card charges 18% interest, you can’t reasonably expect to get those kinds of returns on investments, so that’s a bad debt. However, if you get a mortgage with a 3% interest rate, there’s a good chance you could invest that money and make more in interest.

It’s also important to teach kids that bad debt vs. good debt involves the types of things and events that they’d want to use the credit for. Borrowing money to buy a candy bar? Bad debt. Borrowing money to invest in a mower so you can start making money cutting the neighbor’s lawns? Good debt (since they’ll in theory be using that borrowed money to make more money).

Get Real About Student Loans

One of the biggest decisions kids will have to make early on in regards to debt is whether to take out student loans. Start talking to your teens early about how student loan debt could affect their lives after college.

Although it can be a very personal decision, encourage them to consider the costs and benefits of student loan debt. For instance, is the private, out-of-state school with the gorgeous campus worth the debt burden if they’re getting an education degree?

Pro Tip

If the plan is for your teenagers to cover the cost of tuition themselves, help them discover the different options for paying for college — besides their parents and student loans.

Teaching your kids early about how to use debt and credit lines responsibly — perhaps by adding them as an authorized user — will let them see the benefits of building a solid financial foundation.

Start Small

And if all this is a little much for your youngest kids to understand, you can introduce this money lesson with one of these debt free charts.

Start by deciding on a bigger purchase your child wants but doesn’t have enough cash for yet — but small enough that they can “pay it off” in a few weeks or months. Each time they make a “payment” to you, they can color in another section of the chart.

By the end, they’ll have a better understanding of what it means to pay off debt, and you’ll have another piece of art to hang on the refrigerator. Win-win.

TIffany Wendeln Connors is a staff writer/editor at The Penny Hoarder. Dana Sitar contributed to this post.

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Source: thepennyhoarder.com

April 27, 2021

Budgeting Basics: 4 Things Everyone Needs to Know

What is an NFT?

They’ve generated quite the buzz lately, with many tokens selling for millions of dollars. Let’s take a minute to explore more about NFTs.

Full Story

Source: mint.intuit.com

April 23, 2021

âBroke Millennial Talks Moneyâ Review: My 4 Major Takeaways

Many of us have been raised to believe that money and finances are not topics to bring up in polite company.

But frankly, I think it’s time we abandon that line of thinking.

Talking about money with others might feel uncomfortable or awkward, but it can be so beneficial. Financial expert Erin Lowry, the founder of the Broke Millennial series, focused her latest book — “Broke Millennial Talks Money” — on navigating tough financial talks.

I had the opportunity to read Lowry’s book and chat with her via Facebook Live. Here are my major takeaways.

4 Things I Learned from ‘Broke Millennial Talks Money’

If you’re looking for the solution to how to successfully talk to your coworkers, your manager, your significant other, your parents or your friends about money, “Broke Millennial Talks Money” is the book you’ll want to read.

Discussing money can be tricky. Even as someone who writes about finances for a living, I’ve struggled with this in my personal life.

While “Broke Millennial Talks Money” offers much advice you’ll want to bookmark, here are the top four things that resonated with me when reading this book.

1. Talking About Money Has Real Financial Impact

If you’ve gone most of your life avoiding tough money conversations, you may wonder what’s the big deal when it comes to talking about finances with others.

The thing is: Being able to successfully navigate money conversations can have a real impact on your bottom line.

The first chapter of the book leads with a great example. A negotiation expert poses this question: “How much are you willing to pay to avoid an awkward conversation?”

It’s a rhetorical question, but it really gets you thinking. By choosing not to have a conversation about money, you could end up losing out.

For example, if you don’t negotiate salary with your employer, you could wind up being underpaid. If you don’t discuss poor spending habits with your spouse, you might delay reaching big personal goals.

Lowry put it best during our live Q&A. “You can do everything right to build your financial house,” she said, “but if you cannot communicate effectively, if you can’t set healthy boundaries and if you do not know how to engage in these tough financial conversations, it’s going to start to slowly crumble the foundation that is your financial house.”

2. You Can Talk Money Without Giving Exact Dollar Amounts

Sharing how much money you make, how much debt you have or how much you have saved up for retirement puts you in a vulnerable position. The fear of being judged about those numbers is what makes many people reluctant to talk about finances altogether.

But there are ways to discuss money without mentioning any dollar figure. In the book, Lowry says chatting with friends about housing prices or child care costs can lead to bigger money talks in the future. Getting context clues about how a significant other spends money can be helpful to gauge whether you’re on the same page financially.

Another strategy Lowry discusses in the book is using the over/under method when asking someone about salary. Instead of requesting the exact figure, you can ask if they’re making over or under a certain amount.

Talking in percentages is an additional way to discuss money without going into specifics. For example, you can talk about retirement savings as a percentage of your salary.

3. Talking About Money Can Take Practice

Because talking about money can be awkward, you may think it’s better to rip off the Band-aid and put everything on the table in one conversation. However, Lowry says it’s fine to let money talks be something that evolves over time.

When talking to your parents about their retirement plans, for example, you might start off by asking what they’d like their retirement to look like. In later conversations, you can follow up by asking how much money they have saved up and whether they have the proper estate planning documents in place.

Keeping the conversation ongoing can help it feel less uncomfortable over time. If you’re not sure how to kick off a money discussion, Lowry includes dozens of sample scripts.

4. Having a Positive Money Mindset is Key

While it’s very useful to be able to talk about finances with the people in your life, it’s also important to have positive money talks with your inner self.

Negative self-talk can lead to issues like imposter syndrome and scarcity mindset, which can sabotage your pathway to financial success.

“Most people start to have their relationship with money coded between the ages of about 8 to 12… so it can be really hard to undo some of the mindset as you age,” Lowry shared during her virtual chat with The Penny Hoarder.

“It’s just really important for us to excavate all of our deep-rooted feelings about money so that we also can understand how and why we make the decisions that we often subconsciously are making about money.”

Having a healthy money mindset means we’ll make better decisions with our finances and may even feel more confident to discuss money with our loved ones.

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Why I Recommend Reading ‘Broke Millennial Talks Money’

As much as I wish talking about money wasn’t so taboo, the fact of the matter is that too many of us simply avoid talking about money with the people in our lives.

We often pay for that avoidance. We rack up debt trying to keep up with friends. We work at companies for years never knowing about wide pay disparities. We get married without being on the same page financially with our significant other. And we wait until our parents are on their deathbeds to find out if they have a will or life insurance.

“Broke Millennial Talks Money” breaks down how to have these crucial conversations about finances. Almost everyone can relate to one of the situations discussed in this book. Best of all, it’s written from the perspective of someone who wants to help make these money conversations less awkward — and judgment-free.

Nicole Dow is a senior writer at The Penny Hoarder.

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Source: thepennyhoarder.com

April 21, 2021

Erin Lowry of Broke Millennial on Navigating Tough Money Talks

Talking about money with your loved ones can feel uncomfortable. It can be awkward. It can be so difficult that you just avoid bringing up the subject altogether.

But you’re not doing yourself any favors by putting off the conversation. You’ll have a hard time saving up for a house with your partner if you can’t confront each other’s poor spending habits. You don’t want weekly outings with friends raising your credit card debt because you don’t want to mention you’re on a tight budget.

Erin Lowry, a financial expert and founder of Broke Millennial, focused her latest book “Broke Millennial Talks Money” on the topic of navigating tough financial conversations. She recently joined The Penny Hoarder for an online discussion where she shared tips and advice.

The following is an abridged version of that conversation, edited for length and clarity.

10 Questions With Erin Lowry of Broke Millennial

1. Why is it important for folks to be open to talking to people in their lives about money, even when it’s awkward?

You can do everything right to build your financial house, but if you cannot communicate effectively, if you can’t set healthy boundaries and if you do not know how to engage in these tough financial conversations, it’s going to start to slowly crumble the foundation that is your financial house. It’s useful that we learn how to navigate awkward money conversations, because they’re going to keep happening through our entire lives.

2. Why do you think it is so taboo to talk about money?

Judgment. I really think that that’s the word that sums it up. Oftentimes, we are fairly comfortable talking about money with total strangers. I’ve had many — pre-pandemic — fun conversations on the airplane with people about their financial lives, especially once they find out what I do. And there’s no risk there. I’m probably never going to see them again, so people get really vulnerable and open. On the flip side, I’ve had friends and family members not as willing to be open because there is this feeling of: “Oh, am I going to be judged?”

3. What should you do if you want to have a money talk with someone but they’re very hesitant?

It depends on who the person is and why you’re trying to initiate the conversation. There’s a big difference when you and your partner are getting really serious and about to move in together. That’s then a necessity to be having the financial conversation.

But every so often I get messages that are like: “My best friend’s pretty crappy with money and I want to have a conversation with her about how to be better.” Well, listen, if she doesn’t come to you, if she doesn’t ask, it’s — at the end of the day — not necessarily your business to offer guidance and advice.

You really need to allow this to be a very collaborative conversation. Maybe you share something about your own success and that can open the door to being asked questions to initiate more conversation. But sometimes, it is very much a “not your business” situation and if you overstep boundaries, people are also going to get uncomfortable.

4. How do you know when you’re in the right place in your relationship to start talking about finances?

While I would love it if everybody on the first date was super comfortable baring it all, that’s just not realistic. What you can do is to start taking notice of context clues that you’re being given along the way. This includes comments that get made, ideas for how much you should be spending on dates or trips or presents to each other, where that person lives and what kind of car they drive. All of these are giving you signals about how they value things, how they spend their money and either how much they’re earning or potentially how much debt they’re in.

Beyond that basic level, you should begin to get fully transparent with each other about money at the point where you look at that person and think, “I could spend the rest of my life with you.” When you realize that it’s that level of seriousness, you need to have the full conversation. That means sharing all of the information: salaries, credit scores, history of relationships with money, debt loads, investments, absolutely everything. It doesn’t have to happen all in one conversation. It can be an evolving conversation over time.

The other thing I really want you to know about your partner is their triggers when it comes to spending money — what makes them uncomfortable, what makes them want to spend, what their emotional relationship with money is and what they grew up around. Not just what their socioeconomic background was but how was money talked about and treated in their family, because that is eventually going to rear its head in your relationship dynamics.

5. Should you wait to get married when you’re both in debt?

No, not necessarily. My husband had over $50,000 worth of student loans when we got married. You need to understand the type of debt that it is and the laws in the state that you’re getting married.

I’m a big advocate of the prenup myself, so I do think it’s really important to consider going through the prenuptial agreement process. We truly need to reframe how we think of prenups and think of it more like marriage insurance.

A lot of times when I say the word, people get triggered, like: “Oh, you don’t love or you don’t trust your spouse.” No, that’s not true. Everybody getting married has a prenup. It’s the default laws of your state. If you create your own prenuptial agreement, you’re basically creating a slightly different system that you feel would be a fair and equitable division of assets or any debt.

Now all that being said, if you do have debt, depending on state laws and when the debt was created, you’re not necessarily liable for your spouse’s debt. I do think that if you are going to wait, it could be a decade or more before you’re then able to get married if you’re waiting for someone to be debt free.

And the other thing is I don’t think of debt as a red flag for a relationship. What is a red flag is how the debt is being handled today. If there’s credit card debt from five years ago, maybe there was a medical emergency, maybe something happened or maybe they just weren’t good with money at that phase in their life. But now they have a plan and they’re paying it off. If instead there’s a continual cycle of creating debt, that is a red flag.

6. What advice would you give about how to compromise in a romantic relationship before things lead to a bigger money fight?

One of my favorite pieces of advice that an expert told me when I was writing “Broke Millennial Talks Money” was that it’s okay to just let a person take the win sometimes. Say you and your husband want to buy a couch. You want to spend $3,000, and he wants to spend $1,000. Well, $2,000 would be the compromise, meeting in the middle. Instead, it could be that you get to spend the $3,000 on the couch and then at another point, he’s going to get to take the win on a money conversation.

The other thing, too, when you’re getting into a fight about money — especially with purchases that you want to make — is to come back to the original goals that you have set. And if you haven’t set any as a couple, take a minute to do so.

Pro Tip

Develop strong money goals by making them SMART goals.

Your goals are the north star of your entire financial plan. Anytime there is a big debate about how you’re going to spend money, you need to look at how this is going to have a ripple effect on everything else you want to achieve and that can help solve the problem.

7. Do you have any advice for people on navigating cultural norms when talking about money with family?

I do think it’s really critical that we start to have conversations early on about what is the expectation — particularly if you are living in America and you’re married to somebody who has a different cultural expectation of how to handle aging parents or a dependent sibling or a sick relative.

Also, you need to talk to your parents. You need to ask them early on what they want. For some parents, it’s going to be obvious that they expect to live with you in their later years if that’s your cultural norm. You probably have an idea that’s the expectation, but it’s still good to have a chat about it.

For others, your parents might tell you don’t worry about it. Just because they tell you that, doesn’t mean you’re not going to worry about it. I think a really easy way to turn the conversation around is to ask about what they see their retirement looking like. Over time though, it does need to start to become more of a real conversation about the finances.

8. How do you bounce back from a falling out with someone about money?

I think that depends on how necessary — and this is going to sound a little harsh — it is to bounce back from it. What one of the financial therapists in the book said, pertaining to friendship dynamics, is that not everyone is a lifelong friend. I do think that an important thing to consider is that there are friends who will be close friends with you only through seasons of your life. That doesn’t mean that anytime there’s any difficulty or strife, you say, “I’m out!” But it is an important thing to keep in mind.

9. How do you advocate for yourself when you and a friend have different values when it comes to spending money but you want to do things together?

Provide an explanation. It really does help provide context for why you keep saying no or keep pushing back. Now, just because you have different values doesn’t give you the right to belittle their values.

Let’s use an example of going out to brunch. Bottomless brunch is going to cost like 50 bucks and you don’t want to spend that much. You can say, “I really want to spend time with you but I’ll be honest, I don’t want to pay bottomless brunch money right now because I am trying to [insert thing here]. How about we grab a bagel and go for a walk in the park? Or how about you come over and I’ll cook us some brunch?” Provide some sort of alternative solution for the fact that you’re saying no.

Pro Tip

This list of 100 free things to do can help you find an activity to do together that won’t cost any money.

Now remember, they’re free to do whatever it was they initially planned to do. Just because you’re removing yourself from the equation doesn’t mean that they have to adjust plans. Providing that alternative, however, maybe you can just set up plans for another time.

Another thing you can do is join later. I really love this for birthday dinners and splitting the check. You could join for dessert after or for a drink after. You’ll miss that whole part that’s going to cost the most amount of money. Just tell your friend you’re going to do that ahead of time.

10. Do you think this experience of living through the pandemic will help people become more comfortable talking about money?

I really hope so. I do feel that we certainly have had an unprecedented experience and unlike other recessions prior, most people did not have any level of personal culpability for what happened to them.

You could have had your financial house in totally great shape. You could have had six to nine months — even a year’s worth of emergency savings — but if you worked in an industry that got totally shuttered during the pandemic, that’s not on you.

I do think that, hopefully, people will feel slightly more comfortable having conversations about getting into credit card debt or being behind on bills or their credit score taking a hit because truly it wasn’t their fault in a lot of ways. So that might give us the flexibility to have less judgment wrapped up in some of these financial conversations.

Nicole Dow is a senior writer at The Penny Hoarder.

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Source: thepennyhoarder.com

April 17, 2021

Mint Success: Transitioning from College Kid to Young Professional

Photo Credit: Lawrence Peart

“Mint is so crucial to my personal finance I honestly have no idea where I would be without it.” That’s what Austin, TX photography consultant Lawrence Peart says when reflecting about his transition from college student to young pro, financially speaking. His experience so far shows that it is possible to graduate from college without debt, and to adjust to the higher cost of living as a young professional, while also saving money for your future.

But Peart stands out from the crowd. We looked at Minters’ numbers to see how college students and recent graduates use their money or handle debt, and found that there’s a big shift in many categories from ages 18 to 25 – incomes increase, spending categories fluctuate, and debt repayment – well, you know how that goes. Student loan payback time for many!

College Grads Make More Money…

Depending on the field that graduates enter, incomes can be across the board, but a majority of our Mint users in that age range earn between $25K and $50K annually.

…and Spend More Money!

The newfound earnings may seem like a lot of money to a recent grad but, when faced with the sticker shock of life outside school, the typical Mint user experiences an accompanying increase in spending on rent, entertainment, and education related expenses – mostly student loan repayment. That bill averages about $300 per month.

Most grads continue to use credit cards after graduation. In fact, their card charges increase from $1,200 to $1,900 on average. But most of them don’t pay finance charges, which means these savvy Mint users are the ones who pay their balances by the end of the month. This explains why Mint’s young users have an average credit score of 690, considerably higher than the national average of 630 for the same age group*.

Good work, Minters! But while you’re paying off your college debt and adjusting to life on the outside, don’t forget to save for your future. Only 2% of college students have significant long-term savings, and that number only goes up to 7% among college graduates 25 and under. It might seem daunting to set aside those crucial dollars, but that money will grow over time and make your older self thank your younger self.

Moving Forward

Peart is in that 7% – he follows the mantra “Save, invest early and often, reap the benefits later.” With a goal to live debt-free and retire in his 20’s (he just turned 26), Lawrence uses Mint to budget and find extra money to sock away for the future. While his income falls in the same range as the majority of recently graduated Mint users, his experience both during school and in the few years since graduation defies many of the statistics, so naturally we asked him all about it.

What kind of shift in spending did you experience between college and post-college life?

I think it might surprise most people to hear that I spend far less money now than I did in college. Once you start earning an actual income and developing a clearer sense of your relationship to money it becomes much easier to save, and feels more rewarding to do so. While in school I never had much cash, so in a way it had less value and I spent it more freely. You expect to be broke in college, which becomes a self-fulfilling prophecy, and unless you’re careful that can then extend past your college years into your working life. I even had a little saying for it: the closer I am to zero, the less I have to lose.

The average college graduate spends about $300 per month on student loan repayment. What’s your bill?

$0. My experience paying for college was a mixture of some good fortune, a little bit of privilege, and tons of hard work. I chose a public school in a reasonably cheap city, I received decent grants, I applied for every scholarship available to me every semester (and made sure I had the grades to qualify) and for all but my sophomore year I worked at least part-time to have a source of income. I graduated broke, sure, and maybe missed out on some fun things here and there, but at least I didn’t owe anything.

What was the most shocking financial realization you experienced once you left college?

That you can save quite a bit of money not doing the stuff everyone seems to think you have to be doing. If you don’t buy fancy clothes, go out for drinks every day, feel the need to keep up with the newest phone every 6 months etc., all of that extra cash starts to add up.

What are your thoughts about retirement savings, and what do you practice?

I half-seriously tell myself that I want to retire in my 20’s. I don’t mean “retire” in the way most people would think of retirement, I always want to be creating and applying myself to something, but I’d like to have the ability to not work for long periods of time. To be able to wake up one day in the near future and say “I am comfortable not working the rest of the month, time do something creative” and not feel guilty about it. That’s the goal.

I set up a Roth IRA almost immediately upon getting sustained income and contribute the full amount each year into basic low-cost index funds. I admire my parents in a lot of ways and don’t question their decisions and what life events influenced them, but while they are both doing fine in retirement age they are doing so without any long-term retirement account holdings. It might be hard to imagine 40 years down the line, but the math regarding investing when you’re young is compelling.

How does Mint help you stay on track?

I worked for about nine months before I came across Mint, and even though I thought I was being good with my money, you truly have no idea until you see it categorized and laid out in front of you. Those little purchases each day, the subscriptions, the monthly payments, it all adds up fast. You might think you’re saving money, but you’re not. It really does take hard work. Mint makes it easy, and I’ll tell everyone who listens: it’s even made paying bills fun. The first week of each new month is like Christmas. I get paid, I pay off my recurring expenses and then allocate how much I want to save that month before organizing more flexible costs like groceries, entertainment, etc. I follow one maxim above all else: you don’t save what is left after spending, you spend what is left after saving.

You can be like Lawrence

Does the idea of watching the savings pile up get you excited? Try setting up a goal with your Mint account and making that progress bar move!
We would like to hear your story! Contact us at Editor_Mint@intuit.com with “Mint User Story” in the subject.

Kim Tracy Prince is a Los Angeles-based writer who is pretty jealous of Lawrence’s early progress. It took her many years to pay off her student loans. She celebrated by finally framing her diploma.

*Source: https://www.creditkarma.com/trends/age

Learn more about security

Source: mint.intuit.com

April 16, 2021

Cord-Cutters Guide: The Best Alternatives to Cable TV

Maybe you first heard the term whispered in hushed corridors at work or in a back-alley near your house, but now there’s no escaping the fact that “cord cutting” has gone mainstream. And it’s no wonder why. The monthly cost of cable TV in this country now averages more than ever before: a whopping $123 per household. But thanks to à la carte streaming services and the disruptive technology that’s taken over the living room in recent years, it’s easier than ever to save serious cash. Cancel your cable subscription, and join the growing ranks of cord-cutters streaming their shows.

Four out of five Americans still pay cable companies for hundreds of channels they’ll never watch. You don’t need to be one of them. Here’s what you need to know about seeing the shows you love without paying an arm and leg.

Cord cutting 101

Although millennials are leading the charge in the cord-cutting movement, anyone with a decent Wi-Fi connection can take advantage of the many available cable TV alternatives. And the soaring number of streaming services on the market means you can watch just about any TV show and sporting event in existence without going through a cable company.

If you watch a lot of shows on your local stations—think ABC, NBC, CBS and FOX—you can tune into them for free. These channels are publicly broadcast and the signals are easy to pick up in most metropolitan areas. All you need is a good HD antenna, which you can score for under $40 on Amazon. Depending on the terrain in your area and your proximity to TV towers, one type of antenna might be better for you than another. But once you’re set up, you’ll be able to enjoy the latest episode of Modern Family with the same crisp picture you were getting through your cable company, minus the monthly bill.

Living the stream

Unless you’ve been held captive in an Indiana bunker for the past 15 years, you likely already know about the three biggest names in streaming: Netflix, Hulu and Amazon Prime. Each of these services lets you watch hundreds of movies and television shows plus tons of original content you won’t find anywhere else. Both Hulu and Amazon offer a large selection of TV shows—with new episodes available a day after they air on cable—while Netflix has a vast library of movies and binge-worthy original series awaiting your eager eyeballs.

Aside from those streaming behemoths, an increasing number of cable channels have launched their own independent services. HBO Now is at the high-end of this category, but many stations offer the ability to stream their shows for free, albeit with a few commercial breaks. And then there’s Dish Network’s newly launched Sling TV service, which streams a variety of live cable channels, including ESPN, for $20 per month.

Plus, there are more niche streaming services, such as MUBI, which focuses on independent and foreign films, and the forthcoming FilmStruck platform, which will soon showcase an extensive library of cult-classics and art-house flicks.

With the exception of Sling TV and HBO Now, the latter of which is available for $15 per month, prices for these services start at under $10 apiece. It’s easy to mix-and-match providers as none of these companies require contracts. You can even share login info with a friend down the block or sibling on the other side of the country, without worrying about anyone getting on your case.

Think outside the (cable) box

A ton of devices are available to help you cut the cable, with more tools debuting all the time. As of now, there are basically two routes you can choose: streaming sticks or streaming boxes.

Streaming sticks, which include the Chromecast, Amazon Fire Stick and Roku Streaming Stick, aren’t much bigger than a pack of gum, and they plug right into your TV’s HDMI port. You can then use your smartphone, laptop or—in Roku’s case—a remote control to launch hundreds of steaming apps. These devices are available for well under $50 apiece, and, on their own, don’t require a monthly fee.

Streaming boxes, on the other hand, such as Apple TV, Android TV and the Roku Player, as well as newer Xbox and PlayStation video game consoles, offer all of the advantages of the streaming sticks, plus the ability to install more apps. These boxes vary in price, but again, aren’t tied to any monthly fees. For serious TV watchers interested in cutting the cord, these boxes are the way to go.

Breaking the news

When you’re ready to cut the cable, invest the money you save on boosting your internet speed. To get the highest quality picture with the least amount of buffering, you need a connection that’s at least 10 Mbps.

Another way to shave a few bucks off your monthly bill is to shell out some money for a modem of your own. Many cable companies charge a monthly fee for renting a modem, but in the long run, it’s far more economical to buy one outright.

Are your utility bills bogging you down? Embrace the cord-cutter lifestyle and never pay for cable again. Not sure where you stand financially? Sign up for a free Mint.com account and get an instant overview of your money. See you on the couch!

List of cable TV alternatives

Streaming service	Monthly fee	Known for
Netflix	$7.99	TV shows, movies, and Netflix exclusives
Hulu	$7.99	New TV episodes a day after they air on cable
Amazon Instant Video	$8.99	Hundreds of old and new movies and shows
HBO Now	$14.99	First-run films, Game of Thrones
Showtime	$10.99	Original series (Homeland, Masters of Sex)
STARZ	$8.99	Modern movie library and exclusive originals
CBS All Access	$5.99	7,500 episodes of classic and new CBS shows
MUBI	$5.99	Cult-classics, foreign and independent films
Sling.TV	$20	Dozens of live cable channels, including ESPN
Crackle	FREE	Funny, feel-good shows and movies
FilmStruck	TBD	Turner Classic Movies and Criterion Collection

Streaming sticks and boxes

Device	Price	Known for
Chromecast	$30	Stream video from your laptop or smartphone
Roku Streaming Stick	$50	Portable tool with tons of popular apps
Roku Player	$50-$100	Enhanced picture quality, solid remote control
Amazon Fire Stick	$40	Best for users in the Amazon ecosystem
Apple TV	$149	Easiest way to play iTunes purchases on your TV
Android TV	$100	Access Android apps, Chromecast built-in
XBOX One or PlayStation 4	$200-$400	Play games, some streaming services built-in

Learn more about security

Source: mint.intuit.com

Living on What You Have Saved

How Much Should You Have Saved?

How to Make the Most of Your Nest Egg

Factoring in Income Beyond Your Savings

How to Create a Retirement Budget

Take Stock of Your Essential Expenses

Account for Changes

Make Room for Fun in Your Retirement Budget

Adjusting Expectations to Reality

Steps for Budgeting for Insurance

1. Decide how much insurance you need

2. Get quotes from agents or online

3. Find out what the payment schedule is

4. Set aside enough money monthly

5. “Pay” the bill monthly

How to Budget for Different Types of Insurance

Car Insurance

Health Insurance

Life Insurance

Homeowner’s or Renter’s Insurance

The Bottom Line on How to Budget for Insurance

5 Ways to Teach Kids About Money

1. Talk About Family Finances

2. Show Them Why Saving Pays

Use Real Dollars and Coins

Open a Bank Account

Teach Them About Compound Interest

3. Let Them Learn the Value of Their Money

4. Don’t Let Investing Be Only for the Rich

5. Don’t Make Debt a Four-Letter Word

Differentiate Good Debt vs. Bad Debt

Get Real About Student Loans

Start Small

4 Things I Learned from ‘Broke Millennial Talks Money’

1. Talking About Money Has Real Financial Impact

2. You Can Talk Money Without Giving Exact Dollar Amounts

3. Talking About Money Can Take Practice

4. Having a Positive Money Mindset is Key

Why I Recommend Reading ‘Broke Millennial Talks Money’

10 Questions With Erin Lowry of Broke Millennial

1. Why is it important for folks to be open to talking to people in their lives about money, even when it’s awkward?

2. Why do you think it is so taboo to talk about money?

3. What should you do if you want to have a money talk with someone but they’re very hesitant?

4. How do you know when you’re in the right place in your relationship to start talking about finances?

5. Should you wait to get married when you’re both in debt?

6. What advice would you give about how to compromise in a romantic relationship before things lead to a bigger money fight?

7. Do you have any advice for people on navigating cultural norms when talking about money with family?

8. How do you bounce back from a falling out with someone about money?

9. How do you advocate for yourself when you and a friend have different values when it comes to spending money but you want to do things together?

10. Do you think this experience of living through the pandemic will help people become more comfortable talking about money?

Photo Credit: Lawrence Peart

College Grads Make More Money…

…and Spend More Money!

Moving Forward

*Source: https://www.creditkarma.com/trends/age

Cord cutting 101

Living the stream

Think outside the (cable) box

Breaking the news

List of cable TV alternatives

Streaming service

Monthly fee

Known for

Streaming sticks and boxes

Device

Price

Known for

Here are 5 tips to get you started: