Posts

Are Financial Advisors Worth it for Medium Income Families?

, , ,


Financial advice is mostly regarded as a service needed by the affluent in the society. The argument being that with more money, one needs guidance on how and when to invest. However true that might be, it’s good to consider that even people with low to medium incomes have to contend with college fees, mortgages and eventual retirement among other financial obligations. So,

How much does Financial Advice Cost?

The input that financial advisors bring to the table does not come cheap. The usual fee ranges from 1% to 2% of a client’s portfolio, these kinds of charges works best for people with established wealth and assets north of $250,000. To cater for the middle class, financial planners charge hourly fees depending on the complexity of the service required.

It’s hard to quantify financial advice because it is difficult to standardize its pricing. Some advisors charge a minimum or an initial set up fee that can be as low as $70 for budgetary advice.

A sound financial or investment plan can go for up to $400 hourly. There are firms or planners who charge a fee for ongoing service, this can be as low as $20 monthly. Others will charge a retainer and an annual fee of $600.

Middle income earners can also take advantage of Digital Advisors; these are websites that offer financial advice at a fee. Routine monetary questions are answered for a couple of dollars. On the other hand, queries that require a great deal of effort are charged hourly at between $150 and $250 per hour.

Importance of Financial Advisors

While middle income earners may not have vast amounts to plan for, it doesn’t make their financial decisions less sophisticated. They have to manage debts, decide on new purchases and plan on new investments. All this has to be done within the time of probably working two jobs or racking up overtime to boost the take home. This is where financial advisors come in.

  1. Steering a financial plan

They help you keep track of how and where your money is being invested. It is within their expertise to predict how such investments may change with time. They get to come up with changes that can be done to your portfolio so as to position yourself better.

With complete knowledge to your current expenses and income your advisor can keep you from overspending on a given investment. This allows clients to free more of their income to go towards saving for future expenditures like college fees or a new car.

The investment market is riddled with new and never ending opportunities. Some are good but not all amount to profits. A financial advisor helps in sifting through the buzz to keep clients off bad investments like pyramid schemes that plague the middle class.

  1. Protecting Client’s Investments

Every investment comes with a risk. Fidelity postulates that a safe investment is one which strikes a balance between different classes of assets. These includes bonds, cash, mutual funds and stocks. Advisors help clients to pick the right mix of products, this in turn diversifies their portfolio to minimize individual risks.

  1. Ensuring Investments Follow Regulations

When it comes to financial matters, it’s not easy to keep abreast all the dos and don’ts contained in fine print. Advisors helps in navigating through the rules and regulations that govern different aspects of investments.

Apart from ensuring the client’s money is safe, the rules also lay out the expected taxation on different ventures. A planner will assist in choosing the most tax efficient financial products.

Some financial matters may input from not only a financial planner but also attorneys. Without a qualified advisor to bring this to a client’s knowledge, they may find themselves in the murky waters of litigations all in the name of healthy finances.

In conclusion, everyone needs some financial advice at one point or another. It may be in form of a long-term rapport or independent sessions. This requires you to incur some cost. As a medium income family, you may not afford to have an on-going relationship with a financial advisor but you can get some much needed advice which can be accessed in sessions either online or in person.



Source link

Financial Advice for Recent Graduates

, , ,


The feeling that comes with graduation is a bit hard to describe; it’s a peculiar combination of relief at the end of exams, excitement about the future, pride in your accomplishment, and dread of the real world knocking down your door.

But, dreadful or not, the real world does come a-knocking, and your finances are one of the first places you’ll likely feel the effects. Not only will those ever-present student loans soon come due, but you’ll also need to start building credit and saving for retirement.

Unfortunately, only a few schools teach its students how to actually navigate the real world. So, we’ve put together a few key pieces of financial advice to help you get started on the right path.

Always, Always, Always Pay On Time

The first, most important rule of personal finance is to always pay your bills on time. Whether it’s a credit card statement, power bill, or car payment, you need to make at least the minimum required payment before the due date.

With typical late fees coming in north of $30 a pop, the cost alone is a good reason to pay on time. But, late fees aren’t the only reason to avoid late payments; your credit score is also strong incentive.

Your payment history is worth up to 35% of your FICO credit score, and every late payment reported to the credit bureaus can cause your credit score to drop by dozens of points. Bad credit not only makes it harder to qualify for new credit, but can also mean higher interest rates and fees, as well.

And even one reported delinquent payment can cause years of damage; up to seven years, in fact, as that’s how long delinquent payments live on your credit report.

Build a Budget

While everyone should put together a proper budget, it can be especially important when working with limited income and/or trying to pay down debt (such as student loans).

A detailed budget will be the most effective, but even a rudimentary budget outlining savings, bills, and discretionary funds can keep you on track and ensure you have enough money to cover your necessities every month, which will help keep you from accumulating debt.

Along those lines, a key part of that budget is the savings portion. Before you put any money toward extraneous expenses, like new clothes or meals out, you should pay your savings account.

For the best results, treat your savings like a bill that must be paid each month before you can have fun. You’ll thank yourself in an emergency when you don’t need to take on expensive debt to cover an unexpected expense.

Make More Than the Minimum Payment

Although your credit card statement typically comes with a minimum required payment, don’t assume that’s all you should pay.

Minimum payments are purposefully designed to encourage you to take as long as possible to repay your balance, because the longer you take, the more interest you pay, especially with one of the many high-interest credit-builder cards. Save yourself the interest fees and pay as much of your balance as you can afford to each month.

Look Before You Leap

A common financial nightmare is being stuck with a huge bill because you didn’t carefully read through your credit card or loan agreement before signing that dotted line (or clicking that “apply” button). While you may not need to read every word in the fine print, you should always check through all the terms of a financial agreement,

This can be particularly important if you’re taking advantage of any special promotions, such as an introductory interest rate deal. While you can find lists of cards offering 0% APR deals, these promotions can vary in everything from the length of the offer to which types of transactions qualify for the lower interest rate.

Also, watch out for special financing deals that operate on deferred interest models. With deferred interest, you need to pay off your entire financed amount before the end of the promotional period or you’ll be charged interest on the full amount, not just whatever is left.

Take Advantage of Automatic Payments

Given that the most important rule is to always pay on time, you should do everything you can to stack the deck in your favor here. So, if you’re at all prone to forgetting payments until the last minute — or, worse, entirely — you should probably look into setting up automatic payments.

Most banks will allow you to set up regular payments from your checking or savings account, with the ability to set your chosen due date and even the amount. Of course, you’ll need to be diligent to ensure you always have enough money in your account to cover any automatic payments.

Analyze Your Bills

The last piece of advice for graduates entering the real world is something often overlooked in the era of digital banking, but vitally important nonetheless: always look over your bills and credit card statements.

Given that few people keep and balance checkbooks anymore, the only way you’ll know if unauthorized charges have been made is to go over your accounts yourself each month.

If you do find charges you don’t recognize, be it a utility bill or credit card statement, be sure to notify your provider at once. Most credit card companies offer $0 liability policies for unauthorized charges, and the law also protects you from fraudulent charges, so speak up to avoid being on the hook for purchases that you didn’t make.

 

Carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.





Source link

Overcoming Financial Worries for Millennials

, , ,


Financial stress is a common thread through all generations; however, millennials are feeling extra pressure due to skyrocketing student loans, a competitive job market, and high cost of living. Despite this set of challenges, there are some ways to whip your finances into shape. Let’s take a look at some of the methods this generation can use to relieve financial anxiety.

Create a Budget

Rather than seeing a budget as rigid and limiting, think of it as GPS for your money. If you have a destination (like saving for a special occasion), a budget will map out what you need to get you there.

Not sure where to start? Search online for budgeting templates, and either use one you find or leverage it as inspiration to create your own with software like Microsoft Excel. It doesn’t have to be fancy, but it does need to be honest and realistic. Looking at the hard numbers might be uncomfortable, but remember that it’s part of building the road to your financial destination.

As any good GPS will tell you, sometimes you have to recalibrate. Your budget is a living thing that evolves with your income and priorities. So it’s good to revisit it regularly, e.g. quarterly, after compensation increases, etc., and adjust allocations as needed. And when you’re ready to level up, check out tools like Mint. It’s free and connects directly to your accounts to display your spending habits in easy-to-understand charts, allowing you to see patterns and make informed financial choices.

Trim Expenses

In comparison to older demographics, millennials annually spend $2,300 more on things like groceries, gas, restaurants, coffee, and cell phones. When you have a smaller budget to work with, it’s vital to focus on areas that matter most — think of these as must-haves. If having a nice cell phone or dining out with friends is important, prioritize funds to those areas and scale back on nice to haves like taking cabs, cable TV, or concert tickets, etc.

Baby Steps

The tiny hinge swings the big door. Translation: Small things accumulate over time to become impactful. There are countless ways to achieve this, such as:

  • Saving Change: Collect your loose change in a bottle and cash it in for paper money. If you prefer a digital approach, NerdWallet breaks down apps like Acorns or Digit.
  • Pay Yourself First: Build a reserve with automatic transfer to your savings account. You can set this up with your bank and choose the cadence and value of each transfer. Even starting with something small, such as $25 every pay period, will grow over time if left untouched. Added bonus: You’ll have a emergency stash in case you truly need it, providing more comfort and control in your financial life.
  • Switch to Cash: Credit cards are convenient, but if you struggle to pay off the full balance every month and are getting deeper into credit card debt, consider using cash as your primary form of payment choice you whittle down balances. If you have a credit card, commit to only using it for true emergencies. For those times when you need a little inspiration, here’s one about a Millennial who paid off her $8,000 credit card debt in 90 days. It can be done!

Becoming a stress-free, financial ninja means protecting your assets. There are many ways to do this, including using credit score calculators to see your overall rating and, in some cases, working to repair your credit to get back in good standing.

 

Carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.





Source link

Financial Spring Cleaning 101 – Lexington Law

, , ,


Guest Article by Alayna Pehrson- Content Management Specialist at BestCompany.com

Spring is a season of new beginnings. The warmer temperatures can motivate us to freshen up our homes with a good, deep spring cleaning. But while you’re putting your house in order, don’t forget that spring can also be a great time to get your finances in order. Here are some ways to get your financial spring cleaning off to a good start:

Brighten up your budget

Your budget may be suffering a bit from your winter spending. You should consider taking a good, hard look at your budget to ensure it is still keeping you on track. Major holidays like Thanksgiving, Christmas, and New Year’s may have led to overspending on your monthly budget allowance. If so, spring may be a great time to brighten up your budget before the summer months come around, especially if you have a summer vacation or other summer event planned. It’s best to calculate how much you spent the previous month and what you may have overspent on. Once you figure that out, you should consider what you can save on, how much per month you are adding to your savings, and how much you plan to spend on your summer vacation. Additionally, you should also take life changes and other things that may have affected your budget into consideration when you reexamine your current budget.

Tidy up your credit report

Your credit report is a good place to start financial spring cleaning. Check your credit report on a regular basis as bad credit can definitely sneak up on you. If you know you have bad credit, consider what options you have to either start building good credit or fixing your credit. Keep in mind that your credit options may depend on your current situation. Are you looking into buying a home soon? Are you changing jobs? If you need good credit in the near future, then hiring a professional credit repair service may be your best option.

Refresh your financial goals

Although many people set financial resolutions at the beginning of the year, most people either stray from their goals or they need to set new financial goals after just a few months due to changing circumstances. Maybe you want to save a certain amount of money or maybe you want to get on track to pay off past debt. No matter what your financial goals are, it’s important that you revisit them on a regular basis and make sure that you are on a stable financial path. Your goals may change depending on your current circumstances and your future plans. Maintaining your financial goals list can help you obtain a bright financial future.

Sweep away bad financial habits

Bad financial habits, even small ones, can really hold you back. For instance, you may have developed some bad financial habits, like failing to check your credit report or not paying bills on time, without much thought. Bad financial habits can be easily formed if you’re not careful. To get rid of your bad financial habits, first make a list of every bad habit you have. If you can’t identify your bad financial habits, then try talking to a friend or family member who knows you well. They may have some insight, especially if they know how you handle your finances. You could also try looking at your past expenses, your credit history/report, and your other financial accounts to see what habits are holding you back. Once you find out what bad habits you do have, set goals to eliminate these bad financial habits for good.

Take out the trash

Have you noticed overwhelming piles of old documents laying around your house that you no longer need? Having these old, useless documents in your possession can put your at risk of identity theft, not to mention clutter up your office or living space. Before you simply toss these documents with your other trash, you should shred them. Shredding these documents will help stop anyone from easily obtaining your important information (like social security numbers, date of birth, tax information, etc.). You should also shred any old mail that you have around the house for the very same reasons.

Fight the potential identity theft mess

Identity theft is a growing threat that torments people every day. If you are accessing your various financial accounts for your spring cleaning, consider changing your passwords. Using the same passwords for each account and having weak passwords can really put you and your finances at risk. To avoid cleaning up a big identity theft mess this spring, you should consider investing in identity theft protection services. These services will monitor your accounts around-the-clock and will send you alerts if there is any suspicious activity taking place. Another bonus is that some of these services also offer identity restoration and recovery plans. Overall, taking the proper security measures can help you avoid becoming a victim of identity theft.

Clearly, financial spring cleaning can be worthwhile, especially when striving to keep your finances on track, getting your credit up to speed, and helping you prevent identity theft. It can also help you stay in tune with your financial habits and stay motivated. So, the next time you decide to clean your home, try taking some time to clean up your finances as well.

 

 

You can also carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.





Source link

5-Step Recipe for Financial Success

, , ,


Everyone has different definitions of financial success. For some, it may mean fancy cars and a three-car garage. For others, it could simply mean lowering their debt, paying their bills on time, and improving their credit score. Across the board, it generally means a sense of security and peace of mind.

But the question is, how do you get there? Whatever your specific financial goals, the best way to achieve them is with a plan. So if your goal is financial success, try this simple “recipe” to reach it:

1.   Create a budget

You can’t improve your finances without knowing where you currently stand. From there, you can start setting realistic goals and create a roadmap on how to reach them.

Start your budget by taking a cold, hard look at the numbers, including, your income, your debt, and your other expenses. Figure out where you can start cutting down. Then, determine your goals: what do you hope to achieve and by when? Map out the specific steps it’ll take you to get there.

The end result of any budget should be living within your means—not spending more than you’re earning. But a good longer-term goal would be to save up to 20 percent of your income each month.

2.   Stay on top of your bills

Falling behind on your bills is the fast track to credit disaster. If you’re making late payments on any of your bills, whether credit cards, utilities or your mortgage, you could be penalized with high late fees. Worse, you could be dramatically harming your credit score. If you have a 680 credit score, even a single late payment could result a dent of up to 80 points. If your score is 780, that could be as many as 110 points. That’s not anyone’s definition of financial success.

3.   Lower your debt

If you’re only paying the minimum each month on your credit card debt, you’re throwing away money on high interest rates that could otherwise be put towards furthering your financial goals. Plus, if your credit utilization rate consistently exceeds 30%, you’re doing harm to your credit. Paying down your debt is one of the simplest ways to lower your credit utilization. Additionally, making dents in your debt looks good to lenders, so if your version of financial success looks like owning a home or a car, you’re more likely to be approved for those loans.

4.   Start saving

According to a 2016 GoBankingRates survey, 69 percent of Americans have less than $1,000 saved in case of an emergency. A 2015 brief from Pew Charitable Trusts found that 60 percent of U.S. households dealt with a “financial shock” (median cost: $2,000) over the course of a year. Half of families struggled to “make ends meet” following these crises.

Take all of that into consideration and you get a good sense of why an emergency fund is so important to financial success. Make your emergency fund a priority and start saving today.

5.   Make plans for “Future You”

Plans for today are important, but so are plans for tomorrow. If you’re not planning for your retirement, you’re not setting yourself up for success. If you have the option, you should contribute to your employer-sponsored 401(k). But even if you work for yourself, or your company doesn’t offer that benefit, consider starting an IRA. Financial success is about the long game. Your future self will thank you.

Whatever financial success means to you, it’s important to have a plan to get there. If you’re not sure where to start, a credit repair company can help. Contact Lexington Law today to find out how we can assist you in reaching your financial goals.

You can also carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.





Source link

5-Step Recipe for Financial Success

, , ,


Everyone has different definitions of financial success. For some, it may mean fancy cars and a three-car garage. For others, it could simply mean lowering their debt, paying their bills on time, and improving their credit score. Across the board, it generally means a sense of security and peace of mind.

But the question is, how do you get there? Whatever your specific financial goals, the best way to achieve them is with a plan. So if your goal is financial success, try this simple “recipe” to reach it:

1.   Create a budget

You can’t improve your finances without knowing where you currently stand. From there, you can start setting realistic goals and create a roadmap on how to reach them.

Start your budget by taking a hard look at the numbers, including your income, your debt, and your other expenses. Figure out where you can start cutting down.

Then, determine your goals; what do you hope to achieve and by when? Map out the specific steps you’ll take to get there.

The end result of any budget should be living within your means—not spending more than you’re earning. But a good longer-term goal would be to save up to 20 percent of your income each month.

2.   Stay on top of your bills

Falling behind on your bills is the fast track to credit disaster. If you’re making late payments on any of your bills—credit cards, utilities, your mortgage and so on—you could be penalized with high late fees. Worse, you could be dramatically harming your credit score. If you have a 680 credit score, even a single late payment could drop your score up to 80 points. If your score is 780, that could be as many as 110 points. That’s not anyone’s definition of financial success.

3.   Lower your debt

If you’re only paying the minimum each month on your credit card debt, you’re throwing away money on high interest rates that could otherwise be put towards your financial goals. If your credit utilization rate consistently exceeds 30%, you’re doing harm to your credit. Paying down your debt is one of the simplest ways to lower your credit utilization. Additionally, paying down your debt looks good to lenders, so if your version of financial success looks like owning a home or a car, you’re more likely to be approved for those loans.

4.   Start saving

According to a 2016 GoBankingRates survey, 69 percent of Americans have less than $1,000 saved in case of an emergency. A 2015 brief from Pew Charitable Trusts found that 60 percent of U.S. households dealt with a “financial shock” (median cost: $2,000) over the course of a year. Half of families struggled to “make ends meet” following these crises.

Take all of that into consideration and you get a good sense of why an emergency fund is so important to financial success. Make your emergency fund a priority and start saving today.

5.   Make plans for “Future You”

Plans for today are important, but so are plans for tomorrow. If you’re not planning for your retirement, you’re not setting yourself up for success. If you have the option, you should contribute to your employer-sponsored 401(k). But even if you work for yourself, or your company doesn’t offer that benefit, consider starting an IRA. Financial success is about the long game. Your future self will thank you.

Whatever financial success means to you, it’s important to have a plan to get there. If you’re not sure where to start, a credit repair company can help. Contact Lexington Law today to find out how we can assist you in reaching your financial goals.

Carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.





Source link

Top 2018 Financial Resolutions to Make (and Money Mistakes to Avoid)

, , ,


Top 2018 Financial Resolutions to Make (and Money Mistakes to Avoid)

Posted by Erica Steeves on January 3, 2018


It’s a new year, which means it’s time to make some new resolutions. This year, we challenge you to make managing your finances – and improving your credit score – a priority, along with any other pledges you decide to make at the start of 2018. If you haven’t already, you can get back on the right financial track by paying off any debts you’ve accrued thanks to your holiday spending. After you’re done with that, here’s a look at some other financial resolutions to make and mistakes to avoid as 2018 gets into swing:

 

 

  1. Start an emergency fund: Minimally, you should try to have an emergency fund with enough to pay up to three months worth of bills (i.e., mortgage or rent, utilities, auto payments, etc.). It’s this type of breathing room that can come in handy in the event of an unexpected auto or home repair, or if the unthinkable happens and you found yourself out of work for a period of time. A lack of an emergency fund can cause you to take out loans when the unexpected occurs, which can leave you playing catch up when the dust settles.
  2. Set a budget (and stick to it): Come up with a list of financial goals that you want to accomplish (i.e., investments, retirement savings, pay off loans, etc.). Then, come up with a reasonable monthly budget that can permit you to meet said goals and do your best to stick to it. Not setting a budget can be the start of a slippery slope into debt. Consider using a mobile app like Mint to manage everything.
  3. Don’t oversubscribe: Entertainment these days comes at a price. And while the likes of Netflix, Hulu, HBO Now, Amazon Video and other services may not cost a lot individually, together they can add up. In order to stay true to your budget, consider only subscribing to one or two premium services at a time. That’s one of the best things about said services – you can cancel and restart them at any time.
  4. Set automatic payments for your bills: Making on time payments is the single-largest category that impacts your FICO score, and late payments can cause your score to take a serious hit. On that note, let technology work for you when it comes to making on time payments and set up automatic payments online. This way, you’ll never have to worry about missing a payment again.
  5. Refrain from charging: To continue the theme of setting a budget and sticking to it, we challenge you to only charge what you know you can pay off. Going overboard on credit card spending can spiral out of control and cost you a lot more long-term. If you have credit card debt accrued, commit to paying off the cards with the highest interest rates first to save more in the long run.
Follow the above five tips and you can make 2018 a financially prosperous one.





Source link

A Brief Timeline of Financial Crisis

, , ,


A Brief Timeline of Financial Crisis

Posted by Erica Steeves on October 30, 2017


If you’re not learning from the past, chances are you’re doomed to repeat it. That’s why it’s so important that we all learn from the financial crisis and the mishaps of the past, from the recent “Great Recession” of 2008 all the way back to the 1772 credit crisis. Here’s a closer look at some of the great financial crises and what we need to take out of all of them:

A Timeline of Financial Crisis

16 Nov 1930, Chicago, Illinois, USA — Notorious gangster Al Capone attempts to help unemployed men with his soup kitchen “Big Al’s Kitchen for the Needy.” The kitchen provides three meals a day consisting of soup with meat, bread, coffee, and doughnuts, feeding about 3500 people daily at a cost of $300 per day. — Image by © Bettmann/CORBIS
  • Crisis of 1772: Originating in London and then spreading throughout Europe, the crisis stunted economic growth and led to the failure of 20 banks.
  • The Great Depression: Fueled by a drop in stock prices in September 1929 and a full-blown stock market crash less than two months later, the Great Depression had a major impact on the entire world. Worldwide GDP fell by 15 percent, trade plummeted and unemployment skyrocketed. Many economies didn’t recover until World War II began.
  • 1973 Oil Crisis: Due to perceived support of Israel during the Yom Kippur War, OPEC embargoed oil to a variety of Western nations, including the U.S. This embargo caused oil prices to skyrocket from $3 a barrel to $12 worldwide. A second crisis occurred in 1979.
  • 1997 Asian Financial Crisis: With Thailand bankrupt, crisis spread throughout much of Asia in 1997, often raising concern that it could spread worldwide. The crisis was plagued by low currency, devalued stock markets and an increase in private debt. Debt-to-GDP ratios also climbed.
  • The Great Recession: Though this recession lasted less than two years, the effects were devastating. A financial crisis and subprime mortgage crisis was the perfect double whammy for this recession, so much so that the financial sector was in great peril (that is, before the banks were bailed out). The housing market tanked and manufacturing slowed to a trickle, forcing a variety of bankruptcies and closures.

So what can we learn from the various crises of the past? Lots. For instance, don’t invest all of your money in one entity – diversify it. Secondly, it’s always a good idea to take the appropriate measures to ensure that you’re debt free. Not only does this keep your credit score and borrowing power high, but things are less likely to snowball on you in times of uncertainty. And finally, live frugally. Don’t borrow any more than what you need – and only do it when you need it.

 





Source link