For most taxpayers, the light at the end of […]
Have you tried the minimum wage challenge? This challenge is designed to help you understand the difficulties of living on minimum wage. However, it also has benefits such as clarifying your spending priorities and teaching you about responsible budgeting.
Quitting work too soon. One-third of all retirees will live to be over 91 years of age. Avoid the mistake of rushing to retire as soon as possible. Working until age 66 instead of 62 will increase your social security benefits by 25 percent. You can expect social security payments 75 percent higher if you wait until you’re 70 years old. Overestimating investment returns. Stock market returns can be depressed for 10 years or more. Just because the average return is 7.0 percent after adjusting for inflation doesn’t mean it’s seven percent every year. Be realistic in your assumptions about future returns.
Calculate what your income is. Your income will determine if you qualify for Chapter 7 or Chapter 13 bankruptcy. Income qualifications vary from one state to another, however, so it’s important to check the requirements for your state. Ensure your debts will be erased if you file for bankruptcy. Debts can be secured or unsecured, and some types of secured debts won’t go away when you file. What is Chapter 7 bankruptcy? Chapter 7 erases any unsecured debt, which includes medical bills as well as credit card debt. Your income has to be below a certain level for you to qualify for this type of bankruptcy and this level varies from one state to another. The downside of filing for Chapter 7 is that your assets will be sold to pay your creditors back. Your creditors will not be paid back if there are no assets to sell. What is Chapter 13 bankruptcy? Chapter 13 bankruptcy includes setting up a restructuration plan, usually with monthly payments. Filing for this type of bankruptcy means that you’ll have pay at least a portion of your debt. The main advantage of Chapter 13 is that your assets won’t be sold. However, you’ll have to prove that your income allows you to keep up with the repayment plan after subtracting your living expenses. Your secured debts also have to be below a certain level in order to qualify for Chapter 13. What kind of assets could you lose if you file under Chapter 7?
Should you loan money to friend or family member? It’s […]
A lack of preparation for financial emergencies. Everyone needs an emergency fund. While the lack of an emergency fund is common within every age group, millennials are especially likely to not have any money set aside for emergencies. Strive to set aside 3-6 months of living expenses and you’ll be prepared for most financial emergencies. Failing to take advantage of 401(k) matching. If your employer offers 401(k) matching, take advantage of it. Not only will your money work for you, but your employer is giving you the same amount as what you’re investing. Considering future growth, your employer could be handing you a fortune – for free!
Many people handle money well at work, but horribly at home. There’s a different mindset when you’re expected to act like a professional. What if you handled your personal finances with the same professionalism a CFO takes care of business? Discipline and professionalism can add a lot to your personal financial future. Just because no one is watching you doesn’t mean you can be irresponsible with your finances at home. Act like a CFO and take control of your money: 1. Live by your budget. Even the wealthiest companies have budgets that each department and manager are expected to follow. As your own personal CFO, you should prepare a monthly budget and chart any discrepancies. Then make the necessary budget adjustments. • If you don’t have a budget, creating one is the first order of business.
We’ve all seen how medical expenses, including health insurance, go up with age. If you’re not yet age 65, where you can have Medicare, The Affordable Care Act (ACA) has made finding health care that corresponds to your budget easier, in some circumstances. However, understanding how tax credits and subsidies affect your options is not always easy. You might find that getting insurance under the Affordable Health Care Act requires some planning: Start by assessing your income and find out what the poverty level is in your state. These numbers will determine the subsidies you qualify for. Find out if you qualify for Medicaid. Income requirements vary from one state to another: In some states, you can qualify for Medicaid if your income corresponds to the poverty level or is below this level. Some states have expanded Medicaid, which means this option is available if your income corresponds to or is below 138% of the poverty level. You might qualify for tax credits that would help you pay for health care coverage. You can qualify for tax credits as long as your income corresponds to or is lower than 400% of the poverty level in your state.
A heavy debt burden is like climbing a mountain with […]