Diversification, it's not just for income any more. Let's talk about the importance of not putting all of your retirement funds into one solution. Maybe you work for a company that offers a defined benefit pension plan. Defined benefit plans are really on the way out. Companies such as Boeing, GM, and Ford have such huge pension plan obligations that they can no longer continue to fund them.
United Airlines declared bankruptcy and got out from under their huge pension plan obligations. As a result, retired employees saw their monthly benefit drop by about 50%.
I would expect that GM and Ford would be following in United's footsteps in the very near future.
For those of us who are expecting Social Security to provide us with a comfortable retirement, think again. In the next 10 years, the bulk of the baby boomers will be receiving social security and for the first time in the history of the plan, Social Security will be paying out more than they take in. The government will have to make up the difference.
This is why it is vital that you do not rely on only one source of retirement income in your plans.
10 Reasons to Choose Direct Deposit over Paper Checks - ANYDAY!
More than half of employees (Over 70%) have converted to Direct Deposit as their preferred method of payment. As more people come to the realization that Direct Deposit is simply safer and more convenient, these numbers continue to rise - rapidly. Let's review ten reasons why Direct Deposit is rapidly ripping paper checks to shreds:
1. Direct Deposit Saves You Time
* Funds are conveniently deposited in your account electronically - saving you trips to the bank and helping you avoid long lines at tellers or ATMs.
* No more waiting for checks to clear... Funds clear instantly!
2. Your Money is Safer and More Secure
* You'll never have to worry about lost or stolen checks and can avoid the risk of carrying cash.
* Direct Deposit is more confidential. Since deposits are transferred electronically it passes through fewer hands than a paper check. This helps protect you from becoming a victim of identity theft.
3. It's Wiser
* You can access your money earlier - No more waiting for checks to clear. (Usually at the strike of 12:01a.m. on payday funds are available for use).
* Puts you in complete control of your money... You can automatically divide your funds amongst different accounts with ease.
* You're always a step ahead! - Employers will issue you a paper stub, in advance, so that you'll already know the amount of your direct deposit before it hits (including taxes, insurance, and any other deductions).
* Financial planners recommend Direct Deposit as a proactive step toward gaining control of your finances.
4. It's Simpler
* Once you sign-up for Direct Deposit you don't have to worry about it anymore. Your money is deposited on time, every time... regardless of where you are. Try that with paper checks.
5. Saves You Money
* Avoid check cashing fees
* Save gas money from traveling back and forth to the bank or check-cashing store.
* Avoid bounced check fees because you can always rely on your funds being cleared and in your account in a timely manner.
* Helps you to better manage and budget your money to avoid OVERspending.
1. Direct Deposit Saves You Time
* Funds are conveniently deposited in your account electronically - saving you trips to the bank and helping you avoid long lines at tellers or ATMs.
* No more waiting for checks to clear... Funds clear instantly!
2. Your Money is Safer and More Secure
* You'll never have to worry about lost or stolen checks and can avoid the risk of carrying cash.
* Direct Deposit is more confidential. Since deposits are transferred electronically it passes through fewer hands than a paper check. This helps protect you from becoming a victim of identity theft.
3. It's Wiser
* You can access your money earlier - No more waiting for checks to clear. (Usually at the strike of 12:01a.m. on payday funds are available for use).
* Puts you in complete control of your money... You can automatically divide your funds amongst different accounts with ease.
* You're always a step ahead! - Employers will issue you a paper stub, in advance, so that you'll already know the amount of your direct deposit before it hits (including taxes, insurance, and any other deductions).
* Financial planners recommend Direct Deposit as a proactive step toward gaining control of your finances.
4. It's Simpler
* Once you sign-up for Direct Deposit you don't have to worry about it anymore. Your money is deposited on time, every time... regardless of where you are. Try that with paper checks.
5. Saves You Money
* Avoid check cashing fees
* Save gas money from traveling back and forth to the bank or check-cashing store.
* Avoid bounced check fees because you can always rely on your funds being cleared and in your account in a timely manner.
* Helps you to better manage and budget your money to avoid OVERspending.
Credit Cards and Your Personal Budget
Many people will tell you that credit cards are evil, that you shouldn't use them, that you should destroy them all or lock them in a drawer. In some cases, this might be true.
If you don't have a budget that you use regularly, credit cards might be a big risk for you. If you can't keep yourself from spending money you don't have, credit cards might be a big risk for you. If you carry a balance and don't pay it in full each month, credit cards might be a big risk for you.
But if you are the type of person that has the discipline to use credit cards without getting yourself in debt, you may still have some issues getting your card to work with your budget. Credit cards can provide a lot of utility to your life, like easy spending records, fraud protection, and kickbacks like frequent flier miles or cash back.
The key to successfully using your credit card in conjunction with your budget is exactly the opposite of how you handle savings: you consider your credit card to be a part of your account. What does this mean? It means that when you charge something on your credit card, you immediately count that money as "spent" in your budget. So if you've charged $500 on your credit card by the end of the month, you should have a corresponding $500 counted against your budget categories.
In this way, you're never spending more than you should be. You're keeping to your budget. Then at the end of the month (it's best to try to align your credit card's payment date with your budgeting cycle if possible), when you make the payment to your credit card, the payment itself doesn't show up in your budget at all. As far as your budget is concerned, your credit card is just a part of your regular account.
If you don't have a budget that you use regularly, credit cards might be a big risk for you. If you can't keep yourself from spending money you don't have, credit cards might be a big risk for you. If you carry a balance and don't pay it in full each month, credit cards might be a big risk for you.
But if you are the type of person that has the discipline to use credit cards without getting yourself in debt, you may still have some issues getting your card to work with your budget. Credit cards can provide a lot of utility to your life, like easy spending records, fraud protection, and kickbacks like frequent flier miles or cash back.
The key to successfully using your credit card in conjunction with your budget is exactly the opposite of how you handle savings: you consider your credit card to be a part of your account. What does this mean? It means that when you charge something on your credit card, you immediately count that money as "spent" in your budget. So if you've charged $500 on your credit card by the end of the month, you should have a corresponding $500 counted against your budget categories.
In this way, you're never spending more than you should be. You're keeping to your budget. Then at the end of the month (it's best to try to align your credit card's payment date with your budgeting cycle if possible), when you make the payment to your credit card, the payment itself doesn't show up in your budget at all. As far as your budget is concerned, your credit card is just a part of your regular account.
Learn Money, Take Control, and Become Wealthy
Personally, I believe the ONLY long term debt help solution is to increase your financial education. When it comes to getting yourself debt help, your greatest asset is time. The greatest investment you can make is to invest your time into increasing your financial education.
When it comes to money, wherever you stop learning, you stop earning. See, it does not take money to make money...it takes knowledge and experience to make money. The more knowledge and experience you have, the less money and risk are involved.
Most people are discouraged from taking control of their financial situation because they believe it is too complicated for them to handle. Nothing could be further from the truth! This is a perception encouraged within society to help keep you in your place. The first step is to believe you can do it.
The next big spot where many people fail...they do not find the right information soon enough. This becomes another group of people who end up discouraged. In our schools today, you will learn reading, writing, math, and science, but you will never be given a financial education. You might get a lesson on how to balance a checkbook, or how supply and demand work, but you will never be given the right information...the simple lessons that could change your financial position for the rest of your life.
When it comes to money, wherever you stop learning, you stop earning. See, it does not take money to make money...it takes knowledge and experience to make money. The more knowledge and experience you have, the less money and risk are involved.
Most people are discouraged from taking control of their financial situation because they believe it is too complicated for them to handle. Nothing could be further from the truth! This is a perception encouraged within society to help keep you in your place. The first step is to believe you can do it.
The next big spot where many people fail...they do not find the right information soon enough. This becomes another group of people who end up discouraged. In our schools today, you will learn reading, writing, math, and science, but you will never be given a financial education. You might get a lesson on how to balance a checkbook, or how supply and demand work, but you will never be given the right information...the simple lessons that could change your financial position for the rest of your life.
Simple Steps to Living Frugally
Living frugally isn't difficult, you simply have to take a few steps. They aren't large steps, in fact, they are baby steps. The difficult part is staying on the path.
Step One: Know your destination.
You can't stay on the path towards your goals if you don't even know what your goals are. Have you ever gone into a grocery store without a list? You wander up and down the aisles, not really knowing if you are getting what you need. This is a lot like your frugal living. You have to know where you are going and what you need in order to follow the correct path.
Step Two: Don't take every path.
You will quickly find that if you follow every single frugal path that you encounter, you will go crazy! It just isn't possible. Not everything works for every person. For example, the busy mom with five small children is not going to have time to make homemade bread and everyone's clothes. She might simply focus on shopping wisely and reducing the utility bills. The retired homemaker may have time in which to make her own laudnry soap and plant a garden. It simply depends on where you are at in your life -- and how much you want to take on. There are some things that are just worth it.
Step Three: Keep searching for new paths.
You know your destination, but you don't always know how to get there. Frugal living is an ongoing challenge. There is no end to it. You keep learning and you keep pushing yourself to save a little bit more.
Step Four: Budgeting is your gasoline.
You have to know where you are spending your money in order to spend less. It often helps to track every penny that you spend. Right down to the penny. Don't cheat. Those small expenditures can really add up.
Your budget will keep you working towards your goal and spending less each month. This is where you can really sit down and see what is necessary and what isn't. When everything is on paper, it is easy to see the changes that could be made.
Step One: Know your destination.
You can't stay on the path towards your goals if you don't even know what your goals are. Have you ever gone into a grocery store without a list? You wander up and down the aisles, not really knowing if you are getting what you need. This is a lot like your frugal living. You have to know where you are going and what you need in order to follow the correct path.
Step Two: Don't take every path.
You will quickly find that if you follow every single frugal path that you encounter, you will go crazy! It just isn't possible. Not everything works for every person. For example, the busy mom with five small children is not going to have time to make homemade bread and everyone's clothes. She might simply focus on shopping wisely and reducing the utility bills. The retired homemaker may have time in which to make her own laudnry soap and plant a garden. It simply depends on where you are at in your life -- and how much you want to take on. There are some things that are just worth it.
Step Three: Keep searching for new paths.
You know your destination, but you don't always know how to get there. Frugal living is an ongoing challenge. There is no end to it. You keep learning and you keep pushing yourself to save a little bit more.
Step Four: Budgeting is your gasoline.
You have to know where you are spending your money in order to spend less. It often helps to track every penny that you spend. Right down to the penny. Don't cheat. Those small expenditures can really add up.
Your budget will keep you working towards your goal and spending less each month. This is where you can really sit down and see what is necessary and what isn't. When everything is on paper, it is easy to see the changes that could be made.
Preparing for Retirement
When it comes to retirement, there is more to consider than your retirement account. Preparing for retirement requires more than simply putting money away. While it is essential that you start as young as possible when working towards your retirement savings, you should work on other areas as well.
When we are young, we often think that we have plenty of time. So many people start their retirement investments late in life. This means that they will retire later with less money in their retirement funds. It also means that they will have to invest a larger portion of their monthly income in order to meet their retirement goals.
One of the most important things you should do to protect you into retirement is to remain healthy. Medical concerns are a top problem facing the elderly and their income situations. Getting older happens, but you can work at remaining healthy.
Start with taking care of your health by exercising, eating right and getting enough sleep. Learn to handle stress appropriately and handle health concerns immediately.
No matter how healthy you are, you will find that your medical expenses and insurance premiums will increase as you age. It can often be very difficult to purchase reasonable insurance when you are older. If you purchase your insurance now, in most cases you will be able to keep it so that it will be there when you are older.
You can't simply fall back on Medicare, which requires you be 65 years of age (except in special cases). If you have a major health problem at 63 without insurance, you will find that your entire retirement fund could be depleted rather quickly. Even if you qualify for Medicare, it doesn't cover everything. In most cases supplemental insurance is great for taking up the slack.
Don't think of Social Security as a retirement fund. This may have been true at one time for some people, but things have changed. In most cases, Social Security simply covers the basics, but not an excellent lifestyle. You should have retirement savings to fall back on, whether they be an IRA, 401(k) or other form of investment. In addition, if you are young there may be no Social Security when it comes time for you to retire.
When we are young, we often think that we have plenty of time. So many people start their retirement investments late in life. This means that they will retire later with less money in their retirement funds. It also means that they will have to invest a larger portion of their monthly income in order to meet their retirement goals.
One of the most important things you should do to protect you into retirement is to remain healthy. Medical concerns are a top problem facing the elderly and their income situations. Getting older happens, but you can work at remaining healthy.
Start with taking care of your health by exercising, eating right and getting enough sleep. Learn to handle stress appropriately and handle health concerns immediately.
No matter how healthy you are, you will find that your medical expenses and insurance premiums will increase as you age. It can often be very difficult to purchase reasonable insurance when you are older. If you purchase your insurance now, in most cases you will be able to keep it so that it will be there when you are older.
You can't simply fall back on Medicare, which requires you be 65 years of age (except in special cases). If you have a major health problem at 63 without insurance, you will find that your entire retirement fund could be depleted rather quickly. Even if you qualify for Medicare, it doesn't cover everything. In most cases supplemental insurance is great for taking up the slack.
Don't think of Social Security as a retirement fund. This may have been true at one time for some people, but things have changed. In most cases, Social Security simply covers the basics, but not an excellent lifestyle. You should have retirement savings to fall back on, whether they be an IRA, 401(k) or other form of investment. In addition, if you are young there may be no Social Security when it comes time for you to retire.
Critical Protection Issues - How To Get The Right Level of Personal Protection
Having looked at the quality of cover, we now turn our attention to:
How to get the right level of protection
Using our example again, Dr Cureall has a clear idea now on the quality of protection he wants, and now needs to make a decision regarding the level of cover he requires.
He is a family man in his late thirties, his wife, 3 years younger, is not working, and they have two children, Mat and Laura aged four and two.
We suggested to him that he should follow a simple process to work out how much cover he should buy:
- Find out what income they need to create
- Work out what they already have
- Decide on the time period to be covered
We asked Dr Cureall to fill in a detailed spending plan of what his wife would need if he had died yesterday – and vice versa.
This is to ensure that they would have enough income between now and retirement and into old age, should either of them die prematurely.
The Solution
Mortgage – it is decided to fully cover the interest only £200,000 mortgage with level term assurance over the 20 years of the loan. Since it is only slightly more in premiums, Dr Cureall decides on two single life policies instead of one joint life plan. This would mean on either death, the surviving partner would still have their cover intact.
Since the strategy we have created for him involves overpaying on the mortgage (he has a flexible mortgage) we could have used decreasing term assurance to mirror the reducing debt. However, Dr Cureall feels he may not reduce the debt all the time, and will reduce the sum assured on the level term assurance when he feels it is appropriate.
Dr Cureall already has sufficient critical illness cover therefore no additional cover was required.
So, on either death, the surviving partner would be free of debt.
What’s next?
Living expenses – this is where the spending plan comes in. This, together with a forecastig tool we use, Dr Cureall is able to see how the next 50 years will look on the scenario of either/both deaths.
Clearly their main priority is to provide for the children. This means being able to give them the life they would have had if the grim reaper had not called. So any school and university fees are built in as well as holidays and general living expenses.
Due to the children’s ages and university costs being anticipated, the Curealls look at their projections (‘financial map’) and decide on 22 years as the optimum time period. This also would give Mrs Cureall enough to live on into her old age.
The projection takes into account all NHS benefits, which are considerable now that Dr Cureall has 14 years service, including spouse and child payments. (In addition we recommend that the NHS death in service benefit is placed into trust which will potentially save the family £60,000 in Inheritance Tax).
Because we have built in these NHS payments, the amount of cover required on Dr Curealls life is nowhere near what he expected. They decide on more lump sum cover, with the balance to be provided by Family Income Benefit (pays out an annual income).
This time instead of level protection, the Curealls decide on indexed cover to protect against inflation. After all we can’t plan when we are going to die, and in payment the amounts would increase as well.
We recommend all these policies are written in trust to minimise Inheritance Tax, as well as ensure the monies are paid to the right people quickly on death.
How to get the right level of protection
Using our example again, Dr Cureall has a clear idea now on the quality of protection he wants, and now needs to make a decision regarding the level of cover he requires.
He is a family man in his late thirties, his wife, 3 years younger, is not working, and they have two children, Mat and Laura aged four and two.
We suggested to him that he should follow a simple process to work out how much cover he should buy:
- Find out what income they need to create
- Work out what they already have
- Decide on the time period to be covered
We asked Dr Cureall to fill in a detailed spending plan of what his wife would need if he had died yesterday – and vice versa.
This is to ensure that they would have enough income between now and retirement and into old age, should either of them die prematurely.
The Solution
Mortgage – it is decided to fully cover the interest only £200,000 mortgage with level term assurance over the 20 years of the loan. Since it is only slightly more in premiums, Dr Cureall decides on two single life policies instead of one joint life plan. This would mean on either death, the surviving partner would still have their cover intact.
Since the strategy we have created for him involves overpaying on the mortgage (he has a flexible mortgage) we could have used decreasing term assurance to mirror the reducing debt. However, Dr Cureall feels he may not reduce the debt all the time, and will reduce the sum assured on the level term assurance when he feels it is appropriate.
Dr Cureall already has sufficient critical illness cover therefore no additional cover was required.
So, on either death, the surviving partner would be free of debt.
What’s next?
Living expenses – this is where the spending plan comes in. This, together with a forecastig tool we use, Dr Cureall is able to see how the next 50 years will look on the scenario of either/both deaths.
Clearly their main priority is to provide for the children. This means being able to give them the life they would have had if the grim reaper had not called. So any school and university fees are built in as well as holidays and general living expenses.
Due to the children’s ages and university costs being anticipated, the Curealls look at their projections (‘financial map’) and decide on 22 years as the optimum time period. This also would give Mrs Cureall enough to live on into her old age.
The projection takes into account all NHS benefits, which are considerable now that Dr Cureall has 14 years service, including spouse and child payments. (In addition we recommend that the NHS death in service benefit is placed into trust which will potentially save the family £60,000 in Inheritance Tax).
Because we have built in these NHS payments, the amount of cover required on Dr Curealls life is nowhere near what he expected. They decide on more lump sum cover, with the balance to be provided by Family Income Benefit (pays out an annual income).
This time instead of level protection, the Curealls decide on indexed cover to protect against inflation. After all we can’t plan when we are going to die, and in payment the amounts would increase as well.
We recommend all these policies are written in trust to minimise Inheritance Tax, as well as ensure the monies are paid to the right people quickly on death.
Strategies in Personal Finance: Basic Investment Principles for Today and Tomorrow
This book is not a quick "how-to" but rather a substantive text intended for undergraduate course in financial planning and investments management. Material is arranged in sections relevant to people in their accumulation years (ages 20 through 60) and their retirement years; the first two sections address management and investment tools and opportunities, and the third focuses on management decisions. An extended case study, end-of-chapter questions, a glossary, suggested readings (including relevant "Getting Going" columns by Jonathan Clements of the Wall Street Journal, and website and other resources are included. Keith V. Smith is a business writer formerly associated with Krannert School of Business at Purdue University, and Jane A. Smith is a consultant for small businesses.
Very personal finance: when love is gone and paradise is lost, one question remains: who gets the toaster?
You've decided to slap on the ol' bail and chain. Great! Just remember, the whole "Till death do you part" thing can fall apart in a Britney minute, so you better protect yourself financially, Rockefeller. Here are our tips on discussing finances before shacking up or walking down the aisle--and what to do if things torn ugly.
PRE-SHACK-UPS
Before she gets too comfy on the couch, have a sit-down to divide fiscal responsibilities. "When you start spending together, you need to talk money" says Wall Street Journal columnist Jeff D. Opdyke, author of Love and Money. Maybe she pays electric and you cover cable. But Opdyke draws the line at sharing checking accounts, credit cards, and mortgages while dating. There's nothing to stop one partner from raiding the joint checking account, he says, or going on a spending spree after finding the other in bed with the personal trainer. "No joint assets," he rules.
Before she takes your name, consider getting her to sign on the dotted line. Both parties can benefit from a prenup, says Opdyke. It could even be good for your wife-to-be if, say, she's a player on Wall Street, while you're a mere haiku writer. Meanwhile, you'd want to make sure Nana's silverware stays in your family should wifey suddenly find your union irreparably tarnished. The key: "Approach this as a business decision," says Opdyke, "not a statement on the longevity of the marriage."
POSTNUPS (AND THE BIG "D")
Never got a prenup? Try "postnups," which are contracts made after you've tied the knot. And if she's already grabbed her yoga mat and split, hire a lawyer. Just make sure you keep your emotions in check. "People, in general, are greedy at heart," says Opdyke. "I've seen couples fight over salt and pepper shakers?' Better to hand over the china with a smile--that way she won't squawk as much about the plasma TV.
PRE-SHACK-UPS
Before she gets too comfy on the couch, have a sit-down to divide fiscal responsibilities. "When you start spending together, you need to talk money" says Wall Street Journal columnist Jeff D. Opdyke, author of Love and Money. Maybe she pays electric and you cover cable. But Opdyke draws the line at sharing checking accounts, credit cards, and mortgages while dating. There's nothing to stop one partner from raiding the joint checking account, he says, or going on a spending spree after finding the other in bed with the personal trainer. "No joint assets," he rules.
Before she takes your name, consider getting her to sign on the dotted line. Both parties can benefit from a prenup, says Opdyke. It could even be good for your wife-to-be if, say, she's a player on Wall Street, while you're a mere haiku writer. Meanwhile, you'd want to make sure Nana's silverware stays in your family should wifey suddenly find your union irreparably tarnished. The key: "Approach this as a business decision," says Opdyke, "not a statement on the longevity of the marriage."
POSTNUPS (AND THE BIG "D")
Never got a prenup? Try "postnups," which are contracts made after you've tied the knot. And if she's already grabbed her yoga mat and split, hire a lawyer. Just make sure you keep your emotions in check. "People, in general, are greedy at heart," says Opdyke. "I've seen couples fight over salt and pepper shakers?' Better to hand over the china with a smile--that way she won't squawk as much about the plasma TV.
How low? With new tax brackets, now's the time to lower your withholding - Personal Finance
Barrels of media ink have been spilled over the 25 million checks Uncle Sam mailed out as advance refunds on the 2003 child tax credit. Plenty of attention has been given to other aspects of the so-called Jobs and Growth Tax Relief Reconciliation Act of 2003, too, including dividend and capital gains cuts and increased, deductions for business owners. But little notice has been paid to the one thing that almost all taxpayers can do immediately to take advantage of the legislation--change the withholding from their paychecks to reflect new, lower marginal tax brackets.
The tax bracket changes are relatively small, so the extra money in each paycheck won't be enough to overcome fiscal inertia in many households or to get the nation's financial advisers clamoring about the oversight. Still, if you don't make the change, you're paying the government too much money and will have to wait for your tax refund to get it back.
Under the new law, the 38.6 percent income bracket drops to 35 percent; the 35 percent bracket falls to 33 percent; 30 percent dips to 28 percent; and 27 percent goes to 25 percent. Plus, the basic standard deduction jumps for millions of taxpayers. Granted, it doesn't sound like a lot, but for a married couple filing jointly and making $75,000 per year (in the new 25 percent bracket), a tweak in the withholding could add $125 per month to take-home pay.
For certified financial planner Rick Fingerman, president of Financial Planning Solutions Inc. in Medford, Massachusetts, it's an easy call. "More money in your pocket now is better than more money left to Uncle Sam until refund time. "The exceptions, he says, are people who can't seem to save other than through withholding and couples with self-employment income whose taxes tend to get a little fuzzy each year.
Even the forced savings component tends to be overstated, Fingerman says. Surveys have shown for years that most people spend their refunds rather than tuck them into retirement funds or use them to prepay the mortgage. (Although, to be fair, a substantial minority does pay debts with the yearly windfall.) Instead, put that $125 extra from each paycheck in the 401(k) plan, Junior's education fund, or a more sizable payment on that nagging credit card balance, and the immediate difference for your finances can be significant.
The tax bracket changes are relatively small, so the extra money in each paycheck won't be enough to overcome fiscal inertia in many households or to get the nation's financial advisers clamoring about the oversight. Still, if you don't make the change, you're paying the government too much money and will have to wait for your tax refund to get it back.
Under the new law, the 38.6 percent income bracket drops to 35 percent; the 35 percent bracket falls to 33 percent; 30 percent dips to 28 percent; and 27 percent goes to 25 percent. Plus, the basic standard deduction jumps for millions of taxpayers. Granted, it doesn't sound like a lot, but for a married couple filing jointly and making $75,000 per year (in the new 25 percent bracket), a tweak in the withholding could add $125 per month to take-home pay.
For certified financial planner Rick Fingerman, president of Financial Planning Solutions Inc. in Medford, Massachusetts, it's an easy call. "More money in your pocket now is better than more money left to Uncle Sam until refund time. "The exceptions, he says, are people who can't seem to save other than through withholding and couples with self-employment income whose taxes tend to get a little fuzzy each year.
Even the forced savings component tends to be overstated, Fingerman says. Surveys have shown for years that most people spend their refunds rather than tuck them into retirement funds or use them to prepay the mortgage. (Although, to be fair, a substantial minority does pay debts with the yearly windfall.) Instead, put that $125 extra from each paycheck in the 401(k) plan, Junior's education fund, or a more sizable payment on that nagging credit card balance, and the immediate difference for your finances can be significant.
Subscribe to:
Posts (Atom)
Posts
