Saving Money

Do Young People Invest in the Stock Market?

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Do Millenials Have Money To Invest? A recent Bankrate survey shows that just 26 percent of Millenials say they own any stock. That sounds about right to me. As a former financial advisor, I never conducted any official, statistically valid surveys, of course, but I did talk to a lot of people, many of them younger. Younger people, like Millenials, almost never became my clients. The feeling was mutual. You see, most younger people don’t HAVE any money, even if they are currently making it. If you graduate from college at say 22, and you get a job paying $75,000 per year, then you are doing pretty well. But, you may have student loans; you probably would like to buy a house; you might be getting married and saving for a wedding. Of course, you might also be enjoying your freedom and taking trips, buying cars, and so on. The thing is, even if you were saving 10 percent of your income that still means you only have $7,500 of investable assets after a year. $15,000 the next, and so on and so on. By the time you had even the minimum of $100,000 that makes it worth even a …

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Basic Retirement Plan Simple

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Retirement planning is actually incredibly simple and straightforward for most people. However, it can quickly sound complex because of all the edge cases, exceptions, and possibilities that really only affect a small number of people. If you eliminate all of that noise, however, there really isn’t much to the average American’s financial plan. Follow the following information and there really is no reason you can’t make your own simple retirement plan. Obviously, every situation is different. If you have unusual circumstances such as a coming inheritance, money in trusts, or other legal situations, this plan won’t work for you. If you have regular income, a family, and just need a plan, this is perfect for you. Do It Yourself Financial Plan One of the things that quickly complicates financial planning is the idea that you have to predict how much income you will need in retirement. This step is a waste of time for 90 percent of people. Why? Because, for most people retirement saving and investing is about how much they can save, not how much they will need. To put it another way, consider this. If I tell you that if you can save $10,000 per month, you …

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401k Fees at Supreme Court

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Somehow I missed this until today. The Supreme Court is hearing arguments regarding a new(ish) law about 401k plans. Under something called the Employee Retirement Income Security Act (one of the few legislative acts of recent years that doesn’t have a snappy acronym), a company that has a 401k plan has a fiduciary responsibility to employees in the plan. This means that the company must act in the best interest of the employees. As you can imagine, in U.S. courts this gets pretty nebulous, but it does set a standard. Supreme Court 401k Case In this particular case, the company, Edison International, has a 401k plan with six mutual funds that charge higher fees than identical options. In other words, the plan administrator, through incompetence, or for other reasons chose the more expensive options for the plan. Unfortunately, this is very common. Usually, this isn’t the company, or the HR person, deliberately trying to screw over the employees. Instead, what happens is a 401k company comes in and offers up some proposals. It will say something like, you can have a plan with these investments and it will cost this much, or you can have these other mutual fund investments and …

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Your First Basic Financial Plan

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As a former Certified Financial Planner, or CFP, I tend, like many other financial experts, to think (and write) in terms of the tricky, the convoluted, and the complex. The truth is that money and personal finance can be very intricate and complex. However, it is also true that the biggest bang for the buck financial planning wise comes from doing the most basic things. Too often, we get caught up in things that actually end up being tiny details of your overall financial life. For example, many people shop endlessly for higher savings account interest rates. Whether you have a high-yield savings account, a regular savings account, or even a kids savings account, the interest rate matters far less than how much money  you put in it. If you have $10,000 and you put it in a regular savings account earning 0.5 percent, your interest for the year will be approximately, $50. If you got double that rate, 1.0%, then you’d have $100 in interest. In either case, you would still basically just have $10,000 at the end of the year, $10,050 or $10,100, respectively. Neither has a meaningful impact on your overall financial status. On the other hand, if …

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Types of College Savings Accounts

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When it comes to saving money for college, there are a lot of options. A parents saving money for children’s college fund there are different ways to title those accounts, jointly or otherwise. Believe it or not, saving up money so your kid can go to college is a lot more about actually doing it, than how you do it. Most parents let a sizable amount of time pass in between college investments and that is a much bigger deal than exactly which kind of college savings account is right for you. Ways to Save Money for College Assuming you don’t want to stick money into a mattress, you are going to need some kind of bank account or other financial account to store up that money you need to save and invest. Here are the options. 529 College Savings Plans If the 529 plan came first, there wouldn’t be so many other ways to save for college. It is, quite simply, the best possible way to invest for college for most people. A 529 college account works a lot like a Roth IRA plan for college. You don’t get a federal income tax deduction for your contributions, but the …

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Youth Accounts at Banks

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Banks have long offered various types of checking accounts and savings accounts. Some of these accounts are actually fully developed products that are different from other offerings. Others are merely gimmicks, and some bank account types lie in between. Youth Accounts Banking One such niche account offered at many banks is a youth account. These accounts are typically broken up into youth savings accounts and youth checking accounts. Just what each account is, and how it differs from other accounts depends on the bank. For the most part, special bank accounts for young people are joint accounts with limited access for one person. For most purposes, a person under the age of 18 cannot legally enter into a contract. No contract, or banking agreement, then no account, not even a kid bank account. Instead, in order to open a kid savings account or student checking account, the bank will require an adult’s signature. No matter what it gets called on the statement, what you have really just opened is a joint account with the child. So, then what is the point of a youth accounts? As an adult, you might not like the idea of joint account with your child. …

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Save Money on Vacation Travel Airfare

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Most of the time, if you find information for saving money on travel, you’ll find tips on how to get the lowest airfare, or how to get discounted hotel rooms. Unfortunately, these tips are often impractical for the vacation traveler, or even the business traveler. While it may be true that new airfares on released on Tuesdays or Wednesdays, I never seem to be going to the kinds of places that have a cheap fare just because it is Tuesday. In fact, what is seldom mentioned in these travel tip articles is that the most volatile airfares occur either on the least popular routes, or on travel at the least popular times That is because those planes are not already full, so the airlines have to jockey around on the price in order to sell the seats. Realistic Airfare Savings Tips There really aren’t any secret airfare tips that you can use, unless you can be pretty flexible in your travel. If you need to leave on a certain date, or even at a certain time, the “tricks for saving money on airfares” won’t help you. To see what I’m talking about, open up any travel website you like. Try …

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Coming to FinanceGourmet – Personal Finance Blog

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This coming week, we have some interesting new articles for Finance Gourmet to help with frequently asked about and requested personal financial health topics. First up, as May draws to a close, June marks both the end of the second quarter, and the midpoint of the year. What kinds of things should you be aware of at this point for optimal financial health? We’ll discuss quarterly tax payments, how the markets are looking at the half way point, what things you might want to be thinking of for minimizing your taxes, and more. Next, we tackle signing up for a 529 plan, step by step. Not long ago, I wrote about how a financial planner can help keep you from getting stuck on your financial planning actions such as setting up a 529 plan. But, when you can find them, a detailed step-by-step guide to setting up financial accounts such as a 529 plan can be just as valuable. We’ll give you a detailed guide on how to open a Colorado 529 plan, including how to fill out all the Colorado 529 plan forms to set up an account. Then, we’ll look at some of the new IRS numbers that …

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Bumper Sticker Financial Advice

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Bumper stickers are an interesting way to convey an idea. They aren’t very big, so the message must be small. They tend to be ignored, so the message must be clever. You can’t ask the person driving the car what they mean, so they must be clear in any context. On the other hand, a lot of the information is lost when a message is conveyed as a bumper sticker. Entire political debates boiled down to a certain sounding phrase are one example. In the financial world, bumper sticker financial advice often comes from books where repackaging existing financial ideas in new sounding ways is the fastest way to personal finance stardom. Pay Yourself First What Does It Mean?   One of the most ubiquitous financial planning as a simple phrase is, “Pay yourself first.” What pay yourself first means, literally, is that you should set aside money to be saved or invested before spending money on anything else. The concept works like this. If each week (or month, or whatever) you get a paycheck if you pay yourself first, then you won’t spend too much money and you’ll save for your future. Sounds good, and it is. In practice, …

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Is Extreme Couponing Worth It?

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The extreme couponing fad hit its high water mark a few years ago. That doesn’t mean it’s gone away, and every time someone shows up on TV or a magazine article is published, the race is on again to figure out how to do extreme couponing. If you’re wondering how using coupons can get extreme, consider this hypothetical example. You see a coupon in the newspaper for $1 off of something. For our sake, let’s say it’s $2 off of a bag of cookies. Now, let’s say that the grocery store is having a sale where those cookies are 2 for $4. Bam! You’ve got yourself some free cookies. That’s not really extreme, yet. Now, imagine that you go through the recycle bin at your office building and find eight of those coupons and you get eight bags of free cookies. That’s a little more extreme. Now, imagine that you build your entire shopping list around this sort of deal and you roll home with $300 worth of groceries for just $23. Now, that’s extreme. Is Extreme Couponing Right for Me? Coupons can save you money, there is no doubt about that. If you have a coupon for something you …

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