Stressed Out About Money? 5 Things to Do

October 26, 2018

No one likes to be stressed. And unfortunately, money can be a huge source of stress if you aren’t careful. Whether it’s an unexpected expense, a job loss, or inability to meet your savings goals, money stress is real, and it can completely derail you.

Fortunately, while you can’t avoid every money woe, there are plenty of ways you can better prepare yourself to avoid sticky money situations. Not only that, but you can work on altering your reaction to money stress so it affects you less. Here are 5 things to do if you’re stressed about money.

1) Get Organized

Living in a chaotic state can cause you more stress than you may even realize. Like anything else, it pays off to take time and organize your finances.

When you organize your money, you know exactly when each bill is due, how much money you will have in your bank account at any given month, and you can know exactly how much you need to save in order to meet your financial goals.

To start organizing your finances, one tip is to create a money calendar. First, you can write down every pay day. Then, write down when every bill is due. From there, you can calculate to ensure that you have more than enough money in your checking account to cover every bill without over drafting.

2) Build an Emergency Fund

Peace of mind is priceless. Without an emergency fund, you may be left in financial despair when a sudden, unplanned event occurs. If you stress over wondering how you will pay for unexpected expense (and even if you don’t stress), an emergency fund is a must.

And you can start small. Even an extra $500 can go a long way to cover you if you’re ever faced with a financial emergency.

3) Change How You View Your Budget

Budgets don’t just exist to tell you how to spend your money. This view of a budget can feel restricting, and you may grow to hate your budget. Instead, view your budget as an invaluable resource to bolster you to your financial goals. In fact, your budget is the way you can afford the things you dream about spending money on.

So instead of focusing on what a budget prevents you from spending money on, key in on how a budget allows you to spend money on the things you care most about. This mindset shift is imperative to removing financial stress from your life.

4) Stop Comparing Yourself

Keeping up with the Joneses is stressful. Ultimately, the Jones effect happens when you compare yourself and your lifestyle to those around you. Most of us are guilty of feeling pressure to keep up with what our peers are doing. And it’s a fascinating phenomenon – we spend a lot of money and create a ton of stress for ourselves by trying to keep up with our peers who we may not even like, or share the same interests with.

Once you free yourself from comparison, you can focus on spending money on the things that truly are important to you.

5) Learn More

You don’t need to be an expert in every job, responsibility, or area of life. Everyone, however, needs to be educated about money because, like it or not, money plays a huge role in most everyone’s life.

There’s no shame in admitting you could stand to learn more about money – in fact, even most financial gurus will admit there is always more to learn. Commit to educating yourself. Fortunately, there are endless resources at your disposal for little to no cost. From blogs to books, and from podcasts to newspapers, you can always find a new tool to help teach you more about money.

Bonus: Side Hustle Your Way to Financial Freedom

Would you be as stressed about money if you simply made more? Increasing your income is easier to do than most people think. And having a higher income means you can meet all of your financial goals faster.

You don’t have to leave your day job in order to increase your income. Side hustles are a great way to earn more, and you can start a side hustle today. Whether you choose to become a part-time dog walker, a blogger, or a freelance writer, there are thousands of ways to earn extra cash on the side.


Source: Young Adult Money

How to Refinance a Car Loan

October 9, 2018

Refinancing an auto loan can save you hundreds of dollars in interest payments. When most people hear the word “refinance,” their minds automatically jump to home refinancing. After all, your home loan is likely the one that will take you the longest to pay off. So it’s the one that typically benefits the most from a refinance.

But did you know you can also refinance your car loan? This is an especially good option if you could get a much lower interest rate on a new car loan. This can save you tons of money and also help you pay off your car more quickly.

Interested in refinancing your auto loan? Here’s how:

Know When to Refinance

First, you will, of course, want to keep an eye on whether or not you should refinance. You’re likely a good candidate to refinance if one or more of the following applies to you:

  • You’ve seen auto loan interest rates drop. It’s a good idea to keep an eye on industry trends to be sure you’re still getting a good rate.
  • You’ve boosted your credit score. According to this auto loan interest rate calculator, your credit score can make a huge difference in what you’ll pay in interest on your car loan. On a $10,000 used purchase loan, you could pay an average of 15.58% interest with poor credit, or an average of just 2.73% with excellent credit. That’s a huge difference! If your credit score has increased several points since you financed your car, look at your new expected interest rate.
  • You just didn’t get that great a deal on your financing. Maybe when you bought your car you didn’t know how to get the best financing deal.
  • You need to decrease your payments. Are you struggling to make your car loan payments? In this case, a refinance could get you into a lower payment by extending the repayment term. This isn’t a great option, if you can avoid it. But it can be a reasonable way to trim your budget without having to give up your car.

If one or more of these situations sounds familiar, you should at least find out what deal you might get by refinancing your car loan.

Find Your Break-Even Point

Before you actually refinance your car, first find out if it’s actually a good idea financially. Sure, saving a few percentage points on your interest rate seems like a good idea right off. But there are costs involved with refinancing. So be sure your savings will outweigh your costs.

To do this, you need to calculate your break-even point. This is the point–usually a number of months–at which your savings will begin to outweigh your costs.

To calculate your break-even point, first figure out if there are any fees involved with refinancing your car. This might include early termination fees on your original loan, transaction fees for your new loan, and potentially new state registration fees. Some states require borrowers to re-register their cars after a refinance. Add all that together, and that’s how much your refinance will cost.

On the savings side, get an estimate of how much you’ll pay on your refinanced loan. Find out how much that will save you per month. Then, divide your overall cost by your monthly savings.

This is easier than it sounds. Let’s say your refinance will cost you a total of $500 in fees, but you’ll save $50 per month on your loan. It will take you 10 months to break even. After 10 months of car payments, you’ll start saving money.

Shortening Your Term

Calculating your break-even point can be tricky if your refinance leaves you with a larger or similar loan payment because you’re also shortening the term. If you can significantly cut down on your interest, you can pay off the loan more quickly for the same monthly payment. This is a good option if your payment is affordable and you want to get out of debt more quickly.

In this case, though, you’ll need to calculate your overall expenses versus your overall savings. You can do that using an amortization calculator. Put in your current car loan terms and current principal. See how much you’d pay in interest over the rest of the life of your loan as is. Then put in your current principal with the new loan terms. What’s the difference in interest payments?

In our first scenario, where a refinance would cost $500, if you save $501 by refinancing, you’re saving money. Of course, it’s up to you to decide how much you need to save in total to make the effort of the refinance process worth your while.

Get Your New Loan

Getting a new auto loan is typically pretty simple. You get your documentation together, usually including the car’s information and documentation about your income. Then you fill out the application for funding. In the last step, you may have filled out preliminary applications. At this point, you’ll likely need to provide things like actual proof of income.

If the new lender approves the terms, they’ll typically work behind the scenes with your existing lender. The new lender will pay off the balance on the loan, and then they’ll take over the title. Once you pay off that loan, they’ll send you the title to the car that you now own free and clear.

Refinance with Argent Now!


Source: DoughRoller

8 Moves That Will Protect Your Family from Financial Chaos in Case of the Unexpected

October 1, 2018

Older man doing his taxesWhen it comes to protecting your family from any financial disputes in the event that you die, there’s a lot you need to consider. In fact, you need to plan everything accordingly and early enough so that you don’t leave your loved ones having to deal with all your financial affairs during such an emotionally charged time.

People who die unexpectedly without having their financial affairs in order usually end up putting their family through tremendous financial turmoil. This is especially true for those who have dozens of estates that need to be managed after they die. With that in mind, here is a list of what you can do to ensure that doesn’t happen in the event that you die unexpectedly:

Draft a will

Studies have found that more than half of all Americans currently don’t have a will. That’s a very big mistake, especially if you own estates or properties. Someone will need to handle and manage the assets you leave behind; that’s one of the main purposes of a will — to set your records straight and avoid disputes after your death.

Seek trusts

A trust is used to manage your financial affairs, estates, and/or property after you die. You should also include this in your will. In most cases, people opt for trusts if they still have minor kids who they feel may not be able to handle the finances you leave behind — or if you have adult children but you believe they aren’t up to the task of maintaining what you have already built. Trusts usually include an attorney’s will-creation fee.

Assign a power of attorney

By assigning a power-of-attorney, you authorize someone else to act in your place to handle your business affairs if you are incapacitated or can’t manage to do so personally.

Set an advance directive

This is a document which usually lays out your end-of-life preferences. The document also can incorporate a living will, medical power-of-attorney, and even “Do Not Resuscitate” orders. You don’t necessarily need an attorney to create this document. But other states require that the document be witnessed as you write it.

Have enough life insurance

Life insurance can help provide coverage for things like lost income after your death in case you have children who are dependent on you financially.

Update your beneficiaries

It is extremely important to ensure that the beneficiaries on your insurance policies, 401(k), investments, and retirement accounts are included in your will. Don’t let someone from your past relationship end up inheriting your financial assets simply because you failed to specify your intended beneficiaries.

Organize your paperwork

It is also important to ensure that your tax returns, 401(k), insurance policies, and brokerage statements are properly organized and paid up. And be sure to notify your closest friend or family member where the paperwork is so that they can access it in the event of your death.

Keep everything accessible

Never keep your wills and important financial documents them in a safety deposit box; some estates seal these deposit boxes when the owners die. As a result, the survivors may have a hard time settling an estate. While it is important to keep these relevant documents safe, it is just as important to keep them easily accessible after you die; this is very important especially if you have quick loans or any form of credit. Keeping everything accessible makes it easier for your family members to manage your credits and assets more smoothly in your absence.


Source: Len Penzo Dot Com

How to Make your Extra Money Work for You

August 24, 2018

Couple searching on line with a tablet pcLottery winnings, inheritance, lawsuit, gift, severance pay, financial grant–all mean extra cash. So, what’s your plan when money suddenly appears in your hands?

Sometimes in life, you get lucky. The person in front of you buys your coffee, you are gifted tickets for your favorite team, or you make every green light on the way to work. Of course, sometimes this luck involves money, and it has the potential to change your life.

Sudden windfalls can take many forms. You could bring home extra cash from gambling winnings, an inheritance, or even a financial gift. It could also be the best result from a bad situation, such as a lawsuit settlement or severance package. No matter where the money comes from, though, it’s important to plan how to put it to work for you.

By having a plan in place, you can not only optimize your financial impact, but you will also avoid the all-too-common tendency to fritter it away.

Take the Time to Make a Plan

I’ll admit it: I dream about winning the lottery sometimes. Since I’m not in the wills of any rich uncles (that I know of) and I doubt anyone I know will be gifting me with some serious cash anytime soon, the lottery is probably my best chance for a sudden windfall. And boy, oh boy do I have my new-money strategy all figured out.

First, I would pay off my mortgage, student loans (sayonara, Navient!), and auto loan. The rest would be a combination of paying off my parent’s house, fully funding my kids’ college savings, fully funding my retirement accounts, traveling the world, and giving some to charity. I’ve given this some serious thought over the years, and my strategy has changed along with my life and obligations. (Now, I just need those winning numbers to hit! I’m ready for it.)

Depending on where your finances currently sit, though, your priorities might be a little different. In fact, there are a few things that you should absolutely focus on first, whether your unexpected windfall is $250 or tens of thousands of dollars large.

You might have a plan in place long before the dream money arrives (if it ever does) or you might be caught off-guard by a sudden influx. No matter what, though, the important thing is to establish a plan before you do anything. Even if that means parking the money in a savings account or short-term CD until you can figure out exactly how to optimize the spending.

Think About Taxes

The very first thing you should consider when coming into extra money is the tax implication of those funds. Depending on where they come from and what you do with them, you could wind up with a seriously inflated tax bill come next April.

Cash gifts are generally safe, up to a certain amount. This means that if your parents or Aunt Sally want to write you a $15,000 check for Christmas, you’re in the clear. Since this doesn’t cross the annual gift tax exclusion threshold ($15,000 in 2018), neither the giver nor the receiver has to worry about Uncle Sam taking his cut. Beyond that amount, the donor is supposed to report the gift and pay necessary taxes, but in certain cases (if the taxes go unpaid), the IRS can come after the donee instead.

Gambling winnings–whether through a raffle, on a lottery ticket, or in a casino, among others–must be reported as income. This means that come April, you will need to pay taxes on those winnings according to your overall tax bracket. This also means that you should take measures to lower your taxable income throughout the year and reduce the amount due.

If you inherit your windfall, it may or may not be subject to taxes, depending on the nature of the funds, the amount inherited, and even the state in which you live. For instance, some states charge an inheritance tax, though it will usually be taken out of the funds before you ever even see a check. There are also estate taxes to worry about if you are inheriting a sum of money from a large estate. If you inherit a 401(k) or IRA, or even property, you will need to pay taxes on the deductions or capital gains resulting from either.

If you aren’t sure about the tax implications of the money you’ve come into, you should consult with a tax advisor to be sure. By planning ahead for your tax bill, you can not only optimize your investments and spending to reduce your taxable income, but you can also avoid spending your windfall only to get stuck with a tax bill you can’t afford the following spring.

Focus on High-Interest Debt

Whether you come into $500 or $50,000, your first focus should be on high-interest debt. Credit card interest rates are an average of 15% but can easily top 30% on some products. If you have private student loans, you probably have some high interest rates (some might even be variable). This means that you are throwing a substantial amount of money into a hole each and every month because of your balances.

If you are carrying around high-interest debt, your windfall should first be directed at clearing out those accounts. Even if you don’t have enough extra money to pay down the balances entirely, you can still make a dent with your extra funds. This will not only mean less interest charged each month, but will jump-start your payoff progress.

You shouldn’t worry about low-interest debt just yet, such as an auto loan (usually 3-5% or so) or even your mortgage (averaging 4.7% right now).

Build an Emergency Fund

Did you know that less than half of Americans have enough money on-hand for a sudden, $1,000 expense? This means that if they have an unexpected medical or dental issue, if the water heater suddenly leaks, or if they lose their job, they don’t have a safety net. Credit cards can be a fall-back, albeit a dangerous one, but if those are already maxed out or unavailable, you could be one emergency away from homelessness.

Having an emergency fund in place gives you peace of mind in case something comes up, and can be the safety net that you need to make it out of an emergency situation.

If you’ve already taken care of high-interest debt, your windfall should next be directed at funding such an account. Start by building an emergency fund that can cover a full month’s worth of expenses in your home. Then, build up to one and two months. Your goal? A full six months’ worth of expenses, from your mortgage payment and insurance to gas, groceries, and utilities.

Think About Clearing Other Debt

Next on the list for you might be clearing out other, smaller/lower-interest debt, depending on your personal priorities. For some of us, this could mean paying off a mortgage (our own, mom and dad’s, or even grandma’s) or auto loans. Even though the interest rates on these are probably reasonably low, the peace of mind that comes from eliminating the debt could be exactly what you need to de-stress.

Some argue against this, opting instead to invest those funds (where you could be earning 7-8% or more a year in interest) versus paying down a debt that only charges 4% or so. However, investments aren’t guaranteed; by getting yourself entirely debt-free, you can have the financial freedom and peace of mind that you may desire.

Invest Wisely

Depending on your priorities and current financial situation, investing might be next on your list. For some, it may actually come before paying off smaller, lower-interest debt. It’s really a matter of personal preference at this point.

Building an investment portfolio with your windfall can vary depending on your interests, the amount of money you have to invest, and even where you are on your road to retirement.

If you are still working and haven’t already maxed out all of your tax-advantaged retirement accounts, this should be your priority. These accounts allow you an easy way to reduce your tax burden, and you should jump on that every chance you get.

If you’re already maxed out for the year on your 401(k) or IRA accounts, you could earn some interest by investing your money. You could choose to allocate some of the funds to peer-to-peer investing, for instance. These types of loans have a certain level of risk involved but the returns are excellent. You could also work with a robo-advisor (like Personal Capital) or financial advisor to choose funds and even individual stocks that interest you, and build up your investment portfolio.

Buying another home or investment property might be the right answer for you. Even if you just use your money as the down payment on a new house, it can still be an excellent investment. Just be careful: being able to afford the down payment doesn’t necessarily mean you will be able to afford the home in the long run. Be sure to plan your purchase(s) wisely.

Make Charitable Donations

I personally believe in tithing and doing for others, so my win-the-lottery dream has always included charitable causes. While my plan would be to donate 10% of my windfall to others, this may vary wildly for others. The percentage isn’t the most important thing here, but doing good for others when you can should always be on the list.

For you, this could take the form of donating to your church or an organization that speaks to your heart. You could also start a scholarship fund for underprivileged youth, support a special program in your area, or any number of other avenues.

Be sure to consult with a tax advisor regarding the implications of your donation. There may be ways to optimize your charitable giving so that you also reduce your taxable income in the process.

Plan for the Future

I have two small children, so their future is always on my mind. One of them has special needs as well, so that opens up a whole new can of “planning for the future” worms.

Whether planning for their inevitable education expenses to setting aside extra money for down payments, their wedding, etc., it would be great to establish funds for their future needs. I don’t necessarily want to create “trust fund children,” even if I could afford to do so, but planning for specific needs down the line is a priority of mine.

If setting aside educational funds, look into utilizing a 529 account. This tax-advantaged plan will reduce your income tax burden and also earn them interest as it grows. If they are working, you can also use the money to fund a Roth IRA for them; just be sure that you don’t cross the maximum contribution amount or the amount of money they actually make this year, whichever is lower.

Of course, be sure to also address your own future, as we talked about in the retirement account/portfolio section above.

Have (a Little) Fun

While it’s important to be smart and intentional with your windfall spending, it’s just as important to have a little bit of fun. After all, work and no play can drive anyone crazy.

Set aside a specific amount to just enjoy life with–this would be another 10% for me personally. I would use that money to travel the world or just buy myself a pair of fun shoes (depending on how much money I came into), but you can set whatever amount you’d like. Just be sure that you’ve left yourself enough to take care of the really big priorities, like high-interest debt.

Update Your Estate Plan

Once you’ve decided how to spend your windfall and allocated funds to the appropriate accounts, it’s important to then update your estate plan. Failing to do so could mean serious tax implications later on (for your heirs), many of which could be avoided with the right planning.

Consult with a financial and/or tax advisor if needed, to see how you can create a new estate plan that accounts for your newfound funds. If you only come into a few thousand dollars, this obviously isn’t an issue for you–when I inevitably win the Powerball, though, you best believe that I will be calling up an advisor first thing to create a decades-long plan for my money.

Coming into funds is exciting and almost always a welcome surprise. However, there are smart ways to spend this money and there are dumb ways. By planning your spending intentionally (and even consulting with an expert or two), you can maximize your new funds and ensure that they go the furthest.



How to Tackle Your Summer Vacation Credit Card Debt

Family hiking through rivier in Andalusia, SpainIt’s easy to rack up credit card debt while on summer vacation. After all, finances are probably the last thing on your mind, and you have a handy credit card in your wallet whenever you need something. You can sit back with a margarita in hand without having to look at that credit card statement until next month.

When summer comes to a close, however, it can be quite a shock to see how high your credit card balance has grown. It’s not a fun situation, but with a plan in place, you can get out of credit card debt before the snow starts to fall. Here’s how to do it.

  1. Assess your new debt

As tempting as it might be, now’s not the time to hide your head in the sand. In order to create a plan to get out of credit card debt, you first need to know how big of a monster you’re fighting.

Log into your credit card accounts — all of them — and record two things for each of your credit cards:

  • How much you owe.
  • What the interest rate is.

It’s also a good idea to go back over your credit card statements to make sure everything’s kosher. Look for any double-charged expenses (maybe that waiter at the bar was a little loose with his fingers while keying in your purchase), or any charges you don’t recognize, as this could be a sign that your credit card information has been stolen.

  1. Check in with your budget

It’s a good idea to check in with your budget again if it’s been a while. In this case, it also serves another purpose: Finding out how much extra you can afford to pay toward your debt each month.

Go through each line item and ask yourself if there’s any way you can reduce it without sacrificing too much. For example, do you really need to pay for cable if you’re mostly watching Netflix, or can you start bringing leftovers for lunch instead of going out to pricey restaurants? Cut those corners now and it could make a huge impact in your debt repayment plan.

  1. Commit to a monthly payment amount

After you’ve gone through your budget and found extra money, it’s time to commit to a monthly payment amount. If at all possible, strive to pay more than the minimum monthly payment amount for your credit card debt. The more you can afford to pay each month, the sooner you’ll be out of debt.

Once you decide on a number, the final step is to set it up on autopay. That way, it’s even harder to self-sabotage your debt-payoff plan.

  1. Decide which credit cards to pay off first

If all of your credit card debt is on one credit card, this’ll be easy: pay off that credit card and you’ll be done.

But what if your debt is scattered across two or more credit cards? In that case, you’ll need to make the minimum payment on each. If you have money leftover after making the minimum payments, you’ll need to decide where to send it.

Two popular debt-payoff methods are the debt snowball and debt avalanche methods. The debt snowball method has you paying off the credit card with the smallest balance first, then moving onto the next smallest balance. The avalanche method is similar in execution, but instead of starting with the card with the smallest balance, you start with the card with the lowest interest rate until your debt is gone.

  1. Throw extra money at your debt

So, you’ve committed to a monthly debt payment that is hopefully higher than the minimum required. This will get you out of debt on schedule, but wouldn’t it be better to get out of debt even sooner?

That’s why it’s a good idea to throw any extra money you have coming in toward your debt. If you earn any money from a side hustle, selling unwanted items, unexpected gifts, or a raise at work, throwing it at your debt rather than buying a new big-screen TV can go a long way toward getting out of debt sooner.

  1. Make a savings plan for next year’s summer vacation

In order to avoid a repeat event next year, why not take the time now to plan a savings strategy so you don’t go into debt again? Figure out a target savings goal, either based on how much you spent this year, or the cost of a trip you want to take next year. Then determine how many months you have between now and your vacation. Finally, divide your target savings goal by how many months you have to save, and strive to set that amount aside each month.

For example, if you have six months until you want to go on a $1,800 cruise vacation, you’ll need to set aside $300 per month until it’s time to go.

After all, won’t sipping cocktails on the beach be that much sweeter if you’re not worrying about facing a debt hangover once you return?