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  • Archive for the ‘Holiday’ Category

    I Love You Enough to Discuss Finances

    Saturday, February 14th, 2015

    Pink TableWhile it may not sound as romantic as the traditional fancy dinner or a dozen roses, nothing says “I love you” like making smart decisions that can build your financial future together. Have some fun with your sweetheart this weekend, but also make a commitment to each other to improve your financial foundation. These steps can help get you started:

     

    1. Review your finances, even if you are not married.

    Make time to sit down with your partner and see what your current financial picture looks like. To get you started, here are some questions you should each know the answers to:

    • What is your spouse’s income?
    • Where are you spending your money on a monthly basis? Where is your partner spending his or hers?
    • What debts do you both have (Credit cards? Student loans? A mortgage?) and how are you working toward paying them off?
    • Does your spouse have an employee-sponsored or other retirement plan? How much is he or she contributing each month/year?
    • Do you have money in joint or individual savings accounts? If so, how much? Do you make regular contributions to it?
    • Do you have any investments as individuals or as a couple? What are they? How are they performing?

    It can be hard to talk about money and especially debt, but you will be more confident that you can make good decisions if both of you know all the same information.

    Even if you are not married, you and your significant other should start to share your financial situation. Many couples do not talk about finances until after they are married and then find themselves straddled with their significant other’s debt. It is better to prepare yourself now than be surprised later.

     

    2. Discuss how to split finances.

    You may want everything to be even and equal, but often one partner makes more money than the other. You should discuss how that affects your spending and saving. Instead of trying to pay for half of everything, suggest splitting it by percentage of income. For example, if you make $45,000 a year and your spouse makes $52,000, try splitting your rent so that your spouse pays 15% more.

    Creating a budget can help with understanding spending habits. Use our budget worksheet to organize your finances

    Also, keep in mind the fact that women often spend their money on everyday expenses, while their partner’s income goes into investments or savings. Make sure that you are contributing to long-term savings and that there are assets that are also in your name.

     

    3. Plan ahead.

    Many women will end up living on their own at some point in their later years. You may be part of the 50% of couples that divorce. Or you may stay married, but live longer than your husband. Get involved in your family’s finances now so that you know how to handle them if you become solely responsible. Know where your investments are and how much they are worth. Make sure your name appears on all of your family accounts and investments to establish your legal right to them should your marriage end or if your spouse becomes ill or unable to assist in making decisions. And finally, make sure you take those extra years when you may be living on your own into account when you and your spouse are planning for retirement.

     

    4. Revisit your financial plan.

    Make plans to re-evaluate your finances each year, at minimum. Scheduling a time to sit down annually will allow you to make any necessary adjustments to your budget and check to see if your long-term savings and investments are on track. Also important – make a promise to each other to have a conversation anytime there are major changes to your finances. Did your spouse get a bonus, or are you now out-earning your partner? Discuss how to use those additional funds together. Did one of you make a big purchase that you have not told the other one about? Be honest with each other and talk about how to adjust your spending habits.

     

    These four steps will help you avoid common mistakes women in couples make about their finances. You’re committed to each other, be committed your financial future as a couple too.

    For more tips on making your love nest financially secure, check out one of WISER’s earlier blogs, WISER Ways to Say “I Love You”.

    5 Steps for Your End-of-Year Financial Planning

    Wednesday, December 17th, 2014

    As 2014 comes to a close, this is a perfect time to review your finances, make last minute adjustments to your savings, and plan for the future. These five steps will help you make the most of your December and ensure you start 2015 as financially fit as you can.

     

    1. Add money to your 401(k).

    Give yourself the gift of retirement savings. In 2014, you can contribute up to $17,500 to your 401(k) plan. If you are 50 or older, you can contribute an additional $5,500 as a catch-up contribution. WISER recommends making contributions throughout the year, but even if you cannot reach the max, contribute at least enough to get the benefit of your employer match (if your company offers one).

    It’s tempting to put off saving, especially during the holidays when you are buying gifts for others, but contributing to your retirement now saves you more in the long run.

    2. Open up a Roth Individual Retirement Account (IRA).

    If you don’t have a retirement plan through your employer, this step is the next best one to take. Find out if you are eligible for a Roth IRA. The contribution limits to IRAs are smaller than 401(k)s — $5,550 in 2014, or $6,500 if you are over age 50.

    To learn more about IRAs and how to decide which type is best for you, see our page about ways to save for retirement. You have until April 15, 2015 to make IRA contributions for 2014. 

    3. Don’t forget to take your required minimum distribution.

    If you are 70½ or older, you generally must start taking money out of your taxable retirement accounts by December 31st. Of course, there are a number of exceptions to these very complicated rules so check with your tax advisor or accountant. If you do not take out the required minimum, you may have to pay a steep penalty to the IRS. Not sure what your required minimum distribution is? The financial industry regulator, FINRA, offers a calculator to help you figure it out. You can also check out this WISER newsletter for more detailed information.

    5 documents.hand copy4. Find and review important documents.

    At bare minimum, you should review your beneficiaries on financial accounts and insurance policies annually. Make sure you have a designated beneficiary for each account or policy. If there were any significant changes in your life and family such as a birth, marital status change, or death, your accounts should reflect the change. Now is also a great time to gather documents and records you’ll need to complete you 2014 tax returns. If you start preparing now, you can file for your tax refund sooner!

    We also recommend reviewing your personal end-of-life documents such as your health care directive. While this time of year may be busy, it’s also a perfect time to consider letting others know where these important documents are kept. Step 6 of our Financial Steps for Caregivers booklet offers lots of information on the types of documents you need. Most Americans do not have up-to-date documents, so start thinking about how you can prepare your family’s paperwork.

    5. Make tax-effective, charitable contributions.

    You probably know that you can deduct all kinds of charitable contributions from your taxes, including cash, stocks, donated clothing, and even the cost of ingredients you bought for a soup kitchen! In order to maximize the benefit from these charitable gifts, you’ll need to itemize your deductions when filing your taxes. In many cases, donating is a great way to lower your tax bill. (If you are looking to make any end-of-year donations, you might consider a gift to WISER!)

     

    The holiday season is a busy time of year, but it also provides a great opportunity to get your finances organized and on track. If you can’t take all of these steps right now, choose at least one or two of them and commit to checking them off your list. Then ring in the New Year with even greater peace of mind about your financial future.

    Happy Holidays!

    A New Year to Invest in Your Financial Future

    Wednesday, January 19th, 2011

    The New Year presents us all with an opportunity to reevaluate our priorities and make some new year’s resolutions. Sometimes we have a habit of creating really extravagant goals for ourselves each year, hoping that this year will be the year to change it all. But by the time the New Year ball drops again, we often feel disappointed that we didn’t accomplish all we had in mind. This year, let’s resolve to make some financial resolutions that will stick!

    WISER’s mission is to help you create achievable savings and investing practices that can be maintained for a lifetime. To help you create your own unique, financially savvy path towards retirement, we have put together resolutions—one for each month—that are realistic and attainable. Take this opportunity to start fresh in 2011 with new goals for your financial future. Then when the ball drops on this year, you will be on your way to a more secure retirement. From all of us at WISER we wish you a happy financial new year in 2011!

    12 Helpful Tips for Each Month of 2011: Click here to print out your own copy for the fridge or your desk to remind you year round!

    1. January – Resolve your budget.
    Even if you feel like you are swimming in debt or living paycheck to paycheck, the first step to taking control is knowing how much money is coming in and where it is going. Our budget worksheets can help track where your money is going and help you establish some firm financial goals. Simply taking the time to calculate the numbers and having them right in front of you can be empowering and help motivate you to get (and stay!) on track.

    2. February – Invest in your financial relationships.

    This month, take time to sit down with your partner, spouse, significant other, (or even just yourself) and review all of your finances – look at what you spend each month, make sure you are both aware of each other’s employee-sponsored or other retirement plans and assets, review your insurance needs, and create an organized file with your important documents. Try not to let it become an overwhelming conversation, but make it your goal as a Valentine’s day gift to yourself and your loved ones to have a financial discussion about the future.

    3. March – Prepare for Tax Season.

    A quick way to immediately start saving before your tax refund burns a hole in your pocket is to have your tax refund automatically put into a savings bond. Visit the IRS website for great information that can help you fill out your tax forms so that you can instantly start saving with government bonds.

    4. April – Start a “Rainy-day” fund.

    April showers bring May flowers, and this month is a great opportunity to start a “rainy-day” fund. Many experts recommend having about six months’ worth of expenses in a savings account to cover sudden unemployment or other emergencies. Of course it will take some time to build up to this amount, but resolve this April to start stashing away some money each month, even if it’s just a small amount, for that rainy day.

    5. May – Show Mom you really care.

    May is a time to celebrate our mothers and all the other women in our lives who have done so much for us over the years. A great way we can show our mothers and other older relatives our appreciation is to make sure they will have the financial assistance they need in retirement. Take time this month to have a conversation with your parents or others who may depend on you down the road about their caregiving needs and retirement plans. Helping them now will also help you in the long run. Visit the National Alliance for Caregiving for great resources on this topic.

    6. June – Take a vacation from your finances by paying yourself automatically.
    Put yourself at the top of your “payee” list. Regular automatic deductions from your paycheck or bank account into a savings, investing or retirement account will keep you on track toward your short and long-term financial goals. Commit to save as much as you can each month, but if you don’t feel like you have a lot to save, start small. Find a way to save even just $25 a month towards your retirement goals.

    7. July – Kick the summer doldrums by taking a long-term view.
    Summer months give us the opportunity to slow things down and appreciate the long days of summer. This is good time to think long-term about your retirement needs.  Take some time this month to play around with a retirement calculator and start to get a sense of what you will realistically need. Don’t let this task overwhelm you, but instead try plugging in different scenarios and allow yourself to plan for the future. A good calculator we recommend can be found at www.360FinancialLiteracy.org, specifically the Retirement Planner Calculator.

    8. August – Feeling the heat of debt?

    Let’s admit it; most of us have some pesky debt that is hanging over our heads. Take this month to face the heat and organize your debt. Resolve to stop adding to your debt and start making some headway on paying it off. Check out WISER’s Debt Warning Signs Fact Sheet to see where you fall when it comes to financial debt, and what you can do to start getting out of it.

    9. September – It’s back to school time, so educate yourself.
    If you are not already investing your money and feel overwhelmed by the thought of things like stocks, bonds, and mutual funds, then commit this month to educating yourself on these topics.  Read at least one book or informational booklet that covers the basics of investing.  You do not need to be an expert in finances to successfully plan and save for retirement; a little knowledge of the basics can go a long way. WISER’s booklet, “What Everyone Needs to Know About Money and Retirement” is a great place to start.

    10. October – Trick or Treat? Understand Financial Scams.

    Sometimes it’s hard to tell whether or not something is a great financial opportunity or just too good to be true. Use October as the time to educate yourself about financial scams and abuse that unfortunately happen more often then we’d like to think. WISER’s Too Good to Be True Checklist can help you spot a financial scam, and our Elder Financial Abuse Brief can also help you look out for those you love. Then share this information with a friend or family member to help protect them too!

    11. November – If you have benefits at work, give thanks! And learn how to maximize your options.

    For many companies and organizations, November is benefits enrollment season where you can sign up or make adjustments to your benefits. Take this month to learn more about your individual benefits and how you can make the most of them.  To help you think about this, check out WISER’s brochure “20 Ways to Take Advantage of Your Company Benefits Plan”.  If your company does not offer a benefits plan, take this time to research what you can do on your own, like opening an IRA (Individual Retirement Account).

    12. December – Celebrate your financial success.

    As the year comes to an end, celebrate all that you have accomplished this past year. Look back on all of the financial strides you have made and commit yourself to keeping up those goals and improving upon your success next year. If for some reason you were unable to meet your financial goals, then take this month to recommit to your financial future and to making each month count in 2012. One month at a time can make all the difference when it comes to saving for retirement.

    WISER

    About Us

    WISER is a nonprofit organization that works to help women, educators and policymakers understand the important issues surrounding women's retirement income. WISER creates a variety of consumer publications including fact sheets, booklets and a quarterly newsletter that explain in easy-to-understand language the complex issues surrounding Social Security, divorce, pay equity, pensions, savings and investments, banking, home-ownership, long-term care and disability insurance.

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