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Apache is functioning normally

July 27, 2023 by Brett Tams

For the past few months, I’ve been moving toward a system of paperless personal finance. In this guest post from Paul Lussier, he explains his own automated system.

Lately J.D. has been talking a lot about automating his finances. In my world (that of high-tech, software, and large computer systems), we strive to automate as much as possible. By doing this, we hope to minimize error by reducing human interaction, leveraging the power of the computer for what it’s good at, leveraging the power of people for what we’re good at.

In other words, we emphasize the strengths of both the computer and the human. Computers are really good at doing the tedious, mind-numbing, soul-sucking repetitive tasks which humans hate. Humans are far better at reasoning, logic, and creative thinking than computers.

I’ve applied this understanding to put my finances on auto-pilot. I use the automated computer systems at my bank to move money around between different accounts, pay bills, earn interest, credit-card points, etc. Though the following system may seem complex, it’s really fairly simple once it’s set up. (This method also works nicely with the recent post about building wealth with a “virtual employer”.) Here’s how my system works:

Consolidate your bank accounts
I’ve consolidated all my accounts at USAA Federal Savings Bank. Their online banking site and customer service are unparalleled. Choose a bank with which you are comfortable, and which does not charge outrageous fees or otherwise “nickel & dime” you to death.

If you use credit cards, get a credit card with this bank and stop using the others. If your bank and credit card are with the same institution, you can easily set up automated payments from your checking/savings accounts to your credit card to occur on the due date. This will virtually eliminate all late fees! Consolidating bank accounts makes life simpler.

Set up overdraft protection
Some banks allow this — others don’t. My bank does. Using your savings account to protect your checking account does mean that you may lose some interest on your savings. But it’s better than having to pay back the overdraft amount plus interest, plus a possible late/finance charge on top of that. In some cases you can set up a credit card to be the overdraft protection, but this just feels wrong to me.

Set up accounts specifically for bills
This means you actually have two checking and two savings accounts. One pair is for Daily Use — this checking account is the one from which you buy gas, groceries, take out cash at the ATM, etc. This primary savings account is where you stick “extra money” (more on that later).

The Bills accounts are where you start budgeting. I struck on this idea when we had some major financial re-organization a year or so ago. I opened a new savings account online. The process took five minutes. I calculated what our bills cost, and then set up an automatic transfer from my Daily Use checking account to the Bills savings account to occur on the dates when I get paid. Now I’m budgeting this way for all my bills that occur less than monthly, and I’m earning ~4-5% interest on the money as well!

Sign up for direct deposit
Have your check directly deposited to your Daily Use checking account. In most cases, that money is available one business day before payday. Compare that with the hassle of having to go to the bank, deposit the check, and have it clear. That whole process, if you’re lucky, takes two days, which means it takes three days longer than with direct deposit. Think of the amount of interest you’re losing and the amount of time required to go to the bank!

Pay yourself first
For many people, paying yourself first is the starting step. But with this system, you need to set up the infrastructure to handle paying yourself first. Set up an automatic transfer from your Daily Use checking account to your Daily Use savings account on each day you get paid. It doesn’t need to be big: $10/week, $100/month, $50/paycheck — whatever you think you can afford. Remember, if you need this money, it’s just a transfer away. But the key is to make it more painful to get at.

Pay your bills second — automatically
Now that you’ve set up the infrastructure, determine which bills you want to budget for. Set up an automatic transfer for that amount from your Daily Use checking account to your Bills savings account on the day you get paid. (You’re moving the money to savings because it will earn a higher interest rate than in a checking account.) Consider putting it in a certificate of deposit which may earn a higher interest rate.

I pay my bills with debit and credit cards, and sometimes with my bank’s automated bill-payment system. (Different vendors have different requirements.) Again, this allows me to consolidate things. Looking at my credit card statement, I can see most of my bills in one place. Also, I don’t have to worry about variable payments. For example, my cell phone bill fluctuates from month-to-month based on usage, text messages, etc. This makes it difficult to set up an automated payment from my bank. Charging the bill to my credit card solves this problem.

If you have a Bills checking account, you can use the associated debit card to pay bills, too. I use the credit card, since my rewards credit card provides me twice the return compared to the rewards debit card. Using the credit card also provides me with some amount of protection in the case of identity theft.

Schedule recurring transfers
Now that all your accounts are in place, it’s simply a matter of setting up transfers for the correct times and amounts from your Bills savings account to your Bills checking account. Though this may sound complicated, it’s not.

It’s true that the process of transferring between all these accounts works best when the bills are large and infrequent. For example, I have a variety of insurance bills, none of which occur more often than quarterly. By totaling all these different bills, I’m able to use this system to not only budget these expenses, but also earmark certain monies specifically for them all while earning interest on them.

For regularly occurring monthly expenses (like electric, cable, cell phone, etc.), I have the biller charge my credit card. This makes sure the payment is never late and earns me a bonus reward. The credit card bill itself usually gets paid directly out my normal checking account because that’s where the money happens to be.

Another thing I like about the separate checking/savings account set up is that if there are billers who need to draft a checking/savings account, I can completely isolate what they have access to. I can also make sure that the money is sitting in savings until the last possible moment but gets automatically transferred over in time to pay the bill without incurring a late fee.

Putting the system into practice
This is my first year using this set up. So far I like it. As I continue to refine and tweak it, however, I’m finding a few rough edges. For example, I can schedule an automatic bill pay for an indefinite amount of time in the future, but I cannot schedule a transfer between savings and checking to occur on a date greater than one year from today’s date.

Also, the scheduling of automated transfers is not as granular as with the automated bill pay system. I can set up transfers to occur weekly, 1st and 15th of the month, every two weeks, every month, or every two months. I’d really like to be able to set up a transfer for the 15th and last day of the month (when I get paid) and I’d really like to set up transfers every three months (quarterly) on a given date.

I hope you find this system useful as I have!

Thanks, Paul. I, too, continue to refine my paperless personal finance system. It’s a matter of discovering which accounts work best with which companies. Sometime later in 2008, I’ll describe my current setup.

Final note: Paul sent me an e-mail the other day. “Ironically,” he said, “I just finished The Automatic Millionaire. It was great read. I was amused to read so much of what I already do on my own. Most of what I do here is covered in much greater detail in that book.”

Source: getrichslowly.org

Apache is functioning normally

July 27, 2023 by Brett Tams

After a year’s worth of warnings about a recession, Federal Reserve chair Jerome Powell said Wednesday that the central bank’s staff no longer forecasts a nationwide economic downturn. It’s welcome news for the economy to achieve a soft landing, a scenario in which inflation falls, unemployment remains relatively low and a recession is avoided.

Housing activity, however, will be limited as the impact of tighter policy continues to reverberate through the economy, housing experts and economists projected following the Fed’s decision to raise interest rates by 25 basis points on Wednesday.

Mortgage rates are expected to remain elevated until inflation moves to a level more consistent with the Fed’s mandate. High mortgage rates have triggered a rate lock-in effect across the country – disincentivizing homeowners to move and finance their new home with higher rates.

“High mortgage rates triggered by the Fed’s policy have caused more sellers to sit on the sidelines given the large differential between the rate they enjoy on their current home compared to the possible interest rate on any home they may purchase today,” said Marty Green, principal at Polunsky Beitel Green, a law firm for residential mortgage lenders.

Data from Redfin showed that about 92% of homeowners have a rate below 6% and a record 60% of mortgage holders have lived in their home for four years or less – further contributing to the supply shortage.

“Higher mortgage rates change the trade-up calculation for existing homeowners and are keeping as many as 1 in 7 out of the market because they don’t want to give up their existing low rate,” Danielle Hale, chief economist at Realtor.com noted.

Existing home sales dropped to a seasonally adjusted annual rate of 4.16 million in June from the previous month. Year-over-year, sales dipped 18.90% from 5.13 million in June 2022.

Hale expects the number of home homes for sale to decline this year, and continue to be a damper on home sales.

“A large swath of outstanding mortgages has below-market rates, and this has led to a restriction in the supply of existing homes for sale,” Ruben Gonzalez, chief economist at Keller Williams, said.

During his press conference with reporters, Powell acknowledged that the housing market has cooled due to high rates, but also said it “has a ways to go” before home prices fall.

Powell also said more supply was coming. Though housing starts boomed in May and fell slightly to a seasonally adjusted 1.43 million units last month, supply is mostly coming from multifamily rental construction. Permitting data suggests future multifamily supply is slowing and developers of such projects are highly sensitive to high interest rates.

For now, first-time homebuyers are the most impacted group as higher mortgage rates cut into their purchasing power.

High rates have made affordability exceedingly challenging, and low inventory in return increased competition, especially at lower price points.

The combined impact of higher rates and higher home prices has driven the cost of financing the typical listed home up more than $250 or 12.4% from a year ago; and up more than $1,100 or 96.5% from June 2020, nearly doubling the cost in three years, Hale noted.

It’s not just the buyers that are getting sidelined.

Renters are expected to get hit with higher rental rates, according to Justin Barry, partner at Morris, Manning & Martin.

While the Fed is attempting to stave off inflation by raising interest rates, it could actually have the opposite effect on rents, according to Barry.

“With each round of rate hikes, the Fed puts increasing pressure on multifamily properties with floating-rate loans or maturing fixed-rate loans. Many owners are attempting to pass along the increased financial burdens to tenants by increasing rental rates, provided that demand in a particular submarket supports higher rental rates,” Barry said.

With affordability challenges to persist, demand for new housing construction will follow.

“The onus is on homebuilders, as well as municipal, state and federal authorities, to take steps that will increase construction activity of owner-occupied single-family and multifamily housing to ease the affordability burden on would-be homeowners,” Kyle Enright, president of lending at Achieve, said.

Last hike of the year? The housing industry hopes so

While Powell emphasized any future policy decisions would be made on a meeting-by-meeting basis and that in the current environment, there is expectation that the central bank will pause its rate hike for this year.

“The Fed sounded surprised that we have disinflation factors without a hit to the labor market, which is positive because they might believe now they don’t need a job loss recession to help inflation data improve,” Logan Mohtashami, lead analyst at HousingWire said.

During a press conference with reporters on Wednesday, Powell said the Fed has “seen the beginnings of disinflation without any real costs in the labor market.”

Although inflation dropped to 3% in June, it is still above the Fed’s goal of 2%. Hiring still remains strong and the unemployment rate is hovering at very low levels.

If jobless claims get better, they might hike one more time, but they’re sounding more confident than they’re restrictive now, Mohtashami said.

“It could be the last one for a while,” Melissa Cohn, regional vice president of William Raveis Mortgage, said.

Although the Fed previously signaled it was looking at one or two more increases this year, “we’re starting to see other weaknesses in the economy” and that may put the Fed on a pause after this month’s rate hike, Cohn noted.

Goldman Sachs projected that the FOMC will ultimately remain on hold at the September meeting as the committee leadership has advocated for a “careful pace” of tightening.

“If the Fed isn’t careful, this critical industry may once again slow to crawl in the fall and winter,” Green said.

Source: housingwire.com

Apache is functioning normally

July 27, 2023 by Brett Tams

When it comes to our health, it is essential to obtain the best quality care possible. For some, employer sponsored health insurance coverage is an option for this. But for others, it is necessary to go out into the market and shop for either an individual or a family health insurance plan.

Because there are many options to choose from, it can be difficult. Therefore, it is important to have a good understanding of how health insurance works, and which options are available to you.

Then, you can determine which may be the best choice for you. We understand that any type of insurance purchase, from finding the best car insurance companies, best life insurance companies, or companies that offer burial insurance for seniors, can be a daunting task, that is why we are here to help you!

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Types of Health Insurance Plans

In its most basic sense, individual health insurance coverage is the alternative to purchasing via one’s employer on a group basis and can be purchased on either an individual or a family basis.

With an individual policy, the individual who is insured is fully responsible for paying the policy’s premiums. Therefore, if the person stops paying, the coverage will typically lapse (following a grace period).

There are several forms that individual health insurance can take:

Fee For Service / Indemnity Plans
HMO (Health Maintenance Organization)
PPO (Preferred Provider Organization)

Fee For Service Plans

A fee for service plan – also referred to as an indemnity plan – is a type of policy where the insured individual pays a predetermined percent of the cost of his or her health care services, and the insurance provider pays the remaining amount.

With this type of coverage, the insurance company does not have any type of contractual agreement with medical providers or hospitals, nor does the insurance company have a “network” of providers that the insured must use in order to obtain benefits.

Understanding HMOs and PPOs

Managed care plans are a different way to obtain health insurance services. These types of plans are able to contain costs by taking certain measures. One way of doing so involves controlling the behavior of the plan participants. This refers to both the members that are covered by the plan, as well as to the medical service providers.

A managed care plan will typically have the following basic characteristics:

Controlled access to providers
Case management
Preventive care
Risk sharing with the providers of the services
High quality of care

Some types of managed care plans include Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs). These plans may also be self-funded, dual choice, or indemnity.

Health Maintenance Organization (HMO)

A health maintenance organization, also referred to as an HMO, is a type of prepaid group health insurance plan that entitles its members to services of participating physicians, hospitals, clinics, and other types of health care providers. The emphasis in an HMO is on preventive care. In an HMO, the members are required to use contracted health care providers that are listed within a certain “network” of providers.

Health Maintenance Organizations represent what is known as “pre-paid” or “capitated” insurance plans in which individuals or their employers pay a fixed monthly fee for services, instead of a separate charge for each visit or service.

The monthly fees will typically remain the same, regardless of the types or levels of services that are provided. The health care services that are provided through an HMO are provided by physicians who are employed by, or under contract with, the HMO. HMOs can vary in design. Depending on the type of HMO, the services may be provided in a central facility or in a physician’s office.

Health Maintenance Organizations are the oldest form of managed care. They were created in the 1980’s as an alternative to indemnity insurance. HMOs are highlighted by their focus on preventive care and efficiency measures. And, HMOs usually offer lower rates on health care services than fee for service type of plans.

Although there are many variations of HMOs, these plans overall will typically allow members to have lower out-of-pocket health care expenses. However, HMOs may offer less flexibility in the choice of physicians or hospitals than other types of health insurance plans. With an HMO, individuals will likely have coverage for a broader range of preventive health care services than they would with another type of plan.

In addition, with an HMO, an individual typically won’t have to submit any of their own claims to the insurance company. It is important to keep in mind, though, that an individual will likely have no coverage at all for services that are rendered by non-network providers or for services that have been rendered without a proper referral from their primary care physician.

Because HMOs focus on preventative care, they seek to reduce health care costs by identifying and treating illness early on, before it becomes a more serious and costly situation. HMO plans usually do a good job of covering routine checkups and vaccinations. In addition, they frequently offer general well-being incentives such as smoking cessation or weight loss programs.

The HMO functions as a health care network. Aside from emergencies, a Primary Care Physician (PCP) serves as the primary and initial point of contact for all health concerns. The Primary Care Physician is oftentimes referred to as being a “gatekeeper.”

The PCP then refers participants to appropriate specialists if they are needed. If an HMO member opts to go to a doctor or hospital that is outside of the HMO network of care providers, they will have to pay the fees on their own. The intent of having a primary care physician is to prevent unnecessary doctor visits, thus saving money for the HMO.

With HMOs, premiums are typically required to be paid monthly. Since HMOs are considered pre-paid health care, participants usually won’t have to pay a deductible, although the plans do vary.

When a person visits a doctor, goes to the hospital, gets a prescription or receives other health services, they will have to make a small co-payment that will typically range from $10-$25 in most cases.

Preferred Provider Organization (PPO)

A preferred provider organization, or PPO, is a network of medical providers who charge on a fee-for-service basis, but that are paid on a negotiated, discounted fee schedule. As a member of a PPO, individuals will be encouraged to use the insurance company’s network of participating doctors and hospitals.

These providers have been contracted to provide services to the plan’s members at a discounted rate. Individuals in a PPO won’t be required to pick a primary care physician and they will typically be able to see doctors and specialists within the network at their own discretion.

The members of a PPO will likely have an annual deductible to pay before the insurance company begins paying their claims in the PPO. Once the deductible has been met, PPO participants will be required to make a co-payment for most doctor visits. Some PPO plans may also require that participants cover a percentage of the total charges for their services that have been rendered.

With a PPO plan, services rendered by an out-of-network physician are typically covered – but at a lower percentage than services that are rendered by a network physician. Seeing an out-of-network provider, then, can become costly.

For example, if an individual visits an out-of-network provider for services that total $500, the PPO plan may cover the charge at only 60% of the amount that a network provider would charge for the same service. If a network doctor would accept $250 as payment in full, this means that the insurance company would pay only $150, and the remaining $350 would come out of the PPO member’s pocket. Additionally, if a person sees a provider outside of the plan’s network, he or she may have to pay the charges up front and then submit their own claim for reimbursement.

PPO plans do offer more flexibility in choosing providers than do HMOs. For example, they do not require an individual to maintain a primary care physician, nor do they require them to use a primary doctor as a gatekeeper to other care. This means that a participant in a PPO can seek care from a specialist without having to first get a referral.

While it is easy to confuse HMOs and PPOs, there are some key differences. For example, PPOs utilize a networking method similar to HMOs, but with a much larger network, and a smaller monetary penalty for seeking care outside the network. As long as the provider is part of the network, the benefits are the same. In addition, in a PPO, the participants are free to use any provider that they choose, but they will likely have to pay more for it.

Point of Service (POS)

A point of service plan (POS) combines the formulas that are used by HMOs and PPOs. Like an HMO, a primary care physician must refer a person to an in-network specialist. When receiving care from a provider that is within the network, the patient is responsible for a small co-payment, but there is no deductible.

When a participant goes outside of their network, a POS plan acts more like a PPO. A POS plan will allow a person to self-refer outside of the network. In this scenario, the participant must first pay the deductible, then a co-insurance amount. In this way, the POS plan offers a strong financial incentive to remain within the network, however, it does not forbid it the way that an HMO would.

Other Ways to Pay for Services

Throughout the years, there have been other ways created to pay for health care services that are not covered by health insurance coverage, but that work in conjunction with health insurance policies. Some examples include Medical Savings Accounts and Flexible Spending Accounts.

Medical Savings Accounts (MSAs)

Medical Savings Accounts (MSAs) were typically combined with a high deductible medical insurance policy. The MSA offers a way to save money on a tax-deferred basis whereby funds in the account can be withdrawn tax-free and used for paying qualified health care expenses that are not covered by the health insurance plan. Withdrawals from an MSA can also be used towards paying the deductible expenses on the employee’s health plan in a given year.

Flexible Spending Accounts / Flexible Spending Arrangements (FSAs)

Flexible Spending Accounts (FSAs), also referred to as flexible spending arrangements, are a type of tax-advantaged financial account that can be set up through a cafeteria plan in the United States, much like a Health Savings Account, or HSA.

An FSA can be set up by an employer for an employee. The account allows the employee to contribute a portion of their regular earnings to pay for qualified expenses such as medical care of dependent care costs.

One of the primary benefits of an FSA is the fact that the funds that are contributed to the account are deducted from the employee’s earnings before they are made subject to payroll taxes. Therefore, the contributions that are made to an FSA can substantially lower an employee’s annual income tax due. There are maximum dollar amount limits as to how much can be contributed to an FSA account each year.

How and Where to Get the Best Quotes

When obtaining health insurance quotes, it is usually best to work with a company that has access to more than just one insurer. This is because you will be able to get many competing quotes – oftentimes on very similar coverage.

If you’re ready to shop for top health insurance providers, you can get you all of the information that you need – directly from your computer. No need to meet in person with an insurance agent or to go through the hassle of the HealthCare.gov website. In order to get the process started, all you have to do is simply use the form on this page. You can get your quotes and speak with a health insurance specialist about your specific needs.

Source: goodfinancialcents.com

Apache is functioning normally

July 27, 2023 by Brett Tams

Financial goals are meant to help you live your best life, whether that means helping you buy your dream home, affording your child’s education, or taking your mother on a cruise for her 60th birthday. To help you get there, it’s vital to have a budget that works for your situation and aspirations.

Having a budget can help you see where you are financially, know whether you’re on track for reaching your goals, and identify ways you can adjust your spending.

Once you have a budget nailed down — and the math is not as scary as some people think — you can reconfigure and adjust. After all, a budget is meant to work for you so you can reach your money goals, not the other way around. It can evolve right along with you, your needs, and your goals.

Why Is Creating a Budget Important?

Creating a budget is important because it allows you to see where your finances stand: You see how much money is coming and how much is going out, plus what it is being spent on.

It can provide you with a snapshot of your financial life, and it can illuminate any issues you need to address. Think about it: If you don’t know where your money is going, you can easily spend more than your means, leading to more debt than you can handle. Not budgeting can also prevent you from reaching your goals, such as having enough in retirement savings or being able to afford that kitchen renovation you’re pining for.

Although some people think a budget will cramp their style, the truth is that a budget doesn’t have to hold you back, restrict you from fun, or sour your lifestyle. It can eventually set you free from the financial burdens that are keeping you from setting and reaching your ultimate life goals.

Next, learn the step-by-steps.

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1. Determine Your Financial Goals

Setting financial goals is a crucial first step to being more intentional with your money management tactics. As in, having a purpose can give you more motivation to stick to your budget and get you on your way to creating smart financial goals that suit your life.

How to set financial goals? Start by taking time to come up with a clear idea of your short-term and longer-term aspirations. What kind of things could you dream about? Anything that’s ultimately important to you could be a financial goal example, including:

• Having $1,000 in the bank

• Hosting an amazing 30th birthday party for your partner

• Buying a home

• Starting a family

• Getting some new wheels

• Taking a dream vacation

• Getting out of credit card debt

• Starting your own business

• Planning for retirement

• Establishing and maintaining an emergency fund.

2. Calculate Your Income

Before allocating money for various spending categories and goals, you need to know how much money you have to work with each month. Calculate your after-tax income — you can look at your paystub and/or other earnings from your side businesses or second job. Or maybe you are the lucky holder of an investment account that generates dividends. Perhaps you regularly receive bonuses or tips at work. Add it all up.

3. Review Your Expenses

To make a solid, workable budget, you also need to know exactly how much money is typically going out. Pull together all your financial statements and look at how much you typically spend per month in the following budget categories:

• Loans (such as student or car loan payments) and debt (including credit cards)

• Insurance premiums

• Housing

• Utilities

• Monthly food expenses

• Childcare, child support, or related family obligations

• Transportation-related expenses

• Healthcare

• Savings/investments (for instance, 401(k) or IRA automatic savings deductions).

In addition, think about some other spending categories that are more about discretionary purchases. You can also track:

• Dining out (even those lattes to go)

• Entertainment, such as movies, books, concert tickets, and streaming services

• Personal care (manicures, yoga classes, etc.)

• Travel

• Gifts or treating friends to birthday drinks or dinners

• Non-essential clothing, electronics, home furnishings, and any other fun things you might go shopping for.

As you gather this information, you may want to look at a couple of months’ worth of records. For example, your credit card bill may vary considerably, so averaging a few months will give you a more realistic picture than checking a single month.

Once you have an idea of what you spend, it’s time to take a look at where you may be able to make adjustments. Many people look at their spending as “needs” versus “wants.” A need is something required for basic existence, while a want is discretionary spending. Needs also include debt payment, so if you have a student loan or similar monthly expenses, include that in the need category.

Also consider looking at each spending category in terms of fixed and variable expenses. For instance, your mortgage is a fixed expense since it typically won’t change from month to month, whereas entertainment would be a variable expense since it can change. Don’t forget to look at occasional expenses — like semi-annual car insurance payments — so you can set aside money in your budget each month to account for this expense.

4. Choose Your Budgeting Method

Subtract your monthly expenses from your monthly income. How are you doing? If there’s money left over, it means you may be able to meet your financial goals. Otherwise, you may need to either cut your expenses a bit or earn more money (or try a combination of both).

Whichever direction your money is trending in, you can benefit from a budget to get your cash aligned with your goals and provide guardrails for your spending and saving.

While there are a bunch of budgeting methods, what’s most important is to find an organizing principle that works for your personal and financial style. Some options to consider:

The 50/30/20 Budget Rule

The 50/30/20 budget rule breaks up your budget using the following percentages:

• 50% on essential expenses. This category could include housing costs, utilities, car payments, debt payments (student loans, credit card minimums due, etc.), education costs, food, basic clothing, childcare, and medical expenses.

• 30% on discretionary expenses. Your discretionary expenses could include shopping, entertainment, personal care, travel, and other expenses that may not necessarily be considered essential.

• 20% toward your goals. This amount of money can go into savings and investments as you work toward things like an emergency fund, a new car, retirement, and/or your child’s college education.

Recommended: Discretionary Income Explained

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The 70/20/10 Budget Rule

The 70/20/10 rule is another budgeting method. It’s similar to the 50/30/20 one but allocates more money toward your needs (70%) and less to the wants and savings areas. This budget can be a good variation for those who are just starting their careers or anyone who lives in an area with a high cost of living.

Zero-Based Budget

The zero-based budget system gives every single dollar a purpose so that every bit of your income is accounted for. You start with your monthly income then keep subtracting expenses (even savings or a sinking fund counts here) until you get to zero. This system can help you be more mindful since you know how your money is allocated.

The Envelope Budget System

With this technique, you write the name and cash amount you have for each spending category for a month. For example, you allocate $2,000 for housing for one envelope, and $600 for food in another. You can only spend the allocated amount in each category.

If there is no more cash in the envelope but the month isn’t over yet, you will need to wait until the next month to replenish it or borrow from another category and spend less there. For instance, if you need cash for an insurance premium that went up, you could save on streaming services by dropping a platform or two while you adjust your budget.

This method can be adapted to use debit card payments. You don’t have to literally only use cash.

5. Make Adjustments

A budget is a dynamic, living entity. Some months may be more expensive than others. For instance, you might have an emergency one month (your laptop dies) and wind up spending more (or even going into debt) to make ends meet. Life happens: use these situations to learn and readjust.

You can also look for trends in your money. If you find you are living paycheck to paycheck, you might find ways to economize (such as getting a roommate) or to earn more money.

After using your new budget plan, you should review and update it regularly. You may need to do it more often at the beginning of your budgeting journey when you’re getting used to looking at your finances in a new light. Still, it is typically useful to review your spending at the end of each month to see if your budget is still working for you. If not, then take the time to see what may be happening and tweak your spending as necessary.

Another reason you may want to make adjustments is if your life situation changes, such as you have a baby or get a divorce. Or your income may have gone up, so you will need to think strategically about how best to allocate those dollars to help you reach your financial goals.

Monthly Budget Example

Here is an example of a family’s monthly budget:

Total monthly income: $4,650

Monthly breakdown of expenses:

Monthly income	$4,650
Monthly expenses
Rent	$2,000
Groceries	$400
Student loan payments	$337.50
Car payment	$150
Credit card payment	$300
Discretionary spending	$232.50
Utilities	$330
Auto & renters insurance	$150
Career enrichment class	$60
Savings	$400
TOTAL:	$4,360 ($290 surplus)

How to Handle Unexpected Expenses in Your Budget

You know how it goes: Life can be filled with unexpected expenses, such as a car repair or larger than expected medical bills. Instead of letting these derail you, work unexpected expenses into your budget.

There are several ways you can go about it, one of which is to have a bit of a buffer in your account. Meaning, you can allocate some extra cash each month just in case — any money that isn’t spent, you can roll it over onto the next month. It can act as a cash cushion in your checking account.

You can also consider building up an emergency fund, a separate set of savings in case you have unexpected expenses. The amount will vary, but a good rule of thumb for how much to have in an emergency fund is to save three to six months’ worth of basic living expenses.

How to Work With Your Family or Partner to Create a Budget

Creating a budget with others means being open to a conversation about what each one needs, and how you can keep each other accountable. It can start by having a meeting about family spending. You can discuss and agree to budget goals and reasonable expenses and use a budget planner to help you solidify things.

Once a preliminary budget is created, find a way to ensure that everyone sticks to it. Some tactics include having one joint account to ensure everyone can track spending or having an app where your partner or family can see an overview of the finances. Whatever you choose, it’s important to meet regularly to review your budget to see whether adjustments need to be made.

💡 Quick Tip: An emergency fund or rainy day fund is an important financial safety net. Aim to have at least three to six months’ worth of basic living expenses saved in case you get a major unexpected bill or lose income.

The Takeaway

Creating a budget to set and reach your financial goals doesn’t have to be hard, and it can be a great way to guide your spending and saving. While there are many approaches and techniques to try, what matters most is finding one that is a good fit for you personally and helps you feel in control of your cash. By learning how to manage your money well, you can be on track to crush your personal and financial goals, whether short- or long-term.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

Better banking is here with up to 4.40% APY on SoFi Checking and Savings.

FAQ

What is money management and why is it important?

Money management involves making a plan to help you reach your financial goals, such as getting out of debt, saving for a vacation, or buying a new home. Without sound money management, it can be hard to understand your personal finances and reach your goals.

How do I prioritize my expenses?

You can prioritize your expenses by making sure you have an effective budget and sticking to it. You’ll likely want to prioritize basic living expenses and debt payments. Discretionary spending on the fun stuff of life (entertainment, eating out) can be an area to rein in, if needed.

What are some common mistakes people make with their money and how can I avoid them?

Some common mistakes people make with their money include not establishing clear financial goals, not building a budget that works, and not tracking their spending. To avoid them, it’s a wise move to find a budget technique that works for you, to regularly review and tweak your financial goals, and make adjustments when necessary.

What are some resources available for improving my financial literacy?

Your bank likely offers articles and tools to help improve your financial literacy. You can also head to government or reputable sources like the Consumer Financial Protection Bureau, or buy books or listen to podcasts by respected sources. You can also seek the help of a financial professional.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.

The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SoFi members with direct deposit can earn up to 4.40% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum direct deposit amount required to qualify for the 4.40% APY for savings. Members without direct deposit will earn up to 1.20% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 7/11/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.

SOBK0623016

Source: sofi.com

Apache is functioning normally

July 27, 2023 by Brett Tams

Floods are among the most common and devastating natural disasters, causing extensive damage to homes and properties. They are also extremely expensive to recover from – in 2022 alone, property damage from flood events in the US cost people and governments more than $13 billion. This amount will likely rise as people continue moving to flood-prone areas at a record rate.

If your home was recently flooded, it’s important to start the recovery as soon as the waters recede to avoid further damage to your home and belongings. So what do you do after a flood, and how do you protect your home in the future?

To help, we put together ten essential steps for homeowners so you can be better prepared. So whether you live in a house Tampa, FL, and are recovering from a flood, or an apartment in Wilmington, NC, and just want to learn more, read on for ten important flood safety tips.

1. Prioritize your safety

Safety comes first. Only return to your home once authorities say it’s safe, and use abundant caution. Avoid rushing into your home, as there could be hidden dangers. When you first enter, watch out for downed power lines, gas leaks, standing water, and structural damage. If your power isn’t already out, turn off the electricity if you suspect it’s not safe.

As you move through your home, it’s essential to wear protective gear, like rubber boots and gloves, to prevent injuries. You should also have a first aid kit at hand in case of minor injuries.

2. Assess water quality

Water contamination is extremely common during and after a flood. This is because floodwaters often carry a wide range of pollutants, including bacteria, chemicals, heavy metals, and sewage that can significantly contaminate a home or community’s drinking water supply. This contamination poses serious health risks, especially when used for drinking, cooking, or hygiene purposes.

To reduce risk after a flood, it’s essential to have your water tested to ensure its safety. Local health departments often offer testing services or can recommend a reliable lab. Until your water has been tested and deemed safe, use bottled water for drinking and cooking.

Importantly, if your home uses a private well and it was inundated by floodwater, it’s likely contaminated. You must have your well cleaned, disinfected, and tested by a professional before using the water again. The Environmental Protection Agency provides guidelines on how to disinfect wells after a flood

3. Look out for mold

Mold is a common and serious issue following floods. It can develop within 24 to 48 hours in damp, warm conditions, infesting walls, carpets, and furniture. Mold not only compromises the structural integrity of your home, but it can also pose significant health risks. These can range from allergic reactions and asthma attacks to more serious respiratory infections, especially in individuals with weakened immune systems.

Identifying mold can be tricky since it’s not always visible and it grows in hidden areas, such as behind walls or underneath floors. Common signs include a musty odor, discoloration on surfaces, and worsening allergy symptoms. If you spot or suspect mold growth, don’t attempt to handle it yourself, especially if it covers a large area. It’s best to call in a professional mold remediation company, as they have the appropriate equipment and expertise to remove mold safely and thoroughly, and can advise on preventing future mold growth.

4. Contact your insurance company

If you have a flood insurance policy, it’s crucial to contact your insurance company as soon as possible after a flood. They can guide you through the process of filing a claim. Be prepared to provide comprehensive documentation of the damage, which includes taking pictures and videos of the floodwater, damaged structures, and destroyed items. If you can, try to include water levels in your photos. This documentation helps expedite the claim process and helps ensure that you receive a fair settlement.

It’s important to understand that standard homeowners’ insurance policies typically do not cover flood damage. This is a common misunderstanding and can lead to unpleasant surprises in the event of a flood. Coverage for flood damage requires a separate flood insurance policy, often provided through the National Flood Insurance Program (NFIP), a program managed by the Federal Emergency Management Agency (FEMA).

5. Seek additional financial assistance

Dealing with the aftermath of a flood can be financially challenging, especially if your policy coverage falls short, or you don’t have one at all. If this is the case, you may qualify for assistance from federal, state, or local entities.

The Federal Emergency Management Agency (FEMA) provides the majority of assistance after declared disasters, including floods. This assistance can take many forms, including grants for temporary housing, home repairs, and low-interest loans to cover uninsured property losses. You may also qualify for assistance programs through the U.S. Small Business Administration (SBA), even as a homeowner or renter. The SBA provides low-interest disaster loans to help cover the cost of repairing or replacing damaged property.

Lastly, local charities, non-profit organizations, and community groups often offer free emergency aid in the aftermath of a flood. This could include distributing supplies, organizing volunteer cleanup crews, and offering temporary housing.

No matter your method, make sure to reach out for help proactively and promptly; there can often be application deadlines for disaster assistance programs, especially for major events

6. Thoroughly clean your home

Next, it’s time to begin cleaning up. This step is crucial as stagnant water can lead to mold growth, which poses serious health risks. Remove water-damaged items from your home and start drying out the property. Utilize fans, dehumidifiers, and heaters to speed up the process.

Cleaning up after a flood is a monumental task. You might consider hiring a professional restoration company that specializes in post-flood cleanups. They have the expertise and equipment to handle the situation effectively and safely.

7. Repair and renovate

Once everything is dry and clean, it’s time to repair and renovate your home as necessary. This process could range from replacing drywall and flooring to more extensive structural repairs, such as replacing your roof. Consider hiring a contractor who has experience in restoring homes after a flood.

You can take this opportunity to make your home more flood-resistant so you’re prepared for the future. Options include elevating utilities, waterproofing your basement, or even raising your home, depending on your budget and local building codes.

8. Be aware of scams

Unfortunately, disasters can bring out scammers who prey on vulnerable homeowners. Scammers can take many forms, including charity, government, and insurance impersonators. One of the most common types are home renovation contractors who come unsolicited offering repairs. They will often ask for a downpayment for work that they never end up completing.

To be safe, always verify the credentials of anyone you hire or divulge information to. You can also check with your local Better Business Bureau or your state’s licensing board to ensure you’re working with a legitimate professional. If you’re unsure, ask plenty of questions and contact local authorities.

Insurance adjusters and government officials will never ask for money, collect down payments, or charge a fee for their services.

9. Take care of your emotional health

Don’t neglect your emotional wellbeing in the wake of a flood. It’s normal to feel a variety of emotions, including sadness, frustration, and anxiety. If you feel like you need support, reach out to local community organizations or a mental health professional. Taking care of your emotional health will help you better navigate the recovery process and emerge stronger.

10. Prepare for the future

While you can’t control the weather, you can prepare for surprises. Even if you felt prepared for this flood, it’s essential to prepare for the next as soon as you can. Here are some important steps to take:

Review your insurance policies: Ensure you have appropriate coverage by revisiting your insurance policies. If you didn’t have coverage for this flood, you’ll want it for the next one.
Install a sump pump: Sump pumps are critical to help remove water from your basement or other depressed areas. Consider a battery-powered option in case of a power outage.
Create a flood readiness plan: This should include a clear evacuation plan detailing how and when to leave your home, the safest escape routes, and where to go.
Prepare an emergency kit: Even if you had plenty of supplies this time around, it’s important to keep it stocked for the next event. Your kit should be waterproof and include necessary items like food, water, medication, important documents (like insurance policies), a first-aid kit, hygiene supplies, clothes, cash, and anything else you might need if you must evacuate your home quickly.
Understand your flood risk: Many people don’t know if their property is more at risk of flooding. You can learn if your property is at risk using the flood factor tool, or by searching your property on Redfin.

What to do after a flood: final thoughts

Knowing what to do after a flood can be extremely challenging and daunting. You have to juggle various tasks, ranging from documenting damage and contacting insurance companies, to dealing with potential mold issues and seeking out financial assistance, all while dealing with emotional pain. However, with a systematic approach that includes safety, restoration, insurance, and preparing for the future, the road to recovery can become more manageable.

Recovering from a flood also provides an opportunity to rebuild stronger. This can include understanding and updating insurance policies, flood-proofing your home, creating a comprehensive readiness plan, and understanding your flood risk.

As the world continues to experience the effects of climate change, for many, these measures aren’t just optional but essential. By being proactive and informed, homeowners and renters can not only navigate the recovery from a flood but also better prepare themselves for future events.

This guide should not replace professional advice or guidance. Always seek help from certified professionals for issues related to structural integrity and safety, and follow all official guidance before, during, and after a major weather event.

Source: redfin.com

Apache is functioning normally

July 27, 2023 by Brett Tams

Are you stuck in a rut feeling like nothing is exciting left to do? Think again! If you were lucky enough to inherit $100,000 suddenly, what would be the first thing on your bucket list? Redditors had plenty of ideas for how they’d spend their newfound fortune. From purchasing exotic vacations, high-end home renovations, virtual reality headsets, and dream weddings to community sculpture gardens to more practical investments in college tuition grants—there are plenty of ways to imagine how you’d spend a large inheritance!

1. Attend the Funeral

Photo Credit: Shutterstock.

One user pointed out, “Attend funerals.”

Another user replied, “It took me a second, but yep.”

One commenter responded, “Goes without saying.”

“First, I would attend the funerals of the deceased. Then I would think about what to do with the money. Just a matter of respect,” another Redditor shared.

2. Pay Off Debt

Photo Credit: Shutterstock.

“Become debt free!” exclaimed one user.

Another user added, “Become debt free, stash the rest in savings and CDs for sure. I’ll even get adventurous and go out and have a nice dinner.”

One commenter shared, “You know you’re an elderly millennial when you see the term CDs and start thinking about replacing your beloved but heavily scratched pop-punk and hardcore punk collection from the early and mid-2000s.”

3. Pay Bills

Photo Credit: Shutterstock.

One user posted, “Pay bills.”

Another user confirmed, “100% this. Pay bills. Pay off debt. Bank the rest against a rainy day.”

One replied, “Smart.”

4. Plan Ahead

Photo Credit: Shutterstock.

One user shared his own story, “I inherited a little more, roughly $150k total, than that after my mom passed away a few years ago. My dad [had been] a doctor, and she didn’t have to worry about money for her remaining 21 years. When they sold their rental duplex (they never raised the rent in the 30 years they had it), I used my share to open an investment account for both of my kids and used the rest to pay off one credit card.

“With the cash I received from the trust, I paid off the other cards and started my own investment account. I’m 50, and for the first time in my adult life, I don’t have debt other than a student loan (that will hopefully get discharged under the borrower’s defense for false advertising) and our house.

“Before doing that, though, I booked a family vacation to Riviera Maya. I mentioned Dad was a doctor; well, he and Mom traveled the world going to dads medical conferences and just seeing the world. They lived to see new places and do new things. So, to honor and thank them, I spent a small amount and took the family on our first trip outside the US. I cried on the plane, I cried on the beach, I cried when I saw apple pie at the resort like mom made, and I cried when we came home. At one dinner, we talked about Grandma and what we miss most about her. Dad passed before I met my future bride, so only I mentioned him.

“So if I inherited that again, I’d probably do the same thing again. I remembered where it came from, and I prepared for those it would eventually go to.”

One user replied, “This is beautiful, thank you for sharing your incredible story with me.”

“For a person who is not from the US, it’s mind-blowing that you are 50 years old (not that far away from retirement age), and you still have student loans,” one user commented.

5. Make Sure it’s Not a Scam

Photo Credit: Shutterstock.

Another user posted, “You know how generational wealth is kind of a thing—well, so is generational poverty, as it turns out. So if I suddenly inherited 100k, the first thing I would do is make sure this wasn’t a prank or a scam.”

One confirmed, “Yes, fortunately, it’s not a scam, as my aunt passed away.”

Another user added, “I missed that part. Condolences and congratulations in whichever order you feel is more appropriate. Take the sincere advice of a generational poor person for what it is—but if I were in your shoes, I would act conservatively. I imagine there are a lot of people with a lot of enticing pitches for the newly rich. Just keep pulling in a regular paycheck for your day-to-day if you can, and make sure you have found a well-regarded accountant before the next tax season. Start inquiring into a money manager that can provide a realistic plan to ensure your long-term retirement.

“(Edit: Also, think of ONE affordable extravagance you could never financially justify before but might have been able to pull off and give to yourself as a gift. For me, that would be a 3-day weekend in some major city.)”

“Sending condolences, I was put in a similar situation when my dad passed away. The best advice I can give is to not rush into any decisions financially, take your time, and the money isn’t going anywhere!” shared one user.

6. Fully Exhale

Photo Credit: Shutterstock.

“For the first time in my adult life, I could fully exhale,” one user confirmed.

One user pointed, “THIS.”

Another user commented, “YES.”

One Redditor added, “Hell yeah, just to breathe easy is a luxury.”

7. Add It to the Rest

Photo Credit: Shutterstock.

One user shared, “Throw it on the pile.”

One user added, “New paint job for the jet.”

“Ya know, my old boss traded in his propeller plane for a jet and got $100,000 in tax write-offs…” a user commented.

One user commented, “I get it… sometimes it’s just super exhausting just thinking of all the money I have.”

8. Invest

Photo Credit: Shutterstock.

“Invest,” one user shared.

Another user replied, “All in SPY 0DTE 0.5% OTM calls.”

One user commented, “Invest half, and with the other half, live pretty much the same life, stay at my job, etc., but with complete financial security.”

Another user said, “Invest, invest, invest.”

The OP asked, “What would you invest in?”

The user answered, “The reality is 100k is just the starting point to getting anywhere financially. If you did inherit 100k like you say you did in another comment, it’s worth knowing that if you’re still young (30 or under), you have a huge head start in a secure financial future. I’ll get crap for this, but only spend up to 15% or so of the actual money you get from this. For the rest of it, you should first look to invest in a tax-advantaged account like a Roth IRA. If you max out that annual limit ($6500 for 2023), then either open up high-yield savings (if you’re in a place to buy a house soon) or put it in something simple like the S&P 500 index fund (if you can put this money away for a long time you’ll be shocked at how much it’s grown in 20 years). But most importantly, if you have any high-interest debt, pay that off first.”

9. Buy Lottery Tickets

Photo Credit: Shutterstock.

One user shared, “50,000 lottery tickets.”

The OP commented, “Love this, thanks for a laugh.”

Another user shared, “Laugh?”

One user commented, “And then you get $70k back if the MrBeast videos are any indication.”

10. Pay Off Mortgage

Photo Credit: Shutterstock.

A user shared, “Pay off my mortgage and other debts, then go back to living as normal, just with more disposable income since I won’t be making repayments anymore. It’s such a boring adult answer, but it’s accurate.”

Another user replied, ‘I agree with it; I would do the same.”

11. Save As a Safety Net

Photo Credit: Shutterstock.

One user shared, “Wife and I inherited around $175k. What we did was largely just keep living life, exhale finally, and catch up on some… debts we had. Used the money as a safety net to get out of construction and into something else, and now our lives are, without a shred of doubt, 100x easier than they were before.”

The OP of the thread replied, “This is my hope.”

12. Ask a Financial Advisor

Photo Credit: Shutterstock.

One user posted, “I’m 50F on a disability pension with high rent and living costs. It’s an unexpected windfall, and I am not financially literate. I don’t want to blow it. Yes, I am going to get a financial advisor!”

One user commented, “Go to a personal finance Reddit or something and ask how to choose a good advisor. Some are shady!”

“It’s honestly not that much these days, a down payment on a house at most. Pay off any debt, but otherwise, live as you have been. Hopefully, with a safety net for the next financial speedbump,” replied one user.

13. Trucks and Good Times

Photo Credit: Shutterstock.

One user freely posted, “Trucks and H–kers. It would be best if I didn’t get 100k.”

Another user replied, “That’s like 1 of each, lol”

One replied, “Each? You must have gotten a cheap truck.”

14. Government Bonds

Photo Credit: Shutterstock.

One user commented, “After potentially paying estate/ inheritance tax, Spend [40k] on settling debts (I don’t have much, so there’s going to be leftovers, but I will put them in government bonds as savings $. Spend [10k] on online courses and career certifications. Spend [10k] on buying stuff I’ve wanted for a while. Spend [10k] on new tech. Spend [5k] on a mini solo budget vacation to somewhere random. Keep [5k] as pocket cash. Save [20k] in a high-interest account or maybe split into government bonds, high-interest accounts, green tech stock options, etc. ( I am hesitant investing real estate because of the obvious market bubble).”

“Love this detail; much appreciated. No tax and I’m debt free. I’ll be making a list off this,” replied one user.

15. Donate

Photo Credit: Shutterstock.

“Help out a lot of people,” one user shared.

Another user replied, “Yes. I’ve already decided who I’m going to help and how much. Giving back is important. I couldn’t imagine not sharing my blessing with those closest to me. I also need help as I have been living on the disability pension, so I’d also like to be out of poverty if at all possible, lol.”

Do you agree with the things listed above? Comment below!

Source: Reddit.

These are 10 Things That Completely Destroyed The Love in a Relationship

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There’s no question that relationships can be confusing, but here are some of the top things to avoid if you want to keep your relationship healthy!

10 Actors and Actresses People Refuse to Watch Ever Again

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We all have a favorite actor or actress, but most of us have a least-favorite as well. Check out this list of actors and actresses people never want to see performing again!

Top 10 Worst Human Inventions of All Time

Photo Credit: Shutterstock.

Some inventions are world-changing, and some of them, well, they change the world in the wrong ways. Here are some of the worst inventions Redditors could think of.

10 Famous Celebrities Who Look Like They Smell Terrible

Photo Credit: Shutterstock.

We’ve all had moments of hygiene faux pas—but these celebrities just look like they don’t take care of themselves at all.

10 Terrible Fads People Are Glad Died Out

Photo Credit: Shutterstock.

Every fad has its time in the limelight, but some of them come and go faster than others; and some just need to die out right away. Check out this list of fads of which people were happy to see the last.

About the Author

Source: financequickfix.com

Apache is functioning normally

July 27, 2023 by Brett Tams

There are many uncertainties on the road to financial independence. You can’t know what rate of return your investments will earn over the coming decades. And you certainly don’t know exactly how long you’ll live.

That old cliché is true: the only certainties in life are death and taxes.

So, we control what we can. And we try not to worry about the things we can’t control. From experience, this is easier said than done.

Tax is one variable over which we have a modicum of control. No, we cannot control how the government changes the tax code. But we can plan our lives and investments in ways that will affect how much tax we owe – both now, and in the future.

Strategic tax planning isn’t just for the wealthy. Unfortunately, it’s true that billionaires seem to benefit most from it. But, in fact, there are some simple things nearly everyone can do that may end up saving you tens of thousands of dollars in taxes – or more – over your lifetime.

Here, I’m going to show you what they are. I’ll begin with tax moves that will be available to most people. Some of the strategies that come later will only be relevant once you’ve taken advantage of the basics or earn a certain amount of income.

What’s Ahead:

Take advantage of retirement accounts

Are you tired of hearing about the importance of saving for retirement using a 401(k) or IRA? Well, there’s a reason that guys like me go on and on about them. These accounts represent a huge gift from Uncle Sam to taxpayers including you and me.

In a traditional IRA or 401(k), contributions are tax-free. Then, your earnings grow tax-deferred until retirement.

Every year, investments generate dividends, interest, and – if you sell investments at a profit – capital gains. In a traditional taxable investment account, you pay taxes on that investment income every year.

With a traditional 401(k) or IRA, you can invest pre-tax dollars now and you don’t pay taxes on any of that investment income until you begin withdrawing money in retirement. With a Roth IRA, you must invest after-tax dollars now, but all of the investment income you earn over the years is tax-free. With either type of account, the money you save by not paying taxes on investment income each year can continue compound growth. The earlier you start putting money in these accounts, the more you’ll save.

A modest example – consider the following situation

A 29-year-old in the 25% tax bracket contributes $5,000 every year to an IRA for 30 years and retires at age 65. She earns an average of 6% annual interest. At retirement, her IRA is worth $631,341 before taxes. If the money had been invested in a taxable account, it would be worth only $337,655. That’s a significant difference! But, since this is a traditional IRA, she still has to pay taxes on withdrawals.

After paying taxes on the IRA, she’s left with $473,505. That’s still a savings of $135,850 over investing in a taxable account!

Everybody needs to put as much money as they can afford into these kinds of retirement accounts. Not only is it smart planning for your future; it’ll save you a bundle on your taxes.

If you need help managing your 401(k) or IRA, I’d highly recommend checking out blooom. They can manage your account for you, taking into consideration your retirement goals, and rebalance your portfolio as needed.

Get an HSA or FSA

Flexible spending arrangements (FSAs) and health savings accounts (HSAs) are accounts that allow you to use tax-free dollars for medical expenses. The largest difference between them is that FSAs are owned by employers while HSAs are controlled by individuals.

HSAs are the better option, in my opinion. But to qualify for an HSA, you need to be enrolled in a qualifying high-deductible health plan.

What are health savings accounts (HSAs)?

You can contribute up to $3,450 pre-tax dollars per year ($7,750 per household) to an HSA. These funds can be withdrawn at any time to pay for qualifying medical expenses tax-free. There’s no need to “use or lose” HSA dollars, as unused funds roll over every year.

Like traditional IRAs and 401(k)s, early withdrawals that aren’t used for medical expenses are subject to a 20% penalty and income taxes. After you turn 65, however, you can withdraw HSA funds for any purpose (not just medical expenses) penalty-free. (You will owe income taxes on withdrawals not used for medical expenses).

HSAs are great for saving on medical expenses now. But they’re even better if you invest dollars in HSAs and let them grow to pay for medical expenses later in life. If you invest the funds in your HSA, the money will grow tax-free (just like an IRA.)

But when you withdraw money later in life to pay for medical expenses, you pay no taxes at all on both the dollars you contributed and your earnings. No IRA is truly tax-free. With a traditional IRA, you pay taxes on withdrawals but not deposits. With a Roth IRA, you pay taxes on deposits but not withdrawals. When used for medical expenses, you don’t have to pay any taxes on the money you put into or take out of an HSA.

Whare are flexible spending arrangements (FSAs)?

Flexible spending arrangements are another type of account that provides tax-free dollars for medical expenses. FSAs are set up by your employer and go away when you change jobs unless you contribute your health insurance through COBRA.

FSAs have lower contribution maximums ($3,050 for individuals and $5,000 for households).

The trickiest part of FSAs is that they are “use it or lose it” accounts. You can roll over up to $550 every year, but all other funds in an FSA expire at the end of the year (with a two-and-a-half-month grace period). This can lead employees to scramble at year-end to line up routine doctor appointments and even stock up on prescriptions or qualifying OTC pharmacy purchases!

Since you can’t usually have access to both an HSA and an FSA at the same time, take advantage of either if you can. If you find yourself in the unusual position of having the option between the two, choose the HSA.

Avoid tax penalties and interest

It should go without saying, but I’ve seen enough to know that it needs to be said: pay your taxes! Equally as important, do not ignore or procrastinate on any tax problems that arise.

The IRS charges penalties and interest any time you don’t pay enough tax by the relevant deadline. This can occur for lots of reasons, but most commonly it happens when:

You don’t have enough taxes withheld from your paycheck (W4 error).
You earn money through a business or self-employment and do not make or underpay quarterly estimated payments.
You file a tax return extension and fail to pay any estimated amount due. (An extension to file is not an extension to pay).
You simply pay late!

The longer you go with a balance due to the IRS, the more interest accrues. And a tax debt is the worst kind of debt to have. The IRS has the power to garnish your wages, seize future tax refunds, attach your assets, and even reduce Social Security benefits when you retire.

Donate to charity smartly

You probably know that donations to qualified charities are tax-deductible.

But you can only claim the tax benefits of charitable donations if it makes sense for you to itemize your deductions. With the standard deduction standing at $13,850 for individuals and $27,700 for couples, a minority of taxpayers itemize.

Does this mean charitable donations can’t help you if you don’t itemize? No! Keep reading…

If you do itemize deductions, charitable donations made in cash can reduce your taxable income dollar-for-dollar by up to 60%. Go ahead and make them every year.

You can also donate appreciated stock to charity can be a win-win. The charity gets its donation and you get a tax deduction equal to the stock’s fair market value (not its cost basis). You can deduct up to 30% of your income this way.

If you don’t regularly exceed the itemized deduction amounts, you can still make charitable donations work for you by either grouping your deductions in certain years or, better yet, making occasional large gifts to a donor-advised fund.

Donor-advised funds

A donor-advised fund is an investment account to which contributions are tax-deductible in the year you make them. You can contribute cash, appreciated assets, or investments held for more than a year. Then, you can make donations from the fund whenever you want. Donor-advised funds are a great way to give because you can give your money a chance to grow and yourself years to choose the best way (and time) to allocate your charitable funds.

To give you an example of how this might work, let’s say you give $1,000 to charity a year, on average. Your total tax deductions, not including your donations, total about $10,000. Even adding the donation will keep you under the standard deduction.

So, rather than donating $1,000 every year, you set $1,000 aside in a savings account every year for five years. In the fifth year, you put that money into a donor-advised fund and add $5,000 to your itemized deductions. This gets you a $1,150 additional deduction ($15,0000 itemized – $13,850 standard) in your taxes that year.

Be tax-savvy about where you live

If you’re serious about paying fewer taxes, you’ll want to consider living in a low-tax state.

When it comes to state and local taxes, not all states are created equal. Far from it. According to data from the Tax Policy Center, the difference in tax burden between the state with the highest burden (New York) and the state with the lowest burden (Alaska) is 7.12%. If you’re a New Yorker, you might be thinking about what you could do with an extra 7% of your income right now!

A handful of states attract an outsized share of entrepreneurs and other wealthy residents because of their 0% income tax rate. Although I personally can’t imagine moving across the country solely for tax purposes, I do know people who’ve done it. There is an argument to be made that a lifetime of state tax payments invested is an amount of money too significant to ignore.

For example, let’s say you will earn an average of $100,000 a year over 50 years (not that you have to work 50 years…income can include other sources like dividends). Over those years, you pay an average state income tax rate of 5%. If you could skip the tax payments and instead invest that money in the stock market at an average annual return of 7%, you would be sitting on just over $2 million ($2,032,660 to be precise).

And, now, seeing those numbers, I’m about to call my realtor.

Be a tax-efficient investor

When you own stocks and bonds outside of a retirement account like a 401(k) or IRA, you will owe taxes on the interest, dividends, and capital gains earned from those investments.

Although you do not need to not pay capital gains taxes until you sell an investment at a profit, most investments will pay you interest and dividends each year. Whether you spend that money or reinvest it, you will owe taxes on it.

There are two schools of thought when it comes to taxes and investing. Most investors try to minimize the tax consequences of their investments whenever possible. Some, however, argue that taxes should take the backseat to whatever investing strategy will get the best return. I think the answer lies somewhere in between.

Whatever your view, some of these ways to reduce taxes on your investments just make sense.

Take credit investment losses

If you own investments (stocks and bonds or even real estate) and sell them at a loss, you can write-off your losses. This can be an incentive to exit a losing investment if you suspect it’s never going to recover its value. But this tactic can also be used strategically as a part of routine portfolio re-allocation. When used in this way it is called “tax-loss harvesting”.

You can deduct up to $3,000 per year for stock investment losses, but you can carry-forward losses to future tax years. For example, if you had a $9,000 capital loss, you could deduct $3,000 a year for three years.

You may also be able to deduct up to $25,000 of rental real estate losses if your adjusted gross income is $100,000 or less (or a portion of that amount if your AGI is up to $150,000).

Hold bonds and dividend-paying stocks in retirement accounts

Bonds and dividend stocks will generate taxable investment income every year. Growth stocks that do not pay dividends, however, do not. If you have a taxable investment account and want to own both kinds of investments in your portfolio, put the income-generating investments in your IRA or 401(k) and buy non-dividend stocks with your taxable account.

Use ETFs instead of mutual funds

Exchange-traded funds can be more tax-efficient than traditional mutual funds. Both can generate capital gains and dividends, but ETFs are structured in a way that minimizes tax liability for the investor.

Invest in municipal bonds

If want to pay even fewer taxes on your investment income, consider tax-exempt municipal bonds. Municipal bond earnings are exempt from federal income taxes. The government makes interest on these bonds tax-free to encourage investment in local and state projects.

These bonds (called munis) yield less than corporate bonds before taxes but are competitive, and sometimes better when you compare after-tax returns.

Use a business to reduce your tax bill

Starting a business takes you to the next level of tax breaks. You don’t even need to create an entity like an LLC. If you earn money outside of a salary (W-2), you can call yourself a sole proprietor.

To deduct business expenses and take advantage of other business tax breaks, you’ll need to do two things:

Keep an accounting of your business income and expenses separate from your personal accounting.
File a Schedule C with your tax return.

In addition to deducting business expenses and, potentially, the use of part of your home as an office, you can also take advantage of some special retirement savings accounts.

The Solo 401(k) and SEP-IRA both allow much higher contributions than traditional 401(k)s and IRAs. For 2023, you can contribute up to the lesser of $66,000 or 25% of operating profits to a SEP-IRA. Otherwise, the SEP works like a traditional IRA: money in is tax-deductible and your money grows tax-deferred until retirement.

Summary

Nobody wants to pay more taxes than they have to. Everybody should take their taxes seriously and seek professional advice when they need it.

If you’re intent on achieving financial independence as quickly as possible, reducing taxes will likely be a large part of your plan. The methods described above will be invaluable.

As you begin implementing them, just remember not to let your life be dictated by paying as little tax as possible. At a certain point, the law of diminishing terms will apply. There are probably uses of time that will be more profitable in the long run!

Apache is functioning normally

July 27, 2023 by Brett Tams

In 1973, Burton Malkiel published A Random Walk Down Wall Street, in which he argued that a blindfolded monkey could pick stocks as well as a professional investor. Though I bought a copy of Random Walk for $3.99 at the local Goodwill last year, I haven’t read it. It looks dense. I know it’s written for the layman, but it still seems rather academic.

In 2003, Malkiel published The Random Walk Guide to Investing, “a book of less than 200 pages in length that boils down the time-tested advice from Random Walk into an investment guide that [is] completely accessible for a reader who knows nothing about the securities markets and who hates numbers.”

Several patient GRS-readers have been recommending this book for the past year. When I stayed home sick yesterday, I finally found time to read it. I’m impressed. Malkiel has produced an easy-to-read straightforward investment guide that I’m happy to recommend to anyone. His philosophy matches my own:

The advice in this book is both simple and realistic. There is no magic potion in the investment world because the truth is that one doesn’t exist. There is no quick road to riches. And if someone promises you a path to overnight riches, cover your ears and close your pocketbook. If an investment idea seems too good to be true, it is too good to be true. What I offer are ten simple, time-tested rules that can build wealth and provide retirement security. Think of the rules as the proven way to get rich slowly.

Malkiel’s rules are familiar. We’ve discussed most of them here before:

1. Start saving now, not later. Don’t worry about whether the market is high or low — just begin investing. “Trust in time rather than timing,” Malkiel writes. “The secret to getting rich slowly (but surely) is the miracle of compound interest.”
2. Keep a steady course. “The most important driver in the growth of your assets is how much you save,” writs Malkiel, “and saving requires discipline.” To develop discipline, the author recommends that you learn to pay yourself first (invest before anything else, even paying bills), implement a budget, change spending habits, and pay off debt.
3. Don’t be caught empty-handed. Malkiel recommends that readers open an emergency fund. He doesn’t specify how much should be set aside, but he does cover a variety of places to put the cash: money market accounts, certificates of deposit, and online savings accounts. He also recommends purchasing term life insurance.
4. Stiff the tax collector. Make the most of tax-advantaged savings: Open an Individual Retirement Account, contribute to your company’s retirement plan, take advantage of tax-free savings for your child’s education, buy your home rather than rent. All of these things help to reduce the bite that taxes take out of your money.
5. Match your asset mix to your investment personality. Based on your risk tolerance and your investment horizon, choose the best mix of cash, bonds, stocks, and real estate. (Malkiel encourages investors to buy each of these through mutual funds.)

Never forget that diversity reduces adversity. Don’t just buy stocks — buy stocks, bonds, and other investments classes. Within each category, diversify further. And don’t just buy one stock — buy mutual funds of many stocks. (Malkiel makes his case with the stark example of a 58-year-old Enron employee who had a $2.5 million 401k — of Enron stock. When Enron went bust, the employee not only lost her job, but her retirement savings vanished completely.) Finally, the author recommends “diversification over time” — making investments at regular intervals using dollar-cost averaging.
Pay yourself, not the piper. Interest and fees are drags on your wealth. “Paying off credit card debt is the best investment you will ever make.” Avoid expensive mutual funds. “The only factor reliably linked to future mutual fund performance is the expense ratio charged by the fund.” In fact, the author advises that costs matter for all financial products.
Bow to the wisdom of the market. “No one can time the market,” Malkiel says. It’s too unpredictable. Professional money managers can’t beat the market, financial magazines can’t beat the market — nobody can beat the market on a regular basis. The best way to earn consistent gains is to invest in broad-based index funds. It’s boring, but it works.
Back proven winners. After Malkiel has preached the virtues of index funds, presumably converting the reader to his religion, he spends a chapter suggesting possible index funds and asset allocations.
Don’t be your own worst enemy. Malkiel concludes by admonishing readers to stay the course, warning them against faulty thinking. He discusses the sort of money mistakes I’ve mentioned before: overconfidence, herd behavior, loss aversion, and the sunk-cost fallacy.

Ultimately, Malkiel’s advice can be stated in a few short sentences: Eliminate debt. Establish an emergency fund. Begin making regular investments to a diversified portfolio of index funds. Be patient. But the simplicity of his message does not detract from its value. The Random Walk Guide to Investing is an excellent book because it sticks to the basics:

It’s short.
It’s written in plain English — there’s no jargon.
It’s easy to understand — concepts are simplified so the average person can grasp them.
It’s filled with great advice.

This book refers often to other books to bolster its arguments, and includes quotes from financial professionals like John Bogle and Warren Buffett. Though the advice may seem elementary, it’s advice that works. If you want to invest but don’t know where to start, pick up The Random Walk Guide to Investing at your local library.

Source: getrichslowly.org

Apache is functioning normally

July 27, 2023 by Brett Tams

Today the Census Bureau reported that in March 2021, new home sales were at a seasonally adjusted annual rate of 1,021,000. This number beats estimates.

Additionally, major positive revisions were made to the sales number of the previous months. I expect this month’s headline to be revised lower a tad next month, but even considering that, this report was the best new home sales report in over a decade. The headline number was solid, the revisions were all positive, and the monthly supply on a three-month average is below 4.3 months.

New home sales get impacted much more than existing home sales by movements in mortgage rates. Mortgage rates from 4.75% to 5% created a supply spike in 2018. At that time, we worked from the weakest new home sales and housing starts recovery ever, and sales were not high, historically speaking. My forecast for the bond market was that it would fall in 2019, and if world growth slowed down, the 10-year yield would get below 2%. This would drive mortgage rates much lower than the 5% levels of 2018.

As you can see below, today’s monthly supply looks much different from what it did at the start of 2020. Demand is better now than any time from 2008-2019. During that period, we never had a monthly supply below 4.3 months with rising sales.

The most critical housing data line to follow in this housing market is the trend in monthly supply for the new home sales market. When the monthly supply is 4.3 months, and below, builder confidence is high. When supply is between 4.4 to 6.4 months, builder confidence is just meh for new construction. As long as new home sales can grow, construction can happen.

When supply is 6.5 months and over, builders will pull back from construction because demand no longer warrants more construction. The baseline supply I use to gauge conditions is a three-month average. We are currently at 3.86 months. For the last three months, supply has been 3.6, 4.4, and 3.6 months. When demand for new homes is really good, the monthly supply should be this low; we didn’t have this from 2008-2019, hence why housing starts grew slowly like how my tortoise moves from room to room.

Remember that new home sales and housing starts can vary widely month to month, and those numbers are highly susceptible to revisions, both positive and negative. We are likely to get some negative revisions to the numbers in this report, so it is more helpful to focus on the trend. The trend is your friend.

As long as the monthly supply stays below 4.3 months, like what we had for a good portion of 1996 to 2005, builder confidence will remain high, and they will continue to build. I don’t consider the housing data from before 1996 because too much has changed for those numbers to be relevant to our current economic models. The U.S. economy is more mature and developed than it was from 1960 to the 1990s.

In 2020 to 2024, the biggest tug of war in housing will be between good demographics driving demand and home-price increases suppressing demand when mortgage rates rise. The COVID-19 pandemic has caused the bond market and mortgage rates to be lower than they should be considering current economic conditions. The resulting low mortgage rates have been a blessing for the builders, especially considering the other challenges they face, like skyrocketing lumber prices.

In the current market, low rates are beating lumber prices in that particular paper-rock-scissors game that we are playing. New home sales aren’t working from the low levels we had from 2008 to 2019. New home sales in the years 2020-2024 are an entirely different ball game. Monthly supply levels will be your best guide to where the market is going.

I believe the hostile impact lumber prices will have on-demand in 2021 are overstated, as we can see in the data in the past few months. Lumber prices are a big issue for the entire housing market — not just for the builders but also rehabbers and flippers. Out of all of these, builders are the most capable of handling the high prices.

Homebuilding may be suitable for the public, but it is not a public service. Those who are in the business of rehabilitating homes for sale or rent are in the industry to make money — and won’t take on these projects if the cost of materials eats all the profits.

It will be a great blessing for lumber prices to come down, but we don’t see hints of that happening just yet. When mortgage rates rise, and lumber prices remain high, builders’ confidence will drop, and we can expect a slowdown in new construction. If we do get a big infrastructure plan, labor costs for construction will also increase, eating even more into the builders’ profits. These are things to look out for in the future because we always want to be mindful of the future but not lose focus in the current moment.

The new home sales sector is much different than the existing home sales sector. New homes have all the bells and whistles and are more costly, so the average new home buyer tends to be older and better off financially than the average existing home buyer. This new home sector can’t compete with the existing home sales market in terms of price, so when mortgage rates increase, it’s more of a significant disadvantage to the new home sales market.

However, as we can see, this is not the case today or in the past year. This is one aspect that doesn’t get spoken about too often. We did come from the weakest housing recovery ever, so the production of homes and new home sales weren’t working from an overheated speculative market. The demand for new homes and housing starts from 2018-2021 looks nothing like what we saw from 2002-2005. This is also similar to what we see in the existing home sales market, but we have home price gains as if mortgage demand was as hot as 2002-2005. I did talk about that issue on Bloomberg Financial today and wrote about it yesterday on HousingWire.

We just need to be mindful that we are enjoying some real solid economic data without the consequences of higher mortgage rates and bond yields. At some point in the future, this won’t be the case. Until then, let the monthly supply data guide you as it has guided me for many years.

Source: housingwire.com

Apache is functioning normally

July 26, 2023 by Brett Tams

Mr. Cooper’s chairman and CEO, Jay Bray, said the company delivered “strong margins in both servicing and operations, while Xome generated higher sales this quarter.”

Bray said Mr. Cooper is working on three strategic initiatives: drive further reductions in costs, which will help to generate greater operating leverage and deploy capital to portfolio growth; improve the direct-to-consumer platform contribution to the overall profitability, exploring new products; and grow the subservicing business, which provides incremental income, including gain on sale from recapture without tying up capital or liquidity.

The company’s servicing portfolio ended the second quarter with a pretax operating income of $182 million, compared to $157 million in the previous quarter. Based on these results, executives said Mr. Cooper raised its full-year guidance for operating income by 17%, from $600 million to $700 million.

Mr. Cooper had 4.3 million customers and $882 billion in unpaid principal balance (UPB) at the end of June, compared to $853 billion at the end of March. The servicing portfolio grew because of Rushmore’s special servicing platform acquisition, which brought about 300 employees to Mr. Cooper.

Other deals may bring the servicing portfolio to $957 billion, including $83 billion from the acquisition of Home Point Capital and $25 billion in pending bulk acquisitions, executives said.

The Home Point deal is expected to close in the third quarter, with loans onboarding in late 2023 or early 2024, executives told analysts. On Monday, Heisman Merger Sub, Mr. Cooper’s subsidiary, extended the expiration date of its offer to acquire all of Home Point’s outstanding shares of common stock for $2.33 per share.

“We continue to see a buyers market for MSRs, with plenty of attractive pools trading at unlevered pretax yields in the low double digits for conventional loans, and even higher for Ginnie Mae, which is exactly what we guided you to expect when we shared our proprietary forecasts late last year,” Chris Marshall, vice chairman and president, told analysts.

According to Marshall, “We’re now seeing a sharp increase in regional banks bringing MSR pools to market,” and one of the reasons is the expected new capital requirements for these financial institutions.

Regarding its subservicing business, Mr. Cooper is in the process of launching an MSR Fund. “We’re expecting our acquisition of the platform company to close in the third quarter subject to regulatory approval, positioning us to begin a fundraising campaign in the fourth quarter,” Marshall said.

Mortgage originations

Mr. Cooper’s origination business, which focuses on acquiring loans through the correspondent channel and refinancing existing loans through the direct-to-consumer channel, delivered $38 million in pretax operating income, compared to a $23 million net income in the previous quarter.

“During the quarter, we saw continued outstanding execution by our DTC platform and somewhat more rational competition in the corresponding channel,” Marshall said. “However, with mortgage rates hovering at 7%, we’re going to keep our guidance unchanged at $20 to $30 million [net income] per quarter.”

Mr. Cooper’s funded volume increased to $3.8 billion in the second quarter of 2023 from $2.7 billion in the previous quarter.

Direct-to-consumer originations reached $1.6 billion, compared to $1.4 billion in the previous quarter. Meanwhile, according to executives, the correspondent channel was responsible for $2.2 billion in Q2 2023, compared to $1.3 billion in Q1 2023, due to more rational pricing.

Mr. Cooper had strong second-quarter earnings, said a team of equity analysts at Jeffries.

“While volumes in the originations segment improved, ancillary revenues in servicing primarily drove the beat,” the Jefferies analysts wrote in a report. “As COOP is now occupied with closing the HMPT acquisition, we anticipate the company taking a step back from the bulk market in the N/T.”

At BTIG, analysts said it was a “good quarter,” reflecting the benefit of slow prepayment speeds and significant operating leverage.

“We think earnings visibility has strengthened as the company has further scaled its servicing portfolio, and the expense load appears relatively well-calibrated for the current interest rate environment. We also see enough liquidity to support additional bulk MSR purchases, as banks, in all likelihood, will be net sellers of servicing over the foreseeable future.”

To support its acquisition mode, Mr. Cooper said it has strong liquidity. The company had $2.2 billion in liquidity at the end of June, including $517 million in unrestricted cash.

Mr. Cooper’s share was trading at $57.17 on Wednesday around noon, up 5.73% from the previous closing. The firm’s board of directors has authorized stock repurchases of $200 million.

Source: housingwire.com

Last hike of the year? The housing industry hopes so

Types of Health Insurance Plans

Fee For Service Plans

Understanding HMOs and PPOs

Health Maintenance Organization (HMO)

Preferred Provider Organization (PPO)

Point of Service (POS)

Other Ways to Pay for Services

Medical Savings Accounts (MSAs)

Flexible Spending Accounts / Flexible Spending Arrangements (FSAs)

How and Where to Get the Best Quotes

Why Is Creating a Budget Important?

1. Determine Your Financial Goals

2. Calculate Your Income

3. Review Your Expenses

4. Choose Your Budgeting Method

The 50/30/20 Budget Rule

Ready for a Better Banking Experience?

Open a SoFi Checking and Savings Account and start earning 1% APY on your cash!

The 70/20/10 Budget Rule

Zero-Based Budget

The Envelope Budget System

5. Make Adjustments

Monthly Budget Example

How to Handle Unexpected Expenses in Your Budget

How to Work With Your Family or Partner to Create a Budget

The Takeaway

FAQ

What is money management and why is it important?

How do I prioritize my expenses?

What are some common mistakes people make with their money and how can I avoid them?

What are some resources available for improving my financial literacy?

1. Prioritize your safety

2. Assess water quality

4. Contact your insurance company

5. Seek additional financial assistance

6. Thoroughly clean your home

7. Repair and renovate

8. Be aware of scams

9. Take care of your emotional health

10. Prepare for the future

What to do after a flood: final thoughts

1. Attend the Funeral

2. Pay Off Debt

3. Pay Bills

4. Plan Ahead

5. Make Sure it’s Not a Scam

6. Fully Exhale

7. Add It to the Rest

8. Invest

9. Buy Lottery Tickets

10. Pay Off Mortgage

11. Save As a Safety Net

12. Ask a Financial Advisor

13. Trucks and Good Times

14. Government Bonds

15. Donate

These are 10 Things That Completely Destroyed The Love in a Relationship

10 Actors and Actresses People Refuse to Watch Ever Again

Top 10 Worst Human Inventions of All Time

10 Famous Celebrities Who Look Like They Smell Terrible

10 Terrible Fads People Are Glad Died Out

About the Author

Take advantage of retirement accounts

A modest example – consider the following situation

Get an HSA or FSA

What are health savings accounts (HSAs)?

Whare are flexible spending arrangements (FSAs)?

Avoid tax penalties and interest

Donate to charity smartly

Donor-advised funds

Be tax-savvy about where you live

Be a tax-efficient investor

Take credit investment losses

Hold bonds and dividend-paying stocks in retirement accounts

Use ETFs instead of mutual funds

Invest in municipal bonds

Use a business to reduce your tax bill

Summary

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