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Early retirement requires deep consideration, otherwise it might not work out for you.

The dream of early retirement is one that many, many people have. The reality of early retirement can become a nightmare for those who are not prepared, as well as for those that go into it without giving it deep consideration.

Even for those sitting on a tidy sum in assets, it is possible that early retirement simply is not the right move. Here are a few points to consider.

The Traditional Retirement

First, it is important to understand how retirement is designed to work for most people. Once someone reaches retirement age, they have access to all of the funds that have been waiting for them over the years. That includes,

  • Social Security
  • 401(k)s
  • Other retirement funds
  • Pensions

When someone retires, they can start collecting many of these things. However, each of these sources of funds comes with caveats and rules that can upset someone who is seeking early retirement.

Social Security Doesn’t Favor Early Retirement

Generally, for someone to collect their full Social Security retirement benefits, they need to retire at the proper age. As of right now, the full benefit age for those born on or after 1960 is 67. In fact, those who retire even later than 67 can receive more than their full benefit amount.

When were you born?

Those born before 1960 can usually get away with full benefits at the age of 66. For any age before 66 down to around 62, Social Security funds are still available, but only at a permanent reduction. For the SSA “early retirement” is retiring at the age of 62. At that age it is possible to forfeit about 30% of Social Security benefits.

Since social security benefits go by work credits and formulas, it is still possible that someone who retires extravagantly can collect. Social Security benefit amounts are reduced by a percentage for each month before retirement age. Depending on when someone retires early, they can still collect, albeit a ridiculously reduced amount.

A 401(k) Withdrawal Will Come with Harsh Penalties

If an early retirement is predicated on a 401k withdrawal, then it is important to know what early withdrawal entails. In almost all cases, a withdrawal before the age of 59.5 will result in some or all of the following penalties.

  • Taxed federally
  • Taxed by state
  • 10% early withdrawal penalty

Altogether, those taxes and that penalty can equal about 35% to 45% of the full amount. So an early withdrawal can mean giving away nearly half of the funds. Depending on how the plan is managed, there may be some ways to bypass some of the penalty, but that is strictly on a case-by-case basis.

Retirement Plans of All Kinds Don’t Like Early Retirement

If someone would want to retire early, they would do well to go over the plan details of their retirement plan. Not all plans have the same rules, and some may actually cause less of a hassle than others.

For example, it is easier to take withdrawals from a Roth IRA than it is from a 401k. Regular IRAs, like 401(k)s, do not like for anyone to try to take a withdrawal before they reach 59.5 years of age.

However, IRAs offer the ability to annuitize payments for those that would withdraw early. There are many retirement plans out there, so it is important for the early retiree to fully research theirs before they attempt to retire.

Early Retirement Relinquishes Many Future Funds

When someone retires early, they stop contributing to all of the previously mentioned options. There are no more 401k contributions, which means no more company matching as well. There is no more interest accruing on many of the retirement investment accounts. There is no more rate of return, or if there is, it is drastically reduced.

These are important considerations when thinking about early retirement. If someone retires today, they are literally giving up future money, and lots of it.

Retirement Plans Do Not Always Match the Reality of Available Funds

Many people want to retire in either extreme luxury or extreme relaxation. Ideally, they want both. But the goal for most is to live comfortably. But in order to live comfortably for several decades, a lot of money is a requirement.

Regular funds are great for paying for a home to live in, and food to eat. Unfortunately, regular payments cannot always take care of medical costs and many other needs that arise. What many early retirees fail to realize is that retirement requires considerations that go far into the future.

That is one of the reasons why waiting until actual retirement works better for some. When some starts an early retirement flushed with cash, they must watch as that cash slowly dwindles over the years. It is highly possible to hit bottom with a good several decades of life still left to go.

Make a plan that includes the future.

None of this means that early retirement is a poor choice. It just means that it requires a depth of planning that goes beyond what many people ever consider. It is still possible to break it down into steps.

  • Determine the proper age to retire
  • Consider how many years the retirement plan must account for
  • Estimate the yearly expenses for the extent of that plan
  • Document current assets, match them against the expenses for the plan
  • Develop a budget
  • Make changes to portfolios to line up with goals
  • Decide when to take distributions and apply for Social Security
  • Allocate resources to healthcare and long-term care

There are numerous tools out there to help someone figure out the numbers. These steps are the same no matter what age someone chooses to retire.

Early retirement can definitely turn into a financial risk. But for those that take the time to make sure their finances are ready for the long haul, that risk becomes greatly reduced.

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Over 100 million people live in rental properties in the United States. This includes properties like homes, condominiums, and apartments. Therefore, chances are high that you pay monthly rent rather than a mortgage. Rent rates vary from city to city, and even different areas within a single city can feature staggering differences. Certain areas in the country even feature rental rates that match mortgage rates.

It’s a simple fact that millions of people struggle to pay their rent each month. Plenty of people pay late on a regular basis. Otherwise, a late payment or two per year is quite common. An increase in rent or an unexpected expense can make paying the rent a challenging task. You’ve undoubtedly experienced such situations from time to time. We can’t control everything in our lives related to money after all.

Here’s a simple question: can you afford your rent? Nothing is worse than a monthly rent that eats up most of your income. American consumers deal with that exact situation on a regular basis, though. Without a doubt, you should take stock of your current financial situation and figure out how much you rent impacts your financial livelihood. The results could prove shocking to say the least.

To figure out the answer to this question, let’s start crunching the numbers!

Step 1: Create A Basic Budget

First, you should figure out how much you spend on housing, fuel, and groceries. Most households spend 60% of their income on these three expenses. Overreaching beyond this threshold can wreak havoc on your finances. Your budget should include how much money you earn from all income sources in a typical year. To paint an accurate picture, you should include things like employment income, investment income, and bonuses.

Annual income helps you determine how much you can spend on expenses like rent.

You should consider creating a more detailed budget now, or sometime in the near future. When you map out all of your expenses, then you acquire a better picture of your financial situation. With that information, you can make a lot of positive changes to increase your savings and decrease your expenditures. Only a basic budget is necessary to figure out your ability to pay the rent each month.

Step 2: Run Your Income and Rent Against Common Guidelines or Formulas

30% Income Rule

Most people know about the 30% Income Rule in which rent shouldn’t comprise more than 30% of your annual pay. In reality, a large number of people spend way more than 30% of their income on monthly rent. This guideline is still solid advice because it helps you reign in your expenses. The less money you spend on rent, the more you can put into savings or other expenses. You can still live comfortably passed this threshold.

In the United States, it’s not uncommon to see people paying 70-80% of their income in monthly rent. That’s not a desirable position to exist in, but some individuals and families can make it work. The takeaway here is that rent should take up the lowest amount of your annual income possible. By keeping rent low percentage-wise, you’re more likely to live a comfortable life with some financial stability.

40X Rent: Can You Manage It?

Many property management companies use a formula to determine if you can afford rent. Typically, landlords use a “40 Times The Rent” methodology to make this determination. Your annual income divided by 40 dictates what you can easily afford per month in rent. Annual earnings of $40,000 results in yourself being approved for $1,000 per month in rent. Such formulas help landlords approve financially stable tenants.

If you meet these requirements, then you can indeed afford your rent as far as many landlords are concerned. Other landlords use a variety of separate formulas to make that determination, though. Many property owners want you to earn 2.5 times more than the rent on a monthly basis. Sometimes, the entire decision is based upon your creditworthiness more so than anything else. Every landlord is slightly different.


You might consider using the 50/30/20 rule instead. This means that you should dedicate 50% of your income to fixed expenses. From there, 30% of your income goes into day-to-day expenses, and 20% falls into the financial goals category. A 50/30/20 spending formula ensures that you’re taking care of necessary expenses with some wiggle room for unexpected events. It even ensures that you take care of savings, too.

For obvious reasons, the 50/30/20 rule is more of a guideline because you can make modifications. Perhaps you want to spend 40% on fixed expenses, 20% on day-to-day expenses, and then put the remaining 40% into savings. Most people can’t manage that particular proportion. Still, all that matters is that your expenses are covered and that you’re putting money away for financial emergencies and future expenses.

Another Factor To Consider

In the end, you need to take a step back and consider your situation. Do you feel comfortable paying your current rent rate? Are you happy with the money you’re able to put into savings? There are countless ways to determine if you can pay your rent. Most people are satisfied with paying the rent and getting on with their lives. For that reason, how you feel about the situation does make a difference in many ways.

Using tangible formulas and calculations to answer that question comes with certain benefits, though. You can crunch the numbers and easily determine whether you can pay the rent or not, especially in the eyes of your landlord. With these numbers, you have real evidence that your money is going where it should based on your income. Such numbers allow you to see if adjustments are possible to lower expenses.

Either way, you can probably pay your rent in full on most months. Everyone experiences financial uncertainty throughout their lives. A late payment or two won’t become the end of the world. To avoid such situations, you should check out your financial and rent situation. Determine if adjustments can result in lowered rent or higher savings each month. A few changes could help you live more comfortably.

Rent shouldn’t be 70% or more of your income. Sadly, thousands upon thousands of people experience high expenses like that. A simple budget and assessment of your finances can make an incredible difference. Many people look at that picture and realize that they can improve their financial situation. Getting that rent rate closer to 30% isn’t necessary, but it can’t do any harm either.

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Coupons boast big savings, and it is difficult to pass up a good bargain. Coupons have been a staple of American consumerism for decades, and there are even television shows covering “extreme couponing” with buyers obsessed with savings. But are coupons actually tricking you into buying and spending more? Here are some ways coupons may actually be a trap rather than a bargain, and tips on how to avoid them.

Buying What You Don’t Need

The most common way that coupons can cost you money is by encouraging you to buy things that you otherwise would not have. Perhaps this can lead to trying new things, but more often it leads to stockpiling. Rather than actually getting a good bargain, you may be cluttering your home with unwanted and unused items. This is a particular problem with food items, as food expires and you may literally be throwing money away. When using a coupon, it’s smart to always ask yourself if you would have purchased that item without the coupon. If not, skip the savings and spend that money on something useful.

“Buy One Get One”

One of the most common types of coupons are the “Buy One Get One” deals, often referred to as BOGO’s. But buyer beware: unless the coupon is “Buy One Get One Free” the consumer is rarely getting a good bargain. “Buy One Get One 50% Off” is the equivalent of getting 25% off on two items, which may seem like a good deal. However, single coupons often award more than 25%, and the BOGO may simply be trapping the buyer into purchasing more. When using a BOGO, you should ask yourself if you really need two of the item, or if you will actually use it.

“Minimum Order” Coupons

Another type of coupon that often tricks buyers into purchasing more is the “Minimum Order” Coupon. These are coupons, on or offline, that offer a percentage-off for a minimum order such as “20% off with a minimum purchase of $99 or more”. This is an attempt by retailers to get the buyer to purchase more than they would have otherwise. Although the coupon does provide savings on the overall order, it often leads buyers to spend more than they would have otherwise. A good trick when using one of these coupons is to ask yourself if you would have spent the minimum required for the coupon anyway. Then you can reap the savings, but otherwise you can get caught in the trap of buying items you don’t want or need.

Online “Coupons” That Aren’t Actually Coupons

One of the most common ways in which buyers end up spending more is through online “coupons” that don’t actually give a lower price. Online buyers love a good deal, and there are hundreds of websites that provide coupon codes to various retailers. However, many online stores provide 20-25% coupons only after raising their prices, leaving the buyer with the same or a higher price for the full-price item a couple of weeks before. Many popular clothing retailers use this method often. Avoid this by comparing the prices of the items to other similar retailers and decide if the coupon is actually providing a good deal.

Free Shipping with Minimum Purchase

With the convenience of online shopping comes the extra cost of shipping, and buyers jump at the chance for free shipping to save a few extra dollars. However, often free shipping comes with a “minumum purchase”, and you may find yourself $10 or $20 dollars short of the minimum. This coupon comes with a catch; often it leads buyers to buy more, and end up with a larger total than they had before. To avoid this trap, first ask yourself if you really want or need the extra items, and if the items are worth the extra purchase. It’s also a good idea to bring up Google and search for “Free Shipping [Insert Retailer Here]” and see what comes up. Oftentimes, coupon websites provide a ton of coupon codes that may give free shipping without the extra purchase. Finally, it’s always a good move to contact the retailer customer service directly, as they may have a few coupon codes set aside that they can give.

Coupons You Buy

Popular websites like Groupon boast big savings, but often with an expiration date. Often buyers will purchase the coupon and then forget about it, or decide it’s not for them, giving money to the retailer with nothing in return. When purchasing a coupon, ask yourself: will I actually use this in 30-days? Do I actually want to take this cooking class, or will I decide later that I don’t have the time? Always check for expiration dates on coupons before buying, and only purchase if you know you’ll use it long before the expiration date.

Extra/Lengthy Trips

Fortunately using online coupons avoids this problem, but oftentimes in-store coupons specific to certain stores can lead buyers to make extra or lengthy trips. The coupon savings may be tempting, but the extra gas and wear and tear on your car may not be worth using it. When using a store-specific coupon, be sure to compare to prices to nearby stores, and decide whether or not the extra mileage is truly worth the savings.

These are the primary ways in which buyers can find themselves losing money rather than saving money from coupons. Following these tips will help you use coupons the smart way, and to both avoid stockpiling and to become an overall smarter consumer.

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Identity theft stands as one of the most common offenses in the United States, affecting over a million new people every month, and there are several factors that make it so widespread. To start with, it’s quite simple to commit. Criminals can generate a handsome profit with hardly any effort, and there’s often not much probability of them getting caught.

A primary reason it’s so difficult for individuals to guard themselves against identity theft is due to there being several kinds of identity theft that may occur in a wide variety of ways. Methods for identity protection may help decrease the threat, but a few forms of identity theft just can’t be averted at all.

Listed below are a few of the more prevalent kinds of identity theft, ways to reduce the likelihood that it will happen, and what should be done if it does happen.

Existing Account Fraud

This is probably the most frequent type of identity theft. Rather than stealing or duplicating someone’s identity and pretending to be them, thieves just get hold of a debit or credit card number and start racking up purchases. According to Identity Theft Resource, credit card scams increased in 2014, comprising one-fifth of all identity thefts.

How can it be prevented? The best strategy for anyone hoping to avoid this kind of identity theft is to just be cautious of where they use their credit card, and to use a credit card rather than a debit card.

How can it be spotted? The best and possibly way only way is for people to carefully and frequently scrutinize their bank account statements. This means investigating even small charges that seem unfamiliar, as it may be identity thieves checking the card to see if it’s valid.

New Account Fraud

This is a more dangerous form of identity theft since it often means the crooks have their victim’s Social Security number or other extremely vulnerable data. With adequate facts, thieves can convince creditors and banks that they are their victim, and may then start up credit cards with their name. Aside from credit cards, they can even sign up for mortgages, utility services, house rentals, car leases, and plenty of other kinds of credit. Even though new account scams appear to have dropped in 2014, the 2015 Javelin Strategy and Research Identity Fraud Study reveals that it usually takes much longer for new account fraud victims to realize that their identities are being stolen in contrast to other kinds of identity theft, like existing checking account fraud.

How can it be prevented? This can also be quite challenging to avoid, since a lot of businesses that might have data such as Social Security numbers don’t adequately protect it.

One definite method for consumers to prevent new account fraud is to freeze their credit reports. While this is fast, easy and usually cheap or free, it also means people cannot sign up for authentic credit in their own names. Another alternative is for people to constantly monitor their credit reports in order to spot early warnings that crooks are attempting to start new credit accounts with their names.

How can it be spotted? A credit monitoring company will notify consumers when somebody tries to start up an account in their names, and some lenders will also want verification that it is actually the consumer applying for credit. Sadly, many victims first discover it after it’s happened and appeared as an unpaid debt on their credit reports, or when a collection agency makes contact.

Tax Identity Theft

This still-expanding form of expensive identity theft occurs when criminals use a consumer’s data to file a bogus IRS tax return in order to obtain a sizable refund in place of the victim.

It’s very profitable for identity thieves, and the IRS reports that it loses billions of dollars annually to this kind of offense. Consequently, the IRS has been forced to employ a huge workforce to catch it, and has reported receiving calls from over a million tax identity theft victims in 2014.

How can it be prevented? People can file their taxes as soon as possible each year in order to outpace tax thieves. They may also apply for a special PIN from the IRS which must be used whenever they file a tax return. Without this PIN, thieves can’t file for a fraudulent refund.

How can it be spotted? The only true way to discover this sort of identity theft is to have a tax filing rejected after somebody has already submitted one under the same Social Security number.

Criminal Identity Theft

Criminal identity theft specifically involves an offender masking their own identity with that of someone, such as if somebody is arrested and provides another person’s identity or information. In this case, victims are tied into that person’s criminal history, which may cause them to be denied a driver’s license due to someone else’s DUI or even arrested as a result of another person’s crimes.

This variety of identity theft is often very tough to reverse. It may require a lengthy legal course of action in order to have the false offenses expunged from the record, and if the courts reviewing the case are in another state or country they may be reluctant or slow to take action.

If tangible proof like fingerprints or photos of the identity thief is unavailable, it may even be impossible to correct. According to the Federal Trade Commission, identity theft using government documents and records accounted for more than 1 in every 3 cases of identity theft last year.

How can it be prevented? Just like detecting it, it’s nearly impossible to avoid. Victims usually won’t know how or when thieves steal their sensitive information until it’s already happened and resulted in much misery and heartache. This stands as one of the biggest issues of coping with identity theft, and in some instances there are no solutions. It can’t really be prevented, and all a victim can do is act in response to it and piece their life and identity back together.

How can it be spotted? Unfortunately, most victims only learn about this kind of theft once they’re denied a driver’s license, declined for a job due to an unfavorable criminal background check, or when they’re imprisoned owing to another person’s outstanding warrants.

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When a business owner applies for a credit card, he or she will have the option to apply for a consumer card or a business account. While there are many similarities between the two, there are also a few key differences. The credit card that is selected by the business owner will impact everything from convenience and usage abilities to financial record keeping, bonuses and perks and more. Each card has different features, costs, and benefits. However, when all options are carefully analyzed, the small business owner may discover that there are clear benefits associated with applying for a business card rather than a consumer card if the credit card will be used only for business purposes.

Benefit From Business-Related Perks

Some credit cards do not have perks, but most cards today do. The majority of the perks that a business owner can benefit from relates to points earned with each purchase. Bonuses points on credit cards generally can be redeemed for everything from cash to airline miles or gift cards from retailers. Consumer cards generally have a rewards system that is designed for consumers, so the business owner may see more gift cards for restaurants, movie theaters and consumer-based retailers, such as home and bath stores. Business owners, on the other hand, can find cash-back rewards as well as rewards for office supplies stores, technology stores and other similar venues that businesses may use regularly. Some also have airlines miles programs. Keep in mind that many credit cards have a limit on the number of points that can be earned, and this will limit the power of the rewards program for the account holder. When selecting a business card based on the reward program, it is important to read the fine print and to learn more about the requirements, rules and limitations for the business card’s rewards program.

Maintain Separate Financial Records for Business and Personal Expenses

One of the main reasons why small business owners apply for a separate business card relates to record keeping and accounting. It is possible to charge all business-related expenses onto a consumer card. A business owner may even open a separate consumer card that is used solely for this purpose. This is one way to keep the records for personal and business expenses separated. However, when a personal credit card is used, all of the debt will be linked to the account holder’s personal name. This means that when applying for a personal loan, such as a home mortgage or a car loan, the outstanding balance, payment history and minimum monthly payment will be listed as a personal expense. When the business owner is the primary account holder on a business card, he or she will be personally liable for the debt on the business card. However, it will not be reported on a personal credit report or listed as a personal debt.

Access to Financial Tools and Analytical Features

Most credit card accounts today give the business owner access to at least a few financial tools online. For example, the owner may be able to log into all types of accounts online, view payment and usage history and make a payment. Redeeming points online and monitoring rewards program usage online is also possible. However, this is typically where the financial tools associated with a consumer credit card end. Business credit cards may have advanced features like the ability to itemize expenses for the year, to categorize them for easier accounting management and to view images of receipts so that the account holder can see exactly what was purchased and by which employee. In addition, many of these accounts can be linked with accounting and financial management software programs, such as Quicken or others. This can save a considerable amount of time and energy with financial record keeping efforts and can make it easier to manage funds. When there are different authorized users on the account, the account holder can also log in to simplify the management of the authorized users.

Enjoy Better Control Over Authorized Users

With both consumer and business credit cards, the account holder can typically add an authorized user to the account. Because consumer cards are designed to be used by individuals, the number of authorized users may be limited to one or two individuals in most cases. This is because an individual may need to authorize a spouse or perhaps a teenager or adult child to have access to the card. In a business setting, the number of authorized users may need to be higher. Most business card accounts enable the account holder to have many more authorized uses. Bear in mind that there typically still is a limit on the number of authorized users, so compare the limitations of different cards up-front before deciding which business card to apply for. In addition to having access to more authorized users on the account, most business cards provide improved control over those users’ usage. For example, the business owner may log into the account online to monitor spending on each individual account in real-time. It may also be possible to establish individual spending limits and even to turn access to the account on and off as desired. These are powerful and convenient functions that many business owners who will have authorized users on the account may prefer to have.

Access to Better Sign-Up Bonuses

Many credit cards for both business and consumer use have a sign-up bonus. For example, it is common to see a sign-up bonus for a consumer credit card that offers free balances transfers or a low introductory rate on new purchases for a period of time. The sign-up bonuses for a business card may be more lucrative in many cases, and they may also be more advantageous from a business standpoint. For example, some business card accounts will give new account holders tens of thousands of rewards points that can be redeemed immediately. Others offer special perks or incentives for a period of time, such as complimentary access to a VIP lounge in different airports around the world or discounts on air travel and rental cars. These can save businesses a small fortune, and they generally may be far more advantageous for a small business owner to use rather than the moderate perks and bonuses associated with a consumer card.

Each business owner many have unique needs and goals when opening a credit card account for the business. While applying for a personal credit card that is used solely for business expenses is one option, it is generally not the best option for most small business owners. Each of these benefits can be truly advantageous to a small business owner in different ways. With this in mind, many small business owners who are shopping for a credit card today may consider comparing the different types of business cards available.

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One of the most important elements of keeping up with your finances is self-awareness. The ability to evaluate your progress and make money adjustments if necessary is crucial if you want to keep yourself on track and stable. There’s a lot of ways for you to adjust your plans after you make them, so you have to get into the mindset of thinking of your financial planning as a constant activity, not a one-off planning session you do once a year. In this post, we will list some of our favorite tips for making changes to your financial plans after you make them in ways that will benefit you or let you adapt to circumstances in a more flexible way.

Re-Evaluate Your Budget Every Month

If you did your planning at the beginning of the year, then you are doing everything correctly- it’s a great idea to set goals in advance for the medium term, and the beginning of the year is a good time to do that. However, it’s also important to make sure that you go back and revisit your plans frequently. Each month, don’t just do your monthly budget- check on how you are doing for your yearly goals each month as well. That lets you see if you need to make an adjustment to, for example, how much money you save per month or what you can expect to spend on Christmas gifts. Don’t get sucked into the trap of only thinking a month ahead- stay on top of the longer-term considerations as well.

Check Your Expense Categories Often

Being on top of your finances is more than just making note of how close you are to your goals. You should also carefully track your expenses and see where your money goes. It’s highly valuable for you to understand which expense categories cost you the most money. Conduct a little audit to see how you spend your money on, say, a monthly basis. If the results surprise you, that could indicate you are prone to impulse buys in a certain category like meals out or clothing, or that you need to rethink the number of movie rentals you make. Then, armed with that information, you can try to reduce your spending on your biggest expense categories and free up more money for saving.

Buy Gifts Months In Advance

One of the biggest predictable expenses for most people is Christmas presents. Big sale days like Black Friday and Cyber Monday encourage you to delay thinking about buying presents until late November, but it is actually a good idea to start early in the year. If you put the time in to build a list of presents early on, then you can enjoy summer sales and early fall sales, which are often just as big, if not bigger than the traditional big sale days in late fall or early winter. Plus, depending on what presents you choose, the gifts might be on bigger discounts because they are out of season. Prices on winter gear are lower in the summer because few people think to buy winter items then, and you can take advantage of that. If you buy early, you can save a lot on presents and save that money, or put it towards holiday travel expenses.

Maintain An Emergency Fund

Your emergency fund is not just a static savings account that you fill up once and forget. First of all, keep in mind that your emergency fund should have enough money to cover six months of expenses. As your spending evolves, that amount will change as well- keep a running total of the past six months of expenses for you so you have an up-to-date figure for how much you need to have banked. Furthermore, keep in mind that your emergency fund is not for typical purchases. If you find yourself dipping into the fund frequently, then reevaluate how you spend money each month. It’s for emergencies only, so at the end of every month transfer money to make sure it is topped off and check the account activity to ensure that you did not spend it on anything that was not an emergency.

Check Your Credit Score

You are entitled to three free credit reports each year- one from Experian, one from TransUnion, and one from Equifax. There is an official US government website to let you access these reports. In addition, some credit cards include free credit score reports as a perk. You don’t need to use all of these sources at once, but you should have a good idea of the condition of your credit at all times. It’s up to you to decide if you need an update. If you haven’t missed any payments, paid off a big debt, or applied for a new card or loan in the past few months, then your score should not have changed much. On the other hand, if you have done any of those things or you haven’t seen a credit report in a year, then you should probably get one. It will tell you your credit score and whether you have any important problems with your credit like delinquent accounts. This is also a good way to check for identity theft- if you see credit cards or loans on your report that you don’t remember taking out, you might be the victim of fraud or identity theft.

Do A Progress Check

Finally, once you set out your annual goals, take an hour or so every quarter to see how you are doing. Check to see if you are on pace to save the amount you anticipated, whether that be for retirement, a down payment, a vacation, or anything else. Evaluate the obstacles to your goals. If they are one-off expenses or emergencies, then you might just have had some bad luck. On the other hand, if you have systematically failed to meet your benchmarks simply by spending too much, then you have a problem that you can address. Sit down and think about ways to trim spending so that you can reach your financial goals.

If you follow these tips, you will be able to step back and evaluate your goals in the short, medium, and long term and know how to adjust your spending and saving to meet them. This is a valuable skill that gives you the flexibility to change your habits for your financial well being.

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Most people know that they should have an emergency fund stored away in case of financial problems. Although there is some disagreement about how large this fund should be, many say that it should be enough to cover at least three to six months of living expenses. The truth is that the right amount can vary with the individual. While too much savings is certainly preferable to too little, an overly large emergency fund can actually cause some problems.

Planning for an Emergency

Emergency funds are generally created as safeguards against unemployment, which has been shown to last an average of eight months. Otherwise minor expenses, such as auto repairs or dental procedures, could be devastating without either an ongoing supply of income or enough savings in place. At the same time, long-term absence of income can be managed more effectively by developing a budget for such a situation.

To create an emergency budget, one should list out all routine expenses and decide which can be eliminated to save money when necessary. This can extend the useful life of an emergency fund until income returns to normal levels. Other strategies that can minimize savings expenditures include freelancing and taking temporary jobs.

Accounting for Surprise Expenses

Job loss is far from the only reason for having to dip into emergency funds. Costly medical care or critical repairs may arise, exceeding what your income covers. Having enough savings can prevent financial destitution or hardship in these cases. Unfortunately, fully accounting for possible emergencies borders on impossible.

Besides costs associated with medical care and vehicles, many people face emergency expenses involving their housing, children and other events. Some financial burdens, such as births and deaths, are inevitable but not always easy to plan for before they arrive. One way of addressing these events is to budget individually for them. For example, one can create budget categories for vehicles, home expenses and medical care and set money aside with each paycheck. This will greatly reduce the impact that unexpected costs can have on savings.

Problems Caused by a Too-Large Emergency Fund

Considering that an emergency fund can last significantly longer than expected if certain measures are taken, what problems might an overly large emergency fund cause? After all, nobody can deny the feeling of financial security that such savings can give. Problematic aspects of huge emergency funds basically boil down to issues of inflation and opportunity cost.

In the average year, inflation rises about 3 percent. This may not seem excessive at first glance, but it can have major effects as savings accounts grow larger. First, it is important to note that 3 percent inflation dwarfs the 1 percent rate of interest that even the top savings accounts offer. Each year such a savings account is maintained, about 2 percent of it is essentially being depleted by inflation. Of course, inflation also compounds, which means that a $15,000 savings account with the listed rates of inflation and interest would be reduced by one-third over 20 years.

While the potential for financial emergency demands preparation, one must also consider that many people will not be forced to use their savings in a normal 20-year period. Such a scenario would mean that significant money has been lost to inflation, highlighting a major loss of opportunity in that period. How might those savings have been better spent? One should recognize that investing that extra money would have been the better option in the long term.

Smart Moves for Emergency Fund Maintenance

Even with limitations related to long-term savings in the face of interest, a savings account is a crucial part of smart personal finance. Still, one must remain aware of the problems that can accompany an emergency fund once it grows too large and lasts too long. Prudent use of mutual funds is a great way of addressing this issue. So, how can one determine the point at which funds should be diverted to mutual funds?

This is a personal decision that individuals must make based on their comfort levels. For those who feel most secure with plenty of savings stashed away, an emergency fund on the larger side may be ideal. This is particularly true when funds have already been set up for retirement and other long-term investments. For those whose retirement accounts are currently lacking size, more diversion of emergency funds to long-term investments is probably preferable.

No matter which route is taken with an emergency fund, regular payments to savings are essential. Continual contributions to savings will pay off eventually whether or not an emergency occurs. By paying attention to the size of this account and making adjustments with regard to other investments when necessary, one will achieve the highest levels of financial security.

The potential downsides of excessive savings accounts are rarely mentioned. However, a majority of workers fail to maintain even the minimum levels of emergency funds and should work on developing a basic security net before starting to limit it. Once this fund is created, one can taken several steps to stay financially safe, including making emergency budgets and setting savings limits at which other investments should be sought. In the long term, these savings offer rewards not only in financial stability but also in peace of mind.

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There are certainly risks involved when traveling abroad, but the chance to collect new priceless experiences makes it all worth it. Nonetheless, you need to take extra caution to protect your money, especially when traveling overseas.

Nothing would ruin an otherwise well-planned vacation like suddenly losing access to money. Between the bank believing authorized purchases are by fraudulent thieves or otherwise charging hefty fees, as well as the chance that the exchange rate doesn’t work in one’s favor, it can be risky to travel without a monetary plan.

It’s always a priority to protect your money, but it’s even more important in this scenario. By taking a few precautions before embarking on your trip, anyone can ensure that a trip is smooth sailing all the way through. Here are some tips on keeping money safe while traveling:

Prior to the Trip

First and foremost, be smart when packing; keep the flashy valuables at home. The United States Department of State recommends avoiding showing off any affluence since it may make one a target for tourist scams.

Make sure to do some research on a travel destination to find out which parts may have more theft crimes. Avoid any parts that have high rates of crime or are known to have tourist scams. There are a few different ways to find out these areas:

  • The United States Department of State provides crime data for different countries. This section provides information on safety threats and details common crimes.
  • Check the newspapers of the destination. Look for news on Twitter or other sorts of updates from the area to get an idea of the situation there.
  • Seek reviews for the destination. There are several websites where one may check the opinions of past travelers — who better to explain a destination than a former visitor?

In the same vein, it’s worth asking friends and family if they’re familiar with anyone who has traveled to this destination. Lastly, one may try contacting travel bloggers who have previously written about the country; they may be more than willing to answer personal questions.

Protecting Money During Travel

Once on the road, take additional precautions.

1. Talk with the credit card company.

Before getting on the plane out, make sure to acquire the bank’s international contact number. The typical 1-800 number that is normally used may not work while abroad. That said, be sure to use a credit card for any major purchase. In most cases, a credit card will have a zero-liability policy, meaning it is not the cardholder’s responsibility if charges occur on a stolen credit card.

Under the Fair Credit Billing Act, the maximum liability a cardholder may have for an unauthorized credit card charge is just $50. In other words, that’s all that one will need to pay should a thief steal one’s credit card. Either way, the sooner the credit card company is informed of the theft, the better.

A backup credit card is also worth considering — perhaps even two. In this case, there is another means of purchases if the primary card gets stolen, and the vacation won’t be ruined. Unlike the primary card, backup cards should be left securely in the hotel.

2. Divide the money.

If only going to follow a single rule when it comes to protecting money, make it this one: Whenever humanly possible, divide traveling money and credit cards into more than one safe places. If everything is in one place, then a thief only needs to find one place to make life very bad.

This idea also works while carrying on one’s person. For instance, keeping some money on one’s person and some in a carried bag. If the bag is stolen, there should still be enough money to at least return to the hotel or access a nearby police station.

3. Use a travel wallet.

A dummy wallet can be a good way to trick an inevitable thief, but it’s also worth looking for a wallet that is specially designed for travel use. After all, travelers who are used to using their wallet on a day to day basis, such as to use coffee gift cards, gym memberships, pocket change or loyalty member punch cards, it is easy to get stretched pockets.

With a travel-only wallet, credit cards won’t accidentally fall out of the pocket while fishing for something else in the pocket. Not only that, but it means you don’t need to repack the day to day wallet; just take whatever is needed on the road in the travel wallet.

4. Don’t use large amounts of cash.

Credit cards may not work for everything, and cash will sometimes be required, but it’s too risky to take large sums of it at once. Unlike credit cards, cash is gone forever once it’s stolen. Not only that, but using big bills to pay for something cheap just makes one a target for theft. Instead, keep the big cash on a debit card that can be withdrawn as needed, or keep it in a hotel safe or on a traveler’s check.

If it must be on your person, keep it tucked away in a pouch under your clothing while keeping the smaller bills handy to reach.

5. Monitor the debit card.

Always keep an eye on the debit card. They’re useful tools for taking out cash for small purchases while abroad, but it has direct ties to the checking account. If it gets stolen, it doesn’t take long to empty the account.

The Electronic Fund Transfer Act protects these transactions, but the cardholder must act quickly in order to limit his or her liability for unauthorized charges.

Aside from that, some countries have fraudulent ATMs that take information when using a debit card. The thieves put the false machines in high traffic areas. While using a credit card is the best bet, if withdrawing money is necessary, stick with an ATM that is in the hotel, in the airport or by a known bank.


Above all, it’s important to keep yourself safe while keeping your money safe. The same precautions that tourists use to protect themselves can help keep their money protected as well. For example:

  • Keep aware of surroundings
  • Keep away from unsafe areas or known high-theft areas
  • Keep away from unknown shortcuts through dangerous places
  • Stick with a partner
  • Be extra careful while traveling at night

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One of the best ways to keep yourself on track financially is to have financial milestones that you would like to meet by a certain date. When you have goals to start you on the right financial path early on, that helps you build up good habits for the future. The earlier you start making good financial choices, the better you will be in the long run. In this post, we will explain seven of the most important milestones in your early adulthood into middle age, explain a good age range for hitting them, and talk about why they are important.

1. Become Free of Debt

Rising tuition and increasing costs of living mean that more and more people are starting out their careers with debt. Student debt, car loans, credit card debt, mortgages- these are all possibilities. One goal to hit as soon as possible is to pay off all of your debt. The longer you keep debt, the more interest you need to pay. Aim to have your debt paid off as soon as you can. It is difficult to specify a good timeline for becoming debt free because everyone’s debt load and income are different, but it should always be a priority.

2. Learn Your Credit Score

The federal government hosts a website where you can obtain a free credit report per year at www.annualcreditreport.com. That includes your credit score and other things you should know, like whether you have a delinquent account, or if there is an error in your report, or if your identity has been stolen and someone is making charges in your name. It is good to get into the habit of regularly checking your credit report. Some credit cards provide you with your credit score for free, but for a full report you have to do it yourself. You can do this as soon as you start building credit history with a student loan, credit card, or similar financial instrument.

3. Build Your Emergency Fund

Emergency funds are important to have in case you suddenly need to spend money. There are many reasons this might occur- you might need to fly home, you might lose your job and need to live on savings, or you have an accident and need to pay medical costs. As soon as you get your first job, start setting aside money in an emergency fund. A good rule of thumb is to have a few months’ worth of pay sacked away. That obviously takes time to build up. You don’t need to starve yourself to get it done, but within a year or so of getting a job, aim to have a few thousand put away.

4. Save for Retirement

This one is critical. You need to begin putting money away for retirement as soon as you get your very first paycheck. Starting early makes an enormous difference, because you will be investing money for decades, and the earlier you get started, the more years of compound interest you get. If your employer offers any kind of matching for contributions to a 401(k) or IRA, take full advantage. Talk to a financial professional for specific advice if you need it, but the bottom line is that you need to start saving for retirement as soon as you get the opportunity.

5. Make a Budget

You can start making a budget as soon as you have income, even if it’s a work-study job at college or a part-time first job. It’s good to get in the habit of setting a budget every month so you understand where your money comes from and where it goes. That way, if you need to cut back, you know where you can afford to reduce your spending. The more you practice with it, the less time it will take. A basic budget can scale up so that the same techniques you use to categorize your spending and income can keep working for you for your whole life. Having some experience with this early on will put you a step ahead of everyone else.

6. Think About a Side Gig

There are many ways to scratch out a second source of income, and depending on your job and hours, it might not be a bad idea to spend some time on that. This isn’t a traditional second job. A side job is smaller than a full job, and should be flexible to fit your schedule. There are many ways to do this. Freelancing is popular, as is transcription work, ad rating, and Mechanical Turk. If you think creatively and look around for advice online, you will quickly see there are many sources of income that consist of small tasks you can do from home and on your own time.

7. Figure Our Your Net Worth

Your net worth is a good measure of the overall state of your finances. To obtain it, add up the value of any assets you own, like a car, house, bank accounts, and your personal possessions, and then subtract your total debt. Include all kinds of debt- credit cards, student loans, car loans, mortgages, and anything else you might have. The result is your net worth. If you thought that you were in good financial shape, but your net worth is actually negative, then that should be a wakeup call for you. It is a good idea to check on your net worth every now and then. If you want to learn more about the debt, try making a graph where you divide your total debt into the different sources of debt you have.

Financial literacy and stability is much easier to achieve with a good foundation of healthy habits. That comes from starting early. These milestones are within the grasp of just about anyone with a job, and starting out with them early on means that you will maintain these habits later in life. The key to financial success is discipline, and these habits build the right kind of discipline.

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Traveling to foreign countries requires cash when you are on the ground. You bring along money that will help you have fun on your trip, but you cannot take cash indiscriminately. Search for the best exchange rate you can find for your cash, and ensure you are using the steps listed in this article. Each step explains how you can use cash in a foreign country without losing money when you exchange from country to country.

#1: Use Your Bank

Your personal bank is the best place to get good exchange rates when you are traveling abroad. There is no guarantee that your bank will have branches in the countries you visit, but you may ask your bank for assistance finding better exchange rates. Partnering banks will help you get better exchange rates, and your account status will help you receive the rates you require.

Your bank will take note of your trip when you go abroad, and the bank will convert your money at the best exchange rate available. You may shop with your credit or debit card when you are abroad, and the bank will give you favorable rates that allow you to save money while shopping.

#2: Use Local Visitor’s Centers

The tourism and visitor’s centers you visit have exchange rate information and cash to trade. You will get the exchange rate listed on the window when you enter the facility, and you may exchange cash at any time when visiting the center. Every large city around the world has these visitor’s centers, and you may exchange currency in every location you visit. Going to the visitor’s center is the fastest way to exchange cash, and you can walk to many centers from train stations of airport in foreign cities.

#3: Use Traveler’s Checks

Traveler’s checks are still the best form of cash you can carry when you travel. The checks may be replaced at any time, and the checks can be used like cash in most locations. The bank you purchase your checks from will help with exchange rates, and you must learn the rates when you travel to new countries. The bank will send out more information on exchange rates when you travel to new countries, and you may exchange your money at the best possible times.

#4: Working With Local Vendors

The exchange rates in places around the world are not a concern to local vendors. Working with local vendors helps you save money because prices are fluid. You may barter and trade with local vendors around the world who are not concerned with the exchange rates you get for your cash. The American dollar is so valuable in many countries around the world that a few dollars will buy many things. Do not attempt to overanalyze how much money something costs in a foreign country when you can part with a few dollars easily.

#5: Exchange Cash Before You Leave

You may take out cash from your account before you leave for your trip. Budgeting for your trip is simple, and you can exchange for foreign currency at the bank branch before you leave. File all your cash in envelopes that you will use in each location, and ensure that you have enough money for each stop on your trip. You will receive excellent exchange rates at your local bank, and you need not make extra trips for cash when you visit foreign destinations.

#6: Exchange In Large Cities

The largest cities in the world have banks that can handle your currency exchanges. You may find a branch of your bank in a large city, and you may complete the transactions in each major city before you move on to new places on your journey. The largest banks in the biggest cities are going to help you find new cash that you need for the trip.

#7: Exchange Foreign Currency

Exchange your foreign currency when you come to a new country in a local bank. You may receive better exchange rates when you come to a bank in a new country, and you should not use American dollars in certain countries. You can call your bank for help with the exchange rates on certain currencies, and the bank will be prepared to offer you good rates when you visit certain locations.

#8: Visit Foreign Powers

You may visit foreign powers that have the strongest currencies, and the exchange rates will be much more favorable than what you would receive in your local bank. Do some research on the exchange rates in foreign countries before you leave for your trip. You may make a profit on some of the exchanges you make, and it is possible that your trip will pay for itself in certain locations. Do not take the first exchange rate you see unless you have done some research on the places you will visit.

#9: Use Credit Cards

Credit cards in foreign countries will give you good exchange rates that were derived for your account. Credit card providers will help you get better exchange rates on your purchases, and you need not use the credit cards at specific times or on specific days. Your trips will be much more exciting if you are not concerned with the exchange rates you are getting in each new location. Your vacations and business trips become cheaper when the credit card company offers you better exchange rates.

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