Before we answer this question, ponder to yourself what you think the number one indictor would be for building wealth and having a successful amount in your retirement account(s). There are many answers and logics behind each answer.
I recently went on New Day Cleveland to share some Quarantine Budget Tips and I wanted to share them here as well.
This pandemic has impacted all of us in one way or another and as we know, money touches all areas of our lives, so here are a few tips that might help you when it comes to your life and money right now.
If you follow Dave Ramsey’s principals, then I’m sure you know how important budgeting is! EveryDollar is Ramsey Solutions’ budgeting tool that can be used on your desktop or via an app on your phone. They have a free version as well as a paid version. The paid version links to your bank account to make it easier to register your transactions. The paid version used to be called EveryDollar Plus but has been updated to Ramsey+ and includes even more features.
Dave Ramsey, Rachel Cruze, and Chris Hogan did a free Livestream last Thursday evening entitled "What Now? COVID-19 And Your Money!"
In case you missed it, you can still watch it on their website, here.
The Livestream is definitely worth watching but I will do a quick re-cap of their presentations here.
For many Americans, a large part of your retirement net worth is contained within your company 401(k) plan. Employer’s encourage this type of saving by not only giving you an easy payroll deduction option, so your savings is automatic, but they also provide you with a match, up to a certain percentage and occasionally will even make profit sharing contributions to that plan. Additionally, they have the fiduciary responsibility to select the investment options available to you within their plan.
If you are wanting to save money for your kids, the next question is always “what type of account should I open for them?”
The answer depends on the goal for the money. If you want them to be able to use it for anything that they need/want (ie: house, car, etc) then you will likely want to open an UTMA for them. Here is an article that outlines all the details of an UTMA account.
Do you have a savings account for your child at the bank? If so, did you know that you could have that money invested and potentially earning much more than the interest rate that the bank offers? You can! Since savings interest rates at banks are typically pretty low, it is definitely beneficial to have the money invested instead.
As you know, the government is issuing stimulus checks in order to help balance out the hardships that many people are feeling right now. Many Americans have already received their check or will be receiving it soon.
If you are receiving one, it's a good idea to have a plan for the best way for you to use the money. That’s why we wanted to share...
Are you new to the term “sinking fund”? If you are, you are not the only one because whenever I mention it, I am usually met with a blank stare. Followed by… “What is that?”
Simply put, a sinking fund is a savings that is for a specific purpose. It is NOT your emergency fund. It is a separate fund that you are using to set money aside that will be used for a specific bill or event.
There is a difference between a sinking fund and an Emergency Fund.
