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The Money IDEA
Ideas on How to Save and Ideas for What to Do with Your Savings!
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Here are 5 financial wellness moves you need to master this year!
(BPT) - If you had to grade your financial literacy, what would it be? Are you an A+ saver, investor and planner, or do you think you could do better? If you grade yourself average at best, you’re not alone.
When asked to grade their own financial literacy, more than half of Americans say they’d earn a “C” or lower, according to new data from Prudential Financial. This isn’t surprising, considering data from Prudential’s Financial Wellness Census shows less than half of Americans are on track to meet their financial goals, including planning for retirement. “Regardless of where you are on your family’s financial wellness journey, the best way forward is through financial literacy,” says Prudential Advisors President Brad Hearn. “Researching, educating yourself and getting advice from a financial professional can help you make the best decisions based on your life stage, risk tolerance and goals.” Hearn says each family’s situation and goals are unique, and things like life stage and personal preference will impact how they choose to prepare for their financial future. To get started, here are five financial wellness basics every family should master: Set up an emergency fund Life is a series of experiences, and sometimes the unexpected can hit your finances hard. Whether it’s a car breaking down, your AC unit on the fritz or even losing a job, it’s important to be prepared for emergencies. If you don’t already have an emergency fund, start saving a little each month until you reach your goal. A good rule of thumb is to have three months’ worth of expenses saved in an emergency fund. So, if your monthly expenses are $2,500, you should have $7,500 saved. Create a budget Saving for college? A new car? How about starting that emergency fund? Whatever your family’s financial goals are, it’s important to have a plan in place that helps you achieve those goals. Budget to manage day-to-day expenses, and include in that budget a commitment to save for bigger milestones. For tips on getting started, do some research. There’s no shortage of advice, whether you decide to go it alone or consider using the help of a professional financial advisor. Plan for the unimaginable If you have people who count on you for financial support or caregiving, you should have life insurance. A life insurance policy can help give your family financial peace of mind should the worst happen. There is no rule as to how much life insurance you need, but important things to consider are your annual income, mortgage debt, potential college costs for kids and other future financial obligations. Save for retirement According to Prudential data, of Americans who have retirement savings and debt, nearly one-quarter have more in total debt than in retirement savings (23%), while 15% of Americans say that they have no debt, but also have nothing saved for retirement. Planning for retirement is something that should start as soon as possible. If your work offers any type of matching program, make sure to take advantage. If you don’t, you’re essentially leaving free money on the table. Seek professional advice Retirement, life insurance and savings can be confusing. Information overload is partly to blame. According to Prudential data, two-thirds of Americans agree that the list of things they need to learn to successfully manage their finances keeps growing, not shrinking. That’s where financial literacy programs and professional financial advice can play a key role. Nearly two-thirds of Americans don’t have a financial advisor. They say they cannot afford one (42%) or don’t believe their financial situation warrants needing an advisor’s help (26%). The reality is that advice is more within reach than ever before — and it’s not just for the wealthy. A financial professional can help at various stages in life and work with you to create a strategy based on your timeline, risk tolerance and goals. “Financial wellness isn’t always a matter of having more money,” says Hearn. “Instead, it’s a journey that takes a combination of proactive effort, dedication and professional guidance.” Prudential Advisors is a brand name of The Prudential Insurance Company of America and its subsidiaries. Life insurance is issued by The Prudential Insurance Company of America, Newark, NJ and its affiliates.
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Regardless of income or wealth, the road to financial health – how you are able to manage your day-to-day financial life while building for the future – can be a lifelong journey. What you do today can build toward or detract from your long-term resilience and ability to pursue opportunities. These questions can serve as a starting point to take inventory of your financial health.Planning for the Future
Taking inventory of your financial health(Family Features) Only 28% of Americans are financially healthy, according to the U.S. Financial Health Pulse. Most others will have difficulty reaching long-term financial goals and are more vulnerable to the threat of financial shocks, such as car trouble, unforeseen medical bills or job loss. Regardless of income or wealth, the road to financial health – how you are able to manage your day-to-day financial life while building for the future – can be a lifelong journey. What you do today can build toward or detract from your long-term resilience and ability to pursue opportunities. Whether you want to take that dream vacation, prepare for retirement or save for college, financial health takes effort to build. “An overwhelming majority of the country is experiencing financial challenges that have lasting effects on people’s lives, on their ability to weather the inevitable ups and downs and on their chances to pursue their dreams,” said Jennifer Tescher, CEO of the Center for Financial Services Innovation (CFSI), the nation’s authority on consumer financial health. “Each year, CFSI and MetLife Foundation join forces on #FinHealthMatters Day to highlight the importance of financial health, especially for the 180 million people who are financially vulnerable.”
Photo courtesy of Getty Images SOURCE:Center for Financial Services Innovation
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If your homeowner insurance rates are creeping up even though you haven’t filed any claims, it may be time to take a look at how you can bring those prices back down. Research, smart shopping and even some home upgrades can make a noticeable difference in your insurance premiums. Explore the cost-savings potential with these tips.Save Your Way to Lower Home Insurance
(Family Features) If your homeowner insurance rates are creeping up even though you haven’t filed any claims, it may be time to take a look at how you can bring those prices back down. 
Research, smart shopping and even some home upgrades can make a noticeable difference in your insurance premiums. Explore the cost-savings potential with these tips from the experts at CertainTeed, a leading manufacturer of exterior and interior building products: Shop for the best rates. It’s easy to be complacent when you’ve used the same insurance company for years, but if getting the best rate is your objective, it’s a good idea to shop around. To do effective comparison shopping, have a copy of your current policy ready and contact a handful of competitors. Provide them the exact same coverage details so you can compare like rates, but also be ready to listen to information about additional coverage options that may suit your needs. Combine homeowner insurance with other policies. Most insurance carriers offer multiple policy discounts, which they apply when you insure more than one item. For example, if your homeowner insurance carrier also insures your cars, you’re likely to save money on the rates for protecting both your home and automobiles. Update your home’s first line of defense. Many homeowners focus on aesthetics when it’s time to make upgrades, but there are some important functional improvements that can make a difference when it comes to your insurance premiums. For example, as extreme weather becomes more commonplace, the first line of defense is often the type of roofing material chosen. Many insurance companies even offer discounts for using impact-resistant shingles. Check with your insurance provider before making a final selection, but in general, look for products that include “impact-resistant” in their name and specs, and “Class IV Impact Resistance,” the highest rating available for roofing materials. For example, NorthGate Class IV impact-resistant shingles from CertainTeed are engineered to have a higher probability of resisting hail. These shingles are made using rubber-like polymers that offer flexibility and impact resistance, as well as crack and shrink resistance, even in cold weather. So when severe weather strikes, your home can be protected and stay looking good. Install a home security system. An intruder alarm can provide more than peace of mind. Insurance companies often reward homeowners who take steps to minimize the chances of burglary or vandalism. After all, a well-protected home is less likely to result in a claim for losses. Some companies offer varying degrees of discounts on insurance rates depending on the type of system you install, so be sure to thoroughly research the options. For example, a system that simply emits a loud noise when triggered may generate one level of discount, while a system that dispatches emergency personnel when activated can lead to an even better rate. Insurance rates are one place to save money on your home costs. Learn more about impact-resistant shingles and how they can save your home and wallet at certainteed.com. SOURCE:CertainTeed
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Thinking about home repair costs? Maybe you should be...
Don’t fall victim to the financial risks and mental stresses associated with owning a home. Appliances have set lifespans, breakdowns are inevitable and repairs and replacements are costly. Make sure your home is covered, so you and your wallet can rest assured that your home is taken care of.
(BPT) - Nobody bats an eyelash when it comes to buying homeowner's insurance, but many homeowners don’t apply that same logic to planning for home repairs — not what might happen, but what will happen.
Only a fraction of the 120 million U.S. households today are protected by a home services plan, also known as a home warranty. That number is growing, as homeowners recognize the value of coverage when appliances go on the fritz, hot water heaters run cold in the middle of winter or a leaky faucet drives up their water bill. Perhaps one reason more homeowners don’t have home service plans is because they think they are covered through their homeowner's insurance policy. Homeowner's insurance doesn’t protect you from the natural home aging process. Insurance kicks in when damage occurs from an outside force, like a busted sewer line or roof damage due to a major storm. While insurance covers you when Mother Nature strikes, it doesn’t protect you from the natural wear and tear that your home’s major systems and appliances go through during the aging process. Understanding how home service plans work and how they fit into your financial and risk-planning strategy allows you to be prepared for covered breakdowns, without breaking the bank. Let’s start at the beginning. What is a home service plan? Home service plans typically cover the repair or replacement of major home appliances, including refrigerators, washers, dryers, ovens or cooktops, and components of major systems like plumbing, HVAC and electrical. When your air conditioning system breaks, or your washer or dryer stops spinning, you want the confidence of having a home services plan in place that will help protect your budget. This is where the true value of a home service plan comes in. Home service providers such as American Home Shield accept service requests and assign professionals to diagnose the problem and offer a solution through its vast network of skilled and trusted contractors, which includes more than 15,000 licensed and qualified pros throughout all 50 states. What’s the bottom line? With a home service plan, you won’t pay the full cost of repairing or replacing items covered by your plan. Regardless of age, make or model, your contract helps cover the repair or replacement of items covered in your plan. For example, if your refrigerator malfunctions, your service provider will connect you to a quality contractor to diagnose and repair the problem. This can help reduce the hassle of repairing it yourself and help protect your budget. Think about your home’s future (and yours). Service plans can come in handy when selling a home. The appeal speaks for itself: When buyers are making that final decision around one of the biggest investments in their lives, having a home service plan in place gives the new homeowner confidence that the home’s systems and appliances are protected, and they won’t bear the entire financial impact of repairing or replacing it if it breaks down. The choice seems obvious: Don’t fall victim to the financial risks and mental stresses associated with owning a home. Appliances have set lifespans, breakdowns are inevitable and repairs and replacements are costly. Make sure your home is covered, so you and your wallet can rest assured that your home is taken care of.
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No matter where you are in life, whether you’re just starting your career or nearing retirement, it’s important to understand the voluntary benefits available to you that can complement traditional health insurance. With the right information about the options available you can make choices that best fit your lifestyle and budget. Consider these common voluntary options.Understanding Insurance Benefits
(Family Features) No matter where you are in life, whether you’re just starting your career or nearing retirement, it’s important to understand the voluntary benefits available to you that can complement traditional health insurance. While health insurance can help cover medical costs in the event of injury or illness, sometimes there are additional expenses your health care plan doesn’t cover. Voluntary benefits, such as life insurance, disability insurance and dental insurance, offered by your employer or as portable options through a company like Colonial Life can help bridge the gap should an unexpected event occur. “Even if an employee has to pay a nominal sum for a voluntary benefit like disability insurance or dental coverage, it can be well worth it,” said Sharlyn Lauby, president of ITM Group Inc., creator of the HR Bartender blog and contributor to Colonial Life’s WorkLife blog. “Think of voluntary benefits as those specialized, personalized extras that make your overall benefits package exactly what you’d like it to be.” Benefits can be complex, but with the right information about the options available you can make choices that best fit your lifestyle and budget. Consider these common voluntary options: Life Insurance Disability Insurance Dental Insurance Accident Insurance Critical Illness Insurance Learn more about how you can live healthier, enjoy more success at work and take full advantage of your benefits at worklife.coloniallife.com. Photo courtesy of Getty Images SOURCE:Colonial Life KEYWORDS
Could mortgage insurance be the key to unlock buying your first home?
(BPT) - The homebuying process is exciting, but can also seem fraught with added costs, like a home inspection, title insurance and closing costs. And if you can’t afford a full 20 percent down payment on a conventional home loan, then you will most likely pay for private mortgage insurance (MI). Some people consider private MI yet another added cost, but it helps creditworthy middle-income homebuyers qualify for home financing sooner with a low down payment. Is it really an added cost if it saves time and money in the long run?
For most people, low down payment home loan options include conventional loans with private MI and government-backed loans like those offered by the Federal Housing Administration (FHA). While comparable, each of these options has important differences. For example, the minimum down payment for an FHA mortgage is 3.5 percent while it’s only 3 percent on a conventional, privately insured mortgage. Another key feature of private MI is that it can be canceled when a borrower reaches 20 percent equity in his or her home. Borrowers who purchase a home with private MI can typically cancel it within 5 to 7 years, resulting in their monthly bill going down. Private MI’s cancelability makes it a more affordable option over FHA-backed mortgages, which typically require mortgage insurance premiums for the entirety of the loan term. Both are offered by most mortgage lenders, so it’s smart to ask a loan officer for both options so you can compare and do the math. The myth that a homebuyer needs 20 percent down to obtain a mortgage is simply not true. Low down payment mortgages are widely available and used every day across the country. In 2018, the National Association of Realtors found that first-time homebuyers typically put down 7 percent, while repeat buyers put down an average of 16 percent. Many homebuyers choose a lower down payment option to preserve some savings for home improvements or save for other goals. The time it could take to save up a 20 percent down payment is significant. On average, it could take up to 20 years to save a full 20 percent, plus closing costs, for a $257,700 house — the national median sales price. With home prices on the rise, the amount of time it takes to save up could only increase. Private MI can mean the difference between getting into the home of your dreams sooner or waiting for years. For over 60 years, more than 30 million homeowners of all backgrounds have used private MI to successfully buy their homes. In the past year alone, private MI helped more than one million borrowers nationwide purchase or refinance a mortgage. According to a study by U.S. Mortgage Insurers, 56 percent of purchase borrowers were first-time homebuyers and more than 40 percent had incomes below $75,000. For decades, millions of homeowners and prospective homebuyers have relied on private MI to help them affordably and responsibly purchase their homes — in turn helping them build personal wealth. Today’s historically low mortgage interest rates are a good reason to buy a home now. It is estimated that in 2019, the average rate for a 30-year fixed-rate mortgage will be around 5 percent. Borrowers should take advantage of these historically low mortgage interest rates because experts forecast that primary mortgage rates are on the rise. Getting a mortgage with private MI and keeping more of your hard-earned money in the bank can be a very smart way to invest in your future. Check out lowdownpaymentfacts.org to learn more.
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Do you know what you need to know about life insurance?
(BPT) - If you haven't made solid financial plans, now would be a good time to consider a life insurance policy to protect you and your family in your time of need - or protect your loved ones in your absence.
Given the importance of life insurance, it's surprising that 37.5 million American households lack such a policy, according to the 2016 Facts About Life study by the industry group LIMRA. That may be because many people misunderstand how such policies work and how much they cost. For example, recent Insurance Barometer studies by LIMRA and Life Happens found 63 percent of Americans cite expense as the reason they don't carry term insurance, yet 80 percent overestimate the cost - millennials by 213 percent and Gen Xers by 119 percent. While some Americans hope to rely on other sources to protect their families, they may not realize all the benefits life insurance offers. Every family has different needs, and some life insurance products are flexible enough to offer customizable options to provide a measure of financial security to your spouse and children - the people that matter most. Consider these other common myths about life insurance: Myth: Life insurance is only available through financial advisors. In fact, quality policies for your entire family are often available through your employer or your spouse's employer. For example, Boston MutualLife Insurance Company offers a range of workplace solutions paid for by employers, employees or both, including permanent life, term life, critical illness, accident and disability insurance. Talk to your company's HR department about the process involved in securing comprehensive coverage for your family. Myth: Workplace policies can't offer enough options for your needs. You'll find that well-established life insurance companies understand the market well enough to offer a range of flexible products, including policies that are payroll deductible, stable in cost regardless of your age, portable when you're changing jobs and available with add-on riders or other insurance types through the same carrier. Myth: Young, healthy people don't need life insurance. The truth is, your health can change at any time and it's best to expect the unexpected. Uninsured people can easily leave behind personal, medical or mortgage debts and/or funeral expenses that end up burdening family members or executors when they die. Myth: Your life insurance policy only covers you, not your family. Not true. Some products protect you, your spouse, your dependent children and even your grandchildren, often at one affordable cost. That's why marriage and becoming a parent can be excellent reasons for buying new policies. Investing in life insurance is a crucial step to take to protect yourself and your family from unexpected losses. But it doesn't have to be confusing or complicated. Find more detailed information about life insurance options for you and your family at www.BostonMutual.com. KEYWORDS
What should you be doing to prepare for retirement? Top tips and tactics from financial advisors7/10/2018  Top tricks to prepare for retirement Retirement is waiting just around the corner. People need good advice to help them build their nest eggs before "someday" becomes "now." Here are the best tips, advice and tactics for retirement planning from the top financial advisors in the business.(BPT) - You're 10 years or less away from retirement. You can clearly see the next phase of your life down the road and it's coming up fast. Are you ready for it? Do you have a comprehensive plan in place so you don't outlive your savings? If you're not as prepared for retirement as you should be, you're not alone. The Federal Reserve did a study and found that one-fourth of Americans have no retirement savings or pension. And a Money article reports 56 percent of Americans have less than $10,000 saved. Why aren't more people prepared? There are myriad reasons. Some people are stretched thin. Credit card debt, student loans, rising mortgage and interest rates all conspire to make it difficult for them to save. Others may lack information on the importance of retirement savings, or lack the financial savvy to be comfortable managing their own investments. And then there's the gap between men and women. The Federal Reserve’s study found that among women with any level of education, investment comfort is lower than among similarly educated men. Yet, retirement is waiting just around the corner. People need good advice to help them build their nest eggs before "someday" becomes "now." That's why the National Association of Personal Financial Advisors (NAPFA), a national organization representing Fee-Only financial advisors, conducted a poll of its members to get their top tips and advice for people who are nearing retirement. They want to raise consumer awareness about the urgency of preparing for retirement and the importance of having a comprehensive plan in place. Here are the best tips, advice and tactics for retirement planning from the top financial advisors in the business. 1. Make a list of retirement “needs” and “wants.” If you do not have enough savings for all of your “needs,” make a ten-year plan to increase your funds. 2. Take a hard look at any major debts you have and develop a plan to eliminate them. 3. Brainstorm any “big ticket” financial commitments (caretaking for a family member, etc.) for the next 10 years and consider how these items might affect your ability to save for retirement. 4. Continually monitor and analyze your asset allocation to make sure it is the right one for you. Understand whether you should move to a more conservative asset allocation or continue investing for growth. 5. Be tax efficient with your investments. For example, you should defer as much of your salary as you can to your defined contribution plans. 6. Save to an emergency fund and stay aware of your company’s financial situation. Companies are prone to reorganizations and layoffs, and older workers can be vulnerable. 7. Ask your HR department about the relationship between your current health insurance and Medicare, as well as what your options are when you reach age 65. Get information about any pension or defined contribution options and any other retiree benefits. 8. Research when stock-based compensation might expire and what stock awards you can retain after retirement. 9. Double check your reported Social Security earnings and resolve any discrepancies now. Explore your Social Security claiming options and make sure you understand the timing of applying for benefits. 10. Make sure that all of your estate documents are up-to-date. Verify that your named executors and proxies know your wishes and are willing to act on them if needed. If you think you’ll need help creating and sticking to a financial plan, NAPFA recommends working with a Fee-Only financial advisor who adheres to a strict fiduciary standard. These advisors are required to put your best interest first and don’t accept commissions on the products they recommend, which reduces potential conflicts of interest. For more information and resources on retirement planning, check out NAPFA’s infographic about the poll. To find a Fee-Only financial advisor in your area, visit the NAPFA website at www.napfa.org and NAPFA’s “Find an Advisor” search engine. KEYWORDS
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