Personal Finance Wellness.

You won't be free until you are financially free!

certificate of deposit

What Is A Certificate Of Deposit?

A certificate of deposit (CD) is a product offered by banks and credit unions that provides an interest rate premium in exchange for the customer agreeing to leave a lump-sum deposit untouched for a predetermined period of time. Almost all consumer financial institutions offer them, although it’s up to each bank which CD terms it wants to offer, how much higher the rate will be compared to the bank’s savings and money market products, and what penalties it applies for early withdrawal.

Shopping around is crucial to finding the best CD rates because different financial institutions offer a surprisingly wide range. Your brick-and-mortar bank might pay a pittance on even long-term CDs, for example, while an online bank or local credit union might pay three to five times the national average. Meanwhile, some of the best rates come from special promotions, occasionally with unusual durations such as 13 or 21 months, rather than the more common terms based on three, six, or 18 months or full-year increments.

How to choose a Certificate of Deposit

Certificates of Deposit (CDs) are a great tool for all consumers who want to earn some extra money on money that’s sitting around their bank accounts. That being said, there are a few considerations to keep in mind when choosing a CD. The lowest risk CDs are the shortest-term CDs, which typically offer only a few months of interest. The medium-term CDs offer anywhere from six months to three years, the longest-term CDs offer anywhere from five years to a few decades, and the highest-yield CDs are the longest-duration, providing the highest interest rate. How to open a CD Most CD products require a minimum deposit of either $1,000 or $2,000, with the remainder to be paid in the form of monthly interest checks.

How Certificates of Deposit Work

Certificates of Deposit usually offer interest rates as high as 3.5% but have a fixed rate until you decide to withdraw your cash. This term “until you decide to withdraw” generally applies to 2½ months or less, but many financial institutions extend that period to 3 or 4 months. Once you decide to take your money out, though, the rates quickly fall to near-zero and may require a deposit of $50,000 or more to earn a rate of even 1%. Although CDs are normally a lot safer than savings accounts, they’re still very risky investments. That’s why they’re typically treated with a degree of caution by the prospective depositor.

Certificate of Deposit Interest rate

The CD interest rate will be set by the bank when you open an account and will remain the same or increase from that point on. The difference between what a CD paid and the best available rate on a savings account today is called the CD premium. The CD premium is the difference between the CD’s fixed rate and what the best available savings or money market product has to offer. The CD premium can be paid as a bonus when you open an account, or the rate may increase when you renew the CD at the end of the term. When your CD gets paid as a bonus, you are getting the difference between the CD’s stated interest rate and the CD premium.

This post contains affiliate links. Please please read my Disclaimer for more information

Certificate of Deposit Term

The minimum term for CDs is set at several years and can vary a great deal based on the type of product and the bank or credit union issuing it. It’s standard for certificates of deposit to have terms of one to five years. However, CD terms of one to two years, or shorter, are also common and are often offered at higher rates. Certificate of Deposits (CD) is considered to be fairly safe with a few obvious exceptions. Many borrowers don’t pay attention to the term of their CD or in fact, may be required to make a minimum monthly interest payment in the form of minimum monthly required fees.

Certificate of Deposit Principal

These are the initial deposits you make to get the CD, but they will be converted to interest payments during the duration of the certificate, which is typically set at between 2 and 5 years. The interest rate on a certificate of deposit is determined by the bank. For example, a 3-year CD will pay interest between 0.20% and 0.80%, with 1-year CDs paying between 0.30% and 0.80%, 2-year CDs paying between 0.60% and 1.40%, 3-year CDs paying between 1.50% and 2.00%, and 5-year CDs paying between 2.00% and 2.80%. You can see an even wider range of CD interest rates for even more specialized products such as certificates of deposit tied to specific maturities or “guaranteed” money market accounts.

Why do banks offer Certificates of Deposit?

Typically, a certificate of deposit has a higher interest rate than a savings account. For example, if a savings account has a 1.01 percent interest rate, a certificate of deposit would likely have a higher rate and could provide an additional 2 percent to 4 percent of interest rate over time. CDs also have certain advantages over savings accounts, such as the ability to take out a portion of your deposit at any time and without having to pay a penalty. CD withdrawals are typically not subject to a penalty, but the interest rate of the product could be significantly lower if you withdraw the money before the term is completed. Certificates of deposit can be long-term, meaning your money will remain invested in a bank’s CD, and there are also short-term certificates of deposit.

Advantages of Certificate of Deposit

A CD offers three distinct advantages to the holder of the certificate: Secured The account is secured with your cash and so the interest on your CD will not be taxed. (If you leave the money in your CD for less than one year, then it’s considered a checking account.) You will not be liable for any fraud or loss on your cash deposit, and this protection is covered under the FDIC’s deposit insurance. The yield on a CD also is guaranteed by the government. The account is secured with your cash and so the interest on your CD will not be taxed. (If you leave the money in your CD for less than one year, then it’s considered a checking account.) You will not be liable for any fraud or loss on your cash deposit, and this protection is covered under the FDIC’s deposit insurance. You will get a real interest rate on your money. You can withdraw money before the end of the term, usually several years. As a general rule, certificates of deposit tend to pay higher interest rates than a savings account or money market fund.

Disadvantages of Certificate of Deposit

Dealing with a financial institution There’s no point dealing with an institution that doesn’t have convenient branch hours. This will require you to take time off work to visit the bank. On the flip side, there’s no point dealing with an institution that offers interest rates that are either too high or too low or that doesn’t allow for easy, on-demand withdrawal. Also, interest rates for CDs vary depending on where they are issued, so CDs can’t be set up to work with online accounts. Interest rates for CDs vary depending on where they are issued, so CDs can’t be set up to work with online accounts. Also, interest rates for CDs vary depending on where they are issued, so CDs can’t be set up to work with online accounts.

Conclusion

Banks often offer higher rates on CDs, but unlike with a savings account, they do so in exchange for some restrictions on the rate you can withdraw on demand. Keep in mind that these higher interest rates on CDs are often found in specialized accounts offered by banks. For example, some banks will offer CDs with shorter durations and/or higher rates than their traditional savings account offerings. So, regardless of the product, you’re looking for, start by focusing on checking and savings accounts, not CDs. And if you find a specific bank that offers a CD offer that you like, contact the bank to get a better understanding of the terms and conditions.

“If you have any feedback about what is a certificate of deposit that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

what's 457 plan

What Is A 457 Retirement Plan? How Does It Work?

The 457 Plan is a type of tax-advantaged retirement plan with deferred compensation. The plan is non-qualified – it doesn’t meet the guidelines of the Employee Retirement Income Security Act (ERISA). 457 plans are offered by state and local government employers, as well as certain non-profit employers. A 457 plan is provided by the government and local state organizations (and some non-profit organizations), allowing employees to contribute portions of their salary into a tax-advantaged, non-qualified retirement vehicle.

What Is a 457 Plan?

A 457 plan is commonly associated with state and local government, while many private-sector employers offer a similar type of plan. It is a deferral, defined contribution, Roth or Traditional IRA-type plan. 457 contributions are not deductible as income (for federal income tax purposes), but are fully or partially deductible for state and local income taxes and in certain cases, for self-employment taxes. The 457 plan is different from a 403(b) (a non-qualified defined contribution plan), in that the 457 is not eligible for “catch up” contribution amounts or for matching contribution to an employer’s contribution.

How a 457 Plan Works

The employer may contribute up to $52,000 per employee (10% of employee’s compensation up to a maximum of $208,000 in 2019) or as many as 20% of employee’s compensation. As the employee draws out portions of the contribution over his or her life, he or she gets to keep this tax-free. Any balance leftover at the end of the year is returned to the employee. The 457 plan is for employees of state and local government organizations. You can contribute up to 25% of your salary to the plan, or $127,200 (for 2018), or up to $132,500 (for 2019) if you are age 50 or older. The plan has a $3,400 annual maximum in employer match funds. However, the federal government match is $1,000 and your employer match is $2,400 for 2018, so your employer and federal government match are equal to $4,400. You don’t have to take any distributions until age 59 ½.

Advantages of a 457 Plan

According to a study conducted by Fidelity, a 457 plan can provide a tax benefit of up to $40,000 annually for middle-income participants. Qualified participants can defer taxes up to an additional $16,000 annually through their first five years. After that, they can defer up to $30,000 annually. unqualified participants can contribute up to $54,000 annually tax-deferred (or $17,000 annual) if they meet certain requirements.

A 457 plan offers an employer a 50% match on qualified plan contributions. Even though the 457 plan isn’t a qualified retirement plan (such as a 401k), an employer may contribute up to $52,000 (for 2018) into the 457 plan on behalf of each employee on a tax-deductible basis. If the employer makes matching contributions, this is a 50% tax deduction on the employee’s contribution, and an additional 50% tax deduction for the employer, resulting in an immediate tax savings of the employee’s contribution. Employer and employee contributions are protected 457 plans are a tax-deferred savings plan, and contributions are not subject to income tax, Medicare tax, FICA tax, or Social Security taxes.

This post contains affiliate links. Please please read my Disclaimer for more information

Limitations of a 457 Plan

There are a few significant limitations to the 457 plan. There are no investment restrictions on the plans – so, once money has been contributed to a 457 plan, there’s no need to diversify. Unlike 401(k) plans, 457 plans are non-qualified. So, if an employee takes a loan from the plan, it must be repaid in order to receive the refundable portion of the contribution back. There are some exceptions to the rules – such as the case of government employees. If an employee is an employee of a government entity, there’s a one-time exemption that makes it easier for employees to invest a small amount of their salary without losing the benefit of the tax-advantaged funds.

Types of 457 plan

There are four types of 457 plans: Regular – a current 457 plan with a percentage of salary matching contribution, and employer match. Mandatory – a current 457 plan with a percentage of salary matching contribution, and employer match. Permitted – a current 457 plan with a percentage of salary matching contribution, and employer match. Unrestricted – a current 457 plan with a percentage of salary matching contribution, and employer match. 457 plans work because employees can contribute pre-tax dollars – either through direct deposit or by paying themselves. While the contribution and/or the employer’s matching contribution is not taxed, the balance of the account is after-tax, and in most cases after-tax dollars.

How Withdrawals in 457 Plan Work

A 457 plan allows you to take advantage of both the tax-deferred aspects of a 401(k), as well as the tax-free aspects of a 403(b). An investor can withdraw the funds, tax-free (within limits, depending on your specific plan), as a lump sum, in smaller amounts, or in combination. The lump sum, however, is taxable as ordinary income (unless the amount withdrawn is below the applicable withholding taxes). At age 62, the 457 workers are generally allowed to begin taking withdrawals from the plan. Any vesting requirements or time payments must be met, however.

Rollover and Transfer Options

The custodian of a 457 plan allows participants to roll over balances over to a new participant, or roll over to a personal IRA. The custodian will automatically roll over the balance, with or without a change in beneficiary information. The rollover amount is determined by the value of the balance at the start of the rollover. For example, if a participant has a $100,000 balance, the rollover amount will be equal to the balance at the time of the rollover, multiplied by a one-time income tax savings for the participant. Rollovers are accomplished by the custodian and financial institutions.

Special Consideration for 403(b) Plan Holders

Although there are pros and cons to the 403(b) plan structure, the key difference is that the 403(b) plan type has the characteristics of a defined benefit plan (traditional plan), not a defined contribution plan (401k plan). Some 403(b) plans offer features and benefits not available to other plans (i.e., a fee-for-service option). Contributions made to a 403(b) plan must be made with pre-tax dollars, and the plan has no upfront employer contribution.

There are two other important points to note in regards to 403(b) plans: The 403(b) plan you are in will automatically roll over your 401(k) to your 457 plan after 10 years, or sooner if you request it. You can rollover your 403(b) after 15 years of service unless you request it in the contract. There are three major differences between the 403(b) and 457 plans. The biggest difference is the way contributions to the 403(b) are tax-deductible. Employers will make an offer letter, which gives employees the opportunity to participate in a 403(b) plan. The 401(k) option is the default option for new employees, and once employees join the 401(k) program they can continue to contribute in the 403(b) plan until age 59 ½.

The benefits of a 457 plan

The 457 Plan has tax benefits on both the employee and the employer side. The employee has to contribute to a separate account on the individual side, called the “discretionary” account. The amount that the employee contributes to the plan is counted as income and taxed as regular income. But on the other hand, the employee’s wages are protected from the excesses of the income tax, and the contribution does not count as income on the employee’s return. The employee then receives a withdrawal from the plan for a period equal to the number of years worked. For example, the employee works 20 years in the plan. The employee receives a 10% return on the money.

Conclusion

Until President Trump signs the tax plan into law, 457 plans will continue to exist as federal law. For now, employers who want to incorporate the plan into their benefits packages for their eligible employees should do so now and consider offering it to additional employees as well.

“If you have any feedback about what is a 457 retirement plan that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

Reduce your cable bill

WaysTo Reduce Your Cable Bill By A Half

In this post, we will help you make ends meet. Cable deals look great until the bill arrives, and their customers are shocked with all their extra fees. Some people looked inside cables’ hidden costs and detected cable TV surcharges had increased considerably since 2010. According to a 2020 report from DecisionData.org, the average household cable package in the U.S. costs $217.42 a month —that is nearly $2,600 a year. According to the findings of this report, a cable TV bill is relatively expensive compared with other utilities for smaller households.

The cable companies that offer such services, such as Spectrum, Mediacom, Xfinity, claim that these costs are necessary; because of the rising cost of cable programming and the cost of local broadcast stations. For years, cable companies rebroadcast local channels without paying anything! However, Congress changed that in 1992. Now the cable companies have to pay local channels to broadcast their programs.

10 ways to lower your Cable Bill

Here, there are several tips and trick you can do to lower your cable bill and save more money:

  1. Buy a digital antenna for approximately 30 dollars. Once you set it up, you will get dozens of free over-the-air channels.
  2. Usually, cable companies offer specials to be more competitive in the market. Find promotional deals from cable companies and other providers. Call with specific offers you have found from competitors, and say you are thinking of leaving; finally, ask for the retention department whose job is to keep their customers from canceling. “Cable companies know that it is much more costly for them to get a new customer than to retain an existing customer,” says financial advisor Charles H. Thomas III, founder of Intrepid Eagle Finance. Most likely, you will get a price cut. Therefore, you can use it as a bartering tool to bring it down to the price you want or switch cable providers.
  3. Compare different rates by different providers in your area. If you think there are better available options for you, then switch away from your current service. As long as you will not face a sizable cancellation fee for switching away from your current service, you could end up with a cheaper alternative.
  4. You can directly call your current cable company provider and ask them about the options to reduce your bill. Sometimes people unknowingly and due to the lack of information or knowledge pay for more bandwidth or premium cable programs than they need. “This could include less costly packages that have fewer channels or other options,” Thomas says. Getting out the channels you rarely watch or switching to a less deluxe package can greatly reduce your monthly cable bill. A September 2016 report by Nielsen revealed that, on average, American adults watch only about 20 channels, though they get around 205. You can talk with a sales representative at your current cable company provider about the ways to reduce your cable bill. Remember that if you follow TV series such as “Games of Throne” or “The Crown” you can remove the channel when the season wraps. Therefore, speak with your cable provider agent to find how you can cut your cable bill costs. The agent is there to help you find cable and internet options that fit your needs and your budget. Therefore, when in doubt, ask! Feel free to ask the agent, “Is that the best you can do?” or “Are there any other incentives or promotions?” “Do you know what other offers might be available?”
  5. Get rid of unnecessary cable boxes. Premium channels are not the only extras you can manage. Additional cable boxes often cost $3 to $12 per month. Maybe the equipment in your bedroom is not necessary after all.

6. Cut the cable cord altogether! Stream TV and movies online and live. You can buy Roku, Boxes, Google TV, or Apple TV box for about 100$. These let you stream the internet. On the other hand, you can buy a smart TV (In this case, you do not have to buy a separate box). You can also watch from your computer, laptop, or smartphone and use services such as Netflix or Hulu. Subscriptions for Netflix start at $8.99 per month, while Hulu’s base plan is just $5.99 per month. Millions of people have switched from cable companies in favor of streaming services to save their money.

This post contains affiliate links. Please please read my Disclaimer for more information

“The quality of internet streaming these days is excellent, and there are a variety of content providers that offer bundles for a fraction of the price of cable,” says financial expert Cyrus Vanover, founder of The Frugal Budgeter. Nevertheless, you still have to pay your internet bills. Vanover recommends combining streaming platforms with services like Tubi TV to get all the content you are used to for a fraction of the price. However, you have to know that some programs do not exist in online streaming.

7. Try SlingTV or DirecTV. Packages start at $25 per month with SlingTV and $40 per month with DirecTV. Both offer access to live and on-demand TV without all the extra fees of cable.

8. Buy a single package. Try to get your internet, phone and cable services from one company. Instead of having multiple services from different providers, try to bundle your services. In this way, you will lower your spending.

9. If you have always paid your cable bills on or before their due date, you can use it as a bargaining tool when trying to persuade your current cable company to lower your costs.

10. Pay attention to each fee on your cable bill. Some expenses are unavoidable, but you can avoid others, such as those for HD technology. Please call your cable provider’s customer service line for more help in this regard.

Conclusion

Nowadays that cable bills are increasing daily without warning, or a clear reason, there are some ways to lower your cable bills. If you feel I have missed out on anything to mention in this list, please share it with us.

“If you have any feedback about ways to reduce your cable bill by a half that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

without a will

What Happens If You Die Without A Will?

If you die without a Will, the law says that you have died “intestate,” which means that you left no instructions as to how your property is to be divided and distributed. In these circumstances, this article will show you how your property will be distributed to your surviving relatives or your wife and children. Even if you want your property divided according to provincial law, you should still have a Will because it will reduce delays and expenses involved in wrapping up your affairs.

What is a Will?

A Will often called a “Living Trust,” is a legal document that dictates how your property is to be divided after your death. Some people choose to make a Will for their own benefit while others may use their Will to transfer property to their spouse, children, or a charity. It is also a common practice to name someone to act on your behalf as an “Administrator of the Estate.” This person is responsible for the proper execution of your Will. It is important to specify in the Will who will be appointed as the Administrator because this person will be the only person authorized to distribute your property according to provincial law and estate laws in the province or territory in which you lived.

Why do people make Wills?

People sometimes make Wills for the following reasons: They want to be sure that they and their family members are legally protected from possible lawsuits from other family members (or even themselves) that could arise from any potential estate disagreements. They might have young children who are minors, or they may have a spouse or child who is incapacitated, mentally disabled, or who is ill and might die within a short period of time. They might have parents or other adult relatives who are facing financial problems, or they might be senior citizens. They might have some reason or other that might have to be considered by the courts regarding their property.

Problems that arise when someone dies without a Will

If someone dies without a Will, the law doesn’t have much say about how the property should be divided. While there are provincial laws that spell out the types of property that should be distributed according to provincial law, the law doesn’t really spell out how it should be done. It does say that the only factor in deciding how the property should be distributed is whether the deceased person intended it to be distributed according to provincial law or on the understanding of a personal representative. So here are some of the questions that might arise if someone dies without a Will: Does the property have to be divided in the order in which the deceased owned it? The answer to this question depends on the date of death.

What Exactly Happens If I Die Without A Will?

Here are some key points that you need to know about how your property will be distributed if you die without a Will: Unless you have a surviving spouse or dependent children, your property will be divided equally among your four remaining living children and your surviving spouse or dependent children. Your surviving spouse or dependent children can’t have any other children before your death, but they can have other spouses, boyfriends, or girlfriends after you die. This is a result of the “step-up” provision, which allows surviving spouses to keep certain property that they had earlier inherited from you. You can inherit a piece of property outright, and it will be distributed equally among your heirs, without a Will.

This post contains affiliate links. Please please read my Disclaimer for more information

What Exactly Happens If I Die Without A Will?

Here are some key points that you need to know about how your property will be distributed if you die without a Will: Unless you have a surviving spouse or dependent children, your property will be divided equally among your four remaining living children and your surviving spouse or dependent children. Your surviving spouse or dependent children can’t have any other children before your death, but they can have other spouses, boyfriends, or girlfriends after you die. This is a result of the “step-up” provision, which allows surviving spouses to keep certain property that they had earlier inherited from you. You can inherit a piece of property outright, and it will be distributed equally among your heirs, without a Will.

Who Will Be In Charge Of My Estate?

The law allows each province or territory to choose to handle the distribution of your property. Generally, your province or territory will make a recommendation of who will be responsible for your estate if you die without a Will. If you live in a province that is not listed, you should still make a Will. Who Is On My Estate? Each province has a division of wills that is responsible for managing the probate of your estate. In Ontario, the government’s General Division of Wills handles these matters. By registering with the General Division, you appoint them to take care of your estate upon your death. These persons then form the General Division’s executor and administrator. These persons are in charge of organizing your estate and your distribution of your estate.

Who Will Take Care Of My Children?

For many of us, including parents, children are the most significant, cherished family members. It would be shocking if one of these loving children lost everything. In order to address this possibility, you must have a Will. If you don’t have a Will, your property will be divided according to the following provisions: If your spouse dies first, then his/her estate, which includes your children, will be taken care of first, even if you have separate wills. If you have separate wills and your spouse died first, then his/her children will be taken care of first. If you have no children, then the property will go to a designated charity. If you have a minor child, then the child will be left to your spouse, and the minor child will be taken care of first.

Who Will Get My Estate?

There are several ways your family can receive your property. The surviving spouse will inherit the entire estate, including your real estate, personal effects, and remaining money. Your spouse will have the benefit of your remaining income tax-free until you are buried or cremated. You can tell the decedent to set up a living trust so that the spouse will be named as the beneficiary in your Will. Even if you have children who are no surviving children, they can be named as beneficiaries under a living trust because children are considered legal persons for the purposes of intestate succession. Even if you don’t have any children who are now living, you still may want to have your estate divided equally among your children after you die.

What happens if you die intestate?

In the case of intestate deaths, a judge determines how the estate is distributed. Typically, a family court judge will appoint an executor, a person who is appointed to look after the will of a person who died without a Will. An executor is usually a family member or a close friend who will carry out the terms of the will. An executor is often paid to do his or her job, which is usually quite complicated because executors are tasked with doing tasks that most of us would rather not do. The executor will investigate the contents of your estate. They will look into bank accounts, investments, and real estate, as well as a credit union and insurance accounts. An executor can pay your bills and settle your estate without having to go to court.

How to make a Last Will and Testament

If you have not made a Will, you will have to create one in the circumstances described below. Making a Will takes time, and making one in the wrong way can cost you more than it should. The more time you spend on writing it, the better off you are. You can write it in a few hours or even a few days if you work hard, but do not make the mistake of taking a few weeks or months to do it, as that will add more delays to the process. If you do not have a Will, your property will be distributed according to the law of intestacy. This is the law that requires that your property be divided equally among your heirs.

Conclusion

Get a Will done or change your Will to reflect the current law on your property. Not only should you have a Will, but it is very important that you read through the information that this article gives you and be prepared for the eventuality that you might die without one. No one wants to die in a legal limbo; it may be one of the greatest fears of all.

“If you have any feedback about what happens if you die without a will that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

Wealth Management

What Is Wealth Management? We Will Find Out!

Do you want to know what exactly wealth management is in simple terms? How does it benefit you? How does it work? So, if you have these questions in mind, keep up reading this post.

Wealth Management

Wealth management is a holistic approach to wealth creation and sustaining wealth. If you have a wealth management plan and approach in your life, you will reach your financial goals and dreams in life much more easily; you will have better control over your money in the present and future life; you will have more financial independence and security, even in your retirement period.

Wealth management includes four components: 1. Financial life planning; 2. Building capital; 3. Managing capital; 4. Succession planning. 

1. Financial Life planning: some of the wealth management services in this area include:

  1.  Life planning gives you more control over life and its expenses.
  2. Making sure you have the rainy day fund, lifetime savings, college savings planning, retirement planning, etc.
  3. Life planning provides a roadmap to achieve the things you want. It will help you to reassure that you will reach your goals and aspirations.
  4. Life planning in wealth management focuses on planning your wealth to meet your life plan.

2. Building capital will cover a number of needs such as:

  1.  Investing intelligently, effectively, and timely.
  2. Maximizing your capital in the few years of employment and introducing investment vehicles and plans such as target-date funds (TDFs), 401(k), Roth 401(k), Roth IRAs, etc.
  3. using tax shelters
  4. Providing research-based financial advice to help you decide what to invest in. To help clients get the most from their investment plans, wealth management pros will draw on their market-leading research.
  5. Recommend the type of investment journey that suits you well according to your personality, risk tolerance, needs, goals, etc.
  6. Managing your portfolio on your behalf, freeing your time for other activities and pursuits in life. Moreover, there will be constant reporting and ongoing communication between financial advisors and their clients.

This post contains affiliate links. Please please read my Disclaimer for more information

3. Managing capital

  1. Creating a balance between your income, capital preservation, and capital growth objectives.
  2. The management of risk by using diversification strategy or insurance. Investment should be diversified across all assets –i.e., cash, stocks, bonds, equities, and so on.

Why Is Wealth Management Important?

In the lifetime, we may encounter different financial questions and dilemmas. Do I have enough money to retire? Which investing strategy is the best one for me?  How can I maximize my capital? What is the best way to minimize my taxes? And immeasurably more other questions.

If you make a wrong decision based upon false information and advice, it will cost you –and your family members- dearly. Moreover, financial management is very daunting for some people; thus, you should hire a financial advisor or wealth manager.

What do the Wealth Management Professionals do?

Generally, wealth managers take the following actions:

  • They talk to their affluent clients to gather specific information and then analyze their unique financial situation. They take the time and effort to understand your household expenses and cash flow, to help you manage your wealth effectively and appropriately. They ask about your tax situation, medical expenses, family expenses, your expectations, and even more personal questions to customize your life and wealth plan. In other words, without building personal relationships with their clients, wealth management professionals will not have an outstanding performance.
  • These professionals try to understand their client’s financial needs and goals that matter most to them. They help their clients transition from their current financial situation to where they wish to be.
  • Having had good knowledge and expertise in the financial area, they offer advice and recommendations; create a financial plan; help their clients overcome difficult monetary decisions and dilemmas.
  • They are very experienced in dealing with large sums of money and managing multiple assets over different accounts.
  • They will help you invest your money in securities and investment strategies that will enhance and protect your wealth.
  • They improve your portfolio performance by using tools and strategies that enhance your passive income and allocate your assets wisely.
  • They are in contact with you to make sure that you stay on track.
  • They offer individualized and unique financial services for their clients. To do this in the best possible way, they build long-term relationships with their clients. Wealth management professionals should be at your disposal throughout your life.

Conclusion

On the whole, the question “what is wealth management?” Can be captured by asking yourself what does it mean to live a good life and leave a good legacy? It is all about your financial needs and goals and deals with your life and wealth plan. It may sound easy at first, but the reality is that the financial world is complex and fast-changing, with a wide range of choices available for you.  Therefore, you had better seek a wealth management professional.

Finding the right and trustworthy wealth manager will require some research. In addition, you had better look at the wealth manager’s immediate past performance. You can choose to go to wealth management firms, such as Pillar Wealth Management, JARDEN, and ST. James’s Place.

You should feel comfortable with the advisor you choose; the wealth management advisors should also consider your standards and specific requirements. If you do not see eye to eye with them, this long-term process will be stressful and frustrating and probably will be doomed to failure. Additionally, receiving the best insight and advice from the right and competent wealth management advisor will motivate you to take steps to achieve your life goals and aspirations. The right wealth management advisor will ensure a better future for you and your family.

“If you have any feedback about what is wealth management that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

Will and Trust

The Importance Of Will And Trust: Which Is The Best For Your Family?

Have you ever thought about the financial well-being of your beloved ones when you pass away? Do you care what will happen to your kids or assets if you die? Yeah, I know these are bitter questions, but they must be asked. Well, will and trust are two legal instruments that can provide you and your family members some peace of mind dealing with these resentful questions and issues. They can help your loved ones avoid potential financial hardship. Indeed, no one knows what the future has in store for us, so it is essential to make your estate plan.

What Is a Will?

A will is an official legal document that declares one’s wishes for his/her money and property after death. It guarantees that your money and assets will pass to your intended inheritors.

Five Reasons You Should Have a Will:

  1. If you do not have a will, the law will decide upon the distribution of your money and property; and this can be contrary to your wishes. However, if you have a will, there is a better chance of getting things to happen in the way you want.
  2.  If you don’t have a will, the distribution of your estate (money, property, possession, and all these things together called your ‘estate’) will be time-consuming, costly, burdensome, and nerve-racking.
  3.  It can reduce the amount of inheritance tax.
  4. You can also use it to tell people about your other wishes, e.g., about how and where you want to be buried.
  5.  In your will, you can choose a guardian for your minor children. Moreover, if you have a pet that you love, like your own child, you can ensure that someone takes care of your pet after your death.

What Is a Trust?

A trust is a legal relationship in which one party (known as a trustor or grantor) gives another party (a trustee) the right to the ownership of a property or assets for the benefit of a third party (i.e., the beneficiary).

Two Basic Types of Trust:

  1.  Revocable (or living) Trusts can be changed by the grantor. Usually, a revocable trust turns into an irrevocable trust after the death of the grantor.
  2.  Irrevocable Trusts cannot be changed or modified.

What Is the Difference Between a Will and Trust?

  1.  The most important difference between will and trust is the way the estate is held. When you write a will, you mention the name of heirs or beneficiaries together with the property that they will receive. In a trust, you also name your beneficiaries along with the property they are to receive, but the property must be transferred into the trust for their benefit.

*Now, you may ask that what is the difference between an heir and a beneficiary? Though people use these two terms interchangeably, there are differences between them:

This post contains affiliate links. Please please read my Disclaimer for more information

 An heir: a person who is related to the deceased by blood; it also includes a spouse.

A beneficiary: one whose name is explicitly mentioned in a will, trust, or insurance policy to receive property or financial assets. A beneficiary can be not an heir; for example, a friend, a long-term but unmarried partner, ex-spouse, a stepchild, a charity, or even a pet can be a beneficiary.

If a person dies with no will or trust, it is usually heirs who inherit assets, including one’s spouse and children, and in some cases, his/her parents or siblings.

2. The second difference between will and trust is probate. Probate is the official and legal proving of a will. This process varies according to place and situation, but generally, it is very time-consuming, expensive, and controversial. A living trust does not pass through probate, while a will can. In other words, trust helps avoid probate.

3. A will can be contested and challenged in the court, but a trust can not. In other words, will have a contentious nature.

4. Unlike a will, a living trust goes into effect once you create and sign it; while you are still alive. But, a will can be effective only after your death.

5. In a trust, you can not choose a guardian for your minor children, but in a will, you can do this.

6.  Trust gives you more control over the distribution of assets and property.
Put differently, trusts give more control over when and how your assets are distributed.

7.  There are different forms and types of trust.

8. Creating a will is much easier and less expensive than a trust.

Should I have a Will or Trust? Which One Is Better?

Choosing between a will and trust is a personal choice, and it depends on many personal factors (though some attorneys recommend having both; because each one has a different and separate function). Overall, to answer this question correctly and appropriately, you have to assess your situation, your goals, and needs at the very beginning of this process.

If you have minor kids and want to choose a guardian for them after your death, you must have a will.

  • If you have an heir or beneficiary who is underage or has a mental disability (i.e., one who is unable to manage finances), setting up a trust is a good choice.
  • Four Online Legal Services for Making a Will or Trust:
  • LegalZoom: A simple trust done online with LegalZoom costs less than $300
  • Nolo’s Quicken WillMaker & Trust
  • Trust & Will
  • Wiling

Conclusion

If you want to make an estate plan, it is a good idea to consult an attorney first. They have good expertise to offer assistance and answer your specific questions. Remember that having both a will and a trust is a true gift for your family members and friends, showing your care and love for them.

“If you have any feedback about the importance of will and trust that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

Transportation

How To Save Money On Transportation

Transportation costs for many people worldwide are between the biggest expenses, maybe greater than housing and even food. Only a few people are lucky to live near to work, schools, shops, so can walk to their destination. However, your transportation costs should not squeeze your monthly budget. Fortunately, there are many ways to save money on transportation.

How to save money on your transportation costs

1. Walk

Many people use the car even for short distances, and walk only because parked their car. A study from the University of Glasgow showed that people of different ages rather drive than walk for distances greater than 15-minute by walk, specifically in the situation that they have a car and parking space is easily accessible.

Walking is free and also available to everyone in most places. Walking, besides saving money compare with automobile trips is an easy way and the cheapest one to achieve good health. While walking people can see the circumstances and can also think.

2. Replace Cars with Bicycles

Many countries encourage people to ride a bicycle and open certain lanes for bicycling. Walking or pedaling a bike, in addition to saving money, creates significant notable health benefits. Although, regarding the costs, time, and safety considerations of biking, ride a bike is not possible for everyone.

3. Public Transportation

The expenses of operating a small car, including maintenance, fuel, and parking, can be more than the food budget of many families. In case you do not want to give away the automobile completely, you can replace it with public transportation. Small cities often provide scheduled bus services, and big cities combine bus services, rapid light rail, and commuter rail systems that are vast and cheap. Many of the public transportation systems set space for passengers to load their bikes for short-distance trips.

The average travelers can save $770 each month while self-serve, regular gasoline costs $2.75 per gallon and the monthly reserved parking space in a city center is about $155, the American Public Transportation Association said.

4. Share Rides

Before owning two cars in the same family become universal, sharing rides between neighbors was common. When people are traveling to or from the same place, carpooling is a great choice. Even in a location where using a car is necessary, you do not have to ride your car. Parents who pick up kids at school can manage to share the trip with other parents. The expenses will be split by drivers and cars or by passengers giving an agreed amount of money for travel.

This post contains affiliate links. Please please read my Disclaimer for more information

5.  Rent a Car Only for Special Occasions

Renting is often the most inexpensive way when you need a car just temporarily. Many people who are living in big cities rent cars for vacation trips or weekends away from the city. Rental companies often suggest special deals to attract more customers. Attention to their tricks in adding extra costs for car renting without customer recognition.

6. Reduce the Retail Price of an Automobile Purchase

While cutting the costs of automobile ownership, notice the following:

  • One car ends up cheaper than two. Besides savings on the operating expenses such as maintenance and fuel, there are saving on insurance, licensing, depreciation, and interest charges on each loan to buy a car. There are advantages and disadvantages of having one car in a family, including the feasibility of saving hundreds or thousands of dollars each year.
  • Small models are cheaper than large models. The expenses of owning a Ford Focus or Honda Civic are $4,548 per year, while the expenses of owning a larger Buick LaCrosse or Ford Taurus is $7,620 annually, the American Automobile Association (AAA) calculated.
  •  Purchasing and operating a second-hand car is cheaper than a brand new one. The car that we drive, for some people, is satisfying some needs more than a safe, reliable, and inexpensive ride. Some individuals consider an automobile as a personal brand. Financial executives, for instance, often drive Cadillacs or expensive foreign cars. However, for many people car is just a vehicle to transport them from a place to another. For such people purchasing a used car in good condition can be a better option rather than buying a brand new car.
  • Finding a car at a fair price. Some people use a car buying online service to buy a car; in this way, in addition to saving money and time, they will avoid bargaining with an aggressive car salesperson.

7. Save on Auto Insurance

One of the biggest costs for car owners is automobile insurance. According to the rules of most states, all drivers need to carry liability insurance to protect the public, and most lenders need comprehensive and collision insurance until their loan is repaid. The following steps help you to reduce your insurance expense without breaking the law or notably elevating your financial exposure:

  • Choose your car make and model wisely. Insurance premiums for those models with high horsepower, high repair costs, and most possibly to be stolen are higher than the premium for a car with moderate horsepowers like a sedan or station wagon.
  • Knowing the factors that impact your premium rate. Several factors affect car insurance. Try to manage those factors to reduce your premium and pay less.
  • Review the insurance coverage. Various automobile insurance coverages are available including collision, comprehensive, gap, and liability. Sometimes you do not need all the coverages; for instance, comprehensive and collision insurance might be necessary on an old car.
  • Pick higher deductibles. In case of a car accident, a higher deductible means a higher out-of-pocket cost. Good drivers select a $500 deductible over a $200 deductible and will save 15-30% in the collision and comprehensive insurance premium each year.
  • Request discounts. Remember to utilize car insurance discounts for good drivers. Drivers who take courses in defensive driving or refresher driver training course qualify for a discount.

Conclusion

Overall, transportation expenses are among the most expensive things that families have to pay for. By reading this article you learn a lot of ways to save money around transportation costs. Take care of small or big changes that you can make in your transportation methods to keep more money in your bank account.

“If you have any feedback about how to save money on transportation that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

Estate Planning

Estate Planning Checklist

To do estate planning doesn’t have to be rich; in fact, everyone needs some degree of estate planning. The estate includes everything someone owns and can be in any size, which is why it can be worth taking time to plan for what happens to it. Estate plans should be created for the particular needs of the individual.

The estate plan checklist provided in the current article will explain various types of estate planning documents, and assist you to evaluate those that will be valuable to you.

Even if you plan to hire an estate planning attorney, still you need to have a basic knowledge of what is involved.

Six steps to basic estate planning

1. Inventory your stuff

Maybe you think that you do not have that many assets to justify estate planning. However, when you begin to look around, you will get astonished by all the tangible and intangible assets you have.

The tangible properties in an estate can be including:

  • Homes, lands, and other real estates
  • Cars, motorcycles, and boat as well as other vehicles
  • Collectible objects like art, coins, antiques, and trading cards
  • Other personal properties

The intangible assets in an estate can be including:

  • Bank accounts like checking and savings accounts and certificates of deposit
  • Mutual funds, bonds, and stocks
  • Health saving accounts
  • Life insurance policies
  • Retirement plans like individual retirement accounts and workplace 401(k) plans
  • Ownership in a business

At the moment that you make a list of your tangible and intangible assets, you should calculate their value. An outside valuation can help for some assets such as:

  • § Statements from your financial accounts
  • § Recent appraisals of your home

In the lack of outside valuation, value your assets based on how you expect your inheritors will value them. In this way, you will assure that your possessions are divided fairly among your loved ones.

2. Account for your family’s needs

When you are informed of what is in your estate, you will consider how to protect your assets and your family in your absence.

If you are married and your current lifestyle needs dual income, having life insurance is very important. It will be even more important in case you have kids with functional needs or college tuition bills.

While writing your will, name a guardian and a backup guardian (just in case) for your children. It helps escape from expensive family court fights.

Write your wishes for your kids’ care. Do not assume that your family members will care about your children or raise them according to your ideas and goals. In case the issue goes to court the judge will not abide by your wishes.

This post contains affiliate links. Please please read my Disclaimer for more information

3. Establish your directives

A trust can be appropriate. You can determine parts of your estate to go toward specific things while you are alive. Your selected trustee can take over, in case you become ill or incapacitated. After your death, the trust properties transfer to your designated beneficiaries.

In case you become unable to decide on your medical care, a medical care directive, also called a living will explain your wishes for medical care. Regarding your health care, you can also give a trusted person the authority to make decisions in case you cannot. These two documents sometimes merged into one, named advance health care directive.

If you are medically unable to manage your financial affairs, a durable financial power of attorney enables someone else to do so. If you cannot act in legal and financial situations, your designated agent, as directed in the document can act on behalf of you. These acts include paying your taxes and bills and also accessing and managing your assets.

If the idea of turning over everything to someone else worries you, a limited power of attorney can be useful. This legal document imposes limits on the powers of your selected representative.

Attention about who you give power of attorney. They will actually have your financial well-being in their hands.

4. Review your beneficiaries

Check out insurance and retirement accounts. Insurance products and retirement plans generally have beneficiary designations that you should follow and update as needed.

Assure the right persons receive your assets. Sometimes people forget the beneficiaries they names on policies or accounts established years ago. For instance, if your ex-spouse is yet a beneficiary on your life insurance policy, it would be bad news for your current spouse.

Do not remain any beneficiary sections empty. If so, when an account goes through probate, it can be divided according to the state’s regulation for whom gets the property.

Define persons as contingent beneficiaries. These possible beneficiaries are very important if your primary beneficiary passes away before you do and you forget to update the primary beneficiary designation.

5. Weigh the value of expert help

You need whether hire an estate tax or attorney expert to assist build your estate plan.

In case your estate is small and your wishes are simple, an online will-writing program could be adequate for your requirements.

It can be valuable to consult an estate attorney and a tax advisor if possible, in case you have doubts about the process. They can guide you to the proper estate planning path, specifically in the state with estate or inheritance taxes.

For the complicated implications like a large and complex estate includes business issues, special child care, or non-familial heirs, an estate attorney and tax professional can help.

6. Plan to reassess

Once your circumstances change, revisit your estate plan. No matter these changes are bad or good they can be including the birth of a child, marriage or divorce, perish of a loved one or getting a new job.

Considering that laws may have changed, you need to revisit your estate plan periodically, even in non-changed circumstances.

Never drafting a plan at all, this is the biggest mistake in estate planning.

Conclusion

Making delays in estate planning can be very harmful. Although no one likes to think about dying, no planning and not being prepared can cause family disputes, assets getting into the wrong hands, long legal disputes, and extra money paid in estate taxes. So set a time to get started.

“If you have any feedback about the estate planning checklist that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

Compoun Interest

How Does Compound Interest Work?

While managing your finance, compound interest is one of the most important concepts to understand. Compound interest on your savings will help you earn more returns, but on a loan, it will work against you!

What is compound interest?

First, you all maybe knew that interest means the money earned on money you saved or invested.

Compounding interest is the process of growing your savings. It has the ‘snowball effect’ and means something can build upon itself. Compound interest refers to the interest earned on money that was previously earned as interest. This cycle caused increasing interest and account balances at an increasing rate, which is also called ‘exponential growth.’ It is a good way to put your money to work overtime.

How does compound interest work?

To understand compound interest let’s start with the simple interest: you deposit money in the bank, and it returns you interest on your primary deposit.

In the case of 5% annual interest, you will gain a $5 on $100 deposit after one year. So, what will happen in the next years? Here is the compound interest that comes in. you will get interested in your primary deposit, and will also get interested in the interest you just receive.

Accordingly, you will receive more interest in the second year compared with the first year, since your account balance is now $105, not $100. Although you did not increase your initial deposit, your earnings will accelerate.

First-year: A primary deposit of $100 receives 5% interest, or $5, increasing your balance to $105.

Second-year: Your $105 receives 5% interest, or $5.25, increasing your balance to $110.25.

Third-year: Your $110.25 receives 5% interest, or $5.51, increasing your balance to $115.76.

It was an example of interest compounded yearly. Interest at many banks, especially the online ones, compound daily and get added to your initial deposit monthly; therefore the process goes ahead even faster.

This post contains affiliate links. Please please read my Disclaimer for more information

Take advantage of compound interest

Do you want to be sure if compounding works out in your favor?

  • Save early and often. Time is the friend of compounding interest. Since the compound interest grows exponentially over time, the longer you do not touch your money in a saving account, the greater it can grow. If you add a $100 deposit per month at 5% interest (compounded monthly) for five years, you will have $6,000 deposits, plus received $800.61 in interest. Even if you do not add up any money to your deposit after that, your account will receive an additional $7,573.87 in interest after 20 years. This will be more than your primary $6,000 due to compounding.
  • To see the true annual rate of compounding, you can check out the APY (annual percentage yield). Banks usually publicize the APY, so you can easily find it. If you have an extremely large account balance you should try to get decent rates on your savings.
  • Pay debts quickly and pay extra if you can. Paying the minimum on your credit cards will cost you too much since you will hardly reduce the interest charges and your balance can grow. If you have student loans, prevent adding unpaid interest charges to the balance total and try to pay the interest as it accrues. This way you will not be caught off guard when graduating.
  • Keep borrowing rates low. The interest rates on your loans, besides that impact your monthly payment also will determine how quickly your debt grows. See if it is possible to merge debts and lower your interest rates when you pay off debt.

What makes compound interest powerful?

When interest is paid repeatedly, compounding happens. The first one or two years are not very impressive, but compounding starts to improve after the interests add up over and over.

Frequency: The frequency is very important in compound interest. More frequent periods such as daily, have more surprising results. Look for daily compounding while opening a saving account. Although you see the interests add to your deposit monthly, it calculates daily. There are also accounts with monthly or annually calculating interest.

Time: Compounding is more surprising over a long time. If you left your deposit for a long time to grow, you will earn higher calculated interest.

Interest rate: One of the significant factors in your account balance over time is the interest rate. Your account will grow faster in case of having higher rates. An account with compounding but a lower interest rate, especially over a long time, can end up with a higher balance compare with a simple account.

Deposits: Withdrawals and deposits also impact your account balance. Leave your money alone to grow or add a new amount of money to your initial deposit regularly works best. If you withdraw your interests, you will decrease the effect of compounding.

Compound interest works both ways. It can make you, and it can break you. If you owe money, the compound interest on your debt can ruin you. As a result, many people keep paying the bill with high interest. Despite numerous payments, the balance of the bill barely goes down because high interest on the balance continues to compound. Sometimes, it feels as if it’s important to pay the balance off.

Conclusion

The power of compound interest can be hard to understand. This article provides you with a few situations to show the impact compound interest can have over time. Set a time sooner to open a saving account with compound interest, and then you will have more time for compound interest to work in your favor.

“If you have any feedback about how does compound interest works that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

money

How To Stop Worrying About Money

Money is among the biggest things that people worldwide are worrying about, even more than their health, families, or jobs. It has been said often that money is the ticket to happiness. Human binges mind always seek pleasure and avoid pain. It is a common belief among people that if they have money, they will be happy; otherwise, they will be miserable. Therefore the reason people worry is that they believe money can help them get more pleasure and prevent them from pain. In case people have worried for a long time, this thought will change into a habit, and eventually, they will feel anxious more often in their life.

How worrying about money can affect your life?

It is worth mentioning that many around the world scared of losing their jobs during the COVID-19 pandemic, falling into uncertainty about their future savings and economic situation. They are worried about what would happen to them, especially after getting too much news. In such a situation people start asking, “what if?” And as you may know, what-if scenarios can get out of control fast. The fact is, they may happen all the time in everyday life-not just during a pandemic.

Being worry about money also can affect relationships. It would be specifically damaging in marriage. It is difficult for couples to be empathetic, supportive, or even romantic when they are worried about money. While emotions are getting pale and the financing issues are getting too much, one of the couples might say something less kind than usual. That is why money is a leading cause of divorce for decades.

In another situation, the topic of money turns into fights for couples and it prepares them for financial infidelity. It tempted them to hide their spending rather than engage in the conversation and make purchasing decisions together.

Many physical health problems are leading by money stress. Worrying about money can cause diabetes, cardiovascular disease, migraines, sleep problems, and more issues than you realize. And worst is when people postpone going to the doctor because of the expense.

Today, the younger generation is also suffering from anxiety and depression; and that is because they are trapped into debt at a young age. There is always something they can do to change the situation of their life and stop worrying about money.

How to stop worrying about money

Here are the steps that will help you overcome financial anxiety and stop worrying about money:

This post contains affiliate links. Please please read my Disclaimer for more information

1. Master your life

By deciding to read this article, you simply take the first step. So you want to master your life and do not want to be a victim of your circumstances anymore. Now you are planning to learn something to make your life better and stop worrying about money.

The thought of victimization is widespread in our society. People wrongly have thought that they have no control over their lives and what happens to them. The fact is that your environment, your mind, and your beliefs are what build your reality. Your mind generates coherence between your mind and your reality.

To stop worrying about the money you should first take back control of your situation. Regardless of the occurrences in your external world, how you feel it inside your mind causes your outcome. If you see what happens as something that you cannot control, then you are a victim of your circumstance. In case that the external happening is not mattered for you, you are the master and creator of your life.

2. Accept the current reality

Decrease the tension between your current reality and how you tend it was different. While arguing with your reality, you feel tension and frustration. People wish things were different, and this makes them suffer. They ask themselves why those things are happening to them. When you stop opposing your reality, no more questioning about why this is happening to you, or wishing life was different, your mind can eventually become completely clear.

When you accept your current reality, actions become fearless and simple.

3. Make a plan

A plan can assist you to control what you can, and that is your money. Your plan can be everything from working to get out of debt or save an emergency fund, to your monthly budget, or a long-term investment plan for your retirement.

Here is an example of debt snowball:

Let’s start with the number of debts you have. Write down all your debts from the smallest to the largest. Pay more on your smallest debt. In this way, you can get rid of them sooner than usual. When your smallest debt is gone, focus on the second smallest debt and then the third-smallest one. The more you pay off, the more you get free.

3. Be aware of your weaknesses

Having a plan is the key to stop worrying about money. But, exactly when you think that you finally manage your finances, something happens that will seduce you to return to old habits. You are thinking of a new transmission for your car and you want to pay for it by credit card. You have been invited to a vacation, and you wish to reach your hands on your emergency fund. You are going to take out a Parent Plus loan to send your kids to college.

That is because being aware of your weakness is so crucial. Do not dwell on them, just know that what they are become it easier to stop a bad habit at the right time.

Conclusion

Remember that worrying about money is just a waste of time.

By reading this article you may prepare yourself to stop worrying about money, stressing, and losing sleep. We recommend you to read more about how to stop worrying about money and teach yourself how to overcome frustration and stress on money by reading relevant books, blogs and using experts’ advice.

“If you have any feedback about how to stop worrying about money, that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.