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WellCents For Teens - Your First Job

WellCents For Teens - Your First Job

Apr 2021

Whether you mow lawns, stock shelves or help a businessowner with social media, here are some tips for success on your first job.

 

But first of all — congrats! Getting a job is a big accomplishment. You should be very proud of yourself. Someone is placing a great deal of trust in you. This is likely the first of many jobs in your life, and you have the chance to develop good habits and skills that will serve you well now and in the future.

 

1. Impressions matter. Always present yourself professionally for the job setting. Whether you’re raking leaves or working in an office, comb your hair and dress suitably for the work environment. Even if you’re only seen on a Zoom call, make sure whatever shows looks appropriate (including what people can see in the background).

 

2. Be punctual and reliable. The importance of this can’t be overstated. Time is very important to most homeowners and businessowners, and they can see it as a sign of disrespect if you show up late — or worse — don’t show up at all. Most people understand that, on rare occasions, things can come up that delay you. But when this does happen give as much notice as possible that you will be tardy or absent. And apologize for any inconvenience.

 

3. Ask questions. Make sure you have a full understanding of the task at hand. Asking good questions shows you care about your work and getting the job done right. And most bosses appreciate that kind of initiative. Often, simply checking in and requesting feedback can be very helpful.

 

4. Be a team player. On any job, you may need to collaborate with other workers. It’s just as important to be courteous and helpful with your workmates as it is to be respectful of your boss. Offer assistance where you can and give credit for the contributions of others. Maintaining positive work relationships will serve you well in the years ahead.

 

5. Understand your compensation. Is your pay period weekly, biweekly or monthly? Is your pay based on completing a project, or are you earning an hourly wage? If you receive wages in a paycheck, understand how tax withholding works. Be sure to turn in all required paperwork, whether that’s submitting a time sheet or preparing an invoice or bill for your services.

 

6. Plan for your earnings. Decide what to do with the money you make. There might be certain things you want to buy for yourself, but also consider saving for your future. Think about taking part of every paycheck and setting it aside in a savings account where it will earn interest. It’s surprising how quickly your contributions add up over time.

 

7. Aim to exceed expectations. Try to do a little more than what’s expected of you. Going above and beyond from time to time is a great way to distinguish yourself in the eyes of your employer. Always try to leave things a little better than before.

 

8. Say thank you. Remember that the job you have could’ve gone to someone else. Don’t be shy about thanking your employer for the opportunity to work. Maintaining good relationships and demonstrating a strong work ethic can open up opportunities for advancement — and other jobs in the future.

 

Getting your first job is a big step in life. Now go knock it out of the park!

 

 

The Race to Retirement: Be the Tortoise Not the Hare

The Race to Retirement: Be the Tortoise Not the Hare

Apr 2021

We all know the fable about the tortoise and the hare. And just like in the fairy tale, the tortoises of financial planning — the ones who slowly but steadily achieve — usually come out on top. If you delay planning and saving for retirement, that could leave you in the role of the frantic hare, racing to catch up before you reach the finish line. To help you plan your trajectory on the retirement race course, here are some mile markers for each decade of life.


Your 20s

The best time to launch a financial plan is when you’re first establishing your career. You’re out of school and starting to make your own money. And you probably don’t have a lot to spare after you pay your bills. But before you buy that gorgeous handbag or head off for that weekend in Vegas, establish the habit of paying yourself first through a regular program of saving. Suppose you start out earning $40,000/year at age 25 and contribute 10% of your salary to a 401(k) with an average annual rate of return — and your employer matches your contributions 50% up to your first 6%. If you maintain that level of contribution, you’ll have more than $2,000,000 in your retirement account by age 65. But if you wait until 35 to start contributing, you’ll net only about $825,000 — well less than half of what you’d have if you started earlier. It’s hard to overstate the importance of starting retirement saving early.

 

Your 30s

Hopefully, this will be the time to build on the good habits you set in your 20s. By now, you’re probably a few years into your career path. You might be married. You may even have a mortgage and a kid or two running around. All of those things translate into higher expenses. Even with increases in income, you may still struggle to keep saving at the pace you want. But this is one battle you need to win. Avoid the temptation of borrowing against your future to finance today.


If your employer has a 401(k), hopefully, you’re already in it. But if enrolling somehow fell off your radar, sign up right away — especially if your company offers a matching contribution. If you don’t, you’re just leaving free money on the table. Don’t give in to the urge to use credit indiscriminately. Mind those card balances and pay them down while you continue to save for retirement and other financial goals.


If you have children, this is a good time to consider setting up a tax-advantaged education account for them. It doesn’t have to start large — even small amounts you let accumulate can make a big difference by the time you’re ready for your little ones to head off to college.

 

Your 40s

You’re probably in a bigger house with a bigger mortgage, bigger kids and bigger expenses — but also a bigger income and a bigger 401(k) balance. As you earn and invest more, having a prudent tax strategy becomes even more important. You’re working hard to bring home that paycheck and want to keep as much of it as possible. Your financial advisor can help guide you toward more a more tax-efficient investment strategy as you navigate this more complex — and rewarding — stage of life.


Believe it or not — you’re now probably at about the halfway point between your first real job and retirement. This is a good time to take stock of where you are. You should have a better feel for your trajectory — where you’d like to end up and how much it’ll cost when you get there. Sit down with your financial advisor and map out the details of your retirement plan. How much longer will you work? Where will you live after? What will you be doing? Will you continue to earn income in retirement? This time is critical because, at 45, you still have two decades to keep saving and investing.


Your 50s

You’re approaching your peak earning years. If you have outstanding debts (other than your mortgage), make a plan to retire them before you do. The loan you took out for the RV or boat? Pay it off. Likewise with the vacation place upstate. You’ll have so much more financial freedom later on if you do.


Take a closer look at your healthcare options. Do you plan to rely on Medicare in retirement? Bear in mind that Medicare has significant shortfalls when it comes to long-term hospitalization and especially custodial care. Talk to your financial advisor about your overall health and any need for long-term care insurance to provide for your (or your partner’s) future needs.


If you find your contributions to your 401(k) are coming up short of your goals — maybe you’re borrowing against a retirement account during a downturn to pay for health costs or college — the IRS allows people over 50 to make “catch-up” contributions over and above annual limits. The amount can change from year to year, but take advantage of the valuable opportunity to get your retirement back on track if you need to.


Your 60s

This is the payoff — the decade when you can hopefully throttle back a bit and begin enjoying life more. If you’ve followed the path above, you should have savings to help smooth out your transition to retirement.


One of the most important decisions you’ll face is when to begin taking Social Security benefits. You’ve probably paid into the Social Security fund for 30 or 40 years, and you should make the most of the income you’ve earned. Monthly payments are higher if you wait to start collecting, but there are other factors to consider. Talk to your advisor about your circumstances and your needs in this critical area.


Slow and Steady Wins the Race

If you’re on the starting line of the race to retirement, remember that it’s more of a marathon than a sprint. Sometimes it may not feel like you’re getting where you want to be fast enough. While it can be tempting to look for shortcuts and quick fixes along the way, trust that the steady pace, and sustained effort of the tortoise can get you safely to the finish line and the retirement you dream of.


Source:

https://www.aarp.org/work/retirement-planning/401k_c
10 Steps to Making a Budget

10 Steps to Making a Budget

Apr 2021

Creating — and sticking to — a household budget is the cornerstone of a sound personal financial plan. Here’s how to make one in 10 simple steps.

 

1. Pick a system. There’s no shortage of budgeting apps and online tools available. You can also use a basic electronic spreadsheet or even pen and paper, if you prefer. But whatever your approach, select a convenient and flexible system to capture and categorize your income and expenses over time.

 

2. Track current spending. Keep track of everything you buy for a month to have a realistic picture of your spending before you start. It can be surprising how many purchases occur under your radar — like that occasional latte, magazine or fast-food lunch.

 

3. Log Your Income. Record income from your job and any other sources, like a side hustle building websites or selling handmade jewelry on Etsy. Don’t forget to include investment or retirement income as well.

 

4. Record Fixed Expenses. These are costs that remain relatively stable over time — things like your mortgage, insurance premiums or car payment.

 

5. Project Variable Expenses. These change from month to month. They might include things like gas, takeout dinners and clothing purchases. Credit card payments tend to also fall into this category. Look at your average over the two previous months for a ballpark, but always err on the high side when it comes to budgeting for them.

 

6. Include Occasional Expenses. Some expenses only come up from time to time. They can be predictable (like your summer vacation) or unpredictable (like a car repair). Either way, it’s important to budget for expected and unexpected occasional expenses. To do this, take the total estimated cost, divide by 12, and include that amount into your monthly budget.

 

7. Emergency Fund Savings. Aim to set aside at least 3-6 months’ worth of expenses in a highly-liquid savings vehicle like an FDIC-insured bank account (some advisors suggest 12 months depending on whether you own a home, are married or have children). Clearly, this can take time to build up, so if you don’t yet have enough saved for a rainy day, budget regular contributions to an emergency fund.

 

8. Retirement Savings. Sit down with your financial advisor, who can help you determine how much you’ll need to save in your 401(k) and other retirement accounts each month to stay on track to achieve your retirement goals. It’s important to “pay yourself first” when it comes to funding your future — and your budget should reflect this important priority.

 

9. Plan for Windfalls. Decide ahead of time what you’ll do with an increase in pay, tax refund, gift, bonus or other found money. Having a plan reduces the likelihood of an impulse buy. Consider using most of it to bolster your retirement fund or pay down debt.

 

10. Monitor and Periodically Re-evaluate. It’s important to reexamine your budget regularly and whenever your financial circumstances change. Depending on your situation, that could be quarterly, semi-annually or annually.

 

Don’t be hard on yourself if it’s difficult to stick to your budget each and every month. You may need to make some adjustments from time to time. The most important thing is to keep trying to meet your spending and saving targets. If you need help determining a realistic budget for your situation, make an appointment with a financial advisor who can assist you.

 

How Do I Save for My Child’s College and Retirement?

How Do I Save for My Child’s College and Retirement?

Mar 2021
You juggle multiple financial priorities, whether it’s buying a house, having children, starting a business or buying a car. Saving for retirement and a child’s college fund at the same time is no different, but that’s not to say it’s easy.

Get It Down on Paper
Start by setting a budget and timeline for both retirement and college. While the college start date is probably somewhat fixed, you may have more latitude concerning your retirement. Once the kids are old enough, include them in the conversation about how much you can afford to help with college and what they can do. 

It’s important to set realistic goals about the types of colleges within your budget. Don't let higher education costs get out of control. If your child has their heart set on a specific school or major, there may be ways to lower costs (e.g., subject-specific scholarships and grants). The expectation shouldn't be that you're going to write a lot of checks. And always have a backup plan or safety school.

Controlling College Costs
Explore ways to reduce college expenses. Help your child identify special interests early on. Athletics? Music? Science? Math? Money may be available for all of those IF your child is exceptional. Identify colleges early too. See if they can attend special interest camps there to (a) see how they like it, and (b) meet faculty who might recommend them for a grant/scholarship.

Also, 529 plans can be a good way to divide retirement from college savings and offer a number of benefits, including the option of contributions by relatives. Coverdell Education Savings Accounts (ESA), sometimes called education IRAs, are tax-advantaged savings vehicles that allow tax-free distributions for qualified educational expenses. Read more about the rules and restrictions of the program in the link below. 

Reevaluating Retirement
Similarly, find ways to boost your retirement savings or scale back your retirement goals. If time is tight, consider whether you can work a little longer or adjust the kind of retirement lifestyle you’re budgeting for. For example, could you downsize your home or move to an area with a lower cost of living? 

Also, make sure you’re contributing at least enough to your employer-sponsored 401(k) to earn the maximum company match — this is free money, and you don’t want to leave it on the table. What you also don’t want to do, however, is ramp up your level of investment risk beyond what is appropriate for your personal tolerance and your retirement timeline just to try to boost returns.

The most important thing you can do during this juggling act is to sit down and have a frank conversation with your financial advisor about your goals. He or she may be able to come up with options you haven’t even considered.  

Source:
https://www.irs.gov/taxtopics/tc310

Myths About Working with a Financial Professional

Myths About Working with a Financial Professional

Mar 2021

An employer-provided financial professional can help you plan for a successful retirement and navigate a wide array of financial decisions and challenges. Unfortunately, many people fail to take advantage of this valuable resource because they believe one of the following myths:

 

1. Financial advisors are only for the rich. You could actually make the opposite case — a financial advisor is even more important for those who aren’t independently wealthy. Good financial advice can make the difference between retiring comfortably on time and remaining in the workforce for years longer.

 

2. Nobody can “beat the market,” so why bother? While returns are never guaranteed, there are many reasons to work with a financial advisor beyond selecting investments. They can help you create a budget, determine how much house you can afford, plan for your children’s college education and help you manage debt.

 

3. I’ll lose control of my money. You will always maintain control of your investment funds while working with your employer-provided financial advisor. Their role is simply to explain and give advice, but you’ll always have the final say regarding all financial decisions.

 

4. They’ll make me feel embarrassed about my spending. A good financial advisor helps their clients make better decisions through education and support — not by judging or embarrassing. They should never make you feel bad about any lack of investing experience or ongoing financial challenges.

 

5. I’m in a target date fund (TDF), so I don’t need advice. Target date funds adjust risk according to your planned retirement timeline, thereby automating a certain amount of decision-making. However, you may still want to discuss your contribution levels to the TDF as well as a host of other issues, such as the ones already mentioned. Your personal finances comprise more than just your retirement account, and your adviser can be helpful in many different areas.

 

6. I won’t understand what they tell me. Your advisor can explain financial concepts and investment options in a way that matches your level of understanding and experience. If you don’t understand something, ask for an example. You may also receive written materials or videos that you can read or view on your own. In short, it’s their job to explain things to you in a way that you can understand — no matter your level of expertise.

 

7. They’ll pressure me to put my money in risky investments. You’ll always have final say over how to invest your money. An advisor should conduct an investment risk assessment to help gauge your personal risk tolerance and make recommendations that are appropriate to the level of risk you’re comfortable with.

 

Don’t believe any of these myths and potentially miss out on a valuable and useful employer benefit. Schedule a meeting with your financial advisor today to discuss retirement planning and any other financial goals you have.


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