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Winning Habits for Financial Fitness
Winning Habits for Financial Fitness
Just as physical vitality requires a nutritious diet and regular exercise, achieving financial fitness also demands deliberate action and conscious choices. And while external factors like the economy and market volatility are beyond your control, a number of healthy habits and smart strategies can empower you to keep your personal finances in peak condition. Consider these steps to build up your monetary muscle and assert greater agency over your financial future.
Make a Game Plan
Financial fitness doesn’t require you to set foot on a treadmill. Actually, it all begins with a pen and paper (or keyboard and screen). Studies show that the act of writing down your aspirations can actually increase your chances of success by a staggering 42%. So craft a plan that’s realistic but also aligns with what you ultimately want to derive from your financial life — and refer your playbook to guide your decision making.
Recruit Great Coaches
Teams rely on top coaches to have a winning season. And you don’t have to get financially fit alone. Just as you might hire a personal trainer to help you build muscle or a nutritionist to overhaul your diet, there are a variety of financial pros who can help you improve different areas of your fiscal health. These might include a financial advisor, an accountant or CPA, a lawyer, an insurance agent and even your personal banker.
Play the Long Game
In the end, financial fitness is about identifying — and achieving — your long-term goals, so it’s important to pay yourself first. Treat emergency savings and retirement funds as top priorities in your monthly budget. Automate retirement savings by electing to put a certain amount of each paycheck in your employer-sponsored 401(k).
Don’t Go Out of Bounds on Budget
Financially fit individuals live within their means whenever possible. Whether you earn a more modest income or command a substantial salary, prioritize expenses and avoid unnecessary spending to secure your financial wellness. Surprisingly, 40% of people earning more than $100,000 a year in the U.S. find themselves living paycheck to paycheck. Keeping a close eye on expenditures is a key habit across all income brackets.
Play Defense by Diversifying
The old adage “don’t put all your eggs in one basket” holds true for your nest egg too. Diversifying your investments across different asset classes, such as stocks, bonds and cash equivalents — and also within each class — can help mitigate risks from a number of economic conditions. A well-diversified financial portfolio is often recommended to play defense against economic and market uncertainty.
Huddle up Regularly
When working toward financial fitness, it’s important to review your investments, budget, credit report, taxes, debts and insurance at least annually or whenever your situation changes significantly. This might include a job change, marriage, medical crisis or even a bonus or raise. That way, you can make any needed adjustments to your financial game plan.
Get Your Game Face On
While it’s never too late to start making improvements in your personal finances, the sooner you begin the better — because the game clock is already running. A good starting point is to make an appointment with a qualified financial professional and set your sights on the finish line.
How to fight Shrinkflation
How to fight Shrinkflation
Consumers across the nation are looking in their pantry and wondering, “Where did all the Munchy-Os go?! Why is there a divot in the bottom of the peanut butter jar? And wait, there definitely used to be more chips in this bag!” Welcome to “shrinkflation” — a practice where companies make smaller products, downsize the packaging or put smaller amounts in the box so consumers spend the same for less. These are subtle changes that most people won’t even notice but will have you questioning your sanity while you wonder where all the cookies went.
You can’t stop shrinkflation, but you can outsmart it! Here are five strategies savvy shoppers can use to shrink the effect shrinkflation has on their wallets.
Pick Your Prices Like Peter Piper
Remember the nursery rhyme about Peter Piper picking a peck of pickled peppers? Looking at the price per pepper rather than per package helps reveal the real cost of your purchase. Next to the item price on the grocery shelf, you’ll see a unit price in smaller print. Unit pricing tells you how much you’ll pay per pound, ounce, piece or whatever unit of measure applies. And it lets you compare costs across different brands or product sizes. If Peter Piper’s Pickled Peppers are $1 per pound and Mary Mary Quite Contrary’s Sour Pickles are $2 per pound, you get a better deal per pound buying from Peter, even if the price of Mary’s pickles is less for a smaller jar.
Go Big Before You Go Home
If you compare unit prices and product size, there is often a premium on smaller sizes — you spend more per ounce on the smaller bottle of ketchup than the larger one, even if it’s the same brand. If you go through ketchup like you’re running a summer camp, then double down and stock up on those supersized products. But also be mindful about waste — bulk shopping can end up costing you more in the end if you stock up on perishable items that go bad before you use them.
Dial in on Deals
Whether you like to peruse the paper old-school with scissors in hand or use the latest shopping apps or digital coupons, deal hunting can get you better prices on products you use all the time. And don’t forget to seek out BOGO deals to double your purchasing power (just calculate your unit price to make sure it’s as good a deal as it seems).
Rethink Your Retail Relationships
It might be time to give up on manufacturers that have done you wrong. Maybe you buy the same brand of freezer pops your mother did, but if the amount in the box is shrinking it may be time to cut loose your brand loyalty — and switch to one that gets you more pops per pack. And while you’re at it, if you’ve traversed the aisles of the same supermarket for years, now may be the time to try out a discount grocery store, a big-box retailer or even your local farmer’s market to see if you can find better prices on products you buy.
Shrinkflation Support
If you’re struggling with the stress of shrinkflation, consider talking to a financial professional about your situation. They can provide budgeting help and smart saving strategies to help take the sting out of shrinkflation.
Budgeting for an Engagement Ring
Budgeting for an Engagement Ring
You’ve found a quiet, secluded beach to pop the question, and picked out the perfect bottle of champagne for a celebratory toast. Most importantly, you’ve found that special someone who’s captured your heart — the one you want to spend the rest of your life with. Now all that’s left is to find the right ring, a token of your eternal love, to seal the deal.
While you want something beautiful that encapsulates your special love story, you also want to stay true to your financial aspirations as a couple as you begin the next chapter of your lives together. Here are tips to help you find the right ring for you and your partner, and for your budget, as you seek a symbol of your connection — while honoring your commitment to a secure financial future together.
Design Decisions Can Drive Cost
The average cost of a diamond engagement ring is between $3,500 and $5,000. Opting for a different size or diamond cut can alter the price substantially, but so can the setting and the material for the ring itself. Using a vintage ring or a family heirloom, which can often be re-set into a new band, can be a great sentimental and cost-saving option.
Think Outside the Rock
Though many people think diamonds are synonymous with engagement rings, a mined diamond isn’t the only option available. Lab-created diamonds typically cost 50% to 70% less than mined diamonds. Other stones, such as rubies, sapphires and emeralds, can reduce your cost while giving a unique look that may even stand out more than a traditional diamond. And if you like the look of diamonds but not the cost, moissanite is a beautiful, clear, sparkling stone that mimics the look of diamonds at a fraction of the price — typically around 1/10th the cost of a similar size diamond.
Budget for the Ring You Want
Whether you plan to be frugal or more extravagant with your ring purchase, it’s important to budget in a way that supports your goals. Once you have the right ring picked out, spending-tracker apps and automatic savings deductions can help you set money aside. A ring that’s out of your immediate price range might be eligible for a payment plan, but be sure to check the financing terms carefully — look over the interest rate, how often it’s compounded and any late payment penalties or other fees. Think realistically about your price range — it’s best not to put a ring on a high-interest credit card, which will increase your cost even further.
Your Journey Begins Here
When you’re budgeting for a ring, put this significant purchase into perspective. Remember that you’ll need to balance the expense with the other costs you’ll incur as you begin your lives together, like buying a house or starting a family. And unless you plan on a low-key ceremony, small reception or a frugal honeymoon, when you budget for a ring, you’ll have to make sure it doesn’t cut into your wedding budget too much. Consider consulting a financial professional to help you plan for this expense, and remember that regardless of which engagement ring you choose or what it costs, what matters most is the one who’ll be wearing it.
Sources
Getting Ready to Transition to Medicare? Then It’s Time to Re-Visit Your ABCs … and LMNs
Getting Ready to Transition to Medicare? Then It’s Time to Re-Visit Your ABCs … and LMNs
Transitioning from an employer-provided plan to Medicare, the federal health insurance program for those 65 and older and certain younger people with disabilities, can provide a tremendous sense of security — though it can also feel a little daunting. But demystifying this vital benefit doesn’t have to be an impossible task. In fact, it can be as easy as (re)learning your ABCs. Here’s a quick rundown on the basics of Medicare and its various parts if you’re about to become eligible.
The ABCs and Ds of Medicare
Unlike the private insurance you may be accustomed to, Medicare coverage is composed of four main parts, each labeled with a letter:
Part A (Hospital Insurance): Covers inpatient hospital care, skilled nursing facility care, hospice care and some limited home health care services. Most individuals’ premiums are covered by the Medicare taxes either they or their spouse have paid.
Part B (Medical Insurance): Covers medically necessary services, such as doctor visits, outpatient care, medical supplies and many preventive services. Part B requires a monthly premium, which is usually deducted from Social Security benefits.
Part C (Medicare Advantage): Offered by private Medicare-approved insurers, these plans combine Part A and Part B benefits and can include additional services like vision, dental and prescription drug coverage. They often have lower out-of-pocket costs but can come with network restrictions and requirements regarding your health care.
Part D (Prescription Drug Coverage): Covers prescription medications and is available as a stand-alone plan or as part of Medicare Advantage. The monthly premiums and drugs covered can vary by plan, so it's crucial to choose a plan that suits your needs.
Don’t Fall into the Gap (plus a few more letters to consider)
Just as your private insurance may have had limitations, restrictions or exclusions, it’s important to get the lay of the land regarding what is — and isn’t — covered by Medicare. Luckily, though, you have some flexibility when it comes to dealing with any coverage shortfalls. Medigap policies, also known as Medicare Supplement Insurance, are offered by private insurance companies and can help cover costs that Original Medicare does not, including copayments, coinsurance and deductibles (filling coverage “gaps”). There are 10 standardized Medigap plans available, each named with a letter (A, B, C, D, F, G, K, L, M and N) and offering different levels of coverage. Not all plans, however, are offered in every state, and they’re not compatible with Medicare Advantage. Carefully compare Medigap plans and choose the one that best aligns with your health care needs and budget.
Important Enrollment Periods
When you’re getting ready to change from private health insurance over to Medicare, there are specific periods for enrollment that you need to observe to avoid costly penalties and coverage gaps:
Initial Enrollment Period (IEP): A seven-month enrollment window begins three months before you turn 65, includes your birth month and ends three months afterward.
General Enrollment Period (GEP): If you miss your IEP, you can still sign up for Part A and/or Part B between January 1 and March 31, with coverage starting on July 1. However, you want to avoid this as you may face lifetime late-enrollment penalties.
Open Enrollment Period (OEP): Between October 15 and December 7 each year, you can make changes to your Medicare coverage, such as switching from Original Medicare to a Medicare Advantage plan.
Maximize Medicare Benefits by Choosing Wisely
Selecting the right Medicare coverage is essential to maximize benefits and minimize your out-of-pocket costs. Carefully evaluate your health care needs, budget and lifestyle as well as any program costs, covered services and restrictions when making your decision. How you handle your initial enrollment can have long-term consequences, so consider consulting a qualified Medicare consultant if you’re unsure what to do. They can help guide you through the important decisions you’ll face during the enrollment process and answer additional questions you may have as you make this important transition in your health care coverage.
Sources
https://www.medicare.gov/basics/get-started-with-medicare
https://www.medicare.gov/basics/get-started-with-medicare/get-more-coverage/buying-a-medigap-policy
https://www.medicare.gov/health-drug-plans/medigap/basics
Does Your Budget Need an Update?
Does Your Budget Need an Update?
Having a budget is a great way to take charge of your financial health. In fact, people who track their spending are more likely to owe under $5,000 in debt than those who don’t. A budget can help you stay on track toward achieving goals like a secure retirement, but as your life changes, your budget may require updating from time to time. So, whether you’re planning for your dream home, a vacation or a debt-free future, it’s important to make sure your budget reflects your current financial reality. Here are some common reasons you might need to reassess your budget.
Changes in Income (Up or Down)
If your income changes, adjust your budget accordingly. With a raise, you might want to allocate more money to savings or retirement accounts or pay down debt more rapidly. On the other hand, if you lose a job or face a pay cut, you may need to reduce a few discretionary expenses, such as eating out, until you’re able to recoup the lost income.
Major (and Minor) Life Changes
Major life changes, such as moving or purchasing a home, a serious illness, starting a family or getting married tend to significantly impact household budgets across several spending categories. But even less drastic changes, such as a costly home repair bill or a car purchase, will often require budgetary adjustments. In the event a complete overhaul is needed, it may be wise to seek out assistance from a qualified financial professional.
Inflation (and Other Changing Economic Realities)
In early 2023, the average price of eggs was 70% higher than in 2022. While eggs have become the poster child for inflation run amok, many other household expenses have also increased significantly. And taken together, these changes have stressed the financial health of American households and likely contributed toward soaring consumer debt. But by reworking your budget numbers, you may be able to avoid burdensome credit card bills in the future.
Evolving Long- (and Short-) Term Financial Goals
As your financial goals change, so too should your budget. If you once thought you’d retire in Akron but have now decided you want to spend your golden years in Malibu, you might need to sock more away to make that retirement dream a reality. Rapidly increasing mortgage rates are changing the calculus for would-be home buyers; a budget can help you make adjustments based on shifting economic conditions. Consider your near-, mid- and long-term financial goals as you reassess your resources and needs.
Changes in Credit Card (and Mortgage, Car Loan) Debt
If you take on increased debt, whether it’s a new car payment, mortgage or medical bill, your budget will need to adjust to incorporate those payments. On the other hand, when you pay off a debt, it presents an opportunity to put more money toward paying down other obligations or putting more funds aside toward your retirement or other financial goals. What once was spent chipping away at a credit card balance could now be put toward your vacation fund or building up emergency savings for a rainy day.
A Budget Is a Living Document
Establishing a budget that works for you is an important step toward building a healthy financial future and securing your retirement readiness. But it will likely require several updates along the way. A midyear budget check is a great way to make sure your plans stay in step with all your life circumstances. If you need assistance, a financial professional can help you.
Sources
https://www.thepennyhoarder.com/budgeting/budgeting-statistics/ https://www.ers.usda.gov/data-products/food-price-outlook/summary-findings/#:~:text=Retail%20egg%20prices%20increased%208.5,flock%20to%20a%20lesser%20extent .
