The Best Ways to Establish and Build Credit

Those who have never had credit extended will not have a credit score. This might not seem like a problem for those who have tens or hundreds of thousands saved up, but it can be a problem for anyone who wants to take out a loan. Those with no or poor credit will be stuck paying more in interest when they take out loans. Here are some options that can allow people to start building credit.
Get A Secured Credit Card

This type of credit card has a credit limit that’s secured with a deposit, which can be as low as $500. Other than this fact, cardholders use the card much as they would any other credit card. They make purchases with the card and then pay the card off each month. Keeping this up for a while can help them get to a better credit score and allow them to qualify for an unsecured card.
Become an Authorized User

Those who have a parent, spouse or sibling who have a solid credit score could benefit from this fact as long as the issuer reports authorized users to the credit bureaus. Most banks will allow cardholders to add authorized users to their accounts, regardless of their credit history. The card does not actually get mailed to the authorized user, but should the actual cardholder keep up a solid payment record, it will allow the authorized user to build credit.
Get a Credit Builder Loan

These are loans in which the bank actually leaves the money in a bank account while you pay it off. It’s effectively a savings account of sorts, but the payment information will get reported to the credit bureaus. This means that a person who keeps up with payments will start to build credit up over time.
Get a Cosigner on a Loan

This requires getting someone, usually a family member or a friend with a good credit history, to pay off a loan if you can’t. No one really wants to wreck someone else’s credit, so it’s could be a good idea to only borrow a small amount for which you already have the cash built up to pay it back. Repeated on-time payments will slowly start to build up a higher credit score.

While building up credit can seem like a daunting task, it can be done over time. Making sure that you pay off the minimum amount due each month is key to keeping a credit score after you’ve earned one. Those who keep a high score will benefit by paying less in interest over time.

Financial Prep When Searching for a New Job

Whether you’re searching for a new job to procure greater happiness or to land a larger salary, you might not think of this quest as a task that you need to financially prepare for. However, you should take certain steps to ensure that this search doesn’t leave you with money problems.

Consider Your Current Position

In the event that you are planning to stay at your current position until you find a new job, then you may not have a tremendous amount of financial concerns. However, this approach isn’t possible in all fields. For example, you may need to constantly take off from work for interviews, which could compromise your position at your current company. Additionally, you may find that a full-time job and a full-time job search are too much to handle together, at least if you want to put your efforts into the latter.

Allocate Some Funds

Going on interviews is probably not something that you think will cost money, but that isn’t always the case. If you are applying for positions where you need to give a lesson or a demonstration at some point in the interview, you will have to purchase materials to put these projects together. Keep in mind that you won’t necessarily get the first job that you interview for. Also, each one might require a different type of lesson or demonstration, meaning that you would have to buy additional supplies.

Account for the Commute

You might not be on a search to have a shorter commute. In fact, you may be considering a longer one or even a long-distance move to get the job of your dreams. Whether you are paying more money for gas or you are flying across the country and staying in hotels for the interviews, you are going to have to put funds toward these endeavors. Longer drivers or days away also means you’ll be paying for meals.

Stock Your Savings

When you know that you’re going to be looking for a new job, the time has come to put as much money into savings as possible. On top of these related costs, new jobs can be precarious. You don’t necessarily have a guarantee of a position for a long period of time, so you want to be prepared in the event that the new job doesn’t work out.

Searching for a new job isn’t a task that many people associate with costs. As you can see, however, you should prepare yourself financially.

Big Myths Surrounding Why People Don’t Plan for Retirement

Ask anyone about their retirement accounts and they’ll have one of two things to say. They’ll either tell you they’re working hard and saving as much as they can so they can retire early and well, or they’ll begin issuing excuse after excuse about why they’re not saving, can’t save, or definitely will focus on saving later. Retirement is a big deal, unless you’re not saving and can’t do it. Before you start judging those who aren’t saving, take a look at the biggest myths surrounding the lack of retirement planning in the United States.

Myth: People Can’t Afford to Save
Fact: People Choose Not to Save

It’s easy to say you can’t afford to save for retirement. It’s suggested you save at least 10% of your income for retirement. If you make $50,000 annually, that’s $5,000 per year. If you’re paid 26 times per year, you save just over $192.00 every paycheck. It might seem like a lot to someone who only makes $50,000 per year until you break that down. That’s just over $96 per week, or $13.70 per day. You probably spend that in coffee and lunches. People can afford to save for retirement, but they don’t because they focus on other things first.

Myth: Only Wealthy People Save for Retirement
Fact: Only Half of Wealthy People Save

In this situation, wealthy is anyone who brings in more than $50,000 per year. This is considered average income in the United States right now, and only half of the people who make more than this are saving and planning for retirement. The rest are ignoring it completely. It’s true that fewer people belonging to low-income families are saving, but those who make more also aren’t saving.

Myth: Young People Don’t Save
Fact: Young People Do Save

It’s easy to fall into the trap of believing it’s young people with the mentality that they can worry about saving tomorrow and have fun today who aren’t saving. It’s true many young people aren’t saving for retirement, but almost half of people who are close to retirement age haven’t saved yet or didn’t start saving early enough to allow them to retire well. Retirement planning isn’t just ignored by the young.

As the age for retirement gets higher and higher as the years pass, it’s more and more difficult for people to retire with the kind of money they need to live comfortably. Many seniors are on a tight fixed income unable to afford to live, and it’s devastating. Saving for retirement is crucial, and it’s time everyone starts doing it.

Staying Financially Fit

You might not think that you need to check in on your financial status when you’re just starting out in your career. But looking at where you stand financially can have both immediate and long-term benefits. This blog post will give you a few tips for staying financially fit.

Go Over Your Statements
Go over your statements whenever you receive your bills in the mail, immediately review them. By doing this, you’re taking one of the few opportunities you have to catch mistakes and fraudulent activity. You should never just pay your creditors without going over your bills with a fine tooth comb. Since most banks have stopped mailing statements to their customers, this bit of advice goes for your electronic statements, too.

Know Your Assets and Liabilities

The items and property you own, or assets, and your debts, or liabilities, together determine your individual net worth. Assets could include some of the following:

  • Bonds
  • Cars
  • Cash
  • Collectibles
  • Real Estate
  • Retirement Accounts
  • Savings
  • Stocks

Liabilities might include some of the following:

  • Auto loans
  • Credit card debt
  • Mortgage
  • Other bills
  • Student loans

On an annual basis, calculate your net worth by adding up all of your assets and subtracting your liabilities. If you just left college with student loan debt, your net worth is negative. It’s not necessarily something for which you need to be ashamed. You’ll just have to work hard to pay down the debt.
Balance Your Checkbook
Balance Your Checkbook Even though most of us rarely write checks anymore, we still need to reconcile every cent that we spend on our credit and debit cards. Prevent those nasty overdraft fees by doing the math as often as possible.

Look Over Your Credit Report
Look Over Your Credit Report In your credit report, you will find information about your credit accounts and your payment history. If you want to qualify for loans at great rates, you will need a high credit score. Experts recommend that you look at your credit report at least once a year to ensure that all of the information on it is correct. You should do another check before you apply for big purchases like vehicles and houses. You can ask for a free credit report from each of the three credit reports – Equifax, Experian, and TransUnion – once every 12 months.

Hybrid Advisors Making a Big Shift

Online Financial Advisors

The world of personal finance is changing rapidly. Many people want better financial help with the issues that they have in life. One of the most important things to plan for is retirement. Few people are saving up enough money for retirement, and you need to make sure you have a plan in place to do so. There is a huge shift going on in the industry today. In the past, financial advisors were in your local area and you went to meet them in person. As technology continues to increase in this area, a lot of financial advisors are going online. This trend is expected to increase over time.

Financial Advice

A lot of financial advice is really simple. The issue for many people is actually following the advice. Over the years, a lot of people have had issues with their finances for a variety of reasons. If you have a lot of debt, it is going to be really hard to invest money for the future. Some people are having to work multiple jobs just to pay the bills. Whatever your situation is, you need to have a plan that makes sense for your future. Working with a financial advisor can be a great way to have success in this area over time.

Robot Advisors

A new trend that is emerging in the industry is robot financial advisors. Although this sounds like something out of a fiction novel, this is actually happening across the industry. Financial advice usually comes down to a calculation, and this is something that computers are great at. Need to know how long it is until you can retire? A computer can spit that information out for you quickly. This is one of the reasons that the industry is starting to move in this direction. In the coming years, it is expected that robot advisors will continue to gain market share from typical investment advisors.

Final Thoughts

Overall, your personal finances are an essential part of your life. If you struggle with your finances, it is hard to accomplish the things that you want to in life. In addition, planning for retirement is difficult if you do not have a professional on your side. One of the biggest trends in the industry is the rise of automated online advice. A lot of people really like the simplicity of working with a person or robot online with their financial plans.

How to plan an inheritance

When you think about providing an inheritance to your loved ones after your passing, you may have high hopes that the funds will improve their quality of life for many long years or even decades. However, cases of people obtaining a windfall of cash, such as through lottery winnings or an inheritance, have been well-documented. There are numerous instances where individuals have blown through millions of dollars in a very short period of time and who are left in dire straits for the remainder of their lives. There are a few steps you can take as you plan an inheritance that will prevent this from becoming an outcome for your loved ones.

Determine Your Intentions

As a first step in planning an inheritance, it is important to determine who the funds will go to and what goals you want to achieve by giving them the money. For example, you may have adult heirs who have proven their ability to manage their finances, and you may be comfortable giving them a lump sum of cash. Perhaps you have younger heirs who have been frivolous with their money. Consider taking your heirs to financial planning meetings so that they are aware of your intentions and can learn how to use the money once they receive it.

Set Up an Inheritance Structure in Line With Your Plans

With each heir, you may have a different financial plan. Some heirs may receive a lump sum of cash. Minor heirs may receive funds through a trust that is established under the supervision of a parent. Others may receive an inheritance through an annuity that doles out cash on a monthly or quarterly basis.

Create Financial Guidelines

There may be no requirement for your loved ones to follow your guidelines after they have access to the funds you provide to them. However, you can create guidelines with the best intentions, and some heirs will follow your instructions. For example, you can instruct a younger heir to invest at least a portion of the funds they receive each month from an annuity. Explain that the investment will provide additional wealth after the inheritance payments have ceased.

You may not be able to fully control how your loved ones spend their inheritance after your passing. However, you can create safeguards and controls through how the inheritance is provided to them. You can also educate them about finances in your living years and provide instructions for the funds after your passing. By taking these steps, you can create an effective inheritance plan.

Investing the right way. How to do it well

Billionaire Warren Buffett is a good example for value investing. Buffett gives a good example of value investing that other people should pay attention to. Buffett recommends that we buy low and sell high. Sadly, many investors tend to let emotion handle their financial decisions. This causes them to buy when others are buying, and sell when others are selling. When we buy when others are buying, we get a high priced Apple stock that is not really a good deal. When we sell when others are selling, we get a trashy Kodak stock that just went bankrupt. The key to becoming the investor that succeeds is being a shareholder in Apple before they became successful. It is selling Kodak stock before the rise of the digital camera. All of these things are what the biggest investors do well.

If you do not know how to begin stock investing, think about something practical in your life that you can try this principle with. A good example is food purchases. Most people are eagerly buying sweet and popular premade meat products. They are eagerly ignoring bitter and unpopular raw vegetable products. A smart investor would buy mostly raw vegetables and sell sweet popular meat products during the day.

The best investment models buy something unpopular, and then they convert it into something very popular. The worst investment models take something popular, and then they convert it into something very unpopular. Evaluating your personal financial practices to see how you are doing in this area can show you the things that need to improve. A person who is smart will take a job that others do not want, and give others exactly what they want. A person who is foolish will take a job that others desperately want, and give others exactly what they do not want.

If you do not know what is popular, look at the universals of marketing. The universals of marketing include survival, protection, freedom, pleasure, relationships, and likability. These are the things we should be selling to be a great investor. We should also be buying danger, slavery, suffering, enemies, and unpopularity to be a great investor. Why? These things have a low purchase price because no one wants them.

There are different great companies to try stock investing cheaply. One of the recent ones is Robinhood. Robinhood lets you place trades from the convenience of your smartphone without having high fees bothering you.

Robinhood puts the investing market in the hands of the common person. If you are curious about how to begin with stock trading, remembering the buy low and sell high principle can go a long way toward removing the issues you are having.

Fast Cash: How to Make Supplementary Income Quickly

When it comes to making fast cash, most of the time, it’s not a good thing. Get rich quick schemes and things that seem too good to be true probably are. However, that doesn’t mean all ways of making fast money is bad. In order to give you a few examples and context, here are a few ways to make some extra money on the side.

Ride Sharing

Apps like Uber and Lyft are providing individuals with the flexibility of an open schedule and their own cars to earn money. Some people have gone as far as giving up more traditional jobs in order to make their own hours and be in charge of their income. Plus, with a job like this, you decide how much you want to earn. You can drive a little or a lot depending on how much supplementary income you’re looking to make.

Selling Old Items

Most people have items in their homes that are no longer of use to them. If you’re in a similar situation, you very well could be sitting on money! Have a yard sale or sell unwanted items online to make a few bucks. Sites like Ebay are great because you may end up receiving much more money than expected. Opening it up to bidding, you could make some serious cash if a few people really need to have your item.

Freelance

Think of a skill you have mastered and odds are there’s a way to make money doing it. Freelancing is one of the best ways to make money using skills you have that others may not. For instance, a lot of businesses need help with logos and design, web design, or content creation and they’re willing to pay for fast help. Try your hand at offering your work for a small fee. As you get better and have more clients, you can begin to charge more and see referrals from happy clients coming your way!

Seasonal Yard Work

Lastly, each season brings a new type of yard work with it. In the winter, driveways need to be shoveled, summer brings landscaping with it, and fall tends to require a lot of leaf cleanup. Not many people enjoy doing these types of yard work and would often pay someone to take care of it for them. Earn a bit of cash by sprucing up someone’s yard – plus, it’s a good workout.

Discussing Family Wealth

The topic of family wealth often brings a fair amount of apprehension with it. Openly discussing wealth feels like a taboo subject and one that should be avoided at all costs. The talk may feel daunting, but it’s an important one to have with your kids. If they are not prepared to inherit a large sum of money, then they are bound to make mistakes. Here’s a few tips on starting the conversation and what the younger generation needs to know about the family’s wealth.

Rip off the Band-Aid

The first step to opening a money dialogue is initiating the conversation. It may be uncomfortable and family opinions may vary, but no matter what, the discussion needs to happen. It will be easier on everyone if the topic is laid out on the table at once and intelligently discussed. At the end of the day, you will feel better for speaking about it and your children will feel much more prepared for the future.

Use Teachable Moments

The inheritance and financial planning conversation will not feel as daunting if your children are exposed to the idea in small, real life increments. These teachable moments will feel less like a hard and fast talk about the family money and much more about the idea of money. For instance, the birth of a new family member is the perfect time to organically discuss inheritance. Your children will understand inheritance, but may not directly apply it to themselves yet. That’s perfectly okay! At the very least, the building blocks will be there come time for the “big talk.”

Keep the Dialogue Open

The money talk should not be an open and closed conversation. Family wealth is complex and evolves over time – so should your conversation. Closing the door after the initial conversation will cause confusion and potentially leaves a lot of questions unanswered. The transition of wealth is a delicate matter and should be treated as such. Be an open book for your children and let them openly discuss wealth. They will develop ideas on their own about how to best use the family wealth and you need to be open to that. By doing so, you ensure that less mistakes are made down the line. Trial by fire, especially with money, is not always the best way to learn.

Money Goals

People all too often talk about the importance of setting financial goals but do not actually talk about what those goals look like. Goals will inevitably vary from person to person, but there are some general goals that apply to the majority. If you find yourself being tasked with setting financial goals, but have no idea where to start, look no further. Pick out some goals that work for you or use these as a springboard for your own. No matter what, it’s great to be thinking about what you want out of your finances so you can start making plans and adjustments to get there.

Get out of Debt

If you have debt, this should be your ultimate goal. Debt is a financial burden you don’t need to carry. Think about all the good you could do for yourself financially if you were not already allocating a certain amount to paying down your debt. Aggressively tackle the problem and then stay out of debt. You’ll be happy when it’s behind you – trust me.

Commitment to Budgeting

Budgeting is awesome for so many reasons. You can track your spending, optimize your saving, and have a better grasp on how your money comes and goes. Set a goal of committing to a budget. It’s easy to stop putting in the effort to budget, but setting it as a goal can help push you to stick to it.

Plan Ahead

Thinking to the financial future leaves a lot of room open for goal making. You might set a goal for retirement, want to have a substantial emergency fund, or pay off your student loans at a quicker pace. No matter what you decide, even it it’s all three, just do it. It can be difficult to think to the future, but it’s necessary when it comes to finances. Life only gets more expensive the older you get. The sooner you are thinking to the future, the less worry you’ll have down the line.

Cut Down Spending

Set a goal to cut down on unnecessary spending. We all can get out of control with spending, but some people have a bigger problem with it than others. If you identify as big spender, but you want to save more money, it may be time to make a commitment to yourself. Curb the spending habit and start banking more money each month.

Make Investments in Yourself

Something people don’t often think about when financial goal planning involved taking care of themselves. Invest in your future. Spend some money for continued education classes that will beef up your resume, purchase a gym membership to take care of your health, or look out skill strengthening opportunities. Becoming the best version of yourself will ultimately lead to an enhanced career path and more money over time.