What makes a couple successful in their financial relationship? Ameriprise Financial surveyed over 1,500 couples (those married or living together for at least six months) to learn about their money conversations and how they make decisions. The results revealed eight ways you can improve the financial health of your relationship:
1. Understand your partner’s money mindset. It’s normal to have differing views and habits about money, but that doesn’t mean you can’t agree on your financial goals. Couples who report being on the same page financially work to understand their partner’s approach to money and keep the lines of communication open.
2. Make finances a priority and don’t give up. Couples who are willing to have the hard conversations and who work together to find financial harmony will reap the benefits over time. As you might expect, the study found that couples who had been together longer tend to have better communication and are on the same page when it comes to financial matters.
3. Agree on financial goals. It’s tough to pool your money with someone who overspends or who isn’t willing to save for the vacation you’ve always dreamed about. Sharing financial goals does bring you closer together-or at least it’s one less thing to argue about. To make it easier to save, challenge yourselves to add a timeframe to each goal so you know what you’re working toward first.
4. Assign and accept financial roles and responsibilities. Most couples split up tasks such as paying bills or monitoring investments. Clear responsibilities allow you to hold one another accountable without worrying if the cable bill was paid. However, be sure to work together on tasks such as retirement planning that requires close collaboration.
5. Invest in your future together. Make it a priority to set aside a portion of your earnings for short- and long-term goals, including retirement. Know how much you collectively have in retirement savings-a surprising 23 percent of couples are unsure of this number. If you have kids, talk about how much you’d like to contribute to their college expenses so you can save accordingly.
6. Set a spending limit. Spending habits were the leading cause of contention for couples. Consider setting a spending limit to ensure you’re on the same page as your partner regarding large expenditures. On average, couples said a purchase over $400 should trigger a discussion.
7. Understand that disagreeing is okay. According to the Ameriprise study, even couples who say they’re in financial harmony disagree on financial matters. What’s important isn’t that the partners don’t always agree, but that 82 percent resolve their issues and move on.
8. Enlist a professional to solidify your financial plan. When you need an objective opinion – or a deciding vote – meet with a financial advisor. Together the three of you can create a financial plan that meets your specific needs as a couple.
Ultimately, it feels good when you are in sync with your partner regarding financial decisions and can work together toward managing your finances. Couples who actively work on improving their financial relationship will likely be less frustrated over money matters and may even feel better about their relationship overall.
As a landlord, your return of investment comes in the form of rent. If your property is not leased, it does not earn the income that you need to pay the mortgage.
However, many landlords have difficulty in collecting the rent. Even if there is a solid lease agreement, which indicates late rent fees, some tenants have the problem of paying on time.
How could both parties meet halfway to make sure that the landlord receives the payment, and that the tenant will find it easy to pay the rent before or on the first day of every month?
Let’s take a look at how tenants pay their rent and the pros and cons of each payment method:
In the Form of Check
Paying a check is a secure method, which informs the bank to withdraw from the checking account to pay money to anther party. Most landlords still accept checks.
Pros: Tenants can mail checks in advance and also postdate them to cash on the specified date.
Cons: In case the check bounces, the bank charges the tenant, who has to pay a fee. Additionally, getting a check does not necessarily mean that there is money in the account of the tenant.
Take note that checks are not commonly used by millennial, which you need to remember when renting to students.
By Means of Cash
It is not practical to accept cash as payment because it can get lost, it’s difficult to trace, and could have discrepancies on the amount the tenant paid against the cash you received. One more disadvantage of cash payment is that you need to collect from the tenant every month.
If ever you accept cash payments for rent, which is common among landlords who have their basements leased or live close by, make sure to give your tenant an acknowledge receipt as proof of payment and a record of their payment.
There are tenants that still choose to pay rent with cash since many of them use it to monitor their spending. Yet, this appears on their bank statement simply as a withdrawal – that is why it can be difficult to use is as rent payment.
With a Cashier’s Check or Bank Draft
Another secure form of payment is through a cashier’s check or bank draft, wherein the bank withdraws on its funds after withdrawing the amount from the account of the tenant.
Though these may be a secure payment, this is not practical for a lot of tenants, since a fee is required to draw one up. Besides, the tenant has to go all the way to their bank to issue it.
With the holiday season in full swing, most people begin to think about what’s on their loved one’s annual wish list. While the latest high tech gadget might be a great idea, have you ever thought about how far a monetary gift can go? A gift to the youngest generation in your family can help teach the importance of saving and self-discipline, ultimately leading to a lifetime of good habits and fiscal responsibility. For 20 & 30-somethings, a monetary gift can not only reinforce good habits, but can immediately ease the debt of those coming out of college, or help boost a loved one’s retirement account. And although we always assume that a gift exclusively helps the receiver, the tax benefits associated with these types of gifts can also be good for your wallet. As the “gifter” you can reduce your estate by giving to whomever you choose and if it’s to a registered non-profit charity, you could even be eligible for a tax deduction.
An individual can give up to $14,000, and a married couple as much as $28,000, to as many recipients as they’d like without any tax ramifications each year. These gifts can be made directly to the individual or put into an account in their name that they’ll benefit from in the future. Savings bonds, or deposits into custodial accounts or educational savings plans are very popular gifts for young children, ensuring that the gift is saved for a future purpose. For those 20 or 30-somethings, consider a gift into a traditional or Roth IRA. If you’re worried that your children will grow to expect these gifts instead of saving themselves, consider offering some type of match. One common strategy is to offer a retirement match, putting one dollar in an IRA for every dollar that the child puts toward their IRA or company 401k plan. For those paying student loans, another common strategy is to match dollar-for-dollar into a retirement account every dollar the child pays over the minimum monthly payment on their loans.
The holidays are also a time of year when people contribute more to charitable organizations close to their heart. If you own highly appreciated stock, this year consider gifting those shares instead of a cash gift. Let’s assume you bought a share of Apple for $20 that’s worth $100 today and that you’d like to use it to give to charity. If you were to sell this share yourself and then gift the proceeds, you’d pay capital gains taxes on the $80 of growth. If the charity is a tax-exempt non-profit, they don’t pay capital gains taxes. By gifting the share of Apple directly to the charity, you’re able to avoid the $80 taxable gain and also tax a deduction for the full $100 market value of the stock. If you’re growing your investment savings, write yourself a check for that tax-deduction and re-deposit the value back into your investment account. If you have required minimum distributions (RMDs) from your IRA, you can donate up to $100,000 of these assets each year to satisfy your required withdrawal and avoid paying ordinary income tax.
Many people only make plans in their will for gifts to their loved ones. As advisors, we see cases where a person with a large estate leaves gifts in their will that are below the annual gift exemption. When this happens, in addition to possible estate and generation-skipping taxes paid by the estate, certain states require the recipient to pay inheritance tax on the gift as well. By giving to your loved ones while you are alive you can reduce your estate and help avoid taxes, but more importantly, you get to see the recipient benefit from the gift. You also have the opportunity to warp your gift in a story, sharing your hopes and desires in giving the gift. Share with the next generation the importance of financial independence, why you enjoy giving to your favorite charity, or the biggest money mistake you made over the years.
Holiday gifts of cash can do a lot to help your loved ones, teach strong financial lessons and potentially lower future taxes. But, monetary gifting is most successful when it is about sharing your success and your values at the same time.
The start of a new year is a great time to take stock of your financial life. Have you done all that you can to put yourself in the best possible position? Or, have you missed out on some important financial opportunities? Take a look at where you stand and consider these key opportunities that could make a big difference in your financial life in 2017 and beyond:
1. Revisit your financial goals
You may have established financial goals a year ago or maybe it has been several years. Either way, it makes sense to revisit your goals and make sure they are still consistent with the direction of your life and dreams for the future. Make adjustments if anything has changed.
2. Build a sufficient emergency fund
One of the most fundamental forms of financial security is having money set aside in a “rainy day” fund to meet any emergency needs. You don’t want an unexpected expense to result in a major financial setback. It’s best to have a minimum of three-to-six months of expenses set aside, and up to a year if you can.
3. Save on interest payments
First and foremost, if you have outstanding credit card debt, make it a priority to pay down this costly form of borrowing as fast as you can. Also, take a closer look at the interest rate on your home mortgage. If it’s notably higher than today’s market rates, look into refinancing to reduce your monthly payment and put the money you save to better use.
4. Take advantage of your workplace retirement savings plan
If you participate in a 401(k) or 403(b) plan at work, make sure you are, at the very least, contributing enough into the plan to take full advantage of any employer match. It’s a “free money” opportunity and should not be overlooked. To the extent you can afford to do so, consider contributing more than the match amount to your plan.
5. Capitalize on “catch-up” contribution rules
If you are age 50 or older, you can boost contributions to your workplace savings plan and individual retirement account (IRA) by taking advantage of so-called “catch-up” rules. This can mean investing tens of thousands of additional dollars over time to help secure your financial future.
6. Establish Roth savings if you qualify
Roth IRAs and Roth 401(k)s allow you to build retirement savings with after-tax dollars where all distributions may qualify for tax-free treatment in the future. The potential for tax-free income in retirement can be an important benefit.
7. Make sure you are comfortable with your portfolio
Are you constantly worried what could happen to your portfolio in a market downturn because you’re taking on too much risk? On the flip side, do you think your portfolio needs to be more aggressive to keep up with your financial goals (knowing that there’s always risk with reward)? If you come up short in either area, it may be time to revisit your investments and make appropriate changes.
8. Review your protection strategy across all aspects of your life
Do you have sufficient life insurance in place to protect your loved ones? Is disability income coverage part of your mix? Are you protected against the risk of specialized care costs later in life? Are your home and personal possessions properly covered? Make sure you have a comprehensive protection strategy in place to prepare for unexpected events.
9. Get a handle on your taxes
Review past tax returns and your current financial situation with a tax professional who can help you find potential ways to reduce your tax liability. If charitable giving or volunteering is important to you, consider the tax implications of your donations.
10. Solidify your legacy plan
Make sure your will, health care directives and trust documents reflect your current priorities. Review and if necessary, update beneficiary designations on retirement accounts, bank accounts and insurance policies.
Recently I tried putting ‘money’ in my article topics to see how they would fare above the others that include health, child abuse, spirituality, and last days’ prophecies, among other things. Of the top twenty performers 12 deal with money or the financial system. This speaks volumes of the way many think when it comes to what’s important in the minds of many, and who can blame them? In today’s world the economy is tethering on the brink of disaster and people are struggling.
In Australia where an election will be held on July 2nd, it is the economy that is the main issue on the government’s agenda. The Prime Minister promises better management of it and more incentive and growth leading to more jobs. While that is the promise it is not the reality.
Over the three years of the present administration the economy has gone backwards. Jobs have been lost left, right, and center. Payments to parents have been cut, government sponsored services have disappeared, and generally the mood is one of gloom. Businesses are closing and retail shops are finding it so hard to trade that many are folding.
The world economy is also on a knife-edge while economists are struggling to prop up stock markets and keep something like stability going ahead. But how long can this continue before the big break comes?
Many of my articles deal with this crisis and it is no surprise that people want to know. It seems that there is a general nervousness that is driving people to look for alternate leaders who promise things that are impossible to deliver. Some don’t have to promise anything and they are leading in the poles because voters don’t want to have a return of the same.
Is there anything that can be done to prevent Australia going into a recession? That is the big question and it is one for the world as well as other countries fight back bankruptcy and declining incomes. Venezuela is one nation that stands as an example of what is likely for many other nations and right now there appears to be none that are immune.
It is my opinion that we are in the last days and the prophecies state that at this time there will be a collapse of the systems as the Spirit takes back control of the World Order that has been built on a false premise. That is the money that invented to give men power and while it has been pushed to the limit to do that it is based on nothing bur dreams.
Why do so many businesses fail to make profits and achieve their financial goals? The answer is simple because many business owners simply ignore one or more of the 5 keys to financial success. Many businesses are making sales but are not profitable. Learn how to fortify your business model and set your company up for success. Developing a financial business model provides a clear picture of your company’s financial history as well as your company’s financial future. Working from a financial business model will help to prepare your company to make better decisions for the company in the future. And analyzing your finances on a regular basis will provide you with the financial success you are seeking to achieve. Get ready to gain more flexibility and financial freedom in your company with the keys to success.
Key #1) Don’t Go It Alone
Mismanagement of finances is not reserved for start-up companies but for all businesses. Many business owners are able to produce and sell their products and services but are not able to manage their finances. If you are not able to determine where you have been you will not know where you are going. Accountants and bookkeepers are able to assist your company with establishing a financial foundation and making predictions surrounding your financial future.
Key #2) Review Historical Data
By developing a financial history of your company’s finances provides you with valuable lessons for the present that will guide you into a more profitable future. Reviewing financial history helps you to know what to do and what not to do in your business. Compiling historical financial data can help your bookkeeper or accountant to assess the reasons for your success or failure.
Key #3) Project Sales and Costs
Once you have completed the second key it will set you on the trajectory to be able to project the sales and costs. Projecting sales and costs without historical data can be challenging but not impossible. Projections for your company are not a process that begins at the start-up phase, it is an on-going process to help determine areas of growth and change. Costs are always easier to project than sales. However, sales should not be your main focus but rather on the company being profitable!
Key #4) Develop Financial Statements
Financial statements are the framework for the accounting cycle. In other words, the income statement, the balance sheet, and the statement of cash flows provide a picture of how well your company is doing financially. Financial statements structure all financial data in a manner that is easy to understand and should be prepared with accuracy. These statements assist you with assessing financial performance and determining key business decisions.
Key #5) Assess and Implementation of Changes
This is the final piece in the financial business model. Once all of the first four keys have been established you will be able to assess your company’s financial position and implement changes where it is necessary to ensure financial growth and success. Tying it all together the financial statements will reflect your company’s historic information and decisions can be made about the future from that data.
The ease of making financial transactions and financial services in general, had first been revolutionised when telegraph companies introduced wire transfers. But with the coming of new age financial services like Bitcoin and Ripple, it is the time we address the question of what the future holds for the financial services of the world.
Traditional Wire Transfers
Let us begin by first taking a look at how things have been going on for these past 150 years since wire transfers were first introduced. Transferring funds using a wire transfer method via a bank is not a single step process but a multi-step process. It is like this:
- The sender approaches his or her bank and orders the transfer of funds to an account. Unique codes like BIC and IBAN codes are provided to the bank by the sender so that the bank knows exactly where the funds need to be transferred.
- The sender’s bank contacts the receiver’s bank by sending a message through a security system, such as Fedwire or SWIFT, signalling it that a transfer needs to be made. The receiver’s bank receives this message, which includes settlement instructions as well, and then asks the sender’s bank to transfer the amount specified in the message.
- The sender’s bank now transfers the amount. This is not done in one go but bit by bit, so it can take anywhere from a few hours to a couple of days for the entire sum to be transferred.
- To make the transfer, the two banks must have a reciprocal account with one another. If that is not the case, the transfer is made through a correspondent bank that holds such an account.
As one can see, this form of transfer relies overly on a mediator, takes more time than it should, and can prove to be costly as the banks charge some fee for their service. Distributed currencies like Bitcoin provide a viable alternative to this process.
What sets services like Bitcoin apart from traditional services is that they do not rely on a central mediator but rather operate using cryptographic protocols. The process is therefore faster, simpler, and much more efficient. The system is quite transparent to both end users as well while traditional systems are susceptible to fraud due to the complex process involved.
However, there is a downside to this too. With services like Bitcoin, it is simple to trace a transaction back to each unit value’s creation.
Solution? A Common Ground
More and more people are opting for services like Bitcoin and peer-to-peer mobile transfers, where a network operator could help users transfer funds by simply sending an SMS. Although these are indeed more efficient, they are a long way from global acceptance because there are many who still do not have bank accounts, plus there is the issue of limited user identification in such services.
What would be ideal for everyone is if banks could tap into the potential of decentralized currencies and overlap the source code of services like Ripple on their existing system to form a hybrid of the two. It would kill two birds with one stone as:
- Decentralized currency systems provide more efficient transfers
- Bank systems ensure only registered users access the service, taking away the possibility of foul play.
The world has come a long way since the last time an indigenous financial service system was introduced. There is definitely a crying need to improve this traditional service and decentralized currencies like Bitcoin have shown them the way.
Although these are two different services and proper cyber security measures with their own shortcomings, if they were to be applied together, they could fit each other’s gaps perfectly, making for a system that revolutionizes the financial service system again.
People are often tempted to give unsolicited advice to others about the best way to manage finances. You’ll come across ideas that work and get you places, but often people are offering up such generalized advice. Trying to put together bits of information and use it in a meaningful way is not usually the best plan, as some of the information may be flawed and other parts confusing.
How can you take good care of your money and your finances so that you do not end up frittering away your savings on things you don’t need?
Generally, the problem is that most people lack a good understanding of just how important saving for the future is. Most people are going to do everything else with their money first before they even think about saving. Although saving in this way is better than not saving at all, it is in fact a highly ineffective way to build any kind of financial independence or security.
Managing Your Personal Finances
If you want to save money for the future, you’ll want these tips to help you on your plan. Many people who practice these methods are surprised at how easy they are to follow.
Simply set aside 20% of your paycheck.
Just reverse your spending and saving habits, instead of putting away your savings after you spent what you thought you needed from your income. Take 20 percent of your earnings first and put it towards savings before spending it all. Make sure to deposit this money as soon as you get paid. Whatever is left after the 20 percent has been saved can then go to paying bills, buying groceries and even getting yourself a new pair of shoes.
This method ensures that you’ll have the cash on hand that you need for your future and helps you to be more effective when you develop your budget. It’s a good feeling when you know that you have cash on hand for emergencies.
Keep Things Simple
There are too many people who are going to look at the latest gadgets and get wooed. You cannot let others around you dictate what you are doing with the money that is in hand. You want to buy the latest iPhone, but there is something you must ask yourself. Think about it, do you really need to spend the money on one?
Is there something in the newer model that is not there in your present one? There is no shame in being rewarded with luxurious items, but you need to keep it under control. You should never forego important expenses to purchase luxuries, and your twenty percent savings rule mustn’t be violated.
You Want Cash Over Credit
Don’t fall for fancy credit card marketing. So many people end up with huge debt due to starting to buy small items using their credit cards. It’s easy to get lured into the trap that a $50 purchase won’t wreak financial damage in the future because it can be paid off within the month. Actually, once the billing cycle rolls around, you are probably like most people who just pay the minimum amount of money towards the bill, making that $50 dress cost close to $100 in interest.