There is barely ever a time when there are not competing calls on family finances. Recent graduates may well have student loans to repay and perhaps credit card balances that have been created to help subsidize student life. In the following years there may be real estate costs, auto loans then the costs of a growing family. As the children grow attention inevitably turns to education, potentially further education that is becoming increasingly costly, well above the rate of inflation.
All the while there is the issue of parents’ retirement with time running out the later those plans are initiated.
The dilemma becomes the extent parents can help towards further education costs as well as making a proper level of contribution to their retirement fund. The problem is that both demands are fairly immediate. Even parents fifteen years from retirement know that time is tight. Compound interest is a major ally to those saving for retirement but it must be given time to work. A recent report by E TRADE suggests that as many as a third of Americans regard the competing education and retirement demands as the most difficult they face.
While it may be a difficult decision to make retirement should be the top priority in virtually all cases. A different study by T. Rowe Price reveals that a similar amount of people, a third, have in fact taken a risk and borrowed from their 401(k) to help with children’s education. While the interest rate is relatively low if for some reason, typically redundancy, something unexpected happens, the full amount of the current fast loan balance becomes due in 60 days. In addition growth is lost on the sum withdrawn.
People who were questioned in both these studies had fairly similar recommendations. Over three quarters said they would advise younger people to start saving earlier; as soon as possible after beginning work. Indeed there is a product that allows children to start to save for themselves. Children who are taught the value of money are most likely to have their affairs in good shape throughout their lives. For example if a child is asked to do a little chore in exchange for an allowance that is a good starting point. Perhaps encourage a child to save part of the allowance against the cost of something they want to buy? These little lessons help.
Modern Day Realities
Where things go wrong it is important to take action. It is easy to build up credit card debt for example. It is costly because credit card companies make their money on the high rate of interest they apply to month end balances. Personal loans are much cheaper and should be used to eliminate such balances to ultimately release more money to put to more positive use.
A tax expert is useful. There are several things to look at when you make decisions on education costs and retirement provisions. Whenever you make a decision of any kind it is important to have all the information relevant in making a good decision. In the case of finance that means any tax benefits for one course of action over another.
The Value of a Student Loan
You might be surprised by the size of some student loans; there are a significant number at $100,000 and plenty at $20,000 at least. It is quite a daunting prospect starting a career needing to pay back such a debt. It is clearly something that concerns most parents who want to help as much as they can. A figure not far short of half actually admit to the fact that they now believe that the qualifications they received have not been worth the ‘’burden’’ they now have around their necks.
It is difficult to decide one way or another whether they are right or just expressing frustration. However what is certain is that all young people have much longer to get their financial affairs in place than parents who have to prepare for retirement with minimal help from elsewhere. Good financial management is not a subject youngster will be studying but the sooner they learn it the better their own future prospects.
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Learning to make and stick to a budget is one of the most important duties of adulthood. A well-kept budget is the key to financial stability, but a few too many mistakes in your calculations can send you reeling. One of the most common budget mistakes is forgetting to plan for financial obligations that occur less than once a month. Just when you get excited about having a little extra money to spend, you get an unexpected bill in the mail, and there goes your extra cash.
To avoid finding yourself in this situation, sketch out a rough budget several months in advance that includes these less-than monthly expenses. You do not have to be very detailed, but it is helpful to at least have some notes in your planner or spreadsheet. Some common expenses to watch for are detailed below.
If you own a home and/or a car, then you need to have them insured. Payment amounts and schedules vary wildly depending on your property, provider and plan. Be sure to go over the specifics of your policies so that you know when you are responsible for making payments and how much those payments will be.
For example, homeowner’s insurance is often, but not always, paid with the escrow portion of your monthly mortgage payments. Car insurance is sometimes billed for six months of coverage at a time, but in other situations, it is billed monthly. Failing to make your payments can result in hefty fines, so it is critical that you stay on top of them. Discussing your policy with an insurance agent can help you get the best prices for your situation.
Most cell phone service providers offer their subscribers free upgrades approximately every two years. It is always fun to pick out a pristine new phone and play around with its special features. What’s not so fun is receiving a higher-than-usual bill later that month. The fact is, even if your new phone is free in the store, there is often an associated service charge that is only mentioned in the fine print. Next time you are due for an upgrade, double-check the terms of your plan so that you are not blindsided by hidden costs.
One of the most irritating budgetary surprises is vehicle registration renewal fees. How often you must pay these fees depends on where you live. For example, Washington vehicle owners must renew their vehicle registrations once a year. You should get advance notice of the fees you owe, but they can still be shocking if you had not planned for them, especially if you have multiple vehicles. The cost of your registration fees will depend upon your vehicles’ specific characteristics. It is also worth noting that some states allow you to renew your registration several months in advance.
No Surprises, No Sweat
If you want to stick to your budget, then you must eliminate the possibility that you will have to deal with surprise expenses. Budgeting is a skill that can take years to master, and it is normal to experience a few hiccups along the way. Don’t worry, though—by planning in advance and remaining diligent, you will eventually experience the freedom that comes with financial security.
Betterment is a novel new investment platform that takes the guesswork out of investing. They’re not the new kids on the block anymore, having been around since 2008, but they’re still new to a lot of investors. If you’re hoping to learn more about Betterment, here are three reasons that you might want to consider the service. Betterment offers a whole lot of value to users, especially users who are new to investment. We’ll examine some of their most important value propositions below.
Betterment offers a lot more value to users, especially people who have never invested before. They make it easy to roll over accounts like IRAs, they offer free tax-loss harvesting, and they even offer free service for new users. Their algorithms are powerful, giving reliable returns to users based on insights gleaned from millions of data points, not the hunches of a few experts. The market is too diverse and wild for anyone to legitimately claim expertise over it. Instead, the automated diversification methods built standard into Betterment are enough to do better than investors of yesterday.
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Broadly speaking, people from legal backgrounds hold some of the most powerful positions in the world – from presidents to highly respected journalists and executive directors, there seems to be something about those who have previously studied to be a lawyer or attorney that drives them to rise to the top.
Without further ado, let’s take a look at the most influential lawyers and attorneys in the world today, and how they achieved their goals.
With a distinguished career as a journalist, advocate, lawyer and UN ambassador, Samantha Power has it all. Samantha worked her way through the prestigious Harvard Law school to get to where she is today.
This Harvard Law professor comes from humble beginnings. Elizabeth Warren is of Native American origin and specialises in commercial law. Despite ruling herself out of the running for the Democratic Party leadership to leave room for Hilary Clinton, she is hotly tipped to enter the political arena in the future.
Another lawyer with multiple strings to his bow, when not dispensing legal advice Bryan Stevenson can be found working as director of the Equal Justice Initiative, as well as working as an NYU law professor. He is well known for his liberal stance that “forgiveness is a necessary means” of achieving equality.
Believe it or not, Vladimir Putin received his degree in International Law as a student at Leningrad State University (now St. Petersburg State University), which is the oldest law school in Russia. It’s no surprise to learn that Putin’s experiences of university inform his pulls-no-punches leadership style, particularly when it comes to foreign policy.
As his second and final term as President of the United States comes to an end, it’s easy to forget that Obama worked his way through Harvard Law School as a youngster. Barack must be a quick learner, as he believes law school should take no longer than two years.
Marine Le Pen
Le Pen is a right-wing politician who heads the National Front, the third-largest French political party. Prior to becoming a political figure, Le Pen gained a Master of Laws from Pantheon-Assas University in 1991, followed by a Master of Advanced Studies in criminal law a year later. Le Pen began practising law after this as a lawyer representing illegal immigrants who could not afford a lawyer – ironic, given her political stance on the current refugee crisis.Comments: 0 Read More
I’m sure you already heard that from a friend or from a family member: “the bank declined my loan, they don’t know what their doing!”. Banks and other financial institutions are often seen as the bad guy who doesn’t understand. This situation often occurs because most people don’t know how loans workout. I have a Norwegian friend who works in a bank and told me how it works. Here are they look at Norwegian consumer loan application:
The first question is related to the person who applies for a loan. The banker wants to know where you work, for how long, if you are married, have children, etc. This helps him drafting a portrait of the kind of person you are. The point is to know if you are in a situation that you will need more credit later on or if you are relatively stable. Loan officers love when someone is stable, it makes credit behaviours predictable.
Then, the banker will look at your balance sheet. If you have been working for the past 20 years, he will expect to see some assets. If you ask for more credit and you show a negative balance sheet (more liabilities than assets), your chances of getting the loan are not very good. Usually, cars, furnitures and jewels are not accepted as asset in the eye of a financial institution. They will most likely look at your bank account, investments and real estate properties.
The financial institution will also pull out a credit bureau to see which kind of payer you are. A bad credit is a direct breach of confidence in your relation with the bank.
Finally, the banker wants to know who you will pay off your debt. This is often a misconception from the population who has assets, but little revenue. If your house is free of debt but you don’t work anymore, it will be harder to convince the lending firm to give you a new mortgage. In the end, the banker doesn’t want to take back your house. He is not in the housing business, he is in the lending business. He wants to make sure you have an income stream that is sufficient to pay for your living and reimburse your debts.
My friend finished his explanation with a great tip to put all your chances on your side to get approved for you loan: tell the truth! A good explanation of the worst situation is better than a good lie. Most bankers will read you and find out about your lie instantly. Then again, lying to a financial institution will definitely not get your loan approved!Comments: 0 Read More
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