Money Saving Apps

5 Apps that can Help you Save More Money

When it comes to saving for retirement, a number of individuals claim that they either don’t have the time to plan for this part of their lives or that they need some form of assistance to get started. If you find that you’re someone who is also putting off saving and making every excuse imaginable, you may be able to get started quickly and easily by using any one (or more) of the apps mentioned below. 

  1. Acorn

One of the main reasons why so many individuals don’t invest money is because they don’t completely understand how the process works or they feel anxious about taking that first step. 

This app works by rounding up your spending to the closest dollar and putting the leftover change into an investment of sorts. Getting started with Acorn is easy – all you have to do is link a checking account and credit card and the app will do the rest for you. Several individuals have stated that they enjoy this form of investment because it’s easy to work with and literally only a few pennies at a time are being invested. 

  1. Simple

This app comes with a fee-free debit card that is directly linked to a dedicated checking account and it has the ability to perform a range of budgeting functions on your behalf. It will subtract any incoming bills, allowing you to set various financial goals and keep you up to date regarding whether you’re on your way to achieving them or not. 

Simple also lets you know how much money you have left for investing, ensuring that you don’t end up spending funds that have been put aside for emergency use. 

  1. Stash

Stash allows you to get started on your investment journey without the need to have a lot of money available. In fact, you’re able to invest amounts of as little as $5 and a short questionnaire not only helps determine an investment-related risk level that you’re comfortable with; it provides you with various investment options to choose from at the same time. 

This app allows you to be in total control of your investment so that you can make choices that you’re comfortable with along the way. 

  1. Digit

This app links directly to your chosen bank account and you receive regular text messages about how your balance is changing. In addition, it informs you of any frivolous spending habits you have but may not realize.

Another feature of Digit is that it will provide you with realistic recommendations with regards to the amount of money you could be saving and if desired, you can even set the app up in such a way that it automatically transfers a predetermined amount of money into a dedicated savings account daily, weekly or monthly. 

If you’re brand new to investing or you would like to find out more about the options that are available to help grow your money as much as possible, speak to our team today. 

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When does it make Financial Sense to Dig into your 401(k)?

Your 401(k) allows you to set aside a predetermined amount of money each month that can then be used to live on after you’ve retired. Although you do have the option to dig into these funds before you reach retirement age, it’s usually not recommended that you do this. However, there may be one instance where it would make sense for you to do this. 

 

When it’s Possible to Repay it Quickly

In most cases, the only time you should ever consider accessing the funds in your 401(k) account early is if you’re in a very tight financial situation and you know that it will be able to be repaid within a few months at the most. 

While you will still lose out on potential interest that could be earned on the amount you’ve withdrawn, you won’t be jeopardizing your final payout amount as much as if you took longer than a few months to repay your loan. For instance, if you’re faced with sudden unexpected medical expenses that you don’t have the money to pay for or your home is in danger of being foreclosed upon, but you’re assured of obtaining additional funds within the next month or two that will cover the full cost of the loan you’ve taken out, it may be a good idea to borrow against your 401(k).

 

A Serious Disadvantage

While you may plan to rely extensively on social security payouts each month after retiring, more and more information is being revealed stating that these amounts will not be nearly enough for seniors to live on – especially if they suffer from serious health conditions or you live in a high cost of living area. 

If you borrow funds from your 401(k), you lose out more than once. The first time is when you miss out on the potential interest you could have earned on that loan amount and the second will be because the amount of money you’ll have left to live on after retiring will be reduced quite substantially. 

 

Start Preparing for Retirement Now

If you’re still in your 20s, you may think that there is still a lot of time left to start planning for your retirement. However, this is not the case. The sooner you start making contributions to your 401(k) in your 20s, you’ll be able to contribute smaller amounts each month than if you wait to start making payments once you reach your 30s. Over time, this could amount to a difference of $100,000 or more that you’ll have to live on during your retirement years. 

Many employers still offer to match employees’ 401(k) contributions up to predetermined amounts or percentages, which is why it makes even more sense to start contributing to this account as soon as possible. If you are seeking further financial advice regarding how to prepare for retirement, get in touch with our team today. We look forward to working with you and helping you plan for your future. 

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Boost Office Morale by Providing a 401(k)

Several reasons exist with regards to why any business with employees should set up a 401(k) plan. It doesn’t only benefit staff members; it can also be beneficial to company owners in that it could help reduce payroll taxes and result in subsequent tax credits being provided. Along with this, setting up a subsidized 401(k) can also go a long way to help boost workplace morale – which will in turn enhance productivity and profits. 

 

How does a 401(k) work?

Regardless whether you’re in a business partnership, are self-employed, part of a corporation or operating as a sole proprietor, it’s possible to set up a 401(k) plan. A 401(k) is a retirement plan that is federally insured and it enables employers and employees to contribute to it. If you’re an employer, you will be able to establish a unique investing schedule that will determine have much of an employees’ contribution you’ll be willing to match and up to an amount you choose. 

 

How these Plans Benefit Employees

When providing one of these plans to employees, all contributions they make are withheld before tax is applied, meaning that they are fully invested in their own contributions. While penalties are imposed on anyone who withdraws funds from their 401(k) before reaching retirement or age 55, anyone who retires during the calendar year in which they reach age 55 (or older) won’t fall prey to them. In some cases, exceptions can be made for hardship withdrawals and loans based on an employee’s contributions.  

 

Why it’s Essential to Contribute

Although you may not be mandated by law to contribute to a 401(k) if you’re an employer, you will benefit by doing so. Any employees who make contributions will also enjoy the benefit of having their taxable income reduced accordingly. This results in overall payroll taxes being reduced, which will in turn offset the contributions you make as an employer. For example, you might decide to match the first 4% of an employee’s contributions at 100%, and the next 1% to 4% by as much as 50%. In fact, this schedule can be set up in any way you choose.

 

How a 401(k) will Improve Morale

These days, many employees feel completely unappreciated in their workplaces. Even those with above average levels of education and who work harder than normal can struggle to survive because of personal circumstances. 

Taking the time and making the effort to introduce a 401(k) fund to your employees will show them that you care about their long-term needs and you want to ensure that they succeed financially. To many employees, being introduced to a subsidized 401(k) plan will make them feel as though they’ve received some form of raise – despite the fact that these funds will only be accessed many years down the line. 

Not only is a 401(k) plan a benefit that most employees want to be rewarded with; it is something that makes most of them feel more appreciated than usual. If you’re an employer who is keen to establish a 401(k) for your employees, chat with us today about getting one established. 

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Some Tips on How to Tackle Your 401(k)

Very few people are lucky enough to work for one employer over the course of their lifetime, so it becomes vital to know what to do with your old 401(k) plan once you switch jobs. You don’t want those hard-earned retirement savings going to waste, after all.

There are several things you could potentially do with your 401(k). Which you choose is up to you, but below we give you information on each option, so you can make an informed decision when the time comes.

 

You Can Simply Leave It Alone

Check to see if your employer allows you to simply leave your 401(k) alone – many do. With this option you should keep in mind you won’t be allowed to contribute to it any longer, nor will your former employer contribute to it. But it’s perfectly fine to leave it where it’s at, and it will still gain interest.

The perks of taking this route are:

  • There is nothing you really need to do

 

You Can Roll It Over to Your New 401(k)

While it’s definitely fine to simply leave your old 401(k) alone, many financial advisors suggest rolling your funds over to your new employer’s 401(k). This means you take the funds from your old account and either have them automatically transferred over to your new one or manually transfer them yourself.

The perks of deciding to do this are:

  • You won’t need to keep track of more than one 401(k)
  • Most of your retirement assets will be in one place
  • Previous employers won’t need to keep tabs on your address
  • You can keep the funds invested the way you’d like and not simply the way previous employers choose

 

If You Choose to Roll Funds Over, Do it Correctly

Although choosing to have your old 401(k) funds rolled over into your new one ends up being the better option in the long term, there are some things you’ll want to keep in mind. Although it seems easy enough to tackle this, there are a few do’s and don’ts you’ll want ot familiarize yourself with first.

When rolling over your 401(k) DO:

  • Have the old funds sent directly to your new 401(k) financial institution and/or account
  • Keep the old funds for your retirement savings
  • Ensure the correct amount of funds ends up in your new account, without errors
  • Keep in touch with both financial institutions until the transfer is complete

Make sure you DON’T:

  • Have the check sent to you, because this will mean 20% of funds will be withheld for taxes
  • Withdraw the funds for personal use now, despite how tempting it may be

In the end it’s up to you whether to transfer your old 401(k) into your new one or simply leave it alone. While financial advisors recommend rolling the funds over, the most important thing is that those savings continue to be saved for retirement – NOT spent on something now because of how easy and tempting it is.

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When it Comes to Money, Where do Millenials Stand?

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With student loan debt at an all-time high, many millennials these days are faced with a dilemma. That dilemma involves whether they should pay off their student loan debt early or use any extra money to save toward retirement or purchasing a home. What’s right for you may not necessarily be what is best for another, which is why you should weigh your options carefully before deciding.

Student Loans vs. Investments

If you are like many millennials, the idea of paying on student loans for 20 or even 30 years can seem overwhelming. As such, you may be tempted to pay yours off before you start saving toward a home or contributing to a 401(k). The problem with that strategy is that it could essentially take years before you are ready to begin saving.

A better idea is to compare the amount of interest on your student loan with the amount of interest you could expect to earn from an investment. A good rule of thumb is that if the interest on your student loan is 5% or less, you should direct any extra funds toward a diversified investment account. That is because any money you earn from that account will likely be greater than the amount of interest you would have paid on your student loan.

Home buying vs. Student Loan Payoff

A home is a major investment that is in essence a part of your retirement fund. Even so, that does not always mean it is a smarter choice than paying off student loans. Today’s real estate market can be very volatile, so it could be quite a few years before you notice a significant increase in equity. Unless you plan to remain in that home for at least seven years, the return on your investment may not pay off.

Implement Smart Strategies

There are a few smart strategies you should take advantage of regardless of whether you choose to pay off student loans, save for a down payment on a home, or begin investing. For example, everyone should have an emergency stash of cash that is equal to at least three months’ worth of income. Until you have saved that amount, you should not even think about trying to do anything else.

You should also focus on more than just your student loan debt. For example, if you have high interest credit cards, paying them off first should be one of your top priorities. It’s also important to eliminate any other bank notes that come with a higher rate of interest than what your student loan currently has.

If your employer offers a 401(k), contribute enough to take full advantage of any employer match. You’ll barely notice the difference in your paycheck, and are actually leaving money behind on the table if you don’t.

Meeting all your monthly obligations can seem hard enough without having to worry about investing or saving. It can be tempting not to think about these things; however, addressing them now is essential if you are to achieve greater financial security in the future.

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Don’t Be Stupid with Your 401(k)

 

Your retirement fund is arguable one of the most important investments you will make in your life. Whether it is your 401(k) or IRA fund, starting your investment as early as possible is a must. Making contribution commitments to your retirement investment can translate to hundreds of thousands of extra money at your disposal during your thirty plus years as a retiree.

On Wednesday, April 5, 2017, the Department of Labor postponed part of the April 10 scheduled implementation of the fiduciary rule to rather go into effect on June 9 as a result of President Donald Trump’s request to edit or roll back the Obama Administration’s rule that was implemented to protect those saving for retirement from poor advice from self-serving brokers.

Evaluate All Investment Options Before Committing

A good place to start is with your current 401(k) and IRA funds, and evaluating the pros and cons of each. For one, many 401(k) plans offer stable-value funds that essentially deliver interest rates, around 2%, much higher than many other similar cash offers. On the other hand, switching to an IRA account could save you money when it comes to fees. This particularly applies if you work at a small company, where expenses are structured into 401(k) accounts, and can be around 1% each year. If you have an account balance of $1,000,000, switching from a 1% to 0.5% fee account, that would easily save $5,000 per year that you can take advantage of post retirement. Another major difference that retirement savers need to consider are the options a 401(k) and IRA can offer. According to Brightscope report, the average 401(k) offers around 28 investment offerings, whereas an IRA can have over 10,000 options from various companies.  

Know Your Exit Route Options

Another key component of your retirement fund is how you can take advantage of your saved capital. IRA funds offer far more flexibility considering you are able to withdraw funds on your own terms. While a 401(k) account has more restrictions, especially if you want to withdraw prior to your retirement age. Although, with some 401(k) accounts, there is an increasing flexibility, with almost 61% of large 401(k) accounts now permitting a varied or fixed monthly withdrawal. It is important to look into your own investment funds, and see how their flexibility fits into your unique retirement plan.

Draft Your Own Fiduciary Rule

The fiduciary rule is defined by the standard that brokers must put their client’s financial interests and well-being above that of their own. Despite the outcome of the rule’s enactment, creating financial standards of your own in regards to dealing with your retirement investments is a smart way to stay on track. One of the easiest modes is to seek out only fiduciary qualified advisors. You can find a list of these qualified financial planners on napfa.org and garrettplanningnetwork.com.

Finding a fiduciary planner on one of these online resources is the first step, but you also need to use your own personal judgement and standards to determine whether your planner has your best interest at heart and falls in line with your retirement plan. A quality financial planner should truly educate their clients not only about potential annual returns, but equally about the involved risks.

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Different Ways to Double the Amount of Money You Put in Your Savings

If you’re saving for retirement, a kids’ college fund, or even a rainy day, putting money into a savings account can be difficult. In fact, many people feel like no matter what they do, they can’t put back enough money to make a difference. Here are some ways to double the amount of money you’re saving each year and the reasons why it’s so important.

Why You Need to Save More

The Federal Reserve’s policy on low interest rates is both good and bad. For those who have good credit and who want to take out a mortgage, it’s a great thing. For savers, it’s not so great. Savings accounts of all kinds and CDs have low yields, which means you won’t get much out of your money. What’s more, stock and bond returns are slated to be quite low in the future, which can put a damper on your retirement savings plans. Because of this, you need to start saving more. Fortunately, there are a few good ways to do just that.

#1 – Take Advantage of Your Employer’s 401(k) Plan

If your employer offers a 401(k) savings plan and you aren’t taking advantage of it, you’re missing out on a lot of money. Your employer should match your contributions up to a certain amount, so you should be contributing at least that amount each paycheck – even if your 401(k) plan isn’t the best. This is the absolute best way to double the amount of money you’re saving, and the best part is that the money is taken from your earnings before it is taxed, which saves you even more.

#2 – Give Up One Thing

If you’re like most people, then you probably have a few vices. Perhaps you enjoy stopping off at your favorite coffee shop each morning for a latte. Maybe you take your family out to eat for a nice meal once per week so you don’t have to do the cooking and cleaning. These things are great, and while there’s nothing at all wrong with rewarding yourself for working hard all week, it’s important to look at the amount of money you’re spending. For example, if you stop for a $4 latte five days per week, that’s $20 every week – or $80 every month, or $960 every year – that you could be putting into an IRA or savings account. You don’t have to give up everything, but giving up one thing will make a huge difference in your savings.

#3 – Diversify Your Investments

There’s nothing wrong with being conservative when it comes to saving and investing your money. After all, the less risk involved, the less likely you are to lose money – and nobody wants that. However, by diversifying your investments, you give yourself an opportunity to double, triple, or even quadruple your savings with riskier alternatives. Rather than putting everything into 401(k) and a standard IRA, consider buying a few shares of a stock you like, and one that is slated to perform well. The potential returns are limitless. You might also consider investing in real estate, becoming a venture capitalist, or any other high-risk, high-reward activities.

Now more than ever, it’s important to look at your investment portfolio and make sure you’re saving enough to allow you to retire comfortably. The three tips above can help make it easier for you to find more money, save more money, and put that money in the right places.

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The Only Time you Should Ever Dip into your 401(k)

A 401(k) is a specific account that enables you to save a set amount of money each month that you will be able to use to live on during your retirement years. While it is possible to dip into these savings before reaching retirement, this is not a good idea. However, there is usually only one instance where making this money move is recommended, which will be discussed below.

When Fast Repayment is Possible

The only time you should ever consider dipping into your 401(k) is if you happen to be in an extremely tight spot financially and you know for certain that you will be able to repay all of it within a few months at the most. Although you will still lose out on potential interest when doing this, you will not be affecting your bottom line or final payout as much as if you had to repay your loan over a longer term. For example, if you have a sudden unexpected medical expense that you cannot afford to cover or you are facing foreclosure on your home, but it is a guarantee that you will be receiving a work bonus in a month or two that will cover the amount in full; a 401(k) loan may be a good idea.

A Double Disadvantage

Although you may be relying heavily on Social Security to pay you each month after retiring, there is more and more evidence coming to light where the amounts being paid are not nearly enough to live on – especially if you suffer from health conditions or live in area where the overall cost of living is high. When borrowing from your 401(k) for any reason, you end up losing out twice – the first time is when you lose out on the compound interest that could have accumulated on your loan amount over time, and the second is because you are shrinking the amount of money that you will have to live on after you have stopped working by a substantial amount.

Prepare for Retirement Early

If you are young, you may be thinking that ‘you still have many years to plan and save for the retirement years.’ However, the earlier you start contributing to a 401(k), the larger your nest egg will grow over time. If you start contributing in your 20s, you can contribute smaller amounts each month as opposed on only starting in your 30s or 40s because the power of compound interest during your 20s will make a difference of as much as $100,000 or more to the final amount in your 401(k) account – this can make all the difference between being able to enjoy yourself or having to survive on ramen noodles during your golden years.

In cases where your employer offers to match your 401(k) contributions, it is advisable to take advantage of this as well, as this will enable your nest egg to grow a lot quicker as well. If you are looking for advice pertaining to retirement investments, contact us today to see how we can assist you.

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Why Implementing a 401k Plan in the Office Can Boost Morale

There are myriad reasons why businesses of any size should consider implementing a 401k plan. Not only does it benefit the employees, but it can also benefit the business owner in terms of reduced payroll taxes and perhaps even tax credits. However, the biggest benefit that business 401k provides is an increase in office morale, which can improve your overall productivity and increase your bottom line.

How 401k Works

First and foremost, no matter if you are a partnership, a corporation, self-employed, or even a sole proprietorship, you can establish a business 401k plan. This is a federally insured retirement savings program that allows contributions from an employer, employees, or both. What’s more, as an employer, you can set up your own vesting schedule, which basically determines how much of your employees’ contributions you will match, and up to how much. Although a business owner is not necessarily required to contribute to 401k plans, sometimes an obligation may arise, particularly after non-discrimination testing shows a plan is “top heavy”.

How it Benefits Employees

When you provide 401k to your employees, every single contribution they make is withheld before any taxes are applied, and they are 100% vested immediately in their own contributions. Although there are penalties for employees who choose to withdraw funds from their business 401k accounts prior to retirement or before age 55, those who choose to retire during the calendar year in which they turn 55 (or older) are not subject to these penalties. Furthermore, some exceptions can be made for loans and hardship withdrawals based on 401k contributions.

Why You Should Contribute

Despite the fact that you are not legally required to contribute to a 401k plan as an employer, you should. For every single employee that contributes to 401k plans, their taxable income is reduced slightly. This means that your overall payroll taxes will likely come down, thus offsetting any contributions you make. For instance, you might opt to match the first 3% of the employees’ contributions 100%, and the next 1% to 3% as much as 50%. You can set this vesting schedule any way you would like.

How it Boosts Morale

In today’s day and age, many employees feel like slaves for companies that have very little appreciation for them. Even those who have a great education and work hard can sometimes barely eke out a living due to personal circumstance. When you take the time to implement a 401k program into your business, you are essentially showing your employees that you care about their long-term financial status and that you want to help them succeed. In short, to your employees, it is like they are getting a raise – even if they will not see those funds for another 20, 30, or even 40 years.

A business 401k plan is a must have for any business of any size. Not only is it an in-demand benefit that talented employees expect to see, but it helps those same employees feel appreciated. An appreciated employee is a productive employee, and that is just better for business.

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