Unfortunately,
we can’t do anything to help your headstand (though we hear using a wall for
balance helps), but we can offer advice for some of the money issues that
you’re afraid to address. So, this Halloween, instead of pulling the covers up
over your head, plugging your ears and singing “La-la-la-la!”—meet your
financial fears head on. They’re only scary when you avoid ’em.
The Fear:
Wading Into That Pile of Bills
How to
Get Over It: First: “Go through them one by one,” says Natalie Taylor, a
CFP® with LearnVest Planning Services. You just have to take it one bill at a
time. If you keep letting them stack up, it’s just going to get worse. Once you
get started, you’ll build up momentum and want to keep going.
How to Stop
Worrying and Start Saving Time and Money with Auto Bill Pay and Online Banking
Online
banking and automatic bill pay is extremely convenient—but it's also something
that a surprising number of people don't take… Read…
To keep
the pile-up from happening again, advises Taylor, set up automatic bill pay
to cut down on the mail you receive at home. However, automated bill pay is best used on fixed expenses (such as a
gym membership, Netflix, your mortgage), while variable expenses like your cell
phone bill or electric bill should never auto-deduct because their cost depends
on usage (say, a $100 bill one month and $150 the next). If reading this still
makes you feel like, “I don’t wanna,” then consider the price of your procrastination.The Fear: Asking for a Raise
How Do I Ask for a Raise When I Feel Underpaid and Overworked?
Dear
Lifehacker, For the amount of work I do, I feel very underpaid. At work,
there's almost a culture of having a heavy workload is a very good … Read…
How to
Get Over It: Pick the right time. You’re itching to pull your boss aside to
have a delicate conversation about giving you a pay bump
but… you’ve got cold feet. We don’t blame you. The secret? First, spend a few
months going above and beyond your job description. Be the star employee who’s
top-gunning it all over the company—winning new business, impressing clients and
knocking important projects out of the park. The best time to negotiate is when
you’re riding high from a big success, and make sure you can quantify how your
contribution is fueling the company’s bottom-line interests and values.
And
remember: You must be your own advocate. You might think that your employer
should take notice of how you’re hunkering down at your desk, head bowed and
typing away, and that your hard work will speak for you. But that’s not always,
or often, the case. Yes, work hard. But also: Speak up.
The Fear:
Paying for a Medical Emergency
How to
Get Over It: First of all, know that your fears are merited. “This is a
legitimate fear,” says Taylor. “One of the main causes of bankruptcy is medical
debt. Of course having an emergency fund is super important, but the first line
of defense is adequate health care coverage.” If you’re not covered through
work, find out how you could potentially get coverage through the Affordable Care Act.
Five Questions You
Should Ask When Building an Emergency Fund
There
are some aspects of personal finance that are dead sexy. Like investing–it’s
pretty darn exciting to put a little bit of money into the stock… Read…
And,
yes: By having six or more months’ worth of living expenses socked away, you
can increase your peace of mind if your emergency
isn’t covered. (At the very least, says Taylor, “get in touch with your insurer
and find out what a maximum out-of-pocket expense would be, and make sure that
your emergency fund is enough to cover it. For out-of-pocket maternity costs,
for example, I’ve seen anything from $100 to $5,000, but they can vary
widely.”)
Don’t
have this in the bank already? Don’t worry, you’re not alone. The June 2013
Bankrate Financial Security Index report found that most Americans (76
percent) don’t have this much in their emergency funds. But with the average emergency room visit costing $1,233—40 percent higher
than the average American rent, at $871 per month—you could be one mishap away
from financial trouble. Here are five ways to get an emergency fund started today. Plus, everything you need
to know about stocking your fund and spending it.
The Fear:
The Economy Tanking or Stock Market Crashing
How to
Get Over It: Keep in mind that you are probably investing money for the long
haul, so the trick is to not be too swayed by immediate gains or losses. Says
Taylor: “I even recommend that clients write out an intention statement that
they can refer to, something like, ‘I know that this is a long-term investment
and that being in a well-diversified portfolio maximizes my returns in the
long-term, so even if I see the market drop, I’m going to stick with it.’”
How Can I Get
Started Investing in the Stock Market?
Dear
Lifehacker,I've built a decent amount of savings over the years and I'm ready
to start investing some of it. I've heard I should… Read…
In
other words, with the money you invest,
you “set it and forget it.” “Control your behavior so that you’ll get
market-like returns,” says Taylor. “A lot of investors lose money by getting in
and out at the wrong time.” You shouldn’t invest money you’d need to pull out
in the next three to five years. Historically, the market has returned at a
7%–8% average, but you may get that only if you’re able to wait out the ups and
downs. And, really, a market downturn isn’t necessarily the worst thing in the
world—which is to say, in Taylor’s words, “When the market drops, that’s the
time to buy like it’s the sale rack at Banana Republic.”
The Fear:
Never Getting Out of Debt
How to
Get Over It: Maybe it’s your student loans. Maybe your spending went off the
rails and you racked up too many credit card purchases. “The scariest part is
not knowing how much you owe or what your payments look like and how they can
fit into a realistic budget. So the first step is getting your arms around your
debt,” says Taylor. How to do that? Pull your credit report and see who and
what you owe.Whether it’s consumer debt on credit cards, student loans, or a mortgage, most people find themselves weighed down by debt at some point in their… Read…
Then
put a game plan together for tackling your number. Look the amount
square in the face and do something about it. (If it’s student loans that
you’re trying to tackle, and you’re a teacher or work in some other kind of
public-service industry, Taylor suggests researching loan-forgiveness programs
to see if you qualify.) What we want you to know: You can get out of debt,
though you might need help creating and sticking to a plan. Get going with our Live a Debt-Free Life Bootcamp. You can also use the National Foundation for Credit
Counseling as a resource, says Taylor, or get one-on-one guidance
from a certified financial planner™ by signing up for a plan today.
The Fear:
Never Saving Enough to Buy a Home
How to
Get Over It: You see all your friends who seem to be buying homes left and
right… and you feel left behind because you’re still renting. “When it comes to
real estate, people really get into comparing themselves to others,” says
Taylor. We get it: Homeownership is an “I’ve arrived!” hallmark baked into our
cultural psyche. In a recent October 2013 LearnVest survey, “The American Dream
2.0,” 77% of respondents say that owning a home is an achievement that they
most associate with the American dream.
But
it’s not an automatic rite of passage. It’s one of the biggest purchases you’ll
ever make, and one you should only consider if you’re in a good financial place
to make that investment. And it might be that you’re still enjoying the perks
of not owning a home. “There are substantial benefits to renting,” says
Taylor, who touts the flexibility of being able to upgrade, say, from a
one-bedroom to a two-bedroom, without having to sell your place first, and the
limited out-of-pocket expenses, because when something breaks, it’s usually not
on your dime.
Still,
if owning a home is your American dream, and you’re saving toward making
it come true, then keep in mind that it’s a stalwart purchase. “You should
generally only buy a home if you’re going to stay in it for seven to ten
years,” says Taylor. “The housing market goes up and down, and you want to have
time to build equity so that you’re not under water when you sell.” Another way
to avoid being the proverbial under-water seller: putting a full 20% down. If
you’re still working toward that goal, then here are five ways to boost your down payment.
The Fear:
Being Poor in Your Retirement
How to
Get Over It: First of all, you’re not alone. According to the National Institute on Retirement Security,
the typical American family has only “a few thousand dollars” socked away for
the golden years. “This is a fear more people should have!” warns Taylor, who
adds: “It takes trade-offs in our regular monthly spending. We need to carve
out money on a regular basis to save for later.” And the sooner you start, the
better. (The October 2013 LearnVest survey “The American Dream 2.0“ revealed that most people think that they’ll be working until
at least 65—though they would like to retire at age 60—and nearly two-thirds
see themselves working a part-time job once they are retired.)
How Much You
Should Save for Retirement, Based on 139 Years of Data
With
the stock market constantly rising and falling, it's hard to predict what kind
of luck you'll have when you retire and how much you… Read…
Use
LearnVest's Retiring in Style Bootcamp to begin figuring out how much
you’ll need to live in retirement. Then, investigate your savings options. See
if your employer has a 401(k) matching program (that’s free money!). If you’re self-employed, consider a Roth IRA or a traditional IRA. Remember: There’s no such thing
as a retirement loan, so it’s up to you to think ahead. Many of us are
unprepared for the future, but it’s never too late to reboot your retirement
savings.
“Just
get started,” says Taylor. “And you can start small, putting aside 3% of your
income at first, then every six months increase it by 1%.” And know that it
might take you a while to get up to the recommended savings amount. According
to Taylor, a good rule of thumb is to contribute at least 5% of your income if
you’re around 25 years old, at least 10% if you’re 30, at least 15% if you’re
35, and at least 20% if you’re 45.
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