Hedge fund luminary Ray Dalio has 3 financial recommendations for millennials.

Hedge fund luminary Ray Dalio has 3 financial recommendations for millennials.

By Julia La Roche.
Hedge fund titan Ray Dalio, the founder of $160 billion Bridgewater Associates, outlined three financial recommendations for Millennials.

1) Save.
“The first recommendation is to think about your savings and how much money you have for savings,” Dalio said. “The best way to think about that is to think ‘How much money do I spend each month, and how much money do I have saved. How many months I’m I going to be OK without that?'”

It seems like obvious advice, but it’s easily forgotten and taken for granted when the paychecks are coming in.

“Value savings and calculate it because savings is freedom and security,” Dalio stressed.

That said, it’s important to allocate your savings wisely.

2) Cash is the worst investment.
“The second thing is, ‘How do I save well? What should I put my savings in?'” Dalio said. “When thinking about what you should put your savings in, realize that the least risk investment that you think from volatility – which is cash – is the worst investment over a period of time.”

Cash may appear stable, but it actually loses value in a world where inflation is increasing the price of goods and services. Dalio says it’s important to think about investing in and saving in the context of inflation and after-tax income. That’s why it’s essential to not think of cash as a good investment option.

“You have to move into assets that are going to do better over a period of time,” Dalio said.

With that in mind, Dalio pointed out that investments that offer better rewards also come with greater risks.

“The most important thing I can convey to you is to diversify well because I can guarantee you that one of those assets —and you won’t be able to pick the right one — will be disastrous in your lifetime. [You] will lose half of that savings if you’re in the wrong one and you won’t know what the right one is. And so pick different countries, pick different asset classes.”

Dalio also takes a nuanced view of debt.

“When you’re thinking about debt, think, ‘Is that debt going to help my savings or is it going to produce an income?’ Sometimes debt, like buying a house or buying an apartment or buying an asset, produces forced savings. Forced savings is a good thing,” Dalio said. “Or if you’re taking on debt and you’re thinking, ‘Am I going to have that debt in an asset?’ That asset better produce more income than the cost of your debt. If you’re using debt for consumption, that’s not a good thing to do, OK, you’re giving up that that safety.”

3) Don’t follow your instincts.
The third thing is to “do the opposite of what your instincts are.”

“If you’re going to play the game, it has to be the opposite of what your instincts and what the crowd says because the market reflects the crowd,” he said. “So if you want to buy when no one wants to buy, and you want to sell when no one wants to sell, right. And that’s emotionally difficult, and probably you’re not going to play that game well, because it takes a lot of resources to play.”

The financial markets often appear to offer obvious and easy investing opportunities. The markets, particularly in the short term, will often do the opposite of what you expect. And if investing were easy, everyone would be rich. With that in mind, Dalio notes that there are players in the markets like hedge funds with extensive resources competing with small-time investors for short-term opportunities.

“We spend hundreds of millions of dollars each year to try to play that game well, and it’s a tough game to play well. So I would caution you about the market timing game,” Dalio said. “But I would say that if you’re going to do it do it in the ways that are uncomfortable because they’re opposite your instincts.”

August 11, 2020

Ray Dalio gives 3 financial recommendations for millennials

Ray Dalio gives 3 financial recommendations for millennials

By Jacob Wolinsky.
Founder, Chairman and Co-Chief Investment Officer of Bridgewater Associates Ray Dalio talks to Julia La Roche in 2018 of Yahoo Finance about the value of savings and investing.

These are Ray Dalio Gives 3 Financial Recommendations For Millennials.
Well I want to talk about my generation the millennials. We were really coming of age during the crisis. So how would you advise us to prepare. And what I mean is what would you tell our generation. We feel scarred from the crisis. First of all I think. One of the problems is that the experience that you had is the last experience is the one that's going to stick in your mind.

And probably will not be the one that's going to get you so that the next experience will be very very different. I know my my parents went through the Great Depression and then they missed out on the boom because they're always thinking about that. And so I think I think that what they need to do is see all of those crisis's. That's why you can see inflationary ones and see all of those and once you get that perspective I would say three things to your generation. OK. Three recommendations. The first recommendation. Is to is to think about your savings and how much money do you have for savings and the best way to think about that is to think how much money do I spend each month. And how much money do I have saved so that I can. How many months are my going to be OK without that and to savings. Right. And calculate it because savings in that is freedom and security. And think about what that is. So that's that's the first one. How much do I have for that.

The second thing is how do I save. Well what should I put my savings in. And when thinking about what you should put your savings in. Realize that the least risky investment that you think from volatility is the least risk investment. It which is cash is the worst investment over a period of time. And you could judge that by judging the rate of inflation in relationship to the after tax income you're going to earn. So if you have an inflation rate that's two or three percent and you're earning 1 percent and you have to pay taxes on that one percent or the 1 or 2 percent that you're going to get. You're going to get taxed essentially at two percent a year. And that's going to be a problem. So you have to move into assets that are other assets that are going to do better over a period of time. And when you do that the most important thing I can convey to you is to diversify well because I can guarantee you that one of those assets and you won't be able to pick the right one will be disastrous in your lifetime that you will lose half of that savings if you're in the wrong one and you won't know what the right one is. And so pick different countries pick different asset classes and I could probably take too long explaining how you might do that. But but. So that would be the second thing to learn from. First thing is think about how to save be cautious about debt when you're thinking about debt. Think about is that debt going to help my savings or is it going to produce an income.

Sometimes debt like buying a house or buying an apartment or buying an asset, it produces forced savings. Forced savings is a good thing. Or if you're taking on debt and you're thinking am I going to have that debt in an asset that asset debt or produce more income than the asset than the cost of your debt. If you're using debt for consumption that's not a good thing to do. OK you're giving up that that safety. So I want. So number one is think about how much you save and think about whether that should be how you borrow. Number two make sure that you think about the diversification of that not in cash. And number three. Do the opposite of what your instincts are. If you're going to play the game. It has to be the opposite of what your instincts in the crowd says because the market reflects the crowd. So you want to buy when no one wants to buy and you want to sell when no one wants to sell. Right. So and that's emotionally difficult and probably not going to play that game well because it takes a lot of resources to play with it. We spend hundreds of millions of dollars each year to try to play that game. Well and it's a tough game to play well. So I would caution you about the market timing game but I would say that if you're going to do it do it in the ways that are uncomfortable because they're opposite your instincts.

That's really good advice right. One more thing that really resonates with me in the book was if in the next downturn the implications could be the impact on pension obligations health care. Is my generation are going to be on the hook for that. Yeah. So we pay a lot of attention to debt. And we should. But pension obligations and healthcare obligations are just like debt.

August 11, 2020

How to Managing Stress and Your Finances During the COVID-19 Pandemic

How to Managing Stress and Your Finances During the COVID-19 Pandemic.

By Monika Ritchie.

There’s no doubt that as we weather the coronavirus pandemic, stress has increasingly become a regular part of our lives. As if worries about our own health and the health of our loved ones isn’t enough, many of us are feeling the pressure of financial stress from mounting bills, reduced incomes, and job uncertainty.

That kind of stress can lead to many health issues, and decreasing it is a great way to help us stay healthy in a time when that’s so crucial. So what can you do to manage stress during the coronavirus pandemic? Getting your finances sorted out as soon as possible will go a long way to mitigating your money worries. Pair financial stress relief with tips to take care of your mental health, and you’ll be able to manage this difficult time more effectively.

4 Tips to Take Care of Your Finances During COVID-19.

During this time your health really does come first, but taking care of your finances will alleviate some of the tension and stress you might be feeling. Knowing that your money issues are taken care of will also allow you to focus more on your wellbeing. Here are a few steps to help you move forward:

1. Reach Out to Your Bank and/or Creditors.
The best time to talk to your financial institution is before things have gotten out of hand. Concerned about paying your mortgage? The sooner you reach out, the better. As nervous as you might feel about talking to your bank, keep in mind that a lot of people need help right now, and many banks, credit unions, and lenders are working to support you. They’ll appreciate you being proactive and will help you find solutions.

2. Get Familiar with the Resources Available to You.
Right now, there are a variety of resources available to help you through this difficult time. Whether it’s support during unemployment, deferred payment plans, or other emergency benefits, learn about which programs are for you. Visit this comprehensive coronavirus resource page to find all of the key resources available for Canadians in one spot.

3. Build and Adjust Your Budget for Reduced Income.
If you don’t have a budget, now is a good time to put one together. If you’re facing a significant reduction in income due to the COVID-19 pandemic, then track your expenses carefully and build an emergency budget. If you already have a budget, consider reviewing it to see if you can pare it down and reduce your expenses further. Take advantage of staying home for all this time and implement a no-spend challenge to help yourself save on discretionary expenses.

How to Manage Your Money During an Unexpected Financial Crisis.

4. Stay Safe and Be Aware of Scams.
Unfortunately, even during a worldwide health emergency, scammers are trying to take advantage of the situation. With so many individuals anxious about the state of their health and finances, many are susceptible to frauds around COVID-19. Be wary of any unsolicited emails, phone calls, or other communications, especially ones that request donations or sensitive information. Do not give out any of your personal information to unfamiliar individuals or businesses, and don’t fall victim to text message scams that ask you to get your money by clicking on a link. When in doubt, contact a company or the government directly by looking up their contact information yourself.

Tips to Manage Your Mental Health During COVID-19.

By now, everyone is familiar with the guidelines around social distancing and self isolation, but that doesn’t mean you need to resign yourself to loneliness and zero social contact. Your mental health is just as important as your financial well-being, so check out these six tips for self-care:

1. Connect with Family and Friends.
While in-person visits are not possible right now, phone calls, video chats, and emailing are all great ways to stay in touch with loved ones. You can share photos and videos, favourite songs, recipes, and more. Make it a priority to (remotely) interact with at least one person outside of your house every day. It will do wonders for your mood and emotional health as well as theirs.

2. Catch Up on Unfinished Projects.
For many of us, there are simply not enough hours in the day to catch up on our various chores and miscellaneous projects. If you’re “stuck” at home, it can be a great time to finish these off. Not only will you check some items off your to-do list, but you’ll get a great mental boost from being productive. However, be wary of tacking a project with a higher price tag than what you can afford on reduced income.

3. Use Community Resources.
Many communities across the country have risen to the challenge of providing support services to those who may need extra help during this time. If you have mobility issues or other challenges, you don’t need to struggle alone. Look into programs in your area that can help you with running errands, grocery shopping, and other necessities. On a larger scale, many grocery stores now have options for online shopping and delivery to help with social distancing. Try connecting with your community on Facebook or see if your province has a central resource centre to coordinate offers of help.

4. Get Creative with Exercise.
You may not be able to go to the gym for now, but many fitness providers are offering online and remote classes that you can follow along with. If you’re not really a gym person, you can lift weights and do strength training from the comfort of your own home. Or you can simply put on your favourite music and have a dance party. You’ll burn calories and get a great boost from all those endorphins!

5. Get Outside If You Can.
Most public spaces like playgrounds, parks, and pools have been closed. But going out for a walk, hike, or run is acceptable if you’re doing it in areas that allow you to keep your distance from other people. If that’s not possible, simply sitting on your balcony or in your backyard with a book is a great way to get some fresh air and vitamin D.

6. Reach Out for Help If You Need It.
If you’re starting to feel overwhelmed or anxious with what’s been going on, counsellors and other support professionals are often available for appointments over the phone or online and can help you work through feelings of anxiety, panic, or depression. You don’t have to suffer alone, so reach out if you need to. If you’re not sure where to turn, contact the Canadian Mental Health Association to find services in your community.

When to Ask for Help from Professional Credit Counsellors.
There’s nothing wrong with getting some professional help before you back yourself into an even tougher spot with a do-it-yourself (DIY) debt relief program. Building budgets, accessing government resources, and speaking to creditors can be a daunting task – especially if you’re new to the experience and feeling stressed and overwhelmed. An accredited financial counsellor can help with navigating the resources available to you, building an emergency budget, and working through your options in an objective and pressure-free environment. Don’t be afraid to reach out – the best non-profit consumer credit counselling services are ready to help.

July 16, 2020

How to Deal With Losing Your Wallet

How to Deal With Losing Your Wallet.

Losing your wallet can be frustrating, embarrassing, and, if it falls into the wrong hands, a threat to your finances and your good name. If you cannot quickly locate your lost wallet using sensible search strategies, acting promptly to secure your identity and credit can save you a good deal of aggravation down the road. Consult this article to help take back control of what you’ve lost.

Part 1 Handling a Lost Wallet.
1. Search for 24 hours before canceling credit cards or requesting a new ID. You have 48 hours to report a missing card before you are liable for any charges, so use the time wisely. If you know the card is stolen, move on to the next step immediately.
Search all clothing, bags, and pockets.
Call recent locations, like restaurants and bars.
Search your house systematically, circling from the perimeter of rooms to the middle.
2. Go online and check for any fraudulent charges. Check your bank and credit card accounts online to see if any purchases have been made since the card went missing. If there are charges, this likely indicates the card was stolen.
3. Inform your bank of the missing card. Call your bank and let them know the card is gone. Report any fraudulent charges immediately. Log the date and time of every interaction in case there is a dispute.
4. Cancel any credit or debit cards. Call the institutions involved and request a new card. If you have any alternate copies, cut them up and discard them. You may need to provide bank information to verify your card is missing.
5. Call the major credit bureaus and to request a fraud alert on your credit line. This helps prevent serious changes to your credit score.
6. Apply for a replacement ID. Call, visit, or go online to check your state DMV's policy on new licenses. Many let you get your first replacement online, though it does cost money.
7. Call your insurance company and request a new account number. You should do this for medical, dental, and auto insurance to avoid potential identity theft.
8. Report potentially stolen property to the police. They will let you know if something comes up. Having a police report will also make it much easier to deal with disputes from your bank or credit cards if something goes wrong or your identity is stolen.
You should file a police report online no matter what, providing a paper trail for your bank in a dispute.
9. Photocopy all of your cards and IDs for future reference. It is much, much easier to remedy a lost wallet if you have copies of all the documents and cards. Never carry your Social Security card in your wallet, even a copy.

Part 2 Searching for Your Wallet.
1. Relax, focus, and think. Have you ever gotten angry because you can't find the remote or the Corn Flakes, then gotten even angrier because nobody in your house can put things back where they belong, then eventually calmed down and realized the remote or Corn Flakes are in fact exactly where they belong and you just missed seeing them?
When we panic about losing something, especially something important like a wallet, we lose focus and can easily overlook obvious clues -- or even the item right in front of us.
Take several deep breaths, and try to clear your mind. Try not to think about all the problems you'll have to face if you can't find your wallet. Focus only on the wallet, where it should be, and where it could be. Then begin your true search.
2. Look again in places it would normally be. Your first search was probably increasingly panic-stricken and thus increasingly useless. Now that you are calm, pick out the most obvious spots where your wallet would be -- the pocket of your pants hanging on the chair, your nightstand, your desk at work -- and give a proper search.
Search in proximity to the obvious places as well -- the floor around your nightstand, your other desk drawers / pants pockets, etc.
3. Retrace your steps. Think about the last place you remember having your wallet -- paying for coffee downtown, picking it up from your nightstand, etc. -- and work backwards until reaching that point.
Go through all the clothes you’ve worn in that period of time, and check all the pockets carefully. Be sure to include coats and bags as well.
Working your way back through your routine may help jog your memory, so leave no stone unturned even if it seems an unlikely place to have lost your wallet.
Consider whether someone may have (without bad intent) picked up your wallet -- a curious child? a friend trying to help? Contact anyone who may have had inadvertent contact with your wallet.
4. Call places you visited recently. Did you visit a restaurant, theater, an office, or even a friend’s house? Call and ask if your wallet has turned up.
You may need to describe your wallet. Knowing the name on your ID and credit cards will probably suffice to prove it’s yours, but being able to describe a family photo or ice cream punch card might help as well.
Don’t assume a business will call you if they find your wallet. They might place it in lost and found and forget, or they may have a policy not to call for privacy reasons -- they may not want to disclose where you were without your permission by calling your home.
5. Look carefully in places it would not normally be. Expand your search radius further away from the most likely places your wallet would be -- your whole bedroom, your whole second floor, your whole house.
Pick out high-traffic areas in your home/workplace where you wouldn't usually place your wallet but could have -- the kitchen, the restroom, etc.
Search a room methodically by using a grid search (breaking the room up into small segments and searching each one-by-one), or a spiral search (searching around the perimeter, then working inward to the center).
For more search ideas, see How to Find Lost Objects
6. Assume your wallet is stolen if not found within a day or so. No, don’t call before making a good effort searching for the wallet, because it would be very frustrating to go through the process of canceling cards, etc., only to find it in your jeans pocket. That said, it is better to be safe than sorry if you can’t track down your wallet relatively quickly.
Your liability for purchases made with a stolen debit card begins after 48 hours (at $50), and other lost cards may have deadlines for reporting as well. And even if you are not liable for credit card purchases, it is much easier to stop fraudulent charges before they can happen than deal with them after they do.
Begin making the notifications indicated in the relevant Part of this article.

Part 3 Protecting Your Identity and Finances.
1. Call your bank(s) and report your debit card(s) as missing. Because laws governing debit cards and credit cards are different, you should make this call first and within 48 hours of losing your wallet to protect yourself from fraudulent charges.
If you alert your financial institution within 48 hours, you maximum liability is $50; within 60 days, it is $500; after that, your liability is unlimited if someone is using your card.
Because your debit card is linked to your checking account, and your checking accounts may be linked to other accounts, expect to receive not only a new debit card / number but also new account numbers. You will also need new paper checks.
Keep in mind any automatic payments you may have through your debit card or checking account (phone bill, life insurance premium, etc.). You will need to update the payment information on these when your account number changes.
Yes, this is a hassle, but it is better than having your bank accounts drained and then having to jump through hoops to have your funds restored.
2. Report your credit cards as missing. You don’t actually need to cancel them, which would necessitate applying for cards all over again. By reporting them as missing / stolen, you will get new cards with new numbers but be able to retain your current account status.
You maximum liability for fraudulent credit card charges is $50, and is $0 if you contact the company before the card is used fraudulently, but it is easier to prevent fraudulent purchases before they happen than work to erase them afterward.
Program the customer service numbers for your credit card companies (as well as your banks) in your phone so you can contact them quickly.
Don’t forget store-issued credit cards as well.
3. File a police report for a lost or stolen wallet. No, finding your lost wallet isn’t likely to be their first priority, but making a police report is an important way to protect yourself regardless.
Filing a report creates an official documentary record of the loss and your recovery efforts. This can prove quite valuable for any insurance claims, fraud liability resolution, identity theft problems, or other issues that might arise.
Provide as accurate and detailed an account as possible, with specific time frames and locations. Keep a copy of the report for your records.
4. Call the major credit bureaus to protect your credit rating. In the U.S., contacting one of the three major agencies -- Transunion, Equifax, and Experian -- should suffice, since they are required to share this information, but it can’t hurt to notify all three directly.
A fraud alert will be placed on your accounts, meaning that any attempt to extend further credit will require identity verification.
Anything you can do to avoid the mess of cleaning up damage to your credit score caused by fraud is well worth your time and effort.
There are pay options for fraud monitoring services, sometimes offered through your credit cards, that can alert you immediately of possible fraudulent activity.
5. Replace your lost identity cards. No one looks forward to visiting the Bureau of Motor Vehicles, but you shouldn’t expect the police to buy your story of a lost wallet (and driver’s license) if you are pulled over.
Each U.S. state has its own policies and procedures regarding replacing lost or stolen driver’s licenses, but expect to have to visit in person and pay a replacement fee.
Other ID cards -- school, work, etc. -- will need to be replaced as well.
6. Make a list of everything that was in your wallet. Try to remember as much as you can, and see if you can come up with anything else that needs to be reported or replaced.
Don’t forget about store discount cards or even a library card. These may seem like small potatoes compared to debit and credit cards, but they may permit access to personal information that you don't want in someone else's hands.
Basically, you want to start over from scratch in order to make the contents of your lost wallet as worthless as possible, both financially and in regards to your identity.

Community Q&A.

Question : I have lost my wallet and I am 12, I have looked everywhere. What do I do?
Answer : Don't panic. Keep looking and retrace your steps. If you went anywhere, check to see if your wallet was turned in by someone. If you still can't find it, tell a parent, they will help you replace whatever you had in your wallet (if possible).
Question : How would I find my child's wallet?
Answer : If a child has lost their wallet, retrace their steps until you find it. More likely than not, the child has simply misplaced it. If you still can't find it, you may want to report it missing to the police. Also, if the child had any credit cards inside the wallet, freeze them online immediately.
Question : How do you handle it appropriately if you lost your wallet at school?
Answer : Don't panic. Your first reaction might be that someone stole your wallet, but you should check everywhere before jumping to that conclusion. Check everywhere you might have left it. Pockets, backpack, classrooms, and your locker are all places where you might have left it. Dig deep in that bag! Retrace your steps. When was the last period you remember having your wallet? Go to the room where you remember having it. If it is not there, contact the teacher you had during that period and ask them if they or any students took it to give to you. Go to the lost and found. Ask the Public Safety or Main Office if anyone has brought in a wallet. They will take it from there.
Question : I lost my purse, but I believe it was stolen. Is there a possibility of finding it?
Answer : The chances of finding it are very low. Someone probably has seen it and taken it. Still, try checking if it's been handed in.
Question : What should I do if a customer's wallet was found, but returned with missing cash?
Answer : You are not responsible for missing cash.
Question : My wallet was stolen; it had all my identification in it including my social security card. What do I need to do to get the DMV to issue me another ID?
Answer : You'll have to check with your local DMV for exact instructions, but usually they need two forms of ID, most commonly social security card, birth certificate, and/or passport. If you don't have a passport, you may have to use your birth certificate to get a replacement social security card before you can replace your license/ID, but like I said, check with the DMV.
Question : If my wallet is stolen in Europe, should I report it when I get back home?
Answer : No, report it to the local authorities. The police in your home country will likely not be able to help.
Question : I lost my wallet in school today. How can I figure out if my friend stole it?
Answer : If you really think someone stole it, tell a teacher, principal, guidance counselor, etc. They might be able to review security footage, and/or talk to the person or people you suspect to find out the truth.
Question : How do I get someone to give me back my wallet if they stole it?
Answer : If you know the person, ask them to give it back. If they don't, that is stealing. If you don't know them, file a police report and freeze all your credit cards immediately.

Tips.

Don't keep all your cash in your wallet. Get a money clip to hold some of it in, or keep some at home in a safe place and only carry what you think you may need. This way, you reduce the amount of cash you may lose if you lose your wallet.
Periodically during the day, make sure you still have your wallet. It takes only a second to do, and it gives you a better chance of finding your wallet if you have just lost it. Get in the habit of checking regularly: every time you get up to go, while you're walking, etc. A light touch of your back pocket or a quick look in your purse will give you a clear indication.
If you keep your wallet in your back pocket, make sure the pocket is not stretched out. Your wallet will most likely stay in your pocket if the wallet is not too thick and your pocket is tight.
Keep your cards separately in a card holder. When you lose a wallet you can still use your cards, and when you lose cards/cardholder, you will still have cash.
If you regularly keep your wallet in your back pocket, try to wear pants that have a button on the back pocket, and use it.
Do not keep your wallet in your back pocket when you travel, or are in crowded places, unless it is secured with a chain. This extra level of security nearly eliminates the chance of someone taking it from you. Or, for even more security, use a money belt.
Write your phone number and small message on a piece of paper or card and put it in a visible compartment of the wallet. Make it easier for an honest person to return the wallet to you.
Make sure you write down important account numbers before you lose your wallet, or check your paper or electronic bills for the account numbers and contact information. In the case that you do lose your wallet, these numbers will be critical to know.
Good places to check for your wallet include recently worn clothing (pants pockets, etc.) and your clothes dryer.

Warnings.
Never store pin numbers, passwords or your Social Security number in your wallet.

June 25, 2020

How to Start a New Life with No Money

How to Start a New Life with No Money.

Starting a new life can be a great opportunity to make refreshing choices and decisions. However, doing so with no money can present a bit of a challenge as well. To make the most of your new life, start by creating a list of goals and keeping a positive mindset. Learn more about saving and your spending habits. Get a job to bring in additional income and reach out to your friends and family for assistance, if needed.

Method 1 Deciding How You Want to Live.
1. Be clear on why you are starting over. Spend some time determining whether or not you are creating a new life out of necessity or desire. If this is a choice based out of need, then you’ll want to identify what life improvements you will need to make as well. If you are making a decision based out of want, then carefully consider what your ideal life looks like.
For example, if you are starting a new life because you need some space from negative family members, then you might include limiting contact with these persons as part of your plans.
Or, if you are starting a new life because you want a challenge and some excitement, then you might consider placing yourself in a unusual circumstance, such as living in a foreign country.
2. Make any moving plans, if necessary. You may need to move to a new apartment or house in order to truly start over in the same city. Or, you may need to head out of the country entirely. Do as much research as you can online to determine the best way to use your limited funds. Look for locations where the cost of living is cheap and jobs are plentiful.
Find locations with affordable living options by selecting cities and then searching online for rent and food expense estimates. For example, in the Cook Islands you can find an apartment to rent for $130 a month.
3. Decide who to keep in contact with. Starting over can mean severing some personal ties, but it doesn’t always require breaking your bonds with your loved ones. Go through a list of all of your friends and family and determine what place they should have in your new life, if any at all. You’ll also want to consider how you will break the news to everyone that you’ve decided to start over, or if you will just stay silent about your choices.
For example, if you are trying to rebuild your finances and you have a relative who has a tendency to be a bad financial influence, then you will need to determine if you should continue to interact with them moving forward.
4. Keep a goal journal. Spend at least 15 minutes a day writing and thinking about your current situation and editing your goals. Try to create goals for a month, for one year out, for five years out, and for ten years out. Reassess your goals on a regular basis and change them if you need to. Make sure that your goals closely align with what type of life you’d like to lead in the future.
For example, you might write, “I would like to have $500 saved by the end of the year.” This will help you to be more financially stable, so it will likely fit with your lifestyle choices, too,
Make sure to think both big and small when setting your goals. Don’t be afraid to push for a goal that seems a long-shot.
5. Break down each goal into a series of actionable steps. Consider exactly what actions you’ll need to take for each goal and write them down as a sequence. As you decide to tackle that particular goal, look at this list as a reference. This will make larger goals seem more possible. This, in turn, will make you feel more in control of potentially difficult situations.
For example, if you plan to save money, then you’ll probably need to start by monitoring your spending or perhaps opening a savings account.
6. Seek out exciting, new experiences. It can be easy to get bogged down in the unknown or the unusual when you are starting over. Instead, force yourself to use positive adjectives when describing what you are experiencing. Change from using “weird” to “exciting,” for example. If you feel yourself getting too anxious, tell yourself to open your eyes and find one thing positive about your new environment.
For example, try to seek out the natural beauty of an area. Look for how the birds fly in the sky or how the sunlight comes through the trees. If you are stuck in an office all of the time, you can even print out these images and place them around you.
7. Give yourself positive encouragement. Starting over takes time and a great deal of work. Don’t expect everything to be in order overnight. Instead, be gentle with yourself and acknowledge all of your victories, even the small ones. Tell yourself throughout the day, “You are doing good.” Give yourself compliments as often as possible.
It is helpful to see your life as a book. This is just one chapter of many and does not necessarily tell you what the end will be. You are still writing it out.
You will also need to be watchful when you fail, so that you don’t let these moments set you too far off course. For example, if you make a poor spending choice with your limited funds, see if you can correct it as quickly as possible.

Method 2 Rebuilding Your Financial Life.
1. List out your debts. Take out a piece of paper or open up a spreadsheet on your computer. Write down all of the details regarding your debts. Include information about required payment amounts, due dates, and interest percentages. Update this list often and mark off the debts as you pay them off.
This will also allow you to see which debts need to be paid off first and which ones can come later. For example, it is always a good idea to pay off high interest credit card charges as soon as possible.
One entry on your list might look like, “American Express Card, $1,800 balance, 18% percent interest rate, $25 minimum payment per month.”
2. Develop a savings plan. Even without any money at present, it is still a good idea to consider what you will do with cash when you have it. Your goal should be to move away from a lifestyle that involves surviving paycheck to paycheck. This could mean finding a job and moving a certain percentage of pay into a savings account each month. This could also mean spending some time learning about saving on a site such as Learnvest.
There are also some handy spending “tricks” that you can learn, such as setting aside the change from your checking transactions using an app, such as Qapital.
3. Choose a thrifty lifestyle. Make a decision to pursue frugal, but safe, accommodations. If you are moving, select a location that will allow you to live in a thrifty way. Look into the cost of living numbers and consider the benefits of living within a city versus in a rural area, for example. You can also investigate saving money on transportation by forgoing a car.
For example, Panama is one location where you can live comfortably for around $300 a month.
4. Find a job. If do not have a paid position, then look for one by creating a solid resume. It might help for you to list out all of your skills before you begin applying for positions. You could contact a temp agency as well or just browse the job sites on your own. Make sure that you only apply for legitimate work opportunities.
You might also consider putting your skills to work by creating a business.
5. Create back-up plans. Without a financial safety net, there are many moments in life that you will need to navigate carefully. You’ll feel less anxious if you create at least one back-up plan for all of the major decisions and actions that you take. Try to think about both worst and best case scenarios.
For example, if you are saving money by cycling to work and your bicycle breaks down, what will you do? You might want to investigate public transportation as a back-up option.
6. Talk with a financial advisor. Go online and enter your city and “financial advisor.” Then, contact each advisor and ask if they offer any fee-free assistance. If they do, make an appointment and bring all of your financial paperwork with you to the meeting. They may also ask that you attend a financial support group with some of their other clients.
You can also find a forum for financial advice online and ask the members for tips on savings and tracking spending.

Method 3 Getting Help From Others.
1. Take advantage of government programs. Talk to government officials in your area to see if there are any assistance programs available to you. Consider these programs a temporary way to give your finances a boost in order to prepare you for future success. Make sure to follow all guidelines involved with the program.
For example, there are many government grants available to small business owners. Some of these grants can help you to start over with a new business even if you lack the initial funding. Check with the Small Business Association (SBA) for more details.
2. Ask your friends and family for help. Tell your friends and relatives about your goals and your plans to start over. See if they have any suggestions or advice. They might also be able to provide you will additional resources, financial or otherwise, to help you get on your feet.
Be aware that your story and choices may also help others to make positive changes in their own life. For example, you might have a friend who is struggling with credit card debt and could use any information that you learn about paying it down.
When talking to your friends and family members you might say, “I have very little money to work with, but I’m planning to get a job in an industry that guarantees regular pay and insurance as well.”
3. Consider staying with friends. Living expenses can very quickly destroy your budget and ability to save. If you have a friend or family member who is willing to let you “couch surf” for a while, you might consider this as a viable option. It will allow you to save up money and give you enough time to find a living situation that suits your frugal lifestyle.
You may also find that you are not the only person living in someone else’s home, especially in big cities. It is quite common for people to open their home’s to others searching for paid work in crowded, competitive areas.
4. Make lots of professional contacts. Every time that you talk with someone, try to consider how they could work as a professional contact for you. This may sound mercenary, but considering these connections can also make it possible for you to help them as well. When you are out in public, try to talk with the people that you encounter and be friendly as often as possible.
For example, if you are a waiter looking for work it never hurts to talk with the wait staff when you eat out at restaurants. They may be able to give you some tips regarding looking for a job in that area.
5. Talk with a therapist. Go online and enter your city and “therapist” into a search engine. Contact these professionals to see if any of them offer free sessions or group therapy. If so, this can be a great way for you to explore your past choices and how you can make changes for the present. In a support group, you can also find people who can be your friends in your new life.

Community Q&A.

Question : What if I hate my field and would definitely be required to get a degree I can't afford to get to be hired at the very bottom of the only field I think I might not be miserable in?
Answer : Some public libraries and business organizations offer free courses in many fields, with certificates upon completion. They could be classes that would be included to earn a degree and may become transferable college credit. A certificate could be the beginning to getting your foot in the door. Add to the certificate some volunteer work experience in the field. Submit this on your resume and gain contacts from your free certificate training and volunteer experiences that you might want to use for job references. Talk with your new contacts for tips on how they got started. Present all these at the interview for an entry position in your new field of work.

Tips.

When you are starting over it might be tempting to work all of the time, but make sure to give yourself breaks as well

June 02, 2020

How to Build a Diversified Portfolio

How to Create a Profitable Property Portfolio.

You've been thinking about investing in property. Although investing in real estate can be an overwhelming thought for some people, it can also bring great rewards. You may want to consider investing as a way to create cash flow or build a nice nest egg. Becoming profitable in investing requires a certain degree of skill and know-how, but once you stick your toe in the water, you may become hooked.

Method 1 Planning and Researching.
1. Know why you’re buying. Before you buy an investment property, you need to consider your investment strategy. Put some thought into what type of investment interests you and meets your needs. Perhaps you would like to diversify your holdings besides stocks and bonds. Maybe you would just like to build your wealth or improve your cash flow. Whatever your reasons are for wanting to invest, it is good to be clear on them before you start. A few common reasons for investing in real estate include the following:
You want to increase your current income. Getting a monthly rent check, for example, can give your income a boost.
You're interested in capital gain — buying a property and later profiting from its sale.
You want to take advantage of the tax write-offs that come with real estate investments.
2. Learn about the various types of real estate investments. Ask yourself how much time you are willing to invest in managing the property, and whether you have the necessary skills to manage the property. Different types of investments have different risks and rewards, so it's important to consider which type of investment best meets your needs. Consider these investment choices:
Raw land investments. Raw land requires little management and has the potential for big appreciation if it's in an area that becomes attractive to developers. However, there is limited cash flow from this investment through leasing to farmers/ranchers short term, mineral royalties if included in purchase, or appreciation. Also, government restrictions on how the land may be used can impact its value.
Residential real estate investments. Fixing up a residence and "flipping" it is a popular type of investment. The profitability of this type of investment is dependent on the state of the local housing market; location is very important.
Commercial real estate investments. Investing in commercial real estate, such as an apartment building, office building, or retail building, can yield a steady flow of cash, since you'll be getting a regular rent check from your tenants. However, the property requires significant upkeep to make sure it's up to code. You also run the risk of getting bad tenants who damage the property or do not pay rent on time.
3. Decide whether to flip or hold the property. "Flipping" generally applies to residential properties that are purchased, improved, and sold for higher price. Most real estate requires long term holding, and is not conducive to short-term trading. When considering what type of investment to make, determine which situation works best for you.
Consider whether you need additional income now or in the future.
Review your short- and long-term financial goals and if bringing in income now makes sense for you.
Factor in your income tax bracket and how that could be adversely affected by bringing in more income.
Consider the real estate market and if it is rising or falling at this time.
Evaluate your financial situation and see if you have other income that you can tap into if your rental properties become vacant.
Think about your available time and capabilities to manage or improve properties. Using third parties for such services may decrease expected return.
4. Obtain statistics on the town in which you are considering investing. Check the local state government website about the area you are targeting to see how it compares to other locations. It is important to have as much information and knowledge as possible on property investing before you dive in.
Find out the local median income.
Research the population growth of the area.
See what the unemployment statistics are in the area.
Check to see if the community is continuing to grow.
Find out what the real estate taxes are compared to nearby towns.
See if there is a supply and demand of rentals in the area.
Check out the schools to see how good they are.
5. Research online or take a course. A lot of research can be done online, but you may also check your local directory and sign up for a reputable real estate investment course or seminar. Make sure you bring some paper and a pen so you can jot down notes as you listen to the experts speak.
6. Work with a local realtor, property investor, or developer who also invests in real estate. Someone who has been investing on his own will know the pitfalls from his own first hand experience. A realtor with substantial knowledge in investing can teach you as you go along and help make you feel more comfortable with the process. However, remember the money you are investing is yours, not the realtors, so trust your intuition.

Method 2 Pinpointing your Property Needs.
1. Decide on your location. When you are searching for your investment area, look for a place that has clear signs of growth and economic stability. If you aren’t familiar with the area, take a drive around the town or city and get to know it. Check to see if there is adequate shopping and amenities close by. If you like the area and what it has to offer, chances are your renters will too.
2. Pick the right property. See if the properties you are interested in have desirable features, like a great view or ample parking. If so, take that into consideration. There are other issues to consider when picking your property, as well.
If you're deciding between investing in a house or an apartment, keep in mind that houses seem to have a better capital growth rate and apartments tend to have a better rental yield.
Also, the quality of the neighborhood in which you buy will most likely influence the type of tenants you attract. For example, if you buy near a college, you may be renting to students. There is a possibility of vacancies in the summer when the students return home.
Make sure you find out what the property taxes are. Take into consideration that high property taxes may not be such a bad thing if the property is in an excellent area and suited for long-term tenants.
Check to see if the area has any criminal activity. Go to the local police department to learn about the specific area you are interested in. Things to ask about might include vandalism, gang activity or any recent serious crimes. You have a better chance of finding out the facts from the police department, than from the person selling you the property.
Make sure the property isn't in a natural disaster zone. The insurance on the property can get pricey if you are in a questionable area so it is worth checking into. Many property owners are underinsured for natural disasters which can lead to devastating property loss in the event of a major storm or earthquake.
3. Have your property inspected by a professional inspector. You want to make sure the property is in good shape and has up-to-date repairs. You are looking for a property that, with a few minor repairs, will attract tenants who are willing to pay higher rents. In addition, find a contractor who you trust to give you the right advice on any repairs that may be required, especially for older properties. There are some things that you can check yourself, however.
Check the drains to make sure there are no problems with flooding.
Open and close all the windows to make sure they are in working order.
Turn on all the faucets to make sure they are working.
Light a fire in the fireplace to see if it's working.
Flush the toilets to make sure they flush properly.
Open the electrical panel and make sure there are no loose wires.
Turn on the heat and air conditioning to see if they work.
Make sure there is no basement moisture as this can be a sign that there is a more serious problem.
Pull the carpet back to see if there are hardwood floors underneath.
4. Know your target tenant. If you're investing in commercial real estate, your choice of tenant should influence the type of property you buy and where you decide to buy it. For example, families with children will potentially be interested in different amenities than young, single people.
See if the property is near any schools.
Check to see if there are any parks in the neighborhood.
See if the shops and cafes are within walking distance.
Find out how close the transportation options are.

Method 3 Examining the Finances.
1. Check into your credit history. Make a plan to get your credit in better shape if necessary. Having a good credit score will help you secure a loan with better terms. If your credit is compromised, check your local listings for agencies or nonprofit organizations that can help you clean it up.
2. Decide how you will finance your property. There are several ways to begin investing in your property portfolio. You may consider selling an asset or refinancing a property to get the funds. If you're investing in raw land, it's common to get financing from the seller. You may also choose to take out bank loans to finance your property.
If you have the money, you can pay all cash, or you can put down a percentage and get a loan for the remaining amount.
There are different loan requirements depending on the bank and your financial history.
3. Visit with a mortgage broker or your bank. Find out how much money you can afford to borrow responsibly for your investment. The quickest way to find out if you can afford a loan is to ask the bank. If you get a "no" from your bank, then consider trying another one as each bank is different in their approach. You may also consider looking into a credit union or a smaller bank to get your loan through.
4. Find properties that produce positive cash flow. Unless the property has good cash flow, there is really no reason to consider purchasing it. Examine the financials on the property to make sure it is supplying a good source of income. The rent you receive from your tenants should be enough to pay all of your expenses, including your mortgage payment, utilities, property taxes, and insurance.
This excludes raw land investments, which generally yield no income unless leased for farming or another purpose.
5. Examine your investment expenses. A common mistake first time investors make is underestimating their expenses. Rental buildings are always needing touch ups and repairs. There are several areas of expense to factor in when considering your purchase. The amounts will vary depending on the property.
Water and sewer, Garbage, Utilities, Legal fees and accounting, Evictions, Vacancies, Scheduled maintenance.
6. Consider hiring a property manager. You may want to factor in a salary for a property manager if you don’t have the personality, skills, and availability to manage your own property. There are many benefits to hiring a property manager.
The manager advertises and rents for you and will show your property when vacancies arise.
The manager meets with prospective tenants and handles all of your lease agreements.
The manager collects the rent from the tenants and performs the move-in and move-out inspections.
The manager deals with all the tenants complaints.
The manager serves legal notices in the case of a dispute and starts the eviction process if necessary.
The manager usually has a list of reliable contractors that he or she has used before.

FAQ.

Question : How would I stay up to date on pertinent laws, regulations, and real estate terminology?
Answer : Become a member of an apartment owners association. If they are very large, they will send you magazines that have all the new problems that laws are causing for home owners and what they need to do to avoid these problems.

Tips.
Take your time doing the research. Rushing into a property purchase without significant knowledge may bring unwanted results.
If you are considering buying with a partner, make sure you have a proper partnership or joint venture agreement.
Don’t be afraid to walk away if the deal isn't working out.
Stay up to date with pertinent laws, regulations and real estate terminology.
Understand the risk you are taking when becoming a real estate investor. Success is not always guaranteed.
Find a mentor, lawyer or a supportive friend that has experience in investing to bounce your ideas off of.

April 01, 2020

How to Find a Home After Divorce with Limited Finances

How to Find a Home After Divorce with Limited Finances.

Divorce is an emotionally draining experience, and on top of everything else you need to find somewhere to stay. There are fewer options for people with limited finances. Since you probably can’t buy a home, you should find a cheap rental in a good location. If necessary, you can crash with friends or family or even try to stay at home with your ex-spouse until you save up enough money.



Method 1 Finding a Cheap Rental.

1. Search the Internet. Looking for cheap rental options is a little like searching for a needle in a haystack. However, there are cheap apartment rentals out there. Check websites such as Rent.com. A studio or a bedroom in someone’s house will probably be the cheapest to rent.

You might need a small place at first—really small. In expensive cities, you might get a 100 square foot micro-studio for under $1,000.

Also consider apartments in slightly shady neighborhoods. Check neighborhood crime rates at www.neighborhoodscout.com. Remember that your first home after a divorce doesn’t need to be your permanent home.

2. Contact hotels. You might only need a temporary place to stay, e.g., for a month or so. In some countries, such as Canada, a lease must be for at least 12 months. Your only option for short-term housing might be to stay in a hotel or motel.

Many national chains have extended-stay hotels. Call and ask about rates.

Renting a hotel this way is more expensive than renting an apartment. However, it’s more convenient if you need short-term housing.

3. View the apartment. Call up the landlord and ask to see the place. No matter how desperate you are, you shouldn’t rent a place without first viewing it. Some cheap apartments are unsanitary and unsafe.

Make sure the apartment is close to work or accessible by public transportation.

Check your cell phone reception. You can save money if you just use your cell phone and skip the landline.

Also confirm that there is enough water pressure. Flush the toilet and turn on the taps.

4. Check your credit. More and more landlords are looking at people’s credit history before deciding to rent to them. Pull your credit score and credit history. If your score is low, try to clean up your credit history quickly.

There may be errors on your credit history that are pulling down your score. For example, your ex-spouse’s debts might show up on your credit report, or accounts might wrongly be listed as in default. Dispute any credit report errors. It usually takes a couple months for inaccurate information to come off.

5. Ask if you can forego a security deposit. Landlords typically want a month’s rent as a security deposit to protect them in case you damage the apartment or skip out before the end of the lease. If you have good credit or a long rental history, you can ask the landlord if you can rent without paying a deposit.

If necessary, check whether you can put your rent on a credit card. It’s not an ideal solution, but it will help you get a roof over your head. You can pay the credit balance down once you get re-established.

6. Get a roommate, if necessary. Any apartment is cheaper if you have someone splitting the bills. You can advertise for a roommate on websites such as Craigslist, though it is better if you know the person already. Confirm that the lease allows you to have a roommate, because not all leases do.

If you have to advertise, ask any potential roommate for references and one month’s security deposit.

Be very clear about your expectations regarding cleanliness and having guests over.



Method 2 Staying with Friends or Family.

1. Call them up and ask. Don’t show up at someone’s doorstep with a suitcase, but call ahead of time. Ask if you can stay with them for a little bit. Give them a deadline when you anticipate moving out.

For example, you can say, “Mom, I need to come home. Is that okay? I’ve only got a few hundred saved. But if I can stay with you for two or three months, I’ll be back on my feet.”

2. Save money fast. You can’t sleep on someone’s couch forever, so cut all unnecessary expenses and take on a part-time job if possible. Build up enough money to afford a security deposit on a small apartment.

A part-time job might be ideal since it will keep you out of the house. Check Craigslist for part-time gigs such as dog walker, Uber driver, or bartender.

3. Be a model guest. People are doing you a huge favor by letting you crash with them for a little while. Make things easy on your host by keeping your space clean, not making noise, and being respectful when your host has guests.

Wash dishes or prepare meals without asking. This will relieve your host’s stress.

Avoid draining your friend’s electricity by charging up your computer and phone on their dime. Instead, find a public café or recharge while at work.

Keep complaints to yourself. Do you think the sheets are scratchy? Consider yourself lucky to have a place to stay.

4. Follow house rules. Your friends might have rules that seem weird to you. That’s not the point. You need to follow them if you don’t want to get kicked out. Ask about anything that seems unclear.

Some rules are unspoken. Pay attention to your host’s habits. For example, if they only watch TV with the volume down low, do the same.

5. Buy your own food. You should prepare your own meals so that your host doesn’t feel like they have to wait on you. Ask your friend where the nearest grocery store is and load up on food. Make sure there’s enough room in the refrigerator.

6. Volunteer to cover expenses. You can build goodwill by volunteering to buy food or paying other bills. For example, pick up a large pizza on your way home from work and invite your host to share.

7. Leave when asked. Someone might need you to leave before you want to. Gather your things and thank them. Then call up other family or friends to find a place to stay.

Remember to clean up after yourself. Remove any trash and wash the sheets or vacuum the sofa you slept on. Don’t leave anything behind.



Method 3 Living With Your Ex.

1. Talk to your ex. No law says you must leave your home after a divorce. If you have no money, you might be best off sitting tight until you’ve managed to save up enough for an apartment. Of course, you’ll need your ex spouse’s permission—especially if they were given the house in the divorce decree.

If your ex doesn’t want you in the house, volunteer to stay in the garage or in a guest house.

Staying in the house isn’t an option if there’s been any history of domestic violence, or if there is a restraining order against you.

2. Contribute to the bills. You should split shared costs, such as property taxes, insurance, electricity and—if you can afford it—the mortgage. Sit down with your spouse and talk about what you will contribute.

If you don’t have any money, volunteer to do things around the house. You can cook all meals, make repairs, and clean.

3. Come up with a schedule. Try to limit contact as much as possible. Staying in the house will be uncomfortable for everybody, but a detailed routine can make things easier. If your ex thrives on conflict, then limiting contact will be beneficial.

For example, you might get up an hour earlier than your ex and come back home an hour earlier. Schedule when you’ll use the bathroom and the kitchen.

4. Be considerate. You might have been a slob while married, but now you need to clean up after yourself. Become the ideal roommate. Follow these rules.

Wash your own dishes.

Eat only the food you buy. If you want something your ex bought, ask first.

Volunteer to clean shared spaces, such as bathrooms, and mow or rake the lawn.

5. Avoid bringing dates home. Your ex might hit the roof, and who can blame them? It’s terribly rude to start dating in front of your ex-spouse. If you want to date, then meet outside the home and don’t bring them back.

There’s also no reason to advertise that you’re dating. Keep that news to yourself.

6. Reduce conflict. If you have children, they will be harmed by constant fighting. As long as you are staying in the house, you need to commit to living peacefully. You can defuse tension by practicing the following.

Listen to your ex-spouse and avoid getting defensive. If your ex complains about your habits, avoid the temptation of starting a tit-for-tat argument. After all, your ex might have a legitimate grievance.

Don’t revisit the divorce. You’re living at home for financial reasons, not because you want to pick apart why you divorced in the first place.

7. Leave as soon as possible. Staying in the house should be a temporary solution. Some people get comfortable being part of a couple even when they are no longer married. For your own personal growth, you should move out as soon as you can afford it.



Method 4 Considering Other Options.

1. Rent a motor home. If you need a temporary place to stay, rent an RV or buy a used one. Ask friends or family if you can park on their property. If you don’t know anyone, you can park at a local campground for a fee. Recreational vehicles typically have sleeping, dining, and bathroom areas.

You can find rentals online or by looking in your telephone book. Shop around for the most competitive price.

2. Apply for housing assistance. In the U.S., low-income people can apply for a Section 8 voucher. You find a landlord willing to accept the voucher and rent directly from them. The voucher then subsidizes your rent. Contact your nearest Public Housing Authority to apply.

There are income limits for eligibility. Typically, your income shouldn’t exceed 50% of the median income of a family your size in the county or city where you want to live. For example, the median income for a single person might be $25,000. Your income will need to be $12,500 or less.

Even if you qualify, there’s usually a long waiting list. You might need temporary shelter.

3. Get a room at the Y. Your local YMCA or YWCA might have rooms for rent. Generally, they will charge by the day, week, or month, and you can book online. A night at the YMCA in the Upper West Side costs around $100 a night. This is pricey, but a decent choice if you need a place to crash for a couple days.



Tips.

If you have children but are not receiving child support, contact your local child support agency immediately. They can track down missing parents, establish paternity, and get a child support order in place.

February 25, 2020

How to Prepare Your Finances for a Job Leave.

How to Prepare Your Finances for a Job Leave.

Working people depend on having an income to live. You need to pay for housing, food, health care and many other things. Nevertheless, there may come a time when you want to be able to leave your job. The most common reasons are either retirement or a temporary leave to change jobs or careers. Whatever your reason for wanting to leave work, you will need to make financial plans. You will need to set aside some savings and make changes to your spending. Your mortgage and insurance costs will be an important part of the picture as well. With adequate planning, you can make it happen.



Method 1 Setting a Target.

1. Choose a date. Some people may decide at the start of their career that they want to work to age 50, or 55, or some other number. If you would like to make this a goal, you need to set your target and then work toward it. Claiming to have a goal means nothing unless you take steps to get there, but your first step is to decide what you want.

2. Identify an event. Your target to leave your present job may be some event, such as reaching a particular level of expertise or the day your supervisor leaves. Some of these targeting events may be under your control, and some may not. The less certain the event, the more prepared you will need to be.

For example, you may have decided that you want to leave your present company if they ever sell out or merge with some other company. Since you cannot control something like this and may not know when it is coming, you should try to have some alternative source of employment at least in mind for when the time comes.

In the event of a maternity leave, you may not know for years exactly when it is coming, but then in the final nine months (or so) you will know almost exactly. You can plan in general to have some savings set aside, and then when you get pregnant you can begin making some specific last-minute preparations.

Sometimes, the "event" that triggers a temporary leave might be a long-term illness, either yours or someone you need to care for. This can come with almost no advance warning. You need to plan for the general contingency and make some emergency preparations.

3. Plan a savings target. This is probably the most controllable concept. You can sit down with a financial planner and decide how much money you would need to have in savings to allow yourself and your family to survive adequately without your income. Then work toward setting aside that amount of money. As time goes by and interest rates fluctuate, you may need to adjust your plans accordingly. However, setting the target and doing the work up front will help you be as prepared as you can be.

If your target is to retire early, financial experts recommend that your savings target should be about 25 times your annual salary. You will then be able to withdraw money at the rate of about 4% per year.

If you target is to be able to leave work temporarily to look for a new job or another reason, then your target will be whatever amount you need to meet your expenses for that time. For example, the average job search is approximately four to six months, so you should plan to have savings to cover your living costs for that long.



Method 2 Reaching Your Target.

1. Work with a financial adviser. If you want to plan for leaving your job, you should enlist the help of a qualified financial adviser. Someone with expertise in investing can help you decide how much you need to save and can help you find the best ways to invest. If you want some help with finding a qualified financial adviser, read Hire a Financial Advisor or Select a Financial Advisor.

2. Invest your savings carefully. Working with your financial adviser, you will want to do more than just place your earnings in a bank account. Simple savings accounts earn very low interest. You will do better to invest in bonds, stocks or other securities, in accordance with your adviser’s opinions.

Investing works best when you begin as early as possible. Your best ally when saving is time. Your interest compounds more effectively when you begin early.

If your focus is to be able to take a temporary leave at some time, then you may need to have your savings in a readily accessible account. Long-term IRA savings are good for retirement planning, but you may need to be able to withdraw money sooner. Work with your adviser to find the best investment or savings plans for your needs.

If you want to plan for a lengthy, temporary leave, such as for a maternity or family illness, you will want to have savings in some readily accessible account. A short-term bond or money market may be the best bet, or even a simple savings account that you earmark for such an emergency.

3. Cut your expenses as much as possible. Many people live their lives from month to month and use a great deal of their income. If you manage a budget this way, you will do fine from month to month, but you will greatly delay your savings plan. If your goal is to be able to leave work, you should begin by cutting expenses as much as possible.

To begin cutting expenses, start by listing them all. Then review how you spend your money over a one- to three-month period and identify the expenses that you believe you can live without. Perhaps you can reduce the number of times that you go out to dinner. Maybe you can cut some entertainment expenses.

Manage your utilities. Try to reduce some of your monthly expenses by reducing utility usage in your home. Manage the heat, turn off lights, and do what you can to save water. These sound like small steps, but over time they can all add up.

Cutting expenses is a powerful financial tool for any job leave, whether permanent/retirement or a temporary leave for illness, maternity or some other reason. You need to consider the absence from work as an overall change in your lifestyle.

4. Plan to spend some on your new job search. Part of setting your target, if you are anticipating leaving your current job, should be to have some savings available to spend on a search for a new one. You will need money for correspondence, printing resumes, travel, parking, and possibly one or two new interview suits. You should anticipate these costs, estimate the amount of money that you will need, and set this aside as part of your target savings.



Method 3 Handling Your Mortgage.

1. Recognize the importance of your mortgage. For most people, housing payments make up the largest expenses they have. If you are paying rent, rather than owning your residence, those monthly payments are effectively doing nothing for you. If possible, purchase a property and get a mortgage. In this way, your monthly payments will be building equity for you. At the end of your mortgage, you will own the property outright in your own name.

2. Aim for your target date. As much as possible, try to align your mortgage to your target retirement date. That is, if you are relatively young and just starting out, then you may want to get a 30 year mortgage to last the duration of your career. However, if you can afford the monthly payments of a shorter mortgage, you will be setting aside money toward your equity at a faster rate.

3. Refinance when possible. When mortgage interest rates go down, you should try to refinance. By refinancing, you will get a lower interest rate and reduce your monthly payments. You may also take that opportunity to refinance into a shorter term. For example, if you started out with a 30 year mortgage, you may be able to refinance to a 20-year or even 10-year mortgage, for roughly the same (or even lower) monthly payment amount. More of the money, that way, will be going to pay down the principal loan.

4. Downsize after retiring. When you do leave your job, whether for permanent retirement or as a temporary leave, you may want to consider changing your residence. Many retirees choose to move to a smaller house with a lower expenses and mortgage costs. You may also wish to move to a different part of the country with lower overall costs of living.



Method 4 Making Other Miscellaneous Arrrangements.

1. Investigate your employer's maternity leave benefits. Some employers will offer paid maternity leave for some period of time. Others may stick to the allotted unpaid leave that is required under the Family and Medical Leave Act, which allows up to 12 weeks of unpaid leave. However, many small employers are even exempt from this. You need to find out what policy your employer has, and use that information to help you determine what financial help you will need.

For a maternity leave, you can also investigate whether you can be covered under short term disability insurance. This could provide a portion of your salary during your leave. To investigate coverage, you should talk with your employer or human resources personnel, or your own insurance company.

2. Plan some alternative, temporary income. If you are out of work temporarily, either looking for a new job, on a maternity leave, caring for an ill family member or for some other reason, you may want to plan for some temporary work that you can do. Find something that gives you the flexibility that you need to go along with your leave, but still provides some income for you and your family. For example.

Even with a new baby or an ill family member, you can probably find some time to tutor a few students a week or teach music lessons (if you have that talent).

You might be able to do some freelance writing or editing.

3. Transfer your company-based savings plans. If you participated in an employer-based savings or retirement plan, you should transfer that plan when you leave. Your financial adviser may be able to help you set up a personal IRA, or you might talk to an investments adviser at your bank.

4. Collect any payout benefits. If your company allowed you to accrue vacation time or sick time, you might be able to cash that in and collect an additional payment in accordance with your contract. In some cases, this can be a valuable payoff amount.

In some cases, you may be able to collect a partial cash payout for unused sick or vacation days to provide some cash for a temporary emergency leave, such as a family illness or bereavement leave. Even if such a benefit is not standard, you may want to talk with your employer and come up with some creative possibilities.

If you are not aware whether or not you have such a benefit, contact your company’s human resources department and ask.

5. Maximize stock options, if any. If you were granted the option to purchase stock in the company, and you have not exercised that option to its fullest potential, you should do so before leaving. These options can often be very valuable and will not be available to you later.

Depending on your contract, you may have a set period of time to purchase such options upon your separation from the company.

6. Plan for health insurance. One of the primary benefits of employment is having health insurance. When you plan to leave, whether for permanent retirement or a temporary leave for a job change, you will need to make plans for some replacement health insurance. You may wish to investigate the following options:

If you are under age 26, your parents may be able to add you to their health plan.

If you participated in the insurance plan through your employer, you may be eligible through COBRA to continue on that plan for up to 3 years by making your own monthly payments.

Your spouse or partner may be able to add you to their health plan.

February 25, 2020

How to Split Expenses As a Couple.

How to Split Expenses As a Couple.

Splitting expenses as a couple is an important aspect of having a stable relationship, especially if you’re living together. There are several ways to split expenses. One way is to split everything right down the middle, so each person pays half. The other way is for each person to pay for what they can afford. The final way is for one person to pay all or most of the expenses. If one of you works little or not at all, that person should make up the difference by contributing energy toward domestic tasks. Finally, ensure you’re covering yourself by keeping separate bank accounts and not cosigning loans with your partner.



Method 1 Choosing the Right Method.

1. Determine what expenses qualify as shared. Sometimes it is easy to identify a shared expense. For instance, heating, water, and electricity are house-wide expenses and you will both, presumably, enjoy their use in approximately equal amounts. But it might be harder to justify sharing other expenses. If you have TV service at your home, for instance, but only one of you watches TV, it makes little sense to split that particular expense.

Talk to your partner about which expenditures they believe should be considered shared and which should be considered individual expenses.

2. Split expenses evenly. By splitting every expense evenly, you and your partner have a form of equality in the relationship. This is probably the most logical way to split expenses for couples who have equal or roughly equal incomes.

There are many ways to split expenses 50/50. You might choose to split each expense as it comes in. Alternately, you might reconcile receipts at the end of each month and pay your partner whatever is “owed.” Talk to your partner about which method works best for you.

You don’t need to split everything perfectly evenly. Creating a spreadsheet to track expenses, or otherwise accounting for every penny spent between you can reduce your relationship to a purely economic exchange that takes the romance out of it. Even if you split household bills, it’s still okay to treat your significant other to dinner or a date when you go out.

For instance, you might take turns paying for dinner. Even if your dinners don’t total the exact same amount each time you go out to eat, over time, you’ll each probably end paying about the same amount. This qualifies as a form of splitting costs evenly.

3. Split your expenses according to income. This expense-splitting technique calls for the person with the higher income paying for a larger share of the household expenses. In other words, equality is achieved through each person in the relationship paying expenses according to their ability.

For example, suppose you earn $3,000 per month and your partner earns $2,000 each month. In this case, you should pay for 60% of the expenses, since your income is 60% of the total household income (the figure you get when you combine the incomes of you and your partner).

Talk carefully with your partner to make sure that there are no hidden issues before going forward with this method. In some cases, your partner may feel as though they are contributing too much or too little if this method is used.

4. Share expenses unevenly. In this method, one person will pay for the majority of household expenses. This is the natural choice to make when one person in the relationship has way more income than the other person. However, if both you and your partner make a lot of money, either of you could choose to take on an expense-splitting arrangement like this.

A fair arrangement doesn’t necessarily need to divide all expenses perfectly. For instance, one of you could take the internet bill while the other takes the power bill. Divide things up according to whichever scheme suits your situation.

5. Be willing to trade time and money. If you work and your partner doesn’t or if your partner works but you do not, there are other ways you can come to a fair arrangement by thinking about the work (as well as the money) it takes to run a household. Domestic work – cleaning, cooking, and doing the laundry – is crucial to keeping a household going. It makes little sense for one person to both complete all these tasks and also provide financial stability for you as a couple.

Think about splitting the total amount of work that each of you do as a couple rather than thinking of splitting expenses along purely financial lines.



Method 2 Splitting Food Expenses.

1. Figure out your food budget. Your food budget is the total you spend on food over a given period. To get an accurate picture of how much you spend on food, track your expenses over a certain period of time. Tracking over a month is a good unit of time, since depending on how much you and your partner eat, you might not spend much on food.

Use a shared spreadsheet in Google Doc or another program to track your expenditures. Your document should indicate each item you bought and how much it cost.

Alternatively, try a low-tech route like writing your grocery and dining-out expenses on a piece of lined paper.

Keep your receipts while tracking your food budget.

2. Analyze the budget. Once you’ve figured out your food budget, evaluate the information with your partner. Are you spending too much, too little, or just the right amount? Look for areas where you can cut expenses.

For instance, instead of spending so much on junk food and snacks, try to find healthy alternatives like fruit or veggies and hummus.

Instead of eating out so much, try eating at home more often. Make cooking together a couple's activity.

Eliminate or reduce your alcohol consumption for more savings.

3. Decide how to split the food expenditures. You can use an income-based method to choose how to split the food expenses, or split the food expenses according to consumption patterns. Whatever method you choose, ensure you and your partner agree on how much money you should be spending on food, and ensure you both set aside money each month for your grocery budget.

Let go of small differences in food consumption. Even if your partner eats more than you, constantly analyzing how much money each person owes for food can put a strain on the relationship.



Method 3 Being Smart About Shared Finances.

1. Plan for emergencies. Both you and your partner should have money saved in the event that one or both of you needs to pay for surgery, a new vehicle, or another large expense. Try to set aside at least 25% of your monthly income for savings.

You should have at least six months’ worth of income saved to cover periods of potential unemployment.

Be sure to set beneficiaries on your retirement and insurance plans, too.

If you separate from your partner, don’t forget to change your beneficiary list.

2. Have regular financial checkups. Every month or two, you and your partner should have a conversation about where you’re both at financially. Are you still both increasing your savings? Do you have enough saved to cover an emergency? Are you both still comfortable with the way expenses are being shared? Talk to your partner about these and other related issues.

Make budgeting and financial planning an activity you do together. This can be more successful or even exciting if you are both working towards a common goal, such as a vacation or purchasing a home.

Always be honest about your finances. If you are struggling financially, you should admit to your partner that you’re having money problems. That way they can help you out by either loaning you money, helping you find another job, or taking other action that can help.

Encourage your partner to be honest with you about their spending habits and their happiness with your current financial arrangement. If your partner lies about money matters, you should seriously consider ending the relationship.

Don’t let your partner push you into a purchase you can’t really afford. For instance, if you can’t afford a new car but your partner really wants you to have one, stand firm and insist that you will not make such a purchase. If they love you, they will respect your decision.

3. Do not move in with your significant other for financial reasons. Living with someone else and sharing expenses does save money, but if you make the decision to shack up based on the potential economic benefit, your relationship will be on an unstable foundation. Only move in together if you’re truly in love with the person and ready to be in close proximity to them night and day. This will make splitting finances just one part of your relationship, and not its entire basis.

4. Avoid borrowing money. Not only is it annoying for your partner, but it might make them suspicious of your financial health and question your intentions. It’s okay to borrow money in an emergency situation, but don’t make a regular habit of it.

If your partner regularly asks to borrow money, you should inquire as to why they constantly need money. They may have lost their job or have unpaid debts you don’t know about.

5. Avoid sharing debts. Cosigning a loan for your partner is never a good idea. The last thing you want to do is end up saddled with debt that you did not personally incur. Only make a large investment with your partner like a house or car if you are in a stable, long-term relationship.

You should ask your partner about any debts or liabilities that they may hold. Be honest about your own debt as well. Keeping these secret can ruin a relationship when the debt is discovered by the other partner.

Always put both your names on the lease, mortgage, or loan. This will allow you some degree of protection in the event you and your partner separate.

For mortgages, consult a real-estate attorney to help you figure out the best way to negotiate your local real estate laws as they relate to your relationship. A married couple has different options for taking out a home loan than an unmarried couple.

For auto loans, too, you (and your partner) should talk to a financial officer at your local bank or credit union. There are many variables that could impact whether you and your partner decide to take out an individual loan or cosign the loan. Seek advice relevant to your living situation in order to get the lowest interest rates and avoid shared debt.

6. Do not share assets. Assets are valuable possessions or investments. Common assets include bank accounts as well as big-ticket items. Typical material assets include houses, cars, and boats. These items should never be purchased using both your names. Otherwise, you might end up wrangling over ownership in the event you separate.

Bank accounts, likewise, should never be shared between you and your partner. These accounts can be a source of tension should one partner decide to use the money for themselves.

If you want to set up a shared account with your partner – for instance, an account either of you can use to pay bills – keep it completely separate from your personal account. Put a small amount of money in it each month along with your partner, and use it only to pay the bills you intended it for.

February 25, 2020

how to split expenses as a couple

How to Split Expenses As a Couple.

Splitting expenses as a couple is an important aspect of having a stable relationship, especially if you’re living together. There are several ways to split expenses. One way is to split everything right down the middle, so each person pays half. The other way is for each person to pay for what they can afford. The final way is for one person to pay all or most of the expenses. If one of you works little or not at all, that person should make up the difference by contributing energy toward domestic tasks. Finally, ensure you’re covering yourself by keeping separate bank accounts and not cosigning loans with your partner.



Method 1 Choosing the Right Method.

1. Determine what expenses qualify as shared. Sometimes it is easy to identify a shared expense. For instance, heating, water, and electricity are house-wide expenses and you will both, presumably, enjoy their use in approximately equal amounts. But it might be harder to justify sharing other expenses. If you have TV service at your home, for instance, but only one of you watches TV, it makes little sense to split that particular expense.

Talk to your partner about which expenditures they believe should be considered shared and which should be considered individual expenses.

2. Split expenses evenly. By splitting every expense evenly, you and your partner have a form of equality in the relationship. This is probably the most logical way to split expenses for couples who have equal or roughly equal incomes.

There are many ways to split expenses 50/50. You might choose to split each expense as it comes in. Alternately, you might reconcile receipts at the end of each month and pay your partner whatever is “owed.” Talk to your partner about which method works best for you.

You don’t need to split everything perfectly evenly. Creating a spreadsheet to track expenses, or otherwise accounting for every penny spent between you can reduce your relationship to a purely economic exchange that takes the romance out of it. Even if you split household bills, it’s still okay to treat your significant other to dinner or a date when you go out.

For instance, you might take turns paying for dinner. Even if your dinners don’t total the exact same amount each time you go out to eat, over time, you’ll each probably end paying about the same amount. This qualifies as a form of splitting costs evenly.

3. Split your expenses according to income. This expense-splitting technique calls for the person with the higher income paying for a larger share of the household expenses. In other words, equality is achieved through each person in the relationship paying expenses according to their ability.

For example, suppose you earn $3,000 per month and your partner earns $2,000 each month. In this case, you should pay for 60% of the expenses, since your income is 60% of the total household income (the figure you get when you combine the incomes of you and your partner).

Talk carefully with your partner to make sure that there are no hidden issues before going forward with this method. In some cases, your partner may feel as though they are contributing too much or too little if this method is used.

4. Share expenses unevenly. In this method, one person will pay for the majority of household expenses. This is the natural choice to make when one person in the relationship has way more income than the other person. However, if both you and your partner make a lot of money, either of you could choose to take on an expense-splitting arrangement like this.

A fair arrangement doesn’t necessarily need to divide all expenses perfectly. For instance, one of you could take the internet bill while the other takes the power bill. Divide things up according to whichever scheme suits your situation.

5. Be willing to trade time and money. If you work and your partner doesn’t or if your partner works but you do not, there are other ways you can come to a fair arrangement by thinking about the work (as well as the money) it takes to run a household. Domestic work – cleaning, cooking, and doing the laundry – is crucial to keeping a household going. It makes little sense for one person to both complete all these tasks and also provide financial stability for you as a couple.

Think about splitting the total amount of work that each of you do as a couple rather than thinking of splitting expenses along purely financial lines.



Method 2 Splitting Food Expenses.

1. Figure out your food budget. Your food budget is the total you spend on food over a given period. To get an accurate picture of how much you spend on food, track your expenses over a certain period of time. Tracking over a month is a good unit of time, since depending on how much you and your partner eat, you might not spend much on food.

Use a shared spreadsheet in Google Doc or another program to track your expenditures. Your document should indicate each item you bought and how much it cost.

Alternatively, try a low-tech route like writing your grocery and dining-out expenses on a piece of lined paper.

Keep your receipts while tracking your food budget.

2. Analyze the budget. Once you’ve figured out your food budget, evaluate the information with your partner. Are you spending too much, too little, or just the right amount? Look for areas where you can cut expenses.

For instance, instead of spending so much on junk food and snacks, try to find healthy alternatives like fruit or veggies and hummus.

Instead of eating out so much, try eating at home more often. Make cooking together a couple's activity.

Eliminate or reduce your alcohol consumption for more savings.

3. Decide how to split the food expenditures. You can use an income-based method to choose how to split the food expenses, or split the food expenses according to consumption patterns. Whatever method you choose, ensure you and your partner agree on how much money you should be spending on food, and ensure you both set aside money each month for your grocery budget.

Let go of small differences in food consumption. Even if your partner eats more than you, constantly analyzing how much money each person owes for food can put a strain on the relationship.



Method 3 Being Smart About Shared Finances.

1. Plan for emergencies. Both you and your partner should have money saved in the event that one or both of you needs to pay for surgery, a new vehicle, or another large expense. Try to set aside at least 25% of your monthly income for savings.

You should have at least six months’ worth of income saved to cover periods of potential unemployment.

Be sure to set beneficiaries on your retirement and insurance plans, too.

If you separate from your partner, don’t forget to change your beneficiary list.

2. Have regular financial checkups. Every month or two, you and your partner should have a conversation about where you’re both at financially. Are you still both increasing your savings? Do you have enough saved to cover an emergency? Are you both still comfortable with the way expenses are being shared? Talk to your partner about these and other related issues.

Make budgeting and financial planning an activity you do together. This can be more successful or even exciting if you are both working towards a common goal, such as a vacation or purchasing a home.

Always be honest about your finances. If you are struggling financially, you should admit to your partner that you’re having money problems. That way they can help you out by either loaning you money, helping you find another job, or taking other action that can help.

Encourage your partner to be honest with you about their spending habits and their happiness with your current financial arrangement. If your partner lies about money matters, you should seriously consider ending the relationship.

Don’t let your partner push you into a purchase you can’t really afford. For instance, if you can’t afford a new car but your partner really wants you to have one, stand firm and insist that you will not make such a purchase. If they love you, they will respect your decision.

3. Do not move in with your significant other for financial reasons. Living with someone else and sharing expenses does save money, but if you make the decision to shack up based on the potential economic benefit, your relationship will be on an unstable foundation. Only move in together if you’re truly in love with the person and ready to be in close proximity to them night and day. This will make splitting finances just one part of your relationship, and not its entire basis.

4. Avoid borrowing money. Not only is it annoying for your partner, but it might make them suspicious of your financial health and question your intentions. It’s okay to borrow money in an emergency situation, but don’t make a regular habit of it.

If your partner regularly asks to borrow money, you should inquire as to why they constantly need money. They may have lost their job or have unpaid debts you don’t know about.

5. Avoid sharing debts. Cosigning a loan for your partner is never a good idea. The last thing you want to do is end up saddled with debt that you did not personally incur. Only make a large investment with your partner like a house or car if you are in a stable, long-term relationship.

You should ask your partner about any debts or liabilities that they may hold. Be honest about your own debt as well. Keeping these secret can ruin a relationship when the debt is discovered by the other partner.

Always put both your names on the lease, mortgage, or loan. This will allow you some degree of protection in the event you and your partner separate.

For mortgages, consult a real-estate attorney to help you figure out the best way to negotiate your local real estate laws as they relate to your relationship. A married couple has different options for taking out a home loan than an unmarried couple.

For auto loans, too, you (and your partner) should talk to a financial officer at your local bank or credit union. There are many variables that could impact whether you and your partner decide to take out an individual loan or cosign the loan. Seek advice relevant to your living situation in order to get the lowest interest rates and avoid shared debt.

6. Do not share assets. Assets are valuable possessions or investments. Common assets include bank accounts as well as big-ticket items. Typical material assets include houses, cars, and boats. These items should never be purchased using both your names. Otherwise, you might end up wrangling over ownership in the event you separate.

Bank accounts, likewise, should never be shared between you and your partner. These accounts can be a source of tension should one partner decide to use the money for themselves.

If you want to set up a shared account with your partner – for instance, an account either of you can use to pay bills – keep it completely separate from your personal account. Put a small amount of money in it each month along with your partner, and use it only to pay the bills you intended it for.

February 25, 2020