How To Completely Organize Your Financial Life

January is one of my favorite times of the year – for a financial blogger – because a majority of people start thinking about their money again. And when you start thinking about your money, the key place to start is organization.

Over the years, I’ve tried everything possible to organize my money. I’m talking about keeping track of all my accounts, paper statement, insurance documents, bills, wills, old tax returns, business documents, and more. It seems like every year, the amount of “stuff” I need to keep grows and grows. As such, I’ve become a financial organization pro.

Today, I’m going to show you how I organize my financial life, and you can as well. I break it down into three sections:

Keeping Your Financial Accounts Organized

Tracking Your Live Documents (like bills)

Organizing The Stuff You Have To Keep

Let’s get started.

Keeping Your Financial Accounts Organized

The first step in getting your financial life organized is simply listing out your financial accounts. There are three ways to go about this – the simple spreadsheet or list method, the software method, and the online method.

But before you start, you just need to list out what you have. You should account for all of the following for accounts that hold monetary value. That is the key – these are the accounts that are worth money, not insurance or other financial “things”.

Banking

Checking

Savings

Certificates of Deposit

Money Market

Debt

Credit Cards

Auto Loan

Mortgage

Personal Loans

Student Loans

Investments

Brokerage

Peer-to-Peer Lending

Retirement

401k

403b

TSP

IRAs

Once you have all of these accounts listed, it’s time to get them organized so that you always know your balance and any transactions that take place. The three ways to go about it are pretty straightforward:

The Spreadsheet or List Method

This is the traditional way to keep track of everything. You basically maintain a spreadsheet or list of all your accounts, and you update it manually every month as you pay your bills.

This method takes more work than any of the other methods, and it’s hard to get real time data unless you’re going online and checking your accounts. Most people that use this method rely on paper statements and reconcile them when they arrive.

The Software Method

This has been the cornerstone of financial organization for the last 10 years – using software to keep track of all of your accounts. The most popular software for this is Quicken, which I use myself (just don’t get Quicken 2015 for Mac).

However, there are alternatives, like iBank (which works for Mac).

The great thing about the software method is that you can automatically update all of your accounts, so it alleviates a lot of the manual work involved. First, you take your list of accounts (that you created earlier), and you input them into the software. Next, you connect it to the online service using your online name and password. Going forward, you can use the software (like Quicken) to automatically download recent transactions and update your account balances. Finally, these software tools have more reports and tools that can help you monitor your money easier than with a basic spreadsheet.

The Online Method

Over the last five years, online services to help you keep track of your accounts are really becoming popular. The two main services are Mint and Personal Capital.

These services work just like Quicken, except they are online, and they are FREE! Once you add in your accounts, these services will update your balances and make recommendations on how you can save – which is how they make money (through services and advertising).

Tracking Your Bills And Other Documents

Alright, now that you have all of your account balances in one place, what the heck do you do with all that financial mail you get? You know, the bills, medical statements, and more? You have to deal with some now, and some you just need to file for later.

This is all about having a system. For our family, the system is very simple: we have an inbox on our desk that we clear on Friday nights once the baby goes to sleep.

The goal is to make sure that you clear out his inbox every week. You have to take action on these documents. 

Sometimes the action is very easy, you just pay the bill. I prefer to use online BillPay to send all of my payments, so we typically have Quicken and our bank’s website open on the computer while we’re paying our bills.

Once we clear out the inbox, we file away the statements and throw away the trash.

But how to we file the statements?

Managing Your Financial Files

This is the last part of the financial organizing equation – managing your financial files. Over the course of a year, you create so many documents it’s important to stay organized. You will typically have: a monthly account statement for every account listed above, a monthly bill for every utility you have, copies of your tax return, insurance statements, and more.

Some of these items you can toss after just a short period of time. Most bills you can toss after a year. However, some items you need to keep for a long time. For example, the IRS recommends you keep your tax returns for at least three years, but it really makes sense to keep them forever.

As you can see, the system provides tabs for all of the major categories that you will ever need to keep, along with guidance about what should go where, and a Quick-Find index up front.

Inside each tab, you make a manilla folder for each individual account. For example, one of the first tabs in “Auto”, and you can see a manilla folder for one of our cars- Honda Civic. Inside each tab you can keep a copy of your registration, insurance, and any service records. That way, everything you need for resale or trade-in is filed in one spot.

The same applies to banking, investing files, even pay stubs from your “Employment” (which you can see almost dead-center in the picture).

I then make it a habit, once a year in January, to go through and purge out any old items that I don’t need anymore. This is the best way I’ve found to stay financially organized.

What systems and tools do you use to stay financially organized?

[Source:thecollegeinvestor.com]Sourse: Thefinancebucks.com

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How Does Senior Life Insurance Work?

Senior citizens often have a difficult time obtaining life insurance. Some providers have age and health condition restrictions that prevent seniors from obtaining proper coverage. You can, however, still get a good policy. For elders, working with a broker is the best idea. The broker can sift through the different companies and policies to bring you only the ideal agencies to work with to suit your life insurance needs.

Term Life Insurance

Term life insurance policies are valid for specific periods of time determined by the policy that you select. In most scenarios, policies range from 15 to 30 years. The issue here is a senior citizen may outlive the term of the policy. Once this policy expires, it is difficult to find another insurer for higher age groups.

Final Expense Insurance

This type of insurance helps take care of the essentials at the time of death.  Things like medical bills, credit cards and burial insurance. It’s important to sit down and plan out a good estimate of the financial needs. Under planning coverage can burden your family.  Final expense insurance is often called senior life insurance as they are small plans just to handle the end of life expenses.

Refusal for Acceptance

Refusals are more common when it comes to senior citizens and life insurance. This is mostly due to their age and potential health problems. In terms of policy type, seniors are more likely to obtain a refusal from term life insurance agencies. This is mainly due to the fact that many do not out live the term of the policy and the insurer has to pay out the policy’s value to the family. Rates increase for others the more that an agency has to pay out for claims.

Picking the Right Type of Policy

Elders are just as confused as younger generations when it comes to picking the right policy. It is best to obtain a whole or permanent life insurance policy. This covers seniors for the entire span of their lives. There isn’t cut-off periods or expiration dates with these policies. This is often found to be the best option for seniors. The policy’s value pays out in full, as long as it has been kept current, upon the passing of the policy holder.

Finding the right life insurance policy is difficult for seniors. Be diligent in your research and make sure that you are picking a life insurance plan that is ideal for your personal situation. The amount of the policy can always be changed to make sure there is enough to cover all of your final expenses including your burial, medical bills, taxes and other financial obligations. As previously stated, a whole or permanent life policy is likely to be the ideal option as it does not expire. Consider this along with your individual needs when sifting through the numerous policies available.

[Source:debtroundup.com]Sourse: Thefinancebucks.com

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Are you ready for digital currencies?

When it comes to material things, technologies, and progress in general, I have never been an early adopter. I like my little comfort, even though I am adventurous with travel and life decisions, I guess having familiarity in the form of material things brings the stability I don’t have changing countries more often than some people change jobs. So when I first heard about Bitcoins and their offer of buying and selling goods via a digital currency, I was a bit skeptic. But like any financial product that changes value, it can be considered as an investment, and as such, studied as one of the various ways we, here at Make Money Your Way, investigate in order to diversify our sources of income.

I trade Forex, which are foreign currencies, and do so because, even if the dollar drops for example, I still need it for my construction needs. I still need Euros to travel back home, and Pound Sterling to pay my UK bills. So worst case scenario with currency trading, I take a loss but still have a use for the albeit lower currency. With Bitcoins, I know that many companies are starting to accept them, but it is a pretty young currency, having been introduced in 2009. So if something were to happen, and for some reason Bitcoins were not accepted around, you couldn’t trade them for much. Unlike the dollars that still are backed by the central bank and the U.S. government.

Bitcoins also have ups and down that are hard to predict since they don’t rely on political and economical data, but rather on supply and demand, and online buzz and other hard to expect events.

For example, the price variations of Bitcoin for the past few weeks have been from $386 on September 30th down to $325 on October 8th. Knowing that is was valued at over $1,000 earlier this year, and that it was worth around $100 in early 2013, it is pretty scary for investors, unless you are planning on shorting the Bitcoins of course.

I would trade extremely carefully if I were to invest in Bitcoins. Maybe start with one, make a few trades, buy, sell, or just hold it for the long term and see if it buys more down the road. But it feels a bit like gambling rather than the more stable currency trading I am used to.

I have to admit that I try to go for things I know when it comes to investing, and that has been a recommendation from successful investors too: if it is too complicated for you, just stay out of it and invest in what you know. I am not a techie and I have a hard time grasping how Bitcoins are created. Apparently, it is an online protocol, that could be done by any programmer, and it is called “mining”. While Bitcoin.org says Bitcoins are created at a predictable rates, I still don’t really get what makes them of any value, aside from the fact people find them a convenient payment method. But the high volatility could mean your payment may cost you more money than all the bank’s exchange and wire fees if Bitcoins lose value when you need to use them.

[Source:makemoneyyourway.com]Sourse: Thefinancebucks.com

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Different Types of Insurance Available

Insurance is a financial product in which companies that offer it will take on some form of monetary risk in return for the payment of premiums. An individual will typically invest in it to guard against having to pay out a large sum of money for common problems that may occur. Being insured gives peace of mind that should disaster strike, the financial implications of this can be dealt with and some of the common insurance products available include the following.

Life Insurance

No one wants to think about dying although all adults need to consider the problems this can leave for family members. This is especially true for those that are breadwinners, and life insurance is designed to pay out a sum of money in the event of the insured person dying.

This is most commonly paid to a family member and is a way for someone to ensure their loved ones are provided for in the event of their death. Contacting a company that offers this is a way to get life insurance quotes that will show how much money can be obtained for different premiums.

Property Insurance

Anyone buying a home or business premises will usually have to get property insurance as part of the deal for receiving a mortgage. This type of insurance can have a few elements to it, with the two most common being building and contents.

The building part covers for the cost of damage to the property caused by fire, flood, and other disasters. The contents part covers for the loss of the property owner’s belongings due to theft, vandalism, or damage.

Vehicle Insurance

It is against the law to drive on UK roads without having vehicle insurance in place and this means anyone intending to buy a car, van, motorbike, or other automobile must insure it. There are many companies that offer this type of insurance and there are a few different types available. The most basic is third party, which pays out for the cost of damage caused to other vehicles if the covered driver is responsible for an accident.

Third party fire and theft provides additional protection for the covered driver by also paying out if their vehicle is damaged by fire or stolen. Fully comprehensive offers the most extensive protection possible for the covered driver’s vehicle and those they are in an accident with.

Health Insurance

The cost of medical bills can be expensive should someone fall ill and investing in health insurance is a way to cover these. Quotes for this type of insurance can depend on factors such as age, current health, previous problems, and any medical conditions suffered. Even those that consider themselves in good condition should think about the benefits of health insurance as illness and injury can strike at any time.

Guarding against the cost of unforeseen circumstances is a common sense course of action and this is what insurance is for. While there is a cost in paying premiums, it can be worthwhile to avoid a large bill landing on your doormat. The insurance types shown above are some of the common options and anyone should consider investing in these.

[Sourcemoneyqanda.com]Sourse: Thefinancebucks.com

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Easiest Way Ever To Know How Much Money You Need For Retirement

Everywhere you go, you see various retirement articles telling you how much to save for retirement. One article will tell you that you need $1 million. Another article will tell you that you need $5 million. I don’t know about you, but the difference between $1 million and $5 million is fairly large.

From there we get into how much you can safely take out of your account every year. For years it’s been 4%. You’ve probably heard of the 4% rule. Well, now there is argument that the 4% rule cannot be followed.

I don’t know about you, but all of this conflicting information gives me a headache. To solve this problem, I sat down and realized something: the amount I need in savings is simply my annual spending multiplied by years of retirement. Pretty simple right? Let’s see this in action.

Look At Your Spending

The first step in figuring out how much money you need for retirement is to look at how much you spend. You can go about this a few ways.

The easiest way is to look at your annual budget. If you don’t have a budget, you can either create one or do a rough estimate of how much you spend. Two notes about this:

First, having hard data from a budget is much better than just creating something on the fly. It will be more accurate and while it might not seem like a big deal now, in the future when you run out of money because your estimate was too low, it will be a big deal.

Second, if you estimate, make sure you add 10-15% to that number. Trust me, everyone, and I mean everyone, underestimates how much money they spend. When I worked for a high net worth financial planner, we had millionaires who underestimated their spending.

Once you have your spending amount, you can go to the next step.

Consider Your Years In Retirement

The next step is to figure out how long you will be retired. Do you want to work until age 65 or do you want to retire early? We all have an idea of when we plan to retire. This is the easy part. The hard part is figuring out how long you are going to live. Again, using information from my financial planning days, we used age 95 as our estimate. The idea here is to estimate long. In other words, it’s better to save more just in case you make it to that age than to just save for 5 years and live another 20.

Putting It All Together

Now that you have all of your information, you can figure everything out. Let’s use an example here to see how this works. Let’s say my annual spending is $30,000 and I want to retire at 65. I will use my length of retirement as 30 years (age 95). To figure out how much money I need, I simply multiply $30,000 by 30. This gets me to $900,000.

If I can save $900,000 for retirement, I should be fine. If I work until 70 instead (only 25 years in retirement, I would need $750,000.

Tips and Notes

It really is this simple to figure out how much you need for retirement. Some might be wondering about mortgage and car payments, etc. You probably have them now, but won’t in retirement. Therefore, aren’t you over-estimating your retirement expenses? Technically the answer is yes.

The caveat to this is that there is no guarantee you won’t have a mortgage when you retire. Maybe you will move to a warmer climate when retired and have a mortgage on that house. Or you might buy a car in retirement and have a car loan. At the end of the day, you just don’t know what expenses you will have in retirement.

In the best case, you will not have a mortgage or car payment. This will just mean you have more money for travel or giving to your kids or even spoiling your grand kids.

Final Thoughts

When it comes to saving for retirement, put down all of the articles you see and figure out how much you will actually need. As you can see, figuring it out is a lot easier than you think.

[Source:savvyscot.com]Sourse: Thefinancebucks.com

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What is the Guaranteed Income Supplement?

The Guaranteed Income Supplement can help if you have a low income in retirement. GIS is part of the Old Age Security Pension, and it can help you supplement your income in old age. It’s a non-taxable benefit, so you don’t have to worry about paying taxes on what you receive.

Eligibility for Guaranteed Income Support

In order to be considered eligible for the GIS, you need to be receiving OAS. You need to have lived in Canada for at least 10 years after the age of 18, or have resided in Canada as a citizen or permanent resident on or before March 6, 1996 and become eligible for benefits on January 1, 2001 or earlier, or if you have been receiving OAS benefits since March 1996 or before.

You also have to show that you have a low income. In many cases, you are considered eligible for Guaranteed Income Support if OAS represents most or all of your income. Every year, you need to report your income, and your GIS benefit will be adjusted to fit your qualifications. I’s important to realize that you have to keep providing information to the government in order to keep receiving your GIS benefit.

How Much Will You Receive?

The GIS benefit is figured based on your income and your marital status. Income that you receive from a variety of sources, including pensions, retirement accounts, interest, dividends, workers’ compensation, wages, and rents is including in the calculation. The amount of money that your partner (if you have one) receives in income is also taken into account.

The government also takes into account the fact that you might be receiving only a partial OAS pension.

How to Apply for the GIS

You need the proper application form in order to qualify for the Guaranteed Income Supplement. It doesn’t hurt to apply for this benefit, and you might be eligible now, even if you weren’t in the past.

You will need supporting documentation to back up your application. When you request your GIS application, you will be provided with a list of documents. These documents might include salary and other other income information, as well as supporting documents like a marriage certificate or a statutory declaration (if you are in a common law partnership).

Pay attention to the documentation you need so that you can turn in what is required, and your application isn’t delayed.

While your benefit is adjusted each year depending on your income and whether or not your marital status has changed, you don’t have to fill out the full application each year. In fact, as long as you file your tax return each year, you will automatically re-apply for your GIS benefit. If you don’t file a tax return, though, you might need to fill out a renewal application.

The Guaranteed Income Supplement can be a great help to seniors who are struggling with poverty. It is a good way to ensure that our respected elders are cared for.

[Source:canadianfinanceblog.com]Sourse: Thefinancebucks.com

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What is CMHC Mortgage Insurance?

The Canada Mortgage Housing Corporation provides mortgage loan insurance to lenders for home buyers with a down payment of less than 20%, to as low as 5%. It offers a way for borrowers to get away with putting down a lower down payment than a lender might like.

However, it is important to note that this insurance is not meant to protect the buyer; it is used to protect the lender. CMHC insurance guarantees the bank or credit union that it will not lose money on this high ratio mortgage. If a borrower has more “skin in the game,” he or she is considered less of a risk. A 20% down payment usually represents a large commitment to the home, and a lender can feel reasonably sure that such a borrower won’t default on the mortgage loan.

How Does CMHC Insurance Work?

CMHC mortgage insurance is purchased to compensate the lender in the event that you default on your loan. Since it is the lender that is putting up the capital for your home purchase, the lender takes on the bulk of the risk of you don’t follow through. Insurance can help offset some of the risk involved.

It is the lender that technically pays the CMHC mortgage insurance premium, though the cost will pass to you. Many lenders add the insurance premium amount into the mortgage, so that you will not need to pay it immediately.

How much will CMHC insurance cost you?  There are three cost tiers for employed people with verifiable income:

15% to less than 20% down payment requires a standard insurance premium of 1.75%

10% to less than 15% down payment requires a standard insurance premium of 2.00%

5% to less than 10% down payment requires a standard insurance premium of 2.75%

There is also a premium paid on mortgages that are amortized over more than 25 years.

Over 25 years, up to and including 30 years, carry an extended amortization surcharge of 0.2%

Over 30 years, up to and including 35 years, carry an extended amortization surcharge of 0.4%

As you can see, the smaller your down payment, the more you pay in charges. On top of that, if you want a longer mortgage term (resulting in a smaller monthly payment), you have to be willing to pay the surcharge. The longer your mortgage term, especially when combined with a smaller down payment, the larger the chance that you default on your commitment.

If you want to reduce your costs, the CMHC has a program that provides a 10% refund on your premiums and no surcharge on extended amortizations if you purchase an energy eficient home, or if you renovate your home to make it more energy efficient. If you are environmentally conscious, this can be a great way to save a little money, as well as the earth.

While you would benefit from having a 20% down payment, in both interest and premiums saved, CMHC mortgage loan insurance serves a purpose by allowing people to buy a house with a smaller down payment. Being insured against loss, the bank is less concerned about the higher risk they take on, which allows the buyer to stop renting and start building equity in a home of their own.

Before you decide to buy a house, though, think about whether or not you can afford a bigger down payment. Weigh the costs and benefits of saving up for a down payment and paying less over time, or getting into a home sooner, but paying a larger amount over the life of your loan. Only you can decide which scenario is likely to provide you with the best use of your financial resources.

[Source:canadianfinanceblog.com]Sourse: Thefinancebucks.com

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What is a Binding Financial Agreement (BFA)?

Perhaps more commonly known as a pre-nuptial agreement, a BFA allows a couple to agree on an acceptable division of assets. They can be entered into before the commencement of a marriage or relationship, at any point during the marriage or relationship and after separation.

Entering into a properly drafted and executed BFA can prevent the courts from having to interfere with the agreed property distribution – helping to provide some certainty when a relationship breaks down.

How binding are they?

A Binding Financial Agreement is binding on the Courts, provided they comply with the requirements of the Family Law Act 1975 (Cwlth) for married couples and the Family Court Act 1997 (WA) for de facto couples (including same sex couples). Non-compliance may mean that the BFA can be set aside or voided.

It is therefore essential that you seek legal advice when contemplation entering into a BFA and have a lawyer draft the document to avoid any problems at a later date.

If your BFA is entered into prior to or during the relationship, it is recommended that you review it regularly but particularly following a significant event such as the birth of a child or receipt of an inheritance.

What is in a BFA?

Generally a BFA will detail how the parties have agreed to divide their assets in the event that the relationship fails. The agreement deals with property, financial resources as well as spousal maintenance, and any incidental issues.

BFAs entered into prior to the commencement of a relationship may address such practical issues as:

Protecting existing assets or likely inheritances;

Ensuring that children of a previous relationship inherit;

Preserving the family farm or other business for future generations;

Providing more weight to the contribution of a higher income earner; or

Avoiding disputes about financial matters at the end of a relationship.

Information required for preparing a BFA

Before an agreement can be correctly drafted, a lawyer will need detailed information about your financial situation, for example:

The parties’ occupations and future earning capacity;

Superannuation entitlements;

The value of currents assets including vehicles, furniture, shares etc;

The current market value of properties;

Details of debts, loans, mortgages etc;

Details relating to children, previous marriages and the date of commencement of your relationship.

Binding Financial Agreements can provide significant comfort to parties before any relationship issues arise. If prepared in accordance with the law, they can provide certainty, and reduce stress and costs. Your affairs are resolved in a timely manner thus avoiding the possible long delays caused by court proceedings.

[Source:onecentatatime.com]Sourse: Thefinancebucks.com

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3 Reasons to Use an Online Only Bank

Data breeches are seemingly affecting everyone these days – or at least my husband and I feel that way. My debit card got ensnared with last year’s Target breech and his got caught up with the recent Home Depot issue. Our bank ended up cancelling our cards (with little notice), which was a big problem last year when we didn’t have a credit card!

If that wasn’t bad enough, we just got a letter in the mail stating that, since we haven’t used our online bill pay feature in the last 4 months, our bill pay account was being suspended. But we just signed up for the feature a few weeks ago!

Our bank’s customer service drove us on a search to find a better back. After researching we came up with 3 reasons to use an online only bank.

Your Money Goes With You

My husband and I got married during my last semester of college. When I got my first job, we had to move to another state, so we closed our bank accounts and opened a new account with my employer’s credit union. After all, they had some great rates and offered free checks. Then we moved two years later, for my new job, so we had to find another bank. Again, we opted for my employer’s credit union. Guess what? We moved again, but this time there was no employer credit union to tempt us. Instead, we went with a local bank – the one whose service has been less than stellar.

We wanted to put our money in a national bank so that we never had to move our money around again. Closing and opening accounts is a pain, and it’s an unnecessary one. By going with an online-only bank, we never have to worry about whether there is a branch in our area or not. The bank is always around and is always serving us.

Better Interest Rates

One of the best reasons to go with an online-only bank is the interest rates. You will get a far better deal on your checking and savings interest rates by putting your money in an online-only bank, versus a traditional financial institution. Yes, you read that correctly – you can earn interest on your checking account.

Wonder how the online bank manages the great rates? They don’t have to pay all the overhead expenses of a traditional institution.

Added Perks

One of my biggest concerns about going with an online bank was ATM fees. We don’t withdraw money from ATMs frequently, but we do it a few times a month. Additionally, my husband travels frequently for work, so there’s always a chance that he’ll need to grab some cash in a strange corner of the world. The best online banks take care of this – either by refunding ATM fees you pay or by offering a large network of fee-less ATMs that you can choose from.

We are also going with an online bank that offers free checks (we use a few a month), compounds interest daily, and doesn’t charge a monthly maintenance fee – things we couldn’t find with the “national” brick-and-mortar banks in our area.

[Source:everythingfinanceblog.com]Sourse: Thefinancebucks.com

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What To Do With Your Raise

I recently got a fairly large raise at work and immediately breathed a huge sigh of relief knowing that it would make a huge difference in our debt pay-off journey, especially on top of the money I make freelancing. You see, my freelancing money is basically a windfall for me – it’s money I haven’t budgeted for because I don’t require it. No matter your financial situation, it’s smart to have a plan in place for the extra money your budget says you don’t need, otherwise you will never know where it went. Maybe that extra money is a raise. Maybe it’s a windfall – a one-time financial pick-me-up like a tax return, bonus, or inheritance. Having a plan for that money will ensure that you continue to achieve your financial goals and achieve them more quickly.

What you do with a raise really depends upon your individual financial situation (this is why it’s called personal finance). Are you in debt payoff mode or savings mode? If you are in savings mode – are you close to retirement or are your kids close to college? Now is the time to step back and reassess your goals and the steps you want take to achieve those goals.

Check Your Budget

As you reassess your goals, it’s a great time to just double check your budget. You might have a need to invest in yourself, so to speak. Make sure you know where all your money is going to and if you are short in a category, now is the time to add in some funds to bring your budget back into balance. For example, I knew we were pretty short in our personal care category, especially given that our daycare has refused to use cloth diapers, which I had initially budgeted on. With my raise, I can add some money into that category to make sure I have enough money to buy diapers.

Check Your Emergency Fund

Next, check your emergency fund. Maybe you established your fund a long time ago and have left it alone, believing it’s enough. But now that you have rechecked your budget, do you really still have 3-6 month living expenses in that fund? Have you dipped into it here or there without realizing it? Or maybe your needs have grown and you didn’t account for that in your fund. Now is the time to take care of that.

Check Your Debt Status

Your budget is solid. You know you have plenty of money in your emergency fund. Are all your debts paid off – even the doctor bills and other nonrecurring charges? If you have any debts at all, put the rest of your money toward the debt. You’ll end up richer in the long run by not paying all the interest, so avoid the temptation to run out and treat yourself (or at least don’t keep treating yourself).

Check Your Savings

So you are a financial rock star – your budget is in good shape, emergency fund is solid, and even your debts are paid off. That means you are in saving/investing mode. You are probably throwing a little party, knowing that your raise can be put straight toward those goals. For everyone else, just know that this is where you will be one day if you continue to handle your pay increases wisely.

First Loan Payoff!

For us, I have rechecked our budget, shored up a few categories, and now I am looking at paying off the first of our student loans this year. No, it’s not as fun as booking a trip to Paris, but paying off our first loan feels much more satisfying!

[Source:everythingfinanceblog.com]Sourse: Thefinancebucks.com

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The Health Insurance Premium/Deductible Tradeoff: Which Saves More Money?

For the first time ever, my husband and I have full benefits through his work. As we looked over our health insurance options, we discussed the premium/deductible tradeoff. We’ve had a high-deductible plan for years, mainly because that was the only way to keep health insurance costs reasonable when buying as an individual.

But, thanks to my husband’s awesome benefits package, we briefly considered choosing a plan with a higher premium, but a much, much lower deductible.

In the end, though, we decided that a high-deductible plan was still the best financial move for us, since we can save money on the premiums and put those savings in a Health Savings Account for further tax benefit, and future investment growth.

It looks as though we are not alone in our assessment of the situation.

The Premium/Deductible Tradeoff

A recently-conducted Bankrate.com poll indicates that more than 40 percent of Americans prefer the monthly savings of a high-deductible plan, while 36 percent want a lower deductible, even if it means a higher monthly payment.

When making your own decision about health insurance, it’s important to be aware of the premium/deductible tradeoff so you can make the choice best for your family.

When choosing a lower monthly premium, you’re expected to pay more out of pocket through a higher deductible. Our current plan requires our family to pay the first $2,500 (2014 requirements) of health care costs — other than the yearly preventative visits for each of us — out of pocket.

My husband’s recent doctor visit means we’re responsible for the entire $108 cost. After the deductible has been met, we’re only required to pay 20 percent of any health costs.

Monthly Savings vs. Out of Pocket Costs

We save money each month as a result of our high-deductible plan, though. Our monthly cash flow benefits from this arrangement. However, when we have prescriptions, or when we visit the doctor, we need to be prepared to pay the cost up-front.

On the other hand, if we were willing to pay a higher monthly premium, our out of pocket costs would be lower. That doctor’s visit of my husband’s would only require a $30 co-pay as the out of pocket expense. This would be a savings of $78. Of course, our higher monthly premium would have probably offset that savings quite quickly.

The real question you have to ask yourself is whether or not you need health care services often. If we needed to visit the doctor once or twice every month, or if one of us had a chronic condition (like diabetes), the story might be different.

Paying a higher monthly premium in order to lower out of pocket costs at the time of service would likely smooth our cash flow. However, since we have few health care needs, we benefit from contributing to our HSA, and then being able to call on the money when our higher out of pocket expenses are required. Plus, the money is ours indefinitely, so if it isn’t used, it goes toward our future prosperity.

As you engage in open enrollment, and consider your own health insurance options, think about the tradeoff you make when it comes to your premiums and deductibles.

Do you prefer to pay a higher deductible to save money each month? Or does having lower out of medical pocket costs work better for you? 

[Source:moneyning.com]Sourse: Thefinancebucks.com

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Forex - Australian dollar gains ahead of trade data, yen up early

Investing.com - The Australian dollar gained on Tuesday in Asia ahead of trade data for November expected to show a wider deficit as commodity prices slumped globally in the tail end of 2014.

AUD/USD traded at 0.8101, up 0.20%, while USD/JPY traded at 119.34, down 0.25%.

Australia's November trade balance is due at 1130 Sydney time (0030 GMT). The data is expected to show a wider deficit of A$1.59 billion compared with a deficit of A$1.3 billion in October.

Then at 0945 Beijing time (0145 GMT), HSBC's China December services PMI is due. In November, the survey showed a reading of 48.8.

Overnight, the dollar remained near nine-year highs against the other major currencies in quiet trade on Monday, as expectations for a U.S. rate hike this year continued to lend broad support to the greenback.

The U.S. dollar index, which measures the greenback against a basket of six major currencies, rose 0.05% to 91.70.

Demand for the dollar continued to be underpinned by the diverging policy outlook between the Federal Reserve and central banks in Europe and Japan.

The Fed is widely expected to raise interest rates in the coming year as the steady economic recovery in the U.S. continues.

EUR/USD hit lows of 1.1858, the weakest since February 2006, and was last at 1.1937, up 0.03% on Tuesday in Asia.

The single currency came under pressure after official data showed that German inflation slowed to the lowest level since 2009 in December.

German consumer price inflation accelerated at an annualized rate of 0.2% last month, below forecasts for 0.3% and slowing from 0.6% in November.

The euro also weakened after European Central Bank President Mario Draghi said Friday the risk of the bank not fulfilling its mandate of price stability is higher now than six months ago.

Uncertainty over Greece’s future in the euro zone also weighed ahead of upcoming elections later this month. 

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