Author: Jenny Smedra

7 Signs That You Aren’t Saving Enough For Retirement

Jenny SmedraLeave a comment

Signs That You Aren't Saving Enough for Retirement

Most people plan to retire in their early to mid-60s. However, that won’t be an option for everyone, especially if you think that your Social Security benefits will not be enough to support you. Financial planning must begin early in your adult life. Most advisors agree that you will need about 70-80% of your current income to sustain your lifestyle. So, are you on track to reach your goals and retire by 65? If you recognize any of these red flags, then your answer is probably a “no.” For those who see any of these 7 signs that you aren’t saving enough for retirement, then it’s time to make some changes.

7 Signs That You Aren’t Saving Enough for Retirement

1. You don’t live below your means.

The first rule of budgeting that every adult must learn is how to live below your means. Simple math will show you that it isn’t sustainable to consistently spend more than you earn. If you want to remain financially independent, you have to know how to make a budget, but also have enough discipline to stick to it.

If you frequently overspend, then you are undercutting your long-term goals and future stability. Retirement planning requires careful money management and regular contributions to your dedicated accounts. When you outspend your budget every month, it becomes incredibly challenging to save anything. In the worst-case scenario, you won’t have anything saved, which means you won’t be able to afford to retire. That’s why it is so important to learn this lesson early and ensure that you have enough to live well in retirement.

2. You continue to accrue debt.

Although this goes hand in hand with the first point, it is so detrimental that it deserves its own recognition as one of the worst signs that you aren’t saving enough for retirement.

At some point in our lives, nearly everyone will carry some amount of debt. But retirement planning also requires you to eliminate it before you are living on a fixed income. If you are already struggling to cover your expenses while you are earning a salary, imagine how much more difficult it will be when you have to rely on your benefits and retirement accounts.

Sadly, many people who continue to accrue debt after they retire quickly burn through their retirement savings. If you still have debt in your later years, retiring may not be an option for you.

3. You don’t have a retirement account.

This one should seem obvious, but you should have dedicated retirement accounts to help you with your financial planning. There are several different types of accounts that provide different contribution thresholds and tax benefits for you.

Most people have a combination of IRAs, 401(k)s, life insurance, and other investment vehicles in their portfolio. But your ultimate goals will dictate how much you should save and which ones are right for you. You will need to discuss it with your financial advisor to determine which type of accounts are best suited to your long-term goals.

4. You aren’t maxing out your contributions.

One piece of advice I got as a young investor was to max out the accounts with contribution limits. This is because they offer the greatest tax advantages and return on your investment. Therefore, maximizing your contributions is a good habit to get into.

While it may not be possible every year, hitting these thresholds will optimize your savings plan. And, it will help you get the most from your hard-earned money. For 2022, you can contribute a maximum of $6,000 to your Roth IRA and a total of $20,500 between your 401(k)s. This amount increases to $6,500 and $27,000 for those over 50 who are eligible for “catch-up” contributions. But, these limits will increase in 2023 to help compensate for the increased inflation rates to help you save even more.

5. You don’t take advantage of employer retirement benefits.

You will rarely find employers who offer pension plans as part of their retirement package anymore. Instead, they opt for 401(k)s and contribution matching plans. If your employer offers this and you aren’t taking advantage of it, then you are leaving free money on the table. Those who are lucky enough to have this option need to take advantage of it.

And the best part is that you don’t need a ton of money to get started. Even small, consistent contributions can grow into a large sum if your employer is matching a percentage. And with compounding interest, it can grow into a substantial sum over time.

6. You aren’t investing at all.

One of the most significant signs that you aren’t saving enough for retirement is that you are not investing. It can be a difficult decision to place retirement planning before your immediate financial needs. But, you have to start at some point. It is impossible to save enough of your salary to fund your retirement.

The longer you put it off, the harder it will be to reach your retirement savings goals. As previously mentioned, you don’t need a huge sum of money to get started. However, the sooner you begin investing, the better off you will be when you finally decide to retire.

7. You don’t evaluate or adjust your money management strategies.

Change is a natural part of life. As we grow, we change as people, and our financial situations change right along with us. So, it’s important to revisit your money management strategies after reaching important milestones or experiencing major life changes.

You have to adapt and adjust to your new circumstances. But, it can be overwhelming when faced with these monumental decisions. Remember that you don’t have to do it alone. Find a financial advisor you can trust to guide you through these important decisions and help you build a solid foundation for your future.

What do you think are the most significant warning signs that you aren’t saving enough for retirement? Share your thoughts in the comments below!

Read More

7 Bad Financial Habits You Need to Forget this 2023

Jenny SmedraLeave a comment

 

With the new year upon us, it’s normal to reflect on the positive changes that we want to make in our lives. So when January 1st arrives, many people resolve to break their bad habits and establish good ones. Since many people struggle with managing their finances, it’s no surprise that many of these changes revolve around regaining control and building a more secure future. If you are looking to improve your money management skills or finally get out of debt, these are 7 bad financial habits you need to forget this 2023.

7 Bad Financial Habits You Need to Forget in 2023

1. Overspending

Your spending habits will set the tone for your lifestyle. If you are spending more than you bring in every month, you cannot establish sustainable habits. Overspending will undermine all your other financial goals. While splurging once in a while isn’t a crime, consistently overspending means that you are setting yourself up for failure.

And if you are prone to impulse shopping, this can be even more damaging. Blowing every penny you earn on things that provide instant gratification prevents any chance of improving your financial situation. Therefore, you must learn to live below your means if you ever hope to get out of debt or reach your savings goals.

2. Overindulging in Your Vices

Many people find comfort and relief through behaviors that aren’t good for their physical and financial health. For example, you may enjoy smoking, drinking, and fast food as a way of dealing with the stresses of everyday life. But, do you know how much it is costing you each month?

The average smoker spends about $1,000 a year and those who eat out regularly can spend the same amount within a month. While these behaviors may be okay in moderation, regular indulgence in these activities can hit your wallet hard. If your vices make it impossible to stick to your budget, then it may be time to kick these bad habits for good.

3. Always Paying with Credit Cards

If you have ever tried to get a loan or line of credit, then you know it’s impossible to obtain anything without a credit history. And credit cards are an important part of establishing that. However, you shouldn’t rely on them to get by from month to month.

If you are unable to pay off your monthly balances, the high-interest rates can quickly bury you in debt, especially if you are only making minimum payments. Those who are already struggling to pay down their debt don’t need this added burden. This is why many financial advisors will tell you to reduce your dependency on them. Monitoring your spending and using cash will make it easy to track your finances.

4. Ignoring Your Financial Situation

As hard as it may be to face the truth, you can’t ignore the reality of your financial situation. Burying your head in the sand won’t make your problems go away, On the contrary, it usually makes them worse. Small issues can quickly snowball into an avalanche of problems.

Therefore, you need to be honest with yourself about your financial habits. Start by assessing your situation to see where you are at. Then, make a plan to track your expenses, monitor your accounts, and regularly check your credit report. Once you know where you stand, you can take steps to get closer to where you want to be.

5. Not Taking Advantage of Employer-Sponsored Retirement Accounts

When you are living paycheck to paycheck, investing in your retirement may not seem as important as keeping the lights on or putting food on the table. While your immediate needs supersede future ones, you have to take action toward future financial security.

An easy way to get started is through employer-sponsored retirement accounts. And the best part is that you don’t need a lot to get started. Even small, regular contributions can grow into a sizeable nest egg over time thanks to compounding interest. If you aren’t taking advantage of your employer matching your contributions, then you are leaving free money on the table.

6. Not Tracking Your Invisible Expenses

Creating a budget is the first step in financial management. However, you have to be sure it is an accurate depiction of your finances.

Everyone knows that you must account for major living expenses like food and housing in your budget. However, many people overlook the “invisible” expenses that are tacked on to your bills. This could be anything from higher interest rates on your loans to increased premiums to hidden fees for services. Things that are easily overlooked and not factored into the final budget can tip the scales and put your finances in the red.

7. Procrastination

Procrastination is one of my worst financial habits. I often say that I will take action to get back on track, but then never follow through to make impactful changes. Without a doubt, it has hindered many aspects of my life.

However, if you don’t break this habit, it can also keep you from reaching financial freedom. This nasty habit encompasses many negative financial behaviors such as delay in creating a budget, not building an emergency fund, waiting to invest, continuing to pay for unused services, or even paying bills late and accruing unnecessary fees. If you are guilty of this as well, perhaps procrastination is one of the bad financial habits you need to forget this 2023.

Breaking the Habits

Like many things in life, breaking bad habits is much easier said than done, especially when they are deeply ingrained behaviors. But if you are serious about changing your finances in the new year, then you need to commit to taking action. You must first acknowledge your financial shortcomings and then find a path forward. But, don’t beat yourself up if you experience setbacks along the way. As long as you are putting in the effort and making progress, you will eventually reach your goals.

Read More

Which States Are Americans Fleeing to Save Money?

Jenny SmedraLeave a comment

The 5 States Americans Are Fleeing to Save Money

People move for many reasons: family, job opportunities, tax advantages, better climate…the list goes on. But, as the economic conditions persist and inflation remains high, the cost of living is becoming a more popular reason for people to move. Unfortunately, life in major metropolitan areas has become too expensive for some. Here are 5 states Americans are fleeing to save money and find a better quality of life for their budget.

The Cost of Living Index

Every year, the U.S. Bureau of Labor and Statistics collects data from each state to compare the cost of living across the country. It then ranks each state based on the cost of living, or the bare minimum you need to afford basic living expenses such as housing, transportation, healthcare, utilities, and groceries.

As a means of measurement, it then created the cost of living index which provides a standard comparison from state to state. A score of 100 represents the national average. Currently, the average American household spends $5,111 per month on living expenses, or $61, 334 per year. A score below 100 means the cost of living is below average. Meanwhile, states with scores over 100 indicate that the cost of living is higher than the national average.

5 States Americans Are Fleeing to Save Money

So, what are the most expensive places to live? And, which states are Americans fleeing to save money?

1. New York

The Empire State claims the top spot for several reasons. First and foremost, a recent study from the Pew Research Center shows that New York had the single greatest population loss in the country. From 2020 to 2021, 1.58% of New Yorkers left the state. Although it was higher than in previous years, it has been a continuous trend.

Secondly, it has one of the highest cost of living index scores at 148.2. Housing expenses are 2.3 times more expensive than the national average, with the average single-family home valued at $373,880. Meanwhile, the average rent is over $1,700 for a two-bedroom apartment here. And, these averages are much higher if you are only looking at the costs to live in New York City. Those who live in the city have a median rental rate of $5,878 per month for a two-bedroom apartment.

Lastly, people here will find it harder to save and pay down debt. The living wage in New York is $110,225, but the average income is only $111,054. This leaves many living paycheck to paycheck, and looking to New Jersey for financial relief.

2. Hawaii

Hawaii has long claimed the title of the most expensive state. It has an index score of 193.3, reflecting that the cost of living here is nearly double the national average. Furthermore, the cost of housing is triple the national average, with the median value of a single-family home of $730,511. Even renting is expensive at $1,651 per month for a two-bedroom apartment. And since many items have to be shipped to the islands, groceries also cost about 50% more as well.

However, it still has one of the lowest poverty rates. Living wages are estimated to be $107,702 per year while the average income for a family of four is slightly higher at $118,223. Yet according to the analysis, Hawaii still experienced a population loss of -0.71% in 2021 alone, more than double previous years. This migration likely shows those who moved, seeking some relief from the price of living in paradise.

3. California

Although the cost of living here has always been notoriously high, inflation has made it even more expensive to live in the Sunshine State. The current index score is 142.2, over 40% more than the national average. The price of gas makes transportation costs here the second-highest in the country. And, housing expenses are more than twice the national average. The median value of a single-family home is $683,996 while the average rent runs about $1,600 per month. But, you can expect it is much higher in larger cities like San Francisco and Los Angeles.

With these prices and current wages, it’s hard to keep up with the cost of living. The current living wage is set at $110,255, but the median income is only $105,232. When you look at these figures, you can understand how it has the highest rate of homelessness in the country.

Life in California has become unsustainable for so many, that they have decided to seek greener pastures elsewhere. During the span of the study, California saw a population loss of -0.66%. And, this figure will likely increase as economic conditions persist.

4. Massachusetts

The Commonwealth of Massachusetts takes the fourth spot on our list of states that Americans are fleeing to save money. An index score of 135 makes it the fourth most expensive state to live in. However, it should be noted that the cost of living in Boston is much higher than in other areas of the state.

On average, residents of Massachusetts pay 77% more than the national average for housing. The average single-family home runs $518,203 and the median rent is about $1,360 a month. But, you will need triple this figure if you are looking in Boston. People in the Bay States also pay nearly 20% more for healthcare and groceries here.

However, it also has the highest household income in the nation at $140,309 while living wages are set at $121,414. But a population loss of -0.53% by 2021 proves that wages alone are not enough to keep people from leaving.

5. Illinois

Looking at the consumer price index and an index score of 94.3, Illinois may seem out of place on the list. However, it has one of the highest population losses with -0.89% growth from 2020 to 2021. This is the eighth consecutive year with 69% of all moves going out of state.

So, why are so many people leaving? The analysts at Kiplinger believe it is because Illinois is the least tax-friendly state for the middle class, with higher than average income, property, and sales taxes.

However, it is also important to point out that the figures for Chicago are drastically different from the rest of the state. And with almost 22% of the state’s population, it’s worth looking at Chicago on its own. The cost of living in the city is 33% higher when compared to the rest of the state and 25% higher than the national average. In this context, it makes more sense. Between the high cost of living and bitter winter weather, it’s no wonder people are looking for milder conditions.

Final Thoughts

Although many Americans are fleeing these states to save money, we can’t assume that the only reasons are financial. However, one thing is for certain; people are moving in search of a lower cost of living and a better quality of life.

Read More

5 Hottest Collectibles to Invest in 2023

Jenny SmedraLeave a comment

 

The 5 Hottest Collectibles to Invest in 2023

As the economy continues to struggle and inflation remains high, people are looking for additional ways to make money. Since many people are looking at alternative assets, collectibles have become popular for those who want options outside the stock market. Some have even made a career of buying and reselling collectibles for profit. So if you are thinking about adding this asset to your portfolio, experts predict that these will be the 5 hottest collectibles to invest in 2023.

Learning the Basics of Collectibles

The collectibles market is notoriously fickle. Items that are popular one year may completely disappear the next. You will see many people waste thousands of dollars on fads that never appreciate in value. The truth is that it takes time, patience, and a good eye to build up a valuable collection. It could take decades for certain items to even become valuable. So, you should carefully consider if it is the right type of investment for you.

If you decide to invest, the next step is to choose your niche and learn everything you can. You’ll need to know the rarest collectibles and how to identify them. Furthermore, you will need to be able to gauge the condition of the items. Since rarity and condition have the greatest impact on an item’s value, you will need to teach yourself how to recognize it.

Lastly, you’ll also need to be prepared to properly store your collectibles. Since they won’t improve with age, you need to take precautions to prevent damage or deterioration. Depending on what you collect, this could be an investment in itself. Even if you bought the items in pristine condition, they will be worth nothing if you don’t care for them.

5 Hottest Collectibles to Invest in 2023

For those who want to add alternative assets to their portfolio, collectibles can be a great way to preserve and pass on wealth. Based on expert opinions and current trends, these are 5 of the hottest collectibles to invest in 2023.

1. Toys

The collectible toys industry is still booming. In 2021, it was valued at $12.5 billion. And, it shows no signs of slowing down. On the contrary, it seems more adults are taking an interest every year.

People spend hundreds of dollars on Barbies, Hot Wheels, Legos, dolls, figurines, trading cards, and toys affiliated with popular movies from their childhood. Some Star Wars, Harry Potter, and Marvel memorabilia even sell for five and six figures at auction. So, toys would be a solid choice of collectible to invest in.

Even if you don’t have the capital to buy valuable items, you may discover hidden treasures among your childhood toys. Or, you can try to buy items that will appreciate in time. Franchises like Disney have always had a strong market. So, collectibles from new movies will probably also hold their value.

2. Sports Memorabilia

Diehard fans are always willing to spend top dollar to own a piece of their team’s history. And thanks to e-commerce, you have a much wider market. Not only can collectors find items from around the world, but sellers can also access global communities.

And there is a huge variety of branded items that fetch a good price. Old ticket stubs, newspapers, magazines, trading cards, autographed pictures, uniforms, equipment, and even the original player’s contracts have come up for auction.

However, you must be cautious with the increased number of forgeries. These fakes have undermined the entire market. Always look for authentication. And if you collected an item yourself, get photo evidence whenever possible.

3. Tech and Electronics

It should come as no surprise that there is a huge market for vintage electronics. Just as adults have nostalgia for their favorite childhood toys, movies, and sports teams, many also have strong attachments to certain electronic products. For years, people have geeked out over antique computers and systems that represented pivotal changes in the industry.

So, many people choose to turn their passion into a valuable collection. We are at a point where many items are still fairly common, but that may change in the near future. If you want to look for these collector’s items, seek out things that are the first of their kind, new in box (NIB), and in mint condition. A 1st generation Apple iPod recently went for $23k at auction. So, who knows what an original iPhone, iPad, or Alexa device will bring down the road?

4. Work from Emerging Photographers

Photography is one category in which many collectors have had success in recent years. Several lucky people have stumbled across caches and prints from the early work of respected artists. Back in 2007, someone discovered negatives from Vivian Maier. Since then, they have made a documentary and books of her work. Now, her prints start at $4,000 each.

Another example is the rare photos from Frank Worth. He had some fantastic shots on old Hollywood sets which started appearing on the market in the last decade. One photo of James Dean sold for around $7,200.

If you have an interest in photography, visit local galleries to learn about emerging artists so you know whose work to watch for. And even if you don’t strike it rich, you can still enjoy beautiful art.

5. First Editions of Best Sellers

Many people choose to invest in literature after falling in love with a particular book, author, or series as a child. While many classics are sold for a small profit, it’s the first editions that hold the most value. After publishers print a new book, they release a small number of copies to gauge popularity. Only a few hundred copies of these first editions were released, making them more valuable.

Over time, a book’s value tends to be more linear in appreciation. And based on current collections, a rare book will typically double in value in 7 years. While most of us will never be able to afford any of the most valuable books and manuscripts, you can start building your own collection. Start by finding copies of new releases and put them away somewhere for safekeeping.

Key Considerations Before Investing in Collectibles

It’s true that collectibles can bring in much more money than their original value. But, it’s not as easy as people think to find rare and valuable items. And, there are no guarantees that your investment will pay off.

If you decide to pursue it as an investment, do your research and choose something that you are familiar with. As Warren Buffett said, never invest in a business you don’t understand.

However, the best advice is to discuss it with your financial advisor before you buy anything. You may discover that collectibles are not the best investment for your financial goals.

Read More

7 Things That Are Disappearing With the Pandemic

Jenny SmedraLeave a comment

Things That Are Disappearing During the Pandemic

Many things have changed since the early days when Covid-19 first started to spread. And while more people are vaccinated now and life is returning to some sense of normalcy, no one can deny that certain things have permanently changed. For example, the way we view public health, how we communicate, and how the workforce is organized will never be the same. Looking back over the last few years, here are 7 things that are disappearing with the pandemic.

7 Things That Are Disappearing with the Pandemic

Although many things have changed, here are a few things that have affected nearly everyone since Covid-19 became a household concern.

1. Handshakes

When doctors and national agencies first realized we were in the midst of a pandemic, health experts recommended precautions to protect people from the virus. In addition to handwashing and masks, one of the most important was to minimize person-to-person contact.

Since Covid-19 is highly contagious, it makes sense that people would eliminate handshakes to reduce their risk of contracting it. However, people got inventive. Some started using other gestures to greet one another and seal business deals. Although it is a culturally entrenched behavior, handshakes may be phasing out with new generations who have been taught the danger of passing contagions through physical contact.

2. Offices

As the world went into lockdown, businesses had to adjust to keep their employees safe and their operations running. Therefore, many people were allowed to work remotely. Today, some companies have tried forcing employees back into the office. But, people seem to enjoy working from home. Not having to commute allows them more time with family and a better work-life balance.

Companies are also seeing the benefits. Since they no longer have to lease offices or pay utilities on large, commercial spaces, it drastically reduces their operating costs. Although some companies are resisting the transition, others have gone fully remote. If more corporations realize the financial advantages, Covid-19 may trigger the end of traditional office culture.

3. Local Shops and Restaurants

The service and retail industries were two of the hardest hit by the pandemic. Many locally owned shops and businesses suffered huge losses when the government implemented new public health standards for social distancing. But reducing staff and hours of operation wasn’t enough for some to survive.

After several months, smaller stores and restaurants were unable to pay their staff and continue covering the costs to do business. Unfortunately, they couldn’t compete with national retailers. So, many smaller shops had to permanently close their doors.

4. Movie Theaters

As a teenager, I spent every Friday night at the movies with my friends. And, the location changed every week since we had several different theaters to choose from around the city. Even as streaming services became more popular, many movie theaters were still thriving before the pandemic.

However, now a good number of them are scrambling to stay out of the red. Although many theaters have changed ownership or branding, you will still be able to find places to catch the latest flicks. But, it seems like they are fading away and may never reclaim the prominence they once had.

5. 24-Hour Walmarts

When it first entered the scene, this giant in the retail world set itself apart as the store that was always open. You could find anything you needed at Walmart, day or night. However, they announced that they would reduce their store hours when the pandemic hit in 2020.

Nowadays, stores no longer remain open overnight or maintain the same hours of operation during holidays. Although the policy changed two years later, it is still in place. Many hopeful shoppers have shared rumors that Walmart would return to their former 24-hour schedules. But, the Director of Walmart Press Office Corporate Communications confirmed there are no plans to make this happen. So, it seems the days of 24-hour Walmarts are already fading into our collective memory.

6. Cash

The decreased circulation of cash is not a new concern. In recent years, some governments have even tried to eliminate cash currency and have discussed ideas to go fully digital.

Although it may seem like a plot from a science fiction movie, digital payments have become more popular and e-commerce has been booming long before the pandemic began. In fact, it spurred their development and acceptance in the marketplace. And at the rate people are utilizing them, digital payments may replace cash transactions entirely someday.

In 2017, only 30% of all transactions were paid in cash. However, this has decreased even more thanks to Covid-19. With the fear of spreading germs through paper money and coins, even fewer use cash today. If people continue to choose alternative forms of payment, cash may not be the only currency disappearing with the pandemic.

7. Privacy

One of the greatest losses over the last few years has been our personal privacy. If you have a smartphone or use the internet, you should assume that you have no privacy, and you need to act accordingly.

Nowadays, hackers and businesses alike can track every keystroke and click you make. Some use it to steal your information while others analyze your web activity for marketing purposes. However, even your personal devices track your movement with sensors and GPS data. And, if you use a smartwatch, they can even access information about your personal health

While you should always take precautions to protect your data, it is nearly impossible to operate in modern society without the internet. That is, unless you plan to live off the grid. So unless you can rely on your survival skills, personal privacy may be a thing of the past.

Keep in mind this list is not intended to be all-inclusive since many things are disappearing with the pandemic. What do you think has changed most since the pandemic began? Share your thoughts in the comments below! 

Read More

How to Strengthen Your Four Walls of Budgeting

Jenny SmedraLeave a comment

How to Strengthen Your Four Walls of Budgeting

When you are in debt, it may feel like you are digging yourself deeper with every dollar you spend. And as the bills start mounting and collection agencies are pressuring you to pay, it’s easy to panic and forget your priorities. However, knowing the four walls of budgeting can help remind you what is most important in your budget. So if you are having a hard time making ends meet, here are a few ways you can strengthen your four walls of budgeting and get closer to your financial goals.

What Are the Four Walls of Budgeting?

Dave Ramsay describes the four walls of budgeting as the essential things in your budget that you need to survive. Like the four walls of your home, these four categories represent the things you need to sustain the bare minimum standards of living.

But, the amount you spend and the definition of each wall will vary from person to person. So you have to identify them within your own budget. However, here is a basic guideline of what each wall represents.

1. Food

Humans are animals, and our bodies need fuel to function. This category should include all the food with the essential nutrition that your body needs. When tallying these expenses, you should include all your expenses for food.

2. Shelter

The second wall of budgeting deals with our basic need for shelter. This category covers all the expenses to keep the roof over your head and the lights on. For most of us, this will incorporate the largest portion of the budget.

The general guideline suggests that 30% of your income pays for housing. In addition to your monthly mortgage or rent payment, there are also property taxes, utilities, maintenance, and repairs and repair costs to consider as well.

3. Clothing

The third wall represents the basic clothing items you need in your daily life. This should account for formal and business attire at work, footwear, winter apparel, undergarments, and any other clothing items you wear from day to day.

4. Transportation

The final wall of budgeting has a great deal of variation depending on where you live. Transportation covers the amount you need to get from Point A to Point B. In some places, there is no other option than to own a vehicle. However, this comes with significant costs such as registration, insurance, maintenance, repairs, and gas.

Those who live in urban areas with modern public transit have the luxury of more options to fit the budget. Most cities have buses, trains,  or subway systems that offer monthly passes for minimal fees. Some people may even be able to ride a bike or walk to save even more.

How Do You Strengthen Your Four Walls of Budgeting?

If you want to strengthen your four walls of budgeting, you have two options: earn more income or decrease your spending. While the answer is cut-and-dried, the way to achieve it is more fluid.

Bring in More Income

The easiest way to strengthen your four walls of budgeting is by bringing in more income. These are the easiest ways to make that happen.

    • Ask for a raise. If you had a good performance this year, then asking for a raise may be well received. Try to time your request after a big win or the completion of a successful project. And, you will probably have a better chance to get it if you do it before they determine the annual budget.
    • Go for a promotion. Another option is to go for a higher-paying position. So, if you are willing to take on more responsibility, then why not get paid to do it? Start looking for positions within your company to advance your career and your savings goals.
    • Look for a second job or side hustle. Many people look for ways to bring in extra cash around the holidays You could bring in more income with seasonal work, a second job, or starting a side hustle in your spare time.
    • Find ways to generate passive income. My personal choice is to put your money to work for you. Look for investments that generate passive income to support your budget.

Reduce Your Expenses

For those who have no way of earning more money, the only option is to reduce your spending. If trimming the budget is the only way to strengthen your walls, here are a few ways that have worked for me, even on a bare-bones budget.

    • Food – The best way to reduce your food bill is to stop dining out and prepare you food at home. You can also use coupons, buy off-brand items, buy in bulk, and save more with discount shopping clubs.
    • Shelter – If the timing is right, refinancing your mortgage could save you on interest. However, you can also save money by finding cheaper accommodations or downsizing. Another idea is to look for a roommate or renter to split expenses if space allows.
    • Clothing – Since I live in athletic wear, my clothing costs are minimal. I avoid designer brands and prefer to items second-hand to save money.
    • Transportation – Choosing to sell a car or trade it in for one with a lower monthly payment is a tough decision. There are tons of ways to save on gas and car insurance, but it is a major expense. If you have to eliminate it completely public transportation, riding a bike, or walking when possible could save your budget.

Beyond the Four Walls

The four walls are a great starting point for anyone learning to live on a limited budget. However, there are other essential costs that you will need to tailor to your situation. For example, those of us who work from home must have reliable internet and cell phone service. Those with children will need childcare. And, all of us will require healthcare services at some point. Although you may be able to live without them temporarily, it’s not a long-term solution.

There is no single answer for strengthening your four walls of budgeting. Ultimately, it comes down to whatever method will help you stick to your budget. You may have to try several different approached before you find one that sticks. But, if you have determination and self-discipline, you can strengthen your walls and build a solid foundation for your future.

Read More

Are Porch Pirates Affecting Your Holiday Plans?

Jenny Smedra2 Comments

Are Porch Pirates Affecting Your Holiday Plans?

While wooden ships and hidden treasures may be a thing of the past, piracy is still alive and well. However, it looks a little different today. People have adapted to modern trade and e-commerce. Instead of waiting in ambush, now porch pirates will take things right from your front steps. Here’s what you need to know to make sure their crimes won’t interfere with your holiday plans.

What Is Causing the Rise of Porch Pirates?

Porch pirates are not a new phenomenon. There have always been people who seize packages from homes while the owners are away. It’s only recently that they have been dubbed “porch pirates.”

And sadly, it seems like it is becoming a more common practice. Part of the reason is that so many more people shop online. So, it’s relatively easy and most people get away with it. Some rationalize their actions because they see it as a victimless crime since most shippers or retailers replace stolen goods.

In most instances, porch piracy is a crime of opportunity. Walking off with an unknown package could result in a big payoff if it contains expensive electronics or other items they can resell. Unfortunately, it is occurring more frequently and will probably only get worse.

How Much Financial Damage Do They Cause?

When asked, nearly 64% of Americans reported that they had stolen packages last year. And although the holiday season has just started, a recent survey found that an estimated 260 million packages have already “gone missing” this year.

The sheer number is staggering. But when you consider that the average value of these packages ranges from $50 to $200, the financial impact becomes clearer. According to UPS, 1.7 million packages go missing every day, totaling $25 million in lost or stolen goods.

How Can You Protect Yourself from Porch Pirates?

Although you may be tempted to take things into your own hands, it’s wiser to take preventative measures against future theft. You don’t want to end up in a legal situation because you were trying to protect your personal property or teach someone a lesson.

1. Install a security system.

Even those who work from home can’t be there all the time. But, you can install a quality security system. Adding a doorbell camera, motion detector lights, and a security system will help you keep an eye on things while you are away.

Video surveillance allows you to monitor activity and confirm deliveries, and possibly provide evidence if someone does steal your packages. As an added bonus, you can speak directly to people through the doorbell camera to scare them off. Something as simple as posting a sign and making cameras clearly visible could also act as a deterrent.

2. Track your package and verify delivery.

Merchants usually send you the tracking number with your purchase. If the package is taking longer than expected, check the status online. You can also set alerts and updates, and many carriers will send photos of the delivery. However, you can add an extra layer of security by requiring a signature so packages are not left outside.

3. Become familiar with your delivery people.

One thing people don’t often think about is discussing mail issues with their carriers and delivery people. Sometimes they make mistakes and send things to the wrong house. Other times, there are errors on the shipping labels.

But if you are dealing with porch pirates, you can make them aware of the problem. And, you could also ask them to place your packages somewhere out of sight so porch pirates don’t target your home.

4. Add delivery instructions for your packages.

Another idea is to include delivery instructions at the time you order. Many sites provide space to include special instructions. If you are afraid the package will go missing, specify where you want it left so it isn’t in plain view. Then, there is less chance someone will see it and be tempted to steal it.

5. Talk to your neighbors.

Our neighbors frequently end up with our packages. So before I make any claims, I check around to see if it was delivered to the wrong house. However, if other people have had packages go missing as well, it could turn everyone on to a bigger problem.

Networking in your neighborhood is always a good idea. You can watch for suspicious activity and keep an eye on each other’s homes when you are away. Creating a neighborhood watch could prevent more thefts and major holiday headaches.

6. Contact the seller and shipping service.

If you are certain your item was stolen, contact the seller or shipping service. They may already have theft insurance. Furthermore, many carriers offer reimbursement or compensation through their claims process. So even if something goes missing, you will likely receive a replacement once you file a claim.

7. Purchase homeowners or renters insurance.

There are several good reasons to purchase homeowners’ or renters’ insurance.  Porch pirates are one more you can add to the list. Your policy should protect against financial losses caused by package theft under personal property coverage. Just be aware of the policy limits, because it may not cover the full expense of electronics, fine art, jewelry, or cash.

8. Send your packages to the office.

You can avoid the issue altogether by having packages sent to your office or place of business. It’s a convenient option for smaller packages, but may be impractical for larger ones. Just remember to make sure that your boss is aware and okay with the arrangement before you flood the mail room with your holiday purchases.

9. Pay for receiving services.

If you receive multiple packages each week, it may be worth paying for receiving services. Many large delivery services rent lockers for a monthly fee. It could be a secure and practical solution for you if they have locations near your home or office.

10. Pick up your packages in person.

While it may be more inconvenient, sending your packages to the post office or distribution center is 100% secure. The only person they will release your package to is you. Picking up your items in person will ensure that you get every delivery on time and that nothing goes missing.

What Do You Do If You Are a Victim?

If you are a victim, follow the same steps to document everything as if you were making a claim for a car accident.

The first step is to contact the police and file an official report. The insurance companies may require it later during the claims process. You should also include all additional documents or photos you have. For example, you can provide any video footage you have of the theft. And, include any notifications and documentation of the delivery.

When you have everything in order, contact your insurance company to file the claim. But, you don’t want to delay too long since claims have to be promptly submitted. If you wait too long, it could cause them to deny your claim.

Read More

3 Efficient Ways To Keep Track of Your Side Gig Income

Jenny SmedraLeave a comment

3 Efficient Ways To Keep Track of Your Side Gig Income

Many people are taking on second jobs and side gigs to earn extra cash, especially around the holidays. However, it’s important to keep track of your earnings and expenses, whether you are doing it part-time or have turned it into a full-time career. If you don’t know where to start, don’t worry; there are simple solutions that can help. Here are 3 efficient ways to keep track of your side gig income and prepare for tax season.

Why Do You Need to Track Your Side Gig Income?

No matter where you live or the source of your income, American taxpayers are required to report all their earned income, unless it is explicitly exempt under the U.S. tax code.

Unfortunately, it becomes harder to track your income in a gig economy since many people get paid in cash. But, if you don’t keep track of your side gig income, you will never have an accurate picture of your financial situation. And, you need to avoid this type of uncertainty when you have variable income.

It’s important to know where you stand so you can make better, more-informed financial decisions. When you record your profits, you have a tangible metric to measure your success over time. It is also easier to see profit margins, calculate losses, and report taxed earnings when you have meticulous bookkeeping. And, all this information will help you determine whether the effort is worth the profit in the long run.

Most importantly, monitoring your expenses will save you a ton of time when preparing your taxes. When you work a side gig, no one deducts your state or federal taxes from your pay; the responsibility falls on you. If you don’t make payments to the IRS, your bill will come due when you file your return. So, tracking your income allows you to know how much to deduct to mitigate your tax liability come April 15th.

3 Ways to Keep Track of Your Side Gig Income

You don’t need an accounting degree to efficiently track your income. There are tried-and-true methods to balance your books for free as well as software that can automate all your recordkeeping. Here are 3 efficient ways to keep track of your side gig income.

1. Free Options

When I started my own business, I looked for ways to save money anywhere I could. Since I’m fairly good with numbers, I decided to do my own bookkeeping. Although some people still prefer a paper ledger of their transactions, I thought it would be better to create a spreadsheet to track my expenses and income.

You can quickly set up an Excel or Google spreadsheet to help you track all your income, expenses, and deductions. While it may be lower tech than some of the other options, it is free. A spreadsheet was the perfect solution for my small businesses since I had little overhead costs and few expenses.

But, a spreadsheet is more labor-intensive than accounting software. You will have to manually enter data. But then you can use formulas to calculate your totals and get a snapshot of your finances. If you become more adept with the program, you can even create cash flow statements and visual graphics of your earnings.

2. Personal Finance Software

When my finances became more complicated, I decided to invest in the Quicken personal finance software. It was so simple to use and took the time and effort out of accounting.

When you link the software to your accounts, it will automatically pull information from your bank, credit cards, and loans. Then, it categorizes your purchases to help you sort through expenses. This saved me hours of looking through receipts and financial statements.

The software also offers additional features, such as budgeting, invoicing, and cash flow tools. These were valuable resources, especially for someone just starting out on their own. However, there are also free apps you can download that can help you as well.

3. Accounting Software

If your side gig has turned into a full-time job, then it deserves the time and attention a new business requires. As your income increases and your finances become more complicated, your recordkeeping will be even more important.

Therefore, business accounting software is an excellent long-term investment for your venture and your finances. When you purchase this software, you no longer have to spend time on time-consuming accounting tasks. Instead, you can focus on other things that will have a higher impact on profits.

Business accounting software will streamline your accounting, assess your finances, and forecast for the future. Not to mention, it will save you hours in tax preparation. Although there are several options for business accounting software, the most popular choices are QuickBooks and Xero. While there may be cheaper options, the convenience is well worth the expense.

Considerations for Multiple Side Gigs

You may not think it’s difficult to track income from your second job. But, if you have multiple side gigs or sources of income, it gets complicated. So, I maintain separate spreadsheets/books for each one. I also separate all the expenses for each one and have dedicated accounts for both my business and personal finances. Getting a business credit card can help you track, separate, and categorize your expenses as well.

When you are working multiple side jobs, you have to stay on top of your accounting and update your spreadsheets every few weeks. It makes it easier to compare profits from month to month and saves you time when tax season is here. And if you automate as much of your accounting as possible, it will save you valuable time that you can put toward more profitable tasks.

Final Thoughts

Tracking your expenses will make life simpler. Plus, it may encourage you to go after more business when you see your profits growing. However, it’s also an effective way to make sure that your expenses aren’t undercutting your profits and that the extra money is actually worth the effort.

It may be stressful to think about money management, but it’s much worse to receive a huge tax bill from the IRS. Rember that your accounting system doesn’t have to be perfect, it just has to work for you.

Read More

10 Low Paying Jobs in Need of a Salary Increase

Jenny SmedraLeave a comment

10 Low Paying Jobs in Need of a Salary Increase

Many of us are feeling the impacts of the economic downturn and rising inflation rates. But as the cost of living continues to rise as well, minimum wage workers fear that they will no longer be able to afford the bare essentials. And with 125 million or 61% of Americans already living paycheck to paycheck, there is cause for concern. However, some positions have been notoriously underpaid for decades, hardly providing a living wage. Here are 10 low paying jobs that desperately need a salary increase to keep up with the rising inflation.

10 Low Paying Jobs in Need of a Salary Increase

Based on the reported earnings to the U.S. Bureau of Labor and Statistics from 2021, the following list includes low paying jobs in need of a salary increase. Keep in mind that this list doesn’t look at each position, but rather groups several low paying positions by industry. If you would like to see the breakdown by each job, you can view the full report here.

1. Fast Food Workers

The fast-food industry has been one of the hardest hit by labor shortages. But after learning how much they earn, it leaves little doubt as to why.

Fast-food service remains among the lowest-paying industries. Most positions are below the poverty threshold to support a 4-person household. Cooks are the lowest earners with an annual average salary of $25,490. Counter Workers come next at $26,060, and dining room staff earns slightly more with $27,690 per year.

2. Restaurant Staff

The restaurant industry in general has been struggling since the pandemic began. Although more people have returned to eating in restaurants, some never recovered and were forced to close their doors.

When the restaurant isn’t earning much money, then it can’t afford to pay its staff. Unfortunately, employees who relied on tips were not even earning minimum wage at times. When you see how much restaurant positions take home before taxes, some salaries are barely enough to live on, let alone build savings.

    • Host/Hostess $26,000
    • Dishwashers $27,350
    • Servers $27,520
    • Bussers and Barbacks $27,690
    • Food Prep and Service $28,810
    • Bartenders $30,340

3. Entertainment and Recreation Attendants

People need entertainment as an outlet from the demands of their job and the stresses of daily life. Attending events, going to amusement parks, and catching a movie can help you slow down and enjoy life.

However, those who provide these services may be experiencing their own financial stresses. This category includes different types of positions from ticket-takers to ushers and attendants. Any way you look at it though, they only earn an average annual salary between $26,110 and $27,170, depending on the position.

4. Cashiers

Any business that sells products or services will need cashiers to handle the transactions. While it is an entry-level position, they plan an important role in the corporate structure. But a position as a cashier usually means working long hours for little compensation. Most companies hire people for an average salary of $26,770 a year.

5. Child Care Workers

You would think that the people we trust to care for our children would be higher up the pay scale. Sadly, child care positions are low paying jobs in need of a salary increase. Child care workers have a very busy and demanding job. Furthermore, the well-being of many children directly depends on them. However, they only earn an average salary of $27,680.

6. Hospitality Staff

When you are traveling, it is easy to overlook how important each position within the hotel is. From check-in and food service to special requests, hospitality staff make it their job to take care of you when you’re away from home.

Unfortunately, they don’t earn much for their efforts. A desk clerk earns about $28,040, while maids and housekeeping cleaners make a little more at$29,580. Baggage carriers and porters can expect about $30,040 per year.

7. Healthcare Aides

Medical professionals have been tried and tested over the last few years. The strenuous conditions have caused many people to retire or leave the field. The resulting staffing shortages have made healthcare all the more difficult.

Hospitals and healthcare facilities are trying to promote and train doctors, nurses, and new medical staff to meet the demand. Many employers are even offering more financial incentives to fill these positions.

But, there has been little financial gain for healthcare aides who have an important function in day-to-day care. Orderlies take home about $33,440 while personal care and home health and personal care aides earn slightly less at $29,260 a year.

8. Agricultural Workers

Farmers across the country are responsible for growing the food that feeds our country. However, agricultural workers have a very thankless job. It includes long hours, hard work, and minimal pay. Although agricultural workers can earn more depending on their skills and training, the average agricultural worker brings home about $32,450 a year.

9. Security Guards

Security guards play an important role in assisting the local police. They often provide manpower to patrol buildings, monitor commercial areas, and investigate suspicious activity. Many even carry a weapon. However, they are not well compensated for the level of danger the job entails. A security guard earns an average salary of $35,830 per year.

10. Teachers

In other cultures, teachers hold revered positions. But, that isn’t the case in the U.S.

It’s no secret that teachers don’t get into it for the money. A preschool teacher is the lowest paid position requiring a degree. They earn an annual salary of $36,460 while other teachers earn anywhere from $10-$20k more. But even this salary bump is very low when you consider how important they are in shaping young minds.

Final Thoughts

While gaining new skills, certifications, or degrees can help you increase your income, it doesn’t change the fact that some jobs are severely underpaid. Having held many of these position on this list over the years, I understand why people get burnt out working long hours for little pay. However, the nation could be facing a serious labor crisis if people decide they are burnt out and no longer willing to perform these jobs at the same pay level.

Read More

12 Things To Know Before Investing in Rare Books

Jenny SmedraLeave a comment

12 Things to Know Before Investing in Rare Books

Lately, it seems that every time the market takes a dip, there are tons of articles and blogs talking about investing in alternative assets. It makes sense that people would want something tangible when everything else is uncertain. While gold, silver, and collectibles usually top this list, bibliophiles know the value of a rare book. So, why not turn your passion into a way to earn income? Although most people won’t make enough to retire, serious investors know the value of investing in rare books and have been doing so for years.

Why Are People Investing in Rare Books?

When people decide to invest in rare books, it usually stems from a love of the written word. Like most types of alternative assets, people look for tangible assets that can bring both pleasure and financial gain. Whether it’s fine wines, classic cars, art, antiques, or even toys, many investors find ways to incorporate their passion into their portfolios. And with the right pieces, these investments offer high returns when they appreciate.

However, you don’t need to be a bibliophile to start investing in rare books. One thing that makes them an attractive investment is that their value doesn’t depend on the performance of the stock market. Furthermore, the appreciating value tends to be more linear than other types of assets. Based on the returns from well-established collections, a rare book’s value typically doubles in value after 7 years, with normal inflation rates. And as long as it’s well cared for, it will retain its value for years to come

Where Can You Find Rare Books?

Unfortunately, you are not likely to find rare books at your local bookstore. You will have to start searching in more specialized markets such as auctions, estate sales, book fairs, and private dealers.

Auctions

Auction houses have brokered the sales of some of the most valuable books ever sold. The greatest benefits of buying from reputable auction houses are that they often have access to extremely rare items, and their experts are able to authenticate the books. Plus, auctions will usually ensure that the rarest and most valuable books fetch top dollar for the seller.

Dealers

Like art, book dealers can help you locate rare books. Therefore, it’s crucial to find someone you can trust to look out for items suitable to your taste and collection. Paying a dealer may also allow you to jump on opportunities before they become public knowledge.

Online Platforms

Anytime you purchase something online, you should use caution. So to help you find better vendors, search for platforms dedicated to investing in rare books. These are credible platforms that carefully review each book and verify its authenticity. Not only is it convenient, but it also gives you greater access to books from around the world. And if you can’t afford to purchase it outright, you can also buy shares in valuable books.

12 Things to Know Before Investing in Rare Books

Based on the advice from expert collectors, here are 12 things you should know before you start investing in rare books.

1. Know what you are paying for.

With any investment, research everything before you buy. It may take a while to uncover the true origins of a book, which is why the majority of a dealer’s price is for their time to do this for you. However, you must do your research and know what you are paying for. This will help determine if a book is the real deal or prevent you from making an expensive mistake.

2. Only buy from reputable dealers.

The internet has changed many things about investing in books. If you buy online, it is much more difficult to authenticate and judge the quality of items. But generally speaking, a detailed description of the book and its condition are good indications that what they are selling is authentic. And if need be, you can always ask for additional photos of markings for further verification.

3. Condition is key.

Like all collectible items, books never can improve their condition. At best, they stay the same. At worst, they deteriorate with time. Even if you have a rare book, any damage and wear will affect its value.

4. There is no price guide or catalog to track their value.

One of the greatest drawbacks of these investments is the subjectivity of their value. Unfortunately, there is no price guide or catalog to tell you the exact value of the book you have. There is huge variability, even for books within the same edition.

Several factors besides quality also can add value such as age, rarity, desirability, inscriptions from the author, first editions, limited editions, or the inclusion of the dust cover. But ultimately, a book’s value is whatever the buyer is willing to pay.

5. Buy the best books you can afford.

Serious collectors will tell you not to waste time on low-quality books. Instead, buy the best ones that you can afford. Look for the best examples of an edition or title that you are interested in since they are worth significantly more.

6. Invest in books that you have an interest in.

Tracking down titles and research can become tedious. So, invest in books that interest you. If it is a labor of love and not only profit, it makes the task more enjoyable. And, it makes the successes that much sweeter.

7. You need to develop a personal network of people you can trust.

Collecting books can become highly competitive, especially for the most desirable titles and authors. Therefore, you should build a network of people you can trust to help you build your collection. This could include other collectors with different interests or specialized dealers. And, don’t forget to use the digital tools at your disposal to help you expand your network.

8. Don’t buy a valuable book if you aren’t prepared to care for it properly.

If you buy a rare book, it must be stored safely to protect it from fire and water damage. Unfortunately, if it isn’t properly cared for, the value will deteriorate with the condition. So, if you aren’t prepared to store it, don’t waste your money.

9. There are lower transaction costs if you go through a dealer.

Although auction houses handle the rarest and most valuable books, there are lower transaction fees when you use a private dealer. On average, auction houses take a commission of 35-45% which is shared between the buyer and the seller. However, a dealer’s commission is usually 15-30% so you will get a better return on your investment.

10. Like any valuable asset, consider getting insurance.

Any time you purchase an expensive asset, you should insure it. Sometimes, you can include coverage for rare books under your homeowners’ insurance. However, you can also obtain specialist insurance through reputable brokers. And, it’s not as expensive as you might think.

11. You can purchase fractional shares of valuable books.

Even if you don’t have enough funds to purchase a book, you can still purchase fractional shares. Although you won’t be able to display it in your home, this way of investing has less risk, lower costs, and eliminates the expense of storing it. This may be the best option if you are more interested in the financial gains than the asset.

12. Have a strategy before you start buying.

Lastly, have a strategy before you start investing. Don’t just buy books that look old or have a familiar title. There should be some sense of cohesion in your collection. Decide whether you want to focus on the most valuable books you can find, or if you would like to specialize by genre, author, classics, or generational favorites. This will help limit your search and help you find the titles you truly want.

Diversifying Your Portfolio

A good collection that is carefully curated by a knowledgeable collector has value in itself. However, rare books provide a low-risk investment that retains its value over time. Since their value is not correlated to the performance of the stock market, it offers greater diversification for your portfolio.

As Ernest Hemingway said, “There is no friend as loyal as a book.” And now, you can turn that loyalty into a valuable asset.

Read More