How to plan if you are short of funds – San Bernardino Sun

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If you (or someone you know) find that you don’t have enough income or assets to need a financial plan, you are not alone.

A 2018 Federal Reserve survey found that 25% of Americans have no retirement savings, and a third of middle-class Americans cannot cope with a $ 400 emergency. paddy field. According to the US Census Bureau, 45% of Californians did not own a home in 2020.

Traditional personal financial planning begins with long-term goals. Some events, like retirement and children’s education plans, won’t happen for over 30 years. If you’re young or have limited funding, it’s often an immediate stop. How about getting expensive life insurance or saving 10% of your income (sometimes called “pay yourself first”) for retirement when you have little monthly income? ..

If you are currently facing economic instability and your future is uncertain, it is difficult to plan for long-term goals.

What if I already have a derailed financial plan? People most often file for bankruptcy due to sudden and unexpected life-changing events, such as illness or injury, unemployment, death, or the loss of their spouse due to divorce. In all the suffering we see around us, why are we spending all of our time and effort now and now sacrificing for promises in the distant future that may not come to pass?

The traditional process of financial planning has been developed for another generation over the past century. Most young people are unlikely to have the same wealth as their parents and grandparents. It’s not your imagination that life is more expensive. Real wage cuts, inflation and shrinkflation are real when you receive fewer services and smaller products at the same price. The baby boomer generation was much easier to graduate from college, buy (and pay off) a house, and retire in their early 60s without debt than today’s youth.

But instead of completely destroying the outdated financial plan, we’re making it the best part of helping you improve your financial situation (or that of someone you know) from now on. How about you take it? Put aside the first step of setting long-term goals and instead understand and use the best (almost free) financial planning tools available today.

Reaction vs determination

First of all, understand that even if you don’t have a financial plan, you are still making financial decisions that will affect your future every day. The decisions you made to spend, save, charge, sign, etc. were either planned or passively reactive, as it was convenient.

When you negotiate wages and benefits for a new job, rent a car or apartment, open a bank account, or decide how much to pay with this month’s credit card, you join our Was economy, and those actions have affected your finances in the future. When it comes to finances, most people don’t research and review options, confirm contracts, ask questions, or negotiate before signing. It’s also part of the plan.

For example, in the book Women Don’t Ask, author Linda Babcock writes that 93% of women (and 43% of men) did not negotiate their starting salary. However, those who negotiated were able to increase their wages by more than 7%. It might not seem like much, but if you add $ 350 a month and invest in your tax deferral account with an 8% annual return for 30 years, that’s over $ 500,000.

Some industries make it a “bank” where you just do the simplest thing and not a knowledgeable and attentive consumer. For example, according to Bankrate, banks paid $ 30 billion in overdraft fees last year, other interest rates were flat, but credit card interest rates will rise again in 2021. Most of consumers choose banks based on convenience of location, not service. or fees.

There are companies everywhere that are ready to take whatever you have. Credit card companies want you to respond to their specials with a quick referral commission. Private “diploma mills” are prepared to take out student loans without guaranteeing future employment or salary increases. The automaker wants to put you in a rental vehicle with a low down payment (but high excess mileage charges). It can be used for delivery work done to pay for the car.

There is an application for that

To make better financial decisions, you need help studying your options, knowing what questions to ask, and getting used to negotiations. Assistance in doing all of this is almost free and available electronically.

So set aside time to investigate and make changes.

First of all, you need to make sure that you are getting whatever is available while your income is limited. Currently, there are many benefits that can be used to cover rent, utilities, higher education, meals, dependent care, and health care. Prioritize investigating your living expenses to see if assistance is available in each category. There is a list of federal programs and links to state programs. acf.hhs.gov/ocs/programs ..

There is an article on how to negotiate the best salary and allowance without fear. Harvard Business Review on hbr.org and learnhowtobecome.org are two of the many sites that offer professional support. If you are planning to create a second job, you can often spend your time learning skills and investing in yourself for free or at low cost. Make sure employers like Apple, Netflix, Google, and Tesla no longer require a four-year degree. Investigate the jobs you are looking for, the skills you need, and how to get those skills for free or at low cost. Study where you want to live and how much you need to earn to live there.

Many sites are a great source of general financial knowledge and a comparison of banks, credit cards, investment products and services. Tip: Some sites include “wallet” in their name. There are some great apps that track your costs and give you recommendations. Thebalance.com has several app reviews. The tools are there and most are free.

John Steinbeck is often said to have said that the poor see themselves as embarrassing temporary millionaires rather than exploited proletariats. Choose it if it helps you see your situation as temporary. Most of my wealthy clients weren’t wealthy at the start. Everyone has to start somewhere. Pay attention to your finances and promise to be actively involved from this day forward. Investigate, reflect, negotiate and make decisions.

Michelle Harting is a Chartered Accountant, Certified Business Valuation Specialist and Certified Real Estate Planner. She speaks frequently with a panel of experts on tax planning and charitable giving planning. Its offices are in Los Angeles, Orange and Riverside County.

How To Plan If You Are Running Out Of Funds – San Bernardino Sun Source Link How To Plan If You Are Running Out Of Funds – San Bernardino Sun


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