Bobbi L. Mastalka

Bobbi L. Mastalka

303.594.4303

Financial Professional

11990 Grant St.
#304
Northglenn, Colorado 80233

m303.594.4303 w303.782.6567 f800.673.1719

Schedule a Call

World Financial Group

How to save for a big purchase

July 17, 2019

Jump To Article

Subscribe to get my Email Newsletter

To Close It or Not to Close It? That Is the Question.

July 8, 2019

To Close It or Not to Close It? That Is the Question.

Your credit score helps determine the interest rate you’ll pay for loans, how much credit you’re eligible to receive, and it can even affect other monthly expenses, such as auto or homeowners insurance.

Keeping your credit in tip top shape may actually help save you money in some cases. With that in mind, how do you know if it’s a good idea to open a new credit card or to close some credit card accounts? Let’s find out!

Opening Credit Card Accounts
Opening a new credit card isn’t necessarily detrimental to your credit score in the long term, although there may be some potential negatives in the short term. As you might expect, opening a new credit card account will place a new inquiry on your credit report, which could cause a drop in your credit score. Any negative effect due to the inquiry is often temporary, but the long-term effect depends on how you use the account after that (not making minimum payments, carrying a high balance, etc.).

Opening a new credit card account can affect your credit rating in two other ways. The average age of your credit accounts can be lowered since you’ve added a credit account that’s brand new (i.e., the older the account, the better it is for your score). On the plus side, opening a new credit card account can reduce your credit utilization. For example, if you had $5000 in available credit with $2500 in credit card balances, your credit utilization is 50%. Adding another card with $2500 in available credit with the same balance total of $2500 drops your credit utilization to 33%. A lower credit utilization can help your score.

Closing Credit Card Accounts
Closing a credit card account can also affect your credit score, largely due to some of the same considerations for opening new credit card accounts. Generally speaking, closing a credit card account likely won’t help boost your credit score, and doing so could possibly lower your credit score for the same reasons above (lowering the average age of your accounts, increasing your credit utilization, etc.).

First, the positive reasons to close the account: This might be obvious, but closing a credit card account will prevent you from using it. If discipline has been a challenge, instead of closing the account, you might consider simply cutting up the card or placing it in a lockbox.

Second, the negative reasons to close the account: Closing a credit card account when you have outstanding balances on other credit card accounts will raise your credit utilization. A higher credit utilization can cause your credit rating to fall. You’ll also want to consider the average age of all of your accounts, which can play a big role in your credit score. A longer history is better. Closing a credit account that was established long ago can impact your credit score negatively by lowering your average account age.

Fair Isaac, the company responsible for assigning FICO scores, recommends not closing credit card accounts if your goal is to raise or preserve your credit score.[i]

Would opening or closing a bank account have any effect on my score?\ Closing a bank account has no effect on your credit rating and normally doesn’t appear on your credit report at all. When you open a bank account, however, your bank may perform a credit inquiry, particularly if you apply for overdraft protection. A hard inquiry (such as an overdraft protection application) can cause a temporary drop in your credit score. Soft inquiries – which are also common for banks – will appear on your credit report but do not affect your credit rating. Banks may also check your report from ChexSystems[ii], a company that reports on consumer bank accounts, including overdraft history and any unresolved balances on closed accounts.[iii]

WFG97806-0918

  • Share:


[i] https://www.myfico.com/credit-education/faq/cards/impact-of-closing-credit-card-account
[ii] https://www.chexsystems.com/web/chexsystems/consumerdebit/page/home/
[iii] https://www.mybanktracker.com/news/account-denied-chexsystems-report

WFG97806-0918

How to Build Credit When You’re Young

June 10, 2019

How to Build Credit When You’re Young

Your credit score can affect a lot more than just your interest rates or credit limits.

Your credit history can have an impact on your eligibility for rental leases, raise (or lower) your auto insurance rates, or even affect your eligibility for certain jobs (although in many cases the authorized credit reports available to third parties don’t contain your credit score if you aren’t requesting credit). Because credit history affects so many aspects of financial life, it’s important to begin building a solid credit history as early as possible.

So, where do you start?

  1. Apply for a store credit card.
    Store credit cards are a common starting point for teens and young adults, as it often can be easier to get approved for a store card than for a major credit card. As a caveat though, store card interest rates are often higher than for a standard credit card. Credit limits are also typically low – but that might not be a bad thing when you’re just getting started building your credit. A lower limit helps ensure you’ll be able to keep up with payments. Because you’re trying to build a positive history and because interest rates are often higher with a store card, it’s important to pay on time – or ideally, to pay the entire balance when you receive the statement.

  2. Become an authorized user on a parent’s credit card.
    Another common way to begin building credit is to become an authorized user on a parent’s credit card. Ultimately, the credit card account isn’t yours, so your parents would be responsible for paying the balance. (Because of this, your credit score won’t benefit as much as if you are approved for a credit card in your own name.) Another thing to keep in mind is that some credit card providers don’t report authorized users’ activity to credit bureaus.* Additionally, even if you’re only an authorized user, any missed or late payments on the card can affect your credit history negatively.

Are secured cards useful to build credit?
A secured credit card is another way to begin building credit. To secure the card, you make an initial deposit. The amount of that deposit is your credit line. If you miss a payment, the bank uses your collateral – the deposit – to pay the balance. Don’t let that make you too comfortable though. Your goal is to build a positive credit history, so if you miss payments – even though you have a prepaid deposit to fall back on – you’re still going to get a ding on your credit history. Instead, it’s best to use a small amount of your available credit each month and to pay in full when you get the statement. This will help you look like a credit superstar due to your consistently timely payments and low credit utilization.

As you build your credit history, you’ll be able to apply for credit in larger amounts, and you may even start receiving pre-approved offers. But beware. Having credit available is useful for certain emergencies and for demonstrating responsible use of credit – but you don’t need to apply for every offer you receive.

  • Share:


Source: “Does Being an Authorized User Help You Build Credit?” Discover*, 2018, https://discvr.co/2lAzSgt.

WFG2174855-0718

The Advantages of Paying with Cash

The Advantages of Paying with Cash

We’re using debit cards to pay for expenses more often now, a trend that seems unlikely to reverse soon.¹

Debit cards are convenient. Just swipe and go. Even more so for their mobile phone equivalents: Apple Pay, Android Pay, and Samsung Pay. We like fast, we like easy, and we like a good sale. But are we actually spending more by not using cash like we did in the good old days?

Studies say yes. We spend more when using plastic – and that’s true of both credit card spending and debit card spending.² Money is more easily spent with cards because you don’t “feel” it immediately. An extra $2 here, another $10 there… It adds up.

The phenomenon of reduced spending when paying with cash is a psychological “pain of payment.” Opening up your wallet at the register for a $20.00 purchase but only seeing a $10 bill in there – ouch! Maybe you’ll put back a couple of those $5 DVDs you just had to have 5 minutes ago.

When using plastic, the reality of the expense doesn’t sink in until the statement arrives. And even then it may not carry the same weight. After all, you only need to make the minimum payment, right? With cash, we’re more cautious – and that’s not a bad thing.

Try an experiment for a week: pay only with cash. When you pay with cash, the expense feels real – even when it might be relatively small. Hopefully, you’ll get a sense that you’re parting with something of value in exchange for something else. You might start to ask yourself things like “Do I need this new comforter set that’s on sale – a really good sale – or, do I just want this new comforter set because it’s really cute (and it’s on sale)?” You might find yourself paying more attention to how much things cost when making purchases, and weighing that against your budget.

If you find that you have money left over at the end of the week (and you probably will because who likes to see nothing when they open their wallet), put the cash aside in an envelope and give it a label. You can call it anything you want, like “Movie Night,” for example.

As the weeks go on, you’re likely to amass a respectable amount of cash in your “rewards” fund. You might even be dreaming about what to do with that money now. You can buy something special. You can save it. The choice is yours. Well done on saving your hard-earned cash.

  • Share:


Sources: ¹ Steele, Jason. “Debit card statistics.” creditcards.com, https://bit.ly/2JB9cGE. ² Kiviat, Barbara. “Going Shopping? How You Pay Can Affect How Much You Spend.” Consumer Reports, https://bit.ly/2sNQiG7.

WFG2174868-0718

Money Woes Hurt More than Your Bank Account

Money Woes Hurt More than Your Bank Account

How do you handle job stress?

Sticking to a solid workflow? Meditation? A stress ball in each hand?

Whichever way you choose to lessen the stress (that 80% of American workers experience), there’s another stress-relieving tactic that could make a huge difference:

Relieving financial stress.

Studies have found that money woes can cost workers over 2 weeks in productivity a year! And this time can be lost even when you’re still showing up for work.

This phenomenon is called ‘presenteeism’: you’re physically present at a job, but you’re working while ill or mentally disengaged from tasks. Presenteeism can be caused by stress, worry, or other issues – which, as you can imagine, may deal a significant blow to work productivity.

So what’s the good news?

If you’re constantly worried and stressed about financing unexpected life events, saving for retirement, or funding a college education for yourself or a loved one, there’s a life insurance policy that can help you – wherever you are on your financial journey.

A life insurance policy that’s tailored for you can provide coverage for those unknowns that keep you stressed and unproductive. Most people don’t plan to fail. They simply fail to plan. Think of a well-thought out insurance strategy as a stress ball for your bank account!

Contact me today, and together we’ll work on an insurance strategy that fits you and your dreams – and can help you get back to work with significantly less financial stress.

  • Share:

The starter kit for building good credit

February 27, 2019

The starter kit for building good credit

Having a good credit score is one of the most important tools you can have in your financial toolbox.

Your credit report may affect anything from how much you pay for a cell phone plan, to whether you would qualify for the mortgage you might want.

Getting and maintaining a good credit score can be advantageous. But how do you achieve a good credit report? What if you’re starting from scratch? The dilemma is like the chicken and the egg question. How can you build a positive credit report if no one will extend you credit?

Read on for some useful tips to help you get started.

Use a cosigner to take out a loan
One way to help build good credit is by taking out a loan with a cosigner. A cosigner would be responsible for the repayment of the loan if the borrower defaults. Many banks may be willing to give loans to people with no credit if someone with good credit acts as a cosigner on the loan to help ensure the money will be paid back.

Build credit as an authorized user
If you don’t want or need to take out a loan with a cosigner, you may want to consider building credit as an authorized user of someone else’s credit card – like a parent, close friend, or relative you trust. The credit card holder would add you as an authorized user of the card. Over time if the credit account remains in good standing, you would begin building credit.

Apply for a store credit card to build your credit
Another way to start building your credit record is to secure a store credit card. Store credit cards may be easier to qualify for than major credit cards because they usually have lower credit limits and higher interest rates. A store credit card may help you build good credit if you make the payments on time every month. Also be sure to pay the card balance off each month to avoid paying interest.

Keep student loans in good standing
If there is an upside to student loan debt, it’s that having a student loan can help build credit and may be easy to qualify for. Just keep in mind, as with any loan, to make payments on time.

Good credit takes time
Building a good credit report takes time, but we all must start somewhere. Your credit score can affect many aspects of your financial health, so it’s worth it to build and maintain a good credit report. Start small and don’t bite off more than you can chew. Most importantly, as you begin building credit, protect it by avoiding credit card debt and making your payments on time.

  • Share:


WFG116365-0219

Are you credit worthy?

February 11, 2019

Are you credit worthy?

Credit scores are determined by credit reports, which are built over time by those who utilize credit.

However, there is a sizeable portion of the United States population, numbering in the tens of millions of individuals[i], who either have no credit history, credit history that’s too limited to provide a score, or credit history that’s too old to provide a score. These people may be rejected by lenders simply because they can’t prove their creditworthiness.

A large segment of these citizens are either just becoming adults and have yet to build a score, have little access to today’s modern financial system, or are from older generations who no longer need loans and thus their history has become “stale” or too old for scoring purposes. New immigrants who have no credit history in the United States also face this issue. The invisibles tend to cluster in dense urban centers or in small, rural towns, and, according to the latest Consumer Financial Protection Bureau’s report, lack of internet access seems to have a stronger correlation to credit invisibility than access to a physical bank branch.[ii]

The detriment of credit invisibility
It might seem better to always cover your bills with cash and simply save up for whatever items you wish to purchase. And this is generally a sound practice. However, if doing this leads to credit invisibility, it may have a detrimental effect on your financial life.

Most people – even if they have enough money on hand to cover normal bills and the occasional emergency – might someday want to purchase a home, start a business, or need a new car. It’s not usual that someone could pay for these high-dollar items with cash. Entering a loan agreement for any of these situations may be something you choose to do if the benefits seem to outweigh the costs, and if you have a solid strategy in place to repay the loan. If you can’t prove your creditworthiness, it might be more difficult to secure a loan for these things.

How to avoid being credit invisible
If you are credit invisible because you have little to no assets and lenders refuse to open accounts for you, one possibility is obtaining a secured credit card.[iii] The cardholder deposits cash and the deposit amount is usually the credit limit. The issuer has zero liability against your non-repayment, because they already have the money. Using a secured card and paying the balance back on time helps you build a credit history if you have none.

Once you’ve started to build a history, you may be able to apply for a “real” credit card. At that point, you’ll want to be cautious with your spending (according to a budget, of course) and always make sure to pay your bill on time, especially in full whenever possible so you can avoid interest. Then you should be on your way to establishing a solid credit history, which may help you with other milestones in life, like buying a home, replacing an old car, or even starting a new business venture with a friend.

  • Share:


[i] https://www.americanbanker.com/opinion/senate-should-take-up-bill-to-help-lenders-see-credit-invisibles
[ii] https://www.consumerfinance.gov/about-us/blog/new-research-report-geography-credit-invisibility/
[iii] https://www.experian.com/blogs/ask-experian/what-is-a-secured-credit-card/

WFG114854-0219

The state of financial literacy

December 17, 2018

The state of financial literacy

We learn a lot of things in school.

Some of which are useful later in life, some of which are hurriedly memorized and then promptly forgotten, and some of which barely get a passing glance. In decades past, financial literacy wasn’t an emphasis in school curriculum – unless you include the odd math problem that involved interest rate calculations. For all our years of education, as a nation we were woefully unprepared for one of the largest challenges in adult life: financial survival.

Recently, however, schools have begun to introduce various topics regarding financial literacy to the K-12 curriculum. Some states have fared better than others in this effort, with graded results ranging from A to F, as measured in an analysis done by the Washington Post.[i] Read on for the breakdown.

How we’re doing so far
In its annual Survey of the States, the Council for Economic Education reported that not one state had added personal finance to their K-12 standard curriculum since 2016, and that only 22 states require high school students to take a course in economics. Only 17 of the 50 states require students to take a course in personal finance.[ii]

We can’t count on schools (at least not right now)
While it’s easy to pick on schools and state governments for not including financial literacy education in the past and for only making small strides in curriculums today, that’s not solving the problem that current generations don’t understand how money works. As with many things, the responsibility – at least in the short-term – is falling to parents to help educate younger people on financial matters.

Other financial literacy resources
Given the general lack of financial education provided in schools, unsurprisingly, most teens look to their parents to learn money management skills.[iii] Fortunately, there are some great online resources that can help begin the conversation and help educate both parents and children on topics such as budgeting, how (or if) to use credit cards, differences in types of bank accounts, how to save, managing credit scores, etc.

Pepperdine University offers a “Financial Literacy Guide for Kids, Teens and Students”[iv], which covers many of the basics but also provides a useful set of links to resources where kids and parents alike can learn more through interactive games, quizzes, and demonstrations.

Included highlights are mobile apps which can be useful for budgeting, saving, and so forth, and even listings of websites that can help kids find scholarships or grants.

So if you feel like you haven’t learned quite as much about money and finances that you wish you had in school, contact me so that we can explore how money works together, and I can help put a strategy in place for you and your family!

  • Share:


[i] https://www.washingtonpost.com/news/answer-sheet/wp/2017/12/19/grading-u-s-states-on-teaching-financial-literacy-some-earn-as-while-others-flunk/?noredirect=on&utm_term=.3faad208d1d9
[ii] https://www.councilforeconed.org/wp-content/uploads/2018/02/2018-SOS-Layout-18.pdf
[iii] https://www.juniorachievement.org/documents/20009/20652/2015+Teens+and+Personal+Finance+Survey
[iv] https://mbaonline.pepperdine.edu/financial-literacy-guide-for-kids-teens-and-students/

WFG111747-1218

The effects of closing a credit card

November 5, 2018

The effects of closing a credit card

Americans owe over $900 billion in credit card debt[i], and credit card interest rates are on the rise – now over 15 percent.[ii]

So if you’re on a mission to reduce or eliminate your credit card debt (go you!), you may be thinking you should close out your credit cards. However, you need to know that doing that may have several effects, some of which may not be what you’d expect.

There are times when canceling a card may be the best answer:

  1. A card charges an annual fee
    If you’re being charged an annual fee for the privilege of having a certain credit card, it may be better to cancel the card, particularly if you don’t use it often or have other options available.

  2. You can’t control your spending
    If “retail therapy” is impacting your financial future by creating an ever-growing mountain of debt, it may be best to eliminate the temptation of buying on credit.

Then there are times when closing a credit card may not make much difference, or could even hurt your score:

  1. Lingering effects: The good and the bad
    Many of us have heard that credit card information stays on your report for 7 years. That’s true for negative information, including events as large as a foreclosure. Positive events, however, stay on your report for 10 years. In either case, canceling your credit card now will reduce the credit you have available, but the history – good or bad – will remain on your credit report for up to a decade.

  2. The benefits of old credit
    Did you know that one aspect factored in to your credit score is the age of your accounts? Canceling a much older account in favor of a newer account can actually leave a dent in your score, and we know that canceling the card won’t erase any negative history less than 7 years old. So it may be best to keep the older credit account open as long as there are no costs to the card. Another point to consider is that the effects of canceling an older account may be magnified when you’re younger and haven’t yet established a long enough credit history.

Credit utilization affects your credit score
Lenders and credit bureaus not only look at your repayment history, they also look at your credit utilization, which refers to how much of your available credit you’re using. Lower usage can help your credit score while high utilization can work against you.

For example, if you have $20,000 in credit available and $10,000 in credit card balances, your credit utilization is 50 percent. If you close a credit card that has a credit limit of $5,000, your available credit drops to $15,000 but your credit utilization jumps to 67 percent if the credit card balances remain unchanged. Going on a credit card canceling rampage may actually have negative effects because your credit utilization can skyrocket.

If unnecessary spending is out of control or if there is a cost to having a particular credit card, it may be best to cancel the card. In other cases, however, it’s often better to use credit cards occasionally, and make sure to pay them off as quickly as possible.

  • Share:


[i] https://www.nerdwallet.com/blog/average-credit-card-debt-household/
[ii] https://fred.stlouisfed.org/series/TERMCBCCINTNS

WFG109458-1118

4 easy tips to build your emergency fund

October 8, 2018

4 easy tips to build your emergency fund

Nearly one quarter of Americans have no emergency savings, according to a recent report.[i]

Without an emergency fund, you can imagine that an unexpected expense could send your budget into a tailspin.

With credit card debt at an all-time high and no meaningful savings for many Americans, it’s important to learn how to start and grow your emergency savings.[ii] You CAN do this!

4 tips to building your emergency fund

  1. Where to keep your emergency fund
    Keeping money in the cookie jar might not be the best plan. Mattresses don’t really work so well either. But you also don’t want your emergency fund “co-mingled” with the money in your normal checking or savings account. The goal is to keep your emergency fund separate, clearly defined, and easily accessible. Setting up a designated, high-yield savings account is a good option that can provide quick access to your money while keeping it separate from your main bank accounts.[iii]

  2. Set a monthly goal for savings
    Set a monthly goal for your emergency fund savings, but also make sure you keep your savings goal realistic. If you choose an overly ambitious goal, you may be less likely to reach that goal consistently, which might make the process of building your emergency fund a frustrating experience. (Your emergency fund is supposed to help reduce stress, not increase it!) It’s okay to start by putting aside a small amount until you have a better understanding of how much you can really “afford” to save each month. Also, once you have your high-yield savings account set up, you can automatically transfer funds to your savings account every time you get paid. One less thing to worry about!

  3. Spare change can add up quickly
    The convenience of debit and credit cards means that we use less cash these days – but if and when you do pay with cash, take the change and put it aside. When you have enough change to be meaningful, maybe $20 to $30, deposit that into your emergency fund. If most of your transactions are digital, mobile apps like Qapital let you set rules to automate your savings.[iv]

  4. Get to know your budget
    Making and keeping a budget may not always be the most enjoyable pastime. But once you get it set up and stick to it for a few months, you’ll get some insight into where your money is going, and how better to keep a handle on it! Hopefully that will motivate you to keep going, and keep working towards your larger goals. When you first get started, dig out your bank statements and write down recurring expenses, or types of expenses that occur frequently. Odds are pretty good that you’ll find some expenses that aren’t strictly necessary. Look for ways to moderate your spending on frills without taking all the fun out of life. By moderating your expenses and eliminating the truly wasteful indulgences, you’ll probably find money to spare each month and you’ll be well on your way to building your emergency fund.

  • Share:


[i] https://money.cnn.com/2018/06/20/pf/no-emergency-savings/index.html
[ii] https://www.experian.com/blogs/ask-experian/credit-card-debt-hits-an-all-time-high-how-much-do-you-owe/
[iii] https://www.nerdwallet.com/blog/banking/life-build-emergency-fund/
[iv] https://www.qapital.com/

WFG098377-0918

You'll Still Need This After Retirement

July 30, 2018

You'll Still Need This After Retirement

Ask anyone who’s had a flat tire, a leaky roof, or an unexpected medical bill – having enough money tucked away in an emergency fund can prevent a lot of headaches.

It may seem obvious to create a cushion for unexpected expenses while you’re saving up for retirement, especially if you have kids that need to get to their soccer games on time, a new-to-you home that’s really a fixer-upper, or an injury that catches you off guard. But an emergency fund is still important to keep after you retire!

Does your current retirement plan include an emergency fund for unexpected expenses like car trouble, home or appliance repair, or illness? Only 41% of Americans surveyed that they are less than $200 from being unable to meet their current monthly bills. That means over 50% of Canadians and nearly 60% of Americans may need to turn to other methods of coverage like taking loans from family or friends or accruing credit card debt.

After you retire and no longer have a steady stream of income, covering unexpected expenses in full (without interest or potentially burdening loved ones) can become more difficult. And when you’re older, it might be more challenging to deal with some of the minor problems yourself if you’re trying to save some money! You’re probably going to need to keep the phone number for a good handyman, handy.

Don’t let an unexpected expense after retirement cut into your savings. A solid financial strategy has the potential to make a huge difference for you – both now and during your retirement.

Contact me today, and together we can put together a strategy that’s tailored to you and your needs.

  • Share:

Emergency Fund 101: Protecting and Growing Your Fund

Emergency Fund 101: Protecting and Growing Your Fund

Over 50% of Canadians¹ and nearly 60% of Americans² report that they don’t have savings to turn to in the event of an emergency.

If something unexpected were to happen, do you have enough savings to get you and your family through it and back to solid ground again?

If you’re not sure you have enough set aside, being blindsided with an emergency might leave you in the awkward position of asking family or friends for a loan to tide you over. Or would you need to rack up credit card debt to get through a crisis? Dealing with a financial emergency can be stressful enough – like an unexpected hospital visit, car repairs, or even a sudden loss of employment. But having an established Emergency Fund in place before something happens can help you focus on what you need to do to get on the other side of it.

As you begin to save money to build your Emergency Fund, use these 5 rules to grow and protect your “I did not see THAT coming” stash:

1. Separate your Emergency Fund from your primary spending account. How often does the amount of money in your primary spending account fluctuate? Trips to the grocery store, direct deposit, automatic withdrawals, spontaneous splurges – the ebb and flow in your main household account can make it hard to keep track of the actual emergency money you have available. Open a separate account for your Emergency Fund so you can avoid any doubt about whether or not you can replace the water heater that decided to break right before your in-laws are scheduled to arrive.

2. Do NOT touch this account. Even though this is listed here as Rule #2, it’s really Rule #1. Once you begin setting aside money in your Emergency Fund, “fugettaboutit”… unless there actually is an emergency! Best case scenario, that money is going to sit and wait for a long time until it’s needed. However, just because it’s an “out of sight, out of mind” situation, doesn’t mean that there aren’t some important features that need to be considered for your Emergency Fund account:

  • You must be able to liquidate these funds easily (i.e., not incur penalties if you make too many withdrawals)
  • Funds should be stable (not subject to market shifts)

You definitely don’t want this money to be locked up and/or potentially lose value over time. Although these two qualities might prevent any significant gain to your account, that’s not the goal with these funds. Pressure’s off!

3) Know your number. You may hear a lot about making sure you’re saving enough for retirement and that you should never miss a life insurance premium. Solid advice. But don’t pause either of these important pieces of your financial plan to build your Emergency Fund. Instead, tack building your Emergency Fund onto your existing plan. The same way you know what amount you need to save each month for your retirement and the premium you need to pay for your life insurance policy, know how much you need to set aside regularly so you can build a comfortable Emergency Fund. A goal of at least $1,000 to three months of your income or more is recommended. Three months worth of your salary may sound high, but if you were to lose your job, you’d have at least three full months of breathing room to get back on track.

4) Avoid bank fees. These are Emergency Fund Public Enemy No. 1. Putting extra money aside can be challenging – maybe you’ve finally come to terms with giving up the daily latte from your local coffee shop. But if that precious money you’re sacrificing to save is being whittled away by bank fees – that’s downright tragic! Avoid feeling like you’re paying twice for an emergency (once for the emergency itself and second for the fees) by using an account that doesn’t charge fees and preferably doesn’t have a minimum account balance requirement or has a low one that’s easy to maintain. You should be able to find out what you’re in for on your bank’s website or by talking to an employee.

5) Get started immediately. There’s no better way to grow your Emergency Fund than to get started!

There’s always going to be something. That’s just life. You can avoid that dreaded phone call to your parents (or your children). There’s no need to apply for another credit card (or two). Start growing and protecting your own Emergency Fund today, and give yourself the gift of being prepared for the unexpected.

  • Share:


Sources: ¹ Simpson, Sean. “Half (48%) of Canadians are Less than $200 Away Monthly From Being Financially Insolvent.” Ipsos, 2.18.2016, https://www.ipsos.com/en-ca/news-polls/half-48-canadians-are-less-200-away-monthly-being-financially-insolvent. ² Cornfield, Jill. “Bankrate survey: Just 4 in 10 Americans have savings they’d rely on in an emergency.” Bankrate, 1.12.2017, https://www.bankrate.com/finance/consumer-index/money-pulse-0117.aspx.

WFG2026522-0318

Making Money Goals That Get You There

Making Money Goals That Get You There

Setting financial goals is like hanging a map on your wall to inspire and motivate you to accomplish your travel bucket list.

Your map might have your future adventures outlined with tacks and twine. It may be patched with pictures snipped from travel magazines. You would know every twist and turn by heart. But to get where you want to go, you still have to make a few real-life moves toward your destination.

Here are 5 tips for making money goals that may help you get closer to your financial goals:

1. Figure out what’s motivating your financial decisions. Deciding on your “why” is a great way to start moving in the right direction. Goals like saving for an early retirement, paying off your house or car, or even taking a second honeymoon in Hawaii may leap to mind. Take some time to evaluate your priorities and how they relate to each other. This may help you focus on your financial destination.

2. Control Your Money. This doesn’t mean you need to get an MBA in finance. Controlling your money may be as simple as dividing your money into designated accounts, and organizing the documents and details related to your money. Account statements, insurance policies, tax returns, wills – important papers like these need to be as well-managed as your incoming paycheck. A large part of working towards your financial destination is knowing where to find a document when you need it.

3. Track Your Money. After your money comes in, where does it go out? Track your spending habits for a month and the answer may surprise you. There are a plethora of apps to link to your bank account to see where things are actually going. Some questions to ask yourself: Are you a stress buyer, usually good with your money until it’s the only thing within your control? Or do you spend, spend, spend as soon as your paycheck hits, then transform into the most frugal individual on the planet… until the next direct deposit? Monitor your spending for a few weeks, and you may find a pattern that will be good to keep in mind (or avoid) as you trek toward your financial destination.

4. Keep an Eye on Your Credit. Building a strong credit report may assist in reaching some of your future financial goals. You can help build your good credit rating by making loan payments on time and reducing debt. If you neglect either of those, you could be denied for mortgages or loans, endure higher interest rates, and potentially difficulty getting approved for things like cell phone contracts or rental agreements which all hold you back from your financial destination. There are multiple programs that can let you know where you stand and help to keep track of your credit score.

5. Know Your Number. This is the ultimate financial destination – the amount of money you are trying to save. Retiring at age 65 is a great goal. But without an actual number to work towards, you might hit 65 and find you need to stay in the workforce to cover bills, mortgage payments, or provide help supporting your family. Paying off your car or your student loans has to happen, but if you’d like to do it on time – or maybe even pay them off sooner – you need to know a specific amount to set aside each month. And that second honeymoon to Hawaii? Even this one needs a number attached to it!

What plans do you already have for your journey to your financial destination? Do you know how much you can set aside for retirement and still have something left over for that Hawaii trip? And do you have any ideas about how to raise that credit score? Looking at where you are and figuring out what you need to do to get where you want to go can be easier with help. Plus, what’s a road trip without a buddy? Call me anytime!

… All right, all right you can pick the travel tunes first.

  • Share:


WFG2026518-0218

Worry Once. Suffer Twice.

December 18, 2017

Worry Once. Suffer Twice.

If you Google “how to be financially independent,” over 4 million search results come back.

And for good reason: People are really worried about their finances. Last year, 76% of Americans can’t say that they are knowledgeable about financial matters.

Are any of these top 5 concerns true for you?

  1. Health Care Expenses/Bills
  2. Lack of Emergency Savings
  3. Lack of Retirement Savings
  4. Credit Card Debt
  5. Mortgage/Rent Payments

Chances are that one of these is going to hit home with you. If worrying about a problem means that you suffer twice, millions of people are suffering twice over their finances.

Are you?

An effective way to learn about and work toward financial independence is with someone who already knows how – an ally who can walk the road with you. Someone who has been where you are. Someone who isn’t buried somewhere in a 4 million hit search result. All it takes is one phone call or email. Then, together we can start you moving toward financial independence – and stopping some of that worry over your finances.

  • Share: