If you're wondering "Can I contribute to an IRA and a 401(k) this year?", then you'll be delighted to know that the answer is most likely: Yes. For most middle income families, the good news is that both spouses can usually contribute to both types of retirement plans. With a 401(k), eligibility is pretty straight-forward. Your employer will either offer one or they won't. The employee generally just has to meet the employer's requirements which might be being 21 years of age (or older) and having worked with the company for a minimum amount of time (such as one year). IRAs, on the other hand, are accounts that you set up yourself. If you want to start one, you simply pick a reputable financial institution and apply. Its … [Read more...] about Can I Contribute to Both an IRA and a 401(k)?
If you're looking for some good things you do with $1,000 right now, then you're in the right place. Anytime you're about to receive some money, it's important to have some good options for what you plan to do with it. And let's be honest: With the median household income in the U.S. standing at $61,937 per year, a thousand dollars can do a lot of good. In fact, according to a survey reported by Fox Business, the majority of people who are about to receive $1,000 or more plan to use it to pay down their debt. While that's always a very responsbile use of money, is it the only option? Depending on how you normally manage your money, there may be some other choices that would also make similar positive impacts. In fact, if … [Read more...] about What Are the Smartest Things You Can Do With $1,000 Right Now?
So you want to save for retirement, and you've heard good things about both 401(k)’s and IRA’s. You'd love to save your money into both types of retirement accounts. But unfortunately, that might not be possible. First, there's the big question: Are you even eligible? Maybe you work at a place that doesn't offer a 401(k) plan. Or maybe you have no idea if you qualify to open an IRA. Next, if your finances are anything like most American households, then there's only so much money to go around. Your paycheck is only so big, and you might only be saving somewhere around 10 percent of it. There might be enough to spread around. Finally, there's the debate of what's best for you and your money. Do any amount of searches in … [Read more...] about Should I Put Money in a 401(k) or IRA First?
After reading enough personal finance blogs, this whole financial independence thing starts to sound pretty good! But what exactly are the steps to retire early? How does someone acquire enough money to never have to work again (if they choose)? What was the path that got them there? And more importantly, what are the habits and routines in our daily lives that we can adopt that will help make early retirement an option? You might be surprised to learn that much of achieving financial independence has less to do with earning a lot of money and more to do with how you go about getting it. Your ticket to freedom doesn’t necessarily have to include some fancy high-paid position. Although it might help accelerate … [Read more...] about 10 Steps to Retire Early – What You Should Be Doing Right Now!
Do you pay taxes on the money you earn from your side hustle? If so, then he's a hack you'll want to know: Contributing to a SEP IRA can help lower your taxes as well as allow you to stash away more money for retirement! For years I’ve enjoyed making money on the side from blogging. But in the eyes of the government, that money is “business income”, and therefore taxable. So while it was fun to earn several thousand dollars per year, it wasn’t so great having to pay roughly a quarter of that money back into taxes every year. Just like all the steps I’ve taken to reduce my personal taxes down as much as possible, I knew there had to be a way to do the same with my business income. That’s when I discovered the SEP IRA. By … [Read more...] about How We’ve Saved $1,000’s in Taxes By Contributing to Our SEP IRA
We all know that budgeting is the key to managing our money. But have you ever considered how an annual budget might work better than a monthly budget? Tell me if this is how budgeting usually goes for you … You take your annual income, divide it by 12, and then make a goal to not spend over that amount each month. Things might go well for a little while. But then you find that you’ve over-spent by $500 because of a bill you weren’t expecting. Then the next month its $1,000 more than you anticipated. Perhaps you’d like to buy a new car, but you’re unsure of how much you can actually afford each month. Or maybe you’d like to boost your 401(k) savings rate. But again – how much extra can you … [Read more...] about Monthly Budget Not Working? Why An Annual Budget Is Better
Admit it ... You’ve probably asked yourself “How do I become a millionaire?” more than once in your life. Don’t be shy! I can certainly tell you that I have. With all the images of happiness and security we see associated with wealth, how could you (or most anyone) not wonder about such a thing. Regardless of what your actual financial goals are, the act of having a net worth of one million dollars or more is still heavily regarded as quite an accomplishment! In fact, in a survey conducted by investment service Charles Schwab, less than 10% of Americans had accumulated a net worth of $1 to $5 million. So while 10% may sound like a small sliver of the population, keep in mind that this represents 9.4 million individuals. Is … [Read more...] about How to Become a Millionaire – The Simple Way to Save $1,000,000
It's pretty safe to say that if you want to do a better job managing your money, one of the first changes you're going to need to embrace is how to live frugally. I know, I know ... The word frugal makes most people want to cringe! Why? Because they associate it with another word that brings about unpleasant thoughts: Cheap! I think we can all agree - no one wants to be thought of as "cheap". And for good reason. The idea of people being cheap implies that they are being stingy with their money. It means you hold yourself back from buying the things you want or even need, and for no good reason. That's not how you want to be! "Frugal", on the other hand, implies that you are simply being conscious of your money and making … [Read more...] about How To Live Frugally Without Being Cheap