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If you pay a monthly cable bill, you’ve probably bemoaned the soaring prices and the lack of choices when it comes to the channels you actually watch versus how many you pay for. In fact, you may find yourself paying for 50 channels you don’t want just to get three you do.
That’s why consumers are increasingly ditching cable in favor of streaming TV, which can be much cheaper and still provide all the shows, movies, sporting events and news you like to watch.
Want to ditch your cable company to save money, but still watch your favorites? Here’s how to make it happen.
Women are actually better investors than men – we just don’t realize it yet.
A 2017 study by Fidelity Investments found that women earn higher returns on their investments than their male counterparts by about 0.4 percent. This number may seem small at first glance, but can have a “significant impact” over time, the study says.
Yet only 9 percent of women expected that they would outperform men.
“It was shocking,” says Alexandra Taussig, senior vice president of women investors at Fidelity. “Women need to lean in and own the fact that they’re better investors and celebrate that. As we would say, ditch the doubt.”
There are a few reasons why women investors tend to outperform men. In general, women take a more hands-off approach to investing, which allows their funds to gain a better return over time.
They’re also more cautious: Statistics show that men trade their stocks 45 percent more than women do. These differences are so well-documented that there’s even a book titled “Warren Buffett Invests Like A Girl: And Why You Should, Too.”
Taussig says that in her experience, women view money as a tool that they can use to accomplish their goals, while men tend to view investment as a game to be won.
“Men have a less long-term view and less patience. They… look at investing as a competition to see (if they are) beating the benchmarks,” she says. “Women evaluate success by saying, ‘Am I on track to achieve my goals?’”
Women Investors Still Not on Equal Footing
Although it’s great news that women are successful investors, they still have a long way to go to be on equal footing with men financially, Taussig notes. Important steps include breaking down the stigma of women talking about money, building confidence when it comes to financial decisions, and increasing access to resources that address women’s specific concerns about money.
“Money has been a taboo topic. Women are more comfortable talking about health than money,” she claims. “When we open it up and start talking in a human way, the shackles fall off, and the questions just start coming.”
Fidelity has a site aimed specifically at women investors, and other financial outlets like Ellevest are on the rise. It’s clear that more women are engaging with financial services, a sector that has typically been dominated by men.
But just as women may need to change their perspectives on money, the financial industry needs to change how it engages women investors, as well.
“Financial services has not done a good job of embracing and welcoming women,” Taussig says. “The financial services industry was created by men for men.”
Women should think of themselves as investors, Taussig advises. Don’t feel like one? Anyone with a 401(k) or other retirement plan is an investor and should embrace that role. It’s also time to ditch the myth that you need to do everything right in order to get a return on your investments.
“Women try to be perfect, but you don’t have to be perfect,” she points out. “You just have to do more right things than wrong things over the course of your life.”
Taussig doesn’t shy away from sharing her own financial mistakes: “I bounced a check to the minister when we got married,” she says with a laugh. She’s also borrowed from her 401(k) and had a large amount of credit card debt.
Although many women think mistakes like these will entirely derail their finances, most of the time, that’s not the case. “A lot of women are doing a lot of things right. We need to take credit for that,” she says.
It’s also time to change the narrative around women and money, she says. Alarmingly, Fidelity found that only 25 percent of women say that they are a primary decision maker (which includes being a decision maker alongside your partner) in their households.
It’s a cycle: women are intimidated by finances because they don’t feel in control. That intimidation keeps them from becoming more engaged and building confidence, which in turn keeps them from engaging wisely.
“Women have half the confidence and twice the stress when it comes to money,” Taussig says.
But by educating themselves and taking small positive financial steps, we can change that.
“What we are trying to do systematically is introduce a new cycle,” she says. This cycle of empowerment includes encouraging women to talk about finances, engage with financial education, and to act, even it’s just by doing something small like increasing their retirement contributions by one percent.
By taking a small step every three to six months, people can drastically change their finances, she advises.
“That’s where you start to build muscle memory and confidence in order to break this lack of confidence and stress dynamic that we’re in now.”
A few years ago, I unexpectedly found myself raising two kids on one income. In my case, the situation was the result of my partner’s sudden death, so the change was utterly unexpected.
The loss was devastating. But even during that difficult time, I knew that I was fortunate, since I had a steady job. That’s not something everyone can count on in the face of an unanticipated change in circumstance.
And while changes in circumstance, like a death, disability, or job loss, account for some of the 37 percent of American families who are currently raising kids on one income, many are making this choice deliberately.
Some do the math and realize they don’t need two incomes. Others determine that it’s more financially sensible for one partner to stay home with kids, or that doing so is simply more aligned with their lifestyle choices.
Whether you are consciously raising kids on one income, want to plan for the possibility, or even find yourself unexpectedly doing so, there are a number of things you can do now to make the situation as manageable as possible.
When I moved to a new state with an 18-month-old toddler, one of my first concerns was childcare.
I couldn’t afford full-time daycare and didn’t have any friends or family in the area who could watch my daughter when I was in a pinch. I found a teenaged babysitter online but wasn’t entirely comfortable leaving my daughter alone with her.
I found an unexpected solution in my Facebook inbox: A mother I knew informally through a playgroup in town offered to watch my child one day a week. In return, I would take her daughter the following day, and we would both have a day to ourselves. It was the perfect solution: free childcare for both of us, the intrinsic trust between moms and a social opportunity for our toddlers.
For the next year and a half, we swapped kids, eventually each taking the girls two days a week, which gave us each 16 hours of free childcare weekly. Even on the days I had both girls, I was able to get more done than I could with just my child around since she had a playmate. It was life changing. Our daughters became friends, and we formed a great relationship, chatting at pick up and trouble-shooting common parenting problems.
We were certainly lucky in some regards. We both worked from home and had fairly flexible schedules. However, anyone with a part-time or flexible schedule could set up a childcare solution similar to ours, whether to free up a day for work, have a day to catch up on housework or get some much-needed “me” time.
It’s no wonder this unconventional approach has gained traction. Across the country, parents are struggling to afford childcare, which can cost more than 12 percent of a two-parent family’s income.
Childcare costs represent a “very” or “somewhat serious” problem for 71 percent of parents polled, NPR research found. A co-op or childcare exchange provides an affordable solution, yet it is often overlooked.
While I fell into my childcare swap, there are several options for platforms on which to secure your own.
Sitting Around, a Boston-based startup that helps facilitate co-ops and childcare swaps, launched in 2010 and has grown 35 percent year over year. Today, about 25,000 families use the site.
Childcare giant Care.com also has a co-op section. Katie Bugbee, the managing editor of the site, says this system is popular because it keeps costs down, is social, and provides caretakers that parents trust — other parents.
Consider these tips for setting up — and maintaining — your own successful swap.
I’ve always considered myself frugal. I was raised by frugal parents who reminded us to throw on extra sweatshirts, turn off unnecessary lamps, and not be frivolous with money. Knowing how to bargain, barter and negotiate has been one of my best secret weapons for most of my adult life.
The problem starts when being frugal turns into being cheap. Cheap is needy, clingy, desperate and reeks of rock bottom. Moreover, cheap is settling — it’s cheating yourself.
A cheap person might buy low-priced heels that don’t fit well, only to retire them unworn and buy another cut-rate pair expecting something different. Cheap people settle, because to them, money spent is money gone.
The good news is that cheap is a mindset, not a life sentence. Breaking out of it is not an overnight fix, but it can be done. It requires a commitment to a new belief system, even when it feels strange to pass up dollar-store goodies that will eventually wind up in the trash so you can purchase something you’ll truly savor.
How to Stop Being Cheap
Undoing this pattern is not about beating yourself up, but about making better choices going forward. The key is to course correct — and be kind to yourself while you do it. In my case, it meant easing up on the things I’d settled for in order to make space for what I truly wanted, and in some cases needed.
It was a computer purchase that forced me to break out of my cheap rut. I was hesitating on making the splurge, even though I knew my beloved MacBook was failing. All the upgrades in the world couldn’t hide the fact that I simply needed a new computer, especially as someone who writes for a living.
Things reached a tipping point when in the midst of working on a massive assignment, my computer froze, plagued by the spinning wheel of death and a power button that, no matter how hard I pressed, refused to budge.
I took a moment to survey the choices I’d made over the past six months, and saw just how much I’d suffered from nickel-and-diming my own life:
I was wearing a pair of leggings that were past their prime, and my clothes were hung in multiples on pink plastic hangers acquired in haste because I didn’t feel like spending the extra $20 on the wooden hangers I like.
My apartment was filled with Ikea furniture bought on Craigslist — not quite what I had in mind at almost 33, but it got the job done, I’d reasoned when I’d picked up my desk, lamp, and shelving unit from strangers’ homes over the years.
Outside my window was a neighborhood I never wanted to live in, and at times made me miserable. But it was cheap.
As you might guess, I eventually replaced my computer. Having to bite the bullet to buy another one felt scary at first, but I did it. Furthermore, those leggings, along with other clothes that no longer worked, ended up in a boxes destined for recycling centers and women’s shelters. It was gratifying to clear out what no longer worked or fit, leaving space for the unknown to take its course.
So go ahead, I dare you: Take stock of your life, and see where you might have allowed your standards to slip because of cheapness, convenience, or assuming you can’t do better. No matter who you are, where you live, or what you do with your time and money — you’re worth it.
It can feel like mortgage lenders and real estate agents speak a secret language. If you’re planning to buy your first home — or your first in a while — you’re bound to hear unfamiliar terms during the mortgage process.
Here’s a cheat sheet to help you understand key terms.
Prequalification: This is the first step in the mortgage process and can be done over the phone. In the prequalification process, you give a lender your basic financial information — income, debt, assets — and after evaluating this information, the lender can tell you about the amount of mortgage for which you qualify. This step does not include a credit check, but it does allow the lender to explain the various options available and make recommendations.
Preapproval: The preapproval process is more in-depth than prequalification. During this phase, a borrower submits a loan application along with documentation of income and assets, and the lender runs a credit report to determine whether the borrower can be officially approved. After this process, the lender can tell you the specific loan amount for which you can be approved, and will provide you with a conditional commitment in writing for a specific loan amount, which can give you more leverage with home sellers.
Private mortgage insurance: Often referred to as PMI, private mortgage insurance is usually required by lenders when borrowers put down less than 20 percent of the purchase price as a down payment. PMI costs about 0.25 to 2 percent of your loan balance per year, depending on your down payment, loan term, and credit score. It’s paid as part of your monthly payment until you reach 20 percent equity in your home.
Appraised value: This is the evaluation of a property’s value performed by a professional appraiser during the mortgage origination process. Most lenders require an appraisal by a third party to ensure the property is worth the purchase price. The lender usually chooses the appraiser, but the borrower pays for the appraisal. If the appraisal value doesn’t match or exceeds the contracted purchase price, the mortgage is unlikely to be approved.
Loan points: A point is a fee charged to the borrower, equal to 1 percent of the loan amount. Points are usually charged by the lender as a way of making a profit on the loan, but you may be able to negotiate for zero points or lower points fees. A 30-year, $150,000 mortgage might have a rate of 4.5 percent but come with a charge of one point, or $1,500. A lender can charge one, two or more points.
Origination fee: An up-front fee charged by the lender for processing a new mortgage loan application.
Down payment: This is the amount of money that the buyer puts toward the price of the home out of her own pocket. Traditionally, most mortgage lenders require borrowers to make a down payment of 20 percent of the cost of the home, but many now allow lower down payments, sometimes as low as 3 percent. The earnest money you pay upon making an offer to purchase a home is usually credited back to you to be included in your down payment at closing.
Earnest money: When you’re ready to make an offer on a home, you’ll supply earnest money, or a deposit on the purchase, to show the seller you’re serious about the offer and convince them to hold the property for you. Earnest money allows the buyer additional time when seeking financing and is typically held jointly by the seller and buyer in a trust or escrow account until the contract is fulfilled.
Escrow: An escrow is a deposit of funds that will be held by a third party (such as an attorney) until certain conditions are met. For instance, you may pay earnest money upon submitting a contract to buy a house, and those funds will be held in escrow until the closing date, when they will be paid to the seller.
Title: A formal document, such as a deed, that serves as evidence of ownership. Before you can purchase a property, you usually have to pay for title research so your lender can ensure that no other person or entity holds rights to the property and you can obtain a clear title.
Title research: This is the process in which a title professional retrieves documents that evidence events in the history of a property, like former purchases and construction, to determine any parties that have interests in or regulations concerning that property.
Balloon payment: Some mortgage loans do not amortize the entire loan amount over the life of the loan and only charge interest payments each month throughout the term. In those cases, a large payment of the remaining balance is due at the end of the loan. This final repayment to the lender is called a balloon payment.
Amortize: To pay off gradually, usually by periodic payments of principal and interest or by payments to a sinking fund.
Adjustable-rate mortgage: A mortgage with an interest rate that is adjusted periodically to reflect market conditions.
Fixed-rate mortgage: A mortgage that has a fixed interest rate for the entire term of the loan.
If you’re no longer using a particular credit card, there are financial benefits to keeping it open — as long as it’s free. But if it’s costing you unnecessary fees (or tempting you to spend), make sure to close it correctly or you could hurt your credit score.
Before you cancel a credit card, ask yourself these questions:
How long have you had the card? Your oldest credit accounts can be the most valuable to your credit score, because they show a long history of credit. It may not be a good idea to close your oldest credit card, especially if you have a positive payment history with it.
What is the card costing you? If it has a high interest rate or an annual fee, and the card issuer refuses to eliminate the fee, it might be worth closing the card. There’s no need to keep paying money needlessly.
Have you closed other cards recently? It’s better not to close several cards at once because it may look suspicious to potential creditors or lenders. Instead, if you want to close more than one card account, gradually pay them down and close the accounts, spacing the closures over time.
Will you still have a few active credit accounts? Many experts recommend keeping four to six credit accounts open to keep your credit score healthy and show a strong debt to available credit ratio. These accounts don’t have to be all credit cards, however; student loans, car loans, mortgages, and other credit accounts count too.
If you decide to close a credit card account, take these steps to make sure you do it right.
1. Check your credit report. You can access a copy of your credit report online annually at AnnualCreditReport.com, without affecting your credit score. Take a look at the report to make sure there are no errors regarding the credit account you want to close.
2. Redeem outstanding rewards. You may be able to apply the rewards toward paying off the balance on the card. If not, cash in on a new video game or airline miles. Use whatever rewards you can before closing the card.
3. Pay off the balance. You won’t be able to completely close the account until the balance is paid in full. If you want the account to be closed to new charges while you’re still paying it off, you can usually contact the customer service department and ask for that.
4. Contact the card issuer. Once your balance is paid in full, call the card issuer and let them know you want to close the account. You can usually find contact information on the back of the card, your monthly statement, or on the issuer’s website.
5. Follow up. After 30 to 60 days, the card issuer and the credit reporting agencies should have had time to update your records. It’s a good idea to check your credit report to make sure the account has been updated without errors. The account and its associated payment history may remain on your report for several more years, but the status should show that the account is closed.
I’m 57 years old and wondering: Is it too late to save money for retirement? I expect to be working for another 10 years. Is that realistic? — Maria, Trenton, NJ
Unfortunately, the American dream of retiring at age 65 seems to be a thing of the past. I think many of us will be lucky to be able to retire at age 70! There are plenty of reasons why most Americans do not have enough saved for retirement. Perhaps you suffered a financial blow (or several), or took time off from work to be a caregiver, or sacrificed to pay for your kids’ college. Whatever your reason, the good news is that it is never too late to save money. But if you are starting later in life and need a boost, here are some tips to help you succeed:
It may be depressing, but you probably need to revise your ideal picture of retirement and be realistic about what you need to do in order to have enough income to sustain you for decades to come. This could mean scaling back your lifestyle, downsizing your home (or renting, moving in with family or relocating to a less expensive area), working longer and maybe even working part-time through retirement.
Have a Plan
There are several free retirement planning calculators online that can help you figure out how much you to need to save to support your retirement income needs. The AARP offers a good one, taking you through a step-by-step questionnaire that accounts for Social Security and other potential income sources (like proceeds from the sale of real estate and inheritances). It provides a detailed chart of your income sources over time and indicates any potential gap, and allows you to make a variety of adjustments to see how you can help improve your odds of not outliving your money. If DIY planning makes you nervous, it might be worth the cost of paying a fee-based certified financial planner (CFP) to help you create a customized roadmap and implement suitable strategies.
Get Rid of Bad Debt, for Good
If you have nagging high-interest credit card debt, make it a high priority to pay it off. While debt consolidation loans are tempting, they are riddled with fees and the application process can be a real hassle. Save your time and money and use this handy spreadsheet instead to prioritize your debt and create an easy-to-follow payoff plan. You will save yourself potentially thousands of dollars that you can put into retirement accounts instead.
Don’t waste time on guilt and regret. Just focus on catching up. You should try saving at least 10 percent of your current income on a regular basis, though 20 percent would be ideal. (We know, easier said than done.) If possible, set up a monthly automatic transfer from your banking account to a retirement account so you force yourself to save and not spend. Once you have eliminated high-interest debt, commit to saving at least 80 percent of any extra income like bonuses, tax refunds, inheritances or lottery money (yeah right!).
Take Advantage of Tax Breaks
If you have a retirement plan available through your employer, great. Set up automatic payroll deduction contributions, if you haven’t already. If you are already contributing, increase your deductions as much as possible. Keep in mind that if you are over 50, the IRS lets you put extra money in tax-deferred retirement accounts to “catch-up” on retirement savings. A CFP, as well as an experienced Certified Public Accountant (CPA), can be helpful in navigating your options and remember: simply contributing to a plan does not mean that you have purchased any investments (which is another step).
Stock Up on Stocks
Stock investing remains the best chance most of us have to grow our money and outpace inflation. Some financial advisors recommend equating your age to the percentage of your investment portfolio that should be allocated to less risky investments, like bonds (so if you are 57, you would have 43 percent invested in stocks). Some advisors would argue that formula is still too risky, while other advisors would argue that you should have a greater percentage invested in stocks to achieve the growth you need, despite your age. Whatever allocation you ultimately choose, make sure that your portfolio is diversified and contains a variety of investments from different asset classes to spread out and reduce risk. And if you are uncomfortable making your own investment decisions, consult an advisor from your retirement plan’s administrator or a fee-based CFP.
Delay Social Security
One of the easiest ways to boost your retirement savings is to work longer. At age 62 your monthly Social Security payments would only be 70-75 percent of your full retirement benefit, but if you postpone claiming until age 70, your payments would be 132 percent of your full benefit. By waiting to collect, you will not only get more from the government when you need it, but you will also give yourself more time to save money in tax-deferred retirement accounts and build your nest egg. Additionally, your benefits are not affected if you continue to work after you begin collecting.
Saving for retirement can be daunting at any age, but it is particularly stressful when you are starting later in life. Taking stock of your current situation and having a realistic plan that includes investing in stocks will help you go a long way in a shorter time. Good luck!
“If I leave my job to freelance or take another job, what should I do with my retirement account? I won’t lose the money, will I?”
— Jennifer, Brooklyn, New York
Before you leave, it’s important to understand the (potentially negative) impact on your retirement savings. If you don’t, you could stand to lose significant dollars. Consider these questions:
Are you vested?
The money you contribute is always 100 percent vested, but your company match usually vests over a period of several years — typically three to five. If you leave, you may forfeit a portion or all of your employer’s match, plus any earnings on that match.
Do you have an outstanding loan from your 401(k)?
If so and you leave, you’ll owe the balance of the loan quickly — typically within 60 days. If you don’t pay it back in time, it’s considered a distribution and you’ll owe taxes on it plus a 10 percent penalty that year.
Do you have less than $5,000 in the account?
If so, you’ll want to roll over the money immediately or your former employer may distribute it to you directly, automatically withholding the IRS-required 20 percent. In that case, if you do not roll over the entire amount within 60 days and you’re under age 59 ½ you’ll end up with a 10 percent tax penalty in addition to any taxes you may still owe.
Does your new employer have a retirement plan?
If so, you may want to rollover the money in your old plan to the new one. Find out when you’ll be eligible to participate, and put some thought into what your new investments will be. If there’s a waiting period, you can leave your funds in your old employer’s plan in the meantime. But to avoid a tax headache, make sure all rollover checks are written out directly to the new plan administrator, NOT to you.
Do you think you’ll need the money post-departure?
You should reconsider since it’ll cost you in the short and long run. If you cash out your plan, you will owe taxes and a penalty (see above). Plus it could be a huge setback in saving for retirement. In other words, don’t do it!
In most cases, the best strategy when changing jobs or going freelance is to rollover your 401(k) to an IRA or Roth IRA. This way you can have more control and a wider variety of investment options with potentially lower fees and expenses. You can also continue to contribute to your account, which you would not be able to do if you left it with your old employer.
If you already have an IRA set up to receive the rollover, great. If not, you can easily open one at virtually any financial institution. Just make sure to have your administrator send a check directly to the new administrator to avoid that tax headache and remember that if you roll to a Roth, you will owe taxes on the amount rolled that year. Good luck!
About a year before my husband and I tied the knot, we had a financial powwow over margaritas (just one each). We wrote down our personal “numbers” — including savings, debt and credit scores — on Post-its. Then we did a swap. It’s a story I share often and something I know helped us set the stage for a healthy financial relationship.
As my friend and financial author Beverly Harzog says, “You don’t want to wait until you’re madly in love and committed before finding out your future husband has a terrible credit score and $30,000 in credit card debt.” After all, arguments about money are a leading predictor of divorce.
If you’re in a serious relationship or planning to tie the knot, here are seven things you should talk to your partner about now. (Already married? It’s not too late.)