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Debunking Personal Finance Myths

Personal finance is one of the most fundamental topics and aspects of our individual lives. Much has been said regarding how to practice good personal finance practices. Unfortunately, some of the information available out there is rooted in misconception. Here is an overview of some of the commonly perpetuated myths about personal finance.

“To make an investment, you need to be rich”

This misconception is based on the fact that most investments today are capital-intensive. One does not, however, have to be rich to successfully establish a business, as there are numerous options to source for startup capital. In addition, one can start a successful business with minimal savings and gradually advance the investment portfolio.

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Choosing Between a 401(k) and Roth IRA

When it comes to retirement savings, two of the more popular vehicles are the 401(k) and the Roth IRA. Both are tax-advantaged retirement accounts, but there are significant differences. Depending upon your specific situation, you may find that one fits your needs better than the other.

What are the savings limits?

For workers who haven’t yet reached age 50, it’s possible to save as much as $19,000 in a 401(k) as of 2019. Those who have passed 50 can save an additional $6,000 as a catch-up contribution. Depending upon their age, those who want to save in a Roth IRA can save $6,000 or $7,000 per year. Both are great savings vehicles, but those who are looking to max out their savings would most benefit from using a 401(k).

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Finance Tips for the Holiday Season

The holiday season can get pretty expensive. Starting with candy and costumes for family and neighbors in October, followed by a feast of food in November and all of the gifts, gatherings, and extras around the winter holiday season, bills can really add up. Unfortunately, your wallet may not be able to keep up with the hustle and bustle of the holiday season. There are several ways to help you save money while still allowing you to delight in the magic and wonder of the holidays.

Set a budget

It’s easy to spend money when you don’t try to set a cap on how much you’re allowed to spend. Without a budget, you’ll be more likely to overspend. Sit down and work numbers before even setting foot in a store so you know exactly how much you have to spend. On average, people spend around $704 during the holiday season, but that is all dependent on an individual’s personal financial situation.

Do your research

Everyone is going to be advertising that they have the best deal on a specific product during the holiday season. It’s up to you to do your homework and see who’s actually telling the truth. You can comparison shop right from the comfort of your own home by looking up prices online. That way, you’ll know you’re getting the best deal.

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Budget-Friendly Features of Autumn Travel

While it may not feel like it in some parts of the country, the summer season has officially come to an end. This means that the comfortable temperatures and beautiful colors of autumn will be here in no time. One of the best ways to celebrate the turning of the seasons is by going on a nice vacation. These are the three ways you will save money when traveling in autumn.

Reduced Travel Cost

The most expensive part of going on vacation is the cost of getting to and staying at the destination. You will be able to greatly save on these costs by traveling in autumn. Since families are unable to travel with the kids back in school, airlines and hotels are forced to reduce their rates to entice travelers. Many people believe winter is the off-season for traveling, but airline tickets are actually cheapest in the month of October. Travel costs start to go up in the winter because of poor weather conditions and the holiday season.

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Personal Finance for College Students

You’re finally living on your own, attending classes and joining new clubs and organizations. In college, it’s easy to overlook personal finance when focusing on your studies, but proper money management is vital for a successful future. If you’re new to college and money management, here is some personal finance advice.

Consider Your Credit

Swiping a card is convenient, but that money has to come from somewhere. If you’ve fallen victim to overspending on your card, try to set up a system to evaluate your spending habits. Perhaps you could limit card spending and use more cash. Or, perhaps you need to change your card limit to dissuade yourself from making unnecessary purchases. In addition, you should keep track of when your credit card payments are due—missing those payments can harm your credit score, which can be difficult to improve later down the line.

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Mortgage Tips for Young Homebuyers

For some young people, creating a home is the first major post-graduation decision they’ll make. While young adults might have little capital available, research into mortgages can help these homebuyers make the most informed, budget-friendly decisions. Here are a handful of mortgage tips for young homebuyers.

Access to Special Financing

While younger people might not have much of a credit history, there are options that can help them get into houses. If you’ve never bought a house, there are opportunities for first-time home buyers. These sometimes come with relatively low interest rates. They also come with low down payment requirements for the house’s residents. This will allow you to get into a house without having to save a large sum for a down payment.

More Flexibility

Those who are young tend to have more flexibility. They’ve just entered adulthood. Therefore, living with roommates and sharing a kitchen or bathroom is usually not a big deal. Additionally, younger adults who are unmarried and without children can find value in having roommates. By taking on a roommate or two, you could effectively have them pay off a significant portion of your mortgage and help you build wealth. These less structured options provide plenty of flexibility for young people, and something as simple as renting out a room can lead to cost benefits.

 

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When to See a Financial Advisor

For many, talking about money can be a nerve-wracking experience. It’s not included in the preferred “small-talk” topic list, and some consider it a sensitive subject. However, conversations about personal finance are an important element in the process of helping individuals grow their net worth. That’s where financial advisors come in. Financial advisors serve as conduits for these conversations, offering advice and assistance in planning and executing financial strategy. When should you see a financial advisor?

When You’re Experiencing Life Changes

From starting a family to transitioning into retirement, drastic changes in your life often benefit from the perspective of a financial advisor. When it comes to marriage and bearing children, the introduction of joint finances, college savings, and estate planning for wills can be a tempest of confusion. As for retirement, financial advisors can offer insight into a retiree’s financial stability and the process of filing for Social Security. In both cases, financial advisors can help organize the clutter and reorganize an individual’s priorities. A thorough understanding of your future financial situation will only serve as a benefit.

When You Have Large Investment Sums

Having a good chunk of money involves much more strategy than one may expect. To manage strategies and accounts and balances, individuals need assistance from people who can navigate those murky waters and work with large sums of money and investments. If you’re dedicated to stock market investments and exchange trading, a financial advisor can help organize your finances. It’s easy to let small aspects of portfolios slip through the cracks, but a successful financial advisor can spot those bits and make sure that you’re really getting your money’s worth.

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