Month: August 2019

Your parents likely taught you all about money, helped you open your first bank account, and gave you an allowance. Sadly, over time, these roles frequently reverse themselves.

Many of us in our 40s and 50s find ourselves in the position that we must help our aging parents manage their money.

This can be awkward and difficult in some circumstances, but there are things that can be done to make the transition easier.

The Effect of Aging on Managing Finances

As with many other aspects of life, age may eventually impact an individual’s capacity to manage their finances and make wise decisions. A change in cognitive ability or even relatively minor health issues can have challenging consequences for handling their money.

It’s common for spouses to divide tasks over time. Perhaps one pays the bills while the other manages the investment accounts. This can be fine while both are still living, but ultimately, the surviving spouse will be left with additional responsibilities that they’re not accustomed to. Errors can be made, especially in times of grief.

Where to Begin

1. Insurance. While there are many issues to address, health insurance and long-term care coverage is critical. While never inexpensive, the likelihood of needing it at some point is quite high in older folks. Ensure the necessary insurance coverage is in place.
   
   
2. Savings. Make a real assessment of where your parents stand financially. How much is there? How likely is it to last throughout the remainder of their lives? Is the money invested in adequate places? Don’t be afraid to call in an expert if you’re not knowledgeable in this area.
   
   
3. Budget. It would be wise to take a look at their spending habits versus their income and savings. Are they spending the money they have wisely? Communicate with them about any adjustments you think they should make.

Getting More Involved

It’s usually wise for at least one the children to be added to all of the parents’ accounts. There are ways to do this that don’t permit the person added to the account to use or spend the funds, if that would make your parents more comfortable. But they still receive all the statements and are notified in the case of missing or late payments or any other issues.

Automating things as much as possible can be a huge help. This includes bill payments as well as any deposits, like social security. Instead of dealing with checks that have to be deposited, you can set up direct deposits whenever feasible. This can also include things like pension payments and retirement fund distributions.

If your parents have a large amount of equity in their home, but need more cash, looking into a reverse mortgage could possibly help them as well.

Helping with Estate Planning

Be sure that the proper person(s) will have legal authority to act on your parents’ behalf. Procedures regarding estates can be legally complicated and are dependent on the state in which your parents live. Seek out the proper legal advice sooner rather than later regarding such things as access to bank accounts, wills, trusts, medical decisions, and more.

Conclusion

When the time comes, it’s important to assist your parents with their financial decisions. You must respect their desire for independence while still providing them with the support they need. Don’t be afraid to consult a family therapist to assist with the transition, if needed.

The key is to be as respectful as possible. An attorney may need to be involved if your parents clearly can’t handle their finances and are unwilling to allow anyone to assist. Even if they resist, find a way to help – for your peace of mind as well as theirs.

Time is at a premium these days. It’s hard to find someone that complains about having too much time on their hands. Most of us are so busy with work, family, and various obligations, there’s little time left to do the things we’d really like to do!

It’s not easy to find time to pursue your passions, but there’s usually a way if you’re truly serious.

Use these techniques to create the time you require for important pursuits:

1. Decide what you want to make room for. The best way to motivate yourself to create more free time in your life is to identify what you want to make time for! What are the most important things you’d like to spend more time on? Do you want to learn the violin? Spend more time with your spouse?
   • Figure out how you’d spend that extra time and make sure you have some good reasons. Create a list of reasons that give you an emotional response. Being logical is unlikely to inspire you.
     
     
2. Use your mornings wisely. Most people waste their mornings. They stay in bed as long as possible and barely manage to get to work on time each day. Make the most of your mornings. Go to bed earlier and get up earlier.
   • It’s often easier to do something worthwhile in the morning than in the evening. What are you missing by going to bed earlier? Probably not a lot.
     
     
3. Understand the ways you waste time. We’re quite ingenious at wasting time. Watch yourself for a day and write down all the ways you waste time. When you understand where your time is leaking away, you can start working on solutions.
   
   
4. Make a schedule. A schedule can keep you on track and help to ensure that your time is being spent wisely. A schedule can help to minimize the amount of time you waste. You can also build time into your schedule to do the things you enjoy the most.
   
   
5. Delegate. Create more time for yourself by utilizing the people around you. This can work at work and at home. There’s a good chance that someone in your life has time on their hands. Put your employees, coworkers, children, and partner to work! A little help can free up quite a bit of time.
   
   
6. Prioritize and eliminate. Perhaps you just have too many non-essential things going on in your life. It might be time to cut back on a few of those obligations.
   • Take a look at everything you have to do each day/week/month and think about how much value those things add to your life. You can probably find something to remove from your life.
     
     
7. Multitask. Multitasking sometimes helps. You might make phone calls or do important reading while sitting on an exercise bike. Get your exercise while taking the dog for a walk. Make a few phone calls while you’re waiting in line. You can even work on your tan and mow the grass at the same time!

You can find time if you have a good enough reason! Determine what you want to create time for and make it happen.

Delegate, schedule, eliminate, and avoid wasting time. It’s been said that the average life is plenty long enough, provided you don’t waste any time. What are you willing to give up to spend time on the things you love?

Although credit unions and banks are similar in that they provide many of the same services, it’s a good idea to have a grasp on the differences between the two. Knowing how each of these entities operates will help you make a more informed decision about which financial institution you’d prefer to use.

Who Owns Credit Unions? Who Owns Banks?

Credit unions are owned by the customers, usually referred to as “members.” When you have an account at a credit union, you’re considered to be an owner and receive the privilege to vote on issues regarding the credit union. Banks, on the other hand, are owned by for-profit corporations and have governing boards that vote to make business decisions for the profit of the corporation.

What Do Credit Unions and Banks do With Profits?

If you bank at a credit union, this is good news. When your credit union experiences a profit, it will be split among its members, so you’ll get a piece of that profit. A bank’s profits go to its owners.

Costs of Operations

Overhead is lower at credit unions because any profits are always split with its members. Also, banks are required to pay federal and states taxes, since they are for-profit corporations.

Differences in Fees and Charges

Credit unions typically don’t charge monthly fees on checking or savings accounts and charge low fees on loan applications. Banks, however, make a huge chunk of profit off their $5 to $10 per month checking account fees.

Credit unions tend to offer loans at lower interest rates than banks. Banks charge higher interest rates to increase the profits to the corporate owners. Also, as banks are required to pay both federal and state taxes since they are for profit, banks’ overall fee structures tend to exceed those of credit unions.

Who Provides Oversight of Credit Unions and Banks?

Credit unions are regulated, governed and insured by a different government body called the National Credit Union Administration, NCUA. Banks, on the other hand, are regulated, governed and insured by the Federal Deposit Insurance Corporation, FDIC. Both regulatory bodies insure an individual’s accounts at the corresponding institution up to $250,000.

Do the Services Provided by Credit Unions and Banks Differ?

Banks tend to focus their services on providing businessmen with accounts to run their businesses. Also, banks provide banking accounts and services for consumers as well. Many banks offer trust services, which means they take charge of estates after the estate owner’s death and manage the estates for the deceased.

Credit unions, however, focus on their members as the main receivers of their services to whom they provide various checking, savings and money market accounts as well as offer loan services.

Which Financial Institution Provides Better Customer Service?

Although you could find people to argue each side of this question, you’ll often hear that people who bank at credit unions will “never go back” to a bank again. Credit union members tend to enjoy no monthly fees on any of their personal banking needs and receive personalized service.

Credit union employees are often trained to call their members by name and to treat everyone the same, regardless of the amount of money in their accounts.

Even so, banks also have their loyal customers who would not consider switching to a credit union and appreciate the supportive business atmosphere that banks provide.

Summary

When you’re trying to determine where to place your money and do your financial business, consider the institution’s ownership, fees and charges and what the institution does with profits. Once you weigh out all the above factors, you’ll be better able to place your money into the best financial institution to help you meet your financial goals.

If you’re not as successful as you’d like to be, your standards are probably too low. If being 20 pounds overweight is acceptable to you, you’re probably 20 pounds overweight. If living in your mom’s basement is okay with you, then you’ll likely be down there until you’re 40.

Most people believe they’re being reasonable, or non-selfish, when they set low standards. But you get what you tolerate in life.

Having high standards is a way of respecting yourself and getting the most out of your life. Life will rarely give you more than you demand from it. Ensure you’re demanding enough.

Try these ideas:

1. Identify the area of your life you’d like to change. Of course, you could raise all of your values. There’s nothing wrong with that. However, your short-term success will be greater if you focus your attention on a single part of your life. It might be finances, relationships, health, or any other category.
   
   
2. Set a new minimum. Let’s imagine that you want to improve your finances. You might need new standards for your income, rate of savings, and spending. Take a look at all the items that are related to your area of focus and set a new minimum for what you’re willing to tolerate.
   • Do you think Donald Trump would be satisfied with only earning
     $250,000 per year? Do you think Warren Buffett would be satisfied with a 2.2% return on his portfolio? Of course not, and that’s a big part of the reason they’re wealthy.
     
     
3. Begin making changes. New standards are a starting point. Now, you have to make actual changes to your life and behavior to meet those new minimums. If you need to increase your income to meet your new standard, it might be necessary to look for a new job or to create a business you can run on the side.
   • A standard is really just a goal. What do you need to do in order to reach that goal?
     
     
4. Incorporate those changes into your identity. You can force yourself to go to the gym a few times, or to save an extra $200 each month, but it’s not easy to make those changes stick. You have to believe that it’s part of who you are. Here’s how you can accomplish that:
   • If you’re beginning a gym habit, make a note of each time you set foot in the gym. Say to yourself, “See that? I’m the type of person that goes to the gym. I go even if I don’t feel like going. That’s who I am.”
   • It sounds silly, but it works over time. Keep proving to yourself that you’re the type of person that does that behavior religiously.
     
     
5. Monitor yourself. Measure your progress and congratulate yourself for it. Give yourself a verbal reward. Jump up and down and smile. Ensure you’re enjoying your progress. You’ll be more likely to stick with the changes you’re making.
   
   
6. Keep going. You’ll probably raise your standards many times over your life. Pick a new area of your life to address and go for it. You’re turning yourself into a more successful person with each iteration.

Raising your standards is the first step to improving the quality of your life. Most people don’t consider their standards at all or have standards that are far too low to live the type of life they desire.

Demand more from yourself, the people around you, and from life. You’ll struggle to receive more than you’re willing to tolerate.

Are you a good saver? Few of us save enough money to maintain a reasonable level of financial security. Many seniors are forced to work well into their golden years. Adopting effective habits can make saving money considerably easier. A few small changes might be all you need to have a financially abundant future.

Saving is a slow process and can require many years to see impressive results. However, your habits dramatically influence your results over time.

Become a successful saver by implementing these habits:

1. Savers pay themselves first. Our instincts can steer us in unproductive directions. Many of us feel compelled to pay all of our bills first before saving. It’s nice to be out from under the mental burden of bills and other financial obligations. But there’s rarely anything left at the end of the month to put into savings.
   • Make a habit of saving a percentage of every dollar you earn or receive. Start with 2% if that’s all you can afford, but make an effort to increase the amount in the future. Avoid spending this money on anything else!
     
     
2. Savers save automatically. It’s much easier and more effective to simply have the money removed from your paycheck before you have the opportunity to spend it.
   • Most employers are willing to split your paycheck and send a portion to a separate account. This might be the easiest way to save.
     
     
3. Savers keep their spending in check. The less you spend, the easier it is to save. Go through your spending over the last month and determine if all your money was well spent. If it wasn’t, carefully monitor your spending next month. Think about how much your spending is costing you.
   • It’s reasonable to expect an annual return of 10% on your long-term investments. Every $100 spent today would be worth nearly $750 in 20 years if it had been invested. Spending $100 when you were 20 years old cost you nearly $8,850 at 65 years of age.
   • Shop with a list. We’ve all gone to the store for a couple of small things and come home with far more. Make a list of what you need and stick to it.
     
     
4. Savers avoid debt. Trying to save while in debt is like walking up a hill and never getting to the top. Consumer debt is an obstacle to achieving any financial goal. If you’re unable to pay cash, you simply can’t afford it.
   • Unless it’s for something very important that needs to be paid for
     immediately in an emergency situation, avoid accumulating any
     unnecessary debt.
     
     
5. Savers have goals. Saving is easier if you have a clear picture of the reason. The objective of a comfortable retirement or sending your child to an Ivy League school can help maintain your focus.
   
   
6. Savers take regular measurements. You’ll find that most savers are very aware of how much money is in their accounts and how much they’ve saved and spent. They’re on top of their income and expenses.
   
   
7. Savers are financially responsible in general. They pay their bills on time. They know how much debt they’re carrying. They have an emergency fund for the future. Do you know anyone that saves well, and the rest of their finances are a mess? Take responsibility for all aspects of your financial life.

It’s possible to save enough money to secure your future and retirement. Having more effective habits will enhance your results. With a few minor adjustments, you can watch your savings grow. Our lives are the result of our habits. Create habits that support your financial well-being.

You probably know more than your fair share of negative people! Since they’re everywhere, it’s important to know how to coexist with them.

Negative people can have an impact on your attitude and your day. But, that doesn’t have to be the case. There are ways to mitigate the effect that negative people have on you.

Practice these strategies to avoid allowing negative people to negatively impact your life:

1. Understand that you can only control yourself, but you can influence others. You can’t snap your fingers and make the people around you take a more positive view of the world. But you can control yourself and how you choose to react to their negativity.
   • You might even be able to sway people over to your way of thinking a little bit. Set a good example and be a positive influence on those around you.
   • Accept people for who they are. It’s just easier that way.
     
     
2. Be grateful. One way to maintain a positive attitude is to remind yourself of the positive. When you’re feeling run down by the negativity around you, make a quick mental list of the things in your life that you’re thankful for. It will give your mood a quick boost.
   
   
3. Remember that it’s not about you. Everyone has their challenges and issues. There’s no reason to be upset that someone has a negative attitude. It likely doesn’t have anything to do with you at all. It could be circumstances in their life or their basic nature. Just keep on doing what you’re doing.
   
   
4. You have the choice to be positive or negative. You can choose to be affected or not by the people around you. Focus on yourself and keep your chin up. Take care of your business and let others view the world however they choose.
   
   
5. Speak up. Sometimes it can be helpful to tell people to just cut it out. Many people will push until someone calls them on their behavior. Have a frank talk with someone that’s perpetually negative. Maybe they’re not aware of the impact they’re having on others.
   
   
6. Spend time with positive people. Recharge your batteries with the positive energy of other positive people. Get away from those negative people and spend time with people full of positive attitude. It doesn’t take long to recenter yourself when you surround yourself with the right people.
   
   
7. Make the most of your time alone. Make the most of the time you have to yourself. Do things you really enjoy doing. Read positive affirmations. Watch feel-good movies. Put your attention on positivity. It can be like armor against negative people.
   
   
8. Headphone can be your friend. If the situation permits, put on some
   headphones or earbuds. What you can’t hear can’t bother you. Consider listening to a positive podcast or music that makes you feel good. If your work situation allows this, it would be silly not to take advantage of it.
   
   
9. Stay away. There are plenty of people in your life that are optional. Stay away from negative people that you don’t have to associate with. You have some control over who is part of your life and who is not.

Negative people will drag you down if you let them. Take steps to minimize the impact they have on your life. Practice gratitude each day, and you can maintain a positive perspective. Block negative people out with headphones and stay away from as many negative people as possible.

Negative people will always be around, but you can deal with them and still be a positive person.

The first step to achieving anything is having an accurate understanding. If you believe that the key to getting in great shape is to stand in a closet for six hours each day, you’ll never make any progress. Faulty beliefs limit success, because you’re not even playing by the correct rules. Misconceptions regarding money are common and can last a lifetime.

Avoid believing these fallacies:

1. THERE WILL BE TIME TO SAVE OR BE FINANCIALLY RESPONSIBLE LATER.
   • Teens have some big financial advantages. They typically don’t have a car payment, mortgage, children, or other major financial  responsibilities. The time to start saving and being responsible is right now. The benefits can’t be over-exaggerated.
     
     
2. A BIG SALARY IS NECESSARY TO CREATE WEALTH.
   • A decent job is sufficient to create a high net worth. The amount of money you make isn’t nearly as important as the amount you keep.
   • Save and invest each month and you can easily be worth more at retirement than someone with a huge salary.
     
     
3. MONEY AND HAPPINESS ARE STRONGLY CORRELATED.
   • Beyond a salary of around $70k, you won’t be happier by making more money.
   • If you can reliably pay your bills, have a little extra to pursue a couple of hobbies, and take a vacation or two each year, you’re earning enough money to be as happy as anyone else.
     
     
4. MONEY WILL IMPROVE YOUR SOCIAL LIFE AND MAKE YOU MORE ATTRACTIVE TO THE OPPOSITE SEX.
   • You can spend more time socializing if you have enough money to afford it. Your money doesn’t do others much good.
   • Most people don’t care about your income or net worth. It’s advisable to avoid those that do.
     
     
5. YOU CAN RELY ON LUCK OR ON SOMEONE TO RESCUE YOU.
   • You might be a great person with a wonderful family, but you’ll eventually have to fend for yourself. Relying on the kindness of friends or strangers – or expecting to win the lottery – isn’t an effective strategy.

You can create a life of your own design when you start your financial future with accurate beliefs about money and wealth.

Why are you in a holding mode? People everywhere seem to be waiting for
something to happen before they can begin living their dream. This is a mistake. Now is the time to begin making things happen.

You might be short on time or money, but there are still things you can do to get started. Let today be the day you start to make your dreams come true!

Use these tips to begin living your dream:

1. Realize that life gets shorter each day. It’s easy to believe that you’ll have time to do what you really want to do after the kids finish school, you have a better job, you’re retired, or more money in the bank. The truth is, there will never be a perfect time to start living your dreams.
   • The amount of time we all have left gets shorter each day. Time is the most valuable resource of wealthy and successful people. It’s also the most valuable resource of the average person, but the average person doesn’t realize it.
     
     
2. Define your dream. Have a crystal-clear objective of what you’re trying to achieve. It’s not enough to have a vague idea. A vague idea isn’t motivating enough to keep you going when faced with obstacles. It’s important to have a clear picture you can keep going back to when challenges arise.
   
   
3. Work backwards. It won’t be possible to take one step from where you are to the end. There will be many steps along the way. The important thing is to find something you can do today. Keep working back from the endpoint until you find something you can accomplish right now and get busy working on it.
   
   
4. Do a little each day. A little each day turns into a lot over time. Cutting a few calories each day can result in a lot of weight loss over a year. Adding a piece or two to the wood pile each day is a lot of wood after a year.
   • You can probably reach your dreams without spending eight hours each day on it. Just do something each day.
     
     
5. Deal with limiting beliefs. The primary reason you don’t already have everything you want is limiting beliefs. There are many forms of limiting beliefs:
   • It’s going to take too much time.
   • It’s too hard.
   • I don’t have enough money to get started.
   • People won’t approve.
   • I’m too tired.
   • I can start next year.
   • Any thought that prevents you from getting started is a limiting belief.
     
     
6. Ignore the people that get in your way. There’s always someone trying to get in your way. It might be a family member, friend, neighbor, or anonymous person online. You have to be strong enough to ignore those people and stick to your plan. You can have the last laugh.
   
   
7. Focus on the things you can control. There aren’t too many things you can actually control. However, it makes no sense to spend your time, energy, and focus worried about things outside of your control. Keep your attention where it can make a difference.
   
   
8. Celebrate victories. A long journey is easier with a few pleasant experiences along the way. Celebrate your progress regularly. It will be easier to reach the finish line.

It’s never too late, or too early to begin living your dream. Each second that passes by is a second you’ll never get back. There’s not a good reason to wait any longer. The time to begin living your dream is right now.