A recent survey by Western Union reveals that 44% of young Americans – those age 18 to 34 – have never seen their credit score.
Even though many recent grads have a lot of debt, they think about retirement. In fact, about 70% of millennials have started to save for retirement, says a recent study by the Transamerica Center for Retirement Studies.
In comparison, boomers started saving at about 35 years of age.
The millennial group includes those to 25-35 year olds.
In the past year, only 15% of Americans spent two hours or more in planning for an IRA investment, according to TIAA-CREF’s annual survey on Individual Retirement Accounts (IRAs). Many often spend more time than that to research a one-time purchase or choose a place for a special dinner.
While most of us know that an IRA is a tax-deferred retirement savings plan, only 17% of us actually contribute. Why don’t more save in an IRA?
Roughly 35% of those polled said they don’t understand what an IRA is, and even more Millennials (about 47%) don’t know. About one third said they don’t contribute because they don’t know enough about the account. Another third of those not using an IRA say they have a retirement plan through work and they don’t feel they need both.
Yet, the average American will come up short when it comes to retirement savings and could use both plans. Will you?
Trying to analyze a retirement investment or see which loan is the better deal for that new car? Check out the financial calculators at Dinkytown
This site offers more than 400 financial tools to help you figure taxes, insurance rates, investment returns, loan payments and more. For example, you can calculate how long it will take to recover from a poor investment or how long it will take to pay off a mortgage at varying payment options. Vocabulary and definitions accompany the calculators, so they are easier to understand.
Money talks….especially in a place like Walt Disney World. Oh, you might assume it’s all about getting vacationers to buy souvenirs and spend lavishly? But hold on there, space rangers! It’s not just about spending money, although you have plenty of opportunities for that.
We just returned from a family trip to Disney World, and as always, it was a magical experience we enjoy. This was the first Mickey Mouse encounter for our 2-year-old granddaughter. She learned a great deal, including some unexpected lessons about saving money and investing.
Here’s what I saw her take in:
1) Learning to wait brings rewards.
It’s hard for a two-year-old to understand waiting in line for the Dumbo ride, but she eventually got the idea. So did other kids. Grandma calls this delayed gratification, just like saving your money to buy something later.
2) Someone else is in control. Deal with it.
Even a two year old knows that mom makes the decisions and runs the schedule. When it comes to your money, it’s your bank, credit card companies, other lenders and your employer who run the schedule. If you don’t comply, you pay for it. Deal with it, by using a budget and a net worth statement.
3) Incentives work.
Prepared parents stay one step ahead of kids, especially tired kids. Promises of more fun after a nap or a sweet treat after a meal make good incentives. A two year old can get that. The same goes for saving and investing—those dividends and interest rewards keep us building that nest egg.
4) Small adds up to big– it’s magical.
There’s nothing like seeing Disney through the eyes of your grandkid. Mickey Mouse and his friends are larger than life, and Disney knows how to give a quality experience—and capitalize on desire. Of course, enamored kids (and grandparents) who get caught up in the magic keep wanting more. Now, transfer that to an investor’s mentality – small amounts add up and the more you get, the more you want.
5) Why can’t I get everything? It seems others do.
It’s hard for two year olds to understand “choose” or “just one,” and even adults have trouble with this concept. They want everything and don’t want to decide on prioritizing by what they can afford. (Think big screen tv, vacation home, new car, boat, etc.) Grandma calls this deciding wants vs. needs.
Can you relate? Email me with your story.
It’s almost the end of the year. Are unopened bank statements and receipts piling up on your kitchen counter? It’s time you got financially organized, so you know what to keep and how long to keep it.
1. Collect 2013 receipts, separating those needed to file income taxes.
2. Store the year’s pay stubs, banking statements, and credit card statements.
3. Make a net worth statement- list all assets (including banking and investment accounts) and all liabilities (including credit card balances and loans).
4. Make a copy of all credit cards, passport, licenses (save time if lost or stolen).
5. Rent a safe deposit box to keep important papers (will, birth certificates, passports, real estate deeds/titles)
6. Shred mail with your private information before discarding.
Not sure what to keep or how long to keep it?
Keep these records for the calendar year:
• Bank statements
• Pay stubs (consider autopay direct to your bank account)
• Social Security benefits statements
• Investment/broker statements, including 401(k) plans
Keep these for 7 years:
• Tax returns and supporting documents
• Bank statements needed to prove a deduction on a tax return
Keep these forever:
• Employer-defined benefit plan communications
• IRA contributions
• Brokerage statements (document gains/losses until sale)
• Life insurance policies (most recent copy)
• Loan documents (until paid and you have title)
• Home improvement records/receipts (keep 7 years after you sell)
• Savings bonds (you can convert paper bonds to electronic)
• Safe deposit box inventory
Keep until you’ve reconciled your statement:
• Bank deposit slips
• Credit card receipts
• Monthly bills and credit card statements
• Keep statements and receipts you may need to prove tax deductions
Let’s talk about debit cards…
It’s likely you’ve paid for purchases with a plastic card a time or two. Ever been at a checkout counter and handed the clerk your debit card only to be asked: “debit or credit?” And you’re thinking…”I just handed you a DEBIT card!
While it might not make much difference to you and your debit card, it is a big deal to the retailers and banks/credit unions. It’s all about who pays the processing fees.
So what’s the difference between a “credit” transaction or a “debit” transaction? (Remember we are talking only about debit cards, not using a credit card, which is entirely different.)
When you say “debit”…
• you must enter a PIN (Personal Identification number)
• chances are, the issuing bank/credit union pays the fees
• you can get cash, if you want it
When you say “credit”…
• you will use your signature, not a PIN
• chances are, the retailer pays most of the fees
• you cannot request extra cash
• your bank/credit union may give you an incentive if you make 10 or more credit transactions every month.
What’s the same for both “credit” and “debit” transactions?
• your purchase is immediately deducted from your bank account
• you are protected from theft, according to rules of your bank/credit union
• the retailer processes refunds, exchanges and returns similarly
• unlike a credit card (which is a loan), you do not receive a monthly bill
Now when that checkout clerk asks “debit? or credit?” you’ll know there’s a reason to the question.