We also know it can be stressful when emergencies happen, or hard times come your way. Lately, most of our day-to-day lives have been shaken up in some way. During times like these, it’s important to keep a clear focus on your finances, and that’s where SmartDollar can help.
SmartDollar is our online financial wellness program, available 24/7 at no cost to you. SmartDollar will calmly walk you through what something like this means for you and your money.
Regardless of your current situation, SmartDollar’s budgeting tools and resources are designed to help you wherever you are. While everything happening in the world may not be within our control, we’re doing what we can to help our team.
Remember, we’re here for you.
Below are additional resources to help you take control of your money and understand this constantly changing situation.
- 7 things you can do to adjust your money situation during hard times
- How to Prepare for a Recession From the Coronavirus
- What you need to know about the student loan suspension
- Coronavirus and investing, what you need to know
- The importance of getting on a budget right now
- What the Government’s Coronavirus Stimulus Plan Means for You
- 3 Questions to Ask Before You Use Your Emergency Fund
- Should I Refinance My Mortgage?
- 5 Quick Ways to Build Your Emergency Fund
It is a type of retirement plan offered through your workplace. They can offer tax advantages. In some plans, your contribution comes out of your paycheck before income taxes are deducted, which means your tax bill will be lower. You could also save on taxes when you withdraw the money because you may be in a lower tax bracket in retirement.
It’s a long-term personal plan for growing your savings by investing in a mix of mutual funds, stocks, and bonds.
The earlier you start saving, the more time your money has to grow.
Automate your savings. Setting up automatic contributions each month and automatically increasing your contributions by 1% or more each year (if your plan allows) are great ways to save, since the money goes directly to your retirement account.
If you’re 50 or older, catch up on your contributions. Saving later in life can still pay off. You may be able to contribute an additional amount each year, depending on the plan you’re in.
One final note: If you’re a high-income earner and already reaching the contribution limit, avoid maxing out early. Find out how your employer contributes to your account and spread out your deferral so you don’t miss out on employer contributions.
You can see the effects of saving early.
Here’s how time and compounding impact a $5,000 pretax yearly contribution when saving starts at various ages.
This hypothetical example assumes the following: (1) $5,000 annual contributions on January 1 of each year for the age ranges shown, (2) an annual rate of return of 7%, and (3) no taxes on any earnings within the qualified retirement plan. The ending values do not reflect taxes, fees, or inflation. If they did, amounts would be lower. Earnings and pre-tax contributions from qualified retirement plans are subject to taxes when withdrawn. Qualified retirement plan distributions before age 59½ may also be subjected to a 10% penalty. Systematic investing does not ensure a profit and does not protect against loss in a declining market. This example is for illustrative purposes only and does not represent the performance of any security.
Step 1: Write down your Total Income
This is your total take-home (after tax) pay for both you and, if you’re married, your spouse. Don’t forget to include everything- full-time jobs, second jobs, freelance pay, Social Security checks, and any other ongoing source of income.
Step 2: List your Expenses
Think about your regular bills (mortgage, electricity, etc.) and your irregular bills (quarterly payments like insurance or HOA) that are due for the upcoming month. After that, total your other costs, like groceries, gas, subscriptions, entertainment and clothing. Every dollar you spend should be accounted for.
Step 3: Subtract Expanses from income to Equal Zero
Your income minus your expenses should equal zero. When you do that, you know that every dollar you make has a place in your budget. If you’re over or under, check your math or simply return to the previous step and try again.
Step 4: Track your Spending
Once you create your budget, track your spending. It is the only way to know if your spending is aligning with your plan. Visit EveryDollar.com to learn more!
For more information, visit smartdollar.com
We have a partnership with Bank of America Merrill Lynch in helping you plan financially at every life stage for whatever matters most to you. As our financial wellness provider, they can offer access to a diverse set of resources and guidance to help you navigate through your life priorities.