Clarity Money

Being Smarter With Your Money

It’s been several months now that we’ve been with our new sponsor, Marcus by Goldman Sachs, so today we’re bringing on Omer Ismail, the Head of U.S. Consumer Business at Marcus to discuss what’s behind the online bank. 

The focus at Marcus is on three main areas:

Value - Financial products intended to help the customers, from personal loans with fixed rates and customizable payment options to savings accounts that help customers meet their financial goals.

Transparency - The personal loans have no hidden fees. Same with the savings accounts. But there is an early withdrawal fee associated with the CDs. And money is made on interest from the loans. 

Simplicity - No jargon. No tricks. Just straight talk. Not to mention an intuitive digital experience and real people answering the phones at the customer call center.

The team at Marcus listened to more than 100,000 people and their experiences with money. Whether your goals are short-term or long-term, they likely have a product that will help you make the most of your money.

Have a money question? Email me here.

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Financial Resolutions for 2019

Okay, 2019 is here, which means it’s time to jump into those financial resolutions.

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Sadly, the majority of budgets or New Year’s resolutions fall by the wayside within months of making them, as life interrupts our best-laid intentions. Part of the reason is that we sometimes make the whole process more onerous than necessary.

Budgeting should not be an end, but the means by which we can accomplish our financial goals. Of course that fact means that you need to start by establishing those goals. If you can’t come up with your own, try these (in order):

  1. Pay down consumer (credit card balances or auto loans) and student debt

  2. Establish an emergency reserve fund of six to twelve months of living expenses

  3. Maximize retirement savings (the 2019 limit for 401k, 403b and 457 plans is $19,000 or $25,000 if you’re over 50; the limit for Traditional or Roth IRAs is $6,000; $7,000 for those over age 50.)

  4. Fund a 529-education fund

  5. Establish a general investment account to fund anything from a second home to an accelerated path to retirement

You will notice that goal number two specifically requires an important piece of information: knowing how much you spend each month. This is where the dreaded budget enters the conversation. That said, most financial goals require that you start with how much you spend today and what portion of that spending can be redirected towards saving and investing to fund the goals.

Instead of making yourself crazy populating a bunch of categories, it’s far easier to start with what you are currently spending. With the advent of easy to use technology, this once-horrible and time-consuming activity is a snap. Apps like MintYou Need a BudgetClarity Money or even your bank’s own technology can help you with the process. Keep track for ninety days, that’s it, just three months to pour the financial foundation necessary to construct our dream house.

Once you know how much you spend on a monthly basis for ongoing needs, you will have to add some of the one-time expenses that arise throughout the year, including vacations; money for kids’ extra-curricular activities or camps; or the annual “homeowner’s surprise,” like the unanticipated appliance melt-down.

Congratulations, you have completed most of the hard work! The next step is to review where the money is going and determine how much you can redirect towards your goals. Again, technology will be your friend. Use it to create automatic drafts to avoid late payments and accelerate the pay down of loans; to establish similar drafts with your bank or brokerage firm to beef up your emergency reserve fund; and to slowly increase your contribution levels to your retirement plan with auto-escalation features available at many financial institutions.

Psychologists note that change requires new thinking. Instead of hyper-focusing on the budget itself, remind yourself why you are doing what you are doing...these goals are YOUR goals, what you are trying to accomplish. Don’t forget to celebrate the small wins and if you fall off the wagon, re-focus your efforts, be mindful and get back on track.

Have a money question? Email me here.

New Year’s Financial Resolutions

New Year’s Financial Resolutions

Every year, millions of Americans resolve to “do better” with their money and 2019 will be no different. According to Fidelity Investments’ New Year Financial Resolutions Study, for the tenth consecutive year the top three financial resolutions among Americans considering one are: save more (48 percent), pay down debt (29 percent) and spend less (15 percent).