Building Your 2020 Budget

Creating a budget is an important financial strategy for building a future nest egg. One way to conquer the temptation to spend too much money during and after the holiday season is to establish a sound 2020 budget and stick with the plan. The following tips offer helpful suggestions for devising a workable budget:

 

  1. Think About Future Expenses

 

Include all prospective future expenditures in the 2020 budget and estimate the costs for each. For example, include a potential college tuition expense expected to occur in the new year, or the cost of a new car if yours is getting older. It is also important to encompass prospective gains. Whether these gains refer to an expected raise at work or projected investment dividends, an accurate budget must depict all expenses and increases.

 

  1. Learn to Estimate Conservatively

 

Since it is not always possible to know what the future holds, it is wise to make conservative assumptions. Instead of including low estimates for expenses, a 2020 budget should incorporate high estimations. Applying the reverse procedure for income, the budget should include low estimates for expected increases in income.

 

Infusing a budget with these techniques means gives the plan a realistic basis. It is also helpful to think about the possible rising costs of everyday expenses, including gasoline for vehicles and utility hikes. It is better to overestimate and underspend. 

 

  1. Study the Current Spending and Savings Trend

 

Viewing the current year’s expenses and savings enables a person to have a clear understanding of how to set future goals for a 2020 budget. A person may discover that they need to spend less money eating out and deposit more earnings into a savings account.

 

Paying off debts is another important aspect to consider. A golden rule of budgeting is to avoid overspending. Living within a person’s means is the optimum way to develop a 2020 budget.

 

  1. Obtain a Credit Report

 

A good credit score provides the opportunity to take out a loan on a car or mortgage and pay less interest. A poor credit score has the opposite effect. So, it is a good idea to include a debt payment plan in the 2020 budget and eliminate all current debts. After the debts are gone, the next best thing is to limit expenses to one credit card and pay for most expenditures with cash.

 

This post was originally published on Etienne Kiss-Borlase’s Finance Blog. For more info about Etienne, please visit his homepage.

Building Your 2020 Budget

The Rise and Fall of Facebook Libra

Facebook Libra has been in the news a lot lately. This cryptocurrency was envisioned as a so-called stablecoin. Libra was designed carefully to avoid the huge fluctuations faced by cryptocurrencies like Bitcoin. The plan was to offer a more stable currency, backed by stable securities. Sponsors like Visa, Mastercard, and Paypal seemed just about ready to get on board with the project.

 

However, by late October, they had all pulled their backing off the table. eBay, Stripe, and Mercado Pago were other potential sponsors who didn’t quite come through. Why the loss of confidence? Many aspects of Libra have been too up in the air for too long. In particular, Facebook’s role in the project opened it up to special concerns.

 

Facebook was famously always the social network that required real names. With Libra, if they offered anonymity, it could create liabilities. The platform could attract lots of black market activity and scams. However, if Libra were too closely linked to people’s Facebook profiles, it could cause problems in terms of privacy issues. The social network has alarmed consumers when it comes to data already.

 

Asking Facebook’s end users for access to financial details could really increase their risk exposure. If the two services were too closely linked, any data breach to either network could prove devastating for everyone involved. The idea of the low-volatility securities backing the stablecoin also seems overly optimistic in the wake of the 2008 recession.

 

Perhaps most importantly, Facebook is already facing calls for increased regulation. These are coming from powerful political figures, including candidates for the US Presidency like Elizabeth Warren. Entering the world of currency will almost definitely lead to more government scrutiny. For one thing, governments need a stable currency and don’t want people to use an alternative that undermines theirs. For another, Facebook has already been implicated in election tampering.

 

Critics of Libra point out that there are already better ways to do many of the things Facebook claims this currency will solve. Solutions like Ripple follow the rules set in place by the federal government. They’re already used to facilitate payments internationally at reasonable costs. There seems to be no real way that Libra would do the same thing at a lower cost, or with more efficiency.

This post was originally published on Etienne Kiss-Borlase’s Finance Blog. For more info about Etienne, please visit his homepage.

The Rise and Fall of Facebook Libra

The Rise and Fall of Facebook Libra

The Rise and Fall of Facebook Libra Etienne Kiss-Borlase

Facebook Libra has been in the news a lot lately. This cryptocurrency was envisioned as a so-called stablecoin. Libra was designed carefully to avoid the huge fluctuations faced by cryptocurrencies like Bitcoin. The plan was to offer a more stable currency, backed by stable securities. Sponsors like Visa, MasterCard, and PayPal seemed just about ready to get on board with the project.

 

However, by late October, they had all pulled their backing off the table. eBay, Stripe, and Mercado Pago were other potential sponsors who didn’t quite come through. Why the loss of confidence? Many aspects of Libra have been too up in the air for too long. In particular, Facebook’s role in the project opened it up to special concerns.

 

Facebook was famously always the social network that required real names. With Libra, if they offered anonymity, it could create liabilities. The platform could attract lots of black market activity and scams. However, if Libra were too closely linked to people’s Facebook profiles, it could cause problems in terms of privacy issues. The social network has alarmed consumers when it comes to data already.

 

Asking Facebook’s end users for access to financial details could really increase their risk exposure. If the two services were too closely linked, any data breach to either network could prove devastating for everyone involved. The idea of the low-volatility securities backing the stablecoin also seems overly optimistic in the wake of the 2008 recession.

 

Perhaps most importantly, Facebook is already facing calls for increased regulation. These are coming from powerful political figures, including candidates for the US Presidency like Elizabeth Warren. Entering the world of currency will almost definitely lead to more government scrutiny. For one thing, governments need a stable currency and don’t want people to use an alternative that undermines theirs. For another, Facebook has already been implicated in election tampering.

 

Critics of Libra point out that there are already better ways to do many of the things Facebook claims this currency will solve. Solutions like Ripple follow the rules set in place by the federal government. They’re already used to facilitate payments internationally at reasonable costs. There seems to be no real way that Libra would do the same thing at a lower cost, or with more efficiency.

This article was originally published on EtienneKiss-Borlase.net

The Rise and Fall of Facebook Libra

How to Make Money Without Getting a Second Job

Most people want disposable income and walking around money so they can have a more enjoyable lifestyle, but for those who are otherwise content with their current employment situation, it might not be a viable option to switch careers. In this day and age, it is easier than ever to have a lucrative side gig in addition to having a regular job. 

 

For any side gig, it’s important to weigh the pros and cons of the time and money that will be spent on your end in order to achieve the ultimate goal of having more cash in your pocket. One way to earn money pretty easily is through passive income – getting paid for something you’ve already done. If you enjoy taking pictures, you can sell your photos online as stock images to a number of online galleries. This is the gift that keeps on giving because after you provide a one-time product, you still reap the rewards.

 

Another good source of income is to offer you and your car as a transfer service by transporting people or goods around town. Roadie is an on-the-way delivery service that helps bring together people with delivery needs and others who happen to be going in the same direction. The major advantage to you, as a driver, is that you can earn money without deviating much from your typical schedule. Ridesharing services are also a great way to earn some extra income. Lyft and Uber are two major players in the mobility service industry by employing regular citizens as contract employees. 

 

Unclaimed funds are a topic that most people don’t even think about, but there are individuals out there who have money waiting for them for various reasons such as uncashed payroll, insurance reimbursement, stock dividends, balances from bank accounts, and estate revenue. It is important to be cautious when checking the online databases to see if your name appears. There are only a couple of sites that are legitimately certified by the government. They are missingmoney.com and the National Association of Unclaimed Property Administrators (NAUPA). You may file a claim to collect any money that belongs to you. Unclaimed gift cards are another way of getting funds with minimal effort. Many establishments will buy back unused gift cards for a small transaction fee. 

 

If you are someone who is handy or possesses a unique skill set, you can sign up for task services. People are always in need of help such as painting and repairs. Task Rabbit is the most well-known app out there for matching peoples’ needs with the right helpers. 

 

This post was originally published on Etienne Kiss-Borlase’s Finance Blog. For more info about Etienne, please visit his homepage.

How to Make Money Without Getting a Second Job

Understanding Retirement Annuities

There are multiple options for investors saving for retirement including employer-sponsored and self-employed pension plans, 401k or 403b plans, Individual Retirement Accounts (IRAs), and deferred annuities. Here is some information to help you understand retirement annuities and how they can fit into your financial plans.

 

What is an annuity?

 

Financial institutions, mainly investment and insurance companies, offer annuities to individuals as long-term investments for retirement savings. Someone can make a lump sum investment or monthly installments to fund an annuity. At some future date, the annuity contract will provide a reliable income stream to the individual. Social Security and defined benefit pension payments are classic examples of how annuities are intended to work.

 

It helps to understand the concept of fixed or variable and immediate or deferred annuities. A fixed, or lifetime, annuity provides a lifetime stream of income starting at a predetermined date and continuing until death. A variable annuity is popular as a way to defer some portion of income taxes. An immediate annuity takes a lump sum investment and converts it into payments that start immediately and continue for life. A deferred annuity can be funded with a lump sum investment but usually involves monthly investments designed to grow over time before being converted to the lifetime income payment stream.

 

Why should someone invest in an annuity?

 

There are few arguments against planning for and investing in your retirement. If there is a “con” to investing an annuity, it is that you give up a portion of today’s dollars to create a future income stream. The obvious benefit is that you create a lifetime future income that starts as soon as you retire. Another benefit of deferred annuities is tax savings. Many annuities allow you to defer taxes on investment returns or contributions until you start taking monthly distributions.

 

Considerations

 

There are many annuity products to choose from, so you need to consider the:

 

  • High cost and limited tax benefits of variable annuities
  • Hefty commission associated with fixed annuities
  • Risk of loss due to outliving your assets
  • Risk of loss due to insolvency of insurer or annuity company

Advice

 

Financial planners and retirement planning professionals recommend purchasing annuities from more than one company to reduce the risk of loss, minimize costs, and maximize returns. Even if you choose to invest with a single financial institution, it pays to understand how annuities work. Whether you need to invest a lump sum today to create a lifetime income or need to invest for your future retirement, this information can point you in the right direction for including annuities in your retirement plan.

This post was originally published on Etienne Kiss-Borlase’s Finance Blog. For more info about Etienne, please visit his homepage.

Understanding Retirement Annuities

Understanding Retirement Annuities

There are multiple options for investors saving for retirement including employer-sponsored and self-employed pension plans, 401k or 403b plans, Individual Retirement Accounts (IRAs), and deferred annuities. Here is some information to help you understand retirement annuities and how they can fit into your financial plans.

 

What is an annuity?

 

Financial institutions, mainly investment and insurance companies, offer annuities to individuals as long-term investments for retirement savings. Someone can make a lump sum investment or monthly installments to fund an annuity. At some future date, the annuity contract will provide a reliable income stream to the individual. Social Security and defined benefit pension payments are classic examples of how annuities are intended to work.

 

It helps to understand the concept of fixed or variable and immediate or deferred annuities. A fixed, or lifetime, annuity provides a lifetime stream of income starting at a predetermined date and continuing until death. A variable annuity is popular as a way to defer some portion of income taxes. An immediate annuity takes a lump sum investment and converts it into payments that start immediately and continue for life. A deferred annuity can be funded with a lump sum investment but usually involves monthly investments designed to grow over time before being converted to the lifetime income payment stream.

 

Why should someone invest in an annuity?

 

There are few arguments against planning for and investing in your retirement. If there is a “con” to investing an annuity, it is that you give up a portion of today’s dollars to create a future income stream. The obvious benefit is that you create a lifetime future income that starts as soon as you retire. Another benefit of deferred annuities is tax savings. Many annuities allow you to defer taxes on investment returns or contributions until you start taking monthly distributions.

 

Considerations

 

There are many annuity products to choose from, so you need to consider the:

 

  • High cost and limited tax benefits of variable annuities
  • Hefty commission associated with fixed annuities
  • Risk of loss due to outliving your assets
  • Risk of loss due to insolvency of insurer or annuity company

Advice

 

Financial planners and retirement planning professionals recommend purchasing annuities from more than one company to reduce the risk of loss, minimize costs, and maximize returns. Even if you choose to invest with a single financial institution, it pays to understand how annuities work. Whether you need to invest a lump sum today to create a lifetime income or need to invest for your future retirement, this information can point you in the right direction for including annuities in your retirement plan.

Understanding Retirement Annuities

Personal Finance Habits that Everyone Should be Following

Millions of Americans are deep in credit card and student loan debt. There is a big fear of an upcoming retirement crisis because people have so little saved for their golden years. Much of the problem in American personal finance stems from the lack of good financial habits. Here are three great habits that everyone should follow.

 

 

Set up a Budget

 

A budget simply allows a person or family to track income and expenses. Many expenses are fixed each month. For example, a car payment or a rent or mortgage payment will generally stay pretty stable from month to month. Other expenses are variable. Utility bills fluctuate by the season. Food costs can vary widely from one month to the next. At the beginning of each month, it’s a good idea to set aside some time to look at the expected income for the month and then see what’s available for discretionary bills like food and entertainment. One month might require leaner food choices while another might allow for a few steaks. A budget will help a family decide which direction to go.

 

 

Create a Plan for Savings

 

Those who pay themselves after everyone else will have little to save. It’s a good idea to pay yourself first. This requires a savings plan. It’s possible to save even before the IRS takes its share. To achieve this goal, it’s necessary to save in a tax-advantaged plan like a 401(k) or an IRA. The traditional options actually cut taxable income and allows a saver to save every penny of those dollars up to the IRS limit. Starting at a small percentage and then building it over time can allow a family to ease into savings and make changes less painful.

 

 

Pay Down Debt Aggressively

 

Many people are comfortable with debt. However, every dollar that goes toward paying off debts and the interest on them is a dollar that cannot be saved or used for something else that’s more beneficial. Paying the minimum on a credit card could leave a person in debt for 10 or 20 years even on a very small balance. That’s why it’s important to pay more than the minimum each month.

 

 

These are just three financial habits. However, few are more important when it comes to building wealth and achieving financial freedom. Getting started as soon as possible is the key to long-term success in personal finance.

 

This post was originally published on Etienne Kiss-Borlase’s Finance Blog. For more info about Etienne, please visit his homepage.

Personal Finance Habits that Everyone Should be Following