Basic investing is a concept all of us should know, but few I speak to seem to know the importance. Many of us have already given up on our deepest life dreams. But I think we should all consider starting a financial resolution.
It’s impossible to turn on the television and not see commercials with yet another famous celebrity touting some magic weight-loss plan.
It is important to be physically fit, but it’s also important to be financially fit, including basic investing.
Women take time off to care for children and other family members, and as a group we are paid less money than men for the same job. According to 2004 labor statistics, as of 2016 the percentages are about the same:
–White women earned 76 cents for every dollar men earned
–Black women earned 71 cents for every dollar men earned
–Latina women earned 59 cents for every dollar men earned
–And Asian women earned 86 cents for every dollar men earned
The number of marriages per year is decreasing. Women often outlive their husbands, and divorce rates are hovering around 50 percent.
This translates into women spending some part of their adult life alone. And even if we do find prince charming later in life, that doesn’t mean he will be financially educated or understand the essentials of investing for savings, retirement, or education.
Thus we have to take the initiative and learn how to become financially savvy and understand many useful and, at least, basic types of investing.
Confidence is key when managing your money and the only way to get confidence is to be knowledgeable. Msfinancialsavvy.com has a lot of tools to help you get started in your quest for financial security, such as tutorials, calculators, and various articles written by experts.
There is also a book for the beginner investor, Live Rich Save Money! From Stocks to Mutual Fund Research in 47 Wonderful Way by Lois Center-Shabazz, which has great tips to help you manage your money. Go her for your free investing book excerpt.
It’s sad but true that many of us graduate from high school and college never really understanding how to manage our money. The first step to financial freedom and prosperity is to master the 5 E’s of Investing.
Educate – Learn all you can about how money works. Msfinancialsavvy.com is a great place to start. The site has a lot of information to help the novice investor on her way.
Emancipate – There are a lot of pessimists around who will intentionally or unintentionally give you bad information. Free yourself from internal and external negative influences.
Evaluate – Smart savers and investors make good decisions by observing and weighing the pros and cons of each situation. They learn about money and the market through research and observation.
Emulate – Savvy investors and savers are participating in job-sponsored 401ks, contributing to Roth IRA, budgeting and diversifying investments. Copying some of these proven strategies can help you on your road to financial success.
Empower – Once you have educated yourself on your money and have come up with a personal strategy, you will feel empowered in your decisions about your financial future.
It is important to master the 5 E’s of Investing now. The earlier you start investing and saving the more you gain.
Saving Money is the First Key to Get Started
Tax Savings Ideas
A collective sigh of relief can be heard around the nation after the April 15 deadline normally, but this year April 18, 2016, because many people only think about tax savings during tax season. Smart savers and investors realize that managing their tax burden is a year long commitment that can save them a lot of headaches and money. It is important to have a tax strategy early to take advantage of steps that can help relieve the April 15 (18) tax burden.
A good place to start is to analyze your paycheck to see if there are any opportunities you are missing that could result in tax savings or tax payment to Uncle Sam. People should decide if they want to get more money in their paycheck and perhaps have to pay something back each year or perhaps they would like to get a big refund check.
Some financial analyst suggest that people take limited exemptions and use the extra cash in their paychecks to invest. This is a good suggestions for those who are disciplined enough to put that extra money into an investment account instead of purchasing the latest fashion or using the money for entertainment.
If you are not one of those people who can be disciplined enough to dedicate the extra cash generated by limited exemptions and claims taking more deductions might be the better strategy for you. The larger check you receive when you file your taxes should be spent wisely with at least a portion of the money going to an investment account.
The government has creative ways to get more of your money and you have to use creative (and legal ways) to decrease your tax bill. Many people don’t think about taxes until it is too late to do anything about them. There are some steps you can take now that will help you feel less of the pinch of your tax bill. (Please be sure to check with your tax provider or visit the IRS Website for additional information.
Itemized vs. Standard
Keep a file of all the times you have donated to various causes, the Salvation Army and even donation to your church. Compare the itemized deductions with the standard one to see which one will save you more money. It important to remember that when claiming charitable donations on taxes that a receipt is required for donations $250 or more. Make sure that receipts are kept in a safe place.
The cost of higher education can be felt at public and private colleges especially when considering the starting salary for many careers start below the $30,000 a year mark. Make sure you include student loan repayments on your tax bill. Parents can also include contributions to a 529 college savings account on their taxes.
Contribute to Company sponsored 401K
There are two great reason to contribute to a 401K. The first is that it lowers your tax bill because money used for the plans are not taxed until you withdraw. The second reason is that when a company matches the plan giving you free money. There is usually a schedule of when you can take all the company match if and when you leave the company. (Ex. 2nd year+40%, 3rd year=60%, 4th year=80 % 5th year=100%) Please note that you can always take the money that you contribute from your paycheck with you.
Consider Flexible Spending Accounts
Flexible Spending Accounts are ways to put away money for medical expenses. You can use pre-tax money to pay for out of pocket costs. These accounts can help you save money by lowering your taxable income. The important thing too remember about these accounts is that you lose whatever you don’t use during the year so plan carefully.
There are many deductions self-employed people can take. It is important to keep accurate and up-to-date records. Gas, home office supplies, conferences and memberships to professional societies are a few deductions that you can take.
Recently the government has allowed people to write off home repairs related to decreasing energy waste.
Most people employed by companies don’t use this credit because out-of-pocket expenses have to be above 7.5% of your income. The self-employed and those using unemployment benefits may meet the financial requirement.
Whatever your strategy is it is important to have a definite plan on how to manage your taxes. There is one thing that is always certain-paying taxes and the smart investor manages taxes. Check out this articles site and IRS.gov for more information, the IRS site has all of the current tax information for everything in publications, articles and more..