4 Rules to Live By When Making an Offer on a House 

August 06, 2014

Buying a house is a little like asking someone to marry you (scary, right?). In both cases, you make your offer believing there's a good chance you'll get a yes, but you know you could get a no. If the answer is yes in either situation, your fates will be linked for many years to come—possibly until “death do you part”. But if you don't get an immediate answer, the wait can be excruciating. A recent article by U.S. News & World Report may not be able to help you with your love life, but if you want your house offer to be greeted with a yes—and a quick one—here are four rules U.S. News & World Report recommends you follow when putting yourself out there to get the right “yes”.

1. Be likable. The old saying is true: money talks. But so do you. And you don't want to say anything that could turn off a seller. Besides, even though they’re selling their house, it’s still their home until it sells.

"You're most likely buying someone's home that they have memories and a lot of emotional ties to," says Marc Takacs, a real estate agent with Keller Williams Realty in Atlanta. So if the seller is present when you see the house, keep quiet about your grand plans for landscaping or knocking down a wall in the living room.

"Don't tell someone how bad, ugly, stupid, et cetera, that someone's house is, and then try to buy it. That doesn't work," Takacs says.

Well, it might, if the homeowner is desperate and primed to sell, but if there are other buyers circling, you've given the seller an excuse—and a personal one at that—to reject your offer and accept someone else’s.

Another no-no, according to Takacs, is being high-maintenance. "Don't overstay your welcome," he advises. "I don’t think anything irritates a seller more than when a buyer visits a house too much or stays for too long."

He also suggests that when you submit your offer, avoid making unreasonable demands such as a lightning-fast closing date. "Try to be considerate of the fact people are trying to carry on with their lives, move, and all the other stuff that goes along with that. Being pushed out of your house can be very unsettling," Takacs says.

2. Don't be stingy with your offer, but don’t go overboard. If you offer exactly what the seller is asking, you will get his or her attention and probably their respect and appreciation. In many cases, your offer will be accepted. Offer a tad bit more, and you may chase other buyers away whose offers are at or below the list price.

At the other end of the spectrum, a lowball offer may insult the homeowner. In some instances, it may be shrewd to offer significantly less than the list price, but first consult your real estate agent, who will probably have the best read on what your seller is likely to accept.

A VERY important rule of thumb: If you’re looking to make the strongest offer possible, make sure it’s not so high that you can’t afford it, warns Kelly Long, a Chicago-based money coach and member of the National CPA Financial Literacy Commission. "Don't offer more than you can practically afford, even if you're approved for more," she says, adding that this can easily happen if you're looking at a house that's out of your price range.

"If you buy it for more than you can afford, you'll end up hating the house and yourself in the long run," she says.

That’s because the more expensive your house is, the higher your monthly payments will likely be. Long points to the rule of thumb that a monthly payment shouldn't exceed more than 28% of your gross income. That includes taxes and insurance, she adds. Stay within budget.

3. Be ready for a yes. Yeses can be just as daunting as nos. If the seller says no, the next steps are clear enough: You make a better offer, or continue house hunting. But even if the seller accepts the offer, you don't have those front door keys yet.

"You may be preapproved based on your credit report and supplying your W-2, but the [mortgage] application process is much more involved and requires extensive documentation in a short window of time," Long says. "Make sure you have some time set aside to gather all the necessary information in the week following the offer’s acceptance. You’ll also need to schedule, attend and pay for an inspection in that first week, so make sure you have the money on hand to pay for that."

4. Don't sabotage yourself to seal the deal. Speaking of that contract, be careful about what you put in it.

Yes, you want the house. You want the sellers to like you. But in an effort to get those keys from the sellers, don't be their doormat.

According to Kent Sisk, an account executive at NexTitle, a title and escrow agency based in Bellevue, Washington, "the market is so hot right now [that] many buyers are waiving the inspection period, sometimes waiving the inspection altogether, in order to get their offer approved."

Not smart, Sisk says.

After all, you don’t want to learn after you buy the house that the roof leaks or there's mold hidden away in the ventilation. Or you may end up berating yourself if you waive the appraisal contingency, which lets you back out of the deal if the lender concludes the appraised value is less the sale price, and later learn that you vastly overpaid for your home.

Ideally, your offer will be one that makes everyone, the seller and you, happy and reassured that everything between now and the closing will go smoothly. If you feel like you need to win this house at all costs and things go badly after your offer is accepted, not only will you lose—it will definitely cost you.

"Out of sight, out of mind" Financial Philosophy. How cookies taught me to be better with my money. 

By: Gabrielle Leach

Cookies are great. My will power is not. The other day I sat down with a roll of Oreos while I was watching late night TV. As Jimmy Fallon was telling his jokes I was sitting comfortably on the couch blissfully eating my cookies, until I sadly realized I had only one left. Unsure how I had managed to eat an entire sleeve of cookies I rationalized with myself about the final one:

If I eat it, I would have no cookies for tomorrow.

But it is only one cookie, and cookies are there to be eaten. After all I will probably get more cookies in the future.

But I know that it is bad for me to eat all of the cookies, and I know I am going to regret this when I wake up tomorrow.

Oh well, YOLO, after all I’m young, and it’s not that big of a deal

I gave into the little devil on my shoulder and of course the next morning I saw the cookies again as I stepped onto the scale. It’s funny how bad decisions tend to remind you that you’ve made them. I wanted to fix this problem so that I would be unlikely to easily give into temptation again. I then went down to the pantry and hid the rest of the Oreos. Out of sight, Out of mind. It was at this moment that I realized I rationalized eating that last cookie the way I rationalize spending my money.

“Out of sight, Out of mind” philosophy can be applied to cookies, as well as finance. If you’re like me, and have moments of impulsive weakness, you may see some irregularities in your monthly spending.  Opening up a second bank account, separate to the one you regularly use, can really help you save up an emergency fund. Sometimes seeing a lot of money in one account can make you feel as though the money is there to spend. By separating the money into two different accounts, you can save money with out realizing it.  

Currently I have an account at a credit union as well as a traditional bank. I use my traditional bank account regularly but I keep my emergency fund with my credit union because they offer better rates and have a very low minimum balance, so I wont get charged if I have to use everything in the account. Each month I automatically put a piece of my paycheck into my second account for my emergency fund. I find that this system gives me the ability to control my money and the peace of mind that comes with financial security.

While eating the last cookie isn’t nearly as dangerous as spending your last dollar, the same philosophy can still be applied to help you manage your will power. Cookies are great. Overindulgence is not. By understanding your financial weaknesses and utilizing different tactics to most effectively manage your money, you can afford to buy your cookies, and eat them too.

The Fitness-Finance Connection 

By: Gabrielle Leach
July 09, 2014 Categories: fitness health

Many people strive for the same goal—to have their scales weigh less and their wallets weigh more. But could improving ones physical fitness provoke positive signs fiscally? Recent studies have shown a connection between living a healthy lifestyle and managing healthy finances.

More Exercise = More Productivity
Increasing your daily exercise can lead to an increased performance at work allowing you better opportunities for raises and promotions. A study, published in the Journal of Occupational and Environmental Medicine (JOEM), illustrates that workers who engage in moderate exercise have higher work-quality and better job performance than those who lead a sedentary lifestyle. According to the study, physically fit employees get along better with coworkers, take fewer sick days, and often perform more work, using less effort. This means that getting in shape could lead to increased productivity and career growth.

Less Doctor Visits
Getting sick can ruin your day and your budget. As healthcare costs increase, it is important to lower your risk by creating a healthy lifestyle and getting daily activity. Dr. Brian Martinson one of the JOEM study's lead investigators, explains that the study showed that increasing physical activity to even moderate levels was associated with declines in annual health care charges of $2,000 on average. Exercise is also a known stress reliever and can reduce your risk of getting diseases that require long-term treatment (and long-term costs), like diabetes. 

Self Discipline is Important
It isn’t news that maintaining a healthy diet and a balanced budget requires serious will power. Some researches hypothesize that by monitoring the intake of food and exercise, one will begin to analyze other areas of their consumption. The same amount of self-discipline that is required to schedule workouts and count calories can be transferred over to limiting impulsive spending and sticking to a monthly budget.

Unhealthy Habits Can Kill…Your Wallet
Costly vices like drinking alcohol and smoking cigarettes can really add up. According a study done by the U.S. Department of Labor in 2009, the average American consumer spends $49,638 each year. Of this total 0.9% is spent on alcohol and 0.7% is used to purchase tobacco products. Today, the average annual amount spent on cigarettes is close to $2,000. Eliminating unnecessary purchases can free up funds to be reallocated or saved for better use. Cutting out junk food and needless snacking can also help save some serious cash.


The correlation between being physically and fiscally fit is still being studied, although it’s clear a relationship exists. Leading a healthy lifestyle with moderate daily activity can improve your job performance and prevent illness. By evading sickness you can have more free time and can make better decisions about your future. This is why many employers are starting new fitness incentive programs.

While this does not mean that getting in shape will make you a millionaire, it can help teach you the habits necessary to lead a financially healthy lifestyle.


Credit unions are non-profit cooperative financial institutions that believe in fair and honest banking and are dedicated to the financial well-being of their members. They are able to provide superior service because they don’t report to shareholders, making their members their number one priority. To find the right credit union for you and receive more information visit To receive other financial articles, tips, or advice, follow our Twitter account @BankingYouTrust and find us on Facebook at

New Jersey credit unions will be represented at the Belmar 5 Mile Run this Saturday, July 12th and supporting the runners with refreshments. Visit our table to grab a bottle of water and information on how a credit union can help you live a well-balanced financial life. 

Lessons I’ve Learned About Being Broke in my 20s 

By: Gabrielle Leach

The fall semester of my junior year in college, I was saving all of my money to afford studying abroad in Barcelona for the spring term. While this was one of the most amazing experiences of my life, it also emptied out my piggy bank.

For the first time, I knew what it was like to be dead broke. I had only two dollars in my savings account and only $34.52 in my checking; $36.52 was all of the money I owned in the world. Thankfully, I am in a much better state financially, however, learning how to save my money maybe one of the greatest life lessons I ever learned.

I made a list of the 10 most important things I’ve learned from being a broke college kid.

1. It is possible to live off of oatmeal, grilled cheese, and leftovers for an entire semester.
While options of a meal plan are preferable to my empty kitchen cabinets, meal plans tend to be really expensive and often overpriced. I decided I would save some money and try on my chef’s hat. I would go grocery shopping with a list to avoid buying unnecessary items. I always opted for the store brand product because it was cheaper, and I would use my store loyalty card at the register to take advantage of the in-store coupons and promotions they offered. Because I lived alone, I would make one big meal and bag the leftovers for the rest of the week. Since many of the pre-made frozen dinners at the grocery store are loaded with fat and sodium, I made both my wallet and my scale happy.

2. Don’t go shopping if you can’t afford to buy anything.
I made this mistake when I first arrived home from Europe. My friend wanted to go to the mall to get a new dress for her graduation. It was months since I last saw her and even though I had no money in my account, I thought it sounded like a good way for us to hangout. As much as I love my friend, being at a store that’s filled with beautiful things, none of which I can afford, was torture. It made me feel so poor, and it tempted me to buy things I didn’t need with money I didn’t have. 

3. Live below your means.
As a waitress, I make a whopping $2.15 an hour, plus tips. Budgeting with an unsteady income is challenging, but it’s not impossible. Evaluate your priorities and prepare an emergency stash in case one week or month is slow and you still have bills. If you can’t afford to go out and drink every night, don’t.

4. Don’t rely on one income stream.
The way I look at it, if you only have one job, you are only one step away from being unemployed. I currently have three jobs. I am a waitress and I have two summer internships. It’s difficult to manage everything and I don’t have very much free time, but I am finally starting to accumulate enough money for a savings account. As much as working can suck, it’s the only way to make money and gain a valuable network for your future.

5. Moving back in with Mom and Dad is not the worst thing in the world.
I always love seeing my parents, but when I am home for an extended time period, I begin to travel back in time to high school where I have a curfew and chores. Living with them again, however, is allowing me to save my money much easier, with the added benefit of a fully stocked fridge and laundry service. I don’t mind vacuuming a few times a week if it allows me to be one step closer to financial independence.

6. Sales are a very beautiful thing.
I have so many clothes already in my closet that spending full price on something seems a little ludicrous. I still love to get new things, but by shopping at outlet stores, and going to stores like Marshalls and TJ Maxx, I can get what I need without spending my entire paycheck for the week. That being said, you are never saving money when you purchase items just because there is a great sale. You are still spending money even if it’s a good discount. Bottom line: if you don’t need it, don’t buy it.

7. A credit card bill will ALWAYS come at the end of the month.
Credit is not free money. Don’t spend anything on a credit card that you can’t afford to pay at the end of the month. Many credit card companies prey off of young college kids and sell low minimum monthly payments. Do not fall into this trap. Pay off all of your debt and avoid the obscene interest charges that follow. Once you lose your credit rating, it is very hard to build it back up.

8. A simple budget can save you a lot of financial heartbreak.
Knowing how much you make compared to how much you spend can be eye opening. I didn’t realize how much everything was actually costing me until I sat down and crunched the numbers. The amount of money I spent a week on “miscellanous” items was twice as much then I had originally planned. I evaluated my purchases and tried to find ways I could reallocate the money I was misusing. Eventually, I came up with a budget that was flexible enough to accommodate my erratic income and my impulsive spending. Any money that I budgeted to spend but didn’t use would be placed in a separate account that I could use for fun purchases. Using apps like are a great way to keep track of your personal finances as well as create a personalized budget.

9.The diploma alone won’t get you a job.
It’s a sad fact that you can spend $100,000 on a college education and still graduate with no job. It’s even more unnerving when many entry level positions require two to three years of experience in the industry. Internships are the best way to gain experience and build a professional network. Paid or unpaid, the more internships you have, the more interested employers will be in you when it’s time to graduate. Use all of your resources to find the right internships for you, including asking family and friends and applying online. Something my mother always told me about applying for jobs was, “It’s not about what you know, it’s about who you know.”

10.Only YOU have the power to change your life!
No one likes to work crappy jobs. If you are unhappy with your life, change it. We live in an age where almost all of the information we could ever need is available with the click of a finger. Use it. Learn everything you can. Now is the time that we set our work ethic and behaviors for the rest of our lives. You, and only you, have to decide what you want and go for it. Anything you want to be is possible.

Everyone has a different strategy when it comes to managing his or her money. There is no one way for everyone. If you are looking for a student or automotive loan, explore all your banking options. You may find better rates at credit unions rather than traditional banks, which could help you avoid massive student debt. Having a goal in mind, like becoming debt free, can help steer you on the right path to a promising financial future. 

How to Manage Money in Your 30s 

Make the Right Financial Decisions and Establish Good Habits During this Pivotal Decade
March 20, 2014 Categories: saving savings tips


Your 30s can be a pretty significant decade. It’s a transitional point in life in the wake of post-collegiate years where your career starts to take off and you begin to settle down a bit, maybe buying a home, getting married or having kids. Or you might be planning major life adventures, like travelling or writing that novel you always meant to pen. Or, perhaps, all of the above. Whatever your path, you likely face some significant money decisions, and the choices you make can end up impacting your finances for years to come.

A report released from the Pew Research Center earlier this month shows that millennials, the oldest of whom are just entering their 30s now, face higher student debt and unemployment levels along with lower income and wealth levels compared to previous generations at the same age. A tough hill to climb. At the same time, they are optimistic about their economic futures, with most (80%) saying they have enough money now or will one day to “lead the lives they want.”

To increase the chances that such an optimistic outlook comes to fruition, here are seven money moves from U.S. New & World Report that financial experts say you should consider in your third decade:

1. Save when you can.

“If you’ve gotten your salary up to the point where student loan debt is not wreaking havoc in your life anymore, but before you have a lot of responsibilities, that’s a great opportunity to super-charge your savings,” says Jean Chatzky, financial editor of the Today Show and author of “Money Rules: The Simple Path to Lifelong Security.” When parenting responsibilities and mortgage costs take off, for example, it can be hard to save more. “You want to take advantage of the opportunities you have to sock away some money so when the leaner years come around, you don’t beat yourself up,” she adds.

2. Create solid habits.

It’s also time to establish financial habits that will serve you well for the rest of your life. Kerry Hannon, personal finance expert and author of “Great Jobs for Everyone 50+,” says in her 30s, she maxed out her retirement savings accounts and even set aside a portion of her extra freelance income for retirement. “Those funds have served me well over the years as mad money to help pay for vacations and more. I still save outside of retirement accounts religiously in my 50s, too. It's a habit I started back in my 30s,” she says.

3. Plan out your goals and priorities.

“Hopefully you’re starting to become established in your career and can begin to contribute, if you’re not already, to an employer-sponsored retirement plan, and begin to think about other savings goals, too, like a home purchase or college savings,” says Suzanna de Baca, vice president of wealth strategies at Ameriprise Financial.

Trent Hamm, founder of the personal finance Web site The Simple Dollar and a U.S. News My Money blogger, says at age 35, he’s now reflecting on his career goals for the next 30 years. “What would I like to be doing with my time and my life? I don’t want the rest of my life to be a repetition of what I’m doing now and then an abrupt retirement. I have dreams and goals, and right now is the best time to get started on them,” he says.

For many people, a financial advisor helps with that. Bart Astor, author of “AARP Roadmap for the Rest of Your Life,” says your 30s is the ideal time to sit down with a financial advisor and talk, which is what he started doing in his mid-30s. He says he and his advisor met once a year to review savings and other financial goals, especially since he and his wife were meeting their goals. “When I hit 40, the plan showed that we should have about $188,000 in assets based on our salaries, and we had over $200,000, and boy, did that make us feel good,” he says.

4. Talk about money with your partner.

If you have a spouse or partner, then getting on track together and working out any disputes can prevent conflicts later. “People often comingle finances with their partner, and open communication is key. Make sure you talk about your finances and life goals with your partner, and align on how you will get there together,” de Baca urges.

5. Get comfortable with negotiation.

Nancy L. Anderson, 52, a certified financial planner in Park City, Utah, says while she did a lot of things right in her 30s, including investing 20% of her income, buying a home, investing in rental property, and saving for her child’s college education, she also wished she had negotiated her salary more assertively. “If I’d negotiated a higher salary each time I changed companies in my career, I’d be wealthier today,” she says. Since most people change jobs about 11 times in their careers, negotiating those transitions can end up making you more than $600,000 richer over your career, she adds.

6. Be a good role model.

For those 30-somethings who are already parents, Beth Kobliner, author of “Get a Financial Life” and member of the President’s Advisory Council on Financial Capability for Young Americans, says it’s important to model smart financial choices for the little eyes watching you. “You lose all credibility lecturing your little kids about not needing every new toy or tech gadget if you, behind closed doors, have loud arguments with your spouse about not being able to keep up with your credit card bills,” she says. You don’t have to be a money genius, she adds, but it’s important to talk about money—making financial discussions as commonplace as soccer practice or Sunday dinner.

7. Shore up your cash reserves.

While many experts emphasize long-term investing and retirement savings, Tim Maurer, director of personal finance for the BAM Alliance of independent advisors, says he wishes he had kept more money in pure cash savings to give himself a better buffer for unexpected needs and expenses. “Much, maybe too much, financial planning is focused exclusively on the long, long-term," he says, "and while it’s true that real estate can be a great way to build wealth and one should start saving as early as possible for retirement, it’s the unexpected changes in life that often derail 30-something households. Our financial plans should address the short-term, too.”

Maurer points out that your 30s are often a time of “volcanic change” in your personal and professional life, and having a nicely padded bank account can help smooth over some of those transitions.

How Millenials Can Improve their Credit Scores 

Today's young adults carry lower credit balances and are less likely to pay their bills late. So why are their credit scores so low?

Financial editor of NBC’s Today Show and financial expert Jean Chatzky writes about credit cards all the time. Just last week she wrote about varying credit cards, how to know one from the other, and how to move them all in the right direction.

But, she points out in her latest article, choosing credit cards and managing them all is much easier if you “get off on the right credit foot initially”. And unfortunately, that's something many millennials aren't doing right now.

And it’s not because they’re irresponsible young adults still depending on Mommy and Daddy and racking up debt on frivolous things and then forgetting to pay the bill at the end of each month. On the contrary. According to Experian's 2013 State of Credit report, released late last year, baby boomers are actually the ones that tip the high end of the scale. They carry an average balance of $5,347 on their (again average) 2.66 credit cards. Millennials carry $2,682 on their 1.57 cards. Gen Xers and members of the Greatest Generation fall somewhere in between. Millennials aren't even highest when it comes to late payments—that dubious honor goes to the Xers.

And yet, Millennials’ credit scores aren’t reflecting the same fiscal resposibilty. A just 628, millenials’ scores have the lowest average on the list. They're more than 100 points lower, on average, than the Greatest Generation at 735. (Boomers average 700 and Xers 653, for those of you looking to see where you measure up.)

So what's the problem? Utilization. This factor—defined as the percentage of credit you have available to you that you're actually using—is responsible for about one-third of your credit score. Ideally, you want to keep that percentage under 30%. Millennials are at 37%.

Looking at these stats, it's clear that if millennials had more cards in their wallets—but continued to use them sparingly—they'd have substantially better scores. And those better scores would help them get better rates on auto loans, mortgages, insurance, and other credit cards going forward. In other words, they'd save them real money, creating a cycle of funds that will help them a lot in the long-run.

Chatzky has a few suggestions for parents on millenials who want to help them start out on the right foot and/or for millenials themselves to follow as they consider their credit scores:

  • Get a credit card. Or help your child get one. "All the parents who are weaning their kids away from credit and forcing them to use debit cards are [making a mistake]," says Maxine Sweet, vice president of consumer education at Experian. "Just like you need academic credentials you need credit." Under the Card Act, if you're under 21 you're not supposed to be able to get a credit card unless you have the income to prove you can manage it or can get someone over 21, a parent being a likely choice, to co-sign, Chatzky points out. She also points out that she’s not a fan of co-signing, but there is another way: Add a child to one of your own credit cards as an authorized user. Just make sure that the issuer will report on behalf of the child to the credit bureaus.
  • Understand how much you can/can't use the cards you have. As Chatzky points out, 30% is the line when it comes to utilization. If you can see you're going to cross it, either request an increase in your credit limit or—if you've proven to yourself that you can handle having credit—get a second card. (You'll want to use that one, too, but sparingly. Just enough so that the issuer doesn't quit you. Then be sure to pay it off entirely every month.)
  • If the thought of getting another card rubs you the wrong way and you know your utilization is creeping up there over the course of your monthly billing cycle, try this: Pay your bill in-between. Sweet explains that'll reset the clock and help boost that portion of your score. If you're carrying a balance, it'll save you some scratch on interest as well.

CNN Money: Not enough money in America's 401(k)s 

February 25, 2014

Despite the surging stock market bringing balances to record highs, the average Fidelity 401(k) account has less than $100,000 in it. That's just not enough.

Saving May be Tough but Here’s How to Get a Handle on It 

February 24, 2014 Categories: financial strategies saving savings tips

Getting on top of your finances can be a real chore. Sure, on paper the idea sounds simple, but in reality, it’s much easier said than done.

There’s a lot to it. By the time you pay down your consumer debt, chip away at student loans, dole out money for the mortgage, what’s left for saving for your kid’s college education, not to mention your own retirement? The list of demands for your savings is long, yet online tools and advice from advisors suggest we can make it work—we just need to rethink our approach, according to FOX Business.

The word “budget” has the same emotional response as the word “diet”, according to financial psychologist Brad Klontz; we see it as denying ourselves of things we want and desire. Then there’s the tug-of-war between the here-and-now and the distant future (should I buy these shoes today or some relatively-unknown reward 30 years down the road?).

Indeed, it is a struggle. While experts recommend saving at least 10% to 15% of income for retirement yearly, a recent survey shows 44% of respondents who haven’t retired are saving 10% or less of their annual income. Another 21% aren’t saving at all.

Not only are we not saving enough, we are living longer, increasing our retirement fund needs. The survey shows 72% of respondents don’t know whether their retirement plan has a lifetime income option. Even Millennials, who take saving seriously especially when it comes to pegging savings with the needs of their current life stage, seem relatively unconcerned about retirement, according to MassMutual’s 2013 State of the American Family study. The 401(k) may be a reality for them, but more than half have not yet figured out how much money they’ll need to retire.

Above all, the MassMutual study says younger generations are more concerned with taking care of their aging parents and scratching their heads about how they will do it.

Good intentions notwithstanding, experts agree the saving vs. spending conundrum is potentially overwhelming. Here are some FOX Business expert tips to get a healthy handle on saving:

Get real. If retirement sounds far away and “a rainy day fund” sounds kind of depressing, it’s time to rename these goals, advises Klontz. For short-term savings objectives, identify what you want to buy, be it a dream vacation to Hawaii or your youngster ensconced at your alma mater. The same extends to retirement. What does retirement look like to you: a house near the ocean, writing the next great novel, or helping kids in Africa? Visualize it. Then put a picture on your fridge so you can see it, Klontz recommends. “Do whatever to get the emotional part of your brain excited.”

Much like when you’re dieting, being specific leads to progress. Saying you’ll start saving Jan. 1 will likely get you nowhere, says Jamie Rosen, founder and CEO of dietbetter. Saying you’ll save $2.00 a week over the next month is likely to get results.

Ravi Dhar, director of the Yale Center for Customer Insights, recommends identifying how much money you want to have socked away at various ages. Sixty-five may be hard to visualize, but intermediate goals targeted to 30, 40, and 50 will shorten your timeframes, making them more measurable.

Get started. The decision to save is based on a cumulative series of prudent choices, says Dhar. “You tell yourself you’ll save tomorrow and tomorrow never comes.” Any one month that you don’t save is not terrible, but a series of those choices over your lifetime has consequences

And, starting early pays off, says Amy Podzius, a financial consultant at TIAA-CREF. While it’s important to save as much as you can, don’t think you have to stash away lots of money to shore up your savings or start investing, says Daniel Keady, a certified financial planner and senior director of financial planning at TIAA-CREF. Little bits work, and online tools and calculators will make the concept more real for you.

Make savings planning a family affair. Leaving a legacy is not just about providing an inheritance to your children. It’s also about passing down values, says Klontz. The money scripts we teach our children can be beneficial or crippling, even when we say we want our children to be well-prepared to manage their finances. Tracy Shaw, an assistant vice president at MassMutual, advises having money conversations as a family and across generations to set spending and saving goals to keep everyone budget conscious.

Put your savings on autopilot. We’re leaving money on the table when we don’t contribute the maximum allowable amount to our retirement plan, says Podzius.

A precommittment to increase your 401(k) contribution by a percentage equivalent to your yearly raise will help you grow your pretax dollars before the money even hits your wallet, adds Dhar. Eliminating temptation is also important and he recommends daily strategies like less mall visits, carrying only a small amount of cash in your wallet or leaving your credit cards at home to reduce spending.

Hold your feet to the fire. When you do spend, ask yourself what else you could have done with the money, suggests Dhar. Making this a practice enables you to track your purchases and better analyze your spending habits.

Commitments also carry more weight when we make them known to others, says Rosen, especially if we tack on a penalty for noncompliance. Bet on yourself. For example, if excessive dining out has burned a hole in your pocket, announce you’ll limit yourself to say, two dinners out a week for the next month. If you fail, tell your friend you’ll pony up $100. “It's all stick and no carrot but it's effective. People hate losing their hard-earned money.”

Go social. Sharing money-saving ideas or picking up tips from pen-pal like social media acquaintances on free sites like and Moneyning can keep the process exciting. You might even consider injecting some enjoyable healthy competition, suggests Dhar.

Starting a money-saving competition not only holds you accountable, says Rosen. It also makes you more likely to stick with a savings plan and helps take your mind off your struggles.

401(k) vs. IRA: 5 Key Differences 

For those looking into different ways to start saving for retirement, both 401(k)s and individual retirement arrangements (IRAs) are the most common investment options to explore. The beauty of these retirement savings accounts is that your contributions are made before taxation (therefore tax-deferred until withdrawn during retirement).

While 401(k)s and IRAs serve the same purpose, they have significant differences that can influence which one is right for you. Below are five comparisons outlined by FOXBusiness that can help you determine which one best serves your situation and financial needs.

1. Initiation

401(k): An employer or a sole proprietor of a small business can establish these plans; individuals can't start these on their own. If your employer offers such a plan and you participate in it, your employer will routinely withhold from your earnings and contribute to your account the amount you determine, with limitations (see below), but pre-tax. As far as the work required on your part, it's usually minimal.

IRA: An individual sets this up with a credit union, bank, insurance company, or other financial institution, and then adds money to the account themselves as desired pre-tax, though there are limitations here, too (see below). With an IRA, you're responsible for the account set-up and arranging your contributions.

2. Matching

401(k): Some employers offer to match part or all of what their employees contribute to their accounts. Experts recommend that if your employer provides this, you should take full advantage, as an employer match can greatly increase your retirement account's value. However, annual contribution limits, which the IRS sets each year, exist (maximum pre-tax annual contribution of $17,500 as of 2014). This applies collectively to all 401(k) accounts you might have in a given year. There's also a limit to the combined contribution of the employee and employer.

IRA: Because an IRA isn't employer-sponsored, matching contributions aren't an option.

3. Contribution limits

401(k): The IRS limits contributions to traditional 401(k)s to $17,500 in 2014, though participants aged 50 or older at the end of the calendar year can make catch-up contributions of up to $5,500 above the base restriction. The limit for the combined contribution to these accounts (employer and employee) is either 100% of the employee's compensation or $52,000, whichever is less. The latter number jumps to $57,500 if the participant is eligible for catch-up contributions.

IRA: For 2014, the IRS limits IRA contributions to $5,500-$6,500 if you're 50 or older—or your taxable income for the year. But you should note that some of those contributions may not be tax-deductible, depending on your income or if you or your spouse participates in a workplace-based retirement program, such as a 401(k).

4. Beneficiaries

401(k): According to the terms of the federal Employee Retirement Income Security Act, if you're married, your spouse automatically becomes your 401(k)'s beneficiary upon your death, regardless of whom you listed as the beneficiary. The one exception is if your spouse previously consented, in writing, to your naming someone else the beneficiary. If you are single, upon your death the individual you named on your beneficiary form becomes the beneficiary.

IRA: Whomever you designate as the beneficiary will, in fact, become the beneficiary upon your passing. This designation doesn't require spousal consent.

5. Loans

401(k): You may be able to take out a hardship loan against your 401(k) depending on the plan and if you're still employed by the employer that established it, according to the IRS. Loans must be for less than half of the account balance or, at the most, $50,000. If the plan allows for loans, you generally may take out a five-year loan without penalty—provided you pay it back on time.

IRA: You can't take out a loan against your IRA, but may access money from your account for a 60-day period via a tax-free rollover. In other words, you may withdraw money from your IRA free of taxes and penalties if you return it to the same or a different IRA within 60 days. Should you fail to do so, the withdrawal is subject to income taxes and a 10% penalty if you're under age 59 and a half.

Determining whether a 401(k) or IRA is best for you may feel overwhelming at first, but knowing a bit more about their major differences can help make the process much easier.

4 Things Your Teen Needs to Know About Debt 

January 24, 2014 Categories: teens and finance

Upon graduation, many high schoolers are ready (or think they are ready) for college. They’re emotionally ready to spend time away from home, they’re prepared for the workload of classes, etc. But what many of them lack is financial know-how.

According to DailyFinance, within five years of leaving home, most teens are faced with the decision of taking out student loans, buying a car, signing up for credit cards, or even taking out a mortgage. And it's up to parents to instill some wisdom in those bright-eyed, bushy-tailed youths before they learn it the hard way.

Your teens shouldn't be burdened with your financial stress, and they definitely don't need to know all of your misdeeds. But they should know the basics of the common financial situations they're soon to encounter. Whether you've done right with your money, made a boatload of financial snafus, or a little bit of both, here are some worthwhile discussions to have with your kids:

Student Loans: While student loans are oftentimes a necessary debt, they're still money owed to someone else. And unlike many other forms of debt, this one cannot be discharged in a bankruptcy. If you had student loans, you can help your teens by telling them how long it took you to pay them down, as well as what you had to sacrifice along the way.

Car Ownership: If you don't have a car loan, you should let your teenager know your motives for paying in cash or your journey in paying down your car. If you do have a car loan, it might be helpful to explain that it's more than just a monthly payment. Sit down and run the numbers with them, demonstrating the money lost to interest. And it just might be the extra motivation you need to pay it off for good.

Credit Cards: If your 18-year-old has a pulse and a mailing address, credit card companies will find him. That's just a fact of life in the good ol' U.S. of A. Your teenagers should know the responsible ways to build credit and the dangers lurking behind every unnecessary swipe.

You can try to convince them that credit cards, like debit cards, should be paid off in full each month. If you've ever had credit card debt, your teen doesn't need to know the details, but he should know all the work that went into paying it off.

Mortgage: While a mortgage usually isn't seen as a mistake, the timing in getting one can be. Make sure your teen knows the various considerations that go into buying a home, such as the ebbs and flows of the housing market, private mortgage insurance, and interest rates. It's important to stress that there should be no rush.

What might be second nature to you is a whole new world for your soon-to-be independent teen. The more he knows about finances, the better. And sharing your personal financial experiences—the good, the bad and the ugly—will help. Yes, even that time you bought tickets to Twisted Sister on credit for you and your roommates. Let them learn from your mistakes—and, in the process, keep them from making a few of their own.

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