At this point in the year, a lot of people are fixated on the holiday season and the countdown to 2022. If you’re one of them, you may not exactly have financial matters on the mind.
But actually, the moves you make in the coming weeks could set the stage for a financially healthy 2022. Here are four items worth checking off your list to end 2021 in a positive place.
1. Boost your emergency fund
We all need money on hand for emergencies, like when your car needs a sudden repair or your manager decides to cut your hours at work. Ideally, your emergency fund should have enough cash to cover three to six months of essential bills. If you feel your savings could use a boost, now’s a great time to sneak more money in there.
Of course, with holiday expenses piling up, eking out savings may be a challenge. But if you’re getting any sort of extra cash this month, whether it’s a bonus at work or your final monthly Child Tax Credit installment payment, putting that money into your savings is a solid move.
2. Pay off some debt
If you’d rather not start off the new year with a heaping pile of debt hanging over your head, then now’s the time to work on chipping away at some of your balances. Take a look at your credit cards and see what you owe on them. If you have a few hundred dollars to spare, paying down the balance with the highest interest rate attached to it is a smart bet.
At the same time, if you’re in debt already, do your best to not add to that load by charging a ton of holiday expenses. If need be, explain to your loved ones that you have to go lighter on gift-giving this year to avoid closing out the year deep in a hole.
3. Put more money into your retirement plan
Saving more for retirement isn’t something that will just benefit you later in life; it could also result in a lower tax bill for 2021.
If you participate in a traditional IRA or 401(k) plan, the money you contribute may be exempt from some of this year’s earnings from taxes. For example, if you put $5,000 into a 401(k) plan, the IRS won’t tax you on $5,000 of your income. The same could be true for an IRA if you qualify.
Now technically, you have until next year’s mid-April tax-filing deadline to put more money into an IRA. But if you want to stash more money in your 401(k), you’ll need to get moving quickly. That’s because 401(k) contributions are made as a payroll deduction, and you’ll need to give your employer enough time to process that change for it to count for the current year. Once January rolls around, you can no longer contribute to your 401(k) for 2021.
4. Take steps to improve your credit score
Maybe you want to buy a home in 2022. Or you may want to get a new car or credit card. Either way, the higher your credit score, the more likely you’ll be to not only get approved for whatever loan or line of credit you want, but snag a competitive interest rate in the process.
Take a look at your credit score. If it’s already in the upper 700s or higher, you’re in really good shape. If it’s lower, you can take steps to boost your credit score, like checking your credit report for errors (and correcting the ones you spot) and paying off some of your existing credit card debt.
The steps you take in the coming weeks could really set you up nicely for 2022. Aim to check these items off your list so you can close out the year in a solid place.
Many families and friends get together to celebrate, spend time together, and share a meal during the holiday season. However, due to inflation, food is more expensive this year. If you’re worried about the financial aspect of putting together a nice holiday meal, we have some ideas that may help you save money. You don’t have to spend a lot to make the holidays special, and by making a few changes, you can pay less and still have a delicious meal. Here are eight ways to make your holiday meal more affordable.
1. Shop with a list
When you don’t have a list, it can be easy to buy more than you need and forget essential ingredients. Before you head to the store to get your holiday meal ingredients, make a shopping list. That way, you’ll have a plan, which can help you spend less and make your shopping experience a lot easier.
2. Compare prices between stores
Before you head out to shop, it’s a good idea to look at sales flyers for stores in your area and compare prices on the items you need to buy. Most stores put popular holiday meal items on sale leading up to the holiday. If you have several stores near your home, you can compare prices and buy the cheapest items at each store. Just be sure to consider the cost of gas and the distance between stores before driving all over town.
3. Don’t ignore generic brands
While shopping, take a look at the cost of generic brand items and compare them to the cost of name-brand items. In many cases, store-brand products are a lot cheaper than name-brand products. Purchasing generic ingredients can offer significant savings, and no one will know the difference.
4. Use cash back apps
Cash back apps offer an easy way to earn cash back on your purchases. These mobile apps are simple to use, and they offer cash back at many popular grocery stores and other stores. The more you use these apps, the faster your earnings will add up. Once you meet the minimum cash-out amount, you can withdraw the funds you’ve earned. You can then use these funds for a future shopping trip.
5. Host a potluck dinner
If you’re hosting this year, consider suggesting a potluck dinner where everyone brings one dish. A potluck dinner makes for a fun experience because everyone gets to contribute, and it also lessens the financial burden for everyone. If you want to keep things organized, start a group chat and have everyone communicate ahead of time about what dish they plan to bring.
6. Buy some dishes premade
It may be cheaper to buy some prepared dishes. For example, desserts may cost less at your local grocery store. If you don’t bake often, it can be costly to stock up on all the baking ingredients that you need. Many grocery stores sell inexpensive premade dessert items. You can save money and spend less time preparing your meal.
7. Create new traditions
You may think a holiday meal has to include certain dishes, but that’s not the case. You have the freedom to be creative as you plan your next meal. There are no rules that say you need to eat turkey or ham. Why not start a new tradition this year? You can get your family involved to make the planning process more fun, and it may save you some money, too.
8. Don’t be afraid to accept help
Community resources can be helpful, especially during the holiday season. Check your local community groups to see what they’re doing to help families prepare for the holidays. Some organizations will give out ingredients, full meals, or gift cards to help you buy what you need. Don’t feel embarrassed to take advantage of these resources. They exist for a reason and they can make the busy holiday season less stressful.
Your holiday meal doesn’t have to be fancy, traditional, or expensive. By getting creative and changing your shopping habits, you can make your next holiday meal more affordable. We have more personal finance resources to help you make more informed financial choices.
The Haywood County Public Library plans to expand its personal finance collections following the receipt of a grant from the FINRA Investor Education Foundation (FINRA Foundation).
The additional resources will help ensure that residents have the information they need when making critical money decisions as they repair, rebuild and clean up.
“When disaster strikes, the community comes together,” said Library Director Kathy Vossler. “The Haywood County Public Library provides residents with unbiased information to guide financial choices that will have lasting impact.”
Filing claims, accessing government resources, managing lump-sum payments from insurance companies and meeting immediate expenses when income might be disrupted — these are just a few of the money challenges that residents in disaster areas must navigate.
FINRA Foundation President Gerri Walsh noted, “Many of us lack experience with these decisions. Nonetheless, we have to get it right the first time around or face long-term financial consequences. Fortunately, the Library has information that can help.”
The expanded personal finance collections at the HCPL are made possible by a $5,000 grant from the FINRA Foundation. For nearly 15 years, the FINRA Foundation has provided funding, staff training and programs to build the capacity of public libraries to address the financial education needs of people nationwide. Much of this has been accomplished in partnership with the American Library Association through a program known as Smart investing@your library®.
It is estimated that consumer financial fraud costs Americans more than $50 billion a year, according to FINRA Foundation research. Financial fraud is especially prevalent following major natural disasters. Since it was established in 2005, the National Center for Disaster Fraud, which is part of the U.S. Department of Justice, has logged more than 220,000 disaster-related complaints from all 50 states. Financial fraud makes tough times all the more difficult for people recovering from the trauma inflicted by disasters.
Walsh observed, “Recovery follows disaster, but the path to recovery can be smooth or very bumpy. And financial fraud can be one of the biggest potholes along that road. The Haywood County Public Library has information to help people avoid the financial potholes and bring the route to recovery into sharper focus.” As a result of the grant, the Library is adding both print and digital materials to all branch collections.
The FINRA Foundation supports innovative research and educational projects that give Americans the knowledge, skills, and tools to make sound financial decisions throughout life. For more information about FINRA Foundation initiatives, visit finrafoundation.org.
With the new year rapidly approaching, now is the perfect time to assess your finances. Life may feel busy right now, but evaluating your financial situation and coming up with new goals can help you start the year off right. By making some changes, you can improve your finances and set yourself up for success. Here are five steps you can take:
1. Calculate how much debt you have
Having debt can be stressful, but ignoring how much debt you have will not be good for your financial health. With 2022 only weeks away, now is an excellent time to figure out how much debt you have. Take some time to outline all of your debt and the interest rates. This way, you can prioritize which debt you will focus on paying off. Working to pay off higher-interest debt first is a good plan if you want to pay fewer interest fees.
If you’ve been struggling to tackle your debt, this guide on how to pay off debt may be helpful. Once you eliminate your debt, you’ll have more flexibility to save for future expenses or invest.
2. Begin budgeting or rework your existing budget
So many people don’t budget because they think it will be too difficult to do or think a budget isn’t necessary. No matter your financial situation, having a budget can be helpful. If you already follow a budget but haven’t taken a close look at your spending habits recently, go ahead and do so. You may need to rework your budget and your spending goals.
If you’re brand new to budgeting, it’s easier than you might think. This guide will help you set up your first budget. Following a budget can help you reach your financial goals sooner and can minimize unnecessary spending and debt. Some people find that using budgeting apps makes it easier to follow a budget and track spending. You may want to give one of these apps a try!
3. Set financial goals for the upcoming year
Goals can keep you accountable. When was the last time you set financial goals? If it’s been a while, there’s no better time than now. Figure out what you want to achieve financially in the new year. Perhaps you want to establish an emergency fund, or maybe you wish to get out of credit card debt. Your goals may look different than those of the other people in your life, and that’s okay.
Once you outline your goals, you can figure out what steps you’ll need to take to reach your goals. If a goal feels too big, you can break it down into smaller actionable tasks, making your overall goal more achievable.
If you have extra funds sitting in your checking account, go ahead and move some of it over to your emergency fund or into a separate bank account for another savings goal. When you keep excess money in your checking account, it’ll be easier to spend — and you may wind up spending your extra money on unnecessary purchases.
If you set extra money aside where it’s out of sight, it’s more likely to be there when you need it for a future expense. Are you ready to open a new bank account for your savings? These are the best savings accounts.
5. Set up automated savings
Automating your savings is a smart way to ensure you follow your savings goals. Doing this can also save you time and ensure you don’t forget to save. Today’s financial apps and bank apps make it simple to automate your savings. You have complete control over savings automation. You can choose how much money you save and how often your automated withdrawals happen.
It’s a good idea to have your automated savings go into a separate savings account. You can easily transfer the money into your primary bank account when you need to access the funds.
By following these steps, you can set yourself up for financial success before 2022 starts. If you’d like more helpful tips, check out our personal finance resources.
As the UAE celebrates its Jubilee year, the country has emerged as a leading global player in the financial services industry that has been revolutionised by technology and transformed the way we bank, invest and save our money.
From opening bank accounts with facial recognition technology to investment robo-advisories that deploy artificial intelligence to measure risk factors to instant money transfers, neo banks and landmark legal reforms, the sector has come a long way since the early 1970s, when the dirham was first introduced as the country’s official currency, Women Fashion.
That was a time when it would take weeks to remit money home, when financial services employees would painstakingly fill out forms manually and consumers would line up at a bank or exchange house to apply for travellers cheques before taking an overseas holiday.
But it was the 1980s that proved to be the turning point for the sector, when the humble fax and telex machines became a crucial means of “real-time” communication for the country’s banks, exchange houses and other financial services firms, Women Fashion.
“I recall the handwritten book-keeping and the use of carbon paper to create copies before the photocopiers and computers came into the picture,” Rashed Al Ansari, the chief executive of Al Ansari Exchange told The National.
“I also recall when travellers cheques revolutionised international money transfers, which is today considered obsolete. There were days when transactions were being recorded by hand and mailed, before being sent by telex and fax.”
However, it was the internet that was the driver behind the sector’s transformation, which made transactions simpler, quicker and more affordable than ever before, while today’s mobile technology has also influenced the way money is being transferred around the world, Mr Al Ansari said.
The digitalisation of the UAE’s financial services sector accelerated during the Covid-19 pandemic, as consumers increasingly relied on the convenience of mobile apps to do their banking, send money home, trade in stocks or shop online during movement restrictions, Women Fashion.
“Smartphones and other mobile devices effectively reshaped the future of the global remittance business,” Mr Al Ansari said.
New technology will continue to drive the sector’s transformation thanks to innovative FinTech start-ups, which are working with numerous lenders and exchange houses on open banking concepts and blockchain, for instance, in an effort to further streamline services.
Banking customers today want a seamless, automated experience with little waiting time – a far cry from the days when the internet did not exist and queuing up to make a deposit or cash withdrawal at a physical bank was the norm, according to Philip King, the head of retail banking at Abu Dhabi Islamic Bank, the biggest Sharia-compliant lender in the emirate.
To enable this, banks in the region are digitising complex processes and end-to-end customer journeys across their front, middle and back offices, according to the UAE Banking Perspectives 2021 report by KPMG.
Smartphones and other mobile devices effectively reshaped the future of the global remittance business
Rashed Al Ansari, chief executive of Al Ansari Exchange
“At ADIB, we believe the digitisation of banking services is a necessary advancement to help banks fuel new growth opportunities and unlock greater value for customers,” Mr King said.
“For simple transactions like payments and transfers, customers prefer digital or mobile channels that provide instant and convenient services,” he adds, Women Fashion.
“For more complex or critical banking products, including investments and home finance, customers prefer to visit the branch and interact with their relationship managers. So, the appetite for digital interactions varies across banking products, which is why at ADIB we always look at a hybrid approach.”
Meanwhile, the UAE introduced landmark legal reforms in 2020 that improve the protection of our personal finances in the future. The sweeping amendments to laws on inheritance, bounced cheques, bankruptcies and economic support during the Covid-19 pandemic were introduced as part of the Emirates’ efforts to reshape its legislative and investment environment for the 21st century.
One of the most welcome changes was the update to the Federal Law on Commercial Transactions, which includes several new provisions that aim to discourage criminal lawsuits against people and businesses for bouncing cheques.
The amendments come into effect in 2022 and will introduce a mechanism that ensures banks partially pay the amount to the beneficiary after it is deducted from the available funds in the account of the cheque issuer.
The opportunities for retail investors to take control of their investments has also undergone a significant change compared with the days when financial advisers, driven by high commissions, would mis-sell complex investment products to unsuspecting people.
These days, retail investors are increasingly seeking access to markets with the help of technology, leading to a surge in popularity for zero-commission trading apps such as Robinhood, eToro and Interactive Brokers.
Digital wealth managers such as the UAE’s Sarwa and StashAway are also helping to revolutionise the financial services landscape in the Middle East by offering low-cost investment solutions to a large market that has traditionally had limited access to trading and investing in the past.
Demand for trading apps soared during the pandemic as monetary easing by the US Federal Reserve and other central banks around the world gave novice day traders more money to invest during pandemic lockdowns, according to a report by Finra Investor Education Foundation and the National Opinion Research Centre at the University of Chicago.
Novice investors are turning to trading apps such as Robinhood to buy stocks. AP
This trend is set to continue. The global robo-advisory market size is projected to grow by 31.8 per cent to $41.07 billion by 2027, up from $4.41bn in 2019, according to Allied Market Research.
“There have been a lot of milestones that we can point to [in investing], but the main trend at every step was making it cheaper, low cost, almost free in some cases, and making it more accessible so there is more wealth in more hands,” according to Mark Chahwan, co-founder and chief executive of Sarwa.
“It started with mutual funds, then it went on to exchange-traded funds. There was a resurgence in passive investing, but now active is making a comeback with trading, where it’s not just about securing your safety net and a diversified portfolio, but also about investing in themes you believe in.”
Over the coming decades, it will be Generation Z and their younger cohorts who will reshape the financial industry in their tech-savvy, mobile-first image, which will have ramifications for all consumers, companies and investors, according to Morgan Stanley.
Mr Chahwan agrees: “I won’t say this is a plot twist, but the new big element that’s now shaking up the industry is the amount of young people that are investing … and are growing up in such an environment”.
They say 30 is the new 20. Considering how undisciplined many of us are with money in our 20’s, that’s probably a good thing — because that also means it’s not too late to learn some good habits and steady the ship. Whether you’re five years from 40 or you managed to stumble across this article with a decade to spare, here are 6 key personal finance moves you can make right now that could help make life easier on your future self.
1. Build a Budget
You’ve probably heard this one a hundred times before — but that’s because it’s a really good idea. That’s why it’s our top tip here. Your financial goals may remain out of sight if you can’t build (and stick to) a budget.
When it comes to divvying up your income, consider the 50/30/20 rule:
50{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} for essentials: Think rent, groceries, bills, etc.
30{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} for wants: Maybe it’s a new gadget or you’re saving for a vacation.
20{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} for savings and debt: savings or investment accounts, paying off credit cards or student loans, etc. And don’t forget to include a pad of emergency funds within your savings account (or somewhere that’s easily accessible).
2. Tackle Your Debt
If you’ve got debt, you’re not alone. In fact, the average American has $52,940 in debt, according to Business Insider. And that can be a hindrance, especially if you’re still establishing yourself as an adult, and want to work towards financial goals like homeownership.
One strategy you could consider is debt consolidation. Jennifer McDermott, a Consumer Advocate with finder.com, often recommends “consolidating all debts into one place.” You can sometimes take advantage of introductory offers with low interest rates, and having one singular payment may feel easier to manage than juggling several monthly bills.
Then there’s the “good debt vs bad debt” debate. A credit card, for example, could be considered “bad debt” by some, because of the interest rate you may be charged to carry a balance. Drew Parker, who created the Complete Retirement Planner, says “Paying $200 per month on a $5,000 balance can take almost three years to pay off with a high interest rate (18{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} or more), and it will add more than $1,300 in interest charges.”
Parker adds, “If you were to instead invest that $200 per month, you could “have $10,000 in hand in the same amount of time (with a 7{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} return).”
3. Save, Save, Save
It’s never too late to start saving. Once you’ve got a plan to get any debt under control, saving — even a few dollars a week — can really go a long way.
If you get paid through direct despot, consider routing some of that to a savings account automatically. Out of sight, out of mind, and earning interest.
Lou Haverty, a CFA at Financial Analyst Insider, recommends saving at least the equivalent of 1x your annual salary by the time you’re 35. “If you’re not at that level yet, and a lot of people aren’t, it can serve as a good reminder that you should consider increasing your savings rate to get closer to that 1x mark.”
4. Invest in Yourself (You’ll Be Glad You Did)
For some people, the word “invest” brings to mind fancy financial maneuvers not meant for the average person — but that’s not really the case. There are simple, smart ways to invest at an early age that, with the help of compound interest, could help bolster retirement savings down the line.
You’ve probably heard of one of the most popular examples, a 401(k) account. Contributions to your 401(k) are made with pre-tax dollars. They then accumulate (tax-free) until age 70 ½ , when you start receiving regular distributions. If your employer matches a percentage of your 401(k) contributions, you should consider a regular contribution of at least that much. Another way to think about an employer contribution is “free money.” Sounds nice, right?
If you change jobs, you can roll over your 401(k) to a Roth IRA. As of 2021, the annual contribution limit to a Roth IRA was $6,000. With compound interest, that can really add up over time.
Take Advantage of Compound Interest!
Compound interest is your friend. Put simply, the more you put away now (so, the longer you save) the larger your account is likely to grow over time.
Richard Best, a writer for dontpayfull.com, agrees: “There’s a real cost of waiting to save for your retirement.” He gives the following example:
“Vince contributes $20,000 starting at age 25 and then stops making contributions at age 45.
Ally waits until she’s 45 to start contributing $20,000 per year until age 65.
They’ve both invested the same amount of money. However, assuming a 6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} average annual return, Vincent would have $2.5 million by age 65, while Ally would have just $790,000.”
That’s a difference of over $1.7 million. Go ahead and read that last sentence again.
5. Keep an Updated Will
A will is a form of estate planning that can help protect your assets and your family’s future financial well-being should you pass away. It’s worth considering if you’ve recently tied the knot, had kids, or are otherwise wading into the waters of positive net worth.
While you can write your own will, it might be wise to at least meet with a professional first. If you became incapacitated without plans in place, someone may have to go to court to gain conservatorship over your finances.
If you’ve already put together a plan, it’s always a good idea to regularly check and update your beneficiaries.
6. Consider Life Insurance
If you think life insurance is something to put off until you’re older, you might want to think again.
The truth is, the rate you pay for your life insurance is usually determined in part by your health and other factors at the time of your application. So if you’re young and healthy, you’re more likely to pay a lower premium than if you waited until you were older.
And unless you’ve amassed serious assets already, a product like term life insurance could be an affordable way to help ensure some financial stability for your loved ones if you passed away.
While everyone’s financial situation is unique to them, following and implementing these six money moves by the time you’re 35 could help give you a great financial foundation to build on.
We receive a referral fee from Bestow Agency, LLC dba Bestow Insurance Services in CA, who is the licensed agent.
The information provided is not intended to offer any tax, legal or financial advice. It is always a good idea to consult your tax, legal and financial advisors regarding your specific situation. Furthermore, this article does not ensure your eligibility for any specific product.
The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. The content was purely for informational purposes only and not intended to be investing advice.
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