Renting Vs. Buying a Home

It is time for you to look for a new home! Where do you start?

Start by defining you goals. Consider where you want to live, the features and amenities you are looking for, what you can afford, and a realistic date for having the money you will need.  Another decision you will consider is whether you are renting or buying your home. Purchasing a home is a huge investment; you will need to take the time to weigh the benefits of renting versus buying a home.

 

Renting Your Home Buying Your Home
  • The initial cost of renting is usually lower than making a down payment on a house
  • You probably will not pay property taxes and upkeep directly
  • With no money tied up in real estate, you should have more savings to invest
  • You run no risk that the value of your property will go down
  •  You can deduct the interest on your mortgage and your local property taxes on your tax return
  • You build equity as you pay off your mortgage
  • You may be able to borrow against your equity and deduct the interest payments on the loan
  • Your house may increase in value and you may make a profit should you decide to sell

 

Source: Morris, A Woman’s Guide to Personal Finance

Tips to Talking About Money

Talking about money with your partner is tough. Eventually, we all have to do it. Don’t try to negotiate about money before airing your feelings; otherwise, negotiations will always break down. Here are some tips to get started with talking to your partner about money:

  1. Find an appropriate and stress free time when money is not a loaded issue (don’t use tax season for example).
  2. Articulate your concerns and fears about your partner’s money style. After you express your concerns, acknowledge what you admire about their methods.
  3. Talk to your partner about your goals for the future, short and long-term.
  4. Share your hopes and dreams.
  5. Contemplate making a shared budget or a spending plan together by merging your hopes and the goals.
  6. Set up a time to have the next talk. Aim for weekly conversations in the beginning, then monthly ones.

Source: Mellon, Men, Women, and Money

Your Financial Assets

An asset is a resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide future benefit. Assets have four characteristics:

Maturity: Short-term or Long-term

Short-term assets are available for use within one year. One example of a short-term asset is a cash holding. A long-term asset is a stock, bond or other asset that an investor plans to hold for a long period of time. An example of a long-term asset is a retirement account.

Use: Personal, Investment, or Business

A personal use asset is a type of property that an individual does not use for business purposes or hold as an investment. An investment property is a real estate property that has been purchased with the intention of earning a return on the investment. A business asset is a piece of property or equipment purchased exclusively or primarily for business use.

Tax Treatment: Qualified or Nonqualified

A qualified asset refers to the special tax treatment given to investments held in employer-sponsored or individual retirement plans. Non-qualified holding is an investment that does not qualify for any level of tax-deferred or tax-exempt status. They are taxed on an ongoing basis as they earn income.

Security Type: Fixed Income or Equity

Fixed income assets or bonds are types of investing or budgeting styles. Real return rates or periodic incomes are received at regular intervals and at reasonably predictable levels. Equity is a stock or any other security representing ownership.

Source: Investopedia.com

It’s Not All About Money

Women are usually not taught the secret wisdom of creating wealth and exercising power. Studies reveal that the sexes view money and power very differently. A man’s self-esteem comes from his achievements and power is the ultimate goal. A woman gains her self esteem from relationships; power is a means to an end.

Men desire the respect of the office place while women yearn for the opportunity to help others, grow personally, and live genuinely. Women tend to fear power. This fear of power is a fear of finding out who they really are and fulfilling their purpose in life in the biggest way possible.

The word power comes from the Latin word, potere (‘to be able’) and means the great or marked ability to do or act. This definition can be interpreted in many different ways, especially between the genders. How do you define power as a woman? Through business success, money, or a successful relationship? Do you think power hinders or strengthens your success in life?

Learn from Your Mistakes

“Learn from yesterday, live for today, hope for tomorrow.” – Albert Einstein

When it comes to your finances, it’s important to learn from your mistakes. When you learn from your mistakes, you will find yourself better off and more able to ‘live for today’ and have ‘hope for tomorrow’.

We should all learn from the past; especially from the financial mistakes we have made in the past. We certainly don’t want to make the same mistakes again. Don’t spend your entire life re-evaluating these mistakes; they’re over and done with, and all you can do is learn from those financial mistakes.

Enjoy the day you’re living in. Think of each new day as a new adventure — a new life. Tell yourself that it’s going to be the best day of your life. One of the major afflictions in life is that many women put off their financial problems. However, putting those issues off will only mean that they will resurface later. Remember that today is the most important day of your life. Learn from your mistakes; fix them today so you don’t have to fret about the future.

Life is full of problems pertaining to the future: financial problems, worries over your health, and worries about getting old. Some of these will come to pass (such as growing old), but many of them will not manifest past worrying. Force yourself to remain optimistic about the future. Never lose hope; set financial goals for yourself and strive to accomplish them. It makes you optimistic and gives you faith in your financial future.

Source: Parker, Learn from Yesterday, Live for Today, Hope for Tomorrow

Money is a Tool

According to Phyllis Chesler, “Money is power sacred to most men and foreign to most women.” Money does not give us power. It is a tool, and like many other tools, it does us no good unless we know how to use it. Money bestows power by giving us choices. Money gives us the freedom and the resources to make choices based on who we are and what we want, not on what someone else expects or society dictates. No matter how much money a woman has, unless she is knowledgeable and responsible for it, she can never fully tap the power money holds. It is the understanding of how money works and our ability to manage it autonomously that empowers women.

Source: Barbara Stanny, Prince Charming Isn’t Coming

Proactively Manage your Money

What role do you want your money to play in your life? As a natural multi-tasker, you must incorporate a process or routine that allows you to proactively manage your money so that no stone is left unturned and nothing falls through the cracks. Just as we create routines and a process in other areas of life, we must do the same with our money.

checkbook

But the reality is there are many aspects to consider when managing your wealth. You’ve got your investments (stocks, bonds, mutual funds), insurance (life insurance, long term care, mortgages), lending issues, and estate planning. At times, it managing your wealth can feel overwhelming. That is why it is important to break everything down into a manageable system that works for you.

Getting Paid What You Deserve

Financially Savvy Women get the money they deserve
Financially Savvy Women make sure they know what they are worth, and get it!

Do you think that you deserve more money than you are earning? Here are 5 tips for developing your self-worth which in turn develops your net worth:

 

  1. Think Big, Then Think Even Bigger: The idea is to think in terms of what you are worth, not just what you assume the market will bear.
  2. Do Your Homework: One of the worst negotiating mistakes women make is picking a number out of the air that’s way too low.
  3. Take the Initiative: Have tangible evidence of what you bring to the table. Every time you accept more responsibility, successfully complete a challenge or create positive changes, document it.
  4. Daily Affirmations: Affirmations are positive statements expressed as if they’ve already happened. When you act as if you’re worth a lot, you’ll eventually convince yourself as well as others.
  5. Challenge yourself in other areas: A stretch in any area of life has a ripple effect in other areas as well. Anything that puts you out of your comfort zone builds confidence and self-worth.

 

By implementing these tips, you’ll begin to notice a shift in how you feel about yourself. Making more money is not something that you should do, but it is something you have to do, because you know you are worth it.

 

(Barbara Stanny, 5 Tips for Getting Paid What You Really Deserve)

Aging Parents

financially savvy women plan for the expected and the unexpected
Sunset years should be filled with dignity.

As you age, you may find your parents struggling with illness as they age as well. As their daughter, you may be responsible for their care. The emotional and financial strain can be exhausting and the commitment may compromise your career. It can be difficult know where to start when helping your aging parents. Here are some questions to ask yourself to get started:

  • What institutions hold your assets?
  • Ask your parents for a list of their bank, brokerage, and retirement accounts, including account numbers and online usernames and passwords, if applicable.
  • You should also know where to find their insurance policies (life, home, auto, disability, long-term care), Social Security cards, titles to their house and vehicles, outstanding loan documents, and past tax returns. If your parents have a safe-deposit box or home safe, make sure you can access the key or combination.
  • Do they currently work with any financial, legal, or tax advisors? If so, get a list of names with contact information.
  • Do they have a durable power of attorney? A durable power of attorney is a legal document that allows a named individual (such as an adult child) to manage all aspects of a parent’s financial life if he or she becomes disabled or incompetent.
  • Do they have a will? If so, find out where it’s located and who is named as executor. If it’s more than five years old, your parents may want to review it to make sure their current wishes are represented. Ask if they have any specific personal property disposition requests that they want to discuss now.
  • Are their beneficiary designations up-to-date? Designated beneficiaries on insurance policies, pensions, IRAs, and investments trump any instructions in your parents’ wills.
  • Do they have an overall estate plan? A trust? A living trust can help manage an estate while your parents are still living.

(Questions from 360 degrees of financial literacy)

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Woman facing Divorce

Facing Divorce

 

The independence that comes with divorce can be overwhelming, especially when dealing with your finances. You are in a strong position if you are familiar with all aspects of your family’s finances and have played a strong role in the financial decision making. If you are not familiar with your finances, this is the time to be prepared. Be involved as a partner, not a supporter, when discussing your finances. Take the lead! The advice of a financial professional can also be helpful.

(Morris, A Woman’s Guide to Personal Finance)