Learn 4 ways to keep your finances safe in case the unexpected happens
Money Girl
245 MG Safety Nets for Your Personal Finances
Hey Fidelity. How can I remember to invest every month? With the Fidelity app, you can choose a schedule and set up recurring investments in stocks and ETFs. Oh, that sounds easier than I thought. You got this. Yeah, I do. Now, where did I put my keys? You will find them, where you left them. Investing involves risk, including risk of loss, Fidelity brokerage services LLC member NYSE SIPC. When you hear a good idea, it's natural to do a double take. That's what you might do when you hear "discover" will automatically double the cashback you've earned on your credit card at the end of your first year with cashback match. Wait, what? Yep. Double the cashback is something so good you might do a triple take. It pays to discover. See terms at discover.com/creditcard. Hi friends. This is Laura Adams and you're listening to the Money Girl Podcast. Have you ever felt stressed out about money? Most people know what it's like to get caught short without enough cash in the bank or to lose sleep over mounting debt. The key to overcoming any financial crisis is to have the right safety nets in place to keep you safe and help you sleep at night. I'll show you four simple ways to take control of your finances, so you'll be protected no matter what happens. Just like a smart acrobat would never cross a high wire without one of those long balancing sticks and a big strong net stretched out below, you should never go without financial safety nets. The types of safety nets you need depend on your personal and family situation, but they typically provide the answer to various "what if" questions. Like, "What if I lose my job? What if I have a big unexpected expense? What if I get really sick and can't work? What if my spouse dies? What if I get sued?" I know thinking about those situations is a bummer, but believe me, if something bad does happen, you'll be glad you did. Being prepared for the unexpected is a major part of having a healthy financial life. In a recent study conducted by MetLife, nearly three-quarters of Americans said having financial security is vital for achieving the American dream. Americans want to provide their own security rather than having to rely on anyone else. However, 70% also indicated that they don't have an adequate financial safety net. Interestingly, the study reveals that the American dream is less about living large and more about attaining a comfortable, modest lifestyle that's based on personal values. To check out the full report, download the 2011 MetLife study of the American dream at MetLife.com. Here are five safety nets you should start building today. Safety net number one, reduce debt. Having less debt takes the pressure off if your pay is cut or you lose your job or business. Reducing what you owe may also be the key to living within your means if you have a tendency to overspend. What most people don't realize is that you can actually reduce your debt for free. First, work on reducing high-interest debts that don't come with a tax deduction like payday loans, retail accounts, and credit cards by doing the following. Apply for a low-interest loan that you can use to pay off high-interest credit cards. Investigate your options with a local bank, credit union, or appear-to-peer lender like Prosper.com. Use a balanced transfer card that has a reasonable annual percentage rate or APR after the promotional period expires. Refinance high-interest installment loans for a lower rate. Modify a mortgage to take advantage of current low rates. Chapter five of my book Money Girl's Smart Moves to Grow Rich gives you more clever options and details about how to deal with debt. The money you save can go a long way towards plugging holes in the next three safety nets that I recommend. Safety net number two, accumulate an emergency fund. The second important safety net is to make it a goal to set aside a small amount each month to start or build up your emergency reserve fund. Ideally, you should have three to six months worth of living expenses to fall back on in case something unexpected happens. Keep your emergency money in an FDIC insured bank account like a savings or a money market deposit account. It's never wise to invest your emergency money because you want to keep it absolutely safe from market volatility and risk. It's great if you can earn a modest interest rate on your cash reserves. But remember that you need to protect those funds like a junkyard dog so you can tap the full amount right away if needed. Get your holidays started with the perfect tree and your perfect style from the Home Depot. Whether you want something that you can assemble in a few clicks, steal the show with over 2000 color changing bulbs or a tree with lights that can be controlled by remote or foot pedal. The Home Depot has it all in our huge assortment of premium trees plus get free delivery on over two million items this holiday from the Home Depot subject to availability see Home Depot dot com flash delivery for details. I love learning and anything that makes learning easier. If you're a parent and your child needs some homework help then I XL is a right for your family. I XL is an online learning program for kids covering math, language arts, science, and social studies. I XL has interactive practice problems for topics from pre-k to 12th grade and everything is organized by grade and subject. As kids practice they get positive feedback, awards, and explanations for wrong answers. I XL figures out what your kids need more help with and recommends more topics to practice. Their videos, lessons, sample problems, and learning games too. One subscription to I XL gets you all subjects and all grade levels. Membership started just $9.95 a month. It's no wonder I XL is used in 95 of the top 100 school districts. I think the positive feedback that I XL gives is really crucial when it comes to learning. So make an impact on your child's learning. Get I XL now and money girl listeners can get an exclusive 20 percent off I XL membership when they sign up today at I XL dot com slash money girl. Visit I XL dot com slash money girl to get the most effective learning program out there at the best price. With the five dollar meal deal at McDonald's you pick a McDouble or a McChicken then get a small fry, a small drink, and a four-piece McNuggets. That's a lot of McDonald's for not a lot of money. Price and participation may vary for a limited time only. Safety net number three have adequate insurance. Managing risk for you and your family by having enough of the right kinds of insurance like health, life, and disability is the third powerful safety net to have in place. According to the Council for Disability Awareness the odds of becoming disabled are probably higher than you think. One in four of today's 20 year olds will have some kind of injury or illness that causes a long-term absence from work before they retire. Disability insurance allows you to keep up with your bills and meet living expenses because it replaces all or a portion of your income while you're recuperating. Don't assume that all insurance is expensive. In many cases the monthly premium for a disability or term life policy is comparable to the cost of a data plan for your cell phone. Safety net number four invest using retirement accounts. Once you accumulate emergency funds and have adequate insurance in place it's time to build wealth for your future retirement. Using tax advantage retirement accounts at work or on your own is a smart way to grow your money and cut your taxes at the same time. Just about everyone is eligible to open an individual retirement arrangement or IRA and contribute a maximum of five thousand dollars for 2011. To find out which type of IRA is best for you be sure to listen to previous podcasts like episode number 173 called what is the difference between a traditional and Roth IRA. So let's review safety net number one is to reduce debt. Number two accumulate an emergency fund. Number three have adequate insurance and four invest using retirement accounts. Taking these small steps to plug the holes in your financial safety nets will give you peace of mind and put you in the best position to deal with any unexpected hardship. When you visit smartmovestogrowrich.com you can find out how to connect with me on social media like Facebook and Twitter. Get email updates and sign up to work with me for one-on-one financial coaching. If you have a money question or suggestion for a future show topic I'd love to hear from you. Just email me at money@quickanddirtytips.com or leave your voice message at 206-333-1610. I'm glad you're listening to Ching. That's all for now courtesy of Money Girl your guide to our richer life. Get your holidays started with the perfect tree and your perfect style from the Home Depot. Whether you want something that you can assemble in a few clicks steal the show with over 2,000 color changing bulbs or a tree with lights that can be controlled by remote or foot pedal. The Home Depot has it all in our huge assortment of premium trees plus get free delivery on over 2 million items this holiday from the Home Depot subject to availability see Home Depot.com/delivery for details. Imagine earning a degree that prepares you with real skills for the real world. Capelli University's programs teach skills relevant to your career so you can apply what you learn right away. Learn how Capello can make a difference in your life at capella.edu. [BLANK_AUDIO]