Learn money moves you should make now.
Money Girl
231 MG 5 Money Management Strategies for Uncertain Times
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Head over to Dickys.com and use the promo code Workware20 at checkout to save 20% on your purchase. It's the perfect time to experience the quality and reliability that has made Dickys a trusted name for over a century. Hi, everyone. You're listening to the Money Girl podcast, and I'm Laura Adams. The current uncertainty in the global economy and volatility in the financial markets is enough to make even the savviest money manager a little uneasy. Though you can't control what happens to the price of stocks or real estate, you can control the state of your own personal finances. I'm going to cover five smart money moves you should make now to secure your financial future, no matter what happens in the economy. Money move number one, create a financial safety net. One of the best ways to protect yourself financially is to create an emergency fund that you can tap in the event of a financial hardship. Keeping cash in a safe place, like an FDIC insured bank account, is a financial safety net that you should never go without. Don't invest your emergency money because the value could drop at the exact moment you desperately need it. If you don't have an emergency fund, create a plan to accumulate one as quickly as possible. Make a goal to build up enough money to cover six months worth of your basic living expenses and debt payments. For instance, if you spend $2,000 each month for food, housing, utilities, insurance, and credit card minimum payments, accumulate $12,000 in your emergency fund. If that sounds impossible, save enough to cover one month of living expenses and build from there. A secure feeling you'll get from having an emergency fund to fall back on is well worth the effort. Money move number two, optimize your debt. The second smart money move to make right now is to optimize your debt, which is just a fancy way of saying you should make it cost less so you free up extra cash. Interest rates are at historic lows, so whether you have a mortgage, a car loan, or credit card debt, here are three ways to cut your interest rate so you save money. Number one, loan refinancing. Doing a refinance means that your old loan is paid off and a new loan is created at a more favorable interest rate. But a refinance comes with fees, so you have to figure the financial break even point when you fully recover your cost and start to benefit from the refinance. Use the refinance break even calculator at dinkytown.com to easily crunch the numbers so you know if doing a mortgage refinance makes sense for your situation. To learn more about doing an auto loan refinance, check out some good resources on the blog in the Money Girl section at quickanddirtytips.com. The second way to optimize your debt is a loan modification. If your income has been substantially reduced, you don't have funds available to do a typical refinance, or you don't have at least 20% equity in your home, you may be eligible for a mortgage modification. Contact your lender and visit makinghomesaffordable.gov for current program details. And the third way to optimize your debt is to do a balanced transfer. You can use a balanced transfer credit card to pay off higher interest debt such as an auto loan and move it to a low or no interest card. The offer is good during the card's promotional period only, which could range from three months to two years. The amount you transfer can't exceed the credit limit you're offered, and it may be subject to a fee of up to 5%. Use this strategy only when you know you can pay off the balance in full by the offer's expiration date. Check out the balance transfer calculator at creditcards.com to see how much you could save by doing a balanced transfer. The less you have to shell out for your debt each month, the more you can squirl away in your emergency fund. Money move number three, build wealth and reduce taxes. Cut your taxes by investing through a qualified retirement account, like a workplace plan or an IRA. Retirement accounts allow you to defer or eliminate taxes and build wealth for your future at the same time. That's a winning combination. Additionally, workplace retirement plans may offer matching funds, which is a bonus from your employer that makes your nest egg grow even faster. A quick and dirty tip is to increase the total amount you contribute to your retirement accounts by 1% each year until you're putting away a minimum of 10% of your gross income. We wear our work day by day, stitch by stitch. At Dickies, we believe work is what we're made of. So whether you're gearing up for a new project or looking to add some tried and true work where to your collection, remember that Dickies has been standing the test of time for a reason. Their work where isn't just about looking good. It's about performing under pressure and lasting through the toughest jobs. Head over to Dickies.com and use the promo code work where 20 at checkout to save 20% on your purchase. It's the perfect time to experience the quality and reliability that has made Dickies a trusted name for over a century. Earning your degree online doesn't mean you have to go about it alone. At Capelli University, we're here to support you when you're ready. From enrollment counselors who get to know you and your goals, to academic coaches who can help you form a plan to stay on track, we care about your success and are dedicated to helping you pursue your goals. Going back to school is a big step but having support at every step of your academic journey can make a big difference. Imagine your future differently at Capella.edu. AI might be the most important new computer technology ever. It's storming every industry and literally billions of dollars are being invested. So buckle up. The problem is that AI needs lots of speed and processing power. So how do you compete without cost spiraling out of control? It's time to upgrade to the next generation of the cloud, Oracle Cloud Infrastructure or OCI. OCI is a single platform for your infrastructure, database, application development and AI needs. OCI has 4 to 8 times the bandwidth of other clouds, offers one consistent price instead of variable regional pricing and of course, nobody does data better than Oracle. So now you can train your AI models at twice the speed and less than half the cost of other clouds. If you want to do more and spend less like over 8 by 8 in Databricks Mosaic, take a free test drive of OCI at oracle.com/advanced. That's oracle.com/advanced. Oracle.com/advanced. Money move number 4. Diversify your investments. If you're not sure what investments to purchase in your retirement account, my recommendation is to diversify. Diversification is a simple way to manage risk by spreading it out among multiple investments. When your money is invested in a variety of asset classes that are not directly related to each other, such as stocks, bonds, cash, real estate and commodities, they respond to financial conditions differently. Also, having a mix of domestic and international investments helps you limit your losses and get higher total returns. Depending on the menu of investments and funds that are available, consider buying the following. An index fund, which mimics the returns of various market indices such as the S&P 500 or the Dow Jones Industrial Average, a balanced fund which combines investments in stocks, bonds and other securities for a moderate risk offering or a target date fund, which invests with a certain retirement date in mind and it rebalances asset allocation to create results that are suitable for an investor's age and investment objectives. In addition to buying financial securities, investing wisely in real estate or in your own business can be great ways to diversify your money and build lasting wealth. Money move number five, simplify your life. In order to build wealth, you must have discretionary income. That's the amount left over at the end of the month after all your essential living expenses are paid. Reducing your monthly expenses will allow you to build an emergency fund and have a cushion should things take a downward turn or to save a retirement. Track your expenses each month and see where you can simplify your life, cut spending and free up more money to create financial security. So here's a quick review of the five smart money moves you should make. Number one, create a financial safety net. Number two, optimize your debt. Number three, build wealth and reduce taxes with a retirement account. Number four, diversify your investments. And five, simplify your life. On the money girl page at quickanddirtytips.com, you'll find links to everything I've mentioned in the show plus other goodies like the free money girl newsletter, my social media pages and where to email your money question. Most people get the show through iTunes. So if you're not already subscribed to the podcast there, it's free, easy and definitely the most convenient way to get each new weekly episode. And if you enjoy the show, I always appreciate it when listeners take a moment to leave a quick review on iTunes. If you want to leave your question on the money girl voicemail line, just call 206-333-1610. If you like the tips you get in the money girl podcast, you'll love my award-winning book, Money Girl Smart Moves to Grow Rich. It tells you what you need to know about money without bogging you down with what you don't. It's available at your favorite bookstore in print or as an e-book for your Kindle, Nook, iPad, PC, Mac or smartphone. Or even giving away two free chapters from the book at smartmovestogrowrich.com. I'm glad you're listening to Chang. That's all for now. Courtesy of Money Girl, your guide to a richer life. Earning your degree online doesn't mean you have to go about it alone. At Capelli University, we're here to support you when you're ready. From enrollment counselors who get to know you and your goals, to academic coaches who can help you form a plan to stay on track. We care about your success and are dedicated to helping you pursue your goals. Going back to school is a big step, but having support at every step of your academic journey can make a big difference. Imagine your future differently at Capella.edu. [BLANK_AUDIO]