Three Things to Remember During America Saves Week

February 26, 2015

tips, savings

Suzanne Woolley

Broken_bank.jpg(Bloomberg Business) -- Here comes “America Saves Week,” when consumers are deluged with surveys and advice about saving. And no one's going to argue that putting more money away — for a child’s education, for a comfortable retirement, for a rainy-day fund — isn't an important goal.

But next week's flood of tips, warnings and sales pitches also highlights how useless much of this is to those who need to save the most — the many Americans who are just getting by. 
What they need is wage growth.

 

Lately we've seen some positive signs. Labor Department figures for January showed the strongest wage gains since 2008, with average hourly earnings up 0.5 percent. As more industries expand payroll and more employers compete for workers by bidding up wages, incomes will grow. Wal-Mart is preparing to raise wages for half a million workers.

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Look Who's Living On The Financial Edge

stressed-300x216.jpgIf your rainy day fund is light, you have plenty of company.

According to a newly released report from Bankrate, 24 percent of Americans have more credit card debt than emergency savings, and 13 percent are not much better off—they don't have credit card debt but they don't have emergency savings either. Put another way, more than a third of Americans are living at risk of a financial crisis.

"Americans are woefully undersaved for emergencies," said Greg McBride, chief financial analyst at Bankrate. "By not having emergency savings and using some of your available credit, your options in the event of unplanned expenses are much more limited."

Generation X is the group shortest on emergency savings, Bankrate found, largely because they are in an expensive stage of life. Some 32 percent of respondents aged 30 to 49 had more credit card debt than emergency savings.

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How Helpful Is Your Employer's Financial Wellness Program

fin-300x162.jpgLet’s say your employer has announced yet another benefit: financial wellness services at a great price that provide everything from retirement planning consultations to money management tools.

Before signing up, weigh these three factors: the services offered, confidentiality and your ingrained financial habits.

Typically, financial wellness programs offer an array of proactive financial planning tools that help you better manage your money in the short term (through budgeting, credit counseling and the like) and in the long term (retirement planning).

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More Companies Offer Financial Wellness Programs

33214038_m.jpgFinancially stressed-out workers aren't good for businesses. Yes, employees who bring their money worries tend to be less productive and less engaged, and even raise employer health care costs.

And so, it is with good reason that employers are now adding "financial wellness" program to their menu of employee benefits.

For one, companies that offer this sort of benefit could save $3 for each dollar they spend, according to a recent Consumer Financial Protection Bureau (CFPB) report.

What's more, financial wellness programs can reduce absenteeism, as well as disability and workers' compensation costs. That's because poor financial management causes stress, which sets the stage for medical problems, the CFPB said in its report.

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Corporate Wellness is Incomplete Without Financial Wellness

employee-272x300.jpgPicture the quintessential healthy employee, sitting with perfect posture and smiling over her ergonomic keyboard, enjoying a mid-afternoon snack of green tea with carrot sticks and hummus. She surely doesn’t have dark circles under her eyes from staying up all night worrying about repaying student loans or not contributing enough to her 401(k), right? Well, that depends. What does her workplace wellness program look like?

Workplace wellness programs are built on the promise of lower benefit costs and happier, more productive employees. We’re learning that fostering health and wellness requires addressing the big picture — every aspect of a person’s life, not just their weight or blood pressure reading — and supporting employees’ financial wellness is now a bigger priority for organizations at small companies, enterprise organizations, and everyplace in-between.

If Dark Circles Aren’t Proof Enough…

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25 Ways to Get Smarter About Money Right Now

14309969_m.jpgSmall steps that can make a big difference.

Retirement planning is serious business that requires diligence and patience. But a quick tip, or even an irreverent one, can sometimes be helpful, too. Here are 25 observations from my 30 years of writing about retirement and investing that may spur you to plan more effectively (or to start planning if you’ve been putting it off).

1. If you’re not sure whether you’re saving enough for retirement, you probably aren’t. You can find out for sure pretty easily, though, by going to this Am I Saving Enough? tool.

2. There’s an easy way not to outlive your money: die early. But I think most people would agree that coming up with a realistic and flexible retirement income plan is a more reasonable way to go.

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Confronting Our Most Basic Financial Fears

fin1-300x168.jpgMandy Len Catron’s recent essay in The New York Times, “To Fall in Love With Anyone, Do This,” got me thinking: What deserves love, but is the hardest thing to fall in love with? I believe I found it. The least sexy thing you could fall in love with is your finances.

It’s easy to stick your head in the sand when it comes to personal finance, even when you know you shouldn’t. I do, and it’s especially embarrassing as I studied economics and finance at Princeton University and am part of the founding team of GuideVine.com, a website that helps consumers find financial advisors. So I challenged myself, in true Catron-style, to come up with 36 questions that could help me get more comfortable with my personal finances or, dare I say, actually fall in love them.

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Here's How America Needs to Double It's Savings

February 12, 2015

savings

Scott Burns

Budgets.jpgFor over half of American households, retiring to a life of leisure may not be an option. We're facing a massive retirement crisis -- more than $6.8 trillion short of the savings we need. Without dramatic change, millions of us will have to work for life.

Change is possible, and Congress should be leading it by promoting legislation that could help Americans get back on track for a secure retirement.

Golden years spent behind the counter at the golden arches?

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Four Main Elements Define Financial Well-Being

33214038_m.jpgYou probably have a few goals in mind when it comes to thinking about your financial life. You might think about taking more control over bills, or getting to a specific point like paying off a credit card, or making an important purchase. We want to help people improve their financial lives, so we want to help them set goals that can make a real difference, and work toward them. That’s why we talked to consumers across the country, to hear what they had to say about financial well-being and what it means to them.

You can see what we learned in our report on financial well-being.

Savings and income are part of financial well-being, but we learned that they’re not always the most important part. Instead, when people talked about their own financial well-being, four main elements came to light.

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Financial Stress Levels Deemed 'Too High'

stressed-300x216.jpgSignificant numbers of Americans, and therefore employees, are stressing about their financial situation at a level deemed “too high” by the American Psychological Association.

Stress levels, perhaps predictably, are higher at households with less than $50,000 in income, than those at higher levels. Also, stress levels are higher among the “younger generations” as well as parents.

Of particular concern to authors of the study, Stress in America: Paying With Our Health,is that “stress related to financial issues could have a significant impact on Americans' health and well-being," said Norman B. Anderson, PhD, CEO and executive vice president at the APA.

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3 Ways Money Leaks Out of Your 401(k)

February 11, 2015

tips, 401k

Emily Brandon

40521340_s.jpgMany people dip into their 401(k)s before retirement when they change jobs or experience a financial emergency. Workers who take early withdrawals from their retirement accounts often never replace the money and end up with significantly less cash in retirement. A recent Center for Retirement Research at Boston College report found that leakages reduce retirement wealth by about 25 percent. Here’s how money leaks out of retirement accounts and what you can do to prevent it.

 

Hardship withdrawals. Hard­ship withdrawals from 401(k)s are often permitted when the worker can demonstrate an “immediate and heavy financial need” for the money, which might include medical care, higher education costs or repairing or avoiding foreclosure on a home.

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Sticking to Financial Goals Helps Your Health

33214038_m.jpgIt's not just about your waistline any more. Researchers have long known that financial stress can take a toll on physical health. The American Psychological Association found that "for people coping with existing health problems, financial and interpersonal stress can exacerbate their conditions."

Now a new survey finds that sticking to financial resolutions helps people stick to fitness goals. TD Ameritrade surveyed 1,444 American adults about their New Year's resolutions and found that 80 percent made health-related resolutions and 69 percent set financial goals. The respondents who were satisfied with their current financial condition were more likely to stick to their health resolutions, with 66 percent saying they had begun working on them compared to 55 percent overall.

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10 Steps to an Upgraded Financial Life

Broken_bank.jpgThe beginning of the year offers a great opportunity to take stock of your financial situation and make any necessary changes to build a bigger nest egg or cut back on unnecessary spending. If you’re ready for a financial upgrade but aren’t sure where to start, these suggestions will move you in the right direction without requiring too much sacrifice.

 

1. Choose a better bank.

If you find yourself constantly paying fees for using out-of-network ATMs or running out of cash when you're on the road, now is the time to find a bank that better fits your needs. FindABetterBank.com has a comparison tool that can help, as can Bankrate and Google Compare, which focuses on credit cards. Larger banks tend to offer more ATMs for frequent travelers, while smaller banks and credit unions might be less convenient but offer lower fees.

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7 Steps for Financial Wellness

February 06, 2015

tips, Financial Wellness

Susie Moore

fin1-300x168.jpgOften at the start of a new year, one of our most popular resolutions is to become more financially stable and responsible. Overspending and overextending ourselves often comes from a place of lack and not feeling as if we have enough. It is an emotional issue as much as a material one.

Sometimes we feel as if by controlling and increasing the material volume of lives, we feel more abundant. Not only is this not true, it has the opposite effect. The more we spend our money in non-constructive ways, the worse we feel and the more we spend to feel better. Vicious cycle much?

Money is a deeply personal subject and financial circumstances vary greatly from individual to individual and family to family. There are no one-size fits all rules regarding money but there are some general tips that work well for most people.

Here are 7 tips to creating the abundance and calm you deserve:

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Improve Your Financial Status with These 3 Numbers

February 04, 2015

tips, financial education

Jenna Lee

33214038_m.jpgOur society is obsessed with numbers. We’re given numbered grades and GPAs all throughout school, we rely on numbers to track our weight and even our very identities are tagged with a Social Security number from the day we’re born.

We don’t blame you if you’re sick of numbers.

However, there are a few important aspects of your financial situation that you simply cannot ignore. Neglecting these figures could be catastrophic, but proactively working on them could lower your stress level, save you thousands of dollars and minimize future financial fiascos. While working on your finances may be painful now, it should be well worth your efforts in the end. So take a deep breath, and dive right into these three important numbers:

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Commitment to Financial Wellness Pays Off

February 03, 2015

Financial Wellness

Dan Cook

budget.jpgFinancial wellness programs are starting to get more attention from carriers and benefits designers, as studies continue to support their inclusion in a strong benefits package.

Now, a report released by the International Foundation of Employee Benefits Plans offers evidence that companies that offer such help to employees are reaping the rewards.

The study, “A Closer Look: What’s Working in Workplace Financial Education,” found that employees who’ve participated in a financial wellness program feel better about their financial situation and worry less about retirement.

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Financial Wellness Programs Help Employees Get More Out of Paychecks, Even Without Raises

Budgets.jpgIt’s 9 a.m. and John Smith turns on his workstation computer to begin his workday, yet the first Web site he logs onto is his financial institution to see if he has overdrawn his checking account, and the first phone call he takes is from a debt collector.

While this example is only an illustration, “John” has plenty of real world counterparts. In May 2009, the polling company Harris Interactive released its third annual financial literacy survey reporting that more than one in four adults admits to not paying all bills on time and one in three claims to have no savings. In related research, the survey revealed that nearly 60 percent of the workforce agrees they always or usually live paycheck to paycheck just to make ends meet.

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