How to Start Building Credit Once You Turn 18

Good credit is crucial to unlocking many financial opportunities in life. When you have a great credit score, you will see lower interest rates on car loans, credit cards, and mortgages. Some employers and landlords even check credit reports before they make a job offer or approve a resident application.

Building good credit takes time, and adults as young as 18 should consider starting immediately so they have plenty of time to build up their credit score.

Here’s how to start building credit once you turn 18.

 

1. Understand the Basics of Credit

As you start to build credit, you should understand the basics of how it works.

Your credit report – maintained by credit bureaus Experian, TransUnion, and Equifax – contains data on your current and past debts, payment history, residential history, and more. This data is supplied by many of the lenders, creditors, and businesses with which you hold accounts.

The information contained in your credit report determines your credit score. Higher credit scores are more attractive to lenders and creditors. The factors that influence your score include:

  • Payment history
  • Average age of accounts
  • Credit utilization ratio
  • Account mix
  • New credit

As a new adult, some of these factors may not currently apply to you. However, they can all negatively or positively affect your score, depending on your behavior as a consumer. Educating yourself on credit now will help you avoid costly mistakes in the future.

 

2. Become an Authorized User

If you have a friend or family member who is willing to add you as an authorized user on their credit card, you can piggyback off their credit card activity to build your credit. Even if you don’t use the card, the account can still land on your credit report and boost your credit score.

This method poses some risks, both to the primary cardholder and the authorized user. If you or the primary cardholder rack up too much debt or miss payments, that activity could end up damaging the credit of both parties.

You should also verify that the credit card company reports card activity for authorized users. If they don’t, your credit won’t see any benefit.

 

3. Get a Starter Credit Card

Credit cards are one of the best tools around for building credit, but you may have trouble qualifying for one when you have no credit history. Luckily, there are a few credit card options for young people with little or no credit:

  • Secured Credit Cards: Secured credit cards require an upfront security deposit to open. Your deposit will typically equal your initial credit limit – for example, a $500 security deposit would get you a $500 credit limit. These cards are easier to qualify for, but you can use them to make purchases and build credit just like traditional credit cards.
  • Student Credit Cards: If you’re currently enrolled in school, you can apply for a student credit card. These cards typically have low credit limits, but they will help you build credit and they may even offer extra incentives for earning good grades.

 

4. Make Payments On Time

Making timely payments is the most important thing you can do to build credit, as payment history makes up 35% of your credit score. A positive payment history will help your credit score immensely.

This advice applies to credit cards, loans, utilities like cell phone services, and any other account that requires a monthly payment. No matter the account type, a late or missed payment that lands on your credit report can do significant damage to your credit score.

 

5. Maintain a Low Credit Card Balance

Your credit utilization ratio, or the amount of available credit you have tied up in debt, is another major contributor to your credit score. Most experts recommend keeping your credit card balances below 30% of the available credit limit.

Ideally, you should pay your balance off in full each month to avoid interest and keep your utilization low.

 

6. Get a Loan

Getting a loan just to build credit is generally not a good idea, as you shouldn’t take on debt only for the sake of your credit score. But if you have a valid reason, such as needing a car for college, a small loan in your name can help you build credit.

Just like credit cards, loans will only build credit if you pay them on time every month. And if you also have a credit card, getting a loan will help with the account mix factor of your credit score.

 

7. Monitor Your Credit Report and Credit Score

Now that you’re building credit, you should monitor your credit report and credit score. Monitoring your credit is one of the best ways to learn what will positively or negatively impact your scores. It will also help you catch inaccuracies or signs of identity theft sooner.

You can check your credit report for free annually with each major credit bureau. As you review your report, look for any negative or inaccurate information that could be screwing up your credit.

 

8. Keep it Simple… for Now.

The more credit cards and loans you open, the higher chances you have of falling into debt. When you’re just starting out, you should probably play it safe and manage one basic credit card and/or small loan until you get the hang of things. Trying to do manage too many debts at once could get you in over your head.

Over time, you can start to add other credit cards or loans to the mix, diversifying your credit profile and adding more opportunities to build credit. And because the age of your accounts affects your credit score, just keeping accounts open will help you build credit in the long run.

 


This article originally appeared on credit.com and was written by Leslie Tayne.

4 Actionable Steps to Build a Positive Money Mindset

It’s no question that the modern entrepreneur community has become fascinated with wealth consciousness and money mindset. What used to be deemed as “woowoo hippy” content—something I would even admittedly roll my eyes at—is now considered mainstream and essential to an entrepreneur’s toolbox, making every online business owner rethink the importance of mindset work in their creative and business pursuits.

But with so many people talking about wealth consciousness, it’s allowed a lot of room for discussion without much action. This leads us to the million-dollar question: What actually is a money mindset, and how can you start adopting it so that you can actually turn it into a lucrative asset?

My definition of a money mindset is this: getting rid of all limiting beliefs that are preventing you from taking powerful action, and viewing the world through an opportunistic lens in order to achieve unlimited abundance in your life.

Now, plenty of people will tell you that this is a load of bull. “There is only one lens, Lena, and that’s the reality… I am broke!”

And sure, on the surface, this might be exactly what it looks like.

But the truth is that most people are holding onto limiting beliefs that they aren’t even fully conscious of, or that they see as fact instead of an opinion that they’ve been conditioned to believe since childhood.

For example, let’s say you were raised hearing your parents fight about money. In result, you might subconsciously associate money with conflict, anger, resentment and pain. Those same parents would also judge your uncle Joe for having a six-figure income and would call him “shallow,” which taught you that having money made you a bad, greedy and selfish person. And if your uncle Joe then lost all of his money in the stock market and ended up sleeping on said parents’ couch, you would subconsciously see money as untrustworthy, unstable and instigative.

And who would try to attract that?

Basically, most people have the worst relationship with money ever. And this is what prevents them from getting massive amounts of it, all the time.

But, here’s the secret: When you heal your relationship with money, start appreciating it instead of resenting it and see it as an unlimited resource instead of one of scarcity, your reality will naturally transform as well.

Here are four tangible steps that you can take to start strengthening your mindset muscle, raking in the dough and achieving your greatest life:

 

1. Become a money mindset sponge.

One of the simplest steps that anyone can take to begin building a healthy relationship with money is by surrounding themselves by others who are already living by those values. You are the average of the five people you spend the most time with, so when you actively absorb content created by those who are already deep in a strong money mindset, you’ll naturally adopt those qualities as well.

For those who are looking to learn about wealth consciousness in a digestible and fun way, I recommend Jen Sincero’s You Are a Badass at Making Money and The Universe Has Your Back by Gabi Bernstein. There are also dozens of other experts who regularly provide free content on the topic, such as YouTube videos, podcasts and live streams. Commit to digesting one hour of money mindset content per day, whether that’s listening to a podcast episode at the gym or giving yourself and hour to read before bed at night.

Making this simple shift will drastically disrupt your perspective and begin to eat away at those limiting beliefs that are holding you back from making money. Change the people you surround yourself with and change your life.

 

2. Identify your go-to daily affirmations.

Try to find three to five one-liners you can repeat to yourself on a daily basis to pause, get re-aligned with your money-oriented goals and take powerful action to achieve the unimaginable.

For example, if you struggle with the idea that people with money are greedy—therefore you subconsciously self-sabotage by keeping low-paying jobs—a good affirmation worthy of repeating might be, “Having money and being a good person are not mutually exclusive. I give more back to the world when I have more money.”

If you were raised to believe that money is a scarce resource that only certain people are entitled to, a good affirmation might be, “There is unlimited money in the world, and unlimited money is coming to me right now. I am deserving of it.”

Online platforms like Pinterest are littered with powerful affirmations that you can keep written on your bathroom mirror, your car dashboard, your wallet and your iPhone lock screen. Read them out loud daily, multiple times. And while it might seem ridiculous at first, don’t stop until you truly believe them. Repetition leads to results and what you focus on manifests into your reality, so shift your attention and get into the affirmation zone.

In fact, let’s start with this one right now (read it out loud): “I love money, and money loves me.”

 

3. Ditch the negative language.

Notice how most people spend 95 percent of their time complaining? It’s the easiest way to bond with someone, squash an awkward silence or experience some cheap, instant gratification.

Mot of these low-level conversations revolve around the same four topics: a bad work situation (bad boss, bad paycheck); a bad relationship (friends, family, romantic partner); a bad money situation (college debt, the ridiculous price of Whole Foods tomatoes, overdue rent); and a bad health situation (can’t afford a gym membership, can’t stop eating crap, can’t get off the couch).

If this is you, pause and take in the great wisdom of Jen Sincero: You have to want your dreams more than you want your drama.

Or, in other words, there are excuses and there are results. You cannot have both. And by allowing so many negative ideas to flow out of your mouth, fostering a sense of self-victimization and self-pity, you cannot take massive, powerful action and you’re keeping yourself exactly where you are.

Actively eliminate any and all negative language from your vocabulary and try to replace it with the positive flip side. For example, if you find yourself on the verge of complaining about the price of your sandwich, instead say, “Wow, this sandwich is so good! I’m so happy I went with the turkey instead of the egg salad!” Or, if you’re about to complain about how rude your boss is, say, “I’m going to give my boss the benefit of the doubt and trust that she’s going through something challenging that’s preventing her from showing up as the leader I know she can be. I’m going to talk to her about it in an open, compassionate way.”

Positive language, while seemingly cheesy at first, leads to positive beliefs and naturally attracts positive things into your life.

 

4. Get the right mentors in your corner.

Pause and think about who you typically take advice from. Your parents? Your partner? Your co-workers?

From now on, challenge yourself to only seek advice from those who have already achieved what you want to achieve, period.

Of course, that process begins with getting clear on what you want. Do you want to grow your business to seven figures in revenue? Do you want to get a new job? Find a boyfriend who thinks the world of you?

Once you do gain that clarity, actively seek mentors who have already achieved what you want to achieve and spend your time with them.

The truth is that, it’s hard to change the way you perceive the world when you’re surrounded by people who are stuck in a “meh” mindset. (Rule of thumb: If you find yourself regularly listening to rants on just about everything—from the rude salesperson at H&M to the cost of rent in Manhattan to the guy who never called your friend back—you need to switch up your friend circles.) Mentors who are truly invested in your growth activate change within you by sharing their mental roadmaps to success, helping you develop a new lens to view the world through and showing you how to turn that internal fire into strategic action.

Trust me, it’s much easier to follow in the footsteps of someone who’s already done it than trying to tackle these changes alone while listening to your college roommate rant about Kylie Jenner’s parenting ability.

Cut out the frustration, overwhelm, and trial and error that naturally accompanies massive financial change, and find the right mentors who will get you there in a fraction of the time.

As a marketer and online entrepreneur, I know that it’s normal to put the whole mindset thing to the side and instead tackle the sexy stuff, like sales funnels, copywriting and Facebook ads (or is that just me?). But trust me when I say: The entire foundation for your success is how you perceive what’s possible. If you can cement an unshakable mentality and heal your lifelong soap opera with money, you will not only achieve the good, you will achieve the unimaginable.


This article was written by Lena Elkins and originally appeared on success.com.

9 Creative Ways to Boost Your Retirement Savings

Everyone knows how important it is to save for retirement. However, actually setting aside money for your future can be challenging. When you’re short on cash and have other demands on your budget, there might be little to nothing left to put toward your nest egg. How are you supposed to save for your future when you’re completely strapped in the present?

If you don’t make enough money right now to set aside, there are still ways to grow your retirement savings. You just have to think outside the box.

1. Use your tax refund

Many people daydream about how they want to spend their tax refund, which is often the biggest windfall they’ll see all year. In fact, last year the average tax refund was $2,763, according to the IRS.

If you got a tax refund this year, put it to work. Rather than spending your refund on electronics or a vacation, consider depositing that money straight into your retirement fund. With the power of compound interest, that refund could grow by the thousands by the time you retire.

2. Deposit your credit card rewards

If you have a credit card that offers cash back, that cash can be a regular source of extra money for your retirement fund. If you already use your credit card for routine purchases like utilities, gas, and groceries, this is easy money. Just make sure you are paying off your credit card balance in full every month.

3. Use cash back apps

If you don’t have a cash back credit card, you can still earn money for doing the shopping you were going to do anyway. Apps like Ibotta or SavingStar let you earn cash back on grocery purchases, while sites like eBates offer a percentage back on many online purchases. You’ll earn a percentage of your purchase as cash, and a check will be mailed to you — which you can toss straight into your retirement account. It’s a low-effort way to earn extra money going about your normal routine.

4. Launch a side hustle

If you have some extra time, you can earn money in the evenings or on weekends by launching a side hustle for fast cash. From walking dogs to making deliveries, there are hundreds of side gigs you can do in just a few hours a week. That extra income can go a long way to funding your retirement.

5. Sell your clutter

Take a look around at all of the electronics, textbooks, toys, and more that you never use. You may have as much as a few thousand dollars’ worth of items collecting dust in your home. That clutter can be eliminated while netting you some money for your retirement. Sell items on sites like eBay, LetGo, and Bookscouter to get cash for your stuff. 

6. Rent out extra space

If you have an extra bedroom, you can rent it out on sites like Airbnb or VRBO. Depending on your location and the size of your space, you could charge hundreds per night. However, you don’t even need an extra room to make money. You can rent out a spare closet or storage space in the garage on Spacer, or rent out your parking spot on SpotHero. 

7. Sell photos online

If you like photography, you can earn passive income to put toward your retirement savings by selling your photos. You can try your hand at selling stock photography on sites like iStock or Shutterstock, or you could sell your artwork in an online portfolio or on arts and craft sites like Etsy. You could also try selling smartphone photos on Foap, which is an app that connects brands with photographers looking to sell their images. 

8. Let strangers drive your car

If you don’t drive your car every day, your vehicle can become a lucrative source of income. You can rent it out to tourists or business travelers on Turo and set your own daily rate. According to the company, you can make nearly $5,800 a year if your car’s market value is $20,000 and you rent it out for 12 days per month. That alone could get you to the contribution limit on an IRA.

9. Trade in clothes for cash

If you have clothes, handbags, or shoes that you don’t wear anymore, stop letting them take up precious closet space. You can sell those items on sites like Poshmark, Tradesy, and even in-person at consignment stores like Plato’s Closet or Clothes Mentor. A single bag of clothes could net you enough to send a couple hundred dollars toward your retirement account.


This article originally appeared on WiseBread and was written by Kat Tretina.

The Worst Thing You Can Do With Your Savings And What To Do Instead

This article was written by Dani Pascarella and originally appeared on Forbes.


If you’re stashing all of your savings in a checking account, you are actually losing money. Inflation is on track to hit 2% this year and the average yield on an interest-bearing checking account right now is 0.04%.

That means the prices of the things you buy are increasing at a faster rate than your money is growing.

So what should you do with your savings instead?

Pyramid

Here’s the “Savings Pyramid.” Keep in mind that personal finance is not one-size-fits-all. While this serves as a great starting point for figuring out what to do with your savings, everyone’s situation is unique and has factors that can change this order, like an employer retirement match or pressing short-term goals.

Emergency Fund

Establishing an Emergency Fund is the first thing you should do when you have some extra cash. Park it in a high-yield savings account so you can earn interest and keep adding to it until you feel confident that the balance is high enough for you to handle any financial surprises that life throws your way. 

At a minimum, that should be three months’ worth of living expenses but feel free to go higher. Some get peace of mind from being extremely prepared and have chosen to save enough to cover an entire year.

Once Emergency Fund is checked off the list, you can shift your focus to making your money work for you.

High-Interest Debt

If you have high-interest debt, you should pay it off before climbing the “Savings Pyramid” any further, aka starting to invest your money.

That’s because historically, U.S. stocks have delivered an average annualized total return of about 9.8%. That means for every dollar you invest, you’d likely be making a return on investment (ROI) of 9.8% or less over time.

On the flipside, the average interest rate on a credit card is more than 16%. So every dollar you put towards paying off your balance is generating around a 16% return because you no longer have to pay that interest to your card issuer. That’s a much higher return than what you’d get from investing.

Retirement

Now that your Emergency Fund is fully stocked and you’ve eliminated high-interest debt, you’ve earned the right to start investing.

The first step is to focus on retirement. If you want to maintain your standard of living in your golden years, you should be saving at least 10% of your salary in a retirement account like a 401(k) or IRA. These account types come along with tax advantages that will help you get more bang for your buck.

While saving for retirement doesn’t sound like the most exciting thing to do with your money, especially when you’re young and retirement is decades away, it’s extremely important. Think of it as making sure the “future you” is well taken care of and living comfortably.

Taxable Investments

You probably have a lot of big goals between now and retirement that will take years to achieve, like buying a home or starting a business. A taxable investment account is a great place to save for these goals because it allows you to generate returns while you continue to save up. 

A major difference between a taxable investment account and a retirement account is accessibility. With retirement accounts, it’s generally difficult to access that money without consequences before you reach retirement age.

With a taxable investment account, you can liquidate your investments and use them for whatever you want, whenever you want.

Speculation

If you still have money left over after taking care of all of the previously mentioned items, then you can gamble with speculative investments—if it’s something you’re interested in doing.

Speculative investments are high risk/high reward; you either win big or lose big. Some examples include investing in a friend’s startup, buying cryptocurrency, and day-trading options.

Yes, you could make a fortune and your friend’s startup could be the next Facebook. But it could also fail and your shares could become completely worthless. So before you make a speculative investment you need to be completely comfortable with the possibility that your investment may go all the way down to $0.

3 Reasons It Makes Sense to Buy a House Right Now

If you’ve followed real estate news over the last couple years, you’ve probably heard people talking about a “seller’s market.” Maybe you’re asking yourself, “What does that even mean?” It’s just an easy way of saying the number of people looking for houses is high, and the number of available houses is low. It’s a real-world example of the Law of Supply and Demand you learned about in your high school Government and Economics class. So sure, it may be a seller’s market, but that doesn’t mean a buyer can’t get in on the fun! If you’ve been thinking about buying a home, there are many reasons to start house hunting today. Let’s take a closer look at three of them:

  • Mortgage programs offer money-saving options. If you’re currently renting, you probably remember how tough it was to come up with the first and last months’ rent that was due at lease signing. Because of that, you may be worried you’ll never be able to save enough money for the down payment on a home purchase. Fortunately, there’s good news! One of the benefits of a hot real estate market is that mortgage lenders are competing to help more people experience the benefits of homeownership. In addition to traditional fixed-rate and variable-rate mortgages, many lenders now offer programs that may include incentives like low- or no-down-payment options. There’s never been a better time to see what programs are available to you!
  • Mortgage rates are going up. You’ve heard the saying, “What goes up must come down.” Unfortunately, gravity doesn’t apply to interest rates. In fact, experts are predicting that rather than coming down, rates are about to do the exact opposite. After more than four years of historically low interest rates, mortgage experts are predicting that the current upward trend will continue. Since they’re bouncing back from record-setting lows, mortgage rates are still quite affordable. But with expected rate hikes on the horizon, waiting to see if the rates defy predictions could be a costly gamble. Locking in a fixed-rate mortgage loan now is a fantastic way to avoid rising rates in the future.
  • Summer’s just around the corner. This reason is more practical than financial. If you have kids, you know how difficult it can be to navigate the school registration process. If you’ve ever tried to change schools during the middle of a school year, you know why making a move during the summer makes good sense. If you’re buying a house in a new school zone, making the change during the summer months can save you the frustration of making a mid-year transition. Your kids will thank you. Your school administrator will thank you. Your sanity will thank you.

Whether you’re buying a home for one of the reasons listed above—or a different reason altogether, we have a mortgage program to meet your needs. If you’re already a homeowner, but you want to save money by refinancing to a lower rate, we can help with that as well. Contact a Scient mortgage specialist today to find the best solution for your house hunting needs!

How to Guard Your ‘Yes’ (and Own Your ‘No’)

This post originally appeared on Shine, a free daily text to help you thrive.


A year ago, my wife signed me up for a drop-in improv workshop. After just one class, I was hooked. Soon, I was taking weekly classes, going to shows, and pretty much out of the house several nights a week.

At the same time, I began hosting monthly dinners with my friends at different local restaurants, I was in the gym each morning, and I was writing on the weekends. On top of it all, I was getting more tasks to do at work.

Life was busy… a little too busy. I couldn’t remember the last time my wife and I just sat on the couch to watch TV or share a laugh together. When she’d ask, “What’s your plan for the week?” I didn’t hear what she really meant: How are we scheduling each other in this week? My relationship was suffering.

Something had to give.

I took an honest inventory of how I was spending my waking hours, and I accepted that I was doing too much. Sure, I enjoyed everything I was doing—but I wasn’t carving out enough time to help the most important parts of my life flourish.

Eventually, my wife and I added intentional us time. We planned trips, weekend getaways and staycations months in advance. We both have stressful and busy jobs, so we were intentional about getting the important dates on the calendar ahead of time. As I began to prioritize my relationship more, I told my wife that I valued her and what we were working to build. I found that I was no longer just busy; I was productive and feeling fulfilled in my personal relationships.

What I learned from all this: We simply can’t do it all. Every time we say yes to something, we’re saying no to something else. If we’re not careful, our relationships might suffer, our health might decline and we might end up way off our center. What’s helped me, and what continues to help me, is considering what I want to say heck yes to.

Whenever I’m doing date night with my wife, I say heck yes by turning off my phone and being completely present. I say heck yes to my health by committing to going to the gym each weekday morning. When we fully put ourselves into the things we care about, we reap greater rewards. We’re more efficient, effective, and we get to enjoy the experience. And even though it might sound counterintuitive, when we take time to focus on one thing at a time, we can be more productive.

Here are some things that help me optimize (and appreciate) my time:

1. Guard your yes and own your no.

If you commit to something, be present and show up for it. But remember: You get to say no. People respect you when you’re honest about what you want to do and know where you’d rather not put your time. You get to be selfish and pour into your own life. Give yourself permission to say no to protect your time.

 

2. Carve out time for mindfulness and reflection each day.

I get up early so that I have enough time to journal, meditate and write down things I’m thankful for. What time of the day would work best for you to do this? I suggest starting small and putting 10-15 minutes of you time on your calendar.

 

3. Protect your calendar like it’s the last bite of dessert.

It’s imperative that we establish healthy boundaries with others and make sure we’re keeping track of everything we’re planning to do. I challenge you to take a peek at your calendar right now and ask yourself, Does my schedule for the week reflect my values?

 

4. Be here now.

It’s so easy to get caught up in our three-page long to-do lists. We are responsible individuals who want to get it all done—as we’re crossing things off our list. I challenge myself to be present during staff meetings and one-on-one meetings. I’ll silence my phone, take notes in a notebook and practice active listening.

Being more productive doesn’t simply mean just doing more. It means doing more of what we care about. You already have everything you need to shift where you’re putting your energy and time, and to say yes to yourself more.

6 Worries You’ll Always Have No Matter How Much Money You Have

Benjamin Franklin once said, “Do not worry about trouble, or what may never happen. Keep in the sunlight.” In other words, don’t fret.

But it’s not always easy to follow Ben’s advice. Worrying is a normal, natural thing, and it happens to the poorest and wealthiest among us. Money can help ease some fears, but there are ultimately things that will cause us to worry no matter how financially secure we are.

Here are things that we all worry about, regardless of our income. What else keeps you up at night?

 

1. Your health

One of the sad ironies about building wealth is that once you actually have accumulated enough to achieve financial freedom, you may not be young enough to enjoy it for very long. As much as older Americans worry about having enough saved, they also worry about whether they’ll remain healthy enough to have the active and happy retirement they dreamed of.

Financial wealth can help you get access to good medical care, but aging can win over even the richest among us. And even young people with money worry about falling ill or getting injured. The good news is that this worry can motivate us to do those things necessary to maintain good health, like eat well and exercise. 

 

2. Your loved ones

Having money may ease your worries a bit, as you can help protect your loved ones from financial hardship.

But you can’t protect them from the consequences of their own bad choices. You can’t cure their illnesses. You can’t prevent them from having their hearts broken. Their health and happiness will be a perpetual source of worry. Even when we’re old and gray, we’ll still worry about our kids and other relatives. We’ll always worry about our spouses. But that’s OK. What kind of monsters would we be if we felt differently?

 

3. The health of our institutions

We can do a lot on our own to ensure financial security, but much of it also depends on outside entities to function properly. We need the federal government to operate smoothly and play a role in keeping our economy stable. We need a banking system that works. We need stock markets that operate effectively and in the best interests of investors. We need education systems that are working to make America stronger and smarter.

At various times in recent years, these institutions have had shaky moments. No matter how wealthy you are, you’ll always be keeping an eye on our governmental and financial systems to see if they are working the way they should.

 

4. Global conflict

There’s a reason the stock market took a major dive after the events of September 11, 2001. That’s because as a nation, there was genuine fear that we’d be roped into a major conflict or war that might have hurt our nation’s economy. We worry about war and global instability due to the potential impact on our finances.

But we also worry about global conflict because we are human. Having money in the bank means nothing when you’re worried about terrorism, or concerned about a friend or loved one serving overseas. We worry when we hear about global tensions that might turn into something worse. We actually live in one of the most peaceful times in human history, but until there’s peace on earth we will worry, regardless of how wealthy we are.

 

5. Change

Fear of change is so prevalent that it actually has a name: metathesiophobia. It is natural for people to worry about changes in their lives, particularly those they can’t control. Having wealth can help mitigate some negative impacts of change, but there is some change that is inevitable no matter how financially prepared you are.

In fact, some of our biggest life changes — retirement, kids moving out, new living situations due to health declines — come later in life when we have achieved financial security. Consider that many older workers choose to remain in their jobs for no other reason than they fear the lifestyle changes that retirement might bring.

Change is inevitable, no matter how rich you are. Do you have the ability to embrace it when it comes?

 

6. Money

Yes, you’ll worry about money even when you have a lot of money. That’s because there’s a good chance you’ve spent all your life worrying about having enough. So even when you reach a point when you’re financially comfortable, your brain defaults to worrying. Even when you’re rich, there may be things that happen to throw you financially off track.

The stock market can take a dive. Your family may be faced with a string of bad events. You never know what’s around the corner. We all want to reach a point when we don’t have to worry about money, but perhaps worrying about having enough money may be the very thing that ensures we have enough. 


This article originally appeared on WiseBread and was written by Tim Lemke

What Being a Millionaire Means Today

Who wants to be a millionaire? Who doesn’t? The high net worth status has long been considered a prime target for the aspiring rich. And an increasing number of Americans are achieving that goal.

In 2017, there were 9.4 million American millionaire households, according to the annual Market Insights Report from investor research firm the Spectrem Group. That’s up from 9.1 million in 2016.

If you look at different sources, however, you’ll find drastically different counts. In the annual World Wealth Report from consulting firm Capgemini, the number of U.S. millionaires reached 4.8 million in 2016, up 7.6 percent from 4.5 million in 2015. (The tally for 2017 data was not available at the time of reporting.) The annual report from financial services company Credit Suisse estimates there were 15.4 million U.S. millionaires in 2017, up from 14.3 million in 2016.

The differences arise due to how net worth is defined. Spectrem asks individuals to estimate the net worth of all their assets, excluding their primary residence. Capgemini counts all investable assets, excluding primary residence, collectibles, consumables and consumer durables. Credit Suisse includes both financial and nonfinancial assets.

Plus, all three firms rely, at least in part, on self-reporting by individuals – making human error a factor. For example, whether and how to include the value of your pension or whole life insurance policy might vary from person to person. Typically, however, when you estimate your net worth, you’d count such assets’ current cash value, i.e., the amount you could get if you were to tap them today.

Technicalities aside, what does it even mean to be a millionaire? “Attaining millionaire status doesn’t mean much anymore,” says financial planner Vid Ponnapalli, founder of financial planning firm Unique Financial Advisors in Holmdel, New Jersey. “Net worth doesn’t mean how much cash I have. My home, stocks, cars might be in there. And in the last decade especially, asset fluctuations have been much greater than in the 30 or 40 years before that, so someone who was a millionaire three years ago might suddenly not be anymore or vice versa. It’s all on paper.” 

Even if you’re looking at just retirement savings, $1 million might not be as cool as it once was. “It’s a milestone and an accomplishment to be proud of,” says financial planner Marguerita M. Cheng, chief executive officer of wealth management firm Blue Ocean Global Wealth, based in Gaithersburg, Maryland. “However, a million-dollar portfolio in 2018 isn’t as valuable as a million-dollar portfolio in 1998 because of inflation.”

And while it’s a popular savings target, with people thinking that accumulating $1 million will allow them to rest easy, hitting that mark does not guarantee relief from all financial concerns – or even that you’d consider yourself wealthy. According to Spectrem Group, 30 percent of millionaires still worry that they might not be able to retire when they want. And when asked to rate whether they are wealthy on a scale of 0 to 100, millionaires gave themselves a score of about 66.

“It’s always kind of surprising how these people assess their situation and the level of financial concern that still exists among people that we would consider to be wealthy,” says Kent McDill, editor for Spectrem. “So much of it has to do with your emotional makeup, as it does with anything else. It’s about your ability to feel secure, no matter what your financial situation is like.”

The fact is, the amount of savings you need to achieve financial security or feel ready for retirement depends on your unique situation. “Setting an arbitrary target such as $1 million for retirement simply isn’t sufficient to ensure that you will have enough money to live out the remainder of your life comfortably,” says Natalie Colley, an analyst with financial planning firm Francis Financial in New York City. “This is not to say that $1 million isn’t enough, just that there are several variables that need to be considered when determining how much you actually need.”

Among those variables is the kind of lifestyle you hope to have in retirement. Ponnapalli notes that if you want to be able to afford luxury vacations and generous gifts for the grandkids, $1 million might not be enough. On the other hand, that sum might be too much if you plan a more frugal retirement. “It is not one-size-fits-all,” he says.

That’s why he recommends planning a retirement budget – two, in fact. The first should detail your planned expenses for your active early retirement; the second should account for your later retirement years. You also need to estimate how long that second part might last, or how long you expect to live. It may be a morbid consideration, but it’s important that you venture a guess as to how long you’ll need your money to last. You can estimate your longevity using online calculators, such as the ones from the Social Security Administration (which simply asks your gender and date of birth), Living to 100 and financial services firm Blueprint Income (which factors in other details including your weight and how much you exercise and drink alcohol).

Plus, you need to plan for long-term care expenses, as well as health care costs, both of which Ponnapalli says are big expenses that are often “not given as much importance as they deserve.” With all that in mind, you can calculate your unique retirement savings target.

For people in their 20s and 30s, Ponnapalli concedes that rules of thumb and general targets are a good place to start since it might be hard to gauge a detailed retirement budget from that many years away. (Still, even those more loosely defined goals should be unique. For example, most pros recommend you aim to save 20 percent of your current income, as opposed to any set dollar amount.) Then, as you get older, you can adjust your plans and savings goals. “Retirement planning isn’t something we do one time and drop it,” Ponnapalli says. “We have to revisit it every year.”

Most importantly, you need to remember that the million-dollar marker is just a number – albeit a seven-figure one. Your financial goals should be about affording the life you want rather than hitting high dollar amounts. And Ponnapalli notes that this thinking is a growing trend among young people. “It is not money the younger generations are focusing on,” he says. “For them, it’s less about what you have and more about what makes you happy.”


This article was written by Stacy Rapacon and originally appeared on U.S. News

When It Comes to Financial Solutions, There’s No Place Like Home.

Homeownership: more than just the cornerstone of the American Dream, it can be a powerful tool for improving your financial future. While renting can be a smart financial choice for someone starting out or starting over, owning your own home offers a multitude of benefits—not the least of which is the ability to build equity.

For practical purposes, equity can be defined as the difference between your home’s value and the balance owed on your mortgage. Since most mortgage installments are comprised of interest and principal amounts, each payment chips away at mortgage’s remaining balance, resulting in a larger difference between the property’s value and what you still owe. That difference is your equity. And while equity is reassuring in theory, it can be even better when you make that equity work for you.

Loan vs. Line: Find the right home equity option for you.

Because your house’s value offers relatively stable collateral, equity lenders assume lower risk than creditors offering unsecured loans or credit lines. Less risk for the lender means better rates for you. Traditionally, home equity loans and lines of credit feature more attractive interest rates than credit cards, making them ideal for larger purchases. But before you decide to put your equity to work for you, it’s important to know the difference between a Home Equity Loan and a Home Equity Line of Credit. Understanding the benefits of each can help you determine which is best for you.

Home Equity Loan
By allowing you to borrow a lump sum at once, these loans let you lock in an interest rate and payment terms for the length of the loan. While interest is charged on the total amount from the beginning, the security of a fixed rate makes home equity loans a reliable choice for larger projects that involve one-time expenses. Popular uses for home equity loans include:

  • Home renovation projects
  • Consolidation of high-interest debt
  • Establishing an emergency fund

Home Equity Line of Credit (HELOC)

Essentially a credit account that allows you to borrow against the equity in your home, a HELOC gives you a cost-effective way to access the funds you need only when you need them. While you can borrow smaller amounts at a time, a HELOC usually features an adjustable interest rate tied to the standard market rate. Depending on the current financial climate, this could lead to fluctuating interest rates and payment amounts over time. However, since you can borrow smaller amounts and pay interest on the amount borrowed as opposed to the full credit limit, this option is ideal for gaining access to funds while maximizing your cash flow. Common uses for a Home Equity Line of Credit include:

  • Smaller home improvements
  • Funding a small business venture
  • Higher education expenses

As with any major financial decision, it pays to discuss all the details with a financial expert. So, before you decide which home equity option is right for you, schedule an appointment with a Scient representative mortgage specialist to determine the best solution for your financial needs.

8 Valuable Freebies at Your Local Library

To many people, public libraries represent buildings full of books, nothing more. Libraries are where a person goes to look up information or borrow a novel, but if you’re not interested in reading, there’s no reason to visit one.

Many modern libraries buck this trend. They provide books, to be sure. They also offer many other types of resources and entertainment items and provide a central place for varied activities and services, almost all for free.

Here are eight valuable, free resources offered by many public libraries in America.

 

Movies. 

Like they do with books, many libraries now offer movies for checkout. The selection often matches that of a video store, with the difference being that you can check out movies for multiple nights for free. 

The selection isn’t limited to dry documentaries. Libraries often acquire copies of newly released blockbusters, comedies, romances, dramas – anything you would find at your local Redbox or on Netflix – minus the cost.

 

Audiobooks. 

Most libraries have a robust audiobook selection, which is a great option if you’re about to depart on a long road trip. They provide entertainment while allowing you to keep your eyes on the road.

As with their book selection, most libraries offer a wide variety of audiobooks of all kinds. You’ll find exciting fiction, fantasy, sci-fi, horror, literary fiction, mystery and romance. You’ll find nonfiction in all flavors, including biographies, military histories, business books, personal finance books and many others. If you have an interest, the library likely has an audiobook to match.

 

Community groups. 

Libraries often provide a meeting place for community groups of all types, not just book clubs. While the selection might be limited at smaller libraries, larger libraries typically offer meetings for many kinds of groups, from political groups and discussion forums to youth groups and special-interest groups.

Many libraries have a number of meeting rooms set aside for just this purpose, closed off from the rest of the library, so people can converse without disturbing quiet spaces. You don’t have to keep your voice down at these meetings.

 

Public presentations. 

Libraries often have an auditorium in which public presentations are given on all kinds of topics. Visiting authors will present on the topic of their book. Politicians will hold public question-and-answer sessions. Local experts will talk about their specific area of expertise.

Most libraries keep a schedule of their free presentations on their websites. You can also stop in and pick up a printed copy if you prefer.

 

Attraction passes. 

Many libraries have arrangements with local attractions, such as zoos, museums and theaters, to provide passes that can be “checked out” from the library. You simply stop by the library, check out a pass, just as you would with a book, then use that pass to visit the local attraction for free.

This is a great way for your family to visit a nearby museum, zoo, aquarium or other attraction of interest without the expense.

 

Internet access. 

If you ever need to access the internet while traveling or when internet access is unavailable at home, check the local library. Almost all libraries offer free high-speed internet access to the community with little restriction on usage. Many libraries have computers available for use as well, which is perfect for checking a website or two. 

Many larger libraries even offer an “internet help desk” service where they will answer questions and help people with internet-related difficulties.

 

Tools. 

A new feature in many libraries is tool and machine rental. Libraries offer patrons the ability to check out items that can be used to build or repair things at home.

Many larger libraries even have small “maker spaces” where volunteers offer classes on how to use various tools for making and repairing items.

 

E-books. 

Libraries are stepping into the digital era by offering the ability to check out e-books that you can read on your phone, tablet or home computer. Often, you can check these out without even visiting the library, as the checkout process is handled by an app or a website.

Many libraries use the OverDrive platform as a checkout service for e-books. Simply go to the app, choose the book you want and “check it out” for a number of days. It’s then available on your phone or tablet for your reading convenience.

Your local public library offers far more than just piles of dusty books. The next time you’re near the library, stop in for a while and see what it has on offer. You might just find yourself leaving with a new movie in hand or a new addition to your social calendar.


This article originally appeared on U.S. News and was written by Trent Hamm.