…so you think you know everything about your money? Financial experts with LearnVest (an online personal financial information site) will disagree. They recently shared some of the common money misconceptions we have that may be very expensive:
WE’RE NOT SAVING ENOUGH FOR RETIREMENT
Unless we’ve saved 8 to 12 times what we make in one year, we won’t be able to maintain our lifestyle in retirement, reports Capital Financial Advisory Group.
YOUR HOME VALUE IS LOWER THAN YOU THINK
Regardless of our economic times, most people want to believe their home is worth more than the current market. And the trend for decreasing values is expected to continue, at least for a while: According to Zillow Chief Economist Stan Humphries, “… look for 2012 to be a transitional year in which home values fall modestly followed by a prolonged period of flat home values. We’re still three to five years away from ‘normal’ housing market conditions.”
YOU CAN FIND MORE COLLEGE FINANCIAL AID
Families underestimate their eligibility for financial needs-based aid, report financial aid websites Fastweb.com and FinAid.org. Parents with several children in college are likely to qualify for more financial aid if they have more than one student. Here’s a great link for more information: http://www.mainstreet.com/slideshow/moneyinvesting/education-planning/11-tips-mastering-fafsa
YOUR CAR VALUE ISN’T AS HIGH AS YOU EXPECT
“We have found that consumers will often overestimate the value of their vehicle,” says Alec Gutierrez, senior market analyst of Kelley Blue Book. “Only 3% of all used vehicles are estimated to be in excellent condition,” yet 1/3 of the website’s visitors believe their car’s condition is “excellent.” Even with all the bells and whistles, Gutierrez advises to expect to lose at least 50% of the value in just a few years.
YOU DON’T HAVE ENOUGH – OR THE RIGHT TYPE OF LIFE INSURANCE
Experts suggest having 8 to 10 times your annual salary in life insurance. And most advise looking at a universal policy as the best form – premiums are paid into the account value and earn interest over time. Policy rates don’t increase as long as you keep premiums up to date, at you can take loans or withdraw from the account.
LOOK FOR THE TAX BREAKS
For information on charity contributions, medical and dental costs, employee business expense, and other tips, check this website: http://www.mainstreet.com/slideshow/moneyinvesting/taxes/10-tax-deductions-squeeze-2012
YOU DON’T HAVE AN ESTATE PLAN
Every adult needs one – and many don’t. You need to be certain your assets go the right places, even to charity, don’t procrastinate.
YOU OVERESTIMATE YOUR CREDIT SCORE
You may think that paying off your card balance each month guarantees a high score, but that’s not necessarily true. It’s also advised not to spend more than 30% of your credit limit, as this can also affect your score.
You may think that paying off your card balance each month guarantees a high score, but that’s not necessarily true. It’s also advised not to spend more than 30% of your credit limit, as this can also affect your score.
YOU PAY TOO MUCH FOR YOUR 401K
“According to the Department of Labor, 401(k) fees generally fall into three categories: administration fees, which fund day-to-day administrative services such as recordkeeping, accounting, legal and trustee services; fees for investment management and other investment-related services; and individual service fees, which are associated with optional features under a 401(k) plan, such as taking out a loan from the plan,” says Andrew Meadows of The Online 401K. The good news is that, beginning this April, fees must be disclosed on all plan statements.
There are plenty of informational websites and many experts to check with (including many Chrysalis Board members), so keep yourself educated.
For Chrysalis, our work is to teach girls and women the basics of finance and money, and to assure they are prepared to earn, save, and invest for their own futures…so you might forward this message to a woman you know, and invite her to learn with you at Chrysalis educational programs.
Don’t forget to make your reservation for Chrysalis Conversations, kicking off on February 23 with author and women’s leadership expert Sally Helgesen: http://chrysalisconversations2012.eventbrite.com/ (forward this link to your friends as well!) –
