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5 Financial Strategy Tips for Couples

February 22, 2021

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Hannah  Payette

Hannah Payette

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5 Financial Strategy Tips for Couples

5 Financial Strategy Tips for Couples
February 22, 2021

Talking to your spouse about money can be tricky.

Different spending habits and conflicting money management values are sometimes sources of tension between partners. Finances are the number one cause of arguments within relationships. In fact, it’s one of the most common reasons for divorce (1).

With bills to pay, emergency expenses, and a child’s college tuition and retirement on the horizon, many couples find their finances are stretched as they seek solutions to cover the cost of everyday life. The following 5 tips may help you and your spouse gain control of your finances.

1. Set Goals
The goal-setting phase allows a couple to talk openly about their financial history, current obligations, and future objectives. Gauging your spouse’s retirement preferences can often be a challenging obstacle before establishing a financial strategy.

2. Identify Risky Spending
Overspending and making frivolous purchases may damage your financial future. Discussing mistakes respectfully on both sides of the relationship can help prevent poor decisions in the future. If an expense proves to be a blunder, own up to the fact and move on.

Review the household “record of accounts” (that is, your budget) and your current financial landscape before adjusting your strategy. This may help protect your family from further problems that might delay the timeframe you want to retire.

3. Pay off Bills
Be fair. If—or when—your spouse admits to overspending, try not to blow up. We live in a consumerist society designed to push our buttons and trick us into spending. Even worse, it’s a pattern that can be difficult to break because it’s a very socially acceptable addiction.

Instead of exploding, ask them open-ended questions about their spending habits. The key here is working towards a compromise in a way that doesn’t villainize your partner but also protects your financial future together.

4. Periodic Review
Due to the dynamics of financial decision-making between spouses, it’s clear that periodic review has a benefit. Changes in income, lifestyle, and family or business obligations can alter a couple’s financial goals for retirement. Try to meet at least once a month (maybe over a cup of coffee) to review your finances and update your budget.

5. Don’t forget to have some fun!
The goal of getting in control of your finances is not to make life miserable. Sure, you might need to cut back on frivolous spending in the present to have more in the future, but that doesn’t mean you can’t enjoy life. Set aside a little each month for a movie night or dinner with friends. You actually might discover that things like budgeting free up cash!

Building a financially sound relationship takes time. It takes a willingness to listen, to compromise, to take responsibility, and to prepare. Sometimes it might take some experience as well. Contact a qualified and licensed financial professional to help you and your loved one come up with a strategy to build your future together.

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(1) Natalia Lusinski, “9 signs your spouse is spending more money than you think” Business Insider (28 June 2019)

This material is intended for education purposes only and is not intended to be, nor should it be construed as, an offer or solicitation for the purchase or sales of any specific securities, financial services or other non-specified item. Please consult your Financial/Investment Advisor for advice and guidance on your particular situation. Neither Transamerica Agency Network nor its agents or representatives may provide tax or legal advice. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal advisors regarding their particular situation and the concepts presented herein.

Transamerica Agency Network is a marketing group with Transamerica. Insurance products are sold through United Financial Services, Inc. and affiliated Transamerica companies.


TAN255834-04.20

The Birds Have Flown the Coop!

The Birds Have Flown the Coop!
February 10, 2021

The kids (finally) moved out!

Now you can plan those vacations for just the two of you, delve into new hobbies you’ve always wanted to explore… and decide whether or not you should keep your life insurance as empty nesters.

The answer is YES!

Why? Even though you and your spouse are empty nesters now, life insurance still has real benefits for both of you. One of the biggest benefits is your life insurance policy’s death benefit. Should either you or your spouse pass away, the death benefit can pay for final expenses and replace the loss of income, both of which can keep you or your spouse on track for retirement in the case of an unexpected tragedy.

What’s another reason to keep your life insurance policy? Some life insurance policies have cash value. Now that the kids have moved out and are financially stable on their own, the cash value of certain life insurance policies can be used for retirement or an emergency fund. If your retirement savings took a hit while you helped your children finance their college educations, your life insurance policy might have you covered. Utilizing the cash value has multiple factors you should be aware of before making any decision.*

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*Loans and withdrawals will reduce the policy value and death benefit dollar for dollar. Withdrawals are subject to partial surrender charges if theyoccur during a surrender charge period. Loans are made at interest. Loans may also result in the need to add additional premium into the policy toavoid a lapse of the policy. In the event that the policy lapses, all policy surrenders and loans are considered distributions and, to the extent that the distributions exceed the premiums paid (cost basis), they are subject to taxation as ordinary income. Lastly, all references to loans assume that the contract remains in force, qualifies as life insurance and is not a modified endowment contract (MEC). Loans from a MEC will generally be taxable and, if taken prior to age 59 1/2, may be subject to a 10% tax penalty. 

TAN132971 - R1 08.20

4 Ways to Get Out of Debt

4 Ways to Get Out of Debt
February 3, 2021

Dealing with debt can be scary.

Paying off your mortgage, car, and student loans can sometimes seem so impossible that you might not even look at the total you owe. You just keep making payments because that’s all you might think you can do. However, there is a way out! Here are 4 tips to help:

Make a Budget
Many people have a complex budget that tracks every penny that comes in and goes out. They may even make charts or graphs that show the ratio of coffee made at home to coffee purchased at a coffee shop. But it doesn’t have to be that complicated, especially if you’re new at this “budget thing”. Start by splitting all of your spending into two categories: necessary and optional. Rent, the electric bill, and food are all examples of necessary spending, while something like a vacation or buying a third pair of black boots (even if they’re on sale) might be optional. Figure out ways that you can cut back on your optional spending, and devote the leftover money to paying down your debt. It might mean staying in on the weekends or not buying that flashy new electronic gadget you’ve been eyeing. But reducing how much you owe will be better long-term.

Negotiate a Settlement
Creditors often negotiate with customers. After all, it stands to reason that they’d rather get a partial payment than nothing at all! But be warned; settling an account can potentially damage your credit score. Negotiating with creditors is often a last resort, not an initial strategy.

Debt Consolidation
Interest-bearing debt obligations may be negotiable. Contact a consolidation specialist for refinancing installment agreements. This debt management solution helps reduce the risk of multiple accounts becoming overdue. When fully paid, a clean credit record with an extra loan in excellent standing may be the reward if all payments are made on time.

Get a side gig
You might be in a position to work evenings or weekends to make extra cash to put towards your debt. There are a myriad of options—rideshare driving, food delivery, pet sitting, you name it! Or you might have a hobby that you could turn into a part-time business.

If you feel overwhelmed by debt, then let’s talk. We can discuss strategies that will help move you from feeling helpless to having financial control.

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TAN253296-0320

7 Tips for Talking to Your Partner About Money

7 Tips for Talking to Your Partner About Money
January 27, 2021

Dealing with finances is a big part of any committed relationship and one that can affect many aspects of your life together.

The good news is, you don’t need a perfect relationship or perfect finances to have productive conversations with your partner about money, so here are some tips for handling those tricky conversations like a pro!

Be respectful
Respect should be the basis for any conversation with your significant other, but especially when dealing with potentially touchy issues like money. Be mindful to keep your tone neutral and try not to heap blame on your partner for any issues. Remember that you’re here to solve problems together.

Take responsibility
It’s perfectly normal if one person in a couple handles the finances more than the other. Just be sure to take responsibility for the decisions that you make and remember that it affects both people. You might want to establish a monthly money meeting to make sure you’re both on the same page and in the loop. Hint: Make it fun! Maybe order in, or enjoy a steak dinner while you chat.

Take a team approach
Instead of saying to your partner, “you need to do this or that,” try to frame things in a way that lets your partner know you see yourself on the same team as they are. Saying “we need to take a look at our combined spending habits” will probably be better received than “you need to stop spending so much money.”

Be positive
It can be tempting to feel defeated and hopeless that things will never get better if you’re trying to move a mountain. But this kind of thinking can be contagious and negativity may further poison your finances and your relationship. Try to focus on what you can both do to make things better and what small steps to take to get where you want to be, rather than focusing on past mistakes and problems.

Don’t ignore the negative
It’s important to stay positive, but it’s also important to face and conquer the specific problems. It gives you and your partner focused issues to work on and will help you make a game plan. Speaking of which…

Set common goals, and work toward them together
Whether it’s saving for a big vacation, your child’s college fund, getting out of debt, or making a big purchase like a car, money management and budgeting may be easier if you are both working toward a common purpose with a shared reward. Figure out your shared goals and then make a plan to accomplish them!

Accept that your partner may have a different background and approach to money
We all have our strengths, weaknesses, and different perspectives. Just because yours differs from your partner’s doesn’t mean either of you are wrong. Chances are you make allowances and balance each other out in other areas of your relationship, and you can do the same with money if you try to see things from your partner’s point of view.

Discussing and managing your finances together can be a great opportunity for growth in a relationship. Go into it with a positive attitude, respect for your partner, and a sense of your common values and priorities. Having an open, honest, and trust-based approach to money in a relationship may be challenging, but it is definitely worth it.

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TAN253297-0320

Now’s the Time for Future Planning

Now’s the Time for Future Planning
January 13, 2021

What happened to the days of the $10 lawn mowing job or the $7-an-hour babysitting gig every Saturday night?

Not a penny withheld. No taxes to file. No stress about saving a “million dollars” for retirement. As a kid, doing household chores or helping out your friends and neighbors for a little spending money was vastly different from your grown up reality – writing checks for all those bills, paying your taxes, and buying all the things that children seem to need these days, all while trying to save as much as you can for your retirement. When you were a kid, did those concepts feel so far away that they might as well have been camped out on Easter Island?

What happened to the carefree attitude surrounding our finances? It’s simple: we got older. More opportunities. More responsibilities. More choices. As the years go by, finances get more complicated. So knowing where your money is going and whether or not it’s working for you when it gets there is something you need to determine sooner rather than later – even before your source of income switches from mowing lawns and babysitting to your first internship at that marketing firm downtown.

A great way to get a better idea of where your money is going and what it’s doing when it gets there? A financial strategy.

No message in a bottle sent from a more-prepared version of your future self is going to drift your way from Easter Island. A sound strategy for your money is essential, starting as soon as possible is better than waiting, and talking to a financial professional is a solid way to get going.

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TAN260347 07.20

Save The Money Or Pay Off The Debt?

Save The Money Or Pay Off The Debt?
December 30, 2020

If you come into some extra money – a year-end bonus at work, an inheritance from your aunt, or you finally sold your rare coin collection for a tidy sum – you might not be quite sure what to do with the extra cash.

On one hand you may have some debt you’d like to knock out, or you might feel like you should divert the money into your emergency savings or retirement fund.

They’re both solid choices, but which is better? That depends largely on your interest rates.

High Interest Rate
Take a look at your debt and see what your highest interest rate(s) are. If you’re leaning towards saving the bonus you’ve received, keep in mind that high borrowing costs may rapidly erode any savings benefits, and it might even negate those benefits entirely if you’re forced to dip into your savings in the future to pay off high interest. The higher the interest rate, the more important it is to pay off that debt earlier – otherwise you’re simply throwing money at the creditor.

Low Interest Rate
On the other hand, sometimes interest rates are low enough to warrant building up an emergency savings fund instead of paying down existing debt. An example is if you have a long-term, fixed-rate loan, such as a mortgage. The idea is that money borrowed for emergencies, rather than non-emergencies, will be expensive, because emergency borrowing may have no collateral and probably very high interest rates (like payday loans or credit cards). So it might be better to divert your new-found funds to a savings account, even if you aren’t reducing your interest burden, because the alternative during an emergency might mean paying 20%+ rather than 0% on your own money (or 3-5% if you consider the interest you pay on the current loan).

Raw Dollar Amounts
Relatively large loans might have low interest rates, but the actual total interest amount you’ll pay over time might be quite a sum. In that case, it might be better to gradually divert some of your bonus money to an emergency account while simultaneously starting to pay down debt to reduce your interest. A good rule of thumb is that if debt repayments comprise a big percentage of your income, pay down the debt, even if the interest rate is low.

The Best for You
While it’s always important to reduce debt as fast as possible to help achieve financial independence, it’s also important to have some money set aside for use in emergencies.

If you do receive an unexpected windfall, it will be worth it to take a little time to think about a strategy for how it can best be used for the maximum long term benefit for you and your family.

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TAN261940-08.20

When Is It Ok To Use A Credit Card?

When Is It Ok To Use A Credit Card?
December 28, 2020

Some could say “never!” but there might be situations in which using a credit card may be the option you want to go with.

Many families use credit with good intentions – and then life happens – surprise expenses or a change in income leave them struggling to get ahead of growing debt. To be fair, there may be times to use credit and times to avoid using credit.

Purchasing big-ticket items
A big-screen TV or a laptop purchased with a credit card may have additional warranty protection through your credit card company. Features and promotions vary by card, however, so be sure to know the details before you buy. If your credit card offers reward points or airline miles, big-ticket items may be a faster way to earn points than making small purchases over time. Just be sure to have a plan to pay off the balance.

Travel and car rental
For many families, these two items go hand in hand. Credit cards sometimes offer additional insurance protection for your luggage or for the trip itself. Your credit card company may offer some additional protection for car rentals. You might score some extra airline miles or reward points in this category as well because the numbers can add up quickly.

Online shopping
Credit card and debit card numbers are being stolen all the time. Online merchants can have a breach and not even be aware that your credit card info is out in the wild. The advantage of using a credit card as opposed to a debit card is time. You’ll have more time to dispute charges that aren’t yours. If your debit card gets into the wrong hands, someone might be quickly spending your mortgage money, food and gas money, or college tuition for your kids. Credit cards may be a better choice to use online because the effects of fraud don’t have an immediate impact on your bank balance.

Legitimate emergencies
Life happens and sometimes we don’t have enough readily available cash to pay for emergencies. Life’s emergencies can range from broken appliances to broken cars to broken bones and in these cases, you may not have any other viable options for payment.

Using credit isn’t necessarily a bad thing. In fact, if you plan carefully, you may reap several types of benefits from using credit cards and still avoid paying interest. You’ll have to pay off the balance right away to avoid finance charges, though. So, always think twice before you charge once.

Some credit cards offer consumer benefits, like extended warranties, extra insurance, or even rewards. There are some situations in which using a credit card may come in handy.

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This material is intended for education purposes only and is not intended to be, nor should it be construed as, an offer or solicitation for the purchase or sales of any specific securities, financial services or other non-specified item. Please consult your Financial/Investment Advisor for advice and guidance on your particular situation. Neither Transamerica Agency Network nor its agents or representatives may provide tax or legal advice. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal advisors regarding their particular situation and the concepts presented herein.

Transamerica Agency Network is a marketing group with Transamerica. Insurance products are sold through United Financial Services, Inc. and affiliated Transamerica companies.


TAN261527-07.20

Debit Or Credit? What's The Difference?

Debit Or Credit? What's The Difference?
December 21, 2020

For many people, when purchasing items with a debit card or credit card, the only difference for them may boil down to simply entering a PIN code or scribbling a signature.

But what really is the difference? The answer may be a little complicated, largely due to misnomers and a blending of terms used by the public. Read on to see what the difference actually is.

A clarification of terms
The words credit, debit, and cash seem to be used so loosely by the general public that many people seem confused by what the difference is between them. But in accounting and finance, they have very specific meanings. For our purposes, cash is money that you can spend immediately. It can be cold hard currency of course – bills and coins which you might have in your hand or in your wallet – or cash can refer to the balance in your checking account. This is money that you own, and you can withdraw all of it right now, electronically or physically.

Credit is basically someone’s willingness to accept an IOU from you. Here we will use it as a noun. Buying on credit means the seller trusts the buyer to hand over cash – money which is spendable right now – in the future. Debit, on the other hand, is a verb, and it means to deduct an amount from a cash balance immediately (often a bank account balance). Of course, credit can also be a verb (meaning to add to a cash balance immediately). This mixing of verbs and nouns can make the distinction of the terms in everyday use difficult.

Cash is money you can spend right now, electronically or physically. Credit is an agreement to pay cash later. Debit is a verb that means to subtract cash from a balance right away.

When money is due
The major difference between credit and debit cards is the time when cash must be paid. Credit cards, standing in for a promise to pay cash later, allow one to purchase things even if said person has no cash immediately available. For example, if you need to buy some clothes for a new job, you might only have enough cash on hand to purchase one outfit. You may not receive any more cash until you get your first paycheck in two weeks. But you probably wouldn’t want to wear the same outfit every day for two weeks. What can you do?

This is when credit comes in handy: you buy all the outfits you need now, while making a promise to pay the credit card company back in the future. You receive your outfits immediately even though you don’t technically have enough cash yet. You need to complete some work before you receive the money, but the credit card company accepts your IOU in place of cash for the time being.

On the other hand, if you use a debit card to pay for the clothes, the cash will be deducted immediately from your bank account. Remember, the balance of your bank account is cash in financial terms because it is spendable right now. When you enter your PIN code, the bank checks that you have enough money to make the purchase immediately and, if you do, the bank authorizes the transaction. If you need new shoes for your job but don’t have enough money in your bank account, you won’t be able to use a debit card.

Interest rates for using credit cards
Why would anyone ever want to use debit if they could use credit? One reason is budgeting and discipline. However, a stronger reason can be interest: promising to pay later may come at a price, and that price is called interest. Credit card companies do not make these short term loans out of the goodness of their hearts. They do it for profit. If you borrow money for a little while – i.e., you take money and promise to pay it back later – you will have to compensate the bank, seller, or credit card company for that ability. Thus we potentially pay interest with credit cards but not with debit cards.

Why don’t we pay interest on debit cards? Well, because the money is already yours, of course.

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This material is intended for education purposes only and is not intended to be, nor should it be construed as, an offer or solicitation for the purchase or sales of any specific securities, financial services or other non-specified item. Please consult your Financial/Investment Advisor for advice and guidance on your particular situation. Neither Transamerica Agency Network nor its agents or representatives may provide tax or legal advice. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal advisors regarding their particular situation and the concepts presented herein.

Transamerica Agency Network is a marketing group with Transamerica. Insurance products are sold through United Financial Services, Inc. and affiliated Transamerica companies.


TAN261505-7.20

Should You Buy Or Lease Your Next Vehicle?

Should You Buy Or Lease Your Next Vehicle?
November 23, 2020

Behind housing costs, transportation costs are often one of the top expenses in most households.

Auto leasing has been popular for several decades, but many people still aren’t sure about the sensibility of leasing vs. buying a car, how the math works, and which is really the better value.

Should you lease a car?
In many cases, you can lease a car for less than the monthly payment for financing the exact same car. This is because with leasing, you never build any equity in the vehicle. Essentially, you are renting the vehicle for a predetermined number of miles per year with a promise that you’ll take good care of it and won’t let your kids spill ice cream on the seats. (After all, it’s not really your car.)

At the end of the lease – most often 2 or 3 years – you’ll have the option to buy the car. At this point, in many cases you would be able to find a comparable car for a few thousand less than the residual value on the car you leased. After the lease has expired, most people choose to lease another newer car, rather than buy the car they leased.

If you don’t drive many miles, there may be some advantages to leasing over buying, particularly if you prefer to drive something newer or if you need a late-model car for business reasons. As a bonus, for short-term or standard leases, the car is usually under warranty for the duration of the lease and maintenance costs are typically only for minor service items.

Should you buy a car?
If you’re like most people, when you buy a car, you’ll probably need to finance it rather than plunk down a lump sum in cash. Rates are relatively low, but you can still expect to pay a few thousand dollars in interest costs over the course of the loan. Longer loans have higher rates and more expensive vehicles can make the interest costs add up quickly. Still, at the end of the loan, you own the car.

Older cars usually have higher maintenance costs, but it may be less expensive to keep a car with under 150,000 miles and pay for any repairs, rather than make payments on a new car. Cars are also running reliably much longer now. Let’s say your car runs for about 2 years. If you had a 5-year loan, you could be driving for 7 years (or more) without having to make a car payment.

So a big part of the savings in buying a car vs. leasing can occur if you keep the car for several years after it’s paid off. Cars depreciate most rapidly during the first 5 years of ownership, meaning you could take a big hit on the trade-in value during that time. Keeping the car for a bit longer puts you into a period where the car is depreciating less rapidly and you can benefit financially from not having a car payment. But if you think you might be tempted to trade the car in after 5 years (and you typically drive under 15,000 miles per year), you may want to take a closer look at leasing.

Getting behind the wheel
It’s really up to your personal preference whether you buy or lease. If you like to rotate your vehicles so you can enjoy a new car every few years and not have to worry so much about maintenance, then leasing may be a better option. However, if you like the idea of not having to make a car payment for a good portion of the life of your car, then buying may be the right choice.

Either way, before you take the keys and drive off the lot, make sure to ask your dealer any questions you have, so you can fully understand all the terms and any underlying costs for your situation.

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This material is intended for education purposes only and is not intended to be, nor should it be construed as, an offer or solicitation for the purchase or sales of any specific securities, financial services or other non-specified item. Please consult your Financial/Investment Advisor for advice and guidance on your particular situation. Neither Transamerica Agency Network nor its agents or representatives may provide tax or legal advice. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal advisors regarding their particular situation and the concepts presented herein.

Transamerica Agency Network is a marketing group with Transamerica. Insurance products are sold through United Financial Services, Inc. and affiliated Transamerica companies.


TAN260784-07.20

How To Save For A Big Purchase

How To Save For A Big Purchase
November 2, 2020

It’s no secret that life is full of surprises. Surprises that can cost money.

Sometimes, a lot of money. They have the potential to throw a monkey wrench into your savings strategy, especially if you have to resort to using credit to get through an emergency. In many households, a budget covers everyday spending, including clothes, eating out, groceries, utilities, electronics, online games, and a myriad of odds and ends we need.

Sometimes, though, there may be something on the horizon that you want to purchase (like that all-inclusive trip to Cancun for your second honeymoon), or something you may need to purchase (like that 10-years-overdue bathroom remodel).

How do you get there if you have a budget for the everyday things you need, you’re setting aside money in your emergency fund, and you’re saving for retirement?

Make a goal
The way to get there is to make a plan. Let’s say you’ve got a teenager who’s going to be driving soon. Maybe you’d like to purchase a new (to him) car for his 16th birthday. You’ve done the math and decided you can put $3,000 towards the best vehicle you can find for the price (at least it will get him to his job and around town, right?). You have 1 year to save but the planning starts now.

There are 52 weeks in a year, which makes the math simple. As an estimate, you’ll need to put aside about $60 per week. (The actual number is $57.69 – $3,000 divided by 52). If you get paid weekly, put this amount aside before you buy that $6 latte or spend the $10 for extra lives in that new phone game. The last thing you want to do is create debt with small things piling up, while you’re trying to save for something bigger.

Make your savings goal realistic
You might surprise yourself by how much you can save when you have a goal in mind. Saving isn’t a magic trick, however, it’s based on discipline and math. There may be goals that seem out of reach – at least in the short-term – so you may have to adjust your goal. Let’s say you decide you want to spend a little more on the car, maybe $4,000, since your son has been working hard and making good grades. You’ve crunched the numbers but all you can really spare is the original $60 per week. You’d need to find only another $17 per week to make the more expensive car happen. If you don’t want to add to your debt, you might need to put that purchase off unless you can find a way to raise more money, like having a garage sale or picking up some overtime hours.

Hide the money from yourself
It might sound silly but it works. Money “saved” in your regular savings or checking account may be in harm’s way. Unless you’re extremely careful, it’s almost guaranteed to disappear – but not like what happens in a magic show, where the magician can always bring the volunteer back. Instead, find a safe place for your savings – a place where it can’t be spent “accidentally”, whether it’s a cookie jar or a special savings account you open specifically to fund your goal.

Pay yourself first When you get paid, fund your savings account set up for your goal purchase first. After you’ve put this money aside, go ahead and pay some bills and buy yourself that latte if you really want to, although you may have to get by with a small rather than an extra large.

Saving up instead of piling on more credit card debt may be a much less costly way (by avoiding credit card interest) to enjoy the things you want, even if it means you’ll have to wait a bit.

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This material is intended for education purposes only and is not intended to be, nor should it be construed as, an offer or solicitation for the purchase or sales of any specific securities, financial services or other non-specified item. Please consult your Financial/Investment Advisor for advice and guidance on your particular situation. Neither Transamerica Agency Network nor its agents or representatives may provide tax or legal advice. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal advisors regarding their particular situation and the concepts presented herein.

Transamerica Agency Network is a marketing group with Transamerica. Insurance products are sold through United Financial Services, Inc. and affiliated Transamerica companies.


TAN258470-06.20

Why You Should Pay Off High-Interest Debt First

Why You Should Pay Off High-Interest Debt First
October 28, 2020

Credit card debt can be sneaky.

Often, we may not even realize how much that borrowed money is costing us. High interest debt (like credit cards) can slowly suck the life out of your budget.

But paying down high-interest debt can free up cash flow in a big way. It might take time to produce a meaningful return. Your “earnings” will seem low at first. They’ll seem low because they are low. Hang in there. Over time, as the balances go down and more cash is available every month, the benefit will become more apparent.

High Interest vs. Low Balance
We all want to pay off debt, even if we aren’t always vigilant about it. Debt irks us. We know someone is in our pockets. It’s tempting to pay off the small balances first because it’ll be faster to knock them out.

Granted, paying off small balances feels good – especially when it comes to making the last payment. However, the math favors going after the big fish first, the hungry plastic shark that is eating through your wallet, bank account, retirement savings, vacation plans, and everything else. In time, paying off high interest debt first will free up the money to pay off the small balances, too.

Summing It Up
High interest debt, usually credit cards, can cost you hundreds of dollars per year in interest – and that’s assuming you don’t buy anything else while you pay it off. Paying off your high interest debt first has the potential to save all of that money you’d end up paying in interest. And imagine how much better it might feel to pay off other debts or bolster your financial strategy with the money you save!

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TAN258320-06.20

Should You Live With Your Parents?

Should You Live With Your Parents?
October 26, 2020

Plenty of people move back in with their parents.

Data found that 37% of Californians and close to 1.9 million people in Canada between 18 and 64 live with their parents (1 & 2). That might not sound ideal, but is it really that bad? Here are some pros and cons to consider before deciding to move back home.

Pros
Living with your parents isn’t necessarily the end of the world. For starters, it might be cheaper than renting an apartment or buying a house, depending on the deal your parents offer you. Negotiating rent with your mom is typically easier than wrangling with a landlord! On that note, at home you’ll be surrounded by people who love you. That can be a serious boost to your mental health and give you some footing for your next move. And you can’t forget that free food is awesome. (If that’s part of the deal!)

Cons
But moving back in might not necessarily be all rainbows and sunshine. It can be incredibly demoralizing for many people. We tend to estimate our self-worth and how much we’ve accomplished by our independence from our parents. It’s easy to see living with our parents as a step back. Plus, it can encourage laziness. Not having to hustle for food and rent can remove a sense of urgency from your work. Nothing motivates you quite like the imminent threat of bankruptcy!

If you have to move back in with your parents, do it with a plan. Maybe you give yourself six months at home to get your business off the ground. Your goal might be more long-term like caring for a parent. Just remember to take it in stride and don’t let it derail your life!

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This material is intended for education purposes only and is not intended to be, nor should it be construed as, an offer or solicitation for the purchase or sales of any specific securities, financial services or other non-specified item.Please consult your Financial/Investment Advisor for advice and guidance on your particular situation. Neither Transamerica Agency Network nor its agents or representatives may provide tax or legal advice. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal advisors regarding their particular situation and the concepts presented herein.

Transamerica Agency Network is a marketing group with Transamerica. Insurance products are sold through United Financial Services, Inc. and affiliated Transamerica companies.


(1) Matt Levin, “Nearly 40 Percent Of Young Adult Californians Live With Their Parents. Here’s Everything To Know About Them,” Cal Matters, August 25, 2019.

(2) Statistics Canada, “Family Matters: Adults living with their parents.” The Daily, February 15, 2019.

TAN258051-06.20

Financial Strategy - The Importance of Having One

Financial Strategy - The Importance of Having One
October 14, 2020

A financial strategy is many things.

It’s not just a budget. In fact, a solid financial strategy is not entirely based on numbers at all. Rather, it’s a roadmap for your family’s financial future. It’s a journey on which you’ll need to consider daily needs as well as big-picture items. Having a strategy makes it possible to set aside money now for future goals, and help ensure your family is both comfortable in the present and prepared in the future.

Financial Strategy, Big Picture
A good financial strategy covers pretty much everything related to your family’s finances. In addition to a snapshot of your current income, assets, and debt, a strategy should include your savings and goals, a time frame for paying down debt, retirement savings targets, ways to cover taxes and insurance, and in all likelihood some form of end-of-life preparations. How much of your strategy is devoted to each will depend on your age, marital or family status, whether you own your home, and other factors.

Financial Preparation, Financial Independence
How do these items factor into your daily budget? Well, having a financial strategy doesn’t necessarily mean sticking to an oppressive budget. In fact, it may actually provide you with more “freedom” to spend. If you’re allocating the right amount of money each month toward both regular and retirement savings, and staying aware of how much you have to spend in any given time frame, you may find you have less daily stress over your dollars and feel better about buying the things you need (and some of the things you want).

Remember Your Goals
It can also be helpful to keep the purpose of your hard-earned money in mind. For example, a basic financial strategy may include the amount of savings you need each month to retire at a certain age, but with your family’s lifestyle and circumstances in mind. It might be a little easier to skip dinner out and cook at home instead when you know the reward may eventually be a dinner out in Paris!

Always Meet with a Financial Professional
There are many schools of thought as to the best ways to save and invest. Some financial professionals may recommend paying off all debt (except your home mortgage) before saving anything. Others recommend that clients pay off debt while simultaneously saving for retirement, devoting a certain percentage of income to each until the debt is gone and retirement savings can be increased. If you’re just getting started, meet with a qualified and licensed financial professional who can help you figure out which option is for you.

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This material is intended for education purposes only and is not intended to be, nor should it be construed as, an offer or solicitation for the purchase or sales of any specific securities, financial services or other non-specified item. Please consult your Financial/Investment Advisor for advice and guidance on your particular situation. Neither Transamerica Agency Network nor its agents or representatives may provide tax or legal advice. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal advisors regarding their particular situation and the concepts presented herein.

Transamerica Agency Network is a marketing group with Transamerica. Insurance products are sold through United Financial Services, Inc. and affiliated Transamerica companies.


TAN255755-04.20

Which Debt Should You Pay Off First?

Which Debt Should You Pay Off First?

Nearly every type of debt can interfere with your financial goals, making you feel like a hamster on a wheel –constantly running but never actually getting anywhere.If you’ve been trying to dig yourself out of a debt hole, it’s time to take a break and look at the bigger picture. Did you know there are often advantages to paying off certain types of debt before other types? What the simple list below doesn’t include is the average interest rates or any tax benefits to a given type of debt, which can change your priorities. Let’s check them out!

Credit Cards
For most households, credit card debt is the place to start – stop spending on credit and start making extra payments whenever possible. Think of it as an investment in your future!

Auto Loans
Interest rates for auto loans are usually much lower than credit card debt, often under 5% on newer loans. Interest rates aren’t the only consideration for auto loans though. New cars depreciate nearly 20% in the first year. In years 2 and 3, you can expect the value to drop another 15% each year. The moral of the story is that cars are a terrible investment but offer great utility. There’s also no tax benefit for auto loan interest. Eliminating debt as fast as possible on a rapidly depreciating asset is a sound decision.

Student Loans
Like auto loans, student loans are usually in the range of 5% to 10% interest. While interest rates are similar to car loans, student loan interest is often tax deductible, which can lower your effective rate. Auto loans can usually be paid off faster than student loan debt, allowing more cash flow to apply to student debt, bank accounts, or other needs.

Mortgage Debt
In most cases, mortgage debt is the last type of debt to pay down. Many mortgage rates are initially lower than the interest rates for credit card debt, auto loans, or student loans, and mortgage interest may be tax deductible if structured properly. If mortgage debt keeps you awake at night, in some instances paying off other types of debt first will give you greater cash flow each month so you can begin paying down your mortgage.

When you’ve paid off your other debt and are ready to start tackling your mortgage, try paying bi-monthly (every two weeks). This simple strategy has the effect of adding one extra mortgage payment each year, reducing a 30-year loan term by several years. Because the payments are spread out instead of making one (large) 13th payment, it’s likely you won’t even notice the extra expense.

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This material is intended for education purposes only and is not intended to be, nor should it be construed as, an offer or solicitation for the purchase or sales of any specific securities, financial services or other non-specified item. Please consult your Financial/Investment Advisor for advice and guidance on your particular situation. Neither Transamerica Agency Network nor its agents or representatives may provide tax or legal advice. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal advisors regarding their particular situation and the concepts presented herein.

Transamerica Agency Network is a marketing group with Transamerica. Insurance products are sold through United Financial Services, Inc. and affiliated Transamerica companies.


TAN260057-07.20

Splurging Responsibly?

Splurging Responsibly?
October 7, 2020

We have an odd relationship with splurging.

Many of us treat it like a guilty pleasure and almost take a little pride in our extravagant purchases, even seeing it as “self-care”. But there’s also a part of us that knows we’re not being wise when we senselessly spend money.

So how do we resolve that tension between having fun and making good decisions? Here are a few ideas to help you splurge responsibly!

Budget in advance
“Responsible splurging” might seem like a contradiction, but the key to enjoying yourself once in a while and staying on track with your financial strategy is budgeting. Maintaining a budget gives you the power to see where your money is going and if you can afford to make a big/last-minute/frivolous purchase. And when you decide that you’re going to take the plunge, a budget is your compass for how much you can spend now, or if you need to wait a little longer and save a little more.

Beware of impulse purchasing
The opposite of budgeting for a splurge is impulse buying. We’ve all been there; you’re scrolling through your favorite shopping site and you see it. That thing you didn’t know you always wanted—and it’s on sale. Just a few clicks and it could be yours!

Tempting as impulse buying might be, especially when there’s a good deal, it’s often better to pause and review your finances before adding those cute shoes to your cart. Check your budget, remember your goals, and then see if that purchase is something you can really afford!

Do your research
Have you ever spent your hard-earned money on a dream item, even if you budgeted for it, only to have it break or malfunction after a few weeks? Even worse, it might have been something as significant as a car that you wound up trying to keep alive with thousands of dollars in maintenance and repairs!

That’s why research is so important. It’s not a guarantee that your purchase will last longer, but it can help narrow your options and reduce the chance of wasting your money.

Responsible splurging is possible. Just make sure you’re financially prepared and well-researched before making those purchases!

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TAN257084-05.20

Healthy Financial Habits

Healthy Financial Habits
September 30, 2020

Consistency is essential for anything, and the key to consistency is habit.

Habits are behaviors that we do so frequently that they feel second nature. So your friend who’s woken up at 5:00 AM to work out for so long that it seems normal to him? He’s unlocked the power of habit to wake up, get out of bed, and make it happen.

Healthy money habits are the same way; they open up a whole new world of financial fitness! Here are a few great habits you can start today.

Begin with a Budget
Developing a budgeting habit is foundational. Consistently seeing where your money is going gives you the power to see what needs to change. Notice in your budget that fast food is hogging your paycheck? Budgeting allows you to see how it’s holding you back and figure out a solution to the problem. The knowledge a budget gives you is the key to help you make wise money decisions.

Pay Yourself First
Once you’re budgeting regularly, you can start seeing who ends up with your money at the end of the day. Is it you? Or someone else? One of the best habits you can establish is making sure you pay yourself by saving. Instead of spending first and setting aside what’s left over, put part of your money into a savings account as soon as you get your paycheck. It’s a simple shift in mindset that can make a big difference!

Automate Everything
And what easier way to pay yourself first than by automatically depositing cash in your savings account? Making as much of your saving automatic helps make saving something that you don’t even think about. It can be much easier to have healthy financial habits if everything happens seamlessly and with as little effort as possible on your part.

Healthy financial habits may not seem big. But sometimes those little victories can make a big difference over the span of several years. Why not try working a few of these habits into your routine and see if they make a difference?

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This material is intended for education purposes only and is not intended to be, nor should it be construed as, an offer or solicitation for the purchase or sales of any specific securities, financial services or other non-specified item. Please consult your Financial/Investment Advisor for advice and guidance on your particular situation. Neither Transamerica Agency Network nor its agents or representatives may provide tax or legal advice. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal advisors regarding their particular situation and the concepts presented herein.

Transamerica Agency Network is a marketing group with Transamerica. Insurance products are sold through United Financial Services, Inc. and affiliated Transamerica companies.


WFG256622-05.20

Boost Your Daily Routine with These 3 Financial Habits

Boost Your Daily Routine with These 3 Financial Habits
September 9, 2020

It’s late Friday afternoon. Your to-do list is a crumpled, coffee-stained memory in the bottom of your wastebasket. Another great week in the books!

But as you head out for a night on the town with friends or maybe cuddle up next to your kids to watch their favorite movie, did you ever consider how you spent your after-work time during the week?

Whether you’re routine-driven, a free spirit, or somewhere in between, setting aside a few minutes every day to spend on your finances has the potential to make a huge difference in the long run. By adding these 3 financial habits to your daily routine, you have the potential to give yourself a little more power over your finances.

1. Check your inbox (or mailbox). Whether you pay your bills via credit card, automatic withdrawal, or a hand-written check that you mail in to the company, a daily look-see will help you stay on top of any alerts you get. Spend a few minutes every day glancing over incoming bills, payment receipts, and new online transactions. Being aware of the exodus (or pending exodus) of your money can help fend off late fees, overdrawing your accounts, or maxing out your credit card.

2. Review your spending. Every evening, take quick stock of any spending you did that day – whether in brick-and-mortar stores or online. This exercise can be eye-opening. For instance, are you in the habit of grabbing a piping hot cup of coffee from the drive-thru on your morning commute? Depending on your coffee preference, that can cost up to $5 a day! Maybe 5 bucks isn’t a huge deal, but consider this:

  • $5 for coffee x 5 days a week = $25
  • $25 a week x 4 weeks/month = $100
  • That’s $100 per month spent on coffee!

Just staying aware of those little daily expenditures may make a huge difference in your financial health; when you know how much you’re paying over time for something you could prepare at home (for far less money), you may decide to scale back on the barista-brewed coffee so you can help boost your financial future – and keep yourself on the path to financial independence.

3. Learn a little more. Knowing how money works is a vital part of achieving and maintaining financial independence. Taking a few moments every day to educate yourself a little more about money can make a huge difference in the long run. It can keep you aware of best practices for money management and all the ways your money can work for you. Try a blog post, YouTube video, or a best-seller on finances to keep yourself informed and up to date.

As you start putting these simple financial habits in place, contact me any time! Together we can assess how these small changes could help strengthen your financial strategy and get you closer to financial independence.

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Transamerica Agency Network is a marketing group with Transamerica. Insurance products are sold through United Financial Services, Inc. and affiliated Transamerica companies.

TAN132970 - R1 09.20

5 Things to Consider When Starting Your Own Business

5 Things to Consider When Starting Your Own Business
August 19, 2020

Does anything sound better than being your own boss?

Well, maybe a brand new sports car or free ice cream for life. But even a state-of-the-art fully-decked-out sports car will eventually need routine maintenance, and the taste of mint chocolate chip can get old after a while.

The same kinds of things can happen when you start your own business. There are many details to consider and seemingly endless tasks to keep organized after the initial excitement of being your own boss and keeping your own hours has faded. Circumstances are bound to arise that no one ever prepared you for!

Although this list is not exhaustive, here are 5 things to get you started when creating a business of your own:

1. Startup cost

The startup cost of your business depends heavily on the type of business you want to have. To estimate the startup cost, make a list of anything and everything you’ll need to finance in the first 6 months. Then take each expense and ask:

  • Is this cost fixed or variable?
  • Essential or optional?
  • One-time or recurring?

Once you’ve determined the frequency and necessity of each cost for the first 6 months, add it all together. Then you’ll have a ballpark idea of what your startup costs might be.

(Hint: Don’t forget to add a line item for those unplanned, miscellaneous expenses!)

2. Competitors

“Find a need, and fill it” is general advice for starting a successful business. But if the need is apparent, how many other businesses will be going after the same space to fill? And how do you create a business that can compete? After all, keeping your doors open and your business frequented is priority #1.

The simplest and most effective solution? Be great at what you do. Take the time to learn your business and the need you’re trying to fill – inside and out. Take a step back and think like a customer. Try to imagine how your competitors are failing at meeting customers’ needs. What can you do to solve those issues? Overcoming these hurdles can’t guarantee that your doors will stay open, but your knowledge, talent, and work ethic can set you apart from competitors from the start. This is what builds life-long relationships with customers – the kind of customers that will follow you wherever your business goes.

(Hint: The cost of your product or service should not be the main differentiator from your competition.)

3. Customer acquisition

The key to acquiring customers goes back to the need you’re trying to fill by running your business. If the demand for your product is high, customer acquisition may be easier. And there are always methods to bring in more. First and foremost, be aware of your brand and what your business offers. This will make identifying your target audience more accurate. Then market to them with a varied strategy on multiple fronts: content, email, and social media; search engine optimization; effective copywriting; and the use of analytics.

(Hint: The amount of money you spend on marketing – e.g., Google & Facebook ads – is not as important as who you are targeting.)

4. Building product inventory

This step points directly back to your startup cost. At the beginning, do as much research as you can, then stock your literal (or virtual) shelves with a bit of everything feasible you think your target audience may want or need. Track which products (or services) customers are gravitating towards – what items in your inventory disappear the most quickly? What services in your repertoire are the most requested? After a few weeks or months you’ll have real data to analyze. Then always keep the bestsellers on hand, followed closely by seasonal offerings. And don’t forget to consider making a couple of out-of-the-ordinary offerings available, just in case. Don’t underestimate the power of trying new things from time to time; you never know what could turn into a success!

(Hint: Try to let go of what your favorite items or services might be, if customers are not biting.)

5. Compliance with legal standards

Depending on what type of business you’re in, there may be standards and regulations that you must adhere to. For example, hiring employees falls under the jurisdiction of the Department of Labor and Federal Employment Laws. There are also State Labor Laws to consider.

(Hint: Be absolutely sure to do your research on the legal matters that can arise when beginning your own business. Not many judges are very accepting of “But, Your Honor, I didn’t know that was illegal!”)

Starting your own business is not an impossible task, especially when you’re prepared.

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This material is intended for education purposes only and is not intended to be, nor should it be construed as, an offer or solicitation for the purchase or sales of any specific securities, financial services or other non-specified item. Please consult your Financial/Investment Advisor for advice and guidance on your particular situation. Neither Transamerica Agency Network nor its agents or representatives may provide tax or legal advice. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal advisors regarding their particular situation and the concepts presented herein.

Transamerica Agency Network is a marketing group with Transamerica. Insurance products are sold through United Financial Services, Inc. and affiliated Transamerica companies.


TAN132972_1019

Opportunity cost and your career

Opportunity cost and your career
July 31, 2020

“Opportunity cost” refers to what you can potentially lose by choosing one option over another – even when you aren’t thinking about it.

Nearly every choice you make precludes something else that might have been.

Opportunity cost exists in everything from relationships to finances to career choices, but here we’ll focus on that last one. Over a lifetime, the cost of career decisions can be massive.

The math
For opportunity costs that can be measured, usually in dollars, there’s even a math equation.

What I sacrifice / What I gain = Opportunity cost[i]

Let’s say you have two career choices. One is to work as a mechanic at $50 per hour and the other is to work as a karate instructor at $20 per hour.

Opportunity A / Opportunity B = Opportunity cost

Here it is with numbers: $50 / $20 = $2.50

To translate that, for every $1 you earn as a karate instructor, you could have earned $2.50 as a mechanic. The ratio remains the same whether it’s for one hour worked or 1,000 hours worked because it’s based on earnings per hour.

Adding a time element
We can only work a certain number of hours in a week and we can only work for a certain number of years in a lifetime. Adding time into the discussion doesn’t change the math relationship between the opportunities but it does recognize real-world constraints. Sometimes these limits are by choice. You could be both a full-time mechanic and a full-time karate instructor, but most people don’t want to work 80 hours per week.

Something has to give, and that’s where considering opportunity cost comes in. If you only want to work 40 hours in a week, you’ll have to choose one career over the other or split your time between the two. But even in splitting your time, there is an opportunity cost. Think about it like this: Every hour spent in a lower paying job costs money if you had an opportunity to earn more doing something else.

The bigger picture
In our example using the mechanic vs. the karate instructor, the difference in annual income is over $60,000 per year ($104,000 minus $41,600). Over a 40-year working career, the difference in earnings is nearly $2.5 million, and it all happened one hour at a time.

Life balance
Your career choice shouldn’t just be about money – you should do something you enjoy and that gives you satisfaction. There may be several other considerations as well – like opportunity to travel, the kind of people you work with, and the greater contribution you can make to the world. However, if there are two choices that meet all your criteria but one pays a bit more, just do the math!

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The Challenge Of Losing Your Income

The Challenge Of Losing Your Income
March 23, 2020

You’ve already got a lot to deal with. Why buy life insurance at all?

It all comes down to protection. The idea of protecting things like your car or house are pretty common. Even if car insurance weren’t mandatory in most states or provinces, buying it would probably be a good idea. You’d want to make sure you could cover any damages from an accident – especially if you’re at fault. And protecting your investment in your home from the unexpected like an earthquake, fire, flood, theft, etc. is a bit of a no-brainer.

One of the most important things to protect before all others? Your ability to earn an income. Your income enables you to not only buy your car and your house but also the insurance to protect those things. If you were to lose your income, then those things could also be lost if you can’t afford them any longer.

Getting laid off or fired could be a cause of lost income. In that case, you still have the ability to work, which means finding a new job is possible. But in the event of a disability, critical illness, or premature death of a breadwinner? Those situations are a bit tougher to bounce back from – especially that last one.

Before becoming financially independent, a financial situation may typically be less secure, meaning you might have more financial responsibility than wealth. For example, if you don’t have a lump sum of cash to buy a house, you’d need to finance the purchase over a longer period of time via a mortgage. This creates a responsibility to continue making the mortgage payments in full and on time. Losing your income would be devastating since it could affect your payments – and when mortgage payments can’t be made, you might lose your home.

What all of this means: Your ability to earn an income should also be protected. Getting the right type and the right amount of insurance can seem complicated, especially if you’re considering all the different kinds you may need. That’s where speaking with a financial professional might come in handy. If you’re looking to protect the most important aspect of your financial situation (namely, your ability to earn income) and you’d like to see your options, let’s talk. It would be my pleasure to help you get a better understanding of your options.

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TAN132966-10.19

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