(BPT) - Paid Content by Vanderbilt Mortgage and Finance, Inc.
While there are many ways to set your kids up for a successful future, money in the bank is one of the most powerful financial tools you can pass along. Every dollar you save or invest can help your child create a productive and stable foundation for many years to come.
When it comes to saving for your kids, the sooner the better. Building up funds now can ensure kids will have less to worry about as they get older and can open up more financial opportunities.
To help you get started, consider these several ways to save wisely for your kids.
If higher education is in your child’s future, consider a 529 savings plan. This is a tax-advantaged investment plan that can be opened as soon as your child is born. The money grows
tax free and can be withdrawn without taxes. There are two types of 529 plans: prepaid tuition and education savings. Prepaid tuition plans can purchase credits at a participating university and lock in current tuition costs. An education savings plan is an investment account where funds are designated for qualified college expenses. Be sure to consult a tax advisor to assist with your specific circumstances as this is only intended to provide general information.
Purchasing a home can be one of the most secure and highest-return investments you can make for your children, especially in today’s housing market. A home can be passed down through generations or sold when the value has increased.
If you’re looking to invest in a home for your children, consider manufactured housing. Manufactured homes attached to a permanent foundation appreciate at an average rate of 3.4%,
while traditional homes appreciate at an average rate of 3.8%. So, while manufactured homes may not appreciate at the exact same rate, they’re pretty close! Vanderbilt Mortgage and Finance can help you finance manufactured housing with their newly improved loan process, which allows you to apply online and track your progress digitally Vanderbilt’s Home Loan Guide offers more ideas on how to budget and prepare for buying a home.
If you have a Roth IRA account, you can use some of the funds to pay for qualifying education expenses. If your account is at least five years old, you can withdraw up to your original contribution amount. Be sure to consult a tax advisor to assist with your specific circumstances.
Consider teaching your kids money management skills early on by allowing them to use a debit card co-owned by you. If you have teenagers who
earn an income, this is a great tool for learning how to deposit checks, set aside money for savings and more.
A high-yield savings account can be a great place to stash birthday and holiday gift money over the years and watch it continue to grow. This type of account can typically be co-owned and managed by parents until your child is responsible enough to manage it on their own.
Putting money for your kids in a trust doesn’t have the same tax benefits as a 529 plan, but it does pose some important benefits. Trust accounts allow you as parents to create exact rules around how you want the funds dispersed to your children. For example, you can give the money in a series of installments or request that it be used only toward tuition.
(BPT) - What are your goals for the future? If retirement planning is top of mind, you’re not alone.
According to new research from Empower and Personal Capital, 36% of Americans are making retirement planning a priority this year. That’s more than those who said losing weight (28%), buying a house (14%) or getting a new job (11%).
Whether you’re just getting started or looking to kick it up a notch, here are some of the best ways to save for retirement in 2023 and beyond:
It’s important to look at your finances from where you are in the present and where you want to be in the future. Make sure you’re in a good spot now, so you can stay on track to accomplish future financial goals.
One simple way to start is understanding where your money is going and any barriers that are holding you back from meeting your goals. Utilize online tools that can help provide a holistic snapshot of your financial life and commit to making changes where necessary For example, determine areas you can decrease spending and put more money toward saving.
Don’t leave “free” money on the table If you have an employer-sponsored 401(k) plan (or 403b, 457 or other), enroll and meet your match. This is the money your employer provides to match what you set aside for retirement, so you can save more than if you did it individually.
Additionally, check out the IRS 401(k) limits and consider maxing out your contribution. For 2022 the IRS allows individual contributions of $20,500 per person and $27,000 (including catch-up contributions) for people age 50 and older. If that’s not possible, consider increasing your con-
tribution a bit every year.
Remember to explore all options of your employer’s retirement plan to create a savings approach that is right for you For example, some employers offer a Roth 401(k), which is funded with taxed dollars There are no income limits on a Roth 401(k) and withdrawals are tax-free at age 59 1/2 as long as your initial account contribution was made five or more years prior to the withdrawal.
IRAs are another retirement tool to consider directing savings into. IRAs are great options for self-employed workers, small businesses, teens with their first job and those who are maxing out their employer retirement plan. Even if a spouse isn’t working, they may be eligible to fund a spousal IRA. Remember, you can save in both a 401(k) and an IRA.
Which type of IRA is right for you? A traditional IRA gets a tax break upfront because it is funded with pretax dollars and a Roth IRA is funded with post-tax dollars, so you can pull that money out in retirement and not have to pay additional taxes on the contributions and earnings. If flexibility is important, a Roth IRA might be a good choice because you can withdraw your contributions without penalties at any time if needed.
Health savings accounts (HSAs) are a convenient way to set aside money for expenses related to your health, but they are also a smart financial tool. HSA contributions reduce your taxable income so you benefit come tax time. HSA earnings growth and qualified withdrawals are also tax free, rounding out HSAs’ triple tax advantage. In 2022, an individual with coverage under a qualifying high-deductible health plan can contribute up to $3,650, according to the IRS.
What’s more, there’s also no “use it
or lose it” requirement, and many programs allow you to invest your HSA money once you hit a certain threshold. This means it’s a great way to save for health expenses now as well as during retirement.
GET HELP FROM A PRO Financial planning can be confusing and complex, so don’t be afraid to ask for help. A financial advisor can help you determine exactly what your
financial goals are, walk you through your options, and provide a personalized plan. Getting trustworthy advice can have a big impact on how confident you feel about your prospects going forward.
No matter what stage of life you’re in, it’s never too early to start saving for retirement. There are plenty of paths you can take, and the earlier you start, the better off you’ll be.
Patience is a virtue, but waiting can be costly in regard to saving for retirement. A 2019 report from the Economic Policy Institute found that nearly half of families have no retirement account savings at all. Individuals who have delayed saving for retirement could find themselves in difficult situations as they near retirement age. Assuming an 8 percent rate of return on money deposited into a retirement account like a 401(k), an individual who begins depositing $6,000 annually at age 20 will have roughly $1.7 million in that account in 40 years. By waiting until age 40 to begin making the same annual contributions and assuming the same rate of return, an individual would end up with less than $300,000 in his or her retirement account at age 60. That’s a sizable disparity and one that could make the difference between a comfortable retirement and one plagued by financial difficulties. Catch-up contributions allowable by the Internal Revenue Service can help men and women over 50 build their retirement savings. However, the most effective way to save for retirement is to begin early and to continue doing so throughout adulthood. MM21C524
(BPT) - Owning a home is the cornerstone of the American dream. There’s nothing like having a permanent plot of land you can call your own.
If you’ve hit a rough patch with your credit score, this dream might feel like it’s out of reach However, finding a suitable mortgage with a “less than perfect” credit score is still possible.
Is there a minimum credit score for mortgages?
Typically, there isn’t a minimum credit score required for mortgage applications. However, recent blending of government policy and business practice have resulted in a credit score threshold of around 620. But some lenders may have the power to determine their own score acceptance limit. This can make it hard to find the institution where you may qualify, as each lender operates a little differently.
Here are a few tips to help you secure that mortgage:
If you’ve had lenders reject your conventional mortgage application, there is no need to worry. There are several loan options available aside from conventional mortgages. Some of those include:
▼ FHA loans: This is a loan provided by an FHA-approved lender. While there are no maximum income limits on an FHA insured loan, they have typically been used for first-time homebuyers or low- to moderate-income borrowers. The loans are insured by the Federal Housing Administration. FHA loans require a small down payment (typically 3.5%) and will frequently accept borrowers with lower credit scores.
▼ VA loans: For current and former members of the military, a VA loan can be a viable option for securing a home VA loans typically don’t require any down payment; are partially backed or guaranteed by the Department of Veterans Affairs; and are frequently made available to active duty
or former members of the military with lower credit scores.
▼ USDA loans: Like FHA loans, these are frequently made to low- to moderate-income individuals with low to moderately low credit scores. However, to qualify for a USDA loan, your home must be in a USDA-designated suburban or rural location
If you’re not interested in utilizing a government-backed loan such as FHA, VA or USDA, improving your payment habits, thereby boosting your credit score, can be another viable option. Even if it takes time to raise your credit score a few points, it can still be beneficial. You can boost your score by making consistent, on-time payments, and finding ways to diversify your credit mix or lower your overall credit usage.
Even if you have a bad credit score, lenders will perceive you as less of a risk if you stay within your means
when buying a home. Lenders will likely analyze your income to obligations closely to see if you have leftover reserves every month (which they refer to as “residual income”) to help absorb the shock of unexpected expenses. Do your best to save as much as you can for a down payment but remember - private mortgage insurance can help minimize the importance of a down payment shortage.
While the mortgage qualification process can be challenging, it’s essential to stay vigilant. If it looks like you’re going to get a “no” at first, it might just mean more work needs to be done to evaluate your situation more deeply. Many times, a “no” is really a “not just yet.” But with persistence, patience and passion, you can still achieve your dream of homeownership.
Learn more about what your score looks like and examine the factors using VantageScore’s scoring models at https://vantagescore.com/consumers/our-models.
(BPT) - Your digital accounts and online activities may make your life easier and perhaps even more enjoyable, but did you know every time you log in, it’s a chance for cybercriminals to hack your information and exploit it in numerous ways?
Hacking threats are constant. According to research from the University of Maryland, cyber attacks happen every 39 seconds on average. What’s more, hackers get more sophisticated every day. The good news is, there are steps you can take to greatly lower your chances of becoming a cybercrime victim.
Multi-factor authentication (commonly known as MFA) is one of the best steps you can take to secure your accounts. And the good news is it’s already offered on many of your favorite applications and services today. MFA acts as an additional step to protect your accounts in addition to your username and password.
For example, if you sign into an account with two-factor authentication, the system may request you enter a one-time code sent to the phone number you have on file. You’ll confirm your identity by typing the number that was texted in the sign-on request. Often these codes are only activated for a short period of time for added protection.
Not all multi-factor authentication is created equal, and SMS or mobile authentication has been proven to be vulnerable to phishing. The modern and most effective approach to keeping you and your data protected is using phishing-resistant multi-factor authentication solutions such as a hardware security key. YubiKeys are small physical keys you tap on your phone or plug into your computer’s USB port to verify it’s you. Essentially, they’re like a key to your online accounts, similar to a house key or car key.
A single YubiKey has multiple functions for securing your login to email, online services, apps and computers. Because it’s something you carry with you, it’s far more secure than digital alternatives - so much so that there have been zero reported account takeovers. The YubiKey is used by thousands of businesses and is also available for individuals so you can add a higher level of online protection for yourself and your loved ones.
Every password you use should be complex, with a mix of different letters, numbers and symbols. A password manager can create a unique, random password for each of your accounts. Better yet, it stores your passwords in an encrypted database to keep them safe while helping to ensure that you, and only you, will be able to access them easily when going online. And when you update your passwordswhich you should do regularly - they
are updated in the manager as well.
Additionally, don’t forget to protect your password manager with MFA. Pairing your hardware security key with it will give you the ultimate protection. That way, if someone gets your master password for your password manager, they won’t be able to
log in without physically having your security key, too.
Finally, for your accounts or favorite sites that don’t offer MFA, reach out to them and encourage them to provide you the tools you need to protect yourself.
(BPT) - If you’re interested in getting started with investing but you’re not sure what your first steps should be, you’re not alone. A recent survey by Magnifi found that one-third of Americans are planning to invest by themselves in 2023, but even though they want to invest on their own, nearly half of them (41%) don’t think they have the knowledge or confidenceand another one-fourth of them (27%) don’t even know where to begin. Today’s investors want independence to invest on their own, and the control to find and pick investments that are most important to them, but ultimately need personalized guidance so they’re not left guessing and gambling.
Fortunately, now it’s easier than ever to build a personalized investing plan and become a well-informed, confident investor backed by an investing assistant
Here are some tips - and tools - to help you get started with investing this year.
1. Don’t be afraid to get started. Start small, with an investment that allows you to get a feel for the process of investing Most brokerages offer fractional shares, which lets you dip your toe in when you’re just beginning. You can always add more investments as you further develop your plan and determine how much you want to invest over time.
2. Aim for diversification. This simply means not putting all your eggs in one investment basket The truth is, diversification is easier than you may realize You can accomplish this by buying a fund that holds a stock you’re interested in (as well as other investments) instead of just buying that single stock - or by adding a bond fund that will add fixed income and offset risk from equities investments. With an investment search engine, it can be easy to find a variety of investments and all the details about each investment to help you determine if it matches your goals.
3. Make a plan Too often, investors will make one single purchase and
never come back. Having an actual plan before getting started helps you determine how much you want to invest overall, and allows you to develop your strategy to invest regularly over time to take advantage of dollar cost averaging Your plan can also help ensure that you’re investing in things that represent you and your priorities.
4. Invest in what you believe in. As you begin to realize how much more you can invest in, you might be surprised to find how easy it is to find investments that represent your personal values, such as social responsibility, and/or your interests (everything from electric vehicles to nanotechnology). The great thing about many modern online investing marketplaces is that you can find anything you want quickly, and even have fun investing.
5. Lean on technology. Thanks to the explosion of technology, you suddenly have the opportunity to make more informed - and more personalizedinvesting decisions. Now you can buy investments like you buy everything else, with the power of technology to make it simpler and quicker, as well as a better fit to your individual priorities.
Using the Magnifi app, for example, you can individually invest in strategies, ideas and values that are unique and important to you - using data, insights and market intelligence that will help you make more informed decisions to achieve your financial goals.
If 2023 is the year you plan to make investing a serious part of your financial future, try AI-assisted investing from Magnifi Personal. This technology lets you speak with the app’s first-ofits-kind AI investing assistant, which uses cutting-edge technology to offer access to intelligence, education and guidance. The investing assistant uses robust “conversational AI,” so investing and getting answers about investing questions is as simple as texting. It’s like having an investing assistant on-call in your pocket at all times.
Excited to get started? Visit Magnifi com/personal to learn more.
(BPT) - With prices on the rise, nearly everyone is looking for ways to make their money go further In fact, the latest Google Search data shows that individual searches for “monthly budget template” increased a whopping 350 percent in the last five years in the U.S. alone.
While there’s no silver bullet when it comes to managing your money, you can build healthier financial habits that help you move toward your goals. Here are four tips for taking more control of your money:
The first step toward any goal is starting with a clear-eyed view of where you are. Your finances are no different, and to build a better relationship with your money, you first need to know where it’s going.
Digital personal finance apps like Google Pay and others make it easy to see exactly how much money you have, what you’ve spent and where you’ve spent it - all from your mobile phone. You can quickly see how much you’ve spent by category (like groceries and gas) or by business (like your favorite neighborhood coffee shop or big-box retailer). The detailed view can help
you identify which expenses you can cut back on without feeling it too much.
Once you know where your money is going, you’ll need a rough plan for how to allocate it in the future. The 50/30/20 split can be a helpful rule of thumb for managing spending. The general idea is that about 50 percent of your money should go toward essentials (housing, transportation, medical costs, groceries, etc.), 30 percent toward wants (dining out, new clothes, entertainment, etc.) and about 20 percent toward paying off debt or saving for the future.
Online offers and deals are the modern-day coupons without all the clipping and sorting. With personal finance apps like Google Pay, all of the deals available to you are accessible and searchable through your mobile app. Just tap and activate the offers you like and the next time you make a purchase from that business, the offer will be automatically applied. No more fumbling for the right coupon at checkout.
Just as overly restrictive diets don’t
usually work for long, the same is true for restrictive budgets. Both fail because they aren’t sustainable and can lead to counterproductive splurging.
Rather than aiming for perfection,
small, consistent steps can make a real difference. The goal of taking control of your finances is not to deprive yourself of living an enjoyable life - it’s to create better habits, one step at a time, to set yourself up for a more secure and prosperous future.
