A Guide To Everything You Need To Know About Home Ownership Costs [Free Download]

Along with the excitement of purchasing a new home, comes the additional costs that you will be expected to pay as a homeowner. Apart from covering the mortgage of your home, you’ll have additional expenses – such as home insurance – that you will be expected to cover. If you’re looking to budget for a […]

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How to Financially Prepare for Post-Pandemic Life

As the dust slowly begins to settle and we observe businesses putting their action plans in place to recover, we all sit and wonder what this may look like for us. How will I recover from this? How am I…

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The post How to Financially Prepare for Post-Pandemic Life appeared first on MintLife Blog.

What Happens When You Pay Off Your Car Loan?

According to the Consumer Financial Protection Bureau, around 2.3 million car loans originate every year. Car loans can take years to pay off. So when you finally pay it off, you might be wondering—now what? What happens when you pay off your car? What should you do with the money you were previously putting towards… Read More

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How the Sandwich Generation Can Protect Their Retirement

Woman part of the sandwich generation

For those who are caring for their aging parents and raising kids at the same time, it can often seem like there’s never enough time, money, or energy to provide for all the family members who need you. In particular, handling finances when two different generations are relying on you can feel like an impossible balancing act — not to mention an exercise in feeling guilty no matter what you do.

But being the caregiver sandwiched between two generations makes it even more important for you to prioritize your own financial needs, especially when it comes to retirement planning. By protecting your retirement during this difficult season of your life, you’ll be in a better place to remain independent as you age, launch your kids into a more secure adulthood, and offer ongoing support to your parents.

Sound impossible? It’s not. Here’s how you can protect your retirement if you’re a member of the sandwich generation.

Retirement savings comes first

Retirement savings should get priority ahead of putting money into your kids’ college funds. You know that already. Your kids can take on loans for college, but there are no loans available to pay for your retirement.

The more difficult decision is prioritizing retirement savings ahead of paying for long-term care for your parents. That can feel like a heartless choice, but it is a necessary one to keep from passing money problems from one generation to the next. Forgoing your retirement savings during your 40s and 50s means you’ll miss out on long-term growth and the benefits of compound interest. By making sure that you continue to set aside money for retirement, you can make sure your kids won’t feel financially squeezed as you get older.

Instead of personally bankrolling your parents’ care, use their assets for as long as they last. That will not only allow you to make the best use of programs like Medicaid (which requires long-term care recipients to have exhausted their own assets before it kicks in), but it will also protect your future.

Communication is key

Part of the stress of being in the sandwich generation is feeling like the financial burdens of two generations (as well as your own) are resting entirely on your shoulders. You feel like you’ll be letting down the vulnerable people you love if you can’t do it all. But the truth is that you can’t do it all. And you shouldn’t expect that of yourself, nor should your family expect it of you. So communicating with your loved ones about what they can expect can help you draw important boundaries around what you’re able to offer them.

This conversation will be somewhat simpler with your children. You can let them know what kind of financial help they can expect from you for college and beyond, and simply leave it at that.

The conversation is a little tougher with your parents, in part because you need to ask them about nitty-gritty details about their finances. Whether or not money is a taboo subject in your family, it can be tough for your parents to let you in on important financial conversations — to them it feels like they were changing your diapers only a few short years ago.

Being in the loop on what your parents have saved, where it is, what plans they have for the future, and who they trust as their financial adviser, will help protect their money and yours. You’ll be better able to make decisions for them in case of an emergency, and being included in financial decisions means you can help protect them from scams. (See also: 5 Money Strategies for the Sandwich Generation)

Insurance is a necessity

Having adequate disability insurance in place is an important fail-safe for any worker, but it’s especially important for those who are caring for aging parents and young children. The Council for Disability Awareness reports that nearly one in four workers will be out of work for at least a year because of a disabling condition. With parents and children counting on your income, even a short-term disability could spell disaster, and force you to dip into your retirement savings to keep things going. Making sure you have sufficient disability income insurance coverage can help make sure you protect your family and your retirement if you become disabled.

Life insurance is another area where you don’t want to skimp. With two generations counting on you, it’s important to have enough life insurance to make sure your family will be okay if something happens to you. This is true even if you’re a full-time unpaid caregiver for either your parents or your children, since your family will need to pay for the care you provide even if they aren’t counting on your income.

It’s also a good idea to talk to your parents about life insurance for them, if they’re able to qualify. For aging parents who know they will draw down their assets for long-term care, a life insurance policy can be a savvy way to ensure they leave some kind of inheritance. If your parents are anxious about their ability to leave an inheritance, a life insurance policy can help to relieve that money stress and potentially make it emotionally easier for them to draw down their own assets.

Become a Social Security and Medicare expert

Spending time reading up on Social Security, Medicare, and other programs can help you to make better financial decisions for your parents and yourself. There are a number of misconceptions, myths, and misunderstandings masquerading as facts about these programs, and knowing exactly what your parents (and eventually you) will be entitled to can help make sure you don’t leave money on the table or make decisions based on bad information.

The eligibility questionnaires at benefits.gov can help you determine what benefits are available and whether your parents qualify. In addition, it’s a good idea to sign up for a my Social Security account for yourself. This site will provide you with personalized estimates of future benefits based on your lifetime earnings, which can better help you prepare for your own retirement.

Don’t be afraid to ask for help

Caring for children and parents at the same time is exhausting. Don’t compound the problem by thinking you have to make financial decisions all by yourself. Consider interviewing and hiring a financial adviser to help you make sense of the tough choices. He or she can help you figure out the best way to preserve your assets, help your parents enjoy their twilight years with dignity, and plan for your children’s future.

Even if a traditional financial adviser isn’t in the cards for you, don’t forget that you can ask for help among your extended family and network of friends. There’s no need to pretend that juggling it all is easy. Family can potentially offer financial or caregiving support. Knowledgeable friends can steer you toward the best resources to help you make decisions. Relying on your network means you’re less likely to burn out and make disordered financial decisions. (See also: 9 Simple Acts of Self-Care for the Sandwich Generation)

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Are you part of the sandwich generation? When you are a caregiver to children as well as aging parents, it can seem like theres not enough time, money or energy to provide for all the family members. Here are the tips and ideas on how you can protect your retirement finances. | #sandwichgeneration #personalfinance #moneymatters


7 Big Insurance Mistakes to Avoid During the COVID Crisis

The coronavirus has upset lives and livelihoods all over the globe. While insurance can’t keep you from getting COVIID-19, having the right types of insurance can reduce your financial risk as the virus spreads.

There’s never been a better time to protect your health, life, property, and business with the right insurance. Let's take a look at seven insurance mistakes you might be making during the pandemic. You’ll learn how to face new risks and challenges with the help of different types of affordable insurance.

Coronavirus insurance mistakes

Here’s the detail on each mistake you should avoid to make sure you and your family stay safe during the pandemic.

1. Skipping health insurance

The coronavirus has changed the health insurance landscape in drastic ways. If you’ve become unemployed or have your work hours cut and lost employer-sponsored health insurance, don’t go without coverage when you may need it most.

Here are several ways to get health insurance:

Medicaid and Children’s Health Insurance Program (CHIP) may be options for free or low-cost coverage if you can’t afford health insurance. These programs allow you to get coverage at any time of year, depending on your income, family size, and where you live. You can learn more at the Medicaid website at Medicaid.gov.

Your parent’s health plan may be an option if they have coverage, you’re under age 26, and they’re willing to insure you. Even if you’re married, not living with a parent, and not financially dependent on them, they can cover you until your 26th birthday.

COBRA coverage is typically available when you leave a job with group health insurance. Whether you quit, are laid-off, or get fired, COBRA is a federal regulation that gives you the option to continue your employer-sponsored health, dental, and vision insurance for a certain period, such as 18 months. However, if you have funds in a health savings account or HSA, you can use them to pay your COBRA premiums.

Affordable Care Act (ACA) coverage is available through federal or state health online marketplaces, insurance brokers, and insurance websites. If your income is below certain limits based on your family size, you qualify for a federal subsidy, which reduces your healthcare premiums. No matter where you live, you can begin shopping at the federal exchange at Healthcare.gov.

2. Not using telehealth services

If you have a high-deductible health plan (HDHP), it typically only covers certain preventive care costs, such as an annual physical or vaccinations, before you meet the yearly deductible.

The CARES Act makes it easier to use telehealth services because your plan must cover it cost-free before your HDHP deductible is satisfied.

However, the CARES Act makes it easier to use telehealth services because your plan must also cover it cost-free before your deductible is satisfied. For other types of health plans, such as HMOs and PPOs, they must also waive any cost-sharing or co-pays for remote health services.

The telehealth relief is only temporary for 2020 and 2021. However, it can give you significant savings if you have a non-emergency or medical question that you want to address with a doctor online.

3. Only getting minimum car insurance coverage

During tough financial times, it can be tempting to cut your auto insurance coverage or drive uninsured. Remember that it’s against the law to drive without having the minimum liability coverage for your home state.

Since many drivers are uninsured, you should never go without uninsured motorist coverage.

However, since many drivers are uninsured, you should never go without uninsured motorist coverage. This insurance protects you from a driver who hits-and-runs or is uninsured or underinsured for the damage they cause you, your passengers, and your car.

According to the Insurance Information Institute (III), 13 percent of drivers are uninsured nationwide. My home state, Florida, has the highest number—almost 27 percent! This data from 2015 is the most recent. Due to coronavirus-related financial hardships, I’d bet those numbers are much higher now.

If you drop any auto insurance coverage, make it collision or comprehensive, which repair or replace your vehicle if it’s damaged or stolen (after paying your deductible). Reducing or eliminating these coverages could make sense if your car isn’t worth much, such as less than $1,000. A good rule of thumb is to drop these coverages if their annual cost is 10% or more of your car’s cash value.

Another way to save on auto insurance is to increase your deductibles or bundle it with other coverage, such as your home or renters policy.

4. Not purchasing a non-owners auto insurance policy

If you’ve sold your car or you tend to borrow or rent cars when needed, don’t forget that you still need the protection of a non-owner auto insurance policy. This coverage gives you liability protection when you drive a car you don’t own or are a passenger in someone else’s car.

Here are some situations when you need non-owner car insurance:

  • You rent a car and don’t already have insurance on a vehicle you own.
  • You use ride-sharing services, such as Uber and Lyft.
  • You borrow cars from family, friends, or neighbors for short or long trips.

5. Overlooking a renters insurance policy

According to the III, a surprisingly low number of renters, 35 percent have renters insurance. Whether you mistakenly believe that your landlord is responsible for your personal belongings (they’re not) or that you don’t have enough to insure (you probably do), you should have a policy.

Landlords only have insurance to protect the structure of a home or apartment you rent, not for a tenant’s personal property. Nor do they protect your liability if someone gets injured accidentally injured in your rental place.

Landlords only have insurance to protect the structure of a home or apartment you rent, not for a tenant’s personal property. Nor do they protect your liability if someone gets injured accidentally injured in your rental place.

Standard renters insurance offers a lot more protection than many people think. It covers your possessions if they’re stolen or damaged from a covered event, such as a water leak, fire, or natural disaster. A renters policy also pays living expenses if you have to move out while repairs get made after an insured disaster, such as a tornado or fire.

Even more important is the liability protection I mentioned. If you get involved in a lawsuit related to property damage or medical injuries, you’ll be covered up to your policy limit.

Renters insurance gives you a lot of protection for the money. It’s probably more affordable than you might think, costing only an average of $188 per year across the nation. Bundling it with your auto insurance could even reduce the cost.

6. Working from home without commercial coverage

Due to stay-at-home mandates during the pandemic, most people who can work from home are doing so. If you’re self-employed as a solopreneur or operate a small business from home, be aware that your home or renters insurance excludes most home-based business activities.

For instance, if you keep inventory at home or have special business equipment, they aren’t covered under a standard homeowner or renter policy. Make sure your business assets and liability are protected by having a separate commercial policy or adding a home-business rider or endorsement to your existing insurance.

The type of business coverage you need varies depending on your industry, whether you drive for business purposes, if you see clients at your home, the value of your business assets, and how much potential risk you have. But it could cost as little as $150 per year. Check with your existing insurance company or a trade association for your industry about getting coverage.

RELATED: How to Qualify for the Coronavirus Economic Relief Package

7. Thinking you can’t get life insurance

It’s not fun to think about death or what would happen to your family if you weren’t alive. If your surviving spouse, partner, children, parents, other dependents, or business partners would be hurt financially after your death, you need life insurance to protect them.

Think about how your survivors would care for your children and meet financial obligations without additional income. Consider how your children would survive if you and your spouse or partner died at the same time. If you’re procrastinating getting life insurance or increasing your current coverage, think about the legacy you want to leave.

The good news is that term life insurance is affordable and still readily available during the pandemic. For example, a $500,000 payout for your family could cost about $200 a year if you’re middle-aged and reasonably good health. Bankrate.com is a good site to learn more and get free life insurance quotes.

5 Ways to Leave a Legacy With Your Life Insurance

Ask someone if they want to leave a legacy after they’re gone, and they’ll almost assuredly answer yes. Ask someone if they know how to go about accomplishing such a benevolent task, and they’ll probably say, “I have no idea.” You might be surprised to learn there’s a simple solution: your life insurance policy. The… Read More

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5 Investing Strategies That Can Harm Your Portfolio

If you’re educating yourself on how to invest your money for the first time, books such as Thinking, Fast and Slow, The Little Book of Behavioral Investing, and Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism may already be on your reading list. But you shouldn't stop there. Many investors are surprised to learn that building wealth isn’t based purely on graphs and facts you can learn from books. In fact, psychology plays a huge role in the process. Cognitive psychology shows that the ways we manage our money has a lot to do with fear, excitement, greed, and personal biases. 

We often imagine that investors are always rational and make consistent decisions based on new information. However, statistics show that only 20% of individual investors and 30% of institutional investors act rationally. In real life, investors are closer to behavioral finance, which means that they’re influenced by personal beliefs, impulses, and emotions. Even if you did your homework and researched the best investment strategies, emotional behaviors might prevent you from applying them correctly, so it's important to know some of the types of irrational behaviors that can sabotage you.

Five types of irrational behavior that can sabotage your investment portfolio are:

  1. Overconfidence
  2. Loss aversion
  3. Familiarity bias
  4. Framing
  5. Anchoring

1. Overconfidence, or the irrational exuberance trap

Studies have shown that people generally believe they are better than average, even when that’s not the case. After a series of successful investments, it's common for investors to assume they have it all figured out. But in reality, it takes years to become an experienced investor, and even the best investors make mistakes.

After the excitement of the first successful investment, it’s easy to become overconfident in your abilities and forget that chance plays a major role in the financial market. One of the most important lessons in investing is that you can never know too much, so no matter what your financial situation is, manage your portfolio prudently.

2. Loss aversion

The more you invest, the more you realize that loss is inevitable. After all, the higher the risk, the higher the reward. But while many investors accept risk in theory, they aren’t ready to deal with loss. This is called loss aversion, and it can prevent you from making a profit. According to researchers, investors experience the pain of a loss twice as strongly as a success, and they’ll do whatever they can to avoid it. As a result, when they notice that an investment is losing them money, whether that investment is a house, stock, or currency, they hold on to it for as long as possible to avoid the sense of finality of the loss. But that can turn out to be a huge mistake and end up losing you more money in the long run.

There are other, more effective ways to limit losses. For example, if you’re trading Forex, you can try copy trading, where live trading results are openly published online, and you can copy the actions of more experienced traders. Or if you’re trading stocks, you can simply set a stop-loss order. This is designed to limit your loss on a security position and make you sell the stock if it drops below a certain value. Of course, there will always be cases when a stock rebounds after an initial drop, but especially as a new trader, it’s wiser to protect your portfolio proactively.

3. Familiarity bias

Although diversification is a surefire way to minimize the risk of loss, gain more return opportunities, and safeguard your portfolio against the volatility of the market, research shows that investors tend to stick to assets they know and are comfortable with. This is called a familiarity bias, and it can be detrimental to your portfolio.

One study has shown that beginner investors in particular stick to domestic stocks, such as large telecom companies or factories in their area, without realizing that these businesses may be sinking. Or even worse, people invest only in their employer’s stock, and when that employer goes out of business, they lose both their job and their profit.

Diversifying can be a bit uncomfortable at first since it means researching stocks out of your comfort zone, but overcoming your familiarity bias is important if you want to protect your portfolio. Don’t put all your eggs in the same basket. Instead, cast a wide net when choosing investments.

4. Framing

The ability to put things into perspective and estimate the impact that events will have in the long run is crucial in trading. However, this ability takes years to develop. When you're new to investing, you’re much more likely to inadvertently practice framing – a cognitive error where you have a narrow-minded approach and evaluate investments in isolation rather than as a cohesive whole.

According to Harry Markowitz’s modern portfolio theory, the assets in your portfolio shouldn’t stand alone. Instead, you should consider how they fit into your general portfolio and, when necessary, readjust the portfolio to reflect the new reality of the market. Cryptocurrency is a perfect example of framing. People who bought Bitcoin in its early days and held onto it are probably very happy, but if they didn’t invest in anything else in the meantime, their portfolio consists entirely of crypto now, and that’s a risky move.

5. Anchoring, or the confirmation trap

The confirmation trap, also known as anchoring or “the house money effect,” occurs when an investor relies relentlessly on a single investment, simply because it worked out well once. Another example of anchoring is when someone takes information from only one source because they were right the first time. But as any experienced investor will tell you, one positive experience is not a guarantee of future success. While learning from the past can sometimes help you understand future numbers, it can also prevent you from making fresh choices based on more relevant insights. To prevent anchoring from limiting your options, always try to view an investment opportunity from different perspectives, stay open-minded, and talk to several consultants before making a decision.

6 Ways to Summer-Proof Your Home

Not only are we living through a global pandemic, but we’re also living through what is one of the hottest summers in many states. Here’s how you can protect your home from the summer heat and other woes you may face this season.

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