Investments: To Bulk Up or Slim Down?

Investing money is understandably scary. It’s like joining a new gym and worrying whether all the money spent on startup fees and registration will really pay off. Here is a guide to investments based on where you are in your journey towards financial fitness:

If you're in your 20s …
Some say to make your riskiest investments at this age because you have time to recover. Half of that is true, you wouldn’t jump off a bridge because you are young and in shape would you? Invest in solid stocks because even with a lower return, you still have time to reach your financial goals. As you invest, don't ignore your debt. Paying off a credit card that charges 25% is the rough equivalent of earning 25% on your investments.

If you're in your 30s …

Prioritize retirement savings - Don’t let fear keep you from contributing to your retirement accounts. Even baby steps can run a marathon.

Protect yourself from unemployment - Keep enough cash to hold you over for six months.

Try playing with 401(k) contributions - If the market has you nervous, try moving 30% of it into the safer money market options.

If you're in your 40s …
These are your prime earning years. That means you should be stuffing as much as possible in your retirement savings plan, even if it means cutting back on spending. When it comes to stocks, stay diversified. A diversified portfolio has a good mix of stocks and bonds, and also contains some real estate and precious metals. Just like a diversified diet exposes you to all different kinds of nutrients, this will keep you exposed to high earning areas.
How has the market been for you lately? Tell us on the investment board in the forums.

The mint makes it first, it’s up to you to make it last!
-Jainie-

Flex That Fico!

The key to getting the most results the fastest from your workout is targeting the right muscle groups. Have you been targeting your FICO to build your financial fitness? Your FICO score (credit score) is your muscle in the financial fitness world. In this blog, let’s talk about how to target the right areas specifically your FICO score. Here are your target areas regarding your FICO:

1. Payment history- 35 percent of your FICO is based on history, making the repayment of past debt the most important factor in calculating credit scores. According to FICO, past long-term behavior is used to forecast future long-term behavior.
   


2. Debt amounts- 30 percent is based on total outstanding debt. Credit cards count the most in this category.
   


3. Length of credit history- 15 percent is based on how long each account has been open and how recently the account's most recent action occurred.
   


4. New credit and credit mix- 10 percent is based on each. FICO suggests that borrowers only take on additional credit when they must have it or when it makes sense financially. Credit mix is simply having different forms of credit on your credit report such as mortgage, auto loans, credit cards, unsecured lines of credit, etc…

Paying with cash needs to be the first choice when it comes to building a tradition of financially fit choices, but sometimes that’s just not an option. Knowing the ins and outs of your credit score will help in making better credit and financial choices. In the words of Francis Bacon, “knowledge is power.” So now FLEX that FICO!

The mint makes the money first, it’s up to you to make it last!

-Jainie-

Getting Fit Basics - Paying Yourself First

Just like strength training is the first step to a healthier you, "Paying Yourself First (PYF)" needs to be your first step in getting financially fit. This month's video fit tip gives you one technique to start this financially fit tradition, but the 5 steps below are like your PYF circuit training.

1. Isolate Savings - Separating your savings is a great way to focus on your goals. Create different accounts for paying yourself first, getting that new TV, kids college fund, or even a new car. Isolating your goals shows the real impact of your savings.




2. Calculate Monthly Expenses - Knowing what you spend may lead to saving. Seeing the real cost of your "daily cup of coffee" over a month may suprise you. If you find a place to make savings, you could add those funds to one of your goal savings account.




3. Pass It On - You modeling the PYF habit is vital for kids. They practicing it for themselves turns an idea into a movement. Use money earned for chores or their allowance and let them save for their own goals. Insist they pay themselves first to create their own healthy financially fit habit. Remember: kids are more visual so creating a chart or an online visual aid may help.
   



4. Get Interested in Interest - Make your savings work for you. Find an account, such as a CD or Money Market which pays you every month. Be sure to do your homework as every account's options are different. Even kids can get in on the fun. For example, Texas Trust Credit Union has a smart start CD for kids under 18 with a minimum balance of $100.




5. Set Up Automatic Deposits - You can gain without pain. Have some of your check deposited straight into your savings. Since you don't see it, you won't even notice. Then, honor your own word and stick to a regular PYF plan. It is just like your exercise routine. You're the one who knows if you cheated or not. Just think of me as your personal financial trainer.

Stick to your circuit training, and you will build your financial fitness every month.

Need a word of encouragement or have a great story? Stop by our forums. Share your successes and tips on building a financially fit family. Together, we can start a movement.

The mint makes the money first, its up to us to make it last.
~Jainie~