Tis' The Season To Be Spending

The Holidays are here, and it’s a tough time for the fitness world. On one side, the mouths of many are watering at all the tasty family foods flying around. On the other, pressure to be a Holiday hero is running high. Here’s how to make it through this holiday season with your financial integrity intact.

Pay cashPost-Holiday interest charges are about as fun as weighing in after Thanksgiving. You can't have regrets in January if you limit your spending to money you actually have. The tab for unpaid credit card balances in the U.S. is $690 billion. 

PrioritizeIt takes a plan to make it through this season unscathed physically and financially. Here's a three-step strategy: Set a spending limit, stick to a firm list of recipients and most important, no wavering from steps 1 and 2.

Spending Limit Rules:

·         No dipping into savings (unless it was designated for Christmas)

·         No cheating by not making your Roth IRA deposit this month

·         No skipping the kid's 529 College savings contribution

Don't get playedRetailers know we are suckers for anything that seems like a deal. Instead of offering a $50 sweater for $50, they advertise that the sweater was $75 but they are going to let you steal it from them for $50.

Maintaining financial fitness through the Holiday season isn’t just about feeling guilt free in January. When we stick to the budget, we remove layers of stress and panic. And that makes us happier and more present for those we love. I hope you all have a wonderful time with your families this Holiday season.

The Mint Makes It First, It’s up To You to Make It Last

-Jainie-

Why You Shouldn’t Tap Your Roth IRA

In times of financial hardship it can become easy to look for the quickest way out. Making a withdraw from a savings account such as a Roth IRA can seem like a quick fix for a pesky high interest debt. However, the long term effects can come back to bite you. Here are some reasons you should give it a second thought before touching your IRA:

You might have to pay a penalty if you withdraw from a Roth IRA. A distribution is only qualified if you withdraw on or after the date you reach the age of 59 ½; if the withdrawal is made because you become disabled according to the IRS; if the withdrawal is used toward the purchase of a first home; or if the withdrawal is left to your beneficiary in your will. The withdrawal of earnings must also be made five tax years or more after your first contribution.

A distribution that is not qualified will be subject to a ten percent additional tax penalty. The larger the distribution the more this is going to hurt.

You diminish the power of compounding interest if you withdraw from a Roth IRA. Even if your distribution is qualified, you will have a smaller balance after you withdraw. This means earning less interest, diminishing your returns over time.

You might be unprepared for retirement if you withdraw from a Roth IRA.A Roth IRA is designed to help you pay for your living expenses when you can no longer work. Withdrawing money from it today may leave you with less money decades from now, increasing the odds of being short on cash when you retire.

Financial problems can happen to anyone. Speaking with a financial advisor or a Financial Service Officer at your local financial institution can be a great way to get advice. If you have questions about your own finances, head over to the forums. You can get free advice from experts in the field, and start the tradition of financial fitness in your own home today.

The Mint Makes It First, It’s up To You to Make It Last

-Jainie-

Low Returns: Why You Should Save

With interest rates at an all-time low, meaning that borrowing money is cheaper than ever, it’s hard to see the benefit of saving. In fitness when you exercise you don’t expect to see the benefits immediately; financial fitness is the same way. It’s all about average returns over a period of time.

How Interest Rates Work

Right now, finding a savings account that yields more than a 1% return is tough. However, finding an auto loan below 2% is fairly easy. When it’s cheap to lend out money, it doesn’t pay much to keep it. People forget that the rule is also reversed because when savings accounts yield 8%, loans have much higher interest. Your best bet is to save all you can now by taking advantage of the low cost of lending so that when the rates rise, you are ahead of the game.

Saving Versus Investing

If you’re looking to maximize returns, a savings account isn’t the best place to park any funds you don’t need to withdraw in the near future. If you’re looking to earn more on your money, consider an index fund, mutual fund, or even a well-tended stock portfolio. Remember that placing your money in the market is a give and take. You could earn higher dividends even in the current market, but you could also lose it if the market takes a dive.

The Key to Better Returns

The key for investors and savers is not to worry so much about what the rate is right now, but to set up a habit of saving consistently and keeping that money invested.

Consistency forms habit and habit forms tradition. Share your tips on the forum about the steps you take to ensure a financially fit family!