• Budgeting

    Budgeting: 5 Tips & Tricks to Make the Budget Stick

    Have you ever spent an obscene amount of time researching and crafting the perfect budget, only to give up on it a week later like a poorly executed diet plan? Do you find yourself trying to stick to your budget but your inner Donna Meagle just won’t let you?

    If the answer is yes, you’re not alone! Only about a third of Americans actually make and maintain a budget (Yikes!). Being a college student newly introduced to the world of ‘adulting,’ I have tried countless methods in an attempt to set myself financially free. Here are some tips and tricks that have made my life easier (and hopefully yours, too).

    • Find an app or budgeting system that works for you.

    Mint and EveryDollar are great apps that allow you to budget and track your expenses. BUT, in case you want more options, Buzzfeed has already found, rated, and summarized 17 other apps to help you stay accountable. Other ways you can budget include Excel Spreadsheets, good old fashion pen and paper on templates like this template, journals, whiteboards, and more. You’ll want to make your budget before the month starts and adapt the budget to each month. Whether you’re picking up a side hustle in summer time or celebrating birthdays, you’ll need to account for everything! At the end of each month, see where you overspent and try to improve your budget for the next month ahead.

    • Get a calendar, find a place to hang it where you’ll see it, and fill in the boxes.

    Add your bills, the due dates, pricier events like birthdays, etc. to help you organize your expenses. It takes some time, but it’s totally worth it! If you have a fluctuating income, you could even add your day-to-day earnings on the calendar. This will help you visualize your month ahead and show you how much you need to have in your account by the next bill. Not to mention the satisfaction you’ll have when you get to cross out that bill for the month! If you want a more private alternative to this, create events with this information in your phone’s calendar and set reminders for yourself.

    • If you can, try to pay cash!

    I’m not suggesting you carry your entire life savings on you but try to keep only what you budgeted to spend for the day. This will force you to stay on target, and you won’t have to deal with credit card interests if you use cash! People tend to spend more money when they use a debit or credit card compared to when they use cash. With cash, you can look directly at what you have left and adjust your spending habits accordingly.

    Another reason why paying with cash can be helpful is all the loose change you’ll accumulate! You can keep these coins to yourself and cash them in at a later time for cash, or gift cards if you want to avoid fees. If you choose the cash option, you can turn that coin fund into an extra savings fund for your personal goals. You’ll be surprised how quickly coins add up.

    • Find a way to organize your cash.

    Some people like Dave Ramsey’s method of using envelops, but that’s not the only way. Another easy way to organize cash is by purchasing a hanging shoe organizer and put labels on each pocket with different budget categories such as groceries, gas, rent, clothing, etc. You could hang this in your closet, your office, or anywhere you feel would be safe. This cash should be for short-term purchases, not for your emergency fund or savings goals. For that money, I recommend a safe savings account. You can find a good savings account here.

    • Lastly, don’t be afraid to say no.

    In the beginning, budgeting will be difficult because you’ll have to tell yourself no more often—especially compared to your friends that don’t budget. Does this mean you have stay home all day and watch re-runs of the Office instead of hanging out with your friends?

    Of course not! There are plenty of free-to-low-cost ways to have fun. If you’re running low on your recreational fund, try some of these. Not only will this help you stay on track, but it will challenge you to do something different. Also, saying no lets you say yes later. Instead of spending money on late night trips to Taco Bell, you can put that money towards a short-term savings goal like a road trip!

    These tips have made me perfect my budgeting habits, and they may help you conquer the budget! If you need more ideas, Pinterest and Google will be your best friends. Just remember that the hardest part about budgeting is keeping yourself accountable and accepting that you’ll make mistakes. You will fail. You will adapt. You will overcome. Be patient and find a system that works for you. Your current self and future self will thank you!

    Article Contributed By: Kianna Dalton

    Contact Us: facethefearfw@gmail.com

  • The Market: 101

    Compound Interest: How To Earn $ On Your Money

    Have you ever had a terrible day that just seemed to keep getting worse? You didn’t hear your alarm go off, so you woke up 20 minutes late. When you jumped out of bed in a panic, you stubbed your toe on the nightstand (who put that there?!). At least you still had time to make yourself a fresh, steaming-hot cup of coffee! Unfortunately, on your way to work, an idiot cut you off in traffic and that steaming-hot cup of coffee flew out of your hand and on to your favorite white shirt.

    Nice. Huffing and puffing, you barely make it into the office when a coworker stops you and says, “Are you ready for your presentation in the meeting this morning?” (Oh, sh*t. I thought that meeting was tomorrow!) Later on, you realized that you packed a can of cat food instead of chicken salad for your lunch (ew), gave your crush a fist bump in return to a high-five (awkward), dropped a stack of important documents everywhere, and ripped your pants when you bent down to pick them up (tragic). It’s 4:58pm. You’ve almost made it through the day (thank goodness), but you decide to send one last email before you head home. You need to send your coworker, Danielle, a spreadsheet she requested, and decide to mention how annoying your boss has been lately. Sent! Then your heart stops. That email didn’t go to Danielle. It went to Daniel…your boss.

    We’ve all had one of those days. But, what makes a day like this so bad? It’s not because just one little thing went wrong. Oh no. It’s because one bad experience seemed to lead to another, which led to another and another, compounding into a terrible day overall.

    While this example of a bad day demonstrates how compounding can work against you, compounding interest is a financial tool that can actually work for you in a very positive way, even on a crappy day. Holla!

    First of all, what is compound interest? Compound interest is a basic financial concept where interest is not only calculated on your initial investment (simple interest), but is calculated on your initial investment PLUS any interest you have earned previously. Your money is earning money on its money.

    *Mind blowing, I know*

    Let’s break it down:

    Say you put $1,000 into an account that is earning 5% simple interest for 10 years. At the end of the 10 years, you would have a total of $1,500. ($1,000 x .05 = $50 x 10 Years = $500). However, let’s also say that you put $1,000 into an account that is earning 5% compound interest for 10 years. In this case, at the end of 10 years, you would have a total of $1,628.89. How did you end up with more money using compounding interest vs. simple interest? Let’s break it down even further:

    For the DIY-ers out there, here’s the formula used to calculate compound interest:

    P [(1 + i)n – 1]

    P= Principal (Original Investment)

    i = Annual Interest

    n = Number of Compounding Periods

    So, to plug in the numbers from above:

    $1,000 [(1 + .05)10 – 1] = $628.89

    And here’s a comparison between simple and compound interest over time:

    If you’re like me, you probably just glazed over that last section like a Krispy Kreme donut. (I donut blame you). So, we see how the numbers work. Why does it matter?

    Compound interest could be the single most important factor either making or breaking your bank account over time. You could either be using compounding interest to your advantage by putting funds into a retirement or investment account and allowing it to compound (grow) more quickly over time. Or, compounding interest could be your worst nightmare if you’ve got high interest credit card or student loan debt, which would compound just as quickly, but in the wrong direction. (Yikes!)

    As we can see in the chart above, compounding interest produces a greater return (grows faster) than simple interest over the same period of time. And the key word here is TIME. The concept of compounding interest is pretty spectacular on its own. However, without the crucial ingredient of time (no, not thyme, sorry G’ma), your compound interest will produce very bland results. The longer you wait to withdrawal any of your funds, the more powerful – and flavorful – the compounding effect will be. (Can you tell I’m hungry? Did someone say pizza??)

    If you put $1,000 in a retirement account that grows through compounding interest, congratulations! You’re #winning at this game of life. But, if you become impatient and decide to take out $10 here or $20 there, you’ll quickly undermine all the positive benefits of compounding, while likely getting slapped with some hefty tax penalties as well (if you’re under 59 ½). Ouch – Game Over.

    If you’re someone who struggles with delayed gratification (aka ME), here’s a life hack to make you think twice about taking money out of your compounding accounts. It’s called the Rule of 72, and it’s a fast calculation to show how quickly your money can double inside a compounding account (without taking withdrawals – no touchy).

    Simply divide 72 by the annual interest percentage to see how many years it will take for your money to double. For example, if you’re earning an average of 8% annually in an investment account, your money will double in 9 years (72 / 8 = 9). You put in $1,000 today and you’ll have $2,000 in 9 years. Cha-ching! Obviously, the more money you can invest early on, and the longer you can let it grow, the better your outcome will be.

    This is exactly why the best time to start saving is today. Like, NOW. (Actually, the best time to start saving was yesterday…but there’s no time like the present!)
    If you want to see for yourself how compound interest works, check out this, this, and this. You’re welcome.

    Written By: Kaitlyn Duchien

    Contact Us: facethefearfw@gmail.com

  • Insurance

    Disability Insurance: The Base of Your Life Event Planning Strategy

    It’s reported that 40% of millennials would buy this product if they knew about it. No, it’s not the newest iPhone or even the latest Yeezy’s. It’s disability income insurance. Easily considered one of the most important insurance products available to your life event planning financial strategy. Trust me, I know what you are thinking. *Oh, great… another insurance policy that I need to buy but I’d probably be fine without.*


    I’ll tell you right now, you aren’t fine without it.

    Now what exactly is disability income insurance? Disability insurance is the foundation to all financial plans, as it protects and typically replaces about 60% your income in the event of an injury or an illness that prevents you from being able to work at your job and collect a paycheck. There are a two main types of disability insurance; Long Term and Short Term. Both are offered either on an individual basis or group basis offered through an employer. People insure their homes, cars and personal property yet they fail to insure the one thing that makes all of that a reality: their income! Here are some facts that might surprise you:

    • 1 in 4 Twenty-Year Old’s will have a disability event before they retire.
    • Most disability events last an average of 31.6 months.
    • More than 67% of Millennials have less than $1,000 in their savings account to cover any kind of emergency.

    Surprised? I know I was when I heard those statistics. Now with those numbers in front of you, you can easily see how a savings account with less than $1,000 wouldn’t sustain your Starbucks addiction, let alone pay your rent, car payment, or student loans for an extended period when dealing with an injury or illness that prevents you from working and collecting a paycheck.

    Many Millennials have a difficult enough time paying bills on time and not paying those bills with a credit card. Now imagine how a disability event could amplify your already difficult financial situation.

    While many employers do offer group disability insurance, those policies will only cover a portion of the income you typically receive as they are capped at certain benefit amounts, usually around 60% with a strict capped dollar amount. Some employers have disability insurance that you can elect in or out of, while other employers automatically include this coverage in their benefit package and is typically employer paid. Disability insurance on an individual basis tends to be much stronger and is built around your unique parameters, such as age, occupation, annual income, and medical history. As stated previously, the typical replacement of your income is around 60%, as insurance providers need to give you some incentive to return to work when healthy and able to do so. With that said, there is also the option of supplementing your group disability coverage with an individual policy to get the income replacement percentage past 60%, but keep in mind your income will never be 100% fully replaced through a disability income insurance policy.

    An individual disability insurance policy can be tailored around your specific financial needs. The typical design of a disability insurance policy includes an elimination period, along with a benefit period, and a specified definition of disability that determines how the insurance carrier considers you disabled. The elimination period is the beginning period of a disability claim that must be satisfied before disability benefits can be paid out on a claim, typically 90 days. Once that elimination period has been satisfied, the specified benefit amount (income) would be paid out for however long you are deemed disabled, which is determined by the definition of disability outlined in the policy. Or, if you were permanently disabled, the specified benefit amount (income) would pay out for the whole benefit period, which can range between 2 years and all the way to age 67 (Long Term Disability Insurance). There are several different definitions of disability available to disability insurance policies and the need for each is determined by a couple of different factors. The 3 main definitions of disability include: a not-engaged definition, a reasonable definition and a true/pure own occupation definition. Depending on your doctor’s prognosis of the disability and treatment plan, these definitions of disability are the determining factors that will either pay out a monthly disability benefit…or not.

    To sum it all up, you should be protecting your income, the thing that makes life happen! Obtaining disability income insurance on an individual basis is quite easy. Get in contact with a licensed financial professional and start the conversation by stating you would like disability income insurance to set the foundation of your life event planning financial strategy!

    Article Contributed By: Cameron Hull

    Contact Us: facethefearfw@gmail.com

  • Real Estate,  Videos

    First Time Home Buyer? What You NEED To Know!

    This week, the DeVisser Real Estate Group is our special guest on Face The Fear! Brendin DeVisser, a Millennial real estate agent, answers some of your most common questions about the home-buying process. Don’t forget to like, subscribe, and leave a comment! The DeVisser Group with Five Star Lakeshore is a hardworking team of real estate agents in West Michigan who work hard to inform and educate people on the home buying process, especially when it’s their first time buying a home! From credit scores to pre-approval, we can help you better understand these big transactions that can change your life. With helpful guidance and preparation, you’re on your way to owning your own property! If you have any questions, you can find us on social media (links below) or give us a call!

    DeVisser Group:

    Website: http://brendin.seewestmichiganhomes.com

    Facebook: https://www.facebook.com/brendinfives…

    Instagram: https://www.instagram.com/bd5starreal…

    Twitter: https://twitter.com/bdevissfivestar?l…

    LinkedIn: https://www.linkedin.com/in/brendin-d…

    Snapchat: @bdvrealestate

  • Real Estate

    First Time Home Buyer? What You NEED To Know!

    Feel free to watch the video here!

    Hey guys! For those of you who don’t know me, I’m Brendin DeVisser, a real estate agent in West Michigan! I’m 25 and I’m the founder of The DeVisser Group with Five Star Lakeshore which consists of other real estate agents and my marketer.

    My goal here is to quickly and simply, help you through the process of buying your first home! I know it can sound intimidating and stressful, however, if you surround yourself with professionals you can trust, that stress and intimidation will disappear

    I was 19 when I first invested in real estate. Crazy right? Was I scared? Nah. I’m a big tough man and I can handle all this stressful money stuff. I’m kidding. Of course, I was scared!I was putting a lot of money into something that would eventually be mine, but right now felt like it was burning a hole in my wallet. However, with the right guidance from experts I trusted, I was able to purchase a duplex, rent it out and start paying it off. 

    You’re buying your first home, or you’re thinking about it. Well, now is the time to do it! The real estate market is still hot but it won’t be forever. Interest rates will rise and so will the prices of homes. 

    So, where do you start? 

    You contact someone like us. A real estate team you can trust to guide you and prepare you for what is ahead. If they’re anything like us, they will be there to answer any questions you have, anytime. You want to prevent as many conflicts from arising as possible and that is the agent’s job. 

    They can refer you to a bank or lender they rely on to check your credit score to see if you’re capable of getting a loan and eventually approval to buy a home. 

    What’s a credit score?

    Ahh, the dreaded credit score. If you’re afraid of it, it’s for one of three reasons.

    1. You don’t know what it is, therefore you’re afraid of the unknown. 
    2. You don’t have one.
    3. You have a bad one.

     First of all, what is a credit score?

    Simply put, a credit score is something you receive and earn by making a payment on time and for a period of time. (Examples: Phone, car, rent etc.)

    Secondly, how do I improve my credit score?

    • Increase your points by paying in full and on time
    • 850 is a perfect score 
    • Earning a perfect score gives you the best possible interest rate for purchasing your home 
    • Accomplishing this proves to a lender/bank you’re responsible
    • If you have zero credit it will be very difficult in most instances to get an approved loan for a home
    • This process is similar to a car loan if you’ve had one, but we are generally talking a bigger loan, which means more requirements. 
    • Consistent payments for at least 6 months is what lenders are looking for

    Keeping this up and being responsible with your money and payments will offer an easier time buying a home later on.

    Do you have to be Pre-Approved to buy a home?

    Yes, unless you’re paying in cash. 

    The preapproval letter tells us you are ready to buy a home

    To Rent or to Buy? 

    This is the question I get all the time.

    If you plan on staying where you are for a short period of time, renting could be your best option. However, if you plan on settling down in the area for several years, investing in a home, in my opinion, is the best way to go. Then you can add equity (or real property value) instead of paying rent for something you don’t (and won’t) own.

     It’s different for everyone, so make sure you’re talking to a professional you trust to figure out what’s best for you and your situation!

    Some Challenges I Ran Into Buying My First Home

    As I mentioned before, I was 19 when I first bought my duplex. I was taught to use cash for everything so, if you were paying attention, you know what that means. My credit score was NOT perfect, which made it difficult to take out a loan and buy my first home. Learn from my uneducated 19-year-old self and start working on that credit score! Find people you trust and search for a worthy investment!

    These simple steps are crucial as a first time home buyer! I hope this was helpful and if you have any questions feel free to contact us. You can find us on almost every social media platform to learn more about real estate.

    Article Contributed By: Brendin DeVisser

    DeVisser Group:
    Website: http://brendin.seewestmichiganhomes.com
    Facebook: https://www.facebook.com/brendinfivestarealestate/?ref=settings
    Instagram: https://www.instagram.com/bd5starrealtor/
    Twitter: https://twitter.com/bdevissfivestar?lang=en
    LinkedIn: https://www.linkedin.com/in/brendin-devisser-877a09118/
    Snapchat: @bdvrealestate

  • Podcast

    Face The Fear Podcast – Randy Kitzmiller, Social Security

    In this episode, we sit down with Randy Kitzmiller, Social Security Advisor and Retirement Income Consultant, to discuss the basics of Social Security: what it is, how it works, and how it may change in the future. (SPOILER ALERT: It’s not going away! *Phew*) Join us as we dive into Social Security and how it will affect Millennials’ retirement in the future.

    Here are the links Randy mentioned in the podcast:

    Social Security Website: https://www.ssa.gov

    National Social Security Advisers Website: https://www.nationalsocialsecurityassociation.comFace The Fear Website: https://www.facethefearfw.com

    Contact Us: facethefearfw@gmail.com

    Don’t forget to subscribe and leave a review! XOXO

  • Insurance,  Retirement Planning

    The Bills and The Fees: How to Talk to Your Parents About Money (Without Making It Awkward)

    If the thought of talking to your parents about money makes you cringe, you’re not alone. In fact, the majority of Americans would rather talk about “the birds and the bees” than “the bills and the fees” of finances with their own family. When given the choice, we would prefer to talk about our own DEATH than asking our parents about their will or estate. (Now, that is just ridiculous). There’s no question that money is a taboo topic that makes you want to run 100 mph in the other direction anytime you hear the words “budget” or “debt.”

    But, why is it so uncomfortable to talk about cash money with our family? And does it even really matter? After all, you’ve made it this far without diving into the depths of financial awkwardness with your parents. What’s the worst that could happen?

    Well, here’s a few stats for ya:

    • 52% of people turning 65 will need some form of Long-Term Care
    • 64% of people with Long-Term Care needs rely exclusively on friends and family for care
    • 25% of all caregivers are Millennials
    • Average annual cost of caregiving ranges from $18,000 (Adult Day Care) to $91,00 (Private Room in Nursing Home)
    • 55% of Americans have no will or plan to transfer assets at death
    • Only 35% of Baby Boomers are confident that they are financially prepared for retirement

    To summarize these lovely statistics: the odds that your parents may eventually require some form of Long-Term Care (assisted living, nursing home, etc.) during their lifetime is 1 in 2 (a coin flip). The chances that you will need to help pay for some of these costs are also quite high, especially if your parents don’t have any kind of long-term care insurance coverage or other savings in place. AND, if your parents are in the minority of those who have already established a will, congratulations! But, even if they do have a will, are you sure it’s up-to-date? You’d hate for your mother’s ex-husband’s cousin’s half-brother to end up inheriting money that was meant for you, right?

    (Yikes, talk about awkward!)

    With that said, yes. Having a conversation about finances with your parents is obviously very important. So, what are you waiting for?? Go ahead and throw those taboos to the wind and dive right in! OK, easier said than done, right? Let’s look at three simple conversation starters that will make the money talk a little less awko-taco.

    1. You’ve taken good care of me, so I want to take good care of you.

    When I was visiting my parents over the holidays, I asked them if we could set aside some time to talk about money. Specifically, I wanted my parents to know that, if anything should ever happen to them, I would be adequately prepared take care of them and their finances. Just as my parents have spent years caring for me and preparing me for my future, I want to be able to return the love by taking care of them when the need arises. We discussed what kinds of insurance policies, investments, and savings they have in place, where they keep financial records, and who they use as a trusted financial advisor. I didn’t ask to see any financial statements or specific policy information (because that’s usually where the awko-meter starts to rise) — only where this information is kept, so I know where to look if I need to access it at some point in the future. By emphasizing that my purpose behind the conversation was love and care for my parent’s wellbeing, we were able to talk open and honestly — without any hurt feelings or awkward outcomes.  

    YESSSSSSSS

    2. I’m interested in visiting a financial advisor, but I’m not sure where to start. Would you mind introducing me to yours?

    This is a win-win conversation starter. Not only does it provide you an opportunity to visit a financial advisor for the first time (without spending lots of money), but it also provides an ideal environment to discuss difficult financial topics with your parents. Their advisor can guide the conversation and act as a third-party mediator if needed. While meeting with the advisor, you may want to discuss your parent’s current retirement plan, including protection against long-term care events, and to review any beneficiaries on your parent’s insurance policies to ensure they are up-to-date. (You’d be shocked how often an ex-wife, ex-husband, or estranged family member ends up receiving a death benefit, simply because policy information was not current). AND, while you’re in the office, you might as well glean some insight from the advisor on your own financial plan. Most likely, the advisor will be more than willing to assist you, as they see you as a potential future client. (If the advisor doesn’t see your value, you may want to look for another advisor).

    Even if your parents don’t already have a trusted financial advisor, this is the perfect time to find a reputable professional together. It will be an opportunity to bond as a family, while also tackling your finances in an efficient and holistic manner.

    3. Do you have a legacy plan? AKA: If you die tomorrow, what kind of legacy to do you want to leave and how do you want it accomplished?

    Most people don’t like to think about dying until a death actually occurs. Can’t blame you. Death isn’t the first topic that comes to my mind when I think of “fun conversation starters.” BUT, the problem we create when we avoid talking about death is that we miss out on the opportunity to plan for a legacy — until it’s already too late. While your parents may want to leave their house behind to the family, donate their art collection to a local museum, and divide the rest of their assets equally among you and your siblings– if they don’t have these wishes expressly written in a will, they’re not likely to happen. When someone dies without a will (called intestate in legalese), your state will then determine how your assets should be dispersed. This could be okay, except that your state has no idea that you don’t even really like your spouse, you’re estranged from your son, and your daughter is a compulsive shopper who blows every penny she has on lottery tickets. But, the state doesn’t really care about your family issues. It will still divide up your assets among each of these individuals anyway. (Sorry ‘bout your luck).

    This is exactly why a will is important.

    Contrary to popular belief, establishing a will (and keeping it current) is not as much of a headache as many people think. For a simple estate (think: relatively small and not paying estate taxes), it may only cost around $100-$150 for an attorney to draft a will. (If you’re looking for a lawyer, start here). Or, you can also write your own will by using a reputable online software program or following a template. HOWEVER, if you complete your will on your own, you are doing so at your own risk, as each state has different regulations surrounding what is required to validate a will and, if done incorrectly, it may not hold up in court.

    I’ve only scratched the surface on the importance of writing a will (both you and your parents). And I haven’t even started to explain all of the incredible information that can be contained in a will, such as designating power of attorney or establishing a living trust. But, I realize I’ve already bored you to tears, so I’ll save these enthralling topics for a different time. (Psst: stay tuned for an upcoming Face The Fear Podcast episode on Estate Planning 101, coming soon!)

    In summary, you know you should probably strike up a conversation with your parents about money. It’s on your to-do list, right below “Clip grandma’s toenails” and “Watch paint dry.” At least now you’ve got a few conversation starters in your back pocket to break the ice. I promise, it won’t be as bad as you think. (Or, maybe it will be. In that case, I don’t know you). Either way, challenge yourself to start a conversation with your family about finances this week. Even simply cracking the door open today could provide fruitful opportunities for future discussions and prevent a flood of heartache, confusion, and financial strain later in life. Friend, it’s time to #FaceTheFear!

    Written By: Kaitlyn Duchien

    Contact Us: facethefearfw@gmail.com

  • Insurance

    Life Insurance: What Kind Is Best For Me?

    Welcome back! Hopefully you read my last article, where I discussed three reasons why considering life insurance should be a priority. If one of these reasons resonated with you, or you have one of your own, I want to give some thoughts as to the different types of life insurance. Broadly, there are two categories: term insurance and permanent insurance.

    Term insurance is simple – you pay an annual premium for the number of years in the term, and, other than a few exceptions, the insurance company will pay your beneficiary the death benefit if you were to die during the term of the policy. For example, I own a 20 year term policy, running from 2018 to 2038. If I were to die in 2030, my wife would receive the $1,000,000 death benefit, tax-free.

    Permanent insurance is a little more complex. Within the category of permanent insurance, there are several types, but we will focus on the two main “flavors.”

    First, there is “protection-based” permanent insurance. Protection-based permanent insurance is designed to provide a death benefit for your entire life. Instead of securing a death benefit for a 20 year period, this kind of policy can provide a death benefit to your beneficiary regardless of how long you live.

    Second, there is “accumulation-based” permanent insurance. It also has a death benefit, but is really designed to grow cash value within an account housed at the insurance company. A portion of the premium you pay goes to cover the cost of your death benefit, a portion goes to the insurance company’s operating expenses, and a portion goes into an account for you. As you pay premiums, the cash in the account grows. Depending on the strategy of distributions, you can leverage this cash value in tax-advantaged ways.

    So you are probably thinking…why wouldn’t I always buy permanent insurance over term, as it has much more benefit?

    You guessed it: permanent insurance is more (and can be much more) expensive than term insurance. But, most millennials are at a point in their financial journey where permanent insurance is not only too expensive, but is unnecessary. You are likely better off focusing on maximizing your contributions to tax-advantaged accounts like a 401(k) or IRA, but also securing term insurance to protect your finances. (And, if you remember from the last article, term insurance sometimes can be converted into permanent insurance!)

    Remember: the cheapest day to buy life insurance was yesterday. If you just need term coverage, you are in good company. If you can afford permanent coverage, that may be a better fit. Either way, make sure you are protecting the financial plan you work so hard to build.

    Want more information on life insurance? Let’s talk! Face The Fear is here to help millennials make smart financial decisions that fit their lifestyle.

    Article Contributed By: Xavier Serrani

    Contact Us: facethefearfw@gmail.com.

  • Budgeting,  Student Loans

    Student Loans: How I Managed the Madness

    The choice to go to college is a big commitment.  It’s a commitment to yourself and it’s a commitment to the payment that accompanies this hope for a successful life.  Some people are lucky enough to have the financial burden of a college education taken off their shoulders by parents, family members, sponsors, etc. And some people are extremely diligent, work incredibly hard, save up, and pay for college themselves.

    I, however, am neither of those people. I am with the group that I would assume is the majority: the unfortunate souls who had to take out student loans to attend college. Through my own personal experience, I have learned a few lessons on how to avoid some of the student loan burden before you jump into college, as well as how to alleviate some of that burden once you’ve crossed the stage with diploma in hand.

    My first tip comes from something that I did not do enough: Be involved in the process of applying for student loans. Do your research. Knowing what you are getting yourself into is half the battle in being prepared when your loans finally come due.  My mother was nice enough to walk through the loan application process with me. Although I was fortunate to have her assistance at the time, I still did not fully understand what I was getting myself into or how much time it would take to repay the loans after graduation.

    Let me give you a snapshot of what my college expenses entailed. I attended a lovely private university in my home state of New Jersey. Fortunately, I was a good student in high school and received $12,000 per year in scholarships. I also commuted an hour to the university each day to save money. But even with scholarships and without the cost of on-campus housing, the tuition still added up to approximately $30,000 a year. And that’s not even counting the cost of textbooks, which amounted to $500-$1,000 each semester!  So how was this all paid for?  We took out student loans; sometimes per year, sometimes per semester.

    All the loans that I took out were fixed rate as opposed to variable. I didn’t know much, but knew I wanted to have a set payment. (Fixed rate means you have the same interest rate for the life of the loan and variable means the interest rate can move around). I consider myself to be mostly conservative, especially when it comes to my debt; so, for me, fixed rates were the better choice. With a variable rate, you are subjecting yourself to the possibility of rates changing, potentially increasing or decreasing throughout the life of your loan. One option is not better than the other; it simply depends on your financial outlook and how you want your future payments to be structured.  

    Fast forward four years and I am a college graduate! Thankfully, right after graduation, you are not expected to pay your loans immediately. So, go out and live it up! Because in a few months, it’s about to get real! 

    No, please don’t do that.  Plan for your payments and prepare yourself for the abuse you are about to take.

    After I graduated and my student loans came due, it was the biggest slap of adulthood I had ever received.  I had about eight separate loans, all at varying interest rates, coming to a grand total of around $100,000.  My monthly payment totaled out to approximately $950. Combine this payment size with the fact that the first job offer I received out of college was $28,000 per year as a junior business analyst. $28,000. You can imagine how I felt: COOMPLETELY DOOMED!

    I took a step back to figure out what steps I could take to reduce the financial burden and the feelings of doom. First, having eight separate payments is a nightmare. Secondly, all the varying interest rates made some payments seem like a good deal while others seemed to be a rip-off.  Finally, the biggest issue was obvious: paying $950 a month while making $28,000 a year was not going to work. 

    The solution I discovered was to consolidate and refinance my loans with a longer payment period. Consolidation, simply put, allowed me to take all my separate smaller loans and combine them into one larger loan.  Refinancing student loans is just like refinancing a mortgage. In ideal circumstances, a new loan at a better rate will replace your existing loan, although this might not always be the case.

    A plethora of private companies and banks promote assistance with student loans, such as College Ave, Earnest, and SoFi. Many of these organizations allow you to fill out a free online application to determine if you “pre-qualify” for their services. When I began searching the internet for a solution, SoFi and Earnest offered the best interest rates to consolidate and refinance my loans. Here’s the catch: unless you are either making close to $100,000 a year (aka making BANK) or have an extremely solid cosigner (someone who loves you very much and is willing to put their name on your loan so the lender feels more comfortable), the qualifications to be accepted by these companies are quite high. However, through diligent searching and applying, I was able to consolidate and refinance my loans through Citizens Bank. While the process of finding the right company to assist with your specific situation may take time and effort, it is fairly easy and well worth the effort.

    Once I was approved by Citizens Bank, the final step was to choose the term of my new loan. Ultimately, that’s what the consolidation and refinancing process is all about: taking out a new loan to pay off your inconvenient, higher-rated current loans. Here’s the basic principle when selecting the term of a loan: the shorter the term of the loan, the less you will pay in total interest, but the higher the monthly payments will be. The longer the term, the more you will pay in interest, but your monthly payment will be lower over an extended time period. In my case, I chose the longest term possible. As much as I want to pay off my loans quickly, I also need to keep my everyday living expenses in mind.  Also, the loan that I chose allows me to pay early without penalty. So, if I can contribute more than my required payment, I will be able to pay the loan down more quickly. Even if this is a rare occurrence, it’s a nice feature to have. Not all loans allow this, so it is worth asking if this feature is available when refinancing your own.  

    Ultimately, the consolidation process brought my number of payments down from eight to one. The refinancing process reduced my interest rates to a more realistic average, and the longer maturity allowed me to pay a lower monthly payment. Although I did extend the amount of time I will be making payments, the cost of the payment is much more manageable for my current situation, and it addressed the problems I needed to fix. I know I am not the first or the last college grad to feel the wrath of student loans. But, being able to share my experiences, ideas, and relate to others is an important step in finding solutions. 

    Article Contributed By: Christian Boyle

    Contact Us: facethefearfw@gmail.com



  • Budgeting

    Budgeting: How to Crunch Those Numbers Like a Boss

    Like most folks who hear the term ‘budget’, I cringe, close my eyes and begin groaning inwardly like Tina Belcher from Bob’s Burgers (No? Just me? Oh geez…).

    In the past, I would search for budget templates online, attempt to follow them, realize they didn’t fit my tastes or my lifestyle and I would walk away defeated. I would wonder what was so wrong with my finances that I couldn’t match exactly what some of these articles were telling me.

    But that’s the uniquely wonderful (and yes, incredibly frustrating) thing about budgets: they aren’t black & white or one-size-fits-all; they can be tailor-made to fit your specific lifestyle, needs, and wants. I say ‘incredibly frustrating’ because it does take time and a fair amount of effort to find a budget that works for you—your wants and needs are going to change and with that, so will your budget.

    At the end of each paycheck, for me, there’s a sense of strength that comes from knowing where each of my dollars are going and knowing what I’m left with to play with however I choose. Full disclosure: that’s my favorite part about budgeting because I love seeing what money I have left over and let’s admit it, we all want to have fun with our money—after all, we work hard for it!

    I’ve been creating a budget for the past 6 years or so and I have found a few things to be invaluable in my attempt to understand and control where each of my hard-earned dollars are going:

    1. Know your debt intimately. When I started creating a budget, I couldn’t tell you which of my debts had the highest interest rate or what their balances/minimum payments were; it honestly gave me a headache every time I tried to write it all out. Knowing this info gives me the opportunity to see where I am and where I can send extra cash. Small amounts add up over time & it feels so good to see $0 next to a debt I owe.

    2. Figure out some financial goals. These can be as little or broad as you would like them to be but I normally create small goals to feel encouraged in continuing to hit some of my larger goals. I ask myself where I’d like to be in 3 months, 6 months, and a year! And, as a side note: I treat myself when I accomplish a financial goal—it keeps me inspired and reminds me that even though ‘adulting’ and ‘budgeting’ aren’t exactly the most thrilling parts of life, they are necessary and we can make it as easy or hard as we want it to be.

    3. Be flexible. Always be open to changing whatever you feel isn’t quite working for you and your budget. Your goals are going to adjust over time and with that, your budget will too and that’s okay! I’ve tried several different budgeting techniques (the 80/20, the 50/15/5, etc) so be willing to try out different techniques until you find one that works for you. Your wants/needs change regularly, so why wouldn’t your budget?

    One last, small tip I’ll give to those preparing to create or change their budget is this : give yourself lots of grace. You’ll fall short, not reach certain goals, or get that call on a Friday night from your BFF who’s had a rough week and she wants to go out to eat and grab a few drinks—in those moments, it’s challenging. All you can do is adjust, pick yourself back up, and attempt to stick to it better next time.

    There are also tons (and I mean literal tons) of information and resources out on the world-wide web that can get you started on creating a budget or finding example budgets to follow and use as a rough outline for your own.

    Article Contributed By: Bethany Trosper

    Contact Us: facethefearfw@gmail.com