Spring Clean Your Finances

Presented by Marc Aarons

I hope you are doing well today. I am reaching out to remind you that now is the perfect time to give your finances a “spring clean.”

Here are a few simple ways to get started:

• Review and refresh your budget – Take a close look at your current budget. Have there been any changes in your income or expenses since your last review? Adjust your budget to reflect these changes and identify areas where you can save more.
• Declutter your expenses – Examine your monthly expenditures and identify non-essential items you can reduce or eliminate. This might include unused subscriptions, recurring memberships, or finding more affordable alternatives to them.
• Consider consolidation – If you have multiple credit card accounts, you may want to consider consolidating them. This can simplify the debt repayment process, reduce fees, and lower interest rates.
• Update your financial goals – Reflect on your short-term and long-term financial goals. Most likely, they have changed and grown over the last year. Adjust them as needed, and we can strategize ways to reach them.
• Check your credit report – Ensure your credit report is accurate and up-to-date. Report any discrepancies immediately with your credit bureau as soon as possible.

If you have any questions about this guidance, don’t hesitate to reach out – I’d be happy to help. And, of course, if you have questions or needs related to your investments or retirement plan, please feel free to give me a call or book an appointment on my calendar.

Marc Aarons may be reached at 714-887-8000 or marc@ocmoneymanagers.com

www.ocmoneymanagers.com

This communication is from Money Managers, Inc.; a Securities and Exchange Commission registered investment advisor.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities, and past performance is not indicative of future results.  Investments involve risk and are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed here.

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6 Reasons for a “Rainy Day” Emergency Fund

Presented by Marc Aarons

I’m reaching out this spring to highlight an issue of utmost importance: being prepared financially for the unexpected. With spring showers picking up around us, there’s no better time to talk about saving up a financial cushion to shield you from life’s unpredictable downpours.

Like an umbrella during spring rains, an emergency fund protects you during sudden financial hardships. Here’s why an emergency fund is critical for every household:

1. Unexpected expenses – Life is full of surprises, and unfortunately, some can be costly. An emergency fund helps cover sudden financial needs, such as medical bills, car repairs, or home maintenance.
2. Financial security – Knowing you have a safety net for unforeseen expenses gives you greater financial stability and well-being.
3. Avoiding debt – When emergencies arise, it’s easy to use credit cards or loans to cover the costs. However, this can lead to a vicious cycle of debt and added interest fees. An emergency fund enables you to manage unexpected expenses without borrowing money and accruing debt.
4. Protecting savings and investments – Without an emergency fund, you may be tempted to tap into your long-term savings or investments to cover unexpected expenses. This can derail your financial plans and hinder the growth of your assets. An emergency fund ensures that your savings and investments remain untouched and continue to grow.
5. Job loss or income disruption – An emergency fund is particularly important during times of unemployment or reduced income. It serves as a financial buffer, helping you cover your living expenses while you search for a new job.
6. Flexibility and adaptability – Life circumstances change, and an emergency fund gives you the flexibility to adapt to those changes. Whether it’s relocating for a new job opportunity, escaping an unhealthy living situation, or making a career change, having an emergency fund grants you the financial freedom to make important life decisions with confidence.

While tailoring your fund to suit your comfort level is crucial, I generally recommend working towards three to six months’ worth of living expenses set aside in an easily accessible checking or high-yield savings account.

Take care, and, as always, let me know if I can help — that’s why I’m here.

Marc Aarons may be reached at 714-887-8000 or marc@ocmoneymanagers.com

www.ocmoneymanagers.com

This communication is from Money Managers, Inc.; a Securities and Exchange Commission registered investment advisor.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities, and past performance is not indicative of future results.  Investments involve risk and are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed here.

The post 6 Reasons for a “Rainy Day” Emergency Fund appeared first on Money Managers, Inc..

What pre-retirees owe could compromise their future quality of life.

Provided by Marc Aarons @ Money Managers, Inc.

The key points of retirement planning are easily stated. Start saving and investing early in life. Save and invest consistently. Avoid drawing down your savings along the way. Another possible point for that list: pay off as much debt as you can before your “second act” begins.

 Some baby boomers risk paying themselves last. Thanks to lingering mortgage, credit card, and student loan debt, they are challenged to make financial progress in the years before and after retiring.

 More than 40% of households headed by people 65-74 shoulder home loan debt. That figure comes from the Federal Reserve’s Survey of Consumer Finances; the 2013 edition is the latest available. In 1992, less than 20% of Americans in this age group owed money on a mortgage. Some seniors see no real disadvantage in assuming and retiring with a mortgage; tax breaks are available, interest rates are low, and rather than pay cash for a home, they can arrange a loan and use their savings on other things. Money owed is still money owed, though, and owning a home free and clear in retirement is a great feeling.

 Paying with plastic too often can also exert a drag on retirement. Personal finance website Value Penguin notes that the average U.S. household headed by 55- to 64-year-olds now carries $8,158 in credit card debt. As for households headed by those aged 65-69, they owe an average of $6,876 on credit cards.

According to the latest Weekly Rate Report at Credit Cards.com, the average APR on a credit card right now is 16.15%. How many investments regularly return 16% a year? What bank account earns that kind of interest? If a retiree’s consumer debt is increasing at a rate that his or her investments and deposit accounts cannot match, financial pain could be in the cards.

Education debt is increasing. Older Americans are dealing with student loans – their own and those of their adult children – to alarming degree. In all 50 states, the population of people 60 and older with student debt has grown by at least 20% since 2012. That finding from the Consumer Financial Protection Bureau may be understating the depth of the crisis, which may have its roots in the Great Recession. Fair Isaac Corporation (FICO) says that between 2006-16, the number of Americans aged 65 and older with outstanding education loans has tripled.

 Just what kind of financial burden are these loans imposing? According to FICO, the average 65-or-older student loan borrower is dealing with a balance of $28,268. That is up 40% from the average balance in 2006.

 How can pre-retirees and retirees address such debts? One way might be to reduce household expenses and apply the money not spent to debt. Financial assistance for adult children may need to end. Retiring later could also be a good move – income is the primary resource for fighting debt, and the more income earned, the more financial power a senior has to pay debts off.

Servicing debt in retirement can become very difficult. Large recurring debts can drain off a retiree’s cash flow and increase overall household financial risk. Retiring without major debt is a comparative relief.

Rep’s Name: Marc Aarons, 714-887-8000 or marc@ocmoneymanagers.com

MMI Disclosures

Citations.

1 – nytimes.com/2017/06/02/business/retirement/mortgages-for-older-people-retirement.html [6/2/17]

2 – valuepenguin.com/average-credit-card-debt [9/28/17]

3 – creditcards.com/credit-card-news/interest-rate-report-92717-unchanged-2121.php [9/27/17]

4 – consumerfinance.gov/about-us/blog/nationwide-look-how-student-debt-impacts-older-adults/ [8/18/17]

5 – newsday.com/business/65-plus-crowd-facing-growing-burden-from-student-loan-debt-1.14124052 [9/10/17]

^{This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.}

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