Month: November 2017

Most of us suffer from financial anxiety, and it appears to be getting worse. As a 2016 study from Northwestern Mutual points out, some 85% of Americans reported feeling anxious about their personal finances.

Just what are these concerns, and how can we beat them? Well, according to a survey by GOBankingRates, most of us fear never being able to retire, “living paycheck to paycheck,” and being in debt forever. So consider the following:

Retirement concerns

If you don’t feel well prepared for retirement, you’re not alone: according to the Economic Policy Institute, more than 40% of individuals aged 55 to 64 have no retirement savings. But you can catch up. Discuss your situation with an advisor; put the maximum into 401(k) plans, IRAs, and research annuities.

Paycheck to paycheck

You also aren’t alone if your monthly expenses keep you from saving for emergencies. A recent study by GOBankingRates showed 69% of US adults have less than $1,000 saved. Put a little money aside each month until you have enough of a safety net (usually three months’ worth of living expenses) to cover an emergency.

Try to reduce some of your expenses-perhaps by packing lunches instead of eating out, or taking advantage of free events. Small things add up.

You might consider getting a second job, even temporarily. According toBankrate.com, 36% of people who have side jobs earn an extra $500 a month.

Debt worries

If you fear forever being in debt, start by paying off some of those debts you already have. Compile a list, and determine which have the highest interest rates. Start paying those off first, a little at a time, and work your way down, using the money from cutting expenses and working on the side.

With these suggestions, it is possible to get ahead of your financial fears.

You have inherited a sum of money but have some concerns about how to invest it, as there are many options available to you.

Traditional wisdom would be to invest any large sum of money using a method called dollar-cost averaging, which simply means investing it a little at a time. The idea is that you take on less risk by trickling your money into the market rather than dumping it in all at once.

If you like this option, you would put your entire inheritance in a savings account or money-market fund, and then, over the course of a year or so, invest an equal amount each month in a portfolio of stocks and bonds.

But there is another option for those who would like to get their money working faster. This is to determine an appropriate asset allocation-a mix of stocks, bonds, and other investments-that meets your risk tolerance and helps you achieve your financial goals.

With this option, you would invest the entire inheritance at once based on that mix of assets. Proponents of this approach say your money starts working for you quickly, while not leaving you too conservatively invested for a period of time, as dollar-cost averaging might.

Regardless of the approach you choose, your assets, ideally, should be divided between different types of investments based on your financial goals and your risk tolerance.

Your advisor can help you determine the appropriate asset allocation-one that takes into account the fact that, sadly, no one knows how the market is going to perform.