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| This Week In Your Wallet |
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Super savers = modern-day financial unicorns. Do you have what it takes to become one? The global investment management firm Principal defines "super savers" as those who annually defer 90% or more of the IRS maximum to their retirement accounts or save 15% or more of their salary for retirement. HerMoney is sharing super saver cheat codes for cutting expenses and meeting big financial goals, like retirement. One of the big ones? Being willing to make some cost-effective swaps on the pricey stuff. "A recent survey shows super savers favor large sacrifices like driving older vehicles (49%) and restricting travel (40%) over short-term cuts to their daily expenses to max out their retirement contributions," writes Lindsay Mott.
Sweating a recession? There are things you can do to financially prepare. "With workers, businesses and consumers increasingly alarmed, Goldman Sachs has raised its 12-month recession probability from 15 percent to 20 percent, while J.P. Morgan’s chief economist has upped the odds to 40 percent, a significant jump from the 30 percent prediction at the start of the year," reports Michelle Singletary for The Washington Post. In addition to things like paying off credit card debt, Singletary also suggests establishing a backup to your emergency fund. "If you’re a homeowner, consider getting a home equity line of credit (HELOC), which allows you to borrow money using the equity in your home," she writes. "But only use this line of credit as a last resort should your savings run out — and make sure you understand all the fees and interest costs associated with a HELOC."
Social Security recipients, listen up. Starting March 27, if you’re accidentally overpaid benefits, you’ll be expected to repay them in full. That’s a change from a previous policy, where the Social Security Administration only recouped 10% of the overpayment. There are a couple of important exceptions to note, though. "The withholding rate for current beneficiaries with an overpayment before March 27 will not change and will continue under the current repayment terms, so no action is required," reports Kiplinger. "The withholding rate for Supplemental Security Income (SSI) overpayments remains at 10%." |
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| Are Your Finances Retirement-Ready? A Checkup Could Save You $1,500. |
How do you feel about where you are with saving for retirement? If life’s next chapter has you feeling anxious, you aren’t alone. A Pre-Retirement Checkup from FinanceFixx, HerMoney’s financial coaching program, can help.
FinanceFixx is inspired by Jean Chatzky’s Money Makeover methodology, which has been featured on Oprah, The Today Show, and PBS’ Opportunity Knocks.
Our new, streamlined 6-week program is just for pre-retirees and kicks off tonight. Sign up and you’ll:
đź’» Attend weekly, one-hour online classes with a certified coach and a small group of women.
✏ Dedicate about an hour per week to doing homework in between classes, as well as chat with fellow group members and from time to time, meet 1:1 with your certified coach.
đź’° Save major cash. Participants report saving an average of $1,500 during the program.
Ready to make sure you’re on the right track to retirement and build better money habits? Sign up here. Spots are limited – and don’t forget to enter code SAVENOW for a special discount. |
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| Things That Save You Time |
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Whether it’s for happy hour or coffee, putting standing dates on your calendar with close friends can eliminate back and forth, and help save major time. As The Wall Street Journal notes, there’s another added benefit: Deeper connections with those most important to you. |
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Call it a password pep talk. This CEO says by changing your passwords to something related to a goal you’re pursuing, you’ll achieve it faster. "For example, if you wanted to start saving money for a getaway to Aruba next year, you might change one of your passwords to something like 'vacayinaruba2026,’" she suggests. |
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Put down the newspaper and Windex. Here are some of the biggest cleaning myths that are wasting your time… and what you should be doing instead. |
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| How To Make Money Talks Easy, Not Explosive |
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| "Truthfully, most couples who are approaching retirement haven’t substantively talked about money in years. They haven’t sat down and said, what’s our vision…and what do the numbers tell us?" — Ramit Sethi, author of Money for Couples on the HerMoney Podcast. |
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| Money is one of the top issues that cause couples to fight and even end up divorced. It’s so personal that it often feels easier to keep kicking these convos down the road. But this is your nudge. It’s time to sit down and talk about money with your partner. |
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On the HerMoney Podcast, personal finance expert and author of the new book Money For Couples Ramit Sethi talks about how to have more productive money conversations with your partner so you can start building your rich life together.
This is something important for couples at all stages, but especially for those on the cusp of retirement. As Sethi explains, many couples approaching this phase of their lives haven’t substantively discussed money in years, which is a big mistake.
To get the convo rolling, Sethi offers this advice: "[Say] We’re about to enter a new chapter of life…There’s going to be some things I like. There’s going to be some things I want to change. I’d love to hear from you. Let’s put it all out on the table because we have life left. Let’s make it a rich one. That is where that discussion begins." |
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| Ask Jean |
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| Q: |
Today’s question comes from Cheryl. She writes: I have two homes and two mortgages totaling a debt of $1.1 million. I have $1.2 million in equity in one home and $500,000 equity in the other. Should I use one to pay the other one off, and if so, which one? |
| A: |
Thanks for your question, Cheryl. It’s hard to give you a complete answer without knowing some of the other factors that would play into making this decision. That said, I can point you in the direction of determining which aspects of your financial situation you’ll need to evaluate before you make any moves.
According to Catherine Valega, a Boston-area CFP and founder of Green Bee Advisory, first, you’re going to want to see what the interest rate for each mortgage is. How do they compare? Next, what else do you have for assets and investments? If you’re locked into the low-rate mortgages available several years back, it may make sense to invest your money for the long term and keep the loans. Last but not least, how old are you? "If we [your financial professional] know those variables, we can run scenarios to ensure their assets will not run out of steam before they do," says Valega. (PS, if you don’t have one, you can check out HerMoney’s guide to finding the right financial professional for you, here.)
As Valega notes, it can be challenging to be "home rich and cash poor." When you’re in this scenario, you’re ultimately at the mercy of the real estate market and interest rates. A better scenario is all about balance. "I like my clients to have both – real estate and investment assets," says Valega. "That gives us more flexibility in their long-term financial plan." |
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| Submit your questions to Jean here. |
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| More For You To ♥ |
🛟 Riding the stock market wave? Don’t go it alone. InvestingFixx, HerMoney’s investing club just for women, is your ultimate lifesaver in these uncertain economic times. Our next meeting is March 31. Join us here for free.
⏸ What does the Fed’s interest rate pause mean for your money? HerMoney CEO Jean Chatzky joined TheStreet to break it all down.
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