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Tales from the Wallet: What’s Your Vacation Money Strategy?

vacation money strategy tips and tricksHere’s a fun question for today: what’s your vacation money strategy? What’s your overall strategy about vacations and budgets — how do you plan to budget while on vacation — and how do you pay for vacation? There are a lot of questions here, such as:

  • Overall vacation money strategy: What do you consider getting the most “bang for your buck” — frequent and small vacations, one big vacation every year or two, or something else? From the “time vs money” perspective for vacations, do you gravitate towards the more expensive but all-inclusive cruise, resort, or tour so that you save time at the research phase — or do you prefer (for money or enjoyment) to DIY your vacations? For those of you who go to the same place often (such as spending a week every summer at Cape Cod or the Jersey Shore, or heading to DisneyWorld once a year), how big of a role does budgeting play in that decision?
  • Budgeting while on vacation: do you have ways of saving money while on vacation that you use no matter where you go? For example, bringing protein bars with you so your breakfast is covered, or making sure to hit the “included breakfast” at your hotel and eat a ton so you don’t have to eat a big lunch?
  • How to pay for vacation: Do you save in advance for your trip, or put it on credit card? Does anyone use automatic transfers to savings to set aside money regularly to keep for vacations? Is anyone heavily into airline miles or points?

 

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Tales from the Wallet: Seasonal Spending

seasonal spending budget tipsHere’s a fun question for today: Do you think you spend more in certain seasons? How do your strategies for saving or budgeting change from season to season — and what do you think your biggest money challenges are for each season? For those of you at big law firms and companies with extensive summer intern/summer associate programs, do you actively plan to bolster your savings this summer when there are so many firm-sponsored outings, to take care of things like food/drink/entertainment/transportation?

Pictured: love this floral wallet from Halogen for $89 (affiliate link). 

For my $.02, I definitely spend differently in different seasons, although I’m not sure which season I spend more during. A few ways my spending changes from season to season, off the top of my head:

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Cash Savings vs. Retirement Savings Accounts: Where to Stash Your Money When You’re Unsure What You’re Saving For

Cash Savings vs. Retirement Savings: Retirement Savings Accounts 101Everyone knows saving for retirement is a priority, because retirement is important and compound interest is powerful — but are the tax savings for retirement accounts so great that you should use them to save extra cash, too, such as for a hypothetical future home purchase? When I was in my late 20s — unmarried, not yet a homeowner, not sure how long I wanted to do the lawyer thing — this was my serious concern: cash savings vs. retirement savings. With my future so uncertain, and with so long to go before retirement, I wondered if I was losing more opportunities by saving money where I could get to it quickly, or by putting it away in retirement accounts… If I saved in cash, then my money was always available to me in case I wanted to buy an apartment, get married, or go back to school, but everyone told me to put it in retirement accounts instead to get the tax benefits (plus, retirement is important!).

In the early years, I was lucky because Schwab’s money market fund was paying ridiculous interest by today’s standards (5%!); I also finally did start maxing out my 401K in addition to saving money in cash when I was around 28. But when I finally got my bearings and started researching different retirement savings accounts, I was shocked to find that a lot of them would let me put the money (or some of it, at least) toward school, a first home, or more. A few years ago we did a post on tax-savvy investments that looked at these kinds of questions — but it’s been too long and we need an update. Thank you so much to editor Kate Antoniades for looking into the ultimate question: How do cash savings vs retirement savings stack up? If you’re already saving for retirement but have an extra $5,000 that you think you might need soon — but aren’t sure — should you leave it in a cash account earning very little interest, or put it in a retirement account to get tax benefits? – Kat

We haven’t gone into detail about tax-savvy investments like retirement savings accounts since 2012, so it’s definitely time for an update. What are the different retirement savings accounts available to most people? What are the tax benefits of them? Can you use the money for anything other than retirement, like grad school, a vacation or wedding, or a home purchase?  In the meantime, we’re shared posts on some pretty closely related topics such as setting financial goals for the year, making end-of-year money moves, choosing a financial planner, retirement savings in general, and paying down debt vs. saving. At election time last year, we talked about reacting to a stock market drop.

Before we get into the retirement savings vehicles — where, for the most part, you can’t touch your money until 59½ at the earliest — let’s discuss cash savings. (Oh, and a note on going back to school — if you’re 100% certain you’re going back to school, a 529 may be the way to go. Here’s a post from Fidelity that weighs the options.)

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How to Set Financial Goals for the Year

How to Set Financial Goals for the Year | CorporetteToday’s topic in Tales from the Wallet: do you set financial goals for the year? I started setting explicit financial goals when I left my cushy BigLaw job a few years ago — I had been so comfortable there that I could easily move every other paycheck to an interest-bearing money market fund, and then I took a job at a nonprofit, making about a third of my former salary. Suddenly faced with the prospect of austerity, I decided to set financial goals for the year.

Every year, I’ve kept my goals short, choosing just three or four, and I’ve gone back at the end of the year to see how I did. In 2010, my goals were to “1) bank all Corporette income, 2) renovate kitchen within budget, 3) max out 401Ks, and 4) pay down at least $10K of (my husband’s) student debt.” A few years later, when my first son J. came along, the goals were to “1) save 10% of our income, 2) max out J.’s 529 on top of our savings, and 3) assess all investments and figure out fees, performance, etc.” (That last one was a doozy and I wrote about it in our post on asset reallocation.)

(Pictured: Everyone says Comme des Garçons makes the best wallets — this gorgeous red continental wallet looks lovely.)

The “save X% of our income” goal is a mainstay on the goal list for me (sometimes 10, sometimes 15) and I’ve usually done a bit of planning to figure out how to get there. For example:

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Resolutions for 2017 – What Are Yours?

Resolutions for Busy Women | CorporetteResolutions: Do you do ’em? We talked last year about how some people have a resolution theme instead of a list (I had to read my post to remember that “hungry” was my resolution — sad!), but I think this year I’m back to a simple list of things, all aimed at finally losing the baby weight and trying to grow my business.

Like I did last year, I thought I’d round up some of our posts that might help you with popular resolutions, like looking more polished, moving more, growing your career, and more.  Ladies, what are your resolutions for 2017? How did you do on your resolutions from 2016? Did anyone have any breakthroughs that you’d care to share?

Look More Polished

Appreciate More, Stress Less

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Tales from the Wallet: How to React to a Stock Market Drop

How to React to a Stock Market DropDo you know what to do with your investments when the stock market takes a dive — how to react to a stock market drop? Were you worried about what would happen with the markets today? Late last night, as Donald Trump was getting close to winning the presidential election, the headlines began to announce dire predictions: “Trump’s win turns stock market into shock market,” from CBS News. “Be very scared for your 401(k) right now,” from Mother Jones. “Stock Futures Plunge as Donald Trump Posts Surprising Win,” from the Wall Street Journal.

Not everything about such a situation is bad, as Shannon McLay, founder and president of The Financial Gym, told us this morning before the markets opened:

I think that today will be a gift to investors as the stock market will likely drop on the uncertainty of a Trump presidency, but what that means for investors is that they have the opportunity to buy stocks, ETF’s, mutual funds, etc., on sale. Who doesn’t love a sale? If you have cash in your investment accounts, you should consider investing in the uncertainty, especially if you are investing for the long run.

Now that it’s late morning, we know that things aren’t as bad as expected. Under the headline, “Markets meltdown fails to materialise,” the BBC reported,”The S&P 500, Dow Jones, and Nasdaq stock indexes were little changed after the first hour of trading.” The Chicago Tribune reported that the “conciliatory comments” in Trump’s victory speech “helped global stock markets recover a large chunk of their earlier losses Wednesday.”

If there had been a big drop in the stock market, what would you have done? Do you know what the best things to do are? These are some of the experts’ tips:

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