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budget Archives - Sharkey, Howes & Javer

Holiday Spending Hangover

By | Holidays | No Comments

Many people may experience a spiked eggnog hangover during the holiday season, but do you also find yourself with a spending hangover? That nagging feeling that you may have spent too much on gifts for your loved ones but you aren’t really sure how much you should have spent?

According to a recent survey by T. Rowe Price, you are not alone. Of the participants surveyed, 64% “spent more over the holidays than [they] should have”. And women are not the only ones doing the holiday shopping. “Men are more likely than women to try to get everything on their kids’ lists (60% vs. 45%).” The holiday spending hangover is increasing as well. Of the participants surveyed, 69% spent the same amount, a little bit more, or a lot more than last year.

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Thinking of Buying a Vacation Home? Consider These 7 Things Before You Commit

By | SH&J Blog, Tips | No Comments

You found an area you love and you’re thinking of buying a vacation home there. Having a second home can make vacationing easier, but it’s not always the right choice. Before you buy a vacation home, do your homework and make an informed decision.

Here are our 7 tips for buying a vacation home:

Have a Clear “Why”

It’s easy to get caught up in the charm of a new area when you’re on vacation, but it’s different to love a place enough to buy a second home there. Make a list of what you love about the area and create a calendar of dates you plan to visit. Does the list of loves and your availability to travel justify the expense of a second home?

Give it a Trial Run

Before you make the decision to buy a second home, be extra sure you like the area. Take a few trips to your desired location and rent homes in different neighborhoods. This will help you get a feel for what you enjoy most about the area and identify target neighborhoods.

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Making Sense of the Social Security Kill Bill

By | Economy, Investing, SH&J Blog, Tips | No Comments

Early this November, Congress surprised many when they introduced the Bipartisan Budget Act of 2015 causing Financial Advisors to revisit ways to maximize cumulative Social Security benefits for their clients. With the passing of this budget deal, we see the end to two Social Security claiming strategies that have benefited many individuals – File and Suspend and the Restricted Application.

The new rules for File and Suspend will take effect with all applications filed after April 30, 2016. We will see the end of filing a Restricted Application for anyone who is turning 62 after December 31, 2015. This leaves a 6 month window for clients to review their situation with their financial advisor to determine how the changes will affect them, and if they can still take advantage of these strategies before they go away.

The File and Suspend strategy was commonly used by married couples to allow one spouse to begin collecting their spousal benefit at full retirement age while allowing the higher earning spouse to delay and then maximize their own benefit at age 70. Under the new rules, any suspension application filed after April 30, 2016 will also suspend all dependent and/or spousal benefits that would have been paid off of the suspended record. In other words, a worker must now collect their own benefit in order to trigger benefits for their spouse or dependents.

Restricted Applications for spousal benefits were often filed by couples who both wanted to delay collecting their own benefits while taking advantage of a spousal benefit in the meantime. The new rules now state that anyone turning 62 in 2016 or later will no longer be eligible to file a restricted application when they reach full retirement age. Individuals who will be 62 by the end of 2015 will remain eligible to file a restricted application when full retirement age is attained. The caveat – if this strategy depends on one spouse filing and suspending after April 30, 2016, the strategy will not work and further planning with your advisor may be beneficial.

For Example: Mark and Mary are both 63 and remain eligible to file a restricted application for spousal benefits at full retirement age. Mark wants to delay collecting his benefits until age 70. However, he will turn 66 after April 30, 2016 at which point the option to file and suspend is no longer available and spousal benefits will no longer be paid off a suspended benefit. Mark will either have to take his own benefit at age 66 to give Mary the option to file a restricted application for spousal benefits, or Mary will have to forego her spousal benefit allowing Mark to delay his own benefit and vice versa.

Individuals fortunate enough to have already implemented these strategies will not see a change to their current benefits. On the other hand, individuals born after 1953 will be unable to take advantage of either claiming strategy and are encouraged along with anyone who will be 62 by the end of 2015 or 66 before April 30, 2016 to meet with their financial advisor to determine the most optimal claiming strategy before the window closes.

Source: Savvy Social Security Planning for Boomers, Social Security ‘Loopholes’ Closing

Five Tips to Keep Your Spending (and Your Stress Level) in Control on Summer Vacation

By | SH&J Blog, Tips | No Comments

Summer. It’s the season most of us spend the rest of the year waiting for. We look forward to vacations, time off and traveling with family and friends, picturing ourselves relaxing and celebrating the good things in life.

But we spend far less time thinking about how we’ll pay for it.

Without a little forethought and planning, a few weeks of fun can turn into months of credit card bills. With that in mind, here are a few tips to keep your summer spending under control so you can make memories without creating a financial burden that could last the rest of the year.

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10 Beneficial Budgeting Tips

By | SH&J Blog, Tips | No Comments

A 2013 Gallup poll found only 30% of American households prepare a detailed household budget (source). While budgeting can feel daunting at first, it can make a tremendous difference on your path to long-term financial success. With that in mind, here are 10 useful tips for budgeting.

10. Start with the Big 3

When building your budget, it’s important to look at your largest expenses first. For most people those are food, housing and transportation. Make sure to account for all aspects of your Big 3 from groceries to eating out and car payments to fuel costs. Starting with your largest expenses first will help you to get a more accurate view of what’s left to play with in your budget.

9. Bring Your Lunch

It seems so simple, but it’s amazing how much you can save in your budget by packing a lunch every day. In her article, “Buying Your Lunch Is A Terrible Idea. The End. No More Debates” (source), Jillian Berman figured she saves over $1,500.00 per year by bringing her lunch to work. If you are a household, multiply the savings for each person who packs a lunch. It adds up! Plus, you have the added benefit of controlling your portions and making healthier choices.

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