with Aliza Sherman
If you own a business - home-based or otherwise - this is the blog where you'll find practical tips and smart ideas about entrepreneurship. I've started and run 4 different businesses so "been there, done that." I'll also invite successful entrepreneurs to share their best advice with you.
To learn more about Aliza, check out her profile on Work It, Mom! and her website, www.mediaegg.com.
by guest blogger Emily Bass.
Trying to find a financially viable arrangement for my future feels like trying to find the best method of treatment for some rare disease. There are so many options and so many opinions to assess out there. Since I am not a professional financial planner, it is daunting to try and understand my options.
I really appreciate finding Get a Financial Life - Personal Finance In Your Twenties and Thirties by Beth Kobliner. The writing style respects my brain while still using very basic language and explanations when referring to my financial dis-ease.
A former writer for Money magazine and columnist for Glamour, Beth has appeared repeatedly on Oprah, Today, CNN, MSNBC, and ABC’s World News This Morning, as well as public Radio’s Talk of the Nation and Marketplace.
Beth said she wrote this book because financial advice tends to be targeted towards older and better-established people while people in their 20s and 30s lacked advice that spoke directly to them and their concerns such as: paying off student loans, getting their careers on track, and thinking about buying a house some day.
According to Beth, this book can help women specifically because “women who are self-employed – or thinking of making the leap – can probably get the most immediate benefit from the sections on retirement accounts and tax deductions for business owners.”
1. You can’t control the economy. That means you need to take charge of what you do have power over: what you spend and where you save.
2. You don’t have to be a financial genius. The secret to success is making small adjustments to your everyday life and hanging on for the long term.
3. Start planning for retirement or other long-term financial goals now. The sooner you start, the more time you have for compound interest to work in your favor.
When I asked Beth why women seem to have more challenges with finances than men (or do they?), Beth responded this way:
“Women continue to earn less than men – for every dollar a man earns, a woman still earns 80 cents. So they’re starting from a harder place. Many women take breaks during their work life to raise the children and that makes it tougher to save as well.”
Beth also shares these tips specifically for moms:
1. You need life insurance whether you work outside the home or are a full-time mom.
2. It doesn’t matter what you hear: your kids don’t need life insurance.
3. No matter how much money you personally make, you can contribute up to $5,000 every year to some form of IRA. (Deductible and Roth IRAs start to phase out if you and your husband together earn over $166,000, but starting next year you can roll over non-deductible IRA into a Roth.) If you use your husband’s income, this is called a “spousal” IRA.
4. Max out your retirement savings before you invest in special accounts to pay the kids’ college bills. You can tap many types of retirement account for education expenses. The reverse is not true.
5. If you’ve stopped driving to work to take care of a baby, tell your car insurance company. Taking those commuter miles off your policy could earn you a discount on your policy.
Tips for Entrepreneurs:
1. If you have kids, take advantage of the tax rules that make child care a deductible expense. Just make sure to do it right!
2. The government gives self-employed people a lot of ways to save more money for retirement. Make sure you’re putting as much as you can aside for the future; in theory, you could be socking away $65,500 a year in a Solo 401(k) – or even more if you’re over 50.
3. Since your health insurance is fully tax-deductible, make sure to get it. Ehealthinsurance.com will get you started.
4. Disability insurance was created for people like you. Try to get a policy that covers at least 60% to 70% of your income, and update it as your business grows.
5. If you pay the kids to help out around the business, they can get IRAs of their own. At least one financial planner I talk to has the kids work odd jobs around the office, pays them on the books and then deposits half their pay directly into a retirement account. Even 12-year-olds can legitimately earn a little reportable income, and so they can get an IRA. If they do, the long-term effect of interest on that money will be profound.
Get A Financial Life - Personal Finance in Your Twenties and Thirties impressed upon me not only the importance of saving NOW, but also gave me confidence that I can realistically educate myself on how to make the right choices when it comes to navigating this informationally infinite world of personal finance options.
How are you saving for your future? Where are you getting your guidance or information to plan your financial life?
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