Personal Money Management Tips in One Hour
Increase Marital Harmony
Nine out of 10 married people avoid talking to their partner about money, an American Express poll found. Sound familiar? Dodging these discussions may help you avoid fights in the present, but you’ll pay in the long run, says Mary Claire Allvine, co-author of The Family CFO: The Couple’s Business Plan for Love and Money. Says Allvine: “Research shows that couples who regularly look at their balance sheets together do better financially.” She recommends scheduling one-hour “dollar dates” to get on the same page.
Date one: Crack open a bottle of wine to loosen the nerves, then bring out the laptop and register on money-management site Mint.com. Take just 15 minutes to upload your accounts and you’ll get a balance sheet (how much you’ve got and what you owe) and a look at your cash flow (what’s coming in and what’s going out). For the rest of the date, divvy up a pack of index cards and separately write down your money-related goals (say, paying off debt or taking a cruise). Then come together to prioritize your top three.
Date two: Spend the first 20 minutes figuring out how much cash each of your three goals will require. Next determine when you want to accomplish each of them and how much you need to save per month to do so. Finally, program the goals into Mint, and the site will track your progress toward them.
“The majority of Americans haven’t included financial documents in their disaster plan,” says Jim Judge, of the American Red Cross’s Scientific Advisory Council. Be prepared: Scan the paperwork below onto two CDs. Keep one at home and one in a safe-deposit box.
- Driver’s license, passport
- Social Security card
- Health insurance card
- Insurance policies
- Mortgage and other loan papers
- Property deeds
- Car title and registration
- Marriage license
- Your will
- Last year’s tax return
- Bank and brokerage account numbers
Shrink Your Bills
Today the average wireless customer pays $1,320 annually; cable customers shell out around $800. BillShrink.com can help you reduce those costs. Fill out a quick worksheet—your address, how much you pay, favorite channels, and so on—and directly upload data from your phone account. The site will identify lower-cost providers based on your current usage and show you exactly how much you could save over two years. Use the rest of the hour to cancel your current accounts and switch to a new carrier.
Find Your Perfect Blend
Is anxiety about finding the perfect investment—high growth potential! low risk!—keeping you from making decisions about where to put your money? Don’t let it. Studies by the financial consulting firm Ibbotson Associates show that swings in your portfolio value are due more to your exposure to the stock market generally than the specific stocks, bonds, or mutual funds you pick.
How to do it: Use the portfolio models below as a guide, and if you want to fine-tune the mix, check out the asset allocator tool at cnnmoney.com/tools. Or, for a more hands-off approach, go for a target-date retirement fund from T. Rowe Price or Vanguard. These invest in a preset mix of stocks and bonds based on how far you are from retirement, and automatically grow more conservative as you near your quit date.
Fast Fix for Your Mix
Not sure how to invest for retirement? As a guide, use these model portfolios, which ratchet down the risk of losses as you grow older.
U.S. stock: 60%
Foreign stock: 20%
U.S. stock: 55%
Foreign stock: 15%
U.S. stock: 45%
Foreign stock: 15%
Source: Cary Carbonaro, CFP