Monday, June 27, 2022

Why A Good Credit Score Matters

The phenomenon of credit score building is an indispensable part of life. There is a structured methodology for obtaining and maintaining one. The first step is to apply for and be approved for a credit card. Second, we must spend with the credit card on a regular basis. Lastly, pay off the credit card's recurring bills on time. As we do this consistently and repeatedly, making on-time payments, our credit score will improve over time. Keep in mind that establishing good credit is a lengthy process, and patience is essential in this situation.

"In addition to landing a job and finding a place to live, building your credit score is one of the most important things you can do to start traveling the path of financial success," says Michelle Fox, author of Building Credit Is One of the Most Important Things Adults Can Do. This is especially true when it comes to larger purchases such as a house or car. The higher your credit score, the more likely banks are to approve loans to you.

A credit score is a unique multilateral score that is determined by the consistent amount of repayments on the credit card itself. With this specific credit card, you can spend on anything, however, it will have a limit. That limit is the amount in which the credit card holds for maximum spending power. Michelle Fox notes that “Credit scores range from 300 to 850. A good score is 670 to 739, very good is 740 to 799, and 800 and up is considered excellent.” The goal is inevitably to maintain a credit score of around 780, this allows for banks, mortgage companies, and auto dealers to trust you and they know you are reliable for making those payments on time without delays. A good credit score shows financial honesty, meaning that when companies do audits on our credit reports they can see exactly what our payment history looks like. With a bad credit score, trying to buy larger items like a car and or house will be almost impossible because they can see our bad payment history being late consistently. 

Building up your credit score is essential in the world we live in today; everything revolves around good credit. Learning what to spend and how much to spend is all the difference maker to adhering to sound financial responsibilities. Being financially responsible is understanding the debt game. When you are able to keep your debt low and stay net positive on the recurring bill payments. This all plays into healthy spending habits, which means spending a set amount of money that you can repay back in a timely manner. The easiest way to start is with small expenses like groceries, phone bills, streaming services bills, and internet bills. These necessary expenses that are paid with a credit card will exponentially grow your credit score.

Attaining a good credit score is as important as owning our driver’s license, it is in a sense a part of our financial identity. We must stay vigilant on our spending and our recurring payments so we can splurge on much bigger things that require an immense amount of more financial due diligence. 

Here to help,

Your Financially Fit Team 





Monday, June 6, 2022

Saving Money: How Can I? Should I?


To begin the process of saving, it helps to start by thinking about what we are saving for. Is It for emergencies? It is for education? For retirement? Is It for investments? Real estate opportunities? Stock investing? Starting our own business in the future? These are questions that can help us narrow down what our savings goals are, to begin with.

Once we have established our savings goal(s), the next step is to set aside the portion of our income we want to save toward that specific goal. It helps to move our savings money into a different bank account from the one we spend our money from. In this way, our savings become separate from our spending, making it less tempting to wipe them out and spend them on something else.


The next step is the hardest and requires an enormous amount of discipline. Continuing to set aside our pre-determined amount of money for our goal(s) takes a lot of work. This is especially true when we have financial bumps in the road come along and we feel increased financial stress. However, as we keep setting aside savings on a regular basis, something magical happens. Our savings balance grows and grows and grows. We begin to see the possibility of reaching our savings goal, whatever it is.


It helps us to think about savings as a way we can expand our financial outreach and grow our money over long-term periods. If we are saving for retirement, we may want to investigate 401K plans, Roth IRA’s, and other retirement accounts, depending on the type of plans our employers offer us and potentially match us in terms of contribution payments.


If we are saving for real estate investment opportunities, then also learning about renting out properties to produce a sustainable cash flow may be helpful. If we are thinking about stock Investing, we may want to research our options. Learning about the S&P 500, the index containing the top 500 performing companies within each unique sector is a great starting point. We can then build on this knowledge by learning about specific companies if desired. 


Professionals in the industry recommend staying conservative within a volatile market. Due to the unprecedented times, we find ourselves in currently, understanding why our account balances aren’t gaining as much interest as we would like is helpful information. Understanding the market may motivate us to expand our levels of savings so we can properly adjust to market movements and meet our savings goals.


We don’t need to risk all our savings in one category. Diversifying our money can insulate us from volatility. David Blanchett, who is Morningstar’s former head of retirements research said, “Assuming you’re in a risk-appropriate, well-diversified portfolio, the best approach is probably to hang tight.” This may be a good rule of thumb in financial saving situations. Ultimately, how we save our money will determine how satisfied we will be with our financial decision-making and the accomplishment of our financial goals. Our real goal as we continue to save is to be happy and joyful with our finances and to move away from feeling stressed out about money. 

  

Here to help,

 

Your Financially Fit Team


Monday, May 23, 2022

Why Engaged Employees Matter in the Workplace


PwC research shows, “More than half of employees say they’d be attracted to a company that cares about financial wellness. Versus their current employer.” This has never been truer than right now. If there is anything to take away in the workplace, it is knowing exactly what your worth and value are to the company you are working for. As employees, we remain optimistic about how well our own employer takes care of our financial wellness. Donnebra McClendon who is a Global Head of Diversity, Equity, and Inclusion at Ceridian describes in great detail what she learned during her childhood while being around her father as he handled finances for their household: the importance of a consistent saving routine, spending only what is necessary, creating a sustainable payoff debt method and understanding why budgeting is a lifeline.


These concepts are often
overlooked when we focus on the here and now rather than looking at the bigger financial picture. Our workforce demographics are changing, and the pandemic has played a major role in the current shift we see today. Employees are job-hopping continuously, and showing no signs of stopping. This practice has caused employers to take a hard look at how to better help their employees feel financially secure and incentivized to stay engaged at work.

The following are three primary focal points on how to successfully deliver a financial wellness plan to your employees:

1. Balance:
Equal Pay Day has been a referendum on the system of U.S. pay. It is a day that we recognize pay disparities across the country among women and people of color. For so long, women have been grossly behind in terms of pay in contrast to their counterparts. However, this does continue to improve with more awareness and attention to the issue. McClendon discussed her own company’s findings when analyzing pay disparity. “Less than a 1 percent disparity between what women and men earn globally at Ceridian, and less than 1 percent disparity between what white and non-white employees earn in the U.S.” Companies must close the divide between women and people of color with pay. This gives everyone in the workplace the clearest and fairest capabilities to earn more and lose less. Companies today want to implement fair equity policies with pay to help secure their employees’ financial wellness.

                                                                                                 
                                                                                                  
2. Fair and Accessible:
Everyone should have equal access to credit. In the past, many employees have not been given an equal opportunity to fair access to beneficial financial resources. There is a discrepancy among minority employees within companies. The government data is clear, “5.4 percent of U.S. households were unbanked in 2019, almost 14 percent of Black households and 12 percent of Hispanic households were unbanked.” Barriers within the workforce and even in the corporate world create a depressive dynamic that does not allow for financial growth and sharing of knowledge. Although research has served its purpose in bringing many problems to light, companies now are noticing and taking action. According to McClendon, companies are now beginning to bring in “on-demand pay” that allows their employees access to earned wages. Employees are now obtaining benefits that were ignored by their employers. Employer research shows, “Four in five U.S. workers (83 percent) between the ages of 18-44 believe they should have access to their earned wages at the end of each workday/shift, before the traditional payday."

3. Financial Comprehension Plan:
Financial literacy is single-handedly the most fundamental concept to empower employees with. From an employer's point of view, this needs to be introduced at the beginning of employee onboarding. PwC research shows, “A full 87 percent of employees want help with personal finances.” Most employees want access to financial guidance and assistance. Financial knowledge distribution is essential to keep employees engaged in the company and prevent job-hopping. Employees do not want to stay with a company that does not offer a financial literacy & wellness program. Just look at how often employees change jobs to find better financial alternatives.

As employees, we must do the research on our own and know what kind of financial resources are available to us. The importance of knowing how to plan our finances is the key to being satisfied with our savings and spending. We as employees are more engaged with our companies when our financial wellness needs are being met.

 

Financial wellness should never be downplayed. Companies can educate employees in key financial aspects by bringing more pay equity, access, and literacy resources to keep employees engaged and loyal.

 

If you want more information, be sure to check out our amazing tools on the Financially Fit Employees website or mobile app to stay up to date on your financial wellness journey.

 

Here to help,

Your Financially Fit Team






Friday, May 13, 2022

How To Stay Motivated When You Don't Have it In You

Many individuals struggle to stay motivated consistently in all aspects of our lives, finances included. Staying on schedule, sticking to deadlines, setting goals, and even planning out financial objectives may come at a mental cost. Sometimes we fall into the habit of comparing our productivity to others. Doing this is not helpful, but working to increase our own consistency may prove beneficial. Keep in mind, that motivation comes from the inner determination of the will. It is the idea of becoming something larger than our current selves, of envisioning what we might become and working toward it. 
Here are 5 steps to find our inner drive and keep lighting it on fire. 

1. Do What Comes to Mind.
Do whatever needs to be done. It can be an incredibly small day-to-day activity. It is important to start small and work our way up from there. Anything as simple as making our bed at the start of the day will most certainly set the tone for an increased rate of productivity. The art of making the bed in the morning gives an inner awakening in wanting to conquer more throughout the day. We need to start our drive somewhere, and what better way to start developing our drive for success than by making our bed in the morning. 

                                                                                                   2. Defeating Mental Blocks. 
It is crucial to identify what our mental blocks are. What is stopping us right now? Are we capable? What is holding us back? Are we afraid of failure? These are common questions we can ask ourselves honestly and openly. Having a straight talk with ourselves can help us more easily figure out solutions to our mental blocks. Clearing the mind before thinking intensively always helps this process. Another element when it comes to staying motivated effectively is the environment we are engulfed in. Having a chaotic environment that is uncontrollable, disorganized, and cluttered will demotivate any action for achieving at productive capacity. Let's think of amazing athletes as an example. We would suspect they set up their environment in a way to produce effective results. We absolutely can do the same to set up our environment for success to defeat our own mental obstacles. 

3. Flexibility can help. 
In the past several years, the pandemic has revolutionized the way we live day-to-day. Not only that but is has also served as a new perspective to live efficiently. We think more deeply about the purpose of what we do and why we accomplish things. This also applies to the careers many of us are in and how they align with the values we hold. James M. Diefendorff, Ph.D., a University of Akron Professor of Industrial-Organizational Psychology suggests that we "try to structure our day to ensure that some of those 'best day' activities can be experienced at least some of the time." Knowing what makes us excited is crucial because if we can repeat those activities that excite us, we will want to find additional activities that excite us even more. 

4. Break Down Goals. 
It can be overwhelming to set a goal that over time may feel unrealistic to achieve. Why is that? Research by David Zald, Ph.D., the director of the Center of Advanced Human Brain Imaging finds, "when the workload you shoulder seems too heavy or the rewards too far off, the obvious but hard-to-see-when-you're-in-it solution is to break that big goal into smaller tasks." Goals need to be broken down into sub-goals, doing so can help us narrow down and define the necessary steps to accomplish the end result. 

5. Fighting Fatigue.
Being driven comes at a cost, that cost is fatigue and overperforming to the point of inevitably giving up. The ability to maintain drive for a long period of time is difficult. However, we can fight fatigue by fluctuating mental and physical performance. Take the nature of working out as an example. We may maximize our repetitions of weightlifting on some days, then go lighter on other days. 
Mixing up mental and physical drive allows breaks in between to recharge our bodies and minds. 
For more information on maintaining your drive click here!
Feel free to also refer back to our previous blog that dwells deeper on burnout. Burnout may also cause demotivation and loss of drive if we happen to experience it more than we would like to. 

Sincerely, 
Your Financially Fit Team 

Wednesday, February 23, 2022

How to Survive When Inflation Rates are High

In January of 2022, Inflation hit an annual rate of 7.5% which is the highest it’s been in 4 decades.  The annual average is supposed to be 2.3%, so you can see how high this is. As well, the Consumer Price Index (CPI) is the highest it’s been since 1982. The CPI is a measurement of how much consumers have to pay for necessary goods like bread, milk, and transportation. For those of you who have been feeling like your paycheck isn’t stretching as far, know that it is a real problem across the nation. Prices are rising and consumers are learning to cope. 


The Wall Street Journal recently released an article about tips from the 1980s for surviving inflation. What we are experiencing now is significant, but 1980 had it much worse. Through the ’70s inflation rates climbed, reaching a whopping 14% in 1980, and people who remember what that was like have shared some of their stories and tips. Below we have made a summary of the lessons they taught.

  1. How to manage rising electric prices:

    One good way to combat increased utility costs is to turn down your heater at night (to about 65 degrees). Using more blankets at night and wearing warm clothes at home can help reduce your monthly expenses. That way, you’re using the majority of your heating costs for the times you’ll benefit the most from them. As well, some energy companies charge different amounts for energy consumption at different times of the day or at different times of the month. Look into your energy provider to see if they charge more during “peak hours” and try to avoid watching TV and having lots of lights on around those times.

  2. How to manage rising gas prices:

    While gas prices are high, It is good to drive as fuel-efficient as possible. This means coasting down hills, accelerating slowly, not driving over the speed limit (because driving faster tends to consume more gas), and using cruise control while on long trips. While this isn’t a perfect solution, it does stretch your time between fill-ups. You could also consider carpooling with coworkers, taking the bus, or biking to work when possible to cut costs.

  3. Postpone expenses that aren’t necessary right now, and take care of what you have so it lasts.

    Simply being frugal can go a long way. If there is something that you want, but your budget is tight, consider whether it is really a necessity at this time. Do you have something right now that you could use instead for the time being? By making what you have last, you avoid the cost of replacing old items. This could include things like learning to patch clothes or doing a clothing swap with friends instead of shopping.

  4. When you do need something, try to buy used.  Thrifting can still save some money.

    When there is a necessary purchase that comes up, make sure to check out the used market, both online and in-person, to get a feel for your options. While some things shouldn’t be purchased used, most things are just fine. Often sites like Facebook marketplace and craigslist offer low-cost items that are still of decent quality. You can also look for garage sales, moving sales, and traditional thrift stores.

  5. Know that it’s okay to negotiate things you’re buying, especially with large purchases.

    One woman shared that telling her personal story helped her to get lower interest rates on her car loan. As well, working to keep your credit score up by only making purchases you can pay back quickly will give you a better chance in your negotiations.

  6. Saving money on food:

    The first rule of thumb is to eat out less often. Eating at home is almost always cheaper than eating out, but it’s more important when money is tight. As well, there are lots of things you can do to save money at the grocery store. First, always shop with a list, and stick to it! It’s easy to impulse purchase unnecessary foods when shopping and having something to be accountable to can help. The second is to buy value brands. Often the “off-brand” items that are of similar quality cost a lot less than well-known brands.

  7. Finding entertainment at home:

    Going out for date nights and time with kids doesn’t have to stop, but spending money on these outings should be reconsidered. Get creative with at-home hobbies, entertainment, and dates. Working on projects or learning something new can be a fun way to spend time with family. You can also consider playing games or having a picnic at your local park. When it’s cold, try making hot cocoa and s’mores, reading stories together, going on lunch dates instead of dinner dates, or playing board games.

  8. Long term investments

    Though not mentioned in the original article, long-term investments are also a g

    ood way to protect your finances from the effects of inflation. What types of investments a person chooses to work with is a very individual decision, but Financially Fit offers resources to learn about different types of investments and accounts. If you’d like to learn more about this, view our website for information on working with FFE.
If you have questions about inflation and want to understand it better, check out this blog post to learn about the basics of what inflation is and how it affects you. If you’d like to view the original Wall Street Journal article, click here. Feel free to reach out with any questions, and check out our social media for weekly financial advice.

Here to help,
Your Financially Fit Team.

Thursday, January 13, 2022

Boosting Your Company Culture with Manifestation

Lately, lots of popular media has been talking about the power of manifestation. While it may sound unreal, this idea is actually founded in neuroscience and it can benefit your team.

Apple News shared an article that includes interviews with doctors about how manifesting actually works. According to Daniel G. Amen, MD, a clinical neuroscientist and psychiatrist, manifestation is a proven way to help you “match your behavior to your goals.” He shared that “focusing on your goals sparks brain activity, especially in the prefrontal cortex, the region of the brain involved in planning, forethought, and follow-through.” When people focus more on what they’re working toward, their brain subconsciously begins to plan and look for opportunities to be successful. 


In a team environment, having individuals with healthy mindsets bolsters the collective attitude. When people believe they can succeed at your company, they are more likely to find opportunities to make those beliefs a reality. 


Managing your mind is an important step to being successful with any goal. It is more important that leadership positions learn to implement this, than any other position in a company. Not only do you become more open to and aware of opportunities, but you also are more likely to take the right actions when you have a healthy mindset.  Even if a person is doing “all the right things” to reach their goal, their mindset will still affect their results.


Let me give an example:


Say you want to start your own business, and you’re “doing everything right.” By that I mean, you’ve found your suppliers, you hired good people, your product is of good quality, and you made a good marketing plan. Even in this case, if you don’t believe you can be successful or you have doubt about your business, you will subconsciously hint this doubt in every company action. It will be passed from you to your team, and then to your customers, and it will become difficult to make sales. 

If you don’t believe in yourself, you will subconsciously convince others in subtle ways not to believe in you either. This goes for every aspect of life, including your company. 


Working to manifest a healthy mindset about your goals will help you align your actions and intentions to be more effective. Managers learning this will help their team emulate the values they’d like them to have. Teaching it to the whole team will allow every individual to perform better over time. Mindset means everything when it comes to being successful and reaching goals.





Feel free to look at our website or contact us with any questions. Financially Fit is committed to educating individuals about financial wellness and developing healthy teams.


Here to help,
Your Financially Fit Team


Friday, January 7, 2022

4 Financial Tips from a Harvard-Trained Economist For You and Your Team

 CNBC published an article this week that shares 21 financial tips from a Harvard-trained economist. Here are our four favorites and why they will help you and your team members have improved financial health.


1. Invest in debt repayment first! This includes your mortgage.


Say you have $100,000 that you can invest right now. 

a. If you invest it in a bond earning 1.5%, you’d earn 1,500 in interest income over the course of a year.

b. If you instead had a $100,000 mortgage at a 3.2% interest rate, you’d save $3,200 by paying it off and avoiding a year’s worth of interest payments. 


In short, you’d make $1,700 with no risk by investing in your debt instead of in a bond.





2. Use retirement-account contributions, conversions, and withdrawals to cut your lifetime taxes. 


Most companies offer retirement accounts to help their employees plan for their future. By adding money to their own retirement account, each team member can receive tax benefits based on the amount contributed. Some companies also have a matching policy that is important for your staff to be aware of. It's important to help your team understand the retirement plans your company offers and how to best use the type of account offered. By doing so, you allow your team to take advantage of financial tools already available to them, and you can build stronger relationships between managers and staff. 


If you need help understanding the different types of retirement accounts and what is best for you, feel free to schedule an appointment with one of our coaches for personalized guidance.


3. If you don’t formally request your social security benefits, you won’t get it.


Many people don’t know this, and it’s important to help staff that may be transitioning to retirement. Once a person is eligible to collect social security, they actually have to actually file a request for benefits. This can be done through the Social Security Administration’s website.


Another key tip is that if a person can wait until age 70 to claim these benefits, their monthly benefits increase significantly. Of course, this isn’t an option for everyone, but it should be considered before retirement.


4. If you want to invest in stocks but are worried about the risk, don’t add more money to your trading account until you are able to pull winnings out.

There are lots of things to learn when you begin investing, but the first things are: 


a. How much money am I willing to “spend” as I learn about the stock market?

- by investing before you know what you’re doing, you will likely lose some of it. Just consider that the cost of self-education. It will get better as you learn to do the proper research and understand the market better.


b. What is my exit strategy?

- If the stock you buy is doing well, it is sometimes hard to sell it because it may continue to go up. If you sell to early, you lose out on profit you could have made, but if you sell too late, then you could lose out anyways. Building an exit strategy means understanding what the stock is likely to do and deciding at what price or % increase you’ll sell part of the stock.


A basic example:
You buy 200 shares of a stock that will probably go up 10%. It has the potential, though, for a 15% increase.

Your exit strategy could look like this:

- At 5% increase: Sell 40 shares

In case the stock doesn’t do what is expected, you make a little and could sell the rest if need be.

- At 8% increase: sell 80 shares
Here the stock is trending as expected but it may not reach its full potential so selling a little over half guarantees some winnings in case it begins trending down.

- At 10% increase: Sell 40 shares

Now the stock has done what was expected. While it could go up, the future is uncertain, and selling a bit more will help mitigate any potential loss from a dip.

- Hold the last 40 shares in case the stock does better than expected and sell if it turns down.


This isn’t the perfect plan for every situation, but it allows you to see the thought process behind mitigating risk with an exit strategy. Here you can see if the stock were to fall at any point, you’d have made some money and could sell the rest of your holdings if needed. 


To read all 21 tips, see the full original article here.


If you need help with any of these concepts, feel free to reach out. Financially Fit is here to help companies like yours better serve your team members by educating them about financial wellness. We offer many financial tools, like budgeting and debt reduction worksheets to get anyone started. See our website for more information.


Here to help,

Your Financially Fit Team