Budgeting Archives

18Feb 2021 by Martin@FIgoals.com

Should You Pay Off Your Mortgage Early?

Paying off your mortgage as fast as possible is a popular personal finance mantra - but should you pay off your mortgage early? In a previous article we explored buying a home versus renting and investing the difference. We're now assuming you ran the numbers and decided buying is best for you. On to the next question - should you pay off your mortgage early or invest the extra money? One of the most often asked questions from our clients is what should they do with extra money? Almost all of them think paying down their mortgage is a good idea. Their thought process goes something like this: once it's paid off, I'll be able to put more away each month and end up with more overall. A) No, you'll…

12Dec 2020 by Martin@FIgoals.com

Which is Better – Buying a Home or Renting?

Budgeting, Money Mindset

Buying a home has long been considered a smart move to build wealth but is it always the best use of your money or could renting be better? Is buying a home really the best use of your money? If you’ve ever bought life insurance, you’re probably aware the big decision is between whole and term policies. Whole life is much more expensive but you’ll be told there’s an investment portion to it that will grow and always be available no matter how long you live. Others will tell you to buy the cheaper term life policy and invest the difference in premiums in the stock market. Buying a home versus renting a home is a very similar concept to the life insurance decision. You can either commit a large sum to a…

15Nov 2020 by Martin@FIgoals.com

Your home as an investment… worth it?

Budgeting, Money Mindset

Wondering how much your home will appreciate in value? Let's take a look at historical data and see what that tells us about future home prices. There are many thoughts and emotions going through your mind when you purchase a new home. You picture your children growing up and playing in the backyard. You mentally decorate each room before you’ve ever moved in. You imagine all of the great times with friends and family you’ll have in the home. Maybe you even think about how much the home will increase in value; will this property make you rich? There’s a prevailing sentiment that purchasing a home is a great investment no matter what. “Real estate always goes up!” someone will always say. You would think 2008-2009 tampered that enthusiasm but home prices are already higher than…

01Aug 2020 by Martin@FIgoals.com No Comments

The Best Investment You Can Make Right Now!

Budgeting, Money Mindset

Taking care of your physical and mental health will let you enjoy a longer, more fulfilling retirement. It will also improve your financial freedom, possibly allowing you to retire early. Have you ever heard the phrase “The best time to plant a tree was twenty years ago. The second best time is right now.” You can’t do anything about not getting started in the past but you do control getting started right now. It’s a great reminder that no matter how long you’ve put something off for, you can still start implementing that incredible new habit right now and reap the benefits. The same holds true for your finances. If you’ve never put anything away for retirement, right now is the best time to get started. Not tomorrow or next year. Right now! Your physical and mental…

21Jul 2020 by Martin@FIgoals.com No Comments

Best Withdrawal Strategy for Inherited IRAs Under the New Secure Act

Budgeting, Income, Top Posts

Googling the topic of inherited IRAs brings up a lot of articles outlining the new rules. There is very little outlining the best way to approach the withdrawals, though. This article rectifies that with the easy “Years Remaining” strategy that will maximize the amount of the beneficiary IRA you get to keep in the long-run. What happened? The SECURE Act changed how long non-spouse beneficiaries of IRAs have to withdraw the money and it makes a big difference in your retirement planning. The SECURE act stands for Setting Every Community Up for Retirement Enhancement. (Congress loves their acronyms, don’t they?). It was signed into law on December 20, 2019, and takes effect for any IRA inherited January 1, 2020, or later. Prior to the SECURE Act, IRA beneficiaries could take advantage of a feature…

04Jun 2020 by Martin@FIgoals.com No Comments

The Secret to Using Debt the Right Way

Budgeting, Money Mindset

Debt can be a tool used to improve your life but if it’s not used smartly debt could ruin you financially instead. We’ll first take a look at what debt is and how it can be used. We’ll then dive into the secret of using debt to your advantage. It’s easier than you think. What is debt? In its most basic form, debt is borrowing money from someone now and paying them back later. The person lending you the money will want something in return for the risk they are taking. What risk? There’s a chance you may not pay them back! So, you have to agree to pay them back the original amount plus a little extra called interest. The amount of interest will be tied to how much risk the lender thinks they are taking…

04Mar 2020 by Martin@FIgoals.com No Comments

Don’t Worry About Your Budget – Focus on Your Cash Flow

Budgeting

A budget will show if your expenses are on track but your cash flow shows how quickly you’ll reach financial independence. What does cash flow have to do with my FIRE (Financial Independence, Retire Early) planning? Your net worth gives you a good snapshot of what your current financial life is like. Think of it as a photo of that particular moment in time. Well, your cash flow statement will show you what is coming in and what is going out of your bank account over a period of time. Most people will find it most beneficial to do this on a monthly basis, so that’s how I’ll refer to it from now on. Your cash flow number can be positive (more money coming in than going out, yay!) or negative (more money going…

04Mar 2020 by Martin@FIgoals.com No Comments

Your Net Worth: It’s the Engine to Financial Independence

Budgeting, Income, Money Mindset

Figuring out your net worth is an important step in gaining financial freedom. In a nutshell Net worth is an important calculation because it dictates how much income you'll have in retirement. Add up all of your assets and subtract out all of your debts. What’s left is your net worth. Ideally, you want to see a positive number there, but based on what stage of life you are in a negative number can be OK! This figure simply tells you how close you are to financial independence; no big deal. Your net worth will show you what retirement will look like. Your net worth tells you how close to FIRE you are. How? Take your net worth and multiply by 4%. That’s the amount of income your net worth can afford to pay out each…