Thursday’s need-to-know money news

Credit report with score on a desk

Today’s top story: How ‘Pay for Delete’ might help your credit – if you’re lucky. Also in the news: 19 less-obvious wedding costs to bake into your budget, why financial advice is still important regardless of your income, and how to make sure you’re not going to an Equifax phishing site.

‘Pay for Delete’ Might Help Your Credit — If You’re Lucky
Negotiating with a creditor.

19 Less-Obvious Wedding Costs to Bake Into Your Budget
Budgeting the entire package.

Not Made of Money? Financial Advice Is Still for You
You don’t need to be to rich.

Make Sure You’re Not Going to an Equifax Phishing Site
Don’t make matters worse.

Thursday’s need-to-know money news

Today’s top story: 10 tax forms you need to know before you file. Also in the news: How Blacks took banking into their own hands, understanding collision and comprehensive insurance, and why you shouldn’t take financial advice from commercials.

10 Tax Forms You Need to Know Before You File
Understanding the 1099s and the W2s.

How Blacks Took Banking Into Their Own Hands
More than 18% of African Americans don’t have traditional bank accounts.

Understanding Collision and Comprehensive Insurance
The important differences.

Don’t Take Financial Advice from Commercials
Don’t forget – they’re trying to sell you something.

Friday’s need-to-know money news

o-CREDIT-REPORT-facebookToday’s top story: How to buy your kid a good credit score. Also in the news: What keeps us awake at night, what low-income families lose by not having bank accounts, and finance lessons Baby Boomers could learn from Millennials.

How to Buy Your Kid a Good Credit Score for $200
Starting them off on the right foot.

Money, Safety and Privacy Keep Us Awake at Night
What we worry about when we try to sleep.

Low-Income Families Are Most Likely to Skip the Bank Account — and Pay the Price
Losing interest and protection.

5 Finance Lessons Baby Boomers Could Learn From Millennials
Taking advice.

Wednesday’s need-to-know money news

PayRentPiggyBank.157131716_stdToday’s top story: How paying rent can affect your credit. Also in the news: How to protect yourself from cybercrime while banking with your phone, why you shouldn’t consider something “yours” until it’s completely paid off, and financial strategies for creative types without steady incomes.

How Paying Rent Can Affect Your Credit
Rent-reporting services can boost your credit.

4 ways to dodge cybercrime when banking, shopping on mobile phones
Convenience can come with a hefty price.

Avoid Saying You “Own” Something Until It’s Paid Off
It isn’t yours until the last payment is made.

The #1 Reason Artists Struggle With Money, and 3 Simple Strategies to Turn Things Around
Advice for creative types.

Thursday’s need-to-know money news

gay-marriage-cake-toppers-485x320Today’s top story: Wallet-stretching tips for renters. Also in the news: Financial advice for newly married couples, why timing is everything with travel rewards credit cards, and how small businesses can be prepared when disaster strikes.

6 Wallet-Stretching Tips for Renters
Keeping a roof over your head without breaking the bank.

10 Pieces of Financial Advice for Newly Married Couples
What to do when you’re back from the honeymoon.

With travel rewards credit cards, timing is everything
Don’t miss out on valuable points.

When Disaster Strikes: 3 Ways Small Businesses Can Be Prepared
Keeping your business afloat during tough times.

Should you bail on stocks?

Stress Level Conceptual Meter Indicating MaximumIt’s a trick question, of course. If you’re asking it, then it’s time to review your long-term investment strategy (or to come up with one, if you haven’t done so).

The bottom line is that trying to time the market is a loser’s game. Those who say they can do it are blowing hot air up your skirt. Sure, some people sell in time to avoid the worst of a downturn–and then they typically miss the rebound that inevitably follows.

If you’re investing for a goal that’s decades away, such as retirement, then the day-to-day fluctuations of the market are irrelevant noise. Even if you’re close to retirement age, you’re still going to need a hefty exposure to stocks to give you the growth you’ll need over time to offset inflation. You can’t expect gains without declines, though. They’re part of the deal.

If you really feel you need to do something, then get a second opinion on your current asset allocation–how your investments are divided among stocks, bonds and cash. You can get free advice from sites such as FutureAdvisor or look into low-cost options from Vanguard or Schwab, among others. Another option is to hire a fee-only planners who charge by the hour or who charge a retainer or a percentage of assets. The Financial Planning Association has tips on choosing a financial planner. Once you have a target asset allocation, you’ll have a map to follow regardless of what the market does.

 

How you can benefit from the robo-advisor price war

iStock_000014977164MediumDigital investment advisor Wealthfront snagged some headlines this week by dropping its minimum investment from $5,000 to $500 and calling out its competitors, particularly Betterment, for charging too much.

Which is kind of unfortunate, because it could leave people with the impression that Betterment is gouging people, when it (like most of the other robo-advisors) charges a fraction of what other advisors do, and Betterment has no minimum investment requirement.

Betterment’s charge ranges from .15% to .35%. On accounts under $10,000, Betterment charges a minimum monthly fee of $3 unless investors set up auto-deposit. Wealthfront manages the first $10,000 you invest for free, and charges one-quarter of one percent (.25%) above that.

By contrast, many human advisors charge 1%, or even more, to manage investments. If you’re not familiar with robo-advisors, you can read about them here and here.

Roboadvisors, in other words, are providing the cheap, conflict-free investment management that many people, especially those without big portfolios, have been waiting for. They’re even a possible lower-cost solution for those with big portfolios, now that Vanguard is offering a robo-advisor service paired with access to human financial advisors for a .3% annual charge.

If you’re intrigued by the idea of low-cost investment management, don’t let a little dust-up between competitors dissuade you. Check out your options and make up your own mind.

 

Your financial advisor: just a car salesman?

Retro Car Salesman C

Is this your financial advisor?

Wall Street is trying to prevent new rules that would require financial advisors to put your interests ahead of their own. Big brokerage firms have said they simply won’t serve the middle class if they can’t offer conflicted advice to them. Even more telling, MetLife Inc. CEO Steven Kandarin recently used a car salesman analogy that compares financial advisors to Ford and Chevy dealerships. Car salesman aren’t required to point out the better deal across the street, Kandarin asked, so why should financial advisors?

If you think the people advising you about your life savings should only be held to the standards of car salesmen, then do nothing. If you think they should be held to a higher standard, contact your Congressional representatives now:

http://www.usa.gov/Contact/US-Congress.shtml

Q&A: Financial advice and family

Dear Liz: Regarding the brother who has the financially irresponsible sisters, in general I agree with you about not pestering people who don’t want advice. But with family, it’s different. It is quite obvious to me and other readers that this man is concerned about his sisters coming to him later in life even if he didn’t state that in his letter. Telling them he won’t help when they come to him later in life (and they will) isn’t realistic. Maybe his continual pestering will finally make them come to their senses.

Answer: If you’ve had any problems in your own life — you needed to lose a few pounds, say, or stop smoking — think about how you would have received the “continual pestering” of a sibling on the issue.

Announcing to his sisters that he won’t help them financially before they ask may have an unintended side effect. If Mom has any money left when she dies, she may well allocate more of it to the sisters under the assumption that they’ll “need” it more because their mean old brother won’t help them.

Q&A: Unsolicited financial advice

Dear Liz: Your answer to the financially savvy brother whose advice is lost on his sisters was a bit harsh and shortsighted, so my guess is that you may not know anyone who has siblings who will continue for the next few decades to need help. It is hard to deny a sibling help while enjoying the benefits of prudent saving. It is harder to watch a sibling suffer, even if they should have avoided it. Seems to me completely different from giving advice about child rearing, which I might add is sometimes simply a statement of the obvious and one that should not even have to be mentioned, like don’t let your kids scream in public. This young man is almost certainly going to live with either guilt over not supporting his sisters when the mother dies or the frustration of having to give up hard-earned funds to avoid the guilt. You should have said he needs to write them a letter citing the guidance given and making it clear not to come to him when they get in trouble.

Answer: Thank you for providing a perfect example of why people find unsolicited advice so annoying.

The brother asked what he could say to his sisters to make them more financially responsible and to his mother to make her realize she should stop supporting them. The answer, of course, is nothing. There are no words that can make other people change unless they want to change. Since his family has made clear they’re not interested in his advice, continuing to offer it would be pointless.

The brother didn’t express concern that he would wind up supporting either his mother or his sisters. Even if he has such concerns, writing such a letter would be churlish, at best. If he’s asked for help, he can make his position known then.