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My Journey to Millions
Multi-ethnic couple shakes hands with a Clay Advisors consultant
credit cardsDebtPersonal Finance

7 Steps to a Debt-Free Life with Clay Advisors

by My Journey To Millions 08/08/2022
written by My Journey To Millions

Debt — it’s just part of life. In your 20s and 30s, accumulating debt is part of becoming more stable. You buy a car, or two, save up to own a home, upgrade your technology devices, and maybe your kitchen, and take regular vacations. It is all part of everyday life for most of us.

But as you hit your 50s and 60s, that same debt can start to feel like a noose around your neck. Debt can keep you from saving for retirement or achieving other life goals.

But know this: it is never too late to change your habits and begin living a debt-free life. These key steps, provided by the team at Clay Advisors, will lead you to a life without debt and the worry and stress that comes along with it.

Key Number 1: Don’t Spend Money You Do Not Have 

This is a big mind shift for most of us. But as the economy starts to contract and inflation keeps going up, now is as good a time as any to change how you look at income and debt. Get clear with what comes in and what goes out each month. Take a long, hard look at where you can cut back. Living under your means will get you out of debt and bring you the sweet relief of less worry and the joy of looking forward to a better future. Cut unnecessary subscriptions, cancel one of your phone lines, buy store-brand items. These small changes will add up to savings.

Key Number 2: Where Are You Now?

Goal-setting requires the establishment of a starting point. To do this you need to know how much debt you have, what interest rates you are paying and what the monthly minimum payments are. It’s critical to know what your highest interest rate is on your debt — and look to pay that down first if you can, says Raj Patel, a financial consultant at Clay Advisors, a company that offers debt consolidation loans. If you don’t have a handle on your monthly statements, your credit report will generally list all your debts. A free report can be obtained at www.annualcreditreport.com once every 12 months. Put this information on a spreadsheet and tally up what you owe in unsecured debt, i.e. credit card debt or loans. (Secured debt is that which is attached to an asset, such as a car loan or a mortgage.)

Key Number 3: Reorient Your Thinking

Now that you have tallied your debt and taken a long hard look at your spending, now is the time to think about your priorities. Is your money being spent towards the things that are most important to you? Write down the life goals you have and see if you are spending money toward those goals. Ideally, you should establish a spending plan based on those priorities. If retirement is a focus, then be sure you are directing money toward that first after you’ve paid for all your essentials (housing, gas, food, utilities).

And if debt is keeping you from being able to fund your priorities, then this is the moment to commit to living a debt free life, says Patel of Clay Advisors. You need to make paying off debt a top priority for a few years. This goal is more important than a new car, watching the latest show on Netflix, getting a new cell phone and more. Create a concrete play to pay off your debt — and imagine the freedom you will feel when that is done. 

Key Number 4: Bring In More Earnings

There are two ways to pay off debt: reduce spending and increase income. This might mean taking a second job or being creative about “finding” money. We are a society that accumulates “things.” Sell whatever you are not using. Look at your skill sets and find ways to utilize those skills for making extra money. If you are great with computers, home improvements, photography or any range of skills you have developed over the years, create a side job that generates income. Many people have discovered their hobbies can provide an income stream well into retirement.

Key Number 5: Set Aside for A Rainy Day

Life is unpredictable and it is not always possible to account for unexpected expenses. The car breaks down and the roof springs a leak. Having money set aside in an emergency fund to deal with the unexpected will keep you from relying on credit cards again in the future. So set aside $50, $100, whatever you can a month while you are paying down your debt. If there is no emergency fund, efforts to become debt-free debt can feel like one step forward and two steps back when life’s little emergencies hit. That discouragement could derail your goals.

Key Number 6: Reduce Your Monthly Expenses

Take a critical look at every bill and see where you can save. Compare insurance rates, raise deductibles, or eliminate premium services. Seniors and veterans qualify for all types of discounts and senior discounts sometimes start as early as 50. Many people discover when scrutinizing bills line by line, that they are paying for extra services they never even remember signing up for. Becoming more fee-sensitive can save a lot of money.

Key Number 7: Call Clay Advisors — Set a Timeframe for Paying Off Debt

Without a specific end date in mind, it is easy to let weeks and months slip by with no forward momentum. The only way to get out of debt that likely took years to get into is to make a plan to get out. Perhaps set a goal to become free of credit card debt in 4 or 5 years. Talk to an expert who can help you make a plan to address your debt, with payments you can afford. 

If you are burdened with high amounts of credit card debt and want to make a plan to pay it all off — whether with a debt consolidation loan or a debt resolution program — call Clay Advisors today for a free financial analysis that won’t impact your credit score. Committing to a plan to resolve your debt is the first step to setting yourself on the path to a financial future you can count on.

08/08/2022 0 comment
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Track your financial goals
Personal Finance

5 Tips to Help You Track Your Money Goals

by My Journey to Millions 01/03/2022
written by My Journey to Millions

While it is easy to set money goals, many people struggle to stick to them and stay motivated in the long term. To help make it easier to track your money goals, we’ve put together a list of five simple yet effective tips.

Split your goals into smaller milestones

Setting milestones is a great way to stay on top of your financial goals. Instead of tackling huge savings goals head-on, dividing them into smaller milestones makes things seem much more achievable. This will also help keep you motivated as you gradually complete smaller milestones one after the other. Achieving multiple smaller milestones can be much more satisfying than a single goal that takes forever to reach.

Keep track of your expenses

One of the easiest ways to help track your money goals is monitoring your spending habits and expenses. Oftentimes, we overspend on items that we may not necessarily need without realizing how much it is affecting our finances. Therefore, having a convenient tool that tracks your expenses can be extremely helpful nowadays. There are many applications such as Mint and Money Manager that can help you easily track your spending and see exactly where your money is going every month.

Stick to a budget

Aside from tracking your expenses, you should also set a monthly budget that you can stick to consistently. Of course, there’s no use setting a budget that is almost impossible to stick to, and having a massive budget defeats the purpose. Therefore, you should create a budget that is strict but realistic if you are careful with your money.

Automate your savings

By setting up automatic contributions to your savings account, you’ll be saving money every month automatically.  This way a certain amount of money remaining from your checking account is automatically transferred to your savings account. Automating your savings means that you are reducing the opportunities to spend potential savings unnecessarily.

Establishing an emergency fund

While you may be on track to reach your money goals, there is always a chance that you encounter an unexpected financial bump in the road. So, it is almost a necessity to set up an emergency fund to still be able to reach your goals if something goes wrong. Usually, you will want to save up at least three months’ worth of expenses in case of any unforeseen issues or emergencies.

01/03/2022 0 comment
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Fidelity Mutual funds
Investments

The 4 Best Fidelity Mutual Funds

by My Journey to Millions 12/22/2021
written by My Journey to Millions

Mutual funds are when many investors pool their money together in order to purchase a specific set of stocks or bonds. Nowadays, there are many different mutual funds to choose from, each with its own benefits and drawbacks. So, we’ve put together a list of some of the best Fidelity mutual funds in the long run.

Fidelity 500 Index Fund (FXAIX)

Fidelity 500 Index Fund is benchmarked to the S&P 500 which consists of top 500 publicly traded corporations in the U.S.  This mutual fund is one of the most popular choices for investors of all sizes, and for good reason. Fidelity 500 gives investors a wide and varied exposure to large corporations which tend to be relatively stable. Also, the fees are incredibly cheap with a tiny expense ratio of 0.015%. One thing to keep in mind is that S&P 500 is weighted by size so companies like Microsoft (MSFT) and Apple (AAPL) can have a large impact on this index.

Fidelity Nasdaq Composite Index Fund (FNCMX)

FNCMX functions in a similar manner to similarly to Fidelity 500 but focuses on corporations that are listed on the Nasdaq Composite exchange. It comprises around 3,100 stocks which are mostly for tech-oriented companies.  Because Nasdaq has a high concentration of companies in the technology sector, FNCMX functions as an indicator of how well the tech market is performing.

Fidelity Total Market Index Fund (FSKAX)

It may be difficult to choose what to invest in nowadays so there are mutual funds dedicated to those who would like to invest in a little bit of everything. Fidelity Total Market Index Fund consists of 3,700 stocks covering anything from billion-dollar companies to small and ambitious startups. Again, the top corporations do occupy a significant percentage of all assets, but Fidelity Total Market Index Fund is as diverse as it gets.

Fidelity U.S. Bond Index Fund (FXNAX)

Index funds don’t just have to invest your money in stocks, as bonds are also valuable assets with that retain value well over the long term. FXNAX offers a diversified portfolio with at least 80% of the fund’s assets in bonds included in the Bloomberg U.S. Aggregate Bond Index. While the returns aren’t as impressive as those of other index funds FXNAX tends to offer more stability. In addition, the incredibly low expense ratio of 0.025% makes this index fund even more appealing.

12/22/2021 0 comment
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How to Calculate Your Personal Net Worth
Personal Finance

How to Calculate Your Personal Net Worth

by My Journey to Millions 09/01/2021
written by My Journey to Millions

In order to have a complete picture of your current financial status at any given moment, it’s important to know what your personal net worth is. Serving as a snapshot of your financial health, tracking your net worth is the best way to understand how you’re progressing toward your financial goals. With this piece of data, you can make decisions about how to adjust your spending, saving, and other financial activities in order to progress toward your goals and reach financial stability.

In this article, we’ll define net worth, explain its importance, and show you how you can calculate your own net worth.

What is Personal Net Worth?

You’ve probably heard the term “net worth” before, maybe in the context of the net worth of a celebrity, CEO, or other wealthy people. But the reality is that we all have a personal net worth regardless of our income. 

In the simplest terms, your personal net worth is the amount of money that you actually have to your name. It is the difference between your total assets, or the total items of economic value that belong to you, and your total liabilities, or the combined debts and obligations that you owe to outside parties.

So let’s say that your total assets, including the money you have in your bank account, your savings and investments, and the property you own, come out to $200,000. However, your total liabilities, including your credit card debt and the amount of money you owe in student loans, come out to $50,000. This means that your net worth is $150,000. 

In order to increase your net worth, you can either increase your total assets, decrease your total liabilities, or, ideally, do both at the same time.

How is Personal Net Worth Used?

If you want to evaluate your current financial status and make decisions about how to work toward your financial goals, calculating your personal net worth is an invaluable tool. It can serve as a wake-up call that your financial situation isn’t quite as solid as you thought it was, or otherwise it might prove to you that you are on track toward your financial goals. Either way, it’s the best way to get a meaningful view of your finances.

Calculating Your Personal Net Worth

As long as you have accurate records of your assets and liabilities as they stand, calculating your net worth is easy. In a spreadsheet, on paper, or using an online tool, start by adding up all of your assets. This can include:

  • Bank accounts
  • Investment accounts
  • Retirement accounts
  • Real estate
  • Personal assets like cars, art, and jewelry 

The next step is to do the same with your liabilities, which might include:

  • Credit card debt
  • Student loans
  • Personal loans
  • Auto loans
  • Mortgages
  • Other liabilities like debt to family, medical, debt, and IRS liabilities

Once you have your total assets and total liabilities calculated, subtract your liabilities from your assets. The result is your personal net worth. Redoing this calculation once every quarter is a worthwhile, smart, and financially healthy habit.

09/01/2021 0 comment
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3 Crucial Tips to Help Your Parents Financially
FamilyPersonal Finance

3 Crucial Tips to Help Your Parents Financially

by My Journey to Millions 08/25/2021
written by My Journey to Millions

Do your aging parents need financial help?

It’s a strange place to be as a son or daughter because life is coming full circle. No longer are your parents taking care of you. Instead, it’s time to return the favor.

Beyond that, you have your own expenses to manage, which might include your own children, car payments, mortgages, rents, and all manners of insurance.

Are you worried about this new challenge? Don’t sweat it–just read the rest of this blog for three tips to help your parents financially:

Tip #1: Help First. Pay Second.

Are you like the bulk of Americans who have aging parents? 

If so, you’re in a precarious financial position at this stage in your life. You need to make sure your actions are towards financial stability.

You could even be doing okay money-wise, but who knows what tomorrow will bring? Very few people in this world have unlimited funds at their disposal.

So, if you can help your parents while protecting your savings, why not take that option?

One way to be there for your parents without lending them money is to guide them through a downsizing process. You’ll need to be hands-on and take a leadership approach.

With the above notion in mind, Fidelity.com highlights the three most important factors you must consider when helping your parents downsize:

  • Location significantly impacts finances and lifestyle.
  • A home dictates taxes, insurance, utilities, and maintenance costs.
  • Crafting a financial plan will help with finding the right house.

The Balance suggests offering your aging parents the option of moving into your place if you have the space. You should also help them make a budget. You can save up by avoiding unnecessary expenses.

Lastly, if you’re handy, do repairs and maintenance on your parents’ car or in their home.

Tip #2: Transparency is a Must, So You Can Plan.

According to Money Under 30, most millennials who help their parents financially are putting themselves at risk to do so. Furthermore, over half of those people don’t ask why their parents need help. Nor do they know where the money is going.

These arrangements function best when you know where the money is going and whether it will be repaid. Specifics are a must.

Additionally, find out how each family member can assist with your parents’ quality of life.

From there, it’s possible to plan and budget based on the information you’ve been given. 

For instance, it’s better to know your parents can’t pay you back, because you can adjust your lifestyle accordingly.

Tip #3: Protect Yourself from Toxic Situations

You’ll always feel a sense of obligation when your parents are in need. 

Potential guilt aside, if you can’t afford to give your parents money, that’s just a cold hard fact. As this article already discussed, there are ways to help without lending or giving away money.

Essentially, if your parents have been financially irresponsible and keep coming to you for money, that’s toxic behavior. 

While you can still help in various ways (namely, taking charge of your parent’s finances and coaching them), you aren’t responsible for their mistakes. Your money is yours. Helping out when you deem it necessary is one thing. But you’re under no obligation to fork over your life savings.

Rest easy and pull out your calculators. You can now put your best foot forward with these 3 tips to help your parents financially.

08/25/2021 0 comment
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