How Millennials Boosted Their Credit Scores in 2020

Millennials have been receiving some hot press recently. Let’s take a look and see what they’re up to. In a recent blog we discussed how despite the pandemic, millennials have doubled their assets over the past four years, topping $10 trillion in assets. As we continued to monitor how America’s young adults are setting themselves up for financial success, we found that millennials boosted their credit score more than any generation in 2020. However, we have also seen how individuals are struggling financially despite a high credit score.

The average FICO Score for U.S. consumers hit a record 710 last year, and millennials led the pack with an 11-point increase, according to Experian’s 2020 Consumer Credit Review.

Overall, all generations boosted their credit scores by one to 11 points from 2019 to 2020. These increases are a result of consumers paying their bills on-time and cutting back on spending amid an unpredictable economy. While millennials and Gen X saw double digit increases in credit scores (11 and 10 points, respectively), the silent generation continued to have the highest average credit score at 758.

The silent generation even outpaced the average credit score for the general population (710), which doesn’t come as a surprise since older generations typically have higher credit scores. This can be attributed to having more time to build good and excellent credit. We have also found that during the coronavirus pandemic, individuals have been using federal relief measures, including stimulus checks and a pause in loan repayments to boost their credit score, even though they may be struggling financially.

No matter your age or situation, it’s always important to know your credit score matters. And remember, it’s never too early to start building credit. Consider some of these tips if you are beginning to build your credit: make payments on time, pay in full, and consider utilizing a credit score tracker to ensure nothing falls through the cracks, like an old Verizon bill from college. Tiny unpaid bills such as those can have a lasting effect on your credit score, so make sure you stay on top of your finances and bills. 

It’s also important to note low interest rates and how you can use them to leverage your situation. With a high credit score, you can take advantage of historically low interest rates on all loans, including car, home, and student loans. By putting to use some of the tips listed above, you will have a much easier time with lenders when it comes time to take out a loan. If you have any questions about how to build or maintain a healthy credit score, please reach out to us at or schedule a complimentary 30-minute conversation here

Here’s How to Track your Expenses in 2021

Staying on top of your finances and tracking your expenses can seem like a daunting task. When your life continues to get busier, it’s often easier to push aside your finances. However, due to the great technological advances in society, you now have access to simpler and immediate tools that will help you manage your overall finances. 

Luckily, there are various ways you can track your own expenses, depending on what works best for your lifestyle. Some consumers like a more hands-on approach in which you log each transaction as it happens, while others prefer creating a spreadsheet to capture a big-picture look at their monthly expenses overall. There are even budgeting apps that automate the process, making it easy to keep tabs on your cash. In one of our previous blogs, we touched on the technologies we provide our clients with that help them see their overall net worth and all the pieces in between in one snapshot. 

Our biggest recommendation in managing your expenses and finances is automation. As mentioned earlier, our world today has made it so simple to have access to your finances at the click of a button. Using software and automating your bank statements and payment schedule, credit cards, and more can not only save you time, but help keep you more organized and on top of your spending. It’s easy to swipe your credit card without thinking twice, but with new features such as purchase notifications, you can see in real time how much you are spending and where your credit card balance lies at all times. 

How you manage your money is a personal decision that only you can make. While some may prefer logging each of their transactions manually, others may like an app that syncs to their accounts and tracks expenses for them. No matter what route you choose, make sure you are setting aside routine time to check on your spending and evaluate your financial progress as you go. If you have any questions on how to better manage and automate your finances or would like a free trial to our technological software, please reach out to us at or schedule a complimentary 30-minute consultation on our site. 


Here’s Why To Consider A Donor Advised Fund

In our previous blog, we discussed tax implications of short term investments and some options of what to do with those short term gains. At Sherman Wealth, we are very charitably inclined, so we mentioned how setting up a donor advised fund could be a good option. Interestingly enough, we read an article stating that Fidelity Charitable and Schwab Charitable donors gave record amounts of money to support non-profits in 2020, inspired by a desire to help those suffering during the pandemic.

Fidelity Charitable said its donors made 2 million grants totaling $9.1 billion to 170,000 charities last year, a 24% increase in the amount of money donated and a 31% increase in the number of grants compared to 2019, according to a report released Wednesday. In a report in late January, Schwab Charitable said its donors gave 830,000 grants totaling $3.7 billion to nearly 100,000 charities — a 35% increase in the dollars donated and a 39% increase in the number of grants.

According to the company VPs, the pace and the amount of giving stood out compared to previous years.The pandemic changed giving targets, as donors supported organizations that provided food and other necessities for people who experienced economic setbacks due to the outbreak.

For those interested in charitable giving, you can contribute funds into a donor advised fund, which will allow a donor to make charitable contributions, receive a tax deduction and then distribute the money over time. It was so incredible to see such an outpouring of love and support to those in need during such a difficult time. If you are in a position to do so, we always encourage others to consider giving back to those in need or setting up a donor advised fund. If you have any questions about setting up a donor advised fund or charitable giving, please reach out to us at or schedule a complimentary 30-minute meeting.

Here’s How Bitcoin Will Affect Your Taxes

Getting swept up in the crypto-currency craze? Thought so. Since the coronavirus pandemic took its toll on the world in March, bitcoin has rocketed towards the sky. Hovering at approximately $5,000 in March, bitcoin broke its record high at $50,000 this week as you can see in the chart below.  

With the increase of interest in meme stocks and crypto-currency in recent months, we want to bring light a facet of these stocks that you may not be thinking about. With tax season beginning as discussed in our previous blog, you should take a second to look at the tax implications involved with bitcoin and meme stocks. If you are to get swept up in day trading on Robinhood or other platforms, you should know the difference between short and long term tax rates. It’s important to note that some of these alternative coins cannot convert to cash, which could cause some complications when it comes to your taxes. Most people are not aware that if you hold onto any asset for less than 365 days, it will be taxed as ordinary income, which can get quite expensive for some individuals, as you can see in the chart below.

No matter what asset class you are investing in, keep in mind that it’s either most tax efficient in a retirement account or to hold onto for more than a year. If you are day trading or thinking for the short term, be very aware of the tax implications and how that affects the overall return of said investment.  If you do not plan on selling your investments or are thinking about selling, it is important to understand  these tax implications as well. As always, make sure you understand the risks involved before investing  and only risk what you can afford to lose. When listening to the media and the Dave Portnoy’s of the world, it’s easy to swept up in the hype; however, these influencers do not usually discuss the serious tax surprises that these investments can have. Sherman Wealth is charitably inclined, and if you are as well you might want to consider setting up a donor advised fund or donating your gains right to charity if you are sitting on gains before selling. 

While it may be exhilarating and increasingly popular to get involved with meme and heavily shorted stocks, keep in mind the complications and volatility involved. At Sherman Wealth, we always encourage you to keep a diversified portfolio that will benefit your financial future and goes along with your individual risk tolerance and financial plan. If you have any questions about anything discussed in this blog or need help finding the right tax professional to help you with your tax return or discuss donating assets to charity, please reach out to us at or schedule a 30-minute consultation here


Tax Filing Season Is Here

Tax filing season officially begins February 12th, so make sure to get your documents and files in order! We know tax season can be daunting; however, submitting your tax return to the IRS as soon as you are able may be extra crucial this year. 

That’s because the coronavirus pandemic has led to changes in the tax code that will impact individual returns and refunds.

The season is also shorter than usual this year. The IRS will start accepting and processing tax returns on Friday, Feb. 12, and so far, has made no indication that it will also delay the April 15 filing deadline — an additional incentive to be on top of filing taxes, especially if you’re going to work with a tax preparer. Keep in mind that prior to filing your tax return, you should contribute to your retirement accounts, IRA, and Roth IRA’s depending on your income and if you qualify. For more details on whether you qualify, check out the link here

That’s because the coronavirus pandemic has led to changes in the tax code that will impact individual returns and refunds. The season is also shorter than usual this year. The IRS will start accepting and processing tax returns on Friday, Feb. 12, and so far, has made no indication that it will also delay the April 15 filing deadline — an additional incentive to be on top of filing taxes, especially if you’re going to work with a tax preparer. 

There’s no benefit to waiting on getting your tax return this year. Make sure to get organized and file your documents as soon as you are ready to. If you have any questions or need help finding a tax professional please reach out to us at or schedule a 30-minute consultation on our site here.


Has COVID-19 Impacted Your Relationships?

COVID-19 has impacted our lives in myriad ways. Work, relationships and finances — the very core aspects of day-to-day life — have been upended by widespread job loss and stay-at-home orders. Couples are spending more time together. Singles, now socially distancing, are dating less.

Due to the global pandemic, relationships have shifted: Couples and singles alike are focusing increasingly on financial stability and transparency.

In a recent Personal Capital survey conducted by The Harris Poll*, nearly 2 in 3 Americans (61%) told us that the COVID-19 pandemic has made financial stability in a partner more important to them.

Financial stress affects couples in different ways. According to our survey, however, men feel the impact of financial stress in a relationship slightly more than women. They have also noticed that they are talking more about money with their partner, and — either in conversation or in private — they’re more likely to have contemplated a prenup. However, they don’t value financial stability as much as women do.

For many couples, we find the conversation that is needed  is more about being upfront and transparent about finances in general, such as their personal situation, goals and views around money. Money isn’t exactly the most romantic topic — especially when you and your partner broach it out of necessity or due to a conflict. In these instances, we recommend going into the conversation with “an open mind, ready to listen and avoid judgement.”

As a third party and fiduciary advisor, we can help facilitate a big-picture money discussion, laying out the pros and cons of various scenarios and nudging both sides to be honest about your current financial situation and  future money expectations.

We recently published a podcast with psychotherapist David Pearl about tips and ways to have those uncomfortable conversations with your significant other. In all, Personal finance is just that — personal. When discussing it with a partner, it can feel vulnerable, and you can feel anxious or uneasy. However, don’t let those feelings distract you from having a productive and transparent conversation. Consider discussing with a financial advisor to help spark those conversations and find a happy medium when it comes to your finances. If you and your partner would like to discuss with us, please book a complimentary 30-minute consultation here. 

How to Take Advantage of the Student Loan Relief Extension

If you’re juggling federal student loan debt along with other bills, you’re about to get another pandemic-related break. Those of you who lost a job during the pandemic and now need to decide whether to pay their student loan debt or buy groceries can hold off making federal student loan payments through Sept. 30. The temporary pause for federal student loan payments had originally been set to end Jan. 31 for more than 42 million borrowers.

This change means that the interest rate on many federal student loan payments stays set at 0% for another eight months. But keep in mind, millions of private student loan payments and some federal student loans aren’t covered by this deal.

This loan deferral program has allowed many people a chance to breathe and pay down other debt or get back on their feet during these challenging times. Some families may be able to use this time to pay off high-rate credit card debt or other bills. Others, if able, might try to set aside extra cash to create or beef up their emergency fund.

The temporary financial break, which was first announced in March, was extended twice last year and then again, most recently at the request of President Joe Biden, who took executive action on the matter on his first day in office.

It’s important for borrowers to consider signing up for income-driven repayment plans while the pause is in place. In this case, in the months when they’re not required to make a payment will count in their favor with some income-driven plans that offer loan forgiveness at the end of a 20-year or 25-year period. Furthermore, you might want to consider an income-driven repayment plan to help you avoid defaulting if your total student loan debt at graduation exceeds your annual income, especially if you want to pursue Public Service Loan Forgiveness.

In general, since monthly payments are calculated based on borrowers’ incomes and family sizes, these types of plans may be more affordable than other options. 

Typically, experts say, borrowers should opt for the repayment plan with the highest monthly payment that they can afford so that the interest doesn’t keep building over the long run. 

Will there be another pause in payments after September? The Biden administration has left open that possibility, but borrowers would be wise to take advantage of what they know is available right now. 

The risks are high for failing to repay student loans. Borrowers can face collection fees; wage garnishment; money being withheld from income tax refunds, Social Security, and other federal payments; damage to their credit scores; and even ineligibility for other aid programs, such as help with homeownership. 

Going forward, Biden has proposed forgiving up to $10,000 in federal student loans for borrowers. But borrowers have no guarantees that such a change will take place or when. So, right now it’s important to take a realistic look at your overall financial situation and try to use the next eight months to your advantage. There is pending legislation to forgive student loans, so make sure to stay tuned for updates to come. If you have any questions related to your student loans and your strategy to repay them, please contact us at or schedule a complimentary 30-minute consultation here

Deep Dive into Wall Street’s Rollercoaster

In our previous blog, we discussed the recent short squeeze events that occurred on Wall Street. In addition to the short stock names, the last thirteen months in the stock market have been a rollercoaster, with the coronavirus pandemic, the federal reserve, post inauguration record market highs, an influx in “TikTok” day traders, and a great deal of record earnings reports. Check out the wild ride the stock market took in the last 12 months.


Through all these various events, social media has played a large role. News sources, TikTok, the twitter world, and celebrities have blown up the media, sharing their opinions and beliefs. The Dave Portnoy’s of the world believe one thing, while Mark Cuban, Ja Rule, and TikTok are saying another, that’s what makes a “market”. Remember some of these same people told you to sell at the bottom in March when COVID-19 was hitting. With the strong influence and prevalence of social media, it’s hard to know what to believe and where to get your conflict-free advice from. Remember, these TikTok “experts” and celebrities are not financial advisors and do not have the full scope of your financial situation when they post their advice online.  

We know it’s hard not to get swept up in the media and fads at the time, but we encourage you to drown out the noise and focus on the decisions that really matter. Focus on your long-term investment goals and strategies to make sure your financial future is secure. For those who are involved with short-term investments, remember to only risk what you are comfortable with losing and keep in mind tax implications. Everyone’s situation is quite different, and the media won’t always reflect your personal financial situation. 

When the market is volatile and unexpected events may occur, however, we encourage our clients to try to ignore the investment biases that occur. At Sherman Wealth, we believe that all individuals should have access to capital markets, no matter their financial situation. We encourage our clients to diversify their portfolios, invest fearlessly, but successfully at the same time. We know this last year has been a wild ride and quite confusing for some, so we want to help you understand. If you have any questions or would like to discuss how we can help your current situation moving forward, please contact us at or schedule a complimentary 30-minute consultation here