Interest Rates Are Rising, Did You Know?

One common theme we see with many clients, friends and prospects is the lack of knowledge surrounding interest rates. Many Americans have debt, whether that be credit cards, student loans, mortgages or other financial obligations. However, while taking on debt can be beneficial to your credit score and financial health, it can be detrimental for those who are unaware of their interest rate and how to interpret it. 

Interestingly enough, a Bankrate survey  reported that “Of those who carry a balance, 40% don’t know the interest rate they’re being charged on their primary card”. Not knowing your interest rate and its terms can be very dangerous and potentially very costly to the borrower. When reviewing your financial picture, be sure to pinpoint certain debts that have higher interest rates and make sure you are staying on top of your payments and reducing that liability. 

As we’ve been discussing for quite some time now, interest rates are beginning to rise and, according to Federal Reserve’s Jerome Powell’s announcement last week, rates will continue to rise throughout the year. This is a great and timely warning to educate yourself on your interest rates as you prepare financially for 2022 and beyond.

Moving forward, make sure you know your interest rates, especially as you evaluate whether you want to take on more debt and what it may cost you. With pandemic-related economic support the past two years, interest rates may not have been on the forefront of your financial planning list, but now it’s time to take control and see how your current rates and rising rates will impact your portfolio, credit cards, mortgages, and overall financial life. 

If you need help analyzing and understanding how your interest rates will affect you, email us at info@shermanwealth.com or schedule a complimentary intro meeting here. 

Look Out For These Tax Forms to Prepare for 2021 Tax Season

You may be receiving tons of paperwork over the next few weeks to prepare for your 2021 tax filing. We know tax season can be a stressful time, especially given the abundance of information and forms you need to gather. In an attempt to alleviate some of this anxiety, we want to let you know which forms you should be on the lookout for.

  • For starters, W2 employees should be on the lookout for Form 1099
  • In addition, those with investments, including those with dividends, interest , capital gains and losses, should also be on the lookout for their 1099 
  • The sale of real estate or property also requires Form 1099, more specifically 1099-S
  • If you are involved in a partnership, S-Corp, or LLC, you will need a K-1, but those will come later, not by January 31
  • If you exercised ISOs or NSOs, look out for form 3921

While these are only a few of the common forms you should be on the lookout for, if you have more specific questions about which forms you need for your particular situation, email us at info@shermanwealth.com or schedule a complimentary 30-minute consultation here. If you are missing information you think you might need for tax season, make sure to reach out to your financial advisor or custodian so that you have the proper documentation and your taxes are not delayed.

What To Do With Money You Need In The Short Term

There are always lots of money management questions when it comes to investing and saving. Both of these actions are crucial in building your wealth and are stepping stones to reaching your financial goals. One common question we typically get asked by prospects and clients is, “What should I do with money that I will need in the near future?”. This is a great question, because while there is no one right answer due to the fact that everyone’s financial situation differs, there are a few financial tips we can discuss.

Typically, money you will need in the near future is for a large purchase or goal, or an emergency fund you like to keep at arm’s length. Regardless of the reason, for dollars you don’t want to invest for the long-term, think about opening a high-yield savings account. 

High-yield saving accounts differ from traditional saving accounts as they provide significantly higher interest rates, allowing you to earn more money and keep pace with inflation. Your traditional savings account is probably earning you close to zero each month, whereas some high-yield savings accounts are offering rates close to 1%.

The process of opening this type of account is extremely simple, and will only require a few clicks on your computer. So why not make this easy change and take advantage of this great opportunity? While there are other options available when thinking about investing your money for the short-term, high-yield savings accounts are a great start. Click here for CNBC’s top pick’s for high-yield savings accounts and let us know if you have any questions about your particular financial situation. As mentioned earlier, since everyone’s financial goals, priorities, and backgrounds are different, it’s always a good idea to speak with a financial professional about how to make the best decisions for you and your family. If you have any questions for us or want to schedule a complimentary 30-minute consultation, book some time now! 

Inflation Rose 7% in The Past Year, the Highest in 40 Years!

Have you been feeling the impacts of inflation? I’m sure you have. The Labor Department reported on Wednesday that inflation rose 7% over the past year, the highest in 40 years! And on a monthly basis, they reported that CPI rose 0.5%. “The annual move was the fastest increase since June 1982 and comes amid a shortage of goods and workers and on the heels of unprecedented cash flowing through the U.S. economy from Congress and the Federal Reserve,” according to CNBC. Not only will this data continue to affect the prices of things we buy and purchase everyday, but it will also have a dramatic impact on interest rates and as we talked about last week, the 10-year treasury as well.

 

These inflation numbers are quite notable as they will affect aspects of life and personal finance dramatically, in contrast to the declining rate environment we have been in the past few years. Make sure you are understanding the impacts of the Federal Reserve increases and rising rates on your life and portfolio. If you have any questions about how these increases and economic data will affect your personal financial situation and smart financial moves to make, reach out to us at info@shermanwealth.com or schedule a 30-minute complimentary meeting here. 

 

What Are Your Short and Long-Term Goals?

Do you have financial goals? If so, are they short-term or long-term, or both? Maybe you don’t know the difference. That’s okay because we are going to discuss the difference between short and long-term goals and how to strategize for them. 

So, what is the difference between a short and long-term goal? We like to think a short term goal is something that you need liquid cash for in the foreseeable future, maybe within around 12-18 months. A longer term goal is something that you want to save for over a duration of time, maybe achievable within 3+ years or so. 

Now that you know the differences between the two, you may ask yourself, how do I create these goals I have for myself? First and foremost, you want to think about your priorities in life. Do you have upcoming expenses, do you need to save for retirement, do you have enough money in your emergency fund and checking account for your monthly expenses? 

When thinking about your goals, it’s also important to think about your risk tolerance. For example, are you willing to risk your money on investments? Or do you want it to be safe in a FDIC insured account? These are all questions you should ask yourself when designing your goals and thinking about how you want to use your money.

Setting goals can oftentimes get tricky because it’s hard to find a balance between wants vs. needs. Is your goal a necessity? Or a Want? Ask yourself some questions about the importance of your goals and think about how reasonable each one is given your financial situation and lifestyle. Deciphering wants vs. needs is a great starting point when creating goals.  When creating shorter-term goals, be sure to ask yourself when you will need the money you are reaching for so you know exactly how to strategize and save. 

Once you’ve clearly identified a realistic goal and determined the amount, timeline, and urgency of the goal, it’s time to start working towards it. Be slow and steady and stick to your plan once you make it. Goals and the methods of savings will be different for every individual, so it’s important to drown out the noise and do what is best for your personal situation. With the help of a financial advisor, you can easily put your priorities and strategies in place to reach your goals.  If you find yourself needing clarity on goal-setting and achieving your milestones, email us at info@shermanwealth.com or schedule a 30-minute consultation here.

What Are Your Financial Resolutions for 2022?

Happy New Year everyone! We hope you all had a wonderful holiday season and new year celebration. When a new year rolls around, we often think about the year just behind us and set financial resolutions and goals for the year to come. So, let’s discuss a few great 2022 financial resolutions we’ve seen and recommend to ensure you are starting your new year off on the right foot. 

Prior to setting your financial resolutions, it’s a good idea to think about goal setting and how to set challenging, yet realistic and attainable objectives for the coming year. Take a look at our previous blog that lays out the framework of goal-setting, distinguishing between short and long-term financial goals, and sticking to your strategy in order to reach those goals. So, now that we discussed how to set those goals, what are some good resolutions to put in place?

Pay Off Debt 

Paying off debt seems to be a common financial resolution as we head into 2022. If you have loans or credit card debt, think about making a plan to pay it off and sticking to it. If you need assistance in setting up a strategy to tackle your debt, we are here to help! 

Set a Realistic Budget 

When it comes to finances, we see that individuals oftentimes are stressed or concerned about their budgeting and spending. Think about your cash flows, wants vs. your needs, along with long and short-term goals to reach a reasonable and realistic budget that works for you and your family.

Automate & Track Your Finances

If you aren’t already doing so, automating your finances is a crucial way to get organized. Aggregating all your accounts into one place that is accessible at the click of a few buttons on your smartphone can drastically change how you view your situation as a whole. If you are interested in utilizing our data aggregation software, let us know and we are happy to help you get started! 

Saving For Big Purchase/Goal

Whether it’s a new home, college, or a kitchen renovation, we know saving for a big purchase can be stressful. In our podcast episode with David Pearl, we discussed intentional and smart spending, and how there can sometimes be a psychological disconnect when saving for and actually spending money on a large goal. This disconnect and sense of stress is very common when saving for a big purchase, which is why it’s crucial to set up a savings plan and budget that works for you. 

Save for Retirement 

The contribution limits for 2022 have recently increased. If you are unaware of the retirement inflation-adjustments, check out our blog for a breakdown of those changes. This increase in contribution limits is a great opportunity to ramp up your retirement savings in 2022. Also, as we are only a few days into the New Year, make sure to review your company 401(k) match to ensure you are taking full advantage of your situation. 

While these are only a few financial resolutions that may help you improve your financial stability and situation in 2022, there are endless moves that can be made to better your overall financial outlook. If you have any questions about setting attainable goals and resolutions for 2022, email us at info@shermanwealth.com or schedule a complimentary 30-minute consultation here. 

Ep. 67 Launch Financial- Happy New Year & Financial Goal-Setting in 2022

Overview: Happy New Year everyone! We hope you had a wonderful holiday season and New Year! Join us on this week’s episode of Launch Financial as we discuss Apple hitting $3 trillion market-cap, financial goal and resolution setting in 2022, and some financial tips we have to start the year! 

What You’ll Learn

  • Our 2022 financial resolutions 
  • Financial tips to start the year 
  • Goal-setting in 2022

Show Notes

Check out this episode!