When Student Loan Payments Restart

We know the past year and a half has been quite the whirlwind, and as we approach summer and the economy continues to re-open, we want to bring light to some financial stress individuals may be facing. 

Federal student loan payments are set to resume on October 1, after an unprecedented 19-month suspension that was put in place to provide financial relief to borrowers during the pandemic.Borrower balances have paused now for over a year, with no payments required on federal loans since March 2020. 

The pause on payments was originally supposed to be in place for only two 7 months, but it was extended by both of the presidents administrations. We are unsure if it will be extended once again, but will continue to follow it for all of you with student loans who may have been partaking in this extension.  We have been following the recent news of proposals to President Biden to cancel debt for American’s and will continue to report as we learn more; however, for those with student loan repayments starting up soon, its important to start thinking about your financial situation and how that will change as you begin this repayment. For questions about your financial situation or advice on tools to help organize and automate your finances, reach out to us at info@shermanwealth.com or schedule a complimentary 30-minute conversation here.

Here’s How the Pandemic Changed Charitable Giving In 2020

Despite the pandemic, do you still find yourself being charitably inclined? Most affluent Americans — about 90% — gave to charitable causes in 2020, with a third of them giving more than in the past to organizations focused on meeting basic needs, according to research from the Bank of America and the Indiana University Lilly Family School of Philanthropy

There were some shifts in charitable giving, the bank found. More wealthy donors supported local community needs than usual, and there was an increase in unrestricted gifts — those that the nonprofit can use how it sees fit instead of for a specific purpose required by the donor.

As we continually discuss, donor advised funds are a great way to support your charities of choice and make a strong impact in the world, while also benefiting your tax situation. Check out our recent podcast with Elizabeth Goldstein at the Jewish Federation of Greater Washington as we discuss everything you need to know about donor advised funds. At Sherman Wealth, we are honored to be able to give back to the local community, including organizations such as So What Else, Nourish Now, A Wider Circle, and The Jewish Federation Of Greater Washington. What local charities are near and dear to your heart? Let us know at info@shermanwealth.com.

When Should You Give Inheritance Money to Your Kids?

When it comes to gifting and giving money, especially to family members, people are oftentimes confused on when is the right time to pass over their inheritance. Should an inheritance be strictly given after one’s death? Should it be used while one is still alive?  Let’s take a look at some of these questions.

Of course, every family is different, in terms of how they want to be remembered, but there are some things that every family should think about when passing on wealth. 

Give Now or Later?

Giving now rather than later is the preferred approach for many financially comfortable people these days. According to a 2019 Merrill study, Leaving a Legacy: A Lasting Gift to Loved Ones, 65% of Americans 55 and older say it’s better to pass on at least part of their estate while they are still alive.

While every family person has a different financial situation and circumstance, if deciding whether to gift your money earlier or later, here are some questions to ask yourself. 

Are You Over-Giving?

Before you give to your children or family members, make sure you are not sacrificing your own personal financial situation. Oftentimes, family members give too much to their children and don’t save enough for their own lifetime. 

Some of your children may prefer to wait for their inheritance, while others could benefit greatly from having the assets today. Before making that decision, make sure to communicate with your family members to make sure everyone is comfortable with the situation at hand. We recently recorded a podcast episode with David Pearl discussing money and financial traditions, explaining how to pass down money values and concepts. 

Where the U.S Tax Code Comes In

For those who are interested in contributing to the education of heir children or grandchildren, 529 plans may be a great place to start. 529 plans allows you to slowly contribute and save for your children’s education that they can use later in life.

Remember you can give up to $15,000 tax-free without it going against your gift exemption. For more information on the recent tax code proposal, check out our podcast episode with CPA, Shawn Donovan.

While this situation varies from person to person, it’s important to plan out your inheritance and set a will in place so that your hard-earned money is shared amongst your loved ones. Planning early and asking yourself these questions is a great strategy to help you make the right decisions when it comes to your inheritance. If you have any questions about your personal financial situation and what makes the most sense for you and your family, please email us at info@shermanwealth.com. 

Financial Literacy Month Q&A

As we kick off financial literacy month, we want to share some frequently asked questions we’ve received from clients and friends and provide actionable answers. As we embark on a new quarter and the spring season, it’s a perfect time for some “spring cleaning” and financial organization. Throughout the month of April, we want to stress the importance of financial literacy and spread the word about financial education and empowerment. We will be sharing questions, answers, and advice we receive in hope to help you all organize and prepare your finances for the rest of the year.  

Below you will find some frequently asked questions:

Q: As a new college graduate, where/how do I get started in terms of investing?

A: First and foremost, it’s important to take a step back and establish what your financial goals are. If you are saving up for a new apartment or expenses in the near future, maybe consider building up your emergency fund/savings account. If you want to set yourself up for a solid financial future, you should think about contributing to your retirement, in a 401(k) through your workplace, or a Traditional/Roth IRA if you don’t have a 401k at work.  But most importantly, don’t forget about that emergency fund.  If 2020 taught us anything it’s to prepare for the unexpected.  

Q: How do I decide which credit card to apply for?

A: Before applying for a credit card and opening lines of credit, make sure you understand the responsibilities involved. When opening a new credit card, you must remember to pay your balances and statements on time in order to keep your credit score in tip top shape. That being said, opening lines of credits are crucial in establishing your credit score, so it’s important to do so. When deciding which credit card to choose, think about your expenses and where most of your dollars go. For example, if you spend most of your money at Amazon, consider purchasing an Amazon credit card that may provide you with cash back or points offers. Or, if you love to travel and dine at restaurants, consider a card that provides you with double points for those activities. Making the most of your credit cards is a great financial literacy tip to start the month. 

Implementing these small tips into your everyday financial routine is a great way to get organized and start off on the right foot. For more financial literacy advice and questions, check out our most recent podcast. If you have other questions similar to the ones above, please feel free to send them to us to answer at info@shermanwealth.com. If you would like to directly discuss your questions with us, please book a complimentary meeting here

Here are the Benefits of Sherman Wealth Financial Tools

If you budget your money, analyze your investments, and save for retirement, you’d likely benefit from being able to track your finances in one place. With financial literacy month around the corner, it’s a great time to discuss tools that you can utilize to simplify your financial life. Additionally, given the technological shifts due to the coronavirus pandemic and as we are all learning how to operate our lives from the confines of our smartphones and laptops, it’s crucial to continue to automate our lives, especially our finances. 

This is where we can help. Our state-of-the-art technology at Sherman Wealth allows you to track and stay on top of your finances, on your own time, and without charge. Life is complicated, your finances shouldn’t be. We know financial planning may seem like an overwhelming process, but by utilizing these tools, you can do everything in one place, at the tip of your fingers. 

With our comprehensive financial software, all of your financial accounts will be aggregated into one place, and you can use the tools to budget your money for short-term goals and prepare for the long run.  Additionally, through this holistic software, you can utilize the following tools: investment check up, fee analyzer, savings planner, net worth tracker, long-term goal planner, retirement planner, cash-flow planner, running balance sheet planner, and more.

If you have not utilized a financial software yet, we encourage you to consider a trial run of our software. Within minutes, you will be able to see your assets and liabilities in one tab. If you have any questions or would like to trial the software, please reach out to us at info@shermanwealth.com or schedule a complimentary 30-minute meeting here.

The Benefits of “Time” In The Market

As we hit mid-March of 2021, we think about the rollercoaster we’ve been on this past year. A year ago today, the stock market bottomed out. Given this wild ride and great volatility, it’s important to discuss the value of “time” in the market. We saw a very interesting tweet by Peter Mallouk, CEO of Creative Planning, which is a great depiction of what you should save incrementally at each stage of life to become a millionaire by 65 years-old with a 7% return.

As Peter Mallouk states above, “time” in the market truly does matter. It’s crucial to understand consistency, dollar-cost averaging, avoiding the noise, and understanding that there will be drawdowns in the market. Despite these drawdowns; however, stick with your long-term plan because the market will recover, as we have seen a year since the catastrophic lows. Starting early is an essential key to building your long-term wealth, as you can see in the figure below by JP Morgan.

For Brad’s deep dive on a year in the market and the true benefits of “time” in the market, check out the video below. If you have any questions about how to capitalize your financial situation or plan, reach out to us at info@shermanwealth.com or schedule a complimentary 30-minute consultation here

https://youtu.be/_0-eEe76bgg 

MCPS Business Pitch Challenge on March 19th

Brad Sherman is very honored to be asked to judge the MCPS Business Pitch Challenge on March 19th. Students from nine high schools will be participating in this year’s event. As an entrepreneur, Brad Sherman is thrilled to support such a wonderful event promoting leadership, financial literacy and empowerment, and creativity. With the lack of financial literacy around the world, this event is a great opportunity for students to start thinking financially and as an entrepreneur from a young age. 

The event will run from 9 a.m.–noon. Participating high schools are: Montgomery Blair, James Hubert Blake, Winston Churchill, Albert Einstein, Gaithersburg, Northwest, Northwood, Paint Branch and Sherwood. Students will pitch their business ideas for a solution to an existing problem, improvement of an existing product, or create a need for a product/service to a panel of local entrepreneur judges.

The Challenge will be aired via the MCPS homepage, the MCPS YouTube channel and MCPS-TV (Comcast 34, Verizon 36 and RCN 89).

Brad, along with representatives from the MCPS Business, Management and Finance Program Advisory Committee will serve as judges, mentors or supporters. The three top winning teams will receive cash prizes.

Please tune in on Friday, March 19th at 9 a.m. as these bright students pitch their business ideas. Check out our blog from the 2019 MCPS Business Pitch Challenge on ways we helped coach the students in preparation for the big event. Support student growth and empowerment by attending this wonderful event. If you have any questions about the event, email ASKMCPS@mcpsmd.org or let us know at info@shermanwealth.com and we are happy to connect you with the right contacts. 

 

Here Are The Impacts Of The Skyrocketing 10-Year Treasury Yield

Due to tremendous economic aid, interest rates, particularly the 10-year treasury yield, has skyrocketed back up towards where it was a year ago around 1.2%, prior to the coronavirus pandemic.

We have been following this rate quite closely on our instagram handle, @shermanwealth, as we recorded it last week hitting 1.6%. Of course this spike has created tremendous volatility in the housing market in terms of interest rates as well as the stock market in terms of how equities have been priced.

We will continue to follow the 10-year treasury yield closely for you all. Check out the video below for Brad’s take on these interest rates and the effects they are having countrywide. As always, if you have any questions for us, please reach out with questions at info@shermanwealth.com or schedule a complimentary 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 info@shermanwealth.com or schedule a 30-minute consultation on our site here.

 

Launch Financial- How To Work Through Money Conversations With Your Significant Other, with David Pearl

Check out our new podcast episode, “How To Work Through Money Conversations With Your Significant Other, with David Pearl” (You can find the direct download here). In this episode, we are joined by David Pearl, a LCSW a psychotherapist and consultant who specializes in treating professionals, couples, performing artists and athletes. Together we explore tips and advice on the money conversations you should be having with your significant other and when entering a new relationship. When two people with different backgrounds, risk tolerances, and views on money begin to merge their lives, things can get messy. David walks us through how to make those situations lighter and easier on your relationships.

A little about David, he aims to provide a safe and supportive environment to strengthen self-esteem and facilitate more meaningful connections with family, friends, professional colleagues, or teammates.

David obtained his Master’s degree from The Silver School of Social Work at NYU and his Bachelor’s degree in Human Development and Family Studies from the University of Wisconsin-Madison. He is formally trained in Acceptance & Commitment Therapy (ACT), and has certifications in Imago Relationship Therapy and Prepare/Enrich Premarital and Marital Counseling. David is dual licensed in New York and Tennessee, and works with clients on an ongoing basis in both locations.

Prior to founding Music City Psych in Nashville, TN, David provided psychotherapy and performance coaching at Union Square Practice in NYC, counseling to individuals, couples, and families struggling with hematologic cancers at Mount Sinai Hospital, as well as psychodynamically oriented individual and couples counseling at The National Institute for the Psychotherapies (NIP).