{"id":4580,"date":"2015-05-23T07:08:09","date_gmt":"2015-05-23T11:08:09","guid":{"rendered":"https:\/\/kerryhannon.com\/?p=4580"},"modified":"2015-10-19T03:57:50","modified_gmt":"2015-10-19T07:57:50","slug":"how-to-get-started-investing-and-managing-your-finances","status":"publish","type":"post","link":"https:\/\/kerryhannon.com\/?p=4580","title":{"rendered":"How to Get Started investing and Managing Your Finances for Beginners"},"content":{"rendered":"
\"next-ave\"<\/a>Take a read of my Money Beginner\u2019s Checklist for Women 50+ that I compiled for PBS Next Avenue.\u00a0Editor\u2019s note: This article is part of a\u00a0Next Avenue special section<\/a> about women age 50+ managing their money.<\/em><\/header>\n
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If you\u2019re a 50+ woman who hasn\u2019t managed money before, here\u2019s a checklist <\/a>to help you get started.<\/p>\n

\u2610 Bone up on the basics<\/strong>. Two excellent books are Carrie Schwab-Pomerantz\u2019s The Charles Schwab Guide to Finances After Fifty<\/em><\/a> and Jonathan Clements Money Guide<\/a>. Online, visit The National Endowment for Financial Education\u2019s Smartaboutmoney.org<\/a>, whose free guides explain stocks, bonds and mutual funds. Two good money sites oriented toward women: DailyWorth<\/a> andLearnVest<\/a>. Also, check out WISER<\/a>, from the nonprofit Women\u2019s Institute for a Secure Retirement, especially its Investment 101 tutorial.<\/p>\n

\u2610 Get a snapshot of your spending. <\/strong>Sites like Mint.com<\/a> and\u00a0YouNeedABudget.com<\/a> help you track your personal finances and discover ways to save.<\/p>\n

\u2610 Build your emergency fund.<\/strong> Most advisers suggest<\/a> you set aside six months of living expenses; if you can gradually build up to a year\u2019s worth, do. A money market mutual fund or a bank savings account are smart, safe places to stockpile this money.<\/p>\n

\u2610 Focus on paying down debts.<\/strong> Whittle down high-interest credit card<\/a> debts, college loans and car loans. You might begin by paying off the smallest balance first, for a sense of accomplishment.<\/p>\n

\u2610 Give yourself an insurance checkup. <\/strong>If you still have dependent children, you may want to buy a term life insurance policy. In your 50s, you may also want to research long-term care insurance<\/a> policies. Also, review your needs for disability and liability insurance<\/a>.<\/p>\n

\u2610 Take advantage of your employer\u2019s 401(k) or similar retirement plan. <\/strong>If possible, invest enough to qualify for the full match (what your employer kicks in). Why refuse free money? The maximum contribution for people 50+ in 2015: $24,000.<\/p>\n

\u2610 Set an annual target savings amount.<\/strong> Ideally, you should save at least 15 percent of your salary every year, which includes any employer match.<\/p>\n

\u2610 Start learning about investing in the stock market. <\/strong>Over the long haul, stocks have outperformed bonds, bank savings accounts and CDs. A general guideline: for retirement savings, take 100 and subtract your age for the percentage of your portfolio to hold in stocks. If you\u2019re 55, you\u2019d want 45 percent in stocks. As you get older, gradually shift toward a higher concentration in safer bonds.\u00a0The Investor Protection Institute\u2019s site, iInvest.org<\/a>, offers free guides that explain stocks, bonds and mutual funds.<\/p>\n

\u2610 Start investing in stocks.<\/strong> The best way is through a diversified mutual fund.\u00a0Morningstar<\/a>, the investment advisory firm, has areas on its site about funds geared toward novices. You might want to join the National Association of Investors Corp<\/a>. to learn more about the stock market through online classes, webinars and research reports. This group can also help you set up an investing club and point you to ones near you.<\/p>\n

\u2610 Learn about index funds and Exchange Traded Funds (ETFs)<\/a>.<\/strong> They\u2019re low-cost, diversified ways to own a basket of stocks that matches the overall stock market or a slice of it.<\/p>\n

\u2610 Contribute to an Individual Retirement Account<\/a> (IRA). <\/strong>This is a retirement plan, sold by banks, brokers and mutual funds, whose earnings grow tax-deferred. In 2015, the maximum contribution for traditional or Roth IRAs is $6,500 if you\u2019re age 50 or older.<\/p>\n

\u2610 If you\u2019re self-employed, set up a self-employment retirement plan.<\/strong> The self-employed can contribute to SEP-IRAs<\/a>, putting in up to $53,000 in 2015. Two other alternatives are the Solo 401(k), which also has a $53,000 maximum this year, and the SIMPLE IRA, with a $15,500 limit for people 50 and older.<\/p>\n

\u2610 Estimate how much money you\u2019ll need in retirement.<\/strong> A good place to start is the online Ballpark E$timate calculator<\/a> from the Employee Benefit Research Institute\u2019s site, Choosetosave.org<\/a>. Many mutual fund companies also have good retirement calculators on their sites.<\/p>\n

\u2610 Start a money book club<\/a> or a money-circle<\/a> discussion group<\/strong>. A club can force you to read useful books you might never have picked up on your own. A money-circle group lets you and your friends hold regular conversations about finances and help each other.<\/p>\n

by Kerry Hannon<\/a><\/p>\n<\/div>\n<\/div>\n

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