Category : financial wellness

Wall Street Won't Provide 401k Help

Helping You With Your Retirement Where Wall Street Won’t

After about 20 years of working as financial advisors and helping people reach retirement, Kevin Conard and I knew the financial services business model was broken. No — more pointedly – we knew Wall Street was broken. Don’t believe us? Take a few minutes to learn about the Wall Street neglect that led us to create our 401k management app at blooom. We believe every hard-working American trying to save for retirement deserves to receive expert 401k help! If you watch blooom’s story, you’ll see why we are here to change the culture of saving for retirement:

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Based in Leawood, Kansas, our culture consists of Midwestern values and hard-work. We are a low-cost, online platform created to help improve the way average Americans manage their 401k retirement plans. In just five minutes, anyone with a 401k can receive a free health assessment on their current investment strategy. Then, for those that want professional Do-it-For-You 401k help, blooom can be hired manage your account for a flat, Netflix-like fee of only $10 per month. We don’t even need to move your account.

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Study Abroad at 37? How to Hoard Cash for Return to College

This is part two in a three-part series addressing how people can save for college or reduce or eliminate student loan debt.  In our first post, we shared some tips that are “better than faking your death” to pay off student loan debt. In this sampler tray (or beer flight) of savings ideas, we’ll share how adults who are looking to return to college can find financial assistance or reduce the cost of post-secondary education.

We covered the reasons why in more detail in our first post, but we’re chatting about college savings and student loan debt for two reasons:

  • First, plain and simple. The quicker you can wipe out debt, the quicker you can start saving properly for other life events.
  • Second, we recently launched a personal financial advice service. Clients can access it via mobile or desktop using the chat feature on the bottom-right of the screen. Since we’ve launched, the topic of student loan debt has been a top question posed by our clients.

A Happy Hour of Options for Adults Wanting to Return to College

So maybe you’ve always eyed going back for that graduate degree. Perhaps you launched yourself into the workforce early and never quite finished your undergrad. Or you’re looking to make a career change. Whatever your reason for returning to the BIG U, many options exist for scholarships, financial assistance and strategies to reduce your overall cost.

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Student loans :(

Faking Your Death to Pay Off Student Loan Debt? 6 Better Ways

How much do you owe in student loan debt? Enough to consider fleeing the country? (All of a sudden I get why many recent U.S. college graduates want to backpack Europe and never return.) Or worse. You contemplating faking your own death?

According to The Wall Street Journal, the number of Americans with federal student loans grew to 42 million in the last decade. (1.) In that same article, they quote a gentleman whose solution to dealing with his student loan debt is to stretch it out until he dies.

Don’t believe me? Read the entire Journal article. (And BTW … only Federal loans discharge with death. Private loans do not.)

Now that I’ve thoroughly depressed you, you may be asking, this isn’t about retirement or my 401k.

Why Are You at blooom Talking About Student Loan Debt?

We’re addressing student loan debt for two reasons.

First, you’re right, we focus a great deal on helping you with your retirement. We want you to wipe out this student loan debt so you can save more for it. But we also recently launched a personal financial advice service that clients can access via mobile or desktop using the chat feature on the bottom-right of the screen.

Once we launched the service, how to deal with student loan debt was one of the most frequently asked questions posed to me and my advisor team.

We’ve seen so many varied inquiries about student loan debt that we’ll be running a three-part series:

  1. Tackling debt: This post will help if you currently have student loan debt and you’re looking to pay it off faster (if you’re exploring forgiveness options, I recommend reviewing the following guide.
  2. Working adults returning to college: Later this summer, we’ll talk about how non-traditional students or working adults who want to go back to school can proactively address (read: avoid or take on as little as possible) student loan debt.
  3. New college students: Our final post will provide tips and resources to high school students and parents on ways to avoid student loan debt.

Who knows? Perhaps we’ll receive some real-world triumphs of people who’ve defeated this insidious whack-a-mole known as student loan debt (Hint, hint. If you’re a victor, message us with your story. Let us celebrate your achievement with a proper victory lap).

First, the Simplest Thing You Can Do to Get Out of Student Loan Debt

Okay. I’m NOT going to be jerk and say the simplest way is by never getting into student loan debt in the first place. Too late for that.

So …

1. One of the simplest things you can do is set up automatic payments. It works for saving and it works for tackling that debt head on. To sweeten the deal, some services even offer discounted interest rates if you set up auto-pay.

Auto-pay

We like it simple here at blooom. Set it and try to forget it.

How About the Most Effective Ways to Tackle Student Loan Debt?

I’ve covered the simplest tip, but what about the most effective. My next five tips could provide the points to pierce that ballooning student loan debt.

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Millennials Drink Your Coffee

Coffee Is Not The Enemy of Your Retirement

Can you think of starting your day without a cup of your freshly brewed coffee? I bet you can’t!

I can’t either. I love coffee. So … apparently do you. In spades.

But, take a minute and think…. is getting that morning buzz more important than creating your retirement nest egg? According to some recent research, coffee is the enemy of your retirement.

I’m sorry. It simply isn’t.

The Right Steps Don’t Discriminate Against Coffee

In my last post, I lamented the clickbait financial wisdom exclaiming how if we just gave up our latte, we’d be rich. Little did I know at the time that Acorn had based an entire survey question around the dreaded cup of coffee.

In their Money Matters survey, the findings reveal that 41% of millennials – my generation – spend more money on coffee than investing in our future. (1.)

The SAME survey of 1,911 Millennials (914 of the respondents were 24-35 vs. 18-23) also found that Retirement (at more than 40% of respondents) was the group’s top financial concern. It outpaced Daily Expenses and Debt.

Then I found this Forbes Fake News Fact Check gem bolstering the Millennial cause. Could Millennials actually be better at saving for retirement than previous generations? The article references an American Enterprise Institute study where, in 2015, Millennials reported that they first began saving for retirement at age 23, versus age 28 for Generation X and age 34 for Baby Boomers.

If you believe the anti-coffee hype, apparently my generation isn’t thinking rationally about saving for our retirement. That might be true, but we’d be placing the blame on the wrong thing.

The Right Steps Include Paying Yourself First

Just to set things straight, our advisor team doesn’t warn clients about the evils of coffee.

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Spend Your Tax Refund Yet? Stop! How To Do it Right This Year

From where we sit, getting a tax refund is a sin. But we all sin a little, right? And most don’t know that paying the U.S. Government more than you should in taxes is on the wrong side of the moral compass. “Wait,” you say, “I thought giving was good.”

In this case, “overgiving” is not good. You’re essentially spotting Uncle Sam an interest-free loan. But that’s why we’re here to help!

If you’ve already overcommitted this past year, we’ve got at least 5 solid tips for what to do with that extra cheddar.

But, first the public service announcement …

1. More than $500 on your tax refund? Take a look at your W-4

Your W-4 is a form your HR department handed you when you were hired. You might recall it being this weird questionnaire that computes how much money should be withheld in your payroll taxes. I’ve known people who just phone a friend to get the number of allowances: “Johnny does 7, so that sounds good to me.”

Bad idea.

There are many online calculators available that make more sense than the actual form:

Use them. Get your number and then call your HR department to compare what they have on file. If it’s different, change the allowances you’re claiming.

One of our founders, Kevin Conard, likes to use this opportunity to encourage people to increase the amount they’re saving into their 401k. If you’re increasing the allowances you may not notice a difference in your paycheck. Solid plan.

2. Build Your Safety Net

A lot of the other tax refund tip lists have pay off debt listed first. Not going to argue exactly (I’d be contradicting some of my previous tips). But I will pitch an alternative point of view by focusing on your emergency fund with this particular “windfall.”

In my experience, psychologically, building an emergency fund can be a hard tip to grasp. Bad things happen to other people, right? Thus, no emergency fund. Then where do they go – their credit cards. See the vicious circle?

Take your tax refund and either 1.) contribute to your existing emergency fund (Go you!), or 2.) open a savings account to establish that safety net. I typically recommend an online savings account because of the likely preferential interest rates and convenience.

3. Get Rid of the Bad Mojo, i.e. DEBT

Already have a relatively robust emergency fund? Awesome. Then go after the parasite of the financial world – bad debts.

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