We were joined by Dan Shea from Fidelity Investments to learn more about budgeting and financial planning!
Financial planning with Fidelity Investments
Topics to be discussed:
- Track your expenses.
- Know what is a discretionary vs essential spending.
- Monitor your spending behavior.
- Tough to save if you don’t know what you’re saving for!!
- Health care
- Cable TV
- If you have credit cards with an 8-9% interest rate it’s bad, so try to pay them as soon as possible.
- Create a budget.
- Avoid getting a high interest now because it compounds – you end up paying more in the future.
- If you have more than one credit card with a high-interest rate, you can consolidate them but then make sure they get paid during the timeline that was determined for it.
- Example: if you have a credit card with a 10% interest rate versus a card with a 15% interest rate then pay the one with the 15% interest rate first!
- Key to your credit report is how long you’ve had your credit cards.
- Doesn’t matter how much you use the credit card, as long as you pay them. Try to pay them off each month.
- Use only 16% of what’s available of your credit. For example: if you have a $10,000 dollar credit you don’t want to have more than $1,600 in balance.
- Too many cards could hurt your credit.
- Monitor your savings!
- “Don’t keep all your eggs in one basket” – particularly important with investments.
- Good tools:
- In the Fidelity Investments website to keep track of your accounts (free to set up!) – you can buy stocks through that tool.
- Google Wallet
- Some other tools charge $20/month to use.
- Money for essentials, unplanned emergencies and goals.
- 50% of your take home income should go to essential spending.
- ~50% of take-home pay.
- Save 15% of pre-tax (not take-home) income.
- Lowers your taxable income. The younger you are and the lower your bracket is, the more sense it makes to have a Roth-IRA.
- Save 5% of your income.
- “Because the unexpected happens”.
- Should save 3-6 months of essential expenses!
- Maybe start a separate bank of money account and put in a certain amount every month ($20 or so) after you’ve paid your bad debt and covered your essential expenses.
- Start saving for retirement as soon as possible! Up to 8% pre-tax income every month.
- You don’t want to compromise your retirement savings. Compounding is key!
- 403(b) retirement plan – can you merge your 403(b) from your old institution into a new one like Tufts? Yes (Rollover)!
- If you take out a loan on your retirement plan, you have to pay taxes on it.
- Fidelity Investments is in campus twice a month on campus.
- October is booked, but for after October is cool – financial advice for free!!
- Paying debt in full saves you a lot of interest.
- The benefit of paying your debt:
- The higher your FICO score the lower your APR is.
- Student loans can actually help your score, but whether you’re good at making payments to your loan every month is what influences your standing.
- Good debt: i.e. mortgage
- Bad debt: credit cards
- Housing payment should be no more than 28% of your gross income.
- The City of Boston offers a class on home owning for $25.
- Saving for emergency expenses
- Saving for retirement
- Pay/pay-off high-interest cards
- Pay student loans
WebEx login info below!
Versatile PhD Seminar
Wednesday, March 16, 2016
4:30 pm | Eastern Daylight Time (New York, GMT-04:00) | 2 hrs
739 371 167
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Access code: 739 371 167