Making Sure Your Family Is Okay

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Making Sure Your Family Is Okay

When you have kids, it can be easy to think of the here and now and forget about the future. After all, since those diapers and messy rooms are happening in real time, it isn't always easy to hunker down and go over long term financial goals. However, making sure that your family is financially viable can help your kids to feel safe and secure for the long haul. I have been a financial planner for several years, and you wouldn't believe what a big difference a little planning can make. If you want to make a difference, go through my blog and learn how to save a little money.

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Four Options For Investing Your Money When You Aren't Sure What You're Saving For

In the financial world, it seems like there are specific accounts for certain objectives; IRAs are the go-to option for retirement savings, while 529 plans are often preferred when saving for college expenses. However, you may be unsure as to what you will eventually use your money for. A financial planning service can help you out; also, check out some of the versatile investment alternatives to find an option that works for your needs.

1. Municipal Bonds

A municipal bond is basically a loan to a state or local government. When the government needs to raise money, it sells municipal bonds (also referred to as munis). Munis are considered low risk.

One of the advantages of municipal bonds is that the earnings are exempt from federal income taxes. They are also usually exempt from state and local taxes as well. If you are look for a tax-advantaged option for saving money, a municipal bond is a smart alternative.

2. Mutual Funds

Though investing in the stock market may bring you a higher-than-average return, it can also result in larger-than-average losses. One of the best ways to mitigate the risk of investing in stocks while reaping the possible benefits is to invest in a mutual fund rather than individual stocks.

When you invest in a mutual fund, you invest in a variety of financial instruments, including small and large cap stocks, international holdings, bonds, and money market funds. By holding a multitude of stocks and bonds, you won't lose your investment if one of the holdings within the fund has a rough year.

Look for mutual funds with low fees to maximize your return.

3. Roth IRA

When investors hear the term IRA, they usually associate the account with saving for retirement. However, a Roth IRA has several advantages that make it ideal for general purpose investing.

Roth IRA contributions are made with after-tax money (money that you have already paid taxes on). Because of this quality, you are permitted to withdraw contributions to your Roth IRA at any time and for any reason. There are no taxes or fees associated with withdrawing your contributions.

It is important to note that earnings within your IRA are treated differently; you should leave the earnings alone until you retire so that you do not have to pay a penalty.

4. Pay Down Your Debt

Some investors prefer to keep low-interest debt, such as a mortgage or student loans. However, one risk-free way to invest is to pay your debt down ahead of schedule. By doing so, you decrease the amount that you ultimately pay in interest, earning a guaranteed return.