Latest news with #MindfulFinancialPartners
Yahoo
27-05-2025
- Business
- Yahoo
More Americans Track Their Budgets Than Their Diets — Here's Why It Still Feels So Stressful
According to a recent study from Secure Data Recovery, 56% of Americans spend an hour or more weekly tracking and analyzing their personal data. The average amount an American spends on data tracking tools is $108.36. With 59% of respondents monitoring spending and 49% tracking savings, the research also found that more respondents tracked their budgets than their diets. Regarding personal nutrition, 33% tracked sugar and 31% watched their calories. Read Next: Discover More: With 70% of Americans admitting to feeling anxious about tracking spending and 64% worried about their savings, it's worth pointing out that despite tracking budgets more than diets, many are still stressed out about their finances. Why are people still stressed about their budgets and finances despite such extensive tracking? 'Numbers alone don't solve money anxiety,' said Melissa Murphy Pavone, a certified financial planner (CFP) and founder of Mindful Financial Partners. 'I often see that tracking your finances is just the surface layer. The real work is peeling back the onion and understanding the emotions, habits and beliefs that drive your financial decisions.' She stressed that money is deeply personal, and we may carry unconscious money scripts around us. The harsh reality is that tracking your finances can sometimes feel like a spotlight on your shame instead of a tool for empowerment. When you closely monitor how much you're spending, you may discover uncomfortable realities about your relationship with money, which may feel daunting to tackle since you likely already have enough on your plate. Murphy Pavone emphasized that tracking your finances isn't just about control; it's about clarity. However, clarity will require courage, and you may have to face spending patterns that you've been avoiding for various reasons. Check Out: Aaron Razon, a personal finance expert at Couponsnake, believes that many people could be stressed out about tracking their budgets because of feelings of guilt over their spending. 'Tracking your finances is like using a scale to weigh your spending against your savings, and more often than not, the scale tips in favor of spending, and the difference can be very overwhelming, leading to feelings of guilt, frustration and anxiety,' he said. It's easy to be hard on yourself when you analyze your spending data and discover that you have many flaws. Similar to dieting, one may have the best intentions for how they're going to behave, but life can get in the way. Doing the right thing when managing finances isn't always about information, and you may find your spending patterns challenging to manage. Another reason tracking finances might feel stressful is that it can be overwhelming when you're constantly worrying about your spending, since you have to think about multiple accounts, bills and investments that could be dropping. 'The information overload, fear of missing payments or making an error, and the difficulty in staying organized combined, create a sense of financial unease, making it challenging to manage finances effectively,' Razon elaborated. When you get overwhelmed with all of your various financial accounts, the stress can creep in since you're worried about making the best decisions for your future. When you're constantly checking your retirement accounts, various credit card statements and spending, you could start to feel anxious about all of the information that you're trying to process. While you can automate certain aspects of tracking your spending and savings, paying attention to your personal data requires energy and focus. Michael Rodriguez, a CFP and owner of Equanimity Wealth, pointed out that tracking your spending isn't passive and could take up a decent amount of your attention. 'For someone already dealing with stress or burnout, it can feel like one more task you don't have the capacity for,' he added. For example, after a busy workday, the last thing you may want to do is input your spending for the day or review your savings because you have many other tasks to think about. If you're currently feeling stressed about your finances despite tracking everything, it could be a sign that the energy required is weighing heavily on you. If you're constantly comparing how much progress you're making in your financial journey with others, you may eventually feel like you're falling behind. Razon noted that tracking finances also becomes more stressful because individuals create an unfair and unrealistic benchmark for themselves when they compare their financial struggles and setbacks to others' seemingly perfect financial situations. 'When you look at a number that feels bigger than you expected — or that doesn't line up with your goals — it can trigger shame, not action,' remarked Rodriguez. 'Instead of feeling empowered, you feel stuck.' The dark side of tracking the numbers is that you may not like what you see, and it could feel like you're falling behind. With tangible proof of your financial struggles, you could feel like you're not keeping up, leading to feelings of stress and tension. When tracking personal data, it's important that you try to remember to do your best to use the numbers to make decisions about your daily actions instead of worrying about minor mistakes. It's foolish to aim for perfection when the goal should be progress. More From GOBankingRates 7 Things You'll Be Happy You Downsized in Retirement 4 Affordable Car Brands You Won't Regret Buying in 2025 This article originally appeared on More Americans Track Their Budgets Than Their Diets — Here's Why It Still Feels So Stressful
Yahoo
18-05-2025
- Business
- Yahoo
5 Ways To Become Financially Secure on a Middle-Class Salary
Defining financial class isn't just based on the income you make. If it was then, by the Pew Research Center's definition of 'middle class,' you'd be firmly in that category if you earn between two-thirds and twice the U.S. median household income (which is $80,610). That means you'd be considered middle class if you earn $53,740 to $161,220 a year. Read More: Find Out: But income is only part of the bigger picture. Here are some of the top ways to become financially secure on a middle-class salary in the U.S. Your salary is a good starting point to determine your financial well-being, but you need to consider the bigger picture. Things like household size, where you live and your other financial obligations also matter. 'A big misconception is that a six-figure salary automatically means financial security,' said Melissa Murphy Pavone, Founder at Mindful Financial Partners. 'I work with clients making $150K+ who feel like they're barely treading water, especially in high-cost areas like New York.' Imagine a family of four living on $161,220 in New York City. The average home costs about $796,000 there. Tack on other common expenses like childcare, credit cards or other debts, groceries, healthcare and transportation, and you're looking at a potentially tight budget. Now, imagine someone with no kids or debts living in Columbus, Ohio where homes cost an average of $253,000. Assuming they have solid budgeting skills and pay attention to their spending and savings, they could be doing quite well for themselves on that salary. High earners live paycheck-to-paycheck or struggle with debt all the time. Take a California couple who recently called in to the Dave Ramsey Show as an example. They earn about $300,000 a year and owe $119,000 in debt (not including their mortgage). They also spend roughly $5,000 a month on their housing payment and are struggling to lower their expenses and pay off what they owe. No matter how much you're earning, one of the best ways to become financially secure is to make a spending plan or budget. You can keep things simple. For instance, you could follow the 50-30-20 budgeting rule wherein your income goes into the following categories: 50% for needs 30% for wants 20% for savings or debt Or you can break down your spending into larger categories like: Mortgage or rent Utilities Transportation Gas Clothing Food Insurance / healthcare Debts Saving and investing Miscellaneous Whatever you do, find a budget that works for you. If you find yourself spending too much in certain categories, try to back off a little and put that money toward more important things. According to Experian, the average person carries $6,730 in credit card debt. That might not seem like much if you're earning twice the median income, have no other debt obligations and are keeping other costs reasonably low. But if you have that much credit card debt, chances are you've got a spending problem — or you haven't prioritized paying off your balances. And considering how high credit card interest rates are (nearly 23% on average), that just means you're spending more than you ought. If you want to become more financially secure, start by tackling those debts. You can always use the debt snowball method, which focuses on paying off the smallest balance first before moving on to the next-smallest balance and so on. Many financial experts suggest having at least three to six months' worth of expenses in an emergency fund. If you're self-employed or have kids, you might want to shoot for a higher amount. A lot of middle-class households don't have an emergency fund at all. What this means is that even the smallest financial hiccup — like a surprise medical bill — could be detrimental to their monthly budget. It could even mean taking on a new debt to cover that bill. 'Middle class isn't just about income, it's about lifestyle sustainability. Can you cover your needs, enjoy some wants, save for the future, and absorb a financial curveball without falling apart? That's the heart of middle class,' said Pavone. Secure your household financially. Build an emergency fund. Your net worth is essentially the value of all your assets minus all your liabilities (or debts). If you owe $200,000 on a house valued at $500,000, then your net worth is $300,000 (assuming no other debts). If you also have $100,000 in retirement savings or investments, add that to your total net worth. Knowing your net worth is key to understanding how financially secure you are. It gives you a more accurate picture of your overall financial health than income alone. But middle-class households often have a negative net worth — they just don't always realize it. 'In reality, many middle-class families are quietly carrying debt, juggling rising expenses, and struggling to keep up appearances,' said Pavone. 'It is more important to measure how much you save versus how much you make.' More From GOBankingRates What $1 Million in Retirement Savings Looks Like in Monthly Spending 6 Popular SUVs That Aren't Worth the Cost -- and 6 Affordable Alternatives 5 Little-Known Ways to Make Summer Travel More Affordable I'm a Retired Boomer: 6 Bills I Canceled This Year That Were a Waste of Money Sources: Melissa Murphy Pavone, Founder at Mindful Financial Partners Pew Research, 'Are you in the U.S. middle class? Try our income calculator' 'Income in the United States: 2023' Zillow, Columbus, OH Housing Market: 2025 Home Prices & Trends' Zillow, 'New York, NY Housing Market: 2025 Home Prices & Trends' Dave Ramsey Show, 'Where The Flip Are You People Spending Money?' Experian, 'Average Credit Card Debt Increases 3.5% to $6,730 in 2024' Consumer Financial Protection Bureau, 'Credit card interest rate margins at all-time high' Ramsey Solutions, 'Emergency Fund: Why You Need One and How Much to Save' This article originally appeared on 5 Ways To Become Financially Secure on a Middle-Class Salary Sign in to access your portfolio
Yahoo
16-05-2025
- Business
- Yahoo
5 Ways To Become Financially Secure on a Middle-Class Salary
Defining financial class isn't just based on the income you make. If it was then, by the Pew Research Center's definition of 'middle class,' you'd be firmly in that category if you earn between two-thirds and twice the U.S. median household income (which is $80,610). That means you'd be considered middle class if you earn $53,740 to $161,220 a year. Read More: Find Out: But income is only part of the bigger picture. Here are some of the top ways to become financially secure on a middle-class salary in the U.S. Your salary is a good starting point to determine your financial well-being, but you need to consider the bigger picture. Things like household size, where you live and your other financial obligations also matter. 'A big misconception is that a six-figure salary automatically means financial security,' said Melissa Murphy Pavone, Founder at Mindful Financial Partners. 'I work with clients making $150K+ who feel like they're barely treading water, especially in high-cost areas like New York.' Imagine a family of four living on $161,220 in New York City. The average home costs about $796,000 there. Tack on other common expenses like childcare, credit cards or other debts, groceries, healthcare and transportation, and you're looking at a potentially tight budget. Now, imagine someone with no kids or debts living in Columbus, Ohio where homes cost an average of $253,000. Assuming they have solid budgeting skills and pay attention to their spending and savings, they could be doing quite well for themselves on that salary. High earners live paycheck-to-paycheck or struggle with debt all the time. Take a California couple who recently called in to the Dave Ramsey Show as an example. They earn about $300,000 a year and owe $119,000 in debt (not including their mortgage). They also spend roughly $5,000 a month on their housing payment and are struggling to lower their expenses and pay off what they owe. No matter how much you're earning, one of the best ways to become financially secure is to make a spending plan or budget. You can keep things simple. For instance, you could follow the 50-30-20 budgeting rule wherein your income goes into the following categories: 50% for needs 30% for wants 20% for savings or debt Or you can break down your spending into larger categories like: Mortgage or rent Utilities Transportation Gas Clothing Food Insurance / healthcare Debts Saving and investing Miscellaneous Whatever you do, find a budget that works for you. If you find yourself spending too much in certain categories, try to back off a little and put that money toward more important things. According to Experian, the average person carries $6,730 in credit card debt. That might not seem like much if you're earning twice the median income, have no other debt obligations and are keeping other costs reasonably low. But if you have that much credit card debt, chances are you've got a spending problem — or you haven't prioritized paying off your balances. And considering how high credit card interest rates are (nearly 23% on average), that just means you're spending more than you ought. If you want to become more financially secure, start by tackling those debts. You can always use the debt snowball method, which focuses on paying off the smallest balance first before moving on to the next-smallest balance and so on. Many financial experts suggest having at least three to six months' worth of expenses in an emergency fund. If you're self-employed or have kids, you might want to shoot for a higher amount. A lot of middle-class households don't have an emergency fund at all. What this means is that even the smallest financial hiccup — like a surprise medical bill — could be detrimental to their monthly budget. It could even mean taking on a new debt to cover that bill. 'Middle class isn't just about income, it's about lifestyle sustainability. Can you cover your needs, enjoy some wants, save for the future, and absorb a financial curveball without falling apart? That's the heart of middle class,' said Pavone. Secure your household financially. Build an emergency fund. Your net worth is essentially the value of all your assets minus all your liabilities (or debts). If you owe $200,000 on a house valued at $500,000, then your net worth is $300,000 (assuming no other debts). If you also have $100,000 in retirement savings or investments, add that to your total net worth. Knowing your net worth is key to understanding how financially secure you are. It gives you a more accurate picture of your overall financial health than income alone. But middle-class households often have a negative net worth — they just don't always realize it. 'In reality, many middle-class families are quietly carrying debt, juggling rising expenses, and struggling to keep up appearances,' said Pavone. 'It is more important to measure how much you save versus how much you make.' More From GOBankingRates What $1 Million in Retirement Savings Looks Like in Monthly Spending Are You Rich or Middle Class? 8 Ways To Tell That Go Beyond Your Paycheck 5 Little-Known Ways to Make Summer Travel More Affordable 9 Downsizing Tips for the Middle Class To Save on Monthly Expenses Sources: Melissa Murphy Pavone, Founder at Mindful Financial Partners Pew Research, 'Are you in the U.S. middle class? Try our income calculator' 'Income in the United States: 2023' Zillow, Columbus, OH Housing Market: 2025 Home Prices & Trends' Zillow, 'New York, NY Housing Market: 2025 Home Prices & Trends' Dave Ramsey Show, 'Where The Flip Are You People Spending Money?' Experian, 'Average Credit Card Debt Increases 3.5% to $6,730 in 2024' Consumer Financial Protection Bureau, 'Credit card interest rate margins at all-time high' Ramsey Solutions, 'Emergency Fund: Why You Need One and How Much to Save' This article originally appeared on 5 Ways To Become Financially Secure on a Middle-Class Salary Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
02-03-2025
- Business
- Yahoo
Are There Hidden Tax Benefits You're Missing This Year?
Many taxpayers miss out on the chance to lower their tax bill because they don't realize they qualify for valuable benefits. Read More: Consider This: From overlooked deductions and credits to strategic retirement contributions, there are several ways for taxpayers to reduce their tax bill while keeping more money in their pockets. However, many don't know what they are. 'Tax planning isn't just about filing returns — it's about taking a proactive approach to minimizing tax liability,' said Melissa Pavone, founder of Mindful Financial Partners. She said taxpayers can benefit from their contributions to traditional IRAs and 401(k)s using the backdoor Roth IRA strategy, or through self-employment retirement plans. 'Contributions to pre-tax retirement accounts reduce taxable income while allowing for long-term, tax-deferred growth,' Pavone said. 'The 2024 contribution limit for 401(k) plans is $23,000, with an additional $7,500 catch-up contribution for those 50+.' Pavone said high-income earners who exceed Roth IRA income limits can contribute to a non-deductible traditional IRA and later convert it to a Roth IRA, taking advantage of future tax-free withdrawals. IRS Updates Earned Income Tax Credit for 2025: One of the most significant tax benefits for freelancers or small business owners is choosing the right entity structure for their business. 'Choosing properly between an LLC or a corporation, and choosing an S-Corporation status, will have a massive tax impact,' said Crystal Stranger, attorney and CEO of 'But this isn't a 'one-size-fits-all' decision, and there are many pros and cons to each structure.' Stranger explained, 'It should be a careful decision made with a competent advisor who understands both your personal financial situation and your short- and long-term business goals.' Self-employed individuals often qualify for a home office deduction. 'The reason this is so valuable goes beyond being able to take a chunk of the home expenses you normally would be able to take,' Stranger said. 'You can also then take more mileage or auto expenses because there are no longer commuting costs to reduce your business mileage when your home is your main office.' In addition, Pavone said freelancers can contribute up to $69,000 to a Solo 401(k), with an additional $7,500 catch-up contribution for those over 50, or a SEP (Simplified Employee Pension) IRA. Individuals can contribute up to 25% of their earnings, with a maximum of $69,000, for massive tax savings. Some medical costs are eligible as an itemized deduction, depending on an individual's tax strategy. 'However, since the TCJA (Tax Credits and Jobs Act of 2017) changes to itemized deductions and increasing the standard deduction, this has not been something utilized as often,' Stranger said. 'The total amount of itemized deductions needs to exceed the standard deduction before having any value.' Stranger further explained, 'If you do have a year of high medical costs, it is also good to load mortgage interest, property tax and charitable deductions in the same year so that it can be taken to exceed the standard deduction.' Long-term, uncovered health coverage may also be tax deductible. 'One often forgotten tax deduction is uninsured long-term costs for seniors,' said Kevin Quinn, founder and president of Legacy Counsellors, an estate and business planning law firm. 'Home health or nursing home care is a Schedule A deduction.' 'It is missed in most cases because many seniors don't itemize their deductions,' Quinn explained. 'It is important to look at the standard deduction versus the Schedule A deduction to see which is most financially beneficial before filing.' In addition, Quinn said individuals don't get the deduction on uninsured medical and dental expenses for the first 7.5% of their income. 'You can only deduct expenses on the Schedule A 1040 that total more than 7.5% of adjusted gross income,' he concluded. More From GoBankingRates6 Reasons Your Tax Refund Will Be Higher in 2025 7 Tax Loopholes the Rich Use To Pay Less and Build More Wealth How Much Money Is Needed To Be Considered Middle Class in Every State? This article originally appeared on Are There Hidden Tax Benefits You're Missing This Year? Sign in to access your portfolio
Yahoo
02-03-2025
- Business
- Yahoo
3 Key Signs You Should File for Social Security Sooner Rather Than Later
Deciding when to claim Social Security could be an important key for older adults unlocking their retirement future. Claiming early could be the best move for retirees in poor health, who need immediate income or for other reasons taking benefits could be a wise financial move. Be Aware: Try This: Here are three key signs you should file for Social Security sooner rather than later. Many financial experts don't recommend filing for Social Security early, because the reduction in payments can be drastic. Doug Carey, a chartered financial analyst (CFA) and founder and owner of WealthTrace, a consumer retirement and financial planning software company, said claiming at 62 instead of the full retirement age of 67 could be costly. 'Their payments are reduced by 30% per month,' Carey said. 'Over time, this can add up to thousands of dollars in reduced payments.' However, Carey said if an older adult has a lower life expectancy, then filing for Social Security sooner rather than later makes financial sense. 'Generally speaking, if you expect to live to at least age 75, it wouldn't make sense to take Social Security early,' Carey said. 'But if you have serious health conditions or a family history of shorter lifespans, claiming early could be the right strategy.' Find Out: Claiming Social Security early may be a wise move, depending on one's marital status. Joseph Patrick Roop, president and founder of Belmont Capital Advisors, said filing for Social Security sooner could be an option for a single person in poor health who is no longer working or a married couple. 'Spouses should strategize to determine which one should file last to maximize benefits by waiting until age 70,' Roop said. 'Typically, the higher-earning spouse should delay filing until 70 to maximize their benefit.' Roop explained, 'After one spouse passes away, the surviving spouse will continue receiving the larger of the two benefit checks while the smaller check is lost.' Melissa Pavone, founder at Mindful Financial Partners, said divorced retirees who were married for at least 10 years and are unmarried now may be eligible for spousal benefits based on their ex-spouse's earnings. 'In some cases, claiming early may make sense, especially if your own benefit is lower.' For older adults whose spouse is deceased, Pavone said surviving spouses can claim reduced survivor benefits as early as age 60. 'But switching strategies — claiming their own benefits later — can optimize overall payouts,' Pavone said. The Social Security Trust Fund will face a shortfall within the next decade unless Congress acts sooner rather than later to shore up funds for the federal entitlement program. Economists at the Peterson Foundation, a fiscal think tank, estimate that 'without reform, the combined Social Security trust funds will be depleted in 2035, at which point program benefits would be reduced by 17%.' Krisstin Petersmarck, a National Social Security Advisor (NSSA) and investment advisor representative at New Horizon Retirement Solutions, said many people are worried about the future of the Social Security Trust Fund. 'It is not uncommon for individuals who are worried that the benefit could be reduced or eliminated to make the decision to claim early and receive income before it may not be available,' Petersmarck said. She said older adults should understand that they cannot go back once they have claimed their benefits and received payments for 12 months. 'The best decision is to consult with a financial advisor who specializes in retirement planning to weigh the different claiming options and how it can impact you long term,' Petersmarck said. More From GOBankingRates This article originally appeared on 3 Key Signs You Should File for Social Security Sooner Rather Than Later Sign in to access your portfolio
