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Build Strong Financial Foundations to Guarantee No Future Debt Problems

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I’m not going to mince words about this. When it comes to finances, a lot of people are struggling. According to a survey by NPR, the Robert Wood Johnson Foundation and the Harvard T.H. Chan School of Public Health, nearly 40% of US households experienced serious financial difficulties in 2021, including the inability to afford medical care and food.

Obviously, COVID-19 played a role in this. However, prior to the pandemic in 2019, a whopping 70% of Americans reported that they were struggling financially. While numerous external factors have contributed to our financial troubles, one component is not having a strong financial foundation.

For example, you could be considered low-income. But, that doesn’t mean that you’re financially unhealthy. If you live within your means and aren’t buried under debt, you may actually be better off than someone making six figures who blow their money on liabilities.

What is a Financial Foundation?

In order to design, build, and live the life you desire, you need financial security and stability as a foundation. As a matter of fact, building a financial plan is similar to building a house. To hold up your needs throughout your lifetime, they both require a strong foundation.

So, going back to comparing a low-income but financially healthy individual to a six-figure person squandering their money. You could build a structural sound home designed to withstand the elements. Even though it might not be the biggest or more luxurious home in the neighborhood, its foundation is much stronger and more durable than the McMansion comprised of cheap materials.

Overall, having a solid financial foundation provides a sense of financial freedom. How? Because it can help you stop living paycheck to paycheck and eliminate debt. From there, you begin accumulating wealth so that you can actually achieve your goals, like being able to quit your dead-end job or retire comfortably.

While this may sound daunting, building a solid financial foundation can be broken down into smaller building blocks. Doing so makes this process more manageable.

Moreover, establishing a solid financial foundation requires time. It’s also important to build a financial foundation that provides for you now while ensuring you can achieve your future goals. That requires being thoughtful and responsible with your daily spending habits.

With all that being said, here’s how you can your foundations in personal finance.

Get to know your current spending habits.

To begin with, you need to understand your current financial situation. Examine your bank account and credit card statements to see what purchases you’ve made in the past few months. Next, group them into the following three buckets;

50% goes to needs.

This includes bills, groceries, transportation, housing, minimum debt payments, work clothes, and other necessities.

30% on discretionary expenses.

Expenses for entertainment, clothing, dining out, and personal care should not exceed 20 percent of your income each month. Depending on your situation, you might decide to cut these expenses first if you spend more than you earn.

20% goes to “Future You.”

Investing, saving, and paying off debt over and above the minimums are included in this category.

You should also add voluntary withholdings to your list based on your recent pay stubs. Also, insurance premiums are needs, while any 401(k) contributions you make go in the “Future You” bucket. The rest of your withholdings are at your discretion. For example, you might withhold your public transit benefit, and you might also cancel your gym membership.

Finally, add up all the numbers. What is your monthly spending on each bucket? It doesn’t matter what the answer is, so don’t beat yourself up. This exercise isn’t supposed to make you feel bad. Instead, it’s designed to provide you with some perspective on your finances.

Also, you don’t have to follow the approximately named 50/30/30 to a tee. In fact, there are several other variations, such as 60/20/20, 70/20/10, or 80/20 you can try. The jest here is that you need to compare your income with your expenses so that you can budget accordingly.

Identify and plug spending leaks.

Continuing with the last point, compare how much you spend with how much you earn. Why is this important?

The first reason is if you spend more than you earn, you can start looking for ways to correct the situation. Maybe you might temporarily need to limit your spending to just the essentials. It may also mean making more conscious decisions like skipping your daily latte in favor of homebrew or reducing your ATM usage.

Alternatively, you might want to consider ways to supplement your income. Some suggestions would be asking for a raise, searching for a better-paying job, or picking up a side hustle.

Second, you’ll know exactly how much leftover you have at the end of each month once you’re spending less than you earn. These are the funds you’ll use to complete the building blocks.

As for now, you’ve pretty much-accomplished everything you need to do to create a written budget. Maintaining a monthly budget is a surefire way to make sure that your money is being used as you intend.

Save and stash any “extra” money.

Are you expecting a tax refund or salary increase? Set that money aside. And, whenever you get a raise, don’t go overboard with your spending. Put the extra money in your savings account.

The same holds true when you pay off a debt. As an example, suppose you paid $50 a month on a credit card and it’s finally paid off. Take that $50 and deposit it in a savings account.

But, don’t be content with just a savings account. Why? According to Bankrate’s March 2, 2022 weekly survey of institutions, the national average interest rate for savings accounts is a meager 0.06 percent.

As such, if you’re ready to step up your savings, consider the following three factors when deciding on where to stash your cash;

Accessibility.

Emergency situations are something you can’t anticipate, so you want to have access to your money, but it shouldn’t be too easy to access. You should open a new account specifically to handle emergency situations. Simply designating money in your checking account can tempt you to take money out of it impulsively.

Safety.

Make it a point to safeguard your money. A stock market investment, with all its ups and downs, does not provide any guarantee that the money will be there when needed. Keeping it somewhere stable, where it has no depreciation risk, is the best choice.

Profitability.

It’s important that your money doesn’t sit idle. The cost of living expenses for three to six months can add up to a substantial amount of money. Avoid the “under-the-mattress” strategy and instead invest in an account that offers a good rate of return.

By looking at these three items, traditional bank savings accounts are not a good match. While they’re accessible and safe, you won’t earn anything on your deposits. You might be better off storing your cash with an alternative, like a money market account that yields high-interest rates.

Also, establish recurring transfers from your paycheck to special savings accounts to make saving easier.

Eliminate debts that drag down your financial health.

“If you have debt, allocating some of your cash flow to paying down those balances is the next step in building a strong financial foundation,” suggests Kali Hawlk for Credit Karma.

Perhaps you have heard of “good debt versus bad debt” and wondered how any debt can be considered good.

Generally, “good debt” is debt that can help you gain an asset with your money. “A mortgage, for example, is debt, but it allows you to buy a home today and pay it off over decades,” adds Hawlk.

As a result, your basic human need for shelter is met by the home. Additionally, you can use your house as an asset if you rent it out, earn income from it, or sell it at a higher price if its value increases over time.

In contrast, credit card debt is a type of “bad debt”, since it does not allow you to build assets. Rather, it is just money you must repay with interest.

“Getting rid of any debt with no corresponding asset is essential to financial success because it naturally increases your net worth and frees you up from cumbersome payments,” notes Katie Brewer, CFP® and founder of financial coaching service Your Richest Life.

CNBC reports that the average American owes $90,460 in consumer debt, including credit cards, personal loans, mortgages, and student loans. As such, this may indicate that many people suffering from such high balances have difficulty paying them off.

If you’re ready to pay off your debt once and for all, where should you start? Here are a few suggestions.

Get organized.

List all the debts you need to pay off in one location. The source of the debt, the amount owed, and the interest rate should be noted.

Pick a payment plan.

Making debt freedom a reality may require you to make some changes to your lifestyle and budget. “You can either prioritize [debt repayment] by interest rate and pay off the ones with the highest interest rate first, or prioritize it by smallest balance to largest balance and pay off the smallest balance first to get the momentum going,” Brewer says.

Take a break from your credit cards.

Taking a break from your credit cards could be a good idea if you find it difficult to pay off credit card balances. Brewer recommends setting aside cash in an envelope or using a debit card.

Plan for your retirement now.

During your golden years, having a large number of assets can help you maintain a happy and healthy retirement. It is important to start saving as soon as possible for retirement — even if it may seem like it is a long way off.

Take a look at whether your company matches your contributions if it has a 401(k). Contribute at least enough to get matched by your company if it will match any part of your contribution. If not, you’re essentially missing out on free money.

In addition to employer-sponsored retirement plans, you might want to consider an IRA. With an individual retirement account (IRA), you can save for retirement while taking advantage of tax benefits. Unlike a traditional IRA, a Roth IRA is funded with after-tax dollars. Depending on your tax situation, you can choose a Roth IRA or a Traditional IRA.

Once you’ve maxed out your 401(k) contributions, you may want to buy an annuity. It’s a great way to supplement your retirement income by providing guaranteed recurring payments.

Get your feet wet with investing.

Over time, you can build wealth by investing in the stock market. Investing over the course of decades is by no means a get-rich-quick scheme, but it can create a valuable portfolio if done consistently.

To start, go to any brokerage platform you like. There are several good options to consider including Vanguard, Fidelity, M1, and Robinhood. As soon as you have the opportunity, you can open an account and start investing.

Make sure you create your own investment strategy and investment policy statement before you invest in the market. The long-term goals in your strategy should drive your policy statement, which serves as a guide during market upheavals. There is a good chance that your stock market portfolio will fluctuate, so you need to be prepared for those peaks and valleys. When the market is volatile, avoid panic selling to avoid some possible disasters. Do not sell until your policy statement permits you to do so; stick to your investment plan.

Protect your assets and income.

The most valuable resource you possess is your earning potential. In your twenties and thirties, disability and death might be the last things on your mind. However, it’s during those times that you should take the most precautions to ensure you will not lose your lifetime earnings to your family.

As such, take the following steps to ensure these policies are in place for you.

  • Disability insurance. Over your working years, you are three and a half times more likely of getting injured or become disabled due to illness than of dying. In the event of an accident or becoming unable to work, disability insurance can help make sure you can maintain your standard of living.
  • Life insurance. When you die prematurely, your survivors are protected by life insurance. In addition to a death benefit, permanent life insurance policies accumulate cash value over time. Eventually, you could access that money for an unexpected house repair or college expenses. You can also use the cash value in retirement if you no longer need the full death benefit.
  • Property/casualty insurance. The property/casualty insurance protects you in case you cause an accident that results in injury or damage to another person or their property. It will also protect you if someone without insurance or inadequate insurance injures you.
  • Estate plan. Creating or updating an estate plan, which is a document that outlines how your possessions will be handled after you die. Among the features of an estate plan are naming your heirs, dividing up your assets, creating a trust, and assigning guardians to minor children.
  • Balance your portfolio. As you diversify your portfolio, the less risky it becomes; if any one type of asset proves to be underperforming, there will be plenty of other assets to compensate for it.

Frequently Asked Questions About Personal Finance Foundations

1. What is personal finance?

Personal finance is all about managing your short- and long-term financial affairs. In addition to the products and services that are designed to help individuals manage their finances, the term also refers to an entire industry.

2. Why is personal finance important?

You cannot manage your financial needs on a day-to-day basis without a personal finance plan. When you have a good grasp of personal finance, you will have a better chance of investing and planning for retirement in the long run.

If you understand personal finance, you are better prepared to create a plan for improving your finances. Having this understanding will help you budget based on current needs while planning for the future.

3. Is your emergency fund sufficient?

Keep three to six months’ worth of living expenses in your emergency fund, as recommended by experts. Emergency funds will vary depending on factors such as;

  • Your lifestyle
  • Your area’s cost of living
  • The income you earn and the security of your job over time
  • Job opportunities in your field
  • Affordability of your health insurance

For example, if your monthly living expenses are roughly $4000, your emergency fund should consist of $12,000 to $24,000.

4. What’s your net worth?

The cash surplus (or deficit) you have in your bank account each month serves as a measure of what direction your financial health is heading in the short term. Your net worth offers a broader view of your financial standing.

If you have student loans, credit card balances, or other such debt, keep track of your 401(k) balance, home equity, and assets and reduce them accordingly.

5. Are you ever done saving?

Simply put, no.

Periodic expenditures such as routine vehicle and home maintenance, vacations, and special occasion gifts should be covered by your savings account.

Also, you should have regular savings to cover acute emergencies, such as paying off a credit card debt or replacing your car’s tires. You can’t always predict when these things will occur, so you should still plan for them because they won’t be true emergencies.

 

This post was originally published here.

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Know exactly how much money you will have going into your bank account each month. No tricks, no gimmicks. Simple retirement for the modern day human.

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Your iPhone Pro Has LiDAR: 7 Cool Things You Can Do With It

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Tim Brookes

Some high-end iPhone and iPad models have a LiDAR scanner integrated into the camera module on the back of the device. This effectively gives your device 3D scanning abilities with a few unique and interesting applications.

RELATED: What Is LiDAR, and How Will It Work on the iPhone?

What Does the LiDAR Scanner Do?

LiDAR stands for Light Detection And Ranging, but it may also be commonly referred to as “3D laser scanning” or some variation thereon. The technology works by bouncing light waves at surfaces and measuring the reaction time to determine the shape and distance of objects in the area.

Think of it like RADAR (RAdio Detection And Ranging) but for light waves. Unlike RADAR imaging, LiDAR can provide more detailed and crisper scans with smaller equipment. LiDAR uses signals that work in the nanometer range, whereas RADAR requires the use of antennas that produce radio waves at much lower frequencies.

Coupled with the software on your iPhone, the LiDAR scanner can be used to create 3D representations of objects and their surroundings. To do this you’ll need the appropriate software which you can download from the App Store. Some core iPhone features, like the Camera app, will use LiDAR in other ways.

At present, only the iPhone 12 Pro, iPhone 13 Pro, iPad Pro 11-inch (2nd and 3rd generation), and iPad Pro 12.9-inch (4th and 5th generation) are equipped with LiDAR scanners. If you look at the camera array on your device, the LiDAR scanner looks like a small round black circle.

RELATED: How to Use the iPhone Camera App: The Ultimate Guide

Create 3D Scans of Places You Love

Imagine if you had an interactive 3D model of your childhood home or a treehouse you built when you were young. Most of us keep photographs to remind us of places we once lived and loved, but what if instead of flat images we were able to take 3D scans instead?

Well if you have an iPhone or an iPad with a LiDAR scanner on the back, you can do exactly that. Having a 3D space to navigate is a lot more immersive than simply looking at a 2D image. Photographs and videos still have their place, but why not augment your memory bank with something you can experience in three dimensions instead?

This is possible with apps like Polycam, RoomScan LiDAR, and Canvas: Pocket 3D Room Scanner. Most of these apps are free to use, though there are paid upgrades that remove certain restrictions and improve the quality of the scans that you make. You can see LiDAR scanning in action in a YouTube video published by Polycam.

RELATED: How to See 3D Walking Directions in Google Maps

Buying a House? Redecorating? Scan First

Capturing a 3D model of a room or building has some very practical uses. If you’re currently looking to rent or buy a house, taking a scan of the building can help you make up your mind whether or not the place is for you. The process is very similar to taking a walk-through video or series of photographs, both of which are common practices in the real estate world.

Not only is a 3D scan more immersive, but it’s also easier to compare sizes, layout, practical space, and potential for renovation and other major work. We’d recommend taking detailed photos and videos in addition to your scan, which works best with apps like Polycam and RoomScan LiDAR.

If you’re planning major work in a home you already own, a 3D scan can give you a base from which to work in a 3D modeling app like Blender (if you’re comfortable working in such an app). Alternatively, it can provide a nice “before and after” comparison to look back on.

And lastly, selling your house without a real estate agent is surging in popularity. These apps allow you to provide 3D environment scans to potential buyers while still cutting down on expensive agent fees.

RELATED: The Best DIY Home Improvement Apps for iPhone and Android

Create Your Own 3D Assets

Photogrammetry is the act of creating 3D objects from photographic data, and it’s a time-consuming process. While the assets that photogrammetry provides are often highly accurate and detailed, the process of taking an item from a series of photographs to a finished model you can use can take hundreds of hours.

By comparison, a scan made on an iPhone or iPad with an app like Polycam can take a matter of minutes. Scanning an object is a bit like taking a video, and when you’re finished you can export a file that can be used in 3D modeling apps like Blender. Once you’ve tidied up your scan you can import objects into 3D engines like Unity and Unreal.

These engines are used heavily in game development, film, and interactive media. Conor O’Kane is a game developer with a YouTube channel who has not only used this technique but created a tutorial showing how to do this and why small developers might be interested in the process.

Scan and Share Interesting or Cherished Items

Are you a collector? Whatever it is you collect—art, plants, games consoles, or even cars—you might get a kick out of exhibiting it online, in a 3D format. Polycam is perfect for this since it includes built-in model sharing with the rest of the Polycam community, or “polyworld” as the app refers to it.

Some people share ice cream or rock crystals, others share their extensive sneaker collection. Even if you don’t have a LiDAR scanner on your iPhone or iPad, Polycam may still be worth the download just to see what people are scanning and sharing.

It’s like Instagram but for 3D models with an interactive element that other forms of media don’t come close to. It’s easy too, even if you make a bit of a mess while scanning the app has intuitive crop controls that allow you to remove background or surface objects.

Tip: For best results, place your item on a stand, pedestal, or stool before scanning

Take Better Photos in the Dark

Your iPhone and iPad already do this, so you don’t need to activate anything to get the benefit. However, if you’re putting off taking photos in the dark since you don’t trust your device’s autofocus, you might want to reconsider if you have a LiDAR-equipped device.

Since LiDAR is capable of judging distances based on how long it takes the light waves to return to the sensor, autofocus in the dark can be better calculated.

While standard cameras and non-LiDAR equipped models use contrast and phase detection autofocus (what Apple calls “Focus Pixels”) which struggle in low light, your LiDAR-equipped model fares much better. Coupled with Night mode you should be better equipped to take photos in the dark.

Measure More Accurately

You may not have realized this but Apple includes an app called Measure with iOS by default. If you’ve previously discounted and deleted it you can download Measure again for free from the App Store.

The app uses augmented reality to measure real-world distances simply by pointing your phone at a surface. Tap the plus “+” icon to start the measurement and move your device to see it in action.

iPhone Measure app

With a LiDAR scanner, augmented reality is vastly improved on the iPhone and iPad. Measure has gone from being a fun party trick to surprisingly accurate. In our tests, the app was right most of the time, with a margin of error of around 1 cm. This may depend more on how shaky your hands are than anything.

RELATED: How to Measure Distances With Your iPhone

Get More From AR Apps

Measure is just one such AR app that performs better when paired with a LiDAR-equipped iPhone or iPad. Every other AR app can benefit from the sensor, which provides a more stable experience by gauging distance using light rays rather than estimations derived from a “flat” image.

LiDAR really helps to improve the AR experience across the board, like when you’re creating art in apps like World Brush, SketchAR, and Assemblr. Need to provide remote assistance for a real-world problem? Vuforia Chalk allows you to scribble on real-world objects to help relay the point.

Try out various bits of IKEA furniture in your house with IKEA Place, or bring your child’s LEGO sets to life with LEGO Hidden Side, as demonstrated in the above YouTube video published by the Brothers Brick. If you’d rather have a more educational AR experience, Playground AR provides a whole physics sandbox to play around with.

Of course, these experiences are available on just about any recent iPhone, but the experience is considerably more stable with a LiDAR scanner. Find even more apps to enjoy in Review Geek’s roundup of the best AR apps for iPhone and Android.

RELATED: The Best Augmented Reality Apps for iPhone and Android

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Apple’s Mixed Reality Headset Inches Closer to Release

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Apple

While rumors of Apple’s AR and VR “mixed reality” headset have been floating around for years, it sounds like things are starting to heat up. Last week, Apple reportedly showed its board of directors the next-gen headset, signaling a release could be near.

According to a report from Bloomberg, not only did members of the board get to see and try the new Apple VR headset, but engineers are working hard to develop rOS (Reality OS,) the operating system for the wearable.

The report mentions that seven members of the board, along with CEO Tim Cook, got up close and personal with the new VR headset. However, we’re not sure if it was a complete working prototype or the condition of the unreleased device.

And while there are no mentions or even suggestions that the release date is inching closer, it makes sense given that board members are getting a glance at it. Furthermore, lending credence to the idea, Bloomberg said there’s some precedence here, as the board often sees new devices ahead of announcements.

Does that mean Apple is gearing up to release (or at least start teasing) its upcoming mixed reality headset? We’re not sure. If so, we could see some sort of small teaser at the upcoming Apple WWDC developer conference.

That said, earlier reports from Bloomberg suggested that Apple had to push back its plans and release schedule due to “challenges related to content and overheating,” not to mention some issues with the camera system.

Either way, it certainly looks like Apple’s VR headset ambitions are not only heating up but that the project is inching closer to a release date. Considering Bloomberg said nearly 2,000 employees are working on it, maybe we’ll see it sooner than later.

via iMore

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How to Add Google Drive to File Explorer

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Adding Google Drive to File Explorer lets you access your cloud files without having to open a web browser. You can then manage your cloud files act as if they’re your local files. Here’s how to set that up on your Windows PC.

To add Google Drive to Windows File Explorer, you’ll use the free Google Drive app. This app integrates your cloud files with your local PC, allowing you to upload new files, download existing ones, and enable and disable file syncing.

RELATED: How to Download Files and Folders From Google Drive

Link Google Drive to Windows File Explorer

To start the integration, first, launch a web browser on your PC and open the Google Drive download page. There, click “Download Drive for Desktop” to download the app to your computer.

Select "Download Drive for Desktop."

When your file is downloaded, double-click it to run the installer. In the “User Account Control” prompt that opens, choose “Yes.”

You’re now on Drive’s installation wizard. Here, on the “Install Google Drive?” page, choose if you’d like to add Drive and Google’s online office suite shortcuts to your desktop.

Then click “Install.”

Select the shortcuts option and choose "Install."

When the app is installed, you’ll see a “Sign in to Google Drive” window. Here, click “Sign in With Browser.”

Select "Sign in With Browser."

Your PC’s default web browser will open taking you to the Google site. Here, Google will ask if you’d like to allow your newly installed app to access your Drive files. Enable this permission by clicking “Sign In.”

Choose "Sign In."

Google will display a message saying you’ve successfully signed in to your Google account in the Drive app. Close the browser window as you don’t need it anymore.

Successfully signed in to the Google Drive app.

And that’s it. Google Drive has now been added to your File Explorer. Access it by opening the File Explorer utility using the Windows+E keyboard shortcut.

In File Explorer’s left sidebar, you’ll see a new item called “Google Drive.” Click it to access your cloud files in your familiar file manager app.

Google Drive in Windows File Explorer.

You’re all set.

RELATED: 12 Ways to Open File Explorer in Windows 10

Configure Google Drive’s Sync Settings

To help you bring your Drive files to your PC, Google Drive offers two sync methods, each offering unique features.

The first method is called “Stream” which lets you manually download files from the cloud to your PC. If you don’t want to fill up your PC’s storage with all your Drive files, this is the method you should enable.

The other method is called “Mirror” which keeps your Drive files on both your cloud storage and your PC. Since this downloads a copy of all your cloud files to your PC, your PC’s storage will fill up pretty quickly.

Once you’ve decided on the sync method you want to use, configure it in the Google Drive app. Do this by first clicking the Google Drive app icon in your PC’s system tray (the bar located at the bottom of your screen).

You’ll see a Drive pane. Here, in the top-right corner, click “Settings” (a cog icon) and choose “Preferences.”

Choose Settings > Preferences.

On the window that opens, in the left sidebar, click “Google Drive.”

Select "Google Drive" on the left.

On the right pane, enable either “Stream Files” or “Mirror Files,” depending on what method you’ve decided to use.

Choose "Stream Files" or "Mirror Files" on the right.

And Google Drive will sync your cloud files accordingly. Enjoy!


To quickly access File Explorer, did you know you can pin the utility to your taskbar?

RELATED: How to Pin File Explorer to the Taskbar in Windows 11

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