Many times young adults just entering the workforce aren’t getting paid as much as they would have hoped for. For this reason some are not looking into their company’s 401(k) offerings because they don’t want to start saving money that they shouldn’t touch for about 40 years (at least). When you are young you often get caught up in the “here and now” and forget about the future. However, preparing yourself for your future is one of the best ways to start off your career.

According to Schwab Center for Investment Research, young employees in their early 20’s should be saving about 10% - 15% of their paycheck into their 401(k) if they want to be prepared for the future. However, the average rate of savings among this generation is only at about 6% (not nearly enough).

Here some top reasons that you should start a 401(k) ASAP:

1. Tax Benefits

The money that you are putting towards your 401(k) comes out before you are charged for taxes. This way although you cannot touch the money (or shouldn’t touch the money) until you are ready to retire, your income is getting taxed less than it would if you were not putting money towards your 401(k).

2. Company Matching Contributions

If you find yourself in a bind for money right now, at the very least try to contribute as much money as you can so that you can benefit from your company matching contributions (remember: every penny counts!). Many companies give their employees a match on their retirement savings. This means that if you contribute $1 towards your 401(k) often times your company will match you 50 cents per dollar up to a certain percent of your contribution (usually 3%-5%). This is money that you are getting just for investing in a 401(k) and carries with it no risk.

3. Preparing For Your Future

This is one of the biggest reasons that a 401(k) is important. When you are in your 20’s, retirement seems light years away. However, time goes by so quickly that it will be here before you realize how much time has gone by. Putting off investing in your 401(k) won’t benefit you in the long run. With the market currently the way it is, people are afraid to invest in anything, but eventually things have to turn around and you will be happy that you were saving while you were young.

4. Target-Date Funds

Under this, your 401(k) automatically maintains a diversified portfolio of stocks and bonds. For many employees who do not completely understand the market and are too afraid to take big risks and lose their money, a target-date fund may be useful. However, our partners at MainStreet.com suggest that target-date funds are not always as easy as they appear and might still involve some risk. Check out the full article here to learn more!

Don’t let not understanding your 401(k) be a reason to not invest in this saving initiative. Ask your company for help in further understanding what your 401(k) has to offer and do your research online as well. If you do not take the initiative to understand your 401(k) and your future you may find that you are in a bind when your retirement time arrives. Even if you feel too young to start saving, it is always better to be safe than sorry. Knowing that you started to put money towards your future when you were young will be a big weight off your shoulders as the time approaches for you to retire.

Photo: Michael Connors

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What a crazy week. Everyone who either works in, or is invested in the stock market can breathe a sigh of relief that at least this week is over. As someone in the former category, I can attest to the insanity of this week on a physical and emotional (let alone financial) basis. I began this article on Monday and have made daily edits to this first paragraph. But the list that follows has been the same for me all week long. Sitting here now on Friday afternoon with the Dow back up over 350 points today alone (phew) the weekend doesn’t seem as bleak as it did say, Tuesday. However, here are five things you can do to help you ride out the storm.

1. Remember that markets are cyclical.
What goes up, must come down. And what goes down will come up again. Think back a few years when everyone you know was preaching that investing in real estate was a no-risk situation because real estate never loses its value. That kind of thinking was wrong then, and the proof is in the drop in housing values today. Home values in California alone are down 35% from last year. Will they be down forever? Nope. It’s a cycle. Buyers or any investment need to be aware of that cycle and act accordingly. You don’t know when a massive turnaround will happen, and you want to be in the market when it does.

2. Don’t fall prey to panic selling.
As Scott Rothbort points out in “Five More Ways to Handle Market Stress”: “(H)ad you bought the [S&P 500] on the day before the 1987 market crash, your cumulative return through the end of July 2007 — without dividends — would be 415%. That is even after giving up 20% on the first day after your investment.”

3. Turn off the TV.
For every expert opinion there is an opposite opinion. If you have real fears, and not enough time to watch more than one network or get your news from more than one source, it may be better to change the channel, skip the business section and focus on something else for a while.

4. Continue long term investing.
Don’t stop investing in your company’s retirement plan – especially if your employer has a matching policy. This match is “free money” – whether the underlying investment is having a good or bad year. Keep your focus on the long term.

5. Know the FDIC.
Make sure your cash reserves are FDIC insured. The FDIC guarantees the safety of checking and savings deposits in member banks, currently up to $100,000 per depositor, per bank. If you have more than $100,000 in cash you may want to consider spreading the accounts to more than one bank, or talking to an advisor about other options.

Keep your wits about you, and let’s all hope for a less interesting week next week!

Identity theft can happen to anyone these days. All it takes is for someone to get your passwords off your computer, get your credit card number, or steal your wallet and find your social security card or license. ID theft can happen very quickly (and without your knowledge), but getting your identity back can take a lot of time and money on your part.

According to an article from our partners at Mainstreet.com, over 217 million people have been affected by identity theft, making it one of the fastest growing crimes worldwide. This is a huge problem and it continues to grow! Most people are never caught for stealing your identity, but many of your banks will take the financial burden upon them and cover the debt that was accumulated in your name.

However, Identify Theft Insurance could save you a lot of wasted time and money that you may have spent re-gaining your own identity. This type of insurance is fairly new to the insurance industry. Your bank and credit card companies are still responsible for the money that you have lost due to others using your name against your will. However, this new type of insurance will help you through the time and money you could potentially lose filing all the legal paperwork, etc. to get your name back.

Depending on the insurance company, they offer Identity Theft Insurance in a variety of ways. Some insurance companies offer it through homeowners or renters insurance and others use it as a stand-alone policy. You want to make sure to check with your current insurance company to see if you are already covered before purchasing additional coverage. This way you aren’t duplicating what you already have!

The cost for this type of insurance will depend on what insurance company you have/use. Often times costs can range from about $60 to $160 per year for coverage but can also cover anywhere from $15,000 to $25,000 worth of costs that you may incur due to your identity being stolen. These types of costs could be legal costs, shipping costs for documents that must be sent out, and other costs you may not even consider such as loss of wages due to being in court instead of at work.

Another Geezeo article lists several ways to protect yourself against ID theft so you might not have to use your insurance.

Some of these suggestions include:

Monitoring your bank and credit card accounts
Pay with cash
Don’t carry important/personal documents with you unless you need to
Use a shredder

(To see the reasons behind these suggestions check out the full article here.)

Just remember, ID theft can happen to anyone regardless of if you have 15 credit cards or no credit cards. As long as someone can get a hold of your name and personal information, anything can happen. Just be safe and make sure you keep track of your finances and personal documents.

Photo: Jane M. Sawyer

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With 11 major company’s information being hacked into, including Barnes and Noble and OfficeMax, consumers have even more reason to be concerned about identity theft and how they can protect themselves.

Although this is a problem in itself, an even bigger problem is that one of the biggest leaks of private information is that from the U.S. government. According to an article from MainStreet.com, there were more than 230 security lapses from local, state, and federal governments between 2005 and 2008. This breach of security caused the exposure of more than 44 million records!

This is a much bigger problem than some could imagine. It is strange to think that the people you would think to trust in the government are somehow leaking the personal information of thousands of people.

But, let’s be honest, it is definitely not all the governments fault. There are things that we can do to protect ourselves from identity theft as well.

It is much easier for people to get a hold of your information than it used to be. With consumers using online banking, putting their passwords into public computers, and using their credit and debit cards at retailers more than ever, it seems easy to see how people would find a way to hack into this massive amount of information.

Try to do some of the following:

Monitor Your Bank and Credit Card Accounts – This one really is not that hard to do. Everyone can now check their accounts online and banks have made this procedure really simple. Check your account every few days to make sure that your card has not been compromised with charges that are not yours. Also, try to check your accounts from your personal computer and not a public one. You don’t want people to get your passwords or information because you forget to log out of your account.

Pay With Cash – Whenever possible, don’t use your credit card or debit card. I know this is not always convenient, but if you are buying something from a store or location that you may not trust their security, then use cash! It is always better to be safe than sorry.

Don’t Carry Important Documents With You – Make sure to leave things like your social security card, passport, and resident card at home so that if your wallet or purse gets stolen, this extremely important information is not in there. Also, try to keep the minimal amount of cards in your wallet as well. You don’t want to carry all your cards with you every time you go out just in case.

Use a Shredder – Once you put your trash on the street or sidewalk to be collected, it is on public property not your own private property. Shred your information so that people cannot find it in the trash. I know this may sound a little bit skeptic of people, but honestly, think of all the private information you throw away everyday! And not all shredders are expensive either. My mum bought me one the other day (with a store rebate) for only $20. Shop around! Having a shredder can really help you out.

I know that sometimes it isn’t always easy to do the above, but you really want to try to protect your identity as best as possible. Although you can’t control everything, you are able to control certain things that will help you to protect yourself. Better to be safe than sorry!

Photo: Jane M. Sawyer

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Many of us have heard of prenuptial agreements and for more information check out a Geezeo article here. But postnuptial agreements are not as common as prenups, but are constantly growing in popularity.

Often times couples do not want to ruin a marriage before it already begins with the discussion of a prenup agreement. However, after the wedding, if things are not what you had thought they would be or things are not going so well, maybe it is time for you to consider a postnuptial agreement instead.

According to an article about on TheStreet.com, there are several reasons why a couple might enter into a postnuptial agreement or contract:

- Protection against a spouse that has treated you wrong in the past. Sometimes couples sign this because they want to work through their past and things that have happened. However, having this agreement in place if things go wrong allows both to leave with something and not focus on money.

- Both individuals want to know about the others finances. Having a postnuptial agreement puts everything on the table so that there are no secrets between the two of you.

- Sometimes people entering into second marriages want to make sure their children receive the correct assets in case anything goes wrong.

- The most obvious reason for a postnuptial?…Because you just didn’t get around to signing a prenuptial agreement before you were married.

A postnuptial agreement states everything clearly so that both individuals know what will happen if the marriage does not end up lasting. This can save you a lot of money in the long run. An article on MainStreet.com by Shira Levine talks about how a lawyer can easily cost $5,000 for just 10 hours of arguing. Once you put a third or fourth party in the middle of things the arguing and trying to figure things out can last for an extremely long time.

Although you may think that bringing up a postnuptial agreement will make things worse, they may do just the opposite. Make sure to sit down with your spouse to work through things and talk about signing a postnuptial agreement. Postnuptial agreements have been seen to save troubled marriages when the worrying about money is off the table.

Both prenuptial and postnuptial agreements can save you a lot of time and money in the long-run. Review the pros and cons of each to figure out if this is what you should consider. Even those couples who have no trouble in their marriage might consider signing an agreement to avoid worrying about money. Do what you think will work best for you!

Photo: Michelle Kwajafa

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Travel insurance can cover everything from flight delays and cancellations to unexpected medical emergencies when you are away from home, all the way to rental car damages or lost baggage that may occur.

I was born in England, so besides my immediate family the rest of my relatives live in England. My grandparents can no longer visit us the United States because they are not able to get travel insurance. At their age, it is too risky to travel without travel insurance in case anything medically pertinent happens. The insurance companies will not give them insurance because there is an increased liklihood that something significant could happen.

At around the time of the SARS scare in 2003, my grandmother was hospitalized in Miami, Florida. Not only was she in intensive care, but because of SARS she was also in isolation. Having travel insurance saved her thousands of dollars that she would have had to otherwise pay out of her own pocket.

Travel insurance is not necessarily for everyone, but it is definitely something that everyone should consider when taking a trip.

With airline cancellations and travel delays always likely in the forecast, you want to make sure that you are covered for all of the unexpected. Although we would all like to believe that nothing unexpected is going to happen to us, there is always a possibility that something will.

According to MSNBC.com, about 67 million Americans spent $1.3 billion on travel insurance in 2006. This amount is a 20% increase from what was spent in 2004.

Traveling with a family makes cancellations and medical costs much more expensive. Sometimes, travel insurance may even have a family package that will bundle your children with you for free.

There are many companies that offer travel insurance and the policies may differ from company to company. At InsureMyTrip.com, you are able to compare different companies’ plans and costs to one another. Another thing that is offered is an overview of what all of the companies may offer you. Make sure to pay close attention to detail, because often there are things that are not covered such as trip cancellations due to a divorce.

Although the cost of travel insurance may seem like a large investment at the time, you may save a lot of money if something goes wrong with your trip. If you are making a large investment in a vacation, you should make sure that you are covered just in case. It would be a shame for you to lose all of your money just because you may not have been covered.

Travel insurance however is not for everyone. If your trip is short or does not include a long investment, sometimes the cost of insurance is not worth it. Make sure to check out all of your options and seriously consider what is right for you. Even though your credit card may have insurance that would cover an airline cancellation, it would not cover the rest of your expenses if you never made it to your destination.

Photo: Scott Liddell

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Have you seen the movie The Bucket List with Jack Nicholson and Morgan Freeman? If not, you should! It’s a comedy about two guys who make a list of things they want to do before they “kick the bucket.” It is actually quite funny and takes a light hearted look at death.

In an article on MainStreet.com, The Bucket List is described in the following way:

In the film, the two seniors—the independently wealthy Nicholson and the not-so-wealthy mechanic Freeman—embark on Nicholson’s private jet and travel around the world, making pit stops in India, China, Tanzania, and other far-flung destinations. They stroll around the Taj Mahal, ride across the Great Wall on motorcycles, go on safari in the Serengeti and ultimately rack up a bill of $105,730 according to an estimate by the Los Angeles Times.

However, not all of us have that much money to spend, but we should all have our own personal bucket list for what we want to accomplish before we die.

Mine would include something like the following:
• Go skydiving in Hawaii
• Travel to Australia, New Zealand, Fiji
• Backpack through Europe
• Work on Habitat for Humanity
• The list goes on and on…

However, although these are more light-hearted topics and fun, there are some more serious issues that people also need to consider before they die.

As my parents get older, different topics arise in the house that had never been discussed before. It is scary to think of my parents getting older, but the truth is that it is still comforting to know that they want to be prepared.

There are obviously many things that need to be dealt with as you get older and further more before you die. Nobody wants to think about death, but when it happens, it is definitely better for everyone close to you that you were well prepared. It makes the decisions that they have to make much easier.

Some documents and things that you should do before it is too late…
Or in other words, a more serious bucket list:

• Last Will and Testament – This one is a MUST HAVE. You do not want to die without a will. In your will you state where you want all of your assets (money, home, etc.) to go. In the case that you have children, it also provides them with a legal guardian so that you do not have to worry about who they will be with when you are gone. Check out this other Geezeo article about the Importance of Your Will.

• Advanced Health Care Directive – This document states what you want to happen if you have a terminal illness. It is hard for your loved ones to make the decisions for you, so in this document you state what you want to happen if this is the case. Such as if you want to be on medication, life support, or a feeding tube to prolong your life.

• General Power of Attorney – This document gives someone power to handle all of your financial affairs if you are unable to. You want to make sure your debt is paid off and everything is handled in case you are unable to do so.

There are many other documents that could be added to this list, it is your choice which you think you need. Make sure that after these documents are signed and dealt with that you put them in a fireproof safe or safety deposit box in case anything unexpected happens.

Also, make sure to include some fun things in your own bucket list as well! Not all of it has to be documents and legal things to cover; try traveling the world, flying a plane, or bungee jumping out for size!!

Photo: Scott Liddell

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The common desire among Geezeo users is the wish to master our financial lives. Thankfully Geezeo has the tools and community to help on every step of your financial journey.

How do we take inventory of our financial lives? Are you 100% satisfied with your money situation? If not, what’s keeping you from having that satisfaction?

Suppose you are happy. Could you be languishing in a safe zone missing opportunities to earn, save, or give more?

I think we’ve got three basic stages in our financial lives. Managing, growing, and giving. Which stage are you living and how do you plan to move forward?

Stage 1- Managing Your Money.

Ideally we should learn the basics of managing money as children or young adults. The sad reality: Most of us learn ‘on the job’. And we screw up, sometimes hugely. In the management stage we need to develop the habits and knowledge that will allow us to create a basic level of financial security. Unfotunately, past mistakes can keep us on a financial hamster wheel if we aren’t careful. Using credit, understanding taxes, budgeting, paying debt, and having an emergency fund are milestones we need to reach before we can hope to effectively move on to growing our money.

Stage 2- Growing Your Money.

You’re a master at managing your money. Now what? Time to tackle investing and taking some risks so your money can grow. This can be intimidating. Remember you want to grow your money, not lose it. If you’re clueless don’t be afraid to admit it. It’s easier than ever to broaden your financial horizons. Check out TheStreet.com to beef up your knowledge of what’s happening in the stock market. Get over your fear of talking to a financial planner and clearly define your long tem goals.

Stage 3- Giving Your Money

Americans have a hard time with the concept of enough. We want more. I like that about us. There’s nothing wrong with wanting to amass a huge fortune. But aren’t we all here to make the world better in some way? When you have more than enough it’s thrilling to consider how surplus can be used to enrich the lives of others. Be an angel investor for a company that will create jobs. Give your grandchildren a secure financial future. Create your own organization to focus on the causes you care about. The opportunities to give are limitless and the rewards are priceless.

No matter which stage you’re living remember the point is to learn, grow, and move on. If you’re feeling stuck, hire these guys to follow you around. Apparently they’re very passionate about other people’s money.

With the recent floods in the Midwest and hurricane season beginning, flood insurance should be a consideration for many that are located in the affected areas. The devastation of hurricane Katrina is still fresh in many people’s minds and others would like to avoid a similar devastation and loss.

According to The Colorado State University forecast team, the U.S. Atlantic Basin is likely to experience a well above-average hurricane season in 2008. The team predicted that there is a 69% chance that at least one major hurricane this season will make landfall on the U.S. coastline. Don’t you want to be prepared?

Everyone wants to be prepared for the worst. Although hurricanes usually only affect the coastal areas on the United States, flooding due to heavy rain is likely to affect the rest of the country causing significant damage.

Many do not know that flood insurance is NOT always covered under your home insurance. This means that you cannot depend on just home insurance to cover you and should look to investing in suitable flood insurance for your area.

According to FloodSmart.gov, 1 inch of flooding can cost about $7,800 while 18 inches can cost around $24,000! This is a significant amount of money that you may not have readily available to repare the damage of your home.

Flood insurance covers you when there is a flood for losses to buildings and the contents within the building, not for the land surrounding the building. FloodSmart.gov explains that “to be considered a flood, the waters must cover at least 2 acres or affect at least 2 properties.”

There is a possibility that you may already have flood insurance. According to an article on MainStreet.com about flood insurance by Jessica Wakeman, “The National Flood Insurance Program offers coverage for sale to homeowners and businesses located along coasts, on islands, and along rivers.” In the areas that participate in the NFIP, if you have a federally backed mortgage then you are required to have flood insurance, if you do not then you can decide whether or not you want to purchase flood insurance (at your own risk of course!).

FloodSmart.gov has several policies that you can choose from based on the history of floods in your area and where you live.

Remember, it is always better to be proactive when preparing for flood or natural disaster, because when they hit it may be too late to protect your property.

Check out some great related articles:
** You Don’t Have Flood Insurance?
** Why The Midwest Floods Could Impact the Cost of Your Coke and Your Burger
** Are You Prepared for a Natural Disaster?

Photo: Kevin Connors

There are contracts for many things; home ownership, buying a car, opening a bank account, etc. Employment contracts are extremely important to the safety and stability of your career. There are many companies that still do not have new hires sign a written contract. The reason for this…? – Many employers like to have the flexibility to be able to fire whomever they believe is not performing efficiently without being bound by a contract.

Although many people believe that an offer letter is a good enough form of a contract since it usually states your salary and certain aspects of your job, this is not a binding contract and has many loop holes. It also does not cover ALL the aspects regarding your employment at the company.

Employment Contracts Work For Everyone Involved
Signing a contract is not just beneficial for the employee but also for the company that they are employed by. A contract makes sure that all the terms and conditions of your employment are what you thought they would be. By signing your employment contract, you and your employer are in agreement with the correct terms. Make sure you are to read your contract carefully so as to not overlook anything you may disagree with. A good contract ensures that promises made by the company to you will be kept.

What Should Your Employment Contract Include?

* The position you are being offered at that you have accepted (this may also be what some of your daily tasks will include).

* The salary (or compensation) that you have agreed upon with your employer.

* How long you will be employed for or if your employment is “at will” (this means you can quit at any time or be fired at any time that is not illegal).

* Other things that should be included are with regards to how much sick and vacation time you will receive, what paid holidays you get off, etc.

* There may be other terms/conditions that your employer may include…make sure to review all of these!

Who Signs the Contract?
Both you and your employer should sign the contract after you have reviewed it to make sure everything is correct. Afterwards, make sure you keep a copy of your contract in a safe place in case any problems arise regarding your employment (this should be done with any important paper work).

Employment contracts are important to make any disputes or controversies run more smoothly. You don’t want to get caught in a nasty legal battle with your employer in case anything regarding your employment changes. An employment contract helps to smooth out many wrinkles that can occur with your career since your income is such an important part of your life.

Most importantly, make sure to review the entire contract before signing! Although you may trust your employer and think everything is correct, you want to be sure that you are not signing to anything that you may not agree to in the long-run.

If any changes are to be made to your contract, there must be a re-negotiation between yourself and your employer and a new (revised) contract must be signed.

Check out our Career Groups on Geezeo to look for any other questions that you may need answering!

Photo: Dave Wicks