finance

Finances and Work-Family Balance

work-family balance

Work-family balance is an important thing. Most people need to work to be able to support their families. Many people enjoy working and thrive through their work. However, work can take too much time and energy away from the family. Striking a balance is challenging.

Work-Family Balance and Quality of Life

One 2002 study found that people who spend more time on family than work report having a higher quality of life than those others. People who spent about equal time on family and work had a higher life quality than people who spent more time on work than family. Therefore, the perfect work-family balance may be one that leans more heavily on the family side than the work side.

Women and the Struggle with Work-Family Balance

Women, particularly mothers, have struggled significantly with the work-family balance issue. Research shows that 7 out of 10 women with children under 18 also work for pay. However, they earn less than their male counterparts. Plus, they often don’t return to full-time work quickly after the birth of children. One study found that it takes over a decade for the number of women to return to full-time work as the number who were working full-time within one year prior to the birth of their first child.

About 2/5 of mothers wait until their children are older to resume full-time work. Another 1/5 never resume full-time work. This impacts women and their families in a number of ways. In terms of career, many women struggle to get back on track in terms of professional status. We’ve all heard about the lawyers who get put on the “mommy track” and struggle to make partner at a firm after having kids. Recently new information shows that mothers who are scientists have a hard time getting grants and publications in comparison to their single and/or male counterparts.

This Issue Impact All Types of Families

Although women have been uniquely impacted by the work-family balance, it’s an issue that affects all different configurations of family. In the two-parent “mom and dad” family, both partners often struggle with the financial impact of trying to achieve work-family balance. Men increasingly give more time to family than they historically did. That’s a great thing for many reasons. However, it also means that dads are feeling more of the stress in the struggle to achieve work-family balance. The two parents may fight frequently over finances, as well as over division of labor at home.

Single parents, same-sex parents, and people in other family configurations (multi-generational, polyamorous, etc.) also have to grapple with this issue. Who will work? How much will each person work? What adaptations and sacrifices will the family have to make in order for one or more parents to not only earn money but also do a job that they enjoy? All types of families have to answer these questions. There is no right answer and no easy answer. Most people just do the best that they can and adapt as their financial, employment, and family situations change.

Communication is Key

Each individual, and each family, must figure out what works for them. There are many different ways to earn a living. How much money one needs varies widely. People must look at what they are willing to sacrifice in terms of family time in order to work at a certain job. They must look at what they are willing to sacrifice career-wise in order to have more family time. In order to figure this out, people must learn to communicate.

It’s not easy to talk about money. Financial stress makes it even more challenging in families. However, learning how to communicate openly, authentically, and honestly about your work-family balance needs will go a long way towards achieving the right balance in your family.

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A Personal Finance Checklist To Kick Off Your 30’s

A personal finance checklist can help you achieve financial goals.

A personal finance checklist can help you achieve future goals.

A personal finance checklist can be useful to ensure you are on well on your way to achieving financial success (or even simply evaluating where you stand).

Your 20’s are a great time to figure your life (and yourself) out. By the time you are 30, though, you should ideally have much of your life in order. Today’s millennials do tend to take longer to get married and start their lives, as recent reports show, but in order to set yourself up for your later years, you should analyze and improve your finances now.

I just celebrated my 29th birthday at the end of April, which encouraged me to reflect on my life experiences thus far and consider the future. The last decade was focused on enhancing and nurturing my career and my personal life along with developing myself as a full-blown adult. Basically, I spent the last 10 years getting my life in order.

As I prepare for a new decade, it’s time to take the next steps for my future. One of the first steps includes using my own personal financial checklist to accomplish over the next year in order to achieve more of my financial goals. With each milestone, my monetary ambitions change, and yours should too. I’ve already accomplished some of these topics and others still need improvement. As you begin to map out your own, this personal finance checklist will hopefully help you in more ways than one as well:

Budgeting 

  • If you have not already created a budget for yourself, you should do this first and foremost. Tracking your income and expenses is definitely not fun, but it does help to keep you in check and help you build wealth.

Reduce your debt 

  • By the time I was 27, I had paid off my car and two credit cards. My credit score not only went up significantly following these achievements, but I was able to use the money I was using toward this debt to increase my savings account. While I still have my student loan debt I am working on, my credit cards were my top priority to pay off as their interest rates tend to be higher than student loans. I’ve been able to pay more than the minimum amount each month over the last few years with less debt hanging over my shoulders though.

Save for retirement 

  • If you have not been lucky enough to have a 401(k) or similar retirement plan with your job, it’s time to open your own Roth IRA or another retirement savings account option. If you do have a 401(k) with your employer, start contributing more toward this fund. Ask your employer about a match program they may offer and do what you need to do in order to take advantage of this benefit. If you can swing it, you could invest in a separate plan as well as following one with work.
    • How much should you put toward retirement? A common recommendation is a minimum of 10% of your income. If that does not seem feasible at this time, especially with other savings plans you may be contributing to, such as an emergency fund, shoot for 2-5% and work your way up to the 10% goal.

Diversify your financial portfolio

  • As you reach your 30’s, this becomes important to include on your finance checklist. Mix up your investments through stocks, bonds and the like. Before going into such a venture blindly, be sure to do your research and even consult with a financial adviser or stock broker.  Buying stocks is pretty easy – you just need a brokerage account.

Plan for the future

  • No one ever wants to really think about dying or life emergencies, but the fact of the matter is, anything can happen to any of us at any time. As you begin to build financial stability, consider starting a family and reach more life milestones, you will want to contemplate the following:
    • Life insurance. Having a life insurance plan for you (and your spouse, regardless of whether or not he or she works) will be imperative in making any hurdles life throws your or your family’s way a little easier to deal with.
    • Naming beneficiaries on your accounts. Appointing your assets to various people in the event of your passing may not seem necessary at this point in your life, but you need to be prepared for anything. If you are not married and do not have a family of your own, you will want to consider leaving your financial accounts and any assets to your parents or siblings. Your beneficiaries will most likely change and need updated multiple times throughout your life, but get it started now so that it is not a worry later.
    • Estate planning. You do not need to be wealthy in order to start your estate planning. Get a power of attorney and a health care proxy to act on your behalf should you become debilitated and/or lose the ability to make your own decisions. Doing this will ensure you still have a full say in what happens particularly to you and your family.
    • Disability insurance. Regardless of age, you should be prepared for any event in life. If something happens that causes you to no longer be capable of working, disability insurance will provide you with a source of income.

Have a financial plan with your significant other

  • Married or not, live-in couples and relationships that openly discuss finances tend to have a higher success rate in surviving the partnership. Talk to your significant other about a financial plan and goals and compromise when needed.
    • Not married or living with a significant other? Create your own financial plan and be as specific with it as possible.

While a personal finance checklist may seem a bit daunting, it does not have to be all work and no play. It is still important to remember to splurge on yourself from time to time. As you become more financially responsible (and stable), you will find this much easier to do without placing much stress on your bank account.

Start a new decade off right with this personal finance checklist as a beginning point. If you are already in your 30’s and have yet to incorporate any of the above items, take some time to begin including these in your life goals and plan.

What would you add to the list?

 

2016 Real Estate Trends

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Real estate trends for 2016

Real estate trends for 2016 are looking great, which may come at a surprise to some of you considering how well the market did in 2015. Can the momentum really keep going? The short answer, according to various reports, such as Emerging Trends of Real Estate: Yes.

The last couple years were the best the housing market has seen since 2007. While 2016 is off to a slower start than 2015’s market, investors and buyers should not worry about another decline any time soon. The market does vary from location to location, year to year, but with a decreased unemployment rate, things seem to be looking up in many areas. If you are looking to buy your first home (or a new home), you will want to consider the local job market first. Furthermore, this slowed pace is just an indication of the market returning to normal conditions after years of suffering from the housing bubble.

Before we look at this year’s real estate trends, let’s look at some of the contributing factors of this growth in recent years:

  • First, millennials have different spending priorities than previous generations, and they will have a major impact on the economy, according to this report by Goldman Sachs.  As Gen Y becomes more financially savvy, they are choosing investments they can make money on. Luckily for the housing market, homes are one of those investments. Despite it taking longer for millennials to start families and purchase homes than Gen X and Baby Boomers, they are contributing to this rise in the market and actually make up a large portion of first-time buyers.
  • Locations like Austin, Seattle, Denver, San Diego and Portland are among Emerging Trends 2016’s list of top 20 markets for real estate and development. The report also attributes this to the fact that many of these locations doing well in the market are also on the Kauffman Foundation Study top 10 list for entrepreneurship. Because of this, they are seeing many young business owners relocate to these areas for more opportunities.
  • Baby Boomers are reaching or are currently in retirement age and looking to downsize. This means more real estate opportunities in both selling and buying.

While many other factors contribute to the recent rise in the housing market, such as technology and globalization, here are some key trends happening in 2016 for real estate:

  1. A great year to sell. We’ve already mentioned the impact Generation Y has had on the market, but as millennials are reaching their prime spending years looking to purchase their first home, Generation X and Baby Boomers are looking to decrease their cost of living, after already spending years as homeowners. This means their contribution is a double function on real estate. While your local market does still determine the supply and demand of homes, this seems to be a trend across the board that will impact suburban areas, especially from those looking to start a family.
  2. The spotlight is taken by 18-hour cities. Areas defined as 18-hour cities, such as Portland and Austin, are perfect for millennials looking to advance in their career. These second-tier cities are developing rapidly and typically have a lower cost of living, hence their attraction to the younger crowds. They also provide lower costs for doing business along with similar job opportunities as the big scale cities, such as New York City and San Francisco. The 18-hour cities are perfect for investors right now, and 2016 will see more real estate investment options. It’s a great time to jump on this bandwagon.
  3. More office space comes in demand. With the rise of entrepreneurship and job growth in recent years, office space is also becoming more in demand. This means less vacant rental space for realtors and an increase in rents. An open floor plan is the latest trend for offices in addition to co-working spaces, thus resulting in a change in layout and design. These factors have all been helpful in strengthening commercial properties.
  4. Mortgage rates will slowly increase. Although there is a decrease in distressed sales property, mortgage rates are expected to slowly increase. The increase will mostly seem to be manageable as homeowners will begin to get creative with alleviating the amount such as utilizing opportunities through Airbnb. It will need to be taken into consideration, though, as this could mean borrowing more money with higher interest rates. Areas with the highest mortgage rates will see fewer (or slower) sales in real estate; however, the good news is that the pressure for affordable housing is on the rise. This brings me to the next trend:
  5. New homes to be more affordable. In previous years, new-home prices have been rising much more than existing-home prices, which makes it difficult for lower- to mid-level income folk to purchase a new home. Despite the profitability of building luxury-style homes, it limits potential financial growth and entry-level sales.  This year should see a shift from this strategy as home-builders begin to create a more affordable product.
  6. Unaffordable rents posing a problem. The cost of rent is excessively high in most of the United States, which is pushing people more toward home-buying options. This may seem like a positive trend toward real estate, it is in fact a concern. Due to low credit scores, limited savings and the like, purchasing a home for renting households is not an easy solution. The housing market does depend upon multiple key factors, and affordability and the economy are among them. If individuals are spending half of their income on rent, it can predictably hurt the overall well-being of the housing market.

Whether buying or selling, you always want to pay attention to your local market to determine what is best for you. Overall, as an investor or consumer, these key real estate trends should help to guide you along and keep you in the loop of what is happening and what is to come. In addition, it’s important to stay updated on the housing market regardless if you are currently involved in real estate. Consider these, along with location, before making your next big move.