Financial Wellness

5 Tips for Teaching Kids About Money

3 min read
Mar 31, 2020

Financial Wellness

When is it Okay to Dip into an Emergency Fund?

3 min read
February 03, 2020

Your emergency fund is intended to be your first line of defense when times get tough. But sometimes, it can be difficult to decide when to dip into these funds.

You may be reluctant to spend money that took a long time to save, opting instead to use a credit card or take out a loan and keep your emergency fund intact. Or, after going months without an emergency, you may be eager to spend the money on a want rather than a need. But an emergency fund is most helpful when it's saved and used as intended.

Learn about the benefits of an emergency fund and what you should consider as a true emergency so you can make the most of your hard-earned safety net.

What Is an Emergency Fund and Why Is It Important?

An emergency fund is money that you set aside for unexpected events. It can provide financial security and help you get through a rough period without the added burden of financial stress. Unexpected expenses are an inevitability, and you can use these savings rather than having to borrow money or overdraft an account.

MetLife’s 17th annual U.S. Employee Benefit Trends Study found that the number one stressor for employees is personal finances. Two of the top five sources of concern were paying for out-of-pocket medical expenses and covering expenses after losing a job.

That stress, in turn, can lead to worse sleep, health issues, and a lack of focus at work. But knowing you have an emergency fund to fall back on allows you to react to challenging situations with thoughtfulness. For example, if you’re laid off, rather than taking the first new job that comes your way, you’ll have time to hunt for a job you want and negotiate your salary with confidence, knowing that you’ll be okay in the meantime.

What Counts as an Emergency?

With all the benefits that can come from having an emergency fund, it can be difficult to give yourself permission to spend the money. Here are a few examples of when dipping into your savings may be appropriate:

  • Unexpected lost income: Your emergency fund can be a helpful resource if you lose your job, your hours are cut, or you're unable to work due to an accident or illness. If you do experience an accident or illness that prohibits you from working, disability insurance could also help.
  • Primary vehicle repairs: If you can’t get to work or school after your car breaks down, use the money to get yourself back on the road.
  • Natural disasters: Floods, hurricanes, fires, earthquakes, and other natural disasters can leave you scrambling. In addition to your homeowners or renters insurance, the fund can help pay for housing, food, transportation, and recovery efforts.
  • Medical emergencies: You don’t want finances to keep you or a loved one from seeing a doctor or filling needed prescriptions.
  • Home repairs: Whether you’re dealing with a broken window or faulty water heater, homes can require ongoing maintenance and repairs. You may want to save for these within, or separate from, your emergency fund.
  • Necessary bills: If you’ve cut back on your wants and don’t have enough money coming in to cover your needs—rent, utilities, and other bills—an emergency fund can help keep you from shutoff services and late payment fees.

Tapping your emergency funds for non-necessary purchases, such as an extravagant vacation or lavish dinner out, can be tempting. However, try to maintain a strict barrier between real emergencies and your wants. Otherwise, you could get stuck if an emergency strikes before you have a chance to replenish your savings.

How to Build an Emergency Fund

A full emergency fund should have about three to six months’ worth of your necessary expenses. However, if you’re starting from scratch, you may want to begin with a more manageable goal of $500 or $1,000.

It’s not going to happen all at once, as saving hundreds or thousands of dollars takes time and effort, and often, a mindset shift is an important part of the process.

One trick is to keep the money in a separate account, as it’s easier to avoid spending money if it’s out of sight. A high-yield savings account can be a good option that allows you to earn interest on your emergency fund.

Here are a few more tips you can use to build your savings:

  • Automate the process by having a portion of your paycheck directly deposited into your savings. Or, set up periodic automatic transfers from your checking to your savings account.
  • Create a monthly savings goal and track your progress. To help make that easier, you can use apps and programs that analyze your finances and automatically transfer money into your savings, or that offer incentives for saving.
  • Whether you're shopping for food, clothes, travel, or luxury goods, always look for ways to save money. Send the difference (or, at least part of it) to your savings.
  • Find ways to decrease your recurring bills, such as internet, utilities, and phone plans. Bundling services and asking about discounts can sometimes help. Also, shop for new providers every six to 12 months to ensure you’re still getting the best possible deal.

Finally, remember that you’re not alone on this journey. If you want to learn more about managing finances, building savings, and using insurance to protect yourself from emergencies, MetLife’s financial wellness resources are filled with helpful tips and real stories of what has worked for other people.

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Nothing in these materials is intended to be advice for a particular situation or individual. These materials are for general information purposes only.

Financial Wellness

Easy Tips To Help You Manage Uncertain Times

3 min read
April 03, 2020

The unexpected and unchartered coronavirus (COVID-19) has caused us to social distance, shut down businesses, and create a new virtual work and homeschooling experience—all to reduce the risk of spreading the virus.

A prominent emotion you may feel is uncertainty—about your health, your children, your job, your money, and the economy. Not to mention the stress of not being able to engage in the most basic activities, like getting a haircut, working out at the gym, or meeting a friend for coffee.

The good news: You are not powerless, and you can take action to feel more in control, starting now. Use these tips to help you navigate through these unpredictable times.

For Your Financial Health

Stay calm

It’s easy to let emotions and the latest headlines drive your financial decisions. Instead, focus on your long-term financial goals to help you make the right choices.

Talk to your family

If there ever were a time to talk about money as a family, it’s now. Discuss budgeting strategies and take a look at where you can cut back on expenses. Talk about your comfort levels with tapping into savings. If you’re working from home, put the money you’d spend on gas and daycare into an emergency fund account. You might also want to update or create your will.

Review your company benefits

Investigate all the benefits that are available to you through your employer. Think about pet insurance, a legal services plan, or a health savings account (pre-tax money saved for medical expenses). You may not have considered these options before, but review them for future consideration to see how they can save you money.

Evaluate your risk tolerance

It’s hard to honestly evaluate your ability to stay on track with everything changing so rapidly. But now could be the best time to assess or reassess your ability to withstand risk. Speaking with a financial professional can help you get started.

Give it time

If you’ve never invested before, all the news surrounding the stock market may feel overwhelming. Now is a good time to get educated and maybe even start planning for your portfolio. Because throughout history, the market has always recovered after a downturn.

Think twice about large purchases

Consider postponing any large purchases like a new couch, cell phone, or a roof for your home. After things stabilize, you can reevaluate your situation to see if you’re in a position to spend a little more.

For Your Emotional Health

Take a break from the news

It’s important to know what’s going on in your community and the world. But try not to obsessively check the news all day—it can drain your energy and affect your mood. Stick to trustworthy sources, such as the Centers for Disease Control and Prevention (CDC), the World Health Organization (WHO), or your local public health authorities.  

Ask for help

If you are feeling overwhelmed and need to speak with someone, utilize your company’s Employee Assistance Program (EAP). These programs can provide confidential counseling services to help support your wellbeing at work and in your personal life.

Focus on the things you can control

If you feel yourself getting caught up in what-if scenarios, shift your focus to the things you have a handle on. Continue your daily routines as best you can or create new ones. Take advantage of your time at home to learn a new language, read a novel, organize your closets or your office, and (finally) print your digital photos.

Stay connected virtually

Even if you’re physically isolated, use video chats to stay connected—try hosting your book club virtually or have a happy hour with friends. And don’t let the seriousness of the news dominate the conversation. Share stories and laugh—a lot.  

Be patient with other people

We’re all feeling anxious, and everyone handles stress differently. With that in mind, try not to judge others for their actions or emotions, such as being disappointed about having to postpone a birthday party. Be empathetic to what others are feeling, even if you don’t completely understand or agree.

Take care of yourself

Eat nutritious meals; get restful sleep; exercise daily. These habits bear reminding because they’re the first to fall by the wayside. Try to maintain a healthy routine as best you can, and leave room for flexibility.   

Try mindful meditation

Even if meditation hasn’t been your thing in the past, you might want to reconsider it now. There are many useful meditation mobile apps and websites to choose from—some sessions are as short as one minute—if you don’t have much time. Try it out, you just might pick up a new habit.

It’s important to have patience, stay calm, and make sensible decisions in our new reality. Even though the perceived path is unclear, we’ll keep looking forward and the future will be what we make it. And that is certain.

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Nothing in these materials is intended to be advice for a particular situation or individual. These materials are for general information purposes only.

Financial Wellness

How Women Can Boost Their Money Mindset

4 min read
January 31, 2020

Are you financially confident?

If the question makes you nervous, you're not alone. More than half (63%) of Americans say they are confident about their finances, but many are still living paycheck to paycheck according to MetLife's 17th Annual U.S. Employee Benefit Trends Study.

The disparity is magnified when it comes to women. The survey also shows that, compared to men, women are more likely to live paycheck to paycheck (55% women vs. 44% men) and feel less secure when it comes to their finances (55% women vs. 70% men).

With personal finances being the lead stressor for Americans, women who take a more active role in their personal finances may gain more clarity, confidence and control when it comes to managing their money.

Here are key ways women can start to take charge of their finances:

1. Know Your Net Worth

Your net worth is the total value of all your assets including investment accounts, bank accounts and real estate, minus any outstanding debts such as credit cards, mortgages, car loans, or student loans. Knowing your net worth is a good starting point for understanding your overall financial picture and choosing where to focus next.

Ask yourself:

  • Do you have high-interest debt such as credit cards or personal loans? If so, consider creating a plan for paying it off as soon as possible.
  • Do you have three to six months of cash available for emergencies? If not, try setting a goal of saving up an emergency fund. Even saving $25 or $50 per month is a great starting point. 
  • If you're already on a savings track, how much money are you saving each month? Can you challenge yourself to set aside an additional 5 or 10 percent each month?

If you’re married, you and your partner should both keep track of your respective and joint assets and debts so you’re on the same page. Some couples schedule periodic money dates to review spending and saving and ensure that they’re on track to reach their goals.

2. Commit to Investing

Because of inflation, simply saving money isn’t enough to help you achieve most financial goals. You may be able to earn a percent or two of interest on a savings account, but increases in the cost of living generally outpace those interest rates and erode your spending power over time.

Investing can help your money grow over time. Women tend to invest more conservatively than men, but that can be an asset in the long term. Even small amounts consistently invested over time add up.

If your employer offers a match on an employee retirement plan like a 401(k), why not take advantage of that option. Make sure you’re contributing enough to capture the full match. And if you’re not already maxing out your retirement contributions, can you bump up your contributions by a percent or two?

Of course, you don’t need an employer-sponsored retirement account to start investing. You may be able to set up an Individual Retirement Account (IRA) outside of work. For money you plan to access before retirement, mutual funds or a brokerage account could be a good starting point.

3. Fill in Your Knowledge Gaps

If you want to learn more about debt management, investing, or how to prepare for life's curveballs, there are plenty of resources to help you get up to speed.  Some options you can choose are:

  • Meet with a financial advisor to help you get clarity on where you are in your financial journey and what to do next.
  • Listen to financial podcasts to boost your money savvy. Search for personal finance or financial wellness shows on your usual podcast platform — it's a great way to learn money tips from financial experts while on-the-go.
  • Check your local community college or adult education center for low-cost courses on saving and investing. 
  • Research and join a book club that focuses on reading and discussing personal finance books as a way to build a support system as you work towards greater financial confidence. If that appeals to you, see if your local library or Meetup group has a personal finance book club, or consider starting your own.

4. Prioritize Expenses

Identify fixed and variable expenses, as well as distinguish between your wants versus needs. Needs such as housing or food must take priority over wants such as a vacation or a new TV. Fixed expenses are things like rent or a car payment that do not change from month to month. Variable expenses are things like groceries or entertainment that can vary.

If you can lower a fixed expense by moving to a cheaper apartment or switching to a cheaper cell phone plan, that can put money back into your wallet month after month. You can lower variable expenses by being more mindful of your grocery bill or how much you're spending on entertainment, but this requires ongoing attention.

For additional tips and advice on personal finance, access MetLife's financial wellness resources here.

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Nothing in these materials is intended to be advice for a particular situation or individual. These materials are for general information purposes only.

The habits and values we teach our kids about money can stick with them for a lifetime—we want to get it right. Luckily, even though the economy is in flux, the fundamentals for raising financially-savvy kids are still intact. Here are five things you can do to help your children learn about money.

Start Early

You might wonder if there’s an ideal age to teach kids about money or a foolproof way to do it. Good news: You get to call the shots. As a parent, you know your child’s level of comprehension, so just go slowly; try not to overthink it; and make it fun.

For example, turn online grocery shopping into teachable moments. Let the kids use your phone’s calculator to add the cost of items going into the virtual cart. Have them help you compare prices. Talk about the difference between items they need and items they want and what they’d rather spend their money on. Give them a challenge to see how much they can save. Be sure to introduce them to different forms of payment, like debit, credit and digital wallets.

Encourage Saving

It can be tough to convince kids to hold onto gifted money, like birthday or holiday cash, and sometimes it’s easier to let them have their way. However, teaching your kids not to make impulsive purchases—and to save their money so they can spend it later on things they really want—gives them the critical thinking skills and patience they’ll need to save money as adults.

If you’re an adamant comparison shopper or coupon clipper with little ones, have your kids help you find deals on a particular product, and treat it like a treasure hunt with a reward at the end that’ll go into a savings account. Turning saving into a game is a clever way to get kids excited about money management.

Use Apps to Your Advantage

Kids are usually the ones telling us about the newest, coolest apps. But they might not have heard about these: Bankaroo is a virtual bank where kids learn to manage “income and expenses,” set savings goals, and get introduced to foreign currencies. Savings Spree helps kids practice earning, savings, spending, giving, and investing money. Both apps are touted by parents. 

Teach Them to Budget

Sit down with older kids and talk about what a budget is and what categories it has, like fixed living costs, debt repayments, groceries, transportation, and entertainment. Work with them to develop their own budgets and help them understand the consequences of going over their budget. This will help them learn to prioritize needs over wants and how to set long-term goals for big ticket purchases.

Talk about the Future

Educating your teens about the concept and value of insurance, whether it’s life insurance, car insurance, or home insurance, will give them a head start for when they need to think about it as adults and make decisions on coverage. It’s also a good way for them to start thinking about the future. Broach the topic by asking them what kind of car and home they want when they get older—have them describe both in detail. Then, strategically bring up how important it is that they protect their beloved assets with insurance. They’ll be all ears.

Teaching kids about money and planning for the future is an important part of being a parent. The earlier you start, the better you’ll be able to prepare them for the future.

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Nothing in these materials is intended to be advice for a particular situation or individual. These materials are for general information purposes only.