IRA accounts are confusing and unfortunately, not many colleges or workplaces offer the education needed to understand them fully. As valuable as these accounts can be to saving for retirement, though, it is crucial to familiarize yourself with them and how they can benefit you…. Read More

Unnecessary spending is one of the biggest contributing factors to bad credit and financial crisis. If you are seeking to better your credit score and become more financially capable, there are some things that you can do to cut down that unnecessary spending. 1. Make… Read More

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7 Ways to Cut Down on Unnecessary Spending

Unnecessary spending is one of the biggest contributing factors to bad credit and financial crisis. If you are seeking to better your credit score and become more financially capable, there are some things that you can do to cut down that unnecessary spending.

1. Make Shopping Lists

Impulse purchases and not tracking the cost of purchases while shopping can lead to unnecessary spending. To avoid this, make shopping lists before you leave the house and make sure to stick to them!

2. Trim the Fat

Look over your regular monthly expenses and identify where you can trim the fat. Many of our monthly expenses turn out to be “wants” rather than “needs” and can easily be cut from the budget. For example, many of us pay for larger cable packages or internet data packages than we need.

3. Consolidate Shopping Trips

Shopping once a week for all the items that you need for the week will save on unnecessary spending. When you aren’t going to the grocery store every day you will find that you are spending less money both on transportation and saving money by purchasing larger quantities of ingredients at one time.

4. Shop with Coupons, Circulars, and Sales

Cut down on spending in all areas by shopping with coupons, shopping from circulars, and making note of store sales. So many people overspend on items simply because they are too lazy to clip a coupon or lookup what stores are offering the best sales for the week. Take an hour or two every Sunday to clip coupons from the local paper, scan through weekly sales offers, and plan shopping trips using circulars.

5. Analyze Your Spending Habits

Take a moment to look over your spending for the week and identify your spending habits. This will help you to identify where you are overspending the most and where you can cut back. For example, you may think that you only stop to grab a cup of coffee twice a week when in actuality you are stopping four times a week for that $4 cup of coffee! The only way that you can change these habits is to identify them first.

6. Know Your Budget

Being mindful of your budget will help you to identify how much money you can spend per week without overstretching your finances. If you always know how much you have available as “spending money” you will be less tempted to order takeout or splurge at the mall when you don’t have the money to spend.

7. Manage Your Recreational Time

If you have a group of friends who like to spend more money than they make or who make money that allows for excessive spending, manage your recreational time so that you spend less time with this group of friends. It can be easy to fall in to overspending when you are in bad company or when you are trying to “keep up with the Jones’s”.

 

4 Tricks to Help You to Afford Retirement

The prospect of affording retirement is becoming increasingly worrisome for the generations of today.  Over the past few years, the cost of living has increased, more adult children are moving back home, pension plans are declining, health care costs are increasing, and social security benefits are decreasing. These factors make for the foundation of a retirement crisis, but there are some things that you can do to help you to afford retirement when the time comes.

1. Diversify Retirement Accounts

When it comes to saving for retirement, make sure that you diversify your retirement accounts. If possible, split your salary deferrals between a tax-deferred account and a Roth account. Doing this will create a more flexible financial environment when it comes time to retire since it will provide one account with tax-deductible contributions (IRA’s and 401(k)’s) and one account with tax-free withdrawals (Roth). Just ensure that you familiarize yourself with the different guidelines of investing into each of these types of accounts as they differ quite drastically!

2. Diversify Investments

When investing funds for retirement, diversify your investments by following some of these tips:

  • When buying stocks, invest in various industries and various stocks rather than putting all of your eggs in one basket.
  • Invest in index funds to add more stability to your investment portfolio.
  • Don’t be too stubborn to withdraw your money when things aren’t looking good. Too many investors try to ride out peaks and valleys without knowledge of the market, stay on top of market news and know when to get out!
  • Consider investing in real estate.

3. Know What Your Money is Doing

Don’t just leave it to your investment funds manager, know what your money is doing and don’t be afraid to advocate for your savings! Too many people trust their retirement savings to a financial advisor and don’t follow the progress of their investments. Not all financial advisors are good at what they do and not all of them are going to be honest with your money. If you suspect that your financial advisor is not making your money work for you or they are not making your money work hard enough, speak up or pull out!

4. Use Your Savings Account

Not all funds for retirement should be invested, you always need to have a cushion of cash on hand. Use your savings account and set up automatic deposits from your checking account every month to create a readily accessible next egg. A good number to keep in mind is 10%, every month try to set aside 10% of your net income in your savings account while earmarking another 10% for debt payoff or portfolio investments. Just make sure to keep in mind how much the FDAC will insure for your savings account and don’t exceed that amount. The standard insurance amount for personal savings account by the FDAC is $250,000, if you exceed this, set up a second savings account at a second banking institution for FDAC protection.

 

5 Tips On How To Save For Retirement

It’s always hard to put money away, specially for something “boring” as retirement.

This is how I used to think about it in my 20’s and wish I would’ve paid more attention, or someone would’ve led me in a different path.

As I grew older, I understood the power of compound savings.

Here are 5 suggestions on how to start maximizing your savings, and putting money aside for your retirement.

1. Minimum of 5% of Your Monthly Paycheck

Set up a recurring deposit to an investment portfolio such as Vanguard, or services such as Wealthfront or Betterment, so that once a month they will automatically deduct from your bank at least 5% of your monthly earnings.

With an average rate of return per year of 8%, an insignificant amount can quickly pile up, in months, years, decades, and it will be snowballing into a small fortune that you will enjoy in your older days.

If you only put aside, let’s say $250/month, that is $3,000 per year. However that sums accumulates and is constantly being re-invested. That is where the real power of compound investing lies.

2. Drop Your Vices, and Save It Instead

Easier said, than done, but that daily cup of coffee can become costly if you have it every day, all year long. That could amount to thousands per year. And again, read point 1 above, better invested than sipped.

3. Don’t Spend On Useless Things That Will Devaluate

Cars or boats are some of the worst investments you can ever make. They are immediately costing you and bleeding you money the moment you buy them. And, they devaluate in pricing.

Instead, if you do have the money to spare, think about investing in real estate, stocks, or businesses you believe in – – always be looking for the upside potential.

4. Make Better Financial Decisions

There are things that you do need to look for the best, and don’t worry about how much it costs. An example is a good Tax Expert.

The moment you start working with a great Tax Advisor, his or her fees will cost you more, but he or she will end up saving you a LOT more. And, they will probably help organize your finances much better.