by Andrea Carson | Mar 8, 2023 | Retirement
Everyone wishes they had started saving for retirement sooner. If you’re in this situation, saving more is the only way to catch up. Saving for retirement doesn’t have to be painful or challenging. There are many strategies to increase your savings each month without negatively affecting your lifestyle.
Try these easy strategies to increase your retirement savings:
- Avoid impulsive selling of stocks. Avoid concluding that you must sell just because the market is dropping. Do you have reason to believe that your investments are no longer attractive in the long term? Sell for a specific reason.
- A falling market can be the best time to look for buying opportunities.
- Downsize ahead of schedule. If you sell the house and purchase a smaller home, why not do it now? Find a good deal on a smaller home. Cut your expenses now and apply the savings to your retirement.
- Set a savings goal. Goals are effective at improving the likelihood of success. Create a savings goal for the next three months and strive to meet it. A practical plan is challenging yet possible. Give yourself the gift of setting a goal.
- Avoid spending too much for the returns you receive. Focus on inexpensive investments. The fees you pay to invest your money significantly impact your returns, especially over long periods. Index funds are among the least expensive assets and provide excellent returns.
- Get started right away. A small start is better than a later start. Time is the most crucial factor in accumulating a large nest egg. Not only will you contribute to your retirement over a more extended period, but your investments also have more time to grow.
- Take advantage of your employer’s generosity. Contribute enough to your 401(k) to receive complete matching. It’s free money! Ensure that you’re getting all that you can. If you also consider all the money you can earn from investing that free money, it’s a no-brainer.
- Save on autopilot. It’s common to pay your bills, have fun, and then save whatever money remains at the end of the month. This might sound reasonable, but it could be more effective. Spending will increase or decrease to match the availability of funds. You likely have something left over to save.
- Save a percentage of your income before it even hits your checking account. Your human resources department can help you set this up. If you have to do it yourself, transfer money into savings immediately after you’re paid.
- Are you sure you have the best automobile insurance rate? Negotiate your monthly bills. Your credit card company may lower your interest rate if you threaten to move your balance to another card. They often offer to lower your rate if you threaten to cancel your cable service.
- Companies would rather receive less money from you than no money at all.
- Save your raise. Receiving a raise at work is great news. However, consider that you’ve been living without that raise. Apply your raise to your retirement savings. You can’t miss what you’ve never had, and your savings will grow.
If you’re one of the many people that feel behind on their retirement savings, there’s still time to make a difference. A few simple changes can increase your savings rate and the size of your nest egg. Begin applying these strategies as soon as possible. Getting started is often the most challenging part.
by Andrea Carson | Mar 1, 2023 | Retirement
You’re probably well aware that saving for retirement is essential. For most of us, 100% employer-funded pensions are long gone, and Social Security is only designed to offset a portion of your pre-retirement income.
Most financial advisors recommend that workers save enough to cover 75 to 85 percent of their annual pre-retirement income. With stagnant incomes and rising expenses such as healthcare, food, and housing, it’s challenging for most of us to save for retirement!
You can boost your retirement savings, regardless of your age or how strained your existing budget might be.
Use these steps to increase your retirement savings and secure your financial future:
- Save now. If you aren’t already contributing to a 401(k) or other employer-defined retirement plan, start now.
- Start small if traditional contributions of 10% of your income are too much to handle. Try saving just 1 to 2 percent of your gross income. Boost your savings each year by increasing your contribution rate to match the amount of your annual raise.
- You have a 100% instant return on your investment when your employer matches a percentage of your 401(k) contribution. When you enroll in your employer’s plan, contribute at least the minimum to qualify for any match your employer offers.
- Open a traditional or Roth IRA if your employer doesn’t offer a 401(k) plan. Traditional IRAs can help you lower your annual tax bill, free up hundreds of additional dollars to increase your retirement savings. Resist the urge to spend your savings!
- Work longer and retire later. Delaying retirement will boost the amount of your social security benefits and give your savings extra time to grow.
- Early retirees see a permanent reduction of 20% of their estimated benefits. By delaying retirement, you’ll draw a more significant benefit from Social Security and shorten the length of time that you’ll need to draw upon your retirement savings.
- As you approach retirement age, look for ways to create additional income streams separate from your primary occupation, such as freelancing or starting a small business. Increasing your revenue streams frees up more funds that you can use to bolster your retirement savings.
- Get out of debt before you retire. Debt payments often comprise a large portion of most budgets. Debt also eats up funds that you could use for retirement savings.
- Create a realistic, workable budget that eliminates your debt over a specific time frame.
- Aim to be out of debt before you retire so that you need to save less for your retirement.
- As you decrease your debt, the challenge is to remain disciplined rather than going into debt again or wasting your retirement savings on other expenses.
- Downsize before retirement. As you create a budget, take a hard look at how much your home is costing you. Is it time to consider downsizing to a smaller place with lower costs?
- Many of us relocate during retirement for a warmer climate or to be closer to children and grandchildren. Consider selecting a smaller home with lower costs for operation and upkeep if you move.
- You can downsize more than just your home. Sell off unused items and use the proceeds to boost your retirement savings.
Finding ways to save money for your later years can be a difficult and time-consuming chore. However, following these tips makes it easier to increase the money you save for retirement.
by Andrea Carson | Feb 22, 2023 | SAVE MONEY
Overdraft fees can be real killers. To add insult to injury, you’re charged a considerable amount of money as a penalty. You likely already have some financial challenges to get into that situation in the first place.
Banks are growing more reliant on these fees. These fees account for over $32 billion in bank income each year.
Banks have software that maximizes your overdraft charges. Imagine having $100 in the bank and two outstanding checks for $200 and $50. If both are payable around the same time, the software will ensure that the $200 check gets paid first. That way, you’re overdrawn twice.
While many banks offer overdraft protection, this is rarely the answer. Those that overdraft frequently would save money by paying the overdraft fees rather than opting for overdraft protection.
Try these strategies to eliminate or reduce your overdraft charges:
- Use a credit card instead of a debit card or check. This method is not without risk. It requires you to keep track of your spending and be disciplined to avoid overspending. This method can be dangerous if you’re unwilling or unable to control your spending.
- With this method, you only need to write one check each month. That makes it challenging to be overdrawn.
- You can enter your credit card purchases into your checkbook as if you had written a check. This will help to control your spending.
- Keep some extra money in your checking account. This is similar to stashing an additional $20 in your car for emergencies. Many people avoid overdraft problems by keeping extra money in their checking accounts. This can also help to stay above the minimum balance required to avoid unnecessary fees.
- Use online banking systems to stay on top of your balance. Most banks today offer many alerts to keep you updated with your account balance information. You can check your pending payments at the end of each day and make the necessary corrections.
- Many accounts will allow you to set up low-balance alerts.
- It’s challenging to be overdrawn if you never use a check or debit card. You can only be stretched by withdrawing a little cash. The bank won’t let you have it.
- Use cash for your day-to-day expenses. You can pay your bills with online banking, but a better alternative might be to pay your bills with money orders. Your bank can provide you with a money order, but so can your local post office. These typically aren’t free, but it’s a sure way to avoid being overdrawn on your account again.
Overdraft fees can create a tremendous financial challenge if you’re already struggling. Those with at least one overdraft pay an average of over $250 in overdraft fees each year. You can find something better to do with that money than give it to your bank!
Responsible banking is simple, yet many people need help managing it responsibly and effectively. Always know how much is in your account and track your spending. You may need to review your balance and spending daily. Develop a plan that works for you. Follow one of these strategies or come up with your own.
by Andrea Carson | Feb 22, 2023 | Finances, Getting Out of Debt
The nation’s student loan debt is over $1 trillion and is more significant than its collective credit card debt, but there are also 5 million ex-students who are delinquent with their payments.
Student loans are unique because they’re among the few debts not discharged with bankruptcy. The only reliable way to get out of your student loans is to pay them off. Only a federal judge can let you out of your obligation to pay, and they don’t do that often.
A slip can haunt you for a long time.
People frequently get into trouble with their student loans, making getting a mortgage or a car loan much more difficult. While credit repair agencies can do a lot to help remove bad credit history attached to debts that are paid off, current debts are another story.
This process makes it easier to handle your student loans effectively:
- Assess your situation. Student loans can be confusing. You’ll likely have more than one loan, which different financial organizations made. The company servicing the loan might be completely different from the one that provided the loan.
- A great central source of information is the National Student Loan Data System. This resource may provide all the important dates and other information about your loans, including the services.
- Your credit report can be a good way of tracking down the information regarding your private loans. Your college should also have the information you require. However, personal student loans are not covered in that data system.
- Ensure your information is current. For example, the address listed belongs to your parents. When you have your address, you should change your data accordingly.
- Update all the applicable information, including your email address and phone number. You want to know when there is an issue with your account.
- Create a strategy for repayment. Your options depend on whether your loans are federal or private.
- Federal loans have very flexible repayment options. You can extend your payments out as far as 25 years. You can establish a plan with lower payments now and higher payments later on. Payments can even be a function of your income.
- There can be other options for private loans, but they will vary depending on who made the loan. Be sure to call them and see what other options are available.
- Consider automatic payments. Federal loan interest rates are reduced by 0.25% if your payments are taken automatically out of your bank account. Similar deals are usually available with private loans. Either way, you’ll always be on time if the charges are automatically removed from your account.
- Be focused. Debt is like a slow leak that keeps draining money away from you. It would be wiser to put any extra funds towards higher interest-rate debt. But if your student loans are your only real debt, put some extra money toward the principal when possible.
- Consider a second job to get rid of those loans quicker. Student loan interest rates are relatively low, but the payback period is extended. The interest adds up over ten years or more. Pull out a calculator and look at the cost.
- Create a goal of making all of your payments on time. Create a second goal of paying your loan back early.
While making loan payments is never fun, it’s a fact of life for most adults at one time or another. Dealing with student debt is a big responsibility. It could be a newly graduated student’s first big responsibility. Get on top of the situation now, and the future will be much brighter.
by Andrea Carson | Feb 15, 2023 | SAVE MONEY
If you must learn to reduce your everyday spending, saving money can be very challenging. You’ll be shocked to see how much money you may save once you’ve decided to make daily budget cuts!
The following advice will make it simple for you to go closer to your financial objectives:
- Monitor your spending. Using a little notebook that you can carry around in your pocket or purse is one of the simplest methods to keep track of your spending.
- Record the amount you spend each time you purchase your notepad. The majority of people make the error of omitting this crucial step.
- Never undervalue the importance of keeping track of your finances. Despite the incredible strength of your memory, it can be challenging to recall where all that money went.
- It could take some time to get in the habit of keeping track of how much money you spend each day, but once you do, it starts to come quite naturally.
- Reduce your indulgences. Your financial condition can significantly improve by cutting back on pleasure. Sadly, it must be more complex to splurge on entertainment and leisure. What, though, maybe crossed off your list?
- Rather than going to the theater, watch movies at home. Bring your friends for a potluck, and you may have dinner and a movie for less than the cost of movie tickets.
- Take into account quitting bad habits like smoking. You might try switching to an affordable substitute, like electronic cigarettes, or just concentrate on quitting smoking entirely. A pack of smokes might cost $10 or more in some places.
- Dine at home more often. We all enjoy dressing up and visiting a pricey restaurant for a relaxing evening with delicious food. There is nothing improper about that. Nonetheless, the bills might stack up to an absurd sum and significantly affect your finances.
- Take into account limiting how frequently you dine out.
- Start cooking at home. It’s more affordable, healthier, and enjoyable.
- Look into less-priced options for the services you already use. Every day, each of us uses a diverse collection of services. Would you do it if there was a method to lower those bills?
- Take into account prepaid phone cards. Most people spend much time on their smartphones, but how much time is spent making calls?
- Relying solely on text messages sent via the internet is another economical method of connecting with others.
- Is there a less-priced plan offered by your cable provider to suit your needs?
- Having your favorite magazines delivered right to your door is convenient. You may sign up for free online subscriptions to most of these magazines! But is there a less expensive option?
It takes some time to develop the habit of lowering expenses. But as soon as you train your mind to seek opportunities to save a little extra cash, you’ll see that your financial objectives are within your grasp!
