April 23, 2018

How To Plan A Savings Plan

Savings Plan

Adopt a lifestyle that allows you to save, rather than saving what’s left when your over-the-top lifestyle is dictating the spending.

When the time comes that you are finally a little ahead of the bills and want to make the best use of your financial “leftovers,” how do you proceed?

Saving with a concrete plan in mind will avoid the haphazard trickle of savings that too many people rely on to enhance their investment earnings. A specific objective is preferable to random savings.

Turning things topsy-turvy for awhile may help. In other words, take the savings off the top and pay bills with what’s left, forcing yourself to avoid frivolous or unplanned spending. Obviously, you do this based on long experience of what your fixed costs are likely to be. If left unchecked, our perceived “needs” expand to take up the whole paycheck. Immediate gratification is a disease that grows over time. Curb yourself.

The very best definition of “savings,” in this scenario, is “living below your means.” The urge to spend becomes a habit if you don’t control it. Adopt a lifestyle that allows you to save, rather than saving what’s left when your over-the-top lifestyle is dictating the spending. When you get a raise at work, automatically raise the amount you save, rather than putting the whole increase into lifestyle escalation.

Make it harder to spend. Tuck the credit cards into the back of a drawer for a while and operate on a cash-only basis for awhile. Paying cash makes the expenditure immediate, instead of looking forward to a bill that may seem a long way off.

With tax-filing season in full bloom, plan ahead how to spend your refund, if any. Use the windfall to supercharge your savings. The average return, according to the IRS, is $2,895. Half of that, or at least a good share, would go a long way toward reaching a goal of having three to six months’ of savings as a healthy cushion when things go wrong financially. Having this amount stashed in a savings account or money-market fund, before you start toward other investment goals, is a wise move.
The alternative in a financial emergency is to tap into retirement accounts that may impose a penalty on withdrawals.

Once the basics are set, the next savings strategy is to invest in such things as stocks and bond mutual funds or ETFs. Sticking to low-fee investments such as index funds and ETFs reduced your investment costs, opening the way to higher returns. Over decades that is akin to saving an extra percentage or more of salary each year.

But all of these tracks to greater savings have to begin with a viable plan and then sticking to it, monitoring along the way to stay on track. It’s the only way to assure financial security now and when you are retired.

What Would You Do With An Extra $500

Extra 500

Consider how to get the most benefit from extra cash by looking at short-term investment options.

What if you found yourself with $500 that wasn’t committed to any part of your budget. Could happen. An income tax return, for instance.

Regardless of the source of your windfall, it’s time to consider how to get the most benefit from it by looking at short-term investment options. Having one or more of these in your financial profile is a buffer against the unexpected.

Carefully look at the possibilities before putting your $500 on the line. The most common short-term options

• A term deposit, sometimes referred to as a certificate of deposit, means you put an amount into an account at a financial institution, with a fixed term. Maturity dates can be set for as short a time as six months or extend to five years. Most institutions charge a penalty if you close the account before the term is filled. In most instances, the institution pays a higher dividend on a term deposit than on a traditional savings account. You can increase the value of such a deposit by “laddering,” or opening multiple accounts that mature at different times, anywhere from a year to five years. When a deposit matures, you can flip it into a new term account. Creating a train of short-term deposits allows you to access money when you need it on a regular basis while still earning good dividends.

• Look at mutual funds, an investment program that takes money contributed by many people and putting it into securities. Beginning investors may be particularly interested because mutual funds are easy to understand and to buy. They are affordable and offer a variety of categories and types. Consider where you feel most comfortable placing your $500.

• Peer-to-peer lending puts people with money to invest together with people or organizations that need to borrow that money. These lending platforms operate online, so they have lower overhead and fewer transaction costs. Three- to five-year investments usually earn higher returns. As is usually the case, that means higher risk. It is possible the borrower could default and the debt go to collection, or be lost entirely. Diversity is the best approach. Putting small amounts of money into several loans minimizes the possibility of damage to your portfolio.

Whatever you decide to do with your $500, don’t leap before carefully studying all of the possibilities. Be familiar with the institution in which you intend to invest your money. If you are uncertain, find a financial advisor who is familiar with the answers to your questions.

Simplify Next Car Purchase

Simplify next car purchase

If you have a particular vehicle in mind, check Consumer Reports for ratings, reviews and updated car news.

Unless you really like spending time in car dealerships haggling over the details of a car purchase, try to minimize the hassle by using your computer or mobile device to accomplish the legwork before settling down to the details.

If you have a particular vehicle in mind, check Consumer Reports for ratings, reviews and updated car news, There also are sources such as AutoSMART that make it easy to shop and compare both new and used vehicles online.

Compare dealer prices by emailing an internet sales representative and get quotes. Be sure to include taxes and fees, since they can add appreciably to the vehicle cost. If you want particular features, alert the dealer so the question of add-ons doesn’t come up in the final analysis.

Get your loan pre-approved. Know up front what interest you are likely to pay on a loan and be certain how much you have to offer for your new car. If you are considering financing through the dealer, compare first with the other options you have.

Establish the value of your current vehicle. Kelley Blue Book, Craigslist and other sources can give you an idea of the value. Knowing will help you if the plan is to sell the old car to help finance the new vehicle or deal for a trade-in.

Check out current promotions. Your local dealerships may be offering special deals. Look into them in detail to see what the offer means to you personally. The offers most often hold out decreased interest or a “cash back” option as the incentive.

Take the test drive. It’s like the first meeting between prospective couples. Online photos are nice, but don’t always tell the whole story. Take the test over a route that is similar to the one you expect to travel most, such as the drive to work. How does the car handle? Are you comfortable with turns? Does acceleration meet freeway needs? Are you comfortable with the vehicle in stop-and-go situations? If you have reservations, now if the time to express them.

Test out features such as fuel economy, cargo space, seat comfort, safety, information and entertainment provisions. How easy will it be to install a child’s safety seat? Can more hefty family get in and out easily and have room to sit comfortably? A short test drive may not answer all these questions.

Take your time making the final decision. If you think you need more information, rent a similar vehicle and use it for a few days. The prospects of a long-term relationship with a vehicle make it worth the extra effort.

Save Money At Costco

Save Money at Costco

At Costco there are deals that go beyond groceries, such as store and restaurant gift cards, movie tickets and local theme park tickets.

Large families have obvious advantages when they shop Costco. But if you are single and haven’t much living space to store your bulk purchases, is it worthwhile?

It can be if you share the advantage with a friend. Split up bulk packages of essentials such as toilet paper, paper towels, laundry products and other items that you buy routinely and you’ll both save money.

You can learn the Costco pricing codes that will tell you if an item is specially priced, discounted or not considered for restocking. In general, according to HubPages, the codes go like this:

• Prices that end in $0.97 have been marked down from their original price.
• Prices ending in $0.99 indicate the original price.
• Other odd pricing such as $0.49, $0.79 or 0.89, are generally attached to regular-priced items.
• If there is an asterisk (star) in the upper right corner of the price sign, that means the item will not be reordered. Stock up if it’s one of your favorites.
• If the store manager has marked an item down to move the product faster, the price will likely end in a combination such as $0.88 or $0.00.

Watch for Costco coupons. The store issues a monthly coupon book as well as the Costco mobile APP. Don’t bother clipping coupons. The cashier has copies at the register and will scan them when you purchase the discounted item.

Buy seasonal items before the season is over. Costco makes massive markdowns on such things as patio furniture and pool toys to free up room for the next season’s specials. After Christmas is an especially good time to look for bargains.

Even if you are not a card-carrying Costco member, you can buy alcohol at Costco stores in some states, and pharmacy and immunizations are available to you., as are eye and hearing exams. You can obtain a Cash Card without signing up for an annual membership. Such a card, however, must be obtained or reloaded by a member.

Aside from the bulk goods that you have in mind when you join Costco, there are deals that go beyond groceries, such as store and restaurant gift cards, movie tickets and local theme park tickets.

Eating out, especially with a family, is a budget-buster, but there are inexpensive alternatives at the Costco food court, such as the $1.50 hot-dog-and-soda specials or the $10 pizza

Kirkland products, the Costco store brand, offer great deals for quality food and grocery goods. Many of them come from the same name-brand sources as the items you’ll find at greater cost.
Make a list before shopping. Without one, you may be tempted to fill up the cart when you had just a few items in mind. And partake freely of free samples. The companies that made them want the store to pass out as many free samples as people will eat.

Ways Seniors Can Save Money

Seniors Save Money

Millions of America’s senior citizens are looking for ways to save money now that they are living on retirement income.

Millions of America’s senior citizens are looking for ways to save money now that they are living on retirement income. There are things they can do, including:

• Cut the cord on monthly cable costs. You could save up to $100 per month or more by switching to Netflix or Amazon Prime Video subscriptions. But you can avoid even those fees by switching to an antenna that can relay news, weather, sitcoms, cooking shows, kid’s shows, sports and movies for free. Most broadcast stations offer additional regional programming free. The Clear View antenna, for example, is one that attaches to your current TV antenna jack. The new antennas are greatly improved from your old “rabbit ears.” Look at the option that will best serve you.
• If you are traveling, there are many discounts that will cut the costs. Many hotels and motels routinely offer discounts for seniors, usually in the range of 10 to 15 percent. Shop around a little before settling on away-from-home accommodations. Booking.com can help you find the most economical choices.
• If you own your home, investing in a home security system could save you money on insurance. Savings of 10 to 20 percent are offered by some insurance companies to clients who install a high-functioning home alarm system. Some alarm companies also offer perks for the purchase of their systems. An alarm system also has the benefit of putting seniors within easy reach of help in an emergency.
• Cruise lines provide a huge variety of discounts for seniors. Check and compare among the leading cruise providers to see where you can get the best deals. A little time spent researching could make your vacation funds go a lot further.
• A lot of the top retailers give senior discounts. Each store decides on when the discount kicks in, some setting the limit at 50 years old and others at 55 or 60. Some of the retailers have regular days on which seniors are treated to discounts. Don’t be shy about asking.

What Do You Want For Retirement


As a rule of thumb, the more you are willing to give up early on, the faster you will reach the goal.

How Much Cash Do You Want In Retirement?

Ever tried to calculate how much money you would like to have to live on in the way you want to in retirement? Fifty thousand a year? $150,000? Maybe $500,000?

If you want to try to figure it out, subtract out income you currently have from your job and any other income sources. Divide the figure by .04 to see what assets it would take to support that level of annual income. Many financial planners use the .04 figure based on experience that says you could withdraw 4 percent of your money each year and put it into an account that would generate enough, over time, to maintain its value after calculating for inflation.

For example, if you think you would need to make $80,000 per year to live as you like. In fact, you only work part-time and make $20,000 per year. You assume that you can expect about $15,000 per year in Social Security. Take the $80,000 and subtract $35,000 and you’ll have $45,000. Divide that by the .04 and you’ll have a figure of $1,125,000. That’s the amount you would need to earn the other $65,000 from your investments if you want never to run out of money.

The next factor you need to decide on is when you will be wanting the money. If you are 30 and want to retire at 65, you have 35 years to get the money lined up. Use an online calculator such as calculators online, to figure it out how much in monthly savings you will need to reach the goal. Such a calculator also can guide you in different scenarios, showing how long it will take to reach your goals under different savings and investing plans.

Assuming an 8 percent return on your investments, you’d have to set aside $754.85 per month until retirement. (If you had started at age 25, the amount would be only $322.26 per month. If you had begun at 18, the monthly cost would have been $181.09. That’s the power of compounding.)

If you aren’t expecting to leave anything to family or friends, a charitable remainder trust could be a great choice. The savings figure would be much lower because this model assumes that you would maintain the $1,125,000 fund in perpetuity.

Many financial planners will estimate your lifespan and create a program that will see your money run out at your 85th birthday, or longer.

You can expedite your goal by saving more each month. Say $300 per month extra could help you arrive at the goal much, much earlier, possibly decades. That may take some sacrifice – a used vehicle instead of new, fewer meals out, less expensive clothing, etc. Your priorities are your own and no one can make this decision except you. But as a rule of thumb, the more you are willing to give up early on, the fast your will reach the goal. Avoiding unnecessary debt is one of the objectives you should set early and stick with.

Try to look ahead as much as you can. If your part of the country appears to be headed for depressed conditions, move to a place where the economic picture is more rosy. If that seems drastic, consider: If you are not willing to be inconvenienced for the chance of a better life, then you must be content to live in poverty.

Making a good beginning toward your retirement goals is wise. Passing up car ownership into your 20s may save you the costs of upkeep, fuel and insurance. Instant gratification can be costly.

Take Dow Drops Seriously

Dow Drops

Market corrections are common, healthy occurrences that should be embraced as long-term opportunities

In recent weeks, the Down Jones Industrial Average, one of the indicators of how well the country’s investing is going, has dropped twice by more than 1,000 points in a single week.

What should you, as an investor, do? It’s natural to be nervous when it is possible more dips are in store. Mistakes in this kind of market could lead to even bigger mistakes in the future.

Take a lead from multi-millionaire Warren Buffett, whose holdings have declined in value by an 11-figure amount over the past week. He isn’t unhappy about it and sees it as the normal rise and fall of the market. He anticipates more attractive entry points to stock investments and a better chance to find a reasonably priced acquisition, a “more palatable stock price to consider implementing a buyback.”

If you aren’t as knowledgeable as Buffett, rely on past history. Market corrections are common, healthy occurrences that should be embraced as long-term opportunities.

Here are three approaches that will keep your investments safe while the market readjusts:

Use dollar-cost averaging. Many people do this routinely. You invest a fixed amount of money on a regular basis into shares of stock or a mutual fund. Your 401(k) contributions, for instance, are an automatic form of dollar-cost averaging. Making regular deposits to a mutual fund or brokerage account is another way to dollar-cost average. Under this scenario, when stock prices fall, your fixed dollar amount buys more shares. It automatically helps you take greater advantage of corrections by purchasing more shares than you could have before the price drop.

Invest some now and some later. During the recent bull market, many people grew their amounts of cash. Not being able to predict if the current down-trend will than lead to a full bear market, be wary of investing everything now. You may get it wrong. One solution is to invest only a portion of your available money now, depending on your risk tolerance. Consider investing a third now, another third six months from now and retain the rest until you see how the market is trending by then.

Give your savings a bump. Though its emotionally easier to put your money to work in the market, it may pay during the term of a down-time to increase savings while stock prices are weakening so that you can begin to invest again when the time is right.

Market downturns can allow you to forget the reason you’re investing in the first place – to have enough money to meet long-term goals such as retirement. Get past the panic and stay focused on the future. Things will change.

Spouses Who Lie bout Finances

Spouses Who Lie bout Finances

If the offending partner is not willing to address underlying issues and make a real effort to change things, it may be hard to move forward.

Managing money is one of the top concerns couples list when they talk about problem areas. Throw in a situation in which one – or both – of the partners are not truthful about money matters, and you have the makings of marital disaster.

The lies can be about any aspect of the couples’ money management, but often include hiding spending on unplanned shopping, gambling or taking on additional debt without consulting the partner. It’s the cause of a lot of anguish in many marriages. Some experts go so far as to call it a form of infidelity.

If you suspect that your spouse is failing to tell the whole truth about finances, what do you do? Before confronting the spouse, experts advise, find out as much as you can about your current financial condition. Check bank statements over the past year to see if the untruths have been going on for an extended period. Try to have specific examples of the issues you want to discuss.

It is possible that your assumptions are not correct. Discuss your concerns in a calm way and listen to what the offending spouse has to say. It is possible that lies about money are related to other problems, such as shopping addictions, gambling or possible criminal behavior. You may find that as a couple you have more debt issues than you supposed.

Could be that the problems are so serious that you consider them a deal breaker. The answer is particular to the two persons involved. Whenever there is a breach of trust, healing may take a long time. If the offending partner is not willing to address underlying issues and make a real effort to change things, it may be hard to move forward.

If you choose to remain together, make definite plans for handling your money. Considering separating your accounts with each taking responsibility for certain expenditures. Or let the responsible partner have control until trust has been re-established.

A budget is the easiest way to account for money. In most cases, each partner would be expected to make the same contribution toward shared expenses. The person who has lied about money issues should be willing to share records that account for his or her money handling.

Seeking counseling may be necessary if there is evidence of an addiction related to money. Such addictions are as real as those related to drugs or alcohol.

If the marriage is to be salvaged, there must come a time to forgive and forget the issues so that you can move beyond them. That may take some time.

Giving And Getting For Christmas

Giving and Getting for Christmas

Creating a budget before the holidays arrive and sticking with it is the best solution.

Even though most people subscribe to the wisdom that giving is better than receiving at Christmas, the same people also hope that the gifts they receive will be what they want.

Some assure themselves of the right gifts by buying them for themselves. Nothing wrong in that as long as they keep the costs in control.

TD Bank surveyed holiday shoppers and reported that the average amount they expected to spend for gifts was $500. But when all is said and done, one in five (one in three in the Millennial group ) admit to spending more than they had planned — $263 on average. A lot of the overage is consumed in buying items for themselves. In doing so, these shoppers may sacrifice the ability to reach other financial goals they have set., such as building emergency savings or increasing retirement funds.

Creating a budget before the holidays arrive and sticking with it is the best solution. The problem, though, is that while shopping, the shoppers see more items they would like for themselves.

Five ways to assure that you get the gifts you’d like without breaking your own bank:

Ask for gift cards. That might have been a breach of holiday etiquette in years past, but it has become more common. More than half of Americans (56 percent overall, 67 percent of Millennials) say they do it. Consumers who were surveyed said they would rather get cards than traditional gifts. Be sure to use the value of the gift card to purchase what it is you want. You can convert the value of the cards into savings if that is your goal.

Make a list and check it twice. Presenting a list of preferred gifts to your family and close friends will increase your chances of getting what you need/want.

Sell gifts that you do not care to keep. Consider using eBay, OfferUp or Craigslist to sell non-clothing items. Shoes and clothing can be sold trough poshmark.com or thredup.com. Unused gift cards can be swapped out or exchanged via sites such as giftcardsgranny.com.

Or you can start at the beginning and include the items you want for yourself in the initial budget. That will only work if you are honest about how your self-gifts will affect your overall spending. You’ll have to decide if you will have to trim your list if you are on it.

Start early. Review what you did last holiday season. Open a separate savings account that anticipates what you are likely to spend this go-round. Automating the deposits into this account will spare you the temptation to bypass the arrangement to accommodate an immediate desire. Putting the savings into a high-yield account will increase the holiday fund and possibly allow you to shift the excess money into an emergency or retirement account when the season is over.

Managing Financial Stress

Know the difference between needs and wants.

Know the difference between needs and wants.

Americans born after World War II grew up in an era of unparalleled prosperity and now it shows. Part of what built that great economy was the entrenched attitude that “I need more.”

The result was unmanageable national debt, waste of natural resources, class conflict and a frustrated populace. Now, those who are retiring may find their resources have shrunk. Those still in the workforce are facing the necessity of living lean, a lifestyle for which they aren’t prepared. It is no longer possible to rob the future to pay for fun and games in the present. Now it’s time for serious reflection on whether “wants” can be allowed to dictate personal finances.

It is possible to live frugally and build up a reserve that will create financial security. But it requires some thinking in advance. At the top of the list is the essential attitude that needs must trump wants. You NEED a roof over your head. You WANT a mansion with a backyard pool. Getting the difference engrained in your mind is the starting point for financial independence.

As a very practical exercise, consider two scenarios: If you have a home with 2,300 square feet of space, purchased for $310,000 with 20 percent down on a 30-year mortgage at 4.5 percent interest, you pay some $1,259 per month. Under the “I need more” mode, you could consider a 3,200-square-foot home with an asking price of $496,000. The 20 percent down is now $99,200, a $37,100 increase. At the same mortgage rate and term, you face a monthly payment of $2,011, an increase of $752 per month. Investing the difference between the two houses, at 6 percent average growth rate, could net you $980,000 in reserves.

The comparison does not consider taxes, insurance, utilities and upkeep expenses or the pressure to fill extra space with “things” worthy of the more expensive home.

Owning too much actually can cause mental stress, experts say. Psychiatrist Elana Miller notes that “Having too much is hazardous to a healthy way of life. The more you own, the more time and energy you use to keep track of it and the more you worry about breaking or losing what you worked so hard to get.” She recommends learning to be grateful for what you have and determined to get by with less. An attachment to physical things may force you to work beyond the usual expectations.

Many of today’s health problems are related to excess. Obesity is rampant, with two in three Americans grossly over healthy weights. This has contributed to increases in diabetes, heart disease and some cancers. Surgeries to counter weight gain have made surgeons wealthy, costing $18,000 to $35,00, with costs likely not to be reimbursed by health insurance plans. The blame for the epidemic in overweight is directly attributable to overeating and the overuse of high-calorie foods and drinks. The size of portions also has increased as Americans clamor for more. The nutritionally wise suggest half of what the standard restaurant serves.

Better yet, they say, cut down on eating out and fix more nutritious and less expensive meals at home. If you do go out, share an entrée or take half home for another meal. Cutting 500 calories a day, for many people, can lead to a one-pound-per-week weight loss. Both your wallet and your body will be happier.

Living lean can result in more savings, more security for retirement, and the sense of well-being that comes with not stressing over possessions. You may live not only longer, but better if you feel positive about yourself and your situation. You’ll have more control of your future.