Money Management

Ways Seniors Can Save Money

March 9, 2018 by Twila Van Leer

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

February 26, 2018 by Twila Van Leer

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

February 13, 2018 by Twila Van Leer

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

February 11, 2018 by Twila Van Leer

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

December 16, 2017 by Twila Van Leer

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

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.

Create A Wish-List And Share It

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 Unwanted Gifts

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.

Create A Special Christmas Account

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.