If you’re not as prepared for retirement as you’d like to be, you’re not alone. According to a March 2016 report from the Economic Policy Institute, nearly half of American families having nothing saved for their later years. Among families that do, the average savings balance is $95,776. The beginning of the new year is a great time to review your spending and savings habits and map out a plan for hitting your retirement goals. If you haven’t been setting aside as much for retirement as you’d like or you have yet to start, here’s how to get your plan on track. 1. Start with your employer-sponsored plan If you’ve got a retirement plan available through your job, you’re off to a good start already. Stashing away some of your salary into a 401(k) is a relatively easy way to build up your nest egg. So how much do you put in? At a minimum, you should aim to save at least enough to get the matching contribution if your employer offers one. Here’s an example of how valuable the match can end up being. Let’s say you make $50,000 a year and you’re 35 years old. You’re saving four
If you’re a spender by nature, saving money probably falls somewhere in between stepping on a Lego and getting a root canal on your personal pain scale. The problem is that when the refrigerator goes on the fritz or your roof springs a leak, you may end up regretting your less than frugal ways. A new year is a good time to make a fresh start where your spending and savings habits are concerned. If you’re new to saving or you’ve tried to save in the past but you keep hitting a brick wall, here are some helpful tips for beefing up your cash reserves in 2017. 1. Put Your Goals In Writing Keeping a mental inventory of your goals means you’re not chasing bits of paper but it’s not a foolproof system for building up your savings. It’s like going to the grocery story without a list. You always end up spending more than you planned and you inevitably forget the milk. Before you do anything else, take the time to spell out exactly what it is you want to do savings-wise in the new year. For example, “save for retirement” is a good goal to have but it’s
My inner math nerd loves the new year. On New Year’s Eve when everybody else is out blowing big bucks at the bar, I’m at home setting my financial goals for the next 12 months. Sounds boring, I know but I’ve learned how important it is to have a plan in place for my dollars and cents. If you spent most of 2016 dealing with debt or living paycheck to paycheck, you may be looking forward to the fresh start that a new year brings. You may even be writing up some financial resolutions to get your bottom line in shape. While that’s a step in the right direction, there are some resolutions that could be worth breaking. Resolution #1: Stop using credit Swearing off credit cards for good may seem like a smart move but it can backfire if you’re not careful. The reason? Your credit score. Thirty-five percent of your FICO credit score is based on your payment history. If you stop using credit cards cold turkey and you don’t have any other loans, you don’t have any opportunity to continue building a positive payment history. While that won’t necessarily hurt your score, it does nothing to help
Do you know if you’re on track for your retirement savings? Even if you don’t know exactly how much money you’ll need in retirement, you’re likely not saving as much as you should. Whether that’s because your money is tied up in other financial obligations or because you’re just unaware of how much you should be saving, now’s the time to get informed on how much you should have saved for retirement. Of course, there are many things to consider when it comes to retirement savings, but age is one of the leading factors. How much you have saved at certain milestones in your life will determine when you can retire and how comfortably you can retire. Let’s take a look at how much the average American has in retirement savings by age: Median Retirement Savings By Age According to a study conducted by Transamerica Center for Retirement Studies, median retirement savings for people in America by age are as follows: 20’s - $16,000 30’s - $45,000 40’s - $63,000 50’s - $117,000 60’s - $172,000 It’s important to know that these numbers represent total household savings. So, the numbers for individuals could be even lower. Given these numbers, it’s
Last year, over 80% of tax filers received refunds. The average tax refund was $3,120. With tax refund being so prevalent, it’s no wonder people are searching for the best ways to use this money windfall. Whether you receive a tax refund every year or will be receiving one for the first time, you may have questions on how to best use the money. Fortunately, there are some smart strategies that’ll help you improve your financial situation. Here are best things to do with your tax refund: 1. Pay Off High-Interest Debt The higher the interest rate on your debt, the more money you lose over time. If you have a $1,000 balance sitting on a credit card with a 15% interest rate, you’ll lose $150 in a year if you don’t pay it off. Bump that amount up to $10,000 and you’re losing $1,500 in one year by not paying it off! In general, debt limits the freedom you have with your money. The payment that you’re making every month on your credit card or loan could be used for other financial goals like saving for a house down payment. So, the best thing you can do with you
I adore traveling at least as much as the next hedonist. Just about everything about it its enthralling — choosing a location, deciding on the mode of transportation, finding the best lodging, learning about the place and it’s history. It’s all so exciting. Well, except for one detail: the bill for all that fun. As the old saying goes, when planning a trip, pack half as many clothes you think you’ll need and take twice as much money. The fact is, vacations are almost always considerably more expensive than you anticipate. Thankfully you can keep the costs down, both before you leave and while you’re out of town. You do not want to come home to debt. Here’s how you can avoid this. 1. Obtain a mega-reward credit card well before your intended trip If your credit rating is excellent and you earn big bucks at a stable job, you may be able to qualify for a credit card that comes with enough points to pay for your entire flight - and then some. For example, the Chase Sapphire Reserve card offers 100,000 sign-up points, as long as you spend $4,000 in the first three months of it being granted.
You’re either a people-person, or you’re not. People-people have this amazing ability to chatter on about anything with anybody, and they actually love to make small talk and figure out what makes other people tick. Car salesmen are, by their very nature, people-people. I am not. If you’re like me, the idea of striking up a conversation with a total stranger about your work and your kids fills you with a bit of dread — especially if it’s while you’re trying to concentrate on making a huge purchase like a car. I’m also not a car person, so I’m not great at making chitchat about horsepower or torque — though I’m happy to dive into the wonders of fuel efficiency, since it directly affects my pocketbook. I’m pretty sure the guys at the car lot can smell my lack of car knowledge from a mile away, kind of like how a shark can sense blood in the water. So if you’re like me and feel like buying a new car is an exquisite form of punishment, take heart. I’ve figured out a way to get a great deal on a car — without having to talk to anyone in person
When many people begin planning their vacation, many different ideas come to mind. Images of flights, exotic destinations, and five-star accommodations are often the first things would-be travelers plan for, almost with abandon as to how they pay for it. However, the first step to planning any trip is setting a budget prior to departure. Setting a budget and travel savings goal does not have to require scrimping to save every single penny, or sacrificing the daily cup of coffee to take a vacation (although it wouldn’t hurt). Rather, by putting away a little bit prior to booking flights and before leaving for a trip, everyone can make sure their getaway doesn’t come at the sacrifice of their everyday expenses – or, even worse, incurring debt. Here are five easy ways everyone can save money towards their next vacation. 1. Create a SMART goal Before deciding on a destination, buying accommodations, and deciding on attractions, the first step should always be deciding on a SMART goal. While most goals are smart in of themselves, a SMART goal allows would-be travelers the opportunity to make the most of their budget. SMART is an acronym to describe five aspects of your financial
I remember four years ago when my mother was diagnosed with dementia. There was this mountain of responsibilities that had now shifted to my shoulders. An unfortunate truth about getting older is all the added responsibilities. I tell my kids all the time to, "Stop rushing to grow up, and enjoy your youth." Why? Because all that awaits are the bills and headaches of adulting. One of those major responsibilities that many never quite plan for is that of caring for your aged or disabled parents. In fact, 15% of adults between the ages of 40 – 50 are responsible for taking care of their children as well as their elderly parents, with a total of 46% that have kids and retirement age parents they expect to have to care for soon. Where do you start with such a sensitive and vast subject? Sensitive because it requires acknowledging the reversal of roles that were thought to be cemented. The child now takes care of the parent, and in essence the parent has to submit or acquiesce to their child. There’s no easy way about it, but you can save yourself some unnecessary headaches by doing your research & being prepared.
Ask most people how much money they spent last year and they probably couldn’t give you an exact number. Yet most people know they want to spend “less” money. The first step in spending less money is knowing how much you currently spend. That’s why an annual spending review is such a powerful process. An annual spending review involves looking at all your expenses for the past year from a bird's eye view. You’ll look at how much money you spend on a set number of categories and identify areas of overspending. From there, you can take the necessary steps to save money in those areas. An annual spending review does take time - to gather the statements, sign up for the budgeting tool, and evaluate the expenses. If you set aside a couple of hours one day, you can complete this task. It’ll open your eyes to your spending habits and save you money in the long run. Gather All Credit Card Statements For The Year The first step is to gather all your credit card statements for the year. If you participate in online banking, you can simply download each month’s statement from your online account. You can