save-money-holidays

Plan Ahead to Avoid Overspending this Festive Season

Various polls that were recently undertaken have revealed that the majority of Americans intend spending between $800 and $900 when purchasing Christmas gifts this year. With Christmas being the largest of the gift-giving holidays, it makes sense that more than 20% of retailer’s sales are made during November and December. 

When January rolls around, more than half of the shoppers surveyed noted that they had regrets about spending so much during December. However, this need not be the case if you plan ahead with regards to the financial side of your festive season shopping. Below are a few ways in which you can do this. 

  1. Determine how much you can Afford to Spend

Before setting foot in the mall or browsing any online shopping websites, establish a realistic budget for purchasing gifts and spending on other holiday-related products and services such as food, decorations, travel expenses if you’re visiting relatives and even gift wrap. 

Divide your budget into various categories to see whether you’ll have enough money available to pay for everything – without resorting to your credit card. If the numbers don’t add up, cuts may need to be made to some categories in your spending plan. 

  1. Establish Expectations Quickly

If your holiday budget is smaller than it has been in previous years, you’ll need to either cut down on the amount of gifts being purchased or spend less on each recipient’s gift – but it’s crucial that you make your intentions in this regard known as early as possible. For instance, if you usually purchase costly gifts for nieces and nephews, let your siblings and in-laws know that your gifts may not be as lavish as they have been in previous years. This will help prevent any ill feelings when the time comes to open gifts. 

  1. Don’t Fall Prey to Retail Tricks

Even the savviest shoppers are known to overspend during the holidays – especially when so-called special offers are being pushed at the end of every aisle. 

Although some retailers may have genuinely good offers on items you’re considering purchasing, many of them mark the items down that have been slow movers during the year. This allows them to make way for new stock when January rolls around. 

Offers such as Buy One get One Free (BOGOF), buy three and pay for two and xx% discount when spending more than a predetermined amount can all cause you to spend more than you’d initially budgeted. Always ensure that you shop with a list, and only purchase the items you’d initially intended adding to your cart in the first place. 

Once you’ve created your shopping list, ensure that you search online for any discounts or coupons that could help reduce the cost of your spending as well.

Although budgeting for the festive season can seem boring and overwhelming, you’ll be glad that you did so – especially when the New Year rolls around and you don’t have to spend the next few months paying off your Christmas debt. 

 

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new-years

Make those Financial New Year’s Resolutions Now

Regardless of whether you’ve started to put a dedicated financial plan into place or not, it’s possible to get on track with this at virtually any age while you and your spouse are still earning an income. Below are a few financial New Year’s resolutions that you should consider making – and sticking to – when 2021 rolls around. 

  1. Set up an Appointment with a Financial Planner

If you’ve never worked with a financial planner yet, enlisting the help of one who is reputable should be your first priority as soon as the New Year starts – the sooner you can make that first appointment and keep it, the better. 

Getting your financial affairs in order can be daunting, especially if you have no idea where to start. You’ll need the services of a professional, especially where taxes, investing and other forms of saving are concerned. While it may seem like an unnecessary expense at first, you’ll certainly be glad you hired a professional – especially if you’ve never dealt with these aspects before.

  1. Set Up Retirement Savings Accounts

If you don’t have an IRA or 401(k) set up with your employer, now is the time to gather everything you’ll need to do so – your financial planner will be more than happy to assist you here. 

A 401(k) and/or IRA are among the best and easiest ways to start saving for your retirement, and the sooner these are set up, the better. Keep in mind that contributions to these accounts are pre-tax, so you probably won’t notice the small deduction being made from your wages at the time. However, you’ll certainly notice the lump sum of money that has accumulated by the time you’re ready to retire though.

  1. Pay Debts Off

One of your ultimate goals should be to remain free from consumer debt as far as possible. 

Many individuals don’t prioritize repaying consumer debts because they think they’ll still have a good few years left to do so. However, the quicker consumer debts are repaid, the more money you’ll save on interest and finance charges as the years go by – money that can rather be put into some form of savings instead.

  1. Look for Ways to Save Extra Cash

After setting up retirement, savings and/or investment accounts, many individuals quickly discover that they aren’t setting aside as much money as they’d hoped. If you find that this applies to you, it’s time to start looking for practical ways to trim your budget or increase your income as soon as possible. 

Some options for cutting spending can include switching to more affordable internet service providers, cell service companies and even eliminating physical newspaper subscription services – many news sites offer greatly reduced options for viewing their content online instead. 

While everyone dreams of becoming financially secure, this will only happen if you take the necessary steps to start saving and investing as soon as possible. If you’d like to learn more about making your money work for you, contact us today. 

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adult kids retirement

Don’t Let Adult Kids Destroy your Retirement

Research has revealed that nearly 70% of parents older than 50 have provided their adult kids with some form of financial assistance over the past few years, with amounts for this assistance totaling an average of just over $7,000 per year. If invested or saved in a tax-deferred account that provides an annual return of just 6%, this could amount to as much as $100,000 extra that these parents could have saved for their retirement years. 

Here are a few practical ways in which parents can offer help and support to their kids:

Ensure that they Trim their Budgets

If there’s a genuine reason for your adult kids to not be fully supporting themselves financially yet, lending a hand to cover aspects such as utility bills or rent is quite acceptable – for example, if your adult kids are doing everything they can, but still aren’t able to make ends meet due to a low paying job.

Funding a lavish lifestyle, paying rent on a costly apartment or condo or enabling your adult kids to pay for fancy restaurant meals will not help them learn to support themselves over time.

Establish a Practical System

More than 65% of parents have provided financial assistance to their adult kids at some point to help cover the cost of a utility bill or an unexpected emergency expense. However, an alternative approach is also recommended.

Start by determining ahead of time how much your adult child will require to supplement his or her existing income and then set up automatic transfers to them totaling the amount needed. After a few months, it’s recommended that you review this arrangement and consider reducing the amount systematically until you reach a mutually agreed upon timeline for stopping your financial support. 

Establishing an arrangement like this will mimic the situation of receiving a steady paycheck. However, there may still be instances where genuine emergencies will arise, such as dealing with unexpected vehicle repairs. If cases like this occur, don’t feel bad about stepping in and providing your adult child with the amount of financial assistance you can comfortably afford. 

Become your Child’s Financial Advisor instead of their Provider

When it’s time to stop providing your adult child with financial help, it doesn’t mean that you should stop giving them appropriate financial advice. Information you should provide them with can involve teaching them how to budget effectively, how to choose the right healthcare plan to suit their finances and how to opt into the best 401(k) plan to prepare for retirement. 

Another option you can use to provide adult kids with financial guidance and advice is to introduce them to the numerous budgeting apps that are available these days, such as Mint and Digit. It’s also recommended that they be informed about the various financial blogs that can be accessed, as this will provide them with valuable information regarding financial responsibility and security. 

If you would like to learn more about securing your retirement nest egg and preventing it from being eroded by your adult kids over time, contact our financial advisors today. 

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Kids and Money

Why your Kids should be Included in your Budget Planning

Several of today’s adults grew up in households where financial matters were never discussed with the kids. However, research has shown that kids who were raised in homes where finances were discussed openly went on to become adults who mastered their money from a young age. 

While you may not want to share all aspects of your finances with your kids (unless you think they’re old enough to understand), it is important to give them an idea of how money is earned and how household expenses are covered from month to month. 

  1. Start with a Family Meeting

The first step to getting your kids involved in your family’s finances is to hold a family meeting, and this time should be used to discuss the various expenses that your budget covers each month. During this time, give each child a pen and paper and ask them to write down how much they think each line item in your budget costs, such a groceries, rent or mortgage, insurance, vehicle-related costs, entertainment expenses and any other item you pay for on a monthly basis.

  1. Teach Kids that they will sometimes go without

It’s crucial for kids to learn that they will never be able to have absolutely everything their little hearts desire – and the best way to do this is to be open with them about how much it costs to live from day to day. Show them that money is by no means an infinite resource, so it will be necessary for them to sometimes save up for a specific item they want. 

  1. Provide an Allowance from an Early Age

One of the best ways to teach children how to allocate any money they receive is to set up an allowance system – preferably one that is linked to some form of work having to be done in order to earn these funds. 

For younger children, a simple system of saving a small portion of their money and being allowed to spend the rest is sufficient. However, as your kids get older and obtain a better understanding of money, they can be taught how to have a basic savings account, a little something for investing, a small portion for donating to a charity or cause of their choice and the remainder for spending however they like. 

  1. They will Learn how to become Financially Independent

Once your kids know how money is earned and how to budget appropriately, they will usually go on to become adults who budget efficiently, avoid debt as much as possible and invest wisely over time. However, in order for them to do this successfully, they will need to see you putting these principles into practice as well – it’s no use telling them to budget and save if you aren’t doing so yourself. 

If you would like to learn more about teaching your kids how to manage their finances and make the best investment choices possible, contact our team today. 

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financial advisor

Why a Financial Advisor should Help you Plan for Retirement

Although financial advisors are often thought of as ‘costly money grabbers,’ the truth is that they possess the knowledge needed to help you plan ahead for your long-term financial goals. These specialists can analyze your current financial status and provide the information needed to plan for almost any life event such a buying a home or retiring. Below are some reasons why you should work with a financial advisor when planning for your retirement. 

  1. The Economy will Change

You may decide over time that you’d like to retire with an amount of $200,000 in savings. This is quite a reasonable goal for most individuals to achieve, but it will be necessary to take economic changes into account over time. 

For instance, you may pay $3.50 for a gallon of milk at the moment, but how much will this price have increased by the time you’re ready to retire? The initial amount you had in mind for retirement may not last as long as you’d planned, which is why a financial advisor should be consulted when setting up a savings plan. 

  1. Anything can Happen

You may currently be in your late 20s or early 30s, have a good amount of money saved in a 401(k) and be working your dream job. While everything may be going well at the moment, anything can happen over time – you could get laid off (think COVID19 – no one expected to lose their jobs because of a pandemic during 2020) and end up needing money in a hurry. 

Although it can be tempting to dip into your 401(k) account, this will not only cost you money in the form of early withdrawal penalties; you’ll be robbing yourself of potential retirement savings as well. A qualified financial advisor will be able to help you set up a practical savings plan to help deal with unexpected events like job loss or illness.

  1. Health can Change Unexpectedly

While most individuals set up a concrete savings plan for retirement, it’s important to remember that a health crisis can occur at any time – leaving you in a financial bind. A professional financial advisor will be able to work with you to help allocate money for various needs, such as long-term health conditions. Even in the event of you not being able to work for an extended period of time, a reputable advisor will help you make the most of the money you already have. 

  1. Money Pits may need to be Identified

Several individuals earn enough to save and invest in retirement accounts, but tend to struggle with actually doing so. A financial advisor will be able to help you establish a practical budget to ensure that there’s enough money to invest each month.

For example, you may be eating out twice a week when it’s possible to prepare tastier meals at home. Although everyone deserves a treat once in a while, the bulk of what’s being spent on restaurant dining can be invested instead – even $100 extra that you save per month can make a substantial difference over the course of 20 years. 

If you’re concerned about not having enough money to retire in the near future, get in touch with our advisors today. We look forward to getting your money work for you.

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social security savings

Stretching your Social Security and Pension Funds to make them Last

A large number of retirees are extremely concerned because they feel that their pension funds won’t be sufficient to last them for the rest of their lives – especially if current inflation trends are taken into consideration. However, there are a few steps you can take to ensure that your retirement funds will be able to last for as long as possible. 

  1. Consider Taking on Part-time Employment

If you’re still physically active and healthy, it might be worth considering taking a part-time job when you reach retirement age – instead of stopping work completely. This will not only help to reduce the amount of money that needs to be withdrawn from your retirement funds; it will allow you to keep busy for at least a few days a week as well – several older folk often find themselves becoming bored quickly when they stop working altogether. 

  1. Check Withdrawal Rates at Least Annually

Your withdrawal rates should be checked at least once a year to determine if you’re living off the interest from your retirement accounts or whether you’re dipping into the capital itself. If it’s discovered that you’re dipping into the capital, it’s a good idea to sit down with a financial advisor and see what can be done to preserve your fund. In most cases, it’s recommended that withdrawal rates don’t exceed 4% of the account’s balance over a 12-month period.

  1. Examine your Budget

Unfortunately, not everyone will be able to continue working after reaching retirement age. If you will be one of the individuals who have to stop working, it’s crucial that you start examining your monthly budget and reducing expenses wherever reasonably possible. 

Some of the quickest ways to reduce spending can include downsizing to one vehicle, moving into a smaller home or a property that’s in a more affordable part of town and even asking for senior discounts whenever making purchases – it never hurts to ask. 

  1. Avoid Taking on Debt

If you still have to pay for vehicle financing or cover the cost of credit card installments each month after retiring, your Social Security and pension benefits will not last nearly as long as they should – especially when taking the high interest rates that are charged on these payments into consideration as well. 

Before you can even think about retiring, it’s crucial to ensure that all outstanding debts are repaid in full. This will allow you to free up funds to cover your essential expenses such as taxes, utilities, potential medical expenses, groceries and hopefully a few fun purchases along the way. 

Preserving as much of your pension fund and Social Security benefit as possible by being reasonably frugal will allow you to rest assured that there will be enough money for you to live on once you’ve stopped working. If you would like to obtain a little guidance with regards to stretching your retirement funds as effectively as possible, get in touch with our professional advisors today. 

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phone scams

Expert Tips on Avoiding Common Financial Scams

After working and saving their hard-earned money for many years, many individuals fully expect to be able to retire with a comfortable financial nest egg on hand. If anything unexpected were to happen to their savings, it would be close to impossible for many people to recover their money in time for retirement – especially if they fall prey to a scam of any sort. 

These days, several criminals focus their efforts on scamming the elderly and the best form of protecting your money against them is to ensure that you’re informed and suspicious of any unusual activity. Below are some of the most common financial scams that are aimed at senior citizens. 

  1. Phone Calls from the IRS Scam

When scammers call under the pretense of being IRS representatives, their main intention is to obtain as much of your personal information as possible. In this case, the information they are usually after is your last four digits of your Social Security Number and your debit card information. 

Keep in mind that the IRS will never call you directly – even if you owe money to them. All forms of communication from the IRS will only ever be sent through the US Postal Service, so it’s imperative that you end the call as quickly as possible if a caller claims to be from this agency.

  1. Medicare Scams

Over the past few years, a number of scammers have attempted to go door to door or directly call unsuspecting individuals in order to try and obtain Medicare insurance numbers from them. Once they have this information, it gets used to bill Medicare for services that have never been rendered. 

As with the IRS, a Medicare representative will never arrive at your door or call you. In the event that they need to get in touch with you, it will be done through the mail – unless you need to contact them for any reason. If anyone call you directly or shows up at your door claiming to be from Medicare, end the call immediately or tell them to leave your property immediately.

  1. Offers for Fake Prescription Medications

While you can save a substantial amount of money by purchasing your prescription medications online, always exercise extreme caution if a website claims to offer, ‘cheaper medication alternatives,’ – scams like these will usually operate from a totally fake website. After you’ve sent your payment through, you will most likely receive medications that won’t treat your condition because of fake ingredients. 

It’s crucial to check that any online pharmacy is legitimate before you pay them for any medication. This can be done by verifying whether they are licensed in the state you live in or not and that they have a licensed, experienced and trained pharmacist to dispense medications. 

Although it can seem tedious to verify information before parting with your hard-earned cash or giving out Social Security and banking details, doing so will save you a lot of heartache along the way. If you would like to learn more about making your money work for you, contact us today.

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working and retirement

Getting into the Right Retirement Mindset throughout your Career

While most individuals in their early and late 20s think that their retirement years will take ‘forever’ to arrive, the truth is that this time of your life will arrive far sooner than you realize. The main secret to creating a good-sized retirement account is to start saving as quickly as possible after you start working. 

Getting into the right mindset regarding retirement savings and taking the appropriate action will help ensure that you get to enjoy this time of your life without worrying about money – regardless of how old you currently are. 

  1. Your 20s

This is the time to take full advantage of any 401(k) matching programs your company may be offering, and if you enroll in a program like this before reaching the age of 25, it will significantly reduce the amount of money you’ll need to save on your own than if you waited until reaching your 30s and older. 

Studies have revealed that if you’re able to increase your income by just $5,000 per year in your 20s, it could enable you to accumulate an additional $500,000 during your working life. Just saving 10% of this additional income would see your retirement account grow by a minimum of $50,000. 

  1. Your 30s

One of the best things you can do to prepare financially for your retirement during this time of your life is to stop accruing consumer debt. Wherever possible, pay cash for anything you purchase and direct any bonuses, tax refunds or overtime income towards getting debt repaid as quickly as possible. 

Although there is nothing wrong with splurging on a treat occasionally, money should only be spent if it won’t cause you to go into deeper debt. 

  1. Your 40s

This is the time to make sure that you become as indispensable as possible to your employer, and one of the best ways to do this is to improve your existing skillset. Consider taking additional training courses that will help you to perform better in the workplace – this could even lead to you being given unexpected raises over time, which could then be invested as well. 

  1. Your 50s

At this time in your career, you should consider catching up on retirement savings wherever possible – especially if you weren’t able to contribute to any dedicated plans earlier in your career. By now, the vast majority of your debt should also have been cleared – including your mortgage and any student loans that may have still been looming. 

The extra cash that would previously have been used to repay the debt should now be channeled into your retirement accounts wherever possible. In addition to a 401(k), you should set up a Roth account – this will enable you to save a larger, tax-free amount of money towards your retirement every year. 

The main aspect that will ensure a comfortable retirement is to make it as easy as possible to save money throughout your working life. Sticking to a realistic budget and not spending frivolously on unnecessary items will allow you to retire without having to worry about finances. If you’d like to learn more about saving towards your retirement, contact us today.

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feet on the ground

Finding your Feet Financially after Quarantine

Not only has COVID19 left most Americans feeling afraid about their physical health; several families have experienced stress levels unlike anything ever seen before due to sudden job losses or a reduction in working hours. Although life will eventually return to some level of normalcy over time, several families will need guidance with regards to getting their finances back on track.

  1. Prioritize Rebuilding your Emergency Fund

Job losses and reduced working hours have seen millions of families across the world having to dip into their emergency funds – with many of them still not having enough money to cover basic expenses. Once you’re back at work and earning a decent income again, your first financial priority should be rebuilding your backup savings account. 

Each time you receive any form of income or an unexpected amount of money, putting just 5% to 10% of it into a backup account will help rebuild your emergency fund over time. If you’re fortunate enough to receive overtime pay or stimulus checks, part of this money should also be set aside. 

  1. Take Advantage of Historically Low Interest Rates

if you’ve been fortunate enough to rebuild your emergency savings account, the next practical step that should be taken is to repay any consumer debt you may have as quickly as possible. Lower than usual interest rates will work to your advantage at a time like this because it will allow you to apply more of your money towards your debt principal instead of the interest payments. 

  1. Create a New Budget

During quarantine, many families were able to reduce the cost of expenses such as gas, transportation and childcare because they were spending more time at home. 

Now is the right time to reevaluate your existing budget to see if there are absolutely any expenses that could be reduced or even eliminated completely. For example, if one spouse is currently unemployed, would it not be more beneficial to eliminate the cost of childcare until such time as new employment can be found? 

Wherever possible, look for ways to reduce each expense in your budget. This may require changes in your grocery and entertainment budgets, for example. Instead of purchasing all organic foods, you may need to see where cheaper groceries can be obtained – even temporarily. Instead of enjoying a day at the movies, pop some popcorn in the microwave or on the stovetop and enjoy a show on Netflix. 

  1. Consider Speaking with a Financial Advisor

If you’ve secured alternative employment and you need help rolling retirement funds over from one account to another, this is something that should be performed by a qualified financial advisor. They will also be able to provide advice regarding how to start saving towards retirement or even for another large expense, such as a home. 

Although the pandemic has left millions of families feeling completely overwhelmed in several ways, it is possible to start re-gaining control of your finances in a step-by-step manner. If you require advice in this regard and would like to ensure that you have enough money to cover future expenses, get in touch with us today.

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Stress Free Retirement

Ensure your Retirement is as Financially Stress-free as Possible

A number of individuals simply don’t give much thought to retirement – until such time as they realize that they will be entering this time of their lives within just a few years. However, if the right amount of planning and thought is put in early enough, your golden years could end up being some of the most enjoyable and financially stress-free times of your life. The tips below will help you get started on this important journey.

  1. Get as Much Debt as Possible Paid Off Now

Most people who retire will not have as much disposable income available to last from one month to the next. As such, now is the time to eliminate as much of your debt as possible.

Repaying as much debt as possible won’t only save on interest and bank charges; it will allow you to free up more of your current income so that you’ll be able to get by easier once you’re no longer working. Another advantage of repaying debt while you’re still employed is that you won’t have to worry about struggling to repay it when you’re living on a lower income. 

  1. Save as Much Money as Possible 

Regardless of whether you’re in your 20s and just starting out in your career or you’re closer to retirement age, saving for your future is essential. A number of surveys undertaken over the years have revealed that as much as three-quarters of employees have less than $30,000 set aside in savings towards retirement – definitely not enough to survive on. 

The sooner you start saving, the less you’ll have to set aside each month for this time of your life – thanks to the wonder of compounding interest. If you’re still in your 20s, you’ll usually be able to save between 10% and 15% of current income. However, if you only start savings in your 40s, you’ll have to sacrifice as much as 50% of your current income so that you can survive your golden years. 

  1. Spend Carefully

Although your retirement is supposed to be about enjoying yourself, it doesn’t mean that you should go and spend frivolously on costly vacations or other unnecessary items – unless you’re 100% confident that you can afford to. 

If you’ll still be paying off your mortgage after retiring, it’s crucial to ensure that you won’t be paying a penny more than 20% of your retirement income each month on it. Whenever spending money after retirement, don’t be afraid to ask if any senior citizen discounts are available – it never hurts to ask. In some cases, you could have as much as 50% shaved off the original price of an item or service. 

Planning ahead for your retirement years will help ensure that you’ll be able to enjoy yourself as much as you can without constantly having to worry about finances. If you’d like to ensure that you’ll be able to retire as financially comfortable as possible, contact our investors today.

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