Save Money Without Feeling Poor

Yes. You are feeling the economic crunch.

Times are hard and you are finding it hard to even make both ends meet with the rising costs of basic necessities and the fact that maybe you or a family member has lost one one or all of the jobs they have. This is the common scenario that people, not only in the US, is feeling. They may not have lost their jobs but they have certainly found it hard to earn extra.

Can you blame them then if they look for ways to cut costs and save money?

Although it looks like a pretty daunting task, it’s not impossible to do and once you get the hang of it and establish a routine, it’s not really so hard. In fact, as you become used to cutting down costs, you’ll even ask yourself why you just did it this year. Thank God for the recession right? I guess, if there is anything good that the recession has taught people all over the world is that no country is impervious and that you can save without really allowing yourself to be poor.

Here are some of the ways that you can save money without really making yourself feel or look poor.

1. Cut down on the luxuries
This does not mean that you will not treat yourself every now and then and just live in poverty. This can be depressing and at this point you need something to at least brighten up your month. This just means that you need to cut back on the frequency that you indulge in luxuries. For instance, if you are used to going outside to eat every weekend, cut that down into just twice a month. Restaurant food can be pretty expensive and besides they are not at all healthy anyway. Other things to give up on are movies and recreational trips. You can still go on trips but make sure that they will not involve a lot of fees.

2. Keep it simple
If you do not have the money to go out, you can still do so provided that you keep it simple. Go back to nature and have a family picnic in the park or maybe walk along the beachside. You can pack a lunch that you have cooked yourself at home. You don’t have to spend a lot of money just to be able to enjoy the weekend with the family. You just need the imagination.

3. Recycle
Instead always buying things that you think you need, why not use your imagination and creativity by recycling things. Use them for other than their uses. For instance, if you need a message board where you will be posting the chores, why not use that old chalkboard instead of buying a new bulletin board. It may not be much but if you do it for other things that you want to buy, you have not only saved a lot of money, you would have also cleared that garage full of junk.

4. Rework
If you cannot use something for another thing, why not transformed it into something that you can actually use. This is actually applicable to clothes and accessories but with imagination, you can even do it with other things in the house. Who knows, it may not even be just one of the ways to save money, you can even turn it into a business that will earn you more.

5. Live

It’s OK to treat yourself once in a while!. Don’t try to save every single dime. You don’t have to file EVERY DOLLAR bill permanently.

Its ALL about the balance between living and preparing for the future.

Money-Saving Tips For Married Couples

Most newly-married couples are having a hard time adjusting to a different way of life, especially when it comes to financial matters. As separate individuals, your spending habits will differ. This is why you both need to make certain adjustments to combine the household budget.

Here are some ways on how you and your partner can make the ‘financial aspect’ of your marriage harmonious and organized:

1. Understand the way that you both look at money.

If you and your spouse have different beliefs when it comes to money matters, sit down and discuss it. The key here is to be able to compromise. For some people, money is a security measure that needs to be saved. Other people spend it luxuriously and look at spending money as a means to reward themselves for their work. Still, other people are very thrifty that they hardly ever spend a cent of what they have earned.

Understand that the way that you both treat and spend money stems from how you were brought up by your parents. Think of everything that you need to discuss when it comes to your household budget. If possible, set rules on how you will spend your combined income on utility bills, food, mortgage, car maintenance, etc.

2. Set future financial goals.

If you are newly weds and you are planning to have a baby soon, consider this when organizing your finances. If you are a couple nearing the age of retirement, you can make plans on where you will spend your leisure years. Setting long-term and short-term goals will help you finalize your financial plans.

3. Share your money-saving skills with your partner.

If you have different family backgrounds, then you would have something to contribute towards organizing your joints assets. Make each other aware of your personal finances then think of ways on how you can further boost your money-handling tactics.

By following these tips, you will surely have your finances organized to lead a more comfortable lifestyle.

Your Financial Journey to Successful Retirement

The rules of retirement have changed forever! Whether you like it or not, you can no longer depend on a pension from your employer or expect that social security will be there when you need it most. Once in retirement, the biggest risk is running out of money and there are many obstacles along the way ranging from inflation to longer lifespan. For some, retirement is in the distant future and is lodged deep in the back of your mind as you make room for more pressing day to day issues. For others retirement might be right around the corner and has claimed such a large share of your thoughts that it’s difficult to focus on anything else. No matter what your retirement time horizon is you absolutely must develop a retirement strategy and start saving for it now. Successful retirement planning will require hard work, sacrifice, and dedication.

Let’s face it, most of us will not be getting a cushy pension and social security may be there to cover some minor expenses but will not provide you with the financial security that you and your family deserve. So what can you do to be prepared for that big day? Let’s review the various retirement vehicles available to you.

One such option is an Individual Retirement Account (IRA). Traditional IRA’s are a great choice because your contributions are pre-tax dollars that grow tax free until you withdraw the funds in retirement. Imagine the amazing result of compound interest growing tax free! This is such a great deal that the Government puts restrictions on who can contribute. Generally high earners are limited or restricted from contributing. Most folks expect that their income will decrease when they retire so in that case all those pre-tax contributions you made during your earning years will be taxed at the lower tax bracket when withdrawn in retirement. An IRA can be opened at most banks and brokerage firms.

Another great retirement savings vehicle is known as a ROTH IRA. With a Roth, you pay taxes on the contributions, but upon retirement when any withdrawals are tax free. This is an awesome option for anyone who expects his or her tax bracket to be higher in retirement then it is right now. Higher taxes in retirement may not necessarily be due to higher retirement income, they can also result due to changes in the political landscape and laws governing taxation. The scenario of higher taxes in your future is very possible so the Roth IRA is the best vehicle to mitigate that risk. A ROTH IRA can also be opened at most banks and brokerage firms.

One of the most popular and powerful type of retirement accounts is the 401k. The 401k is a lot like an IRA with the major difference being that 401k’s are most commonly offered directly through your employer. What’s so great about the 401k you ask? I have two words, employer matching. Once you are eligible for a 401k plan at work, most employers will match as much as fifty to one hundred percent of your contribution usually up to six percent of your pay. Let’s look at a simple example. You contribute six percent to your 401k and your employer matches your contribution with another six percent. That is 100% instant return on your money and a total contribution of 12% of your pre-tax pay. Since your contributions are pre-tax and are deducted straight from your paycheck you won’t even miss the money. If you are eligible for a 401k plan at work and have not yet signed up, what are you waiting for?! GO sign up now.

The Keogh plan is another type of IRA that is suitable for self employed people. Self-employed small business owners may also be interested in Simplified Employee Pension Plans (SEP). This is another type of Keogh plan that people typically find easier to administer than a regular Keogh plan. Both of these plans have similar features as the IRA with additional benefits geared toward self employed individuals.

In each retirement vehicle, you have the option of investing in stocks, bonds, mutual funds, certificates of deposit, or money market accounts. These are the basic options available in most plans. But which plan is right for you? The answer depends on your personal situation and may consist of any one or a combination of several retirement savings and investment accounts. Whichever retirement investment you choose, just make sure you choose one! Please, do not depend on social security, company retirement plans, or even an inheritance that may or may not come through! If your situation is complicated you may need to speak with a financial planner or accountant to help you with these decisions. Secure your financial future by investing in it today.

Essential Tools for Your Retirement Toolbox

There are certain fact of life that are out of your control such as unexpected emergencies or changes in the political climate that will affect your retirement savings plans and strategies. It is difficult to plan for those unknowns; nevertheless you must make the best possible plan based on what you know. One of the biggest certainties in life is that one day you will retire. Retirement is an event that everyone dreams about but is too overwhelmed to plan for and avoiding the issue will not make it any easier. That’s why you need to be familiar with various financial tools available to you so that you may build the retirement savings plan to match the scope of your dreams and aspirations. Your investments do not need to be risky; you can easily invest your money in ways that are very safe, which will show a reasonable return over a long period of time. The investments that you ultimately choose will depend on your tolerance for risk and time horizon.

First consider the basic retirement savings tools, the Money Market and Certificates of Deposit (CDs). These are the safest retirement tools around and can be found at your local bank. Usually money markets and CDs are FDIC insured. The benefit of such instruments it that they can pretty much guarantee a return of your principal. I know what you are thinking; a retirement tool with a guarantee to never lose money? Sounds amazing, sign me up! Not so fast, although your deposits are guaranteed, the interest rates are pretty low. The biggest concern when using these tools is loss of value due to inflation. Since retirement is a long term goal and those who are already in retirement can expect to live twenty to thirty years, you need to make sure that the tools you choose are strong enough to beat inflation.

A bond is a financial tool you can use and have a better chance at beating inflation. There are various types of bonds that you can purchase. Bonds are similar to Certificates of Deposit. Instead of being issued by banks, however, there are many issuers of bonds. The safest bonds are issued by the Government and gradually increase in risk followed by Municipalities, and Corporations. The type of bonds that you decide to buy will determine the interest rate (yield) and term that is offered. Government and Municipal bonds have some tax advantages and are considered safer because they can always increase taxes to raise the cash they need to pay back their debts. Corporate bonds tend to pay higher rates to compensate for the higher level of risk. Each bond has a rating that can help you choose the right amount of risk and reward.

Stocks are another great tool for long term investments. Although stocks are considered the riskiest asset class, they have the best potential to beat inflation and help you achieve your retirement savings goals. Shares of stocks are essentially pieces of equity in the company you are investing in. Equity equals ownership like the equity in your house. Buying stock essentially makes you a fractional owner of the company you invested in. When the company does well financially, the value of your stock rises. However, if a company is doing poorly, your stock value drops. Even though there is a greater amount of risk, you can still purchase stock in sound companies and diversify in many different companies, industries, and regions domestically and internationally. By diversifying your stock holdings, you are lowering your risk.

Mutual funds can be as safe or risky as the investments they hold within. A mutual is like a basket with either a specific investments like stocks or bonds or it can be a mix of cash, stocks, and bonds all in one. A mutual fund is a way for a group of investors put their money together to buy stocks, bonds, or other investments. A fund manager typically decides how the money will be invested. Mutual funds are great tools for retirement savings plans because they allow you to invest relatively small amounts of money and achieve the greatest level of diversification which is essential to managing risk.

These are the basic tools you can use to construct a retirement savings plan. It is critical to do your research and put together a plan before investing your money for long term. Start as early as possible, save as much as you can, and stick to your plan. When researching mutual funds to invest in choose a fund that is well established, has a proven track record, and low fees. If you aren’t quite ready to take the risks involved with mutual funds or stocks, at the very least invest in bonds that are guaranteed by the Government.