All Financial Matters

The fact is that in today’s society, people are living longer. Thirty years ago, retirement may have lasted around ten or fifteen years for the average person. These days however, retirement can last for twenty to forty years depending on when you are able to give up work. To prepare for this period of your life, here are five tips to make sure that your savings are enough to last as long as you do.

Saving money doesn’t have to be hard. In fact, the hardest part is letting go of the money in the first place. We all want to save but we are torn between going to that sale now and planning for a future that is many years away. Okay, let’s see if we can make it easy enough for anyone to save the money that they need.

1. Think about your retirement goals. What do you want to do after you retire? If you want to travel, chances are travel costs will rise significantly by the time we retire. If you want to own a beach house or spend half the year in a warmer climate, you will have to have the money to free you up to do just that. Setting a goal gives your financial expert a place to start.

2. Contribute all that you can to your employer’s retirement plan. If you are closer to retirement age than others, you will likely want to contribute more of your income to the plan. At least contribute up to the maximum percentage that the company is willing to match. A good way to save more is to increase your plan contribution when you get a raise. Instead of using the raise for other things, add one or two more percents to the amount deducted from your check for retirement.

3. Consider your spouse’s retirement plan. As partners, both of your retirement plans will feed into the amount of money you have to live on after you quit working. Be sure that your spouse is following the same guidelines so that they are getting the most out of their plan.

4. Look at the diversity options. While a savings account type option for your 401(k) is safe and will get you around 3.5% return, a more diversified picture with a mix of high risk and low risk stocks and mutual funds makes the most of your money. You know what they say about putting all your eggs in one basket.

5. Look at your Social Security statement. You get one every year from the Social Security Administration. It tells you what your benefits could be based on your earnings to date and the amount of Social Security taxes you have paid.

There are lots of ways to save for retirement without it being such a struggle. The key is to find a balance between spending and saving that will allow you to live your life as you wish before you hit retirement age

There are many different attitudes when it comes to money matters; some people spend what they earn in a hand-to-mouth fashion whilst some people save for a rainy day. Why is that? It’s our attitudes and thinking about money that determine our spending behaviour. That means in order to change the way you spend you also need to change your attitude towards money.

How do you view money? We all learn from an early age about money. We watch our parents and how they handle the money that they earn. Some may have had very little because Mom and Dad were low paying jobs whilst others had a lot of money because Mom and Dad had a good income.

Whatever your environment, your money views were probably shaped by those around you. This is where unhealthy views of money begin. If money was a bone of contention in your home, you will likely make every effort to avoid confrontation when it comes to money. That could lead to overspending becoming a hush-hush topic in the home.

If money flowed freely, then you could become a free spender as an adult. Even if your means are more limited than your parents’, you may continue to spend as if you had a million dollars. This type of money attitude can lead to a debt burden too big for you to carry.

Many scenarios can be drawn from childhood exposure to money. Remember Ebenezer Scrooge? He grew up with no money and it took over his life. During his adult years he shunned all other pleasures for his obsession with money. I’m sure nobody wants to end up like that.

It’s not an easy process to change your attitude towards money, but having the desire to do so is the first step. Having the determination to make a change gives you a real chance of making it happen.

It’s important you visit a financial advisor and discuss with them your money problems and your views about money. Let them know what it is you want to accomplish with your money. A financial advisor can take your money and other assets and create a portfolio for you. The portfolio includes how to invest and what to invest in.

A financial advisor may be able to help with a budget. For frugal spenders, a budget can set aside money for one’s enjoyment each month. A frugal person may not take more than one day of freedom, but it is a start. As time goes on, they will relax the reins and learn to enjoy money now and in the future.

A big spender will use a budget to curb spending. It is okay to spend, but make it special and not an everyday occurrence. Money doesn’t always flow freely unless we plan for it to do so. That requires a spender to realize that it is okay not to spend it all at once, but to save some for later.

Ask yourself, what is your money attitude? Is it beneficial or setting you back? To improve your life, why not meet with a financial expert to discuss healthy changes to your money attitude?

For those who feel that they are in serious financial distress, they may have considered bankruptcy as a possible solution however, bankruptcy is not something to be taken lightly.  Whilst your debt may be wiped clean, there are far-reaching consequences for that “new freedom”.

When a person’s debt has risen to a level that they can’t hope to get under control, they may consider filing for bankruptcy.  For a consumer there are two bankruptcy choices:  Chapter 7 and Chapter 13.  Chapter 7 bankruptcies involve wiping out the debts in part or in their entirety and liquidating assets to do it.  Chapter 13 bankruptcies are more of a debt restructuring plan that gives you more time and a plan to pay back a portion of the debt that is owed to creditors.

Bankruptcy damages a person’s credit rating.  A bankruptcy judgement stays on credit reports for as long as ten years.  During that time, any credit that is applied for will disclose the bankruptcy to the creditor.  If filing Chapter 13, you still have to pay back part of your debt and the judgement stays on your credit report for ten years.

In the past, people have taken advantage of the bankruptcy laws.  For instance, people have been able to file more than once for Chapter 7 bankruptcy.  They have used it as their own personal “debt eliminator”.

Each state decides on what assets they will exempt from being seized during a bankruptcy hearing.  Knowing that, some may use available cash to purchase those items (real estate property, vehicles, etc.) in an effort to avoid payment and still retain the stuff they purchased.  In this instance, creditors receive little or nothing from the bankruptcy settlement.

The new laws concerning bankruptcy have changed this.  Whereas courts used to have the leeway of deciding who could file for Chapter 7 bankruptcy, there are now criteria that must be met first.  In order to file for Chapter 7 bankruptcy, a person has to have an income that is below the median income for the state where they live.  Their income must be put through a calculation that determines if they have enough disposable income to pay 25% of their outstanding debt.

More people that file bankruptcy will have to file under Chapter 13.  The courts decide what a person could pay from the information provided to them.  There is an allowance made for rent/mortgage, food, and other pertinent bills.  With the new bankruptcy law, standards set by the IRS determine allowable values for each of these bills.  A certain amount is exempted, and the payments are determined from the rest.

Because there are more hoops to jump through, bankruptcy lawyers are charging more for their services.  The whole process of bankruptcy will cost the filer more than before, which will make them think twice about the process.  Credit counselling sessions are also required as a precursor to filing for bankruptcy.  A credit counsellor may determine that they can help you and thus eliminate the need for bankruptcy proceedings.

Bankruptcy should always be a last resort after careful consideration of alternatives as well as the consequences of filing for it.  While it will give you a clean slate, it does come with a heavy price.

Few people will actually want to file for bankruptcy even if you often hear about big corporations doing it all the time, but individuals are very difference from corporations.  As an individual, finding an alternative to bankruptcy can save you a lot of trouble in the long run as it isn’t a solution without side-effects.

First off, consider loan to consolidate your existing debts.  Debt consolidation means that all of your debt is grouped together and a loan secured for the overall amount.  Creditors get paid what is owed to them and the bank that issues the loan is given a monthly payment that the consumer can afford. Very much a win-win situation for all concerned.

Debt consolidation mostly includes unsecured debt.  This would be credit cards, store credit cards, unsecured lines of credit from companies, and gas cards.  Unsecured debt is what creditors have a hard time recouping from people because it is not backed up by any collateral.

If you can’t find a bank that will give you a debt consolidation loan then try going through an agency.  The agency counselors are used to working with creditors and can negotiate on your behalf.  They can even get your debt dropped by as much as sixty percent.  You then make just one monthly payment to the agency, and they take care of the rest with the creditors.

Debt consolidation does not involve liquidating your assets.  With bankruptcy proceedings, the court may rule that you have to sell your belongings at much less than their market value in order to pay your creditors.  On the other hand, debt consolidation allows you to keep the things that you have and offers up another solution.

Another option is to get a second job.  It isn’t necessarily a pleasant option, but if getting another job will allow you to make a sizeable credit card payment each month for a year or two until your debt is repaid, then it will prove to be well worth it.  If a second job is not feasible, ask about overtime at your current job.  You need to find a way to make more money if you want to reduce your debt.

A second job can be a way to supplement your income while you are paying off a debt consolidation loan.  Things come up without warning and you may need more cash than you have available.  A second job will help you to save for a rainy day and still make payments on your debt.

You could also consider starting a home business.  For those who are in a time crunch that prevents a second job, a home business may be the most suitable option.  Most can be started with little or no money.  For example, selling unwanted items from around your home on eBay can bring in some extra money when you need it most.

Do you have a special skill?  Market that to others who could use your services.  Remember to earmark the money to be used for resolution of debt and not to spend freely and incur more debt.

Bankruptcy is not the way to go if you don’t absolutely have to.  Always try to seek alternatives to this final course of action.  Any changes you make don’t have to be permanent, just until you get out of debt and back on a more stable financial footing is what you’re aiming for.

Without a doubt, our children are such precious little beings.  They add that special something that enriches our lives, but when they start to want everything that catches their eyes it can get somewhat stressful.  Here are some tips for parents to help avoid these particularly difficult and often expensive episodes.

Don’t think of it as cute behaviour.  It’s very easy for doting parents to fall into this way of thinking.  When a child is young and they throw a temper tantrum over a toy in the store, we see it as a phase and label it cute.  Worse still, most parents will give into their child’s demands in order to pacify them.

Children learn quickly.  A child that discovers they can get what they want by acting up will do so again and again.  This is how you train your children to get what they want by causing a scene.  Setting them on this course only makes it harder to break the habit as they age.

Give them an allowance.  Children naturally think that our money is also their money, and to a certain extent they are right.   We provide for their well-being by purchasing food and clothing.  We pay the mortgage so that they have a roof over their heads.  But this doesn’t entitle them to act like we have unlimited supplies of money to spend on their desires.

An allowance gives kids something they never had before: their own money.  A child that understands money will be fascinated.  As the money grows from week to week, share with them how saving money allows them to afford toys that they buy for themselves.

Watch your spending habits.  Children mimic what they see.  If their parents buy everything that they want, the child will likely want to do the same.  When your children are old enough, include them in the family budget.  Convene a family meeting once a month to discuss the financial picture.

Explaining how saving works in their favor gives kids a head start in the money game.  Explaining to kids that parents also have to save for things they want and for family vacations, gives them a better understanding of family finances.  Money really doesn’t grow on trees.

Teach a life lesson.  Kids will want things.  They learn how to share and not be greedy from you.  Teach them the lesson of “less expensive” early on in their lives.  When their allowance is small, take your kids to the dollar store for their money-spending excursions.

Television commercials prompt kids to ask about the latest toys and games.  Don’t try to distract them by saying, “We will see about it later.”  Kids will take that as an affirmative answer.  Instead, offer the idea of putting that toy on their Christmas or birthday wish list.  Even better, encourage them to save and buy it with their own money.

Your children are a blank slate and will learn to behave in the manner that you teach.  When they’re very young, it’s only natural that they’ll become upset when they don’t get what they want, but it’s your responsibility as the parent to guide them and teach them the real value of money.