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The top 8 reasons to consider life insurance

September 16, 2019

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Becky Gordon

Becky Gordon

Insurance Representative

m: 423-526-8337



New Tazewell, TN

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Is a balance transfer worth it?

Is a balance transfer worth it?
September 9, 2019

If you have established credit, you’ve probably received some offers in the mail for a balance transfer with “rates as low as 0%”.

But don’t get too excited yet. That 0% rate won’t last. You’re also likely to find there’s a one-time balance transfer fee of 3% to 5% of the transferred amount.[i] We all know the fine print matters – a lot – but let’s look at some other considerations.

What is a balance transfer?
To attract new customers, credit card companies often send offers inviting credit card holders to transfer a balance to their company. These offers may have teaser or introductory rates, which can help reduce overall interest costs.

Teaser rate vs. the real interest rate
After the teaser rate expires, the real interest rate is going to apply. The first thing to check is if it’s higher or lower than your current interest rate. If it’s higher, you probably don’t need to read the rest of the offer and you can toss it in the shredder. But if you think you can pay the balance off before the introductory rate expires, taking the offer might make sense. However, if your balance is small, a focused approach to paying off your existing card without transferring the balance might serve you better than opening a new credit account. If – after the introductory rate expires – the interest rate is lower than what you’re paying now, it’s worth reading the offer further.

The balance transfer fee
Many balance transfers have a one-time balance transfer fee of up to 5% of the transferred amount. That can add up quickly. On a transfer of $10,000, the transfer fee could be $300 to $500, which may be enough to make you think twice. However, the offer still might have value if what you’re paying in interest currently works out to be more.

Monthly payments
The real savings with balance transfer offers becomes evident if you transfer to a lower rate card but maintain the same payment amount (or even better, a higher amount). If you were paying the minimum or just over the minimum on the old card and continue to pay just the minimum with the new card, the balance might still linger for a long time. However, if you were paying $200 per month on the old card and you continue with a $200 per month payment on the new card at a lower interest rate, the balance will go down faster, which could save you money in interest.

For example, if you transfer a $10,000 balance from a 15% card to a new card with a 0% APR for 12 months and a 12% APR thereafter, while keeping the same monthly payment of $200, you would save nearly $3,800 in interest charges. Even if the new card has a 3% balance transfer fee, the savings would still be $3,500.[ii] Not too bad.

If you’re considering a balance transfer offer, use an online calculator to make the math easier. Also, be aware that you might be able to negotiate the offer, perhaps earning a lower balance transfer fee (or no fee at all) or a lower interest rate. It costs nothing to ask!

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[i] https://creditcards.usnews.com/articles/when-are-balance-transfer-fees-worth-it
[ii] https://www.creditcards.com/calculators/balance-transfer/

TAN109433-1118

Ways to pay off your mortgage faster

Ways to pay off your mortgage faster
August 12, 2019

It’s paradoxical how owning a home might make you feel more secure.

But it may also be a constant source of worry, particularly if you still have a hefty mortgage payment each month. For some, having a mortgage is simply a part of life. But for others, it can be an encumbrance, especially once you realize that your interest expense might cost as much as the home itself over the course of a 30-year loan.

Whether your goal is becoming mortgage-free or you just don’t want to pay interest to your lender for any longer than necessary, there are some effective ways you can pay off your mortgage faster.

Make bi-weekly payments instead of monthly payments
Many of us get paid weekly or bi-weekly (meaning every two weeks). A standard mortgage has twelve monthly payments. While we tend to think of a month as having four weeks, there are actually around 4.25 weeks in a month. This seemingly small discrepancy in time can work to your advantage, if you switch to making bi-weekly mortgage payments instead of monthly mortgage payments. At the end of the year, you’ll find that you’ve made thirteen mortgage payments instead of just twelve.

Over the course of a 30-year mortgage, switching to bi-weekly mortgage payments may shave some time off the length of your mortgage, depending on your mortgage balance and interest rate. You may potentially save thousands of dollars in interest expense as well.[i]

Make an extra payment each year
Some lenders may charge extra fees for customized payment plans or may not provide an easy way to make biweekly payments. In this case, you can simply make one extra payment each year by putting aside money in a dedicated account. If your mortgage payment is $2,000, you could fund your account with $40 per week, or $80 every two weeks, to save for an extra payment each year. If you use this method, your savings won’t be as dramatic as the savings you might see by making bi-weekly payments because the extra payments don’t reach your mortgage balance as frequently. If you have any spare cash, you might consider raising the amount that you save each week.

Round up your payments
Mortgage payments are almost never round numbers. Yours might look like $2,147.63, for example. Consider rounding up your payment to $2,175, $2,200, or even $2.500. Choose an amount that won’t break the bank but can put a dent in the balance over time. Depending on how much you round up your payment, this method may shave some time off your mortgage and potentially save you money in interest expense.

The key is consistency. Making one extra mortgage payment and then never making any extra payments again won’t make much difference, but sending a little extra with every payment may help make you mortgage-free a little faster.

Pro tip: Before you make any drastic moves to pay off your mortgage, first be sure that your emergency fund is well established, that your high-interest credit cards are paid off, and that you’re contributing enough toward your retirement accounts. The average rate of return on some types of accounts may be higher than the savings you might realize on mortgage interest. It’s possible that any extra money is more wisely put away elsewhere.

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[i] https://www.mortgagecalculator.org/calculators/standard-vs-bi-weekly-calculator.php#top

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What to do first if you receive an inheritance

What to do first if you receive an inheritance
July 31, 2019

In many households, nearly every penny is already accounted for even before it’s earned.

The typical household budget that covers the cost of raising a family, making loan payments, and saving for retirement usually doesn’t leave much room for spending on daydream items. However, if you’re fortunate, you might be the recipient of some unexpected cash – your family might come into an inheritance, you could receive a bonus at work, or you might benefit from some other sort of windfall.

If you ever inherit a chunk of money or receive a large payout, it may be tempting to splurge on that red convertible you’ve been drooling over or book that dream trip to Hawaii. Unfortunately for many though, newly-found money has the potential to disappear with nothing to show for it, if there is no strategy in place ahead of time to handle it wisely.

If you do receive some sort of unexpected bonus – before you call your travel agent – take a deep breath and consider these situations first.

Taxes or Other Expenses
If a large sum of money comes your way unexpectedly, your knee-jerk reaction might be to pull out your bucket list and see what you’d like to check off first. But before you start making plans, the reality is you may need to put aside some money for taxes. You may want to check with an expert – an accountant or tax advisor may have some ideas on how to reduce your liability.

If you suddenly become the owner of a new house or car as part of an inheritance, one thing to consider is how much it might cost to hang on to it. If you want to keep that house or car (or any other asset that’s worth a lot of money), make sure you can cover maintenance, insurance, and any loan payments if that item isn’t paid off yet.

Pay Down Debt\ If you have any debt, you’d have a hard time finding a better place to put your money once you’ve set aside some for taxes or other expenses that might be involved with an inheritance. It may be helpful to target debt in this order:

  1. Credit card debt: This is often the highest interest rate debt and usually doesn’t have any tax benefit. Pay your credit cards off first.
  2. Personal loans: Pay these next. You and your friend/family member will be glad you knocked these out!
  3. Auto loans: Interest rates on auto loans are lower than credit cards, but cars depreciate rapidly (very rapidly). Rule of thumb: If you can avoid it, you don’t want to pay interest on a rapidly depreciating asset. Pay off the car as quickly as possible.
  4. College loans: College loans often have tax-deductible interest, but there is no physical asset with intrinsic value attached to them. Pay these off as fast as possible.
  5. Home loans: Most home loan interest is also tax-deductible. But since your home value is likely appreciating over time, you may be better off putting your money elsewhere if necessary, rather than paying off your home loan early.

Fund Your Emergency Account\ Before you buy that red convertible, make sure you’ve set aside some money for a rainy day. Saving at least 3-6 months of expenses is a good goal. This could be liquid funds – like a separate savings account.

Save for Retirement
Once the taxes are covered, you’ve paid down your debt, and funded your emergency account, now is the time to put some money away towards retirement. Work with your financial professional to help create the best strategy for you and your family.

Fund That College Fund
If you have kids and haven’t had a chance to put away all you’d like towards their education, setting aside some money for this comes next. Again, your financial professional can recommend the best strategy for this scenario.

Treat Yourself!
NOW you’re ready to go bury your toes in the sand and enjoy some new experiences! Maybe you and the family have always wanted to visit a themed resort park or vacation on a tropical island. If you’ve taken care of business responsibly with the items above and still have some cash left over – go ahead! Treat yourself!

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TAN107335-1018

Behind the curtain: How your insurance premium is determined

Behind the curtain: How your insurance premium is determined
July 22, 2019

Ever wonder why you’re paying the premium you’re paying?

It’s not arbitrary. Read on to take a peek into some factors that can determine the amount you’ll pay.

An insurance company issues contracts that provide coverage in the form of compensation due to a covered financial loss in exchange for premium payments. Insurance companies use statistics and probability projections to determine how much money someone should pay based on the probability that person will make an insurance claim. Those more likely to make a claim are typically required to pay a higher premium.

How insurance works
The concept itself is relatively simple: bad things happen sometimes and people want to avoid financial ruin that could arise from those bad things. To maintain peace of mind, or sometimes by law, people will obtain insurance to reduce the risk of ruin. People also use insurance to “make themselves whole” again after financial issue, such as a car accident or the loss of income.

All those who want to obtain insurance apply to be part of a pool. The insurance company then calculates how many people are in the pool, how much money they’ll probably need to pay insurance claims, then calculate each individual’s risk to the company.

Which factors affect premiums
Which factors affect premiums vary widely across insurance types. Driving style and vehicle value are obvious determining factors in car insurance. But so are other factors you may not be able to change, like location: those who commute to work spend more time in their cars and thus increase the probability of having an accident, simply for being in the car longer.

Health and life insurance focus on healthy lifestyles. If you’re more likely to live longer and require less medical attention, the lower your premiums. Renters and homeowners insurance consider the value of the property and the contents therein. Insurance plans will also vary based on the amount of coverage they offer. If your fire insurance only covers $2,000 worth of possessions, all things being equal, you’re probably going to pay a lower premium than someone who wants $20,000 of coverage.

Reducing your premiums
To avoid frequently making lower-risk members pay for the claims of higher-risk members, not everyone is thrown together in the same pool. If you can adjust your personal risk factors so that you’re entered into a different pool, you might see substantial reductions in your insurance premium. Your insurance company or agent should be able to help you identify which factors you score high for in riskiness so you can try to reduce your costs.

For example, if you smoke, quitting may greatly reduce your premiums (although you may have a waiting period like 12 months after you quit in order to qualify as a non-smoker). If you have several speeding tickets, ask how much a driving school certificate might help reduce your premiums.

The takeaway here is that your riskiness is based on a quantification of factors and the probability that any one of those factors will trigger a claim. Changes you can make in your lifestyle may add up to significant savings with your premiums, so it’s worth looking into!

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112352

Is a personal loan a good idea?

Is a personal loan a good idea?
July 10, 2019

Life is full of surprises – many of which cost money.

If you’ve just used up your emergency fund to cover your last catastrophe, then what if a new surprise arrives before you’ve replenished your savings? Using a credit card can be an expensive option, so you might be leery of adding debt with a high interest rate. However, you can’t let the ship sink either. What can you do?

A personal loan is an alternative in a cash-crunch crisis, but you’ll need to know a bit about how it works before signing on the bottom line.

A personal loan is an unsecured loan. The loan rate and approval are based on your credit history and the amount borrowed. Much like a credit card account, you don’t have to put up a car or house as collateral on the loan. But one area where a personal loan differs from a credit card is that it’s not a revolving line of credit. Your loan is funded in a lump sum and once you pay down the balance you won’t be able to access more credit from that loan. Your loan will be closed once you’ve paid off the balance.

The payment terms for a personal loan can be a short duration. Typically, loan terms range between 12-60 months.[i] If the loan amount is relatively large, this can mean large payments as well, without the flexibility you have with a credit card in regard to choosing your monthly payment amount.

An advantage over using a personal loan instead of a credit card is that interest rates for personal loans can be lower than you might find with credit cards. But many personal loans are plagued by fees, which can range from application fees to closing fees. These can add a significant cost to the loan even if the interest rate looks attractive. It’s important to shop around to compare the full cost of the loan if you choose to use a personal loan to navigate a cash crunch. You also might find that some fees (but not all) can be negotiated. (Hint: This may be true with certain credit cards as well.)

Before you borrow, make sure you understand the interest rate for the loan. Personal loans can be fixed rate or the rate might be variable. In that case, low rates can turn into high rates if interest rates continue to rise. It’s also important to know the difference between a personal loan and a payday loan. Consider yourself warned – payday loans are a different type of loan, and may be an extremely expensive way to borrow. The Federal Trade Commission recommends you explore alternatives.[ii]

So if you need a personal loan to cover an emergency, your bank or credit union might be a good place to start your search.

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[i] https://www.nerdwallet.com/blog/loans/personal-loan-calculator/
[ii] https://www.consumer.ftc.gov/articles/0097-payday-loans

TAN109850-1118

When should you start planning for retirement?

When should you start planning for retirement?
July 8, 2019

Depending on where you are in life’s journey, retirement may seem like a far away dream or it may be closing in faster than expected.

You might think that deciding when to start planning for retirement requires complicated algorithms. Yes, there may be some math involved – but the simple answer is – if you haven’t started planning yet, the time to start is right now!

The 80% rule
Many financial planners recommend saving enough to provide 80% of your pre-retirement income in your retirement years so you can maintain your standard of living. Following this rule isn’t an exact science though, because expense structures for each household can differ greatly. It is, however, a good place to start. How do we get to 80%? Living expenses typically decrease in retirement because costly commutes, investing in business clothing, and eating lunch out 5 days a week are reduced or eliminated. The other big expense that often changes is housing. At retirement, it’s common to trade in your 3, 4, or 5-bedroom home for something smaller, easier, and less expensive to maintain.

Retirement planning when you’re young
When you’re younger, planning for retirement may be a fairly simple process. Two considerations are life insurance and savings. This can’t be overstated: Now is the time to buy life insurance. If you’re young and healthy, life insurance rates are much more likely to be low. This also can’t be overstated: Now is the time to start saving. Every penny you put away now can get you closer to your goal. As anyone who’s older can tell you, life is full of surprises that end up costing money, and these instances have the potential to interfere with your savings strategy.

Longevity considerations
Another consideration is that we’re living longer. In the U.S. in 1960, life expectancy for men was 67 years. By 2016, life expectancy had increased to over 76 – with even longer life expectancy likely in following years – as medicine advances and as we become more aware of behaviors that affect our health.[i] Women tend to live even longer, with an average life expectancy of about 81 years by 2016.[ii] Life expectancy rates are essentially averages, with low and high numbers in the mix. If you’re fortunate enough to beat the average life expectancy, your retirement savings may become slim pickings in your later years, a time when you might not be able to generate supplementary income.

Manage your expenses
Whether you’re young or getting on in years, the time to start saving is now. But if you’re nearing retirement age, it’s also time to take an honest look at your expenses. Part of the trick to stretching retirement savings is to eliminate unnecessary costs. If you’re considering moving to a smaller home to cut costs – and you’re feeling adventurous – you might want to consider moving to a different state with a lower tax rate to enjoy your golden years. If you’re younger, it’s still a great time to assess your budget and eliminate any and all unnecessary spending that you can.

For younger people, time is your ally when it comes to saving for retirement, but waiting to start saving might leave you with less than you’d hoped for later in life. If you’re closer to retirement age, there’s still time to build your nest egg and examine your projected expenses. Talk to your financial professional today about options that may be available for you!

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[i] https://data.worldbank.org/indicator/SP.DYN.LE00.MA.IN?locations=US
[ii] https://data.worldbank.org/indicator/SP.DYN.LE00.FE.IN?locations=US

TAN98517-1018

Should you buy or lease your next vehicle?

Should you buy or lease your next vehicle?
June 26, 2019

Behind housing costs, transportation costs are often one of the top expenses in most households.

Auto leasing has been popular for several decades, but many people still aren’t sure about the sensibility of leasing vs. buying a car, how the math works, and which is really the better value.

Should you lease a car?
In many cases, you can lease a car for less than the monthly payment for financing the exact same car. This is because with leasing, you never build any equity in the vehicle. Essentially, you are renting the vehicle for a predetermined number of miles per year with a promise that you’ll take good care of it and won’t let your kids spill ice cream on the seats. (After all, it’s not really your car.)

At the end of the lease – most often 2 or 3 years – you’ll have the option to buy the car. At this point, in many cases you would be able to find a comparable car for a few thousand less than the residual value on the car you leased. After the lease has expired, most people choose to lease another newer car, rather than buy the car they leased.

If you don’t drive many miles, there may be some advantages to leasing over buying, particularly if you prefer to drive something newer or if you need a late-model car for business reasons. As a bonus, for short-term or standard leases, the car is usually under warranty for the duration of the lease and maintenance costs are typically only for minor service items.

Should you buy a car?
If you’re like most people, when you buy a car, you’ll probably need to finance it rather than plunk down a lump sum in cash. Rates are relatively low, but you can still expect to pay a few thousand dollars in interest costs over the course of the loan. Longer loans have higher rates and more expensive vehicles can make the interest costs add up quickly. Still, at the end of the loan, you own the car.

Older cars usually have higher maintenance costs, but it may be less expensive to keep a car with under 150,000 miles and pay for any repairs, rather than make payments on a new car. Cars are also running reliably much longer now. The average age of cars and light trucks on the roads currently is almost 12 years, which means if you had a 5-year loan, you could be driving for 7 years (or more) without having to make a car payment.[i]

So a big part of the savings in buying a car vs. leasing can occur if you keep the car for several years after it’s paid off. Cars depreciate most rapidly during the first 5 years of ownership, meaning you could take a big hit on the trade-in value during that time. Keeping the car for a bit longer puts you into a period where the car is depreciating less rapidly and you can benefit financially from not having a car payment. But if you think you might be tempted to trade the car in after 5 years (and you typically drive under 15,000 miles per year), you may want to take a closer look at leasing.

Keeping your car for 10 years
How would you like to “make” an extra $25,000 over the next 10 years? That’s enough to buy another car! Assuming you make the same down payment on a leased car as a financed car, and assuming the same APR for your financed vehicle as the lease rate percentage, you can save nearly $25,000 in a decade by buying and keeping your car for 10 years instead of leasing a car every 3 years. And that savings applies to each car you own.[ii]

Your savings will vary based on the type of car and its price of course, but buying a car and keeping it for a while after it’s paid off can “yield” handsome dividends.

Getting behind the wheel
It’s really up to your personal preference whether you buy or lease. If you like to rotate your vehicles so you can enjoy a new car every few years and not have to worry so much about maintenance, then leasing may be a better option. However, if you like the idea of not having to make a car payment for a good portion of the life of your car, then buying may be the right choice.

Either way, before you take the keys and drive off the lot, make sure to ask your dealer any questions you have, so you can fully understand all the terms and any underlying costs for your situation.

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TAN0398/9.18

[i] https://www.energy.gov/eere/vehicles/articles/fact-997-october-2-2017-average-age-cars-and-light-trucks-was-almost-12-years
[ii] https://www.moneyunder30.com/buy-vs-lease-calculator

Creating Healthy Financial Habits

Creating Healthy Financial Habits

When it comes to building wealth and managing finances well enough to live comfortably, it’s up to your participation in a long-term financial strategy, which – more often than not – depends on creating healthy financial habits NOW.

Check out these ideas on how you can do it!

Automate It
Fortunately for us, we live in the electronic age, which can make streamlining financial goals a lot easier than in decades past. Whether building savings, investing for the future, paying down debt, or any other goals, take advantage of the apps and information available online. Savings can be put on autopilot, taking a fixed amount from your bank account each month or each pay period. The same can be done for IRAs or other investment accounts. Many mobile apps offer to automatically round up purchases and invest the spare change. (Hint: Compare your options and any associated fees for each app.)

Be Mindful of Small Purchases
It can be much easier to be aware of making a large purchase (physically large, financially large, or both). Take a physically large purchase, for instance: it’s difficult to go into a store and come out with a washing machine and not have any memory of it. And for large financial purchases like a laptop or television, some thought usually goes into it – up to and including how it’s going to get paid for. But small, everyday purchases can add up right under your nose. Ever gone into a big box store to grab a couple of items then left having spent over $100 on those items… plus some throw pillows and a couple of lamps you just had to snag? What about that pricey cup of artisan coffee? Odds are pretty good that the coffee shop has some delicious pastries, too, which may fuel that “And your total is…” fire. $100 here, $8.50 there, another $1.75 shelled out for a bottle of water – the small expenses can add up quickly and dip right into the money that could go toward your financial strategy.

Paying with plastic has a tendency to make the tiny expenses forgettable… until you get that credit card bill. One easy way to cut down on the mindless purchases is to pay in cash or with a debit card. The total owed automatically leaves your wallet or you account, perhaps making the dwindling amount you have to set aside for your financial future a little more tangible.

Do What Wealthy People Do
CNBC uncovered several habits and traits that are common among wealthy individuals. Surprisingly, it wasn’t all hard work. They found that wealthy people tend to read – a lot – and continue learning through reading. Your schedule may not allow for as much reading time as the average billionaire – maybe just 30 minutes a day is a good short-term goal – but getting in more reading can help you improve in any area of life!

Another thing wealthy people do? Wake up early. This may help you find that extra 30 minutes for reading. You’ll get more done in general if you get up a little earlier. A 5-year study of self-made millionaires revealed that nearly 50% of this industrious group woke up at least 3 hours before their work day started.

Making these healthy financial habits a part of your regular routine might take some time and effort, but hang in there. Often, success is about the mindset we choose to have. If you stay the course and learn from those who’ve been where you are, you can experience the difference that good habits can make as you keep moving toward financial independence!

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Tips on Managing Money for Couples

Tips on Managing Money for Couples

Couplehood can be a wonderful blessing, but – as you may know – it can have its challenges, too.

In fact, money matters are the leading cause of arguments in modern relationships.* The age-old adage that love trumps wealth may be true, but if money is tight or if a couple isn’t meeting their financial goals, there could be some unpleasant conversations (er, arguments) on the bumpy road to bliss with your partner or spouse.

These tips may help make the road to happiness a little easier.

1. Set a goal for debt-free living.
Certain types of debt can be difficult to avoid, such as mortgages or car payments, but other types of debt, like credit cards in particular, can grow like the proverbial snowball rolling down a hill. Credit card debt often comes about because of overspending or because insufficient savings forced the use of credit for an unexpected situation. Either way, you’ll have to get to the root of the cause or the snowball might get bigger. Starting an emergency fund or reigning in unnecessary spending – or both – can help get credit card balances under control so you can get them paid off.

2. Talk about money matters.
Having a conversation with your partner about money is probably not at the top of your list of fun-things-I-look-forward-to. This might cause many couples to put it off until the “right time”. If something is less than ideal in the way your finances are structured, not talking about it won’t make the problem go away. Instead, frustrations over money can fester, possibly turning a small issue into a larger problem. Discussing your thoughts and concerns about money with your partner regularly (and respectfully) is key to reaching an understanding of each other’s goals and priorities, and then melding them together for your goals as a couple.

3. Consider separate accounts with one joint account.
As a couple, most of your financial obligations will be faced together, including housing costs, monthly utilities and food expenses, and often auto expenses. In most households, these items ideally should be paid out of a joint account. But let’s face it, it’s no fun to have to ask permission or worry about what your partner thinks every time you buy a specialty coffee or want that new pair of shoes you’ve been eyeing. In addition to your main joint account, having separate accounts for each of you may help you maintain some independence and autonomy in regard to personal spending.

With these tips in mind, here’s to a little less stress so you can put your attention on other “couplehood” concerns… Like where you two are heading for dinner tonight – the usual hangout (which is always good), or that brand new place that just opened downtown? (Hint: This is a little bit of a trick question. The answer is – whichever place fits into the budget that you two have already decided on, together!)

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Savings Rates Need Some Serious Saving

Savings Rates Need Some Serious Saving
May 8, 2019

Ever hear the old story of the 7 years of plenty followed by 7 years of famine?

In the years when there was an abundance of crops, it was wise to store up as much as possible in preparation for the years of famine. However, if instead of saving you ate it all up during the 7 years of abundance, the result would be starvation for you and your family during the 7 lean years. This might be an extreme example in our modern, First World society, but are you “eating it all up” now and not storing enough away for your retirement?

The definition of retirement we’ll be using is: “An indefinite period in which one is no longer actively producing income but rather relies on income generated from pensions and/or personal savings.”

According to this definition, the “years of plenty” would be the years that you are still working and generating income. While you still have regular income, you can set aside a portion of it to save for retirement. This amount is called the “Personal Savings Rate.”

In 2017, the personal savings rate for Americans was approximately 2.4% annually. If you compare that with the average during the 1970’s of a 12.9% annual savings rate, you’ll see it has decreased significantly. This should set off some alarms concerning the impact on your retirement savings.

Suppose you want to retire at 65. Looking at the 10-year window from age 65 to 75, even if you’re planning to live on only half of the income that you were making prior to retirement, you would need to save up 5 years worth of income to last for the full 10 years – not to mention what you’d need after that. But if you’re currently saving only 2.5% of your income per year, it would take 200 years to save up 5 years of income replacement!

So unless someone discovers the elixir of everlasting life, we’re all going to need to do some serious “saving” of the personal savings rate.

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Building your budget

Building your budget
April 1, 2019

The number of Americans who don’t have a budget is alarmingly high.

One poll puts the number at 34%.[i] That equates to over 100 million Americans who have no budget.[ii] Yikes!

You don’t have to be a statistic. Here are some quick tips to get you started on your own budget so you can help safeguard your financial future.

Know Your Balance Sheet
Companies maintain and review their “balance sheets” regularly. Balance sheets show assets, liabilities, and equity. Business owners probably wouldn’t be able run their companies successfully for very long without knowing this information and tracking it over time.

You also have a balance sheet, whether you realize it or not. Assets are the things you have, like a car, house, or cash. Liabilities are your debts, like auto loans or outstanding bills you need to pay. Equity is how much of your assets are technically really yours. For example, if you live in a $100,000 house but carry $35,000 on the mortgage, your equity is 65% of the house, or $65,000. 65% of the house is yours and 35% is still owned by the bank.

Pro tip: Why is this important to know? If you’re making a decision to move to a new house, you need to know how much money will be left over from the sale for the new place. Make sure to speak with a representative of your mortgage company and your realtor to get an idea of how much you might have to put towards the new house from the sale of the old one.

Break Everything Down
To become efficient at managing your cash flow, start by breaking your spending down into categories. The level of granularity and detail you want to track is up to you. (Note: If you’re just starting out budgeting, don’t get too caught up in the details. For example, for the “Food” category of your budget, you might want to only concern yourself with your total expense for food, not how much you’re spending on macaroni and cheese vs. spaghetti.)

If you typically spend $400 a month on food, that’s important to know. As you get more comfortable with budgeting and watching your dollars, it’s even better to know that half of that $400 is being spent at coffee shops and restaurants. This information may help you eliminate unnecessary expenditures in the next step.

What you spend your money on is ultimately your decision, but lacking knowledge about where it’s spent may lead to murky expectations. Sure, it’s just $10 at the sandwich shop today, but if you spend that 5 days a week on the regular, that expenditure may fade into background noise. You might not realize all those hoagies are the equivalent of your health insurance premium. Try this: Instead of spending $10 on your regular meal, ask yourself if you can find an acceptable alternative for less by switching restaurants.

Once you have a good idea of what you’re spending each month, you’ll need to know exactly how much you make (after taxes) to set realistic goals. This would be your net income, not gross income, since you will pay taxes.

Set Realistic Goals and Readjust
Now that you know what your balance sheet looks like and what your cash flow situation is, you can set realistic goals with your budget. Rank your expenses in order of necessity. At the top of the list would be essential expenses – like rent, utilities, food, and transit. You might not have much control over the rent or your car payment right now, but consider preparing food at home to help save money.

Look for ways you can cut back on utilities, like turning the temperature down a few degrees in the winter or up a few degrees in the summer. You may be able to save on electricity if you run appliances at night or in the morning, rather than later in the afternoon when usage tends to be the highest.[iii]

After the essentials would come items like clothes, office supplies, gifts, entertainment, vacation, etc. Rank these in order of importance to you. Consider shopping for clothes at a consignment shop, or checking out a dollar store for bargains on school or office supplies.

Ideally, at the end of the month you should be coming out with money leftover that can be put into an emergency fund (your goal here is at least $1,000), and then you can start adding money to your savings.

If you find your budget is too restrictive in one area, you can allocate more to it. (But you’ll need to reduce the money flowing in to other areas in the process to keep your bottom line the same.) Ranking expenses will help you determine where you can siphon off money.

Commit To It
Now that you have a realistic budget that contains your essentials, your non-essentials, and your savings goals, stick to it! Building a budget is a process. It may take some time to get the hang of it, but you’ll thank yourself in the long run.

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[i] https://nypost.com/2018/01/18/americans-are-clueless-when-it-comes-to-personal-finance/
[ii] http://www.worldometers.info/world-population/us-population/
[iii] https://news.energysage.com/whats-the-cheapest-time-of-day-to-use-electricity-with-time-of-use-rates/

112355

4 Easy tips to build your emergency fund

4 Easy tips to build your emergency fund
March 25, 2019

Nearly one quarter of Americans have no emergency savings, according to a recent report.[i] Without an emergency fund, you can imagine that an unexpected expense could send your budget into a tailspin.

With credit card debt at an all-time high and no meaningful savings for many Americans, it’s important to learn how to start and grow your emergency savings.[ii] You CAN do this!

1. Where to keep your emergency fund
Keeping money in the cookie jar might not be the best plan. Mattresses don’t really work so well either. But you also don’t want your emergency fund “co-mingled” with the money in your normal checking or savings account. The goal is to keep your emergency fund separate, clearly defined, and easily accessible. Setting up a designated, high-yield savings account is a good option that can provide quick access to your money while keeping it separate from your main bank accounts.[iii]

2. Set a monthly goal for savings
Set a monthly goal for your emergency fund savings, but also make sure you keep your savings goal realistic. If you choose an overly ambitious goal, you may be less likely to reach that goal consistently, which might make the process of building your emergency fund a frustrating experience. (Your emergency fund is supposed to help reduce stress, not increase it!) It’s okay to start by putting aside a small amount until you have a better understanding of how much you can really “afford” to save each month. Also, once you have your high-yield savings account set up, you can automatically transfer funds to your savings account every time you get paid. One less thing to worry about!

3. Spare change can add up quickly
The convenience of debit and credit cards means that we use less cash these days – but if and when you do pay with cash, take the change and put it aside. When you have enough change to be meaningful, maybe $20 to $30, deposit that into your emergency fund. If most of your transactions are digital, mobile apps like Qapital let you set rules to automate your savings.[iv]

4. Get to know your budget
Making and keeping a budget may not always be the most enjoyable pastime. But once you get it set up and stick to it for a few months, you’ll get some insight into where your money is going, and how better to keep a handle on it! Hopefully that will motivate you to keep going, and keep working towards your larger goals. When you first get started, dig out your bank statements and write down recurring expenses, or types of expenses that occur frequently. Odds are pretty good that you’ll find some expenses that aren’t strictly necessary. Look for ways to moderate your spending on frills without taking all the fun out of life. By moderating your expenses and eliminating the truly wasteful indulgences, you’ll probably find money to spare each month and you’ll be well on your way to building your emergency fund.

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[i] https://money.cnn.com/2018/06/20/pf/no-emergency-savings/index.html
[ii] https://www.experian.com/blogs/ask-experian/credit-card-debt-hits-an-all-time-high-how-much-do-you-owe/
[iii] https://www.nerdwallet.com/blog/banking/life-build-emergency-fund/
[iv] https://www.qapital.com/

TAN098393-1018

How to save for a big purchase

How to save for a big purchase
March 13, 2019

It’s no secret that life is full of surprises. Surprises that can cost money.

Sometimes, a lot of money. They have the potential to throw a monkey wrench into your savings strategy, especially if you have to resort to using credit to get through an emergency. In many households, a budget covers everyday spending, including clothes, eating out, groceries, utilities, electronics, online games, and a myriad of odds and ends we need.

Sometimes, though, there may be something on the horizon that you want to purchase (like that all-inclusive trip to Cancun for your second honeymoon), or something you may need to purchase (like that 10-years-overdue bathroom remodel).

How do you get there if you have a budget for the everyday things you need, you’re setting aside money in your emergency fund, and you’re saving for retirement?

Make a goal
The way to get there is to make a plan. Let’s say you’ve got a teenager who’s going to be driving soon. Maybe you’d like to purchase a new (to him) car for his 16th birthday. You’ve done the math and decided you can put $3,000 towards the best vehicle you can find for the price (at least it will get him to his job and around town, right?). You have 1 year to save but the planning starts now.

There are 52 weeks in a year, which makes the math simple. As an estimate, you’ll need to put aside about $60 per week. (The actual number is $57.69 – $3,000 divided by 52). If you get paid weekly, put this amount aside before you buy that $6 latte or spend the $10 for extra lives in that new phone game. The last thing you want to do is create debt with small things piling up, while you’re trying to save for something bigger.

Make your savings goal realistic
You might surprise yourself by how much you can save when you have a goal in mind. Saving isn’t a magic trick, however, it’s based on discipline and math. There may be goals that seem out of reach – at least in the short-term – so you may have to adjust your goal. Let’s say you decide you want to spend a little more on the car, maybe $4,000, since your son has been working hard and making good grades. You’ve crunched the numbers but all you can really spare is the original $60 per week. You’d need to find only another $17 per week to make the more expensive car happen. If you don’t want to add to your debt, you might need to put that purchase off unless you can find a way to raise more money, like having a garage sale or picking up some overtime hours.

Hide the money from yourself
It might sound silly but it works. Money “saved” in your regular savings or checking account may be in harm’s way. Unless you’re extremely careful, it’s almost guaranteed to disappear – but not like what happens in a magic show, where the magician can always bring the volunteer back. Instead, find a safe place for your savings – a place where it can’t be spent “accidentally”, whether it’s a cookie jar or a special savings account you open specifically to fund your goal.

Pay yourself first
When you get paid, fund your savings account set up for your goal purchase first. After you’ve put this money aside, go ahead and pay some bills and buy yourself that latte if you really want to, although you may have to get by with a small rather than an extra large.

Saving up instead of piling on more credit card debt may be a much less costly way (by avoiding credit card interest) to enjoy the things you want, even if it means you’ll have to wait a bit.

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TAN108360-1018

How to live without credit cards

How to live without credit cards
February 13, 2019

Our parents, uncles, aunts, and maybe even our grandparents tried to warn us about credit cards.

In some cases, the warnings might have been heeded but in other cases, we may have learned the cost of credit the hard way.

Using credit isn’t necessarily a bad thing, but it may be a costly thing – and sometimes even a risky thing. The interest from credit card balances can be like a ball and chain that might never seem to go away. And your financial strategy for the future may seem like a distant horizon that’s always out of reach.

It is possible to live without credit cards if you choose to do so, but it can take discipline if you’ve developed the credit habit.

It’s budgeting time
Here’s some tough love. If you don’t have one already, you should hunker down and create a budget. In the beginning it doesn’t have to be complicated. First just try to determine how much you’re spending on food, utilities, transportation, and other essentials. Next, consider what you’re spending on the non-essentials – be honest with yourself!

In making a budget, you should become acutely aware of your spending habits and you’ll give yourself a chance to think about what your priorities really are. Is it really more important to spend $5-6 per day on coffee at the corner shop, or would you rather put that money towards some new clothes?

Try to set up a budget that has as strict allowances as you can handle for non-essential purchases until you can get your existing balances under control. Always keep in mind that an item you bought with credit “because it was on sale” might not end up being such a great deal if you have to pay interest on it for months (or even years).

Hide the plastic
Part of the reason we use credit cards is because they are right there in our wallets or automatically stored on our favorite shopping websites, making them easy to use. (That’s the point, right?) Fortunately, this is also easy to help fix. Put your credit cards away in a safe place at home and save them for a real emergency. Don’t save them on websites you use.

Don’t worry about actually canceling them or cutting them up. Unless there’s an annual fee for owning the card, canceling the card might not help you financially or help boost your credit score.[i]

Pay down your credit card debt
When you’re working on your budget, decide how much extra money you can afford to pay toward your credit card balances. If you just pay the minimum payment, even small balances may not get paid off for years. Try to prioritize extra payments to help the balances go down and eventually get paid off.

Save for things you want to purchase
Make some room in your budget for some of the purchases you used to make with a credit card. If an item you’re eyeing costs $100, ask yourself if you can save $50 per month and purchase it in two months rather than immediately. Also, consider using the 30-day rule. If you see something you want – or even something you think you’ll need – wait 30 days. If the 30 days go by and you still need or want it, make sure it makes sense within your budget.

Save one card for occasional use
Having a solid credit history is important, so once your credit balances are under control, you may want to use one card in a disciplined way within your budget. In this case, you would just use the card for routine expenses that you are able to pay off in full at the end of the month.

Living without credit cards completely, or at least for the most part, is possible. Sticking to a budget, paying down debt, and having a solid savings strategy for the future will help make your discipline worth it!

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[i] https://www.myfico.com/credit-education/improve-your-credit-score

115279

Save the money or pay off the debt?

Save the money or pay off the debt?
February 11, 2019

If you come into some extra money – a year-end bonus at work, an inheritance from your aunt, or you finally sold your rare coin collection for a tidy sum – you might not be quite sure what to do with the extra cash.

On one hand you may have some debt you’d like to knock out, or you might feel like you should divert the money into your emergency savings or retirement fund. They’re both solid choices, but which is better? That depends largely on your interest rates.

High Interest Rate
Take a look at your debt and see what your highest interest rate(s) are. If you’re leaning towards saving the bonus you’ve received, keep in mind that high borrowing costs may rapidly erode any savings benefits, and it might even negate those benefits entirely if you’re forced to dip into your savings in the future to pay off high interest. The higher the interest rate, the more important it is to pay off that debt earlier – otherwise you’re simply throwing money at the creditor.

Low Interest Rate
On the other hand, sometimes interest rates are low enough to warrant building up an emergency savings fund instead of paying down existing debt. An example is if you have a long-term, fixed-rate loan, such as a mortgage. The idea is that money borrowed for emergencies, rather than non-emergencies, will be expensive, because emergency borrowing may have no collateral and probably very high interest rates (like payday loans or credit cards). So it might be better to divert your new-found funds to a savings account, even if you aren’t reducing your interest burden, because the alternative during an emergency might mean paying 20%+ rather than 0% on your own money (or 3-5% if you consider the interest you pay on the current loan).

Raw Dollar Amounts
Relatively large loans might have low interest rates, but the actual total interest amount you’ll pay over time might be quite a sum. In that case, it might be better to gradually divert some of your bonus money to an emergency account while simultaneously starting to pay down debt to reduce your interest. A good rule of thumb is that if debt repayments comprise a big percentage of your income, pay down the debt, even if the interest rate is low.

The Best for You
While it’s always important to reduce debt as fast as possible to help work toward financial goals, it’s also important to have some money set aside for use in emergencies.

If you do receive an unexpected windfall, it will be worth it to take a little time to think about a strategy for how it can best be used for the maximum long term benefit for you and your family.

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113893

New Year, New (Financial) You!

New Year, New (Financial) You!
January 16, 2019

The new year is best known for resolutions.

The trouble is that many new year’s resolutions don’t survive past the first month or so. Why is that? You might suspect it’s because we set unrealistic goals or lack the proper motivation.

If you’ve got some financial resolutions you want to stick to, the key is to set realistic goals and have the proper discipline to hang in there, especially when the going gets tough.

Consider the following tips. Everyone can improve their finances and – as a bonus – you won’t end up with a basement full of barely-used exercise equipment that’s standing in for clothes drying racks.

Put away your credit cards
Do you have a fireproof box at home? (You probably should to store your extra-important documents, like the title to your car or your will.) This might be the perfect place for your credit cards. Many families struggle with credit card debt and in many cases, they aren’t even sure where the money actually went.

Credit can be a crutch that only ends up helping us postpone healthy financial habits. The frequent result is years of accumulating interest payments and growing balances that may prevent you from maximizing your savings. (Debt also may lead to household friction.) Lock the credit cards in the strongbox and make a pact with the rest of your household to use a credit card just for when you have a real emergency – and this would only occur if you’ve depleted your normal emergency fund.

Get your own life insurance policy
It’s great to see families insured by at least an employer-sponsored policy, but how insured are they really? Employer plans usually don’t follow you to the next job, and the benefit for your family is typically limited to a fixed amount, such as $50,000, or in some cases up to one to two times your salary.[i] That’s probably not enough coverage for your family – and it might disappear at any time if you were to change jobs. Get a quote for your own life insurance policy that better meets your needs and that you can control.

Make a budget
Many of us think we know where our money goes, but making a budget will illuminate your spending in vivid, full-color detail. You might startle your family with loud exclamations as you realize how much you actually spend on gourmet coffee stops, eating out, clothes, golf accessories, etc. It can add up quickly. A budget may not only help you cut spending, but it may also help you build your emergency savings (yes, this should be a budget item) and start piling away more money for retirement (another necessary budget item).

Know your number
Nope, not the winning lottery number. In this case, your number is the one that can help you reach a financial goal. Saving for retirement without knowing how much you’ll need or how much you can put away each month is like running a race blindfolded. You need to see the course and the finish line ahead. That’s your number. Whether saving, paying down debt, or accomplishing any other financial goal, you need to identify the number that will define your short-term targets and help you reach your ultimate destination.

If you need help with your goals or aren’t sure how to find the number you need to know to prepare for your future, reach out. I have some ideas we can discuss.

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[i] https://www.policygenius.com/life-insurance/group-life-insurance/

113384

Budgeting 101: Where should I start?

Budgeting 101: Where should I start?
January 14, 2019

It’s the new year so there are bound to be some new resolutions you want to stick to.

If one of them is improving your budgeting skills – or maybe just creating a budget in the first place – read on for some guidelines that may help reduce some of your expenses (including what you might call the essentials).

Start with debt and interest rates
If you have any loans in your name, rest assured there will be interest associated with those loans, unless you’ve got a really nice aunt who leant you some money interest-free. From the borrower’s perspective, interest is simply the expense of receiving money from a creditor which you’re required to pay back over time. No one wants to pay higher interest than necessary.

In contrast to other expenses, like rent, food, or entertainment, interest itself produces absolutely no value for the borrower. The borrowed money may produce value, but the interest itself does not. For that reason, you’re going to want to pay as little interest on your loans as possible.

One strategy is to transfer credit card balances to lower APR credit cards – just beware of transfer fees. Read the fine print to make sure the new card actually carries a lower interest rate, as sometimes the rate after the introductory period may go up. If you can refinance any of your loans, like student, auto, or home, consider it. For example, there’s no reason to pay 5% if you can pay 4%. (Again, make sure you understand the terms and any fees involved.)

Slim down the essentials
This is the time when all items in your budget are going to come under consideration. Everything is on the table. For transportation, any reduction in cost you can make is going to depend on your location. If you live in a high-density urban area and you normally drive yourself or use public transit to get to work or other destinations, ask yourself if you can walk or cycle instead. These options often provide health benefits as well. If you live in a rural area, you’re probably going to drive to get to where you want to go, but think about using an electric bicycle or motorcycle as an option to help save on fuel.

The key? Look at the essential sections of your budget and mentally run through how you obtain those essentials, like driving to the nearest grocery store or who your landlord is. Then brainstorm alternatives for paying for these items or services – anything is fair game! (For example, would your landlord reduce your rent if you help out with yard maintenance?) Finally, do a little research and analysis to see if those alternatives are cheaper (and feasible).

Eliminate non-essentials
The next step is to look at each non-essential and determine its utility to you. If you barely think about the actual purchase, you might have simply developed the routine of purchasing that item or service (think: “monthly movie subscription service you never use anymore”). In that case, the hardest part might be combing through your credit card statement and nixing the services you never use. Another example of routine, autopilot spending might be the soda you buy with your lunch. Do you really need it? Maybe not. Switching to tea or coffee that you can brew at home may be cheaper. And water is (usually) free.

Repeat this process with every non-essential. Are you really using your 10GB/mo mobile internet plan? If not, look for a lower, more cost-effective GB plan. The key here is to try to distinguish between convenience and necessity.

Don’t discount the discount
There are discounts everywhere, from loyalty programs to manufacturers’ coupons to seasonal specials. If there is an essential that burns your budget, it may be worth checking to see if you’re eligible for a government program.[i]

Some credit cards offer rewards programs, but be very careful to pay off the full amount each month to avoid accruing interest, otherwise your rewards could be negated.

Keep the big picture in mind
Sometimes it can be hard to justify the time and effort that might be involved to save $2 per day. It’s just two dollars, right? But look at the accumulated savings. Saving $2 per day for a full year translates to $730. If you choose to brew that tea instead of buying the soda, maybe you can afford the 10GB plan instead of the 1GB plan.

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[i] https://www.usa.gov/benefits

112806

5 Things you can do with a bonus

5 Things you can do with a bonus
December 26, 2018

It’s your lucky day and you’re flush with cash.

Maybe you just got a bonus at work, or a tax refund, or won that scratch-off lottery ticket. Hold up. Don’t spend it all just yet. There are some great ways you can put that windfall to work for you before it disappears during a spontaneous shopping spree.

1. Pay off those credit cards. This may not seem like quite as much fun as that trip to Paris you were daydreaming about – but paying down debt is like finding money every single month. If you come into some unexpected cash, paying down those credit cards is like “giving yourself a bonus” in saved payments on interest.[i]

2. Save it. Experts recommend that you have enough savings to cover at least 3 to 6 months of expenses. In reality, nearly half of all households won’t make it more than a week without borrowing or selling something.[ii] This is the perfect opportunity to break away from the statistics and get prepared. Consider a high-yield checking account that allows easy access to your savings.

3. Put it in the college fund. If you have kids, this is a great time to contribute to the college fund or to start one if you haven’t already. Depending on whether your kids attend an in-state or out-of-state school, tuition can range from $10,000 per year to over $30,000 per year for a 4-year school. Books and boarding are extra on top of that. Look into a 529 plan that allows your college savings fund to grow tax-free.

4. Invest in yourself. This might be the perfect chance to finish off those last few credits for a degree or to earn that certification you’ve been wanting but couldn’t justify spending money to complete. If you choose carefully, the right degree or certification can open doors in your career, potentially enhancing your earning power and helping you break out of the holding pattern.

5. Take a vacation. Maybe it’s a trip to Europe or maybe it’s someplace else you’ve always wanted to go. If all the above are in good shape, go ahead and treat yourself. You deserve it!

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[i] https://www.forbes.com/sites/markavallone/2018/08/12/5-things-to-do-with-your-raise-or-bonus/#32cf94c01d95
[ii] https://www.usatoday.com/story/money/personalfinance/2017/10/06/why-half-of-americans-cant-come-up-with-400-in-an-emergency/106216294/

97851

Royal Wedding or Vegas? Keeping your wedding costs under control

Royal Wedding or Vegas? Keeping your wedding costs under control
December 19, 2018

The average cost of a wedding in the U.S. is over $33,000.[i]

That’s an expensive day by any standard!

That amount might be enough for a down payment on a first home or for a well-equipped, late-model minivan to shuttle around your 1.9 kids – assuming your family has an average number of children as a result of your newly wedded bliss.[ii]

If you’re having cold feet about shelling out that much cash for one day’s festivities – or even worse, if you fear you might have to go into debt to pay for it – here are a few ideas on how you can make your wedding day a special day to remember, and still save some money for other things (like that minivan).

Invite Close Friends and Family
Many soon-to-be newlyweds dream of a massive wedding with hundreds of people in attendance to honor their big day. But at some point during any large wedding, the bride or the groom – or maybe both – look around the well-dressed guests and ask themselves, “Who are all these people, anyway?”

You can cut the cost of your wedding dramatically by simply trimming the guest list to a more manageable size. Ask yourself, “Do I really need to invite that kid who used to live next door to our family when I was 6 years old?” Small weddings are a growing trend, with many couples choosing to limit the guest list to just close friends and immediate family. That doesn’t mean you need to have your wedding in the backyard while the neighbor’s dog howls during your vows – although you certainly can. It just means fewer people to provide food and drink for and perhaps a less palatial venue to rent.

Budget According to Priorities
Your wedding is special and you want everything to be perfect. You’ve dreamed of this day your entire life, right? However, by prioritizing your wish list, there’s a better chance to get exactly what you want for certain parts of your wedding, by choosing less expensive – but still acceptable – options for the things that may not matter to you so much. If it’s all about the reception party atmosphere for you, try putting more of your budget toward entertainment and decorations and less toward fancy food. Consider trading the seven-course gourmet dinner with full service for a selection of simpler, buffet-style dishes catered by your favorite restaurant.

Incorporate More Wallet-Friendly Wedding Ideas
A combination of small adjustments in your plan can add up to big savings, allowing you to have a memorable wedding day and still have enough money left over to enjoy your newfound bliss.

  • Consider a different day of the week. If you’re planning on getting married on a Saturday in June or September, be prepared to pay more for a venue than you would any other day of the week or time of the year. Saturday is the most expensive day to get married[iii], and June and September are both peak wedding season months.[iv] So if you can have your wedding on, say, a Friday in April or November, this has the potential to trim the cost of the venue.
  • Rent a vacation house – or even get married on a boat. The smaller space will prevent the guest list from growing out of control and the experience might be more memorable than at a larger, more typical location. Of course, both options necessitate holding the reception at the same location, saving money once more.
  • Watch the booze costs. There’s no need to have a full bar with every conceivable drink concoction and bow-tied bartenders that can perform tricks with the shakers. Odds are good that your guests will be just as happy with a smaller-yet-thoughtfully-chosen selection of beer and wine to choose from.
  • Be thrifty. If you really want to trim costs, you can get creative about certain traditional “must-haves,” ranging from skipping the flowers (chances are that nobody will even miss them) to purchasing a gently-used gown. (Yes, people actually do this.) Online outlets may provide beautiful gowns for a fraction of the price of a new gown.

There’s a happy medium between a “royal wedding” and drive-thru nuptials in Vegas. If you’re looking for a memorable day that won’t break the bank, consider some of the tips above to keep things classy, cool – and within your budget.

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[i] https://www.prnewswire.com/news-releases/couples-spend-an-average-of-33391-on-weddings-incorporating-cultural-religious-and-personalized-elements-according-to-the-knot-2017-real-weddings-study-300598597.html
[ii] https://www.statista.com/statistics/718084/average-number-of-own-children-per-family/
[iii] https://www.theknot.com/content/less-expensive-days-for-weddings
[iv] https://www.marthastewartweddings.com/631490/most-affordable-months-to-get-married

111939

Are you sure about this?

Are you sure about this?
December 10, 2018

Nearly every working adult dreams of a comfortable retirement, to finally be free to enjoy life.

If you’re approaching retirement age, it’s important to check on your numbers to be sure you’ve considered all the factors. If you’re younger, it might be difficult to know exactly how much to save. Think of it this way: strive to put away as much as you can.

What age do you want to retire?
Social Security can play a big role in retirement income, and the difference on a monthly basis between taking a benefit at age 62, 65, or waiting until age 70 to begin drawing benefits can be substantial.[i] If you choose to wait until 70 to take benefits, the total amount paid is comparable for all three options. However, from a cash-flow perspective, the bump in pay could be valuable when the monthly bills arrive in the mail.

How long will your money last?
One rule of thumb for knowing how much to take out of your retirement account each year is the “4% rule”.[ii] As its name suggests, you would withdraw 4% of your retirement savings each year. If you have a larger amount saved, your “income” from your retirement savings will be higher. The 4% rule is designed to prepare for 30 years of income after retirement. Of course, if your expenses are higher than your income, the money has to come from somewhere, potentially drawing your savings down faster – and that’s where many people get into trouble. Save as much as you can now.

Are you prepared for your health care needs?
The cost of health care for a couple retiring at age 65 varies, with estimates ranging between $197,000 and $265,000.[iii] This is the expense that often catches retirees by surprise. It’s relatively easy to budget for housing, food, utilities, and other essentials but medical care costs can vary widely and your actual expenses can be much higher or lower than average estimates.

By building a strategy for income from multiple sources, you’ll be much better prepared for retirement. Taking the time to prepare now is essential. Once you leave the workforce there might be less room for mistakes and fewer ways to earn additional income. When it’s time to retire, you’ll find that there’s no such thing as too much when it comes to retirement savings.

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[i] https://www.fool.com/retirement/2018/01/27/whats-the-maximum-social-security-at-age-62-65-or.aspx
[ii] http://www.fourpercentrule.com/
[iii] https://vanguardblog.com/2018/09/19/whos-afraid-of-the-big-bad-health-care-number/

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