Twila Van Leer

Retirement Planning For Women

January 18, 2015 By Twila Van Leer

Plan carefully for your retirement. — Women, Money & Prosperity: A Sister’s Perspective On How To Retire Well, Written By Donna Phelan

Concerns about having enough savings to finance a worry-free retirement plague many women. According to Donna Phelan, 62, who has guided many women through the process as she has worked with several large Wall Street investment firms. She has even written a book on the topic, “Women, Money & Prosperity: A Sister’s Perspective On How To Retire Well.”

Women tend to earn less than their male counterparts. They save less toward retirement. Many of them take a break from work to rear children and they spend more time taking care of the elderly. All these factors have an effect, Phelan says.

Her response has an acronym, Stackable Income Streams to Empower Retirement Security – SISTERS. The objective is to “stack” as many sources of retirement income as possible. For instance, if a woman has five sources of income, each paying just $12,000 per year, the total for a year is $60,000. Possible sources for this income are Social Security, investments and savings, retirement plans such as 401ks or IRAs, part-time work, inheritance, annuities, home-based or small business, rental property, life insurance and home equity.

She suggests that women get together and pool their information. In some cases, there will be opportunity for collaboration that would improve the retirement outlook for more than one of the parties.

Her tips for building a healthy retirement:

Research your own circumstances. Consider how much in resources you will reasonably have, what kind of lifestyle you would like, whether there are potential sources of income you have overlooked.

Delay retirement as long as reasonably possible. Talk with a professional finance planner and look at alternatives. It may well be necessary to continue generating income past usual retirement age. Working part-time actually can be a good alternative. It keeps you active and healthy. It gives you more time to prepare mentally for retirement.

Pool assets with like-minded women to create a small business. Varied work experiences, say marketing, artistic talent and accounting, might add up to a viable business. Make it home-based if that seems reasonable. Crafts and hobbies can be made into money-making undertakings.

Consider renting out rooms if your home has become larger than you need. Get a roommate or downsize to a less expensive home. Phelan points to the experience of a woman who rented rooms to local art students, using the money to invest in ways that generated more income.

Become financially literate. A professional financial planner may seem a heady step for many women, but the advice can be well worth moving a little out of your comfort zone.

Understand Social Security issues. The longer you delay retirement, the more money you will receive each month. Each year you wait increases your benefit by 8 percent, up to age 70.

Pay off debt as quickly as possible, particularly credit card debt, and create a realistic budget that avoids any further debt.

In a word, become responsible for your own retirement planning. The sooner you begin, the fewer problems you are likely to encounter when the time comes.

Not Too Late To Make Personal Finance Resolutions

January 17, 2015 By Twila Van Leer

Paying bills online is the easiest way to pay your bills on time.

By now, most of the resolutions made on Jan. 1 are in the wastepaper basket. Experience shows that most of them don’t last into the second week of the new year. But if you’re willing to take a second shot at it, here are some ways you can improve your financial standing in 2015:

Analyze how you pay your bills. Many, if not most, utilities, credit card issuers and merchants, give you the option of paying online. If you decide that is a good approach, give some thought to whether you will direct your payments to the creditor’s online payment center, or utilize your bank’s bill pay program. Either will allow you to make payments directly from your checking account and in some instances, automatic withdrawal is available.

These payment options have benefits. They save you having to keep track of payment due dates. The bank’s online bill pay keeps all your payment data in one site. It can save you time for more productive things.

If you prefer paper payments, get a system for storing all bills and receipts correlated to your banking. Set a time to review each month and balance your checking account. Having all your bank accounts – checking, savings and primary credit card all at one institution streamlines accounting.

Track spending. Knowing how your money comes in and goes out is critical to good management. Monitor accounts weekly. Watch for unexpected fees or unauthorized activities. Be sure to note ATM withdrawals as you go. Keep a spending log, either on paper or electronically, documenting every transaction and purchase. Trim if you need to.

Build a budget. Knowing up front where your money needs to go lets you make more confidant decisions about spending and investing. It is the foundation for your personal finances, a plan in concrete that keeps bills paid and allows for working toward the “rewards” of your labor – vacations and travel, further education and retirement.

A session or two with a qualified financial planner may be useful, especially as you embark on this resolution to make you money work for you. It can be done. Just do it.

The 31 Day Spending Diet

January 16, 2015 By Twila Van Leer

Personal finance planning by eliminating excess spending. — Can you go on a 31 day money diet and cut out all spending on unnecessary goods?

Haven’t gotten serious yet about a resolution for the New Year? Here’s a thought: Instead of resolving to lose pounds, resolve to lose debt and live more frugally.

Eliza Cross, a blogger at Happy Simple Living can offer some advice. She has started each of the past six years on a fresh-start basis. To begin with, she spends no money beyond the necessary monthly bills, for 31 days. That means no restaurants, no movies, no fast-food purchases, no impulse items. Nada.

She gets excited when she realizes how much money she saves by bypassing everything except the bare essentials. The break from spending also inspires her to be ore cognizant of what she spends and what she spends it for. Then she maintains the attitude as the year moves along.

Her tips:

Look for free activities in your area. Local museums and art galleries often have special events. Libraries have moved way beyond books and now have DVDs and other media, all for free.

Plan some home cooking. You’ll find that in-season foods are cheaper. When you cook, make a double batch and freeze half. A slow cooker can tenderize a tougher, cheaper cut of meat if you let it simmer all day.

Treat yourself now and again. The tough part of any diet is that awful feeling that you’re starving. Don’t hoard the fancy lotions, soaps and scented candles that tend to multiply at Christmas. Wear your nicest nightie and whip up the baked goody mix that is languishing in your cupboard. Splurging in this way once in awhile can take the die out of diet. Just don’t overdo.

Make your friends part of the challenge. Tell them what you are doing and most likely they’ll go along cheerfully when you invite them over for potluck rather than heading to the expensive restaurant. Create some new traditions. If a friend has a birthday during your January spending fast, for instance, recycle a book you really enjoyed and create an opportunity to share your thoughts after she has read it. Make her lunch or share a trip to one of the free events you have identified.

There’s nothing that says January must be the month for your adventure in no-spending. It just happens to be traditionally the month for new resolutions. If another month works better, feel free to change your target period. The whole idea is simply to end mindless spending and be more wise about what you do with your money. Then you can start deciding how to make the money you saved work for you toward a more stable personal financial plan.

Gas Prices To Remain Low In 2015

January 14, 2015 By Twila Van Leer

Major airline companies are saving billions of dollars in monthly fuel bills.

For the last three months in 2014, average gas prices dropped almost daily in the United States and the Energy Department predicts that American drivers will continue to see prices in the same range as the new year begins.

The department is forecasting a price of $2.60 per gallon. That would be 23 percent lower than the predicted average for 2014, the lowest since 2009. What that means to consumers is more money to spend for other things and a boost to the overall economy as the costs of transportation and shipping goods drop.

The average per-gallon cost of $2.66 registered in the last week of December is 61 cents less than a year ago, the agency reported.

At the root of the rapid decline is a drop in crude oil supplies worldwide. Global prices were down to $66 per barrel after hitting a high of $115 per barrel last June. Rising production in the U.S. contributed to high supplies around the globe. At the same time, slow economic growth in Europe and Asia has lessened demand.

Oil companies are trimming production plans for the coming year. U.S. crude oil production is expected to rise by 300,000 per day to a total of 9.3 million barrels. Before the precipitous drop in prices, the EIA had forecast a 400,000-barrel per day increase in production.

Home heating costs will fall this winter, according to the agency’s predictions. Weather forecasts do not predict a long period of low temperatures and prices for propane and heating oils are much lower.

The average savings to U.S. households for 2014 was $115. If prices stay low, as expected, the 2015 aggregate savings could be $75 billion. Gas prices are closely associated with consumer confidence, which is at its highest since the recession. The reduction in oil and gas prices contributed to better-than-expected holiday spending, according to Goldman Sachs.

South Carolina has had the cheapest gas for the past three years, at an average $3.10 per gallon. Missouri, Mississippi, Tennessee and Arkansas were next in line. Hawaii had the highest prices at $4.16 per gallon, followed by Alaska, California, Connecticut and New York.

The 2015 prices are expected to bottom out after the midpoint of the year and begin rising again.

Family Budgeting For The New Year

January 12, 2015 By Twila Van Leer

Involve the whole family in planning your budget.

Making resolutions as you head into a new year is simple. But a good hard look at the year disappearing over the horizon is just as important. If better financial management is your objective, it becomes the basis for what to do next.

In fact, your family may be well served to think beyond 2015 as you go through finances with a fine-toothed comb. Involve everyone in the group by making specific assignments. Tweak past plans to meet new realities related to aging children, changes in employment and all the other eventualities that go with real life.

Start with a review of assets and liabilities. Savings, investments and loan status all will have changed and need to be considered, as well as income. There must be room for possible challenges to your financial standing. If you find that debt leaves you with a negative net worth, make that the focus for the near future. Plan how you can attack debt through increased payments or finding more sources of income to beat it down. Don’t be one paycheck from poverty.

Involve all household members in finding way to economize, while focusing on the “musts” such as housing, food, transportation, health, utilities, tuition and clothing and prepare to resist temptation to stray off into unnecessary expenditures.

Don’t plan how you can pay tuition before the student is ready for classes. Prioritize spending to meet the costs that can’t be deferred. Keep everyone in the loop so they won’t be surprised when austerity comes to visit. Learning about trade-offs early is good training for life.

If you have problems sticking to a savings plan, make it automatic at the bank. If you don’t have the cash in hand, it is easier to part with. Make the importance of savings a household commitment.

Plan meals in advance and shop in bulk where possible. Monitor waste in the kitchen. Make conservation of electricity, fuel and water regular habits by creating awareness among family members.

Investing has to be an action item. There is no other way to grow money. It takes study and time and resources. Make ongoing financial education part of the plan. Use your networks to learn more and identify mentors who can help you put your money to work. Get an “accountability” partner, a family member, if feasible, to encourage follow-ups and reviews of your action plan.

Make your resolutions based on practical experience and you’ll have more chance of actually keeping them.