Budgets

Save Money For Important Things

July 2, 2016 By Twila Van Leer

Save Money

Some say that saving money is difficult. You make personal finance choices every day, most likely without any conscious thought about the end result. Whatever you choose, it is going to use more of your money or less. If you begin to make conscious choices, you can take the steps that will put more money in your pocket.

The truth is that having more money means spending less.

Setting Money Goals

If you are determined to add to the asset side of your ledger, it is wise to choose a specific goal that requires more money. What you really want can be the motivator to put your dreams into action. And you’re the only one who knows the purpose that will be worth the effort.

Think of the possibilities: Retirement needs, starting a business, buying a home or car, making improvements to the home you have now, making provision for future medical needs, planning a special event for your family, building your emergency fund. Your money, your choice.

When you have narrowed the list to one specific goal, it’s time to begin.

Analyze Your Financial Situation

Begin at the beginning. Analyze your current income/outgo patterns. Sometimes as life goes along, it is easy to lose track of specifics. Look at last month. Were all your basic bills paid in full? Look at your bank statement closely. You can’t start setting money aside for your goal if you are already losing ground.

Even families with healthy financial practices can find themselves in debt and needing to save money. Not paying off credit card bills monthly will build a negative balance faster than you would suppose. Habitually spending more than you earn is fatal. Debt is not neutral. It costs. Sometimes it costs so much that you sacrifice your ability to work toward your chosen objective.

Create A Budget

Set up a budget that will take care of your main living expenses. If you are serious and there seems to be no wiggle room in your budget, consider how you can cut corners. Find a cheaper place to live, if necessary. Brown bag instead of eating out for lunch and eat at home for breakfast and dinner. Plan less expensive entertainment and more cheap outings. Avoid payday loans and tax refund anticipation loans. Live on what you have without mortgaging your future.

Start Saving Money Now

With a goal in mind and your finances under control, you’re ready for the next step.

The Credit Elite Have Savvy Habits

June 23, 2016 By Twila Van Leer

Payment history most important factor used to determine overall score.

Ever yearned to be part of the “Credit Elite,” those whose credit ratings are up the 800-850 range as determined by the rating agencies? That kind of credit almost assures that you will be approved for loans and likely enjoy lower interest rates.

Those in the 800-plus range know that it doesn’t happen by chance. They make particular credit habits part of their regular personal finance strategies. Here are some of their suggestions:

Pay On Time

Without exception, pay on time. The payment history is the single most important factor that the agencies use to determine your overall score, being some 35 percent of the total. If you miss a payment or make one late, it has a negative effect.

Keep Balances Low Or Paid Off

Keep a rein on credit card balances. The size of the balance relative to the card limit is a factor. The best credit is generated by using less than 10 percent of the allowable limit.

Low Number of Credit Cards

Limit your credit accounts. Applying often for new credit can affect your bottom line. That activity represents 10 percent of the credit agency’s total. If you make frequent inquiries about new cards, for instance, trying to find the best mix of perks, it could have a negative effect. Try to get the right mix into place, then stand pat. A mix of debt, including credit cards, auto loans, mortgages, student loans, etc., all deftly managed, will impress the rating companies.

Don’t Spend More Than You Make

Live within your means. Overextending yourself financially will come home to roost. Don’t use credit to overspend. A solid, long-term credit history will keep your score in the range you want. The older your accounts become without serious lapses, the more they count. Stability is a factor when you’re looking at the 800 rankings.

Staying on course is important. Consistency is key to a good credit score. A small lapse can have a reverse effect. Make good credit a habit and stay on course. Check your credit score periodically and monitor your progress toward the elite standing.

Budgets Should Include Savings

June 21, 2016 By Twila Van Leer

Recording every penny you spend lets you know how much goes to non-essentials. — Recording every penny you spend lets you know how much goes towards non-essentials.

Personal financial security almost always is built upon a foundation of creating and sticking to a budget. And a budget line dedicated to savings is extra insurance that you are on solid ground, no matter how much you make.

Tracking your spending is a necessary preliminary to creating that budget. Start by recording every penny you spend. And be prepared to be surprised at how much of your money is going into such things as movies, potato chips and other non-essentials.

Sticking To Your True Needs Leaves More For Savings

Once you have a true picture of how you are spending what you earn, the next step is to set a realistic budget that covers all your needs. That is needs, not wants. Needs vary from family to family, but for almost everyone, they include housing, food, water, shelter, clothing and education. The list of “wants” is long and variable, but often includes fast foods, meals out, expensive clothing, over-expensive cars, fancy cell phones and electronic gadgetry.

Engage Your Family In Setting The Budget

Let them help make up the shopping lists and then go through them to see what you can realistically do without. An occasional “fling” can be accommodated, but be sure they stay occasional and don’t become embedded in the budget by default.

Start A Savings Plan

Through your employment you may have access to a 401(k) account. Or set up an IRA (Individual Retirement Account), which is another way to enjoy tax benefits while you save. Keep retirement in mind. It comes sooner than you’d think. Save as much as you can and increase the amount as children grow up and leave home or as your earnings increase.

Consider What Is Practical In The Way Of Education

Too many Americans face retirement with student loans still weighing them down. It may be that you can achieve career goals without a four-year university degree. If you have to borrow to pay for higher education, keep these figures in mind: The typical monthly payment for loans escalates with the type of training you desire, from $54 for vocational school; $60 for an associate degree; $184 for a bachelor’s degree; $220 for a master’s degree; $280 for a college professor; $530 for a professional degree; and $840 for a physician.

Certainly don’t settle for less than you desire, but approach higher education with your eyes open. Start planning early, warn children they may have to work while they go to school, do your best to encourage them to perform well in high school as a springboard to scholarships and other support.

Finances Change With Divorce

June 17, 2016 By Twila Van Leer

Knowing how to manage money after divorce is essential.

Unfortunately, in a society where divorce is common, no one expects women to be expert in personal finances. They tend to know more about weight loss, cooking and other traditionally feminine matters.

But, according to DivorcedMoms.com, knowing about money and how to manage it (especially when a divorce may have drastically cut your resources) can become absolutely essentially in your new reality. Here are some tips to help in the process.

Hope For The Best, But Be Prepared For The Worst

Though your ex may be as generous as he promised he would be, it often happens that support money begins to lag. Insist on discussing money issues as the split occurs. You’re better off, if possible, to plan on taking care of yourself financially. If you get all the help you are promised, you’ll be pleasantly surprised, and if not, you won’t be devastated.

Educate Yourself

Financial training for women should begin in high school, but it seldom does. If possible, plan to do your own taxes and hone your budgeting and investing skills. Find a consultant, research online or get advice from someone you trust.

Regular Savings Plan

If work is part of the equation for you, be certain that some set percentage of your income goes into savings. Take advantage of employer participation in a retirement savings, if that is feasible. If you still have dependent children, buying a home may be very desirable. But be sure that it’s affordable and leaves you enough for other necessities, including education for the kids. If you need to upgrade employment skills, there are agencies that offer free services or can steer you to affordable options. Don’t be reluctant to explore any options, including government support, if it is necessary to provide for your family.

Have A Strategy

Create long-term goals, including concrete plans on how you are going to achieve them. Get rid of what you don’t need in favor of the things that will help you reach your goals. Be sure your goals are realistic, seeking counseling if necessary to stay within reason. Most women have some assets, such as jewelry or over-expensive cars, that they can convert to cash if necessary. Incurring more debt trying to become financially self-reliant is not a wise way to go.

Live Within Your Budget

It may even do your children good to be forced to expect less. Teach them to live realistically within the new budget now in place. They could thank you for it later. Keep in mind that the old saying is true: You can’t buy happiness. Look for free entertainment, such as board games at the kitchen table, home movie nights, visits to the library, nature walks, local parks, etc.
Love and attention don’t cost anything and they’re the greatest gifts you can give your child. Don’t let your emotional fallout become their problem.

Seek Mediation If Necessary

Resist going to court with your ex-spouse for every dissatisfaction. Lawyers are expensive and courts not cheap. . With divorce child support orders can be changed if your circumstances change, but don’t make money a constantly divisive issue that too often puts children in the middle.

Look around you at all the women who have divorced and succeeded. One needn’t automatically exclude the other. Divorce creates challenges, but it isn’t the end. Learn from it, plan for success and stick with the plan.

When To Begin Social Security

June 9, 2016 By Twila Van Leer

Social security main source of income for retirees.

A growing number of Americans are starting to withdraw Social Security benefits before reaching full retirement age, according to a research poll conducted by Associated Press and the NORC Center for Public Affairs and reported by the AP.

Forty-four percent of those polled said they will look to Social Security for their main means of financial support after retirement and they will start collecting before they reach 65 or 66, the benchmark for receiving full benefits.

Benefits Reduced If Collect Early

Social Security regulations allow retirees who were born in the period from 1943 and 1954 to begin collecting as early as 62 years of age, but the benefit is reduced by up to 30 percent. That can have a significant effect on the long-term benefit.

Retirees who wait until they over 66 years of age see considerable increases in their monthly benefit, according to experts at the AARP Public Policy Institute. For each additional year past 66, the amount of retirement pay rises by 8 percent. The benefits top out at age 70, at which time the retiree is receiving the maximum amount.

Individual Circumstances Affect Retirement Decisions

But many Americans can’t or don’t want to wait that long to begin collecting, depending on their individual circumstances. Health and other considerations may weigh heavily in decisions to retire. Some people who lose their employment while approaching retirement are not able to get another job and early withdrawal of Social Security funds is a necessary option.

Social Security Main Source Of Income

Social Security is becoming more and more the main source of anticipated income for the retirement crowd. Fewer companies are offering standard retirement plans, opting to offer employees 401(k) and other plans to provide for their old age years. Only 43 percent of those polled said they are expecting a traditional pension.

Supplementing Social Security

Some workers, about 50 percent, reported that they also have other padding, such as a regular savings or IRA account, but some Social Security is by far the most commonly anticipated source, the survey found. Some 86 percent of those polled said they expect Social Security to contribute to their retirement income.

Retirement Age Rising

The average retirement age has been rising, as more Americans, particularly women, see the necessity for working longer to make retirement affordable. The average age for males is 64, and 62 for females. Compared with other countries, the American retirement ages still are relatively young.

Many factors enter into the retirement decision, including life expectancy data that show there are differences between rich and poor and among ethnic groups.

Questions about the solvency of the country’s most–drawn on retirement finance source have been a troubling aspect of the issue for some time. Since 1984, the program’s trust fund has run a surplus, but that is expected to end by around 2020 when the Baby Boomer generation hits the retirement ranks. The Social Security Administration believes interest income from the fund should be able to handle the increase until 2034, but at that point, the possibility of shrinkage in benefits could become a reality unless the issues are addressed. The matter is part of the current presidential debates taking place before the November elections. Democratic front-runner Hillary Clinton sees a need for expansion of the program, while likely Republican candidate Donald Trump has declared it should not be changed.