Investing for Retirement

Retirement may be a long way off for you – or it might be right around the corner. No matter how near or far it is, you’ve absolutely got to start saving for it now. However, saving for retirement isn’t what it used to be with the increase in cost of living and the instability of social security. You have to invest for your retirement, as opposed to saving for it!

Let’s start by taking a look at the retirement plan offered by your company. Once upon a time, these plans were quite sound. However, after the Enron upset and all that followed, people aren’t as secure in their company retirement plans anymore. If you choose not to invest in your company’s retirement plan, you do have other options.

First, you can invest in stocks, bonds, mutual funds, certificates of deposit, and money market accounts. You do not have to state to anybody that the returns on these investments are to be used for retirement. Just simply let your money grow overtime, and when certain investments reach their maturity, reinvest them and continue to let your money grow.

You can also open an Individual Retirement Account (IRA). IRA’s are quite popular because the money is not taxed until you withdraw the funds. You may also be able to deduct your IRA contributions from the taxes that you owe. An IRA can be opened at most banks. A ROTH IRA is a newer type of retirement account. With a Roth, you pay taxes on the money that you are investing in your account, but when you cash out, no federal taxes are owed. Roth IRA’s can also be opened at a financial institution.

Another popular type of retirement account is the 401(k). 401(k’s) are typically offered through employers, but you may be able to open a 401(k) on your own. You should speak with a financial planner or accountant to help you with this. The Keogh plan is another type of IRA that is suitable for self employed people. Self-employed small business owners may also be interested in Simplified Employee Pension Plans (SEP). This is another type of Keogh plan that people typically find easier to administer than a regular Keogh plan.

Whichever retirement investment you choose, just make sure you choose one! Again, do not depend on social security, company retirement plans, or even an inheritance that may or may not come through! Take care of your financial future by investing in it today.

Why Should I Make a Budget?

You say you know where your money goes and you do not need it all written down to keep up with it? I issue you this challenge. Keep track of every penny you spend for one month and I do mean every penny.

You'll be shocked at what the itty-bitty expenses add up to. Take the total you spent on just one unnecessary item for the month, multiply it by 12 for months in a year and multiply the result by 5 to represent 5 years.

That's how much you could have saved AND drawn interest on in just five years. That, my friend, is the very reason all of us need a budget.

Whenever we can get control of the small expenses that really do not matter to the overall scheme of our lives, we can enjoy financial success.

The little things really do count. Cutting what you spend on lunch from five dollars a day to three dollars a day on every working day in a five day work week saves $10 a week… $40 a month… $480 a year… $2400 in five years….plus interest.

See what I mean… it really is the little things and you still eat lunch everyday AND that was only one place to save money in your day by day living without doing without one thing you really need. There are a lot of places to cut expenses if you look for them.

Set some specific long term and short term goals. There are no wrong answers here. If it’s important to you, then it’s important period.

If you want to be able to make a down payment on a house, start a college fund for your kids, buy a sports car, take a vacation to Aruba… anything… then that's your goal and your reason to get a handle on your financial situation now.

The Budget – The Ultimate Financial Management Tool

A carpenter uses a set of house plans to build a house. Whenever he did not the bathroom might get overlooked altogether.

Rocket Scientists would never begin construction on a new booster rocket without a detailed set of design specifications. Yet most of us go blindly out into the world without an inkling of an idea about finances and with no plan at all.

Not really smart of us, is it?

A money plan is called a budget and it's important to get us to our desired financial goals.

Without a plan we'll drift without direction and end up marooned on a distant financial reef.

Whenever you've a spouse or a significant other, you had better make this budget together. Sit down and figure out what your joint financial goals are…long term and short term.

And then plan your route to get to those goals. Every journey begins with one step and the first step to achieving your goals is to make a realistic budget that both of you are able to live with.

A budget had better never be a financial starvation diet. That will not work for the long run. Make reasonable allocations for food, clothing, shelter, utilities and insurance and set aside a reasonable amount for entertainment and the occasional luxury item. Savings had better always come first before any spending.

Even a small amount saved will help you reach your long term and short term financial goals. You are able to get many budget forms on the internet. Just use any search engine you choose and type in “free budget forms”.

You will get lots of hits. Print one out and work on it with your spouse or significant other. Both of you'll need to be happy with the final result and feel like it’s something you are able to stick to.

Spend Wisely to Save Money

Have you ever noticed that the things you purchase weekly at the grocery store and hardware stores go up a few cents between shopping trips? Not by much…just by a little every week but they continue to creep up and up.

All it takes for the price to jump up by a lot is a little hiccup in the world wide market, note the price of gasoline as it relates to world affairs.

There's a way that we can keep these price increases from impacting our personal finances so much and that's by buying in quantity and finding the best possible prices for the things we use and will continue to use daily… things that will keep just as well on the shelves in our homes as it does on the shelves at the grocery store or hardware store.

For example, dog food and cat food costs about 10% less when purchased by the case than it does when bought at the single can price and if you wait for close out prices you save a lot more than that.

Set aside some space in your home and make a list of things that you use regularly which won't spoil. Any grain or grain products will need to be stored in airtight containers that rats can’t get into so keep that in mind.

And then set out to find the best prices you are able to get on quantity purchases of such things as bathroom items and dry and canned food.

You'll be surprised at how much you are able to save by purchasing a twenty pound bag of rice as opposed to a one pound bag but don’t forget that it must be kept in a rat proof container.

You are able to purchase some clothing items such as men’s socks and underwear because those styles do not change, avoid buying children’s and women’s clothing, those styles change and sizes change too drastically.

Try to acquire and keep a two year supply of these items and you are able to save hundreds of dollars.

Rebates – Reward or Rip Off?

Rebates have become progressively popular in the last few years on many items and certainly on electronic items and computers. Rebates of $20, $50 or $100 are not uncommon.

I have even seen items advertised as “free after rebate”. Do these rebates come under the heading of “too good to be true”? Some of them do and there are “catches” to watch out for but if you're careful, rebates can help you get some really good deals.

The way a rebate works is that you pay the listed price for an item then mail in a form and the bar code to the manufacturer and they send you a refund thus reducing the price of what you paid for the item except with a time delay of several weeks.


Rule #1. Rebates from reputable companies are generally just fine.
You are able to be pretty certainly you'll get the promised rebate from Best Buy, Amazon or Dell but you had better likely not count on getting one from a company you have never heard of. Whenever you really want the product and are OK with paying the price listed then buy it but do not estimate actually getting the refund.


Rule #2. Check rebate expiration dates.
A lot of times products will stay on the shelf of a retailer after the date for sending in the rebate offer has expired so check that date carefully.


Rule #3. Make sure you've all the forms required to file for the rebate before you leave the store.
Rebates will almost always require a form to be filled out, a receipt for the purchase and a bar code.

Rule #4. Back up your rebate claim.
Make copies of everything you send in to get your rebate including the bar code. Stuff gets lost in the mail all the time and if the rebate is for $50 it’s worth the trouble to back up your claim.

Avoiding Impulse Spending

Answer these questions truthfully:

1.) Does your spouse or partner complain that you spend too much money?

2.) Are you surprised every month while your credit card bill arrives at how much more you charged than you guessed you had?

3.) Do you've more shoes and clothes in your closet than you could ever possibly wear?

4.) Do you own every new gadget before it's time to collect dust on a retailer’s shelf?

5.) Do you buy things you did not know you wanted till you saw them on display in a store?

Whenever you answered “yes” to any two of the above questions, you're an impulse spender and indulge yourself in retail therapy.

This isn't a good thing. It will prevent you from saving for the important things like a house, a new car, a vacation or retirement. You have to set some financial goals and hold out spending money on items that really do not matter in the long run.

Impulse spending won't only put a strain on your finances but your relationships, as well. To overcome the problem, the first thing to do is learn to separate your needs from your wants.

Advertisers blitz us hawking their products at us 24/7. The trick is to give yourself a cooling-off period before you purchase anything that you have not planned for.

While you go shopping, make a list and take only enough cash to pay for what you've planned to purchase. Leave your credit cards at home.

Whenever you see something you think you really need, give yourself fortnight to decide if it's really something you need or something you are able to easily do without. By following this simple solution, you'll mend your financial fences and your relationships.