Retirement can be a pretty daunting stage in one’s life. Seniors must know how to stretch their lifetime savings over the next few decades, deal with cost for health care, and have a good contingency plan if they shortfall.
Being smart on your finances though goes beyond following a budget and balancing your checkbook. It is also about spending wisely and carefully. Here are some tips how retirees can spend wisely:
Take control of medicine costs
You will save a lot when you think generic or go for store brands. The prices of medicine can be three times higher if you go for branded ones. You can also sign up for discount programs which will save you some money thru time. There are pharmacies and groceries which offer these but you have to pay an annual fee.
Join a Warehouse club
Upon retirement you might think that you will not be doing a lot of shopping or you will not be needing a lot of things but it will be wise to signup with a warehouse club. You might not need to buy a lot of stuff in bulk but you will be able to save a lot in discounted non-food items like electronics, clothes, books, and fuel. You can also join thru your neighbors and just split the fees with them.
Review your insurance coverage
Before retirement make sure you know the ins and outs of your insurance coverage for your car, home, disability, life, and other coverage. It will be wisest to look for lower premiums, price cuts, or discounts upon your retirement. Double check your deductibles and get some quotes and you might end up with a better deal. You might also consider dropping life insurance if your kids are already independent and see if you will benefit more with long-term care coverage.
Tighten the wallet a bit on family spending
You might think it is a bit heartless if you will hold back on buying gifts for your children and grandkids but it keeping your finances in order is your top priority. Know your boundaries and know your financial priorities.
You might be putting aside some money on a regular basis and growing your savings but you might want to track your spending aside from building up your surplus. Think of it as keeping a bridge although you might think that you will not feel the difference when you monitor it or not. Here are some of the reasons why you need to monitor your expenses:
Keeping yourself organized and disciplined
Monitoring how you spend your money builds your discipline and organizes every bit of your finances. It gives you access to data which is easy to read and which you can review from time to time to see where you are going wrong and where you are doing good.
Makes you think about your finances
Think more about money and you might focus more about building up your finances. The more you know yourself and your spending habits, the more opportunities to save you will see.
Preventing Crisis
Looking at your cash flow on a regular basis will allow you to spot areas where you can improve on. This way you can prevent problems from starting. Instead of reacting to a financial crisis, you are well ahead of the situation and avoid financial nightmares.
Useful for family discussions
It is always hard to bring something up about money to your loved ones. If you involve everyone in the process—budget making and tracking of expenses—life will be a lot easier. You can discuss with your family where you need to tighten the belt a bit using your tracker which every member can understand.
Measure of progress
Ideally, you want to cut off on your spending and build a surplus of savings. It is impossible to do this though if you do not keep track of your budget.
Planning
When you keep track of your budget, you know what comes in and what comes out of your pocket every month. Knowing these, you can allocate the funds and know possible issues that you may need to address in the coming month or so.
Stress reliever
This last point is easy. Know where your money is at and going and you do not have an unknown variable. No need to worry, no stress.
There was a time when everyone had a savings account. It was a place to put away money for things that were needed later in life like cars, housing, or schooling. The account would be opened up and money would be faithfully added every week even if it was a small amount. The money would also accumulate interest as time passed. Savings accounts used to be very useful. However, with the current economy, increasing fees, and the uncertainty of the banking industry, people often wonder if savings accounts are still useful today. They wonder if it is still safe put money into a savings account or if it would be better off to tuck money underneath the bed.
There is no right or wrong answer to this question. Whether or not to open up a savings account is the individual customer’s decision. One good point about a savings account is that it still accumulates interest. That is something that is not likely to happen if the money is held at home. Also, the FDIC will still insure the funds up to a certain amount. If money is saved at home and it gets stolen it is just gone forever. So as far as safety and actually earning extra money, it does appear that the savings account is still useful.
There is also an old saying “Out of sight out of mind”. Having the money put away somewhere where it can not be easily accessed is a great way to forget about it until the right time. No matter how strong willed a person may be it still might be difficult to avoid temptation if the funds are within reach. That is another solid reason why a savings account would still be useful.
Every time you go to purchase something the cashier may ask you if you are using credit or debit. Depending on what you use, will determine how your transaction is processed. Debit cards are very much similar to credit cards. Many people use their credit cards on very large purchases, and their debit card on smaller purchases. The difference is, everything that gets put on your credit card, has to be paid back. When you pay for items with your debit card, you do not have to pay anything back. That money is automatically deducted from your checking account.
When you use your debit card, you have the choice to decide if you want it to go through as a credit, or regular debit. If you choose for it to go through as a debit, it will make it an online transaction. If you choose credit, it will make your purchase an offline transaction.
When you pay for items with your credit card, you do not have those options. You do need to make sure that you have enough money on the card to cover the purchase, and that you will be able to pay that money back. You do not want to go over the limit, because you will then be faced with some outrageous fees, that will affect your credit.
Compilation from the Korelin Economics Report in April. More and more proof that we are losing a financial war with ourselves…
Check out GlobalCrossig for more information about the financial crisis, and keep in mind – if I post a video, that doesn’t mean I share the opinion with anyone I’m showing.
The finance market has been up and down for the past several years. Interest rates have been dropping on everything from home loans to car loans. Those kinds of decreases are beneficial for buyers. However, people who are looking to save money are looking for places with good solid interest rates for their savings. When choosing a bank to place your hard earned money in it is important to consider a few things.
What to Look for in a Bank
One of the top things to look for when choosing a bank is good customer service. People these days are looking for banks that value people. For banks, it comes down to what the top priorities are. For instance, a bank that is more concerned about money will often be impersonal and really focus on things that generate money for them.
Another thing to look for in a solid bank is the interest rates. A bank’s interest rates are usually published on a card for account holders to take with them. Look for a bank that gives extra for having a savings account with them. Some banks will often have a real low savings rate while another bank will offer more interest for having an account with them.
Conventional wisdom often tells us that it is smarter to buy something than to lease it. After all, why make payments on an item that will never belong to you? But for many, when it comes to deciding whether to lease or buy a car, leasing may in fact the better option.
The most immediate benefit of leasing a car rather than buying one is that it usually requires a much lower down payment. In fact, sometimes all that may be required is the first month’s payment and a refundable deposit. So for those who are low on available cash but are still hoping to drive a new car off the lot, the leasing option often allows them to drive away without having to provide a large amount of money upfront.
Deciding to lease a car also usually means lower monthly payments than purchasing one. The reason is that when an individual leases a car, they are not really paying for the whole car. They are only paying for the car’s value during the time that it is leased. Therefore, monthly payments are often 50% or less than what they would be with a conventional loan to purchase the same car.
It’s also true that a new car loses much of its value the moment it is driven off the lot. This is simply because once it has its first owner, the new car suddenly becomes a used car. Even if the previous owner only drove it for less than year and put nothing but highway miles on it, the car has lost its “new car appeal”. But for someone who chooses to lease that same car, the resale value is of little concern. After all, it was never really their car to begin with and selling it to the next owner is not their responsibility, as long as it is returned in good shape when the lease expires.
Lower upfront costs, smaller monthly payments, and not having to worry about resale value all make leasing a car an attractive option. Although the individual may never actually own the vehicle, in most instances they are still able to drive a great car off the lot. In fact, with short lease options available, drivers who decide to lease rather than buy can even experience the thrill of driving a new car every two or three years.
Retirement can be a pretty daunting stage in one’s life. Seniors must know how to stretch their lifetime savings over the next few decades, deal with cost for health care, and have a good contingency plan if they shortfall.
