Single Senior Finances And How You Can Manage It Well

Single Senior Finances And How You Can Manage It WellSingle senior finances are one of the points in your life that you need to plan for because you will have a tougher hill to climb than the rest. You need to understand that one of the components that makes old life easier is when you have a family with you. If you are going through it alone then it changes the dynamics of old age retirement.

If you start comparing it to traditional retirement planning, going at it alone is a lot different. Parts of your retirement planning might seem a little easier since you are only planning for yourself. However, you need to understand that this is more challenging because you would need to do everything on your own.

Single senior finances mean that you do not have any spouse or even children to help you with old age needs. You might have some friends from work or in your neighborhood but may not be enough. Besides, they might start to focus on their own needs as they get older. When that happens, they might not be able to help you as much as they want.

This and the fact that you are alone makes it all the more important to make sure you plan for old age well. While you can, you need to put in all the work to make it possible your golden years. There is no one else to rely on but yourself so better make it count. Here are a few things you might want to look into to help you prepare better.

Manage all debt payments before hitting retirement

While you can, it is important to manage your debt obligations especially if you are nearing retirement. If you are just starting out, try and plot out your payments to make sure that you pay everything off before you retire. This is important especially when you start to look at your big-ticket debt items.

For one, you need to make sure that you pay off your mortgage loan before you hit retirement. It will put too much stress on your finances because house payments tend to be a big amount in your expenses. Take a look at other big payments such as your student loans and even car loans try to work on the same timeline. Your objective is to pay these off before heading into retirement.

Carrying these debt payments while trying to enjoy retirement will cut into your retirement funds. You can make an argument that you can just sell the house and even earn from the sale. But these types of life and financial decisions need to be planned out very carefully. You also need to time these well so you are not left homeless on the street.

Look for ways to lower your expenses in old age will help single senior finances

Making every dollar count is important in single senior finances. You need to be able to stretch your budget to cover a lot in your expenses. This might even be a good time to start looking into a frugal lifestyle. Whatever you decide on, it is best to identify areas on how you can cut down on your budget expense side.

As mentioned earlier, joining the tiny house movement in retirement is one of the ways you can bring down your expenses. You might even be able to get a hefty sum from the sale of the house. However, timing is important in these types of decision. You need to make sure that selling the house and closing your purchase on the one you want to buy net are in succession. A hitch on one of the will either make you pay for two mortgages until you dispose of your old house or become homeless when you sell the old house but fail to close on the new one.

One other idea you might want to consider is relocating to a new place where the cost of living is relatively lower than where you are now. Forbes shares that Costa Rica is one of the top retirement countries at present. This can help you get more out of your retirement money. Choosing to live in a smaller house and in a new place may look daunting because you are doing something new. Just think of it as an exciting stage in your life where you get to meet new people in a new place.

Identify areas to increase your income

Once you hit retirement, you might have this notion of just hanging out in your porch the whole day reading newspapers or books or knitting whatever you want. Though there are some retirees who feel it is for them and this is their idea of single senior finances, this should not be your default thinking. If at all, retirement should be an exciting stage in your life.

For one, it can give you the chance to pursue something that you really love. That is if you did not have the luxury of doing the same while you were still working. Not everyone lands their dream job so retirement affords the luxury of going after what you really want to do. As an added benefit, you can even earn from it.

This becomes an income-positive hobby that benefits you in two ways. You get to spend time doing what you love doing. In this case, you will not feel like you are working at all. The money you earn can be used to add to your retirement fund. This can give you more elbow room to pursue other activities such as vacations or visiting family and friends.

Lower down your stress level

This is one of those objectives which are easier said than done but it does not mean it’s impossible. There are a few things to look into and try to lower down your stress level. For one, doing a hobby that you earn from can be great in reducing stress. If you love baking, then it can help you manage some stress in your life. The additional income, if you get to sell it, will even help with single senior finances.

You can also try and start putting in some exercise into your daily routine. It helps you feel food afterward. Not to mention that the stronger and healthier you are, the more it can help with your single senior finances. It lessens the need for doctor’s appointments and even hospital emergency visits. You might also lower the need for maintenance medicines.

Look for new friends

If you do decide to retire elsewhere and buy a smaller house, it is important to make new friends in your new place. For one, you will need the support system once you find it harder to move around. If your finance allows it, you can check out assisted living facilities so there will be people taking care of your every need.

Single senior finances might be daunting for single people who are about to enter into retirement. It might feel like you are going to be up against everything all by yourself. However, this is not the case because there are a lot of living arrangements you can opt to make a comfortable life in retirement. You can still have a full life in your golden years if you start preparing for it early on.

Shoestring Budget And Tips To Stop The Cycle

Shoestring Budget And Tips To Stop The CycleWorking with a shoestring budget is a hard place to be in and all mistakes are magnified when you don’t have much to move around. You are walking on hot water and every single decision is calculated and under the microscope. You barely have enough to make ends meet and when you run short, it cascades down to all areas of your finances.

It is possible that you might not be able to pay a credit card statement at the end of the month when you are short on your food budget. The time might come where you will not pay your car loan because your mortgage loan is more important. It is better to have four walls and a roof over your head compared to living on four wheels.

There will be a lot of sacrifices you have to do when you are running on a shoestring budget. Some financial obligations might be pushed back to give way to other more important areas of your finances. Psychology today shares how psychologist Abraham Maslow has laid out the basic human needs. It starts with the physiological needs such as water and food and everything else is secondary.

Some people may even think of this as a way to fix their budget cutting out the ones they can live without. But still, this is a difficult situation to be in. This becomes a lot harder when you have a family to think of. Their needs multiply while your finances remain the same so you get deeper and deeper into trouble. There are a few ways to help you manage and get out of your financial situation. Here are a few of them worth looking into.

Have a clear understanding of where your money goes

You might think that you do not need a budget when you do not have that much to budget in the first place. Thinking you will just remember everything you spend on will only put you into more trouble. When working with a shoestring budget, you need to account every dollar amount you have at your disposal.

You need to have a very comprehensive budget especially when you are working with limited funds. As you do this, you gain more understanding of how you spend your money. Once that happens, you get to put together a plan on how to move forward. It might seem simple that you just have to earn more money but there are a lot of factors you have to look at.

Once you look at your budget, you might notice that you have been paying for two music streaming apps on your phone. You might even be still subscribed to magazines delivered every month. Your budget could also show that you are spending a lot on cable when you rarely get to watch tv anymore. These costs may look small but when bundled up together, they can make a difference in a limited budget.

Lower expenses can help a shoestring budget

As mentioned earlier, having a budget gives you the chance to look over your expenses and determine which ones you can do away with. You can start with the “wants” you have in your budget and slowly move on to other areas of your budget. This now becomes a balancing act where you need to look at what you need and what you have.

There are also other areas of your finances you need to look into. Your housing situation is one thing especially when you are renting. If rent is less expensive in another area, you might want to consider moving. Of course, this goes without saying that you have to weight all factors such as proximity to your work, the kid’s school, and even how your family has come to love a place.

Transportation can be another area where you can cut down on cost and be able to spend below what you earn. If you are a two-car family, try and do the math when you give up one car and just use one vehicle. You save on gas, maintenance, and even insurance but you have to coordinate schedules to make it work. Explore using the train, bus, or even a bike going to and from work. You get to save money and get some exercise along the way. Fox News even shared how a man decided to row to work just to avoid traffic and even get an exercise along the way. This will not only help you manage a shoestring budget but get you healthy as well.

Look for ways to increase your income

One of the first things that people think about when they have a tight budget is to increase their income. For those with a day job, the most obvious thing to do is to put in a request for overtime work or an additional shift. Then there are those who will take on a second job after their day job just to increase their take-home pay.

There are also a lot of online jobs that you can look into. This can be a lot easier when because you can do it in the comfort of your own home. You can take up writing or editorial jobs at home. If you have the tools and know how you can even create artwork needed by some people. You might even go and edit images online. These are just some of the online jobs you can take up to help you increase your income.

As you try and increase your income, you can also try and use your hobbies for and turn them into income-positive ventures. If you love to bake for families and friends, you can start selling them within your circle or even offer them online. If you love hosting, you can offer your services to venues if they functions and even event organizers.

Start allocating extra money to savings

Once you start lowering your expenses and increasing your income, you will find that you will start to have some extra funds in your budget. The temptation might start to creep in and you lose your way of spending that money on unnecessary purchases. Once you are able to manage your tight budget, you need to make sure that you use extra funds wisely so you prevent going back to having a shoestring budget.

One of the best ways to do this is to save money for future use. It can be for an emergency fund or even for retirement. The important thing is to save up and put the money to good use. Try to remember how hard it was before you had extra funds in your budget. This can help you put your finances in perspective and help you make better financial decisions along the way.

Managing a shoestring budget can be a tough challenge for anyone but there are ways to help manage it and turn things around. You just have to be up to the challenge because you will need to make some tough decisions as you change some areas in your life. You will have to make some hard decisions and give up a few of the things you have gotten used to, However, these can help you move past your current situation and to a better one.

Build A Reliable Emergency Fund At The Start Of The Year

reliable emergency fundA reliable emergency fund is one of the most important financial tools you will ever come across. It is one of those things that you wish you never have to use. As soon as you start to consider using your reserve funds, it means that you are going through some financial challenges. None of them is a good sign especially at the start of the year.

However, you need to understand that most of your financial emergencies are out of your hands. From a broken washer, minor roof repair, medical emergency, or even job loss. These are all unplanned situations that you need to prepare for. Though there are times when your direct actions put you in challenging financial situations.

Whatever the reason is, you need to have a reliable emergency fund to get you through the toughest of situations. And there is no better time to focus on your reserve money than at the start of the year. You get a clean slate and you get to start early with it. The sooner you save extra money, the more you would have when you need it. Here are a few items to keep in mind when aim to save for emergencies at the start of the year.

Revisit your old budget

You will always need a benchmark and when it comes to saving money, you always need to take a look at your previous household budget. As the new year is here, pull out your budget for the previous year. It can help you understand what you are working with and how you can save for future. Your budget needs to be on point when it comes to your income and expenses.

Before you start planning for emergencies, you need to have an idea how much you really are earning and what percent of that is going to expenses. This gives you a clear picture of what you can work with. It also gives you an idea if you need to make some changes this year especially if you are ending up with higher expenses that your income.

Set a goal for an amount

As you make the necessary changes to your budget get a grip on the amount you can work with, you need to set a goal. You need to understand that having a reliable emergency fund has a lot to do with your expenses. This is one of the reasons why you need to take a look at your budget before you set your sets out in getting your reserve funds in order.

Once you have an idea what your expenses are, your goal is to cover one month’s worth of expenses. As soon as you have enough for one month, you start saving for two months, them three, and so on. Some people would suggest having enough for six months. This is because the average time to look for a new job is around six months according to the Balance. The amount is up to you depending on lifestyle and past experiences.

Look for areas where you can cut costs

Now that you have an idea how much you need to have a reliable emergency fund, you can now start to look for ways to save up. As you have your budget with you, try to look at the expense side and identify areas to cut costs. There will always be some items you can do away with or even some bills you have forgotten is there.

One of the items you can take a look is your subscriptions. It can be anything from a magazine to music and even unused gym memberships. Take a look at what you can take out so you can save a few dollars. You can even try to take a bike to and from work so you save on gas and even bus or train money. The idea is to identify areas to save up on and put that amount towards your reserve fund.

Identify opportunities to make extra money

As you might already know by now, the best way to maximize cost-cutting measures in your budget is to increase your income. For some people, this is a little more challenging when compared with expense cuts. This is because they need to put in a lot of effort as they look for ways to earn money just to increase their take-home pay.

The most conventional way people try to earn extra money is to get a second job. Jobs, where they get tips, is a great one such as bartending. For others, they prefer to play to their strengths. Creative people can take up design work for various establishments in and around the community. Then there are some who choose to transform their hobbies into an income-positive venture.

Where to put a reliable emergency fund

Now that you have a goal and have identified ways to save that amount, the next step is to pinpoint where you can put that money. It is important that you understand that this is a delicate balance between access and limitations. The fund needs to be within arm’s reach in cases of emergency but not too accessible that you are tempted to use it for other purposes.

If possible, try to split up your fund. You can put a few in a safe place in the house and most of them in a savings account. If your reserves get too big, you might be tempted to invest that money. What you need to watch out for is getting the fund tied up for months when you invest. It limits your ability to get your hands on it when an emergency occurs.

How it helps you throughout the year

Having a reliable emergency fund can help you secure your plans for your future. There are also a lot of things it allows you to do. For one, it allows you take a certain level of chance in life. It gives you the ability to chase your dreams if you are not in that field yet. As you transition from a day job that pays the bills to do something you love, you have something in reserve in case your finances takes time to catch up.

You need to make sure though that you still have income coming in as you chase your dreams. This way, you only tap on your reserves in case of emergency. Having extra money as back-up gives you enough freedom to take risks as long as you are doing it with your future in mind. If you simply want to take a break to try and “find yourself,” you better save up for that trip rather than using your reserve fund.

It is important to focus on saving up for a reliable emergency fund at the start of the year. It gives you the elbow room to chase your dreams and even get through life’s toughest challenges. There will be a lot of unexpected situations in life that you cannot control. A serious health issue, losing a loved one, needing unscheduled repairs at home, or even losing your job. All of which can have an impact on your finances. Your reserve funds will help you weather the storm without taking on additional debt.

Retirement Planning When You Are Playing Catch Up

Retirement Planning When You Are Playing Catch UpRetirement planning can intimidate a lot of people partly because it seems to give off an aura of both complexity and urgency. It might raise the question, especially for the younger section of the working class on what makes it so pressing they have to look at it as early as possible. They understand that it can be quite difficult to maneuver through since most investment tools are but that is something they can learn over time. But why is so important given that they will only have a need for it a few more decades down the line?

Retirement is a concept that becomes more critical as you get older. This is one of the reasons why it is not given much thought by the younger group of working people. Imagine a 22-year old reporting for a first day on the job. It is quite difficult to have retirement planning in mind especially as Gallup.com shares that average retirement age for Americans is at 65 years of age. That is over 4 decades of separation between the present and the time they would need their retirement fund.

This is one of the reasons why a lot of people are not savings for retirement. They are having a hard time connecting their future need with their present actions. Because of this, a lot of people who failed to plan early are now trying to play catch-up with their retirement planning. Now that they have a few short years left, they are now scrambling to save as much as they can.

If this is you and you fell into that trap of being too passive in planning what you need for retirement, there are still a few things you can look into to help you save up. If you are already starting to bump up retirement on your priority list but your funds are lagging behind, take a look at these planning tips to help you catch up.

Have a clear picture of the retirement that you want

Before making any drastic moves, it is a good practice to have a clear and definitive idea of the type of retirement you want. This is the first step in making sure you are planning for what you want to have and not for what other people have. It is quite easy to fall into the trap of planning based on how happy other retired people are.

Retirement planning starts on how you want your life to be in retirement. Do you want to take up a more active role in volunteering for other people or do you prefer to stay at home and work on your garden? Do you see frequent travels while in retirement or soaking up the sun on a beach near you? How you answer these questions and a lot more can help you plan your retirement and work on a definite target amount.

Once you determine what activities you are looking at while in retirement, you can now put in the corresponding cost for those items. Travel, hobbies, side business or even gardening all have corresponding costs attached to them. The better you can jot these all down, the sooner you can work on a target amount.

Ramp up your savings with the help of automation

There are a number of automation programs that benefit retirement efforts and it is a good strategy to take advantage of it. From enrollment to investment escalation and even lifecycle investment, they can all help you achieve your goal of having enough funds to support your golden age years.

Perhaps one of the most effective uses of technology and automation when it comes to retirement planning is in the savings category. Simply put, you can make sure that you save for what you need in your retirement fund by automating that percentage of your income. That way, you are able to take care of the bare minimum amount you need to save up.

Make room to increase your retirement savings

As you are able to take care of a percentage of your income being set aside for retirement savings, you need to find a way to increase that amount. It follows the simple concept that if you are able to save more at present, interest can help you increase that amount for your future need and use.

Increasing your retirement savings usually entails two key components – increasing your income and lowering your expenses. These two work together to free up much-needed funds to increase retirement savings. It sounds so easy in concept but execution would be a lot more challenging.

Increasing income could come in the form of clocking in more hours at work or even look for a side hustle on top of your regular job. On the other end of it, you can start brewing your own coffee in the morning or even packing your lunch so you can save money. You can also save money at home by comparing your cable from streaming services, lowering electricity and water consumption and others. They may not look much but added together and they can help you save a ton.

Make yourself accountable for your retirement planning

There are studies that point to findings where you need to keep your plans to yourself to increase your chances of success. However, one way of making yourself accountable is sharing your plans with other people. The challenge is identifying the right people with whom you need to share your retirement plans with.

It is best to do with those that you trust and who has your best intentions at heart. Family and close friends would surely come to mind at this point. As you let them know what your plans are, you are more driven to reach your goals. They can also provide you encouragement at times when you feel down and out.

Consider downsizing before retiring

One of the smart ways to manage your retirement funds is to consider downsizing your house. This helps you lower down home-related cost across the board and even helps make upkeep a lot more doable during your advanced years. For most people, they refer to this as a tiny house movement where retirees are opting for smaller and more quaint dwellings.

One idea is if you are already an empty-nester even before you retire, you might want to downsize on your house well before retirement. This way, you can iron out any unforeseen challenges in moving to a smaller house and be well-adjusted by the time you retire. This is because it is a lot harder to bounce back up financially when you encounter problems in retirement.

Delay retirement by working a few extra years

Washingtonpost.com explains that a lot of Americans, 75% of them plans to be working well into their retirement. Some just want to and other simply needs to in order to have enough for their retirement. This is one strategy you can look into when you seem to be running up short on the amount you need. Extending your working years and even delaying the time you start taking out your social security benefits can all add up to a considerable amount of funds for retirement.

Retirement planning needs to be done as early as possible to help you reach your goal. Otherwise, you run the risk of playing catch-up or worse, never really being able to fully retire.

6 Ways To Lower Expenses In Your Budget

Businessman Cutting The Word Spending On Paper With ScissorsA lot of people are fervently looking for ways to get a grip on their finances and either increases their income or lower expenses to help them manage their household budget better. Between the two, trying to lower down their expenses seems to be the easier choice as it requires working with with what you already have.

Managing finances is not an easy job especially that most consumers have to deal with a small income and big expenses. It would have been a lot easier if things were the other way around – big income and small expenses but the sad reality is that almost everyone starts off with a small income but a mountain of debt under their name.

Nerdwallet.com shares that average households have about $15,706 debt in their credit cards, $32,953 for their student loans they used for higher education and a whopping $156,333 for mortgage loans they took out to buy a house. Add all of these to living expenses as well as amounts that you need to set aside for retirement and reserve funds and you get a headache looking at the numbers.

Of course there are consumers who are able to ride through these expenses armed with a huge income that they bring in every month. But there are a lot of people who has to make do with limited funds at the end of the month because their income is not what they hope for. There are those that are just starting out while others are starting all over again after getting laid off in their previous job.

Tips in keeping household expenses low

As you go through this phase in your life where your income is not up to the level that you wish it is, here are a few things you can do to lower expenses in your budget. Try to keep an open mind and try to evaluate the financial effects these will bring to your finances.

  • Buying items in bulk will help lower down the cost. This is one tricky approach because this can actually do you more harm than good when you buy the wrong things in bulk. The way some people do it is just look at what they buy regularly on a monthly basis and head on out the store to buy them in bulk. Normally this is a sensible way of getting it done but many people forget to take out the perishables when buying in bulk for the month. They end up with spoiled milk or juice or even some vegetables at the middle of the month because they all haven’t been used. The idea is to separate the perishables and not purchase them in bulk because you end up wasting money on them which defeats the purpose of bulk buying.
  • Growing your own vegetables and herbs can help. There are some people who tries put their green thumbs to use by growing their own food in a garden. It can be vegetables or herbs and some people who has an even bigger land to spare grow their own livestock for their family’s food security. Of course the livestock are best left to people with farms but if you are living in a smaller place with an even smaller garden, you might want to get some patch off of your garden and plant some vegetables or even herbs. These can help you when you cook your own food because you do not have to keep going to the market for some of your perishables. You just pick them off in your garden and you cook knowing that you are putting in fresh ingredients in your dish.
  • Re-evaluate your car use. Statisticbrain.com explains that car production has been increasing because there are about 4.5 million cars produced in the country in 2013 almost doubling the number in 2011. This means more and more people are buying cars as the years progress. But take a look at how you use your car and see if there is a way to cut down on it. Is your office just a few blocks away from your house? Then you might just want to walk or bike to get an exercise out of it or take public transportation. Are you worried about the kids going to school? Look at a school bus and see if it will be a good way to get your kids to and from school. If you really cannot do away with your car then look for an insurance company that will offer lower insurance to save on cost.
  • Try fixing and eventually making your clothes. This is one way to help you lower expenses around the house but a lot of people might not want to put it too much effort in making their own clothes. One way to get around this is to try and fix your own clothes first and see how that works out for you. Socks and other shirts that just needs a few stitches here and there can actually save you a lot of money from having to buy new ones in the store.
  • Learning to live life with less materialism. This is a little tougher to do because you need to start thinking differently about how you buy things. In an economy driven by the amount of consumer activity particularly in purchasing goods, everyone around you is so used to buying things left and right. Oftentimes you start buying for the wrong reasons like a sale or a new release of the gadget that you like. You need to take a step back and understand that you control your money and not the other way around.
  • Making the most out of your space. If you happen to have an adequate amount of space at home that does not have much use to you, you can take this space and use it to earn some extra money. Your first thought would be to rent it out and collect money every month but there are other ways to earn off of a spare space in your house. If you love woodwork then convert it to your workplace and earn some money making wood furnitures. If you love to bake then convert it to a nice kitchen with all your baking needs and use it to sell cupcakes and cookies every weekend.

Tips in increasing income

As you try and look for ways to lower expenses in your budget, you can also go the other way around and see if you can increase your income as well. It is a little harder because it requires a lot more out of you but it is a good way to help you manage your budget better.

  • Look for ways to increase your value in the office. If you have an office job, find ways to get an increase in your take home pay. It might be learning a new skill or taking crash courses to improve your output in the office.
  • Pursue your passion and earn off of it. As you look for ways to earn income outside your primary job, you need to look inside yourself and discern what your passions are. If you love photography then go ahead and offer your services to friends and even the local newspaper for to get extra money.
  • Make your time count financially. This is basically understanding the fact that you can be busy about things that doesn’t really do you much good. If you waste your time in a bar every night rather than cultivating your hobby then you are not making your time count. If you rather sleep in everyday than go out and look for a job, then you are not making your time count.

There are a lot of things that you can do to lower expenses in your budget and you just need to put in a little effort into it. Do not be disheartened by stories about people not being able to fix their finances because everyone is different. Just do what you can to make sure that you are able to provide for your family.