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.

Financial Resolutions That Makes The Most Sense

Financial Resolutions That Makes The Most SenseAs you head on to the new year, you might find yourself putting together another set of financial resolutions you vow to stick to for 12 months. More than promising to start eating healthy, hit the gym, start running, or even using that bike you’ve had for a while, your finances could also need a new direction for the year.

More often than not, these resolutions are done out of habit at the start of every year. Some people also put together these money resolutions because they went through a challenging time in the past year. As they try to avoid getting into the same situations, they resolve to manage their finances better. While for others, they simply want to achieve their financial goals much faster.

Whatever the reason is, these financial resolutions needs to make sense and be in line with your goals in life. You cannot just think of random things you will include on your list or goals you heard other people are aiming for. It has to be personal and give you the chance to make improvements in your personal finance journey.

If you are planning to put together a list of resolutions that aims to help you financially, here are a few thing to consider.

Be more conscious about online security

Technology has come a long way in advancing several industries including the financial sector. For one, it is now a lot easier to manage your bank accounts. You simply go online and check your fund balance. You can also shop in the comfort of your own home. For payments, you can also do most, if not all of it online without the need to fall in line.

However, together with progress and convenience comes a downside as well. For one, online scams can be a huge blow to your finances. It can wipe out your bank account and negatively impact your credit score as well. The best thing to do is be more proactive when it comes to online security. A lot of institutions are being affected including Equifax that got hacked in 2017.

One of the first things you can do is put in harder passwords for your online financial accounts. The more complex the password is, the harder it would be for scammers to guess it. You also need to make sure that you visit legitimate websites and avoid downloading suspicious files on to your devices. These can have a virus that can do a lot of damage when it gets a hold of sensitive financial information.

Commit to a savings plan

One of the best financial resolutions you can ever make is committing to a savings goal. This can help you reach your goals a lot faster or simply keep you on track. The problem with most savings goal is that you end up losing interest early in the game because of the sheer target amount. The best thing to do is break the amount into smaller targets. This might even be the reason why CNBC shares that half of Americans have nothing saved for retirement.

If you are looking to save $2,000, that would seem to be a big amount at the start of the year. You can easily lose interest and focus. However, if you split that in half, that is only $1,000 half a year. If you split that even further, it would come out to $500 for 3 months and about $167 every month. Between $2,000 and $167, the latter seems a lot easier to plan for.

Start a college savings plan

As soon as you start talking about financial resolutions, it involves a lot of planning for the future and this should include your children most especially for their educational needs. Higher education does not come cheap and cost of attendance usually goes up year after year. According to College Data, average in-state public college and private college is around $25,290 and $50,900 respectively.

That is a lot of money for young people wanting to go to college. The usual route of would be to take out student loans to pay for school. They then have to pay for it for years to come after they graduate. There is a good chance that you are also paying for one yourself. You should know that student loans are quite hard to shake off and sticks with you for a long time. If you can help your children get a better start with their finances after college, now is the best time to do that.

Credit card management

A big part of why you want to improve your finances is because you could be struggling with debt payment. There are a number of reasons why you could be in debt and usually, your credit cards are involved. From having the ability to pay for things you cannot afford to miss payments and being hit with fines and a lot of other charges, your credit card can quickly put you in serious debt.

This is the reason why a lot of people includes credit card management in their financial resolutions. There are actually a few ways to help you manage your card debt. One of the most important things you need to learn is when not to use your card. There are a lot of temptations when it comes to credit card purchases and it boils down to repayment ability.

If you do not have the ability to repay back the amount at the end of the month, better think twice before swiping your card. Minimum payments could help you stay current with small manageable amounts. However, you end up paying a lot more for interest over time. That amount could be better used for other financial goals.

Learn a new money-saving skill

As you start the new year, you can try and learn a new skill. This is one of the financial resolutions that can be your jump-off point not only in earning a lot more but it can actually allow you to cut costs as well. Just look at all the things that you pay money for around the house and you will be able to pinpoint skills.

If you seem to spend a lot of money in ordering take-out food, it might help you save money if you start learning how to cook. You can buy and cook in bulk over the weekend so you just reheat all throughout the week. You can also try to learn DIY repairs at home so you do not have to call for everything and anything that needs repairs.

Be serious about your reserve funds

Money and budget resolutions also need to protect you from unexpected challenges that you could face all throughout this year.  This is why you need to make sure you include your emergency fund in your plans for the year. It will be your financial cushion in case you encounter emergencies such as being hospitalized or even losing your job.

There are a number of ways how you can put together sensible financial resolutions that can help you throughout the year. You just need to make sure that you think about your targets so you do not waste time with other resolutions that will not really help you achieve your goals.

Debt Traps For Fresh Graduates

There are a number of debt traps young consumers need to watch out for early in their careers because these can put them in the red early.There are a number of debt traps that could put young people especially fresh graduates in a financial pickle. Their age becomes a factor as well because most of them lack the financial acumen to get through financial challenges. This can come from either experience in managing their own money, financial lessons or even both.

That being said, fresh college graduates are at the point where they are more prone to debt problems than ever before. As they enter the full-time working class, they are now more exposed to a multitude of financial tools. These can either help them get ahead and be able to plan their finances accordingly or put them under the crushing weight of debt traps.

This possibility makes it all the more important for younger consumers to be mindful on how to handle their finances. If you are part of the millennial generation who is just about to enter the workforce or already been working for a few years, here are some common potholes to watch out for. Knowing these beforehand will not only help you avoid them but learn from the process as well.

Charging too much on your card

There is no question that the use of credit cards is so deeply embedded in the financial practices and ways of Americans. In fact, it might even be a harder to find someone who is not using or has not used a credit card in their life. This day and age are mostly about charging to credit and taking care of the actual payment at the end of the month.

For one, it gives people the chance to manage their finances until payday comes along. However, it also poses as one of the trickiest debt traps for consumers much more, for the younger generation. For one, charging expenses could lead to unmanaged expenses. This can creep up and shock you when the statement comes around.

This is even more dangerous when you start to use multiple credit cards for specific expenses in your household budget. As effective as it can be for other people if you lack the discipline and commitment to stay within budget will be a cause for concern. You might start to charge more on your card simply because you have a lot to use. At the end of the month, you might not be able to meet all your payment obligations. This can force you to operate in the red and pay for penalties and other fees.

Putting off student loan payment

According to Forbes, the class of 2016 has an average of $37, 172 which forms part of the $1.3 trillion student loan debt in the country. This is already a big amount for consumers in their prime earning years, what more for fresh graduates taking on their first job? If you start to add basic necessities such as rent and food, their budget slowly becomes a tough balancing act to juggle.

As a result, some people might choose to put off their student loan payment. This decision then becomes one of those debt traps that is hard to escape. For one, student loans are a bit hard to discharge even in bankruptcy. Apart from mortgage loans, student loans are one of those payments that stick with people for a long time.

That being said, it is best to make sure that you prioritize student loan payments after you get your first job. This helps you develop the repayment habit early on which should make payments easier in the long run. Look into debt consolidation as well to combine your loans under one account. You might be able to take advantage of a lower monthly payment as well.

Sticking with minimum payments

Once you start talking about debt traps, one of the most overlooked factors is sticking to minimum payments. Fresh graduates usually rely on this to simply keep up to date with their payments. There is nothing wrong with minimum payments because it keeps penalties and fees at bay. However, you would end up paying more on interest as time goes by.

Sticking to minimum payments also keeps you paying on your debt for a lot longer time. True that it is your repayment schedule. However, sending in either extra monthly payments or principal payments can help your cause. It could shorten and pull your pay off date closer or even save you interest money in the process. There are a number of underlying factors when it comes to debt and minimum payments can be one of them.

Lifestyle inflation to show-off

If you are a fresh college graduate about to enter your first job, one of the biggest difference you would ever see is a spike in your income. If you are just like most college students who are broke, getting a steady pay could be a big jump in your finances. One of the first things that could change can be your lifestyle.

You can now afford things that may have been out of your league when you were still in school. This can result in lifestyle inflation and increase your expenses as well. What is worst is that there are times that you do this just to impress other people. As you continue with the charade, it becomes one of those debt traps simply because you cannot keep up. Your expenses will soon overrun your income. The time could come that you start to borrow money you cannot pay back to buy things you cannot afford to impress people you don’t even know.

Not checking your monthly statements

It could be tough for some people to start managing their finances on their own. They could have had some experience in college but doing it full time might be difficult. As the bills start to come in every month, young consumers might choose to just ignore their statements. They feel that they have a pretty good idea on how much they owe.

This financial approach can breed a multitude of problems that can lead to debt. For one, it would be difficult to see exactly how much you owe. As a result, there is a chance that you send out a lower amount which can result in penalties and fees. This increases the amount that has to be paid in the succeeding month. Not to mention the effect it would have on your credit score. As such, it is important to make it a habit to open and check your monthly statements. This can also be a good way to help protect yourself from identity theft.

Opting for payday loans

There are a lot of unexpected financial emergencies that can come your way. It is a lot harder for young people because they might not have an adequate emergency fund built yet to get them through it. This pushes some of them to look for ways to infuse cash on their budget. With this, they tend to take out payday loans simply because they know they can pay it back. The problem starts when the emergency takes longer than expected and they cannot pay back. This puts them in deeper debt as the interest starts to come in.

Here is a video about payday loans so you can understand it better:

There are a number of debt traps young consumers need to watch out for early in their careers because these can put them in the red early. The sooner they understand some of these potholes, the better they can prepare and steer clear of it.

Mid-Year Assessment Of Your Household Budget

Couple With Laptop And Piggybank Making Savings Plan At TableYour household budget is a major pillar of your personal finances and checking on them every now and then is a must to keep them aligned with your short and long term goals. Checking your budget in the middle of the year is a great idea and should be a habit worth developing. It helps you check and see if you are on track with the financial goals you started the year with and if you are on track for year-end.

The household budget would usually consist of mortgage or rent, utilities, household furnishing, house operations and supplies according to USNews.com. Of course this is not a hard and fast rule when it comes to putting up your budget. This is just what most people would have in theirs and a great place to start with when sitting down and writing down every line item.

Some people could have less that the list while others would definitely have more items to take care of in their budget. Apart from trying to balance and pinpointing the possible reasons for their budget to fall, it is a tough juggling job to keep both income and expense on a certain level. Ideally the income should and needs to be always bigger than the expense.

When your income is bigger than your expenses, you have surplus in your budget that helps you be more financially secure. If you are spending more than you are making, you are in a tough situation. You will end up in a deficit and might have to resort to borrowing money or getting behind some payments just to survive the month.

Once this happens, you can now spiral down a path of debt where getting out is harder that getting in debt. You will find that if your household budget is not aligned and properly laid out, your debt can rise and some important payments might be sent out late causing the lenders to slap fees and charges on succeeding payments.

Checking the budget

This makes checking your budget an important task that you can do in the middle of the year. Here are some of the things that you can look at when you decide to sit down and review your budget.

  • Check your income and expense. This is the first thing that you need to look at because what you have at the end of the month depends on how well you balance these two. Checking your household budget mid-year also allows you to make the necessary changes and adjustments to the entries. Remember that your budget will continuously evolve and change as long as your income and expense change.
  • Take a close look at your purchases. Your income amount is pretty straightforward when you talk about your budget especially if you rely on one primary job. The one thing that you need to take a closer look would be your expenses and purchases. This means that you have to be able to clearly separate purchases based on wants and those from actual needs. This gives you a wake up call once you see how much you are wasting away from those impulse purchases.
  • See where your reserve funds are. Your emergency funds and rainy day funds are important tools that will help you get through unexpected financial need in the future. As you go on and review your budget, you might want to check the level of your rainy day fund and see if it is up to par with what you need to secure your future expenses.
  • Measure if you are on target with retirement. Your retirement is an inevitable occurrence in the future and as Gallup.com explains that American consumers are retiring at 62 years old at an average, you can plot your retirement fund against that age. See if what you are saving is on track with how old you are and how much more years you have to work and save. This can give you an idea if you are ahead, behind or just doing right with the amount that you are tucking away for the future.
  • Check if your big loans and debts are being paid off. Looking at your household budget in the middle of the year can also give you a chance to take a closer look at your big loans and debt account over what you are sending every month. It is a good idea to see how far along you are in paying off your debt and see if you need to fast track any payments.

Here is a video that can give you an idea how big debts are paid off:

Increasing your safety net

When you are checking your budget in the middle of the year, you might want to check into your safety nets that can give you peace of mind when it come to your finances. Here are some of them.

  • Your emergency fund. This forms part of your reserve funds and is the bigger of the two components. This is meant to help you address bigger financial emergencies such as losing your job, medical emergencies and even big house repairs. This can also be measured with how many months it can cover for your expenses.
  • Your rainy day fund. This is the second part of your reserve funds and is much more smaller that your emergency fund. Taxpolicycenter.org explains that there are states that are allowed to set aside some of their extra funds for future needs. The same with reserve funds in your household budget, it is to address unexpected, but small emergencies such as a busted headlight or even a plane ticket to see a sick relative.
  • Retirement fund. Your retirement fund is another one of your safety nets that you need to closely monitor. Check how your 410(k) contributions are and if you are able to max them out to take advantage of a company-matching program if there are any. You might also want to look at other investments that you have made to diversify retirement fund. Check if you are on track with your long term financial goals.
  • College fund. It might be hard to understand how your children’s college fund plays a role in your financial safety net. The thing that you need to understand is that once they all grow up and start thinking about higher education, one of the first roadblocks that will be right in front of would be the cost of attendance. Given that they are already accepted in a school, the finances quickly becomes a concern if you did not save up for it. Children are all encouraged by family and society that pursuing higher education is a great move but it is only now that student loans are getting the limelight. Once they need money for college, guess who the first people they will ask. That would be you as their parents and you might have to take out some money from your 401(k) or even using your home’s equity for college money.

Checking your household budget in the middle of the year is a great way to make sure that you are on track with your short and long term goals. It also gives you an idea if you are making any progress with the financial goals that you have made at the start of the year.

5 Ways For Couples To Retire Together

Portrait of cute young married couple It is a great achievement for couples when they get to retire together after years of hard work and dedication to their jobs and family. But it is a challenge for couples to retire comfortably at the same time let alone at a time that they want. There are a lot of consumers who are forced to work beyond their target retirement date because they still do not have enough in their fund to sustain their needs.

A lot of young couples might not see this as a red flag precisely because of their age and sometimes priorities in life. For some, it is more important to pay off their student loans rather than start making contributions on their retirement fund. For others, they need to buy a house or a car first before they even look at maxing out their 401(k) in the office.

The biggest challenge for these consumers is the fact that they are missing out on the multiplier factor of a retirement fund. When they want to retire together, they need to understand how a compound interest is their friend when trying to build a nest egg for the future. The earlier they start with their retirement fund, the bigger the amount the compound interest can work on.

Of course, missing out on early retirement planning has a haunting effect in the future because the more they put it off and delay the process, the bigger they have to put in down the line to catch up. This is exactly why some soon-to-be retirees are forced to either stay longer in the office or look for other sources of income. They cannot live off what they have saved and the scary part is that 80% of consumers within 30-54 years old believe they do not have enough money saved up for retirement according to Statisticbrain.com.

How couples can handle retirement

There are some people who say that marriage inspires young people to plan for retirement and it is best for couples to retire together because apart from being able to enjoy life together, they also spare each other of financial burden at an old age. This is because if one of them retires ahead of the other, the one left working might have to shoulder more than what is needed especially with the living expenses until they are both retired. Here are some ways to help ensure that couples are able to retire at the same time.

  • Visualize your retirement idea with your partner. This is an exercise that couples can do together to help them gauge how their retirement plans pair up. Being able to retire together is a great plan but you need to have a similar idea of how retirement is. Visualization can start from when you both want to retire to what you want to do after leaving your corporate jobs. This needs to be an open and honest exercise between the couple because this will lay the foundation for future retirement plans.
  • Identify the main differences between the two. As you go through the exercise, you will find that you will have areas that will not match. One way to do this is to divide your plans into three separate lists. One would be the ones that you have in common like if you agree that you want to retire together at the age of 62 which is what Gallup.com shared as the average retiring age of Americans. Another list would be those that you can manage to reach a compromise with. The last list would be the ones that you are having a hard time agreeing on. It could be that one of you dreams of retiring by the beach while the other wants to take care of a garden. These are the things that you need to work on as you go along.
  • Establish financial ground rules to achieve your target. With the plans in place, you can now start putting in ground rules to achieve you goals. If you both want to retire at an early age, then this requires a higher percentage of your salary that goes to your retirement fund. If the plan is to pay off the house at age 35 then you divert all excess funds in your budget over to additional mortgage payments. When you want to retire together, your plans will be the basis of your financial rules and the retirement fund is actually one pillar to manage your budget better.
  • Put in place age-based targets together. This makes your retirement plans a little easier to digest and achieve as well because you divide the goals by age. You can set financial goals every two years to make your overall target easier to manage. The idea is to do small targets every few years that adds up to your total retirement fund target.
  • Regularly check your status with your achievements. Your plans will only pay off if you make sure that you follow through and actually put in the hard work. One way to make sure you are on top of things is to regularly check and monitor your plans versus achievements. Schedule a regular date with your significant other to help assess how far along you both are with your retirement plans. Regularly checking can help you assess and even make changes along the way to make sure that you are able to retire together in a few years.

How to strengthen your retirement fund

Now that you are able to tackle retirement with your partner in life, how will you now make sure that what you are setting aside for will be enough for your needs? Well here are some tips to look into to help you strengthen your retirement nest egg.

  • Start putting in contributions early. This might already be in the ground rules you have set to make sure you have what you need come retirement time and if that is the case, you are then on the right track. This is because you are able to take advantage of compound interest early on in your retirement plans. Investopedia.com explains that compound interest is calculated on the initial principal amount and the succeeding accumulated interest. If you decide to start planning for retirement early on then you get to make interest work on your favor.
  • Take advantage of employer-matching. If your current company offers the program of matching your retirement fund, make sure you understand the mechanics so you can take advantage of it and be able to retire together with your partner. You might be lucky if your employer matches your contribution dollar to a dollar but whatever the amount is, do not miss out on this opportunity to fast track and probably max out your annual contributions.
  • Make sure your children have college funds. Student loans are crippling not only students graduating with huge amounts of debt but their parents as well. One common scenario is when students would ask their parents to co-sign a student loan and they fail to make the payments because of hard times. The parents are the left to pay of the student loans and sometimes they either put off their retirement fund contributions or wore, dip into their retirement fund just to make the payments. If you want to retire together, better put in a college fund for your kids early on rather than pay for it later with your retirement fund.
  • Maintain a healthy body. Keeping a healthy mind and body can help you keep your costs down in retirement. As your body gets old and weak, you might not be able to recuperate as easily as before and simple coughs and colds could last for days and can lead to other sickness. This can increase your need for medicines and even lead to frequent hospital and doctor trips. This in turn leads to more costs and depletes your fund much faster than it should. Eating healthy and engaging in a healthy physical activity or sport can do wonders for your body and keep it healthy and strong.

Married couples who wish to retire together needs to put in the work leading to their retirement date. There are challenges along the way but if you tackle them together and find solutions that works for the both of you, you can overcome them and be on your way to a healthy and exciting retirement years ahead.