Game On: How to play catch up with your savings

Have you ever felt like, money wise, that with every passing day and dollar not saved that you’re constantly playing a game of catch up with your savings account?

What makes matters even worse is the constant barrage of expertise and opinion that states you should be converting income into savings at a rate of 5 to 10 percent with each paycheck, making sure that “nest egg” stays nice and warm (and untouched) heading toward retirement or, specifically, if something happens that you need cash up front to fix (i.e. medical expenses, home repair, etc.)

But if you aren’t saving, there must be a reason why.

And your job is to find it, correct it and start saving now, rather than later. Don’t get bogged down in the fact that you aren’t where you need to be but instead about where you want to end up when it’s all said and done and your golden years are upon you.

Playing catch up sounds daunting but it doesn’t have to be if you exercise a few budgeting maneuvers and adjust your income in the process. Income adjustment means simply that you look for ways to increase your stream of money coming into the household. Some do this with a convenient part time job or perhaps starting to sell items that you no longer need.

When you’re friend who makes less than you all of a sudden tells you that he or she paid for new furniture just on odds and ends from the basement, your ears should perk up immediately.

In addition to addressing your income, you also want to budget by taking two “wants” off the list. Incidentally, a want is something you don’t need to live, such as a $300 per month personal trainer tab or trips to and from the salon to get the works (nails, massage, pedicure, facial, etc.).

Yes, no one is going to argue that these things are fun and, at times, necessarily when stress hits an all time high, but you have to limit them to the point where you’re not spending hundreds of dollars per month in lieu of saving that cash.

That doesn’t mean you can’t ever have a massage or treat yourself to something but instead those buying impulses should be tempered for special occasions or extremely sporadic. Some have eliminated them all together and watched as saving $200 or $300 per month on “wants” turns into about $5,000 at the end of a calendar year.

Imagine how you’d feel if you had that kind of money waiting for you after 12 months of playing catch up. Not only would you have that savings account well on its way to being built but also you’ll be in the process of learning how to save, and that is more valuable than any purchase.

Worry Warned: How to finally stop being concerned with money

So don’t let the headline fool you. You should always concern yourself with money, but not in the way you might think.

When you talk about paying attention to money, that means having a budget, making sure you know what your expenses are and always try to lessen them any chance you get, so that you can save money for unexpected expenses and retirement.

That overview is what you should be “concerned” with, not so much the constant worrying you have when it comes to the almighty dollar.

Worrying about money isn’t new to the general public. You have plenty of individuals doing anything from paying bills without a budget to living beyond your means and not really understanding what the problem is.

How exactly do you stop concerning yourself with money in a way where your spending and saving is almost on auto pilot?

Well, the real trick is making sure that your budget isn’t just there, but also is updated to reflect changes in income, an added expenses or change in a line item, either more money needed or less. The ever evolving budget is something that only the really good money managers know and then do, rather than just writing on a piece of paper what they spend on the larger items or simply refuse to update and tweak as needed or is warranted.

This shows not only the ability to adapt but understanding exactly what your money situation is, and how to fix it. The real problem we find for those who can’t manage money is they don’t truly understand that a problem exists. You wouldn’t necessarily call it sticking your head in the sand, but you’d be hard pressed to see accountability when it comes to money, and that centers on worrying about having the latest and greatest products or keeping up with the rest of the world, when in actuality you can’t afford it.

And if you’re struggling debt wise, you have to address it, get it under control by any means necessary. That can start with consulting a financial planner, consolidating debt or finding some way to lower interest rates (even if it’s balance transfers that you know can be paid off during the special rate time period).

Saying or suggesting you’ll never worry about money is silly. That simply isn’t going to happen, but your concern should be that of how to continue to improve your standing, rather than wondering how you’re going to get from one money gaffe to another.

Running on Empty: Will you have enough money to see retirement through?

Do you want to make every last dollar saved for retirement actually last for your entire time you’re not working?

The answer, for everyone, should be a resounding “yes.” When polled, retirees (or ones on the cusp of doing so) say their biggest fear about retiring is simply running out of money and thus being forced back into the workforce to take on a job to cover expenses when they’re 70 plus years old.

Hello, early retirement (not really).

If you’re worried about running on empty financially as retirement comes closer or you’re in the midst of it (at least a few years in), some would argue that you didn’t do an adequate job of planning. While that has some truth to it, the argument also could be made that you might have a surprise expense here or there, as well.

So how do you make your money last or even grow as you get older and make your way safely and securely money wise through retirement?

What tends to fall by the wayside the fastest is actually having a budget beyond retirement. As much as you scrimped and saved and watched all of your dollar and everything made sense, why would you think it to be a good idea to let that disappear once you hang up your work clothes for good? Far too often, you’ll hear of people running out of money because they spend it as if there still is the same amount of income available as when they were working.

You have to adjust that budgeting process accordingly with what ever drop you have in your income and also allow your saved money to play into that. If you only have $60,000 to retire on and you made that amount of money per year when you worked, and nothing about your budget changes, you can see the major flaw in that plan.

Refinancing also can be a worthwhile option as well, even thought that word often is met by a lot of grimaces and groans. The idea that you can refinance means that you lower rates, consolidate debt and thus spend less per month without extending the payments to a degree that has you paying on a home, for example, until you’re 105 years old.

Retiring should be a time to put your mind and body at ease, and that includes what happens with your money. If you’re prepared to retire and have taken all the steps to do so expertly, that’s only the beginning as the budgeting and paying attention to your money isn’t about to let up as far as importance goes.

Off-Limits: Certain money habits are always bad ideas

Depending on who you talk to, money is greatly debated as far as what is smart, prudent and good and, of course, what you want to try to avoid.

But as much as we discuss, often time common ground eludes us on things like budgeting, paying off credit card bills and other money related issues.

There are, however, some money habits that we all can agree are bad news, no matter who you are or what perspective you take with them.

For starters, if you’re someone who pays for vacations, groceries or bills with your credit card, you’re living beyond your means and your budget needs a serious overhaul, without question. That type of behavior is not only going to put you in debt but it is a cry for help that your income is not what it needs to be.

And as long as we’re discussing credit cards, are you only paying the minimum on those? If that’s the case, you’re setting yourself up for a lifetime of debt. Instead of the minimum, why not follow the lead now being set forth by the card companies who have to tell you what amount will get you out of a debt faster, such as suggesting a $100 per month payment that will have the card paid off in three years rather than the minimum of $35 and 20 years of debt with one charge card?

Budgeting also is paramount, and if you’re one of the millions of individuals that has no budget and just earns and spends without a care in the world, you’re not doing yourself any favors as far as saving money is concerned. Budgeting is the lifeblood of saving, and without one that is true to your income, your expenses and all the little incidental buys you have throughout the course of a month or year, you’re only sabotaging your ability to save.

You’re also making it very hard to have a nest egg, savings account or emergency fund. Call it what you will but what it boils down to is you should have money in hand just in case something happens you’re not prepared for at this very moment. Otherwise, you’ll be begging, borrowing and only increasing your debt.

To go along with budgeting, you can’t overlook financial decisions you make with a budget in mind, such as spending more than 35 percent of your income on a home and thus becoming “house poor,” a term coined that suggests all of your income is being sucked up by your mortgage payment.

Money will always be a polarizing topic, but some money mistakes are blatant, obvious and so bad that the masses have no problem nodding in unison at them.

Retired Lament: Why you won’t be able to retire on time

For those who have retirement on the brain, you can tune out at this moment, because you’re undoubtedly well on your way to getting the funds set aside to call it quits on your terms. You have a retirement plan, and you’re following it to a tee, but sadly you’re in the minority for the most part when it comes to saving money for the day you stop working.

The rest of us have retirement on our minds, but hardly at the forefront. We want badly to have the right amount of money so we don’t have to work into our late 60s or early 70s. Our bad habits when it comes to money tend to hold us back, however.

For starters, you know retirement is important. That doesn’t keep you from spending money all too freely as a result, and you’re not so much concerned with the future as you are with present day and that means you might be inclined to buy too much house or a brand new car when a used when could save you thousands.

And then, you have those who just aren’t paying any attention to their retirement whatsoever. They don’t get involved in the company 401K, even if their employer employs a company match. If there’s nothing offered by the company, this group still doesn’t look into a retirement plan on their own or invest in an IRA to boot.

What often is overlooked when you aren’t able to save for retirement is the thought that you can’t put money aside because you have to much invested already: into debt, that is. Having too much debt means you’ll be paying on it for quite some time, and those monthly payments, particularly if you have more than just a few, are going to take away from money you could be saving and putting toward retirement.

Finally, you have to really take a long, hard look at your retirement and determine what is realistic to the point that you know when you can retire and how much you’ll need money saved wise to be able to live comfortably for more than just a few years. Often retirement numbers and goals get bloated due to the masses wanting to have a plethora of cash to travel or spend as they see fit, and don’t do it in a way that makes the most sense as far as how they’ve saved and spend for the 30 years they’ve been working.

Retiring will never be viewed under the same light as everyone, but discounting its importance is just plain silly.

House on Hold: Why some expenses at home can be cut

Saving money starts at home, whether that’s clipping coupons for grocery store shopping or spending less on clothing via at second hand stores or online auctions, and anywhere else you can pull together money for our savings account.

But instead of staring blankly at a change jar that gets all those loose pennies, how about really getting serious about saving money and looking a little deeper at household expenses that you really can cut or eliminate altogether.

First and foremost has to be your television, more specifically your cable and internet package. The internet, for your entertainment purposes, might be needed but streaming is the way to go to save money. Cable can easily be eliminated if you’re perfectly fine with getting your news via the internet and not nightly and feeling as though movies and television shows can be enjoyed via Hulu or Netflix. The costs of those streaming services pale in comparison to the enormous amount spent on cable, probably close to five times expensive for cable or satellite.

When was the last time you stood in line, bought something and realized that you just spent anywhere from $50 to $200 on an “extended warranty.” That number grows exponentially when you buy something like a vehicle, too. Extended warranties are typically viewed by the consumer as protection for the “what if.” But most of the time, that “what if” never comes to fruition and so when it comes to lower cost items or even that car, truck or SUV, say no to the warranty. You’ll find if you read the fine print that the extended warranty really isn’t all its cracked up to be.

Often lost in the household expense conversation is the topic of credit cards, fees and interest. If you have a card that has a high interest rate, move it over to another card or focus on paying that one off first. You’ll save hundreds or thousands of dollars in interest that you’re avoiding. Furthermore, if you have credit cards that have annual fees or fees in general that aren’t interest, walk away. No, run. There’s no reason why you should be paying interest on a card along with fees that have no business even being part of this agreement between you and your card.

If you can’t look around the house and see spots where you can save money, then chances are you’re complacent with your budget and aren’t really looking hard enough to in the place where it is easiest to find savings.

Get Smart: Why successful people keep the process of saving money simple

Do you consider yourself smart when it comes to money? Yes, of course.

The more important question is if you are successful when it comes with money, and that is a totally different skew than being smart or what your opinion of the matter is.

Those who are successful with money, quite frankly, have it. But “having it” doesn’t just mean making good money or being able to finance a couch or a trip to Florida when you want to without worrying about applying for credit or spending money on a flight.

“Having it” means that you make good decisions, long term, about money.

The first question you have to ask yourself: Do you have a built up emergency fund?

And if you don’t, when do you plan on starting one?

An emergency fund is having money set aside for just what it says: if something happens unexpectedly as a result of anything from fault plumbing or carpentry in your house to those braces for your kids that you hadn’t planned on as early as last week.

Being successful with your money also means you realize that just because you have it doesn’t mean you have to spend it: all of it, that is.

Those who have a budget and stick to it are the ones that are able to put money aside, build that fund but also have the peace of mind that they don’t live paycheck to paycheck. In short, they live below their means and don’t push their income threshold to the point where their expenses butt right up against it. If you make $5,000 per month, that doesn’t mean you have to have a mortgage that is $4,000. Living below your means doesn’t mean you can’t have or buy things for yourself, but more along the lines of using the 50 to 50 rule. If you make $5,000, your expenses should be about half of that. You have to remember that those who are successful with money are the ones that have the leftover capital to not only save money but to think about things like upping your retirement contribution or having a plan if that monthly income suddenly gets cut in half. Losing a job or having wages cut is a harsh reality that exists and can happen in an instant.

But, will you be ready? You will and can answer that with an affirmative “yes” if you have budgeted accordingly and lived below or well within your means.

Those who are smart or successful with money know one thing: money is only as good as the person who is managing it. You can gauge your own definition of “successful” but those who have already shown they can be dubbed that will tell you that the term centers on saving, budgeting and having a lifestyle that is conducive what you earn.

Young and Restless: Why money and saving it matters in your 20s

When was the last time a 20 year old cared about the future, more so as it relates to money, saving it and, heaven forbid, have a budget in mind if they’re finishing up college for example and embarking on the real world.

The truth is saving money and being financial smart with your cash starts before you even reach college, perhaps as young as when mom and dad doled out allowance on a weekly basis, and you had to make that five dollars last for the next two weeks.

Of course as a kid, that little bit of money might be easier to manage than a first paycheck or initial job out of college. The 20 something year old might still live at home, not have a car payment (you still have that car mom and dad gave you), and have very few if any bills.

What you don’t realize is that from a money standpoint, you are the ideal position, one that you want to hang on to and keep as simple and straightforward as it is at the moment.

The only debt you might be in the midst of accruing is your college tuition and any loans you’ll have. That interest rate, however, is remarkably low and shouldn’t be viewed as an albatross of debt but rather a necessity that helps you land a job out of school.

But in your 20s, fresh out of school and having that first job, now is the time for you to start saving your money, while you’re still nestled in your old room and mom and dad still have a fridge full of food.

For starters, you’ll want to put extra money toward your loans, rather than defer them. Skip a few nights out with your friends and stay in for a weekend here and there, and double up on those school loan payments. That is going to cut the customary 10 year loan for schooling in half, leaving you debt free by the time you’re in your mid 20s.

Even though the average college student accumulates up to $5,000 in credit card debt while in school (this typically is due to needing money while in school and not having a job as part of the equation), you have to understand in your 20s, debt and credit is a necessary evil to build up the latter. That isn’t to suggest that you should be taking on thousands of dollars in debt, but opening up a card and starting to charge and subsequently pay off the card makes sense financially to start showing your credit and paying back loans is credible and capable.

Those in their 20s who start thinking about money right away tend to be the success stories, the ones you hear about retiring in their 50s. If your 20s is a backdrop for excess and wasting cash, you’ll consider that time period a failure when 30 rolls around.

Five Types of Retirement Plans to Consider

Retirement plans are savings plans that help workers and individual consumers to save for when they get older and can no longer work. Several types of retirement plans exist, and they each have a unique quality. The following are some common types of retirement plans and some information on how they can assist a worker or consumer:

The 401K Plan

The 401K plan is an extremely popular plan for employees. The plan works by employer contribution and employee contribution. The employee can contribute up to 6 percent of his or her paycheck on a weekly or biweekly basis. The employer can then contribute up to a match of the employee contribution.

The IRA Plan

IRA is an acronym for individual retirement plan, and many variations of such plans exist. For example, as SIMPLE IRA is one that stands for savings incentive match plan for employees. Employees and employers can both contribute to a SIMPLE IRA plan. A Roth IRA is an example of another plan. A Roth IRA is a tax-deductible plan that people can place money into to build their futures. A Roth IRA is different from a traditional IRA in that it allows people to withdraw funds at any time without charging them penalties.

The Profit-Sharing Plan

A profit-sharing plan is a special incentive plan for employees. Employees are allowed to share the profits that the company earns based on a specific formula. New employees are usually eligible for profit sharing plans after a certain amount of time.

Stock Ownership Plan

A stock ownership plan is similar to a profit-sharing plan in that it uses something from the company. A stock ownership plan is a partial ownership of the company’s stock. The employee earns a small portion of cash when the company stocks go up and so forth.

Cash Balance Plans

Cash balance plans are special plans to which employers contribute to their employees. The employers usually make contributions to such plans at least once per year. Cash balance plans are amazing for employees on the young end of the spectrum because they grow immensely over time.

A new employee will want to ask the HR department or the benefits department about any retirement plans they offer. The new employee can start contributing to the plan as quickly as possible. The 401K plan is one of the most popular because some employers offer high contributions.

Profitable Spring Cleaning

All home and apartment dwellers find themselves ready for spring cleaning at one point or another. Spring cleaning is a process that involves purging oneself of unnecessary household items. Over the years, material items tend to accumulate because of poor organizational skills, impulsive buying, hoarding tendencies and more. Spring cleaning is necessary to bring the number of household items down to a nominal level. Additionally, spring cleaning can be an excellent way to earn extra cash. The following are some tips on conducting profitable spring cleaning:

Choose a Strong Day for Spring Cleaning

A consumer should conduct his or her spring cleaning on a day that will be convenient for everyone involved. Weekends are perfect for people who have traditional 9-5 jobs. The person will want to have a day free of obligations and distractions to conduct the spring cleaning in an organized fashion.

Recruit Friends and Family Members

Recruiting friends and family members is important for simplifying one’s spring cleaning efforts. Not all family members will be thrilled about cleaning, but some of them may be motivated by monetary incentives.

Have a “Trash Doesn’t Exist” Mindset

Spring cleaners must carry a “trash doesn’t exist” mindset. The TDE mindset is one that forces the participants to find a purpose for every item in the house that needs to leave the premises. One man’s trash is always someone else’s treasure. Any item can serve a person an important purpose, and consumers will buy just about anything for a discount.

Offer Electronics, Furniture and Household Appliances for Sale

Cell phones, televisions, microwaves, radios and the like are the most valuable material items in the house. Someone is always looking for such items for a reasonable price. The consumer can offer the items on an online site such as Craigslist or eBay. Someone will respond to the ad quickly, and the seller can use the funds for the good of the household.

See the Value of Used Clothing and Bedding

Sometimes people do not realize the value of old clothing. Clothing that cannot fit one person might fit another person perfectly. Homeless persons, single parents, and struggling residents will appreciate an offer of such clothing. Spring cleaners can sell their mounds of clothes for extremely low prices and still earn a substantial amount of money. Some yard sale sellers offer their clothing items for as little as $.25 per garment. Bedding is equally useful.

Any household can conduct a profitable spring cleaning event. Motivation, organization and creativity are the keys to success.