Three Reasons to NOT Save for Retirement

Most people are vastly under saving, but no matter where you are at with your retirement investments, it never really will hurt to save more. Life is spontaneous and will sometimes throw you in different directions, so there will likely be times when it is more important to allocate your money to other important costs rather than saving for your retirement. Here is a list of three reasons that you may NOT want to save for retirement at the time:

Silver CascadeCredit Card Debt

If you are in a significant amount of credit card debt it is probably a good idea to put a hold on your retirement investments. High interest rates on your credit card debt puts a drain on your finances and unless your investments are making more in interest than you are paying on your debts you are effectively losing money. It’s important to pay off, or at least minimize your credit card debt as a priority over retirement savings.

Have an Emergency Fund

Life can always go differently than you expect it to. By having an emergency fund you will be able to protect yourself financially if you suddenly lose your job or encounter any unexpected medical costs. It’s a good idea to have at least 6 months of living expenses saved up. Once your emergency fund is stocked you should then allocate those funds to your retirement savings.

Student Loans

If you are young, you likely have significant student loans. While you might think that it makes the most sense to direct some money to retirement investments and some to your loans. But if the interest rates on your loans are higher than the interest that you accumulate on your retirement investment, you are losing money. It’s wiser to pay off your debt as quickly as possible and then invest in your retirement.

An exception to this, however, is a low interest student loan where your interest rates are less than the interest that you make on your retirement investments. If this is the case it’s smart to allocate funds to both.

Retirement investments are important and should always be part of a healthy financial plan, but there will be times in your life where it makes more sense to prioritize other expenses over your retirement plan. If diverting money from your retirement investments can help you with current financial burdens, don’t be afraid to deviate from the plan. Finding a balance is important when allocating money to your expenses and to your savings.


7 Ways to Save When Dining Out

Ultimately it’s cheaper to eat at home, but it’s fun to eat out sometimes and entirely possible to work it into your budget. Here are some tips on how to save when you want to go out:

dineSign up for Daily Deal Websites

Websites like Groupon and LivingSocial regularly feature 50% off vouchers for eating at restaurants. Usually they are not for national chains, but are a great deal for local places that you may not have tried yet.

Drink Water

Ordering soft drinks or alcohol can add up. By ordering a glass of water to go with your meal you will be saving yourself a few bucks.

Forgo the Appetizer

Eat the free breadsticks instead. And if there’s no pre-meal snack save your appetite for the main course. Your waistline and your wallet will thank you.

Skip the Special

That lobster covered tenderloin sounds great, but it comes with a price. Restaurant specials are designed to get customers to spend more money on their entree than is necessary.

Add ons cost money

Your server may suggest add ons to your meal and they sound great but can drive up the cost of your meal. Ask your server about the cost any add ons that you may be considering before deciding that you want them.

Skip Dessert

Restaurant desserts can be very pricy. If you really want to have dessert consider having it at home, or stopping elsewhere for a less expensive treat after your meal.

This list may seem like you are making a lot of sacrifices but if you are eating out frequently it really adds up. For example: If you are going out for meals 3 times a week and you drink two beers with each meal, ordering water instead could save you $30-40 a week. Even cutting down to one pint and one water will save you about $15 per week. Skipping the alcohol, appetizer and dessert alone can save you up to $20 per meal.


10 Ways to Reduce Expenses in Retirement

“HOW MUCH?!” – That’s my usual reaction whenever I read articles about how much I will actually need to save in order to retire comfortably, it’s a big scary number that seems so far out of reach.

Okay calm down, it’s okay. We have lots of time to save and keep in mind that there will always be ways to our expenses. Here’s a short top 10 list:

Savings Ahead Sign

  1. Downsize your home – Chances are that your kids have grown and you have a lot of space that you are not using.
  2. Cut down to one car – If you have two vehicles and both you and your partner are retired you may be able to get away with having one one vehicle.
  3. Hold off on collecting Social Security – While it’s tempting to take it at 62, if you wait until you are 70 years old you’ll collect roughly 8% more each year.
  4. Improve your health and well being – Eat better, go for walks, be more active – getting in better shape and living a healthir lifestyle is not only good for you but it can help cut your medical costs.
  5. Do things for free – There may be a number of free or very cheap activities that you can do in your area for entertainment. This will also allow you to be active, meet new people and save cash.
  6. Go to a State Park – Many State parks offer reduced admission for seniors. Have a picnic, walk around and maybe go swimming! It’s an excellent way to spend your day.
  7. Volunteer – There are so many places that could use volunteers. By volunteering you are helping others, being productive and not spending money.
  8. Travel Wisely – Research locations and airfare. Try to book your vacation 3 months in advance.
  9. Use your Seniors Discount – Ask everywhere you go if they offer a seniors discount, chances are that they do.
  10. Rethink expensive purchases – the last thing that you want to do is spend money unnecessarily. When making big purchases evaluate them critically before taking the plunge.

Retiring means that your time is your time. Take good care of yourself, go outside, do whatever makes you happy. You’ve saved all your pennies for this, you deserve it!

Five Ways to Cut Monthly Costs

Finding ways to cut monthly costs is often a tedious task, but if you take the time to make a few calls you can find significant savings. This article will focus on 5 ways that you can save money on your smaller monthly bills:

billsGet Rid of your Home Phone

If you’re not using it, it’s not worth keeping. Now a days, everyone in the family has their own cell phone, if this is the case in your household then you really don;t need that home phone. Cutting your land line can save you up to $400 annually.

If you are really set on keeping a home phone, you can also look at internet based alternatives such as Skype, Vonage, magicjack or Google Voice. These alternatives are significantly less expensive than traditional lines and some will even let you keep your current phone number.

Cut your Cable

How much TV do you watch? Are you only watching certain channels or TV series? If this is the case there may be some better alternatives for you. Switching to a service like Netflix, or setting up a Roku can save you over $100 per month depending on how much you are spending on cable TV.

If you just can;t say good-bye to your cable subscription, take a look at what you actually watch and call your cable provider to find out of there is a less costly plan that could work for you.

Bundle your Insurance

If you are paying for your auto, home, life and homeowner’s insurance through different companies you should call around and get quotes to find out how much money you can save by only having one provider.

Reduce Water Usage

If you put some effort into it you can greatly reduce the cost of your monthly water bill. Here are some ideas:

  • Put a quart sized water bottle full of rocks in your toilet tank
  • Only run full loads of laundry and dishes
  • Delay wash cycles on your laundry and dishwasher so they run late at night or early in the morning
  • Shorten shower times
  • Use a rain barrel to gather rain water for your lawn and gardens

Reduce Energy Use

If you put some effort into it you can greatly reduce the cost of your monthly electricity bill. Here are some ideas:

  • Get a programmable thermostat, raise your temperature to 78F/25C in the summer and lower it to 68F/20C in the winter.
  • Inspect your doors and windows for drafts and seal/repair them as needed
  • Peak into your attic, if you can see the floor it’s time to upgrade your insulation
  • Schedule an energy audit with your provider to get a customized list

It’s not too hard to maximize your savings and once you do this frees up some of your finances so that you can enjoy, invest or save your new found money.