Archives For Top Ten List

Are you using a adding machine to calculate your retirement?

Have you ever wondered how much money you’ll need when you’ll retire? Perhaps retirement (I hate that word) is far off or it could be coming at you like a freight train.

How much money will you need? I’ve collected and reviewed 10 different calculators. 5 Stars is the best. I suggest that you try several as you’ll notice differences.

TIPS

 

  • You’ll need at least 70% of your current income in retirement, if you want to have fun you’ll need more.
  • Determine what age you and your spouse will leave the work force.
  • Estimate you Social Security benefits if you can’t find your paperwork.
  • Conservative return rates are 5-8%, Agressive are 8-12%.
  • Standard inflation rate is 4%
  • Try multiple calculators and return every 3-5 years to see if you’re on track with your goals.

10 Retirement Calculators

AARP– Easy to use and gets the job done. Also factors in SS and estimates how much you’ll need each year. 5 Stars

Bloomberg– A bit too simple and doesn’t factor Social Security. I expected better Michael. 1 Star.

Charles Schwab– I really like this one Chuck! I especially like the interactive graph at the end. Very useful. 5 stars

CNN– Simple to use and it gives a projection if you’re on the right track. It does factor in Social Security. 4 Stars.

FINRA– Basic graphics, yet it gives you instructions and nice chart at the end. 4 Stars.

ING– Just a cute little tool to find out how much you’ll need to save. Only provides a piece of the puzzle. 2 stars.

John Hancock– Honestly this one seems a bit complex and I couldn’t get it working. I always imputed something wrong. There is no guide and I quit after 5 minutes. Next… 1 Star

Office of the Secretary of Defense (for Military Retirement)- Straight forward and much needed. 5 Stars

T. Rowe Price– Good tool and nice slide show at the end. 4 Stars.

Vanguard– One of the best calculators I used and only 1 page. Uses slide bars that change the outcome automatically. The only drawback is you have to figure your SS by yourself, but they provide a link. 5 stars.

4 Factors to Consider:

  1. Are you factoring in Social Security benefits? Will they be around when you retire? Better plan for the worst if you are young.
  2. What will the tax and inflation rate be? Again, youngsters (anyone under 40) should plan for higher taxes and inflation in the future.
  3. What state will you live in when you retire? Some states don’t have income taxes.
  4. Will you be out of debt? I hope so! Get on the ball and let’s get this done. Contact me if you need a financial coach.
Which calculator did you prefer? How are you planning for life after work? Comment below!
(Photo by  Thomas Hawk)

 

scrabble board money

Photo Credit Philip Taylor PT.

There are many ways to save money. The problem is actually doing them. Take this list and starting doing one item per week and you’ll begin to see your financial situation improve.

I’m sure you’ve thought about or heard of all these savings strategies, but the problem is you haven’t started them yet. There is no better time to start saving than today.

1. Cut the cable– If you don’t want to go cold turkey, then at least call and negotiate a better deal. My wife got us from $49.00 a month to $29.00 with just a 5 minute phone call.  That was $240 savings in one year!

2. Shop with a list and a menu in mind at the grocery store– It takes planning and time, but you’ll see the savings roll in. If it’s not on the list, you can’t buy it.

3. Cut the amount of sodas and alcoholic drinks when you’re out– The markup on those drinks are astronomical! “Just a glass of water with lemon please” is what you’ll be saying.

4. Shop generic. Name brands are expensive. Take the generic box of cereal for much cheaper price.

5. Refinance your home at a lower rate– Did you know that interest rates are still at rock bottom prices if you have equity in your home? Shop around and lock in a fixed rate before they start going up. Remember always avoid the ARM!

6. Brown bag it and make that coffee at home. Everyone knows its cheaper to take your lunch and make your tea/coffee at home, but are you doing it now? Time to get out the ole’ lunch sack and pack an apple and turkey sandwich. Don’t forget to set the timer on the coffee pot the night before!

7. Blow some money– Yep you heard me right. Blow some money! We all need a release to spend some money on frivolous items and impulse. The only trick is to work that blow money into your budget and limit it. Blowing a little money each month will help act as release valve, so your spending kettle doesn’t boil over.

8. Sell something– It can’t all be about saving right? You know you don’t need it anymore. It’s that thing in the corner of your living room, closet, or garage. Go ahead sell it and take that old thing in the coat closet too! eBay and Craigslist = money for your emergency savings or debt.

9. Insurance– Yep there are all kinds and many are overpriced. If you have universal or variable life insurance, then it’s absolutely overpriced. Get term life insurance and then cancel your old policy. For car insurance, if your car is worth around 3,000 or less then think about going with only liability and your state min. requirements.

10. Balance your checkbook– Do you really know how much money you have in that account? If you haven’t done it in 5 years…it might take a while. Time to reconcile your account. Here is a video and an outline of the basics.

*Bonus: Start using the Envelope System– stuff envelopes with cash for a few budgeted categories like food or entertainment and only use the envelopes for that spending. When the money runs out, you’re done eating out for the month.

What are other simple ways to save money? 

10

Happy Weekend! hope you’ve enjoyed doing what you love this week. If not, I hope you’re making steps towards working in your passions and strengths for pay.

Top 10 lists are a staple in late night T.V. and online. We see the world in top 10 lists and they’re great for our time crunched sound bite generation.

I’ve collected a number of Top 10 lists for your weekend reading pleasure. Hope you enjoy and travel safe if  you’re taking a long 4th of July week vacation.

Personal Finance Top Ten Lists

Top Ten Lists From OnTargetCoach.com

Seems I like writing top 10 lists too. Check out a few I’ve written:

What is your favorite top 10 list (besides Jay Leno)? What top 10 list do you want to see created? 

Photo Credit woodleywonderworks (Creative Commons)

With spring in the air many people start to think about spring cleaning in their homes and gardens. How about this year concentrating your efforts on a financial spring cleaning? So sit down with your thinking cap and let’s get started!

  1. Formulate a Plan and Set Reasonable Goals.

This is the why of financial spring cleaning. Are you in debt, unorganized or too busy to have a financial plan for your money? You need to dream about what you would do if you had money. Travel, give, save, and invest for your future? This is the place to figure out why you are willing to get your life in order.

  1. Build a Budget

In this step you will sit down and list your monthly take home income at the top of the page. Then you will list your expenses starting with savings, food, housing, utilities, transportation and reasonable clothing. Keep spending down the sheet until you have spent your income on paper for the month. You can go back and adjust categories as needed, but it must come out to a zero on the bottom. This is how you will spend your money this month.

  1. Involve Your Spouse and Children

This will be a family affair, so get input and ideas from your family on how you can cut expenses and save money or pay off debt. If you are out of debt, what would you do or where would you go? How would your stress levels be different if you had no debt and a financially clean home?

  1. Build a Small Emergency Fund

Having a $1,000 set aside for emergencies will help you to not go further into debt while you are paying off consumer debt.

  1. Take One Step at a Time

When trying to pay of many debts list them from smallest to largest and pay minimum payments on each. As you squeeze money out of your budget, pay extra on the smallest debt. Once that is paid off, you can apply that payment to your next debt and continue on up your list until you have eliminated all debt.

  1. Design a Weekly Budget Check-up with Your Spouse

This weekly check should take no more than 10 minutes. You are just checking your progress and adjusting the budget where needed. If you are spending more in one category, you will need to reduce your expenses in another category so that you stay balanced.

  1. Stop Investing in Retirement Temporarily

Even if your company is matching your investment, that money is better used to pay down your debt right now. You do not want to borrow from your 401K, so it is better to stop contributions temporarily and attack your debt.

  1. Use Cash

Studies have shown that using cash for purchases makes you spend less and save more. Spending cash registers as pain in your brain where credit and debit do not. Cut up your cards and use cash instead. It will help you to save more each month.

  1. Have a Garage Sale

As part of your spring house cleaning, set up a garage sale to bring in extra cash. This could go towards your $1,000 emergency fund or to pay down debt faster. If you don’t need it, use it or love it, sell it!

  1. Take a Class

Find a personal finance class in your area, such as Dave Ramsey’s Financial Peace University. This will help you to learn more about eliminating debt and saving for your future, so that you can get pointed in the right direction for success!

Kathryn Gerken blogs at www.GerkenFinancialCoaching.com twice each week. She and her husband Tim are Financial Coaches in the Seattle area.

Photo Credit Nationaal Archief

Avoid a Budget ‘Wipe Out’!

Congratulations, you’ve got a budget in place (click here if you don’t), but now you’re in trouble. Something just isn’t working and your budget is busted. You’ve just made an epic budgeting mistake.

You’re not alone. We’ve all done it. Now learn and try to avid the same mistake again. If you can avoid these common budgeting mistakes you’ll be ahead of the pack.

10 Epic Budgeting Mistakes

1. Gas and Food- You are just getting a handle of how much you spend in these necessary categories. You’ve got to eat and get to work, so put a little extra in these categories in the first few months.

2. Not Tracking Expenses- Making a budget is only 1/2 of it. Now you’ve got to track those numbers. Don’t rely on your online bank statements for this as it won’t tell you which bills are due, what checks are outstanding, and pending transactions won’t show up on MINT.  There are tons of ways to do this yourself. Pen and paper, excel, envelope systems, personal finance software like iBank 4You Need A Budget (YNAB), or Quicken (affiliate links). Find what works for you and track your spending.

3. Forgetting Annual Expenses- Every year there are certain expenses you’ll need to pay like memberships, school clothes, christmas gifts, insurance premiums, etc. When you first begin budgeting you have to remember about these annual expenses, but most likely you’ll forget some important items. Example: Save $50 each month so you’ll have $600 in December to buy those christmas gifts.

4. Not Having an Emergency Fund- Unexpected events and expenses occur. An emergency fund of at least $1000 will protect you from an epic budgeting mistake and shield you from going into debt.

5. The ATM Monster Ate my Budget- You can $20 your budget to death and you have no idea where you spent it. Have a plan for how much cash you’ll get out each month and stick to it. You just might have to tell burger and fries it’ll have to wait till next month.


6. Being inflexible- Some months you just have to be flexible with your budget. Making a budget is more of like art than a science (especially with an irregular budget). Be flexible and willing to change, just make sure your budget balances. If you spend more in category, you’ll have to spend less in another.

7. Unrealistic with your Spending–  $100 worth of groceries won’t feed a family of four, even if you are an ulta-coupon saver. Be realistic in how much you’ll spend.

8. Not Having Fun- You need to blow some money or you’ll sabotage your entire budget. A bit of mad money in your budget allows some steam to seep out. Have absolutely $0 in fun money for a few months and you’ll likely go crazy and make a large purchase or go on a spending spree. It can happen. Have an amount of money each month where you spend anyway and anyhow you want. Your spouse doesn’t even get a vote on this money.

9. Trying to Budget Without your Spouse on Board– This just won’t work. One will be frustrated and the other will feel controlled. Get on the same page with your spouse before you begin budgeting. Read more about budgeting for couples.

10. Saying  ‘Yes’- This will cause epic fail. Want to go out to eat? Yes. Want to go to the movies? Yes. Want to meet for coffee? Yes. Want to have cocktails after work? Yes. With your new budgeting lifestyle you’ll have to say no more often and/or get creative. Want to go out to eat? I do, but it’s not in my budget. Want to go to the movies? Sure, your RedBox or mine? Want to meet for coffee? Sure! (take your home-brewed coffee or fill up your coffee mug at the office). Saying “Yes” too much is especially a common budging mistake for singles (Read more tips for singles here)

What epic budgeting mistakes have you made? Your mistake might help someone else win financially. See you in the comments. 

Photo by:  Denis Dore Photography (Creative Commons)

[This is part of my How to Budget Like a Pro blog series]

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