Financial Thoughts

A wise shopper who is looking to save money and still make the purchases needed, will keep a list of the items he is looking for and how much he would ideally like to spend. If you shop without a list, you will probably end up purchasing many things that you don’t actually need. No matter what the price is, if you didn’t need it in the first place, this is not a good deal.

When searching for the items on your list, be sure to visit some of the online sites that offer new and used merchandise for sale. Some of the best bargains online can be found at a website called PropertyRoom.com. This site assists the police department with their asset recovery. Confiscated merchandise is offered for sale at great prices to the general public. Frequently, you can find luxury items on this site such as fine jewelry, all types of automobiles, boats, yachts, etc. This is a great place to visit as there is a large variety of unclaimed stolen goods which have been collected nationwide.

You are unable to examine the merchandise in advance, however, but experts have appraised them verifying quality and authenticity. Shipping is available for a fee on smaller items, but heavy products will be your responsibility to pick-up or arrange delivery.

Before making any purchases, as always, read the fine print so you are fully aware of the terms of this sale. Some sites offer purchases that are not refundable and, on PropertyRoom.com, there is a restocking fee of 15% if you wish to return the item.

Rising prices everywhere coupled with stagnant salaries creates an atmosphere that demands action on the part of the consumers. Cutting back on luxuries is, of course, always an option; that is, until you run out of luxuries. Soon you arrive at the basics and these are much more difficult to trim. A solution to this dilemma would be to supplement your income.

Most people have many more possessions than they will ever need. It may be time to start weeding through your closets and storage areas to recycle all of the unused items. Price items to sell by checking auctions and comparing prices in consignment stores. Kids clothes are easy to gather up for sale and a popular item to by used. Then determine where your items would fit best and get the highest price for your merchandise. Consider posting them on Ebay. You determine what will work best for your belongings and begin to sell them. Save all of this income, if possible, and use towards an emergency fund for the future.

Another possibility to increase your income would be to exploit any particular knowledge or talent you may have. If you have a strong background in a particular subject, you could try tutoring. If you are into physical fitness, get certified and become a personal trainer. If you charge less than other trainers, you should be able to build a regular clientele.

If you have an extra room at home, consider renting it to supplement your income. If you have an unused garage, this could also be leased to someone who doesn’t have one or needs an extra. If you live in a tourist area, consider visiting family while renting your home or apartment for a few weekends.

Neighbors are always looking for people to assist with tasks such as house sitters, dog walkers, or yard work. Any of these could provide additional income and help you to meet the challenges of today’s economy.

Every household has to begin to budget their finances in these tough times. We are all being squeezed by the price of gasoline, the large increase in the food prices, and everything else that is increasing faster than we can imagine. The only thing which is not increasing is the average worker’s paycheck. With these thoughts in mind, it is time to analyze the family budget and try to plan for a regular savings program.

There is a specific breakdown for the family budget. The first objective is to set aside 5% of your income for savings. If this is not possible, reduce the percentage but do not ignore savings. It is an important part of your budget and must become a routine in your financial planning. This should always come first. The next item to be factored into the budget is a maximum of 25 % of your net income for mortgage or rent expense. Food should account for 20 % of your budget and 10% should be allowed for energy costs. A 15% maximum should be applied to personal credit debt, leaving 25% of your budget for other necessary items. This will include your health insurance and medical costs. It would be wise to use any leftovers as additional savings or to pay towards credit card debt.

Savings usually equates with sacrifice and there are many areas where each of us could give up something we enjoy in order to save money. One of these areas might be the daily visit to a coffee shop. Purchasing these coffees is very expensive and, in these days, a luxury item. Restaurant visits must be curtailed while a bagged lunch and dinner at home will be the obvious replacements. Never shop for groceries more than once a week and be sure to consider store brands as replacements for brand-name items. Coupons are another source of savings that should not be ignored.

It will take a carefully prepared budget to show a family where expenses can be cut. Once you have recognized where there exists opportunities for savings, you are on the road to preparing a realistic budget that can work for your family.

The price of gas is discussed in the newspapers and on the news programs almost daily. It is the major topic of the day as it is causing so many problems for the economy and the family budget. It is definitely time to start driving sensibly so that you can use less gas and save some money. Here are some surefire ways to get more miles per gallon.

Speed control is something everyone should be doing today. Set your cruise control to a few miles per hour less than normal and enjoy the ride. Remember, if you keep your speed at 60 or below, you will get much better has mileage.

Consider removing heavy items from the trunk as a way to fight back against high gas prices. A lighter automobile will help you maintain the mileage you want.

Observing speed limits and eliminating too many stops and starts can also have a large impact on the amount of fuel used.

Avoid long lines at drive-ins. Park the car and go inside. Idling has a negative effect on mileage so turn off the engine if you are stuck somewhere for a long period of time.

Better yet, shop online. You can get just about anything online now, from household items, to groceries, to business gifts for clients, christmas shopping, office supplies.  You will save money usually, the prices are more competitive, especially for larger purchases; you can find cheap laptops by surfing the net instead of driving around trying to compare features. At minimum, shop around online first, saving gas. Shop for health insurance quotes, shop for an accountant, shop in advance online and save time and gas.

It stands to reason that keeping your car in good shape will help you save. It is important that the engine is tuned properly, spark plugs are clean and all tires are properly aligned.

Be certain to use the motor oil recommended by the manufacturer and keep tires inflated properly.

While driving on the highway in summer it actually can be beneficial to use the air conditioner rather than opening the windows. The reverse is true when doing errands locally.

Avoid heavy accessories like luggage racks. If you have body dents in the front of the car have them repaired as the body needs to be straight to assist in your quest for the best mileage possible.

Good planning will also help you save on fuel. Always map out where you are going and be certain to do all errands at one time. Also, consider the time of day so you will not be stuck in traffic.

If we follow this advice, we will all benefit. Driving sensibly can save both money and gasoline.

It is definitely time for all of us to look around our homes for ways to save money. Of course we are all focused on groceries and gasoline right now, but energy savings could also result in improving our family finances.

Begin your home review by taking the time to carefully examine your family’s habits. Are lights being left on unnecessarily? Are all of you guilty of this wastefulness? If so, maybe it’s time to have a family meeting and enlist the help of everyone towards saving energy which will, in turn, lead to saving money.

Hold a discussion about lights. Explain that you are going to replace incandescent light bulbs with the new compact fluorescent ones that last longer and use much less energy. Be sure everyone turns off the lights when they are not needed. Also, televisions must be turned off before you leave the room. Consider hanging signs if the family is continuing to be forgetful. This is just sound parenting, developing good habits for life. Appeal to your children’s desire to save the environment as many are focused on that today and this could be their small contribution. New habits are hard to form but these will be very worthwhile in the long run.

It is worthwhile to unplug items which draw power even when turned off. Especially concentrate on doing this when you and the family will be gone for the day, or when leaving for vacation. This is just one more opportunity for savings. The items that should be unplugged include televisions, computers and microwaves.

Consider installing ceiling fans to create air circulation thereby allowing you to raise the temperature in your home. Automatic timers will help you save on heating and cooling when you are away from home and yet still provide comfort when you and your family return.

Caulking and weather stripping can seal your home more efficiently and provide a big savings in both heating and air conditioning costs. Since the windows allow most of the heat into your home, consider heavy shades or insulated draperies. Another alternative would be to plant trees strategically so they will shade the most vulnerable areas of the house.

While conducting your energy audit, remember to replace air conditioning filters monthly, as a dirty filter blocks air flow and causes the air conditioning system to use more energy. This is a very inexpensive way to conserve.

Share your energy bills with your family in the future. A good idea might be to make a chart showing the savings after initiating all of these changes. Record the energy use over the past year and, each month, post this year’s equivalent use. Show the family how their efforts are improving the family budget while also saving energy.

Everyone today is discussing the price of gasoline and how rapidly it is rising.  People are canceling trips and consolidating errands so they can drive less and save some of their money to put towards other expenses.  It is sad that many people have found it necessary to cancel their vacation plans this year because the cost of driving is probative and the cost of flying is rising just as quickly.  The only options left for those who are struggling financially is to stay close to home and visit whatever interesting sights and beaches might be in their local area.

For those people who are determined to take a vacation there are a few ways that they can cut down a little on their fuel costs.  It will take some effort on their part but may help save them some money that they will then have available to a few treats during the vacation.

Tests have shown that an SUV with a roof carrier carrying a suitcase and cooler can drop their miles per gallon from 27 to 21 while driving approximately 65 mph.  This is a very large increase in gas usage and avoiding it can provide a substantial savings, especially on a long trip.

Bringing your laptop on vacation can help lower your gas expense.  While you are traveling in unfamiliar territory, how can you know where the cheapest gas stations are located?  You can check the many websites that list local gas prices and should be able to save on each purchase.  This, too, could help provide you with a little extra spending cash.

By driving at approximately 60 mph for your entire trip you will be able to cut your gasoline usage.  Traveling at a rate of  8 mph over the speed limit will result in a lower miles per gallon figure and will cost additional money at the pump. The Automobile Association of America had tested gas mileage and found that it decreases rapidly over 60 mph.  Every additional 5 miles added to your speed is the equivalent of paying an additional 15 cents per gallon of gas.  The use of cruise control on highway trips will usually help you maintain a specific speed and result in saving gas.

If you believe you have worked hard all year and earned the vacation you are planning, then you should go ahead and have a relaxing trip.  It is important to remember, however, that you do want to spend your money wisely so following some of these gas saving tips may actually help make your vacation more enjoyable.

The company sponsored 401K is rapidly replacing the old-fashioned company sponsored pension plan of yesterday.  Please note that the burden has shifted from employer to employee.  Companies actually paid 100% of an employee’s pension contributions and then rewarded them with this pension when they retired.  Those were the days!  People actually believed that this would continue and the majority of employers would continue to fund these accounts.  Things have changed considerably in the last decade.

The 401K is the new vehicle for saving for retirement.  Now it is the employee’s responsibility to fund the account and the company now contributes matching funds, usually at a rate of approximately 5% of the employee’s salary, assuming they contribute that amount.  Although this is “free” money, think about the fact that in the past employees were given an entire retirement fund as opposed to a maximum 5% match.

Since 401K’s are what is available today, it is important that all employees take advantage of them.  The money is saved tax free and the employer match is like a gift.  Anyone not taking advantage of this program is making a large mistake and not properly planning for their retirement.

Contributions should begin immediately when starting a new job.  Do not opt out regardless of your reasons.  Try to hang in there and contribute enough to qualify for the maximum match amount.

It is important that you select investments that fit your age and goals.  If you are a young person, stocks should weigh heavily in your portfolio.  If, however, you are near retirement age, you might want to cut your risk and reduce stock investments in favor of bonds and certificates of deposit.

All investors are encouraged to review their accounts regularly (at least annually) and to rebalance investments to meet your original goals.  This might mean moving funds out of stocks, if they have been profitable, and placing the money in a more secure investment.

If you should leave a company, the best thing to do is roll over your 401K to the new plan.  Many people are tempted to take the money and splurge on a few purchases but this is poor retirement planning.  Try to resist the urge to do this.

If your earnings meet specific government guidelines (under $53,000 for a married couple, $39,750 for a single person) you may be eligible for a federal tax cut depending on how much you have put into your retirement programs.  Discuss this with your tax adviser or contact the IRS website for additional information.

Although it is very tempting, try not to borrow from your 401K unless it is an absolute necessity.  You would be paying interest to yourself, but you are losing tax-deferred earnings on the amount of money borrowed.  Also, if you decide to leave your job, the loan must be immediately repaid or you will owe taxes and penalties on the loan amount.
401K debit cards are becoming very popular but present too much temptation to just enjoy these funds in the moment and forego the benefit of leaving them in your retirement account.  It is important that you make deposits to your account regularly and resist the urge to withdraw funds for everyday needs.

After spending many years contributing to your 401K, it is time for you to consider retirement.  While many would like to retire early and spend their time golfing, volunteering for organizations and having socially active lives with other seniors, some may not be financially ready for this new stage of life.  This move must be carefully planned so that you can enjoy the fruits of your labors without having to sacrifice too many pleasures.

One of the big uncertainties when planning for retirement is how long you will live.  Not one of us can answer this question, yet we are trying to plan for the balance of our lives.  This certainly makes everything difficult and the best we can do is plan for a long and healthy lifestyle and hope that this is what is in our future.

When you find it necessary to start drawing on your assets, you must be very careful.  You have the option to leave your account with your former employer (assuming you have more than a minimal balance), or you can roll your savings into an IRA which frequently gives you more investment choices.  Transferring your funds to an IRA is advantageous to your heirs.  As beneficiaries of your IRA, your heirs are able to take minimum required distributions based on their life expectancy while the balance of the account grows tax-deferred.

When deciding whether to leave your funds in the company plan or transfer them to an IRA you must consider possible penalties that may apply.  You may be eligible to withdraw funds from a company sponsored plan at age 55, but are unable to do so from an IRA, without penalty, until you reach 59 ½ years of age.  This is something to seriously consider before deciding to transfer your funds.

Once a person retires they are tempted to become very conservative.  This is not always a good thing because the average life expectancy for a 65-year-old today is 80 plus and 50% will live even longer.  This means that anyone in good health needs to have growth in their retirement assets in order to keep up with inflation.  Some risks will need to be taken in order to earn the returns necessary to keep your retirement portfolio healthy.  A good balance must be maintained and there are many ways to accomplish this.  A financial adviser might be the right choice for some.  Others will choose mutual funds in the hope that they will provide sufficient returns.  Professional advice is probably a very good idea for anyone in this position.

One thing that is extremely important is that you keep your beneficiary information current.  Life changes such as marriages, births, divorces, etc. must be incorporated into your beneficiary information so that all of your assets go the people you want to receive them.