5 Super Easy Effective Ways to Help Save For Retirement

This morning’s water cooler conversation started off very light hearted, as most Friday mornings do, but took a sudden dive into the scary waters surrounding retirement and savings. Being a government employee, I just assumed that my co-workers and I were all on the same path: employer funded retirement accounts, plus additional personal 403b accounts and savings… I mean, that is how I was raised – “[s]aving for retirement is an investment into your own future, no one will do that for you” still echoes in my ears. As the conversation progressed, I realized that I was the only one, at 33 years old, that had taken this path to attempt to secure a financially stable retirement. Later I received an email from a co-worker asking how I recommend they start on they own retirement savings journey, so I thought I would share my response.

The Miracle of Compound Interest

The best advice I ever received in regards to my retirement savings was to start early. The younger you start, the more ground you make with compound interest. Google it. Simply put, you earn interest on your contribution plus the previously accrued interest. Start saving at 30 years old, instead of 20 years old, and you will need to contribute 3 times as much to have the same balance at retirement age.

Employer-Based Retirement Plans – DO IT!

Currently, I work for an agency that offers a 6% contribution to my retirement account and my employer pays the required 6% employee match, on my behalf. 12% of my annual salary is a great place to start. If you are in this situation, it is also important to research additional retirement options to help supplement your retirement goals. For example, I have set up a 403b account that I put $300 a month. The best part about this is that the $300 come out of my check pre-taxed – lowering my adjusted gross income (AGI)! If you want to get crazy, let’s talk about also setting up a Roth IRA as well!

Many private organizations offer a percentage 401K match; therefore, if you pay 3% into your 401K account, then the company will match your contribution and also pay 3% into your account. Why wouldn’t you automatically put in, at the very least, the amount the company is also willing to contribute on your behave? Free money!

Make sure to contact your HR department to determine if this is something that your company offers. It is literally their business to know and to help you.

My Personal Pitfall

Every year when I receive my annual raise, I increase my 403b contribution according. This way I don’t miss the money because I didn’t build my monthly budget around it. This is a very easy way to increase your savings as you move closer to your retirement.

When I first started to contribute to my plan, I made an unrealistic monthly goal and it backfired on me because I was no meeting my monthly expenditures and it was very stressful.

I used Google to find a great retirement calculator to determine how much I could afford to contribute and increased my contribution as I could afford to do so. A staggering 40% of Americans underestimate what their financial needs will be post-retirement.

Rollovers

If you are leaving the company and get asked the big question – rollover or cash out? ALWAYS rollover. Cashing out your 401K or 403b can lead to high fees and tax implications. Do your research and talk to your tax account. I understand the incredibly tempting allure of fast cash but do not fall into that trap if you can! As my dad says “no one else is saving for you…”

Check out the Graphic below, It provides an interesting visual insight into generations and how they go about save for retirement differently.


Presented by Creditlogon.com

Getting Started in Property Investment: What You Need To Know

I think that there will have been one time or another when we have all thought about investing in property. It seems like something we could do alongside our regular job, but it can be something that can grow quite easily too. Plus, just think of all of those properties that people will be paying the mortgage off for you. But is it all as simple as that? Here are some of the ways you can begin your journey to getting onto the property ladder and making it a business.

Check Your Finances

If you want to be approved for mortgages, then you need to know what your finances are looking like. If you have bad credit, for example, it might be a pipe dream that could take a little longer to see come to fruition. With a good credit rating and a regular income, you should be able to get approved for a mortgage.

Set Your Goals

Ultimately, before you start investing in property, you need to decide and set your goals. Do you just want a huge portfolio of flats for rent to help people have homes, or do you want to be buying and flipping houses quite quickly to get the cash? When you know what you want to do, you will know how to go about it and what kind of money you’ll be looking at needing.

How Much Risk Can You Stand?

For any investment, there is always an element of risk. So you need to decide for yourself how much risk you are willing to take. When you know your feeling on this, it can help you to decide what strategy you can put in place to make it all work for you.

Start a Budget

It can be a little dull and boring, but setting a budget is what is going to help you to achieve those goals. If a house needs to be modernized and redecorated, then you need to decide what you can afford to do with it. Otherwise, costs can get out of control and then you may not make as much profit as you were hoping to.

Create a Purchase Plan

You need to decide on the kinds of property that you want to invest in. Residential? Commercial? Ones that need work doing or ones that are ready to rent out straight away? Just make sure that you have a plan in place and do your due diligence for each property. Taking emotion out of it will help you to make better business decisions.

Stay Focused

Times may get tough when it comes to investing in property. So it is important to remember your goals and what you are looking to achieve. You might think you need to sell up at one point, but it could be better to hold on for longer, in order to get the maximum return, for example. Take your time, stay focused on your goals, and you will be achieving them before you know it!

5 Tips for Responsible Credit Card Use

Credit cards can be a useful financial tool in a number of ways. Aside from the purchasing power they provide, most credit cards come with beneficial rewards, and responsible credit card usage can help build and improve your credit. However, the key word in that statement is responsible, and improper credit card use can put you into a financial hole that is hard to escape.

In this way, credit cards are like fire– their usage can have a number of meaningful benefits, but irresponsible or careless use can create serious damage. According to recent research published by NerdWallet, consumers in America owe a total of $784 billion in credit card debt. The average American household with credit card debt owes balances totalling at $16,883, and this costs them approximately $1,300 per year in interest.

This is not meant to discourage responsible consumers from utilizing credit cards, but irresponsible credit card use can build excessive debt, damage your credit score and create a vicious cycle that is hard to escape.

This article is designed to help educate those who are new to credit cards, those who have already dealt with credit card debt or anyone who simply wants to learn better habits. Using these strategies and using your credit cards properly can greatly improve your credit score, reduce the stress of debt and give you more financial freedom and stability.

1. Remember they are credit cards

This means that you are essentially borrowing money every time you use your credit cards. They are not magic wands that give you free money, and everything you spend will have to be paid back with interest. Trying to think of every credit card purchase as borrowing money will help you be more cautious with your spending.

2. Only spend what you can afford

Just because your credit card has a certain limit does not mean that you have to use that much. In fact, if you use your cards responsibly, you should never have to think of your credit limit, as it will have no impact on how much you spend.

Your credit card expenditure should depend solely on how much you can afford to pay back when the bill comes, and you don’t even have to spend that much. A general rule of thumb is to keep your credit card balances less than 10% of your monthly income.

3. Use your money first

Many people make purchases using credit cards before using cash or debit cards, but this can be a mistake that creates bad habits and leads to more mistakes. Especially if you are inexperienced with credit cards, it is best to use the money you actually have before dipping into credit. A simple rule is to use cash or debit on everyday expenses and only use credit cards on large or irregular purchases.

4. Find the right card for you

Credit card rewards can be one of the most useful, beneficial aspects of the cards, and you should use them to your advantage. The first step is to find the right card– with the right rewards– for you.

If you travel a lot, use cards with hotel and airline rewards; if you are a college student, get a student card that rewards you with electronics and useful gift cards. There is a credit card for any interest, vocation and person out there, and sites like offers.creditcard can help you identify the right one for you.

5. Ignore the minimum payment amount

You should pay as much of your credit card balance as possible, and it is best to pay it in full each month. Paying the minimum may seem like it is temporarily helpful, but this will quickly rack up loads of interest. This should go without saying, but you also need to pay your bills on time.

Carefully budgeting and determining how much you can afford to spend ahead of time will greatly influence and benefit your credit card spending. Spend your cash first on regular expenses, find the right card for you, spend only what you can afford and pay your balances on time to experience all the benefits of responsible credit card use.