Saving

5 Ways to Reduce Spending and Start Saving

Written by adminJuly 22, 2019

Believe it or not, there are a lot of things we do as Americans that are more expensive than we realize. We could all easily comb through our budget and see the things we are literally wasting money on. Yet, we live during a time when health insurance is unaffordable and hardly anyone is able to save for retirement.

The economy is doing really well, but it could be doing a lot better. Millions of Americans are burdened by trillions of dollars’ worth of debt. Rather than finding a way to slow down spending, they keep spending even more, taking on more debt and making the situation worse for themselves. The best thing to do is find expenses you can cut from your life.

Here are the 5 ways to reduce spending:

1) Cut the Cord

Unless you’re a massive TV fan, paying $100 per month for cable is utterly ridiculous. The prices only continue to climb. Is it worth the cost for only getting to watch it maybe an hour or two per day? In that case, you can buy a $20 HD antenna to watch the local programming and do well with a Netflix subscription and internet. Anything on TV will show up on Hulu anyway, including live TV. Save your money and cut the cord!

2) Refinance Your Debts

If you’ve been doing really well at maintaining your debt, there’s no doubt that your credit score has improved over time. Maybe you took a loan out ten years ago you’re still paying on. If you have an improved credit score, that can go a long way in helping reduce what you spend each month. You can refinance your auto loan and/or your mortgage and student loan debt. It means a bank will give you a loan to pay that off, but your new loan will have better rates and lower monthly payments, saving you a bundle!

3) Don’t Be Afraid to Renegotiate

A lot of companies will do anything to keep you on as a customer, especially if they have a lot of competition. Don’t be afraid to call up these companies and do a bit of haggling to get a better rate. You can lower your cable get, get a good deal, or even threaten to switch companies if they’re offering something more your size. In most cases, they’re willing to oblige!

4) Share Your Bills

One simple way to save money is to split your bills with someone. Of course, this assumes you’re single or living on your own. By getting a roommate, that has a lot of great economic impacts. Suddenly you pay half of what you were before, putting more money back into your pocket.

5) Coordinate your Activities Better

You can easily lump different errands together and make a single trip out of it. A lot of people don’t do this and it makes no sense whatsoever. You can really save a lot on gas by going out and doing all your things at once while coordinating how you do it. For example, getting groceries after you hit the gym because the store is on your way home.

Written by adminJuly 18, 2019

Saving

For a lot of people, shopping at a thrift store is a big no-no. Who wants to wear pre-worn clothes? What a lot of people are finding, is that thrift store shopping can be extremely helpful. This is especially true if you’re trying to save money. The thing you should remember is to not jump into judgment too quickly. You can find a lot of great items at a thrift store without dropping your entire paycheck just to find some pretty clothes.

Finding quality items in a thrift store can take some work, but there are plenty of items for you to look for. Yes, this is stylish clothing and no one in the right mind would be able to tell that you bought it at a thrift store. So, why not save a lot of money if you’re struggling financially? Especially when no one can tell.

Let’s look at three tips for finding stylish clothing and saving money at a thrift store:

Tip #1: You Can Find New Clothes

It may seem strange, but there’s plenty of new clothing being sold it thrift stores. You can find sweaters, shirts, blouses, and other clothes donated by people who never even wore them. It’s not so odd, as plenty of people buy stuff on impulse. If they see sale, they tackle that sale, and stuff their clothes away in the closet and completely forget about it. Maybe the clothing was given as a gift and it sat in the closet for years, unworn and untouched.

Tip #2: Take the Time to Browse

Yes, you’re going to find a lot of duds at a thrift store. It might come across a pair of pants with a few coffee stains on them, stretched out sweater, or shirt with a hole in it. But that doesn’t mean that all the clothing there is going to look the same. To the contrary, as stated in Tip #1, you can find new stuff there. You just have to take the time to look and browse. Even if it’s pre-worn, you might find something you would like to wear.

Tip #3: It’s Okay to Honor Your Boundaries

Maybe buying a pair shoes is somebody else’s worn crosses the line for you. That’s perfectly okay! There’s no shame in bypassing the few items that might gross you out to wear. No one is saying you have to wear secondhand pair of underwear from some stranger you’ve never met. You might come across a few items that you consider buying, but if it bugs you even just a little bit you should probably refrain or you’ll end up wasting money on something you’ll barely wear.

Written by adminJuly 3, 2019

Saving

We all have the hope and desire of one day retiring during our golden years and sitting by the beach. We’ve worked really hard to get to enjoy this time, but sadly, Americans aren’t able to save enough money. They make decent estimations, according to Catherine Golladay. She’s the COO of Schwab Retirement Plan Services.

They did a survey of 1,000 people of working aged adults. They guessed close to the right amount they’ll need to retire on. That number is around $1.7 million. The rest of the survey also found that Americans are vastly under prepared. 51% of those surveyed are contributing less than 10% of their salary, adding about $8,800 per year to their 401(k).

-55% said they just found a number they were good with.

-36% said they were matching their employer’s contributions.

-8% go with the default amount that was set when they enrolled.

While a lot of Americans are at least trying to save, they find a lot of obstacles are getting in their way. Debt is a large part of why they’re not able to save. Whether it’s spending the next decade paying off student loan debt or other monthly bills and credit cards. It can be difficult to balance debt, saving, and monthly payments, especially when the economy is turbulent.

Many Problems With this Thinking

After looking at the survey results, it’s easy to spot two different misconceptions Americans have about retirement. The first is that they see themselves as savers, when in reality, they’re investors. You’re investing into your 401(k) to get the most of out of it. Just ‘saving money’ won’t get you to your retirement goals.

The second thing Americans seem to push off is getting the advice they need to ensure they have enough to retire on. They’re just making guesses and going with the flow. They have no idea, in general, if they’re on track to reach their goals. And in a lot of cases, they aren’t making it. Considering we’re living longer, that plays a part as well.

Nearly every person involved in the survey said they would feel much more confident is they had the advice of a financial planner, but about half said they don’t feel their financial situation is bad enough where they should spend the money to get advice. It will end up costing them in the end of they don’t know where they’re headed financially.

“They may think their situation is simple, but your wealth is your wealth,” Golladay said. “Put yourself in the best possible position and take advantage of the help out there. It could help Americans to think of themselves as investors, not just savers,” she said. The problem is, investing is an art and it can be intimidating.

“But people — especially younger ones — tend to find the act of investing intimidating, and don’t consider themselves investors even when they have an employer-sponsored retirement account. Shifting the mind-set from saving to investing can help make a person feel more in control,” said Erin Lowry, author of “Broke Millennial Takes on Investing.”

Written by adminJuly 2, 2019

Credit & Debt , Saving

Hey, there’s no shame in admitting that we love our pets. Like, we really love them. They’re a furry part of our family that we’ll always cherish. We love our pets so much that collectively, Americans spend around $70 billion every year to take care of them. This information is according to the American Pet Products Association. That’s a lot of love!

“Today more than ever, pet owners view their pets as irreplaceable members of their families and lives,” says APPA president and CEO Bob Vetere, “and it’s thanks to this that we continue to see such incredible growth within the pet care community.”

When it comes to food alone, we spend nearly $30 billion each year. It’s certainly the most expensive aspect of taking care of a pet. We need to feed them as often as we feed our own kids. If you’re going through a frustrating time financially, having enough money to feed your pets can be a challenge. Here are five ways to save money while buying pet food.

Way #1: Don’t Buy Brand Names

This is an easy step. We do the same thing when we’re struggling a bit financially. Why spending the extra several dollars for a name brand when the off brand is practically the same product? I mean, we know it’s a little less quality, but the price is often in our sweet spot. It’s the easiest way to still get the food we need while saving a few dollars.

At the end of the day, feeding your pets should be about nutrition. The premium brands aren’t more nutritious than the cheaper stuff on the market. They just have known brand names and can afford to stick their product on the shelf and command higher dollar for it. So, don’t be afraid to skimp and buy a cheaper brand of food.

Way #2: Look for Great Deals

It’s likely that the local pet stores around you have deals to get customers in the door. Maybe they have email lists and regularly send coupons. They might even have a customer membership club to join. If you have pets, it definitely makes sense to take advantage of these programs. They can ultimately save you a bundle of cash in the long run.

Way #3: Buy Food in Bulk

Another way to buy food is to get it in bulk. It works in human stores as well. Many people save a lot of money buy buying what they need and use often in bulk. You can do the same with pet food. Don’t always good for the smaller bags, even though they’re often cheaper than the larger ones. Usually the larger bags will give you the better deal. You can even use your Amazon Prime membership to get bulk pet food sent right to your door!

Way #4: Feed Your Pet Adequately

A lot of pet owners don’t pay attention to serving sizes when they feed their pets. They just fill up the bowl whenever they see it empty or when the pet begs for food. That can mean they’re being overfed, which costs more money. If money is tight and you see your pet might be gaining some weight, put them on a diet. Ration their food out appropriate for their size, age, and breed.

Way #5: Make them Treats

If you enjoy cooking and providing for your family, you can do the same for your pet. They love to eat whatever they can, so why not make them daily treats? It can save you money to buy the ingredients and make them yourselves. There are plenty of Pinterest recipes you can use. Just make sure it’s both tasty and nutritious for your pet!

Written by adminJuly 2, 2019

Saving , Student Loan Consolidation

Currently in the United States, prescription drugs cost a lot higher than anywhere else in the developed world. It can be a major burden on many Americans, especially those who rely on certain drugs to keep them alive. Diabetics and people with severe allergies couldn’t survive without their medications.

The average American pays somewhere around $1,200 each year for their prescription drugs. Seniors often pay more as the cost of drugs is only expected to go up in the future. This is according to data from several major study projections that expect drug costs to rise 6% per year through 2027. This is as many Americans are fighting for free healthcare.

If you’re struggling to buy prescription drugs for yourself or for a loved one, here are 5 ways to save money on these drugs:

1) Get Generic Drugs

Many of us don’t know the full dynamic between doctors and the drugs they prescribe. They don’t realize that mega pharmaceutical companies can have doctors in their back pockets. They’ll actually reward them for prescribing the expensive name brands. To counter this, all you have to do is tell your doctor that you’re on a budget and just want generics. Don’t be afraid to tell your doctor that you’re limited financially and they can help find a pathway of treatment that can fit your budget and lifestyle.

2) Split Your Pills in Half

Depending on the types of medications you get, you can try cutting them in half. It might sound strange, but it will ultimately save you money. Ask for a higher dose and use a pill cutter to cut the pills in half and you’ve just saved yourself half of your medication budget. This is one trick a lot of seniors are doing to make their medications last as long as possible.

3) Use Apps, Cards, and Membership Plans

A lot of the bigger pharmacies around the country, like CVS, Rite Aid, and Walgreens, each have their own membership card program that can help you save money on your prescriptions, as well as other items in the store. There are many apps out there as well, like GoodRx and WellRx that will highlight the costs of individual drugs and tell you their prices at different stores so you can compare price your medications, making it easier on you.

4) Get Drug Coupons

Yes, drug coupons do exist! As well as trying to get your doctor to push the expensive, name brand drugs, the pharmaceutical companies will also send your doctor coupons! Again, don’t be afraid to tell your doctor that you’re struggling financially. They will most likely do whatever they can to help you get the medications and treatment you need at a better price you can afford.

5) Use a Non-Profit or Assistance Program

Your area, especially if you live in a low-income town or city, might have some prescription drug assistance programs in your area. There may even be federally mandated assistant programs for you to choose from, like NeedyMeds, the Patient Advocate Foundation, and The Partnership for Prescription Assistance.

Written by adminJune 25, 2019

Credit & Debt , Credit & Debt Settlement , Saving

The big mistake is that we’re using misleading language when it comes to retirement.

New employees will be familiar with this: older colleagues incessantly bombarding you with advice to start saving for retirement as early as possible. Personal finance books go on about why it’s essential to save for retirement. Surveys are done and studies get published about how much you should be putting away for your golden years.

Sure, it only seems logical. You’re putting aside money for the future and letting it grow over the years, which is the definition of saving. But the very word ‘save’ has a double meaning. What you’re doing is putting money into an investment portfolio for retirement.

It’s important to acknowledge that you are now an investor, no matter if you have a 401(k) or IRA. You are now putting your money to work for you in the stock market instead of letting it sit stagnant in a savings account.

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Avoid Making this Mistake

Make sure that when you are setting up your 401(k) that you are selecting actual investments, and that you are not literally saving into your account. Sure, at the maturation of your policy, you may get a decent lump sum, but it would not be enough to comfortably retire. It would also be a huge discrepancy from what you could make if you properly invest the money and reap the benefits of compound interest.

To do some simple calculations, if you end up putting an average of $500 per month into a 401(k) for 40 years estimating an average 6% market return, you would end up with $933,714.65 upon retirement. But if the money just sat in a savings account it would only yield $240,000 upon maturation based on the market average 0.01% annual percentage yield on their savings accounts. Even with the highest savings rate of 2%, the money in savings would not exceed $370,000.

If you have a 401(k) or IRA, it would be prudent to check in on it, and make sure that your contributions are going into your investment portfolio to maximize your return upon maturation.

Stop Procrastinating and Take Control

One main reason that people often procrastinate about adjusting their 401(k)s is that they don’t understand all their investment options. There are many terms like mid-cap, large-cap which can confuse and intimidate people from confronting what they do not understand.

There is rarely any guidance as to which investments are best for an individual’s risk tolerance or time frame for maturation. So how does one go about learning how to set up an investment portfolio that is aligned with their personal interests?

How to Get Started

The simplest way to make sure you are on the right track is to consider a target-date or life-cycle fund. This is directly related to when you decide to retire and these funds are usually offered in 5 year increments.

You can also set up your fund to start with an aggressive portfolio, and rebalance it to become more moderate and eventually conservative as it approaches the set retirement year. You should start off aggressive and take more risk when you have time to withstand the variations of the stock market

There are those that say that target date funds go hand in hand with higher fees, which takes away from the future you. What that means is that one can end up with an investment portfolio that starts off too conservative, missing out on critical returns in the first few years.

Whichever method you choose, make sure that your money is being invested and not saved in a retirement account. If you need any other financial advice, feel free to reach out to the Financial Helpers. We are ready to assist you.

Call Now 844-332-2079

Written by adminJune 18, 2019

Credit & Debt , Saving

You may be among the 25 million HSA account owners, here are some things you might not know about them.

Health savings accounts (HSAs) are becoming an increasingly common feature in benefit packages. Usually offered together with a high-deduction health plan (HDHP), they are tax-exempt and set up to pay for certain medical expenses that owners may incur.

Contributions used to pay for medical expenses that meet requirements are not taxed, and the funds that grow in the HSA remain tax-free.

Some owners may not realize that contributions made via payroll do circumvent the Federal Insurance Contributions Act (FICA) tax, which makes HSAs as tax-perfect as they can get.

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HSAs are Underutilized

HSAs are rising in popularity but are not optimally utilized. According to a survey conducted by Mercer, more than 53% of large employers offer HSA-eligible health plans but only 24% of covered employees have opted into one.

The HSA enrollment process is actually quite easy. Here are the requirements according to the IRS:

You must be covered under a high-deductible health plan.
You cannot have any other health insurance coverage, including Medicare.
You must not be claimed as a dependent on someone else’s tax return

For 2019, if you only have personal HDHP coverage, you can contribute up to $3,500 towards your HSA. If you have HDHP coverage for your whole family, the contribution amount increases to $7,000.

Avoid Spending on Current Medical Expenses

The HSA is designed to cover health care expenses in retirement. But many HSA account holders use their accounts to pay for current medical expenses which defeats the purpose of having a HSA in the first place.

Rob Foregger, co-founder of NextCapital says that in certain situations, HSA account holders have no other funds to pay for their current medical expenses. If they plan to use their HSA in retirement, Foregger suggests investing in mutual funds, and that most HSA providers now offer these long-term investment options.

No Need for Required Minimum Distribution

After signing up for a HSA, you are under no contractual obligation to spend it on current and/or future medical expenses. You can also use it as a savings account, or to pay for personal costs at a 10% penalty.

There is no required minimum distribution (RMD)with a HSA as compared to a standard IRA. After age 70, most IRAs are required to take an annual minimum amount from their accounts. However, HSA owners can leave their money in their accounts for longer and let it grow tax-free.

Shop Smart

It is idealistic to think that people with high-deductible plans will allocate their money wisely for their medical expenses. But if people spent more time comparing prices they can avoid paying for overpriced plans.

There are procedures like MRIs that can be overpriced, draining HSA accounts. HSA owners should get quotes from different vendors for such services to avoid long-term impact to their HSA’s future value.

If you would like to discuss the merits of enrolling in a HSA, or if you require any other financial advice, feel free to reach out to the Financial Helpers. We are only a phone call away.

Call Now 844-332-2079

Written by adminJune 16, 2019

Saving

Most people enjoy the summer. It’s a great time where we spend a lot of time outdoors and enjoying the pleasant weather. But sometimes, especially if you live in warmer climates, summer can mean oppressive heat. Throw in a bit of humidity and you can be drenched with sweat just from stepping outside.

Most people’s solutions to this problem is to crank up the air conditioning. The home itself can be as hot as the air outside. So, turning on the AC can really put a strain on the budget. Having the AC running during the summer months can triple your electricity bill. In order to combat that problem, let’s look at 5 ways to stay cool this summer without blasting the AC.

1) Keep Track of Your Windows

In the summer months, if you’re not running the AC, you might keep all your windows open. The air in the morning and evening are usually cooler than during the heat of the day. But the trick here is to block the sun’s solar heat from entering your home. That means that in the morning, close your east and south-facing windows and draw the blinds.

In the evening, close your west and north-facing windows and blinds. This trick will help block out the sun’s heat during the times it will most likely enter your home. Also, don’t forget that your home can hold onto a bit of that solar heat and release it when the air temperature starts to drop.

2) How is Your Attic Insulation?

Attic insulation isn’t just to keep the warm air in the house during the cold months. It also will help keep the cool air in place. So, in that way, having good insulation keeps the lower floors comfortable throughout the year. If your insulation is poor or isn’t think enough, the cooler air can escape, or even push the hot air from the attic down into the home.

3) Install a Ceiling Fan

If you don’t have a ceiling fan, they are great at keeping rooms a good 5-10 degrees cooler with one-tenth the power usage of an AC. If your fan doesn’t seem to be doing the trick, check to make sure it’s not on a ‘winter’ setting. A winter setting will blow air the opposite direction to blow the air up rather than down.

4) A Whole Home Fan

Consider the places in your home that are the warmest. They are where the warm air settles in and it can make parts of your home really hot and humid. A great way to cool off those areas is to install a standard ‘whole-house’ fan that works like central air. The fan will pull the warm air out and push it outside the home.

5) Keep the Oven Off

During the unbearably hot summer months, using the oven can make the problem worse. Nothing heats up the kitchen like having the oven roaring. During these days, use alternative cooking methods, like grilling outside, using a crock pot, or a microwave. This will even help save on the electricity bill.

It’s understandable that there will be some days so hot, you’ll have no choice but to turn on the AC. But if you do most of the things on this list, it should cover you on most of your warm days while saving a bit of money on your electricity bill.

Written by adminJune 12, 2019

Saving

Parents who pay for their adult children’s expenses, like rent and student loans post graduation is no longer a new concept.

According to a survey conducted by Bankrate, half of Americans with children 18 or over have spent or are spending their retirement security to help support their adult children. The survey also found that parents are paying for a wide variety of bills, ranging from credit cards to rent and even student loans.

As college tuition costs continue to rise, parents are digging into their retirement funds to foot the bill for their children’s college tuition. A new survey done by Country Financial shows that 56% of parents are willing to take on $31,000 in debt, and 10% of parents have already gone into debt to pay for college for their children.

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A Stark Reality

“It’s an emotionally charged subject.” Doyle Williams, executive VP at Country Financial concedes. “If it’s going to help your children of course you’re going to do anything. But parents today need to be objective and ask if that’s the right thing to do for them.”

Williams adds, “The reality is that retirement is a necessity, and paying for your child’s education is a luxury.”

There is a crisis of retirement in our country, roughly 40% of retirees are spending more than they anticipated, and the so-called sandwich generation of Gen Xers are facing the prospect of taking care of aging parents and adult children at the same time.

This ends up putting even more financial pressure on them which is impacting their ability to pay off their debt and set aside money for their retirement.

Bank of Mom and Dad

With a plentiful jobs market and rising wages, why are the younger generations still relying on the ‘Bank of Mom and Dad?’ Bankrate analyst Kelly Smith proposes that delayed entry into the workforce is partly to blame.

“Young adults are staying in school longer, because higher education is getting more popular,” Smith says. “Education costs are going up, they aren’t getting the immediate push to enter the workforce, and on top of that they need help paying the bills.”

Wages have bounced back since the recession, but not all of the younger generation can handle it on their own. Ironically, achieving advanced degrees to get higher paying jobs does mean that some adults have to rely on their parents longer.

And the proof is in the pudding, where we see the impact of the $1.5 trillion student debt crisis on not just the 45 million borrowers but their parents and grandparents as well.

The Elephant in the Room

While parents might think they are doing right by their children, but Smith says that supporting your children financially for too long does them no favors in the long run.

The boomerang generation – when children come back to live with their parents – used to be looked down upon. It would be best to avoid becoming a boomerang senior coming back to live with their children after their retirement savings have been depleted.

When their retirement accounts are at stake, it is imperative that parents have that uncomfortable conversation with their children earlier to come up with a game plan. It’s all about coming to a compromise, and moving towards a more comfortable future for all parties.

If you need any help setting up a plan for your financial future, the Financial Helpers are ready to assist you.

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Written by adminJune 10, 2019

Saving

Many find themselves swamped in debt, and question being able to retire comfortably.

An online survey of 1,000 American adults conducted by CreditCards.com has shown that 78% of people are living paycheck to paycheck. 41% of those surveyed said that they don’t know when they will pay off their credit card debt, and 65% don’t know when they will get out of it.

Financial expert Chris Hogan describes the responses as “a depressing statistic and one that we can hopefully avoid. But we need a wake-up call all around, and people need to engage in this and get more serious.”

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Hogan adds that “people need to understand how important it is to make sure we’re putting money away and saving because if we don’t save, we won’t have any to spend or to build a foundation for retirement.

Avoid the Debt Trap

According to another survey conducted by Freedom Debt Relief, 41% of Americans have set aside little or no money at all for retirement. The overwhelming reason for this is the cost of everyday expenses.

79% of those surveyed said that they have debt: credit card debt 53%, mortgage debt 54%, auto loan 47%, student loans 21%, medical debt 13%, and personal loans 11%.

The overall debt held by households stands at $13.67 trillion in the first quarter this year and is steadily climbing. That figure is $993 billion higher than the peak of $12.68 trillion in the third quarter of 2008 before the Great Recession.

Credit delinquencies are also on the rise, driven at the forefront by credit card and student loan debt. Financial analyst Ted Rossman is optimistic that most people are responsible with their finances. “Most people who have credit card debt didn’t get there because of a vacation or a shopping spree,” Rossman explains, “they got there because something happened with their health, their car, their home, or they’re just having trouble making ends meet.”

This highlights the importance of personal finance and doing what you can to budget and live within your means. Any kind of debt can be a threat to your future. Whenever we borrow someone else’s money, we are charged a penalty called interest. Helping young people understand how money works will educate them to avoid this debt trap down the road.

If you’re not budgeting, then you will end up losing control over your money. You can either tell money where to go or wonder where it went. For any other financial advice, you can reach out to the Financial Helpers.

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