Month: September 2023

Saving for an emergency fund:

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Let’s talk emergency funds! All the stats tell us less than half of Americans have three months’ worth of expenses in the bank. Other statistics tell us over 50% of people could NOT come up with $1000 if they needed to!

The experts tell us we must have three-six months’ worth of expenses in the bank for emergencies, like losing a job.  Let’s say you spend $3000 a month on average for expenses. Expenses are the essentials, like rent or mortgage, insurance, electric bill, groceries… You get it. Not the extras like takeout food, going to the movies…new shoes. 😊 For this example, we are using $3000 per month as your “essential” total, therefore you should have $9000 in a savings account. Yikes! That’s a lot of money!! I know I get it… But you must start with something… Maybe the first goal is half of that and as you build momentum it will get easier… It may take several months to get there, maybe a full year+… but we need to have a starting point… This is a SAVINGS account, NOT a retirement account. So, NO IRAs. Or ROTH IRA’s, 401K’s…  a savings account that you can access immediately!

This looks like a HUGE undertaking… I get it… We are NOT lazy; we work hard for our money! BUT are we paying attention to our money??? What if we start to drill down and pay attention a little bit more.

 Have you ever actually gone through your bank statements?  With online access to most of our accounts you can really drill down and see what you’re paying for.  Doing this for two or three months in a row and you start to see some things that pop up that maybe your saying “I didn’t know I was paying for that!”

Maybe it’s just $20.00 here, then $30.00 there… Or even $8.00 there… and before you know it you can probably pull together $100 maybe even $200 a month of expenses; you really do not need or WANT!

Let’s start there… And if you can’t get yourself to do this simple task, it might be worth looking into apps like Rocket Money or Truebill. Both apps help track your spending and can cancel subscriptions for you. Rocket Money also allows you to “automate” some savings as well. Both apps for the basic plans start at $3.00 per, but if it saves you $50+ a month and gives you a clear idea of where you are spending your money… Might be worth looking into! 😊 There are several apps out there so do some homework and put together the best plan for you! The goal is to DO SOMETHING… Once you start and get a handle on your HABITS… You can start to work on NEW Habits… That’s what all this money stuff really comes down to OUR HABITS… The goal here… FREE up some money, move it into your savings account AUTOMATICLY… and you will find a few months down the road you have money in the bank for those two new tires and you do not need to stress! 😊Good Luck! You got this!!!

Retirement!

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Let’s talk about retirement. A new survey from Axios-Lpsos, says one in five people think they will never retire!   Gen. Xers said they have nothing saved for retirement at all and that’s from the National Institute of Retirement Securities. It’s said this is due to reduced pension plans and decreased access to 401K retirement plans as the major contributors for people working longer.

 I find it hard to believe that people really want to work into their 70s! Sure. you want to have things to do and stay active but do people really want to do the same job they’ve been doing for the last 35-40 years?

 I must think at one point those full-time big person jobs that are stressful and time-consuming, are no longer fun! It’s not a 40-hour week anymore, it’s a 60-hour week for the same money!

 So. what’s really going on? I think people want to stay busy in retirement, but I think they want to do something they feel is rewarding and gets them out. We all need a reason to get up and shower each day and keep our minds sharp. We want to be a part of the world but maybe not the full-time gig we have been doing for the 3-4 decades prior.

 I think more people work full time and stay working full time because they need to, not because they want to and is that good for us overall?

What if we start earlier with small changes in how we spend & save?  Little changes and starting earlier in life. We must educate the younger generations that it is important to start saving for retirement as soon as you start working just a little bit even if it’s only $100 a month, it’s a huge difference on the other end. You might love your job and you might think oh this is great I’m going to do this forever!

 Let me tell you things change overtime, companies change, they get acquired, they go out of business, management changes, you get a new boss and that could change everything! Then suddenly you went from having the greatest job in the world to being completely miserable.

  What’s the lesson here? Start taking care of yourself, the younger the better, but START! A little bit at a time and understand what compound interest does for you!  What’s the worst thing that happens? You get 40 years down the road and you’re still going to work, but you have a $2,000,000 in the bank! Ya, that’s a problem I want!!! Let’s get educated on the “money math”!

Check out this great on-line compound interest calculator from Bankrate! If this does not inspire you, you’re in the wrong place! 😊

Compound Interest Calculator – Savings Account Interest Calculator (bankrate.com)

Example: If you start with $1,000 in a retirement account that earns on AVERAGE 8% return, and you only put $100 per month in for 30 years… You get… wait for it! $146,002.51!!! You would have invested $37,000 and made $109,002.51 in INTEREST!!!

What if as you aged, you added more than a $100 a month or let it run for 33 years, or got a 10% average return??? The market will go up and down but set up a retirement account through work (401k) or a simple IRA, get online with Fidelity or Vanguard, or another major brokage company and start saving! That’s the first step!!!!! These companies have amazing software to guild you along the way as well as real people to call and talk to. Just START!!!

We cannot control everything during those “working” years, and we cannot control the market, but we must put the odds in our favor, so we have options down the road. We want to decide when we retire. We don’t want our “bills & expenses” to decide when we retire!!!