Retirement Preparedness: A Wake-Up Call for Generation X Investors

March 11, 2011

Talking with a group of pre-retirees, one of the people in the room (a born entertainer) used Styrofoam coffee cups as visual aids to illustrate his point.  We were talking about incomes and expenses during retirement, and he broke out into a comedy routine/illustration of his financial life.  He filled a big pitcher with water and filled the first cup, broke out a Sharpie and labeled it “Pension.”  He had been an employee of the phone company for 40 years and has a very solid pension income.  The next cup he labeled “Social Security” and he filled that cup about ¾ full.  The 3rd cup he put a few drops of water into and labeled it “Investments.”  He said the 401(k) plan arrived a little too late in his career and he had not participated until the last several years of his career, plus he had a number of children that all went to college which left his personal savings and investment balances rather low. Continue reading “Retirement Preparedness: A Wake-Up Call for Generation X Investors”

Should I Pay Down My Debt or Save More for the Future?

March 10, 2011

There are questions in life where sometimes the best answer is “it depends” (how many times did we hear that when we were growing up?).  This is one of those questions, but I do have some solid guidelines that can help you make a decision on this question.

First, take a hard look at the interest rates you’re currently paying on your debt as well as what you are getting on your savings accounts.  In most cases Continue reading “Should I Pay Down My Debt or Save More for the Future?”

Healthy and Wealthy

March 07, 2011

I always had a suspicion that health and wealth had a direct correlation but it’s not quite what I expected.  It comes down to cash – cold hard cash.  Who knew?

A recent study published in the Journal of Consumer Research cites that people who pay for groceries with credit or debit cards buy more impulsive and unhealthy items than those with cash.  This may be due to the “pain of payment” according to the researcher Manoj Thomas. Continue reading “Healthy and Wealthy”

Financial Lessons from a Group of Retirees

March 04, 2011

I have had the opportunity lately to talk with a number of people who have been retired for at least a decade.  I asked them to take a look back at their financial lives to see if there were any lessons they had learned that today’s workforce could learn from.  All of these people were comfortable financially and had successful careers in their chosen fields.  I did not expect to hear so many comments about what they would do differently if they had the opportunity to turn back time.  They had some advice for their grandchildren’s generation, and here are just a few of their observations and recommendations: Continue reading “Financial Lessons from a Group of Retirees”

Is a Reverse Mortgage Right for Me?

March 03, 2011

It seems that every retirement planning workshop I do lately, this question rears its head.  Used to be not too long ago many people didn’t know what a reverse mortgage even was (Quick definition of a Reverse Mortgage: A special type of home equity loan for persons 62 and older.  The loan proceeds can be in the form of a lump sum, cash advance, or a line of credit.  The loan does not usually have to be repaid during the homeowner’s lifetime, which is why it is often used by retirees.)  Now that people are aware of this investment product, it has suddenly started becoming a first choice answer to retirement security for some people. Continue reading “Is a Reverse Mortgage Right for Me?”

Are You Saving Too Much?

March 02, 2011

When was the last time someone asked you if you thought they were saving too much?  Someone recently asked me this question and at first I was taken aback.  How is it that anyone could have money to save, let alone enough to wonder if they were saving too much?  Didn’t we just go through a recession?  Aren’t we all just swimming in debt, living paycheck to paycheck, desperately trying to make ends meet? Continue reading “Are You Saving Too Much?”

Retirement Preparedness: Save Forty Years then Spend Forty

February 28, 2011

Think about it.  We work for forty years of our lives starting from our early twenties to sometime in our sixties.  Then we have to support ourselves for the rest of our lives.  In other words, save for forty then spend for twenty, thirty or even forty years depending how your cards are dealt.

In my case, the longevity hand I was dealt isn’t the strongest.  Continue reading “Retirement Preparedness: Save Forty Years then Spend Forty”

Frugal vs. Cheap: How to Tell the Difference

February 25, 2011

In my prior blog, Car Buying: A Way to Save a Fortune, I talked about how I like to be a bit frugal when it comes to buying my cars.  Many of my friends have read that blog and, of course since they’re my friends, they aren’t afraid to chime in and tell me what points I failed to make.  With friends like that…well, you know the rest of that line.

Here’s the overwhelming commentary I got from people I know.  There is a difference between being frugal and being cheap.   Continue reading “Frugal vs. Cheap: How to Tell the Difference”

Why Financial Knowledge Isn’t Enough

February 11, 2011

Last week I talked about how there is an enormous volume of financial knowledge available to anyone willing to look for it.  Heck, you don’t even have to look, it’ll find you if you let it.  But even with the mountains of knowledge out there about how to become financially independent, there are countless people under financial stress who are considering bankruptcy, facing foreclosure or eviction, or who are a missed paycheck away from disaster.  How do we turn this knowledge into action? Continue reading “Why Financial Knowledge Isn’t Enough”

How to Have Financial Harmony in Your Marriage

February 09, 2011

In May, my wife and I will celebrate our 16th wedding anniversary.  Would you believe that in all those years we’ve never fought about money?  (If you believe that I’ve got some ocean-front property I just can’t wait to sell you.)  The truth is when we were first married we use to fight about money all the time.  It’s no surprise that financial stress is one of the biggest contributors to broken marriages, especially for newlyweds, so how is it that Susan and I have managed to stay together for so long?  Over the years we have learned how to resolve our financial conflicts by avoiding some of the common pitfalls that each of us faces.  I know they’re common because in my line of work I hear people say them everyday.  So in the spirit of Valentine’s Day, I’d like to share with you some of these pitfalls, along with ideas on how to avoid them, or at least understand them so that you can turn some of those nasty arguments over money into healthy discussions about your finances. Continue reading “How to Have Financial Harmony in Your Marriage”

Financial Education: Avoiding a Mega Millions Mess

January 25, 2011

Winning the lottery is every worker’s dream, but for Holly in Idaho that dream is about to become her nightmare.   If you haven’t heard the story, Holly recently bought a winning lottery ticket worth $190 million.  Who could be more lucky?  How about her estranged husband, who heard about Holly’s jackpot from a reporter.  Even though they have been legally separated for years, most attorneys are saying that the continued marriage means the husband gets half the winnings.  If Holly tries to fight his claim, her winnings could be tied up in court for years and unfortunately she already quit her job 6 days after the winning numbers were announced.  How could this mess have been avoided? Continue reading “Financial Education: Avoiding a Mega Millions Mess”

Financial Wellness: Getting Started by Taking it from Concept to Practice

January 24, 2011

Physical wellness is a much easier concept to understand than financial wellness but they are actually intertwined together since finances are the leading cause of stress and stress is the leading cause of illness.  This hit me this week because I decided to try something new (that’s my New Year’s resolution — try 52 new things) so I went to a yoga class called Yin Yoga. Continue reading “Financial Wellness: Getting Started by Taking it from Concept to Practice”

Workplace Financial Education: America Saves Week

January 18, 2011

America Saves Week 2011 is scheduled for February 20 to the 27th.   What have you planned to encourage your employees to take financial action through saving, debt reduction, and wealth building?

The American Savings Education Council (ASEC) first piloted America Saves Week in 2007, with the goals of:

Financial Education: 3 Important Check Ups to Do in an Hour

January 10, 2011

There are 8760 hours in a year – 730 in a month with about 240 of them spent sleeping.  That leaves about 490 hours to do what we want. We spend quite a few of those at work and it probably seems like we spend the rest of them waiting in line or being on hold. We can put a few of those hours to good use with some actions that might not be very urgent but are very important none the less.  Here are a couple of important insurance check-ups to do this week that take about an hour each. Continue reading “Financial Education: 3 Important Check Ups to Do in an Hour”

Are Bundled Packages Really a Money Saver?

January 05, 2011
Photo: ShanMac / Flickr

Conventional wisdom suggests that buying things together in a prearranged package is better than buying items separately.  For example, if I’m hosting a super bowl party at my house, I could buy individual slices of meat, cheese, and vegetables, or I could just pick up a party tray.

If I’m tuning up my car I could buy the spark plugs, air filter, motor oil and everything else, or simply look for a tune-up kit.  The upside to the prearranged package is you generally get everything you need in a cost-effective way. On the downside, Continue reading “Are Bundled Packages Really a Money Saver?”

Financial Education in the Workplace: What a Difference a Few Years Make

January 04, 2011

I recently spent a few cold, snowy days meeting with employees in the Midwest counseling each of them regarding their retirement goals.  I was surprised to hear quite a few employees were planning on early retirement, especially since we hear the trend is just the opposite because of our current economy.  Continue reading “Financial Education in the Workplace: What a Difference a Few Years Make”

Financial Planning: New Year, New Goals

December 31, 2010

Year end is a perfect time to take a look back at the progress you made in your financial life in 2010 and set new goals for 2011.  So many New Year’s resolutions fall by the wayside by St. Patrick’s Day.  (Dialing back on the chocolate consumption makes my list EVERY year.  Still, there’s something about dark chocolate that is stronger than my resolve.)  There are some resolutions, though, that are not only good for you but sustainable.  And, maybe a bit more realistic than my dark chocolate resolution too. Continue reading “Financial Planning: New Year, New Goals”

3 Actions to Take in an Hour to Prepare for Emergencies

December 27, 2010

In my last blog,  3 Actions to Take in an Hour to Build Wealth, I pointed out that many of us waste at least an hour a week.  I came up with three very important actions that take an hour or less to do but can significantly improve your finances.  I am writing this blog immediately after the last one and will predict right here that I will lose the playoffs in my fantasy football league.  First of all because my team isn’t that good and secondly because I am not a good manager.  I will admit that I have only gone this far by luck.  So in other words, I have free time.  What will I do with the extra hour? Continue reading “3 Actions to Take in an Hour to Prepare for Emergencies”