Personal finance

27 Jul Money Myths: The Truth About the Cost of Retirement

Myth: My expenses will go down when I retire so I don't need to save as much for retirement. Truth: With inflation, taxes and medical bills, your expenses will go up when you retire so you need to be prepared! Quite a few financial planners out there recommend a future nest egg value that will produce 80% of your current income when you draw a percentage of the dividends and earnings out of the account each month. The assumption is that your expenses will decrease by 20% when you retire and you will need less income to continue with the same standard of living. This means when you reach retirement age, you will have your debts paid off (including your house) and your dependents are gone, with your health remaining good and your taxes decreasing because you're pulling the income out of a tax-deferred retirement account, pension, or social security. Now, if you follow the L.I.F.E. Ladder and start early enough, you indeed should be debt free by retirement age and have fewer expenses in terms of debt. But the sad fact is, not very many of us actually follow those steps and we end up facing retirement with a huge drop in income but no drop in expenses. Actually, 43% of Americans have less than $10,000 saved for retirement. 27% have less than $1,000 saved. This is a problem.
Read More

20 Jul Paying Yourself First: How to Make it Work Part 2

[caption id="attachment_2906" align="alignleft" width="150" caption="Pay yourself first"][/caption] In part one of this two part article I talked about the theoretical part of paying yourself first. Planning our the month's income and expenses to spend every dollar on paper before the month begins, making sure you allocate...

Read More

13 Jul Paying Yourself First: How to Make it Work Part 1

[caption id="attachment_2906" align="alignleft" width="150" caption="Pay yourself first"]Paying yourself first[/caption] There are hundreds, if not thousands of financial gurus out there, all spewing the same advice: live on less than you make, pay down debt, avoid credit, invest early and often, etc. It begins to sound like a broken record with them all saying the same stuff. But what I've begun to see is that many Americans are tuning the broken record out. The reason: too much noise and not enough valuable content. Everybody is saying what you should do but nobody is saying how to do it. A prime example is the concept of paying yourself first. That phrase (or dare I say buzzword) has been uttered so many times over the last 20 years that people have become sick of hearing it. And whenever I mention paying yourself first in a coaching session with my clients, their eyes start rolling and their faces show an unmistakable look of disgust. When I press the issue I find that they have heard the term so much that they've tuned it out because they don't really know how to pay themselves first and actually make it work in real life.
Read More