Top Personal Finance Blogs
Friday November 17th 2017

Three Best Place to Retire on the Cheap

Finding the perfect spot to retire is on the mind of many people these days. With the volatility of the stock market and other investments, retirees evaluating practical retirement options are looking for affordable options that suit their lifestyle. Three cities have been named in the media lately as the best places to retire an they are not as far away as you might think.

St. Augustine, Florida

There is a reason we all think about Florida as a retirement capital. In Smart Money’s March, 2011 issue, the city of St. Augustine, Florida was selected as the second most attractive retirement spot for retirees. With an average home price of $115,400, it is hard to beat this quaint old beach town for affordability. To sweeten the picture even more, Floridians do not have to pay state tax.

The St. Augustine beaches are second to none, stretching out over miles of pristine Atlantic white beaches. Located about forty five minues south of Jacksonville Beach, and a major airport, and tugged into the northeast section of Florida, St. Augustine offers moderate temperatures and a summer ocean breeze to cool hot summer days. With a small population of about 13,000, St. Augustine graces retirees with a small town vibe, free from the stress of larger cities.

As the oldest US city, discovered in 1513, St. Augustine’s historic downtown is quaint and memorable with brick streets and Spanish architecture. There is no shortage of shopping and restaurant venues. With Flagler college in the heart of the city, this small college town has a diverse population, filled with tourists, college kids and retirees.

Lexington, Kentucky

While some retirees want the beach, others favor rolling hills and the four distinct seasons offered by a city like Lexington, Kentucky. Boasting an intellectual population, with almost 40% of the residents having a college degree, Lexington promotes the idea of lifetime learning. Citizenas over 65 can audit classes for free, filling any empty seats they find at the University of Kentucky.

Median home prices are an affordable $144,200, as printed in CNN Money.com’s article “25 Best Places to Retire”. With 29% of the population over 50, there is plenty of company for outings to great restaurants and equestrian events, or to take in a basketball game.

Bellingham, Washington

For retirees looking west, Bellingham, Washington is a city that should not be overlooked. The average price of a home is $$258,450, which is a real bargain for the west coast. The fact that there is not state income tax makes this city even more attractive. Located geographically close to both Seattle and Vancouver, this community is home to an international airport and a picturesque downtown harbor.

A state college and nationally acclaimed hospital also call Bellingham home. A farmers market located in the downtown area hosts local vendors offering a quaint shopping experience. The beneficiary of moderate temperatures, Bellingham offers residents a break from the heat, and the extreme cold weather that many other parts of the country claim.


Figuring Out Your Financial Goals

Most people have a general idea of what their financial goals are, but they never dig down to the specifics. If you want financial independence, for example, what does that mean? It is important to create a detailed explanation of your financial goals so that you can begin to work seriously toward them. You will have better success meeting your financial goals when you have a better understanding of exactly what they are. The sooner you start, the more you will be able to take advantage of accumulating interest that could speed you toward your goals even faster.

Make a List

Begin with a broad list of your financial goals. Think of big things, like buying a new home or paying for college tuition for your children. Once you have defined the big goals, do some research into possible ways to achieve those goals. If you want to send your kids to college, find out about the tuition and housing rates at some of the schools in your area. Give each of your goals a real number to achieve so that you can create a realistic time frame for reaching that number.

Prioritize

Once you have a good list of goals, you need to decide which ones are the most important. You may not be able to afford to save for college tuition and pay for braces at the same time. Think about each of your goals realistically and arrange them in a manner that makes sense. When they are arranged by importance, you can focus your money and energy on the goals at the top of the list first. Once those goals have been met, you can begin to work on goals that are further down the list. The importance of some goals may change as time passes, so you should update your priorities once every other year or so.

Scrutinize Spending Habits

The toughest part of working toward a financial goal can involve adjusting your daily spending habits. When you start to buy a new electronic gadget, think about how much money you are spending. How far would that amount of money put you toward your goal if you put it in savings instead? How long would it take you to make up that amount of money if you did not apply it to your goal. Find ways to remind yourself of how important the goals are. You should also allow yourself some fun money in your budget so that you don’t feel like you are always sacrificing.

Make a Solid Plan

The best way to keep on track toward your financial goals is to create a realistic plan that you know you can follow for the long term. Some of your goals may take years to accomplish, so your plan needs to fit your lifestyle comfortably for a long time. Create a budget that allows you to put a specific amount of money toward your goals so that you can reach them in a timely manner, but don’t make the budget so strict that it is impossible to live up to.


Seven Budgeting Basics

A budget is simply a plan… a plan that you make to tell your money where to go. A written budget will show where every dollar you goes and make your income work for you. Getting started is easier than you might think!

1. Track your spending for a month.

The first step in setting up a budget is to figure out how much money is coming in and how much is going out each month. You probably have a pretty good idea how much is coming in, but you may be surprised to see how much is going out.

2. Categorize your expenses.

You can come up with whatever makes sense to you, but some common categories are:

    • Savings & Retirement

    • Housing & Utilities

    • Food

    • Transportation

    • Medical/Health

    • Personal

    • Recreation

    • Debts

3. Pay yourself first.

Even if you can only save $5 or 10 each week, do it! The quickest way to wreck a budget is not having an emergency fund. When those unexpected expenses come up, you need to be prepared.

4. Figure out where adjustments are needed.

Are your expenses in line with your income? Maybe you found some money leaks… you know, those little expenses like fast food and movie rentals that really add up over a month’s time. You might not be able to do much about your fixed expenses, such as housing and utilities, in the short term; but you can take of control of those money leaks.

5. Reconcile your outflow with your inflow.

If you are fortunate enough to have more coming in than going out, you need to assign it a job; maybe paying down debt or adding to your emergency fund. If your outflow exceeds your inflow, you will have to cut some expenses or create additional income. This is the most important part of budgeting, because it’s the part that calls for action. Don’t forget, this is a process, and it may take two or three months to make your budget reconcile.

6. Use cash.

This is especially important for variable expenses like groceries, clothing, and entertainment. For example, withdraw only the amount of cash that you plan to spend in a shopping trip and discipline yourself to spend only that amount. Spending cash is much more painful than using your debit card!

7. Stick with it.

Your budget won’t be perfect the first month, or probably even the second month. It takes time and persistence to develop a written plan that will work for you. Keep in mind that your budget will change over time, hopefully for the better if you pay off debt or increase your income.

A budget is a powerful tool that you can use to change your future. A certain amount of self-discipline is needed, but the effort you put forth will be worthwhile as you take control of your money.


Step-by-Step Guide to Lower Credit Card Interest Rates

Credit card companies compete with each other using their individual interest rates. The following is a method in which you can use a credit card company’s competitive mindset to lower your credit card interest rates.

Getting the Best Rate

Credit card companies are in the business of making money. If they could charge you a hundred percent interest rate they would. However, credit card companies are constantly competing with each other for customers on a daily basis. No one would use a credit card that charged a hundred percent interest, thus a credit card company with a hundred percent interest rate would become bankrupt in a matter of days. Just how much you do pay can depend on how far you’re willing to go to get the best rate.

Gather Your Information and Start Calling

First off you need to get your credit card statements together and call the customer service number that is list on your credit card statement. This will call will take a while and probably try your patience but it could save your hundreds of dollars in the future so stick with it. Go through the recording and push the necessary numbers until you get a hold of one of your credit card company’s representatives.

Negotiating a Better Rate

Now that you have an actual person on the phone you can start step two. Simply ask the representative to lower your credit card’s interest rate. Make sure you point out that you constantly pay your bill on time. If you make a lot of late payments you may be unable to lower your interest rate at all.

Be Nice

It is absolutely essential that you keep a polite tone. You are trying to get the credit card company to do you a favor; people do not do favors for people that show hostility towards them. Stay polite and the customer service representative will be more willing to help you out however he or she can.

Be Persistent

If your credit card company can’t lower your rate then request detailed information on why they aren’t willing to lower your interest rate and how you can qualify for a lower rate in the future. You may need to simply wait a few months before calling again. It is actually a good idea to call every few months whether they approve a lower interest rate or not. You want to get as close to zero percent as possible.

Lastly, pay your bill in full each month. If you pay your bill in full you make sure your credit card company doesn’t have a reason to increase your interest rate. The longer you pay your bill in full each month without any troubles the more of a reason your credit card company will have to lower your interest rate next time you call.

Politeness and manners are the keys to lowering your credit card interest rates. Those who ask nicely and frequently are more likely to receive lower credit card interest rates than those who demand and never ask. One phone call could save you hundreds of dollars each year


Financial Education and the American Student

Finances are a sore subject for a good majority of Americans. Full grown adults have little clue how to handle their finances on a daily. This is a contributing factor to the slugging economy we are faced with today. The problem can be relieved through simple education. In fact, public and private school systems across the country have begun mandatory financial education in high school in the hopes that more of the next generation will become financially conscious as they grow into adults.

Financial Education Programs

This is not a new concept. Some states have been implementing mandatory financial education for a number of years and more are joining the list each year. In 2007 a survey indicated that seventeen states required their high school students to take a mandatory economics class in order to graduate. A recent survey has found that now twenty-one states require an economics course in high school. The number of states requiring a personal finance courses has increased from seven to thirteen. Thirty-four states now have personal finance content standards. This is up from twenty-eight. Five states now require an entrepreneurship course in order to graduate as well.

Why Aren’t Kids Learning?

All this extra education doesn’t seem to be working though. Financial literary test scores have not increased in the last decade. The reason why kids are having a hard time learning the content is unclear. Many people believe that the children are fully capable of understanding the material; educators are simply unable to teach it well. Only thirty-seven percent of teachers can even say they understand the material. This is the ratio of teachers who have taken even one personal finance course in college. Only twelve percent of teachers have even bothered to take a course on how to teach personal finance to kids.

The general consensus is that teachers are more concerned with their own financial conditions rather than teaching their students. Most teachers did not get into teaching for the purpose of teaching kids how to balance their checkbooks. They have little desire to teach finance to their students.

Take Responsibility for Your Child’s Education

Our education system has been falling behind for years. It is no secret that we are far from the best country in education. Fifteen year old students were out performed and scored lower than twenty-three other countries and education systems in mathematics. The same students ranked nineteenth out of sixty-five in science. Studies have shown that the average American kid is at the bottom of the barrel in terms of received education not just in finance but across the board. The education system is failing our children. As parents, it is up to us to teach our kids about personal finance. Otherwise, they may fall victim to the same poor financial practices that plague our generation.


Accounting for the Next Generation: Free Apps for Small Business and Personal Budgeting

Smartphones are everywhere. As the cost of smartphones lowers, more people are using them. For small businesses, smartphones are ideal for communicating via voice or email. For personal use, smartphones allow people to manage many different apps. Currently, there are many great apps available to people that help them with all things financial. You can manage bank accounts, keep records, and make budgets right from your smartphone. Here is a look at some of the apps available to you for your accounting needs.

Shoeboxed

One great app for the iPhone is called Shoeboxed. Shoeboxed for the iPhone is designed to streamline the process for submitting expense reports. You can take a photo of any receipt you have and log it in a file. You can even add a note to it for further details. Shoeboxed allows you to track the total expense amounts in a detailed list that easily translate to an expense report. This is ideal for small businesses so that they can track expense reports instantly. The app takes care of everything once you take a picture of your receipt.

Expensify

Like Shoeboxed, another app that does all the work for you is Expensify. This is available on the iPhone as well as the Blackberry and Android phones. Like Shoeboxed, Expensify eliminates data entry by doing all of the leg work once you take a picture of your receipt. Expensify gives you detailed expense tracking. You can also text an expense to a phone number that instantly uploads all of the details in to your expense account.

Outright

Another free app for accounting is called Outright. Outright provides you with a quick glance at every part of your financial situation. It tracks expenses with great detail so that you can see how your money is coming and going. You can also keep track of money you owe and money owed to you. This app pulls information from bank and credit card accounts as well as eBay and PayPal. You can also scan in receipts to track expenses further. Outright also helps you when it comes time for taxes. It will give you estimates for all of your taxes and even organize all of the w-9 forms you deal with.

Quicken

As far as personal budgets go, there are many great free apps around. Quicken released a budgeting app for the iPhone that is similar to its popular computer program. This app tracks account balances and transactions from all of your bank and credit accounts. You can also create and manage your personal budget and get a clear picture of your real time financial situation.

Mint

Mint also has an app for smartphones. Mint is a free online site that tracks all of your bank accounts, credit cards, loans, and debts. This translates to the Mint app. The Mint app tracks all of your accounts and provides you with detailed breakdowns of what you spent. For example, you can get an exact dollar amount of what you spent at restaurants. Mint will also provide you alerts when your accounts fall below a certain amount. Since all of your accounts or in one place, the Mint app saves you a lot of time by not having to check many different accounts.


Seven Steps – Retirement Planning Simplified

Planning for retirement is like setting any goal. In order to meet any goal, individuals must determine what required steps will achieve the result. The process may seem tedious, but breaking it down into seven steps will simplify retirement planning.

Determine Net Worth

The first step in retirement planning requires calculating net worth. How much cash accumulates if one sold everything of value? Consider a home, vehicles, recreation vehicles, a business, jewelry, precious metals, collections, etc. Homes are more than likely the most valuable asset people own. Property has multiple means of supplying income.

Besides selling a home, individuals might consider renting a room, renting the basement, buildings on the property, or the entire residence. Use the property to obtain a home equity loan or a reverse mortgage. Consider how anything of value could increase financial status.

Evaluate Hazard Coverage

Individuals should take stock of various insurance policies including homeowner’s, automobile, health, disability and life insurance policies. It is not a pleasant thought to consider, but in the event of illness or disability are there enough assets to cover the costs of medical expenses or long-term care?

Experts suggest individuals accumulating over $2 million dollars will have enough cash flow to afford these expenses. However, persons with a net worth of $200,000 or less, must eliminate assets in order to qualify for government assistance, or individuals could consider long-term care insurance.

Calculate Expenses against Income

Determine the monthly or annual amount of money necessary to live. Usually, persons have eliminated mortgage expenses by retirement, but calculate taxes, insurance and upkeep. Consider food, vehicle upkeep, health insurance and recreational or other out of pocket expenses.

Evaluate the amount of guaranteed income including annuities, pension, social security, and investment accounts. Now look at other sources of income, which may include capital gains, dividends, interest, rentals, and wages.

Compare Amounts Acquired with Amounts Required

Persons desiring retirement at age 65 need enough money to live for 20 to 30 years. Individuals must compare the amount of accumulated assets with the amount of money necessary to sustain living. At this point persons may decide to postpone retirement, continue working full-time or consider working part time. Decide what expenses can be eliminated or devise methods of acquiring other sources of income.

Categorize Income

Divide all the sources of income into three categories: early, middle and late retirement. Early retirement includes immediate liquefied assets or the money individuals can use right away. Middle retirement income should be comprised of assets continuing to grow, which may include bonds, TIPS and various annuities. Likewise, late phase retirement funds might include life insurance, balanced and growth portfolios, and various annuities.

Investments

When considering investing, determine the capacity and size of the portfolio. Implement the assistance of an advisor. Never take unnecessary financial risks for quick, large dividends. Avoid venturing into territories unknown or beyond the skill of an advisor.

Maintain a Current Plan

Experts suggest reevaluating a retirement plan annually. Various life-changing experiences may necessitate adjustments or revisions. Unexpectedly caring for dependents, divorce or death of a spouse, economic changes, and illness or injury, may all be reasons to revise retirement goals.


Five Financial Imperatives for Young Adults

The way you handle your money when you are younger can have a dramatic impact on your quality of life as you get older. Here are five financial lessons you must learn if you are to maintain your financial security in the future.

Write it All Down

The first step in organizing your finances is to write everything out. Make a list of the things that you spend money on. Include everything that you know you will buy during a normal month, such as your utility bills, car payments, house payments or rent, groceries, gasoline, and entertainment.

Don’t forget to include special expenditures that happen on an irregular basis, like car tag renewals or birthday presents. Once you have a complete list of what you spend, you can compare that to the amount of money that you earn.

Recognizing What You Want versus What You Need

If your spending habits exceed your earnings, you will need to make some changes to your budget. Look at the items you usually buy and determine if those items are things you really need or things you really want.

Keep the necessities, but cut back on the things that are not vital. You should always allow yourself a certain amount of money for entertainment, but make sure that it is an amount that you can comfortably afford.

Control Your Credit

Credit will be an important part of your financial life. A good credit rating can lead to better interest rates on loans for cars or mortgages, as well as better rates on auto and health insurance. Make sure you check your credit rating at least once every year to make sure it is accurate. You can keep your rating positive by paying debts in a timely manner.

Try to use credit cards sparingly. Remember that a credit card is really just a convenient bank loan. When you make a purchase using credit, make sure it is an amount that you can pay in full when your next credit card bill comes. Carrying a balance over several months accrues expensive interest payments that make your purchase much more expensive than it was originally.

Begin Retirement Investments Early

The earlier you begin saving money toward your retirement, the better your later years of life will be. It can seem strange to put money away for your senior years when you are just starting out in life, but you need all of that time to create a nest egg that will allow you to do what you want to do when you retire.

Remember that you are planning for a time when you will not work at all, which means that your savings will have to cover all of your expenses. On average, people are living 20 – 30 years after they retire, which means you need to save enough to pay for up to 30 years of life without a regular income.

Create a Safety Net

Unexpected things happen to everyone. Make sure you always keep some money in a savings account to help cover expenses when your car breaks down or you need to replace an appliance. Emergencies can cut deeply into your regular budget if you do not have any savings to help cover the costs.