The Simple Dollar
This question gets asked all the time on personal finance websites, books, magazines, and talk shows. People begin to look forward to retirement living and they start asking themselves about “the number.” How much should I be saving for retirement?
Here’s the really painful truth. No one can answer that question with any accuracy. No one knows how much you should be saving for retirement because no one is psychic. No one can tell you exactly what the future holds.
The future may hold abundance for the United States compared to the rest of the world. We’re taking incredible steps in a large number of technological areas, from biotechnology to energy. If American scientists and companies are responsible for big technological steps, we could easily enter a golden age very quickly and a rising tide lifts all boats.
We also could stay in the economic doldrums for a very long while. Japan was an economic powerhouse in the 1980s but has essentially been in a 20 year recession. ( Continue… )
As a freshman in college, you’re never quite sure exactly how much of everything you’re going to need to get through that first year away from home. As we’ve said many times, shopping for our kids without a strategy in mind is a surefire way to break the bank. And while college students can be notoriously careless when it comes to managing budgets and student credit lines, most of the overspending (and the overpacking) that takes place that first semester can be blamed on parents.
We mean well! We just want to fully prepare our kids for the rigors and challenges of college life that lay ahead. But even in the name of preparedness, there is no need to go overboard dropping hundreds, or even thousands, of dollars on stylish dorm accessories, brand new textbooks or deluxe meal plans. Remember: you aren’t sending them to Mars. There will be grocery stores, office supply stores, secondhand shops (and yes, probably even a Bed Bath & Beyond) somewhere near campus. If you forgot something and they really need it, they’ll go out and get it.
That said, surviving as a college student (or their tapped-out parent) is going to take some creative budgeting. That’s why we thought we’d ask our readers for their very best frugal student living tips for this week’s Reader Tip Tuesday discussion on our Facebook page. As usual, Simple Dollar readers had plenty of great new tips to share.
Here are some of our favorite responses with minor edits! ( Continue… )
The last question in yesterday's reader mailbag left me thinking. Let me repeat Alan’s question again, for all to read.
“I’ve been putting away the maximum amount I can for retirement for the last six years. I’m 29 and I already have almost twice my annual salary saved for retirement. Problem is I can’t stop checking the balance and I constantly feel sick that everything is going to collapse and I’ll lose everything.”
My original response to Alan’s question is that he was simply exhibiting a nervous tic that revolved having that much money in one place and that by loosening his grip on it a little (by making it a personal goal to check it less often), he could improve his peace of mind.
After reflecting on his question a bit more and reading a recent deluge of emails from other readers, I began to see a different concern in his question. Alan’s worry may be less focused on the daily ups and downs of his account and perhaps more focused on the omnipresent worry that many people have regarding total economic collapse.
As I’ve stated many times on The Simple Dollar, I’m not really worried about an economic collapse. There are too many hard working, creative, entrepreneurial Americans out there to see the economy fall into complete shambles. Every day, I hear of another company with a great idea launching. This summer, I witnessed four different home service businesses opening up in my small town, along with several other businesses. I know people in basically every generation, from the Greatest Generation on down to the millennials, who have incredible work ethics and entrepreneurial drive.
The only time you’ll find me worried about economic collapse is when all of those people stop working, and I haven’t seen it.
Yes, there are people who don’t want to work, but there have always been people who didn’t want to work and have lived off of the work of others. Yes, there are unemployed people, but many of them either don’t want to work and are happy barely scraping by or they’ve set their standards for employment unrealistically high.
I simply don’t see economic collapse coming.
A few years ago, I shared a story of a disastrous meeting with a financial advisor. This person did virtually everything they could to convince us to go elsewhere.
While I mostly want to control my own financial planning, I do have some needs that involve specific situations where a financial advisor would be very useful for me, so I’ve spent time in the ensuing years shopping around for one, with some success and some…. well, let’s just say I’ve figured out some people to avoid.
Over that time, I’ve really figured out how to weed out some of the less reputable financial advisors. I’ve found that if I meet one, there are five questions that really help me cut through the situation and give me some material to do some follow-up investigating on my own. I also walk out of the meeting asking myself one key question.
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Here’s what I’m always asking. A point of advice: if you’re nervous about asking these kinds of questions, don’t be. These people are going to be managing a big part of your future and giving you advice that could have enormous life impact for you. You should not be afraid to ask them anything pertaining to their profession. ( Continue… )
For me, frugality means figuring out which products do the job they’re supposed to do well, then finding those products for the lowest price. In other words, I’m always looking to maximize “bang for the buck.”
For many products, the generic or store brand version works well. For other products, there are certain brands which are drastically better than the other options and you’re better off simply seeking bargains and coupons.
The challenge is figuring out which is which, particularly on more expensive items. Here’s exactly how I do it.
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First of all, I turn to Consumer Reports. Their product reviews are a starting point for me for virtually everything that I buy. While I don’t consider them infallible, I do consider them a great place to start. ( Continue… )
Virtually no one likes to think of themselves as a failure. It’s not a good feeling.
Whenever we do fall into that trap, there’s usually some self-loathing and sadness involved. There’s also usually some serious justification involved.
It’s my boss’s (or my supplier’s or someone else’s) fault.
The goal is impossible.
My spouse/friends/family didn’t support me. ( Continue… )
For any parent on a budget, back-to-school shopping can feel more like a back-to-school spending free-for-all. It’s the same every year. Teachers send out those foot-long lists of “required” and “recommended” supplies, and kids are eager not to be the only student who isn’t touting the latest and greatest backpack, lunchbox, pants, or pens on that first day. We all want to send our kids to school equipped with everything they need to face their new school year feeling fully-prepared and confident. But as our writers have pointed out, there are ways to both prepare and please your student without blowing a fortune on school supplies.
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The key to reigning in your back-to-school overspending lies in understanding which supplies are truly essential. What do you already have lying around from last year? Which items can you wait to buy until later in the season? And which supplies can you skip altogether? These are questions that frugal-minded parents deal with every year, so for this week’s Reader Tips, we thought we’d ask our readers for their best back-to-school saving strategies.
Here are some of our favorite responses with minor edits!
- “I try to skip the hype (circulars and catalogs only work wants into needs) and avoid falling into a Starbucks-fueled Target frenzy with the PTA packs for the actual classroom supplies. I do generally buy new sneakers from Zappos or Amazon, so my guys get something fresh for the first day.” –Carrie B.
- “I don’t have kids but I love back to school sales. I pick up my office supplies for the year after the rush is over and the sales are at their peak.” –Randi K.
- “There are always really good sales over Labor Day if you can hold out until then. And also keep reminding yourself that you don’t NEED new clothes and supplies if your old ones are still in good shape; retailers push the snazziest new stuff because it makes them a profit, but if you need to watch your pennies, don’t fall for it.” –Lee B.
- “I usually pick up stuff at “non” peak times and stow it away. So instead of going shopping during the summer, I do it right after Christmas (when the supply stores have some sale or discount) and towards May, when everyone’s out of school and not thinking about it. And then just toss it in a tote until I need it.” –Stephanie V.
- “How much new stuff is really needed? Have a fun arts & crafts week and gussy up last year’s stuff to give it a new, updated feel… What a great time to give your kids a lesson in frugality about the value of decorating and fixing things instead of trashing them! And school hasn’t even started yet!!!” –Jamie S.
A huge thank you for the readers that shared their ideas! Every Tuesday we’ll post a new question on our Facebook page. We look forward to hearing and sharing your tips.
This post appeared first on The Simple Dollar.
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So many of the hard decisions and challenging moments in life boil down to holding on and letting go.
When is it time to let your children go and have more freedom and autonomy – or hold onto them and protect their safety?
When is it time to hold onto your money? When is it time to let go and spend some of it?
When is it time to let go of an ailing loved one?
When is it time to hold onto one’s beliefs and patterns and routines? When is it time to let go of them in the face of the changes in your life?
When is it time to let go of the memories of the past? ( Continue… )
When I’m writing articles for The Simple Dollar, I’m always scouring my life for positive personal finance stories to share. What things have I done that have worked for me? What principles have I seen show up time and time again in my life? How do I keep myself positively motivated?
Over a long period of time, it all presents a very positive picture. When I read through my old articles, in fact, I keep thinking to myself, “Wow, I wish I was as strong at personal finance as that guy!”
The reality is that I fail at personal finance things, more often than I like.
For example, my biggest temptation and spending failure is books. I still have a strong desire to purchase books, often as fast (or faster) than I can read them. Sure, I’m more efficient at buying them than I used to be as I utilize more used book services, Kindle Daily Deals, and so on, but I still spend more money on books than I should and I often give into book impulse buys. ( Continue… )
Frugality isn’t a handful of big things that you do every once in a while to save cash. It’s a steady routine of little steps that, over time, add up to a big difference.
Best of all, those little steps are the ones you choose. You can skip over the ones that impact your particular life in an unwanted way, but stick to the ones that cut spending in areas that you care a little bit less about.
For me, it’s simply a way of going about my life. I spend as little as possible in the areas I find less important so that I can maintain financial stability throughout my life and spend in those areas I do find important. This whole idea is threaded throughout my day to day life.
Want proof? Here are ten things you can do this evening to cut your spending a little. Do them tonight and you’ll save a little bit. Keep the ones that work and make them part of your routine and you’ll find yourself saving quite a lot over time.
1. Make dinner at home…
When you make a meal at home, you cut out the cost of paying someone else to prepare the food, paying for that building’s location and maintenance, and also chipping in for a bit of business profit. If you tip, you’re also tossing some cash at the wait staff or the delivery guy. Those costs really add up, even for one meal, and if you do it repeatedly, that’s a lot of cash. Make it at home instead and cut out all of those extra costs.
Sure, eating out is more convenient, and if you feel less than confident in your cooking abilities, you might want to choose a meal made by someone else. The catch is that the cost is almost always far more than what you can make at home and most homemade meals really aren’t that time consuming either, particularly if you use a slow cooker and prepare something to cook slowly while you’re at work. Start with a great “teaching” cookbook like How to Cook Everything or watch a Youtube video or two on how to prepare something that seems tasty to you and before you know it, you’ll be prepared to make every meal you can imagine. ( Continue… )