Plug Your Money Leaks and Save Hundreds of Dollars Painlessly

Retirement is one of the major end goals for many of us. After putting in a few decades of hard work we hope to be able to break free from the daily grind and do what really makes us happy. That could be starting a new career, traveling the world, or simply enjoying a slower paced lifestyle. Whatever your idea of retirement is, there are plenty of roadblocks standing in your way.

In a perfect world you will have enough money set aside so that come retirement day you have absolutely nothing to worry about. You’re free to carry out your plans without the added stress of wondering whether or not you’ll have enough money to pay the bills. Unfortunately, most people don’t have this luxury. Instead, they come to the realization that they can’t afford to retire and end up spending the later years in their life unhappy because they have to either keep working or simply don’t have enough money to do any of the things they had hoped. Here are five reasons most people will retire broke and unhappy.

1. Not Saving Enough

Not saving enough has to top the list because let’s face it, not having enough money in retirement is the biggest problem. How much money do you really need to have saved up by retirement to fund your dreams? Well, according to a recent poll I took on the site most people feel they need between 1 and 3 million dollars saved by retirement. So, ask yourself where you stand. Are you on track? Do you have some catching up to do? Or do you feel there’s just no possible way to save up enough money by retirement? Even if you are behind in savings that doesn’t mean you should give up. You still have many years ahead of you to make a difference, and every little bit counts. One thing is for certain, and it’s that not having enough money saved for retirement will have a negative impact on your lifestyle down the road.

If you don’t have enough saved up for retirement a few things are certain:

• You may have to work longer.
• You may not be able to do the things in retirement you planned on.
• You may become a burden on your children.
• If you encounter serious health problems it could mean liquidating your assets and going on Medicaid.

If none of those things sound like fun you better start saving. Even if you’re in your 30s and haven’t put a penny aside for retirement it isn’t too late. Take advantage of your employer’s retirement plan such as a 401(k) or 403(b) if they offer one. This is the easiest way to get into the habit of saving since it comes right out of your paycheck and it’s pre-tax money. Even better, if they offer a match you need to at least save enough to get the match. That’s free money! This is the only time someone else will put money into your retirement account for you, so don’t miss out.

Beyond that you should set up your own retirement account such as a Traditional IRA or Roth IRA. It doesn’t matter if you can only afford to put a hundred dollars a month into your account, but you have to start somewhere. Even just $100/month over 30 years earning around 7% will put over $120,000 in your account. Sure, you won’t be able to live off just that, but you can’t tell me that having an extra $120,000 for retirement is a bad thing. So, start small, and start right now. Every little bit helps even if you are getting a late start when it comes to saving.

2. Making Poor Investment Choices

Did you know that you can be on track to save enough yet still find yourself in the poor house come retirement? Just ask all of the baby boomers who planned on retiring in the next few years and were invested too heavily in stocks. Their retirement plans were destroyed in a matter of months. Granted, we don’t have crystal balls and can’t predict what the markets will do, but you can follow some basic investing principals so that you’re not putting yourself at unnecessary risk.

Poor investment choices go both ways. You have those who might be far too aggressive and can’t whether a steep decline shortly before retirement, and you have those who invest far too conservatively from the start and come up short in the end. You need to strike a balance and adjust your investment strategy over time as you age and your needs change. There’s no magic portfolio that works for everyone, in all market conditions, all the time. But it’s up to you to understand what you’re investing in, what the risks are, and how those investments play a role in your long-term objectives.

Finally, don’t neglect fees. You can’t invest without fees, that’s just a fact of life. But in most cases you can limit how much you pay. It may not seem like much, but even choosing investments with 50 more basis points in annual fees could literally cost you over $100,000 by retirement. The sooner you make smart investment choices and understand the impact of fees, the longer your money has to grow so that it can adequately fund your retirement.

3. Neglecting Health Care

Want to retire broke and unhappy? Just ignore the impact that health care will have on your retirement. As a member of Generation X you may have seen this first hand with aging family members. Even when it looks like someone has set enough aside for a comfortable retirement it just takes one major health incident to derail everything. This country obviously has some flaws with its health care system, but that doesn’t mean you have to just take it.

Health care issues can ruin your retirement before it even starts. Did you know that disability is the number one reason for bankruptcy and foreclosure in this country? If you’re still working and rely on your income to pay the bills what happens if you get hurt or become disabled, either for a few years or permanently? In many cases people don’t have disability insurance and even if they qualify for Social Security Disability it isn’t enough to pay all the bills. Just a two year disability in your 30s could be enough to severely impact your retirement, especially if it causes a financial hardship such as bankruptcy or foreclosure. So, make sure you’re adequately protected even while working so that you don’t jeopardize your retirement.

An even bigger problem often comes in retirement. Our health is unpredictable for the most part. We don’t know what kind of health issues we will develop as we age, and depending on what it is and treatment required it could end up quickly draining your retirement fund. Don’t just assume that having Medicare and a Medicare supplement will do enough to cover most of your medical expenses. If you are in a situation where you need long-term care you’ll find that this isn’t covered by Medicare. And don’t be fooled by the name, but most long-term care stays are only a few years. But did you know that the average cost of a year of long-term care is upwards of $50,000 or more? Just needing a few years of care could quickly begin to wipe out your retirement nest egg. If you run out of money paying for this care you’ll either become a burden on your family while they try to pay for or provide the care. If they can’t keep up you’ll be faced with liquidating any assets you do have, and then will likely end up on Medicare. I don’t think anyone looks forward to that kind of retirement.

Finally, a little preventative health care goes a long way in helping you live a long and healthy retirement. Take some time while you’re young to make smart health choices today so that you’ll have a better chance of remaining healthy in retirement. Some good habits today could end up saving you hundreds of thousands in health care down the road.

4. Retiring Too Early

Raise your hand if you’d like to retire earlier rather than later. Stupid question, right? For most of us we’d love to retire a few years early and get a jump on doing the things we planned on in retirement while we’re still young and healthy. Unfortunately, early retirement is simply in the cards for most people. It really comes down to underestimating what just a few years of early retirement can cost financially. For example, say you and your spouse would like to retire at 62 instead of 65. Assuming you each earn $50,000 after taxes at your current job those three years of retiring early will cost you $300,000 in lost income. Even if you elected to begin drawing Social Security at 62 that isn’t going to come even close to replacing that income. If you have a pension, chances are taking it at 62 is also going to be a reduction in payout. So, depending on what your income needs are during those three years you could be draining your retirement account by a few hundred thousand. When you factor in the 20 or more years you still have in retirement that early retirement could significantly reduce how long your nest egg will last.

And it isn’t just about tapping into your retirement assets early. Let’s not forget about health insurance. You don’t qualify for Medicare until 65, so if you retire early where are your health benefits coming from? If you’re lucky enough to have a working spouse you might be able to get by using their plan, but what if you both want to retire early and you don’t have any retiree health benefits offered by your employer? Get ready to open your wallet and pay for an individual plan. This is a common oversight by many early retirees as they get dead set on retiring early and then underestimate the significant costs of health care until reaching age 65. This can be a costly mistake.

Retiring early is doable, but you have to plan well in advance for it. That means saving even more money and thinking about the impact of early retirement, both in terms of your nest egg and health care. If you rush into it like many people you could be giving up a significant chunk of your later retirement just to quit working a couple years early. Weigh your options carefully.

5. Lifestyle Creep

It’s just human nature that as you earn more money and become more successful you generally spend a little more money on the finer things in life. After all, isn’t that what it’s all about? You want to make more money so you can enjoy some of the fruits of your labor. It’s great to be able to buy things that improve your quality of life, but this lifestyle creep can go too far. It starts out with small stuff, but eventually it turns into a bigger house, nicer cars, and maybe even more elegant vacations. If your income goes up but your expenses also continue to go up the net result is often zero. You make more, spend more, but still don’t have enough left over to save more.

As you go through your career and begin making more money it’s important to keep your spending in check. You still might opt for a nicer car or a bigger house, but don’t let those things interfere with your ability to save. When you start making more money make sure you treat your retirement savings like any other expense. If you’re willing to spend 20% more on a new car payment you should be willing to put 20% more into your retirement account as well.

If you don’t increase your saving along with your other expenses you’re going to be in for a rude awakening upon retirement. What you’ve done is built up this more affluent lifestyle and when retirement comes you’re probably hoping to at least maintain a similar lifestyle but without going to work. If you haven’t been increasing your saving over the years to match the increase in lifestyle, guess what. You’re not going to have enough money to fund that retirement. Then you’ll probably find yourself unhappy in retirement since you had to reduce your lifestyle or try to continue that lifestyle and end up broke ten years into retirement. Neither of which is a situation you want to be in.

Will You Retire Broke and Unhappy?

Hopefully not, but as you can see, it’s pretty easy to do. While it’s easy to retire broke, it’s just as easy to start putting measure in place today to ensure it doesn’t happen to you. Start by saving more. Think you’re already saving enough? Think again. Even if you’re just getting started for the first time, every little bit helps. Now that you’re saving you need to make sure you’re investing it properly. Take some time to learn about your investments, understand what they are going to accomplish, and keep expenses low. Next, don’t underestimate health care costs both now and in retirement. Take steps today to make sure poor health won’t drain your retirement fund. If you want to retire early, make sure you plan for it. Early retirement requires additional savings and considerations when it comes to health care. And finally, don’t let lifestyle creep during your working years ruin your retirement. Keep spending in check and adjust your saving accordingly so there are no surprises in retirement.

If you can keep up with all of that you should be able to enjoy a wealthy, happy, and comfortable retirement.

Coupons have been around forever, but it sometimes takes a economic crisis like we have today to get people to start using them. On the other hand, many people have been using coupons long before we entered a recession. So, where do you stand? Have you been a coupon user all along or has the recession led you to begin using them? Or do you simply find them not worth the trouble and don’t use them at all?

For me, I use coupons if I stumble across one that is for something I know I’ll need but rarely do I actively sit down and cut out coupons on a regular basis. For one, the only daily newspaper that we have delivered is the Wall Street Journal and you won’t find any coupons in there. Another prohibiting factor is that our grocery store doesn’t print their own in-store coupons. Instead, they just have some killer weekly sales and I typically just base my shopping around the sales. But one area we have really took to coupons is with baby items. Baby food, formula, diapers, etc. You just can’t go without coupons for those things, and most of the time you get those coupons sent directly to you in the mail.

That being said, I wonder where people go for coupons if they don’t get them in their weekly newspaper? Surely there are some online sites that have some, but I’ve never really paid much attention. So, if you want to share your coupon experiences in the poll and comments it could help people like me who wouldn’t mind using more coupons but just doesn’t know where to look.

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Secret shopping has been given a bad rap lately.  Websites that promise “to pay you to shop” and then make you jump through hoops or sign up for their sponsors’ offers have done damage to reputable companies like Strategic Reflections, Beyond Hello, and Jancyn, who are hired by businesses to evaluate the level of customer service that they receive when frequenting their stores or hiring their services.  In fact, secret shopping scams are so prevalent that the people who ordinarily seek out sources of side income find themselves wondering whether a company is legitimate or not.  This article serves as a primer for those interested in working as a secret shopper by dispelling the myths commonly associated with independent contracting.

FACT: Secret shopping is a real, reputable way to make extra money.

FACT: Secret shopping allows you to work around your busy schedule.

FACT: You are in control when you’re a secret shopper.  You can accept as few or as many shops as you want and make as much money as you want.

Although it seems too good to be true, companies all over the globe are looking for people just like you to provide honest, objective feedback about the level of service that you receive at the businesses that you frequent on a regular basis.  For a few minutes of your time, you can receive compensation for your efforts in the form of cash, free merchandise and services.  A viable form of self-employment, secret shopping has its share of benefits.

Completed at a leisurely pace, secret shopping can supplement your income or take the place of a full-time job.  Making use of your keen eye and observant nature, you can leave behind the nine-to-five grind and live the kind of life that you have always dreamed of.  That is, if you heed the advice given here.

Throughout this article, I will address the topic of secret shopping and provide tips that will not only make you money but ensure that your hard work and efforts aren’t wasted.

Secret shopping is a legitimate way to make a living.  With a little time and some carefully worded direction, you too, will be on the road to becoming a successful secret shopper.

What is Secret Shopping?

Secret shopping is an inexpensive way for companies to obtain accurate feedback on the people that they employ and the service that they provide.  Big corporations hire secret shopper companies to observe their businesses so that they can expose problem areas and address customer concerns.

Secret shopper companies then assign projects to various Independent Contractors throughout their area and give them a time frame to complete their work.  Project guidelines are either posted on the company website or sent to the shopper’s email account.  Upon receipt of the shop, the company then compensates the contractor for their time and any of the items that they were required to purchase.

Finding the Right Companies to Work For

Websites stating that you can “get paid to shop” often require a fee to use their services and be registered in their databases.  Do not consider working for a company that charges you!  There are plenty of companies willing to hire you for free.  Make sure to check out their websites:

Trendsource

Shoppers Inc.

Service Intelligence

About Face: World’s Premier Shopping Company

Jancyn

A simple web search will help you identify which websites are legit and which ones are not.  Remember your objective.  You are looking to increase your income not your expenses.  Do not pay a fee to access databases containing secret shopping company information.  Visit a free website like Walletboosters for an updated list instead.

Secrets to Success

Secret shopping is a wonderful way to earn income.  If your current job isn’t as flexible and you would like it to be or doesn’t pay enough, adding a couple of assignments a month will surely help you in the long run.  Working for more than one company will also give you better opportunities.  This is especially true if you live in larger cities where secret shoppers are abundant.

Keeping Track of Paydays

Paychecks are usually cut once a month but some companies pay more frequently.  It is helpful to learn what payday is for each company you work for.  Keep track of the shops that you have completed and the pay for each one in a notebook or on a calendar.  No one likes to work for free!

Also remember to have money up front to purchase items.  This may be a requirement for a shop. Most companies reimburse you for your purchases.  There are no exceptions to this rule.  If you don’t have $10 to spend on lunch or merchandise from time to time, this is not the job for you.

Making the Most Out of Phone Shops

Some shops pay really well while others pay considerably less.  Some shops must be done in person while others can be completed over the phone.  It is best to do a lot of phones shops if you have free long distance or a fixed rate phone service.  An exceptionally large phone bill will squelch any desire to do phone shops in the future.  If you are concerned about this, it may be best for you to purchase a prepaid calling card or use a service like Skype or the MagicJack.

Super Supplies That Will Aid You in the Process

Having a few inexpensive supplies on hand will help you in the long run.  Purchasing a cheap stopwatch is a necessity.  Do not forfeit your reputation by not completing a shop correctly.  It is better to earn less for a shop than nothing at all.

It is easy to get confused if you work for several companies.  Record the due date of each assignment on the calendar.  Also, make sure to list the shop’s fee and the company’s pay period on there as well.  Keeping your glove box stocked with extra pens and paper will eliminate confusion.  A pocket sized notepad that can be carried and written in discreetly is also a wonderful tool for you to have.

Owning a digital camera will give you an advantage because most companies require strict documentation of the things that you observe.  Photo shops often pay better than others because they do require more work.  The smaller your camera is, the easier it is to conceal.  Keeping your identity anonymous is crucial and one of the most important things to remember when secret shopping.  Never reveal yourself unless instructed to do so by the company that you are working for.

Every company has established its own criteria for assignments.  In order to fill their needs, you must carefully read the instructions for each shop before completing it.  Gather all the supplies you need before hand and pay attention to the time frame given to you to finish the shop.  If problems do arise, contact the scheduler immediately.  Remaining communicative with the company that you work for is an absolute necessity.  Reliable internet and phone service is a must if you wish to work in this profession.

Make Big Bucks Referring Friends

Not every shop will fit into your schedule.  That’s where your friends and family come in.  By referring those to the companies that you work for, you accomplish two things.  You give the people you’re the fondest of extra income and the companies that you work for will pay you a referral bonus for each eligible shopper that you sign up.  Referrals=extra income.  The more people that you refer, the greater the chance you have to make additional money.

A big push for companies to improve their procedures has caused the secret shopping industry to swell with opportunities.  With a few simple tools, these tips, and the desire to succeed, you, too, can start a career as a secret shopper today.

Charissa Arsaoui is a freelance writer for ChickSpeak, Buzzine, DisFUNKshion Magazine, Student Stuff, and a guest contributor for Wisebread.  She loves thrift related topics and can spot a bargain a mile away.

Plan Ahead to Avoid a Financial Holiday Hangover

Does this scenario sound familiar? You use credit cards to do your holiday shopping, promising yourself you’ll pay the debt off within two or three months. Six or eight months later (or more), you’re still paying, and those items that seemed like such bargains end up costing you 10 to 20% more than you thought thanks to the credit card interest.

For many Americans, this debt pattern is repeated year after year. Personal finance experts call this the “holiday hangover.” There are times when incurring credit card debt makes sense, but holiday gift-buying is not one of them. Using credit cards often leads to impulse spending, overspending, and increased debt.

A better approach is to save small amounts of money throughout the year in a special holiday gift fund. Make a list of all the people you’d like to give gifts to and how much you can afford to spend on each one, and then pay cash from the savings you’ve built up. When the cash is gone, you’re done shopping.

If you find it difficult to save money throughout the year you can join an old-fashioned Christmas Club, still offered by smaller community banks and credit unions. You put a small amount of money which is often deducted automatically from your paycheck, into a special Christmas Club account at your bank. The account usually earns interest at the regular savings account rate. In October, November, or December, the money gets transferred to your regular checking account and you’re ready to go shopping!

Don’t have a Christmas Club account where you bank? Don’t worry, it’s just as easy to create your own. If you want, you can simply open a new savings account at the bank and use that as your own Christmas Club account. You can set up direct deposit from your paycheck to fund the account or set up a recurring automatic money transfer into the account. But keeping the money in an easily accessible account at your bank can be tempting to dip into when money gets tight, so you might want to open a separate online savings account. By doing so you’re going to earn a little more interest and hopefully keep the money out of sight so it’s a little less tempting to tap into.

How to Avoid A Financial Holiday Hangover This Year

Here are four simple steps to help you stay out of debt this holiday season and avoid that financial holiday hangover.

1. Set spending limits.

Look at your monthly budget and figure out how much you can realistically afford to set aside towards holiday gift giving without going into debt. Your intentions may be good, but the reality is that most people have a depressing amount of debt after the holidays and are not able to pay it off in as timely a manner as they had hoped.

2. Make a list.

Follow Santa’s example. Make a list of all the people you need or want to buy gifts for, including small gifts for babysitters, teachers, newspaper deliverers, etc. These small gifts can add up and are often the cause of going over your gift budget. Include money you’ll spend on Christmas cards, postage, holiday parties, decorations, holiday entertainment, etc. Just like budgeting your household expenses, you need to budget for all of your holiday expenses.

3. Set a limit.

Decide how much you will spend on each person on your gift list, then add everything up and make sure it doesn’t exceed your overall spending limit. Try to allow a cushion for unexpected items or price fluctuations, but be firm on your limit. Sure, you might come across a last-minute gift you just need to have, but if you don’t stick to the limit the whole exercise is worthless.

4. Decide where to shop.

As important as deciding what you’re going to buy is deciding where you’re going to buy it. If you don’t wait until the last minute, you’ll have time to comparison shop. Prices fluctuate significantly from store to store and from one month to another. Stores start cutting prices 10 to 25% on holiday items like decorations, gifts, and winter clothing the week before Thanksgiving.. As Christmas approaches, some items are marked down as much as 40% but selections are limited. You’ll need to decide whether price or selection is more important to you and time your shopping accordingly.

Don’t neglect online retailers. Online shopping is very popular these days and there are plenty of deals to be found. In many cases you can even find low prices with free shipping. What’s better than taking care of your holiday shopping from the comfort of your home instead of fighting the crowds?

Follow these simple steps and you’ll avoid the nagging feeling that you’ve overspent on Christmas or other holiday gifts. You’ll also avoid the struggle to pay off the credit card bills for months to come. Instead you’ll feel in control and free of the dreaded financial holiday hangover.