Sunday July 12, 2009
Funding your child's college education can seem like a daunting task, but if you start early you can build up substantial savings with relative ease. The power of compound interest only works when you give it plenty of time to work. Even if your son or daughter is approaching their first year of college, it isn't too late. There are many tax benefits available for college savings, so even if you can't take advantage of 10 years of growth, you might be able to save money on taxes. Find out how much money you can save for your child's education by looking at the following examples.
More information on saving for college:
Thursday July 9, 2009
Combining finances can be very helpful for a new couple, but it can also be very stressful. Money is one of the top issues that create arguments in a relationship. Everyone has different priorities and values pertaining to money, so it is easy to see why money can be a hot button issue when couples don't see eye to eye.
Plan Ahead
The good news is that you can alleviate most of the problems with some planning. This means taking the time to talk about financial issues before getting married if possible. While you may currently maintain separate accounts, realize that it is important to think about what you're going to do in terms of bank accounts, saving money, paying off debt, and getting insurance before you're overwhelmed with all of these important decisions after you've tied the knot.
Communication is Important
While planning out your financial road map is important, maintaining an open and honest line of communication with your spouse is vital. One of the most damaging things you can do in a marriage is to hide and lie about money issues. Eventually, the truth will surface, and it will create an incredibly stressful and possibly harmful situation. If you are bringing debt into the relationship, be open about it. If you place importance on saving for retirement above all else, let that be known. The more open you are regarding your values and money situation, the less likely a problem will arise out of nowhere.
Additional reading:
Make the Most of Lower Interest Rates
Monday July 6, 2009
For over a year now interest rates as a whole have generally been falling. Of course you may have some instances where rates are increasing, for the most part when it comes to savings accounts, CDs, and even mortgage rates, they are down sharply compared to a few years ago.
Good for Debt, Bad for Savings
Lower interest rates are good for borrowing money since it means you will be paying less in interest. The bad news is that the Fed rate cuts don't directly translate into lower rates for consumers. These cuts can take many months before the effects are felt on your bottom line, but you can begin shopping for lower rates now. Once you can begin to benefit from the lower rates, you'll have more money in your pocket as less is being spent on interest payments.
While lower interest rates saves you money when borrowing, the opposite is true when you are saving money at the bank. As interest rates fall, the rate of return on your checking, savings and CD accounts will likely follow suit. If you enjoyed the comfortable savings rates during most of 2007, you're probably not very excited as many rates have now dropped below the rate of inflation. If you can, make sure you're getting the best rate possible and explore other banks to ensure you're getting as much interest on your savings as possible.
Learn more about interest rates:
Friday July 3, 2009
One of the most frequently asked questions I receive has to do with retirement. In particular, people are wondering how much money they need to retire. I wish there was a simple answer, but it isn't an easy question. There are a lot of media outlets out there that will throw around a lot of numbers and say you need at least a million dollars in the bank, or have to save at least 15% of your income for retirement. While these may apply to some people, the problem is that everyone's specific retirement situation is unique and it's impossible to have this magic number that works for everyone.
So, how can you determine how much money you need for retirement? The younger you are, the harder it is to calculate because so much can change in terms of your situation and with things like taxes and economic conditions over the next thirty or so years. In situations like this, you should know that you'll probably need close to as much income in retirement as you need now (adjusted for inflation of course). As you get older and retirement gets closer, you really need to sit down and start to project your expenses. You should have a rough idea of whether or not you'll be receiving a pension, what your Social Security check will be, and realistically start thinking about life expectancy and your retirement goals.
Learn more about how you can project how much money you'll need to retire.
