Saving money for a secure retirement should be a primary goal for every working person, but many are not saving the amount that they will need for their retirement years. Because retirement is often seen as something that will occur in the far off future, many other priorities are often put ahead of saving for retirement and retirement savings are treated like an afterthought. Fortunately, no matter how old you are, there are ways to get your retirement savings back on track. Here are some methods you can use to save more money for your retirement years.
Participate In Your Employer’s 401(k) Plan
Most employers offer their employees the chance to participate in a 401(k) retirement plan that is administered and monitored by the company. Although many people opt out of this system, you shouldn’t. Participating in an employer’s 401(k) plan allows you to save for retirement automatically each pay period as a predetermined amount of money is deducted from your paycheck and deposited into the retirement account. The deposits that go into the account are tax deferred, meaning that you will only pay taxes on the money if it is withdrawn before you reach retirement age. Some employers also offer matching funds up to a certain percentage of the employee’s salary, helping the balance of the account grow even more quickly.
Increase Your Contributions
Many people choose to defer less than 5% of their income towards retirement savings because they want to have more money to pay for the things that they need now instead of saving the money for the future. While this is better than saving nothing, you could be doing much better. The federal government has issued maximum contribution limits for tax-deferred accounts to insure that wealthy individuals do not take advantage of the accounts to shield their money from taxes, but these limits also provide you with a good target to aim for when making your retirement fund contributions. Try to get as close to the maximum contribution amount that you can to ensure you will have enough money for a comfortable retirement.
Be An Active Participant
There are generally a number of different options available when making choices regarding your retirement accounts. If you do not actively participate in making these choices, you may find that you are missing out on money you could have earned. The default choices that will be made for your retirement account if you do not participate in the choosing are often the safest, but least lucrative, options available. Consider all of the options available and choose the ones with the right amount of risk and benefit for your current station in life.
Everyone knows that getting rid of credit card debt is one of the best steps to take on the road to financial freedom, but how you pay off those debts can affect your finances as well. There are some good methods and some bad methods to pay off credit cards and the ones that you choose will determine your financial stability afterwards. Choosing a sketchy method could cause you to spend more money than you were paying in interest and fees on the credit card. Here are some of the worst ways to use to pay off your credit cards.
Using The Money You Saved For Retirement
Using the money that you have saved for retirement to pay off your credit card bills is one of the worst financial choices you can make. If you withdraw the money from the retirement account completely, you will be facing early withdrawal penalties and tax charges. If you take out the money as a 401(k) loan, you will still be paying interest and will miss out on the compounding interest you would have earned if the money had been left alone. Instead of resorting to raiding your retirement account, look for ways to earn or acquire additional money from other sources to pay off your credit cards.
Tapping Your Home Equity
Tapping into the equity of your home is another bad decision when it comes to paying off your credit card bills. Even if low interest rates make refinancing your home to take out equity or opening a home equity line of credit look attractive, you are still swapping one type of debt for another type of debt. Instead of swapping debt from one form to another, find a way to eliminate the debt completely, either through increasing your earnings or using other savings to pay down the debts.
Applying For A Payday Loan
Trying to pay off credit card debt by taking out a payday loan will be an exercise in futility. The interest rates for payday loans are much higher than the interest rates for most credit cards when calculated on a per annum basis, meaning the payday loan will cost you more than you would have paid in interest and fees on the credit card balance. If you truly want to become debt free, do not take on new debt to pay off old debt. The only way to become debt free is to earn more money to completely eliminate the debt that you are carrying.
Mums do a lot for us throughout our lives, whether we’re still living at home or have long since moved out. So they always deserve an extra special treat on Mother’s Day. If you’re looking for that perfect gift, what should you be buying and how much are we spending as a nation?
A bit of a splurge
Mums definitely win out in the battle of the parents. According to the Infographic, Cost of Celebrations, from financial specialists Baines & Ernst, overall for Mother’s Day we’ll spend £1.5 billion. However, dads only get £1 billion spent on them for Father’s Day.
The perfect gift
One of the most popular traditions for most occasions is giving cards. Mother’s Day is the next most popular card giving holiday after Christmas, with 30 million cards given in the UK. Father’s Day is still very popular, with 7 million cards being given.
When it comes to Mother’s Day, the UK’s cut flower industry certainly takes advantage of this celebration, as it’s their largest event of the year. They see sales increase by 40% as we lavish our mothers with 7 million bouquets.
Time for a pamper
Mums spend their lives looking after the rest of the family, so they deserve to have a bit of a rest and some pampering on their special day. That’s why we’ll spend £250 million on luxury food and drink hampers.
Another indulgence is Chocolate as we spend £60 million on these delicious treats for our sweet-toothed mums.
In total we’ll buy 4 million boxes and probably help her get through them. This isn’t surprising when the World Atlas of Chocolate ranks the UK at number seven in the world chocolate consumption rankings. This celebration, though, doesn’t come top of the list of chocolate holidays. We spend £95 million over Valentine’s Day and 10% of all sales are made during Easter.
They might not get much time to themselves, but when they do, mums love to have a bit of a pampering session or a long soak in the bath. And this Mother’s Day, 9 million mums will be treated to a beautiful selection of health and beauty gifts that will help them feel relaxed and revitalised in no time!
Mother’s Day on a budget
Many people worry about paying for the additional extravagances of Mother’s Day, so if you’re on a budget and still want to treat your mum, here are some ideas…
For adults: Your mum probably wouldn’t be too thrilled if you spent lots of money on a gift you couldn’t afford, so get creative! Photo albums, framed pictured, a specially selected playlist, a picnic in the park, afternoon tea with cake in the garden – there are so many fun and lovely things you could do without spending a fortune.
Young children: If you have young children, help them to give their mum a precious day she’ll cherish forever. Treat your special lady to breakfast in bed, help the kids make cards and cakes (from an easy-to-follow cake mix kit!), choose a special family favourite film to watch together, go for a walk in the park and run her a bubble bath. She’ll absolutely love being worshiped and made to feel like a million dollars, without you having even a tenner!
If you are lucky enough to have additional money left over after taking care of all of your other financial needs, like paying your bills and saving for retirement, you will want to find something smart to do with your extra income. Some people use this money to pay for vacations or buy things that they do not really need, but a better decision would be to make this additional income work for you to secure your future financially. Here are some smart things that you can do to make your extra income work for you.
Invest In A Certificate Of Deposit
One good way to get your money working for you is investing in a certificate of deposit (CD). A CD is a deposit account where money is deposited for a predetermined length of time and the account holder is paid an attractive interest rate for letting their money be held by the institution for that time period. After the period has ended, the account holder can withdraw the funds and the interest or can roll over the funds into another CD. Many people like these accounts because their money is as safe as in a regular bank account and is insured up to the maximum limit allowed by the Federal Deposit Insurance Corporation.
Explore Forex Trading
Forex trading is another good way to get your money to work for you by earning you additional income. Forex trading focuses on making a currency trade between two different types of currency and holding a chosen currency until it can be traded for a profit. It is important to do your research before getting started with Forex trading so that you will know the terminology used and can create a workable trading strategy. People that try to play it by ear often end up losing money while chasing results.
Maximize Your Retirement Account Contributions
If you are not already doing so, maximize your retirement account contributions to the highest limits allowed by law. Maximizing your retirement account contributions allows you to save for your retirement tax free and creates a bigger balance that can be helped by compounding interest. The money in your retirement account is destined to be used during your retirement years, but prior to that, the funds can be borrowed against for other things that you need, like a home or new vehicle. Be sure to review the rules for your retirement account so that you know what you can do without incurring penalties or tax charges from your actions.