Why is it so difficult to save for retirement these days?

31. October 2012 · 10 comments · Categories: Retirement

Happy Halloween everyone! For most of us, I think it’s going to be a very soggy Halloween! Ah well – more candy for me. . And now I’m going to cover a scary topic – why it’s so hard to save for retirement!

There was a recent post on Everyday Money on this topic. According to the article, a lot of boomers are approaching their retirement years without a lot saved up. Is it because they’re living high on the hog? Or because they aren’t good with money? While these may be possibilities, apparently one of the biggest issues is that they’re too generous!

Here are the top 3 issues:

Spending for education (for their children, not themselves) has increased by 80 percent for 45 to 54 year olds, and 22 percent for 55-64 year olds.
Spending on adult children has jumped as well – with almost 60 percent of parents giving adult children who are not in school financial support
Spending on housing has gone up by 25 percent – due to house size and rising expenses (like, say – your kids moving back in!)

Wow. This is not a pretty picture. Most financial advice guru’s always say you should never sacrifice your retirement funds for your kid’s education. And yet, plenty of parents seem willing to do so!

I have to admit I’ve seen this is in my own extended family (ah, the joys of posting anonymously). My step-mother in law (yup, you read that right), has 3 children. At some point in time or other, all of her kids, and their spouses/significant others have moved back in with her and my father in law. Heck, my step-sister in law and her husband even got the master bedroom! And 2 of the 3 step in laws have moved back in with their own kids in tow. I can’t even imagine how much this has cost them over the years in terms of food, utilities etc! I’m pretty sure the moochers weren’t paying for much, if anything. My husband moved out a year after college, and hasn’t taken a thing from them since – not that they have any extra to give out! . They’re lucky they both have good pensions waiting or they’d be up a creek.

Do you have anyone like this in your family? Are you concerned your kids will clean you out?

My stats for the month of October 2012

30. October 2012 · 8 comments · Categories: Blog Statistics

Ugh. I have been a lousy blogger this month. I have been on course, I’ve been sick with a bad cold for the past week, and then I went to Niagara Falls for a few days – where it rained non stop. So blogging has not been a priority and I know I’ve been very bad a visiting other folk’s sites. Mea culpa. I did spend one afternoon helping a friend clean up her kitchen, her living room, and her kid’s playroom (she has 3 kids under five – it’s not easy for her!). So that’s my one good deed for the month.

Alexa Ranking: 206,820. That’s down from about 230,000 at the end of last month. I am so darned closed to cracking the 200,00 I’ve been shooting for. So hopefully I’ll get there soon.

Twitter followers – I have 117 followers now. That’s up from 88 last month. Hooray! I very much appreciate those who’ve tweeted my posts, or suggested me on “follow friday” – I really think that’s helped widen my audience.

Facebook fans. Well – I actually have a facebook page now. But I haven’t done anything with it. Last month I said I’d do something with it. But I didn’t. Sigh. This just may not end up being a priority for me. My wisest move may be just to get rid of it, but it’s not like it’s costing me anything.

RSS subscribers – 18. Hmm. I’m up 3 from last month. Better than nothing.

Unique Visitors – 1788. That’s up from last month. Hooray!

Do you post stats on your blog? Do you have monthly goals?

Saving for Christmas – 8 dollars a day – how to do it

There was a post recently on MSN money that suggest you can save 8 dollars a day in order to come up with the 600 the average Canadian spends on gifts. Here are some of the things they suggested you can do:

Raise your car insurance deductible
Avoid driving to work and try biking, walking or taking transit
Stop buying music and add it your own Christmas wish list
Brew your own coffee
Make a fancy dinner at home instead of going out
Brown bag your own lunch
Cut out your gym membership
Rent a movie instead of going to one (even better – get it from the library!)
Set up an automated savings account and transfers
Sell stuff!
Put your change in a jar every night. You can take it to a Bank of Montreal (BMO) coin counter – it’s free and available to everyone. I didn’t know about this- and I have a big jar of change that needs counting!
Clip coupons. I do try to use coupons, but we just don’t get the savings here that you can in the U.S. I have one waiting on the fridge though for the next time the kitty needs food!
Try to live without using the A/C or the heat. It won’t be long til the Canadian winter kicks in..
Do your laundry in non-peak hours to save on energy use. This is a good idea – but it’s a pain some times. My Mom still hangs things out on the line, and as it gets dark earlier, she’s not huge on putting stuff out late – but she has to do the wash late due to time of use rules.

On the whole, I think this is a pretty good list! Mind you, these tips can be used any time to help you save money – not just for Christmas gifts. If you want to cut back on how much you spend on Christmas in general, you can:

Make gifts yourself. Think it through though and price it out – the materials and your time may be more costly than buying it yourself. Or you can offer a service such a babysitting or cooking!
Cut down on who you shop for. We buy gifts for my nieces and nephew and my parents (we have a small family, so if we didn’t buy them something, they really wouldn’t get any gifts at all!). We do a charitable donation in my brother and sister in law’s name, and that it’s. My in laws have a large family and plenty of people to shop for, so we just decided it’d be easier for everyone if we didn’t exchange gifts.

What do you do to save for Christmas or cut down on your Christmas costs?

Blog round up for October 19, 2012

19. October 2012 · 8 comments · Categories: Blog Roundup

I’m finally getting back to my blog round ups! I’ve been a bit overwhelmed and disorganized lately, but I’m trying to get back on track!

What did I post about this week?

And here are some of my favourite posts this week:

Welfare Food Challenge- $26 A Week for 1 In The Grocery Budget: by Canadian budget binder. Really interesting idea!
Are you getting ripped off at the gas pump by Prairie Eco Thrifter
Is Entrepreneurship Dying? By Add Vodka
The Secret to Selling your house flip by Modest Money
Giveaway by Making Sense of Cents. You can win stuff – yay!
Thoughts on unemployment and the presidential debate 2012 by Mo Money Mo Houses. If I could vote in American elections, I’d vote for the third guy pictured

Have a great weekend!

Avoid mixing personal and business records

16. October 2012 · 12 comments · Categories: Business

So, you’re thinking of starting your own business? Tired of working for someone else, and want to strike out on your own? It’s an admirable idea, but you need to think of a lot of things before you get started – including how you’ll handle your finances.

It’s very important to avoid combining personal and business accounts. It can be very tempting to deposit business cheques to a personal bank account or to charge business expenses to a personal credit card, but these actions can put you at risk. At tax time, it can be hard to sort out what is a business expense and what is a personal expensive – and if you deduct an expense you shouldn’t, it can cost you.

Here are some tips to help keep you on track:

Have separate bank accounts and credit cards for business and for personal use. Depending on your bank, you may find that there are perks to the business credit cards or accounts you can can’t get on personal credit cards and accounts.
Keep good records. Make sure you keep track of charges you make for business purposes, since these can be deducted on a tax return.
Consider professional advice. You may want to consult with a business banker, and tax and legal professionals before you start your small business.

Have you ever started your own business or thought about it? If you have run your own business, what was something you wish you’d considered before you started it?

How to waste money – put your Ipod shuffle through the wash..

15. October 2012 · 16 comments · Categories: Wasting money

So, here’s the story folks. I’ve had my Ipod shuffle for at least 4 years now. It’s essential for working out, or sometimes just for cleaning, or drowning out noise in general.

When I bought my shuffle, they didn’t have the clip on version of the shuffle. Like most things, they came out just *after* I bought my shuffle. So, of course I wanted a smaller, clip on version – but I couldn’t justify buying a clip on one, when I had a perfectly good one!

So, it’s lasted quite well over the years – never had any problems with it. Until I decided to put it through the wash – and the dryer. I had pulled out my gym stuff and put it in the laundry basket – and put my shuffle in with it. I then ended up going to the gym before doing laundry so I just pulled my gym clothes back out – and promptly forgot that my shuffle was still in the laundry basket.

So, when my nice hubby went to put the laundry through, he just scooped everything out of the laundry basket and through it in the wash. The shuffle is small and light, so he didn’t even notice it. I didn’t find it til after I was taking things out of the dryer!

The earphones actually survived and still work. The shuffle – well, it seems to be charging, but if I turn it on, no noise comes out, and it makes a strange rattling nice if you shake it. I’m pretty sure it didn’t survive.

So, now I’ve finally gone ahead and bought a clip on shuffle. I’m okay with buying it – it won’t break the bank, and I use it regularly enough to justify it – I just wish I hadn’t decided to wash my other one first!

Have you ever put anything important through the wash?

How does an increase on interest rates affect your savings?

11. October 2012 · 2 comments · Categories: Banking

Today, I’m going to talk about how changes in interest rates affects savings.

Setting interest rates is a main function of a country’s central bank. By raising or lowering short term interest rates, or the cost of money, the Bank of Canada (or the bank of another country ) can affect the amount spent and borrowed by businesses and consumers.

How it impacts them depends on the type of savings you have. There are three main types of savings:

Cash
Bonds
Stocks

Cash

Cash can include high interest savings accounts, GICs, or other cash based investments. The interest rates in bank accounts can vary, and rates on these accounts typically fluctuate in tandem with a general increase in interest rates. So, if interest rates do rise, rates for accounts like high interest savings may too.

Bonds
A bond is an obligation to repay a debt issued by a government or corporation. If you invest in bonds, you basically lend money to the issuer who, in return, promises to make regular interest payments, ending with full repayment on a specific date in the future – that is, the maturity date.

A change in interest rates generally affects the price for bonds – they tend to move in the opposite direction of interest rates. In other words, when interest rates fall, bond prices rise. And when interest rates go up – the rate of return on bonds goes up.

Stocks
Stock funds purchase ownership (also referred to as equity) in a variety of companies. With stocks, you are seeking to make money in two different ways:

· By way of dividends, which are a share of the companies’ profits
· Through capital appreciation - that is, an increase in stock prices

As mentioned previously, when interest rates go up, bond rates also tend to go up. And when bond rates go up – stock returns tend to go down (as a lot of people pull their money out of stock to invest in bonds)

So – how about you? Are you rooting for interest rates to go up or down?

What if time really were money?

09. October 2012 · 9 comments · Categories: Musings

Over the weekend, my husband and I watched “In Time” (taken out the library, so no cost there ). It stars Justin Timberlake (yes, I know, I know), and well – it was okay. There were some glaring plot holes, and it was pretty formulaic, but it was still a very interesting concept. Here’s a summary of the film cheerfully borrowed from IMDB;

Welcome to a world where time has become the ultimate currency. You stop aging at 25, but there’s a catch: you’re genetically-engineered to live only one more year, unless you can buy your way out of it. The rich “earn” decades at a time (remaining at age 25), becoming essentially immortal, while the rest beg, borrow or steal enough hours to make it through the day

It sounds like a great way to live if you’re rich. I mean, who wouldn’t want to be 25 forever (apparently, a good chunk of the people in this world are also really good looking )? But for everyone else, they are trying to make it day to day, just earning enough time to stay alive.

In one scene, 2 of the character buy coffee, and complain about how the cost has gone up (it now costs 4 minutes instead of 3). Which got me thinking – if you were literally paying for coffee with your life, would you still buy it out? I’d definitely make mine at home.

I’d have to make a lot of changes if I were paying for everything in time. No more sleeping in. No playing video games. Leisure time basically wouldn’t exist. I’d have to find a job willing to pay a lot of overtime.

How would your life change if time really were money?