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  • Archive for February, 2015

    How do you save? Tips from WISER Women

    Saturday, February 28th, 2015

    America Saves Week

    This past week was America Saves Week, an annual event to encourage Americans to focus on saving and reexamine their own savings plans.

    As part of America Saves Week, WISER asked you to share with us your own tips, advice, and ways to save. We received submissions via Facebook, Twitter, and email. Below are some of the great tips and suggestions our readers offered that can help you increase your savings and reach your savings goals.

     

     

    1. Enroll in your bank’s “save the change” program, if they offer one. These programs will automatically round your purchases up to the nearest dollar and transfer the difference into a savings account. It can add up over time and is a great way to fund a savings account. You can also do this with physical change. It’s time to break out that piggy bank and save your coins! One reader even saves $5 bills every time she gets one.

    2. If you have only one savings account, consider opening another one. Set one account as a fund for emergencies ONLY. Create a second account for other savings. This method will allow you to save for big ticket items or holiday gifts each year, while reducing the temptation to dip into your emergency fund for anything other than emergencies.

    3. Budget, budget, budget! Make a monthly budget or spending plan that includes a line item for contributions to your savings accounts. Working it into your budget from the beginning will prevent you from thinking of it as available spending money. WISER has a budget worksheet to help with this.

    4. Lacking motivation? Create a card, poster, or other visual item that represents you and the life you want to live in retirement. Put it somewhere visible, like next to your computer or on your fridge so that when you are tempted to buy something, you’ll remember your future and ask yourself if the purchase is really necessary. You can even put a picture of your dream retirement on your credit card as a reminder before you use it.

    5. Teach your kids about finances and saving. Read them books about savings (like WISER’s book, Sonja Meets Her Future Self) to help them learn the difference between needs and wants, and why saving is important. You’re never too young to have a savings account, so think about helping them set one up.

    6. It can be tempting when you get that tax refund to spend it. Instead, put your refunds into your retirement or savings account. If you set it automatically to deposit into those accounts, you won’t even notice that extra cash or be tempted to spend it. WISER also recommends doing this with bonuses and other unexpected cash increases.

    7. Skip the morning coffee run and make your own. Bring a thermos with you to work. This way you can have coffee during your commute, or whenever you need it during the day. It may not seem like a lot, but those little daily purchases add up over time!And my money goes to...

    8. If you do buy something like coffee or lunch that you could have brought from home, rather than feeling guilty about it, match it! Put the same amount that you spent on the item into your savings. You’ll get instant gratification with your yummy treat, but also delayed gratification with more savings!

    9. Just like it’s okay to occasionally splurge on a diet, it’s okay to buy something fun every now and then while you’re saving. But just like a diet, you have to limit yourself and splurge within reason so that you don’t throw your goals completely off track. Try putting a line item in your budget for “extra expenses.” You can plan ahead for those splurges, and then you won’t blow your whole budget when you buy those really cute shoes, or dine out with friends. If you don’t use those funds one month, you can add it to the next month’s budget, or better yet, transfer the amount you didn’t spend into your savings.

     

    Thanks to our readers and followers who participated in America Saves Week. Do you have any other ideas? Let us know in the comments and share your savings wisdom. Let’s keep the spirit of saving alive all year long!

    I Love You Enough to Discuss Finances

    Saturday, February 14th, 2015

    Pink TableWhile it may not sound as romantic as the traditional fancy dinner or a dozen roses, nothing says “I love you” like making smart decisions that can build your financial future together. Have some fun with your sweetheart this weekend, but also make a commitment to each other to improve your financial foundation. These steps can help get you started:

     

    1. Review your finances, even if you are not married.

    Make time to sit down with your partner and see what your current financial picture looks like. To get you started, here are some questions you should each know the answers to:

    • What is your spouse’s income?
    • Where are you spending your money on a monthly basis? Where is your partner spending his or hers?
    • What debts do you both have (Credit cards? Student loans? A mortgage?) and how are you working toward paying them off?
    • Does your spouse have an employee-sponsored or other retirement plan? How much is he or she contributing each month/year?
    • Do you have money in joint or individual savings accounts? If so, how much? Do you make regular contributions to it?
    • Do you have any investments as individuals or as a couple? What are they? How are they performing?

    It can be hard to talk about money and especially debt, but you will be more confident that you can make good decisions if both of you know all the same information.

    Even if you are not married, you and your significant other should start to share your financial situation. Many couples do not talk about finances until after they are married and then find themselves straddled with their significant other’s debt. It is better to prepare yourself now than be surprised later.

     

    2. Discuss how to split finances.

    You may want everything to be even and equal, but often one partner makes more money than the other. You should discuss how that affects your spending and saving. Instead of trying to pay for half of everything, suggest splitting it by percentage of income. For example, if you make $45,000 a year and your spouse makes $52,000, try splitting your rent so that your spouse pays 15% more.

    Creating a budget can help with understanding spending habits. Use our budget worksheet to organize your finances

    Also, keep in mind the fact that women often spend their money on everyday expenses, while their partner’s income goes into investments or savings. Make sure that you are contributing to long-term savings and that there are assets that are also in your name.

     

    3. Plan ahead.

    Many women will end up living on their own at some point in their later years. You may be part of the 50% of couples that divorce. Or you may stay married, but live longer than your husband. Get involved in your family’s finances now so that you know how to handle them if you become solely responsible. Know where your investments are and how much they are worth. Make sure your name appears on all of your family accounts and investments to establish your legal right to them should your marriage end or if your spouse becomes ill or unable to assist in making decisions. And finally, make sure you take those extra years when you may be living on your own into account when you and your spouse are planning for retirement.

     

    4. Revisit your financial plan.

    Make plans to re-evaluate your finances each year, at minimum. Scheduling a time to sit down annually will allow you to make any necessary adjustments to your budget and check to see if your long-term savings and investments are on track. Also important – make a promise to each other to have a conversation anytime there are major changes to your finances. Did your spouse get a bonus, or are you now out-earning your partner? Discuss how to use those additional funds together. Did one of you make a big purchase that you have not told the other one about? Be honest with each other and talk about how to adjust your spending habits.

     

    These four steps will help you avoid common mistakes women in couples make about their finances. You’re committed to each other, be committed your financial future as a couple too.

    For more tips on making your love nest financially secure, check out one of WISER’s earlier blogs, WISER Ways to Say “I Love You”.

    WISER

    About Us

    WISER is a nonprofit organization that works to help women, educators and policymakers understand the important issues surrounding women's retirement income. WISER creates a variety of consumer publications including fact sheets, booklets and a quarterly newsletter that explain in easy-to-understand language the complex issues surrounding Social Security, divorce, pay equity, pensions, savings and investments, banking, home-ownership, long-term care and disability insurance.

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