How to Budget for a Pet

How to Budget for a Pet

If you’re a pet owner, you know just how much fun they can be. But adopting a pet is a big decision that comes with many responsibilities — and expenses. Here are some considerations when planning for the next four-legged addition to your family.

Adoption & Licensing

Most pets require spaying/neutering and vaccinations, and some may also need to be microchipped and trained. If you obtain your furry friend from a breeder, not only does the purchase price go up, but you may also have to pay all these expenses on top which can bring total costs above $6,000. In contrast, adopting a dog or cat from a shelter or rescue organization can be below $500, which generally includes initial vet work. You’re also giving an at-risk animal a happy home. Certain shelters will reduce the price further for older pets that can be good companions for seniors. In addition, some local governments require an annual license that‘s generally below $25 if you spay or neuter.

Food & Supplies

Fish, rodents and birds are often more economical to feed — from around $15 to $50 annually. Cats, ferrets and small dogs may cost approximately $200 to $325 per year, while larger dogs can run up to $400. These prices don’t include special treats or prescription food for older animals. Then come the supplies. Smaller animals can make up for their lower purchase cost with the need to maintain an aquarium, cage or other habitat. Cats and dogs have collars, leashes, crates, carriers and toys that you may replace several times during their lives. Cats have the infamous litter box to repeatedly fill, but dogs can have their own high-ticket demands: After all, they may be the reason you decide to fence in your yard!

Grooming & Veterinary Visits

Cats are generally self-cleaning and may even resent your efforts to groom them (thank you very much), although long hair varieties tend to require more maintenance. Dogs can be a different story. Some even love getting bathed and will try to get you to do it with them. But even if you handle bathing on your own, you’ll still need to buy shampoo, brushes and combs — and some breeds benefit from an occasional haircut. You’ll also need to schedule annual checkups with the vet and may have to purchase heartworm medication or a hairball preventative. You may also want to go to the vet between checkups for

certain delicate procedures you don’t feel comfortable with, like trimming nails or — yuck — expressing glands.

Pet Sitting

You can’t take your pet everywhere but getting a sitter before your vacation or during the holidays usually isn’t cheap. Professional pet sitters can charge different rates depending on the time frame. This can be around $75 a night. Another option is a boarding facility, where your pet can have 24-hour care for about $50 per night. And many pet parents choose to install in-home wifi cameras to monitor their pets when they’re out (some even include remote treat dispensers).

The Joy They Bring … Priceless

Some costs can be difficult to anticipate, such as a pet deposit or monthly fee for renters. It’s important to include all costs as budget line items. And consider a dedicated expense account for furry, feathery or scaly companions. But if you‘re responsible with your pet spending, you’ll find that all creatures great and small can be worth every penny for the joy they bring you.




The Benefits of Estate Planning

The Benefits of Estate Planning

It’s the one personal finance topic people often try to avoid, even though they know they shouldn’t. Estate planning refers to a number of activities dealing with how decisions are made, and assets are handled and disposed of just prior to and following death or incapacity.

While far from the most upbeat of topics, it’s a very important one to contend with, nonetheless. But rather than focus on specific estate planning strategies, let’s consider the potential benefits of addressing this issue at all.

Leave a legacy. Many people want to leave something tangible to those they love, whether to their children, grandchildren and great-grandchildren, nieces, nephews or friends. Knowing that your lifetime of hard work and saving can make affording college, buying a first house, a car, or starting a business easier or possible for someone you love can be gratifying. A final will and testament spells out the specifics of how your assets are disposed of. And you can also leave an explanatory letter to your beneficiaries to let them know what they meant to you, why a gift was made and how you hope your bequest will help enrich their lives.

Unburden your loved ones. Making difficult end-of-life medical decisions can be stressful and anxiety ridden for those who care about you. But this is a burden you can take off their shoulders by putting in place advanced directives — otherwise known as a living will — that express your wishes for continuation of life-support and other medical decisions if you aren’t able to make them for yourself. And it’s a very loving thing to do for your children or other family members

Support a charity. Do you have a charity that means a lot to you? You can leave a lasting gift by remembering that nonprofit organization in your will. Whether you want to support curing childhood diseases, environmental efforts, animal welfare, or a church, synagogue or mosque, you can take comfort in knowing that you’ll help support the causes that matter most to you even after you’re gone.

Take control. Estate planning in some ways, is the ultimate assertion of control over your final destiny. Whether through the establishment of a trust, the creation of a will or the documentation of your advance directives, you’ll be able to maintain greater control over important decisions throughout your life and beyond.

Remember, estate planning isn’t only for the wealthy. Everyone will have to make end-of-life decisions that have tremendous consequences for themselves and their loved ones. Once you have all the essential documents in place, you most likely will not have to revisit these decisions very often. And with an appropriate estate plan in place, you can get on with enjoying your life in the here and now.

Have You Increased Your 401k Contribution Lately?

Have You Increased Your 401k Contribution Lately?

In 2022, inflation rose by a staggering amount. Currently at 8.6% as of this writing, at least one economic forecast projects inflation could reach 9% before years end. To keep up with rising costs, it may be tempting to lower your 401(k) contributions or stop altogether. But in fact, high inflation means youll need to save more aggressively for your future as purchasing power declines. 

While 401(k) savers have the option of raising deferral amounts periodically, many employees fail to increase their contribution rates over time. Heres why you should consider upping your 401(k) contribution, especially when inflation is on the rise.  

A Small Increase Can Make a Big Difference 

Saving for retirement is a long-term proposition, and small changes to your 401(k) allocations can greatly affect your ability to retire comfortably in the future. For example, according to Fidelity, a 35-year-old earning $60,000 a year can make a significant impact in their retirement savings by the time theyre ready to withdraw with only a 1% increase in their savings rate. In the short term, thats only $12 more per week, which isnt enough for most savers to feel an immediate pinch. However, just that small increase can add up to an additional $85,000 more in the fund by age 67, assuming a return rate of 5.5% and a consistently growing salary.  

While your particular situation may vary, increasing your 401(k) contribution rate now means that these funds have more time to potentially increase in value thanks to the powerful effects of compounding. And having a little bit less in each paycheck now will likely hurt a lot less than not having enough for a comfortable retirement later on.  

Consider Auto-escalation 

Even though the math is undeniable, sometimes it can be hard to get yourself to take the plunge, particularly if youre concerned about rising costs in the near term. To make it easier for employees, some plans offer auto-escalation, in which your 401(k) contributions increase automatically. Typically, these rates increase by 1% each year until federal limits are reached. This is a great option to sign up for if you aren’t already enrolled. And you can always opt out of an increase, so theres no long-term obligation. 

Talk to a Financial Professional 

Raising your 401(k) contributions periodically can help put you in a much better position for retirement, without having to take big hits to your available cash flow at any one time. Instead, you can ramp up gradually, upping your contributions whenever you receive a pay increase or at some set interval.  

When youre ready to begin increasing your allocations, talk to a financial professional to find out how you can best augment and manage your retirement savings. As inflation continues to rise, 401(k) savers who periodically increase their contribution amounts are positioning themselves to be better prepared to maintain buying power at retirement, when theyll likely need it the most.  



Inflation Adjust Your Emergency Fund

Inflation Adjust Your Emergency Fund

Inflation, whether steady or steep, can have a negative impact on your savings if you don’t keep pace with it. This means that while you may be prepared for a financial emergency now, you might not be down the road. And particularly when a recession complicates the picture, padding your emergency account can be a lifesaver. If you have three months of expenses currently saved, try to increase that amount to six. If you have six months in the bank, see if you can sock away nine months’ worth. At the very least, aim to increase your savings by the same percentage as the current inflation rate to help keep you prepared in a climbing interest rate environment.

Though it’s important for investors to be cautious during recessionary conditions, there can be a potential upside when interest rates rise — investors can see higher returns on their savings. For any money you might need to access on a moment’s notice, minimize risk as much as possible while maintaining high liquidity. Here are some types of accounts that can be appropriate for an emergency fund.

High-interest Savings

You can save money in an FDIC insured high-interest savings account to generate a higher interest rate than most traditional savings accounts. And the extra interest you earn could help bridge the gap between your savings and the current inflation rate. You may find the best deals with online high-interest accounts.

Laddered CDs

A laddered CD is when an investor divides a lump sum into multiple CDs that mature at different times, so the investor can receive periodic payouts. Staggering maturity dates may also allow you to take advantage of changing interest rates. This strategy can help lower overall portfolio risk as well, which may be important for something as critical as an emergency fund. 

Money Market Accounts

In exchange for higher interest rates, many money market accounts (MMAs) have minimum deposits of $5,000 or more. They have relatively high liquidity, but the number of transactions per statement period are typically limited (often to around six per month). MMAs also often have debit features that give them more liquidity than CDs or even other savings accounts.

Don’t Compromise Your Future Financial Wellness

No matter which savings strategy you choose, try to avoid dipping into your 401(k) or other retirement account. These are intended to be long-term, non-liquid investments that are meant to mature when you’re ready to retire. The taxes and fees alone for early withdrawals can reduce what’s available to you in the short term to the point where the money might not cover a significant emergency. Plus, those funds can’t be put to work in the market while they’re divested — and you may miss out on valuable growth opportunities if stocks rise. The kind of account that’s best for you depends on your financial situation, so speak with a financial professional before committing to one strategy.


Tips for Minimizing Student Debt

Tips for Minimizing Student Debt

From guidance counselors and parents to your soccer coach and nosy neighbors, everyone seems to be interested in where you’re planning on going to college. And with good reason — there’s a lot to consider when making this important decision, beyond just picking the right university or vocational school and figuring out your major. Education costs money … a lot of it. But with some practical planning, there are ways to rein in college costs even if your college fund hasn’t caught up with your dreams quite yet.

Figure out What You’ve Got to Work With

Have the “money talk” with your parents. Find out if they — or your grandparents — have funds put aside for you like a tax-advantaged 529 college savings plan. If they do, know that the impact on your financial aid is different based on whether your parents or your grandparents started the account. And don’t forget to ask for money toward your college fund for birthday presents and holiday gifts to bolster your savings.

Stretch Your Budget

Rather than going straight to a four-year school, consider spending your first year or two at a community college. Community college can cost much less — plus, you could potentially save on living expenses by commuting. You can then transfer to the school of your dreams in a year or two to dig into your major.

Plan Your Way Out of a Jam

Talk to your college advisor about the feasibility of graduating early. Look into concurrent enrollment programs that allow you to take reduced-cost college classes while in high school. AP testing and CLEP tests can also help you receive credit at a reduced rate and speed up your graduation date. Graduating even one semester early can save you thousands of dollars in tuition, housing and other expenses.

Scholarships Are Free Money

In addition to academic and sports scholarships, there are also community-based, gender and subject area scholarships. Once you’re in college, you can work with your major department or honor society to take advantage of these programs. Look into smaller scholarships as well. Sometimes they’re easier to get, and a lot of small scholarships can add up to more money. And don’t forget about grants if you have financial need. Many states and colleges offer their own need-based grant, research and scholarship programs that you can apply for.

Work-study and Summer Jobs

Instead of taking out more student loans, look for opportunities to participate in federal work-study. These are programs that provide you work during the semester and can help you reduce the need for debt. A summer job can build up your resume and help toward paying your college expenses for the coming year.

Get Ahead of Debt

Make sure you fill out the Free Application for Federal Student Aid each year to take advantage of grants, work-study and some scholarships. Speak with a financial professional to help you take steps now to sidestep serious debt and make your transition into life on your own as smooth as possible.

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