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Beat These 5 Budget Busters

Beat These 5 Budget Busters

It happened again. You started the month determined to keep spending within your budget, only to come up short on contributions to your retirement and other savings.  

How can this be? 

Many factors can steer you off course on monthly spending, but a few particularly common culprits are often to blame. Here are five budget busters and some smart strategies to beat them.  

1. Subscription Services 

Premium sports and movie channels are great fun, but subscription creep is common as more channels join your viewing rotation, monthly charges increase over time and free trial periods quietly end.  

Smart savings strategy. Cut back channels to just your favorites. Avoid in-app purchases and only watch shows included in your programming package. When possible, replace premium services with free or lower cost, ad-supported plans.  

2. Unexpected Repairs 

Things break thats life. Computers crash, TVs stop working, appliances wear out, cars break down and phones get dropped. And it can be hard to stay on budget when they do unless you take steps to prepare. 

Smart savings strategy. You cant expect things to never go wrong, but you can establish an emergency fund of at least three-to-six months of expenses for when they do. Good maintenance habits can also help minimize repairs. And be sure to take advantage of any purchase protection that might be available for items bought with your credit card. 

3. The Urge to Splurge 

Weve all walked out of the grocery withextraswe didnt plan on buying or come home from the mall with a new sweater that was too good a deal to pass up or given into the desire for a pricey mochaccino at the coffee shop. While occasional indulgences are rarely problematic, frequent ones can add up. 

Smart savings strategy. Bring a list to the store and avoid recreational shopping. And dont grocery shop when youre hungry — going to the supermarket with an empty stomach increases the chances that you’ll leave with a loaded cart. Spend cash to help keep credit card balances under control and set limits for online shopping (its just too easy toclick to buy). If a purchase is beckoning you, consider layaway or wait to see if the urge passes. 

4. Dining out 

Eating at restaurants is a treat, but it can be easy to spend more than you intended. If your monthly restaurant tab is starting to look more like a car payment, there are things you can do to prevent your favorite eatery from taking too big a bite out of your budget. 

Smart savings strategy. Limit eating out to once or twice a week or month, depending on your budget. Instead of fine dining, try informal, less expensive bistro meals. Alcohol adds a lot to the check, so limit consumption when dining out. Split a meal or have an appetizer instead of an entree. Look for early bird or happy hour specials and swap out a steak splurge for a less expensive pasta dish. 

5. Delivery Fees 

You can get almost anything delivered today, from cat food to a new car. But convenience can come at a hefty price. Whether for meals, clothing or other online purchases, delivery services can make everything you buy more expensive.  

Smart savings strategy. Drive to the store instead of paying delivery fees and forgo rush shipping. Dont fork over hard-earned cash for meal delivery services, which often dont even include tipping the driver. Eat in more or use convenient curbside pickup instead. 

And Most Importantly … 

Whatever you do, theres one way to prevent budget busters from derailing your retirement or other savings plans and thats to pay yourself first. Having retirement plan contributions automatically deducted from your paycheck is an effortless way to accomplish that. Put your financial future at the top of your budget each month to help ensure you can always afford what matters most. 

Inflation and Your Retirement Plan

Inflation and Your Retirement Plan

Lately, it seems we’ve all had to learn more about global economics than we’d like. Thanks to the COVID-19 pandemic, extreme weather in essential manufacturing regions and a container ship mishap in the Suez Canal that wreaked havoc on deliveries for months, there’s no shortage of reasons for soaring prices and low-stocked shelves. With so much uncertainty in the world and all around, you may feel like holding onto cash is a safer bet. But if inflation is on the rise, a dollar today could have less buying power than a dollar tomorrow.  

You may have had to adjust your budget to compensate for rising prices, but have you considered shoring up your retirement savings against the risk of inflation 

Inflation and Your Buying Power in Retirement 

Inflation impacts the “real value” of investments in your retirement plan because the same amount of money may give you less spending power later. If your expenses are $2,000 per month now, you might need $3,500 during retirement, just to maintain the same quality of life — all thanks to inflation. 

Countering Inflation in Your Retirement Portfolio 

If you’re worried about how inflation may impact your 401(k) performance and retirement plan, there are some things you can do to compensate, increasing the chances that you will have more spending power in your golden years. 

  • Look for investment products that yield the same returns as the rate of inflation, or greater. When inflation is historically 2% to 3% annually, keeping most of your money in a bank account or CDs may not cut it. Look for investments likely to have higher annualized returns than inflation. 
  • Diversify your 401(k) portfolio between stocks, bonds and mutual funds. Not all asset classes and individual investments are equally impacted by inflation. Diversifying can help you manage your risk tolerance while still staying ahead of inflation. 
  • Look at treasury inflation-protected securities (TIPS). If you’re concerned about risk, TIPS can help. These are treasuries that offer returns designed to keep pace with inflation, allowing you to at least see returns that preserve your buying power. 
  • Consider investing in gold. Even though gold is sometimes thought of as a hedge against inflation because it traditionally moves opposite to the U.S. dollar, this isn’t always the case. When diversifying your assets, consider gold, but be wary of relying too heavily on it. 
  • Identify sectors with superior performance. Some sectors, like energy and commodities, often beat inflation. Including funds or stocks in these sectors in your portfolio can sometimes help mitigate inflation risk. 

Impact on Retirees  

Inflation can be more of an issue when you’re on a fixed income or close to retirement. Speak to your financial professional about strategies to deal with inflation, especially if youre planning on leaving the workforce soon. 

Enrolling in Your First 401(k)

Enrolling in Your First 401(k)

Youre probably aware of 401(k) plans and may have even heard how they can give you a leg up on your retirement goals. If you have a 401(k) available to you through your job, however, you might still want to know more. Lets look at some answers to frequently asked questions about your employer-sponsored retirement plan. 

Q: Why is a 401(k) better than a savings account? 

A: For the most part, a traditional savings account doesnt offer tax advantages. A 401(k), though, allows you to put money aside for the future before you pay taxes on it. You also dont have to pay taxes on investment earnings from the account as they come. Instead, you only pay taxes when you withdraw from your 401(k) during retirement. By then, youll hopefully be in a lower tax bracket. 

Q: How can a 401(k) improve your retirement readiness? 

A: Since your 401(k) is an investment account, you can take advantage of the considerable benefits of compounding returns, which can allow your money to grow at a faster pace than it would in a traditional savings account. This can help put you in an accelerated position to achieve your retirement dreams. Plus, having the money deducted from your paycheck automatically makes it easier to stay consistent with your investment goals over time you can build wealth without having to think about it as much. 

Q: What are the risks of participating? 

A: Market volatility is always a possibility, so its important to understand your personal risk tolerance and create an investment plan that works for you. Its also why its critical to review your retirement plan regularly and rebalance your asset allocation as needed. 

Q: Are there other advantages? 

A: Your employer might offer a match, providing you with a way to put even more money into your retirement account. Additionally, your employer might give you the option of a Roth 401(k), which can result in lower taxes during retirement. Carefully consider your tax situation and individual needs when deciding if a Roth 401(k) makes sense for you. 

Q: What if I quit my job? 

A: Money you put in, plus your investment earnings, stay with you no matter what. Money your company puts in becomes yours based on a vesting schedule. You can roll your 401(k) over to a new employer-sponsored retirement account or an IRA if you leave your job. 

Q: How much do I need to contribute? 

A: Work with your qualified financial professional to figure out how much you need to meet your specific retirement goals. You decide how much you put in from 1% of your salary up to the annual contribution limit. Some retirement plans also allow you to automatically increase your contributions each year, or you can bump up your deferral rate when you receive a promotion or bonus. Consider what you should set aside each paycheck to help you achieve your long-term goals. 

Q: When is a good time to join? 

A: Sign up for your 401(k) as soon as you can. Put time on your side when it comes to reaping the benefits of compounding returns. There can be significant opportunity costs by sitting on the sidelines too long, which can hamper your retirement readiness over the long term. 

Q: How do I sign up? 

A: Contact your companys HR department for help opening your account and setting up payroll deductions. Enrolling isnt hard at all and it can be one of the most important items to check off on your to-do list in order to help ensure a more secure financial future. The specifics of 401(k) plans can vary from company to company, and theres more to know than what weve covered here.  

Contact your qualified financial professional if you have additional questions or to learn more. 

Where You Retire Matters!

Where You Retire Matters!

Many people dream of relocating when they retire. While some spots are more popular for retirees, these areas often come with higher costs of living. And because most retirees live on a fixed income, it’s important to keep a close eye on costs. If you’re dead set on retiring to a pricier area, you may even need to continue working for a few years longer than you planned to make it happen. Here are things to consider when evaluating your options.


From state to state, and even from town to town, the baseline taxes that residents must pay can vary quite a bit. Some states, such as Florida, have no state-level income tax at all. Others have either a flat tax rate — where the state taxes all income at the same rate — or a progressive tax — in which those with higher incomes pay a higher rate. But even if your state has no income tax, your town’s property taxes may cut into your savings. It’s also important to assess the sales tax rates in the area where you’re hoping to move, as these could also add up. Some municipalities have local sales taxes as well, so be sure to do your research to determine if an area is truly affordable for your retirement budget.

Housing Costs

Home prices and rental rates have increased steadily for years, but this is especially true in places with competitive real estate markets. It may be helpful to research future development plans in your area. If a large company is planning to build or expand a major facility nearby in a few years, for example, expect housing costs to increase as new employees want to move closer to their jobs.


Many of the most popular retirement destinations — particularly along the coast — are also in areas that are at particular risk of certain disasters. For instance, Florida’s hurricane season lasts for several months every year, and residents sometimes face catastrophic storm damage. Because of this, currently the average cost to insure a $250,000 home in Florida is $1,648 per year, compared to $681 per year in Delaware. Your car insurance may be higher in certain states, too, which often depends on the average number of uninsured drivers in the area and other factors.


Unless you enjoy (and can afford) frequent travel, it’s important to think about the proximity to the places you’ll want or need to go often. Being far away from loved ones could require you to spend a lot of your retirement income on visits, and if you’re an outdoorsy person, living in a city means you’ll be planning — and paying for — frequent getaways. But it’s not just leisure that could cost you. Living far from grocery stores, doctors, pharmacies and other necessary places can add significantly to your household budget, whether you drive yourself or take public transportation.

State Benefits

Depending on where you live, your Medicaid benefits could range from generous to very low, potentially leaving you on the hook for expensive in-home or facility-based care. Medicare premiums vary from state to state as well. If you’re able to self-fund your medical care, this may not affect you as much. But if you need to rely on state benefits, be sure to research the costs and coverage in the state where you intend to retire.

Overall Cost of Living

The cost of everyday items such as groceries, clothing, home services and more can vary tremendously depending on whether you’re located in a big city or rural area. With so many factors to consider for retirement, using an online calculator to help project cost of living in areas you’re considering can be a useful starting point. However, it may also be helpful to speak to a financial professional to help you figure out what you can afford, and which area suits your budget best, so you can adjust your retirement plan accordingly.

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.

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