Top Saving Plan

My wife and I needed to reduce our overall monthly expenditure due to a change in our personal circumstances. We sat down with a list of our monthly outgoings and a clean sheet of paper and tried to come up with ways that we could achieve the savings required to live within our means. Ideally our plan would save us three hundred pounds a month and we would aim to renegotiate all of our policies plans and utilities and any shortfall would be made up by cutting back on our holiday plans and social lives. We started with our direct debits and logged onto the internet to get a life insurance comparison, mortgage costs and utilities. The savings it’s possible to make were substantial although we weren’t able to save the entire amount we were virtually there and our lifestyle will not suffer tremendously, so we’ll be able to enjoy our lives as much as we did before. With hindsight  it’s clear that those who put off  carrying out such an exercise are being stupid and wasting money unnecessarily, money that most people can ill afford to give away. It’s not as if there isn’t enough adverts on the television telling us to log onto our computers to compare the price of our car insurance, home insurance and so on.

Source: http://www.lifeinsurancecomparison.uk.com/blog/2011/11/18/financial-austerity-beginning-bite-save-money-free-life-insurance-comparison/

Many of us could benefit from Debt Help, because of the financial and psychological burden of multiple unsecured debts. There are a number of debt help measures that one might turn to in these circumstances and one of these debt help solutions is the debt management plan.

But a debt management plan is not the particular brand of debt help best suited to everybody. Before seeking debt help, it is important to ensure that you choose the best possible debt help for you. There are certain types of debt and amounts of debt for which a debt management plan can be of great use.

Could a debt management plan be the debt management plan be the answer to your debt help problems? Read our debt management plan qualifying criteria and find out.

• Customers can only seek this kind of debt help for unsecured debts. An unsecured debt can be anything from a personal loan to a credit card or store card.
• The aforementioned unsecured debts must be taken with at 3 or more different organisations for the debtor to be eligible for professional Debt Help.
• Usually, the customer’s unsecured debt has to amount to between £8,000 and £15,000 in order for a Debt Management Plan to be seen as an effective debt help measure.
• Customers have to be able to demonstrate that they are struggling to pay their various unsecured credit payments on time; if at all.
• They must also have a disposable income of £100 or more per month so that you are able to make a reasonable contribution to your creditors.

Retirement seems so far away, but you know you need to start saving now. But, how much will you need in your nest egg of savings and investments to be comfortable? That depends on how long you want to work, your expected standard of living and how much you already have saved. You will likely be retired for approximately 20 years and the actions you take today will affect the security you’ll have in the future. Consider the following variables that will influence how much you will need for retirement.

1. Retirement Age – How long do you want (or need) to work to have ample savings? If you are targeting Social Security benefits, which can begin as early as 62 and develop to full benefits at 67, you have a timeframe in mind. However, if you accumulate a formidable nest egg, you don’t have to wait until your sixties.

2. Current Savings – How much is your nest egg worth? The more money that is currently earning interest, the better. So, the earlier you start saving, the more likely you are able to retire in style.

3. How quickly is your money growing? – Before retirement, your annual rate of return is very important. Are you earning 5%, 10%? Over time, compounding interest can quadruple your money saved. Growth is unpredictable, but shop around for the best return, which may require a little more risk. After you retire, the rate of return will be lower, requiring a lower risk investment to keep it safe.

4. Other Income – Social Security, pensions and property income must all be considered during nest egg planning. Currently, the average Social Security benefits present less than one-third of your pre-retirement income and who knows if benefits will be reduced (if available at all) when it comes time for you to retire.

5. Retirement Withdrawal – How much of your next egg will you withdraw each year of your retirement? Retirement calculators estimate this as 70 – 90% of your preretirement income. Multiply that number by 20 (the average length in years of retirement) and that is roughly how much you will need. It is thought that you can live on less during retirement, assuming your property is paid off. However, if you plan on vacationing in the tropics every year or living in an exclusive area, that lifestyle will require even more.

This was a guest post by ChicagoBankingRates.com, a site that provides daily updates on the latest Chicago mortgage rates, finance information and more.

According to a recent global survey by AXA Equitable, American workers are confident, but not well-informed, about their financial outlook in retirement. For example, 60 percent of workers believe their retirement income will be sufficient, but only one in five actually knows what that income will be.

Workers’ confidence may come from watching their parents live well in retirement:

• On average, U.S. retirees receive $4,243 in net monthly income (including Social Security, company pensions, personal assets and savings, etc.); however, the median (middle point) net monthly income is just $463.

• 98 percent of U.S. retirees are confident with their living standard, claiming they already have everything they need.

However, with Social Security and pensions falling out of favor (about 9 in 10 believe the Social Security program is in trouble or crisis), workers are receiving a wake-up call for retirement planning. In fact, an estimated 65 percent of workers realize they will need to rely on their own savings to get them through retirement.

Of all respondents worldwide, Americans are the least likely to rely on government-managed retirement savings programs or to hold the government responsible for providing retirement income.

“Not only are Americans on their own for retirement financing, they’re also living longer and realizing that they may need funds to last them for more than 30 years after they retire,” said Ken Gelman, AXA’s director of market research. “As a result, they’re taking retirement savings very seriously by starting early and consulting trusted financial advisors.”

As a result of sound advice, Americans are able to build diversified retirement portfolios.

When asked how retirement income is being secured, about two-thirds of respondents-working and retired-cited several types of assets, including IRAs, 401(k)s, investment funds and company pensions.

However, Americans are being cautious with the funds that should last a lifetime. Seventy-eight percent of workers favor investments with a modest ROI and no financial risk. Even so, Americans lead the survey in financial risk-taking.

The Retirement Scope survey was conducted by AXA, a leader in financial advice and wealth management. More than 6,900 working and retired people in 11 countries were surveyed.

The journey of a thousand miles begins with a single step. Its as true with saving money as with anything else.

These days, weve been frightened into thinking we must save thousands of dollars immediately. Most of us simply cannot do this, and the media does us no favors when it makes the situation sound so hopeless that we might as well give up.

Financial planning should be focusing on real people, people who have trouble saving, people who really need the help that instead seems geared towards the wealthy.

As a result, many of us think that if we can only save, say, $10 a month, then it isnt worth it. Not true! Once you sock away that $10 and realize that youre still okay, youll realize you can put away a little more.
Maybe you increase it to only $20 a month, but thats $240 a year, plus the interest youll receive for putting the money in a savings account or money market. You only need $250 to open an IRA, and thats a worthy goal.

Even if you stick with $10 a month, thats $120 a year, and if you think that isnt much money, you can probably afford to put away more.
The best part of this technique is that you get into the habit of saving. Once you do that, savings can grow and grow as your income increases, your expenditures decrease, or you receive a bit of extra money from your tax return, a work bonus, etc.

Here are a few tips for saving more by starting small:

Pay yourself first. Youve heard it before, but thats because it works. When you pay your bills, write a check to yourself. Depositing as little as $5 from each paycheck into a savings or money market account should get you to that initial goal of $10 a month. If thats painless, increase it to $10 per paycheck. If, after a couple of months, you find $10 is painless, increase it a little more. Keep doing this and you might be surprised at how much you can afford to sock away!

If your employer offers direct deposit, even better. Open a savings or money market account and have at least $5 per paycheck deposited into that account. Again, keep increasing this as you get comfortable with saving the money.

Do you spend $2 a day on coffee, a muffin, or some other inexpensive treat? Do that five days a week for 50 weeks, and youve spent $500! Spend a little of that on a coffee maker and some ground or whole coffee beans, and put the rest into your savings account.

When you save money with good deals or coupons, consider putting the difference into your account.

Most importantly, get yourself into the habit of saving, and dont underestimate the effect of saving just a little. All you need to do to begin the journey is to take that first, single step.

Say “Bah, Humbug!” To Holiday Debt: Avoid the “Holiday Hangover”

Ah, the holiday season! Turkey and dressing, pumpkin pie, office parties, jingle bells, and lots and lots of eggnog make the season a delight. But all fun and reindeer games aside, you have to be careful to make sure you don’t wind up as poor as Tiny Tim! Americans can spend as much as $1,000 a year on gifts for family, friends and business associates. That is a big chunk of money that can hit you pretty hard come January if you don’t plan ahead. There are some tips and tricks you can do to keep your holidays bright and debt-free this year.

Before the holidays arrive, do some careful plotting and planning for family and business expenses. A few hours spent in preparation can mean less money spent on gifts. You don’t have to be Scrooge, you just have to be smart.

1) Decide how much you are willing to spend, and stick to it. Pretend you are spending cash. How much can you afford out of pocket this month? If you cannot afford it right now, consider that you cannot afford it at all.

2) Budget non-gift and after-Christmas items too. Remember to include other things you buy over the holidays – cards, stamps, candles, a tree, decorations, and food galore. Plus, plan ahead to save some money for next year by taking advantage of after Christmas sales. It is all part of your holiday spending, so plan for it in your holiday budget.

3) Make a list of everyone you will be buying gifts for and estimate how much you want to spend on each person. Include the smaller gifts for teachers or your mailman. Include the price of cards and stamps, because Christmas cards count as gifts when it comes to your budget. Then, add it up and compare the total to your budgeted amount. Make the necessary adjustments. Your brother-in-law may only get socks this year.

4) Cut down your list. This may sound harsh, but look closely at who you are buying gifts for. When saving money is an issue, it is ok not to give gifts to everyone you know. Send only cards to distant relatives, neighbors you don’t know well and business owners who haven’t bought from you this year.

5) Be creative. Determine if some people would be happy to receive home baked cookies. Remember, the holidays aren’t about presents but about good will towards man. Good will comes in many forms and does not always need wrapping paper. If you have a skill or a hobby, use it: needlework, knitting, art or poems. Make a photo album, or offer to plant their garden. Use discount coupons for your customers.

6) Carry your shopping list with you. Take every opportunity to shop. Start early and try to get things before the rush, before highly sought, hard-to-find items go up in price, and before you can’t find what you need. This gives you a chance to comparison shop. It also takes away some of the stress and reduces your risk of overspending just for the sake of finishing your shopping.

7) If a store offers free gift-wrap, go for it! It’ll save you time and money on buying wrapping paper, tape, bows, and cards and struggling with it all yourself.
Have willpower. Stick to your estimates and you won’t go over budget. eBay is a wonderful shopping tool if you remember to start early enough to account for shipping time. Find the right item, bid your budget price and leave it. If someone outbids you, don’t get into a bidding war, just bid on something else within your price range.

9) Increase your income for the season. During the holidays there are lots of ways to make a little extra money. Many stores hire part-time workers for the holidays. Since it is a party season, babysitting is in high demand. Be imaginative. You could be the Official Gift Wrapper in your neighborhood and wrap gifts for friends and neighbors for a small fee.

10) Use your credit cards. Yes! If you stick to your budget and only spend what you are able to pay for in the next 30 days, then yes, you CAN use credit cards. The key is to use them as you would cash. Using your credit card is not a way to buy things you can’t afford, it is a way to organize your spending and possibly get some rewards and discounts along the way.

11) Make the credit card companies compete for your business. It may be the holidays, but you can dig in your heels and play hardball. Call your credit card bank and tell them you won’t be using their card for your holiday purchases unless they sweeten it up for you. You want a little sugar and spice to make using that card a better deal. You can ask for 0% interest, double your gas points or flyer miles. Anything to make using your credit card more worthwhile. Banks will usually be willing to strike a deal with you, so long as you try. It can’t hurt to ask.

12) Use specialized credit cards, but carefully. Many of the stores where you will be buying your holiday gifts offer their own credit cards. They tend to have ridiculously high interest rates. However, they may give you discounts of 10%, 15%, sometimes even 20%! So, you could actually go ahead and use a store credit card to make the purchases and get the discounts, since you are paying these off when the bill comes due the interest rates should not be a problem. If you do get into a pinch and can’t pay them off right away, then transfer your balance to your lower-rate credit card before any interest is added to the higher-rate one. You need to be on the ball with this trick, but it may save you money.

It is important to keep in mind that every new credit card you apply for will lower your credit score. So if you’re saving up for a mortgage or a large loan, you’ll want to avoid applying for additional credit.

Come the start of January, your main concern is going to be getting ready for the new year, and you won’t want post-holiday money troubles making things worse. The Ghost of Christmas Past starts visiting even before you put the tree in the trash. Be sure to have a Happy New Year by being money-wise in advance.

(c) 2005 DebtGuru.com(r). This article may be freely distributed as long as the signature file and active link are included.

You spend the most time there, so it makes sense that your house represents your largest expense. Whether it is the day to day upkeep, and operating expenses, repair projects, or the rent or mortgage payment, you allocate a big portion of your income to your home. Because you spend so much money on it, take advantage of the following tips to start trimming your budget.

If you want to possibly save hundreds of dollars a year on your electric bill, make sure that any new appliances you buy are energy efficient. You can find this information on the Energy Guide Labels that federal law requires of all major appliances.

Call your utility program and ask them if they have any cost saving programs such as load management programs or off hour rate programs. Enrolling in these could save you a substantial amount of money.

Ask your electric and/or gas company if they do a free or low cost home audit. They can identify ways for you to save hundreds of dollars a year on heating and air conditioning and often they will help you implement their suggestions for free.

Go over your phone bill and see if there are charges on it for services you dont use, like three way calling or call waiting. You can save about $50 a year if you eliminate unused services.

When the fireplace is not in use, keep the flue damper tightly closed. A chimney is designed specifically for smoke to escape, so until you close it, warm air escapes24 hours a day!

If you use electricity to heat your home, consider installing an energy-efficient heat pump system. Heat pumps are the most efficient form of electric heating in moderate climates, providing three times more heating than the equivalent amount of energy they consume in electricity. A heat pump can trim the amount of electricity you use for heating as much as 30% to 40%.

You can cut the amount of water you use showering in one year in half, by installing low flow shower heads.

Insulate your water heater and turn the thermostat on it down a few degrees, to save quite a bit on your bill.

Carefully placed trees can help to heat a cool your house. Studies show that just 3 trees strategically planted to give shelter and shade can save you up to $250 a year on heating and cooling.

Provide high efficiency lighting to your home by using linear fluorescent and energy efficient fluorescent compact lamps in your fixtures. They last 6-10 times longer and use less energy.

Use solar pathway lights in your yard to provide nighttime light. It costs less than using electricity to run security lamps.

Refrigerators with freezers on the top are more efficient and therefore more cost effective than those with freezers on the side.

Switching your washing machines temperature from hot to warm or cold cuts a loads energy use in half.

Gas dryers are less expensive to operate than electric dryers. The cost of drying a typical load of laundry in an electric dryer is 30 to 40 cents compared to 15 to 25 cents in a gas dryer. That savings adds up over the course of a year.

When you are drying jeans in the dryer, throw a towel or two in with them. The towel will draw moister from the jeans, cutting down on dry time.

With a little thought and minimal effort you can save hundreds of dollars a year around your house. Start saving today, and imagine how much more money you will have in your bank account in the future.

With the increase in energy prices, it’s important to know that there are ways to lower your energy bill, maintain the overall comfort of your home and be energy efficient.

There is another big plus to being energy efficient: You help the environment. Using less energy means less air pollution from power plants that burn oil, coal or natural gas. Pollution from these sources can cause respiratory disease, smog and acid rain and contribute to global climate change.

Consumer Federation of America offers these tips on how to be environmentally friendly and save energy in your home.

* Clean or replace the air filters in your home’s heating and cooling system regularly. A dirty air filter can increase your energy costs and lead to equipment failure. It’s also good to have your systems checked once a year by a licensed professional. Regular maintenance can detect problems early.

* Use light bulbs and fixtures that have earned the Energy Star label – the government’s symbol for energy efficiency. Such lighting uses two-thirds less energy and can last up to 10 times longer.

* Install a programmable thermostat. It will automatically adjust the temperature to meet your comfort needs efficiently during different times of the day or week. A programmable thermostat can save you up to $100 a year when properly programmed and used.

* Seal air leaks in your home. Add new weather-stripping and caulking around windows and doors. Caulk and weatherproof all exterior openings for plumbing and electrical service, and look for other openings that need to be sealed, such as attic vents and ducts.

Effective air sealing, combined with the right amount of insulation, can save up to 10 percent on energy bills. And if you’re in the market for new windows, look for energy-efficient ones to help keep your home cooler in the summer and warmer in the winter.

* When replacing older, inefficient appliances in your home, look for new ones that have earned the Energy Star label. They meet strict energy-efficiency criteria set by the U.S. Environmental Protection Agency and U.S. Department of Energy; use less energy; help prevent air pollution; and reduce energy costs in your home.

The convenience of 401(k)s and other employer-sponsored retirement plans have turned many Americans into investors. That’s good news, since it is becoming evident that fewer retirees in the future will have substantial pensions and more will have to rely on their own savings to cover their needs.

Statistics show, however, that the average American will change jobs at least 10 times throughout his or her lifetime. This could make it more difficult to maintain a retirement account, unfortunately, since many people opt to “cash out” their retirement savings when they leave their jobs.

In fact, according to a 2003 survey by global human resources services firm Hewitt Associates, 42 percent of people cash out their retirement savings when they change jobs. The number is higher for younger people and people with lower balances: 50 percent of people aged 20 to 29 cash out, while 72 percent take cash if the account balance is between $5,000 and $10,000.

There is a smarter way to handle your retirement fund when you change jobs: Simply roll it over. By transferring your funds to a Rollover IRA, you avoid paying taxes now, giving your money the opportunity to grow tax-deferred. You also won’t be hit with an early-withdrawal penalty if you don’t take out funds before you turn 59 1/2.

Among the many financial firms offering Rollover IRAs, T. Rowe Price has one of the more simple and flexible solutions. Its free interactive CD-ROM, “The T. Rowe Price Rollover Planner,” helps investors decide what to do with their existing 401(k)s when changing jobs or retiring.

“The T. Rowe Price Rollover Planner” includes a distribution calculator that allows investors to compare the dramatic differences between taking cash distributions when changing jobs and keeping the money invested in tax-deferred accounts.

For example, a 35-year-old with $25,000 in a 401(k) who chooses to cash out would end up with just $15,750, assuming a 27 percent tax rate and a 10 percent early-withdrawal penalty. If the money were rolled over to an IRA, however, the account would be worth an estimated $252,000 before taxes when the individual reaches age 65, assuming an 8 percent average annual rate of return.

Joe Smith writes-
I just retired. I have worked all my life and am ready to have some fun in retirement. I want to figure out how much income I can take in retirement without running out. I have $200,000 in my 401k plan with my former employer. I am 65 years old and my wife Emma is 56 years old and would like to be guaranteed to at least have income for the next 20 years for me or for my wife if I don’t make it that long. What are my options when it comes to annuities?

We have two solutions you may want to consider. As with all investment planning there are advantages and disadvantages to each option and my job is to help you understand them.

Option #1 Income for life
There are different types of annuities available that can help make sure you have income for the rest of your life and the rest of your beneficiary’s life. One solution is called a “lifetime five” option. This is where you invest in an annuity that is invested in a managed portfolio of stocks and bonds. The investment decision-making is left up to the annuity company.

You are initially guaranteed each year to receive 5% of the original amount invested for your life and your wife’s life. Since you are both over the age of 55 you would qualify for this type of annuity. Age 55 is the minimum age. You are guaranteed by the annuity company that you will be able to take an income payment of at least:
$200,000 x 5% = $10,000 per year for the rest of your life and the rest of your wife’s life

This is the minimum guarantee provided by the insurance company. This annuity also has the ability to raise the minimum amount you can be paid every 3 years. For example: If you invest $200,000 and in three years your portfolio has grown to $215,000 your new minimum guarantee is:
$215,000 x 5% = $10,750. You just got a $750 dollar raise per year for the rest of your lives.

On the other hand, your portfolio may fall to $190,000 after three years. In this scenario you would not have any stepped up minimum guarantee so you would just collect your original $200,000 x 5% = $10,000 per year for the rest of your lives. You would get another chance to increase your income stream in three years.

Remember, you get a chance to step up this account value every three years, but the amount of your annual payout can only go up, it can never go down.

You may ask, “What if I need some money for an emergency in a lump sum?” In this situation you would be able to withdraw your portfolio’s value, less any withdrawals and penalties. It most likely will have some value but due to market fluctuations and withdrawals it may be lower than your original investment. You may also have to pay a surrender fee of up to 10%.

In summary:
Advantages:
Known income stream for life, with upside potential. (In this example a minimum of $10,000 for life.)
You have upside potential but no downside risk in income streams
You can participate in market gains every three years and possibly adjust your income upward.
If, after the surrender period is up, (usually 7 to 10 years) and your account value has gone up, you can walk away from the contract if you want and invest in another annuity. This may be to your advantage if you don’t want to wait another 3 years to up your income stream.
Guaranteed an income stream for over 20 years, if you live longer than 20 years and for your wife’s life even if she lives any number of years after you die.

Disadvantages:
If you need to withdraw the entire amount of your money within the first 7 to 10 years of investing your money, you will pay a surrender fee of up to 10%.
If you want to walk away from the annuity contract because you need the money in a lump sum your account value can possibly be down from your original investment.
The insurance company allowing this “income for life guaranteed benefit” no matter what happens to the account value does not come for free. There are additional annual fees involved in order to provide these guarantees. You should expect somewhere between 0.50% and 0.75% of the account value.
Option #2 Income for your life or 20 years whichever is longer. (Immediate Annuity)

In this type of annuity we are talking about an immediate annuity. This is where you buy an annuity contract and immediately annuitize the contract. In this situation things are a little simpler, but as we may demonstrate you may pay a price for the simplicity.

In this type of contract the main advantage is the annual payout for this contract is higher than in the previous example. For an individual who has $200,000 to invest the immediate annuity quotes we get from annuity companies average out to $13,500.

Let’s look at how this works. In this example, the annuity company will pay $13,500 every year for the rest of your life, or 20 years, whichever lasts longer. So if you live for 25 years, to age 90, the annuity company will pay him $13,500 every year for 25 years. If you lives only another 11 years and dies, his beneficiary (in this case probably his wife Emma) will receive the remaining 9 years of income payments of $13,500 and that is it. At the end of your life the annuity company knows that if they have not already paid out 20 years of payments one of the beneficiaries will get the remaining payments.

Let’s say you die in 21 years after he initiated this contract. The annuity company has fulfilled their promise of a minimum of 20 years so there will not be anymore payments to anyone. There will be no more money left in the contract and your wife will get nothing.

You might ask, “What if I need to take the money out after 10 years has gone by to pay a medical bill?”
The answer is that you cannot do so. When you get into an immediate annuity contract there is virtually no way to get out of it. You will not have any cash value after you sign the paperwork. All the annuity company is obligated to do is pay out 20 years, or the length of your life whichever is longer. After the annuity’s obligation is up the contract is worth nothing.

In summary:

Advantages:
Known income stream for life of the owner.
Higher starting income stream that never changes
No concerns of the underlying investments because the annuity company is responsible for that.
Guaranteed an income stream for 20 years, if the owner lives longer than 20 years the annuity company will pay the same amount until the owner passes away.

Disadvantages:
If you need your money back at anytime after investing your money, you cannot get it back in lump sum form. You can only collect the annuity payments.
If you live for 20 years or longer your beneficiary will not see any money from this annuity.
There is no ability to increase your income stream. Your payments will stay the same and will not have a chance to increase with inflation.

These are two of many options available to one person’s situation. Both of these annuities have benefits and drawbacks. It may make sense to discuss further details with our local Denver, Colorado annuity consultant.