Today’s the day to enjoy your chocolate cake, your one (or three) glasses of Merlot and any other vices you need to get out of your system. Tonight marks the start of the New Year. And, tomorrow is the day you embrace those New Year’s Resolutions.
For many of you, that means a money makeover. In Fidelity Investments’ fifth annual New Year Financial Resolutions Study, over half (54%) of Americans are looking to spruce up their money habits in 2014.
Topping the list of financial resolutions: saving more, paying off debt and spending less.
What’s changed since years past? In 2014 more people (up 10%) plan to prioritize their savings for short-term goals, like emergency funds, opposed to long-term goals, like retirement. That’s not necessarily a bad thing. According to Ken Hevert, vice president of retirement products at Fidelity, this shift in focus suggests Americans are becoming more balanced with their savings plans. And even with the drop, saving for retirement still remains the top savings goal.
For those of you who have committed to saving more in 2014, especially for retirement, here are a few tried and true (yes, you’ve heard them before but they work!) ways to accomplish your money resolutions in 2014:
Get on board an employer-sponsored plan: “If you have access to an employer-sponsored plan – a 401(k) or 403(b) – and you’ve got the opportunity to get an employer match, you want to absolutely participate in that program at a minimum, up to the point you get that maximum,” Hevert said. Self-employed? No problem. IRAs, or solo 401(k)s, are cost-effective and easy-to-use ways for saving as much as possible for retirement.
Go on autopilot: “Individuals who are on an automatic savings plan are much more likely to stick with their savings as either: A) They’re faced with personal financial challenges, or B) The market becomes volatile,” Hevert said. “We’ve seen, year after year, people who are on an auto contribution plan – either to a 401(k) or IRA – those are the ones who continue to stick to it.” The same suggestion can apply for your regular savings accounts, too.
Assess your assets: One suggestion that doesn’t require you to write a check or set-up an automatic contribution plan is simply reviewing your assets. “A lot of people kind of underestimate the importance of this step, which is to really take a look at how your overall long-term retirement savings are allocated,” he said. “By simply revisiting your asset allocation and making sure you’ve got the right mix of equities, bonds and cash, it can make a meaningful difference over time.”
Save together: In the current survey, 44% of respondents said they generally make their financial resolutions alone, whereas 29% said they make them with their spouses or significant others. If you have a partner, the latter might be the better approach. In earlier research, Fidelity found that the biggest piece of advice long-time couples had for other couples was to make all financial plans together. When you share financial responsibilities (and goals) you keep each other on track. That makes achieving your goals all the more likely. “We’ve seen when people plan as a household and plan as couples the likelihood of achieving their objectives is much more favorable,” Hevert said. Living the single life? Sharing goals with your family and friends works, too.
Happy New Year!
According to new research from PulteGroup, a homebuilder, Americans will spend an average of nearly $350 hosting dinners, parties and other holiday gatherings between now and the New Year. Millennials in particular are planning to pull out their wallets, spending an average of $418, with 57 percent reporting that they’d rather host their own gathering than attend someone else’s.
We’d like to help you take that number down a notch, because in a season of spending, saving where you can goes a long way. So below, a few tips for cutting your holiday entertaining budget:
Set a budget. Yep, before you can cut your budget, you have to set one. It’s important to know what you’re working with. Your budget will help you determine what kind of party you can throw, from the food to the bar to the guest list (if your pot is small, the easiest way to cut costs is to cut the guest list, as anyone who has planned a wedding well knows). Once you have your number, reduce it by 10 percent. That will give you some wiggle room when unplanned expenses pop up.
Lower the bar. You’re not a restaurant or swanky lounge — your friends don’t expect you to stock every liquor. Instead, use one of the oldest tricks in the book: Create a festive signature cocktail. Southern Living has a few suggestions here (that pear-basil sipper has my name on it) or you can experiment on your own. The result is the same: instead of offering a wide selection, you can stock one or two liquors, along with some beer and wine, and cut your budget significantly. Finally, do your wine buying at a discount shop like Trader Joe’s or Costco, where prices tend to be cheaper. If you’re worried about the stigma that comes from serving up bottles of Two Buck Chuck, you can print up some personalized labels on your computer and slap them over the existing labels. Many a friend has whispered this little trick in my ear after a wedding, and I promise, no one was the wiser.
Make it a potluck. Or, at the very least, take your friends up on their offers to bring something, even if it’s a bottle of wine. Every little bit helps and reduces the amount of money you’re pulling out of your pocket. There’s no shame in allowing guests to bring food, though — a dessert or side dish is easy enough, and that way you’re still contributing the bulk of the meal.
Take inventory. Before you plan your menu, take a look at what you have. Not just food — maybe you can finally put that five-pound bag of flour to use in some pies — but also tools. Don’t put miniature cupcakes on your menu if you don’t have a miniature cupcake pan. The same goes with a bundt cake, fondue, and any other dish that requires special tools. Instead, plan around items you own or can easily borrow from a friend or neighbor. Bonus: You won’t be fiddling with a torch to make your first creme brulee as guests arrive.
Roll it into next year. As you buy decorations and party supplies, think about things that you can use year after year — so pick up the fake garland, not real. Then pack everything up at the end of the season, and carefully mark it so you know exactly where to find what you need. It won’t save you much money this year — in fact, it may cost you a bit more — but you’ll reap the benefit down the line.
When Meg Favreau reached out with a guest post idea, we jumped at the chance to have her. If you’re not familiar, she’s Senior Editor of Wise Bread, a must-read personal finance site that Jean just put on her list of personal finance blogs you should be reading. Read on for Meg’s tips on creating homemade gifts for your loved ones this season, then check back for another guest post from Meg in a few weeks, in which she’ll share some simple and frugal cooking advice.
I have two thoughts when I read lists of homemade gifts every December — “Wow, there are so many wonderful, frugal ways to give!” and “Wow, sometimes people make some really hideous stuff!”
I know — it’s the thought that counts. But I believe it’s possible to give something homemade that people love. With that in mind, here are some thoughts on how to give the most appreciated gifts (homemade or otherwise), and some awesome things to make.
First of All, a Note on Gift-Giving
There are two gift-giving guidelines that can help you hugely at any time of year, whether you’re making or buying gifts.
Listen. The best gifts are gifts that fill a need or desire in a person’s life. But there’s no surprise in just asking someone what they want. Instead, think about conversations you’ve had in the last few months with the person you want to give a gift to. What have they complained about or said they love? If your friend has been complaining about not getting out, coupons for free babysitting are a great option.
Establish Ground Rules. Nobody can fault you for wanting to save money on gifts. But it’s never a bad idea to set a spending limit with family or let people know that you’re making gifts (and invite them to make something instead of buying a gift for you as well). A friend of mine once received “sexy” coupons from his then-girlfriend, which was a nice thought — but he had gotten her a violin. If everyone’s on the same page going into the holiday, it makes things easier.
Now, here’s what to make and give:
1. The Gift of Time. The aforementioned babysitting coupons and sexy coupons both fall into this area. Coupons for house cleaning, car cleaning, or yard work are also great.
2. Food…That Isn’t Already-Baked Cookies. In mid-December, one of the last things I want is another delicious pile of cookies that will go stale in a week. Instead consider something that could sit for a while — jarred brownie mix, jam, or logs of pre-sliced cookie dough to keep in the freezer (so you can bake just one cookie when you have a craving) are all great. I’m also a big fan of savory food gifts, such as frozen casseroles that can be popped in the oven or homemade mustard.
3. Notecards or Personalized Stationery. Everyone needs to write a note eventually, and this is an especially nice gift if you know someone who (like me) never thinks to buy note cards until the moment they need them. You can even make thank you cards and help your giftee say thanks for all those other holiday gifts.
4. Useful Personalized Items. One thing I find frustrating about many homemade gifts is that they’re not good if people already have an interest in something. A sewing kit in a mason jar is super cute, but if your giftee is already into sewing, she probably has all of those basic supplies.
Instead, I recommend items that almost anyone can have a use for but also display an interest, like these coasters (just replace the maps with another appropriate image).
5. Stuffed Animals From Kids’ Drawings. You can pay a lot of money for these — or you can do it yourself. Kids will get a kick out of ‘em, or you can give these to a grandparent as a gift from both you and your child.
About Meg: Meg Favreau is a writer, comedian, actress, frugal living expert, and food enthusiast living in Los Angeles. Her book with photographer Michael Reali, Little Old Lady Recipes: Comfort Food and Kitchen Table Wisdom, was released in November 2011 by Quirk Books. Meg serves as Senior Editor for the frugal living and personal finance site Wise Bread, and she’s a regular guest on American Public Media’s Marketplace Money.
Mail-order food is big business – according to David Sprinkle at Packaged Facts, online/mail-order sales of food and beverages will hit $12.8 billion in 2013, and the winter holidays are high season: 48% of Americans order some form of food gift around the holidays. Here are some tips for getting it done right.
Order now. If you want to order a food gift, start thinking about it now and look for cut off dates so that you know your food will get to its destination by Christmas, says Karen Blakeslee, research and extension food scientist at Kansas State University. If it’s perishable, ship it same day or overnight. “For non-perishables, like coffee, tea, dried meats and cheeses, you’ll be able to choose the less expensive shipping options,” explains Blakeslee. And, if the website can’t specify exactly when your gift will land (for instance, if you want it fresh for New Year’s Eve or Christmas Day) don’t hesitate to get on the phone with customer service and order through them.
Give the recipient a heads up. Especially if you’re dealing with perishable food, Blakeslee suggests letting the recipients know that it’s coming so that it doesn’t sit out all day. (I often send ice cream and let the recipient know that “something” is on its way — no need to be specific). “I know it’s nice to surprise people, but when it comes to food, you want to call and tell them it’s coming,” Blakeslee says. Baked goods are often less of a risk, unless they are intended to be refrigerated or frozen.
Get what you paid for. Have the recipients of your gift tell you whether or not the food came on time, if it’s of good quality, and if everything that you paid for is there. If the shipping fell through or the product shows up ruined, then don’t be afraid to bring it up…shipping companies need to know, and so do the food companies.
Understand how to go DIY. If you’re shipping a food item yourself, then you really need to talk to the company you’re shipping with, says Blakeslee. Have them spell everything out for you — the folks at UPS, FedEx and the Post Office deal with this on a daily basis this time of year, and they’ll have suggestions for how your item can get to its destination in tact. And it never hurts to compare prices by shipping method — you’d be surprised at the large variations.
How do you choose an executor when you have a blended family? Previously, we made wills and named executors of our wills and healthcare. How do we assign someone to be executor and not offend the other family. Any tips on how to be fair?
I think you’re looking at this situation the wrong way — I don’t think you want to consider how to be fair. You want to pick the best person for the job. This is a heavy responsibility. It’s complex and time-consuming, and family politics shouldn’t come into play.
So I would start by simply making a list. I find it’s the best way to sort out any difficult decision. Write down the names of people you might choose, then list the qualities that would make each person a good executor. List negatives, as well — you’re essentially making a pros and cons list about each candidate. You’re looking for someone who is organized — there is a lot of paperwork involved — honest, and understands your intentions. You want to select only one person, which as you noted, can be difficult for parents who are selecting among children. But it may be easier than you think — parents often assume that everyone is going to fight over this role, but you’d be surprised by how many people would rather avoid the pressure altogether. In the end, you want to settle on one executor and a couple alternates, then ask those people to take on the job. You don’t have to explain the reasoning behind your decision.
Finally, I want to point out that you don’t even have to select a family member. You can select a close friend you trust, who may be able to act as an outsider in this situation. And if you can’t find someone within your circle, you can name an accountant or attorney to the job, though it will cost you a few hundred or thousand dollars, depending on the complexities of the will.
This morning on TODAY, relationship therapist Argie Allen and I spoke with Willie Geist and Natalie Morales on what financial bullying is, and how to stop it in your relationships. For more information, check out the clip below:
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Considering groceries are one of the largest discretionary expenses for the average consumer, and that the couponing craze is still going strong, it comes as no surprise that new grocery and coupon apps regularly launch. In fact, you can choose from over 1,200 varieties in the Apple store right now.
As a single twenty-something with an always-changing schedule, I’m horrible at grocery shopping. With no plan to adhere to, and little motivation to cook for one, I either waste money on groceries that spoil, or spend too much of it on dining out. While I’m keeping myself full each week, I can’t say the same for my wallet. That’s why I decided to take a look at one of the newer grocery savings apps – Favado by Savings.com.
Favado aggregates all of the ongoing sales in your nearby grocery and drug stores. You can either plug in your zip code or manually search for a store, and if it’s in the app’s database, you’ll be presented with a list of the store’s current sales. In addition to the search component, you can create shopping lists derived from what’s on sale, “heart” products as your favorites and even be notified when those flagged favorites are on sale in the future.
I downloaded the free app to my iPhone (it’s also available for Android) and searched for the nearby Favado-friendly stores. My local Walgreens made the list.
When I took Favado for a spin in my Walgreens shopping cart, I was pleased to see consistency between what the app said was on sale, and what was actually on sale in the store. One of my go-to cleaning products, Clorox Wipes (originally $2.99), was on sale for $2.50 (two for $5). For my new bad habit, diet soda, the app had a special of three Pepsi 12-packs for $12 (originally $4.99 each) correctly listed as on sale for $4 each.
For extra savings, the app also has a coupon feature that shows you which coupons are available for your sale items. But as I pulled it up in the cereal aisle, I was disappointed to learn that the coupons are print-only. If you’re a planner when it comes to groceries – unlike me – then perhaps Favado’s coupon feature will be useful for you. But it’s a bust if you’re already out shopping. The more time I spent with Favado, the more I realized I’m not the type of shopper who’s going to get the most out of this app.
“We built it so that there are different kinds of people, there are the super-couponers, who want to do all of the work, find out what’s on sale, match up a coupon to it and only buy what’s on sale…but, not everybody wants to go through all of that,” said Loren Bendel, CEO of Savings.com. “Other people might just want to show up at the store and see what’s on sale right now, and make sure you don’t miss a really great sale.”
While Favado claims its “secret sauce” to be its ability to gather all of the sales in nearby stores, allowing you to compare store prices against each other, I think the app is particularly interesting because of an old-school meets new-school tactic. Behind the app are 80 plus grocery bloggers scouring the circulars and aisles for the best prices and “secret sales.”
“By secret I mean it’s not advertised,” Bendel said. “When you get your circular from a grocery store that shows all of the sales, that’s only about 20 percent of what’s on sale in that store – the rest is not advertised and people don’t know about that unless someone is walking the aisles and finding those sales.”
Knowing that actual people are walking up and down the aisles to get the information – not just robots extracting it from the Internet – is rather comforting.
Overall the app is easy to use, and I can see how it could save a certain kind of shopper both time and money in the aisles. The key phrase here is certain kind of shopper. But though I haven’t mastered the art of planning ahead when it comes to groceries (yet), this app did spark my interest in being a more proactive shopper. If you’re working toward the same goal — or you already have meal planning down to a science — this free app is worth a try.
My ex-husband and I were divorced via a mediated settlement agreement in June. Our daughter is a sophomore in college and our son is now in his first year of medical school; he got his own loan to help pay for school and most of his living expenses. I’m a 52-year-old woman who has been a stay-at-home mom for about 22 years. I have health issues, and even though I have a master’s degree, my employability remains an unknown. I will receive a lump sum/alimony buyout when our house sells, and for the time being I am living off of savings which were augmented through the settlement agreement. My ex continues to receive his $300,000 a year salary. We have been splitting the costs for our kids and mutual dog in half, but I wonder if there is a more equitable way to split these costs until I can hopefully have some kind of salary or income. Do you have any suggestions?
I would place my aim on getting back into the workforce, as hard as that may seem. Start working on your resume, maybe meet with a career counselor, brush up on your skills with a few classes if need be. While you do that, speak with your ex-husband and your children about how you are going to share costs. Yes, that means your children should be footing some of their college expenses — the freshman, in particular, should be taking out loans and working at a part-time job on the side.
Then I would have a rational conversation with your ex, separate from the kids, about how you might do this fairly until you get a job. Explain what you’re doing to work toward that goal, and point out that you’re in this position, in part, because you stepped away from the workforce to be a stay-at-home mother to your children. Perhaps he can shoulder more of the burden now, and you can make up for your share later when your income increases. Or take my advice for married couples with disparate salaries: Get a handle on the amount of expenses you’re going to assist with, and then figure out what percentage of each of your income will need to be contributed to cover those costs. This is instead of simply splitting 50/50. So maybe you each contribute 5% of your income, but his chunk is larger because he earns more.
Today’s post is by Joy Loverde, author of The Complete Eldercare Planner. According to the Family Caregiver Alliance, as many as 42% of employed Americans have provided eldercare in the last five years; 17% are currently doing so. This is an issue that is likely to affect all of us, and for today’s post, we asked Joy to pull together a list of her favorite resources, with explanations about how they can help. The list below will help both caregivers and those who need care.
Eldercare. This time it’s different. In addition to taking on the myriad responsibilities associated with parent-care, we can now expect to add aging spouses and life partners to the equation. At the same time, we have entered the era of “Unmarried America.” One in three baby Boomers is unmarried.
No matter what your lifestyle situation may be currently, well-being in later life depends on gathering resources and making better choices now. To help you get started in the planning process, check out my recommended list of resources below:
Next Avenue. Geared for people 50 and over, sign up for their weekly newsletter to receive articles, blogs, and videos that address a wide range of financial, caregiving, health, and lifestyle topics.
Aging in Place Technology. Provides thought leadership, analysis, and guidance about technologies and services that enable older adults to remain in their home of choice for longer.
Elderweb. This award-winning research site offers professionals and family members information on aging, eldercare, and long-term care including legal, financial, medical, and housing issues.
Benefits Checkup. Enroll in public and private benefits programs. You will also have access to an online application for Medicare’s Extra Help.
Eldercare Locator. A public service of the U.S. Administration on Aging, this site connects you to services for older adults and their families. You can also reach them at (800) 677-1116.
Golden Reviews. Make better care decisions by taking a look at eldercare from the inside out. By bringing transparency and accountability to senior care, this resource creates a platform of open dialogue between care providers, their residents, and families. Browse through a directory of hundreds of thousands of care providers.
Support Groups Clearinghouse. This resource brings people together around life’s challenges by providing concise, up-to-date-information and meeting places for individuals, their friends and families, as well as professionals who offer pathways to help.
National Association of Senior Move Managers. A professional association of organizations that assists older adults and their families with downsizing, relocating, medical transporting, and home modifications.
Alzheimer’s Reading Room. This one-stop shop offers extensive information on dementia, mental health, memory loss, and treatment. The goal of this resource is to educate and empower.
Well Spouse Association. This national nonprofit membership organization gives extensive support to wives, husbands, and partners of the chronically ill and/or disabled.
EldercareABC Blog. A visit to this website provides access to thousands of insightful and informative blog posts; a library of articles and resources; tele-classes around the most pressing caregiving issues; interviews with experts and authors; special community events; group chat sessions, and products reviews.
Restart Retirement. This interactive online resource incorporates knowledge on wellness, travel, finance, and the passions and pastimes of mature adults.
The Wright Stuff. Established by knowledgeable and extremely helpful health care professionals, customer services is what separates this online store from the rest.
National Academy of Elder law Attorneys. Membership is comprised of attorneys, judges, professors of law, and students dedicated to improving the quality of legal services to seniors and people with special needs. The website also features a “Find an Attorney” option.
About Joy: Joy Loverde’s best-selling book, The Complete Eldercare Planner (Random House, 2009) reflects the depth of her understanding for the needs of older Americans. “The book is the best we saw…” says the American Medical Association. Joy’s media credits include the Today Show, CBS Early Show, CNN, and National Public Radio among others. Joy also serves as a consultant and spokesperson for corporations, professional advisors, associations, healthcare organizations, senior housing, manufacturers, and other members of the fast-growing mature-market industry. Find Joy on her website: www.elderindustry.com.
New research indicates children are developing life-long money habits by the age of seven. Check out the video below to see me break down the important money lessons by age groups and activities with Al Roker and Willie Geist on TODAY.
After this segment aired this morning, a viewer wrote asking me this: “Can you elaborate on the debit card system you mentioned for 11-14 year olds on the Today Show this morning? Is it an actual debit card linked to their own account that is linked to the parent account? Any articles on it or further information on the best way to make it work? Thanks for any information you can provide!”
It’s hard to get all the details on in 4 minutes, so I wanted to elaborate for this viewer and others: I opened accounts at my bank for my kids linked to my checking account. Since I maintain the minimum balance they don’t have to worry about it. The accounts each came with debit cards. Then I set up automatic transfers into the accounts every week for their allowances. They’ve learned to monitor their balances online (they have separate passwords), all about the fees when you use an ATM other than your own bank’s, and how fast money can go when it comes automatically out of a machine. Before they have their licenses, you may have to be the bank for them. So, when they need cash, you give it to them, then have them watch you transfer the money back out of their accounts into yours. It’s worked really well. And when my son took off for college, I didn’t have to add this to the skills he needed to learn.
I hope that helps!