Retirement Planning: Watch for Inflation

A very real threat to you retirement is inflation. The costs of goods and services do rise over time. A gallon of milk at today’s price will greatly vary from what one costs 20 years from now. Are you putting off saving for retirement? Inflation is a REAL reason to start now. Let me give you an example. A round of golf with green fee and cart costs $50 in 2016. A round of golf at 2.5% inflation 20 years from now (2036) will cost you $81.93. Delaying saving for retirement affects your future financial self. Each year you delay saving for retirement requires you to save more to meet the higher prices of things in the future. The time to start saving for retirement is NOW. What is holding you back? Do you think you will get to it tomorrow? Next month? Next year? When I have more time? Don’t delay friend. Time and inflation can erode the power of your future dollars.

Suggestion: Start by saving 1% of your annual income for retirement. If your annual income is $80,000 this means setting aside $800 a year. When divided by 12 (months) this is $66 a month. Do you wonder where to invest such a small amount? I recommend http://www.betterment.com You can open an account at this site in less than 15 minutes. You can specify how much you want automatically transferred from your checking account each month. You can choose what day of the month you want it to come out. You can choose how much to invest in stocks and how much to invest in bonds. You can adjust this amount as you please as well. Don’t delay investing for retirement any longer. Start small and then increase your contributions as your budget allows. Those that fail to plan, plan to fail.

 

Emergency Fund: Expect the Unexpected

An emergency fund means exactly what it says: Financial emergencies will occur. The question is: Will you be ready? Car repairs, house repairs, medical bills, and high power bills are just a few examples of financial emergencies. Having an emergency fund is a FOUNDATIONAL STEP to financial security. This type of stuff should be taught in high school. America’s educational system has done little to prepare today’s youth for the financial challenges they will face in adulthood. An emergency fund is equal to the learning of the alphabet in primary school. Every young adult should know this stuff!

What can you do if you don’t have an emergency fund? Start now. I agree with Dave Ramsey that a $1000 emergency fund is the place to start. So, how can you raise your $1000?


  1. Have a garage sale
  2. Save your income tax refund
  3. Take a part time job
  4. Cut your expenses
  5. Live on a budget
  6. Spend less than you earn (put the difference in your Emergency Fund)
Where do I keep my Emergency Fund money? I recommend an online savings account. Two good choices are http://www.capitalone360.com or http://www.ally.com  Both of these account can be set up in less that 15 minutes and can be linked to your checking account for easy transfer. When an emergency occurs you simply go to the site and select the amount you need transferred to checking to cover the emergency. Transfer usually takes 48 hours (2 business days).
Those that fail to plan, plan to fail. Emergencies will occur. Don’t waste any time getting this $1000 raised and protect yourself against life’s emergencies.