Fortune Watch

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The good news for women: they live longer, so they will have longer to enjoy their retirement. The bad news: they live longer, and so their retirement will be much more expensive than for their male counterparts.

The fly in the ointment: As a woman, you may have to put in more effort before you get to enjoy a worry-free, financially secure retirement.

Women earn an average of 76 percent of men’s salaries. Does that shock you? Yes, even now, women are still way behind the earning curve in corporate America. But rather than get into a discussion of the fairness or unfairness of it all, let’s concentrate on just what women can do to ensure that they aren’t left out to dry in their retirement age!

After all, because women typically live longer than men, combined with the skyrocketing divorce rate, many women will find themselves alone in their older years. (Statistics show that most women are alone by age 56!) And the figures show us that if a woman took out any time from her career to have children (about seven years) she will pay for it later with only 50% of what her male counterparts will receive in retirement benefits.

So, what can a woman do to ensure that she can retire in style? Start by taking a look at some of our suggestions below.

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From simple colds and viruses to life-threatening diseases, any kind of health problem can put a huge strain on your pocketbook. By adopting certain habits you cannot only save money on fewer doctor’s visits and medications, you can preserve your cash in other ways.

Below are eight frugal living tips that will actually lengthen your lifespan.

1. Quit Smoking
Although quitting may be easier said than done, it is a no-brainer that doing so will cut costs and help save your life. The CDC actually offers a helpful guide to quitting smoking, which could be a great resource when you decide to put down the tobacco once and for all.

2. Stop Tanning
There is a growing fad for people of all ages and cultures to look bronzed. If you are seeking the warmth of a tanning bed in order to look a certain way, then it is time you stopped. Quitting now will decrease your chances of developing malignant melanoma.

3. Cancel Your Paid Television
It is obvious how this will save money, but you may not see the direct connection to your health. Simply put, it will get you off that couch and encourage you to pursue more active, healthy activities.

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Before the year is over, you always have a list of New Year’s resolutions. It could be about an oft-repeated promise to lose weight, quit nicotine addiction, or to budget your paycheck and get out of debt.

But even before the first month of the New Year is out, you give up. These useful but practical tips will bail you out of the overspending trap. Budgeting a slim paycheck can be frustrating, especially when unexpected money emergencies crop up. If you are receiving less than $1000 every 14 days, the prognosis is grim. Cutting back on some regular expenses can be very inconvenient for you, especially if you have kids to consider; but better the one-time inconvenience than a lifetime of never ending debt.

For emergencies like this, it’s best to be prepared. Instead of dividing your money into the usual groceries and food, bills and utilities, and rent, add one more money envelope or money clip – this time, one for savings. Impossible, you say, because you can barely survive on your paycheck.

You are right – it is downright impossible to save money when you’re already penny-pinching. Here’s how to stretch your budget some more. Go over your previous expenses and trim down the fat, and say goodbye to impulsive shopping.

Make the budgeting fun. Consider the amount you save as points, and these points should go into the savings envelope. You’ll marvel at the way your savings envelope grows, slowly but surely.
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My basic money-saving strategy goes like this: Decrease your expenses, and increase your income. That’s really all there is to it.

While the concept itself is not at all complicated, in reality it can be difficult to actually put into practice because it requires you to change your poor spending habits. But complicated? No, not at all.

So how do you actually go about following this money saving technique? What, specifically, should you do?

Let’s use the following analogy. If you were trying to lose weight, you could accomplish that by going on a diet and not doing any additional exercise.

You could also accomplish the goal of losing weight by eating the same as you’re eating now, but doing a lot more exercise to ensure weight loss. However, the best, fastest and healthiest way to lose weight would be to do both: eat healthy food in moderate proportions AND exercise regularly.

Similarly, you’ll get out of debt and maximize your financial results most effectively if you reduce your expenses AND increase your income at the same time.

Reducing your expenses is fairly self-explanatory. Spend a day or two reviewing the past 60 days of expenditures in your check register, or if you haven’t kept good records, start tracking every single penny you spend, thus compiling a list of your ACTUAL expenses.
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I said goodbye to an old friend a few weeks ago. We’ve known each other almost thirty years, ever since I started high school really.

We were together on my first date, first kiss, and first trip overseas. We were hand in hand when I left home to go to university.

My friend was there when I started my first real grown-up job, has seen girlfriends come and go, and has been my solace when I had nobody to turn to.

We briefly parted ways from time to time but always managed to find each other. We laughed, we danced, we stressed and we wept together.

We shared our ups and downs. Some times we exercised together and every now and then we even bathed together. That’s a lot of togetherness.

In the past few months I have slowly wakened up to the fact that this friend of mine, who I thought had always been there for me, has slowly been poisoning me from the inside out.

My friend has been digging into my pocketbook on a daily basis for the past 30 years, and stealing my money at the same time as he’s been stealing minutes from my life. My friend has not really been my friend at all.

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When people discuss retiring or having a sea change or chasing their passion, the different reactions usually involve money: “I’d love to do it but I don’t have enough money.”

You reach retirement age and don’t have enough to retire on, you’ll be left with two options, either to delay your retirement or reduce your standard of living in retirement. Which one would you choose?

It always helps to know what you are aiming at and wealth creation is no different. I will assume that you want to build wealth in order to be able to retire and still live well. How much money will you really need?

I was attending a wealth building conference and one of the other speakers, a financial planner, made a statement that when you retire you only need about 50% of you pre-retirement income. I was amazed at this statement and I asked him back stage how he came to that conclusion. He told me that all retired people do is sit around and watch television all day.

My response to him was that this was a description of what broke people do (namely his clients). Retired people who have successfully built a decent wealth portfolio are living the time of their life! What are you aiming at? The lifestyle of the television watching clients of our financial planning friend or the time of your life lifestyle that comes with wealth?

How much will you need for a good lifestyle in retirement?

The short answer is that, if you want to maintain the lifestyle that you are accustomed to then you will need a monthly income equal to your monthly income one month before you retired. Anything less and there is something that you will have to give up.

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In simple economics, there is little distinction between savings and investments. One saves by reducing present consumption, while he invests in the hope of increasing future consumption.

Therefore, a fisherman who spares a fish for the next catch reduces his present consumption in the hope of increasing it in the future.

Most of the people probably have savings accounts with ATMs to access their hard-earned cash and be able to store away any extra cash in a place a little safer than a mattress. A few of you may even have some stocks or bonds.

Let me explain why while a savings account in the bank may seem like a safer place than the mattress to store your money, in the long-term it is a losing proposition! If you open a savings account at the bank, they will pay you interest on your savings. So you think that your savings are guaranteed to grow and that makes you feel extremely good! But wait until you see what inflation will do to your investment in the long-term!

The bank may pay you 5 percent interest a year on your money, if inflation is at 4 percent though; your investment is only growing at a mere 1 percent annually.

Saving and investing are often used interchangeably, but they are quite different! Saving is storing money safely, such as in a bank or money market account, for short-term needs such as upcoming expenses or emergencies.

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Get real about money. Let’s face it: Most people spend way too much money on things they don’t really need. The more money we make, the more we tend to spend. This endless cycle of materialism has led many people to confuse the word “need” with the word “want.” As in, “we need a big-screen TV for our new home theatre.” Or, “I need a new pair of shoes to go with my new outfit.”

If you want to achieve your vocational passion, where every day you jump out of bed and can’t wait to go to work, then you need to re-order your priorities. Stay away from the purely material.

The pursuit of material success often is the root cause of burnout at midlife. In fact, a recent study found that people primarily motivated by the love of their work grow dissatisfied as they begin to make more money. The first step to breaking free from the materialism trap is to understand the difference between “need” and “want.”

We need food, clothing, shelter, reliable transportation, education, enrichment, and the technology necessary to do our work. Also, we need the occasional small indulgence to treat our children and ourselves.

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Stuff happens. And it usually costs money. If you don’t have an emergency fund equal to three to six months worth of basic living expenses, you’re living on the edge. There’s no time like the present to get started.None of us have the ability to foresee the future or predict the hurdles which lie ahead of us. This makes building an emergency fund a financial priority. People who are living on a lean-and-mean budget will have the toughest time setting aside money for emergencies. If it’s possible to squeeze out another $40 or $50 each month and put it in a money market account, it’s worth doing.

Establishing an emergency savings account is vital in good times and in bad. The purpose of the fund is to sock away three to six month’s living expenses. But this money could also be used when you’re staring at major, unplanned expenses such as a car breakdown or a leaky roof.

Housing a small rainy day fund should be a vital part of an individual’s financial goals. This is of high importance if you don’t already have readily available funds in your account for covering any unanticipated expenses. They provide financial security because they give you funds to fall back on if you become ill, or if you or your spouse loses your job, you incur large medical bills, or have an unexpected large bill such as a major car or home repair. You do not want to end up in a situation where you have to buy daily necessities on credit.

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Seriously you dont…

I advise people on personal finance including banking, budgeting, saving, and investing. How to save your money-tricks, how to budget, and using credit cards, etc. How to make more money by investing? What are stocks? Bonds? Mutual funds? What can you do to start today and maximize returns?

All you need is three ingredients, income, discipline and time. Chances are, you already have two of them, income and time. All you need to do is add the third, discipline.

There’s a saying in economics “expenses rise to meet income”. This means money that’s easily available to you is certain to be spent. That’s why most people’s paychecks disappear before their next payday. They get used to having a certain amount to spend, and habitually run down their bank account.

Here’s how it works: Say you start with nothing, invest $500 (of your income) a month (a healthy discipline), and let your money ride (over time) in diversified investments. Long term, the stock market returns at least 10% annually. Assuming a 10% return, you’d have $102,000 after 10 years, $380,000 after 20 years, and $1.1 million in 30 years.

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