You can take the Fright out of Finances
When you compile your list of fears, there are a few that most likely come out on top. Fear of death, the fear of public speaking, fear of spiders (this one tops my lists), and the fear of financial failure are probably all pretty high. Each of these break us out of our comfort zones and put us on edge.
Finances, however, don’t need to have the spook in them. For the most part, it’s just math, and when you get a firm plan in place (and don’t jump the boat when your emotions tell you to bail), you can achieve financial success.
Here are six spooky financial facts that can make your hair stand on end.
33% of Americans Have Nothing Saved for Retirement
We’re not talking about 1/3 of Americans that haven’t adequately saved for retirement. No, it’s not 33% that are unsure if they will meet their goals. That’s a full one-third of Americans that have not saved a single penny for their golden years.
When the time comes and they want to retire, they won’t be able to. When they are forced to retire, they will have just Social Security (which was never designed to provide for all of your retirement needs) propping them up.
The Solution: If your company offers a 401(k), use it! Put in at least enough to get the match. In addition, open a Roth IRA and set up automatic contributions. You can do as little as $25 per month to get things started.
Many Employees could get an Automatic 3% Raise is Salary
If I said you could give me a couple thousand dollars, and I would hand you back twice that amount, you would be foolish not to take me up on it. That’s exactly what’s going on when you’re not taking full advantage of your employer match with the company’s 401(k). Most plans will match every dollar you put in, up to 3% of your salary. It’s literally free money.
The Solution: Head to the HR department, and ask what needs to be done to adjust your withholdings. It’s usually as simple as signing a piece of paper, and sometimes even as simple as making a phone call. Don’t get scared as retirement approaches because you left free money on the table.
Most Americans Couldn’t Handle a $1,000 Emergency
Not long ago, the transmission went out in my car. It cost me $645 to have it fixed. I didn’t really like the expense, but I also didn’t have to wonder where I was going to come up with the cash because I have an emergency fund set up.
That’s not the same story for 65% of Americans. Two-thirds of adults in the US don’t know how they would pay for a $1,000 emergency if it came up.
The Solution: This fright doesn’t have to exist. Before you do anything else today, open a savings account with CIT Bank and commit to at least $25 per month. Once you do that, you won’t have this one scaring you any longer.
More than 75 Million Americans Have Debt Collections Skeletons
You’ve heard the phrase “skeletons in the closet.” If you literally had skeletons in your closet, you wouldn’t want people to know about them. If you have debt collections on your credit report, you probably don’t want anyone to know about it. That’s exactly what 1 in 3 Americans are hiding.
The Solution: The concept of credit and debt is big and can be overwhelming. Missing a payment can send you into a spiral of collections and furthering debt. While the easiest way to avoid it is to avoid debt that will make you struggle with payments, that’s hard to do sometimes.
If you are stuck in your credit, or you have those skeletons in your credit closet, credit repair is a great way to get back on track.
7% of Seniors File Bankruptcy Every Year
After you retire, things just coast along, right? You’ve worked hard, now you don’t have to worry about working and your money woes are over. Not exactly. Most people, when planning their retirement, forget two major expenses: healthcare and entertainment.
Healthcare during retirement alone is expected to cost over $250,000 for those retiring soon! More and more seniors are finding this out the hard way.
The Solution: Save as much as you can, then save some more. Nobody has ever gone into retirement thinking, “I simply have too much money.”
Savings programs like the Acorns App can give you the nudge in the right direction that you need. And putting away cash is much less scary than signing bankruptcy documents.
Student Loans Will Cost You Hundreds of Thousands of Dollars
You’ve probably heard that a good education will get you a good job so that you can enjoy a good retirement. But have you thought about the costs of that education?
Suppose you start your career with $30,000 of student debt, you could end up with $325,000 less in your retirement savings when retirement comes. The idea is that you are paying down your loans with money that could have been invested.
The Solution: Wipe out that debt as fast as possible! Start by looking into refinancing your loans with LendEDU.
Then, work two jobs, start a side hustle, negotiate a raise, or do whatever you must to get it gone. When it’s gone, dump money into your retirement plans early in your career to maximize the compounding interest.
Don’t Get Spooked; Plan Your Finances
Finances can be frightening. But if you take just an hour a month to make sure everything is on track, then you can avoid the scare, and look forward to a comfortable, and spooky-free, retirement.
