As humans, we don’t always make smart financial decisions. From impulse buys to psychological barriers, sometimes we make dumb choices. However, even with our mental weakness, it is possible to overcome destructive ways and store a nice nest egg for the future. We are our own worst enemy when it comes to our financial situation. Here are some things that can ruin our finances.
When Should I Start Planning for Retirement?
by: Sound Credit Union
It’s never too early or too late to start thinking about planning for retirement. But depending on how near to or far from retirement you are, the decisions you’ll need to make and the choices you may have are very different. Figuring out how to live off your retirement savings is as much a personal issue as it is a financial decision. Your first step towards a successful retirement is to develop a strategy that will allow you to enjoy your retirement while minimizing the stress in worrying if you have enough saved.
Will I Have Enough?
According to a 2009 industry study, many pre-retirees haven’t clearly assessed how long their savings will last in retirement. Even more disconcerting is that they haven’t saved nearly enough to fund the retirement lifestyles they expect. The findings of the survey suggest that the savings habits of pre-retirees are insufficient to last for their expected 20 or more years in retirement. However, with preparation and careful planning, you may be able to avoid the pitfalls and start working toward a more secure retirement.
How Can I Prepare?
According to the survey, nearly two-thirds of respondents lack any formal plans for retirement savings or spending strategies. One way to help ensure a successful retirement is to follow a disciplined process that involves developing a written plan. Designing a plan involves gathering relevant financial information, setting life goals, and examining your current financial status. This compilation of information can be used to design a plan for how you can meet your financial goals. Once completed, your plan should be used to help make investment decisions that are in sync with your goals and personal risk tolerance. full article
Saving for Homeownership
by: Sound Credit Union
For most people, buying a home is both an exciting and challenging venture – it is the quintessential American dream. However, because of the high costs involved, saving for home purchase takes commitment, research, and sometimes sacrifice. This fact sheet will provide general information on the costs involved and the types of expenditures you will need to save for in order to buy your first home.
The Down Payment
The down payment will be the most significant outlay of your pre-purchase costs. The rule used to be that you needed to put down 20% of the purchase price, and you would obtain an 80% mortgage. Today, homebuyers can buy a home with as little as three to five percent down. If you do put less then 20% down, you will probably have to purchase mortgage insurance, which will cost you between .5% to .85% of the loan amount until your equity reaches the full 20%. Keep in mind that the more you put down, the less your mortgage payment will be.
Earnest money is a cash deposit you make when you submit your offer, which proves to the seller that you are serious about wanting to buy the home. Your real estate broker will deposit the money into an escrow account, and if your offer is accepted, it will be applied towards the down payment. If the offer is rejected, it will be returned to you. Typically the earnest money deposit will be about two percent of the price of the home. full article